Development Beyond the Numbers

NEW YORK – It has been said that statistics are people with the tears washed away. This is a message that attendees ofthe World Bank and International Monetary Fundspring meetings in Washington, DC, should bear in mind as they assess progress on global development.

Despite the impressive gains many countries have made, hundreds of millions of people are still being left behind. To highlight this problem, the United Nations Development Program has made social and economic inclusion a major theme of its2016 Human Development Report, “Human Development for Everyone.”The reportoffers an in-depth looks at how countries, with support from their partners, can improve development results for all of their citizens, especially the hardest to reach.

Since the UNDP issued its first report in 1990, we have seen significant improvements made inbillions of people’s lives worldwide. Back then,around 35%of humanity lived in extreme poverty. Today, that figure stands at less than 11%. Likewise, the proportion of children dying before their fifth birthday has been halved, partly because an additional two billion people now benefit from better sanitation and wider access to clean drinking water.

We should take pride in these achievements;but we must not rest on our laurels. A sizeable number of people are still missing out on these gains. Worse, theyare now in danger of being forgotten –literally so.Sometimes, they are not recorded in official statistics at all. And, even when they are, national averagescan paint a distorted picture: an increase in average income, for example, might conceal thedeepening poverty of some, as it is offset by large gains for a wealthy few.

One of the most profound demographic shifts in recent years has been the massive expansion of a middle class in the global south. The convergence of global incomes has blurred the line between“rich” and “poor” countries. But, at the same time, inequality within many countries has increased. As a result,poverty – in all forms – is a growing problem in many countries, even as the number of people living in poverty worldwide has declined.

Confronting this challenge will require us to rethink fundamentally what development should look like, which is why the UN’sSustainable Development Goals, unlike the previous Millennium Development Goals, apply to all countries – not just the poorer ones.

After decades of making steady development gains, what can we do differently to help the planet’s most disadvantaged people?As the latest Human Development Report makes clear, there is no simple answer. One reason is that those who are being left behind often face disadvantageson several fronts. They are not just short of money;often, theyare also sick,uneducated, and disenfranchised.

Theproblems that affect the world’s most disadvantaged people begin at birth, and worsenduring their lifetime.As opportunities to break the cycle are missed, these disadvantages are passed on to subsequent generations, reinforcing their impact.

Still, while today’s development challenges are numerous and complex, they also share common characteristics. Many of the disadvantaged belong to specific demographic groups that tend tofare worse than othersin all countries, not least because theyfacesimilar economic, legal, political, and cultural barriers.

For example, indigenous peoples constitute just 5%of the globalpopulation, but account for 15%of theworld’s poor. And, to participate in work and community life, people with disabilitiesmust overcomeobstacles that the rest of us often do not even notice. Last but not least, women and girls almost everywherecontinue to be underrepresented in leadership and decision-making circles, and they often work more hours for less money than their male counterparts.

Although development policies will continue to focus on tangible outcomes –such as more hospitals, more children in school, andbetter sanitation –human developmentmust not be reduced only to that which is quantifiable. It is time to pay more attention to theless palpable features of progress, which, while difficult to measure, are not hard to take a measure of.

All people deserve to have a voice in the decisions that affect their lives; but the most marginalized in society are too often denied a say of any kind.Ensuring that those most in need are not forgotten – and that they have the freedom to make their own choices– is just as important as delivering concrete development outcomes.

History has shown us that many of today’s challenges can be overcome in the years ahead. The world has the resources and the knowhow to improve the lives of all people. We just need to empower people to use their own knowledgeto shape their futures. If we do that, more inclusive development will be within our reach.

SelimJahan is Director of the Human Development Report Office and lead author of the Human Development Report.

By SelimJahan

The G20’s Timefor Climate Leadership

PARIS– At the start of 2016, the United States was well positioned to lead the globalfightagainstclimate change. As the chair of the G20 for 2017, German Chancellor Angela Merkel had been counting on the US to help drive adeep transformation in the global economy. And even after Donald Trump won the US presidential election,Merkelgave him the benefit of the doubt, hoping against hope that the US might still play a leading role in reducing global greenhouse-gas emissions.

But at Merkel and Trump’s first in-person meeting, no substantive statements were issued, and their body language made the prospect of future dialogue appear dim. Trump’sslogan “America first” seems tomean“America alone.”

By reversing his predecessor’s policies to reduce CO2 emissions, Trump is rolling back the new model of cooperativeglobal governance embodied in the 2015 Paris climate agreement. The countries that signed onto that accord committed themselves to sharing the risks and benefits of a global economic and technological transformation.

Trump’s climate-change policy does not bode well for US citizens – many of whom are now mobilizing resistance to his administration – or the world.But the rest of the worldwill still develop low-carbon, resilient systems.Private- and public-sector players across the developed and developing worlds are making the coming economic shift all but inevitable, and their agendas will not change simply because the US has a capricious new administration. China, India, the European Union, and many African and Latin American countries are still adopting clean-energy systems.

As long as this is the case, businesses, local governments, and other stakeholders will continue to pursuelow-carbon strategies. To be sure, Trump’s policiesmight introduce new dangers and costs, domestically and worldwide; but he will not succeed in prolonging the fossil-fuelera.

Still, aneffective US exit from the Paris agreement is a menacing development. The absence of such an important player from the fight against climate change could underminenew forms of multilateralism, even if it reinvigorates climate activism as global public opinion turns against the US.

More immediately,the Trump administration has introduced significant financial risks that could impede efforts to address climate change. Trump’s proposed budget would place restrictionson federal funding forclean-energy development and climate research.Likewise, his recent executive orderswillminimize the financial costs of US businesses’ carbon footprint, by changing how the “social cost of carbon” is calculated. And his administration hasalready insisted that language aboutclimate change be omitted from a joint statement issued by G20 finance ministers.

These are all unwise decisions that pose serious risks to the USeconomy, and to global stability, as United Nations Secretary-General AntónioGuterres recentlypointed out. The US financial system plays a leading role in the world economy, and Trump wants to take us all back to a timewhen investors and the general public did not account for climate-change risks when making financial decisions.

Since 2008, the regulatory approach taken by the US and the G20 has been gearedtoward increasing transparency and improving our understanding of possible systemic risks tothe global financial system, not least those associated with climate change and fossil-fuel dependency. Developing more stringent transparency rules and better risk-assessment tools has been atoppriority for the financial community itself. Implementing these new rules and tools can accelerate the overall trend in divestment from fossil fuels, ensure a smooth transition to a more resilient, clean-energy economy, and provide confidence and clarity forlong-term investors.

Given the heightened financial risks associated with climate change, resisting Trump’s executive order to roll back Wall Street transparency regulationsshould be a top priority. The fact that Warren Buffet andthe asset-management firm Black Rock have warned about the investment risks of climate change suggests that the battleis not yet lost.

CreatingtheG20 was a good idea.Now, itmust confront itsbiggest challenge. It is up to Merkel and other G20 leaders to overcome US (and Saudi) resistance and stay the course on climate action.They can count as allies some of the world’s large institutional investors, who seem to agree on the need fora transitional framework of self-regulation.It is incumbent upon other world leaders to devise a coherent responseto Trump, and to continue establishing a new development paradigm that is compatible across different financial systems.

At the same time, the EU – which iscelebrating the 60th anniversary of the Treaty of Rome this year – now has a chance to think about the future that it wants to build. These are difficult times, to be sure; but we can still decide what kind of world we want to live in. Teresa Ribera, Director of the Institute for Sustainable Development and International Relations (IDDRI) in Paris,wasSpain’sSecretary of State for Climate Change.

By Teresa Ribera

The Economic Policy Trump Should Pursue

LONDON – As Donald Trump assumes the US presidency, a group of 35 prominent international business leaders, led by Unilever CEO Paul Polman and me, is stepping forward to defend open markets, endorse the fight against climate change, and demand a massive push against global inequality. These are the core elements of what we believe is the only viable economic strategy for the United States and the world.

Recent electoral outcomes, including Trump’s election, highlight the intensifying economic grievances of many households across the developed world. In the 20 years before the 2008 financial crisis, unprecedented globalization raised incomes for just about everyone. The incomes of the poorest third of humanity rose by 40-70%, and those of the middle third increased by 80%. The top 1% did even better – so much better, in fact, that the business elite is now facing a powerful backlash.

And yet the incomes of a crucial group – lower middle-income households – barely rose at all. And, since 2008, this same group has borne the brunt of austerity. Unsurprisingly, its members feel “left behind” by globalization – and are now demanding change.

Trump’s administration might be tempted to address this group’s problems in isolation, with inward-looking policies targeting specific industries, or by attempting to limit trade competition. But the problems facing these households are not isolated. Rather, they stem from the social and environmental limits now reached by the prevailing model of economic growth – and the version of globalization that this model has underpinned. Ignoring this reality and implementing narrow and nationalistic solutions would only make matters worse.

Socially, the relative hardship in the US Rust Belt, where support for Trump was integral to his victory, is an unintended consequence of a rapidly expanding global labor market that leaves workers almost everywhere vulnerable – even in emerging economies whose workers have seemed like the “winners” of globalization in recent decades. Countries and regions competing to attract corporate investment make weak negotiators and weak defenders of high labor standards.

On the environmental front, the evidence is dire. Human activity has already pushed the planet beyond four of its nine physical safety boundaries, including those for climate change and loss of biosphere integrity. The rapidly rising costs of environmental damage are restricting economic growth, making the relaxation of environmental protections a false economy.

For example, damage to ecosystems and biodiversity caused by current practices in the food and agriculture sector alone could cost the equivalent of 18% of global economic output by 2050, up from around 3% in 2008. In emerging markets, especially in Asia, rapid economic expansion has brought life-threatening smog and constant gridlock to cities unable to expand their infrastructure fast enough.

Tackling the world’s environmental and ecological problems, and improving the lot of those who have been left behind, will require public action, such as that which I oversaw in my roles at the World Bank, the United Nations, and the British government. But it will also demand the participation of business.

In my own career, I have seen firsthand that the growth fueled by business competition in a globalizing world can do far more to combat poverty, hunger, and disease than government-funded programs alone. But when that competition is not conducted responsibly, the opposite can happen – and, in many cases, it has.

In seizing the opportunities of globalization, businesses have often neglected the developed-world workers they leave behind, while subjecting developing-country workers to extraordinary deprivation. Moreover, individual businesses have often lobbied against and evaded environmental protections that are indisputably in our collective interest.

Today, I am encouraged to see that a fast-growing group of business leaders recognize that the greater freedoms and wealth they gain from globalization imply greater responsibility for labor and the environment. We expect our strategy to ensure continued globalization – in a revised form that is more sustainable and inclusive – to attract more such leaders to the cause.

The framework of our strategy is already in place, in the form of the 17 Sustainable Development Goals that were agreed by UN member states in 2015. Achieving these goals will mean decent pay, working conditions, and safety nets for all participants in the global labor market, as well as safeguarding the environment.

The SDGs also promise to provide a level playing field for growth-boosting competition. Across the four major sectors we considered in detail, we saw high-return business opportunities arising from the strategy, fueling an increase in annual global GDP of at least $12 trillion. Other changes we advocate – especially the creation of prices for resources that reflect their full social and environmental costs – will ensure that future economic growth protects both workers and the planet.

Securing these outcomes won’t be easy, because it will require a new social contract among governments, businesses, and civil society. To succeed, all parties must view themselves as collaborators in a win-win deal, rather than adversaries in a zero-sum game. All the evidence indicates that only a more sustainable, open, and inclusive world economy can support an environmentally secure, economically prosperous, and socially just future for humanity.

As for the US, this strategy aligns with Trump’s own declared priorities. Not only does it offer the most promising solution to the economic grievances of his core supporters; it also entails a surge in infrastructure spending, much like the one Trump has already promised.

Instead of using fiscal stimulus in a vain effort to revive failed smokestack industries and old energy sources, Trump’s administration – and the world – should place its bets on a low-carbon future. Plenty of businesses surely would get on board. Mark Malloch Brown is Chair of the Business and Sustainable Development Commission.

By Mark Malloch Brown

Why Scientists Are Marching

LONDON – On April 22, scientists from around the world will mark Earth Day by participating in an unprecedented “March for Science.” The aim of the march will be to “celebrate and defend science at all levels – from local schools to federal agencies.” For the rest of the world, it is important to understand why the usually sedate community of scientists will be leaving their labs and offices to take to the streets in a global demonstration of concern.

The answer was signaled in November 2016, when Oxford Dictionaries named “post-truth” its “Word of the Year.” In an era in which “objective facts are less influential in shaping public opinion than appeals to emotion and personal belief,” scientists like us cannot afford to stay silent any longer. So we will be marching to return scientific “certainty” to its rightful place in public debate.

“Post-truth” describes well a year in which disregard for facts became a pervasive feature in world politics. As a candidate, US President Donald Trump denied the overwhelming evidence for climate change, endorsed the discredited claim that vaccinations caused autism, and asserted that compact fluorescent light bulbs can cause cancer.

But Trump does not have a monopoly on post-truth politicking. Policymakers in the US and Europe have trafficked in equally outrageous “expert views” on the consequences of their opponents’ positions on topics ranging from genetically modified foods to nuclear energy to Brexit. Recent social media attacks on a measles-rubella vaccination campaign even surfaced in India, fueling a mix of conspiracy theories, safety concerns, and questions of motivation – and demonstrating the extent to which lives can be imperiled when facts are ignored.

Earlier warnings, such as Ralph Keyes’ 2004 book The Post-Truth Era: Dishonesty and Deception in Contemporary Life, attracted little attention from the science community. That’s because we’d heard it all before; “post-truth” responses to “objective facts” are as old as science itself. An early example was the persistent belief in a flat earth, a view maintained for centuries after the ancient Greeks had accumulated clear evidence to the contrary. In some places, the denial and invective hurled at Darwin and his theory of evolution in the nineteenth century continue to this day. “Don’t confuse me with the facts,” goes an old joke capturing the post-truth sensibility: “my mind is made up.”

But now we have arrived at a watershed moment, when this sensibility has entered the political mainstream, influencing policies that will profoundly affect the health and wellbeing of the planet and its inhabitants. Those who regard the scientific method – the systematic observation, measurement, and hypothesis testing that has underpinned humans’ apprehension of ourselves and the world for centuries – as a core value of society must step forward to defend its central role in guiding public debate and decision-making.

To be persuasive, however, we scientists must put our own house in order, by avoiding behavior that can fuel post-truth rhetoric. Lapses in ethical standards give ammunition to the enemies of science. When published findings are based on falsified data or deliberately misleading conclusions, the credibility of every scientist suffers. Peer review must be rigorous and always strive to detect and snuff out shoddy or deceptive work.

Equally important, researchers must do a better job explaining what scientific “certainty” means, helping the public and policymakers to distinguish between proven hypotheses and unverified theories. They must show how alternate models are tested against all available evidence under controlled conditions, yielding observations that can be repeated – and measurements that can be reproduced – by other researchers. Conclusions that are not derived from such carefully controlled observations must remain conjecture.

Those engaged in science urgently need to develop and implement more effective strategies to communicate scientific advances and discoveries that affect society and the environment. A central focus of this effort should be to explain and defend the methods and rigor of the underlying process of evidence collection and validation. Simply put, a higher level of science literacy among the public, the media, and especially among policymakers is essential to recognizing and rejecting unreasoned attempts to discredit science and scientists.

In his 1946 book The Discovery of India, India’s first prime minister, Jawaharlal Nehru, advocated the development of a “scientific temper” – the adoption of the scientific method as a way of life. To defeat the post-truth threat, that temper is needed now more than ever. On April 22, let’s defend it with passion.

Stephen Matlin is an adjunct professor at the Institute of Global Health Innovation, Imperial College London. Goverdhan Mehta is University Distinguished Professor of Chemistry at the University of Hyderabad. Henning Hopf is a professor in the Institute of Organic Chemistry at the TechnischeUniversitätBraunschweig. Alain Krief, Executive Director of the International Organization for Chemical Sciences in Development, is Emeritus Professor of Chemistry at Namur University and an adjunct professor in the HEJ Research Institute of Chemistry at the University of Karachi.

By Stephen Matlin, Goverdhan Mehta, Henning Hopf, and Alain Krief

The Abandonment of Progress

PARIS – Margaret Thatcher and Ronald Reagan are remembered for the laissez-faire revolution they launched in the early 1980s. They campaigned and won on the promise that free-market capitalism would unleash growth and boost prosperity. In 2016, Nigel Farage, the then-leader of the UK Independence Party (UKIP) who masterminded Brexit, and US President-elect Donald Trump campaigned and won on a very different basis: nostalgia. Tellingly, their promises were to “take back control” and “make America great again” – in other words, to turn back the clock.

As Columbia University’s Mark Lillahas observed, the United Kingdom and the US are not alone in experiencing a reactionary revival. In many advanced and emerging countries, the past suddenly seems to have much more appeal than the future. In France, Marine Le Pen, the nationalist right’s candidate in the upcoming presidential election, explicitly appeals to the era when the French government controlled the borders, protected industry, and managed the currency. Such solutions worked in the 1960s, the National Front leader claims, so implementing them now would bring back prosperity.

Obviously, such appeals have struck a chord with electorates throughout the West. The main factor underlying this shift in public attitudes is that many citizens have lost faith in progress. They no longer believe that the future will bring them material improvement and that their children will have a better life than their own. They look backward because they are afraid to look ahead.

Progress has lost its shine for several reasons. The first is a decade of dismal economic performance: for anyone below the age of 30, especially in Europe, the new normal is recession and stagnation. The toll taken by the financial crisis has been heavy. Furthermore, the pace of productivity gains in the advanced countries (and to a large extent in emerging countries) remains disappointingly low. As a result, there is very little in the way of income gains to distribute – and even less in aging societies where fewer people are at work and those out of work live longer. This grim reality may not last (not all economists agree that it will); but citizens can be forgiven for taking reality at face value.

The second reason progress has lost credibility is that the digital revolution risks undermining the middle class that formed the backbone of the post-war societies of the world’s advanced economies. As long as technological progress was destroying unskilled jobs, the straightforward policy response was education. Robotization and artificial intelligence are destroying medium-skilled jobs, leading to a polarized labor market, with jobs created at the two ends of the wage distribution. For those whose skills have lost value and whose jobs are threatened by automation, this hardly counts as “progress.”

A third, related, reason is the massively skewed distribution of national income gains that prevails in many countries. Social progress rested on the promise that the benefits of technological and economic advancement would be shared. But recent path-breaking research by Raj Chetty and his colleagues shows that whereas 90% of US adults born in the early 1940s earned more than their parents, this proportion has steadily declined ever since, to 50% for those born in the mid-1980s. Only one-quarter of this decline is due to slower economic growth; the remainder is attributable to an increasingly unequal distribution of income. When inequality reaches such proportions, it erodes the very basis of the social contract. It is impossible to speak of overall progress when children have an even chance of being worse off than their parents.

Fourth, the new inequality has a politically salient spatial dimension. Educated, professionally successful people increasingly marry and live close to one another, mostly in large, prosperous metropolitan areas. Those left out also marry and live close to one another, mostly in depressed areas or small towns. The result, reckon the Brookings Institution’s Mark Muro and Sifan Liu, is that US counties won by Trump account for just 36% of GDP, whereas won by Hillary Clinton account for 64%. Massive spatial inequality creates large communities of people with no future, where the prevailing aspiration can only be to turn back the clock.

Faith in progress was a key provision of the political and social contract of the post-war decades. It was always a part of the left’s DNA; but the right embraced it as well. After what happened in 2016, support for a concept forged in the Enlightenment can no longer be taken for granted.

For anyone who believes that progress should remain the compass guiding societies in the twenty-first century, the priority is to redefine it in today’s context and to spell out the corresponding policy agenda.

Even leaving aside other important dimensions of the issue – such as fear of globalization, growing ethical doubts about contemporary technologies, and concerns about the environmental consequences of growth – redefining progress is a challenge of daunting magnitude. This is partly because a sensible agenda must simultaneously address its macroeconomic, educational, distributional, and spatial dimensions. It is also because yesterday’s solutions belong to the past: a social compact designed for an environment of high-growth, equalizing technological progress won’t help address the problems of a low-growth world of divisive technological innovation.

In short, social justice is not a matter only for fair-weather environments. For several decades, growth has served as a substitute for sensible social cohesion policies. What advanced societies need now are social compacts that are resilient to demographic shifts, technological disruptions, and economic shocks.

In 2008, US President Barack Obama campaigned on “hope” and “change we can believe in.” The substantive response to the reactionary revival must be to give content to this largely unfulfilled promise.

Jean Pisani-Ferry is a professor at the Hertie School of Governance (Berlin) and Sciences Po (Paris). He currently serves as Commissioner-General of France Stratégie, a public policy advisory institution.

By Jean Pisani-Ferry

Powering Africa’s Transformation

CAPE TOWN/LAGOS – Africa has a bright future ahead of it. Productivity and growth will improve as African economies continue to place more emphasis on services and manufacturing, pursue commodity production, and achieve quick gains in agriculture and light industry.

But African countries’ success presupposes that they generate and manage energy sustainably to keep up with increasing demand. In the next 35 years, Africa’s population will continue to rise, with a projected 800 million people across the continent moving to cities. And Africans are already disproportionately exposed to the adverse effects of climate change, even though they are collectively responsible for less than 4% of global greenhouse-gas emissions.

Urban areas will have to reduce environmental stresses by promoting low-carbon energy systems, electric mass transportation, and energy-efficiency initiatives, as well as the use of cleaner cooking fuels. And rural areas can create new opportunities that reduce the need for urban migration, by expanding renewable energy systems and energy access.

But even with these measures, providing enough energy for a modern, inclusive economy will not be easy. Africa already experiences frequent power outages, even though more than 600 million people there do not have access to electricity, and current demand is relatively modest.

To avoid the harmful spillover effects of high-carbon economic growth, Africa will have to undergo a “climate smart” energy revolution. African countries will need to build climate-resilient infrastructure and tap into the continent’s abundant renewable-energy resources. Doing so will broaden access to energy,create green jobs, reduce environmental pollution, and enhance energy security by diversifying sources.

At the same time, Africa’s energy revolution will itself be challenged by some of the worst effects of climate change. For example, as rainfall becomes more erratic, hydropower production and revenues may decline. This risk can be managed by modifying existing investment plans to account for large climate swings. Still, for the region to adapt, the United Nations Environment Programmeestimates that it will need annual investments of about $7-15 billion by 2020, and $50 billion by 2050.

Rather than treating new climate-related risks as hurdles to overcome, we should view them as opportunities for investment and innovation. We are standing on the threshold of an exciting new era in which technological progress allows us to use a range of conventional and unconventional energy options (excluding nuclear energy).

African countries can now combine energy sources to adapt to realities on the ground. Unlike in past decades, they no longer need be tied to a single energy source. And, because much of Africa’s energy infrastructure remains to be built, governments have a chance to get their energy and infrastructure policies right the first time, thereby maximizing returns on investment.

Policymakers should take a few key steps to help transform Africa’s energy sector and boost long-term economic growth. For starters, making it easier, safer, and more financially attractive for private investors to enter power markets would boost competition, thereby spurring innovation and lowering costs. Moreover, African countries should seek opportunities to share infrastructure and create cross-border power pools.

Another important step is to invest in renewable energy. Africa has an exceptionally rich portfolio of clean-energy assets, including almost nine terawatts of solar capacity, more than 350 gigawatts of hydropower capacity, and more than 100 GW of wind-power potential. This is more than enough to meet the continent’s future demand.

At the same time, renewable-energy sources are becoming less expensive, making them increasingly competitive with fossil-fuel alternatives. For example, the price of utility-scale photovoltaic solar energy in Africa fell by 50% between 2010 and 2014, and continues to decrease today. And South Africa’s Renewable Energy Independent Power Producer Procurement Programme has seen an overall decline in bid prices and oversubscription rates.
Innovative off-grid and mini-grid electricity-distribution systems, meanwhile, are already transforming Africa’s energy landscape and multiplying the ways to exploit clean-energy sources and expand electricity access for the poor, particularly in areas where consumers are widely dispersed. Companies such as M-kopa and Mobisol have made small solar-energy systems available to thousands of African homes, by allowing their customers to pay in installments on their mobile devices.

Still, to accelerate a market shift on the scale that Africa needs will require increased financing from export credit agencies, development banks, commercial financial institutions, and other cross-border sources.

Africa has a chance to bring hundreds of millions of people without electricity into the modern economy; and we have an opportunity to pioneer the next investment frontier. Getting Africa’s energy transformation right, by pursuing a mix of policies and investments that boost diversity and strengthen resilience, will ensure a brighter future for us all.

Carlos Lopes is a Professor at the University of Cape Town and a Visiting Fellow at the Oxford Martin School, University of Oxford. Tony Elumelu is Chairman of Heirs Holdings and United Bank for Africa (UBA), founder of the Tony Elumelu Foundation, and Co-Founder of the African Energy Leaders Group. AlikoDangote is the owner of the Dangote Group and Co-Founder of the African Energy Leaders Group.

By Carlos Lopes, Tony Elumelu, and AlikoDangote

Federalism and Progressive Resistance in America

BERKELEY – The year 2016 was one of ascendant populism in the United States, the United Kingdom, and many other developed countries. With income stagnation, faltering economic opportunities, and a loss of faith in progress fueling widespread discontent, voters backed candidates who promised to return power to the “people” and to shake up systems that mainstream political leaders had “rigged” in favor of a corrupt “elite.” In the US, growing ethnic diversity, smoldering racial tensions, and changing social mores added fuel to the electoral fire.

In the US, long-term erosion of trust in the federal government culminated in Donald Trump’s victory in November’s presidential election: even though President Barack Obama enjoyed high public approval, only 19% of Americans trusted the federal government to do what is right. Given traditional Republican priorities, reflected in President-elect Trump’s cabinet choices, federal government programs (with the notable exception of the military) are likely to be slashed. Ironically, spending cuts for health, education and training, and the environment, along with large regressive personal and business tax reductions, will further enrich the “elite” while undermining programs that benefit the majority of households.

But the major social and economic challenges addressed by federal programs will not disappear. The responsibility to deal with them will merely fall more heavily on state and local governments, which will have to tackle them in innovative ways. Indeed, the answer to Trumpism is “progressive federalism”: the pursuit of progressive policy goals using the substantial authority delegated to subnational governments in the US federal system.

Annual Gallup polls continue to show that a majority of Americans trust their state governments (62%) and their local governments (71%) to handle problems. A 2014 Pew study found that while only 25% of respondents were satisfied with the direction of national policy, 60% were satisfied with governance in their own communities. And the US Constitution allows individual states to function as what Judge Brandeis called laboratories of democracy by experimenting with innovative policies without putting the rest of the country at risk.

There is a long and rich history of successful experiments. State and local governments were leaders in establishing public primary and secondary education systems, as well as state colleges and universities. California, Wyoming, and other states allowed women to vote – an example that encouraged passage of the Nineteenth Amendment (enfranchising all adult women). Welfare-to-work programs in Michigan and Wisconsin served as the model for federal welfare reform under President Bill Clinton, and Obamacare is based on Massachusetts’ health-care system, introduced under Republican Governor Mitt Romney.

Likewise, from 2000 to 2014, by enacting a variety of energy policies – from broad climate action plans to mandated renewable-energy standards – 33 states cut carbon dioxide emissions while expanding their economies. More recently, some states have introduced cap-and-trade systems to put a price on carbon, and many are already on track to meet Obama’s Clean Power Plan targets. Half of all US states have now legalized marijuana in some form, with eight embracing full legalization. Three states have implemented laws offering paid family leave, with a fourth on the way. Nineteen states rang in 2017 with increases in their minimum wage.

The list goes on. Successful examples of progressive federalism can be seen in a wide variety of areas, including health care, prison reform, higher education and job training, entrepreneurship, worker protection and benefits in the “gig economy”, and pay-for-success government contracts. Cooperation, collaboration, and compromise – between private and public actors, for-profit and non-profit organizations, and Republicans and Democrats – are essential features in all of them. They also underpin the myriad examples of policy innovation and civic engagement at the local level described by James Fallows in a recent article and upcoming book.

To promote state and local policy innovation, the federal government often assumes the role of venture capitalist, providing measurable goals and incentives, rather than dictating solutions. Obama championed this approach through statewide competitions like the Department of Education’s Race to the Top program, through federal “social innovation grants” to support state and local governments, and through the Medicaid expansion program. Vice President-elect Mike Pence is proud of the Medicaid expansion he led as Governor of Indiana – though, as of October 2016, 19 states, mainly in the South and Midwest, had opted not to participate, thereby denying health insurance to more than 2.5 million low-income people.

With the world’s sixth-largest economy, a population of nearly 40 million that looks like the future of America, and a united and responsible Democratic government, California is a model of what progressive federalism can accomplish. It has led the way in expanding rights for women, farmworkers, immigrants, and sexual minorities, among others. Similarly, it has been at the vanguard of environmental protection and efforts to combat climate change – from setting tough standards for energy consumption and auto emissions (adopted as federal law in 2016), to pioneering a carbon-pricing system. Governor Jerry Brown recently promised that if the Trump administration cuts federal funding for satellites needed to collect climate data, California would “launch its own damn satellite.”

California can also be a leader of progressive resistance or “uncooperative federalism,” by refusing to carry out federal policies that it opposes. Many cities in California and the state itself already act as “sanctuary jurisdictions,” which protect undocumented immigrants from deportation by limiting cooperation with federal authorities. By law, immigration enforcement is the federal government’s responsibility; in practice, it lacks adequate resources. The massive spending and personnel cuts promised by Trump will exacerbate the shortfall, forcing the federal government to rely even more on state and local authorities to do much of the work. Signaling its opposition, the California legislature recently introduced for consideration new bills to finance legal services for immigrants fighting deportation and to ban the use of state and local resources for immigration enforcement on constitutional grounds.

Trump has already threatened to cut federal funding to sanctuary jurisdictions. But such pressure tactics have been rendered more difficult by a recent Supreme Court decision limiting the use of conditional spending by the federal government to “coerce” state officials into implementing federal policies.

We may remember 2016 as the year populism returned to power in the US. But it may also be remembered as the start of a new era of progressive federalism and resistance, championed by state and local governments trusted by their citizens to help improve their lives and communities.

Laura Tyson, a former chair of the US President's Council of Economic Advisers, is a professor at the Haas School of Business at the University of California, Berkeley, and a senior adviser at the Rock Creek Group. Lenny Mendonca, Senior Fellow at the Presidio Institute, is a former director of McKinsey & Company.

By Laura Tyson and Lenny Mendonca

Trump’s Middle East Supporters

WASHINGTON – US President Donald Trump’s effort to bar citizens from seven predominantly Muslim countries has provided, up until now, the main barometer of how his administration is viewed in the Islamic world. But Trump’s decision to fire 59 Tomahawk missiles at a Syrian airbase, in response to the latest chemical weapons attack by President Bashar al-Assad’s forces, is likely to provide another – perhaps more revealing – indication of who stands where.

To former US government officials and many Muslims, Trump’s proposed travel ban represents a betrayal of liberal values and offers a recruiting gift to extremists. But, among Washington’s oldest allies in the Middle East – those with the most to gain from a partisan president leaning their way – the response has largely been silence. After eight years of being told what to do by the White House, Trump is seen as a welcome – if potentially unsettling – change of pace.

Saudi Arabia may be the Trump administration’sgreatest (albeit silent) cheerleader. The Saudis were never comfortable with President Barack Obama’s overtures to Iran, and were particularly startled when he toldThe Atlantic magazine that the Iranians and Saudis “need to find an effective way to share the neighborhood and institute some sort of cold peace.” The Saudis, bogged down in a proxy war with Iran in neighboring Yemen, are elated that Trump is contemplating an increase in assistance to repel Iranian encroachment from their strategic backyard.

It’s a similar story for the Saudis in neighboring Bahrain, the Kingdom’s closest regional ally (and one that it supports with free oil). Ever since Sunni-Shia strife first erupted there in the 1990s, Bahrain’s leaders have accused Iran of meddling in its affairs (despite offering flimsy evidence). When Saudi-led forces crushed Shia protests on the island in 2011, the Obama administration rebuked Bahrain’s leaders and curtailed arms sales. But the Trump administration, eager to generate manufacturing jobs, has lifted Obama-era restrictions, announcing that it will sell $5 billion worth of fighter jets to Bahrain.

Even in Lebanon, where Iran’s proxy, the Shia Hezbollah militia, is the dominant political force, the Saudis view Trump as a possible savior whose emerging anti-Iranian policy could strengthen the Kingdom’s surrogates.

As Saudi Arabia focuses on Iran, Egypt and the United Arab Emirates are taking aim at the Muslim Brotherhood. And here, too, Trump represents an attractive alternative for these countries’ leaders. The Egyptian government, in particular, blames the Brotherhood – which it overthrew in a 2013 military coup – for all of the country’s ills, from an Islamic State insurgency on the Sinai Peninsula to the country’s economic hardships. Understandably, Trump’s push to designate the Brotherhood as a terrorist organization, and prevent it from fundraising in the US, resonates strongly with Egypt’s government.

Democracy has made few inroads in an Arab world dominated by authoritarian leaders. But that does not concern Trump, who has shown little interest in liberal democratic norms and the institutions that sustain them. After meeting Egyptian President Abdel Fattah el-Sisi in September 2016, Trump gushed that Sisi was “a fantastic guy” who “took control of Egypt …really took control of it.” Sisi returned the platitudes by being the first head of state to congratulate Trump on his victory. And, just days before ordering the attack on Syria, Trump received Sisi warmly at the White House, praising him for doing a “fantastic job.”

Even Turkey’s leaders, long staunch critics of US policy in the Middle East, have warmed to Trump (who in a July 2016 interview marveled at how President RecepTayyipErdoğan crushed a coup attempt). The denunciation by Michael Flynn, Trump’s first national security adviser, of FethullahGülen, a Turkish cleric living in self-imposed exile in rural Pennsylvania, was especially pleasing to Turkey. Erdoğan believes Gülen was behind the coup attempt and demanded that the Obama administration extradite him, to no avail. Flynn, writing in The Hill newspaper, argued that the US “should not provide him safe haven.”

Before they became obsessed with Iran and the Muslim Brotherhood, Arab leaders often began meetings with US officials by railing against Israel. Trump’s early pledge to move the US embassy to Jerusalem, and his support for Israeli settlements in the West Bank, was particularly alarming to America’s Arab allies. But Trump has since backtracked on promises to move the embassy, and, after meeting with Jordan’s King Abdullah in February, changed his position on new settlement construction.

Trump’s now-frozen travel ban has been similarly polarizing. Michael Morell, a former deputy director of the US Central Intelligence Agency, deemed it “a recruitment boon” for the Islamic State, while influential Muslim cleric Yusuf al-Qaradawitweeted that the move “kindles hostility and racism.” The Iranian Foreign Ministry, meanwhile, called the travel restrictions “a clear insult to the Islamic world, and especially the great nation of Iran.” (Iraq, one of the other states singled out, was equally incensed by the original order; the other countries targeted were Libya, Somalia, Sudan, Syria, and Yemen).

Compare those responses with the silence from Egypt and Saudi Arabia, the suggestion of a “fresh start” from Turkey, and the approval expressed by the UAE’s foreign minister.

It remains to be seen how the turn from Obama’s collaborative policy approach to Trump’s more polarizing tactics might affect regional stability, though it is easy enough to speculate. Trump’s ambivalence about the Iran nuclear deal, for example, could have devastating consequences down the road.

So far, however, Trump’s embrace of some Arab leaders, while leaving others alone, suits most Middle East governments quite well. While Western media wax nostalgic for Obama, these leaders, never comfortable with American meddling in their affairs, are relieved he is gone. Regardless of the political heat Trump may be taking for his “Muslim ban,” they have welcomed his agenda. Their voices may be muted now; but, with the US seemingly intent on more robust military intervention in Syria, those rooting for Trump’s success may not be for long.Barak Barfi is a research fellow at New America, where he specializes in Arab and Islamic affairs. 

By Barak Barfi

Finishing Off Malaria

JEDDAH –Malaria has long been one of the major killer diseases of our age. World Health Organization data show that as much as half of the world’s population is at risk. But roughly 90% of malaria cases and 92% of malaria deaths take place in just one region: Sub-Saharan Africa.

Europe and North America live completely free of malaria. Butchildren in Sub-Saharan Africa often suffer through multiple bouts of the disease before they reach the age of five. And children below the age of five account for 70% of malaria-related deaths. Pregnant women who contract the disease can suffer serious health complications.

The good news is thatthe fight against malaria has lately gained momentum, with infections falling steadily in most places and malaria-related deaths down by 29% since 2010. Progress can be attributed partly to innovations, including newrapid diagnostic teststhat work injust minutes,more accessible and affordable anti-malarial drugs, andrising use of long-lasting insecticide-treatednets (LLINs). Greater community engagement has also helped, with popular musicians, media organizations, and religious leaders advocating for stronger action against malaria.

Senegal is one of the countriesleading the decline in cases. Nearly 86% of the populationnow uses LLINs, and most people have access to rapid diagnostic tests, as well as artemisinin-based combination therapy, which is provided for free by the government and donors. Community health workers, under the direction of an effective national program led by the country’s health minister, AwaMarie Coll-Seck, have played a pivotal role in enabling progress.

The results are impressive. In 2001, nearly 36% of outpatient visits in Senegal were malaria-related. According to the National Malaria Control Program (NMCP),thatfigure stood at just 3.3% last year. Over the same period, malaria-related deaths fell from nearly 30%to just above 2%. The US-based Centers for Disease Control reports that, from 2008 to 2010, the number of children under the age of five infected with malaria dropped by 50%.

Senegal is hoping to achieve pre-elimination (defined by the NMCP as fewer than five cases per 1,000 people annually) by 2020,with the WHO certifying malaria as fully eliminatedfrom the country by 2030. But getting there will not be easy. Senegal will need more resources, a stronger government commitment, increased support from development partners, and greater community involvement.

Against this background, the Lives andLivelihoods Fund (LLF) – a grant facility launched by the Islamic Development Bank (IsDB) and the Bill & Melinda Gates Foundation – has joined Senegal’s fight against malaria. The LLF combines $500 million from donors– including Saudi Arabia’s King Salman Humanitarian Aid and Relief Center, the Qatar Fund for Development, the Abu Dhabi Fund for Development, and the Islamic Solidarity Fund for Development (ISFD)– with $2 billion of IsDB financing for health, agriculture, and rural infrastructure projects.Administeredby the IsDB, the LLF isthe biggest initiative of its kind based in the Middle East, aiming to increase the resources available for development across the 30 least-developed and lower-middle-income countries in the Muslim world.

One of the LLF’s first projects will bea $32 millionmalaria pre-elimination project in Senegal.The LLF’s governance mechanism, the Impact Committee (of which I am an alternate member, representing ISFD), approved the year-one pipeline last September. TheSenegalese government officially agreed to the project– a scaled-up version of the already-successful NMCP –in February. As a result,25 districts in five regions of Senegal will be helped in achieving malaria pre-elimination, directly or indirectlybenefiting nearly four million people (about 25% of Senegal’s total population).

I recently traveled to Senegal to assess the project’s progress. The other Impact Committee members and I met withColl-Seckand other national leaders, who affirmed the project’s importance.The most moving part of the trip was ourvisit to the Deggo health post, in the suburbs of Dakar, where health workers and community volunteers explained to us their ongoing efforts to fight the disease.We left that meeting confident that the project possesses both theright skillsand the needed commitment to succeed.

Investments in combating malaria, like those by the LLF, are among the most cost-effective health interventions, yieldingbroad socioeconomic benefits. A healthy child is more likely to attend school, resulting in improved learning outcomes, just as a healthy adult can earn a steady income, resulting in reduced poverty and hunger. Healthy workers are more productive, boosting economic output. Malaria-free communities can divert their health budgets to fight other scourges, such as non-communicable or neglected tropical diseases.

Progress in the fight against malaria will mean progress toward several Sustainable Development Goals (the United Nations targets to which world leaders agreed in 2015), from eliminating poverty to ending preventable deaths in children under age five. If we are to win the fight, more financing from funds like the LLF, particularly in Sub-Saharan Africa, is the way to do it. Shamas-ur-RehmanToor is Senior Program Management Specialist at the Islamic Solidarity Fund for Development,Islamic Development BankGroup.

By Shamas-ur-RehmanToor

Trade Truths for Trumpians and Brexiteers

LONDON – Here’s a reality check for British and American policymakers, and for the many pundits who frequently comment on world trade without understanding its realities: data on Germany’s total exports and imports in 2016 indicate that its largest trading partner is now China. France and the United States have been pushed into second and third place.

This news should not come as a surprise. I have often mused that, by 2020, German companies (and policymakers) might prefer a monetary union with China to one with France, given that German-Chinese trade would likely continue to grow.

And so it has, driven primarily by Chinese exports to Germany. But German exports to China have also been increasing. Notwithstanding a recent slowdown, Germany could soon export more to China than to its crucial neighbor and partner France, and it already exports more to China than it does to Italy. For German exporters, France and the UK are the only European national markets larger than China.

Seasoned observers of international trade tend to follow two general rules. First, the level of trade between two countries often decreases as the geographic distance between them increases. And, second, a country is likely to conduct more trade with big countries that have strong domestic demand, rather than with smaller countries that have weak demand.

The latest German trade data confirm both rules, but especially the second one. A big but geographically distant country is different not only in size, but also in kind from a smaller one. This is too often forgotten in discussions about trade agreements, especially in such charged political atmospheres as currently prevail in the United Kingdom and the US.

In the UK, the House of Commons has already adopted a bill to establish a process for withdrawing from the European Union; but the House of Lords is now demanding that the bill be amended to protect EU nationals living in the UK. In my own brief contribution to the marathon House of Lords debate last month, I argued that, even if Brexit is not the UK’s biggest economic-policy challenge today, it will likely exacerbate other problems, including persistently low productivity growth, weak education and skills-training programs, and geographic inequalities.

Moreover, I warned that the UK will need to adopt a far more focused and ambitious approach to trade, not unlike that of China or India, if it is to fare well after Brexit. Sadly, the UK’s post-Brexit trade strategy is being determined by internal politics, such that it is “patriotic” to focus on new trade deals with Australia, Canada, New Zealand, and others in the Commonwealth, while ignoring harsh economic realities.

New Zealand may be a beautiful country, but it does not have an especially large economy, and it is a very long way from the UK. In fact, despite its massive problems, Greece’s economy is still larger than New Zealand’s.

Many UK policymakers – and all members of the “Leave” campaign – are ignoring the likely costs of exiting the EU single market. But this factor alone demands serious attention, given the single market’s size and close geographic proximity. It is very important that the UK maintain strong trade ties with many EU member states after Brexit. To that end, Britain should be shoring up its exports of services, a sector where it arguably still has a real net natural advantage.

At the same time, the UK should urgently be trying to take its relationship with China – or what former British Prime Minister David Cameron called the “golden relationship” – to a new level. If there is any country with which the UK should want to strike a new trade agreement, surely it is China. During my brief spell in the British government, I helped then-Chancellor George Osborne persuade Cameron that we should aspire to make China our third-largest export market within a decade. Does the new government still consider this a priority?

Beyond China, Britain also needs to be far more focused on its trade ties with India, Indonesia, and Nigeria, all of which will have significant influence in the world economy and global trading patterns in the coming decades.

In the US, President Donald Trump and his economic-policy advisers need to return to reality, especially on trade. They can start by studying Germany’s trade patterns, especially vis-à-vis China. To be sure, China has a large bilateral trade surplus with the US; but it also constitutes an expanding export market for US companies. And if trends from the last 10-15 years continue, China could soon supplant Canada and Mexico as America’s most important export market.

As Chinese household income continues to rise, demand for some of the US’s most competitive goods and services will only increase. Trump, rather than spewing nonsense about China manipulating its currency, should be encouraging market forces to rebalance bilateral trade.

The same can be said for the US’s overall external deficit. Unless the US can boost its savings rate relative to its internal investment needs, it will continue to need foreign capital inflows. And this, in turn, will require it to maintain a trade and current-account imbalance.

Finally, by pushing for a renegotiation of the North American Free Trade Agreement, Trump is taking a risk similar to that of the Brexiteers. Despite China’s recent gains, Canada and Mexico are still close neighbors and crucial trade partners. By potentially disrupting import patterns with all three countries, Trump’s policies are more likely to push up import prices, while jeopardizing US export growth.

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and former Commercial Secretary to the UK Treasury, is Honorary Professor of Economics at Manchester University and former Chairman of the British government’s Review on Antimicrobial Resistance.

By Jim O’Neill

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