Commentary

Brexit In Reverse?

LONDON – Economic reality is beginning to catch up with the false hopes of many Britons. One year ago, when a slim majority voted for the United Kingdom’s withdrawal from the European Union, they believed the promises of the popular press, and of the politicians who backed the Leave campaign, that Brexit would not reduce their living standards. Indeed, in the year since, they have managed to maintain those standards by running up household debt.


This worked for a while, because the increase in household consumption stimulated the economy. But the moment of truth for the UK economy is fast approaching. As the latest figures published by the Bank of England show, wage growth in Britain is not keeping up with inflation, so real incomes have begun to fall.

As this trend continues in the coming months, households will soon realize that their living standards are falling, and they will have to adjust their spending habits. To make matters worse, they will also realize that they have become over-indebted and will have to deleverage, thus further reducing the household consumption that has sustained the economy.

Moreover, the BoE has made the same mistake as the average household: it underestimated the impact of inflation and will now be catching up by raising interest rates in a pro-cyclical manner. These higher rates will make household debt even harder to pay off.

The British are fast approaching the tipping point that characterizes all unsustainable economic trends. I refer to such a tipping point as “reflexivity” – when both cause and effect shape each other.

Economic reality is reinforced by political reality. The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the EU. The Brexit referendum cannot be undone, but people can change their minds.

Apparently, this is happening. Prime Minister Theresa May’s attempt to strengthen her negotiating position by holding a snap election badly misfired: she lost her parliamentary majority and created a hung parliament (no single party has a majority).

The primary cause of May’s defeat was her fatal misstep in proposing that elderly people pay for a substantial portion of their social care out of their own resources, usually the value of the homes that they have lived in all of their lives. This “dementia tax,” as it became widely known, deeply offended the core constituency, the elderly, of May’s Conservative Party. Many either did not vote, or supported other parties.

The increased participation of young people was also an important contributing factor in May’s defeat. Many of them voted for Labour in protest, not because they wanted to join a trade union or because they support Labour leader Jeremy Corbyn (although he gave an unexpectedly impressive performance throughout the campaign).

The attitude of Britain’s young people to the single market is diametrically opposed to that of May and supporters of a “hard” Brexit. Young people are eager to find well-paying jobs, whether in Britain or elsewhere in Europe. In that respect, their interests correspond with the interests of the City of London, where some of those jobs are to be found.

If May wants to remain in power, she must change her approach to the Brexit negotiations. And there are signs that she is prepared to do so.By approaching the negotiations that will start on June 19 in a conciliatory spirit, May could reach an understanding with the EU on the agenda and agree to continue as a member of the single market for a period long enough to carry out all the legal work that will be needed. This would be a great relief to the EU, because it would postpone the evil day when Britain’s absence would create an enormous hole in the EU’s budget. That would be a win-win arrangement.

Only by taking this path can May hope to persuade Parliament to pass all the laws that need to be in place once the Brexit talks are completed and Britain withdraws from the Union. She may have to abandon her ill-considered alliance with the Democratic Unionist Party in Ulster and side more emphatically with the Tories of Scotland, who are keen on a softer version of Brexit. May will also need to atone for the sins of the Tories in the London borough of Kensington with regard to last week’s Grenfell Tower fire, in which at least 30 people, and perhaps many more, lost their lives.

If May embraces such a platform, she could then carry on leading a minority government, because nobody else would want to take her place. Brexit would still take at least five years to complete, during which time new elections would take place. If all went well, the two parties might want to remarry even before they have divorced.

George Soros, Chairman of Soros Fund Management and of the Open Society Foundations, is the author of The Tragedy of the European Union: Disintegration or Revival?.

By George Soros

A Scientific Method for the SDGs

PARIS – In just the latest example of popular support for science, tens of thousands of people around the world recently marched to advocate for a worldview based on facts, not fiction. They understand that science could actually save the world, because it can help us solve our greatest health and development problems.


Those problems are at the heart of the United Nations Sustainable Development Goals, which the international community agreed to in 2015, with the aim of creating a more prosperous, equitable, and healthy planet by 2030. The 17 SDGs, which include 169 individual targets, constitute an ambitious agenda to address everything from gender equity to sustainable cities and climate change. All told, they provide an inclusive vision of sustainable development for the twenty-first century.

But comprehensiveness can come at the expense of effective action. Few people can actually name all of the SDGs, much less explain how every country can achieve them over the next 13 years. Experts around the world – including all of those who have gathered in New York this week for the UN Ocean Conference – are wrestling with individual targets or goals. And yet integrating these efforts remains a formidable challenge. If our leaders are ever to realize the world envisioned in the SDGs, they will need a roadmap for navigating the complex policymaking terrain.

Scientists are well positioned to provide this roadmap, because they know how to ask the right questions, design experiments, draw evidenced-based conclusions, and apply new information to existing knowledge. Better still, scientists enjoy sharing their findings with others.

The International Council for Science (ICSU) recently brought together 22 scientists from various fields – including oceanography, epidemiology, agronomy, and energy economics – to come up with SDG-specific insights for world leaders to follow. By studying how different goals and targets relate to one another, we developed an independent analytical framework to help leaders prioritize policies within their own countries.

Some SDGs have reinforcing relationships, whereby achieving one will make it easier to achieve others. At the same time, some SDGs may be in conflict, if progress in one area comes at the expense of others. While we have long known that the SDGs interact with one another, the ICSU study is the first time that these interactions have been systematically quantified.

For example, we selected the four SDGs relating to hunger, health, energy, and oceans, and then identified every possible interaction between them and the other goals and targets. We then developed a seven-point scale, ranging from +3 when a given goal or target strongly reinforces another, to -3 when achieving one goal makes it essentially impossible to reach another.

By applying this scale to different SDG relationships, we were able to answer some important questions. For example, we could determine if protecting the oceans will stifle economic growth and urban development in a particular country or region. And we could determine if increasing agricultural production would make it harder to manage natural resources; or if expanding renewable-energy sources would deplete the water supply in already-arid regions.

One exciting discovery we’ve made is that most SDG targets actually do reinforce one another. For example, helping the world’s poorest people shift away from traditional fuels such as firewood, charcoal, and animal dung would go a long way toward reducing deaths and illnesses from air pollution, especially among women and children.

And in cases where different goals do not align, policymakers can make adjustments as needed. For example, we found that increased agricultural production can damage the oceans if it adds to nutrient run-off and other forms of pollution; and this, in turn, could undermine health and long-term food security.

Moreover, our approach had benefits beyond the immediate quantitative findings, because it united scientists from different disciplines around a shared goal. This was no easy task: scientists are critical consumers of information, and they do not always agree with one another. But, owing to the sheer scale of the SDGs, the participants had to hash out their differences, and develop a common language to devise the best way forward. Breaking down disciplinary silos and bringing together different voices is a significant achievement in itself. It can serve as an example for leaders in government, business, and civil society to follow.

So, where do we go from here? Our analytical framework can help countries figure out which SDGs benefit others, and which do not. With it, policymakers can prioritize goals and investments; map existing resources and identify budget gaps; and establish mechanisms for sharing data and information across sectors.

More generally, each country will need to monitor its progress toward each SDG, and revise its approach as needed. This will require diligence from all policymakers. But the potential return on investment, not least a better planet for generations to come, is enormous.Whether science really will save the world remains to be seen. But one thing we know is that scientists can point us in the right direction.

Anne-Sophie Stevance leads policy work at the International Council for Science. David McCollum is a research scholar at the International Institute for Applied Systems Analysis.

By Anne-Sophie Stevance and David McCollum

The Rise of the Food Barons

BERLIN – The industrial-agriculture sector has long faced criticism for practices that contribute to climate change, environmental destruction, and rural poverty. And yet the sector has taken virtually no steps to improve quality and sustainability, or to promote social justice.


This is not surprising. Although there are more than 570 million farmers and seven billion consumers worldwide, just a handful of companies control the global industrial-agriculture value chain – from field to shop counter. Given the high profits and vast political power of these companies, changes to the status quo are not in their interest.

Moreover, market concentration in the agriculture sector is on the rise, owing to increased demand for the agricultural raw materials needed in food, animal feed, and energy production. As the middle class in southern countries has grown, its members’ consumption and nutritional habits have changed, boosting global demand for processed foods – and setting off a scramble for market power among multinational agricultural, chemical, and food corporations.

The biggest players in these sectors have been buying out their smaller competitors for years. But now they are also buying out one another, often with financing provided by investors from completely different sectors.

Consider the seed and agrochemical sector, where Bayer, the second-largest pesticide producer in the world, is in the process of acquiring Monsanto, the largest seed producer, for €66 billion ($74 billion). If the United States and the European Union approve the deal, as seems likely, just three conglomerates – Bayer-Monsanto, Dow-DuPont and ChemChina-Syngenta – will control over 60% of the global seed and agrochemical market. “Baysanto” alone would be the proprietor of almost every genetically modified plant on the planet.

With other large mergers also being announced, the global agriculture market at the end of 2017 could look very different than it did at the beginning. Each of the three major conglomerates will be closer to its goal of achieving domination of the seed and pesticide markets – at which point they will be able to dictate food products, prices, and quality worldwide.

The agrotechnical sector is experiencing some of the same changes as the seed sector. The five largest corporations account for 65% of the market, with Deere & Company, the owner of the John Deere brand, in the lead. In 2015, Deere & Company reported $29 billion in sales, surpassing the $25 billion that Monsanto and Bayer made selling seeds and pesticides.

The most promising new opportunity for food corporations today lies in the digitization of agriculture. This process is still in its early stages, but it is gathering momentum, and eventually it will cover all areas of production. Soon enough, drones will take over the task of spraying pesticides; livestock will be equipped with sensors to track milk quantities, movement patterns, and feed rations; tractors will be controlled by GPS; and app-controlled sowing machines will assess soil quality to determine the optimal distance between rows and plants.

To maximize the benefits of these new technologies, the companies that already dominate the value chain have begun cooperating with one another. The John Deeres and Monsantos have now joined forces. The confluence of soil and weather “big data,” new agrotechnologies, genetically modified seeds, and new developments in agrochemistry will help these companies save money, protect natural resources, and maximize crop yields worldwide.

But while this possible future bodes well for some of the world’s largest companies, it leaves the environmental and social problems associated with industrialized agriculture unsolved. Most farmers, particularly in the global South, will never be able to afford expensive digital-age machinery. The maxim “grow or go” will be replaced with “digitize or disappear.” The ETC Group, an American non-governmental organization, has already outlined a future scenario in which the major agrotechnology corporations move upstream and absorb the seed and pesticide producers. At that point, just a few companies will determine everything that we eat.

Indeed, the same market-concentration problem applies to other links in the value chain, such as agricultural traders and supermarkets. And even though food processing is not yet consolidated on a global scale, it is still dominated at the regional level by companies such as Unilever, Danone, Mondelez, and Nestlé. These companies make money when fresh or semi-processed food is replaced by highly processed convenience foods such as frozen pizza, canned soup, and ready-made meals.

While lucrative, this business model is closely linked to obesity, diabetes, and other chronic diseases. Worse, food corporations are also profiting from the proliferation of illnesses for which they are partly responsible, by marketing “healthy” processed foods enriched with protein, vitamins, probiotics, and omega-3 fatty acids.

Meanwhile, corporations are amassing market power at the expense of those at the bottom of the value chain: farmers and workers. International Labor Organization standards guarantee all workers the right to organize, and they prohibit forced and child labor and proscribe race and gender discrimination. But labor-law violations have become the norm, because efforts to enforce ILO rules are often quashed, while trade union members are routinely threatened, fired, and even murdered.

In this hostile climate, minimum-wage, overtime-pay, and workplace-safety standards are openly neglected. And women, in particular, are at a disadvantage, because they are paid less than their male counterparts and often must settle for seasonal or temporary jobs.

Today, half of the world’s 800 million starving people are small farmers and workers connected to the agricultural sector. Their lot will hardly improve if the few companies already dominating that sector become even more powerful.Christine Chemnitz is Head of the Department of International Agricultural Politics at the Heinrich Böll Foundation.

By Christine Chemnitz

The Eurozone Must Reform or Die

OXFORD – With the election of a reform-minded centrist president in France and the re-election of German Chancellor Angela Merkel seeming ever more likely, is there hope for the stalled single-currency project in Europe? Perhaps, but another decade of slow growth, punctuated by periodic debt-related convulsions, still looks more likely. With a determined move toward fiscal and banking union, things could be much better. But, in the absence of policies to strengthen stability and sustainability, the chances of an eventual collapse are much greater.


True, in the near term, there is much reason for optimism. Over the past year, the eurozone has been enjoying a solid cyclical recovery, outperforming expectations more than any other major advanced economy. And make no mistake: the election of Emmanuel Macron is a landmark event, raising hopes that France will re-energize its economy sufficiently to become a full and equal partner to Germany in eurozone governance. Macron and his economic team are full of promising ideas, and he will have a huge majority in the National Assembly to implement them (though it will help if the Germans give him leeway on budget deficits in exchange for reform). In Spain, too, economic reform is translating into stronger long-term growth.

But all is not well. Greece is still barely growing, after experiencing one of the worst recessions in history, although those who blame this on German austerity clearly have not looked at the numbers: with encouragement from left-leaning US economists, Greece mismanaged perhaps the softest bailout package in modern history. Italy has done far better than Greece, but that is a backhanded compliment; real income is actually lower than a decade ago (albeit it is hard to know for sure, given the country’s vast underground economy). For southern Europe as a whole, the single currency has proved to be a golden cage, forcing greater fiscal and monetary rectitude but removing the exchange rate as a critical cushion against unexpected shocks.

Indeed, part of the reason the United Kingdom’s economy has held up well (so far) since last year’s Brexit referendum is that the pound fell sharply, boosting competitiveness. The UK, of course, famously (and wisely) opted out of the single currency even as it is now moving (not so wisely) to withdraw from the European Union and the single market entirely.

It is now fairly obvious that the euro was not necessary to the success of the EU, and instead has proved a massive impediment, as many economists on this side of the Atlantic had predicted. Eurocrats have long likened European integration to riding a bicycle: one must keep moving forward or fall down. If so, the premature adoption of the single currency is best thought of as a detour through thick, wet cement.

Ironically, by far the main reason why euro adoption was originally so popular in Southern Europe was that back in the 1980s and 1990s, ordinary people longed for the price stability Germans enjoyed with their Deutsche Mark. But, while the euro has been accompanied by a dramatic eurozone wide fall in inflation, most other countries have managed to bring down inflation without it.

Far more important to the achievement of price stability has been the advent of the modern independent central bank, a device that has helped dramatically reduce inflation levels worldwide. Yes, a few places, such as Venezuela, still have triple-digit price growth, but they are now rarities. It is very likely that if, instead of joining the euro, Italy and Spain had simply granted their central banks more autonomy, they, too, would have low inflation today. Greece is admittedly a less obvious case; but, considering that many poor African countries have been able to keep inflation well within single digits, one can presume that Greece would have managed as well. Indeed, if Southern European countries had kept their own currencies, they might never have dug as big a debt hole, and would have had the option of partial default through inflation.

The question now is how to maneuver the EU out of the wet cement. Although many European politicians are loath to admit it, the status quo is probably not sustainable; eventually, there must be either significantly greater fiscal integration or a chaotic break-up. It is astonishingly naive to think the euro will not face further real-life stress tests over the next 5-10 years, if not sooner.

If the status quo is ultimately unsustainable, why are markets so supremely calm, with ten-year Italian government bonds yielding less than two percentage points more than Germany’s?

Perhaps the small spread reflects investors’ belief that outright bailouts are eventually coming, however much German politicians protest to the contrary. European Central Bank purchases of periphery countries’ debt already constitute an implicit subsidy, and discussion of Eurobonds is heating up with Macron’s victory.

Or perhaps investors are gambling that the South has walked too far into the cement to get out. Germany will just keep squeezing their budgets in order to ensure that its banks are repaid.

Either way, eurozone leaders would be better off taking action now, rather than waiting for the single currency’s next moment of truth. How long today’s optimism lasts is for Macron and Merkel to decide. Kenneth Rogoff, a former chief economist of the IMF, is Professor of Economics and Public Policy at Harvard University.

By Kenneth Rogoff

How Macron Keeps Winning

PARIS – Emmanuel Macron’s one-man revolution in French and European politics continued this weekend, as he will soon be able to add a huge parliamentary majority to his cause, if the results from the first round of the French parliamentary election hold. Such an outcome appears to be very likely.


Eliminating the old “right-left” divide in French politics by uniting “reformists” of the left, the right, and the center, was the challenge that Macron set for himself when he created his En Marche! movement in April 2016 as part of his bid for the French presidency. The result of the first round of elections to the National Assembly is the clearest indication yet of how successful Macron has been in recasting French politics.

Support for France’s two main traditional parties, Les Républicains on the right (which won 21.6% of votes cast in the first round) and the Socialist Party (down to a mere 9.5%), has fallen to levels unseen in the history of the French Fifth Republic. And backing for the far-right National Front, whose leader, Marine Le Pen, lost to Macron in the presidential election, fell to a mere 13.2% in the first round.

If the second round of voting next Sunday confirms projections, Macron’s new centrist party, La République en Marche! (LREM), could end up with between 400 and 445 of the National Assembly’s 577 seats.

How can a party with about 32.3% of the votes in the first round win in such a landslide in the second round?

The explanation is that only candidates winning more than 12.5% of registered voters in the first round can participate in the second. The low turnout (less than 50%) for the first round means that two candidates at most can make it to the second round, where the candidate with the highest number of votes will win.

This means that in nearly all districts the second round will be a duel between Macron’s LREM and another party. Where the other party is on the right, left-wing parties and voters will support Macron. Where the other party is on the left, it is the right-wing parties and voters who will support Macron.

This year’s voting departed markedly from previous National Assembly elections in several other key respects, beyond the support shown for Macron’s new political grouping.

For starters, more than a third of current MPs opted out. Their withdrawal has opened the door to a new generation of politicians, with a significant number, particularly on Macron’s party list, coming from civil society, rather than from other elected or public-sector positions.

Second, the historically large majority of seats that LREM is set to win, owing to low turnout and the 12.5% threshold for going on to the second round of voting, means that a new and very different French political landscape is emerging. French politics is now crystallizing around a strong center, while the two parties of the left and right that traditionally have formed both the government and the main opposition have been swept to the margins.

For decades the Socialists and the parties of the right, now grouped in Les Républicains, have failed to deliver the economic reforms – and thus the economic growth – that France badly needs. For most French, the traditional parties have come to symbolize a lack of transparency, chronic unethical behavior, and a focus on internal party fights at the expense of the national interest. Now French voters have rebuffed them.

Third, the reconstruction of the French political landscape goes far beyond the radical changes likely to occur in the distribution of National Assembly seats that will occur once the second round is complete. Some future MPs from the two traditional parties, as well as others, will almost certainly buck their own party leaders to vote for Macron’s planned reforms. Indeed, more than 30 members of the National Assembly from Les Républicains, as well as a few key figures from the Socialists, already have made it known that they will be supporting Macron’s reform program.

All of this suggests that Macron will emerge from the second round of the parliamentary election with the strong majority that he needs to embark with confidence on a program to transform France. And the program he envisages offers a viable opportunity – the best in recent memory – to reform France’s economy in ways that will foster innovation-led growth while offering better social protection and education to French citizens.

Macron is raring to get started on that agenda. The first two major reforms that his government will seek to implement entail an overhaul of the labor market and a tightening of rules on ethics in the public sector. But they will likely be just the start of the most dynamic program of reform that France has seen since Charles de Gaulle occupied the Élysée Palace.

Philippe Aghion is Professor of Economics at Harvard University, College de France, and the London School of Economics. Benedicte Berner is a lecturer at Sciences Po in Paris, chair of Civil Rights Defenders, and an associate at Harvard University’s Davis Center for Russian and Eurasian Studies.

The Arab World’s Coming Challenges

LONDON – Fifty years after the Six-Day War, which marked the beginning of Israel’s occupation of East Jerusalem and the West Bank, the Middle East remains a region in seemingly perpetual crisis. So it is no surprise that, when addressing the region, politicians, diplomats, and the donor and humanitarian community typically focus on the here and now. Yet, if we are ever to break the modern Middle East’s cycle of crises, we must not lose sight of the future. And, already, four trends are brewing a new set of problems for the coming decade.

The first trend affects the Levant. The post-Ottoman order that emerged a century ago – an order based on secular Arab nationalism – has already crumbled. The two states that gave weight to this system, Iraq and Syria, have lost their central authority, and will remain politically fragmented and socially polarized for at least a generation.

In Lebanon, sectarianism remains the defining characteristic of politics. Jordan has reached its refugee-saturation point, and continued inflows are placing limited resources under ever-greater pressure. As for the Israeli-Palestinian conflict, there is no new initiative or circumstance on the political horizon that could break the deadlock.

The Middle East is certain to face the continued movement of large numbers of people, first to the region’s calmer areas and, in many cases, beyond – primarily to Europe. The region is also likely to face intensifying contests over national identities as well, and perhaps even the redrawing of borders – processes that will trigger further confrontations.

The second major trend affects North Africa. The region’s most populous states – Algeria, Egypt, and Morocco – will maintain the social and political orders that have become entrenched over the last six decades of their post-colonial history. The ruling structures in these countries enjoy broad popular consent, as well as support from influential institutions, such as labor and farmers’ unions. They also have effective levers of coercion that serve as backstops for relative stability.

But none of this guarantees smooth sailing for these governments. On the contrary, they are poised to confront a massive youth bulge, with more than 100 million people under the age of 30 entering the domestic job market in North Africa between now and 2025. And the vast majority of these young people, products of failed educational systems, will be wholly unqualified for most jobs offering a chance of social mobility.

The sectors best equipped to absorb these young Arabs are tourism, construction, and agriculture. But a flourishing tourism sector is not in the cards – not least because of the resurgence of militant Islamism, which will leave North Africa exposed to the risk of terror attacks for years to come.

Moreover, a declining share of the European food market and diminished investments in real estate undermine the capacity of agriculture and construction to absorb young workers. The likely consequences of North Africa’s youth bulge are thus renewed social unrest and potentially sizeable migration flows to Europe.

The Gulf used to provide a regional safety valve. For more than a half-century, Gulf countries absorbed millions of workers, primarily from their Arab neighbors’ lower middle classes. The Gulf was also the main source of investment capital, not to mention tens of billions of dollars in remittances, to the rest of the region. And many Arab countries viewed it as the lender of last resort.

But – and herein lies the third key trend – the Gulf economies are now undergoing an upgrade, ascending various industrial value chains. This reduces their dependence on low-skill foreign workers. In the coming years, the Gulf countries can be expected to import fewer workers from the rest of the Arab world, and to export less capital to it.

The Gulf might even become increasingly destabilized. Several Gulf powers and Iran are engaged in a partly sectarian proxy war in Yemen – one that will not end anytime soon. And now five Sunni powers have turned on one of their own, Qatar, which has been pursuing its own regional agenda for a generation. The pressures being generated across the entire southern Arabian Peninsula could produce further political shocks.

That is all the more likely, given mounting domestic pressure for reform from a technologically savvy and globally engaged young citizenry. Reforming centuries-old social and political structures will be as difficult as it is necessary.

The fourth trend affects the entire Arab world, as well as Iran and Turkey: the social role of religion is becoming increasingly contested. The wars and crises of the last six years have reversed much of the progress that political Islam had made in the decade before the so-called Arab Spring uprisings erupted in 2011. With radicalism becoming increasingly entrenched, on the one hand, and young Muslims putting forward enlightened understandings of their religion, on the other, a battle for the soul of Islam is raging.

The problems implied by these four trends will be impossible for leaders, inside or outside the Arab world, to address all at once, especially at a time of rising populism and nativism across the West. But action can and should be taken. The key is to focus on socioeconomic issues, rather than geopolitics.

The West must not succumb to illusions about redrawing borders or shaping new countries; such efforts will yield only disaster. One highly promising option would be to create a full-on Marshall Plan for the Arab world. But, in this era of austerity, many Western countries lack the resources, much less public support, for such an effort – most of the Arab world today couldn’t make the most of it in any case.

What leaders – both within and outside the region – can do is pursue large-scale and intelligent investments in primary and secondary education, small and medium-size businesses (which form the backbone of Arab economies), and renewable energy sources (which could underpin the upgrading of regional value chains).

Pursuing this agenda won’t stem the dissolution of the modern Arab state in the Levant. It won’t generate workable social contracts in North Africa. And it certainly won’t reconcile the sacred with the secular. But, by attempting to address young people’s socioeconomic frustrations, it can mitigate many of the longer-term consequences of these trends. Tarek Osman is the author of Islamism: What It Means for the Middle East and the World and Egypt on the Brink.

By Tarek Osman

Trump’s Climate-Change Sociopathy

NEW YORK – President Donald Trump’s withdrawal of the United States from the Paris climate agreement is not just dangerous for the world; it is also sociopathic. Without remorse, Trump is willfully inflicting harm on others. The declaration by Nikki Haley, the US ambassador to the United Nations, that Trump believes in climate change makes matters worse, not better. Trump is knowingly and brazenly jeopardizing the planet.


Trump’s announcement was made with a bully’s bravado. A global agreement that is symmetric in all ways, across all countries of the world, is somehow a trick, he huffed, an anti-American plot. The rest of the world has been “laughing at us.”

These ravings are utterly delusional, deeply cynical, or profoundly ignorant. Probably all three. And they should be recognized as such. After Trump claimed to be representing “Pittsburgh, not Paris,” the mayor of Pittsburgh immediately declared that Trump certainly is not representing his city. In fact, Pittsburgh has made the transition from a polluted, heavy industrial economy to an advanced, clean-tech economy. And it is home to Carnegie Mellon University, one of the world’s great centers of innovation in information technologies that can promote the transition to zero-carbon, high-efficiency, equitable, and sustainable growth – or, more simply, an economy that is “smart, fair, and sustainable.”

Trump’s announcement was rooted in two profoundly destructive developments. The first is the corruption of the US political system. Trump’s announcement was not really his alone. It reflected the will of the Republican leadership in Congress, including the 22 Republican senators who sent Trump a letter the week before, calling on him to withdraw from the Paris accord.

These senators, and their counterparts in the House of Representatives, are on the take of the oil and gas industry, which spent $100 million on campaign contributions in 2016, of which 90%went to Republican candidates. (In fact, the total was almost certainly far above $100 million, but much is untraceable.)

The second destructive development is the twisted mindset of Trump and his closest advisers. Their view, defended with “alternative facts” that have no basis in reality, is paranoid and malevolent, aimed at inflicting harm on others, or at best indifferent to harm befalling others. “The Paris agreement,” rants Trump, “handicaps the United States economy in order to win praise from the very foreign capitals and global activists that have long sought to gain wealth at our country’s expense.”

This is nuts. The Paris accord is a universal agreement among 193 UN member states to cooperate in decarbonizing the world’s energy system and thereby head off the dangers of climate disaster, such as a multi-meter sea-level rise, extreme storms, massive droughts, and other threats identified by the global scientific community. Some of these threats are already evident in vulnerable parts of the planet.

The Paris climate agreement requires each country is to do its part with “common but differentiated responsibilities.” America’s differentiated responsibilities start with the fact that the US is, by far, the largest cumulative greenhouse-gas emitter in the world. As such, the US has contributed more to ongoing climate change than any other country. And US per capita emissions are higher than in any other large country, by far. The Paris accord does not victimize the US; on the contrary, the US has a world-beating responsibility to get its house in order.

According to data from the World Resources Institute, the US accounted for an astounding 26.6% of global greenhouse-gas emissions from 1850 to 2013. America’s population today is just 4.4% of the world’s population. In short, it is America, where per capita emissions have always been several times higher than the world average, that owes the world climate justice, not the other way around.

Consider the most recent data for the year 2014 from the International Energy Agency’s Energy Statistics 2016. The world’s CO2 emissions from energy and industry averaged 4.5 tons per person (32.4 billion tons per 7.2 billion people in the IEA tabulation), while US emissions were nearly four times that level, 16.2 tons per person (5.2 billion tons for 320 million people). Trump carries on about the Paris agreement’s supposed bias in favor of India, but fails to acknowledge that India’s per capita emissions are 1.6 tons, just one-tenth of the US level.

Trump also bemoans the US contributions to the Green Climate Fund (and sneers at the name for some reason as well). He complains that the US has already given over $1 billion, without explaining to the American people and the world that $1 billion is a contribution of $3.08 per American. Indeed, the $10 billion expected from the US over many years is a mere $30.80 per American.

Here’s the simple truth: The entire world needs to move quickly and resolutely to a low-carbon energy system, in order to end emissions of CO2 and other greenhouse gases by mid-century.This is not a move against the US. It’s a global imperative – true for the US, China, India, Russia, Saudi Arabia, Canada, and other fossil-fuel-rich countries, as well as for fossil-fuel-importing regions such as Europe, Japan, and most of Africa. Fortunately, the technologies exist: solar, wind, geothermal, hydroelectric, ocean, nuclear, and other low-carbon energy sources.

Here’s more simple truth: With its large, rich, fossil-fuel-intensive economy, the US has done more than any other country to bring about the global peril of climate change, so it should accept its responsibility in helping to get us all out of danger. At a minimum, America should be eagerly cooperating with the rest of the world.

Instead, Trump’s sociopathic behavior, and the corruption and viciousness of those surrounding him, has produced utter disdain for a world nearing the brink of human-made catastrophe. The next human-caused climate disasters should be named Typhoon Donald, SuperstormIvanka, and Megaflood Jared. The world will not forget.

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and the UN Sustainable Development Solutions Network.

By Jeffrey D. Sachs

A Private-Sector Solution to the Refugee Crisis

BRUSSELS – International development is not just about alleviating poverty; it is also about delivering security, stability, and economic opportunities to poor and fragile communities, thereby preventing citizens from having to flee their home country in search of a better life. For a West eager to stem the flows of refugees and migrants from Africa and the Middle East, supporting development is a much more effective approach than building walls and razor wire fences.


But too often development is forced to take a back seat in policymaking. The so-called War on Terror that began in 2001 has evolved into multiple brutal conflicts that are destabilizing the entire Middle East, eroding people’s freedoms, undermining their safety, and transforming the very nature of their societies. This is driving people from their homes, and often from their countries. The ongoing conflict in Syria, in particular, has already displaced some five million people.

It is, of course, sensible to say that refugees should stay in the first safe country they can reach. But many, nonetheless, clamor to escape the instability of their region altogether. They dream of a life of security and opportunity in Europe, and are willing to go to great lengths to obtain it – even embarking on a life-threatening journey across the Mediterranean Sea.

For Europe, turning our backs on these refugees is not an option – desperate people will continue to march toward safety and hope – though many continue to believe that it is. When German Chancellor Angela Merkel agreed to accept a million refugees into Germany, she was praised by many – and opposed by many others.

But simply absorbing the refugee flows is not really an option either, at least not a complete one. What if Egypt were to explode in the way that Syria has? Developed countries – some of which have resisted accepting any refugees at all – would not simply accept 20 million newly displaced people.

The only real option for tackling the refugee crisis is to address the causes of people’s displacement, including terrorism, hunger, disease, oppression, inadequate infrastructure, scarce vital resources, a lack of jobs and economic prospects, and falling standards of living. Seen in this light, supporting international development is not some discretionary act of generosity; it is a matter of mutual survival.

To succeed, however, requires adapting development policies to economic reality. Rather than simply handing money from one state to another, as the world has done for the last 60 years, development funds must be used to mobilize the private sector – the real engine of economic growth and development. Indeed, in developing economies, the private sector accounts for 90% of jobs.

With the right approach, the €20 billion ($21.9 billion) in annual development funding provided by the European Union could be leveraged to mobilize €300 billion of capital for the developing world, changing millions of people’s lives for the better. The model is straightforward: first, blend public, private, and charitable contributions; second, invest the funds under rigorous private-sector standards, rather than entrusting them to profligate public-sector actors who often treat donor money with contempt.

Such blended finance vehicles, though in their infancy, have already been shown to work well elsewhere in the world. A World Economic Forum survey found that every $1 of public money invested in such initiatives attracted as much as $20 of private investment. And this does not even account for the benefits implied by improved accounting, tendering, and reporting procedures – all by-products of greater private-sector involvement.

This approach is especially appropriate at a time when many European countries are struggling with sluggish growth and face tight fiscal constraints. Only four EU members now spend the globally agreed 0.7% of gross national income on development aid.

The good news is that European governments increasingly seem to recognize the need to tap the potential of the private sector to support development. Last month, at a European Parliament plenary session in Strasbourg, the European Commission threw its support behind my plan to put the private sector front and center in development projects.

But establishing private-sector investment as a key component of Europe’s development strategy is just the first step. The Commission must now put words into action, which means engaging directly with the private sector and business communities. By stabilizing Middle Eastern societies and advancing their economic development, Europe can help to stem the influx of migrants and asylum-seekers today, while securing new markets, business opportunities, and partnerships tomorrow. Nirj Deva is a ranking member of the European Parliament and Conservative Vice-President of the Development Committee.

By Nirj Deva

Vive l’Euro?

LONDON – Emmanuel Macron’s victory in the French presidential election on May 7 triggered a surge of optimism about the future of the European Union, and the eurozone in particular. This is partly because Macron ran an unambiguously pro-EU campaign, and was rewarded for it. But it is also because the threat of a populist government in one of the EU’s founding states is, for the moment at least, a thing of the past.


Yet renewed EU enthusiasm should not be mistaken for unwavering confidence. As Macron himself surely understands, the EU’s long-term viability requires that the “European project” appeal to its citizens more than its leadership. EU leaders therefore must – and probably will – take this opportunity to revitalize efforts to address security, migration, and growth challenges.

There is, however, an elephant in the room: the need for eurozone governance reform. At the moment, eurozone reform talks are not a priority for leaders in France, Germany, or anywhere else. That partly reflects a decrease in the risk of financial instability; but “reform fatigue” among members is a factor as well. The EU’s institution-building efforts pursued over the last few years have stalled. Further progress will require accepting a degree of risk-sharing throughout the bloc, and that will be possible only with more campaigning and possible national referenda. For now, political expedience favors the status quo.

But Macron’s victory gives the EU only a momentary reprieve. The fact remains that a strong EU depends on a credible and stable euro, and much work remains to be done to ensure the euro’s long-term viability. If the eurozone economy were to face a severe shock today, it would be unprepared. A new grand bargain between the eurozone’s two largest economies, France and Germany, will be needed sooner rather than later. In the meantime, the search for technical solutions to the euro’s woes must be pursued.

A few key principles should guide these efforts. For starters, the eurozone’s reformed fiscal and financial frameworks should be based less on rules and more on discretion. The eurozone’s experience during the recent financial crisis – especially when contrasted with that of the United States – highlighted the need for rapid, flexible decision-making by governments, not just monetary authorities.

If the public is to support such a shift toward discretion over rules, however, the system of fiscal governance for the eurozone members must be subject to real market discipline. A debt-restructuring framework should therefore be a pillar of a reformed eurozone governance structure. Such a framework could be administered under the auspices of the European Stability Mechanism, complementing the ESM’s crisis-lending facility.

Given the legacy of high indebtedness in many member states, the transition to such a framework could be dangerously destabilizing. To avoid problems, a kind of debt-management agency should be established as well – possibly also under the auspices of the ESM – with a mandate to buy back member states’ debt above a certain threshold. There are proposals on the table for such a scheme, though any that is adopted would have to incorporate some limited joint guarantee by member states.

And herein lies the most important principle that must guide eurozone governance reform: changes must be pursued alongside political reforms that strengthen the legitimacy of decisions involving risk sharing among countries. Only then can the eurozone achieve a stabilizing compromise between market discipline and any move toward even limited risk sharing.

A similar compromise could also be reached for the eurozone’s financial framework, and in particular the treatment of sovereign risk on banks’ balance sheets. This would move the EU away from the current situation, in which all sovereign bonds denominated in euros are treated equally, regardless of the issuer’s debt position.

A new set of rules – with the goal of strengthening market discipline – would also provide incentives for diversification. One such idea also envisages the creation of sovereign-debt backed collateralized debt obligations While CDOs would not require any joint guarantees, they would help to enforce market discipline, while making it easier for the European Central Bank to implement monetary policy. A recent EU proposal is a welcome step in this direction.

Two additional issues must be addressed. The first is the completion of the eurozone banking union, which would feature shared bank regulation,includinga credibleresolution fund. Given the lack of political will to make progress on this front, however, it may be sensible to begin by focusing on national-level solutions that, if successful, could pave the way for eurozone-level arrangements.

The second remaining issue is the creation of a centralized capacity to ensure adequate fiscal stimulus at the eurozone level. Here, too, there is a lack of political will. But, with a real debt-management agency and a regime for managing legacy debt, member states’ newly liberated fiscal capacity might relieve the need for such a centralized solution.

If the relatively conservative compromises outlined above are to be adopted, EU citizens must be involved in the decision-making process. This is particularly true for proposals involving a larger role for the ESM and joint guarantees for sovereign bond holdings. Moreover, changes of this scale would require giving more responsibility to the subset of the European Parliament that represents eurozone countries.

As we saw with the Brexit referendum in the United Kingdom, giving voters too much power to regulate the European project can backfire. But as France has just demonstrated, selling EU integration to the electorate might be the easy part. Fiscal governance will be the true test of the euro’s staying power.LucreziaReichlin, a former director of research at the European Central Bank, is Professor of Economics at the London Business School.

By LucreziaReichlin

A Sustainable Economy for the Arab World

WASHINGTON, DC – In recent decades, millions of people in the Arab world have been lifted out of extreme poverty. But progress is now at risk of slowing, or even reversing, owing to a vicious circle of economic failure and violent disorder. To prevent such an outcome, Arab countries must move fast to build a more sustainable economy, underpinned by greater private-sector creativity and vitality, improved public services, and the creation of regional and global public goods.


The first step toward achieving this is to recognize the scale and nature of the potential barriers to success. Arab countries today are faced with slow overall GDP growth and tightening fiscal constraints. Disparities in access to education, training, and health care – partly a reflection of those fiscal constraints – exacerbate already rising inequality.

As we have seen in the region, such circumstances can fuel political polarization and violent conflict, with the concomitant displacement, loss of life, destruction of infrastructure, and staggering economic costs. While economic development is no guarantor of peace, development failures do often contribute to extremism and violence, as popular anger combines with a loss of institutional legitimacy. The existence of nearby conflicts, which can have destabilizing spillover effects, heightens the risk of unrest.

Technological innovation can be part of the solution for Arab economies; but the accompanying disruption of markets and livelihoods raises its own challenges. Equally difficult to manage are risks like climate change and pandemics, which transcend borders and thus cannot be addressed by any single country.

Overcoming these challenges will not be easy. The key to success will be smart cooperation: between the public and private sectors; between government and civil society; among countries; and between countries and international organizations.

One of those international organizations is the World Bank Group, which engages with countries to help protect the poor and vulnerable, improve resilience to refugee and migration shocks, and ensure inclusive and accountable service delivery. We also work to strengthen the private sector, so that it can create jobs and opportunities for young people throughout the Arab world. And we promote other kinds of cooperation, particularly regional cooperation on shared public goods and in sectors like education, water, energy, and climate change.

A major goal of cooperation must also be to raise funding. Official development assistance (ODA), which last year stood at $142 billion, will never be sufficient to meet the region’s extraordinary financing needs, even if it is combined with government resources. To put this into context, ODA for 2015 amounted to just one-third of Germany’s annual health-care bill.

The United Nations trade arm, UNCTAD, estimates that, to reach the Sustainable Development Goals (SDGs), the world will have to close a $2.5 trillion gap – annually.To achieve this, we must use innovative mechanisms to leverage and mobilize global funds, especially from the private sector.

Fortunately, the private sector has trillions of dollars that it can shift toward the effort to build a more sustainable economy and, specifically, to achieve the SDGs. But it needs encouragement, which the World Bank Group has attempted to provide, using concessional financing, investment guarantees, and matching investments.We have also worked to encourage countries to improve the policy and regulatory environment for development and growth, thereby becoming more attractive destinations for private-sector resources.

But more must be done to encourage the private sector to invest in sustainable development. For starters, businesses need purpose. As a recent report by Deloitte points out, companies should be able to articulate a clear purpose that is connected to a wider social, environmental, or even economic goal. That purpose can act as a compass for the business, influencing its organizational culture and values, and guiding stakeholders’ individual and collective behavior.

Of course, a sense of purpose alone won’t drive the private sector to shift investment toward sustainability. The Business and Sustainable Development Commission (BSDC) has reported that investments in the SDGs bring enormous returns, including new opportunities, massive efficiency gains, impetus for innovation, and improved reputations.

Once companies recognize these benefits and decide to adopt a purpose-driven approach, they need help monitoring and reporting outcomes. Specifically, they need a transparent framework that enables them more easily to share information about progress on their long-term economic, social, and environmental objectives. There are efforts underway to create such a framework, but much more needs to be done to create the right incentives for businesses to participate.

The ranks of businesses supporting the transition to a sustainable economy are growing. But, to complete that transition, particularly in Arab countries, many more companies and other private-sector entities will need to step up. Of course, their pledges must be reflected and reinforced by commitments from governments, multilateral institutions, and civil society.

The road ahead is fraught with difficulties, but the Arab world has overcome similarly daunting challenges in the past. Now as much as ever, the region has the people, resources, and opportunity to thrive.

Mahmoud Mohieldin is the World Bank Group’s Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships, and is a former minister of investment of Egypt.

By Mahmoud Mohieldin

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