Search

Begin New Search Topic Economics Content Type Policy Brief

21. The “Odious” Legacy of Chinese Development Assistance in Africa: The Case of Angola

Author:
Rafael Marques de Morais and Thomas J. Duesterberg
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Within days of taking office, China’s new foreign minister, Qin Gang, was on a plane to his country’s main African client: Angola. Landing in Luanda on January 12, Qin Gang was ostensibly bringing a gift—a $250 million loan to help Angola expand high-speed broadband. Some gifts, however, are not what they seem, and some of the recent financial gifts from Chinese sources have been toxic. Soon after Qin visited Angola, US Treasury Secretary Janet Yellen traveled to three African countries but skipped Angola, possibly because of its checkered history with Chinese development assistance. The case of Angola raises questions about the extent and nature of Chinese loans and infrastructure aid to a growing number of African nations, as well as the consequences of such loans on those countries’ relations with the US.
Topic:
Foreign Policy, Economics, Infrastructure, Trade, Development Assistance, and Loans
Political Geography:
Africa, China, Angola, and United States of America

22. Radical Steps Are Essential to Jump-Starting the Replacement of the Flawed US Money Regime

Author:
Brendan Brown
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
A previous policy memo argued that flaws in the actual US money regime are responsible for the Great Pandemic Inflation.1 Now that reported inflation has been falling, some of us might imagine that addressing these flaws has become a non-urgent matter. After all, great supply shocks tend to come rarely. But such complacence does not fit the facts. The case for getting rid of the present rotten monetary regime is not simply based on the argument that it has malfunctioned so severely during the pandemic and war supply shock. That malfunctioning continues into the present, where there is now positive supply side news (the pandemic dislocation is fading, and a natural gas glut has emerged despite the continuing Russia-Ukraine War). The Federal Reserve and other central banks, still trying to navigate policy in an anchorless monetary system by choosing a path for short-term interest rates, are stumbling from one huge blunder to another, even if they have a rare lucky stretch in between. Beyond the woes of how the 2 percent inflation standard performed during the supply shock and subsequent supply restoration, this regime should be held responsible for a range of economic and social consequences that predate the pandemic and war. These include malinvestment (poor allocation of capital due to corrupted signaling in markets), advancement of monopoly capitalism, bloated government outlays, and punitive monetary taxation (in the form of inflation tax or monetary repression tax), all of which take their toll. Instead of enjoying a top-quality money with all its benefits, individuals have had to put up with a poor money and all its related costs, particularly the ongoing danger of serious loss of purchasing power.
Topic:
Economics, Monetary Policy, Inflation, and COVID-19
Political Geography:
North America and United States of America

23. Turkey’s Growing Ukrainian and Russian Communities

Author:
Sude Akgundogdu and Collin Trissel
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Since the 1990s, Turkey has become a major destination for tourists and migrants from Ukraine, Russia, and other former Soviet states. Yet Russia’s 2022 invasion of Ukraine set into motion an even greater wave of migrants from both countries. Those fleeing the crisis have used myriad channels to enter and remain in Turkey, from obtaining “golden visas” to applying for protection. Going forward, their presence could have a sizable effect on future socioeconomic ties between the three countries.
Topic:
Economics, Migration, Energy, and Russia-Ukraine War
Political Geography:
Russia, Turkey, Ukraine, and Middle East

24. The Effects of Online Export Promotion Policies for SMEs in Korea

Author:
Kyong Hyun Koo
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study explores the impact of participating in five major online export support programs currently being implemented by the Ministry of SMEs and Startups on online exports of SMEs in 2018-20. The main findings show that the online export support program appear to significantly have improved the online export-related performance of participating SMEs in a short period of time. In addition, the online export support program’s online export enhancement effect tend to be relatively greater when the participating SMEs have relatively little experience with online export and low sales volume. Manufacturers also appear to benefit from support programs more than resellers. In summary, the findings suggest that Korea's online export support policy has had a significant impact in providing incentives for SMEs to start/increase online exporting.
Topic:
Economics, Business, Exports, and Manufacturing
Political Geography:
Asia and South Korea

25. The Emergence of African Continental Free Trade Area Agreement and Lessons from the Asia-Pacific Trade Agreement

Author:
Samuel Igbatayo
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Africa’s regional integration agenda arrived at a cross roads in 2019, with the adoption of the African Continental Free Trade Area (AfCFTA) agreement. The AfCFTA framework came into force on 30th May, 2019, with its ratification by The Gambia, which brought the total number of African Union (AU) member state ratifications to twenty-two, the minimum threshold for AfCFTA implementation (Baker McKenzie 2019). As of May; 2022, forty-three of the 55 African countries have ratified the AfCFTA agreement (African Union 2018). The 12th Extraordinary Session of the Assembly of the African Union in Niamey on 7th July; 2019, witnessed the launching of AfCFTA’s operational phase, which is governed by five instruments, namely: the rules of origin, the online negotiating forum, the monitoring and elimination of non-tariff barriers; a digital payment system and the African Trade Observatory. In addition, the beginning of trade under the terms of the agreement was set for July 1, 2020 (TRALAC 2020). A free trade agreement (FTA) can be aptly described as a pact between two or more countries on areas in which they agree to lift most or all tariffs, and other barriers to imports and exports among them (Barone 2019). Under a free trade framework, goods and services can be traded across international borders, with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The theory of free trade Agreements is rooted in classical economics, dating back to the era of Adam Smith. During this period, David Ricardo (1772-1823), a British political economist, was acknowledged with pioneering thoughts on free trade as a key instrument for wealth accumulation. The evolution of preferential trade agreements is traceable to the rise of European countries after World War II, with the establishment of the European Coal and Steel Community in 1951, a development that eventually culminated in the creation of the European Union (EU) (Johnston 2019). Spurred by the success of regional bodies with free trade agreements and Africa’s poor trading performance; estimated at a paltry 3% of annual global trade, the African Union embarked upon the creation of the AfCFTA agreement as a tool for Intra-Africa trade and regional integration.
Topic:
Economics, Treaties and Agreements, Regional Integration, and Free Trade
Political Geography:
Africa and Asia-Pacific

26. Understanding Hainan Free Trade Port: China's Efforts to Explore High-level Opening-up

Author:
Wenfeng Wei
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
On 13 April 2018, upon the 30th anniversary of Hainan province, Chinese President Xi Jinping announced to build Hainan into a free trade port. According to the Master Plan for the Construction of the Hainan Free Trade Port released by the State Council on 1 June 2020, China aims to build this southern island province into a high-level free trade port with global influence by the middle of the century. As China's largest special economic zone, Hainan is expected to become the frontline of China's integration into the global economic system. Noting that the world is facing a new round of major development, changes and adjustment, with protectionism and unilateralism on the rise and economic globalization facing greater headwinds, it was also a strategic decision of Chinese authorities based on the domestic and international landscapes. As such, Hainan Free Trade Port (HNFTP) is more than a regional development initiative, and it has a much bigger role to play in China’s reform and opening endeavors.
Topic:
Development, Economics, Special Economic Zones, and Free Trade
Political Geography:
China and Asia

27. Digital Divide in Latin America and Opportunities for South Korea-Spain Cooperation

Author:
Angela Sagnella
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The purpose of this brief report is to sketch the current characteristics of the digital divide in Latin America, especially following the effects generated by the spread of the Covid-19 pandemic, in an attempt to understand its crucial aspects and possible outlooks. In this regard, South Korea-Spain future cooperation on digitalization in Latin America will be discussed, as the two countries – by virtue of the long diplomatic tradition that unites them – are developing new horizons of cooperation to fill digital gaps in Latin America.
Topic:
Economics, Science and Technology, COVID-19, and Digital Cooperation
Political Geography:
South Korea, Latin America, and Spain

28. The Export Effect of Servitization of Manufacturing

Author:
Hyunsoo Kim, Jungu Kang, Hyeyoon Keum, and Jae Wook Jung
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study examines the status and characteristics of Korea’s servitization of manufacturing and its impact on business performance and exports. In particular, we focus on servitization in manufacturing, which can be seen as a part of servicification in manufacturing. It is the phenomenon of manufacturing firms producing more services as final goods and provide them to the market with their products. Looking at the status of servitization in the manufacturing sectors focusing on the service sales generated by manufacturing firms, the servitization in manufacturing in Korea has gradually increased. Sales in service sectors, which stood at 4.5% of the total sales of manufacturing firms in 2012, surged to 15.9% in 2017, and then decreased to 6.9% in 2019. Based on the stylized fact that servitization in manufacturing in Korea has gradually increased, we empirically analyze the effect of servitization in manufacturing on the business performances and exports. The result suggets that the servitization in manufacturing is progressing in the direction of improving firm’s productivity, profitability, and exports.
Topic:
Economics, Business, Manufacturing, and Services
Political Geography:
Asia and South Korea

29. Korea's Economic Presence in Iran under Trump and Its Prospects during the Biden Presidency

Author:
Shirzad Azad
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
On July 14, 2015, when Iran and the 5+1 group (the United States, Russia, China, France, Britain, and Germany) ultimately agreed over the Joint Comprehensive Plan of Action (JCPOA), the Republic of Korea (ROK) was practically one of the top three trade partners of the Persian Gulf country. In early May 2016 and only a few months after the nuclear deal was carried through, the then Korean President, Park Geun-hye, made an official visit to Iran where the two countries vowed to ratchet up their economic relations from roughly $6 billion to more than $18 billion in the years to come. Accompanied by “the largest business delegation in the history of Korean presidential trips,” Park’s high-profile trip to Iran persuaded many interested experts and observers to believe that the East Asian country was really determined to shore up its economic weight in Iran by drawing certain policies relevant to the long-term presence of Korean businesses in the Middle Eastern country (Choi 2016). Despite all those upbeat expectations about the ROK’s future economic and technological role in Iran, however, various data and statistics coming out indicate that over the past several years nearly all well-known Korean brands and products have increasingly lost their market share in the Mideast country to brands and goods supplied by other competitors. As a matter of fact, in the late 1990s and early 2000s the East Asian nation emerged as one of the Persian Gulf country’s top trading partners in the world, outstripping a number of Tehran’s traditional trading partners from the West. And while Korea managed to even expand its economic presence in Iran in the heydays of sundry international sanctions levied against the Middle Eastern country over its contentious nuclear program a couple of years before the JCPOA was eventually agreed in 2015, the ROK has been doing relatively poor in Iran during the past years (Azad 2018). Such lackadaisical performance, epitomized by abandoning the long-established pattern of significant trade in energy with Iran, has critically influenced a sharp decline in the total volume of two-way commerce between the two countries. While the plummeting share of Korean brands and goods in Iranian markets had indubitably something to do with certain policies pursued by the Moon Jae-in-led Korean government, however, the main culprit turned out to be the Trump administration’s unilateral withdrawal from the nuclear deal in May 2018. The crippling sanctions which Washington under Trump subsequently imposed on Iran played a pivotal role in reshaping the scope and size of Korean commercial connections to the Persian Gulf country, though some unprecedented diplomatic and political troubles involving Seoul and Tehran during the past years have also had a lot to do with those punitive economic and financial measures targeting the Iranians. How did then the Koreans respond to those unique circumstances rendered largely by Trump’s approach toward the Persian Gulf country? What are going to be the prospects of a Biden administration’s policy shift for Korea’s economic performance in Iran? This study seeks to shed some light on Trump’s Iran policy with regard to Korea, its repercussions for the East Asian nation’s economic relationship with the Middle Eastern country, and potential solutions to chip away at those impediments under a Democrat administration in Washington led by Joe Biden.
Topic:
Foreign Policy, Economics, Donald Trump, JCPOA, and Joe Biden
Political Geography:
Iran, Asia, South Korea, and United States of America

30. Recent Marriage and Labor Supply Pattern of Young Chinese Women

Author:
Yoon Jae Ro and Jeonghwan Yun
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In this paper, we examine the impact of a sibling gender on educational attainment, earnings, family formation for a recent cohort of women in China. Family characteristics such as number of siblings, sibling gender composition, and parents’ characteristics may play an important role in children’s life as the presence of a sibling can affect parents’ treatment of the remaining children. Especially male siblings can affect children’s outcome through various pathways as male sibling may pull parental investment of resources away from girls, because boys may be seen as the “higher return” investment (Becker, 1991). We investigate the effect of having a (male) sibling on a daughter by exploiting the change in fertility trend in China induced by the One Child Policy (OCP).
Topic:
Economics, Labor Issues, Women, Marriage, Supply, and Gender
Political Geography:
China and Asia

31. Exchange Rate Predictability Based on Market Sentiments

Author:
Hyo Sang Kim, Eunjung Kang, Yuri Kim, Seongman Moon, and Huisu Jang
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
It is well-known that exchange rates are difficult to forecast using observed macro-fundamental variables. This discrepancy between economic theory and empirical results is called the Meese and Rogoff puzzle. The purpose of this study is to address this puzzle from a new approach. Rather than pursuing a linkage between macro-fundamentals and exchange rates, we focus on the market sentiment index as a factor that could possibly enhance exchange rate predictability. The analysis folds into three phases. First, we conducted an assessment of the traditional exchange rate predictability model, as well as the augmented traditional model incorporating the market sentiment index. Second, we predicted the exchange rate by applying the market sentiment index, based on the contrarian opinion investment strategy commonly used by foreign exchange dealers. Finally, we analyzed if the machine learning model incorporating both economic fundamentals and market sentiment index could enhance the predictability of the exchange rate.
Topic:
Economics, Markets, and Exchange Rates
Political Geography:
Global Focus

32. Development of the IT Industry and Structural Transformation: Focused on IT Cooperation with Russia, Kazakhstan and Uzbekistan

Author:
Minhyeon Jeong, Jiyoung Min, and Dongyeon Jeong
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study was designed as a primary study to analyze the economic significance and potential of cooperation with Russia, Kazakhstan and Uzbekistan in the IT sector, and to derive implications for new directions between Korea and the three countries with the advent of the fourth industrial revolution era. The goal of the study is to discuss what the development of the IT industry means for the three economies, examine the characteristics of each country, and gain policy implications on how cooperation with Korea should proceed in the future. To this end, this study is consisted of the following four components. First, the economic significance of IT technology cooperation with Russia, Kazakhstan, and Uzbekistan is viewed from the perspective of structural transformation. Second, the effect of IT cooperation between Korea and Russia on the Russian economy is quantitatively estimated through the analytical framework of structural transformation. Third, to supplement the limitations of theoretical discussions and derive customized cooperation directions for each country, the current status and policies of the IT industry in the three countries are examined in detail. Fourth, IT technology subsectors promising for cooperation between Korea and Russia are identified, from the patent citation analysis and network analysis.
Topic:
Development, Economics, Science and Technology, Industry, and Information Technology
Political Geography:
Russia, Central Asia, Eurasia, Kazakhstan, and Uzbekistan

33. Korea’s Regional Cooperation and ODA Policy in Asia: Performance and Challenges

Author:
Aila Yoo and Yul Kwon
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The COVID-19 pandemic and ongoing geopolitical conflicts have deteriorated socio-economic conditions all around the world. As developing countries in Asia have made enormous progress in economic and social development based on the stable ground for growth, the development gap within the region has also been expanded. In addition, the region’s socio-economic conditions have become worse after the pandemic. Along with the pandemic crisis, there are several issues that have negatively influenced the region’s sustainable growth, such as climate change and climate-related natural disasters, and conflicts. These multiple crises change the development needs in the region, and cannot be solved through the efforts of any sole country but must be tackled through regional cooperation. While Korea strengthens its strategic approach for regional economic cooperation to expand its partnership with emerging countries and its Official Development Assistance (ODA) volume is highly concentrated in Asia region, Korea still focuses on cooperation with each country based on priority countries’ Country Partnership Strategy (CPS) without any integrated regional cooperation strategy. Strengthening inclusive partnerships would be a key to reduce the development gap in the region, by supporting regional programs such as the ASEAN Connectivity and Mekong Subregion development projects. To improve policy coherence and tackle the region-wide problems, Korea should adopt an integrated regional cooperation approach by reflecting the characteristics of Asia. This study analyzes changes in the socio-economic conditions and development environment in the Asia region and provides policy implications for preparing regional cooperation strategy for Asia.
Topic:
Economics, Regional Cooperation, Partnerships, Economic Cooperation, and COVID-19
Political Geography:
Asia and South Korea

34. Lending to Defaulters: The IMF Updates Its Lending into Arrears Policy

Author:
Gregory Makoff
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
The International Monetary Fund’s (IMF’s) “lending into arrears” policy outlines the criteria used by the IMF in deciding whether to loan to a country in default. This policy brief focuses on one of the conditions a country must meet when seeking debt relief from the IMF: it must engage in good faith negotiations with its creditors (known as the good faith criterion). The country must also implement significant financial reforms and provide assurances that it will be able to meet its financial obligations. This policy brief looks at the history of the lending into arrears policy, the controversy surrounding its use during Argentina’s 2005 debt restructuring and the May 2022 update to the policy.
Topic:
Economics, International Cooperation, Finance, and IMF
Political Geography:
Argentina and South America

35. Imperial Preference

Author:
Sven Biscop
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
When the economy is globalised but decisions on policy are made in national capitals, states can choose to cooperate and run the global economy in their collective interest, even as they remain economic competitors. Or they can try to fence off their share of the market and force all others out – and economic competition quickly turns into geopolitical rivalry. Is this what will mark the 21st century?
Topic:
Economics, Globalization, International Cooperation, and Hegemony
Political Geography:
Global Focus

36. Russia’s connectivity strategies in Eurasia: Politics over economy

Author:
Kristiina Silvan and Marcin Kaczmarski
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Russia has been attempting to strengthen connectivity within Eurasia since the early 2000s as a part of its policy to “pivot to the East”. Yet due to limited resources and political will, the tangible effects of its connectivity strategy have remained limited. The Russian Far East would greatly benefit from an improved connectivity infrastructure, given its proximity to Asian markets and the abundance of natural resources in the region. However, the attempts to accelerate regional socio-economic development by strengthening the region’s connectivity have failed to make a difference. In post-Soviet Central Asia, Russia adopted a passive approach to connectivity in the 1990s and 2000s, which meant focusing on maintaining and protecting the links inherited from the Soviet Union. It was only the pressure of external actors – both China and the West – that prompted Moscow to take a more active stance in the region in the 2010s. The launch of China’s Belt and Road Initiative pushed Russia to promote its own grand vision of trans-continental connectivity, the Greater Eurasian Partnership, designed to reaffirm Moscow’s great-power status and its equal standing with China. While it lacks economic and administrative foundations and its implementation is highly implausible, it has fulfilled a symbolic role as Russia’s grand connectivity project for Eurasia.
Topic:
Economics, Infrastructure, Belt and Road Initiative (BRI), Rivalry, and Resource Allocation
Political Geography:
Russia, China, Europe, and Asia

37. China’s Belt and Road Initiative: Successful economic strategy or failed soft-power tool?

Author:
Jyrki Kallio
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The Belt and Road Initiative (BRI) is part of China’s efforts to integrate its neighbouring countries into its economic sphere, thus increasing China’s security in its immediate neighbourhood while facing an increasingly hostile international environment due to its rivalry with the US. In reality, the BRI has evolved into an umbrella term for various infrastructure and development projects with no unified object or strategy. The projects should, in principle, increase goodwill towards China, and correspondingly boost its influence, but in practice they are mainly aimed at economic benefit. The results of the BRI, especially as a soft-power tool, are ambiguous. Its ideational basis is thin, consisting mainly of China’s critique towards the “hegemony of the West”. This reduces the BRI to a hollow slogan with little appeal apart from the pragmatic gains. However, the BRI is here to stay for the duration of Xi Jinping’s rule because China’s foreign policy is often driven by prestige. The BRI is enshrined in the Communist Party’s Constitution in order to both add weight to the initiative and to increase the Party’s prestige with its success, modest as it may be.
Topic:
Economics, International Trade and Finance, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia

38. Mapping Innovation-Driven Entrepreneurial Ecosystems: An Overview

Author:
Alessandro Rosiello, Matjaz Vidmar, and Giulia Ajmone Marsan
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Innovation-driven entrepreneurship enables people and companies to pursue global opportunities based on innovative processes, products, or services. Studies show that innovation-driven entrepreneurial high-growth firms represent a small fraction (<10%) of all start-ups but create more than 50% of jobs and are more resilient during crises, including the recent coronavirus disease (COVID-19) pandemic. However, their growth depends on an entrepreneurial ecosystem surrounding them, including access to key markets, finance, networks, and human resources, especially new knowledge and education. To ensure the development of innovation-driven entrepreneurial activities, their geographical and sectoral distribution needs to be mapped, but indicators are lacking, especially for the Association of Southeast Asian Nations (ASEAN). New sources of data, including social media, offer a new way to expand these indicators, and we propose a new methodology to identify emerging places of innovation-driven entrepreneurship (E-PIE).
Topic:
Economics, Entrepreneurship, Business, and Innovation
Political Geography:
Asia and ASEAN

39. Regional Perspectives on the Indo-Pacific Economic Framework

Author:
Matthew Goodman and Aidan Arasasingham
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
The proposed Indo-Pacific Economic Framework (IPEF) is the Biden administration’s answer to questions about the United States’ economic commitment to the vital Indo-Pacific region. For this initiative to succeed, it must address concerns among regional partners about the framework’s form, function, benefits, inclusivity, and durability. Based on conversations with representatives from over a dozen regional governments, this brief summarizes Indo-Pacific perspectives on the IPEF.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:
North America, United States of America, and Indo-Pacific

40. Beyond 2025: The Future of the African Growth and Opportunity Act

Author:
Daniel F. Runde and Sundar R. Ramanujam
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Over the past two decades, the United States has provided assistance and support for sub-Saharan Africa’s efforts to transform its economic and trade relationships, centered around the African Growth and Opportunity Act (AGOA). First enacted into law on May 18, 2000, AGOA was designed to significantly enhance designated sub-Saharan African countries’ market access to the United States by providing duty-free treatment for specific import categories. The legislation’s primary goal was to promote economic growth through good governance and free markets. To qualify and remain eligible for AGOA, countries were expected to demonstrate progress toward market liberalization and to improve the rule of law, human rights protections, and core labor standards. More than 20 years later, AGOA continues to provide preferential treatment to 44 countries in the region, spanning over 6,500 tariff lines. Since May 2000, AGOA has been amended four times, mostly to clarify preferential treatment terms, technical standards, and sunset deadlines. The act was initially designed to be valid for eight years, expiring at the end of September 2007. In July 2004, however, President George W. Bush signed the AGOA Acceleration Act, extending it to 2015. Toward the end of his second term, in June 2015 President Barack Obama extended its validity by signing the Trade Preferences Extension Act, under which AGOA is set to expire in 2025. The global political and economic landscape has changed profoundly since AGOA was enacted in 2000, even before the Covid-19 pandemic created new disruptions and accelerated several ongoing changes. The mobile telephony revolution has created new opportunities for millions to participate in the digital sphere, use mobile banking and payments systems, and receive commercial, educational, and medical services via the internet. Even as the sub-Saharan African region’s middle class continues to grow, it is also set to experience a youth population boom in the next three decades—which, under the right conditions, could pay a demographic dividend and avert a social crisis. Meanwhile, the United States has also entered an era of great-power competition with China. With China’s influence in sub-Saharan Africa rising significantly, this competition is also playing out through the region’s political and economic institutions. Considering these opportunities and challenges, leaders in Washington (and their constituents across the United States) ought to look at Africa as a prospect for deepening commercial partnerships, not as a continent that needs to be “saved” through foreign assistance. Accordingly, the United States can consider one of the three following scenarios in response to AGOA’s current expiration timeline
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Africa