Inequality in the Twenty-First Century

MUMBAI – At the end of a low and dishonest year, reminiscent of the “low, dishonest decade” about which W.H. Auden wrote in his poem “September 1, 1939,” the world’s “clever hopes” are giving way to recognition that many severe problems must be tackled. And, among the severest, with the gravest long-term and even existential implications, is economic inequality.

The alarming level of economic inequality globally has been well documented by prominent economists, including Thomas Piketty, François Bourguignon, Branko Milanović, and Joseph E. Stiglitz, and well-known institutions, including OXFAM and the World Bank. And it is obvious even from a casual stroll through the streets of New York, New Delhi, Beijing, or Berlin.

Voices on the right often claim that this inequality is not only justifiable, but also appropriate: wealth is a just reward for hard work, while poverty is an earned punishment for laziness. This is a myth. The reality is that the poor, more often than not, must work extremely hard, often in difficult conditions, just to survive.

Moreover, if a wealthy person does have a particularly strong work ethic, it is likely attributable not just to their genetic predisposition, but also to their upbringing, including whatever privileges, values, and opportunities their background may have afforded them. So there is no real moral argument for outsize wealth amid widespread poverty.

This is not to say that there is no justification for any amount of inequality. After all, inequality can reflect differences in preferences: some people might consider the pursuit of material wealth more worthwhile than others. Moreover, differential rewards do indeed create incentives for people to learn, work, and innovate, activities that promote overall growth and advance poverty reduction.

But, at a certain point, inequality becomes so severe that it has the opposite effect. And we are far beyond that point.

Plenty of people – including many of the world’s wealthy – recognize how unacceptable severe inequality is, both morally and economically. But if the rich speak out against it, they are often shut down and labeled hypocrites. Apparently, the desire to lessen inequality can be considered credible or genuine only by first sacrificing one’s own wealth.

The truth, of course, is that the decision not to renounce, unilaterally, one’s wealth does not discredit a preference for a more equitable society. To label a wealthy critic of extreme inequality as a hypocrite amounts to an ad hominem attack and a logical fallacy, intended to silence those whose voices could make a difference.

Fortunately, this tactic seems to be losing some of its potency. It is heartening to see wealthy individuals defying these attacks, not only by openly acknowledging the economic and social damage caused by extreme inequality, but also by criticizing a system that, despite enabling them to prosper, has left too many without opportunities.

In particular, some wealthy Americans are condemning the current tax legislation being pushed by Congressional Republicans and President Donald Trump’s administration, which offers outsize cuts to the highest earners – people like them. As Jack Bogle, the founder of Vanguard Group and a certain beneficiary of the proposed cuts, put it, the plan – which is all but guaranteed to exacerbate inequality – is a “moral abomination.”

Yet recognizing the flaws in current structures is just the beginning. The greater challenge is to create a viable blueprint for an equitable society. (It is the absence of such a blueprint that has led so many well-meaning movements in history to end in failure.) In this case, the focus must be on expanding profit-sharing arrangements, without stifling or centralizing market incentives that are crucial to drive growth.

A first step would be to give all of a country’s residents the right to a certain share of the economy’s profits. This idea has been advanced in various forms by Marty Weitzman, Hillel Steiner, Richard Freeman, and, just last month, Matt Bruenig. But it is particularly vital today, as the share of wages in national income declines, and the share of profits and rents rises – a trend that technological progress is accelerating.

There is another dimension to profit-sharing that has received little attention, related to monopolies and competition. With modern digital technology, the returns to scale are so large that it no longer makes sense to demand that, say, 1,000 firms produce versions of the same good, each meeting one-thousandth of total demand.

A more efficient approach would have 1,000 firms each creating one part of that good. So, when it comes to automobiles, for example, one firm would produce all of the gears, another producing all of the brake pads, and so on.

Traditional antitrust and pro-competition legislation – which began in 1890 with the Sherman Act in the US – prevents such an efficient system from taking hold. But a monopoly of production need not mean a monopoly of income, as long as the shares in each company are widely held. It is thus time for a radical change, one that replaces traditional anti-monopoly laws with legislation mandating a wider dispersal of shareholding within each company.

These ideas are largely untested, so much work would need to be done before they could be made operational. But as the world lurches from one crisis to another, and inequality continues to deepen, we do not have the luxury of sticking to the status quo. Unless we confront the inequality challenge head on, social cohesion and democracy itself will come under growing threat.

Kaushik Basu, former Chief Economist of the World Bank, is Professor of Economics at Cornell University and Nonresident Senior Fellow at the Brookings Institution.

By Kaushik Basu

Learning from Russia’s Other Media War

WASHINGTON, DC – Misinformation and propaganda have been around for as long as mass communication. What has changed is the speed and scale of the delivery. Social media platforms have intensified the spread of pseudoscience and conspiracy theories, threatening democratic institutions in frightening new ways. One only has to Google “Russia” and “Trump” to see the impact of so-called fake news on democracy. But the best way to fight disinformation may be to follow the example set by Ukraine, a country that has faced its own barrage of Russian-funded deceit.

Around the world, people who believe that facts still matter are fighting back. US news organizations are fortifying their positions by emphasizing core journalistic practices such as source verification and fact checking. Independent verifiers and fact checkers have also become important resources for the public.

But as the line between news producer and consumer blurs, it is becoming increasingly difficult to navigate the swamp of misinformation. While a number of new initiatives – such as the News Literacy Project’s Checkology training courses, and Factitious, an online game that tests users’ ability to identify fake news – are trying to bolster the public’s filtering capacity, the impact has so far been limited. Owing to confirmation bias, exposure to concepts that conflict with ingrained beliefs may entrench assumptions, rather than leading us to revise them. And, in a media landscape where even politicians rely on data mining and neuroscience to craft messages based on voters’ state of mind, it is hard to separate truth from falsehood.

Against this background, training in “media literacy” – skills to help analyze and evaluate news – has become almost sexy. Media literacy programs have been around for decades in the US, focusing on issues like media bias and the impact of violence on children. But media literacy for today’s world means equipping people of all ages with the means to navigate an increasingly convoluted information ecosystem. And, as my organization’s recent experience in Ukraine demonstrates, formal training in media literacy may be the best means of winning the war on state-sponsored, politically motivated propaganda.

Russia’s propaganda war on Ukraine – a well funded, widely distributed, and highly sophisticated media drive meant to undermine the Ukrainian government’s legitimacy – has been ongoing for years. The Russian effort has been so aggressive that, in 2015, the Ukrainian government reportedly warned officials at Facebook and within the US government that a similar strategy could be used against the US.

Facebook appears to have dismissed that warning, but media development organizations like mine did not. In October 2015, experts from IREX – backed by funding from the Canadian government and the support of local Ukrainian organizations – launched a nine-month media literacy-training course called Learn to Discern (L2D). Through skills-based workshops and fake news awareness campaigns, we sought to equip citizens with tools to identify Russia’s fabricated stories. The results were encouraging.

Program participants reported gaining a deeper appreciation of what is needed to consume news wisely. For example, when we surveyed people at the beginning of the course, only 21% said that they “almost always” crosschecked the news they consume, a troubling rate for a country where trust in media is low but consumption is high. After the training, the percentage surged to 81%.

We also found that the program produced ripple effects: 91% of trainees shared the knowledge they received with an average of six people, such as family members and co-workers. An estimated 90,000 Ukrainians were reached indirectly.

The L2D training drew on principles developed in the US, but built the methodology from the ground up. Collaborating with Ukrainian experts, we incorporated actual media consumption, sharing, and production patterns into the course design. Most important, we imparted critical thinking skills, teaching participants how to select and process media, not what to consume.

L2D trainers worked across peer networks, building knowledge and skills on the basis of trusted relationships. Research shows that loyalty to social groups, plus shared identity and values, have an outsize influence on what we discern to be true.

Perhaps the program’s most innovative feature was its focus on teaching consumers how to detect emotional manipulation, and how to disengage from such information. In a country where emotions regarding Russian influence run high, this skill is essential. Long after L2D formally ended, trainers have continued running programs independently, reflecting growth in demand for their services. Surveys conducted this year indicate that trainees, too, remain engaged in combating the fake news phenomenon in their country.

Our experience in Ukraine demonstrates that a multi-layered approach, working at the levels of critical thinking, individual and group psychology, and social trust, provides a better defense against fake news than simple fact checking.

Clearly, more work must be done to boost healthy skepticism among news consumers and increase demand for factual information. But media literacy training, if organized with local needs in mind, can help. As disinformation amplifies threats to democracy, and the debate about how to defuse fake news intensifies, consumers can take comfort in knowing that with a little practice, it is possible to discern fact from well-concealed fiction.

Tara Susman-Peña is a senior technical adviser for media at the IREX Center for Applied Learning and Impact.

By Tara Susman-Peña

Trump’s Jerusalem Rationale and its Consequences

NEW YORK – It is 50 years since the Six-Day War – the June 1967 conflict that, as much as any other event, continues to define the Israeli-Palestinian impasse. After the fighting was over, Israel controlled all of the West Bank, Gaza, and Jerusalem, in addition to the Sinai Peninsula and the Golan Heights.

Back then, the world saw this military outcome as temporary. United Nations Security Council Resolution 242, the backdrop to what was to become a diplomatic solution to the problem of the stateless Palestinians, was adopted some five months after the war ended. But, as is often the case, what began as temporary has lasted.

This is the context in which President Donald Trump recently declared that the United States recognized Jerusalem to be Israel’s capital. Trump stated that the US was not taking a position on the final status of Jerusalem, including “the specific boundaries of the Israeli sovereignty” there. He made clear that the US would support a two-state solution if agreed to by both sides. And he chose not to begin actually moving the US embassy from Tel Aviv, even though he could have simply relabeled what is now the US consulate in Jerusalem.

The attempt to change US policy while arguing that little had changed did not persuade many. Most Israelis were pleased with the new US stance, and most in the Arab world and beyond were incensed.

Just why Trump chose this moment to make this gesture is a matter of conjecture. The president suggested it was simply recognition of reality and that his predecessors’ policy failure to do so had failed to yield any diplomatic benefits. This is true, although the reason diplomacy failed over the decades had nothing to do with US policy toward Jerusalem, and everything to do with divisions among Israelis and Palestinians and the gaps between the two sides.

Others have attributed the US announcement to American domestic politics, a conclusion supported by the unilateral US statement’s failure to demand anything of Israel (for example, to restrain settlement construction) or offer anything to the Palestinians (say, supporting their claim to Jerusalem). Although the decision has led to some violence, it looks more like an opportunity lost than a crisis created.

What made this statement not just controversial but potentially counterproductive is that the Trump administration has spent a good part of its first year putting together a plan to resolve the Israeli-Palestinian conflict. This announcement could well weaken that plan’s already limited prospects.

What the Trump administration seems to have in mind is to give outsiders, and Saudi Arabia in particular, a central role in peacemaking. Informing this approach is the view that Saudi Arabia and other Arab governments are more concerned with the perceived threat from Iran than with anything to do with Israel. As a result, it is assumed that they are prepared to put aside their long-standing hostility toward Israel, a country that largely shares their view of Iran.

Progress on the Israeli-Palestinian issue would create a political context in the Arab world that would allow them to do just this. The hope in the Trump administration is that the Saudis will use their financial resources to persuade the Palestinians to agree to make peace with Israel on terms Israel will accept.

The problem is that the only plan to which this Israeli government is likely to agree will offer the Palestinians far less than they have historically demanded. If so, the Palestinian leaders themselves may well determine it is safer to say no than to sign on to a plan sure to disappoint many of their own people and leave them vulnerable to Hamas and other radical groups.

The Saudis, too, may be reluctant to be associated with a plan that many will deem a sellout. The top priority for the new Saudi leadership under Crown Prince Mohammed bin Salman is to consolidate power, which the prince is doing by associating himself with an effort to attack corruption in the Kingdom and by pursuing a nationalist, anti-Iranian foreign policy.

But neither tactic is going entirely according to plan. The anti-corruption effort, while so far popular, risks being tarnished by selective prosecution of offenders (which suggests that it is more about power than reform) and reports about the crown prince’s own lifestyle. And the anti-Iran efforts have become inseparable from what has become an unpopular war in Yemen and diplomatic embarrassments in Lebanon and Qatar. Meanwhile, ambitious plans to reform the country are proving easier to design than to implement, and are sure to alienate more conservative elements.

The problem for Trump and Jared Kushner, his son-in-law who leads US policy in this area, is that the Saudis are likely to prove much less of a diplomatic partner than the White House had counted on. If the new crown prince is worried about his domestic political standing, he will be reluctant to stand shoulder to shoulder with an American president seen as too close to an Israel that is unwilling to satisfy even minimal Palestinian requirements for statehood.

All of which brings us back to Jerusalem. Trump argued that recognizing the city as Israel’s capital was “a long overdue step to advance the peace process and the work towards a lasting agreement.” More and more it appears that Trump’s move will have just the opposite effect.

Richard N. Haass is President of the Council on Foreign Relations and the author of A World in Disarray.

By Richard N. Haass

Financial Investors’ Wish List for 2018

NEWPORT BEACH – If financial investors were to write letters to Santa Claus this Christmas, they would probably be tempted to ask for the continuation of the unusual combination of factors that has dominated over the last year: ultra-low market volatility, booming financial-asset values, correlations that lower the cost of portfolio risk mitigation, and promising new opportunities (such as Bitcoin). But before making their wish list, investors should consider the longer-term risks associated with the decoupling of financial markets from economic and policy fundamentals.

Investors could be forgiven for hoping for more of the same. After all, with less than a month to go, 2017 is on course to be a hugely, if not historically rewarding year for them. As of December 12, global stock markets, and in particular the S&P index, had returned around 20% for the year – and this on top of an already-strong multi-year run. Add to that unusually low volatility – in the US, 2017 so far has shown the lowest daily loss in the entire history of the S&P 500 index – and there has been little to keep investors up at night.

Usually, such strong stock returns are accompanied by lower prices for government bonds – the so-called negative correlation between risky and safe assets. Not so in 2017. Despite the impressive equity rally, the price of longer-term US Treasury bills was higher at the beginning of December than at the start of the year.

And then there is the precipitous rise of the crypto-currency Bitcoin. With its price having surged by an eye-popping amount this year (from around $1,000 to over $16,000 as of December 12), even a small allocation of Bitcoin has made a material difference in investors’ portfolios.

Five main factors have enabled this unusual situation.

• A synchronized pickup in global economic growth, which continues to strengthen.

• Progress in the United States on pro-growth policies.

• Skillful normalization of monetary policy (which is still ongoing) by the US Federal Reserve.

• Passive investment products attracting large inflows.

• Continued large liquidity injections from three big central banks – the Bank of Japan (BOJ), the European Central Bank (ECB), the People’s Bank of China (PBOC) – which, together with cash-rich corporate balance sheets, have served to lower funding costs for a significant set of households and corporates.

Now for the less exuberant news: without continued economic and policy improvements, the factors that have delighted investors in 2017 risk generating an unpleasant reversal of fortune. This year’s strong performance has, after all, been buoyed significantly by “borrowed” returns from future years.

With regard to mitigating portfolio risk, the increase in government bond prices leaves little room for this traditionally safe asset to compensate for a possible decline in stocks. Given how many value-at-risk-based models work, the persistence of low volatility has resulted in a crowded trade in a number of areas, which could turn out to be technically fragile.

As for Bitcoin, its vertiginous rise – fueled in part by the growing participation of institutional investors – may imply that it is on the path toward broad acceptance. But it may also turn out to be little more than a large financial bubble, implying serious damage when it inevitably collapses.

What, then, should investors really be hoping for in the coming year? In general, the top priority must be improvement in economic and policy fundamentals to the point that they better validate existing elevated asset prices, while laying a foundation for greater gains over time.

Achieving this would require, in the US, the expansion of pro-growth policies, which, as recently announced by Donald Trump’s administration, would include adding an infrastructure plan to deregulation and tax measures. European countries should also pursue more focused pro-growth measures at the national level, while supporting stronger regional efforts, facilitated by a reinvigorated reform-minded Franco-German leadership and a relatively orderly Brexit process.

As for Japan, Prime Minister Shinzo Abe should take advantage of his commanding majority in the Diet, won in October’s snap general election, to implement the third “arrow” of Abenomics: pro-growth structural reforms. Finally, to promote stable growth, all of the world’s systemically important central banks – notably, the Fed, the BOJ, the ECB, and the PBOC – would need to continue coordinating their strategies, with a view to ensuring consistent monetary-policy stances.

Only with such efforts can the current pickup in global growth develop the structural roots that are needed to make it durable, balanced, and inclusive over the medium term. This is all the more critical at a time of fluid geopolitical risk and uncertain productivity, wage, and inflation dynamics.

However tempting it may be to focus our holiday wishes on our own immediate desires, it is imperative this year that investors’ wish lists take into account the big economic and policy picture.

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

AIDS, NCDs, and the ABCs of Organizing

GENEVA – Non-communicable diseases (NCDs), like heart disease, stroke, cancer, diabetes, and chronic lung disease, are responsible for 70% of all deaths. There is incontrovertible evidence that tobacco use, inactivity, unhealthy diets, and excessive alcohol consumption increase the odds of dying prematurely from an NCD.

And yet, despite widespread knowledge of the risks, global obesity goes largely unchecked, while tobacco and alcohol use continue to rise. It is against this backdrop that networks of NCD alliances met December 9-11 at the second Global NCD Alliance Forum, in the United Arab Emirates.

As they search for solutions to bring NCDs under control, they should look for inspiration to the movement to fight AIDS. People living with and affected by HIV continue to drive response efforts, and their unique form of mobilization has been instrumental to progress. While the battle is not over, AIDS activists know that it can be won.

Similarly, a mobilized NCD movement can turn the tide against that epidemic. Yet, in 2015, Richard Horton, the editor of The Lancet, described the NCD community as needing an “electric shock to its semi-comatose soul.” He added: “But who has the courage to deliver it?”

We believe there are lessons to be learned from AIDS activists. As global attention focuses on NCD prevention, those seeking to control preventable illnesses should look to the “ABCs” of AIDS organizing for guidance.

The first letter that the NCD community should consider is “A,” for activism. Anyone over 40 will recall images of AIDS activists performing “die-ins” at scientific meetings around the world. In the United States, AIDS activists took to the streets, even shutting down the Food and Drug Administration’s headquarters for a day in October 1988. Globally, activists lobbied governments and pharmaceutical companies to make medicines more affordable. This activism continues, and should serve as a model for action on NCDs.

Next, the NCD community must adopt a bolder approach to budgets – the “B” of the AIDS movement’s strategy. Civic organizing and grassroots activism may fuel early energies, but organizing and sustaining a broad-based coalition takes money. The AIDS movement was clear about this from the beginning, and lobbied for resources to support its advocacy and accountability effectively.

“C” is for coalitions: the AIDS movement was quick to understand that progress would come only with diverse support. Activists established links between people living with HIV and those with other concerns, such as women’s rights, intellectual property, nutrition, and housing. Issue-specific coalitions and campaigns work best when they bring together government insiders and outsiders, to combine perspectives and expertise.

The AIDS movement also understood that a holistic response to the epidemic was essential if support was to spread. Thus, “D,” the determinant of success, was to draw attention to the interconnectivity of the challenge. For example, lobbying education leaders to keep girls in school longer has contributed to providing young people with the knowledge and agency to make smart decisions about when and with whom to negotiate safe sex. Similarly, links were forged between groups working on poverty, gender, and nutrition – factors that played a role in driving the AIDS crisis. NCDs are no less isolated in their causality, and similarly require a multi-sector approach to prevention.

Engagement – “E” – was what helped the AIDS movement become so influential. By borrowing from the playbook of the disability rights movement, which championed the mantra “Nothing About Us Without Us,” AIDS advocates demanded representation on the bodies established to address the disease. For example, UNAIDS remains the only United Nations agency with seats on its board for representatives from civil society. This norm is so powerfully embedded in the AIDS movement that it would be almost unthinkable for an AIDS meeting to take place without representation from the community.

Disease prevention movements must also develop persuasive narratives, and “F” – framing the issue – was essential to the AIDS community’s effort to gain support from political leaders. In particular, access to AIDS treatment was framed as a matter of economic justice. Framing the narrative this way led to a dramatic reduction in the price of medicines, so much so that more than half of people living with HIV in low- and middle-income countries are in treatment.

An equally important framing issue for AIDS, which is highly relevant to the NCDs movement, is that of responsibility. The AIDS community worked hard to shift the focus from blaming individuals’ lifestyle choices to putting the onus on the state for providing health care and removing legal discrimination.

In the AIDS debate, gender – our movement’s “G” – was a significant focal point. HIV was initially seen as a “gay disease,” and gender identity was embedded in the DNA of the AIDS movement early on. Gender dimensions of NCDs are no less important; one only has to consider how alcohol and tobacco are marketed to understand that. Gender, therefore, must become a focus of NCDs prevention efforts.

Finally, “H” – human rights – was the bedrock of the AIDS response. Campaigns were launched against discrimination in workplaces, schools, and health centers. Strategic litigation helped ensure equality under the law. The AIDS movement refused to hold major conferences in countries with punitive laws against people living with HIV. The NCD movement could take a similar tack by, for example, refusing to meet in countries that fail to restrict advertising of junk food to children.

The list of AIDS lessons could continue throughout the alphabet, but ending with “H” is apt, given that human rights drove the response, and should drive the response to NCDs. Poverty, exclusion, and social and economic marginalization put people at higher risk for HIV. It is no different for NCDs.

The early mainstream reaction to the AIDS epidemic was to ask, “Why don’t those people make better choices?” The AIDS movement made clear that that was the wrong question. Today, with 70% of the planet at risk of premature death from preventable illnesses, “those people” are many of us. The NCD and AIDS communities can learn from one another. We are a stronger movement when we join forces.

The views expressed here do not necessarily reflect those of UNAIDS.

Kent Buse is Chief of Strategic Policy Directions at UNAIDS. Laurel Sprague is Executive Director of the Global Network of People Living with HIV.

By Kent Buse and Laurel Sprague

The Climate-Change Fight Returns to Paris

PARIS – Nearly two years have passed since France’s then-foreign minister, Laurent Fabius, struck his gavel and declared: “The Paris agreement for the climate is accepted.” Next week, President Emmanuel Macron and the French government will host world leaders and non-state actors for the One Planet Summit. The purpose of this gathering is to celebrate climate gains made since 2015, and to boost political and economic support for meeting the goals and targets of the Paris agreement.

The Paris climate agreement, a historic feat of diplomacy that ushered in a new era of international climate collaboration, was facilitated by a number of political and social forces. One of the most influential of these was a group of more than 100 countries known as the “high ambition coalition,” which helped finalize the deal in the waning days of the 2015 United Nations Climate Change Conference (COP21). This diverse coalition of leaders – from the richest countries to the most vulnerable Pacific island states – broke a political deadlock that had impeded climate progress for years, if not decades.

As we reflect on that success, one thing is abundantly clear: the need for ambitious coalitions has returned. Strong global leadership on climate change scored a diplomatic victory two years ago, and today, new economic and political alliances are needed to turn those commitments into action.

The diplomatic success of the Paris accord is worthy of praise in its own right; it was a remarkable leap forward in the fight against climate change. But we must not rest on our laurels. With the United States, the world’s largest historical emitter of greenhouse gases, dismissive of the accord, the rest of the global community must reaffirm its commitment to reducing carbon dioxide emissions. Dramatic, meaningful, and immediate steps must be taken.

The best available science estimates that the world has only three years to begin a permanent reduction in greenhouse-gas emissions if there is to be any hope of achieving the Paris accord’s goal of keeping warming to “well below 2°C” relative to pre-industrial levels. And, whatever urgency science cannot convey is being communicated by the planet itself – through a ferocious display of hurricanes, floods, wildfires, and deadly droughts.

Given the immediacy of the challenge, what can and should be done to avert crisis?

Solutions start with money, and a main objective of the One Planet Summit is to mobilize public and private financing to fund projects that can reduce climate-changing pollution today. During the summit’s “Climate Finance Day,” companies, banks, investors, and countries will announce new initiatives to help fund the costly transition to a carbon-free future.

Hollow promises will have no place at this gathering; only real commitments of real money for tangible projects will be discussed. As a result, we hope to see hundreds of millions of dollars committed by governments to fund solutions across all fronts of the climate-change battle. Plenty will go to renewable-energy projects, but money will also be committed to clean transportation, agriculture, infrastructure, and urban systems. Funding will also be earmarked for projects that help protect communities that are most vulnerable to the impact of global warming.

The One Planet Summit will be an occasion for countries, companies, and private institutions to forge concrete strategies to shift away from fossil fuels. At the UN climate talks in Bonn, Germany, last month, 20 countries, led by Canada and the United Kingdom, announced plans to phase out coal from electricity generation. The gathering in Paris will provide an opportunity for other countries to join the Powering Past Coal Alliance, which aims to formalize a deliberate transition from coal, and to help companies achieve net-zero emissions.

Ultimately, next week’s summit should be a place where governments, businesses, investors, and other key stakeholders collaborate and share ideas, showcase successful projects, and coordinate goals. This event should not stand alone, but rather serve as a springboard for international meetings that will take place over the next few years. After all, it is during this short timeframe that the fate of the Paris accord’s temperature targets will be determined.

Two years after the adoption of a groundbreaking climate agreement, global leaders are set to reconvene in the City of Light. When they arrive, their collective ambition will be needed once more. This time, however, the goal must be to ensure that past agreements amount to more than just words on a page.

Laurence Tubiana, a former French ambassador to the UN Framework Convention on Climate Change, is CEO of the European Climate Foundation and a professor at Sciences Po, Paris.

By Laurence Tubiana

Refugee Doctors for Refugee Health

TORONTO – Syrian refugees are often portrayed as an unwelcome drain on the communities to which they relocate, especially with regard to health care. But, for those escaping Syria’s civil war, ignorance of their plight is overshadowed only by the reality of their needs – and the diversity of their expertise. Although refugees do bring with them extensive health-care issues, they also bring years of experience in the medical profession that, if put to proper use, could be a boon to the communities that receive them, not to mention for other refugees.

One of the biggest challenges for refugees anywhere is finding a doctor. In many host countries, inadequate treatment is the result of xenophobia, language barriers, or insufficient supply of medical staff. This is especially true for Syrians, who are scattered across the Middle East, North Africa, Europe, and North America.

But many Syrian refugees are also highly educated. As they settle in places far from the hospitals and clinics in which they once practiced, Syria’s doctors simply want to get back to work. Isn’t it time that they did?

In the United Kingdom, efforts are underway to make that happen. The National Health Service and the British Medical Association have begun retraining refugee doctors, including many from Syria and Afghanistan, to fill the ranks of depleted clinics in UK. Through English-language training, postgraduate study, and professional registration, programs in London, Lincolnshire, and Scotland aim to reintegrate refugee doctors into the medical profession. These efforts should be lauded.

Retraining refugee doctors is not only a moral exercise; it also makes practical sense. Displaced doctors are better able to treat refugee patients’ ailments. Refugee doctors can also help ensure that the flood of new patients does not overwhelm host countries’ health-care systems. And retraining a refugee doctor is cheaper and faster than educating a new medical student. With approximately 600 refugee doctors living in Britain, the well of untapped talent in the UK is deep.

Moreover, refugee patients benefit when treated by doctors who understand their circumstances, including the enormous psychosocial stress that displacement causes. Translators can help, but they are not always available in crisis settings. Doctors who understand refugees emotionally and culturally are better equipped to put patients at ease.

Britain is not alone in recognizing the potential of refugee doctors. In Turkey, Syrian doctors and nurses have received training to help them become familiar with the Turkish health-care system. The goal is to enable qualified Syrian professionals to treat refugee patients, thus mitigating the language and logistical barriers to effective, accessible, and dignified care.

But other host countries have not been as forward thinking. In Lebanon and Jordan, for example, where more than 1.6 million registered Syrian refugees currently live, efforts to allow Syrian doctors to care for refugee patients have been criminalized. Doctors ignoring the law face arrest and possible deportation. Even Canada, a country that generally welcomes diversity and values human rights, is behind the curve on innovative approaches to refugee health. Syrian doctors face “many, many years” of retraining in Canada, and often struggle to fund the high cost of recertification.

Amid this resistance, refugee health care should be viewed as more than a set of logistical and operational challenges, but also as an inherently political process. Two dimensions of the issue must be addressed if refugee patients are ever to be properly cared for, and refugee doctors properly deployed.

For starters, refugee doctors may struggle to be accepted by their local colleagues, owing to political or personal bias. Recognizing the potential for local resistance to integration programs for refugee doctors is essential to develop proactive policies that ensure success.

Moreover, refugee doctors must be trained to address the diversity of medical needs they will face in their adoptive homes. For example, in many countries where refugees originate, lesbian, gay, bisexual, transgender, and intersex (LGBTI) health concerns remain taboo, even among medical professionals. For refugee doctors relocating to countries where LGBTI health and rights are recognized, integration curricula should include training on LGBTI health, particularly the rights of exceptionally vulnerable LGBTI refugees. Improving health for LGBTI refugees can serve as a foundation for a more open society.

The refugee crisis that has engulfed Syria is just one ripple in a tidal wave of global displacement. Around the world, some 22.5 million people are officially registered as refugees, and nearly 66 million have been forced from their homes. These numbers are unlikely to fall in the near term, as calamities caused by climate change, and by human and natural disasters, continue to push even more people from their communities.

Every one of these future refugees will need access, at some point, to medical professionals trained in refugee health, diversity, and inclusion. Empowering refugee doctors to become part of the solution will help overcome entrenched dogmas toward refugee diversity and social identities. But, just as important, it will mark a crucial step forward in ensuring more inclusive refugee health.

Vural Özdemir is a medical doctor, independent writer, and adviser on technology, society, and democracy.

By Vural Özdemir

China, the Digital Giant

SHANGHAI – China has firmly established itself as a global leader in consumer-oriented digital technologies. It is the world’s largest e-commerce market, accounting for more than 40% of global transactions, and ranks among the top three countries for venture capital investment in autonomous vehicles, 3D printing, robotics, drones, and artificial intelligence (AI). One in three of the world’s unicorns (start-ups valued at more than $1 billion) is Chinese, and the country’s cloud providers hold the world record for computing efficiency. While China runs a trade deficit in services overall, it has lately been running a trade surplus in digital services of up to $15 billion per year.

Powering China’s impressive progress in the digital economy are Internet giants like Alibaba, Baidu, and Tencent, which are commercializing their services on a massive scale, and bringing new business models to the world. Together, these three companies have 500-900 million active monthly users in their respective sectors. Their rise has been facilitated by light – or, perhaps more accurate, late – regulation. For example, regulators put a cap on the value of online money transfers a full 11 years after Alipay introduced the service.

Now, these Internet firms are using their positions to invest in China’s digital ecosystem – and in the emerging cadre of tenacious entrepreneurs that increasingly define it. Alibaba, Baidu, and Tencent together fund 30% of China’s top start-ups, such as Didi Chuxing ($50 billion), Meituan-Dianping ($30 billion), and ($56 billion).

With the world’s largest domestic market and plentiful venture capital, China’s old “copy-cat” entrepreneurs have transformed themselves into innovation powerhouses. They fought like gladiators in the world’s most competitive market, learned to develop sophisticated business models (such as Taobao’s freemium model), and built impregnable moats to protect their businesses (for example, Meituan-Dianping created an end-to-end food app, including delivery).

As a result, the valuation of Chinese innovators is many times higher than that of their Western counterparts. Moreover, China leads the world in some sectors, from livestreaming (one example is, a lip-syncing and video-sharing app) to bicycle sharing (Mobike and Ofo exceed 50 million rides per day in China, and are now expanding abroad).

Most important, China is at the frontier of mobile payments, with more than 600 million Chinese mobile users able to conduct peer-to-peer transactions with nearly no fees. China’s mobile-payment infrastructure – which already handles far more transactions than the third-party mobile-payment market in the United States – will become a platform for many more innovations.

As Chinese firms become increasingly technically capable, the country’s market advantage is turning into a data advantage – critical to support the development of AI. The Chinese firm Face++ recently raised $460 million, the largest amount ever for an AI company. DJI (a $14 billion consumer drone company), iFlyTek (a $14 billion voice recognition company), and Hikvision (a $50 billion video-surveillance company) are the world’s most valuable firms in their respective domains.

Another important developing trend in China is “online merging with offline” (OMO) – a trend that, along with AI, Sinovation Ventures is betting on. The physical world becomes digitized, with companies detecting a person’s location, movements, and identity, and then transmitting the data so that it can help shape online experiences.

For example, OMO stores will be equipped with sensors that can identify customers and discern their likely behavior as seamlessly as e-commerce websites do now. Similarly, OMO language learning will combine native teachers lecturing remotely, local assistants keeping the atmosphere fun, autonomous software correcting pronunciation, and autonomous hardware grading homework and tests. With China in a position to rebuild its offline infrastructure, it can secure a leading position in OMO.

Yet, even as China leads the way in digitizing consumer industries, business adoption of digital technologies has lagged. This may be about to change. New McKinsey Global Institute research finds that three digital forces – disintermediation (cutting out the middle man), disaggregation (separating processes into component parts), and dematerialization (shifting from physical to electronic form) – could account for (or create) 10-45% of the industry revenue pool by 2030.

Those actors that successfully capitalize on this shift are likely to be large enough to influence the global digital landscape, inspiring digital entrepreneurs far beyond China’s borders. Value will shift from slow-moving incumbents to nimble digital attackers, armed with new business models, and from one part of the value chain to another. Large-scale creative destruction will root out inefficiencies and vault China to a new echelon of global competitiveness.

China’s government has grand plans for the country’s future as a digital world power. The State Council-led Mass Entrepreneurship and Innovation Program has resulted in more than 8,000 incubators and accelerators. The government’s Guiding Fund program has provided a total of $27.4 billion to venture capital and private equity investors – a passive investment, but with special redemption incentives. The authorities are now mobilizing resources to invest $180 billion in building China’s 5G mobile network over the next seven years, and are supporting the development of quantum technology.

The State Council has also issued guidelines for developing AI technologies, with the goal of making China a global AI innovation center by 2030. Xiongan, now under construction, may be the first “smart city” designed for autonomous vehicles. In Guangdong Province, the government has set an ambitious target of 80% automation by 2020.

Such aspirations will inevitably disrupt the labor market, beginning with routine white-collar jobs (such as customer service and telemarketing), followed by routine blue-collar jobs (such as assembly line work), and finally affecting some non-routine jobs (such as driving or even radiology). Recent MGI research found that in a rapid-automation scenario, some 82-102 million Chinese workers would need to switch jobs.

Retraining the displaced will be a major challenge for China’s government, as will preventing the major digital players from securing innovation-stifling monopolies. But the government’s readiness to embrace the emerging digital age, pursuing supportive policies and avoiding excessive regulation, has already placed the country at a significant advantage.

Kai-Fu Lee is a co-founder and CEO of Sinovation Ventures, a leading venture capital firm investing in China and North America. Jonathan Woetzel is a Shanghai-based senior partner of McKinsey & Company and a director of the McKinsey Global Institute.

By Kai-Fu Lee and Jonathan Woetzel

Four Ways to Beat HIV/AIDS

PITTSBURGH – In the fight against HIV/AIDS, some stories illuminate the long road to global eradication more than others. In 2009, I heard one such story in Tanzania.

I was visiting a remote village when I spoke to a woman who knew that she was HIV-positive. She told me that the established health guidelines at the time indicated that she could not receive treatment until her count of CD4 T-helper cells, a type of white blood cell used by the immune system, had dropped below a certain threshold.

After walking several miles to get her count checked, she arrived at the clinic only to find its testing machine broken. The machine was still inoperative the second time she made the long journey. Only months later, after her third trip to the clinic on foot, did she receive her cell count: her levels were far below the necessary threshold. Her treatment should have begun months before.

Since HIV/AIDS was first identified in 1984, it has killed more than 35 million people. Although the number of AIDS-related deaths has fallen by almost half since peaking in 2005, there are still far too many people dying from this preventable condition. In 2016 alone, one million people around the world died from HIV-related causes, while 1.8 million more became infected. Contrary to popular myth, we have not turned the corner on AIDS – not by a long shot.

World AIDS Day, on December 1, is an occasion to honor the millions of victims, and to recommit to ending this devastating disease. According to UNAIDS, just 54% of HIV-positive adults, and only 43% of HIV-positive children, are currently receiving the antiretroviral therapies that save lives and prevent new infections. With so many untreated patients, the virus will continue to spread.

As CEO of a global pharmaceutical company, I’m proud of the work we have done to fight HIV/AIDS around the world. Today, more than eight million people – nearly half of all patients receiving treatment for HIV in developing countries – depend on the antiretroviral treatments that we produce.

But for those of us on the front lines of this struggle, our work is far from over. The pharmaceutical industry has a responsibility to expand access to testing and treatment, and to help stop the spread of HIV once and for all. Fulfilling four key commitments will make this goal achievable.

For starters, pharmaceutical companies should do more to increase the availability of low-cost, generic medicines. My company, Mylan, introduced the first generic once-daily pill for developing countries in 2009, and we have continually reduced its price to make it more accessible to more people. With this treatment alone, Mylan and other generic manufacturers save the US government, international donors, and national health programs more than $4.5 billion a year.

Still, treatment options could be expanded further. In September, Mylan announced a collaboration with UNAIDS, the Bill & Melinda Gates Foundation, the Clinton Health Access Initiative, and other partners to provide the next-generation single-pill HIV regimen to patients in more than 90 low- and middle-income countries for less than $75 per year. These drugs are widely used in high-income countries because they produce fewer side effects. Affordability initiatives like this one should be replicated.

Next, drug makers must continue investing in capacity and supply-chain reliability. Since 2005, the number of people on antiretroviral therapies worldwide has grown by a factor of ten, to 21 million. But roughly twice as many people are currently infected with HIV. Over the last decade, Mylan has invested more than $250 million in expanding production capacity, and we now produce four billion tablets and capsules each year. But further investments are needed if we are to provide access to the other 21 million people still not on treatment.

A third urgently needed commitment is to increase support for research that accelerates the development of new innovations in effective and efficient treatment delivery. For example, Mylan provides study medications to research trials, like the MaxART trial in Swaziland, which demonstrated that providing treatment to all HIV-positive people is the best way to slow the disease’s spread. We also supported the Kirby Institute’s ENCORE1 trial, to develop a reduced-dose version of the most commonly used HIV treatment regimen. And we are currently working with the US Agency for International Development as part of a partnership called OPTIMIZE, which aims to accelerate access to new therapies.

We do not support trials like these because we hope to gain any marketable intellectual property – we won’t. Rather, we support them because it is the right way to advance science and improve treatment.

Finally, real gains in the fight against HIV/AIDS will require drug makers to account for the limitations of health-care systems and distribution networks in the developing countries they serve.

Antiretroviral therapies for children are a good example of these challenges. Drugs for young people produced in the West are often liquids that require refrigeration. But developing countries often have limited cold-storage capacities or an inability to transport liquid in bulk. That’s why Mylan has developed heat-stable, taste-masked, dispersible tablets that can easily be incorporated into food. Our scientists are now working on the next-generation formula, which comes in the equivalent of a sugar packet that even newborns can take. More innovations like these will be needed to solve the country-specific issues that patients face.

The global health community has made remarkable progress in turning the tide on HIV/AIDS, introducing new products and advocating for earlier treatment. But when I think back to the woman I met in Tanzania, I am reminded of how much work remains to be done. Makers of generic medicines have an important role to play in this fight, and we will not stop working until treatment is available to every patient in the world who needs it.

Heather Bresch is CEO of Mylan, a global pharmaceutical company that specializes in prescription generic and brand-name medicines, and over-the-counter (OTC) offerings.

By Heather Bresch

Evidence-Based Policy Mistakes

TURIN – After years of stressing the importance of evidence-based policymaking, economists have clearly had some influence on politicians. What economists now need to do is to impress upon those same politicians that citing any evidence before adopting any policy is not evidence-based policymaking at all.

Turkish President Recep Tayyip Erdoğan has thrown around numbers to defend his decision to flood the Turkish economy with state-guaranteed credit. But the truth is that the policy was a politically motivated effort to win public support by engineering short-term growth (at the cost of driving inflation to a nine-year high of 12%).

Likewise, US President Donald Trump cites simplistic trade-deficit figures to justify protectionist policies that win him support among a certain segment of the US population. In reality, the evidence suggests that such policies will hurt the very people Trump claims to be protecting.

Now, the chair of Trump’s Council of Economic Advisers, Kevin Hassett, is attempting to defend Congressional Republicans’ effort to slash corporate taxes by claiming that, when developed countries have done so in the past, workers gained “well north of” $4,000 per year. Yet there is ample evidence that the benefits of such tax cuts accrue disproportionately to the rich, largely via companies buying back stock and shareholders earning higher dividends.

It is not clear whence Hassett is getting his data. But chances are that, at the very least, he is misinterpreting it. And he is far from alone in failing to reach accurate conclusions when assessing a given set of data.

Consider the oft-repeated refrain that, because there is evidence that virtually all jobs over the last decade were created by the private sector, the private sector must be the most effective job creator. At first glance, the logic might seem sound. But, on closer examination, the statement begs the question. Imagine a Soviet economist claiming that, because the government created virtually all jobs in the Soviet Union, the government must be the most effective job creator. To find the truth, one would need, at a minimum, data on who else tried to create jobs, and how.

Moreover, it is important to recognize that data alone are not enough to determine future expectations or policies. While there is certainly value in collecting data (via, for example, randomized control trials), there is also a need for deductive and inductive reasoning, guided by common sense – and not just on the part of experts. By dismissing the views and opinions of ordinary people, economists may miss out on crucial insights.

People’s everyday experiences provide huge amounts of potentially useful information. While a common-sense approach based on individual experience is not the most “scientific,” it should not be dismissed out of hand. A meteorologist might detect a coming storm by plugging data from myriad sources – atmospheric sensors, weather balloons, radar, and satellites – into complex computer models. But that doesn’t mean that the sight of gathering clouds in the sky is not also a legitimate sign that one might need an umbrella – even if the weather forecast promises sunshine.

Intuition and common sense have been critical to our evolution. After all, had humans not been able to draw reasonably accurate conclusions about the world through experience or observation, we wouldn’t have survived as a species.

The development of more systematic approaches to scientific inquiry has not diminished the need for such intuitive reasoning. In fact, there are important and not obvious truths that are best deduced using pure reason.

Consider the Pythagorean Theorem, which establishes the relation among the three sides of a right triangle. If all conclusions had to be reached by combing through large data sets, Pythagoras, who is believed to have devised the theorem’s first proof, would have had to measure a huge number of right triangles. In any case, critics would likely argue that he had looked at a biased sample, because all of the triangles examined were collected from the Mediterranean region.

Inductive reasoning, too, is vital to reach certain kinds of knowledge. We “know” that an apple will not remain suspended in mid-air, because we have seen so many objects fall. But such reasoning is not foolproof. As Bertrand Russell pointed out, “The man who has fed the chicken every day throughout its life at last wrings its neck instead, showing that more refined views as to the uniformity of nature would have been useful to the chicken.”

Of course, many policymakers – not just the likes of Erdoğan and Trump – make bad decisions not because of a misunderstanding of the evidence, but because they prefer to pursue politically expedient measures that benefit their benefactors or themselves. In such cases, exposing the inappropriateness of their supposed evidence may be the only option.

But, for the rest, the imperative must be to advocate for a more comprehensive approach, in which leaders use “reasoned intuition” to draw effective conclusions based on hard data. Only then will the age of effective evidence-based policymaking really begin.

Kaushik Basu, former Chief Economist of the World Bank, is Professor of Economics at Cornell University and Nonresident Senior Fellow at the Brookings Institution.

By Kaushik Basu

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