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The Review of the Resident Coordinator System: Give UNDS reform a chance!

21. Juli 2021 - 14:00

Photo by hibino on Flickr (altered),

These days, the United Nations (UN) General Assembly is tasked with fine-tuning a centrepiece of the reform: the strengthened Resident Coordinator system – key driver of a more cohesive UN Development System (UNDS) working towards a common agenda. Negotiations have yet to reach a break-through.

A Resident Coordinator (RC) leads a UN Country Team – on average 18 UN entities – in a given programme country. The reform delinked the RC system from the UN Development Programme (UNDP) and invigorated the authority and neutrality of RCs. During the Covid-19 pandemic, many RCs have enabled and enriched the UN’s response; they have been useful beyond the amount of resources they command, due to their convening powers and the ways they can orchestrate change, bridge the peace and development nexus, and liaise with external actors. Many have stood up for human rights, gender equality and the principle of ‘Leaving no one behind’, demonstrating the value of a strong multilateral development actor that can use the considerable trust of developing countries for promoting the 2030 Agenda in all its facets.

The RC system is set out as the centre of gravity in the ongoing exercise to reposition the UNDS. UN member states decided in 2018 on a set of far-reaching measures to make the UNDS greater than a sum of its parts and fit for the requirements of the 2030 Agenda. The objective is to offer more sophisticated services, policy and normative support that leverages the full breadth of the system’s capacities. This is not an easy task in a very heterogeneous system that comprises entities as diverse as the World Health Organization, UNDP, or the Office of the High Commissioner for Human Rights, with partially or completely independent governance arrangements, unreliable funding structures, big differences in size, and overlapping activities.

In the current negotiations, as most important task, parties must agree on how to reliably foot the bill for the 130 Resident Coordinators, their strengthened offices, as well as support structures at regional and headquarter level. The current hybrid funding model (consisting of contributions by UN entities, a 1 percent levy on earmarked resources, and a trust fund for voluntary contributions by member states) does not provide a sound basis. For 2021, a funding gap of US$ 58 million is projected.

The UN Secretary-General therefore –as already in 2018 – proposed to fund the costs of altogether US$ 281 million annually through assessed contributions, or at least a rather small portion (US$ 154 million) thereof. Assessed contributions are mandatory payments by all UN member states in line with their capacity to pay. They would provide greater predictability and distribute the costs of the vital RC function across the UN membership, thereby ensuring better ownership. Assessed contributions would also firmly place sustainable development at the heart of the organisation and on par with the UN’s peace and security and human rights functions.

So far, important member states are opposed to or not yet fully supportive of introducing assessed contributions, even for such as relatively small amount. Nor have they come up with viable alternatives. Should member states fail to agree on a significantly improved funding model, the chances of success for the UNDS reform will be significantly diminished. RCs and their support staff would be weakened in their ability to pull the system together, and resistance from within the UNDS against the reform would increase. Three considerations should inform the negotiations.

1. UNDS reform deserves a chance

So far, the reform is showing progress. More than two years into the reform, the Secretary-General’s RC Review report is an impressive compendium of the multifaceted efforts in terms of legal, institutional, staff-related, programmatic, and operational changes. An analysis by the Multilateral Performance Assessment Network describes the RC system as one of the reform areas that has seen most progress. This chimes in with key positive findings from the first system-wide early lessons study on the UN’s socio-economic response to the COVID-19 pandemic. Yet, the actual impact on delivering on common objectives e.g. through integrated policy advice is less clear. The RC review lists some positive examples, as does our own research which however concludes that a broad repositioning of functions has yet to take place. A UNU CPR report echoes this, detailing the challenges for the UNDS to effectively address environmental crises. While success depends on many factors, all in all, reform measures do address the right levers and need to be reinforced.

2. UNDS Reform demands behavioural change also from member states

Secretary-General Guterres uses his political weight to make UN entities align. Yet, his power remains limited in a system of semi- or fully-autonomous entities and a system-wide share of roughly 80 per cent earmarked funding. Member states command both, the carrots, in form of funding, and the sticks, in form of governance. They can demand support and provide funding through RCs, or can continue to deal with individual agencies. They can demand and fund complex, integrated policy support – or short-term services. The UNDS remains fragmented, and longstanding relations between states and individual UN entities make it hard to follow through on reform commitments articulated in New York.

Funding is a central risk to the reforms. As important as a secure funding for the RC system is an overall shift towards a higher quality of funding. Contributions to the Peacebuilding Fund, the Joint SDG Fund or other pooled funds incentivise cooperation. While the UN system showed overall good progress in implementing its commitments of the Funding Compact, member states lag behind in their commitments to provide a higher quality of funding.

3. A half-hearted solution to funding the RC system will reinforce reform resistance

The reform changes power within the UNDS. Our research saw that some staff and entities fear losses – loss of access to government or funders, visibility, the ability to fully implement their mandate. This is particularly true for larger UN entities. They shoulder a greater burden of coordination costs, individually enjoy strong support from contributing countries, and might calculate that in the long run, they stand a chance of ‘going it alone’. All reform studies underline that the reform is still fragile. Despite nascent structural changes, competition about visibility, mandates, and funding persists. For the reform to succeed, entities need to subscribe to the new model, in which collective objectives (not necessarily joint work) clearly take precedence. Many UN entities have adjusted their policies to reform requirements – across areas ranging from business practices to job descriptions and staff appraisals. However, staff incentives for raising the profile of individual entities still compete with or even trump a more coherent, synergetic approach. In this concoction, whatever member states decide will send signals to laggard UN entities: they encourage resistance or reform.

What next?

Funding coordination is never appealing, least so during a pandemic with high domestic costs. However, investments in the RC System go beyond mere coordination and promise increasing returns. The urgent need to accelerate sustainability transformations calls for a politically empowered UNDS able to work much better across organisations and sectors.

Member states should do their part in supporting a more cohesive UNDS. They should improve the current funding model of the RC system and thereby support the repositioning efforts. Assessed contributions would be a clear sign that states step up to their collective responsibility. Subsequent UN budget negotiations may become affected by the ongoing geopolitical struggle over influence. Assessed contributions however provide clearer limits to unilateral influence than voluntary funding. Negotiators should use the only formula member states ever agreed on for sharing the burden of funding truly collective tasks. If the UN is to become more relevant in managing transnational threats, this is the way to go. Member states: focus on the big picture!

Der Beitrag The Review of the Resident Coordinator System: Give UNDS reform a chance! erschien zuerst auf International Development Blog.

The EU’s Carbon Border Adjustment – proceed with caution

14. Juli 2021 - 14:00

Today, the European Commission presented its “Fit-for-55” proposal which includes a Carbon Border Adjustment Mechanism (CBAM). The CBAM would impose a levy on imports into the EU based on their CO2 content from 2023. As part of the European Green Deal, Commission President von der Leyen had announced this instrument two years ago in order to be able to implement more ambitious climate policy targets without energy-intensive sectors shifting their emissions abroad (carbon leakage). Following the Commission’s proposal, the CBAM must now be spelled out in detail by the EU member states and the European Parliament. Going forward, it is key to ensure that the CBAM is effective in fighting climate change, that it is WTO compatible and, above all, that it has as few ramifications as possible for foreign policy and for developing countries in particular.

International perceptions of the EU CBAM?

With its initiative, the EU is sending clear signals to the outside world. The EU wants to position itself once again as a global leader in climate policy in the run-up to the COP26 in November. On the international stage, however, numerous negative reactions to the EU initiative emerged – to the European Green Deal and to carbon border adjustments specifically. Several sceptical readings of the CBAM exist. One is that the EU wants to introduce the tool to improve domestic competitiveness. Another reading is that the EU ignores potential negative consequences for imports from small and poor countries. And lastly, the perception is that the EU is mainly interested in filling its coffers with the CBAM.

In light of the EU proposal, these concerns from partner countries are at least partially justified. The coming weeks and months will tell to what extent the EU will address them.

How to improve the EU CBAM

How could the EU CBAM be improved? We see the following three entry points as particularly important.

First: In the legislative process, the main purpose of the CBAM, namely climate protection, has to remain in focus and also be communicated internationally. The draft extends the existing EU emissions trading system by requiring importers to pay the actual EU CO2 price for goods purchased abroad in five sectors (steel, cement, electricity, fertilizer and aluminium). The data base on embedded CO2 is collected both from emissions data abroad and from default values. This approach requires a willingness to cooperate and has to be embedded in climate policy cooperation with the countries of origin.

Second, the EU has to ensure that poor countries are not negatively affected by the CO2 border adjustment. This is required both by the principles of the Paris Agreement and the special World Trade Organization rules for Least Developed Countries (LDCs). LDCs who supply very small amounts of energy-intensive goods to the EU should thus be excluded from the CBAM. This can be implemented simply by “de minimis“ clauses that relate to the quantities traded or by negotiating exemptions for particular countries.

Third, the EU should earmark most of the revenue from the CBAM for climate policy purposes in third countries. The focus should be on investments to decarbonise the five sectors covered by the CBAM in emerging and developing countries. Possible ways forward for revenue recycling include establishing investment funds or setting up bilateral climate partnerships.

The essential role of international cooperation

As international cooperation is key to the success of a CBAM, the EU has to address the concerns of partner countries. It needs to reflect on points from partner countries, and understand the Green Deal as a truly global deal. To this end, the European Commission, the European Parliament and the Member States have to consider basic fairness principles, impacts on the poor countries and engage in intensive discussions with major trading partners. Complementing the CBAM proposal with global diplomatic efforts, explaining the approach and negotiating details of application are crucial for its success. Only then will it be possible to prevent trade sanctions and further strengthen the EU’s claim to leadership in climate policy.

Der Beitrag The EU’s Carbon Border Adjustment – proceed with caution erschien zuerst auf International Development Blog.

The G7 Cornwall Summit – Glass half empty or half full?

16. Juni 2021 - 15:16

This year’s G7 summit concluded on 13 June with the release of a 25-page leaders’ communique containing 70 paragraphs.  And yet the summit has been criticised by global health and climate campaigners (including Gordon Brown, the UK’s former Prime Minister) for failing to rise to the unprecedented challenges the world now faces.  How fair is this criticism, and is there anything the UK summit hosts might have done differently to avoid it?

At the outset, we should celebrate the extraordinary contrast between the Cornwall summit and the experience of the G7 over the past four years while President Trump was in the White House. G7 summits had become increasingly difficult, with enormous energy spent by US allies on simply trying to preserve values and philosophies that had previously been taken for granted.  In 2018, President Trump disowned the leaders’ communique shortly after it had been signed. In 2020, the US G7 presidency did not host a formal Summit, even in virtual format, despite the unprecedented challenges facing the world.

By contrast, at Carbis Bay, with President Biden in the US seat, the G7 leaders clearly stated their support for multilateralism (unthinkable with President Trump) and their determination to reform and strengthen international organisations such as the World Health Organization (WHO) and World Trade Organization (WTO).

Moreover, meetings under the UK Presidency had already overseen a wide range of specific commitments: on financial contributions to the global vaccine initiative, ACT-Accelerator (in February); on making the G7 countries net zero as soon as possible and by 2050 at the latest; on ending new direct government support for unabated international coal power generation by the end of 2021; on pushing for a minimum global corporation tax and a new distribution of taxing rights in the Global Tax Forum of the Organisation for Economic Co-operation and Development (OECD); and on supporting a new allocation of 650bn Special Drawing Rights (SDR), the international reserve currency of the International Monetary Fund (IMF).

And the final leaders’ statement contained an enormous amount of qualitative detail on steps the G7 would be taking to tackle global health threats and climate change as well as other less high profile but potentially very important steps to safeguard core G7 interests.

Crucially, though, the leaders’ declaration lacked concrete quantitative commitments going beyond those that had already been made. The main exception was the commitment to donate an additional 1 billion vaccine doses to the poorest countries (making a total of 2 billion doses the G7 has funded or donated since the pandemic began). This represents about 20% of total global need, assuming a 60% vaccination rate.  But the pace of delivery to those in need is painfully slow and ACT-A continues to face an $18bn funding gap.  And despite a renewed commitment to the $100bn per year of climate finance for developing countries enshrined in the Paris Agreement, there was no further detail on the specific contribution the G7 would make towards this.

But despite these apparent short comings, the overall results of the UK Presidency should be judged a respectable outcome – i.e. the glass is half full.   There are three reasons for this more positive view.

First, the UK Presidency should be judged on all the results delivered so far, not just on what has been freshly announced at the Summit.  The UK might have been wise to hold back more announcements for the leaders’ event (rather than allowing them to be announced at preceding ministerials), though internal politics often makes this difficult.  And it would also have been advisable to follow the rubric of “under promising and over delivering” rather than the reverse as seemed inevitable once Prime Minister Johnson had promised that the G7 would “vaccinate the world”.

Second, in response to the argument that the Summit failed to live up to the scale of the challenges the world now faces, the UK Presidency has argued that many of the key commitments will need to be delivered at events later this year – the G20, WTO ministerial and COP26 etc.  This is not on the face of it unreasonable.  And it is possible that there is more agreement privately within the G7 on what will need to be done than has been publicly revealed.  But if this is the case, they would have done well to follow their own example of global tax reform – that is put on the table now what they are prepared to do contingent on others acting, and invite others in the G20 and more widely to follow suit.  Such an approach would be consistent with the G7’s role today as a highly influential actor, but not the dominant force, in global economic decision making.

Third, there are a wide range of issues in the leaders’ statement, on which the G7 has set out steps which are specifically about protecting G7 interests and values in competition with other economic powers.  These range from cooperation in investment screening to enhancing digital governance based on western values to preventing carbon leakage through trade. However, these have been given little profile, probably because a majority of G7 members (though apparently not the US) felt it would be counterproductive vis-à-vis other goals (e.g. cooperation with China on tackling climate change) to give them more emphasis.  This means that this part of the UK Presidency’s achievement is underweighted in public perceptions.

But even if one takes the view that the glass is half empty, and the UK should have done more with the opportunity the G7 Presidency offered, the Summit does clearly demonstrate once more the importance of the G7, not as the dominant economic decision maker it was when first founded more than forty years ago, but as a highly influential group for coming up with global solutions to global problems and safeguarding western interests and values. Next year’s German G7 Presidency will have a very full agenda.

Der Beitrag The G7 Cornwall Summit – Glass half empty or half full? erschien zuerst auf International Development Blog.

Supporting South-South cooperation: Three things the UN should keep in mind

2. Juni 2021 - 11:40

This week, the United Nations (UN) High-Level Committee on South-South Cooperation convenes in New York City, and virtually. For the first time in five years, member state representatives and UN officials gather in this setting to review and advise on how the UN system engages with South-South and triangular cooperation. This contribution discusses recent developments and suggests that delegates should encourage stakeholders to

  • be more explicit about what they mean by South-South cooperation;
  • carefully explore ways to expand UN engagement with triangular schemes; and
  • ask UN entities to focus more explicitly on what South-South stakeholders need and want.

South-South cooperation at the UN: an expanding and diverse agenda

For decades, the UN High-Level Committee on South-South Cooperation has accompanied efforts to expand space for collaboration among developing countries. It has a mandate to review, as well as discuss actions required to strengthen or expand, South-South and triangular cooperation within the UN system. The upcoming session was repeatedly postponed, and a lot has piled up since the last High-Level Committee meeting in 2016.

Delegates gather this week to debate issues that are more visible – and arguably more relevant – today than ever before. Over the past five years, UN member states have gone through several rounds of reporting on implementing the Sustainable Development Goals, with South-South cooperation as a prominent means of implementation. The UN development system has entered one of its most ambitious reform processes, where South-South cooperation is closely connected to the strengthened emphasis on cross-border work. The 2019 UN Conference on South-South Cooperation in Buenos Aires, also referred to as “BAPA+40”, has put forward an updated UN reference for South-South cooperation. Inspired by BAPA+40, and under the leadership of the UN Office for South-South cooperation, UN entities have drafted the first system-wide strategy for South-South and triangular cooperation. The Covid-19 pandemic, in turn, has generated new sets of international collaboration and coordination challenges, with hopes turning towards Southern solidarity and South-South (emergency) support schemes also, but not only, with regard to China.

The expanding clout of South-South cooperation has left a visible but uneven mark on organisational structures at the UN. As I have shown in a recently published paper, institutional efforts to mainstream engagement with South-South cooperation have led to mixed results. Some UN entities, including the Food and Agriculture Organisation and the World Food Programme, have consistently solidified and expanded their support for South-South cooperation. Other entities, however, have engaged with South-South schemes on a more ad-hoc basis, while yet others still do not have a South-South focal point, let alone a related strategy or budget. Although the system-wide strategy the High-Level Committee is set to endorse represents an inter-agency effort to streamline the UN’s role in South-South cooperation processes, considerable differences among entities are likely to remain.

A key role for delegates at the High-Level Committee thus consists in charting paths towards the future. As an inspiration for UN officials and member state representatives, there are at least three issues decision makers should keep in mind:

1. Be explicit about definitions and meanings

Official UN definitions of South-South cooperation are broad and allow for a variety of interpretations and operationalisations. Among stakeholders there is no explicit agreement on who belongs to the South, what exactly counts as South-South cooperation, and how South-South cooperation should be reported on. The position of the UN development system in these processes lacks clarity. What role should UN entities play with regard to South-South schemes? Do they see themselves primarily as supporting South-South cooperation or is their engagement as multilateral bodies, by definition, part of a triangular relationship?

These questions arguably will not be settled once and for all, and they do not need to be. The variety of existing approaches and understandings can make the South-South space an innovative and exciting one. For exchange across borders and institutional silos to bear fruit, however, underlying assumptions need to be addressed – not only to better report on South-South initiatives but also evaluate and show to different audiences why South-South cooperation matters. The recent expansion of South-South spaces requires an even more deliberate and explicit focus on definitions and meanings in order to enable meaningful collaboration and coordination, within and between organisations.

2. Carefully explore triangular cooperation

The UN defines triangular cooperation as cooperation among Southern countries facilitated by a multilateral body or traditional donor. Triangular cooperation has received the most prominent embrace so far in the 2019 BAPA+40 outcome document; and UN stakeholders across the board – including the UN Office for South-South Cooperation – are interested in expanding their engagement with triangular schemes.

A growing number of both Southern and traditional donor countries already have a substantial trajectory on triangular projects outside UN structures. In order to connect their interests and expertise with UN processes, the Trust Fund for South-South Cooperation set up by the General Assembly offers an established tool that partners beyond the South, including traditional donors, could use to support the expansion of triangular schemes at and with the UN.

Throughout these rapprochements, UN entities should carefully factor in concerns by certain Southern stakeholders that triangular cooperation might open the door for Northern players to dominate South-South spaces. Whether triangular cooperation is a space for policy learning across traditional divides, or an arena for the reformulation of power structures among established and emerging players, depends on the contours of concrete schemes that UN entities should make sure to co-shape.

 3. Ask – and listen to – Southern stakeholders

For decades, UN documents have suggested that support for South-South cooperation should be mainstreamed across the UN system in order to build organisational capacity. While the promotion of cooperation formats beyond traditional North-South schemes is laudable, the tendency at the UN to build up capacity on South-South cooperation “for the sake of it” needs to be reviewed. A recent report by the UN Secretary-General, for instance, suggests that the number of UN entities with dedicated South-South teams has been decreasing. While this does not mean that South-South and triangular schemes have become less important for international cooperation processes, it highlights the need to critically evaluate attempts to create additional organisational structures and processes.

Above all, UN entities should carefully listen to those they are supposed to support. How do UN member states that self-identify as Southern, notably UN programme countries, see their role in South-South processes? What do they expect from the UN? What do UN entities need to do in order to provide meaningful support? Answers to these questions will differ across UN entities, and from one national context to another. Instead of wasting resources in the setup and demolition of South-South units, entities across the UN system should dedicate time and energy to mainstreaming a commitment to close and continuous exchange with South-South stakeholders across their different layers of work.

Der Beitrag Supporting South-South cooperation: Three things the UN should keep in mind erschien zuerst auf International Development Blog.

Knowledge Cooperation between Africa and Europe: The power of engagement and changing perspectives

20. Mai 2021 - 8:26

As humanity, we face many common challenges in the 2020s: climate change and its effects are at the core, resulting in demands for economic transformation geared towards more sustainability. Underlying are demographic changes, with the need to feed more people while maintaining the natural basis for our survival. Increased digitalisation, global health issues (this is not the first nor the last pandemic), and strong refugee and migration movements call for a united action to address these shared global challenges. Additionally, geopolitical changes bring new important actors onto the world scene.

Often discussed – and rightly so – are the rising powers of the Global South, such as China or India, and their relevance for global governance. In a multipolar world under this pressure for sustainability, however, African leaders are also at the forefront, as the 2030 Agenda stands or falls with Africa’s development successes and stringent implementation of the African Agenda 2063. In these discussions, African actors need to be understood as partners for joint action for mutual benefit, not mere recipients of benevolent aid.

The future of Africa as our neighbouring continent is of particular relevance and scope for Europe and Germany. In its 2019 Africa Policy Guidelines, the German government postulates:

„Europe’s well-being is inextricably linked to that of our neighbour Africa. Both continents are actors in global development. Cooperation in partnership with the states of Africa is therefore a central task of German policy. It is in the German and European interest to contribute to political stability and a reduction of the development and prosperity gap.“

We have to live this partnership perspective in our cooperation. The African continent offers social and economic potential for sustainable development that should be further strengthened through continental initiatives such as the African Continental Free Trade Agreement (AfCFTA) or the development programme of the African Union (AU). Africa is a predominantly youthful continent – with great opportunities. Yet, we also need to see and name the challenges, not least in creating 20 million jobs annually for school graduates. In many African countries, fragile economic and social development successes of recent years are in danger of being wiped out as a direct result of the COVID-19 pandemic and advancing climate change. Development under the premise of sustainability is becoming more complex and requires networked thinking and action.

Changing dynamics between Africa and Europe

While globalisation puts the focus on the interdependencies and interconnectedness of our societies and the shared challenges arising from it, the effects are local. And so are the solutions to tackle these challenges. While Europe and Africa face similar global challenges, their perceived realities often differ vastly. This is crucial to acknowledge, as consequently, the starting conditions for mastering these challenges differ significantly and determine which are identified as urgent and are thus prioritised. Common value orientations and mutual understanding of key challenges cannot be taken for granted – nor can they be imposed. They must be developed through long-term exchanges and knowledge sharing processes to identify common interests and generate joint answers to common challenges. We certainly cannot afford to ignore one another between Europe and Africa.

Future leaders need more opportunities and platforms to engage in international dialogues on interconnected challenges across all major policy areas – in a working environment beyond political summits. In order to be better able to play a key role in shaping globalisation on different levels, African leaders in politics, business and civil society need access to diverse knowledge and cooperation opportunities to develop concepts and strategies for problem-solving and policy-making jointly. And German decision-makers require first-hand insights into the lived realities and thinking of African partners and can learn from problem-solving in other contexts, too. In the 2030 Agenda, there are no teachers and disciples – we all learn.

New competencies for transnational cooperation

For a successful transformation towards sustainability, it is important for future leaders, on the one hand, to acquire and exchange (new) knowledge through learning with and from each other. Furthermore, on the other hand, they need to develop critical interpersonal competencies concerning cooperation, transformation and innovation. These competencies include, among others, the awareness of one’s mindset and values, the ability to adapt to different perspectives, to develop mutual understanding and to identify, analyse and deal with complementarities arising from different value systems. Additionally, future leaders are required to deploy creativity and strategic thinking to foster innovative ideas and identify new ways to advance said ideas. Finally, young leaders need to develop a systemic understanding of the interconnectedness and interdependencies of different systems, and especially the interplay between the global and local level, according to a competency model developed for the Managing Global Governance Academy in 2019.

It is no coincidence that interest in leadership training formats including African participants is currently soaring. One format that offers this kind of mutual learning and exchange about sustainability is the African-German Leadership Academy. The programme aims to foster cooperation amongst young change-makers in reform partner countries and Germany, and develop transformative and innovative competencies for sustainable development Building on the experiences from the MGG Academy, the format builds on the diversity of the participants who work in different sectors of society (academia, public and private sector, civil society), are specialised in various disciplines and live in different contextual and national realities (African reform partner countries and Germany).

We have to jointly un-learn our mutual stereotypes and embrace diversity as a key and driving force for innovation. Open exchange as peers, mutual learning and joint solution-seeking for common challenges is a core competency for a successful 21st Century engagement.

Der Beitrag Knowledge Cooperation between Africa and Europe: The power of engagement and changing perspectives erschien zuerst auf International Development Blog.

Biden’s Geo-Economics Forces De-Globalization

6. Mai 2021 - 9:53

Under US President Joe Biden America continues to threaten the rules-based world economic order and is pushing the trend towards de-globalization. Although the new Biden administration rhetorically seeks more „values“ and the „community of democracies,“ the United States is still at its core seeking to protect its national interests with all its economic and military power.

In his first „100 days,“ specifically in US trade policy, President Joe Biden has not yet turned his multilateral rhetoric into action. This is particularly important for Europe. Biden has not reversed the aluminum and steel tariffs imposed by his predecessor, Donald Trump, on America’s „allies,“ nor has he ruled out further tariffs, such as on cars. While Biden has abandoned the blockade on the appointment of the new Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, he maintains the US blockade on reappointing judges for the WTO’s appellate body. With the blockage of the dispute settlement function, the United States under the Trump and Obama administrations rendered inoperative the heart of the WTO and thus weakened an important body of the international economic order – the Biden team has done little to nothing to undo these consequential decisions. Instead of using the WTO, and thus the rules-based order, to limit China’s neo-mercantilist economic policies, Biden continues thus far the unilateral economic course pushed by his predecessor with the right of the economically and militarily strongest.

World trade order still under threat

In particular, President Trump has repeatedly portrayed the multilateral world trade system as a bad deal for America. Drawing the “military trump card “ by imposing punitive tariffs (on steel and aluminum) on national security grounds, he not only achieved his protectionist trade policy goals, but also undermined the credibility of the WTO.

The combination of trade and security policy has brought about a consequential paradigm shift: it is questionable whether the WTO can settle disputes at all over trade measures based on national security given the inadequacy of the WTO’s rulebook on this issue. Following the example of the United States, other countries could, for their part, impose tariffs in the name of their national security. That would definitely contribute to the end of an already endangered international trade order regulated by the WTO.

In other respects, too, the United States is endangering the functioning of the WTO by blocking the replacement of vacant judicial posts on the appellate body. Since December 2019, the WTO’s legally binding dispute settlement procedure including an independent appeals mechanism has been suspended. In particular, the United States will continue to criticize the fact that in many cases the appellate body has exceeded its powers and in its judgments has affected the rights of the United States to use trade defense measures.

In any case, the United States, in its obsession with national sovereignty, assumes that a WTO ruling against the United States will not automatically lead to a change in its laws or trade practice. Conversely, however, American trade laws should be enforced worldwide with all the power at the United States’ disposal. Henceforth, US geo-economics, using economic “weapons” such as the dollar to manipulate markets, further undermines the rules-based order.

At the same time, the United States also criticizes the WTO for being incapable of countering trade-distorting practices by non-market countries such as China. The rules are too weak or too outdated to deal with state-subsidized trade, state-owned enterprises, forced technology transfer, or the theft of intellectual property. As a result, the United States has been aggressively and unilaterally targeting its competitors, using all its economic and political power as leverage to force reciprocal market access and better trade relations.

Geo-Economics: Economy as a weapon

In the increasing geo-economic competition, especially between the USA and China, but also with America’s „allies,“ economy is no longer the goal, but a means for geostrategic purposes. America’s „allies“ in Europe are also being forced to buy more US „freedom gas“ instead of cheaper Russian gas and to pay for the infrastructure needed for transportation, such as liquefied natural gas (LNG) terminals. Those in Europe who still expect to do business with Iran underestimate the military and economic power of the United States. The US government may continue Trumps hardline by openly (or diplomatically, behind closed doors) threatening to stop giving Germany intelligence and to sanction German companies that continue to do business with the Chinese supplier Huawei.

European decision makers in politics and business should recognize the seriousness of the precarious situation in the United States and its effects: because of its economic plight exacerbated by the COVID-19 pandemic, and huge debt, which now – with at 100.1 percent of its gross domestic product (GDP) – exceeds the country’s economic power, the United States need to share this (economic) burden with its allies. No one should be surprised if under Joe Biden the US administration will all the more so try to capitalize on the economic and, in particular, military dependence of its allies in Europe and Asia.

European allies should remember that Trump has only exacerbated existing transatlantic conflicts in security and trade policy. Already in the Obama/Biden administration, the United States put pressure on the Europeans to take on more burdens and, as agreed at the 2014 summit in Wales, to spend „two percent“ of their economic output on defense in the   future. In order to achieve this goal, Germany will most likely be encouraged by the Biden/Harris government to “buy American” armaments in order to remain technologically dependent.

The United States will continue to manage or manipulate trade, energy, financial, and data flows, especially through (secondary) sanctions. Above all in the technology sector, for example in the case of 5G/Huawei, Washington will remain intransigent towards allies: in the struggle for technopolitical spheres of influence, in which future economic and military supremacy is at stake, the United States will increase pressure on third countries such as Germany and put it before the choice of doing business with either America or China. The result could be a world divided into Chinese and American standards and systems. That would be the end of the international economic order and globalisation as we still know it today.

Dr. Josef Braml’s Blog:

Der Beitrag Biden’s Geo-Economics Forces De-Globalization erschien zuerst auf International Development Blog.

Europe shouldn’t underestimate the global appeal of China’s vaccine diplomacy

21. April 2021 - 14:00

Western media coverage tends to downplay the success of China’s vaccine development and vaccine diplomacy, but Europe should not underestimate the appeal of Beijing’s offer. The failure of rich countries to address equitable global access to COVID-19 vaccines and the West’s absence from the vaccine diplomacy game has provided China with a reputational win.

Recent comments by the director of the Chinese Center for Disease Control (CDC) about the “not-high protection rates” of current vaccines have been seized upon by headlines to imply the poor quality of Chinese jabs. The comments, which included praise of mRNA vaccine efficacy, mark a rare break with the official state narrative on China’s vaccine superiority, but they don’t reveal anything new or surprising. Most importantly, the choice to purchase Sinovac or Sinopharm vaccines is not primarily political, but pragmatic.

The efficacy of Chinese vaccines

We have long known that available Chinese vaccines do not offer the same level of protection as new-tech mRNA vaccines from US and European manufacturers, but in the context of a global vaccine shortage, “good enough,” is an attractive proposition.

There are three Chinese vaccine makers currently supplying the global market: Sinovac, CanSino, and state-owned giant Sinopharm. Trials in Brazil showed that CoronaVac, the vaccine produced by Chinese company Sinovac, has an efficacy rate of 50.4 percent, a number supported by more recent studies in Brazil and Chile. Meanwhile, Sinopharm claims that its primary vaccine has an efficacy rate of 79.34 percent. The most recent Chinese addition to the global market, a one-shot vaccine from CanSino, has shown an eventual efficacy rate of 65.7 percent. For comparison, British-Swedish manufacturer AstraZeneca claims an efficacy rate of 76 percent, US Johnson & Johnson 63.3 percent globally and 74.4 percent  in US trials, while Russia’s Gamaleya Institute claims 91.6 percent for its vaccine Sputnik V.

The reluctance of Chinese vaccine makers to publish their full data has fueled suspicion among some experts, and efficacy rates are often variable between trials. But available information indicates that the Chinese shots meet the World Health Organization’s (WHO) threshold for Covid-19 vaccine efficacy of 50 percent. It should also be noted that 50 percent efficacy still offers much more protection against severe illness than no vaccine.

Speculation as to the efficacy of Chinese vaccines does not undermine their utility when there is no other option to numerous countries.

The problem of equitable access

Our best chance of avoiding vaccine-trumping mutations and our surest path toward global economic recovery is to rollout vaccines across the world at the same time, prioritizing the vulnerable regardless of nationality. COVAX, a global initiative led by the World Health Organization (WHO) among others, was initially designed as a collective mechanism that would pool resources and distribute vaccines equitably among 190 participating countries.

Unsurprisingly, it didn’t work out that way: national – and in the case of the EU, regional – interests trumped those of humanity as a whole, and rich countries scrambled to secure purchase agreements, pushing those with fewer means to the back of the queue.

Though it still has an important role to play, COVAX now essentially functions as a charitable mechanism. Even if it succeeds, it will only cover 20 to 30 percent of participating countries’ populations, far short of even the low, early estimates required for herd immunity of 70 percent. Although a handful of rich countries are now nearing the light at the end of the tunnel, the problem of equitable access to vaccines – and thus an end to the pandemic – remains fundamentally unsolved. Just 0.2 percent of total vaccine supplies have found their way by donation to low income countries so far.

Global shortage of vaccines

Of course, even rich countries have had difficulties sourcing vaccines they have purchased. Despite the unprecedented efforts underway to scale up vaccine production capacity, the world is facing severe and likely ongoing vaccine shortages. This is the backdrop against which we need to assess China’s vaccine exports.

Countries hit hard by the pandemic are desperately seeking vaccines, and China, with low infection rates and limited urgency to vaccinate at home, has its books open for orders. They may not be the best, nor even the cheapest, but in some cases, Chinese vaccines are the only ones available.

Chinese manufacturers are also helping their partners in countries like the United Arab Emirates, Egypt, and Indonesia to build their own vaccine production capacity – a situation that is highly desirable from an equitable access standpoint.

And so we have arrived at a situation where China can credibly claim to be helping plug the gap in global vaccine supply, especially the gap that exists between the rich and poor countries. Although the EU is exporting millions of vaccines, most of these doses are going to other high-income countries. Those that are supplying middle income and low-income countries are other middle-income countries: China, India, and Russia.

The narrative of China’s helping hand

As far as donations of vaccine supplies are concerned, Beijing is winning just by showing up. COVAX, to which the EU is the lead financial donor, has now kicked into gear, but the EU has halted plans to donate vaccines directly due to shortages at home, while the US is only now entering the donation game. The quantity of doses donated by China are not very large – 14 million so far – only go so far in addressing countries’ needs. But they are at least very visibly getting jabs into arms in developing countries.

Beijing seeks to position itself as a leader of the developing world, and vaccine exports provide a useful tool with which Beijing can deepen relationships in the global South. Current Chinese vaccines may fall short of the golden standard set by Western mRNA vaccines, but they go a long way in the current crisis. In the distant future, Beijing may need to offer a more competitive vaccine, but by then it will likely have added an mRNA vaccine to its portfolio.

The failure of rich countries to address worldwide equitable access to vaccines has opened up room for China to credibly claim that it is doing more than the West to help developing countries. There is fertile ground for this narrative in the global South, where it is commonplace to see rich countries as self-interested and exploitative.

Against the backdrop of worsening tensions between China and the West, it will be increasingly important for Beijing to secure support among what was called in the Cold War the “third world.”  We should not undervalue developing country diplomacy in our “systemic rivalry” with China, nor underestimate the successes of China’s vaccine diplomacy.

Der Beitrag Europe shouldn’t underestimate the global appeal of China’s vaccine diplomacy erschien zuerst auf International Development Blog.

A more ambitious G20 for a sustainable post-pandemic recovery and transformation

8. April 2021 - 13:54

The COVID-19 pandemic submerged the world for more than a year now, and global infection numbers are still rising. There are huge differences in the ability of governments and societies to cope with the pandemic: while Europe and the Americas remain epicentres of the disease, there are signs that infections are now also picking up across the African continent.

In an interesting turn-of-tide in discussion, the IMF calls for more public expenditure and higher taxation of the wealthy. The IMF states that economic recovery is possible in 2021 but dependent on both, access to vaccines and other medical interventions, and continuous effective policy support. Policy support needs to cushion the effects of the economic contraction, to decarbonize energy systems and economies, and for intensified multilateral cooperation to ensure universal access to vaccines and therapeutics and adequate financial liquidity of highly indebted countries.

While the IMF focusses on the dual challenge of recovery and decarbonisation, the G20 has committed to implementing the 2030 Agenda as a whole since 2016. All of this means a full agenda for the G20 (and the G7), domestically and globally. In this piece, I want to discuss the advantages and difficulties of such an integrated approach to recovery and transformation, and what the G20 can do for implementing it effectively.

Why choose an integrated approach towards recovery and sustainable development?

In 2020, the argument for integrated approaches was that states faced a dual challenge: they had to react immediately to the social and economic emergencies of the Covid-19 crisis, and invest into the long-term transformation of social and economic infrastructures and consumption habits towards sustainability. This transformation encompasses the reduction of poverty and inequality as much as climate neutrality, the transition to a circular economy and the protection of biological diversity and natural habitats. Integration of the two agendas was not only timely –so many years had been lost with sterile debates and negotiations – but was also needed because public and private budgets are limited. Sequential or disconnected parallel processes cannot be afforded.

Today, one year after, this has not changed; yet, tonality in the debate is different. Covid-19 and its socio-economic consequences will stay with us much longer than anticipated due to the lack of domestic effectiveness and insufficient efforts at multilateral cooperation. Viruses don’t negotiate; if left to “their business”, they mutate. Thus, public budgets and political institutions are under extraordinary pressure and policymakers are having a hard time understanding that wrong decisions lead to irreversible costs in terms of infections and deaths. Adequate decisions are those informed by a variety of scientific disciplines and careful ethical considerations.

Economic recovery is one important aspect of coping with the pandemic – but just one. Living with the virus requires to adjust the ways in which we live and work, we take care of children, youth and the elderly, the sick and the vulnerable in order to enhance social and institutional resilience, domestically and globally. These broader dimensions of coping are reflected in the 2030 Agenda; decarbonisation is but an important part of it. If these adjustments are designed to last, they can support further transformation processes. Citizens expect governments to do what they can to cope with the pandemic; they demand reliable conditions for public and private life. Naturally, the process of coping creates experiences both with failure and with other, alternative ways of doing things. These experiences raise societal expectations.  And alternative experiences can also raise readiness for reform and further change; the population might be more ready for transformation than some decision-makers dare to believe.

It depends on the quality of crisis management now whether in retrospect from 2050 the Covid-19 pandemic will just seem a short episode, compared with the structural transformation process we will hopefully have substantially progressed on by then. Huge impacts on personal lives and expectations, on the economy and on public budgets will shape the next decades. This is why it is so important to get the pandemic under control as quickly as possible and in ways that do not obstruct efforts to create sustainable and attractive futures on this planet. Recovering and transforming have to be integrated processes, and cannot come one after the other.

How can the integrity of public and private investments towards recovery with sustainable transformation be achieved?

Governments need a clear understanding of where to direct public investments to, and how to align private decisions and investments with a sustainable recovery. A clear and reliable strategy and communication helps. Governments should use their national strategies for SDG implementation and decarbonisation plans for these purposes, link these with public budgets so that funding resources are clear and adequate, monitor their implementation with the support of independent scientific commissions, learn from successes and failures, and invest in clear and regular communication around it – with the general public, with stakeholders in the economy, in society and in academia, and with subnational levels of government.

This will allow for reliable framework conditions for private investors (and households) and make uncertainties manageable. One example is dynamic carbon pricing, another one public support for new infrastructures and for new technologies. Work on sustainable finance by central banks and finance ministers, globally, in the G20 and the European Union is crucial.

Equally, clear and reliable strategies, investments in improved social safety nets (e.g. universal health coverage), in economic infrastructure and transparent communication and accountability help to protect and increase cohesion within society and trust in political institutions. This are vital resources for coping with crises and for sustainable transformation and decarbonisation processes.

What can the G20 do?

These tasks are universal and all countries are confronted with them. Still, the resources needed for accomplishing them are very unequally distributed – be they financial, human, technological, knowledge, cultural or social. Securing fiscal space for low-income countries and middle-income countries under stress is vital for controlling the pandemic, for recovery and sustainable transformation. The G20 and the international community at large needs to define clear perspectives for mutual support over the next decade in order to enable public and private action towards these goals.

In principle, the G20 is a very good platform for making recovery converge with implementation of the 2030 Agenda, but its current form of organisation prevents it from using its full potential. The Global Sustainable Development Report published by the UN Independent Group of Scientists in 2019 distinguishes thematic entry-points for sustainable development, such as “human well-being and capabilities” and “sustainable and just economies” from policy-related levers for delivering change. In 2020 we analysed the workstreams of the G20 under the Saudi presidency, and we could see that most of the lever-related workstreams belong to the Finance Track, while all entry point-related workstreams fall under the Sherpa Track. For shaping recovery in a way conducive to sustainable development, both tracks need to work closely together to ensure that transformative policy objectives (often owned by the Sherpa track) are equipped with the levers of adequate financial, fiscal and economic policies (owned by the finance track). The G20 is particularly strong on finance, fiscal and economic policies. However, it needs to expand its political and financial clout to a second lever: science, technology and innovation (STI) policies, and gear it towards sustainable recovery and transformation. Sharing technologies and engaging in joint knowledge creation is vital for sustainable recovery and transformation. Scientific cooperation by G20 members is primarily motivated by strengthening competitiveness. In the 21st century, much more funding is needed for scientific cooperation that envisages the global common good.

The priorities of the Italian presidency of the G20 – grouped under the keywords people, planet, and prosperity taken directly from the 2030 Agenda – are a very good first step for enhancing the collective capacity of the G20 towards integrating recovery and sustainable transformation measures.

In this context, the Development Working Group (DWG) can play an important role in the Italian presidency: it is grouped in the Sherpa track, and it has been tasked in 2016 to coordinate and inspire the G20’s work for sustainable development across all working groups. The Italian presidency has planned four DWG meetings; the first one took place just before the first meeting of finance ministers and central bank governors, while the last meeting will be back-to-back with the meeting of finance and central bank deputies. Timing offers great potential for coordination and even cooperation, on the broader theme of shaping recovery towards sustainable development, and for ensuring that the G20 engages in expanding fiscal space of developing countries, in particular of least developed countries. For realising the potential, national delegations to the DWG need to include representation beyond development departments.

Furthermore, the DWG needs to be ambitious. It should go beyond updating the G20 Action Plan on the SDGs as it has done annually since 2017, and focus on fresh action in the aftermath of the Covid-19 pandemic. The perspective needs to be how to enhance universal implementation of the SDGs, expanding the horizon beyond instruments of development cooperation, and understanding implementation of the 2030 Agenda as what it is: a universal task that includes cooperation relations across all countries, with the G20 strength to go beyond the boundaries of North-South and South-South cooperation and their instruments.

Der Beitrag A more ambitious G20 for a sustainable post-pandemic recovery and transformation erschien zuerst auf International Development Blog.