Commentary

American Teachers Unions Oppose Innovative Schools—in Africa

No longer content to oppose educational innovation at home, the unions representing America’s teachers have gone abroad in search of monsters to slay.  For nearly a decade, Bridge International Academies has run a chain of successful private schools in the slums of Kenya and Uganda. A for-profit company, Bridge has shown that it’s possible to provide high-quality, low-cost primary education to poor children in the developing world. Naturally, the teachers unions are outraged.

“Bridge’s for-profit educational model is robbing students of a good education and depriving them of their natural curiosity to imagine and learn,” said National Education Association president Lily EskelsenGarcía in October. “This is morally wrong, and professionally reprehensible.”
According to Unesco, the literacy rate among second- and third-graders in Kenya is 32%; in Uganda it’s 27%. The teachers unions blame poverty. Only students who are free from want, they say, can be free to learn.

An alternative explanation is that poor-performing schools in Africa—and India, where Bridge expanded in 2017—are simply not geared for learning. In parts of the developing world, a rigid curriculum leaves many students hopelessly behind. No real attempts are made to monitor school performance. Teachers often lack appropriate skills and frequently fail even to show up to work.

In 2013 the World Bank determined that teachers in Kenya’s government schools were absent 47% of the time, teaching an average of only two hours, 19 minutes a day. A government audit showed that 80% of the primary-school teachers certified by Uganda last year could not themselves reliably perform at the primary-school level in reading and mathematics.

African and Indian parents are no different from American parents. They know that poor-performing government schools are letting their children down. Even the desperately poor in slums and rural areas are willing to pay for a better option.
Bridge is a Silicon Valley-style startup. Its founders hope to revolutionize education, taking inspiration from the way Tesla and Uber disrupted their industries. With more than $100 million in support from Bill Gates, Mark Zuckerberg, the World Bank’s International Finance Corp. and Learn Capital, Bridge has developed a new model of private education.

Bridge school teachers are provided with lesson plans and teaching scripts. They work eight-hour days. Their attendance is monitored; absences are rare. Student performance data are collected, analyzed and used to improve outcomes.
In Kenya, progress has been notable. After two years in Bridge schools, 59% of students pass the national primary school exam. That’s 15 percentage points higher than the estimated public-school pass-rate. In 56 communities from 23 rural and urban counties, Bridge had a 100% pass rate among pupils who attended their schools for at least two years.

These unprecedented gains led World Bank president Jim Yong Kim in 2015 to single out Bridge for helping lift students in the developing world into the modern age. His words of praise enraged Randi Weingarten, president of the American Federation of Teachers.

“The World Bank’s promotion of the fee-charging, for-profit Bridge International Academies in Kenya and Uganda is not an appropriate role for the institution,” she said. In late 2016, Education International, a global consortium of teachers unions, issued detailed reports attacking Bridge’s work in Kenya and Uganda. While never mentioning the improvement in student learning, the reports maligned Bridge’s use of teaching scripts, claiming that they hindered teacher flexibility and creativity. Not surprisingly, a main concern was that teacher salaries are lower at Bridge schools than they are at government schools. But it seems educational innovation anywhere is a threat to union control everywhere.

Is the Deflation Cycle Over?

CAMBRIDGE – Until the global financial crisis of 2008-2009, deflation had all but disappeared as a concern for policymakers and investors in the advanced economies, apart from Japan, which has been subject to persistent downward pressure on prices for nearly a generation. And now deflationary fears are on the wane again.


By the mid-1960s, the advanced economies began an era of rising inflationary pressures, ignited largely by expansionary fiscal and monetary policies in the United States, and acutely compounded by the oil price hikes of the 1970s. Stagflation, the combination of low economic growth and high inflation, became a buzzword by the end of that decade. Most contemporary market forecasts extrapolated those trends, predicting an uninterrupted upward march in oil and commodity prices. Inflation came to be seen as chronic, and politicians looked toward price controls and income policies. Real (inflation-adjusted) short-term interest rates were consistently negative in most of the advanced economies.

Federal Reserve Chairman Paul Volcker’s monumental tightening of US monetary policy in October 1979 ended that long cycle. Stagflation gave way to a new buzzword: disinflation, which accurately characterized many advanced economies, as inflation rates fell from double digits.

But disinflation is not the same as deflation. As shown in the figure, between 1962 and 1986, not a single advanced economy recorded an annual decline in prices. In many emerging markets, inflation rates soared into triple digits, with several cases of hyperinflation. As late as 1991, Greece had an inflation rate of about 20%. Even in historically price-stable Switzerland at that time,inflation was running above 5%.

[chart]

This seems a distant memory after the steady decline in prices in Greece since 2013, alongside a debt crisis and collapse in output. The Swiss National Bank, for its part, has been battling with the deflationary effects of the franc’s dramatic appreciation over the past few years.

The deflationary forces were unleashed by the major economic and financial dislocations associated with the deep and protracted global crisis that erupted in 2008. Private deleveraging became a steady headwind to central bank efforts to reflate. In 2009, about one-third of advanced economies recorded a decline in prices – a post-war high. In the years that followed, the incidence of deflation remained high by post-war standards, and most central banks persistently undershot their extremely modest inflation objectives (around 2%).

Because US President Donald Trump’s stimulus plans are procyclical – they are likely to gain traction when the US economy is at or near full-employment – they have reawakened expectations that the US inflation rate is headed higher. Indeed, inflation is widely expected to surpass the Federal Reserve’s 2% objective. But tighter monetary conditions act to mitigate the magnitude of the inflation spurt: while the expected rise in US policy rates is the most modest and gradual “normalization” in the Fed’s history, sustained dollar appreciation should limit price gains for a broad range of imported goods and their domestic competitors.

This expected turning point in the behavior of prices is not unique to the US. If the International Monetary Fund’s projections for 2017 are approximately correct, this year will be the first in a decade that no advanced economy is experiencing deflation (figure). Perhaps the long-awaited effects of the historic monetary expansion are finally yielding fruit. Most likely, currency depreciation in the UK, Japan, and the eurozone has been a catalyst.

If 2017 really does mark a broad reversal of a decade of deflation, it is reasonable to expect that most major central banks will be not be inclined to overreact if, after a decade or so (longer for Japan) of mostly downside disappointments, inflation overshoots its target. Furthermore, the view that higher inflation targets (perhaps 4%) may be desirable (because they would provide central banks with more space to lower interest rates in the advent of a future recession) has gained ground in some academic and policy quarters.

Of course, there may be yet another factor motivating major central banks’ tolerance for higher inflation. But their leaders may be unwilling to acknowledge it openly: as I have argued elsewhere, a steady dose of even moderate inflation will help to erode the mountains of public and private debt advanced economies have built up in the past 15 years or so. Carmen Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

By Carmen M. Reinhart

Who’s Really Threatening Europe?

YAOUNDÉ – Opponents of immigration into the EU typically make one or more of four arguments: immigrants are weakening Christian values, undermining liberal democratic institutions, bringing terrorism, and burdening public budgets. If these claims were true, the EU would be justified – if not obliged – to close its borders. In fact, none of them withstands scrutiny.


Begin with the loss of Christian cultural values, which has lately received a lot of attention in scholarly, political, and policy circles. Immigration opponents often point to the precipitous drop in the share of Europe’s population that identifies as Christian – from 66.3% in the early twentieth century to 25.9% in 2010 – which they blame partly on the combination of high immigration from Muslim-majority countries and declining birth rates among native Europeans.

But anti-immigration groups have offered no significant empirical evidence to support this claim. In fact, when one actually looks at the data, the holes in their argument quickly become apparent.

For starters, the decline in the share of Christians in Europe does not correlate with an equivalent rise in the share of Muslims. According to Pew Research, the Muslim share of Europe’s population has been growing at a rate of about one percentage point per decade, from 4% in 1990 to 6% in 2010. In 2030, Muslims are projected to make up just 8% of Europe’s population.

In any case, immigrants to Europe aren’t all Muslim. Plenty of them, including from Sub-Saharan Africa and Latin America, are Christian. Add to that religious shifts among “native” Europeans, with many choosing not to attend church or identify as religious, and it seems clear that claims about immigrants diluting Christianity in Europe are not rooted in reality.

Of course, immigration opponents might argue that the threat to Europe is not so much a matter of official religion as of the values, cultivated in Europe’s Christian societies, that underpin liberal democratic institutions. Citing retrograde cultural practices – from the subjugation of women to violence against religious and sexual minorities – in the autocratic and crisis-prone countries from which immigrants often hail, their opponents often argue that people from these cultures cannot assimilate properly in Europe. According to figures like France’s Marine Le Pen, the Netherlands’ Geert Wilders, and Belgium’s Filip Dewinter, immigrants will bring their culture with them, thereby undermining European institutions. But, again, they offer no compelling evidence for this; nor do they differentiate among immigrant groups.

The truth is that some secular developing countries have their own democratic values and institutions, comparable to those in Europe; they may simply lack some of the economic opportunities Europe offers. Even immigrants who come from countries with autocratic governments and problematic cultural norms are, once in Europe, held to the same legal standard as Europeans. And they rarely run for any political office that would enable them to reshape European institutions.

Nonetheless, these immigrants, Europe’s right-wing politicians declare, could still bring religious fundamentalism with them, threatening Europeans with the terrorism that is tearing apart their home countries. This, too, is a flawed argument, for it conflates Islam and Islamist terrorism.

In fact, a very low proportion of the Muslim population is sympathetic to radical Islamic fundamentalism. As of 2010, there were an estimated 1.6 billion Muslims worldwide; there are obviously far fewer Islamist terrorists.

Even more damning for the populists’ argument is that individuals who were born and raised in the EU, not immigrants, have been largely responsible for recent terrorist attacks in Europe. And even they – often self-radicalized online – were not necessarily motivated by religion so much as by grievances over economic marginalization and stalled social mobility.

The final common argument against immigration to the EU is economic. Surveys show that a majority of Europeans believe that immigrants represent a heavy economic burden, owing to generous social-welfare schemes in many EU countries, and contribute little in return. And when immigrants aren’t sponging off the taxpayers, they’re suppressing their wages and taking their jobs.

So what is the truth? In the first few years after arrival, most immigrants do not pay taxes and depend on public services. But once immigrants have had a chance to settle into their new countries and acquire the relevant knowledge and training, they begin to contribute economically.

For Europe, where the population is aging fast, these contributions will prove critical. Indeed, in the longer term, today’s immigrants will become a vital engine of growth and source of tax revenues needed to fund social-welfare entitlements. Europeans simply must be willing to incur the short-term costs of integrating and training these individuals.

When arguing to keep people – especially refugees who are fleeing violence and persecution – out of the EU, one should at least have a solid case. After all, closing the borders to those in need is an extreme response – and one that runs counter to the Christian and European values immigration opponents claim to be defending. Yet no anti-immigrant political leader or group has managed to produce credible evidence to support such a response. So who is the real threat to the European way of life? Simplice A. Asongu is Lead Economist in the research department of the African Governance and Development Institute.

By Simplice A. Asongu

America’s Confidence Economy

LAGUNA BEACH – Financial markets seem convinced that the recent surge in business and consumer confidence in the US economy will soon be reflected in “hard” data, such as GDP growth, business investment, consumption, and wages. But economists and policymakers are not so sure. Whether their doubts are vindicated will matter for both the United States and the world economy.


Donald Trump’s election as US president has triggered a surge in positive economic sentiment, because he pledged that his administration would aggressively pursue the policy trifecta of deregulation, tax cuts and reform, and infrastructure construction. Republican majorities in both houses of Congress reinforced the positive sentiment, as they signaled that Trump would not face the kind of paralyzing gridlock that Barack Obama confronted for most of his presidency.

The surge in business and consumer sentiment reflects an assumption that is deeply rooted in the American psyche: that deregulation and tax cuts always unleash transformative pro-growth entrepreneurship. (To some outside the US, it is an assumption that sometimes looks a lot like blind faith.)

Of course, sentiment can go in both directions. Just as a “pro-business” stance like Trump’s can boost confidence, perhaps even excessively, the perception that a leader is “anti-business” can cause confidence to fall. Because sentiment can influence actual behavior, these shifts can have far-reaching impacts.

In his groundbreaking General Theory of Employment, Interest, and Money, John Maynard Keynes referred to “animal spirits” as “the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism, rather than mathematical expectations, whether moral or hedonistic or economic.” Jack Welch, who led General Electric for 20 years, is a case in point: he once stated that many of his own major business decisions had come “straight from the gut,” rather than from analytical models or detailed business forecasts.

But sentiment is not always an accurate gauge of actual economic developments and prospects. As the Nobel laureate Robert J. Shiller has shown, optimism can evolve into “irrational exuberance,” whereby investors take asset valuations to levels that are divorced from economic fundamentals. They may be able to keep those valuations inflated for quite a while, but there is only so far that sentiment can take companies and economies.

So far, the exuberant reaction of markets to Trump’s victory – all US stock indices have reached multiple record highs – has not been reflected in “hard data.” Moreover, economic forecasters have made only modest upward revisions to their growth projections.

It is not surprising that equity investors have responded to the surge in animal spirits by attempting to run ahead of a possible uptick in economic performance. After all, they are in the business of anticipating developments in the real economy and the corporate sector. In any case, they believe that they can quickly reverse their portfolio positions should their expectations change.

That is not the case for companies investing in new plants and equipment, which are less likely to change their behavior until announcements begin to be translated into real policies. But the longer they wait, the weaker the stimulus to economic activity and income, and the more consumers must rely on dissaving to translate their positive sentiment into actual purchases of goods and services.

It is in this context that the economy awaits a solid timeline for policy announcements to evolve into detailed design and durable implementation. While there is often some delay when political negotiations and trade-offs are involved, in this case, the sense of uncertainty may be heightened by policy-sequencing decisions. By deciding to begin with health-care reform – an inherently complicated and highly divisive issue in US politics – the Trump administration risks losing some of the political goodwill that could be needed to carry out the kinds of fiscal reform that markets are expecting.

Even if a bump in the economic data does arrive, it may not last, unless the Trump administration advances policies that enhance longer-term productivity, through, for example, education reform, apprenticeship programs, skills training, and labor retooling. The Trump administration would also have to refrain from pursuing protectionist trade measures that would disrupt the “spaghetti bowl” of cross-border value chains for both producers and consumers.

If improved confidence in the US economy does not translate into stronger hard data, unmet expectations for economic growth and corporate earnings could cause financial-market sentiment to slump, fueling market volatility and driving down asset prices. In such a scenario, the US engine could sputter, causing the entire global economy to suffer, especially if these economic challenges prompt the Trump administration to implement protectionist measures.

The US is on relatively strong footing to achieve higher economic growth. Indeed, by animating the economy’s animal spirits, the Trump administration has laid the groundwork for the private sector to do a lot of the heavy lifting. But there is more to do. Unless the Trump administration can work well with a cooperative Congress to translate market-motivating intentions into well-calibrated actions soon, the lagging hard data risks dragging down confidence, creating headwinds that extend well beyond financial volatility.

Mohamed A. El-Erian, Chief Economic Adviser at Allianz, was Chairman of US President Barack Obama’s Global Development Council and is the author of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

By Mohamed A. El-Erian

The Mispriced Risk of Infectious Diseases

NEW YORK – Global business leaders and investors are largely transfixed by two kinds of risk: macroeconomic and geopolitical. In the near term, this means a focus on the US Federal Reserve’s impending rate hikes and the upcoming elections in France and Germany.


Over the longer term, it means awareness of structural risks like high sovereign debt, demographic shifts, and natural-resource scarcity. But there is a third, arguably more pernicious, risk lurking below most decision-makers’ radar: infectious diseases.

According to the former director of the US Centers for Disease Control and Prevention, Tom Frieden, the world is at greater risk than ever from global health threats. People travel farther and more often. Supply chains, including for food and medicines, extend across the world. A poorly treated case of, say, tuberculosis (TB) in Asia or Africa can present in a hospital in the United States within days.

Against this background, scientists are concerned about the recent uptick in epidemics of diseases such as Zika, Ebola, and avian flu. And they are alarmed by the resurgence of life-threatening diseases such as influenza, HIV, malaria, and TB.

To be sure, in terms of fatalities, recent disease outbreaks and pandemics are a far cry from past global flu epidemics. Whereas the 2003 SARS epidemic resulted in 774 deaths, and the Ebola outbreak of 2014-2015 left 11,310 dead, the 1918-1920 flu epidemic claimed the lives of 100 million people – more than five times the number killed in the world war that had just ended. Indeed, some 5% of the world’s population perished.

But the risks from infectious diseases that we face today could intensify substantially, owing to the rise of anti-microbial resistance (AMR). According to the World Health Organization, “480,000 people develop multi-drug resistant TB each year, and drug resistance is starting to complicate the fight against HIV and malaria, as well.” Antibiotic resistance, the WHO cautions, is now present in every country, putting patients at risk of worse clinical outcomes and at greater risk of death, while increasing the burden on health systems.

England’s chief medical officer, Sally Davies, has warned that, if left unchecked, the growing impotence of drugs could be catastrophic. By 2050, she estimates, drug-resistant infections could be killing someone “every three seconds.” The Review on AMR estimates that, at that point, some ten million lives could be lost each year, at a cumulative cost to global economic output of $100 trillion. To put that into perspective, world GDP today totals $74 trillion per year.

Yet the potential long-term human and economic consequences of AMR of are not widely appreciated by the public and, in particular, by financial markets. In fact, protection from public health threats is one vital area where markets do not deliver efficiently. As a result, it is governments that usually bear the costs of prevention and treatment.

With government budgets already overstretched, coping with the intensifying health burden from AMR will be difficult, to say the least. Yet governments are unlikely to move fast to mitigate this risk. On the contrary, experience indicates that governments often struggle to align public spending with underlying or mounting problems, such as public-health threats, until they reach a crisis point.

More people died of cancer in the US last year than in combat. In fact, last year’s 580,000 cancer deaths exceed the roughly 430,000 battle deaths, on average, in World War I, World War II, the

Korean War, the Vietnam War, and the Gulf War. Yet government spending on cancer averages approximately $4 billion per year. That is just over 0.5% of the annual military budget of roughly $718 billion.

Of course, government budget-allocation decisions are complicated and dogged by political imperatives. The US military employs some three million people, making it the single largest employer in the world, and there is substantial political pressure from some constituencies to place the highest priority on America’s military dominance.

But it is not just a matter of how much is spent; it is also a matter of when. Governments don’t wait for war to break out before investing in the military. Yet they do tend to wait for crises to erupt before they invest in fighting infectious diseases.

The world spent $15 billion on its emergency response to the SARS epidemic and $40 billion on its response to Ebola. In 1918, the crisis response to the flu pandemic cost some $17.5 trillion. Had countries spent more on mitigating the risk of such disease outbreaks – for example, by fortifying their health-care systems and promoting responsible use of antibiotics – those huge emergency payouts may not have been necessary. At the very least, they probably would have been smaller.

In this sense, the fight against infectious diseases closely resembles the fight against climate change. Though the threat is substantial, it is not immediate, so governments continue to pursue other priorities, allowing the threat to grow, largely out of sight. As a result, it is not adequately priced into the markets.

When the crisis finally erupts, the true scale of the threat will become clear. But by that point, it will be much more difficult and expensive to contain, resulting in far more casualties. Unfortunately, that point may be closer than anyone – government or investor – expects.

Dambisa Moyo, an economist and author, sits on the board of directors of a number of global corporations.

 

Lessons From an Age of Progress

WASHINGTON, DC – Imagine that you are a committed internationalist during a tumultuous period in global politics, and you are now grappling with the outcome of a nail-bitingly close US presidential election. The winner is a Republican who ran partly on a message of foreign-policy retrenchment, against a Democrat who represented continuity with the outgoing administration.


Now imagine that the incoming administration collaborates with other countries to help save 25 million lives over the next 15 years. Until this last part, the scenario probably felt all too current for many readers, a large number of whom are still adjusting to the reality of Donald Trump’s presidency. But this is also how many people felt back in 2001, when George W. Bush beat Al Gore, following an extraordinary Supreme Court decision that ended the vote recount in Florida.

There are certainly limits to any comparison between then and now; but it is worth noting that much of the world seemed mired in chaos in the early 2000s, too. Many regions were beset by economic crisis, and political protests met world leaders whenever they gathered. The United States government’s policy toward the Middle East was squarely at odds with that of the United Nations, and violent extremism was on the rise.

It was against this backdrop that roughly 25 million lives – mostly children under age five and people infected with HIV/AIDS – were saved, owing to accelerated progress in global development from around 2001, early in the Bush administration, to 2015, near the end of Barack Obama’s second term.

My Brookings Institution colleague Krista Rasmussen and I recently published a study that assesses the changing pace of progress during the era of the Millennium Development Goals, which world leaders established in 2000 to tackle by 2015 the most severe problems associated with global poverty. We found that roughly two-thirds of the lives saved during this period were in Africa, while around one-fifth were in China and India, and the remainders were spread around the rest of the developing world.

Progress accelerated in other areas as well. Since 2000, at least 59 million more children have completed primary school than would have if 1990s trends had continued; and more than 470 million additional people were lifted out of extreme poverty than would have been if the pace of improvement from 1990 to 2002 had continued.

Unfortunately, we found that progress toward other goals has been less impressive. While the world made major gains in tackling hunger and expanding access to drinking water, it did not significantly improve upon what could have been expected relative to 1990s trends. And with respect to sanitation – namely, having access to a toilet – the already slow rate of progress has not accelerated.

These results point to three key lessons for navigating today’s uncertain geopolitical waters. First, the past need not be prologue: breakthroughs are always possible, even when they are unexpected. In the early 2000s, prospects for improved international cooperation were bleak. In December 1999, mass protests now known as the “Battle in Seattle” prevented a World Trade Organization Ministerial Conference from finishing its proceedings. And in July 2001, a protester was shot dead amid riots outside the G8 summit in Genoa, Italy. But better angels prevailed, and the world came together to take action on life-or-death global health issues.

Second, breakthroughs are typically driven by pragmatic technical efforts to disrupt the status quo. For example, rapid progress on global health emerged from scientific discoveries and large investments in innovative new institutions. These include the Global Fund to Fight AIDS, Tuberculosis, and Malaria; the Global Alliance for Vaccines and Immunizations (now known as Gavi, the Vaccine Alliance); the US President’s Emergency Plan for AIDS Relief; and many public-private collaborations seeded by the Bill and Melinda Gates Foundation, among others.

Third, political leaders can play a pivotal role in pushing for new approaches and solutions to global problems. Who in early 2001 could have guessed that Bush – who would later lead the US into a devastating war in Iraq – would become a hero in the global fight against AIDS and malaria? The Bush administration ultimately allocated much more to foreign-aid budgets than Bill Clinton did during his two presidential terms.

These three lessons should be applied to the next frontier of global challenges. In 2015, all countries agreed to a new set of ambitious Sustainable Development Goals, to be achieved by 2030. The SDGs aim to eliminate extreme poverty and hunger, reduce inequalities within and between countries, and ensure a sustainable future for our planet. Many people consider these objectives to be too ambitious, given the daunting problems in the world today. But achieving these goals is essential for improving living standards everywhere.

Despite how disordered the world feels in 2017, the potential for renewed progress at any given moment is greater than most people think possible. Realizing this potential requires certain key ingredients, such as institutional and disruptive innovations in science and business. And it requires that politicians of all stripes do their part. When the right elements come together, the potential for human achievement is enormous. That is why it is reasonable to hope that the next round of victories in global development will turn out to be even more impressive than the last. John W. McArthur is a senior fellow at the Brookings Institution.

By John W. McArthur

Where Has All the Water Gone?

MANILA – We live on a parched planet. Farmers till arid pastureland, and policymakers fret over empty reservoirs, dry rivers, and thirsty cities. And that only scratches the surface – literally – of the world’s water problem. Subterranean aquifers, which amount to the world’s reserve water tank, are also running dry. If this continues, the consequences could be dire, especially for water-stressed and fast-growing Asia.


Subterranean aquifers are repositories of water located deep underground, in permeable rock, soil, or sand. And they contain about 100 times the amount of water found on the earth’s surface, in streams, lakes, rivers, and wetlands. If you’re in central Africa, South America, or some parts of Europe, you’re probably standing just a few hundred feet above one.

Surface water resources, such as desalinated seawater or recycled wastewater, will not close the global gap – predicted to reach 40% by 2030 – between water supply and demand. So subterranean aquifers are increasingly being exploited for agriculture, power generation, and daily use in fast-growing cities (urban Asia is growing at a rate of 120,000 people per day).

Today, about 30% of the world’s liquid freshwater comes from subterranean aquifers. And one-third of the 37 largest aquifers studied by the University of California between 2003 and 2013 were severely depleted, receiving little or no replenishment from rainfall. Some of the most stressed aquifers are in the driest regions, including Asia, up to 88% of which is water-stressed.

Asia contains around one-third of the world’s land irrigated by groundwater, with India, China, and Pakistan being the biggest consumers. South Asia alone accounts for half the groundwater used globally. But Asia’s aquifers – many of which were formed millennia ago, when areas like northern China had a more humid climate – are no longer being replenished regularly by rainfall.

Instead, boreholes are getting deeper and water tables are falling. In Pakistan’s Punjab Province, over-pumping is lowering the water table by up to a half-meter (20 inches) per year, threatening future food and water security and making thirsty crops like sugarcane and rice tougher to grow.

Asia’s surging population – which could jump by 25%, topping five billion, by 2050 – will put even more stress on food, energy, and water supplies. Globally, 60% more food will be needed by then, with agriculture soaking up increasingly scarce freshwater. Climate change will exacerbate conditions further.

But the problem extends beyond water depletion. Over-pumping of groundwater is already leading to soil subsidence, causing some Asian cities to sink. By 2030, as much as 80% of North Jakarta could be below sea level. Parts of Beijing are sinking by several centimeters per year, according to some estimates.

Moreover, depleted aquifers near coastlines are prone to contamination from saltwater, rendering land barren. Some aquifers are contaminated by arsenic, which can occur naturally deep underground. Nature Geoscience estimates that more than 60% of groundwater in the Indo-Gangetic aquifer is contaminated by arsenic or salt. In Bangladesh, water tainted by arsenic is blamed for more than 40,000 deaths each year.

The first step toward remedying this situation is to establish precisely how much groundwater is left and how it is being used – not easy, but not impossible either. NASA’s Gravity Recovery and Climate Experiment satellite provides information on changes in the earth’s gravity due to fluctuating water volumes. And by applying remote sensing technology to river basins, we can determine how much surface water is available and who is consuming what.

Another important step is to improve the pricing of groundwater. China has run a pilot program in which farmers had to pay extra if they pumped more than their allocation. Similar approaches have worked well in Australia and Mexico. But such measures can be politically difficult to implement. The key to success will be to help countries not only to design the right policies, but also to create the legal frameworks needed to establish and enforce them.

Even more politically difficult would be the elimination of electricity and gas subsidies, which encourage farmers to pump groundwater all day. If such subsidies can’t be withdrawn, there are innovative alternatives that could curb over-pumping.

For example, in Gujarat, India, the government has reduced groundwater pumping by offering power for just eight hours per day. Farmers have the power they need, but can’t pump all day long. Another approach could be to buy back surplus power from farmers to feed into the grid. That would not just reduce over-pumping, but also help to supplement rural incomes.

Efforts to replenish aquifers could also be pursued. A pilot program in India’s Uttar Pradesh state collects excess floodwater in storage ponds, from which water seeps into the water table.

The final step would be to improve management of surface water, thereby reducing the temptation to turn to groundwater in the first place. Around 80% of wastewater is returned untreated to rivers, often contaminating them. Taking stronger action to stop this would be far simpler – including logistically and politically – than conserving groundwater.

Subterranean aquifers should be the reservoir of last resort. If we don’t protect them today, future generations will pay a steep – or even an existential – price. Yasmin Siddiqi is Principal Water Resources Specialist at the Asian Development Bank.

By Yasmin Siddiqi

Democracy Over Sovereignty in Europe

MILAN – The future of the European Union may not officially be on the ballot in the upcoming elections in the Netherlands, France, Germany, and Italy, but the results will go a long way towards determining Europe’s fate.


Anti-EU sentiment is more widespread than ever, as demonstrated by the feverish campaigns of right-wing populist insurgents like Geert Wilders in the Netherlands and Marine Le Pen in France. But there are also signs of support for revamping and reinventing the EU – a message being espoused by the likes of France’s Emmanuel Macron and Germany’s Martin Schulz.

Any pro-EU campaign, to be convincing, must address the problems stemming from the euro. Adopted by 19 of the EU’s 28 member countries (27, after Brexit), the common currency has become a major source of disillusionment with European integration. Though the euro crisis, in its most acute form, is over, the eurozone remains a fragile construct. In the event of renewed volatility, doubt about its survival could easily return.

At the root of the common currency’s fragility are flaws in the Maastricht Treaty framework, which dictates that eurozone members maintain a common monetary policy and individual fiscal policies that conform to shared fiscal rules. But the mere existence of fiscal rules has proved insufficient to guarantee compliance, and there is no enforcement mechanism at the EU level to ensure adequate fiscal discipline.

Unless this changes, there will always be the risk that weaker members will accumulate unsustainable debts, forcing stronger members to choose between providing politically untenable transfers and allowing members to exit, creating instability that could bring down the entire project. A victory for pro-European forces in the coming elections could provide the opportunity – perhaps the last opportunity – to pursue the changes to the Maastricht Treaty that are needed.

Those changes will not be easy to carry out. Europeans will need to accept a fundamental shift in the basis of the eurozone’s legitimacy, moving beyond a simple commitment to rules-based economic governance to accept the kind of discretionary approach taken by an authority with democratic legitimacy.

Without political union, the adoption of a rules-based approach to governance is understandable. It aligns with the logic of central-bank independence: unelected policymakers are committed to a straightforward set of rules, such as targeting a particular inflation rate, against which they can be held accountable. But that logic hasn’t worked for the eurozone, where concrete rules have proved inadequate to prevent pressure for redistribution that voters do not support.

Now that this has become apparent, some advocate a greater role for the market in enforcing discipline. Proposals for a new sovereign-lending framework that allows for orderly restructuring reflect this reasoning.

One proposal calls for the European Stability Mechanism to adopt a system similar to that of the International Monetary Fund, in order to prevent lending to insolvent countries and force reprofiling or restructuring after a certain debt threshold is crossed. Such an approach would make the EU’s “no bailout” rule more credible and avoid placing an excessive burden on monetary policy.

But it would be naive to believe that such a scheme would solve the problem. Fear of contagion would always be justified in a monetary union, where the externalities of a debt crisis in one country always risks infecting the rest of the union. Given this, a framework based exclusively on market mechanisms would be prone to instability.

This is not to say that a market-driven debt-restructuring framework has no place in eurozone reform. It does, and so does a set of simple common rules. But, to support a shared fiscal stance and achieve a better mix of monetary and fiscal policy, a third component is needed: an independent federal fiscal authority focused on creating risk-sharing mechanisms. Such an authority would need a small budget and some discretionary power, in order to be able to adjust its approach in response to events.

Of course, if such a system were perceived to be undermining member states’ sovereignty it would not be politically feasible. Its critics would need to be convinced of its democratic legitimacy. Without full political union, that could be achieved with an emphasis on transparency, independence, and a much larger role for the European Parliament, possibly in coordination with national parliaments.

After all, the central issue facing Europe is not sovereignty, as the right-wing populists claim, but democracy. (With integrated markets, full national sovereignty is an illusion.) What Europe needs today is a treaty that expands democratic legitimacy at the EU level. Preserving national sovereignty based on institutions designed for the far less integrated European economy of the nineteenth century is a recipe for failure. Lucrezia Reichlin, a former director of research at the ECB, is Professor of Economics at the London Business School.

By Lucrezia Reichlin

How Fake News Wins

WASHINGTON, DC – In response to the wave of fake news that inundated the recent presidential election campaign in the United States, much attention has been devoted to those who produce or spread those stories. The assumption is that if news outlets were to report only the “facts,” readers and viewers would always reach the right conclusion about a given story.


But this approach addresses only half of the equation. Yes, we need news organizations to deliver reliable information; but we also need those receiving it to be savvy consumers.

For decades, the US government has supported programs to foster independent media in authoritarian, resource-deprived, or dysfunctional countries. But these programs tacitly assume that the US itself is immune to the problems people in other countries encounter when they create or consume information. We in the US also assume that American media, sustained by advertising, will continue to thrive; that independent journalism is the norm; and that most people are capable of thinking critically and making sound judgments about the information they receive.

In fact, some of the lessons that we have learned while supporting vibrant information gathering and distribution abroad are equally relevant to the US. In the 2016 election, the personal beliefs that drove millions of voters’ decisions were based not only on each person’s experiences and the information they accessed, but also on how they processed those experiences and that information. Voters’ own relationships with content producers, their motivation to believe or disbelieve facts, and their critical thinking skills all determined how they interpreted and acted on information.

In the election, most mainstream pundits did not seem to “get” millions of Americans’ beliefs or viewpoints, so it is little wonder that those millions of Americans were turned off by the pundits’ incessant chatter. To these voters, the pundits were simply information peddlers with no attachments to the issues that matter. Men and women talking in front of TV cameras are too far removed from the factories, offices, bars, churches, schools, and hospitals where viewers form the relationships that determine how they process information. The so-called digital revolution did not render superfluous the importance of human connection in shaping people’s interpretation and response to the information they receive.

Relationships are built on trust, which is essential for ensuring that consumers accept information that challenges their closely held beliefs. But, according to Gallup, only 32% of Americans have a “great deal” or “fair amount” of trust in traditional media outlets – an all-time low. That is deeply problematic, and it suggests that many citizens are throwing out the good information with the bad.

As with any other good, how information is consumed reflects economic and political opportunities, personal incentives, and institutional or cultural norms. Workers in Ohio whose wages have stagnated, or unemployed voters in Michigan whose jobs have migrated overseas, will consume information in a way that reflects their economic situation. Not surprisingly, they will often select sources – whether credible or not – that are critical of globalization and current fiscal and economic policies.

An ample supply of sound information is not sufficient to make good choices; news consumers need critical-thinking skills. Information is much like the food we eat: we need to understand its ingredients, and where and how it is produced, and the effects of overconsumption.

It will probably take decades to rebuild trusting relationships between consumers and mainstream news media. Information consumers will always have biases and incentives to select one piece of information over another. Even so, we can improve critical-thinking skills so that citizens know how to pick trustworthy sources, and resist their own biases.

Cultivating critical-thinking skills takes time and practice, which is why it is more important than ever to invest in education. Some of the models that have been used abroad may work in the US, too. For example, in Ukraine, a recent initiative carried out by IREX mobilized librarians in an effort to neutralize the detrimental effects of Kremlin-funded propaganda. Fifteen thousand Ukrainians were taught concrete skills in avoiding emotional manipulation, verifying sources and credentials, detecting paid content and hate speech, and debunking fake videos and photos.

The results were impressive: participants improved their ability to distinguish trustworthy news from false news by 24%. Better yet, they then trained hundreds more people to detect disinformation, thus multiplying the initiative’s overall impact.

With a rather modest investment, we can make teaching these skills a standard practice in school curricula. Philanthropists can also create or support grassroots organizations that work with citizens to strengthen their ability to consume information critically.

Accurate information and critical-thinking skills are indispensable to democracy. We cannot take them for granted, even in America. That is how fake news wins.

Aleksander Dardeli is Executive Vice President of IREX, a global nonprofit organization that works to strengthen good governance and access to quality information and education.

By Aleksander Dardeli

A Blueprint for Ending Child Marriage

DHAKA – When a young girl is pushed into marriage, the damage can last long after her wedding day. Research shows that girls who marry before the age of 18 receive less schooling than those who marry later, face a higher risk of domestic abuse, and suffer a lifetime of adverse effects on their physical and mental wellbeing.


Yet child marriage continues to be a common practice in the developing world. According to UNICEF, there are more than 700 million women alive today who were married before they turned 18. One in three women aged 20-24 were married or in a union while still a child.

What can be done to end this harmful practice? Bangladesh offers both a possible blueprint and a cautionary tale.

Today, Bangladesh has the world’s highest rate of marriage among girls under 15, and violence against Bangladeshi women is on the rise. Unfortunately, legal efforts to protect women and girls by criminalizing aspects of child marriage face significant obstacles, due to the prevailing political culture, the accommodation of religious extremists, and the persistence of gender bias.

The existing law penalizing aspects of child marriage – the Child Marriage Restraint Act (CMRA) of 1929 – dates to the British colonial period. The law stipulates terms of imprisonment or a fine for anyone who “contracts,” “solemnizes,” or arranges a marriage with a girl under 18. But, with some recent exceptions, it is frequently ignored and rarely enforced.

In the last three years, various drafts of a bill to give the law more teeth have been proposed. But the proposals focused on criminalizing facilitation or participation; none would invalidate child marriage itself. Individuals who officiate at child marriages or adults who take a child bride may violate the law, but the marriage itself would remain legal.

Each version of the bill has kept open this legal route for child marriage. Moreover, while the drafts have introduced stiffer penalties for perpetrators – and imposed greater responsibility on officials to take action – they have also created more space for exceptions. Marriage below the age of 18 is already permitted in Bangladesh by personal laws based on religion. The newly passed replacement of the CMRA – the CMRA 2017 – allows for exceptions in “special cases,” which remain entirely undefined.

That “special cases” clause was earlier interpreted by an official to mean in “for the sake of honor” – which presumably could include pregnancy following a rape – as long as the marriage has a court’s approval and the parents’ consent. Such a framework could ultimately erode legal protections – such as the right to consent – that girls have had for almost a century.

Despite these legal challenges, Bangladesh’s experience may offer hope. Notwithstanding the current child marriage concerns, Bangladesh has made important strides in improving the lives of girls and women during the last three decades. A generation ago, it was unusual for girls to attend primary school. Today, thanks to a broad political consensus on the value of female education, gender parity has largely been achieved in both primary and secondary schooling.

Even on the issue of child marriage, political developments have been encouraging. As two of us have noted elsewhere, at the July 2014 Girl Summit in London, the Bangladeshi government said it would aim to eradicate marriage by girls below the age of 15 by 2021. Targeting marriages with such young girls may be the right approach. Much work remains, and pressure to make good on these commitments is mounting. But there seems to be at least some will to act.

When it comes to persuading some of the Bangladeshi public, however, progress has stalled. Communities in South Asia often value girls less than boys because of limited opportunities to acquire skills and access salaried jobs. Early marriage is often considered the best option to secure a girl’s future. But the constraints placed on young women originate from the patriarchal norms that dominate the community and the household.

Conservative values that oppose giving adolescent girls and young women full control over their life choices are pervasive, because family “honor,” for them, is closely tied to the perceived “purity” of their daughters and brides. An unmarried adolescent girl’s reputation must be carefully protected, because its loss could damage her family’s social standing considerably. The government has often alluded to this line of reasoning to justify proposed reforms to the child marriage law. The “special cases” clause in CMRA 2017 could be an attempt to pre-empt “patriarchal resistance” or a backlash from religious extremists.

But the social cost of allowing exceptions may be too high. Bangladesh’s success in empowering girls and ending child marriage will hinge on strengthening the rule of law by closing existing loopholes. Crucially, such actions must be accompanied by sustained social campaigns and targeted educational programs that convince the public to support the goal, while empowering girls themselves.

As the UNICEF Goodwill Ambassador Angélique Kidjo has said, “long-lasting, fundamental changes come from within communities, and they depend on engaging both mothers and fathers in finding solutions that make a difference in their daughters’ lives.” Some recent successful efforts to address child marriage do precisely that.

It is still possible for Bangladesh to meet the Sustainable Development Goal of eliminating child marriage by 2030. If the government leads, we are confident that the people of Bangladesh will eagerly follow.

Sajeda Amin is a senior associate at the Population Council in New York City. M Niaz Asadullah is Professor of Development Economics at the University of Malaya, in Kuala Lumpur, Research Fellow at the IZA Institute of Labor Economics, and Visiting Fellow at the Center on Skills, Knowledge, and Organization Performance (SKOPE), the University of Oxford. Sara Hossain is a lawyer at the Supreme Court of Bangladesh and an honorary executive director of the Bangladesh Legal Aid and Services Trust. Zaki Wahhaj is a senior lecturer at the University of Kent.

By Sajeda Amin, M Niaz Asadullah, Sara Hossain, and Zaki Wahhaj

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