As expected, on August 10, Prime Minister Recep Tayyip Erdoğan from the Justice and Development Party (AKP) decisively won Turkey’s first directly-elected presidential election. He received just about 52 percent of the votes, falling somewhat short of the 55 percent that the polls were predicting.

At a time when Turkey’s neighborhood is in a state of chaos and the country is deeply polarized, what will his next steps as president be? Will he transform Turkey’s political system from a parliamentary to a presidential one? Will he be able to simultaneously run his party, control the prime minister and be the president of Turkey? Will he be able to overcome the authoritarian and abrasive politics of the last two years and replace it with politics reminiscent of the mid-2000s characterized by consensus building and liberal reforms? Or will it be a case of more of the same?

Traditionally, presidents were elected by members of the Turkish Parliament, and had limited powers. However, Erdoğan has been aspiring for a strong presidency since AKP won close to half of the votes at the national elections in June 2011. While serving as prime minister, Erdoğan attempted to write a new constitution, but resistance from opposition parties together with the May 2013 Gezi Park protests and the December 2013 corruption scandal prevented him from achieving his goal. Consequently, his fallback plan has been to emerge triumphant from the 2014 presidential elections,use the presidential powers in the current constitution to its full extent and aim to get AKP to emerge from the parliamentary elections scheduled for June 2015 with enough seats, enabling him to see to the adoption of a new constitution. This new constitution would transform Turkey’s parliamentary system into a presidential one and give Erdoğan the possibility to run the country until 2023, the Republic’s centenary.

Erdoğan’s Opponents: İhsanoğlu and Demirtaş

Ekmeleddin İhsanoğlu and Selahattin Demirtaş were Erdoğan’s main opponents. Although neither constituted major challenges for Erdoğan, each represent something significant for Turkey. The left-leaning secularist Republican People’s Party (CHP) and right-wing Nationalist Movement Party (MHP) joined forces to support İhsanoğlu’s candidacy. İhsanoğlu, born and raised in Cairo, a prominent religious scholar, and a secretary-general of the Organization of Islamic Cooperation from 2004 to 2010, was seen as the best candidate to attract former AKP members, and votes from the wider conservative electorate. Though he lacked political experience and visibility in Turkey, he managed to receive more than 38 percent of the votes. This performance falls short of the 44 percent that CHP and MHP garnered at the local elections in March this year, but would still be considered as a respectable performance.

Demirtaş, a prominent figure amongst Turkey’s Kurdish minority population and a keen partner in government efforts to find a political solution to the Kurdish problem in Turkey, ran for presidency on a secular and somewhat leftist agenda, sensitive to the interests of especially minorities and women. He received almost 10 percent of the votes, one point short of most poll predictions, but almost twice the amount that his party, Peace and Democracy Party (BDP), received in March local elections. This suggests that Demirtaş received support not just from Kurdish, but also Turkish voters, a very significant development in terms of politics in Turkey.

How Has the Turkish Political System Worked in the Past?

With Erdoğan’s victory, Turkey is now at an important crossroad. Since World War II, Turkey has been a parliamentary system. The prime minister was the head of the executive branch of government and the president, elected by the parliament, held a ceremonial role. This changed after General Kenan Evren led the 1980 military coup d’état. In 1982, Evren introduced a new constitution that empowered the president with some executive powers intended to exert some control over civilian politicians. However, with the exception of Evren and his successor, Turgut Özal, subsequent presidents, Süleyman Demirel and Ahmet Necdet Sezer, refrained from using these constitutional powers in any conspicuous manner. So where did the notion of a directly-elected president come from?

The idea of a president elected directly by the electorate, rather than by the parliament, is an outcome of the military’s interference in politics in 2007. As the end of the staunchly secular and politically shy Sezer’s term approached, the military in a rather undemocratic manner, tried to prevent the then-Minister of Foreign Affairs, Abdullah Gül, from becoming president. The military and the judicial establishment deeply distrusted Gül’s, as well as the AKP’s, commitment to secularism. The government overcame the challenge by calling for an early snap election that AKP won handsomely, opening the way for Gül’s election as the new president. Furthermore, the electoral victory encouraged Erdoğan to hit back at the military by calling for a referendum on whether future presidents should be directly elected by the people or by the parliament. Erdoğan’s initiative received support from 58 percent of the electorate, thereby quite decisively demonstrating to his opponents the very extent of his popularity while allowing him to emphasize the “will of the people” as the basis of his understanding of democracy.

The Campaigns: Two Approaches to Turkey’s Future

The 2014 presidential campaign unfolded as a competition between two political approaches to the future of governance in Turkey. The first approach, represented by Erdoğan, calls for a narrow and majoritarian understanding of democracy based on the notion of the “will of the people” (milli irade) at the expense of constitutional checks and balances and separation of powers. In return for such an authoritarian form of governance, Erdoğan promises a prosperous Turkey that will grow to be the 10th largest economy by 2023 and become a major regional, if not global power. It is with this in mind that Erdoğan aspires for a powerful presidential system dominated by him alone. The second approach, especially pushed for by İhsanoğlu, advocates the maintenance of the existing parliamentary system and warns that a hybrid system where both the prime minister and the president is elected directly by the people, risks creating instability, tension and polarization within the country. He advocated for a president who would be above party politics and who would focus on protecting freedoms and the rule of law.

Does Erdoğan Have a Mandate?

What will Erdoğan do now? He is confident that he enjoys wide-spread popularity among the masses. However, it is difficult to conclude if the electorate went to the polls on Sunday with a referendum to change the political system in mind. If they did, then they did so with a rather slim margin. Nevertheless, it is likely that Erdoğan will interpret the results of the elections as an explicit approval of his political agenda, and will thus proceed to transform Turkey towards a presidential system. However, a number of challenges will be awaiting his project. The first and immediate challenge will emerge with respect to the next prime minister. As a prominent Turkish columnist put it, Erdoğan will want a prime minister who will always be “one step behind”. But will politics allow for this to occur? Can Erdoğan find a loyal and unquestioning prime minister? The current constitution requires the president to resign his/her political party affiliations. Once he takes up his position as president at the end of August, will he be able to continue to enjoy control over AKP from a distance? This is not a challenge to be taken lightly considering that there will be parliamentary elections in 2015 and the ranks of AKP will be quite restless both in terms of the selection of candidates, as well as the prospects of ensuring a victory at the polls. Lastly, with ISIS’s growing power, political instability in many neighboring countries, a troubled relationship with the European Union and the United States and continued bloodbath in Syria, keeping the Turkish economy on course may turn out to be Erdogan’s greatest challenge. The coming months are going to be critical in terms of whether Erdoğan will overcome these challenges and succeed in transforming Turkey’s political system. The outcome will illustrate if Erdoğan is actually bigger than Turkey or vice versa. However, whatever happens in the next few months, it will largely determine if in 2023, Turkey will celebrate its centenary as a liberal or illiberal democracy. In the meantime, the fact that Erdoğan plans to use a constitution that was drawn up under military tutelage to achieve his presidential ambitions is both ironic, but also not very promising in terms of Turkey’s democracy turning liberal.

Editor's Note: Ranu Nath, the Turkey Project intern in the Foreign Policy Program at Brookings, contributed to this piece.

Event Information

On December 1, the Center on the United States and Europe (CUSE) at Brookings hosted a discussion exploring Russian power throughout history and how two of its most pivotal rulers—Josef Stalin and Vladimir Putin—defined Russian leadership and its role in the world in the 20^th and 21^st centuries. The discussion featured remarks by Stephen Kotkin, professor at Princeton University and author of the authoritative new biography, Stalin Volume I: Paradoxes of Power, 1878-1928 (Penguin Press, 2014).

In his book, Kotkin reveals Stalin as a ruler who is both astute and blinkered, diligent and paranoid, cynical and true-believing, charming and vicious. However, Stalin is more than just an eminent biography; it is a book about Russian power in the world as well as Stalin’s power in Russia, recast as the Soviet Union. Ultimately, Stalin offers an analysis of power—where it comes from, how it is utilized or squandered, and what its human consequences are.

Brookings President Strobe Talbott offered introductory remarks and moderated the discussion.  Prior to assuming the leadership of Brookings, Talbott served in the U.S. State Department as ambassador-at-large for the former Soviet Union and then as deputy secretary.

Audio

• Putin and Russian Power in the World: The Stalin Legacy

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20141201_putin_russia_stalin_transcript

Less than four months after ascending the throne, Saudi King Salman bin Abdul Aziz Al Saud has made unprecedented changes in the line of succession that benefit his own son Prince Mohammed bin Salman. These shifts come as Salman pursues the most assertive foreign policy in recent Saudi history.

The king removed the sitting Crown Prince Muqrin, his half brother, and promoted the third in line Prince Mohammed bin Nayef, his nephew, up to number two. Salman made his own son, Mohammed bin Salman, the new number three. The King also replaced the ailing foreign minister, Prince Saud al Faisal with a non-royal, the current ambassador to Washington, Adel al Jubeir. Prince Saud had been Foreign Minister since 1975.

According to the royal palace, Prince Muqrin asked to be replaced, but no reason was given. No crown prince has ever given up the position in the history of the modern kingdom, founded in 1902. When Salman ascended the throne in January, the press trumpeted Muqrin as heir and there was no sign he was not eager to be the next in line. Many will assume he was asked to quit.

Speculation will be intense about why that might be. Muqrin was a protégé of the late King Abdullah. He is not close to Salman's branch of the family, the Sudeiris. He also appeared less enthusiastic about Salman's war in Yemen. As a former fighter pilot Muqrin understands the limits of air power, and he may have had doubts about the wisdom of what was initially called Operation Decisive Storm, but has now become a stalemate.

The new crown prince, 55-year-old Mohammed bin Nayef, is famous for defeating Al Qaeda's violent attempt to overthrow the House of Saud a decade ago. MBN, as he is known, led a four-year counter-terrorist campaign that decimated Al Qaeda in the Kingdom and drove its remnants into Yemen. In the process MBN survived at least four assassination plots. His father, the late Crown Prince Nayef, was so reactionary he was nicknamed the Black Prince. But MBN studied in Oregon and with the FBI and Scotland Yard before joining the Saudi interior ministry. He also holds the position of chairman of the Kingdom’s security and political committee coordinating all security issues.

Mohammed bin Salman, MBS, is the face of the Yemen war. He became defense minister in January and has been constantly on Saudi TV appearing to direct the war effort and meeting with foreign leaders to win support for the campaign against the pro-Iranian Zaydi Shia Houthi rebels. He is considered ruthlessly ambitious and is very close to his father. He has given up his position as chief of the royal court but he will undoubtedly keep control of access to the king.

Unlike most Saudi princes, MBS was not educated in the west. Instead he studied at King Saud University. There is controversy over his age, reputed to be anywhere from 29 to 34 (officially his birthday is July 24, 1980). He is chairman of a number of young people's organizations in the Kingdom and seeks to portray himself as the leader of the next generation of Saudis. He also chairs the powerful development and economics committee that coordinates economic policies, including oil price and supply.

In promoting his nephew and son, King Salman is passing the torch to the next generations of royals. Since 1902 the Kingdom has been ruled by the founder of the modern Kingdom Ibn Saud Abd Al Aziz or his sons. Now, Salman will be the last son to reign.

These changes have all been endorsed by the Allegiance Council, the committee of the sons and grandsons of Ibn Saud, but the legitimacy of selecting the next generation has been a question mark over the succession process for years. The king hopes it is now all settled.

The late King Abdullah's own son, Prince Mitab, has kept his powerful position as commander of the Saudi National Guard. The SANG is the family’s praetorian guard, it defends the capital, the holy mosques in Mecca and Medina and the oil industry. SANG troops have occupied Bahrain, the Kingdom’s tiny island neighbor, since the Arab Spring in 2011 to keep a minority Sunni monarchy in power.

The new lineup is solidly pro-American but riven with doubts about American reliability. The royals believe George W. Bush foolishly let Iran gain dominance in Iraq and fear Barack Obama is too eager for a nuclear deal with Iran and a grand rapprochement with Tehran. Repeated assurances by Obama and concrete support for the Yemen war have not altered Saudi doubts about America.

Salman's decision to wage war in Yemen so soon after coming to the throne reflected his acute concern that Iran was gaining a foothold on the Arabian Peninsula in what has always been the soft underbelly of Saudi Arabia, Yemen. The Zaydi Houthi rebels are not pawns of Tehran but they did initiate direct air flights between Sanaa and Tehran early this year, offered Iran port facilities and negotiated a lucrative oil deal. A few Iranian Revolutionary Guard advisers have been assisting the Zaydis for the last few years covertly. From Riyadh's view Iran already dominated decision-making in Baghdad, Damascus and Beirut, it does not want a fourth Arab capital to be aligned with Tehran.

But Salman's intense effort to secure wide Islamic backing for the war has been less than a success. Oman, Yemen's other neighbor, has opted not to join with the other five members of the Gulf Cooperation Council in the fighting, instead staying on the sidelines. The Pakistani parliament voted unanimously to keep neutral and rebuff repeated Saudi requests for ground troops to aid the war effort. Pakistani officials have privately suggested Salman panicked into the war without a viable strategy to get the Houthis out of Sanaa. Even Egypt, which benefits from billions in GCC aid, has opted not to send troops. although it's navy is supporting the Saudi blockade of Yemen.

The Yemen war is part Saudi-Iranian regional rivalry, part the unfinished business of the Arab Spring revolutions and part sectarian Sunni-Shia animosity. It is above all the Salmans’ war, father and son together. The surprise elevation of MBN and MBS underscores how the stakes in this war are crucial, not only to Yemen's future but increasingly to the future of the House of Saud.

This piece was originally published by The Daily Beast.

Updated, 11/14/14 with new content.

President Obama is traveling this week in the Asia-Pacific region. He is attending the APEC Summit in Beijing Monday and Tuesday; the ASEAN Summit and the East Asia Summit in Myanmar Tuesday; and the G-20 Summit in Brisbane Saturday and Sunday. Brookings experts have offered significant commentary on the president's agenda and challenges during this trip:

Richard Bush, director of the Center for East Asia Policy Studies and the Michael H. Armacost Chair, reflects on what Presidents Obama and Xi said about the situation in Hong Kong during their summit.

Charles Freeman, a nonresident senior fellow in the John L. Thornton China Center, reflects on Chinese President Xi's address to business executives during APEC during which Xi discussed the "new normal" of Chinese economic growth and more open visa policies. His remarks, Freeman notes, "sounded a contrasting note to those he made just a month earlier" and "were also out of tune with the well-chronicled anxieties of foreign investors about the souring business environment they face in China."

Neil Ruiz, a senior policy analyst and associate fellow in the Metropolitan Policy Program, says that the new visa rules agreed to by Presidents Obama and Xi "is an important step in building economic bridges between Chinese cities and U.S. metropolitan areas."

Senior Fellow Michael O'Hanlon, the Sydney Stein, Jr. Chair in International Security, focuses on two prospective agreements on military matters, dealing with confidence-building and operational safety issues, reached between the U.S. and China. "The Obama and Xi teams should be proud of a good summit," writes O'Hanlon, "But situating these accords in a broader framework underscores how much work remains to be done."

On the U.S.-China climate agreement to cut greenhouse gas emissions: Brookings Managing Director William Antholis calls it "dramatic" for both diplomatic and domestic political reasons; and Fellow Tim Boersma, acting director of the Energy Security Initiative, says it is "a big deal."

Miriam Sapiro, a visiting fellow and former deputy U.S. trade representative, says that the trip "gives the White House the chance to emphasize foreign and economic policy goals that can be broadly embraced by Democrats and Republicans." Sapiro also commented on the importance of trade policy, including the Trans-Pacific Partnership, in a recent Brookings Cafeteria podcast.

Experts recently joined together in a full-day conference to examine the economic, environmental, political, and security implications of President Obama's trip to China and his interactions with President Xi Jinping. Full audio, video, and a transcript of remarks by former U.S. National Security Advisor Thomas Donilon are available.

Six experts from the John L. Thornton China Center recently offered their views on how President Obama can have a productive visit with President Xi. Their comments covered issues including Hong Kong, trade, and domestic Chinese reforms, among others.

Lynn Kuok, a nonresident fellow with the Center for East Asia Policy Studies, offers her perspectives on Obama's trip to Myanmar. 

In Think Tank 20, experts from Brookings and around the world address interrelated debates about growth, convergence, and income distribution—three elements likely to shape policy debates beyond the G-20 Summit. Use the handy globe interactive to navigate to countries and regions.

Kemal Derviş—vice president and director of Global Economy and Development and the Edward M. Bernstein Scholar—and Peter Drysdale—emeritus professor of economics at Australian National University—are the editors of a new volume on the G-20 summit at five years. They explore questions including, Will these summits add ongoing value to global economic governance, or will they will become purely ceremonial gatherings, which continue to take place because of the inertia in such processes?

The biggest news at the end of the Brisbane G-20 on Sunday will be to confirm for the first time in an official G-20 communique that China will indeed chair the G-20 Summit in 2016. 

Coming on the heals of a momentous week of great power realignments and breakthroughs at the APEC Summit in Beijing and other one-on-one meetings of heads of state, the timing of China’s presidency of the G-20 Summit in 2016 could not be a better follow-up to this week’s accomplishments. It puts China in play as a global leader at a critical moment in geopolitical relations and in terms of several global agendas that will culminate in the next two years. It also provides an unusual opportunity for the U.S. and China to collaborate on a broader set of societal issues affecting everyone everywhere building on their agreements this week.

One of the reasons why the G-20 Summits have yet to realize their full potential is that the leaders-level summits have been captured by the finance ministers’ agendas and discourse. Leaders at G-20 Summits have individually and collectively failed to connect with their publics; ordinary citizens do not see their urgent issues being dealt with. Exchange rates, current account balances, reserve ratios for banks, and the role of the IMF do not resonate with public anxieties over their lives and livelihoods.

Three streams of global issues will culminate in 2015:  the forging of a “post-2015 agenda” on sustainable development with a new set of global goals to succeed the Millennium Development Goals (MDGs); the agreement on  “financing for development” (FFD) arrangements and mechanisms to support the new post-2015 Sustainable Development Goals (SDGs) to be realized in 2030; and the achievement of a United Nations Framework Convention on Climate Change (UNFCCC) by the end of 2015, which looks more promising now than it did a week ago.

What has been learned from previous global goal setting processes is that building on the momentum for the goal-setting process in 2015 and carrying it directly into the mobilization of national political commitment, resources and policies for implementation is vital. China as a member of the G-20 troika in 2015 through 2017 will be in crucial position of bridging the goal-setting and implementation phases of the new SDGs for 2030 to be adopted at the United Nations in September of next year.

China, as one of the five permanent members of the U.N. Security Council, will be in a pivotal position to create complementarities between the G-20 forum for the major economies and the U.N. as a forum for all countries for this critical period of setting the global sustainability agenda for the next fifteen years.  

The post-2015 agenda for social, economic and environmental sustainability is of high interest to the United States, and the new China-U.S. climate change agreement in Beijing this week augurs well for collaboration between the two countries on the broader agenda. White House Chief of Staff John Podesta was on the high-level panel for the post-2015 development agenda last year, which signals high U.S. policy involvement. The Shanghai Institute for International Studies has argued in a recent paper for the U.N. Development Program that “the G-20 and the U.N. could have certain complementary roles. The development issue could become the one linking the major work of both the U.N. and the G-20.”  

The world should welcome the unique role that China can now play in bringing the international community and the global system of international institutions together in charting a common path forward building on the progress made in the various summits this week. 

How cohesive is the G-20 as a group? Can it be divided along the lines of the West and the BRICS (Brazil, Russia, India, China and South Africa)? At the summit in Brisbane, the G-20 will discuss growth strategies, the gender income gap, development policy, global institutions, energy and other issues. But what about the controversial topics of international order that are not on the agenda?

The Brookings Project on International Order and Strategy addressed these questions in an analysis of the position that each G-20 member state takes on six major international issues—Russia’s invasion of Ukraine, the containment of Ebola in West Africa, the fight against ISIS, Chinese behavior in the South China Sea, nuclear negotiations with Iran and climate change.

Click on the image to expand

Click on the image to expand

A Note on Methodology

In order to gauge the degree of agreement among the G-20 member states in the run up to this weekend’s summit in Brisbane, we chose six issues we thought most likely to provoke strong stances from the member states and which would best reveal areas of consensus or cleavage between the states. These issues were Russia’s actions in Ukraine, efforts to contain the Ebola outbreak in West Africa, the fight against the Islamic State in Iraq and Syria, condemnation of China’s maritime policy in the South China Sea, confidence in finding a diplomatic resolution to the impasse over Iran’s nuclear program, and efforts to slow, reverse or mitigate climate change.

For each of the major issues, we selected two to six common ways in which states have responded (or failed to respond) since the last G-20 summit in St. Petersburg in September 2013. These actions (or non-actions) were then weighted based on their relative significance—for example, on Russia’s actions in Ukraine, a statement of condemnation was weighted 0.25 while the imposition of sanctions was weighted 1. We then graded each state’s position by the sum of their positive and negative (re)actions. It is worth noting here that sums of zero should not necessarily be read as inaction or neutrality, but in some cases may indicate an ambivalent position on an issue. Grades were based upon an analysis of news reports, public statements by government officials, press releases, etc. since the St. Petersburg Summit. Please see appendix for a more detailed explanation of how we assessed each country’s position on each issue and arrived at our conclusions.

As a disclaimer, we acknowledge that by its very nature the tool we are using is imprecise and relies on a degree of subjectivity in grading both the direction and magnitude of G-20 states actions or positions. We do not claim this is a definitive statement of their positions on these issues, but we believe it is useful as a brief, general indication of areas of convergence and divergence between the member states.

Downloads

• How Unified is the G-20?
• Appendix

As the G-20 Summit concluded in Brisbane, Australia on November 16th, it set a target to achieve an incremental jump in global GDP growth of 2 percent by 2018 and made commitments to creating a Global Infrastructure Investment Initiative (GIII) to address an estimated $5 trillion per year in infrastructure needs around the world. 

It is a valid policy idea to expose the gap between current and potential rates of economic growth to the public. That the Australians put the spotlight on this growth gap was the central achievement of their G-20 Summit in Brisbane. It is a contribution to the global effort to energize the global economy and generate both greater and smarter growth. The question is, will it work? 

The gap between potential and actual growth has more to do with the patterns and sources of growth than the rates of growth. It is certainly necessary to continue to use monetary and fiscal policy to stimulate aggregate, demand-driven growth, but it will not be not sufficient.  

The people-problem in global growth has to do with structural obstacles: market dynamics of globalization tend to increase income inequality; technologies can be labor displacing rather than labor absorbing; and the knowledge-economy requires technical skills that are more sophisticated than investment-driven industrialization.  

As a result, the focus is now on structural policies and reforms, an issue on which the OECD has been an international leader. OECD Secretary General Angel Gurria jointly released an OECD report with Australia Minister of Finance Joseph Hockey in February of this year. At the G-20 Summit in Brisbane, Gurria said that it was possible that the global growth effort by the G-20, which the OECD and IMF are monitoring, could “overshoot” the 2 percent target.  

Discussing structural reforms tends to “get in the weeds” quickly, since the details vary by each country’s circumstances—as made clear by Brisbane’s G-20 Action Plan. Going from the Brisbane G-20 Summit to regional, ministerial, and national agendas and actions becomes the next phase in this effort to boost global growth by shifting the patterns and sources of growth. 

A key component in closing the growth gap will be the aforementioned Global Infrastructure Investment Initiative. The GIII is the culmination of a long discussion involving the G-20, the World Bank, the regional development banks, the private sector and others on how to accelerate much-needed investment in infrastructure—globally, and on a scale that can make a difference, especially in an era of fiscal policy constraints.  

The relationship between private and public investment in global infrastructure and other global growth projects is tricky. Just because many governments face reduced flexibility with fiscal policy at the moment does not mean that the responsibility for infrastructure investment can or will or should be picked up by private investors, much less private financial institutions and markets. The public and private sector each have a vital role. One will not work without the other.

Yet rules and norms do have to be worked out to incentivize private investment in infrastructure. This work is well underway and embodied in the Brisbane GIII. Incremental investment in global infrastructure adds up over time, and prudent direction of financing toward the most impactful projects can be a big boost to global growth and directly have an impact on peoples' lives. This is the kind of people-oriented action G-20 leaders were looking for in Brisbane.

Setting incremental “reach goals” is not just a word game or publicity play. It has proven to be a means of mobilizing resources, policies and efforts by diverse actors to stimulate higher-order results than might otherwise have happened. Just engaging in projecting likely growth outcomes can set the bar too low. In fact, all global goal setting is meant to motivate and mobilize momentum for just such incremental efforts. 

Taken together, a combination of structural reforms, infrastructure investment and continued growth-oriented monetary and fiscal policies can make a real difference in boosting global growth. This combination makes the Brisbane target of an additional 2 percent of global GDP growth by 2018 a feasible, even if ambitious, goal.

Event Information

The world’s top economies had much to discuss at the G-20 summit in Brisbane, Australia last month, including reinvigorating global growth, the reduction of trade barriers, financial regulation reforms, and global infrastructure. The G-20 meeting took place at a key time for U.S. international economic policy, as it came on the heels of President Obama’s prior stops at the APEC summit and the ASEAN summit. As the U.S. joins its G-20 colleagues in aiming to boost G-20 GDP by an additional 2 percent by 2018, there remain many questions about how G-20 countries will follow through with the goals set in Brisbane.

On December 3, the Global Economy and Development program and the Economic Studies program at Brookings welcomed U.S. Treasury Undersecretary for International Affairs Nathan Sheets in his first public address since being confirmed in September. Following the recent G-20 meeting, Sheets discussed his perspectives on priorities for international economic policy in the years ahead across key areas including trade, the international financial architecture, and the United States’ evolving economic relationships.

Join the conversation on Twitter using #GlobalEconomy

Video

• U.S. Economic Engagement on the International Stage: A Conversation with U.S. Treasury Undersecretary Nathan Sheets

Audio

• U.S. Economic Engagement on the International Stage: A Conversation with U.S. Treasury Undersecretary Nathan Sheets

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20141203_sheets_international_economic_engagement_transcript

Editor’s Note: In the report “Think Tank 20: Growth, Convergence and Income Distribution: The Road from the Brisbane G-20 Summit” experts from Brookings and around the world address interrelated debates about growth, convergence and income distribution, three key elements that are likely to shape policy debates beyond the ninth G-20 summit that was held on November 15-16 in Brisbane, Australia. The content of this blog is based on the chapter on Latin America. Read the full brief on Latin America's growth trends here.

A figure says a thousand words. And, looking at Figure 1, which shows the population-weighted average income per capita in emerging economies relative to the U.S., there could be no doubt in anybody’s mind that since the late 1990s something rather extraordinary happened—a phenomenon with no antecedents in the post-WWII period—that propelled emerging economies into an exponential process of convergence.

Needless to say, this phenomenon had enormous consequences for the welfare of millions of citizens in emerging economies. It lifted more than 500 million people out from poverty and extreme poverty, and gave rise to the so-called emerging middle class that grew at a rate of 150 million per year.

So, it seems that something rather extraordinary happened in emerging economies. Or did it? Let’s look again. When China and India are removed from the emerging markets sample, Figure 1 becomes Figure 2a.

In Figure 2a, one can still discern a period of convergence starting in the late 1990s. But convergence here was not nearly as strong—relative income is still far below its previous heights—and it occurred after a period of divergence that started in the mid-1970s after the first oil shock, in the early 1980s with the debt crisis, and in the late 1980s with post-Berlin Wall meltdown in Eastern European economies.

This pattern is actually characteristic of every emerging region including Latin America (see Figure 2b). Only Asia differs markedly from this pattern—with China and India displaying exponential convergence since the late 1990s, while the rest of emerging Asia experienced a sustained but much slower convergence since the mid-1960s. 

From a Latin American perspective, the relevant question we need to ask is whether the recent bout of convergence that started in 2004 after a quarter of a century of relative income decline is a break with the past or just a short-lived phenomenon?

In order to address this question from a Latin American perspective, we study the arithmetic of convergence (i.e., whether mechanical projections are consistent with the convergence hypothesis) and the economics of convergence (i.e., whether income convergence was associated with a comparable convergence in the drivers of growth).

According to our definition of convergence,[1] since 1950, growth-convergence-development miracles represent a tiny fraction of emerging countries. Only five countries managed to achieve this: Japan, South Korea, Taiwan, Hong Kong and Singapore. In other words, convergence towards income per capita levels of rich countries is an extremely rare event.

But where does Latin America stand? Based on growth projections for the period 2014-2018, not a single Latin American country will converge to two-thirds of U.S. income per capita in two generations. Unfortunately, the arithmetic does not seem to be on the side of the region.

What about the economics? To answer this question, we analyze whether Latin America’s process of income convergence in the last decade was also associated with a similar convergence in the key drivers of growth: trade integration, physical and technological infrastructure, human capital, innovation, and the quality of public services. Figure 3 illustrates the results.

In contrast to relative income, during the last decade, LAC-7 [2] countries failed to converge towards advanced country levels in every growth driver. The overall index of growth drivers—the simple average of the five sub-indexes—remained unchanged in the last decade relative to the equivalent index for advanced economies. By and large, the latter holds true for every LAC-7 country with exceptions like Colombia (the only country that improved in every single growth driver in the last decade) and Chile (the country in the region where the levels of growth drivers are closer to those of advanced economies). 

Latin America had a decade of uninterrupted high growth rates—with the sole exception of 2009 in the aftermath of the Lehman crisis—that put an end to a quarter of a century of relative decline in income per capita levels vis-à-vis advanced economies. However, high growth and income convergence were largely the result of an unusually favorable external environment, rather than the result of convergence to advanced-country levels in the key drivers of growth. Fundamentally, the last was a decade of “development-less growth” in Latin America.

With the extremely favorable external conditions already behind us, the region is expected to grow at mediocre rates of around 2 percent in per capita terms for the foreseeable future. With this level of growth, the dream of convergence and development is unlikely to be realized any time soon.

To avoid such a fate the region must make a renewed effort of economic transformation. Although the challenges ahead appear to be huge, there is plenty of room for optimism. First, Latin America has built a sound platform to launch a process of development. Democracy has by-and-large consolidated across the region, and an entire generation has now grown up to see an election as the only legitimate way to select national leaders. Moreover, it is for the most part a relatively stable region with no armed conflicts and few insurgency movements threatening the authority of the state. Second, a sizeable group of major countries in Latin America have a long track record of sound macroeconomic performance by now. Third, the region could be just steps away from major economic integration. Most Latin American countries in the Pacific Coast have bilateral free trade agreements with their North American neighbors (11 countries with the U.S. and seven countries with Canada). Were these countries to harmonize current bilateral trade agreements among themselves—in the way Pacific Alliance members have been doing—a huge economic space would be born: a Trans-American Partnership that would comprise 620 million consumers, and have a combined GDP of more than $22 trillion (larger than the EU’s, and more than double that of China). Were such a partnership on the Pacific side of the Americas to gain traction, it could eventually be extended to Atlantic partners, in particular Brazil and other Mercosur countries.

In the last quarter of a century democracy, sound macroeconomic management and an outward-looking development strategy made substantial strides in the region. If these conquests are consolidated and the same kind of progress is achieved in key development drivers in the next 25 years, many countries in the region could be on the road to convergence.

[1] We define convergence as a process whereby a country’s income per capita starts at or below one-third of U.S. income per capita at any point in time since 1950, and rises to or above two-thirds of U.S. income per capita.

[2] LAC-7 is the simple average of Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, which account for 93 percent of Latin America’s GDP.

Editor's Note: The paper is part of a book entitled, “The G8-G20 Relationship in Global Governance.”

Future global growth faces many challenges. The first is securing economic recovery from the global financial crisis and reviving strong growth. The euro area has experienced a double-dip recession. Growth remains subdued in other advanced economies. Emerging economies (including the BRICS countries of Brazil, Russia, India, China, and South Africa, as well as other major emerging economies) had been the driver of global growth, accounting for almost two thirds of global growth since 2008, but in 2013 they too were experiencing slowing growth. The second challenge is sustaining growth. Many countries have large and rising public debt, and face unsustainable debt dynamics (International Monetary Fund [IMF] 2012). Environmental stresses put the longer-term sustainability of growth at risk. The third challenge is promoting balanced growth. Large external imbalances between countries — China's surplus and the U.S. deficit being the most notable — put global economic stability at risk and give rise to protectionist pressures. Unemployment has reached high levels in many countries, and there are concerns about a jobless recovery. And economic inequality within countries has been rising. More than two thirds of the world's people live in countries where income inequality has risen in the past few decades.

Thus, promoting strong, sustainable, and balanced growth is central objective of the Group of 20 (G20). A core component of the G20 is the Working Group on the Framework for Strong, Sustainable, and Balanced Growth. Yet G20 policy actions since the onset of the global financial crisis in 2008 have focused mainly on short-term crisis response. Economic stabilization is necessary and risks to stability in the global economy, especially those in the euro area, call for firm actions to restore confidence. However, short-term stabilization only buys time and will not produce robust growth unless accompanied by structural reforms and investments that boost productivity and open new sources of growth. To be sure, several G20 members have announced or are implementing structural reforms. But the approach to strengthening the foundations for growth, meeting the jobs challenge, and assuring the longer-term sustainability of growth remains partial and piecemeal. Some elements of an approach are present, but the unrealized potential for a coherent and coordinated strategy and effort is significant. The G20 needs to move beyond a predominately short-term crisis management role to focus more on the longer-term agenda for strong, sustainable, and balanced growth. 

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The flight of humans from Syria has been rapid, massive and dynamic. The number of refugees has grown from 26,000 in the first year of the war to almost 4.2 million now, four years later. It is time for bold action from the world to support Turkey and the other countries of the region hosting the vast majority of refugees.

None of Syria’s neighbors – the primary hosts of refugees – expected the displacement to reach such a scale, nor for the crisis to last this long. Many believed in the early days of the Arab Spring that the oppressive regime of Bashar al-Assad would be replaced by a reformist-minded, popularly-elected government - mirroring the transition that had just taken place in Tunisia and Egypt. Instead, Syria became mired in a civil war between an ever-growing number of opposition groups and the regime, whose repression of civilians, regardless of any involvement in the crisis, has forced millions to flee in terror on either side of the country’s borders.

Until recently, the overwhelming majority of the refugees were fleeing the indiscriminate attacks of the Syrian government. More recently, ISIS has been a significant source of terror, while even more recently Russia’s entry into the conflict has triggered another wave of flight.

Today, the refugee populations registered in Lebanon, Jordan and Turkey total more than 4 million souls. Managing the presence of such large numbers of refugees has been costly on host countries economically, socially and politically. What was expected to be a temporary refugee influx has become a protracted crisis. With no signs of a resolution of the conflict in the foreseeable future, the refugees’ hope to return is diminishing.

The massive influx of refugees into Europe, often via extremely costly and life-threatening channels, reflects the despair and harsh living conditions that many refugees feel. Syrians constitute the majority of the 800,000 migrants that have crossed into Europe this year. As the crisis spills beyond Syria’s immediate neighbors, the EU is experiencing major challenges in managing a response. It is clear that attending to refugees is not only a concern of the immediate neighborhood – but that of a much wider region.

In looking at the challenges to Europe, it is important to underscore that neighboring countries have shouldered most of the burden of caring for the refugees, with inadequate assistance from the international community. Resettlement has been extremely limited, and roughly only a third of the pledges to U.N. response plans have been met.

Now is the time to adopt a comprehensive approach that will offer a better future for refugees and their hosts. Attention must be paid to two areas in particular: Education and access to employment. In this regard, it will be critical to move beyond a strategy focused on humanitarian relief to one explicitly structured around sustainable development and empowerment of refugees.

We need a globally-funded Recovery Program for the Middle East that brings about immediate action to mitigate the impact of the crisis on the economies and services of Syria’s neighbors. As part of that, we need to recognize the skills and income that refugees could contribute to the Turkish economy, if they were only allowed to do so. This program could not be carried out by the Turks alone, but would need the engagement of a range of actors – from the U.N. to the World Bank to the private sector and other donors.

Turkey and its neighbors have generously cared for more than 4 million refugees: But as the displacement crisis enters its fifth year, this burden needs to be shared out much more fairly and effectively.

Sadly, despite the desperate need for peace in Syria, we need to respond to the reality that Syrian refugees will not be able to return home for a while yet. As simultaneously the host of the world’s largest Syrian refugee population as well as host to the G-20 Summit, Turkey is in an ideal position to bring this reality to the attention of G-20 member-states – and leverage more resources to assist it and its neighbors to cope with the crisis.

G-20 leaders must commit to sharing Turkey’s burden and place increased emphasis on empowering refugees to shape their own destinies and become productive members of their host societies.

And it must be remembered: The majority of Syrians want to go home. Eventually they want to be able to contribute to rebuilding a stable and democratic nation for themselves and their families. But peace cannot be served while al-Assad drops barrel bombs on his people and ISIS beheads journalists on the steps of Palmyra. Our leaders must focus on a sustainable political solution to this conflict as the end goal of any plan for the region.

This piece was originally published by Hurriyet Daily News.

The tragic and deadly attacks in Paris, the day before leaders were set to arrive in Antalya, Turkey, for the G-20 summit, underlined the divisions that Syria, its fleeing population, and the terrorists of ISIS have created, as fear and short-term political calculations seem to shove aside policies aimed at sustainable solutions to the unprecedented refugee challenge.

It had started on a more hopeful note. Turkey, which chairs the G-20 this year, had placed the refugee issue on the agenda, hoping for a substantive global dialogue while looking for broad-based solutions to the crisis in Syria and the terrorism challenge. No doubt the 2 million refugees in Turkey played a big role, as President Erdogan and other officials tried to rally support for this unusual situation in a variety of G-20 and other venues.

Turkey was supported by another full member of the G-20, the EU, the only non-nation state member of the group, which shrugged off its complacency when hundreds of thousands turned up on its shores in 2015. European Council President Donald Tusk and Jean-Claude Juncker, European Commission president, echoed the Turkish President in calling for a global response: “Meeting in Turkey in the midst of a refugee crisis in Syria and elsewhere, the G-20 must rise to the challenge and lead a coordinated and innovative response… recognizing its global nature and economic consequences and promote greater international solidarity in protecting refugees.”

The G-20 is an imposing group, consisting of the world’s 20 largest economies, accounting for 85 percent of its GDP, 76 percent of its trade, and two-thirds of its population. Established in 1999 and growing in reach since the 2008 financial crisis, it should be a body that carries weight beyond the economic, with effective mechanisms to have impact on the global agenda. Yet, while Syria and the refugee crisis was the first time the G-20 stepped outside its usual narrower economic mandate, the agenda was quickly overtaken.     

The tragedy in Paris highlighted deep divisions over the refugees. Poland’s new government was the first to announce that it would stop participating in the EU resettlement plan whereby it would have accepted 5,000 refugees. Politicians from Hungary, the Czech Republic, Slovakia as well as those with a nativist message from the Nordic countries, France, Germany, and others saw an opening for tighter border controls and a much less welcoming approach to the more than 800,000 refugees that have already made their way into Europe, not to mention the many more on the way. Such views linking refugees to terrorism are not restricted to Europe but can be seen on the other side of the Atlantic, as U.S. presidential candidates and some 27 State Governors declared that Syrian refugees were not welcome.

At this early date, except for a single Syria passport “holder”—a document easily acquired these days, and found near one of the suicide bombing sites in Paris—all those who died or are being sought as suspects are citizens of either France or Belgium. Clearly, there could be some who get into Europe by using the refugees as a cover but with literally thousands of Europeans fighting in Syria, the real threat emanates from the small number of home-grown extremists in Europe who have easy access to the West and a cultural and linguistic familiarity that will elude newcomers for years. This was the same scenario one saw in the Madrid, London, Copenhagen, and the Charlie Hebdo attacks in Paris earlier this year. 

Fear is winning out over policy

The EU also appears in disarray on aiding the 4 million refugees in Jordan, Lebanon, and Turkey. This is significant since it is reduced funding and aid that is leading to the worsening of conditions in Jordan, Lebanon, and Syria, and driving many to Europe. Turkey too is reaching its limits and may potentially face a million or more new refugees if Aleppo falls. Yet funds pledged to these countries remain largely unfulfilled—of the 2.3 billion euros pledged by EU governments, only 486 million are firm government offers. The discussions between the EU and Turkey for additional aid to refugees of 3 billion euros also remain less-than-certain since such aid requires that EU countries agree to receiving and distributing asylum-seekers from Turkey. It also underlines the lack of funding for Jordan and Lebanon.    

In the end, the G-20 yielded little by way of concrete actions on refugees, though additional border controls, enhanced airport security, and intelligence sharing were promised. There was a call for broader burden sharing and greater funding of humanitarian efforts, as well as a search for political solutions. The G-20 also added little to the broad outlines of a potential settlement on Syria discussed in Vienna, Austria, on November 14, 2015, a day before the start of the G-20 summit.

Unfortunately, these are the very things that separate G-20 members among and within themselves. The growing danger is that fear and political opportunism rather than well-thought-out polices will guide the global response to the greatest human displacement tragedy since World War II. It is precisely this fearful and exclusive reaction that ISIS seeks. Indeed, that legacy may live long after ISIS is gone.                           

For the past several years, international affairs have been analyzed through two lenses. One lens has focused on geopolitics: in particular, the question of how great power relations are evolving at a time of redistribution in the world’s economic and now also political power. The second lens considers the framework of global governance, especially the question of whether or not the existing formal and informal institutions have the tools and the ability to manage complex global challenges.

China's presidency of the G-20 bridges the issues of global governance and great power relations. At a basic level, the G-20 will set a tone for how major powers attempt to tackle the challenges that confront us all.

China’s assumption of the G-20 chairmanship in 2016 marks an important symbolic threshold. It is the first time a major non-Western power will chair the world’s premier body for international economic cooperation—not to mention one of the world’s most important geopolitical bodies, as well. China’s presidency comes at an important time in the substance of the G-20’s agenda, too, as a slowing Chinese economy is integral to the dynamics of an overall slowing global economy. As such, this event offers an opportunity to reflect on geopolitics and global governance—and the way forward. In short, what is the state of international order? 

Heading down a bumpy road?

There is little doubt that we are at an important inflection point in international order. For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding. We risk the rise of a lose-lose international system, encompassing a deterioration of the security relations between great powers, and a breakdown of the basic structures of international cooperation. 

That may be the worst-case scenario, but it is a plausible one. Countries must be vigilant about preventing this outcome. Even though the established powers and the so-called emerging powers (clearly China is an emerged power) may not hold the same views about the content of international order, all sides have a stake in pursuing intense negotiations and engaging in debate and dialogue. It is imperative that parties find a middle ground that preserves key elements of the existing order while introducing some degree of adaptation, such that this order does not collapse.

For the past 25 years, the international system—with its win-win economic structures—has been relatively stable. But this order is under challenge and threat, and it is eroding.

A version of this kind of negotiation may occur later this year. Japan’s presidency of the G-7 will begin just ahead of China's presidency of the G-20, putting important issues into sharp relief. As the older, Western-oriented tool for managing global issues, the G-7 still focuses on global economics but increasingly tackles cross-cutting and security issues. The G-20 is the newer, multipolar tool through which both emerged and emerging powers collaborate—but, so far, members have limited their deliberations to economic issues. The two processes together will reveal the tensions and opportunities for improvement in great power relations and in geopolitics. 

Of particular note is where political and security issues fall on the dockets of these two bodies. Although the G-20 did tackle the Syria crisis at its St. Petersburg meeting in 2013, political and security issues have otherwise not been part of the group’s agenda. But these topics form an important part of the landscape of great power politics and global governance, and they are issues for which we find ourselves in very difficult waters. Tensions between the West—particularly Europe—and Russia are running high, just as disputes are mounting in Northeast Asia. The question of America’s naval role in the Western Pacific and China’s claims of a nine-dash line are serious flash points in the U.S.-China relationship, and we should not pretend that they are not increasingly difficult to manage, because they clearly are.

I believe it is shortsighted for the G-20 not to take up some of these tense security issues.

These are not part of the formal agenda of the G-20, but they should be. Although many economists may disagree with me, I believe it is shortsighted for the G-20 not to take up some of these tense security issues. The group’s argument has been to focus on economic issues, for which there are shared interests and progress can be made, which is a fair point. But history tells us that having difficult, tense issues involving a number of stakeholders leads to one of two scenarios: either these issues are managed in a credible forum, or tensions escalate and grow into conflict. There is no third option. Moreover, these are not issues that can be resolved bilaterally. They have to be settled in a multilateral forum.

In 2016, Japan will take up the issue of the South China Sea in the G-7—a scenario that is far from ideal, since key stakeholders will not be present. Even so, the G-20 refuses to take up security issues, leaving countries without an inclusive forum to deal with these tense security concerns. Of course, they could be raised in the U.N. Security Council, but that is a crisis management tool. We should be building political relations and involving leaders in preventing great power conflict, all of which, by and large, does not happen at the U.N. But it could happen at the G-20. 

With great power comes great responsibility

A better dynamic is at work with respect to the issues of climate change and global energy policy. The Paris climate accords are counted as a major breakthrough in global governance. To understand how the outcome in Paris was achieved, we have to look again at great power relations. What really broke the logjam of stale and unproductive negotiations was the agreement struck between President Xi and President Obama. Their compact on short-lived climate pollutants transformed the global diplomacy around climate change, yielding the broader agreement in Paris.

[G]reat power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs.

Why did the U.S.-China agreement on climate change facilitate the Paris climate accords? The United States and China did not impose a framework, nor did they insist on a particular process or stipulate a set of rules. What they did was lead. They acted first and they absorbed costs. This is the essence of the relationship between great power politics and global governance.

Great power status confers a certain set of privileges, not least of which is a certain degree of autonomy. To that end, the United States has avoided multilateral rules more than other countries, and other countries may aspire to that status. But the larger point is that great power status primarily entails a responsibility to act first in resolving tough global challenges and absorbing costs. That is how great powers lead through a framework of global governance. In today’s world, where global governance will necessarily be more multipolar than in the past, we have to find new approaches to sharing the burdens of moving first and absorbing costs. That is, far and away, the most likely way to maintain a relatively stable but continuously adapting international order—one that is empowered to tackle global challenges and soothe geopolitical tensions.

INTRODUCTION

U.S. public diplomacy with Cuba — or the United States engaging with Cuban public opinion — is an intriguing subject. The principal reason for this is because it has never been tried. There was no attempt before the 1959 Revolution because the United States had no need to convince the Cuban government and people of why the United States mattered to them. In almost every aspect of life it was impossible to conceive of Cuba without the United States. Fidel Castro’s Revolution changed that. And since the Revolution, the Castro regime has carefully molded the United States as the arch enemy of the Cuban people. Successive U.S. administrations have made little effort to banish that impression while U.S. public diplomacy has been largely aimed at the Cuban-American exile community.

The public diplomacy challenge for the United States with Cuba is exciting but also formidable. The Cuban Government has had many years experience of controlling access to information and shackling freedom of expression. The public diplomacy messages that the United States will send will be distorted and blocked. Nevertheless there are growing signs that Cubans on the island are accessing new technologies so information does get through, particularly to residents of the major cities. Expansion of people-to-people exchanges and a lifting of the travel ban on ordinary Americans would greatly assist any public diplomacy campaign. But public diplomacy can start without this and the Cuban government’s capacity to block messages is no argument for not transmitting them.

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Introduction:  The sinking of the Deepwater Horizon drilling platform and the resulting discharge of millions of gallons of crude oil into the sea demonstrated graphically the challenge of environmental protection in the ocean waters shared by Cuba and the United States.

While the quest for deepwater drilling of oil and gas may slow as a result of the latest calamity, it is unlikely to stop. It came as little surprise, for example, that Repsol recently announced plans to move forward with exploratory oil drilling in Cuban territorial waters later this year.

As Cuba continues to develop its deepwater oil and natural gas reserves, the consequence to the United States of a similar mishap occurring in Cuban waters moves from the theoretical to the actual. The sobering fact that a Cuban spill could foul hundreds of miles of American coastline and do profound harm to important marine habitats demands cooperative and proactive planning by Washington and Havana to minimize or avoid such a calamity. Also important is the planning necessary to prevent and, if necessary, respond to incidents arising from this country’s oil industry that, through the action of currents and wind, threaten Cuban waters and shorelines.

While Washington is working to prevent future disasters in U.S. waters like the Deepwater Horizon, its current policies foreclose the ability to respond effectively to future oil disasters—whether that disaster is caused by companies at work in Cuban waters, or is the result of companies operating in U.S. waters.

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Editor's Note: During an appearance on the Platts Energy Week program, Mark Muro discussed jobs in the green sector, using findings from the "Sizing the Clean Economy" report.

Host BILL LOVELESS: Green jobs – what are they? And can they make much of a contribution to the economy? It’s an ongoing debate in Washington, and the rest of the U.S. for that matter, and it’s a knotty one because defining the term “green jobs” is difficult.

But now the Brookings Institution has taken a crack at it with a new report, “Sizing the Clean Economy.” One of the authors, Mark Muro, with the Brookings Metropolitan Policy Program, joins me now. Mark, do you think you’ve defined, once and for all, what the clean economy is?

MARK MURO: The answer to that is “no.” This has been an ongoing discussion for decades, really. On the other hand, I do think that we have done is tried to embrace good precedents, good sensible precedents from Europe. The European Statistical Agency comes at it similar to the way we did. But we’ve also anticipated where the Bureau of Labor Statistics, here in the U.S., will be next year when it offers our first U.S. official definition.

LOVELESS: A summer preview, maybe. I know the Bureau of Labor Statistics is working on that. Should this report ... tell me a little bit about this report — where the jobs are and should this in any way change the way we look at green jobs.

MURO: I think one thing that comes from this is that it’s a broad swath of, sometimes not very glamorous, industries that are very familiar. Wastewater, mass transit – those are properly viewed as green jobs because they take pressure off the environment. They keep our environment clean.

Watch Mark Muro's full interview with Platts Energy Week »