Development

Tim Maurer is the director of the Global Cybersecurity Norms and Resilience Project and Head of Research of New America’s Cybersecurity Initiative. Isabel Skierka is a research associate at the Global Public Policy Institute. In mid-June, the German parliament scrambled to repel the worst cyberattack in its history. Meanwhile, 800 IT security experts and members of Computer Security Incident Response Teams (CSIRTs) from around the world met just a few blocks away at the annual meeting of the Forum for Incident Response and Security Teams (FIRST). Responding to attacks like the one against the Bundestag is at the core of a CSIRTs’ daily tasks. As cybersecurity has become a core strategic interest for companies and governments alike, there is a growing need to safeguard CSIRTs’ operational independence from other political objectives and strengthen them as a neutral pillar of global cybersecurity. CSIRTs have been a cornerstone of cyber incident response for decades. Also known as Computer Emergency Response Teams (CERTs), CSIRTs are teams of technical experts with the mission to maintain and protect the security of their customers’ computer networks and systems that rely on it. For example, when the OpenSSL Heartbleeed vulnerability was discovered last year, which security expert Bruce Schneier called a “catastrophic bug,” US-CERT issued an alert and a white paper containing an overview of the systems affected, a description of the threat, and recommendations for solutions and mitigation. US-CERT worked with private sector partners, the FBI, Financial Services Information Sharing and Analysis Center, and Canadian Cyber Incident Response Center to prepare and disseminate alerts. CSIRTs, can be based at private companies, governments, universities or other organizations. While their primary mission is technical in nature, they are under growing pressure to accommodate various policy and political objectives of the countries in which they are located. A growing number of governments have been setting up national CSIRTs to coordinate CSIRT activity within their borders. Additionally, CSIRTs are increasingly referenced in cyber norm discussions at the United Nations and the Organization for American States. Cybersecurity capacity building efforts now routinely include programming aimed at creating national CSIRTs and strengthening cooperation between existing ones. All of these activities raise a number of important policy questions: What constitutes a national CSIRT? How is it institutionalized? How should it function in countries with existing CSIRTs? Should it coordinate a national response to a major cyber incident and if so, how? These are some of the questions we put to the CSIRT representatives at the FIRST conference as part of our CSIRT project. During the discussion, we explored ways to improve the policy and technical communities’ understanding on the role of CSIRTs. It became clear that cooperation between national CSIRTs can serve as a communication channel for countries with otherwise strained diplomatic relations and can help build confidence between them to improve network security. An example for collaboration is APCERT, a coalition of CSIRTs from thirteen economies across the Asia Pacific region, including the Japanese, Korean and Chinese national CSIRTs. At the same time, as more and more governments establish national CSIRTs, there is a need to mitigate the risk of unintended consequences. For example, existing trust relationships among practitioners could be undermined if CSIRTs are perceived as being an agent of the government or company they work for. This makes it all the more important to enshrine operational principles that ensure CSIRTs can operate independently from other actors’ vested political and commercial interests. CSIRTs need to assess reported vulnerabilities and threats as a neutral party without a hidden or specific political agenda. A major challenge that the CSIRT community faces is ensuring that existing relationships among its practitioners will continue to scale as more and more users and devices connect to the global network. Another challenge is to manage and integrate the growing number of government-driven CSIRTs into the existing governance system. We need more such opportunities to discuss these thoughts and build bridges across communities. Therefore, we were delighted to have the chance to also present these thoughts along with our research at the annual meeting of national CSIRTs that took place right after the FIRST conference. It is only a matter of time until news breaks of the next big cyber incident. In recent years, the steady drumbeat of incidents has shown that cyberspace has become an environment rife with competition and conflict. But many cybersecurity threats, such as common viruses or botnets, affect just about everyone. The work of CSIRTs is an effective reminder that we should leverage common interests in keeping cyberspace safe and create a strong foundation for cooperative structures to emerge.

This is a post in a new series on the Development Channel,“This Week in Markets and Democracy.” Each week, CFR’s Civil Society, Markets, and Democracy Program will highlight noteworthy events and articles. Takeaways from Third Financing for Development Conference World economic leaders and civil society groups were in Addis Ababa this week for the Third Financing for Development Conference, discussing how to fund global development for the next 15 years. Most debated was international tax reform. Developing countries advocated two changes: replacing the existing OECD tax-regulating body with a UN agency (to give them more of a say), and cracking down on corporate tax evasion. Unsurprisingly, rich countries blocked the UN proposal. One issue that participants were able to agree on–the need for more accurate, real-time development data. As a first step, the U.S., U.K. and the Hewlett Foundation jointly pledged $5 million to the Global Partnership for Sustainable Development Data, launched in Addis on Wednesday. Pope Francis Takes on Capitalism, Corruption in Latin America Pope Francis sealed his status as champion of the marginalized during an eight-day tour through Bolivia, Ecuador and Paraguay. In public speeches and meetings with civil society, he decried the “globalization of exploitation and indifference,” and the ills of free market capitalism–poverty, injustice and environmental degradation. The Pope openly criticized political leaders for their role in deepening inequality, even as many tried to use his visit to boost their credibility. In Ecuador, the Pope urged President Rafael Correa to forego the short-term economic benefits of resource exploitation, responding to indigenous groups’ concerns over expanded oil exploration. In Paraguay, he called on government officials to banish corruption, the “gangrene of the people,” and to improve rule of law with “rapid, clear trials,” a nod to the country’s flawed judicial system. Though the Pope’s message was well-received in a region facing severe poverty and graft, some question bringing this anti-capitalist rhetoric to U.S. Congress and UN General Assembly speeches this fall. Egypt and China Justify Recent Arrests In the name of countering Islamic State terrorism, Egyptian President Abdel Fattah al-Sisi’s government is systematically silencing dissent. Last week’s arrests of four journalists add to the eighteen already imprisoned for allegedly “sympathizing” with the banned Muslim Brotherhood. And a new counterterrorism law that would impose draconian jail sentences on journalists who contradict government information was only amended after significant domestic and international pushback. Egypt’s “anti-terror” crackdowns echo China, where this week security services detained more than 50 human rights lawyers and activists, accused of creating “social chaos” as part of a criminal syndicate.  

Numerous organizations and publications rank universities around the world. The value of the exercise is inherently controversial, and by definition it has winners and losers. Nevertheless, rankings always command a large audience. One ranking that focuses on Africa is Journals Consortium. According to its website, it offers scholarly publishers web applications that provide technical, marketing, and editorial support “critical to the success of their journals in the e-publishing environment.” It has compiled a rank-order list of the one hundred top universities in Africa. Its stated criteria is research publications, scholarly citations, and visibility on the internet. In this ranking, African universities are competing only against other African universities, rather than with institutions outside the continent. The top ten universities, according to Journals Consortium: 1.    University of Cape Town (South Africa) 2.    Cairo University (Egypt) 3.    University of Pretoria (South Africa) 4.    University of Nairobi (Kenya) 5.    University of South Africa (South Africa) 6.    University of the Witswatersrand (South Africa) 7.    Stellenbosch University (South Africa) 8.    University of Ibadan (Nigeria) 9.    University of KwaZulu-Natal (South Africa) 10.  Ain Shams University (Egypt) The list is dominated by South Africa, which has six of the top ten universities. Egypt has two, while Nigeria and Kenya each have one. Of the remaining ninety, thirteen are also in South Africa. (The University of Johannesburg, at number eleven, just missed the top ten.) Nigerian media have commented on the country’s poor showing, especially given its disproportionately large population of 183 million, which is greater than that of the Russian Federation. Under apartheid, five of these six South African universities in the top ten were “white” and well funded. The exception was the University of South Africa, an “open” university; Nelson Mandela took its courses while imprisoned on Robben Island. All are now racially integrated, with all but one having a student body that is majority non-white. Journals Consortium’s list, whatever its validity as an indicator of relative academic quality, highlights a South African paradox. The country has world-class institutions, but most students at all levels are still educated in institutions challenged by apartheid’s legacy of poor education funding for the majority of the population.

Governments, civil society groups, and business leaders are gathered this week in Addis Ababa, Ethiopia for the UN’s Third Financing for Development Conference (FFD3). Up for debate is how to fund the Sustainable Development Goals, or SDGs, a new set of global development indicators that the UN will adopt in September. The Addis agenda reflects two major changes since the First Financing for Development conference held in Monterrey, Mexico in 2002. First, the good news–there has been a dramatic reduction in global poverty. Between 2002 and 2015, 28 low-income countries–as classified by the World Bank–made the jump to middle-income status. The second, less-encouraging trend is that foreign aid commitments from developed countries have faltered. Aid spending is far from the UN target of 0.7 percent of gross national product (GNP) established in Monterrey. Instead, the OECD average is closer to 0.39 percent as of 2014, ranging from 1.1 percent in Sweden to 0.08 percent in Poland and the Slovak Republic. In the wake of these trends, the Addis talks will focus on two alternative approaches—private sector investment and domestic reforms. Foreign direct investment (FDI) in developing countries already far outstrips aid flows, totaling $480 billion in 2012, compared to $90 billion in aid spending. While investment stimulates growth and creates jobs, conference participants want to ensure that FDI contributes to inclusive growth that reaches the poorest populations. One proposal at Addis seeks to end tax evasion by multinational corporations, estimated to siphon $100 billion away from developing economies each year—money that might otherwise be used for health and education, and to modernize agriculture and infrastructure. Another avenue for post-2015 development financing is mobilizing domestic resources. Developing countries can raise revenue through higher taxes–now only 13 percent of their GDPs–and improve collection through automation. Equally important is combating corruption and illicit financial flows, which deprive developing economies of an estimated $1 trillion annually. The policy recommendations adopted at FFD3 will be non-binding. But, they could help set the tone for September, when governments and the development community commit to an ambitious post-2015 agenda that aims to eradicate poverty, end hunger, and ensure water and sanitation for all. Whether the 17 proposed SDGs will be achieved largely depends on financing.            

This is a post in a new series on the Development Channel,“This Week in Markets and Democracy.” Each week, CFR’s Civil Society, Markets, and Democracy Program will highlight noteworthy events and articles. Development Community Debates MDG Report The UN released its final Millennium Development Goals (MDGs) report, hailing the effort as “the most successful anti-poverty movement in history.” Since the MDG’s introduction fifteen years ago, the number of people living in extreme poverty and the global child mortality rate have halved. Yet the development community is split over how much the MDGs mattered for this progress. The Center for Global Development warns that emphasizing goal-setting distracts from policy discussions. On the other side, proponents contend that setting data-based yardsticks and reducing the global agenda to eight priorities helped channel focus and funding. As attention shifts to post-2015 development goals, the UN report recognizes uneven gains–growth in China and India has pulled millions out of poverty while the poor in other countries have been left behind. Modi’s Heavy-Handed Efforts to Control the Indian Narrative The Indian government has delayed release of a UNICEF child welfare survey for months, some believe to avoid political embarrassment for Prime Minister Narendra Modi after his home state of Gujarat–where he served as chief minister until 2014–showed dismal results. These revelations coincide with the public ouster of Nobel Prize-winning economist Amartya Sen from Nalanda University. In a televised interview this week, Sen warned of unprecedented government interference in academia under Modi. Modi’s carefully-crafted narrative extends to social media, where his government rolled out a Narendra Modi mobile app. The app awards points for approving government policies through “likes” and sharing flattering articles about Modi–there is no option to disapprove. Reigning in Civil Society in China and Cambodia The Chinese and Cambodian governments are moving forward with proposed laws that threaten civil society autonomy. China’s NGO bill would require both foreign and domestic groups to undergo vetting by state security forces. While framed as part of a broader rule-of-law campaign, NGOs contend that it would allow the government to shut them down. In Cambodia, the draft Law on Associations and Non-Governmental Organizations (LANGO) gives the government broad powers to dissolve any organization deemed a danger to national security or to the “culture, traditions and customs of Cambodian national society.” Cambodian legislators say the bill enables needed regulation of some 5,000 civil society groups. Human rights advocates disagree–32 domestic and international groups demanded the law’s withdrawal, and protestors rallied at Cambodia’s National Assembly to block its passage.        

Peacekeeping is in trouble. More peacekeepers are in the field than ever before, and, as UN Ambassador Samantha Power noted, "we are asking peacekeepers to do more, in more places, and in more complex conflicts than at any time in history." The scale and complexity of peacekeeping have revealed serious problems, including a gap between the tasks peacekeepers are given and the resources they have to accomplish their missions. UN Secretary-General Ban Ki-moon captured this dilemma in observing "[t]he needs are rising, and resources are chronically short." To address these challenges, the Secretary-General appointed a High-Level Independent Panel on UN Peace Operations in October 2014 to catalyze the most significant attempt to reform UN peacekeeping since the Brahimi Report appeared in 2000. Peacekeeping suffers from inadequate access to, and use of, information and communications technologies (ICTs). This problem is not new. The Brahimi Report argued that peacekeeping had to be brought into the information age: "Modern, well utilized information technology (IT) is a key enabler of many [...] [peacekeeping] objectives, but gaps in strategy, policy and practice impede its effective use." Since the Brahimi Report, UN peacekeeping operations have increasingly used ICTs, but they have not kept pace with technological innovation. In June 2014, the UN under-secretaries general for peacekeeping operations and field support appointed an Expert Panel on Technology and Innovation in UN Peacekeeping to analyze how peacekeepers can more effectively utilize technological innovations, including Internet-enabled technologies. In February 2015, the UN issued the Expert Panel’s report, which included the goal that the UN be able to deploy "digital peacekeepers." The Expert Panel asserted that, "despite the omnipresence of advanced technology and applications in our daily lives, United Nations peacekeeping remains well behind the curve [...]. [F]ew observers can argue that UN field operations manifest anything approaching up-to-date practice in the use of modern technology." The Expert Panel also argued: [E]specially in the areas of command and control, monitoring, reconnaissance and reporting, and information and communications technologies, peacekeeping operations simply do not currently possess anything approaching adequate numbers or types of technologies that militaries and police forces around the world accept not only as commonplace, but also as foundational to successful operations. This must change. The Expert Panel made recommendations designed to produce immediate impact, including better integration of interoperable, Internet-connected mobile devices, sensors, surveillance tools, information-sharing systems, and strategic communications platforms (e.g., social media). The Expert Panel also sought to be "forward thinking—even visionary—in [...] imagining the realm of possibilities." Its vision involved military, police, and civilian digital peacekeepers equipped with the latest technologies and provided with ongoing training, review, and reach-back support. For example, the Expert Panel’s military digital peacekeeper would be equipped with "information fusion and enhanced analytic tools, fed by open source information, aerial, geospatial, and other remotely acquired data, commercial satellite imagery, and comprehensive sensor packages, support decision-making at the tactical, operational and strategic levels." To achieve these short- and longer-term objectives, the Expert Panel identified the need to have Technology Contributing Countries—TechCCs—provide technologies, expertise, and training, just as peacekeeping operations have troop and police contributing countries. In its report issued in June 2015, the High-Level Independent Panel on UN Peace Operations endorsed the Expert Panel’s work. It highlighted the Expert Panel’s recommendations on "important solutions for employing systems to provide customizable, geographic information system-enabled solutions to enable better surveillance, monitoring and reporting tools to improve the safety and security of personnel as they implement their mission." Whether the Expert and High-Level Independent Panels’ recommendations to reduce the digital peacekeeping divide fare better than those in the Brahimi Report remains to be seen. The overall peacekeeping reform agenda identifies many entrenched problems that do not arise from technological deficits, including the High-Level Independent Panel’s recommendations on preventing conflict, protecting civilians, achieving rapid deployment of peacekeepers, incorporating the input of women, and integrating human rights. In such an expansive, difficult agenda, reform proposals to upgrade peacekeeping technologies could be marginalized. In addition, technological empowerment of peacekeeping forces might raise political issues that could slow or block progress towards fielding digital peacekeepers. The High-Level Independent Panel flagged this challenge in stating that "introduction and use of new technologies must be implemented with full transparency and in consultation with Member States in order to maintain a high degree of confidence in the UN’s commitment to privacy, confidentiality and respect for state sovereignty." In September 2015, the United States will host a peacekeeping summit during the annual UN General Assembly meeting. This gathering will provide an opportunity to see whether the idea of digital peacekeepers gets strategic attention or is overshadowed by problems that UN member states consider more important than the technological backwardness of peacekeeping operations.

Mexico’s national GDP numbers remain lackluster. In 2014, the country grew 2.1 percent, and forecasts for 2015 predict a modest 3 percent increase. Yet these numbers mask the great diversity within and between the nation’s thirty-two federal entities. The Bajío region experienced Asian rates of growth last year—Queretaro up 14.3 percent, Aguascalientes 14.2 percent, Guanajuato 7.4 percent, and Jalisco 3.7 percent. Home to auto and aerospace hubs, these states receive increasing shares of foreign direct investment. Think tank México ¿Cómo Vamos? expects these states to continue to drive economic growth numbers going forward. Many of Mexico’s northern states saw strong upturns as well. Nuevo Leon, home to industrial city of Monterrey, grew 5.4 percent in 2014. In Chihuahua, Coahuila, and Tamaulipas close ties to a recovering United States seemed to outweigh continuing security challenges, with combined growth edging out the nation’s average. In contrast, Mexico City and the State of Mexico, comprising over a quarter of national GDP, grew just 1 percent. Southern states Chiapas and Oaxaca trailed the national rate as well. Guerrero and Michoacán were boosted temporarily by influxes of government funds for disaster relief and security respectively, but their longer term growth rates remains below average. These four states score the lowest on the United Nation’s human development index. And falling oil prices have hit the energy-rich southern states, in particular Tabasco and Campeche. These differing trends threaten to aggravate already deep economic divides, creating virtuous and vicious circles in terms of infrastructure, education, and opportunities. Federal efforts to redistribute wealth, specifically the Fondo Regional which provides grants for lesser developed states, maintains a MXN$6 billion budget (roughly US$400 million), not nearly enough to overcome ingrained disparities. These differential growth rates have the potential to shape regional and national politics. Economic expansion didn’t temper voter dissatisfaction this time—the Partido Revolucionario Institucional (PRI) lost the Queretaro governorship to the Partido Acción Nacional (PAN), and Nuevo Leon to the independent Jaime “El Bronco” Rodriguez. But as Mexico looks to twelve governor races in 2016, notably in Oaxaca, Puebla, Tamaulipas, and Veracruz, local economic growth rates will surely matter. So too will good governance—a dominant issue behind the 2015 results. And as the race for the 2018 presidency begins (already Margarita Zavala, Miguel Ángel Mancera, and Andrés Manuel López Obrador have publicly put forth their names), it needs to be a party, not just a candidate, who most convincingly promises to bring growth and governance to broader Mexico to stop the fragmentation of the political system.

This year—2015—is an auspicious moment for global development. In September, as the Millennium Development Goals (MDGs) expire, UN member states will adopt a new framework that will guide international development over the next fifteen years. In advance of the fall summit on the Sustainable Development Goals (SDGs)—as well as the upcoming Third International Financing for Development Conference in Addis Ababa, Ethiopia—I hosted Thomas Gass, assistant secretary-general for policy coordination and inter-agency affairs at the UN Department of Economic and Social Affairs, and Ambassador Elizabeth Cousens, deputy chief executive officer at the United Nations Foundation and former U.S. chief negotiator on the SDGs, to discuss gender equality and the future of the international development agenda. It is indisputable that over the past fifteen years the MDGs have contributed to advancement for women and girls—particularly in the area of maternal health, where mortality rates have been halved, and in access to primary education, where the global gender gap has virtually closed. However, many argue that the MDGs could and should have done more to improve the status of women and girls. Several issues critical not only to women’s progress, but also to overall prosperity and stability—such as child marriage, violence against women, and valuation of women’s work—were overlooked. The SDGs afford a critical opportunity to dramatically expand upon progress for women and girls and increase our collective ambition for achieving gender equality. Importantly, early drafts of the SDGs include a specific gender equality goal with targets that are considerably more comprehensive than those included in the MDG framework, and issues related to the advancement of women and girls have been integrated throughout the post-2015 goals. Yet questions remain over the implementation of the proposed SDGs. The UN zero draft of the SDGs released earlier this month includes seventeen goals and 169 targets. Given the high number of goals and targets, how will countries prioritize their efforts? And how can global actors ensure attention to gender equality—an issue that is too often siloed or overlooked, despite considerable evidence of the connection between women’s progress and development? There have been encouraging signs that the commitment to gender equality outlined in the SDGs is strong. During our conversation last week, former Ambassador Cousens noted that the goal on gender equality was the first on which government and civil society groups reached a consensus during the initial stages of the Open Working Group process that formed the basis of the SDG zero draft. But the real test of this commitment will be the extent to which gender equality targets are financed, and how member states are held accountable. Indicators of progress for the SDGs will not be adopted until next March, and although the current proposal includes many references to women and girls, it is unclear whether some potentially contentious issues—for example, female genital mutilation—will survive the negotiation process. The comprehensive gender equality targets included in the SDG zero draft are a positive step forward for the post-2015 development agenda. The promise of this framework, however, will only be realized if member states and development practitioners are held accountable for financing and implementing progress toward the equality of women and girls.

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Amit Chandra, an emergency physician and global health consultant based in Washington, DC. This year marks the end of the fifteen-year Millennium Development Goal (MDG) framework. The health MDGs focused on single, discrete issues including hunger, maternal and child health, and major infectious diseases, and they successfully targeted the spread of HIV and tuberculosis. Slated to replace the MDGs, the Sustainable Development Goals (SDGs) similarly focus on single issues—hunger, sanitation, and an expanded list of key diseases. Continuing this approach fails to address today’s global health challenges, in particular rising mortality associated with non-communicable diseases (NCDs), road traffic accidents, and Ebola-like infectious disease epidemics. To combat these threats, we need to strengthen countries’ entire health systems, specifically incorporate data to identify problems, expand technical capacity, and boost financial and human resources for health. In many developing countries, health systems now face the dual burden of NCDs and persistently high rates of infectious diseases like HIV, TB, malaria, and tropical diseases. Studies estimate that over 900 million people in developing countries have high blood pressure, though only one third of them (300 million) are aware of their disease, and only one third of those aware (100 million) are currently on treatment. Unlike with most infectious diseases, people can live for years with high blood pressure, diabetes, or early stages of cancer without symptoms. Many in the developing world lack access to primary care, and so their first contact with a doctor may only occur when their conditions escalate. In this way, weak health systems turn  preventable and treatable chronic diseases into silent killers. Tackling NCDs requires universal primary health systems that provide prevention, screening, and treatment services to entire populations, not just to the few identified with a particular disease. Health systems also matter for lowering traffic fatalities. Road traffic accidents cause over 1.24 million deaths per year worldwide. In the developing world, an injured person lying on the roadside often depends on bystanders for transport to the nearest hospital, which is unlikely to provide surgical care. A robust health system would enable coordination between health, law enforcement, and public policy leaders to reduce traffic fatalities. Take Rwanda for example. In 2001, the country had one of the highest traffic fatality rates in the world. To address this problem, the government passed mandatory seat belt and helmet laws, increased enforcement of speed limits, and implemented a public awareness campaign. Drivers of motorcycle taxis, a popular method of transport, are even required to carry an extra helmet for their passengers, which they sling over their elbows while looking for customers. As a result, road traffic deaths fell by over 30 percent. On a recent trip to Kigali, I was impressed to see near universal helmet use among motorcycle drivers and passengers. The absence of adequate health systems can permit novel, unexpected infectious disease outbreaks to escalate and spread. The recent Ebola epidemic in West Africa—often cited as an example of the failure of the World Health Organization (WHO)—is first and foremost a failure of the national health systems of the three countries most affected by the disease. Guinea, Liberia, and Sierra Leone’s inability to effectively respond to the initial outbreak led directly to the spread of the disease. Too few hospitals and clinics, a dearth of doctors and nurses, and limited public outreach capacities contributed to a climate of misinformation and a breakdown of public services. Preventing future outbreaks will require more than a WHO emergency fund; it will require national health systems capable of detecting, treating, and isolating a surge of sick and exposed patients. Now, as we determine the scope of the SDGs, we have an opportunity to strengthen health systems. National governments should be encouraged to provide basic health services to their populations. The global health community can support this effort by financing health management training and an expanded health provider workforce. To quote the UN Secretary General’s report on the SDGs, meeting these goals by 2030 will require that we “…act, boldly, vigorously and expeditiously, to turn reality into a life of dignity for all, leaving no one behind.”    

By Lincoln Davidson Lincoln Davidson is a research associate for Asia Studies at the Council on Foreign Relations. Earlier this week, the Chinese government announced a set of policies aimed at encouraging migrants from rural areas to the cities to return to their hometowns and start businesses. The policy guidelines direct local governments to encourage migrant workers (as well as university graduates and discharged soldiers) to take the capital, skills, and experience they’ve acquired in urban areas back to underdeveloped rural areas and engage in entrepreneurship. These policies—think of them as the newest iteration of Deng Xiaoping’s “let some get rich first”—are a solid step towards promoting genuine market-driven development. People’s Daily reports that under the new policies local governments will employ the following five measures aimed at expanding rural entrepreneurship by returning migrants: Reduce “barriers to returning to rural areas” by providing training to returning migrants and reducing administrative fees for starting a business. Cut taxes for qualifying enterprises and individuals. Expand support for such enterprises, by providing subsidies, connecting them to local business networks, and helping them set up ecommerce platforms. Provide financial support for qualifying enterprises and individuals, by providing subsidized loans and expanding credit availability in rural areas. Increase support for entrepreneurial parks in rural areas. The policy comes at a time when the rate of migration to the cities is slowing. While migrant wages in China continue to grow, the rate of growth of the migrant workforce has declined for several years running, dropping from 5.5 percent growth in 2010 to just 1.3 percent in 2014. Government data also show that the number of rural residents employed near their hometown has grown at a faster rate than the migrant population over that time frame. Despite these trends in the labor force, these policies are long overdue. Although recent reforms have begun to liberalize China’s household registration system, known as the hukou system, movement to urban areas is still not always an option for rural residents. And in the countryside, where there’s less well-developed infrastructure, poorer access to credit, and strict rules about what land can be used for, it can be much harder to start a small business than in the city. By addressing the disparity between urban and rural residency, these policies are an important step forward in reducing the inherent inequality of being born in the Chinese countryside and a significant corrective to years of short-sighted development strategies in the Chinese countryside. Just as liberalization and the increased access to opportunities that accompanied it drove up rural incomes in the 1980s (and movement back towards state-driven development drove them down in the ‘90s), policies promoting rural entrepreneurship have the potential to significantly improve the economic situation of millions of Chinese rural residents today. At the same time, innovative agricultural ventures have an important role to play in China’s attempts to scale up its agricultural output. While this policy may not lead to more swimming pigs, it is aimed at upgrading agriculture and cultivating the services to support it. There has long been anecdotal evidence that potential income increases are not the sole—or even primary—factor motivating young Chinese to seek employment in urban areas. Among the many reasons that rural residents choose to head to the cities, a commonly seen one is a desire for self-improvement. Building on this, a 2013 study by researchers at the University of Pennsylvania found that the desire for personal development is a significant motivator behind the migration decisions of youth from rural areas in Gansu Province. The new policies also speak to these individuals. Having gone to the cities to learn and grow, they now have a chance to return home and use their know-how to start up a business, taking on new challenges (and new opportunities for personal development) in the process. By providing training and support services, the new policies can help these entrepreneurial individuals transition from laborer to small business owner. At the same time, it could mitigate the brain drain from China’s countryside that has drawn the best and brightest to urban areas, further sapping the already lagging rural regions of economic vitality. Of course, given how “uneven” and “selective” policy implementation by local governments tends to be in rural China, it remains to be seen what impact these new policies will have. Local governments already facing fiscal crisis will not be thrilled at the prospect of providing subsidized loans and additional services, and verifying the status of returned migrants could prove to be an additional outlet for corruption. However, with its focus on small, entrepreneurial ventures by individuals, this policy has the potential to move the Chinese economy away from state investment with minimal impact on productivity toward private sector investment in productive assets. And in the long run, that could mean higher standards of living for millions of rural Chinese.

Pope Francis’s new encyclical on the environment, “Laudato Si” (“Praise Be to You”), is a profoundly important document. It has the potential to shake up the stalled climate change debate in the United States, not least by broadening the definition of what it means to be a “conservative.” The encyclical arrives at a critical juncture. In five months, world leaders will gather in Paris for the conference of parties to the UN Framework Convention on Climate Change (UNFCCC), where they will devise a climate change agreement to succeed the Kyoto Protocol. Last year, governments pledged to make emissions reductions commitments that collectively will prevent the planet from warming more than 2 degrees Celsius from preindustrial levels. It is clear the world will come nowhere close to that target—and that humanity is on a path to ecological catastrophe. There is, of course, plenty of blame to go around. Most European countries are lagging in meeting targets agreed at Copenhagen in 2009, and big emerging powers—notably China, the world’s largest emitter, and India—continue to resist binding targets. But the United States is also failing to lead, in part because the leadership of the Republican Party refuses to take global warming seriously. Although 68% of the U.S. public agrees with scientists that climate change is real, the majority of GOP leaders remain in denial. Senator and presidential candidate Marco Rubio is a glaring offender. Having once introduced climate legislation in the Florida state legislature—arguably the state most vulnerable climate change—he now dismisses claims that “there are actions we can take today that would actually have an impact on what’s happening in our climate.” The lack of bipartisan consensus on the reality of (much less responses to) global warming has crippled U.S. climate change leadership. The Obama administration has resorted to executive actions of sometimes dubious constitutionality, like defining carbon dioxide emissions as pollutants subject to EPA regulation. But these Band-Aid responses don’t amount to enough. Deadlock will likely continue until Republican leaders feel the heat—in this case, from their constituents. That’s what makes Francis’s foray into climate change so momentous. As the head of the Catholic Church and Christendom’s most prominent leader, the pope wields unrivaled spiritual and moral authority within conservative U.S. faith communities—including many that tend to vote Republican. Francis’s encyclical does what scientists cannot: offer a rationale for climate change action grounded in theology and morality. This is not the first time Francis has championed conservation. In his inaugural mass in March 2013, he appealed to world leaders: “Let us be ‘protectors’ of creation, protectors of God’s plan inscribed in nature, protectors of one another and of the environment.” On another recent occasion, he was more blunt, warning: “Safeguard Creation. Because if we destroy Creation, Creation will destroy us!” The new encyclical makes the battle against climate change a moral responsibility for practicing Catholics. The pontiff pulls no punches about the reality of climate change: It is true that there are other factors (such as volcanic activity, variations in the earth’s orbit and axis, the solar cycle), yet a number of scientific studies indicate that most global warming in recent decades is due to the great concentration of greenhouse gases (carbon dioxide, methane, nitrogen oxides and others) released mainly as a result of human activity. He rails against those who seek to deny or ignore the crisis, writing: “Obstructionist attitudes, even on the part of believers, can range from denial of the problem to indifference, nonchalant resignation or blind confidence in technical solutions. We require a new and universal solidarity.” The underlying cause of climate change, Francis argues, is humanity’s proprietary, shortsighted, and indeed sinful approach to God’s creation, in the form of unsustainable “methods of production and consumption” that despoil the planet. This sister [i.e., Earth] now cries out to us because of the harm we have inflicted on her by our irresponsible use and abuse of the goods with which God has endowed her. We have come to see ourselves as her lords and masters, entitled to plunder her at will. The violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air and in all forms of life. This is why the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor. The Pontiff makes the case for combating climate change by linking it to the topic with which, until now, he has been most well-known: the plight of the world’s poor. The two are intertwined, he argues, since the marginalized will suffer most from climate change. The only solution is to be found in a new ethic of global stewardship grounded in reverence for God’s Creation. Francis’s encyclical has already raised hackles on the right wing of U.S. politics. Anticipating the document, leading Republicans have launched preemptive strikes. Last week Senator James Inhofe said: “The pope ought to stay with his job, and we’ll stay with ours.” Meanwhile, presidential candidate and former senator Rick Santorum said that “the church has gotten it wrong a few times on science, and I think that we probably are better off leaving science to the scientists and focusing on what we’re really good at, which is…theology and morality.” And just yesterday, Jeb Bush—considered a frontrunner for the Republican nomination—told an audience: “I don’t get my economic policy from my bishops or my cardinals or my pope,” adding, “I think religion ought to be about making us better as people and less about things that end up getting into the political realm.” What these self-proclaimed conservatives fail to understand is that efforts to mitigate climate change are deeply conservative. The late William F. Buckley, father of modern U.S. conservatism, famously defined the essence of that movement as “stand[ing] athwart history, yelling Stop.” That is, in effect, what Francis is trying to do: to stop us from despoiling the planet. Buckley, of course, had something else in mind—namely, stopping what he viewed as collectivist schemes at social and political engineering at odds with human liberty. What Francis’s encyclical reminds us, however, is that the selfish pursuit of individual gains can create moral blind spots, impose unfair costs on disadvantaged communities, and degrade resources upon which humanity depend. Consistent with Catholic social teaching, Francis reminds us that the logics of capitalism--and broader consumer culture--must be tempered by a longer-term ethic of responsible stewardship. That includes not only advancing social justice today but also ensuring the planet’s viability for future generations. This ethic of ecological conservation is about taking care of what we have inherited, rather than eating our seed corn, if you will. By contrast, the GOP’s infatuation with turbocharged capitalism is anything but conservative. The essence of capitalism, as the economist Joseph Schumpeter observed, is "creative destruction”. Fierce competition—including the sorting of winners and losers—can be good, since it drives innovation and ultimately economic growth. But capitalism can also generate destruction pure and simple, not least to the environment. Global warming is a classic market “externality”—the fancy term economists use to describe costs are created by firms and consumers but borne by all of society (or indeed the planet). What the modern Republican Party has abandoned is any pretense that the government can and should seek to counter such problems through regulation—by developing incentives, standards and rules that channel market behavior in prosocial directions, without undue constraints on liberty. This was not always the case. A century ago, reformist Republican Theodore Roosevelt not only railed against the "malefactors" of great wealth who had amassed vast fortunes and risked subverting the political system, but also pioneered environmental conservation and stewardship, including by establishing the National Park Service. One can only imagine TR’s disdain for what has become of his party, most of whose leading lights refuse to acknowledge the human hand in catastrophic climate change. History aside, can Francis really hope to change the climate debate? Back in the 1930s, the Soviet dictator Joseph Stalin famously dismissed the Vatican’s power: “The Pope? How many divisions has he got?” Well, Uncle Joe is long gone, but the Catholic Church endures. Francis’s flock includes 1.2 billion Catholics worldwide, including 76.7 million in the United States. His encyclical will carry enormous weight with the faithful—and put pressure on their elected representatives. Fortuitously, Francis will engage U.S. lawmakers on climate change directly in September, when he becomes the first pope to address a joint session of Congress. (The invitation came, ironically enough, from House majority leader John Boehner—a practicing Catholic and climate change skeptic). With the fate of the earth in the balance, the pope’s historic appearance could not come at a better time or place.

As the annual Group of Seven (G7) Summit ended this week, world leaders issued a declaration to address some of the world’s most pressing issues. Prominently featured in this document is a call to promote women’s economic empowerment and entrepreneurship, described as a “key driver of innovation, growth, and jobs.” In a separate annex, the G7 leaders endorsed specific steps to promote women’s entrepreneurship, including facilitating access to finance, improving work-family policies for men and women, encouraging girls’ participation in STEM (science, technology, engineering, and mathematics) disciplines, and championing successful female entrepreneurs as role models for the next generation. This is not the first time that women’s empowerment has been prioritized in a G7 declaration. In fact, it’s part of a recent trend in which gender issues have been elevated by world leaders in international fora and integrated into mainstream policy discussions. Consider, for example, Canada’s leadership of the Group of Eight (G8) in June 2010, which gave rise to the Muskoka Initiative on maternal and child health and led to a commitment to invest in national health systems. The foreign ministers of the G8 have also highlighted the role of women in peace and security. In 2012, the ministers called for implementation of UN Security Council Resolution 1325 on Women, Peace, and Security. A year later, the same group endorsed a declaration on preventing sexual violence in conflict. Gender equality has been a focus of the Group of Twenty (G20) Summit as well.  In November 2014, each G20 country set a historic commitment to reduce the gap between the share of men and women in their workforce by 25 percent by 2025. The G20 commitment to increase women’s labor force participation was echoed at the Kruen summit this week in the G7 declaration that emerged. It was also augmented by a new agreement to increase women’s vocational training in the developing world by one-third by 2030. German Chancellor Angela Merkel highlighted the relationship between gender equality and economic progress in her closing remarks, noting that barriers to women persist everywhere in the world—“not only in the developing countries where a lot of work still needs to be done,” but also “in industrialized countries.” She promised to convene a conference in September to address the “structural differences between men and women” that remain. Research from major international economic institutions supports this focus on gender equality by world leaders. Over the past two decades, analyses from the International Monetary Fund, Organisation for Economic Cooperation and Development, and World Bank have demonstrated the growth potential of increasing women’s labor force participation. The Bank is in the process of revamping its gender strategy, and mainstreaming the discussion of women’s economic empowerment is a core piece of its new concept note. Recent international commitments to advance gender equality are undoubtedly a critical step forward—but the real test of progress for women will lie in their implementation. To ensure gains for women and girls—and for the health of entire communities and economies—such declarations must be coupled with a push to implement the policies they prescribe.

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Gary Ford, chief executive officer of MCE Social Capital, and Benjamin D. Stone, director of strategy and general counsel of MCE Social Capital and a CFR term member. Here they discuss how loan guarantees can help unlock economic opportunities for people in the developing world. According to the World Bank’s 2015 Global Financial Inclusion Database, more than 2 billion people lack access to formal financial services, including savings accounts, insurance, and loans. Over the last two decades, microfinance has helped fill this gap by delivering credit and other financial services to low-income people, particularly entrepreneurs, around the world. As studies show, microfinance helps people build assets, manage risks and unpredictable income, and gain the freedom to decide how to make money. International NGOs, large financial institutions, government agencies, and individuals have all supported microfinance institutions with millions of dollars in grants, equity, and technical assistance. Notable in this context is the use of loan guarantees. Loan guarantees—where a third-party pledges to assume the debt obligation of a borrower—have helped people access otherwise unobtainable capital since at least early roman times. Today, many organizations like Accion International, Grameen Foundation, Shared Interest, and the United States Agency for International Development (USAID) similarly use loan guarantees to help microfinance institutions (MFIs) secure capital and prove their creditworthiness. Here is how it sometimes works: organizations like the ones listed above receive grants (or loans) from individuals or foundations in the United States. Then, working through an international bank, they use the money to back loans MFIs borrow from local banks in the developing world. The MFIs then use this money to finance microloans and other services for people living in poverty. Ultimately, the MFIs are responsible for paying back the local banks, but if they don’t, the organization, through its international bank partner, repays the local bank using the donated or loaned capital. In this way, loan guarantees can help poor communities in developing countries access money and financial services. MCE Social Capital (MCE), a U.S.-based nonprofit impact investing firm that lends directly to MFIs, innovates on this approach. Instead of upfront contributions, MCE collects pledges from foundations and individuals (its “guarantors”) to make tax-deductible contributions to MCE if (and only if) a MFI fails to repay the MCE loan. MCE pools these pledges—now over $100 million from 85 guarantors—and uses them as collateral to borrow from U.S. financial institutions, including First Republic Bank, the Overseas Private Investment Corporation (OPIC), and New Resource Bank. After a thorough due diligence process, MCE then lends to MFIs serving rural women in more than thirty developing countries. MCE’s loan guarantee model diversifies the funding of MFIs by unlocking capital from U.S. financial institutions that do not typically lend MFIs money. And by soliciting pledges rather than actual upfront contributions, MCE’s guarantors retain and continue to earn returns on their capital. With loan default rates at 0.03 percent and the risk distributed across the pool of pledges, a guarantor can facilitate millions of dollars of lending at a relatively small cost. For example, a guarantor who signed MCE’s pledge in 2006 has enabled nearly $3 million in loans into the developing world, all while making only $12,000 in tax-deductible donations to MCE. To date, MCE has funded more than 400,000 microloans and other services (health programs, insurance, savings accounts, and business training) worth more than $160 million, reaching hundreds of thousands of people. MCE is now exploring opportunities to use its loan guarantee model to tackle other market gaps, including the lack of small and medium-sized enterprises (SMEs) financing in sub-Saharan Africa, where nearly half of SMEs report lack of money as the biggest constraint on operations and growth. For thousands of years, loan guarantees have given hesitant lenders comfort to invest in potentially risky borrowers. MCE and other organizations are now adapting this mechanism to help more people and businesses across the developing world access capital and financial services.