Diplomacy and International Institutions

International Organizations

  • International Organizations
    IMF Reform Moves Forward
    There are reports this morning that House and Senate legislators have included language authorizing U.S. support for International Monetary Fund (IMF) reform in the $1.1 trillion spending package funding the government for the rest of FY16.  If this language reaches the president’s desk and is signed into law, it would be an important achievement and a positive reflection on the perseverance of U.S Treasury officials and congressional leaders to get this deal done. The package—first agreed to by the Obama administration in 2010—changes voting shares and governance for the institution at a critical time, bolstering the IMF’s credibility and its ability to play a lead firefighting role at times of crisis.  Failure to pass the legislation had become a substantial irritant for U.S. influence internationally, and resolving this is a win for good global economic governance. The price the administration paid included a commitment to seek to eliminate the “Systemic Exemption”, the rule that since 2010 has allowed lending even when there was a risk that the debt was unsustainable, and that was used to support loans for the periphery countries of Europe.  I have supported the rule, which recognizes the inevitable risk involved in these large scale programs where there are broad systemic effects, but giving up the rule is a small price to pay to get IMF reform passed. Should a global crisis threaten in the future, the IMF may again need to bend their rules to respond effectively. That discussion now will begin with a clean sheet of paper, and Congress will need to be informed. The administration also has promised to report to the Congress ahead of any vote supporting a large lending program.  While these commitments add an extra layer of process, I agree with others that requiring clear explanations before and after the use of such a policy can strengthen the legitimacy of such policy decisions. The idea for this trade--IMF reform for the Systemic Exemption--originates with John Taylor, and I gave it a strong endorsement when I testified before the Senate Foreign Relations Committee earlier this year. Quietly, as a footnote to the broader budget deal, good policy is being made.
  • South Africa
    WSIS+10: In Internet Governance, Actions Speak Louder Than Words
    Byron Holland is the CEO of the Canadian Internet Registration Authority, which manages the .ca domain. A decade ago, a landmark summit was held in Geneva and Tunis to discuss how the digital divide between the developing and developed world could be bridged. This week representatives from more than 190 nations are meeting in New York to assess the progress made since the World Summit on the Information Society (WSIS), and those discussions could influence Internet governance for the foreseeable future. A lot has changed in the past ten years. The number of Internet users has tripled to more than three billion; the Internet is now estimated to contribute $4 trillion to the world’s top twenty economies each year. It has become the catalyst for revolutions and radically changed the ways in which many of us communicate with each other. However, the digital divide that the WSIS was intended to address persists. Sixty percent of the world’s population still do not have access to the Internet and are therefore excluded from the tremendous economic and social benefits that come with it. It incumbent upon all of us, governments, the private sector and civil society, to work together to shrink this divide. However, how to do so, and who gets to make those decisions, continue to be points of contention. The historically unparalleled growth of the Internet is, as I and many others would argue, in large part due to the bottom-up, organic approach inherent to the governance model employed to manage its global development. Underpinned by the principles of inclusiveness, collaboration, openness, and transparency, the multistakeholder model has been the foundation of the Internet’s success. The multistakeholder model ensures that all organizations that have an interest in the Internet’s success have an equal voice at the table when decisions about its development are made, a necessity for an entity as complex as the global Internet. It has facilitated the development of the greatest driver of positive economic and social change humankind has seen in centuries, and it has the power to accelerate the flow of knowledge, education, communication, and wealth globally. While the Tunis Agenda, the output of the WSIS in 2005, called for a lightweight, multistakeholder approach to Internet governance, there have been numerous attempts by certain governments to exert their authority over critical Internet resources over the past ten years. A multilateral approach, one that would put governments in the role of decision-maker, has been preferred by a number of states (primarily from the BRICS group). The negotiations leading up to this week’s meeting has seen the debate over ‘who should run the Internet’ brought to the forefront once again. I was therefore pleased to see that the latest draft of the outcome document—the text that will form the basis of the discussions this week at what is known as WSIS+10—recognizes the value of the multistakeholder model. It attaches “great importance to multistakeholder implementation at the international level” and goes as far to say that “building an inclusive development-oriented Information Society will require unremitting multistakeholder effort.” Those are strong words of support for a model of governance that is sometimes represented as the antithesis of the multilateral approach symbolized by the United Nations. While there are many sections of the text that remain problematic, I see this as progress. Of course, negotiated text is one thing. Actions can be, and often are, something completely different. While the outcome document borders on the self-congratulatory for the UN’s commitment to the multistakeholder model in the WSIS process, I’m afraid the reality tells a very different story. Yes, there have been open consultations with non-state actors leading up to the high-level meeting (often held with less than a week’s notice) and yes, the outcome document has been posted for public comment (the last time for less than 72 hours). However, this is not meaningful multistakeholder participation. Putting aside the very real challenges of travelling to New York for an open consultation with minimal notice, or providing meaningful input to the draft outcome documents in very short order, the process to get to this point has been stacked in the favor of governments. The real work of drafting the outcome document has taken place behind closed doors at the UN, with the technical community, civil society and the private sector largely shut out of the process. I would argue that it does not live up to the spirit and intent set out by the Tunis Agenda a decade ago. In this context, the multistakeholder model may be best defined by what it is not, as opposed to what it is. ‘Consultation’ with stakeholders is not multistakeholder; it is a multilateral approach with input from affected parties. A true multistakeholder approach sees all affected parties come to the decision-making table with equal opportunity for input. Moving forward, the multistakeholder model will become increasingly important in addressing the digital divide. Recognizing the importance of the Internet to development in the global south, the UN’s recently adopted Sustainable Development Goals (SDGs) call for universal and affordable access to the Internet by 2020. The degree to which the SDGs are linked to the global adoption of information and communications technologies cannot be overestimated. Achieving these lofty goals will require an approach that includes full multistakeholder participation. I applaud the United Nations on its recognition of the value of the multistakeholder model for Internet governance in the WSIS+10 outcome document. However, given the process leading up to next week’s meeting, I am skeptical that it is any more than high-minded rhetoric and empty gestures.
  • Americas
    This Week in Markets and Democracy: International Anticorruption Day, Corruption in Ukraine, and Elections in Venezuela
    International Anticorruption Day December 9 marked the United Nations’ thirteenth annual International Anticorruption Day, offering a chance to reflect on global anticorruption efforts this year—from successful antigraft cases to ongoing challenges fighting high-level theft. In commemoration, here’s what we’ve been reading: Transparency International surveyed perceptions of corruption in sub-Saharan Africa. Fifty-eight percent of citizens believe corruption is on the rise. Nearly one in four admitted to paying a bribe in the past year, many to police or in courts. The report calls for greater government efforts to end impunity, as well as more transparency from the private sector. The World Bank’s Ravi Kumar charts how corruption affects business globally. Surveys with over thirteen thousand companies in East Asia, South Asia, and sub-Saharan Africa reveal that “gifts” are often expected for everything from construction deals to operating licenses, while over 50 percent of companies in the Middle East identify corruption as a major constraint. Political scientists Daron Acemoglu and James A. Robinson argue that tackling corruption isn’t enough to combat global poverty.  They say bribery and graft are just symptoms of the larger problem of weak economic and political institutions that undermine inclusive growth. Finally, for an overview of  bribery cases around the world, the Mintz Group maps data on the total penalties assessed for FCPA violations by country. Nigeria has paid the most since 1977, with a majority of cases in the oil industry. Ukraine’s Corruption Risks Setbacks Corruption may undermine Ukraine’s fragile economic recovery just as it exits an eighteen-month recession. A set of ambitious reforms, backed by $17.5 billion from the International Monetary Fund (IMF), enabled an October credit rating upgrade and looks to slightly revive GDP growth in 2016. But as CFR’s Rob Khan highlights, stalled progress on corruption and rule of law threatens IMF support and the larger recovery. And a brewing political confrontation risks further setbacks. Parliament remains at an impasse over the 2016 budget and mounting corruption scandals, including a Minister of Parliament forced out over bribery allegations.  During his visit to Kiev this week, Vice President Joe Biden warned that Ukraine must end impunity for oligarchs and step up a judiciary overhaul, even as he announced an additional $190 million in U.S. assistance for needed reforms. What’s Next for Venezuela? Venezuela’s opposition Democratic Unity coalition won 112 of the 167 National Assembly seats in last week’s legislative elections, the first time they will control congress since Chavez’s rise to power in 1999. The supermajority gives the opposition the power to remove central bank directors, Supreme Court (STJ) judges, cabinet members, and even President Nicolás Maduro himself through a referendum starting in April. With this new power comes responsibility for the deep economic and other malaises Venezuela faces. And Maduro could still undercut their base—many worry the lame duck congress will devolve more powers to the executive branch and further stack the judiciary.
  • China
    Want to Borrow From the IMF? China Just Made It More Expensive.
    On November 30 the International Monetary Fund made its long-awaited announcement that it would add the Chinese RMB to its basket of globally important reserve currencies – the Special Drawing Right (SDR). The impact is largely symbolic for China, although from October 2016 it will mean that even if U.S., eurozone, Japanese, and UK interest rates were to remain flat the rate on normal IMF loans will be 21 basis points higher–a 20 percent jump from the current 1.05 percent rate. This is because the Fund’s borrowing rate is set by a formula based on a weighted average of 3-month government borrowing rates for the countries whose currencies comprise the SDR basket (plus 100bp). And China’s rates are much higher than those of the incumbents, as shown in the figure above. What difference will this make? Well, take Greece. Back in June, it was unable to pay back €300 million owed to the Fund. If its borrowing rate had been 21bp higher, it would have owed an additional €65 million. Not only will IMF borrowing rates be higher in the future, thanks to the RMB’s new status, but they will also be more volatile – since Chinese rates are far more variable than U.S. and other SDR incumbent rates. So if you’re thinking of borrowing from the Fund – be prepared to pay more next October.
  • International Organizations
    Civil-Military Cooperation in International Health Crises
    The following is a guest post by my colleague Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. The Ebola epidemic demonstrated not only the human devastation wrought by lethal infectious disease, but also the broad coalition of actors needed to combat the outbreak. In Liberia, the U.S. military provided logistical and medical support that was integral to stemming the Ebola epidemic. How did armed forces interact and cooperate with civil society and government workers on the ground? What lessons can we learn from civil-military relations during the Ebola outbreak to guide us in future international health crises? In this podcast, I discuss these and other questions with U.S. Army Colonel Valery Keaveny, who played a central role in the U.S. Army’s 101st Airborne Division’s intervention in Liberia, and the University of Sydney’s Adam Kamradt-Scott, whose recent report on lessons learned from civil-military cooperation during the Ebola Outbreak has already made its way into the hands of UN officials, government leaders, and opinion makers.
  • International Organizations
    China’s Symbolic Currency Win
    Earlier today, the International Monetary Fund (IMF) Board approved the inclusion of the Chinese renminbi (RMB) as a fifth currency in the special drawing rights (SDR), the IMF’s currency, as of October 2016.  The move was expected and IMF Board approval was never in doubt once the U.S. government signaled that it would not oppose the step. My read is that the Fund staff acted properly in arguing that the RMB now meets the test of being freely useable for international transactions by its members (though some have argued that the IMF was bending its rules for political reasons). Of course, Chinese financial markets remain significantly restricted for private investors, but the SDR’s current primary use is for transactions between members of the IMF (governments). From that narrow perspective the RMB can be judged to be widely used and widely traded because a country receiving RMB as a result of IMF transactions should be able to switch it to any other basket currency at low cost, at any time of the day or night, somewhere in the world. So too perhaps are more than a dozen other currencies freely useable by this measure, but the SDR is for now limited to the largest of those currencies by a separate (export share) measure. Consequently, next year the RMB goes into the basket with a weight of 10.9 percent (compared to today’s weights, most of China’s share comes from the U.S. dollar which will retain a 41.7 percent share; the other shares will be 30.9 percent for the euro, 8.3 percent for the yen, and 8.1 percent for the pound sterling). While some have argued that the move is a “significant” step for the international monetary system, it is more properly seen as a quite small and largely symbolic step in a long and gradual path of internationalization of the RMB, a reform process that is likely to slow following this summer’s market turmoil. Indeed, even prior to the crisis the IMF and others had warned that Chinese financial market liberalization needed to be cautious and sequenced, with a more urgent priority in bringing market discipline to large borrowers. Nonetheless, the announcement validates and perhaps reinforces the argument for expanding the RMB’s role in markets, and is consistent with measures from the Chinese in recent months to move in this direction. In this regard, the far more important announcement this week was the creation of a working group led by Michael Bloomberg aiming to provide a framework for RMB trading and clearing in the United States, as this could influence the private use of the RMB and SDR. The door for this initiative was opened during the recent state visit by Chinese President Xi, and operationally is independent of the IMF’s announcement though fueled by the same reform momentum. In the near term, the main economic impact of the inclusion of the RMB in the SDR is to raise the SDR interest rate (because Chinese interest rates are higher than rates on other currencies in the basket). Consequently, IMF borrowers will pay more, an amount that has been predicted by the IMF staff to be 27 basis points, but which could well average far more over the cycle. While this may seem small compared to normal swings in the interest rates of the major currencies during the process of normalization, it’s worth remembering that countries such as China in the process of convergence to industrial country levels of income are expected to have higher real rates than developed countries (i.e., interest rate differentials should not be expected to be offset by exchange rate moves). Conversely, if the RMB remains stable relative to the dollar, the exchange rate dynamics of the new SDR will be largely unchanged relative to the old basket. Finally, an important question will be the political impact in the United States, where Chinese and IMF-related legislation (such as IMF quota reform) already faces rough sledding.   FIGURE 1. SDR INTEREST RATE (IN PERCENT) Source: IMF "Review of the Method of Valuation of the SDR" 1/ Using proposed weighting formula
  • International Organizations
    Paris is Just One Piece of the Climate Change Puzzle
    Coauthored with Naomi Egel, research associate in the International Institutions and Global Governance program at the Council on Foreign Relations. Next week’s Paris meeting on climate change—officially, the twenty-first Conference of Parties to the UN Framework Convention on Climate Change (UNFCCC)—is shaping up to be a watershed moment in the fight against global warming. Unlike the disappointing 2009 conference in Copenhagen, the Paris summit is expected to produce a strong global agreement that charts the next steps in combatting climate change. As important as it is, the UNFCCC process is just one part of the global climate change regime. CFR’s recently updated Global Governance Monitor: Climate Change assesses the scope of global warming and its stakes for the planet, summarizes the major multilateral initiatives that have been launched to combat it, summarizes pressing policy debates, and offers concrete recommendations for policymakers on how best to mitigate and adapt to climate change. Combatting climate change is the most complicated collective action challenge humanity has ever faced. But the pace and scale of the global response are both increasing, as the world recognizes that we cannot wait—and that we have tools at our disposal to respond. Major issues Curbing emissions The Kyoto Protocol and subsequent agreements reached at successive UNFCCC meetings have been wholly inadequate at reducing greenhouse gas emissions. As a result, the planet is on a course to warm far more than the 2 degrees Celsius that climate scientists consider a safe threshold. Unable or unwilling to negotiate a comprehensive treaty with common, binding emissions reduction targets, governments recently adopted a more flexible “pledge and review” strategy. At the 2014 climate change conference in Lima (COP-20), countries agreed to publish prior to Paris their own Intended Nationally Determined Contributions (INDCs) to combat climate change, including information on emission reductions. The hope is that these voluntarily pledges, tailored to unique national circumstances, will create pressure for countries to live up to their commitments—and to ramp up their ambitions to further reduce emissions going forward. Financing for mitigation and adaptation Although financing for climate mitigation and adaptation has come a long way, it lags far behind the scope of the challenge. The Green Climate Fund—intended as a centralized hub for climate financing and a core component of the global climate change regime—became fully operational only on November 6, 2015, when it approved its first eight projects (totaling $168 million). Moreover, the Fund’s resources fall far short of what nations have promised. In 2010, countries committed to raising $100 billion by 2020 for the Fund, but today, it has received only $10.2 billion in pledges—and only $5.9 billion has materialized. Notably, the greatest progress on climate financing has been outside the intergovernmental system: private investment in the low-carbon economy has reached hundreds of billions of dollars. Even so, financing for reducing carbon emissions has been far more robust than financing for adapting to the effects of climate change. Future climate refugees As sea levels rise and droughts worsen, the world will see a growing number of refugees fleeing the effects of climate change. Currently, more than 100 million people live less than one meter above sea level, and low-lying and island nations like the Maldives and Kiribati are already pursuing options to relocate their people to higher ground—or abandon their countries entirely. In the Pacific Ocean, rising sea levels are expected to displace between 665,000 and 1.7 million people by 2050. But the concerns of future climate refugees remain an afterthought, for both the UN Framework Convention on Climate Change and the UN High Commissioner for Refugees. These enormous challenges cannot, of course, not be tackled and resolved at a single conference. Still, there are many opportunities—in Paris, at future UNFCCC meetings, and through outside venues—to make serious progress. Recommendations Create a global mechanism for monitoring emissions reductions Nongovernmental groups are already tracking how states’ INDCs stack up against the scale of the challenge. But reliable monitoring is also needed to determine whether countries are actually fulfilling their emissions reduction commitments. At present, the UNFCCC relies entirely on self-reporting from countries as to whether they are meeting their INDCs. A neutral, independent monitoring mechanism under the UNFCCC framework would build the institutional credibility needed for countries to commit to more ambitious INDCs in the future. The UNFCCC could draw lessons on the best approaches for monitoring and verification from other international organizations that engage in analogous tasks, such as the World Trade Organization, International Monetary Fund, and Organization for Economic Cooperation and Development. Develop a voluntary system to encourage compliance post-Paris Left unclear is whether the Paris agreement will include a binding compliance mechanism. One worry is that unaddressed cases of noncompliance could undermine the credibility of the UNFCCC process. Voluntary mechanisms to encourage states to meet their INDC pledges could help fill this gap. Accordingly governments should explore alternative arrangements, outside but supportive of the UNFCCC framework, to further encourage compliance. Such a system could take the form of clubs that confer on their members some additional benefit for their participation. An alternative would be to make country’s progress toward meeting its INDCs a precondition for certain forms of financing. Make combatting climate change a G20 priority Although the Group of 20 (G20) has made tentative forays into the climate field, such as pledges to phase out fossil fuel subsidies, the group could do much more to support the UNFCCC process and catalyze more aggressive emissions reductions and climate financing efforts. In this regard, the recent leaders’ communique from its summit in Antalya, Turkey, was disappointing. China should use its chairmanship of the G20, which begins in December, as a leadership platform to encourage the world’s most prosperous economies to make even more ambitious commitments to reducing emissions, as well as funding clean energy investment. The G20 should also implement the recommendations of the G20 Climate Finance Study Group report, and use the G20 as a body to coordinate collaboration among climate funds, as well as stimulate private investment in financing climate strategies. These are simply a few of the issues we examine in the Global Governance Monitor, which also provides historical context for many of the issues that will dominate the Paris talks. For more information, visit the monitor itself.
  • Americas
    This Week in Markets and Democracy: G20 and APEC Summits
    CFR’s Civil Society, Markets, and Democracy (CSMD) Program highlights noteworthy events and articles each Friday in “This Week in Markets and Democracy.”  The terror attacks in Paris dominated global headlines and U.S. foreign policy discussions over the past week, though regional and global economic summits went ahead as scheduled. From Turkey to the Philippines, leaders discussed the way forward on economic growth, trade, and reform. G20 Targets Corruption, Tax Avoidance At this week’s G20 meeting in Turkey, world leaders considered technical reforms to increase revenue by addressing tax evasion and corruption. Bureaucrats officially endorsed the Base Erosion and Profit Shifting (BEPS) plan to close international tax loopholes and prevent multinationals from moving profits from where they are earned to other jurisdictions. Companies worry about adverse BEPS effects such as double taxation. Others warn of U.S. job losses if companies relocate to countries with lower tax rates. And many outside the G20 argue the BEPS system will favor richer nations that made the rules, even as the UN estimates developing countries lose $100 billion each year to offshoring. Another technical issue on the G20 agenda was beneficial ownership transparency—whether governments enable corruption by not legally requiring companies and trusts to identify their real owners. According to Transparency International, the United States, China, and Brazil are among the biggest transgressors in shielding assets’ owners, despite a G20 commitment to fix the problem. Trade Dominates APEC Agenda Trade took center stage at this week’s Asia-Pacific Economic Cooperation (APEC) meeting in Manila, gathering leaders from twenty-one countries accounting for more than half of the global economy. Supporters argued for greater regional integration as a way to counter extremism and described trade as a “human right,” while opponents protested free trade as the cause of poverty and inequality. With the Trans-Pacific Partnership (TPP) agreement awaiting a U.S. vote, President Obama pushed others to ratify the deal, meeting with the heads of each TPP country. China, as Asia’s largest economy outside the TPP, countered by laying out an alternative trade proposal. Chinese President Xi Jinping also responded to concerns about Chinese growth, saying the slowdown shows his country is making the transition from export- to domestic consumption-led growth. This narrative did little to explain China’s record trade surplus on record last month, up 36 percent since 2014.
  • International Organizations
    From MDGs to SDGs: Lessons Learned and Future Directions for Implementing UHC
    The following is a guest post by my colleague Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. This year, the United Nations released a new set of development goals called the Sustainable Development Goals (SDGs) to replace the previous set of Millennium Development Goals (MDGs). One of the goals includes a target that aims to provide universal health coverage across the globe—a much more ambitious and far-reaching goal than the more targeted health-related MDGs. In this podcast, Tony Pipa, U.S. special coordinator for the post-2015 development agenda, and Sara Bennett, associate director and associate professor at the Johns Hopkins Bloomberg School of Public Health, discuss with Yanzhong Huang some lessons learned from the implementation of health-related MDGs and how those can facilitate a greater level of success in the SDG process. They also explore how the SDGs will facilitate future progress toward bringing health coverage to all people, particularly in low- and middle-income countries.
  • Regional Organizations
    Après Paris: Reverberations of the Terrorist Attacks
    Following Friday’s horrific assault on Paris—the world’s most vibrant monument to the open society—there is a welcome global determination to crush the Islamic State. There can be no negotiation with this apocalyptic movement. The international response against the perpetrators must be, in the words of French President François Hollande, “pitiless.” Achieving this aim will require a broad coalition, including not only NATO allies but also strange bedfellows like Russia, Saudi Arabia, and Iran. There will be necessary debates, of course—about whether to introduce Western (including U.S.) ground forces in Syria and Iraq, about whether to treat the Assad regime as an enemy, bystander, or partner in this effort, and about how the West can escalate its involvement without sparking the global religious war that ISIS desires. An effective response will require the Obama administration to be out in front: there must be no leading from behind in this effort. For the West, including the United States, three priorities stand out: Invoke NATO’s Article 5: The Paris attacks, which President Hollande termed “an act of war,” clearly justify France’s invoking the collective defense provisions of Article 5 of the North Atlantic Treaty, which stipulates that an attack on any of the NATO allies is an attack on all. Although created to defend the West from the Soviets, NATO has invoked Article 5 only once before in its history, following the September 11, 2001, al-Qaeda attacks on New York and Washington. Invoking Article 5 will have several immediate benefits: broadening the coalition to all twenty-eight NATO member states, enhancing intelligence cooperation among France and its allies, and permitting NATO to coordinate the air war against ISIS, as well as to provide unified command and control for the thousands of troops (beginning with special forces) that the alliance will surely have on the ground in Syria and Iraq within weeks. As in Afghanistan’s Operation Enduring Freedom, NATO will provide a useful platform for other non-NATO partners—including the Gulf states, and hopefully eventually even Russia and Iran—to conduct coordinated strikes against ISIS. As former French President Nicholas Sarkozy noted outside the Elyseé Palace, “There cannot be two coalitions in Syria.” Secure Europe’s Borders while Remaining Humane: Even before the attacks, the European Union was in turmoil over its unpoliced borders, as it grappled with an unprecedented (and ongoing) flow of refugees from Syria and other global conflict zones. The mass influx, like the Eurozone crisis before it, exposed growing fault lines among EU members, dividing Germany and other governments that had thrown out the welcome mat from countries like Hungary, which objected to being forced to absorb alien populations. As sovereignty trumped solidarity, borders and fences have begun to reemerge, threatening one of the EU’s proudest accomplishments—free movement within the twenty-six nations Schengen Area. Just last week Donald Tusk, president of the EU Council of Ministers, warned that “saving Schengen is a race against time.” The Paris attacks have added a third “s” to the mix, more powerful than either sovereignty or solidarity: security. France has reimposed strict border controls, and other countries will surely do the same. This is nothing short of a disaster for Syrian (and other) refugees, who will increasingly find themselves suspected of sympathy for (or complicity in) the atrocities of the very terrorists they had fled. EU leaders must find some way of securing the rights and safety of asylum seekers while their claims are processed, even as they take immediate steps to strengthen the Union’s external borders to stem off more draconian demands from far-right parties. And if Schengen is to be saved over the long term, the price to be paid will likely be the creation of a robust, EU-wide border protection service. Reaffirm the Goals of the Paris Climate Conference: The assault on Paris occurred just two weeks before the opening of the pivotal twenty-first Conference of Parties (COP-21) to the UN Framework Convention on Climate Change (UNFCCC). The juxtaposition has led some critics in the United States to excoriate the Obama administration for fixating on global warming, even as ISIS expands its reach and its slaughter of the innocents. This critique is absurd and irresponsible. A recurrent challenge in foreign policy is to be able to focus on the immediate and urgent while not losing sight of the long-term and important. ISIS presents a clear and present danger to international peace and the values of civilization. Global warming presents a potentially catastrophic threat to human survival on the planet. As the world’s most powerful nation, the United States cannot afford to choose between one or the other: it must be able to walk and chew gum at the same time. President Obama plans to attend the Paris summit, along with more than one hundred other world leaders. The U.S. goal in Paris must be to achieve a breakthrough agreement among the assembled parties for the most ambitious reductions in greenhouse gas emissions ever attempted—with robust monitoring mechanisms to gauge progress. The attacks in Paris do not change this. November 13, 2015, has joined a growing list of somber dates on the calendar. With each atrocity, terrorists test both the resolve and the wisdom of their targets, and the resilience of civilization itself. Let us endeavor, in crafting a collective response to this latest outrage, to respond firmly and resolutely, without descending into the barbarism of our adversaries.
  • International Organizations
    UN Peace Operations: Capitalizing on the Momentum of 2015
    The following is a guest post by Megan Roberts, associate director of the International Institutions and Global Governance program at the Council on Foreign Relations. United Nations peacekeeping confronts a make-or-break moment. That was the main takeaway from last week’s meeting of senior UN officials and peacekeeping experts in Washington. The gathering came on the heels of two pivotal events: the release of a troubling independent report on the parlous state of UN peace operations, and the peacekeeping summit President Obama himself hosted on the sidelines of the September opening of the UN General Assembly. After years of inaction, UN member states may finally be willing to close the yawning gap between the expanding mandates of peace ops and the resources and capabilities devoted to them. In June, an independent panel of experts appointed by Secretary-General Ban Ki-moon released the first in-depth report on UN peace operations since 2000. That document laid bare the massive challenges the endeavor confronts, starting with the inconsistent political and financial support member states give to peacekeeping. In late September, President Obama convened a special session on improving UN peacekeeping, unveiling the first new U.S. policy on peacekeeping in twenty years. He also announced several concrete U.S. commitments ranging from new training to logistical support, in addition to increasing the number of military officers provided to UN peacekeeping. The summit generated other commitments from more than fifty world leaders, including the promise of more than 40,000 additional troops, as well as desperately needed specialized assets ranging from helicopters to engineering units, hospitals, and airfield maintenance crews. The standout was China, whose president, Xi Jinping, announced that it would provide eight thousand stand-by troops, as well as a standing police unit, and would provide one hundred million dollars to develop the standby capacities of the African Union. Behind this flurry of commitments is the stark recognition that peacekeeping is at a breaking point. There is no way to disguise the gaping chasm between the ambitious mandates approved by the UN Security Council and the meager resources—military, financial, and human—that the United Nations actually possesses to get the job done. To be sure, this alarm has been sounded before. But the gap has continued to grow. The average length of peacekeeping missions has climbed, as has their scale of ambition. Today, there are sixteen UN peacekeeping missions globally, over half of which are in Africa, with more than 125,000 troops, police, and civilians. Missions struggle to implement multiple tasks assigned by the Security Council, such as protecting nearly two hundred thousand civilians in South Sudan. At the same time, UN peacekeeping faces new sorts of threats, including violent insurgents and Islamic extremists, in the Central African Republic and Mali. The latter has become the UN’s most dangerous operation, accounting for over 30 percent of security incidents in all UN peacekeeping missions and over fifty fatalities since the mission was deployed in 2013. The sudden high-level attention to peacekeeping has two major potential benefits. First, for the first time in years, these new contributions give the UN an opportunity to be picky. For too long, the UN Department of Peacekeeping Operations has had to make do with the troops and police on offer, regardless of whether they are appropriately trained or outfitted. With new offers of contingents from the likes of Brazil and the United Kingdom, the UN has a better chance of matching the best troops to each situation. The availability of high-quality detachments also creates an incentive for existing troop and police contributors to provide the UN with higher performing, better equipped, and professional soldiers and police that are prepared to adhere to UN rules, particularly when it comes to discipline and sexual abuse. Second, the new attention to peacekeeping, particularly from the United States and China, opens the door to a more productive relationship among the Security Council, which authorizes missions; the UN Secretariat, which plans and implements those missions; and member states that provide the troops, police, and financial resources. Among the most important recommendations of the high-level panel was that a political strategy drive the design and deployment of peace operations. It also underscored the need to harmonize UN peacekeeping, which has a military component, and UN civilian political missions. Success will require greater coordination, continual communication, and mutually reinforcing efforts among the Council, the Secretariat, and member states. To be sure, the current environment remains a challenging one, not least given deep divisions between the Western P3 (the United States, United Kingdom, and France) and Russia on how best to handle international crises on the Security Council. Despite these promising developments, three remaining questions will determine whether 2015 marks the beginning of a new, more hopeful era for UN peace operations. The first is whether the United Nations will take up the high-level panel’s recommendation to institutionalize a “culture of prevention,” by seeking to avert—rather than simply respond to the outbreak of—violent conflict. The Secretariat has already taken steps in this direction, including by undertaking monthly horizon scans intended to alert the Security Council to emerging crises. The secretary-general has also launched a new initiative, Human Rights Up Front, geared to prompt early action in the face of impending, large-scale human rights violations. Unfortunately, prevention remains a controversial subject at the UN, as some member states view it as potentially undermining their sovereignty. Without an additional push from the P5 and a broad base of member states, the UN may move no closer to achieving a culture of prevention. Second, the UN must prioritize among the many reform proposals emanating from the high-level panel report and peacekeeping summit. Many areas need fixing, but resources are limited, raising the question of where to start. The three most important places to begin—since they will determine the fortunes of the overall effort—are (1) strengthening the analysis and planning capacities within the UN Secretariat, (2) developing rapidly deployable capacities, to stabilize deteriorating environments, and (3) breaking down silos between peacekeeping operations and civilian missions. In the midst of all of this, the UN will need to respond quickly and transparently to allegations of sexual exploitation and abuse—the credibility of the UN rests on demonstrating zero tolerance. Third, making good on the laundry list of recommendations will require the United Nations—including both the Secretariat and member states—to overcome its fiercest foe: its own bureaucratic inertia. Many proposed changes will require overhauling long-standing, inflexible administrative mechanisms that restrict quick response to emergencies. The UN needs to streamline its ability to mobilize and deploy assets, reallocate budgets, conduct strategic planning, and recruit civilian expertise from outside the Secretariat and UN agencies. Despite years of promised reforms to its human resources, the UN still finds itself unable to deploy the right people with the right expertise at the right time. This is particularly true when it comes to recruiting women. Changing how the UN does business will require more than cosmetic changes—and it will require influential member states to champion these reforms. Finally, the UN and interested member states must figure out how to sustain momentum for reform, given the crowded peace and security agenda, the slow moving pace of bureaucratic change, and looming leadership changes both at the UN and in the United States at the end of 2016. Implementing wide-ranging reforms, particularly on less than scintillating but critical administrative procedures, will require leadership not only within the UN but also outside it—from the Secretariat’s 193 collective bosses.
  • China
    G20: Preparing for the Next Crisis
    The leaders of Group of Twenty (G20) meet this weekend in Antalya, Turkey. The agenda is long, the ambitions are modest, and it is easy to be cynical that the group has outlived its usefulness. Still, the meeting matters in a number of respects: strengthening relationships among leaders of the most important economies, providing momentum to ongoing reform initiatives, and pushing forward work on issues as diverse as climate change and tax avoidance. The most important task for the group though will be preparing for future crises, because it is at those times that G20 leadership is most critical. The G20 will have some satisfaction that serious economic shocks were weathered in 2015. In 2016, when China leads the G20, the story could be different. The headline for this year’s G20 summit is support for robust and inclusive growth, reflecting both frustration with the tepid pace of global activity and a rising global concern with income inequality. The question though is whether there is a collective will to find a solution that goes beyond what these countries are choosing to do already. That would involve countries with fiscal and current account surpluses stimulating demand at a time when deficit countries are tightening their belt.  This is an argument the U.S. government has made for a number of years, presumably aimed at China and Germany in particular. The odds of success on this count always were small, but with China focused on its own economic challenges and Germany (and its European partners) strained by the migration crisis, hope for any meaningful agreement on growth seems even more distant. The reform “deliverables” for the summit are similarly unambitious. The economic agenda includes a focus on expanding infrastructure, strengthening trade (through implementing a trade facilitation agreement stalled after objections from India) and pursuing development goals in low-income countries.  But little is expected to be achieved in these areas at this summit.  As noted by Matthew Goodman and Daniel Remler, the summit should deliver a Base Erosion and Profit Shifting (BEPS) action plan, aimed at curbing tax avoidance by multinational corporations, and the group will give a strong push to the United Nations Climate Change Conference that begins later this month in Paris. Ongoing work on financial sector reform will be endorsed and encouraged.  But, at a time when the agenda of the G20 is becoming overloaded with a rapidly growing wish list of reforms, progress in this area is likely to disappoint all but the most dedicated G20 watchers. These summits, given the presence of world leaders, always provide an opportunity to discuss the political security issue of the moment, and this time is no exception.  Turkey’s President Tayyip Erdogan has signaled that he wants leaders to discuss the crises in Syria and Iraq, and that his government stands ready to take stronger steps in the region to resolve the current crisis. Following on earlier talks in Vienna, and with Turkey struggling to deal with the fallout from the continuing Syria crisis, this issue may well capture the headlines. When Chinese markets came under pressure in August, there was broad concern that we might be on the verge of a global crisis.  Those concerns have receded, based on signs of temporary stability in China and a belief that emerging markets are better prepared than in the past to weather a shock.  I am not so sure, and in any event the question for policymakers this week is how to respond to a crisis that begins in the emerging markets. In my monthly, I argue that we are not as well prepared as we need to be. If a crisis does emerge, the G20 will be looked to lead again, as they did in 2008-09.  From this perspective, the value of this week’s summit is in strengthening the relationships between leaders that will allow for a prompt and efficient response should the downside risks materialize.
  • China
    Chinese Cyber Power: Not Learning From the United States’ Mistakes
    Lincoln Davidson is a research associate for Asia Studies at the Council on Foreign Relations. You can follow him on Twitter @dvdsndvdsn.  In an essay published last month on the website of the Communist Youth League—an auxiliary of the Chinese Communist Party (CCP) for young people between the ages of fourteen and twenty-eight—journalist Cai Enze drew a parallel between cyber power and the “Chinese Dream,” Chinese president Xi Jinping’s articulation of his vision for a “rejuvenated” China. “The Chinese Dream is the hundred-year dream of many millions of Chinese people,” Cai wrote. “Its source is the broad wisdom of the masses…a crowdfunded top-level design, where being a cyber power is one of the parts of that crowdfunding.” But what is a cyber power? For the CCP, being a cyber power means having a well-developed Internet and competitive technology and e-commerce companies that aid China’s development. The state must have impressive cyber capabilities to protect the country’s networks from bad actors. And the state must be the sole voice for the interests of the people with regard to the Internet, both domestically and internationally. In other words, cyber power means the comprehensive expression of state sovereignty in cyberspace. This emphasis on sovereignty is rooted in China’s historical experiences of a “century of humiliation” that shape the modern perception of China’s leaders that “hostile foreign forces” are attempting to ideologically infiltrate the country and tear down the CCP. While the CCP’s leadership has been pushing the link between cyber power and state sovereignty in cyberspace for years, the World Internet Conference, held in Wuzhen, China last November, was something of a watershed moment for China’s involvement in global Internet governance. With the CCP’s top cyber official Lu Wei playing host, the party’s conception of the relationship between the Internet, the individual, and the state were on full display. Chinese officials had been airing their grievances with the existing model of Internet governance for more than a decade, but Wuzhen seemed to signal a shift to a new assertiveness backed by the power and wealth of the Chinese party-state. At the conference, party leaders pushed their vision of a state-controlled Internet, even employing a heavy-handed attempt to get conference attendees to sign on to a last-minute declaration of support for the Chinese approach to the Internet. Since then, the CCP has continued to push these norms for the global Internet, norms that directly conflict with the norms of a free and open Internet led by multiple stakeholders that the United States promotes. As the second World Internet Conference approaches—while it was originally scheduled for October 2015, it has been repeatedly delayed due to conflicts with other conferences—China is taking a look back at the success of its attempts to promote its norm of cyber sovereignty. Pointing to a September 2015 meeting between Xi Jinping and U.S. tech executives in Seattle, the Cyberspace Administration of China said the country was moving “from participant in the global Internet to constructor of the global Internet order.” Echoing that refrain, in August People’s Daily wrote that because the United States government is divesting itself of the IANA functions “China’s voice in Internet governance is growing stronger.” Despite what Chinese bureaucrats and state media might say, China’s preferred norms for cyberspace aren’t making much headway on the international stage, however. For years, China has been pushing at the United Nations a “Code of Conduct for Information Security” signed with its partners in the Shanghai Cooperation Organization, to little avail. Meanwhile, an agreement between Xi Jinping and Barack Obama during the former’s visit to the United States in September garnered a Chinese recognition, for the first time, of the United States’ longstanding distinction between economic and political espionage in cyberspace. And the most recent report of the UN Group of Governmental Experts (GGE) affirmed three of the United States’ norms of state behavior in cyberspace. Although the GGE report acknowledges that “state sovereignty and international norms and principles that flow from sovereignty” apply to cyberspace, it doesn’t define exactly what this means, and there’s still disagreement on how exactly sovereignty should play out online. China’s goals in becoming a cyber power, as mentioned earlier, are threefold: boost economic development, assert China’s role on the international stage, and protect the nation. The incredible success of American tech companies, and the benefits they’ve brought to the American economy, are a product of the free, open, multistakeholder approach to the Internet the United States government has adopted. On the international front, the biggest hit to the United States’ credibility and respected status as a global leader in recent years has been the revelation that the U.S. government’s surveillance apparatus was invading the privacy of both its citizens and people abroad. China’s leadership would do well to learn from these lessons; they might find that they get more respect as a “cyber power” if they express their sovereignty in cyberspace in a way that’s in line with other international norms of the rights of individuals relative to the state. As for security, that’s a challenge that every country is facing right now. China’s leaders should be careful that they don’t risk giving up the first two goals in their rush to achieve the third.
  • Europe
    Greece’s Bailout Dead End
    It should be no surprise that eurozone finance ministers failed to agree to disburse €2 billion in bailout money to the Greek government today or to release bank recapitalization funds. Despite optimism following the recent announcement of a relatively benign program for recapitalizing Greek banks, it is hard to escape the conclusion that the Greek program again is headed off track.  The government has fallen behind its reform commitments, and a substantial number of additional end-year measures look unlikely to be met. Even with substantial forbearance from Greece’s European partners, it now looks likely that conclusion of the first review of its program will be delayed and that the promised debt relief negotiation will come only in 2016. Further, an eventual International Monetary Fund (IMF) program is likely to be small and leave a large unfilled financing gap that will further strain Greece’s relations with its European neighbors.  It is hard to predict how long Greek voters will continue to support a government that cannot deliver on its economic pledges of low debt and sustainable growth. The European Union (EU) bank audit results revealed a capital need of €14.4 billion in an adverse scenario (€4.4 billion in the baseline), which conveniently looks to be consistent with previously approved bank recapitalization funding from the Hellenic Financial Stability Fund (HFSF). While the downside scenario is not an exit scenario—the capital needs would likely be far greater if Greece were to exit the eurozone (and Greek bank capital still relies on deferred tax assets to an excessive and credibility-destroying extent), it does cover a substantial renewed recession that would result from a protracted standoff with the IMF and its European creditors. The push is now on to complete the recapitalization by year end, raising private capital to the extent possible before state aid is drawn on, before new EU rules go into effect that would require a greater haircut on bank creditors as a condition of state support (there is a certain irony in hearing policymakers celebrate the evasion of these new rules once seen as critical to the credibility of EU banking union). The next step in Greece’s reform effort is the first review of the August European Stability Mechanism (ESM) program, which is a condition for further disbursements under the package and, more significantly, required for starting the negotiation of debt relief. Reports today suggest disputes remain on a new foreclosure law, the VAT on private education, and pricing of non-generic medications, as well as on the timing and pace of pension reform.  Individually, each of these problems would appear solvable if the government has the will to move forward, but the growing list of unmet commitments has raised concerns among creditors as has the request by the Greek government for a "political decision" on the review. Much was made over the summer on the dispute between the IMF and Europe on debt relief for Greece, The United States now is also pressuring the eurozone on debt relief for Greece. While the announcement of debt relief could maintain domestic support within Greece, the ultimate success of the program is still uncertain. Whether Greece receives haircuts (what the IMF and the United States would like to see) or further deferral of interest payments (the German proposal) will only affect what Greece has to pay after 2022.  In any event, the extended window of very low debt payments to official creditors creates temporary space for private issuance, but this type of seniority-driven market access is not durable and will require repeated official debt service extensions. Despite this issuance, in the near term there would appear to be substantial funding needs for the Greek government.  The fiscal position has returned to deficit (taking into account accumulated arrears) and growth is likely to remain muted at best.  The current IMF forecast is for growth (year-over year) to turn positive only in 2017. It is easy to be critical of a reform program that contains so many reform measures, and arguably a lack of institutional capacity within the Greek government limits their capacity to move forward. But at the same time, there cannot be a return to durable growth within the eurozone without a major transformation and opening of the Greek economy, and creditors are increasingly frustrated with the slow pace of the Greek government in meeting its commitments.  Ultimately, “Grexit” will become an option again when Greek voters lose patience with the current path being charted by the government.  It is hard to predict when it will happen, but hard to imagine another result.
  • Cybersecurity
    Japan’s New Cybersecurity Strategy: Security Without Thwarting Economic Growth
    Mihoko Matsubara is a cyber security policy director at Intel K.K. In September 2015, the Japanese Cabinet approved the second Japanese Cybersecurity Strategy, which outlines the country’s approach to cybersecurity for the next three years. Unlike the previous strategy, this new one was approved by Japan’s cabinet. This additional step highlights the importance of cybersecurity to senior Japanese leaders. It also comes a year after the Japanese parliament passed a law formalizing the role of the National Center of Incident Readiness and Strategy for Cybersecurity (NISC). The Japanese Prime Minister had originally established the NISC ten years ago but the lack of legal authorization meant that it held little sway over other ministries and agencies. Thanks to the new law, NISC is responsible for developing national strategy and policy, ensuring the cybersecurity of ministries and agencies, and serving as a focal point for international cooperation. There are four important takeaways in the 2015 strategy. First, it highlights the positive and negative aspects of cyberspace—it’s both the source of innovation and threats—unlike the 2013 strategy, which only focused on risks and mitigation measures. By focusing on innovation, the 2015 strategy recognizes that the Japanese government won’t have all of the answers to cybersecurity challenges and that all stakeholders—users, civil society, critical infrastructure companies, and business—should contribute to the safety and security of cyberspace, through measures like two-way and real-time information sharing. It also makes clear that security measures shouldn’t hamper Japan’s ability to innovate given the important role that cyber-enabled technologies will play in driving economic growth. Second, the Internet of things is described as an enabler to create new business opportunities and improve existing ones. The strategy, however, doesn’t provide any insight into how the Japanese government and industry will approach the security challenges associated with the Internet of things or set milestones as it becomes integrated in business operations. We are at the beginning of the Internet of things era, and government regulation or guidance would be somewhat premature. Now is the time for industry—both in Japan and around the world—to work with the government to begin addressing the security of Internet of things devices in a scalable and globally harmonized manner. Third, the 2015 strategy reiterates the Japanese government’s concern over the recent series of massive personal information leaks, such as the Japan Pension Service (JPS) incident of May 2015. The NISC plans to revise Japan’s basic cybersecurity law, first passed in 2014, allowing it to monitor and audit special government-affiliated organizations such as the JPS, similar to its existing authorities with respect to government ministries and agencies. The change is expected to improve the cybersecurity practices of state organizations as they would have government auditors looking over their shoulders. This is particularly important as Japan rolls out My Number, a twelve-digit identification number for Japanese residents to access the country’s social security and tax systems, akin to the U.S. Social Security number. To alleviate worries over potential massive leaks of personal information tied to My Number, industry needs to engage customers and the government to explain the security mechanisms that already exist to keep My Number data safe. Japan will struggle to grow and innovate if its population doesn’t trust new technology designed to improve access to government and private sector services. Finally, the strategy provides an overview of Japan’s international cyber efforts to date, noting its capacity building contributions in the Association of Southeast Asian Nations, South America and Africa and bilateral dialogues, including with the United States and the European Union. The strategy makes clear that Japan is keen to deepen existing dialogues, expand confidence building activities, and participate in the ever-increasing number of cyber-related conferences to convey its interests and cyber security posture to international audiences. Details as to how Japan would actually achieve this, however, are sparse. Overall, the new strategy strikes the right balance in emphasizing the government’s role in Japan’s cybersecurity without limiting the growth of the technology market—especially Internet of things—that will drive innovation.