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52. 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
53. 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
54. 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
55. 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
56. 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
57. 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
58. 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
59. 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
60. 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
61. 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
62. 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
63. How to save the WTO with more flexible trading rules
- Author:
- Robert Z. Lawrence
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The clash between the Western and Chinese economic systems is threatening the world trading system, with countries increasingly using trade as a tool to coerce other countries. It is imperative to return to an inclusive, rules-based international trading order before the problems in trade spill over into the other geopolitical frictions that plague the world. This Policy Brief argues for a system that steers between two extremes that have emerged: “deep integration,” a single undertaking in which all members of the World Trade Organization (WTO) are expected to adhere to all rules regardless of their preferences and circumstances, and “decoupling,” in which groups of countries centered on the United States or China limit trade with each other. Instead, Lawrence says, the world trading system should have a “variable geometry” that allows open plurilateral agreements among self-selected members that desire deeper integration on particular issues while allowing members that prefer to implement distinctive domestic policies to remain outside some of these agreements and follow a set of more limited rules. The universal rules would permit diversity but still promote trade between all countries through measures such as safeguards that would deal mainly with the most harmful systemic frictions. If the multilateral system is not up to the task of creating such an approach, it is likely to lose its relevance as differentiated regional or topic groupings become increasingly dominant.
- Topic:
- Economics, International Trade and Finance, World Trade Organization, Reform, and Trade
- Political Geography:
- Global Focus
64. EU carbon border adjustment mechanism faces many challenges
- Author:
- Gary Clyde Hufbauer, Jeffrey J. Schott, Megan Hogan, and Jisun Kim
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This Policy Brief assesses the evolving EU Emissions Trading System and EU carbon border adjustment mechanism (CBAM) and explains objections within Europe and from major trading countries likely to be affected by the proposed CBAM import levies. While EU officials have sought to ensure that the CBAM is consistent with obligations under the World Trade Organization (WTO), key aspects of the CBAM could violate WTO rules and are likely to be contested, taking years to play out. Meanwhile, several other countries will adopt new carbon-inspired border restrictions, adding to global trade frictions. Major carbon-emitting countries, therefore, need to act cooperatively instead of unilaterally to both advance the fight against climate change and update the rules-based global trading system. Two-thirds of greenhouse gas emissions result from nontraded activities, such as road transport, electricity generation, and home and office heating. Countries can curb emissions in these activities, while developing guidelines for carbon abatement in traded sectors.
- Topic:
- Climate Change, Economics, International Trade and Finance, World Trade Organization, European Union, and Carbon Emissions
- Political Geography:
- Europe
65. CHIPS Act will spur US production but not foreclose China
- Author:
- Gary Clyde Hufbauer and Megan Hogan
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The CHIPS and Science Act, export controls, and agreements with allied countries will accomplish many of their multiple objectives. More US semiconductor fabrication plants will be built, US R&D will be accelerated, and advanced chips and chip-making machines will be denied to China, Russia, and other adversaries. However, the Act will not make a material difference to US chip supplies in the next two or three years. Slower economic growth has already tipped the chips market in favor of ample supplies. While collective measures have inflicted considerable short-term pain on China, causing a sharp drop in the fortunes of its high-tech firms, China will respond by redoubling its self-sufficiency programs. The United States, however, should not mimic China in pursuing self-sufficiency, as US self-sufficiency is an illusion. The United States currently exports high-value chips and imports low-value chips, so increasing self-sufficiency would require the United States to prioritize basic chip production at the same time it is supposed to be competing with China in advanced chip production. Continuing to prioritize advanced chip production—where the United States has a clear advantage—is the most efficient course of action.
- Topic:
- Economics, Legislation, Exports, Production, and Semiconductors
- Political Geography:
- China, Asia, and United States of America
66. Soaring demand is driving double-digit import price inflation in the United States
- Author:
- Caroline Freund
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- At a time of soaring price increases in the United States, inflation in the US import sector has been soaring the most. Import price inflation in the first half of 2022 was in the double digits, above US consumer price index and personal consumption expenditures inflation. Excess demand for certain imported goods is playing a big role, but so are supply shortages caused by temporary business closures overseas and shipping delays associated with the COVID-19 pandemic. Correctly identifying the culprit for misaligned demand and supply, and hence rising prices, is central to understanding the type and extent of policy intervention needed. Using movements in prices and quantities of specific goods, the analysis presented in this Policy Brief shows that the increase in import price inflation has been driven to the same or a greater extent by demand compared with supply constraints. The results have important implications for policies to help reduce the supply and demand imbalance and thus tame inflation.
- Topic:
- Economics, Inflation, COVID-19, Imports, and Supply and Demand
- Political Geography:
- North America and United States of America
67. Is South Korea vulnerable to EU and US carbon border restrictions?
- Author:
- Jeffrey J. Schott and Megan Hogan
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- South Korean exports, especially carbon-intensive products like steel, are increasingly vulnerable to both the European Union’s proposed carbon border adjustment mechanism (CBAM)—set to begin on January 1, 2023—and the proposed Clean Competition Act (CCA) before the US Congress. Schott and Hogan caution that Korean exporters should not count on Korea’s decade-old EU and US free trade agreements (FTAs), nor on the multilateral trading rules of the World Trade Organization (WTO), to protect them from new carbon-based import barriers in key foreign markets. The WTO and the FTAs have broad and loosely defined exemptions for environmental protection. Nor is Korea likely to be shielded by its own cap-and-trade emissions trading system (the K-ETS), because of extensive use of free allowances and large differences between EU and Korean carbon prices. While the threat the EU CBAM poses to Korean exports is imminent, passage of the CCA faces major legislative obstacles. But US imports of Korean steel and other carbon-intensive goods are still subject to climate-related duties at the US border under US unfair trade statutes. The US Department of Commerce has ruled that free allowances issued under the K-ETS (and EU ETS) are implicit subsidies that can be offset by countervailing duties. These charges are in addition to the harsh tariff-rate quotas on imported Korean steel applied under the “national security” authority of Section 232 of US trade law, which are more restrictive than measures imposed against European and other steel exporters. The authors suggest relaxing these US barriers, as they have been for shipments from Europe, in return for Korean participation in the nascent US-EU talks to establish a “Global Arrangement on Sustainable Steel and Aluminum.”
- Topic:
- Economics, International Trade and Finance, European Union, Exports, and Carbon Emissions
- Political Geography:
- Europe, Asia, South Korea, and United States of America
68. The online gig economy’s impact is not as big as many thought
- Author:
- Lee G. Branstetter
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The explosive global growth of online ride-hailing platforms raised concern (and, in some quarters, optimism) that similar growth in other platforms could rapidly disrupt traditional labor arrangements on a large scale in advanced economies. But the evidence to date suggests no significant changes in the overall importance of “gig” work in the US labor market nor a significant decline in the importance of traditional employment relationships. Online platforms may play a growing role (relative to traditional “brick-and-mortar” intermediaries) in connecting gig workers to their customers, but that alone does not guarantee a large increase in the importance of gig work. Branstetter reviews this evidence, noting the gaps in labor market data series that make the measurement of this phenomenon so difficult. Even if traditional employment relationships are not likely to decline significantly in the near future, the rise of online gig work nevertheless highlights longstanding inadequacies of labor market regulations, which recognize employees and truly independent contractors but struggle with the intermediate kinds of worker-firm relationships the online platforms enable. Branstetter summarizes proposals for regulating gig economy work and the lessons policymakers in South Korea and other economies can learn from the literature he reviews in this Policy Brief.
- Topic:
- Economics, Employment, Labor Market, and Gig Economy
- Political Geography:
- Global Focus
69. South Korea should prepare for its exposure to US-China technology tensions
- Author:
- Mary Lovely and Abigail Dahlman
- Publication Date:
- 07-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The stated goal of the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) is to create standards that enhance and elevate regional trade and investment flows, but it is clearly aimed at reducing the role of China in global supply chains. As China is Korea’s largest trading partner, US policy discouraging Chinese participation in supply chains has immediate detrimental implications for Korean manufacturers. The United States is the second-most important destination for Korean exports. Given the values of these triangular trade flows, Lovely and Dahlman assess South Korea’s exposure to US demands to remove or reduce Chinese participation in the manufacture of exports destined for the US market. The reliance of the proposed framework on certain standards will likely reduce Chinese participation in IPEF trade networks. Korea may benefit from this trend, but IPEF could also increase production costs for Korean companies, especially in the electronics sector, a problem that would worsen if China retaliates against these companies. To reduce these risks, Korea might find it prudent to reduce its reliance on intermediate goods from China for products it produces for export to the United States. The Korean government should also seek to better understand its exposure to US–China trade tensions and diversify its trade relations. Korean firms should start preparing for supply chain disruptions, perhaps by making investments at home. Korea could also help other IPEF members reduce supply chain disruptions while addressing security concerns over China.
- Topic:
- Economics, Science and Technology, Supply Chains, and Competition
- Political Geography:
- China, Asia, South Korea, North America, and United States of America
70. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts
- Author:
- Jeffrey J. Schott
- Publication Date:
- 06-2022
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
- Topic:
- Economics, International Trade and Finance, Treaties and Agreements, and Trade
- Political Geography:
- China, South Korea, and Asia-Pacific
71. The Assault of Austerity: How prevailing economic policy choices are a form of gender-based violence
- Author:
- Dana Abed and Fatimah Kelleher
- Publication Date:
- 11-2022
- Content Type:
- Policy Brief
- Institution:
- Oxfam Publishing
- Abstract:
- This briefing paper argues that austerity measures are a form of gender-based violence against women, girls and non-binary people, and lays out clear examples of how fiscal consolidation affects them. Its core argument is that ending austerity must be a priority. The policies that deliver austerity’s deadly consequences can no longer be marketed as the ‘logical’ and ‘inevitable’ economic options that they have been for decades, and certainly not by any government that claims a commitment to gender equality or ending gender-based violence. Austerity takes away from those who need it most, while ignoring common-sense ways to improve both revenue and prosperity. The paper goes on to share feminist economic alternatives offer pathways that can protect the Majority World from completely avoidable suffering.
- Topic:
- Economics, Gender Based Violence, Identity, and Gender
- Political Geography:
- Global Focus
72. Comparative State Economic Interventions in the Carbon Capture and Storage Market
- Author:
- Dillon W. Smith, Umang Bhattarai, and Wake Smith
- Publication Date:
- 09-2022
- Content Type:
- Policy Brief
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- An essential element in the portfolio of climate solutions required to rapidly achieve net zero emissions is flue gas carbon capture and storage, whereby carbon can be sifted from emission streams before it enters the atmosphere and safely sequestered in geologic storage systems. Despite its importance in the climate tool portfolio, flue gas capture capacity is currently much less than reasonable estimates of its potential. States around the world are searching for policies by which to incentivize emitters to invest in carbon capture and storage (CCS) and hasten the technology’s rollout. We survey five leading polities (United Kingdom, Netherlands, Norway, United States, and California) in their efforts to kick-start the deployment of CCS and assess the strengths and weaknesses of each territory’s scheme.
- Topic:
- Climate Change, Economics, and Carbon Emissions
- Political Geography:
- Global Focus
73. The Price Cap on Russian Oil Exports, Explained
- Author:
- Catherine Wolfram, Simon Johnson, and Łukasz Rachel
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- If you’ve taken an introductory economics class, you were probably left with the strong impression that price caps are bad – they distort demand and discourage producers from supplying the market. So, why has Treasury Secretary Janet Yellen, the consummate economist, advocated so strongly for a price cap on Russian oil? The answer is that this price cap is different from the standard cap discussed in introductory economics classes. A standard price cap applies to all goods traded in a market. For example, in some countries there are price caps on bread for everyone or diesel for farmers or rent controls on housing. Such caps lead to excess demand for the good and insufficient supply, leading to shortages at the capped price. If prices are constrained, other non-price mechanisms, like first-come-first-served, are required to allocate the good. All too frequently, the result is empty bakery shelves or fuel shortages or difficulties finding housing. To understand why the cap on Russian oil is different, we first need to provide background on Russian oil trade and the proposed price cap.
- Topic:
- Economics, Markets, Oil, Exports, and Russia-Ukraine War
- Political Geography:
- Russia and Europe
74. The 2023 Turkish elections: An unmarked road
- Author:
- Al Jazeera Center for Studies
- Publication Date:
- 10-2022
- Content Type:
- Policy Brief
- Institution:
- Al Jazeera Center for Studies
- Abstract:
- As the date of elections approaches, the political and economic landscape will undoubtedly come into clearer focus. But at this point, amid so many uncertainties, it is still too early to predict electoral outcomes with any confidence.
- Topic:
- Economics, Politics, Elections, and Recep Tayyip Erdoğan
- Political Geography:
- Turkey and Middle East
75. Don’t Get Caught in the Middle: A Geo-Economic Strategy for Germany to Survive US-Chinese Rivalry
- Author:
- Markus Jaeger
- Publication Date:
- 12-2022
- Content Type:
- Policy Brief
- Institution:
- German Council on Foreign Relations (DGAP)
- Abstract:
- The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
- Topic:
- Economics, Strategic Competition, Rivalry, and Geoeconomics
- Political Geography:
- China, Europe, Asia, Germany, North America, and United States of America
76. The evolving gender gap in labor force participation during COVID-19
- Author:
- Simeon Djankov, Pinelopi Koujianou Goldberg, Lisa Hyland, and Eva (Yiwen) Zhang
- Publication Date:
- 04-2021
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Despite many significant gains by women in the paid workforce in recent decades, the percentage of women participating in the labor force has remained lower than the percentage of male participants. Now, in response to the COVID-19 pandemic and the global economic downturn it precipitated, the gap in labor force participation between men and women in some economies has actually widened, with potentially damaging repercussions for women’s career prospects and pay. The pandemic has disproportionately affected sectors employing more women, such as retail stores, restaurants, and the hotel and hospitality business. An increase in family caregiving responsibilities because of school and childcare closures has also fallen on working mothers' shoulders. Both factors have pulled women out of the labor force. The authors track trends in male and female labor force participation in 43 countries and find substantial differences across countries in the way women’s participation has been affected relative to that of men. In some countries, such as Colombia, Chile, and Cyprus, the gender gap in labor force participation widened the most during the pandemic. The gender gap also widened in the United States, driving 2.5 million women from their jobs in what Vice President Kamala Harris called a “national emergency” for women. In other economies, such as Luxembourg and Lithuania, the gender gap in labor force participation, unexpectedly, shrank during the early period of the pandemic. On average, female employees have fared better in countries where women are less concentrated in the services sector, less likely to be employed as temporary workers, and where laws supported greater equality at the onset of the crisis. Greater government expenditure on childcare in the pre-COVID-19 era, however, does not appear to have insulated female workers from the damaging repercussions of the pandemic.
- Topic:
- Economics, Gender Issues, Labor Issues, Women, Services, COVID-19, and Empowerment
- Political Geography:
- Colombia, Chile, Cyprus, Global Focus, and United States of America
77. Economic costs and benefits of accelerated COVID-19 vaccinations
- Author:
- Joseph E. Gagnon, Steve Kamin, and John Kearns
- Publication Date:
- 05-2021
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- COVID-19 vaccination programs are generally understood to be a prerequisite for a return to normalcy in our social and economic lives. Emergency measures to research, test, produce, and distribute vaccines have been expensive, but increases in GDP resulting from the vaccines are expected to exceed those costs by wide margins. Few studies have quantified the economic costs and benefits of different rates of COVID-19 vaccination, however. This Policy Brief focuses on developing such a quantitative assessment for the United States; the approach may be applied to other countries as well. Two illustrative scenarios support the conclusion that most plausible options to accelerate vaccinations would have economic benefits that far exceed their costs, in addition to their more important accomplishment of saving lives. This Policy Brief shows that if, for example, the United States had adopted a more aggressive policy in 2020 of unconditional contracts with vaccine producers, the up-front cost would have been higher but thousands of lives would have been saved and economic growth would have been stronger. Instead, the federal government conditioned its contracts on the vaccines’ being proven safe and effective. The projections presented in this analysis show that even if unconditional contracts led to support for vaccines that failed the phase III trial and ultimately were not used, the cost would have been worth it.
- Topic:
- Economics, Health, Crisis Management, COVID-19, and Health Crisis
- Political Geography:
- North America and United States of America
78. The economic gains of reducing the employment gender gap in Morocco
- Author:
- Olivier Bargain and Maria C. Lo Bue
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- United Nations University
- Abstract:
- Middle East and North Africa (MENA) countries, including Morocco, currently record the lowest rates of female labour force participation (FLFP) in the world. These rates — between 20-30% in 2019 — appear substantially low in comparison to Western countries, but also compared to low- and middle-income countries that average between 40% (Asia) and 55% (Latin America and sub-Saharan Africa).
- Topic:
- Economics, Gender Issues, Women, Employment, and Economic Growth
- Political Geography:
- North Africa and Morocco
79. The nonsense of Next Generation EU net balance calculations
- Author:
- Zsolt Darvas
- Publication Date:
- 01-2021
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- The estimation of payments from the European Union’s COVID-19 economic recovery fund, Next Generation EU (NGEU), to each EU country in 2021-2026 involves uncertainties, yet the overall magnitudes can be estimated with a reasonable degree of precision. In contrast, estimating member states’ contributions to the repayment of EU debt (which will be issued to finance NGEU spending) is burdened with enormous difficulties, primarily related to the uncertainty of gross national income projections up to 2058. Some numerical scenarios can be put forward to illustrate the difficulties in estimating the amounts of such future contributions.
- Topic:
- Economics, Governance, European Union, Macroeconomics, and COVID-19
- Political Geography:
- Europe
80. Supporting a Public Purpose in Research & Development: The Role of Tax Credits
- Author:
- Jake Taylor
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Tax credits for research and development are a means of incentivizing the private sector to invest their own resources on challenging problems. However, in practice, the fungibility of tax credits and other monetary elements can lead to misalignment between the public good represented by R&D and the actions of the company. In this policy brief, we consider the existing mechanism of tax credits. We see how they can encourage private sector risk-taking to enable research and development (R&D) outcomes. However, our goal is to go beyond economic growth benefits, and to include the less tangible considerations of public good and public purpose in the research and development domain. We then suggest an expansion of tax credits focused on supporting the researchers involved in the R&D and encouraging innovation in both large organizations and in startups and small businesses. This approach builds upon the existing framework of agency-led, mission-defined support of the private sector used by the U.S. government, as occurs in other programs such as America’s Seed Fund (sometimes known by its acronyms, SBIR and STTR). The integration of specific agency- and mission-focused elements to the credit system ensures that these additive credits support research and researchers whose R&D outcomes will improve the health, prosperity, and opportunity for the U.S. as a whole. Specific means of implementing this public-purpose R&D credit system under existing authorities within the executive branch are suggested, along with the public-facing mechanisms for creating and maintaining the evaluation approach of what constitutes “public purpose” as science and society progress.
- Topic:
- Economics, Science and Technology, International Affairs, Tax Systems, and Tax Credits
- Political Geography:
- Global Focus and United States of America
81. The Ahvas Protests Are the minorities' demonstrations a reflection of a crisis in Tehran?
- Author:
- FARAS
- Publication Date:
- 08-2021
- Content Type:
- Policy Brief
- Institution:
- Future for Advanced Research and Studies (FARAS)
- Abstract:
- On July 15, Khuzestan in South West Iran witnessed a range of protests against the disintegrating economic and living conditions in the country, particularly the lack of water within the province, which was called ‘water protests’ or ‘thirst protests’, This was extended to other Iranian cities outside Khuzestan. The protesters' demands evolved to demand the overthrow of the regime itself raising slogans of ‘Death to Khamenei’.
- Topic:
- Economics, Water, Minorities, and Protests
- Political Geography:
- Iran and Middle East
82. Ousting Ennahda: Will Kais Saied's decisions help solve the crisis in Tunisia?
- Author:
- FARAS
- Publication Date:
- 07-2021
- Content Type:
- Policy Brief
- Institution:
- Future for Advanced Research and Studies (FARAS)
- Abstract:
- On the Tunisia’s 64th Republic Day -Sunday, July 25, 2021- the so-called 25 July Movement called for massive protests all over the country. Consequently, many responded and started protesting in Bardo Square, near the parliament, in the capital Tunis. The protests soon spread across other governorates, such as Sousse, the coastal governorate, Sfax (in the south), and El-Kef (in the northwest). In response, President Kais Saied announced, on July 26, 2021, the dismissal of Prime Minister Hichem Mechichi and his cabinet, which consisted of 25 ministries. Saied decided to take charge of executive power until he chooses another politician to form a new government. He further suspended the current parliament and lifted the parliamentary immunity of all its members. Besides, he decided to rule by issuing decrees instead of the laws, which the parliament was supposed to pass. These decisions were announced after the emergency meeting that was chaired by president Saied, and attended by military leaders and security officials on the day the protests and rallies broke out. The protesters demanded reforming the economy, combatting corruption and terrorism, dismissing the Mechichi cabinet, and dissolving the parliament.
- Topic:
- Economics, Government, Reform, Crisis Management, and Ennahda Party
- Political Geography:
- North Africa and Tunisia
83. Trade and trust: the role of trade in de facto state conflict transformation
- Author:
- Tamta Gelashvili, Helge Blakkisrud, and Nino Kemoklidze
- Publication Date:
- 02-2021
- Content Type:
- Policy Brief
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- De facto states – unrecognized secessionist entities that eke out a living on the margins of the international system – are often heavily dependent on external patron states for economic aid and investment. When the parent state – the state that the de facto state seeks to break away from – responds to the secessionist attempt by imposing sanctions or economic blockades, this further exacerbates such dependency. Moreover, due to their lack of international recognition, de facto states often have limited opportunities to engage with the outside world beyond the patron and the parent state. However, closer examination of one such de facto state, Abkhazia, reveals that de facto states can enjoy some bounded independent economic agency. Abkhazia’s maneuvering between Russia as “patron,” Georgia as “parent state,” and the wider international community (here exemplified by the EU) in the sphere of trade and economic interaction has important implications for de-facto state conflict transformation.
- Topic:
- Conflict Resolution, Economics, Emerging States, and Trade
- Political Geography:
- Russia and Eurasia
84. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement
- Author:
- Jos Meester and Guido Lanfranchi
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- Clingendael Netherlands Institute of International Relations
- Abstract:
- Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
- Topic:
- Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
- Political Geography:
- Africa, China, Asia, and Horn of Africa
85. Biden-Erdogan meeting: cautious rapprochement amid still thorny disputes
- Author:
- Al Jazeera Center for Studies
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- Al Jazeera Center for Studies
- Abstract:
- As long as Turkey pursues its regional ambitions, any understandings with the US and the West will necessarily have a hard ceiling. However, Ankara seems to be pursuing a more conciliatory policy in the region and in its relations with the West for both economic and strategic reasons.
- Topic:
- International Relations, Economics, Bilateral Relations, Recep Tayyip Erdoğan, Rapprochement, Strategic Interests, and Joe Biden
- Political Geography:
- Turkey, Middle East, North America, and United States of America
86. Building Infrastructure in Real Time: Avoiding Regulatory Paralysis
- Author:
- Committee for Economic Development of the Conference Board
- Publication Date:
- 09-2021
- Content Type:
- Policy Brief
- Institution:
- The Conference Board
- Abstract:
- The physical infrastructure base of the US economy, once an advantage in global competition, has become a liability. This problem has multiple causes, several of which CED has addressed in recent policy statements, and our nation’s elected policymakers are now taking up the need for additional funding. But the nation needs not only adequate funding but also a more-efficient regulatory process for our infrastructure investment—choosing the right projects, with the minimum delay, and executing them at the least possible cost. Regulatory paralysis is one of the causes of our infrastructure shortfall. It needs attention if we are going to spend our tax dollars on infrastructure wisely and efficiently so that the US economy remains globally competitive. Streamlining regulatory procedures, promoting competition, and cutting red tape across federal, state, and local governments are key to increasing investment, decreasing cost, and maximizing efficiency. Business as usual will not suffice. It takes too long and costs too much to deliver infrastructure projects, preventing us from achieving the advancements and improvements that a future-focused, competitive economy requires. CED has consistently advocated “smart regulation,” subjecting new regulations to rigorous cost-benefit analysis and reviewing existing regulations for continuing cost effectiveness to enhance efficiency and achieve quicker execution, greater benefits, and lower costs. With long delays between project conception and execution, and often multiple layers of jurisdiction and review, a smart regulation approach could ensure that the rules governing review and permitting of projects address all important concerns and ensure that net benefits are maximized over time at all levels of government on a comprehensive and timely basis.
- Topic:
- Economics, Infrastructure, Governance, Regulation, Business, Economic Policy, and Strategic Competition
- Political Geography:
- North America and United States of America
87. Annual Social Security and Medicare Trustees Report Reflects Worsening Economic Environment
- Author:
- Committee for Economic Development of the Conference Board
- Publication Date:
- 09-2021
- Content Type:
- Policy Brief
- Institution:
- The Conference Board
- Abstract:
- The Trustees of the Social Security and Medicare Trust Funds are required by law to produce an annual report on April 1 of each year. It is by no means a shock that the report is late in any year; it happens often. This year, however, there is probably more of a justification that the report was released only yesterday, five months late. The economic and health care environments are perhaps as chaotic and uncertain as they have been in living memory.
- Topic:
- Economics, Health Care Policy, and Social Security
- Political Geography:
- North America and United States of America
88. Decoupling Europe
- Author:
- Gabriel Felbermayr, Steffen Gans, Hendrik Mahlkow, and Alexander Sandkamp
- Publication Date:
- 07-2021
- Content Type:
- Policy Brief
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- The COVID-19 pandemic revealed the vulnerability of international value chains in the face of global shocks. This has triggered a political discussion regarding a possible reshoring of vulnerable supply chains back home. The aim is to reduce dependencies on foreign suppliers and thus improve crisis resilience of the domestic economy. The debate is also rooted in the growing dependence on Asian suppliers and the colliding political and ideological systems between China and the West. Unilateral decoupling of the EU from China (a doubling of trade costs) would reduce real income in the EU on average by 0.8 percent. In terms of GDP in 2019, this equals a permanent loss in real income of 131.4 bn EUR. Should China retaliate, real income would fall by 1.0 percent (170.3 bn EUR). With its extremely interconnected economy, real income in Germany would even decline by 1.4 percent (48.4 bn EUR). China would also lose from such a trade war, with real income declining by 1.3 percent. Should the EU increase its trade barriers against all its non-European trading partners, real income in the Union would fall by 3.5 percent or 584.3 bn EUR in case of a unilateral increase and by 5.3 percent or 873.1 bn EUR in case the rest of the world responds by also raising trade barriers.
- Topic:
- Economics, Regional Cooperation, European Union, Economic Cooperation, Pandemic, and COVID-19
- Political Geography:
- China and Europe
89. Resolving Human Wildlife Conflict in Botswana Through Social Protection
- Author:
- Israel R. Blackie
- Publication Date:
- 05-2021
- Content Type:
- Policy Brief
- Institution:
- Botswana Institute for Development Policy Analysis
- Abstract:
- This policy brief is based on a national tracer survey covering 66 villages in Botswana. The main aim of the study was to ascertain the magnitude and social impacts of human wildlife conflict (HWC) on victims and their families. In addition, the study sought to assess the relevance and effectiveness of the ex gratia compensation scheme to victims of wild animals’ attack which was introduced in 2015. The key findings reveal that local people exposed to life threatening wildlife attacks express fear and animosity towards wild animals, and also feel rejected and disappointed from a fragmented government service delivery system. Major policy recommendations to be considered by government and other stakeholders include provision of comprehensive therapeutic rehabilitation and reconstructive surgery to HWC victims, comprehensive compensation according to the severity of injuries sustained, and establishment of an Ex Gratia Scheme or Ex Gratia Tribunal.
- Topic:
- Economics, Environment, International Political Economy, Sustainability, Ecology, and Wildlife
- Political Geography:
- Africa and Botswana
90. Europe’s invisible divides: How covid-19 is polarising European politics
- Author:
- Ivan Krastev and Mark Leonard
- Publication Date:
- 09-2021
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- The lived experience of the covid-19 pandemic has split Europe just as the euro and refugee crises did, with the south and the east feeling much more badly affected than the north and the west. Some people were affected directly by illness, some only experienced economic consequences, while others feel untouched by covid-19. The economic victims are more likely than others to say that restrictions have been too severe, and they tend to be more sceptical about their governments’ intentions behind lockdowns. Europeans are divided over what they believe to be governments’ motivations behind restrictions: the Trustful have faith in governments; the Suspicious believe rulers want to cover up failings; the Accusers think governments are trying to increase their control over people. Splits are appearing between those who believe that, in the context of the pandemic, the biggest threat to their freedom comes from governments, on the one hand, and those who fear the behaviour of their fellow citizens, on the other. There is a major generational divide, with the young more likely than the old to blame governments for the ongoing impact; the young also feel more badly affected. Poland, Germany, and France could each be emerging as archetypes for post-pandemic politics.
- Topic:
- Economics, Politics, Refugees, Crisis Management, Pandemic, COVID-19, and Polarization
- Political Geography:
- Europe, France, Poland, and Germany
91. Measured response: How to design a European instrument against economic coercion
- Author:
- Jonathan Hackenbroich and Pawel Zerka
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- Europe is at ever greater risk of economic coercion from other powers. To protect itself, the EU could adopt a new anti-coercion instrument (ACI) to allow it to impose economic countermeasures. The ACI needs to enable countermeasures that are both effective and credible; if it does not, this could carry more risks than benefits. These countermeasures could include: trade and investment restrictions; export controls and divestment in certain sectors; and restrictions on access to EU public procurement markets. The EU should also include a flexibility mechanism for countermeasures against those forms of economic coercion the ACI cannot cover explicitly. The ACI should be a de-politicisation tool. It must be used only as last resort and should include an effective de-escalation mechanism to trigger dialogue and negotiations.
- Topic:
- Defense Policy, Economics, European Union, Trade, and Transatlantic Relations
- Political Geography:
- Europe
92. Back from the brink: A better way for Europe to support Tunisia’s democratic transition
- Author:
- Tarek Megerisi
- Publication Date:
- 06-2021
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- Tunisia is seeking a major IMF bailout loan – but the risks of securing it are almost as great as the risks of failing to, given the conditionality that would ensue. Democratic reforms in Tunisia have stalled, but post-revolution economic progress has never even begun. Tunisian politicians urgently need to combine receipt of a new loan and its accompanying austerity with economic reform and renewal to grow their way out of the crisis. The Tunisia policy of the EU and its member states is similarly stalled, but they can assist Tunisian leaders by providing new investment – and thereby reboot the democratic transition. Success in this endeavour could provide a model for political and economic reforms elsewhere in North Africa, which is in the EU’s interest as it pursues its goal of strategic autonomy in the face of other powers’ growing influence in the region.
- Topic:
- Foreign Policy, Economics, European Union, Democracy, and Transition
- Political Geography:
- Europe and Tunisia
93. 100 days of Biden’s new transatlantic strategy – where does Central and Eastern Europe stand?
- Author:
- Danielle Piatkiewicz
- Publication Date:
- 04-2021
- Content Type:
- Policy Brief
- Institution:
- Europeum Institute for European Policy
- Abstract:
- In her policy paper, our research fellow Danielle Piatkiewicz provides an in-depth review of President Biden’s first 100 days in office. Piatkiewicz particularly examines Biden's new transatlantic strategy and how it affects the Central and Eastern Europe region. So far, the US administration’s focus on tackling immediate shared threats has called upon their EU allies to take a stronger role and to continue to invest in its own defense capabilities. This includes not just investing in stronger NATO cooperation, but also the strengthening of economic and security support in CEE region through various avenues. For the CEE region, it will be a true test to see how they adapt towards a Biden administration – the deterioration of democratic processes and rule of law will certainly come to haunt the region, but the question remains to what extent? For Poland and Hungary, whose relations flourished under Trump’s administration, may have to reevaluate their posture to adhere to the pro-democratic policies that the Biden administration will certainly call for, and this can lead to a splintering within the V4 particularly between Slovakia, Czech Republic and Poland and Hungary.
- Topic:
- Security, NATO, Economics, Transatlantic Relations, and Joe Biden
- Political Geography:
- Eastern Europe, Poland, Hungary, North America, Czech Republic, Central Europe, and United States of America
94. Belarus Goes Nuclear: Context and Prospects of the Astravyets NPP
- Author:
- Yuri Tsarik
- Publication Date:
- 03-2021
- Content Type:
- Policy Brief
- Institution:
- International Centre for Defence and Security - ICDS
- Abstract:
- On 7 November 2020, the president of Belarus, Aleksander Lukashenko, visited the Astravyets Nuclear Power Plant (Astravyets NPP) and dubbed its pending commissioning a “historic moment” for Belarus. Despite several incidents during the tests in late 2020 and early 2021 that prompted shutdowns of the reactor, the first unit was reconnected to Belarus’s power grid at full nominal capacity on 21 January 2021. The Astravyets NPP launch took place amid the worst political crisis in the country’s history. Following a rigged presidential election in August 2020 and violent suppression of the ensuing protests, the Belarusian authorities found themselves lacking legitimacy domestically and facing mounting political and economic pressure internationally. These events, and the choices made in response to them, are reshaping the geopolitical and geoeconomic context in which the plant will operate and thus are affecting the prospects of the entire project.
- Topic:
- Economics, Nuclear Power, Elections, Geopolitics, Legitimacy, and Political Crisis
- Political Geography:
- Eurasia and Belarus
95. Xi Jinping’s Evergrande Dilemma
- Author:
- John Lee
- Publication Date:
- 09-2021
- Content Type:
- Policy Brief
- Institution:
- Hudson Institute
- Abstract:
- Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
- Topic:
- International Relations, Foreign Policy, Debt, Economics, Markets, and Business
- Political Geography:
- China and Asia
96. Transatlantic Paralysis: The US-EU Trade Policy Stalemate and the European Union’s Democratic Deficit
- Author:
- Thomas J. Duesterberg
- Publication Date:
- 04-2021
- Content Type:
- Policy Brief
- Institution:
- Hudson Institute
- Abstract:
- What is often labeled the democratic deficit in governance of the European Union (EU) is not a a flaw or bug in its architecture, it is a design feature. From its earliest days in the Second World War’s chaotic aftermath, European integration “was essentially an elite project, pursued at a distance from the daily concerns of the national populations in Western Europe.” Also formed as a response to the economic disintegration following the Depression and World War Two, the General Agreement on Tariffs and Trade (GATT) was similarly removed from national or populist politics. It too was an elite, top-down initiative designed to embed nations in a system of international rules largely articulated by technical experts, enforced by a form of international courts, and far removed from national and populist politics. Many of the intellectual proponents of both supranational institutions, from the Austrian School of economics, the ordoliberals emerging in early-20th century Germany, to the London School of Economics indeed shared a distrust of American-style democracy, let alone the various parliamentary democracies whose failure led to the disasters of the 1930s and 1940s. Over the last fifty years, the institutions put in place after World War II have been perfected and have, to a certain extent, ossified. Many of the difficulties in achieving greater US-EU economic coordination in the 21st century have their origins in the institutional design and the subsequent early implementation of early European Community rules during the post-war period. A brief overview of the history of European integration, and the political thinking behind it, helps explain the current paralysis in contemporary transatlantic cooperation, including in a joint approach to the challenge of Chinese mercantilism and its growing international reach.
- Topic:
- Economics, Governance, Democracy, Trade, and Transatlantic Relations
- Political Geography:
- Europe, North America, and United States of America
97. Winning the Geo-Tech Battle and Building the Quad Alliance in the Indo-Pacific
- Author:
- Eric B. Brown, John Lee, and Thomas J. Duesterberg
- Publication Date:
- 04-2021
- Content Type:
- Policy Brief
- Institution:
- Hudson Institute
- Abstract:
- Under Xi Jinping, the People’s Republic of China (PRC) has established as its paramount geopolitical objective the replacement of the free and open, rules-based order in Asia with an alternative world order, one that is to be dominated by the interests and values of the Chinese Communist Party (CCP). This decision presents a danger to the entire world, not just to any one state or group of states. For, as US Secretary of State Antony Blinken said at the March 2021 US-PRC meeting in Alaska, the alternative to a rules-based order “is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.” In furtherance of its objectives, the PRC is in the midst of a large military build-up, but there is much more. For today’s CCP, political power grows not only from the “barrel of the gun,” as Mao Zedong once put it, but also from cutting-edge technologies. Thus, while Beijing pours billions into artificial intelligence and surveillance tech to impose its new “digital totalitarianism” inside the PRC, from Hong Kong to Xinjiang, it is also using its growing technological prowess to press its larger geopolitical agenda in the Indo-Pacific and beyond. It is weaponizing technology and connectivity, along with trade, finance, and other policy instruments to try to rule the key technologies and industries of the future, as well as to improve its strategic positioning and acquire political power over other countries—for instance, through its bid to dominate other nations’ most sensitive data networks, or via the export of its suite of “social stability” technologies, i.e., the “techno-tyrant’s toolkit.” In all this, the CCP’s intent is to entrench its power and Leninist norms and practices to the extent it can do so beyond the PRC’s borders, and to make other nations, or at the least their ruling elites, beholden to it. So in addition to the PRC’s militarily destabilizing activities in the West Pacific and incursions into India’s Himalayas, there is also a “geo-technological front.” If Xi’s CCP succeeds at enmeshing other countries in its expanding “PRC sphere of technological influence,” it could unlock and be able to exploit decisive military, economic, diplomatic, and ideological advantages.
- Topic:
- International Relations, Security, Economics, and Alliance
- Political Geography:
- China, South Asia, East Asia, and Asia-Pacific
98. The Chinese Communist Party’s Economic Challenge to the Free World
- Author:
- Miles M. Yu
- Publication Date:
- 04-2021
- Content Type:
- Policy Brief
- Institution:
- Hudson Institute
- Abstract:
- The Chinese economy and the philosophical roots of China’s system have greater implications for the United States economy than many assume. The one critical fact to understand about the People’s Republic of China is that it is a communist dictatorship ruled by a Marxist-Leninist party. The Party is dedicated to maintaining and strengthening its monopoly on all powers in the world’s most populous country and to mounting the most serious challenge to the free world since the Cold War. This policy memo will examine the Chinese economy’s distinct traits, how it operates, and why it thrives under a monopolistic government that exploits and challenges the global free market system, along with possible policy recommendations for the United States and its allies. Unlike most other communist countries, China has been afforded the benefits of a global free-market system and enjoys largely open access to international trade, capital markets, and advanced technologies. The paradox of a communist nation fully participating in a largely capitalist system has enriched and strengthened the Chinese Communist Party (CCP), to the point where Beijing poses a mortal threat to the United States and to the international free market economic system that has enabled the rise of the communist state. The West played a role in creating the current state of play. But too many conversations in the United States focus only on our own strategic thinking. In his historic speech at the Richard Nixon Library in July 2020, former Secretary of State Mike Pompeo aptly described the situation and how we got here: “Our policies—and those of other free nations—resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it.” As President Richard Nixon admitted in his later years, his initiative to open up China in 1972 might have created a Frankenstein.
- Topic:
- Foreign Policy, Communism, Economics, and Chinese Communist Party (CCP)
- Political Geography:
- China, Asia, and United States of America
99. Building a Strong and Independent Iraq: Policy Guidance for the Biden Administration
- Author:
- Abram N. Shulsky
- Publication Date:
- 01-2021
- Content Type:
- Policy Brief
- Institution:
- Hudson Institute
- Abstract:
- Formulating US policy toward Iraq can be a fraught matter, given all the debate and disagreement concerning the actions that brought us to the current situation. However, our policy must be formulated in light of it, regardless of views about our past actions. Policy formulation should begin with the realization that Iran has gained a predominant political and military influence in Iraq. Despite efforts of past PM Adel Abdul Mahdi and current PM Mustafa al-Kadhimi, many of the militias comprising the Popular Mobilization Forces (PMF) still answer to Iran, not the Iraqi government. Iran exerts widespread influence throughout the political class. Economically, Iraq remains dependent on Iran for energy;1 religious tourism from Iran to the holy sites in Karbala and Najaf is an important source of revenue; and Iran has flooded markets with cheap food and consumer goods. Although Iraqi oil production has rebounded, the economy remains relatively moribund and the level of basic public services is poor. (That Iraq flares off its natural gas at the same time it is importing it from Iran to produce electricity2 highlights the economic disfunction.) Popular discontent boiled over in 2019, leading to widespread protests. The protests took on an anti-Iranian aspect, and Iran-aligned PMF units attacked the protestors.
- Topic:
- Security, Foreign Policy, Agriculture, Economics, Government, Politics, and Military Affairs
- Political Geography:
- Iraq, Middle East, and United States of America
100. The Proliferation Of Informal Housing In Major Cities In Cameroon: Evidence, Drivers And The Way Forward
- Author:
- Dr. Louis-Marie Kakdeu and Egoh Aziz
- Publication Date:
- 01-2021
- Content Type:
- Policy Brief
- Institution:
- The Nkafu Policy Institute
- Abstract:
- The proliferation of informal settlements in Cameroon is problematic. A range of factors explain why this is becoming recurrent. Some of these factors include a deficit of housing supply, unaffordability issues, critical market factors, weak legal and institutional systems, and the socio-economic conditions of the country. This article focuses on the roots of Cameroon’s informal housing crisis. Reviewing the literature on the topic, we provide the context of the problem in Cameroon by pointing out some evidence and magnitude of the issue and probe into some historical facts on housing. We then explore some of the negative conduits to the housing problem and propose key recommendations to the government that can help improve the situation. We used the content analysis method in collecting data.
- Topic:
- Economics, Governance, Regulation, Housing, and Real Estate
- Political Geography:
- Cameroon