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Lebanon’s New Power Duo: A turning point in Lebanese Politics

written by Tracy Tawil

Introduction

Optimism is in the air for Lebanon in 2025. After years of political paralysis, the country has finally elected a president and a prime minister. The parliament elected Joseph Aoun as President and the latter appointed Nawaf Salam as the country’s Prime Minister. This marks a significant turning point in Lebanon’s recent history. According to a 2024 poll by the Washington Institute, a significant portion of the Lebanese population has expressed frustration with their government, as well as foreign influence from powers like Iran. The poll revealed that trust in the political establishment is at an all-time low, reflecting deep-seated cynicism shaped by decades of economic and political turmoil. While skepticism lingers among Lebanese citizens who have endured decades of economic and political crises, this new leadership offers a glimmer of hope. This article explores the significance of their leadership, analyzing their potential to steer Lebanon toward recovery.

Lebanon’s Political Crisis

Since the end of former President Michel Aoun’s term in 2022, Lebanon has been mired in political stagnation and economic turmoil. Deep divisions within parliament, exacerbated by Hezbollah’s influence and legislative gridlock, prevented the passage of essential reforms. The country suffered from a collapsed economy, skyrocketing inflation, and widespread emigration of its youth. The failure to elect a president for over two years highlighted the dysfunction of Lebanon’s sectarian political system, leaving citizens disillusioned with traditional leadership.

The New Leadership

President Joseph Aoun

Joseph Aoun, Lebanon’s former army chief and newly elected president, has gained widespread respect for his neutrality and disciplined leadership. During the October 17 revolution, he managed national crises with restraint, avoiding the excessive use of force against protesters and maintaining the army’s reputation as a stabilizing force. His ability to rise above sectarian politics and focus on national unity makes him a rare figure in Lebanese politics. During his inaugural address, Aoun pledged that the state would monopolize arms, restructure the judicial system, combat corruption, ensure the rule of law, and set Lebanon on a path of prosperity and growth. 

Prime Minister Nawaf Salam

Nawaf Salam, a distinguished diplomat and former president of the International Court of Justice, brings a reformist vision to Lebanon’s government. With strong ties to the Lebanese diaspora and the international community, Salam’s leadership is expected to open doors to diplomatic and financial support. His background in international law and governance positions him as a capable leader in navigating Lebanon through economic and institutional reforms. Moving forward, Salam highlighted that limiting youth emigration is one of his main priorities. The prime minister promised the Lebanese youth that he will put forth reforms that will allow them to trust Lebanese democratic institutions again, offering them a more stable country in which they can thrive– and hopefully reclaim. 

Why They’re a “Power Duo”

Joseph Aoun and Nawaf Salam bring complementary strengths to Lebanon’s leadership. Aoun’s military background ensures security and stability, while Salam’s legal and diplomatic experience can help restore Lebanon’s credibility on the global stage. Their shared commitment to fighting corruption, strengthening institutions, and addressing economic challenges provides a rare opportunity for Lebanon to break free from its cycle of dysfunction. At a time when Lebanon faces mounting threats, including the Israeli bombardment of South Lebanon, their leadership comes at a critical juncture. Moreover, upon his appointment, Nawaf Salam emphasized that he would work on strengthening the presence of the Lebanese army across all Lebanese territories and implement UN Resolution 1701, which calls for the retreat of Hezbollah from Lebanon’s Southern territory which borders Israel. In light of recent developments in the region, the prime minister and the president share similar positions regarding Lebanese sovereignty and peace in Lebanon as president Aoun called upon Israel to end its occupation in Southern Lebanon by the February 18 deadline. By prioritizing national unity and governance reforms, they have the potential to set Lebanon on a path toward sustainable recovery.

Regional and International Implications

The election of Aoun and Salam could reshape Lebanon’s relationships with key global players such as the U.S., France, Saudi Arabia, and Iran. Their leadership might lead to a reduction in Hezbollah’s influence, as Aoun’s presidency could limit its unchecked power within state institutions while maintaining national stability. Additionally, both leaders possess the credibility needed to secure stronger international support, attracting foreign aid and investments from the IMF, World Bank, and regional allies. One of the most significant indicators of renewed international interest in Lebanon came with French President Emmanuel Macron’s visit. Macron, who has long advocated for Lebanon’s recovery, reaffirmed France’s commitment to supporting reforms and economic restructuring. His visit was seen as a vote of confidence in the new leadership, signaling that international allies are willing to assist Lebanon in exchange for tangible political and economic reforms. Furthermore, Salam’s expertise in international law positions him to improve Lebanon’s diplomatic relations, enabling the country to mend strained ties and negotiate critical trade and energy agreements necessary for economic recovery.

Challenges Ahead

Despite their strengths, Aoun and Salam face formidable obstacles. Lebanon’s deeply entrenched sectarian political system is designed to resist change. Economic reforms, essential for securing international aid, require cooperation from a divided parliament. Sectarian divisions continue to hinder political unity, as traditional power-sharing structures make reform difficult. Additionally, managing Hezbollah’s influence while balancing regional and international pressures will be a critical test of their leadership. The country’s economic collapse, marked by hyperinflation, high unemployment, and mounting public debt, necessitates a comprehensive financial recovery plan to stabilize the nation. Public trust in the government has been severely eroded due to decades of corruption and mismanagement. To restore confidence, transparency and tangible progress in governance and economic policies will be essential. 

Conclusion

The election of Joseph Aoun and Nawaf Salam represents more than just a political transition—it is a beacon of hope for Lebanon and its people. While challenges remain, their leadership offers the country its best chance in years to move toward stability and prosperity. For Lebanon to truly recover, its citizens, regional partners, and the international community must rally behind this leadership duo. If Aoun and Salam can push forward bold reforms with the necessary political will, 2025 could mark the beginning of Lebanon’s long-awaited transformation.

Image Source: Middle East Monitor

February 21, 2025 0 comment
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FeaturedGlobalization

Universalism and International Deadlock

written by Seamus Kim

Global Deadlock 

At the Munich Security Conference on February 16th, UN Secretary-General António Guterres delivered a dire assessment of the current state of global affairs. Despite existential challenges in urgent need of serious diplomacy and concerted efforts, “the global community is more fragmented and divided than at any time during the past 75 years.” Addressing the conflict in Gaza, Guterres warned that unprecedented deadlock in the Security Council is setting the stage for an “unpredictable free-for-all with total impunity.” He offers a solution that, although largely correct, seems trivially obvious. In working for a ‘New Agenda for Peace’, the international community should seek a global order that is effective, comprehensive, and “works for everyone”. 

The Secretary-General is right to paint the global predicament in bleak terms. Over the last decade, the international order has been besieged by alarming rates of democratic backsliding,  continuous declines in the Global Peace Index, increasing risks of great power wars, and impending threats of climate catastrophe. These conditions, coupled with various geopolitical flare ups and enduring humanitarian crises, have engendered widespread fear and skepticism. More recently, international turbulence has been pushed to the brink by the Russia-Ukraine war in 2022 and Israel-Hamas war in 2023. However, whereas disagreements that arrest the international community are often matters of geopolitical interest and diplomatic procedure—say, over territorial disputes in the South China Sea—disunity is increasingly cutting deeper. Divisions in the Security Council and the controversial ruling against Israel in January by the International Court of Justice, for instance, highlight fundamental ethical disagreements in the international community. The described deadlock arresting the international order is not about disagreements over how to achieve peace given shared ethical principles. It is about the ethical principles themselves—when violence is justified, the innate value of human life, the right to self-determination, and so on. 

It is not clear, then, how a global order that “works for everyone” is possible when there are incommensurable principles that govern the US and China, Ukraine and Russia, Israel and Hamas, among other actors. On the contrary, a global framework for peace must ardently commit to a set of fundamental ethical principles grounded in ethical universalism, which apply fairly to everyone but that will not ‘work for everyone’. Principles of ethical universalism are already present in the UN’s Charter and the numerous multilateral treaties ratified in its history. Although insufficient for fostering unity in creating a roadmap to peace, returning to and defending these values that extend universally is a critical prerequisite. Absent insisting on universalist principles, international deadlock is inevitable. 

Universal Ethics 

Although there are various theories of universal ethics—commonly, utilitarianism and Kantian deontology—their fundamental claims share a basic form. That is, there are certain ethical axioms, like the innate value of human life, and rules, that one ought to maximize human life and minimize suffering, that extend universally. They apply in all instances, regardless of the inclinations or desires of individuals (or states). In the words of English philosopher Bertrand Russell:

It is, indeed, so evident that it is better to secure a greater good for A than a lesser good for B … [I]f A happens to be someone else, and B to be myself, that cannot affect the question, since it is irrelevant to the general maxim who A and B may be.

It is because of this basic neutrality, both in its principles and application, that ethical universalism is the best candidate for a shared framework. Ethical universalism, unbound by the subjectivity of personal ideology or religion, sets the terms of deliberation over just and unjust actions on logic and empiricism. Under utilitarianism, if the actions of a state are empirically found to jeopardize more lives than they save, then the actions are resolutely unjust, regardless of convictions of vengeance or divine right. Under deontology, a state may be found to violate ethical conduct if they resort to excessively cruel weapons—say, anti-personnel landmines as banned under the UN Convention on Certain Conventional Weapons—regardless of the expected convenience or strategic benefit. In any case, the ethical maxims come prior, and deliberation is constrained only to whether an actor has violated them. 

The notion of values that extend beyond oneself is not an invention of the Enlightenment. But it is this 17th and 18th century philosophical tradition that distinctly shaped contemporary universal ethics as a fundamentally secular and rational matter. Enlightenment universal values laid the ethical foundations for the UN Charter (1945) and the subsequent Universal Declaration of Human Rights (UDHR) (1948). In fact, the very concept of a ‘League of Nations’, governed by international law, is indebted to Enlightenment philosopher Immanuel Kant’s 1795 essay on Perpetual Peace, which establishes universal moral law as the basic condition for peace amongst nations. The commitment to ethical universality is made expressly clear from the first sentence of the UDHR, asserting the “inherent dignity and of the equal and inalienable rights of all members of the human family.” Such fundamental, inalienable rights are familiar: life, liberty, and security. From these universal ethical axioms, universal rules logically follow, like the rule against “arbitrary arrest, detention or exile.” Correctly, the UDHR recognizes that the acceptance of such universal principles is necessary to provide a “foundation of freedom, justice and peace in the world.” 

Universalism Under Threat

Acceptance of principles grounded in universality is, by no means, universal. We find that within today’s prominent conflicts and debates over them, opposing parties assume ethical justifications that are either un-universal or blatantly anti-universal. In order to ‘denazify’ Ukraine, Russian President Putin has authorized fighting to the “last Ukrainian” in the face of resistance. Inversely, Ukrainian President Zelenskyy has framed Ukrainian resistance as a fight against the evil of Russian state-terrorism, analogizing it to Hamas.

In these cases, among countless others, self-stated ethical imperatives supersede commitments to the universal right to life and security. Without a mutual imperative to protect life— regardless of where or on whose side that life is—enduring resolution beyond expedient, short-term settlement is impossible. If both sides systematically privilege the value of one population over another, the convergence of ethical conclusion is a logical impossibility. 

The Case Against Universalism

Given such ethical deadlocks, with no clear reconciliation of ethical ideology, we may be tempted into denying universal values altogether. To that end, both China and Russia have embraced models that functionally amount to moral anti-universality, despite thin appeals to the universal values outlined in the UN Charter that they helped found. Chinese President Xi proclaimed that, “We advocate the common values of humanity”, but also, simultaneously, “Countries need to keep an open mind in appreciating the perceptions of values by different civilizations, and refrain from imposing their own values or models on others and from stoking ideological confrontation.” Setting aside the remarkable convenience of Xi’s position given repeated UN condemnations of human rights abuses, advocating common values while allowing states to adopt their own presents a puzzling contradiction. How would this model arbitrate cases where a country’s values are at odds with common values? Either all ethical values are authorized or there are some universally right and some universally wrong. It cannot be both. 

In a 2022 presidential decree, President Putin established a similarly contradictory model, although in regard to its own values: “Traditional values include life, dignity, human rights and freedoms, patriotism, civic consciousness, service to the Fatherland and responsibility for its destiny, high moral ideals … as well as the unity of Russia’s peoples.” Over its course, this pronouncement increasingly slips into nationalistic anti-universalism. The nature of universal human dignity and the universal imperative to protect life logically require priority over patriotism and service to the state. One’s obligation to the state may constitute noble character, but it is not an ethical given, since it cannot be universal by nature. Fortunately, this ambiguity over Putin’s ethical vision is quickly dispelled by the mentioned merciless rhetoric about Ukraine. 

While the ethical models offered by China and Russia are logically suspect at best, this does not mean that the purported universalism of the UN and, more often than not, Western states is immune to criticism. The West has a long record of colonialism, gratuitous warfare, and human rights abuses across the globe. And it has often carried out such morally reprehensible actions, often motivated by economic and geopolitical interest, in the name of universal values. China correctly offers its relativist model of ethics against this backdrop of rampant hypocrisy and self-righteous claim to universality in the West, especially the US. In response to a US veto at the UN Security Council over a proposed Gaza ceasefire, Chinese Ambassador to UN Zhang Jun claimed that “It is extremely hypocritical to tolerate the continuation of the conflict while paying lip service to the protection of human rights and the protection of women and children.” 

Arguments that denounce the double standards of the UN and the West are often legitimate and of moral imperative. However, they do nothing to disprove the necessity of universality. On the contrary, claims that problematize Western hypocrisy and paternalism in its application of universal values—whether from states, well-intentioned activists, or the foreign policy intelligentsia—implicitly rest upon universal values. The West is unjust only insofar as it abuses and fails to uphold universal human dignity and the universal value of human life. If we were not to hold certain ethical truths as self-evident and universal, then there would be no secure grounds to level ethical criticisms of maliciousness and hypocrisy against the UN or the West. It could simply be claimed, for instance, that violations of human dignity are simply part of the US’ “perceptions of values” and, therefore, it would be wrong to impose on the US values to the contrary. The defining feature of universal ethics is that its truths bear no relations to those that advocate it—it applies to the US just the same as it does China. 

It is no coincidence, then, that even in advancing anti-universalist ethical models, Chinese and Russian state ideology still deems it necessary to appeal to universal values. It is impossible to have a rational ethical system that is not universal in nature. Even Xi’s injunction to not paternalistically impose one’s values on another implies universality—in no instance is it justified to impose one’s values on another. This is then an ethical imposition in itself and runs into contradiction. If we are to have ethical principles at all—whether between individuals or between states—they must presume universalism. The task is to determine which principles are of logical necessity and self-evident. 

Toward a Shared Horizon

In face of historical grievances and inclinations toward vengeance, or of divine right, or of genuine interest in prioritizing one’s citizens, states must be strictly held accountable to a universalist ethical framework from below—policy advocacy organizations, activists, constituents, etc.—and above—international institutions. National interest, culture, religion, and other ideological idiosyncrasies are, of course, of value. Humanity’s diversity is undoubtedly part of what makes it worth defending against existential threats in the first place. However, such idiosyncrasies are inappropriate and dangerous starting points for diplomacy. Against trivialization, distortion, and abuse—both on the international stage and within policy discussions—we should center ethical principles that are ruthlessly universal. As shown, this is not necessarily a political point as much as it is logical, which everyone is presumably interested in being. Ethics must have a universal quality to make sense, otherwise ethical pronouncements collapse into a matter of statements of preference.

To return to the ‘New Agenda for Peace’, Secretary-General Guterres should not be afraid to unequivocally insist on universalism against the weaker pluralist framework he seems to imply. Accommodating actors who implicitly advocate parochial ethics, like China, or those that espouse universalism while continually violating it, like the US, within a pluralist framework may seem like a pragmatic necessity. Even so, the benefits of inclusion will inevitably be nullified by deadlock—as we face now—which in turn risks international catastrophe. Fortunately, insisting on universalism would itself naturally address some pragmatic concerns about follow-on and enforcement. Firstly, a strong commitment to universal ethics, if applied faithfully, would bolster the UN’s global legitimacy and authority, which has suffered from perceptions of moral vacuity. Secondly, it would compel actors to follow-on since, if they were to reject a clear and neutral commitment to universal values, then they would, in effect, reveal their own moral vacuity and delegitimize themselves. 

Unequivocally advocating universalism at the center of a ‘New Agenda for Peace’ would not be unprecedented. Universalist principles already form the basis of the UN Charter, agreed upon in the wake of World War Two to safeguard against existential catastrophe born of idiosyncratic ideology. Mutual commitment to the universal principles in the Charter and the subsequent international laws they inspired, however flawed, proved critical in helping stave off global conflagration during the Cold War. Such belief will again prove necessary in resolving the current deadlock that threatens international catastrophe and sustains widespread human suffering. If there is to be perpetual peace, as Kant once imagined, it is clear that it must begin with universalism.

—

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March 13, 2024 0 comment
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DemocracyDonald TrumpElectionsFeaturedFreedom of SpeechGlobalizationUnited StatesWhite Nationalism

The Rhetoric of Donald Trump and Global Democratic Backsliding

written by Dylan Tzung

With the Republican frontrunner Donald Trump poised to receive another 19 months of substantial media attention ahead of the 2024 US presidential election, it is crucial for American media outlets to reconcile with the role sensationalized media coverage of his 2016 and 2020 presidential campaigns played in the global proliferation of right-wing authoritarian populism. 

Throughout the 2016 presidential election, Trump’s term in office, and the 2020 campaign, American journalists, lured by the financial gains of Trump’s divisive rhetoric, continually failed to uphold their responsibility to provide balanced political coverage.  

Coverage of his 2016 campaign, in particular, revealed the media’s financially-motivated affinity for sensationalism and the powerful allure of the increased readership associated with Trump’s inflammatory rhetoric and character. The press is expected to justify differing levels of candidate coverage using specific criteria for candidate viability: fundraising levels, endorsements, and polling results. However, even though Trump maintained shortfalls across all three criteria, he received 63% of the media coverage throughout the primaries and 15% more coverage than Clinton during the general election. And, data collected by mediaQuant shows that Trump received more free media coverage than Clinton, Sanders and Cruz combined, the equivalent of $5.6 billion dollars in paid advertising. 

Skewed media coverage of Donald Trump has, in this sense, made American journalists complicit in the global increase in democratic backsliding, continually providing a platform through which Trump’s rhetoric has legitimized violent extremism, radicalization and charged narratives surrounding race, nationalism and nativism.  

Throughout the Trump era, the U.S. experienced a dramatic shift toward autocratization. According to data from the Varieties of Democracy (V-Dem) research project, a global social science data collection effort which aims to examine the successes and failures of global democracies, the U.S.’s Liberal Democratic Index score decreased from 0.85 to 0.72 and the country’s ranking among the world’s liberal democracies dropped from 17th to 29th during Trump’s term in office. 

Similar trends were experienced globally as 2017 represented a period of democratic crisis during which foundational principles including minority rights, freedom of the press, and free and fair elections, deteriorated. According to V-Dem’s 2018 Democracy Report, the number of countries experiencing democratic backsliding equaled the number of countries making democratic progress for the first time in 40 years, signaling an increase in the momentum of global autocratization. The report also found that the factors which make elections meaningful–freedom of expression and media autonomy–were similarly at risk. 

And, although it would be unfair to hold Trump solely accountable for this global democratic recession, a trend which has been ongoing since 2006, his inflammatory rhetoric and actions played an undeniable role in emboldening global authoritarian leaders and augmenting the political acceptability of right-wing demagoguery tactics. 

Parallel to the rise of Donald Trump in the United States, populist authoritarian leaders have experienced success in other democracies across the world including Brazil, India and the Philippines. 

Jair Bolsonaro of Brazil, for example, nicknamed the “Tropical Trump,” found electoral success in 2018 with a platform that borrowed heavily from Trump. The first right-wing Brazilian President, Bolsonaro openly admitted his admiration for Trump and has even adopted his persona at times, making use of similarly inflammatory homophobic, misogynistic and racist comments. Notably, the intense anger of his campaign rhetoric and platform played perfectly with the Brazilian people’s frustration with the ongoing economic crisis and corruption scandals, mirroring Trump’s ability to tap into the economic anger of white working-class voters. 

Furthermore, the American media’s obsession with the former president, combined with Trump’s embrace of autocratic leaders from Saudi Arabia, Egypt, and Russia has created a global environment in which totalitarian regimes are more digestible, emboldening repressive behavior and loosening the constraints on authoritarian leadership. Particularly, in Egypt’s case, Trump’s admiration for President Abdel Fattah el-Sisi’s leadership style appears to have opened the way for Sisi to crack down on freedom of the press. Employing Trump’s ‘fake news’ rhetoric, in 2018, the country passed a restrictive law thinly veiled as a crackdown on the spread of misinformation. 

Before 2018, Egypt had already been using ‘fake news’ charges to prosecute and charge journalists. But, with the new law, their Supreme Council now has the power to suspend websites, fine editors, and require licenses for websites. And, many other countries including Belarus, Kazakhstan, Malaysia, Russia, and Singapore have also been inspired by Trump’s ‘fake news’ rhetoric and are similarly using the spread of misinformation as an excuse to clamp down on journalists.

Additionally, the success of Trumpism in America has also inspired an increased use of right-wing demagoguery tactics globally. Across Europe, for example, right-wing populist parties and candidates, willing to capitalize on a growing sense of disillusionment with economic inequality as well as heightened fears of immigration, experienced significant electoral success throughout the two years immediately following Trump’s 2016 victory. The Alternative for Germany, a right-wing, anti-euro and anti-immigration party, won 12.6% of the vote in September of 2017, allowing them to enter the Bundestag for the first time. French far-right candidate Marine Le Pen won 34% of the vote share in the May 2017 presidential election and the far-right party in Sweden became the third largest bloc in their parliament in 2018. 

And, beyond figures like Bolsonaro, who openly avow adoption of Trump’s tactics, many other right-wing politicians have more subtly borrowed from Trump, refraining from vocalizing any direct support, but still making strategic use of his demagoguery tactics. 

In a study commissioned by the Guardian, for example, Team Populism analyzed the speeches of 138 world leaders and found Theresa May’s rhetoric, British Prime Minister from 2016-2019, to be as populist-leaning as that of Trump, Bolsonaro, and Orbán. In speeches given throughout 2016 and 2017, May, a champion of Brexit, played upon the British working-classes’ disdain for “people in positions of power,” emphasizing the validity of working-class patriotism, as well as their concerns about immigration, crime, and job security. May’s choice to frame her populist discourse around the idea that the liberal elites are ignoring the needs of the common people and continue to betray them by supporting immigration distinctly calls back to the nativist and nationalist discourses that Trump leaned so heavily upon. 

Additionally, in 2017, former President of Argentina Mauricio Macri, similarly reproduced Trump’s “America First” rhetoric, making reference to the “criminals” coming to Argentina “to commit offenses” and the need to prioritize Argentines above all others. And, shortly after a string of immigration restrictions from the Trump administration, Macri, an immigrant himself, announced measures allowing the government to more easily restrict the entry and initiate the deportation of immigrants.

However, as Trump prepares for another presidential run and the global democratic recession continues, it is unclear whether the American media has learned from their mistakes. Media coverage of the January 6 insurrection, as well as CNN’s May 11 town hall paint an unpromising picture.  

For some experts, Biden’s 2020 victory signaled the beginning of the end of the global popularity of right-wing autocrats. However, American journalists failed to refocus their coverage after the Jan. 6 insurrection, continuing to put Trump in the spotlight. A study conducted by Pew Research Center, which analyzed coverage of Biden’s first 60 days in office across 25 news outlets, found that Trump was mentioned in roughly half of the stories that should’ve been focused on the early work of the Biden administration. And, even as the Biden administration continued to progress through their early days in office, rather than shifting focus to coverage of Biden’s policy goals, reporters remained fixated on Trump. 

Furthermore, the May 11 CNN town hall highlighted the ongoing challenges faced by American media outlets in balancing their desire to provide coverage of the former president without giving him free reign to espouse dangerous far-right extremist beliefs. The event essentially turned into a campaign rally for the former president with the audience cheering on his most instigative statements and laughing along as he ridiculed E. Jean Carroll. And, with the backing of a friendly audience, Trump quickly realized that he could say and do whatever he wanted and pounced on every opportunity to steamroll the moderator, Kaitlan Collins. 

Facing heavy criticism from the public, CNN defended the town hall as an attempt to allow Trump to speak to a more mainstream audience, removed from the far-right extremist bubble he typically operates in. However, the event has simultaneously been characterized as a calculated effort by CNN leadership to lure back some of the viewership lost to Fox News over the course of Trump’s GOP dominance. 

Therefore, as the 2024 presidential primary bids roll in and Trump once again launches on the campaign trail, it seems likely that his ongoing indictments, criminal investigations, and civil trials may lure the media into a repeat of 2016. However, this skewed coverage has tangible impacts not just for American politics, but for the global stage as well, a reality that should encourage American journalists to re-evaluate their pitching instincts, newsroom practices and the necessity of striking an appropriate balance between financial incentives and responsible political coverage. 

July 22, 2023 0 comment
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EconomicsFeaturedGlobalizationHistoryPrint ArticleThe International EconomyUnited States

How Recessions Affect Developing Economies: Lessons from the Great Recession

written by Ben Chlarson

The world economy is in turmoil and developing countries are likely to bear the brunt of the turbulence. An unexpectedly strong recovery from the pandemic recession of 2020 has resulted in inflationary surges and supply chain bottlenecks across the economy, especially in the food, fertilizer, and energy sectors. The cascading crises of the COVID pandemic, coupled with the war in Ukraine, have resulted in supply chain issues and other supply-side shocks. Efforts to combat inflation with rising interest rates and fiscal tightening in advanced economies have induced a slowdown in economic growth and stoked fears of an impending global recession and international debt crisis. All regions are affected by the slowdown, but it is especially of concern for developing countries where the average growth rate is forecasted to drop below 3%, insufficient for sustainable development and further binding them financially.(1) 

The United Nations Conference on Trade and Development expects the world economy to have grown 2.5% in 2022, and forecasts that growth will fall to 2.2% in 2023.(2) This would result in a cumulative global shortfall of more than $17 trillion, just shy of 20% of the world’s income.(3) With 60% of low-income countries and 30% of emerging market economies in or near debt distress, the risk of a global debt crisis is at its highest level in recent years.(4) David Malpass, the president of the World Bank warns that with global growth slowing sharply, more countries are likely to fall into a recession, creating long-lasting consequences that are devastating for people in emerging markets and developing economies.(5) As signs point to a global recession in 2023 and business and political leaders issue warnings for the financial gloom ahead, we can understand the potential impact of a global recession on developing economies by examining the data from the fallout of the Great Recession of the late 2000s. In doing so, the global economy may also be better able to understand how to mitigate or even avoid the devastation in 2023.

The inflationary surges caused by the recovery from the pandemic caused prices to rise across the globe, but its impact on the United States has an outsized role due to the dollar’s importance in the international economy. In March of 2022, United States consumer prices 8.5% higher compared to a year prior.(6) The risks of inflation are best illustrated by the global recession of 1982 when high inflation and weak growth triggered debt crises in more than 40 countries and was followed by a decade of lost growth for developing economies. Even as growth slows, persistent inflation–particularly in areas of the economy such as energy, food, fertilizer, and commodities–has spurred policymakers to prioritize the battle against inflation rather than implementing policies to encourage growth. 

To combat rising prices in the United States, the Federal Reserve has rapidly raised interest rates. In 2022, US interest rates went from 0% to 4% at the fastest rate since the late 1980s.(7) Interest rate hikes in the United States can have catastrophic effects on developing economies. As US interest rates rise, the dollar appreciates in value. This is bad news for countries that have outstanding debts held in US dollars, as their debt suddenly becomes more expensive. Rising interest rates also result in a decrease in money supply, thereby contracting lending and credit markets. Furthermore, commodities that are commonly priced in US dollars such as oil, gold, and cotton, among others, also become more expensive as interest rates are raised and the dollar appreciates. All of these byproducts of interest rate hikes will be potentially catastrophic for developing economies and emerging markets if the United States and other advanced economies continue on their current fiscal and monetary policy trajectories. According to UNCTAD projections, these interest rate hikes in the United States are set to cut an estimated $360 billion of future income for developing countries.(8) 

Of particular concern for US policymakers and the international economy as a whole is the emerging debt crisis. Over half of all low-income countries are experiencing debt distress. Countries that were already facing debt distress prior to the pandemic such as Sri Lanka – which has already experienced domestic tumult as a result of economic strife – are especially being devastated by the global slowdown. More debt is held in US dollars than any other currency, and US dollar-denominated debts have been increasing steadily over recent years. When the US hikes interest rates – as they are currently doing – and the dollar appreciates, the foreign exchange rates between the dollar and other currencies widen, meaning these debts become more difficult to pay off, increasing the risk of defaults by foreign governments. 90 developing countries have already seen their currency weaken against the dollar, with more than 30 experiencing depreciation of over 10%. Developing countries have already spent $379 billion thus far in efforts to combat weakening currencies.(9) Even middle-income countries such as Turkey, Brazil, and South Africa, all of whom perpetually run trade deficits and have to finance their debts in US dollars, will see their economies suffer greatly as a result of the appreciating dollar. 

In addition to making debt more expensive for developing countries, a rise in US interest rates also reduces the supply of US dollars in circulation, causing credit and lending markets to contract. As interest rates increase, the cost of borrowing money becomes more expensive, and the cost of capital increases correspondingly. Expensive capital results in reduced investment in manufacturing and production and reduced consumption. This impact will be the most profound in Asian economies which have a heavy reliance on foreign capital. China, which has already been experiencing financial disruption in its economy, will likely experience even more turbulence. Furthermore, commodities that are commonly priced in dollars, such as oil, gold, and cotton, among others, will also become more expensive as the dollar appreciates. Developing economies that rely heavily on these natural resources and commodities will be adversely affected. 

Food and energy prices have risen over the past two years, but have seen their price increases accelerate due to a stronger dollar and the war in Ukraine, significantly disrupting the oil, food, and fertilizer markets. Large multinational corporations (MNCs) — having substantial market power — have also contributed to these price increases by unduly raising prices to boost profits. This is particularly challenging for farmers as the cost of fertilizer, their main input for production, has shot up. While commodity-exporting countries such as oil-producing Nigeria and soybean-producing Brazil will see those industries rake in increased windfall profits, their consumers will still be hurt by the upward pressures in other aspects of the economy. Meanwhile, countries that rely heavily on importing these commodities, particularly oil imports – such as Sri Lanka, Tunisia, Turkey, and Mozambique – are especially vulnerable to any further shocks in the commodity market. 

These are all typical consequences of a recession. Due to the United States hegemony in the global economy, shocks in the US economy have ripple effects across economies all over the world. These ripples may turn to tsunamis as countries already on the brink of disaster are suddenly pushed over the edge. This is apparent when examining the causes and outcomes of the Great Recession during the late 2000s. During the Great Recession, countries with vulnerable economies preceding the economic dip fared much worse. Countries rated to have high economic vulnerabilities as rated by the IMF’s vulnerability report entered into recession earlier and exited recession later.(10) This means that the 60% of low-income countries that are suffering from debt distress currently are all at risk of severe contractions. Additionally, during the Great Recession, real GDP growth in emerging and developing economies fell from 8.3% in 2007, to 6.1% in 2008, and to just 2.9% in 2009.(11) The cumulative nominal GDP loss for these countries between 2008 and 2010 was around $2.6 trillion.(12) It is believed that 120 million more people are living on less than $2 a day as a result of the Great Recession, highlighting the urgency for world leaders to curtail this downward spiral.(13) 

Countries that relied on exports were significantly exposed to the fallout from the crisis. Exports in 2010 were about 20% lower than originally forecasted in 2007, reflecting over $1 trillion in losses as a result of the recession.(14) Countries that specifically relied on labor exports for remittances also suffered greatly as a result of the global slowdown. Remittances fell 6% after consecutive years of double-digit growth, a $100 billion loss for countries that rely on these cash flows.(15) The notable reduction of income for these countries most significantly impacted by the recession had tremendous consequences for their long-term growth and catastrophic immediate consequences for the people living within their borders. The IMF believes that potential growth has been permanently lowered due to the crisis, with no chance of recovery.(16) This loss in income also meant that ⅔ of countries had to cut their 2010 budget allocations in at least one of the areas of education, health, agriculture, and social protection, hindering development and cutting lifesaving necessities for some of the world’s poorest.(17)

Recessions have tragic consequences for developing countries, and central banks and policymakers across the world should be doing everything possible to avoid one. The only benefit of the Great Recession is that the lessons learned from a “once-in-a-lifetime economic recession” can help to mitigate or avoid another disaster barely a decade later.(18) Advanced economies’ central banks, and particularly the Federal Reserve, should opt for more precise policy tools rather than relying on wieldy measures such as ever-increasing rate hikes. Policymakers should prioritize policies to increase labor-force participation and international cooperation to alleviate supply chain bottlenecks. Regulations to reduce commodity speculation would prevent volatility and price-gouging for necessities such as food products and fertilizers. UNCTAD has also implored for greater multilateral assistance to reduce vulnerability before a possible recession. Fiscal stimulus from organizations such as the IMF helped to mitigate the effect of the crisis in the short term and prevented much worse outcomes for poverty.(19) Vulnerable countries should cooperate through multilateral institutions to increase their foreign currency reserves as this was shown to help dampen the effects of the financial crisis.(20) Moreover, it would be extremely beneficial for the health of the global market if multilateral organizations developed a comprehensive framework for debt restructuring in order to reduce fiscal pressure on developing countries. A globally coordinated response during the Great Recession was very effective in helping to mitigate the effects and provide large amounts of financing quickly to the countries that direly need it. Readiness for any scenario is of the utmost importance. As warnings about the global economy reach cacophonous levels, developing countries need to heed these warnings and take proactive measures to protect their economies. Their long-term growth and the fates of billions of people rely on the ability of policymakers across the country to coordinate their policies and cooperate to prevent economic disaster. Fortunately, there already seem to be signs of improvement in preparation for a potential recession. Many developing countries have increased their foreign currency reserves, increasing their ability to pay back debts in the event of a crisis. Robin Brooks, the chief economist of the Institute of International Finance notes that though there is still vulnerability, many emerging market economies are positioned much better financially than they were leading up to the Great Recession and that the international framework for dealing with these events has been strengthened as a result of the upheaval from a decade prior.(21) So while the outlook for the international economy looks grim, there is still a chance to avoid catastrophe, and at the least, to prevent the crisis from reaching the magnitude of the Great Recession.

Endnotes:

  1. UNCTAD. “UNCTAD warns of policy-induced global recession.” October 3, 2022. Accessed January 14, 2023, https://unctad.org/news/unctad-warns-policy-induced-global-recession  
  2. Ibid
  3. Ibid
  4. UNCTAD. “Trade and Development Report 2022.” Accessed December 29, 2022, https://unctad.org/tdr2022 
  5. World Bank. “Risk of Global Recession in 2023 Rises Amid Simultaneous Rate Hikes.” September 15, 2022. Accessed December 27, 2022, https://www.worldbank.org/en/news/press-release/2022/09/15/risk-of-global-recession-in-2023-rises-amid-simultaneous-rate-hikes 
  6. Ibid
  7. Brookings Institution. “Key economic policy developments in 2022 and what to expect in 2023.” December 21, 2022. Accessed December 29, 2022, https://www.brookings.edu/blog/up-front/2022/12/21/key-economic-policy-developments-in-2022-and-what-to-expect-in-2023/ 
  8. UNCTAD. “Trade and Development Report 2022.” Accessed December 29, 2022, https://unctad.org/tdr2022 
  9. UNCTAD. “UNCTAD warns of policy-induced global recession.” October 3, 2022. Accessed January 14, 2023, https://unctad.org/news/unctad-warns-policy-induced-global-recession 
  10. IMF. “IMF-FSB Early Warning Exercise – Design and Methodological Toolkit.” September 1, 2010. Accessed December 29, 2022, https://www.imf.org/external/np/pp/eng/2010/090110.pdf 
  11. Ricardo Llaudes, Ferhan Salman, and Mali Chivakul. “The Impact of the Great Recession on Emerging Markets.” IMF. October 2010. Accessed January 4, 2023, https://www.imf.org/external/pubs/ft/wp/2010/wp10237.pdf 
  12. Ibid 
  13. Ibid
  14. Ibid
  15. UNCTAD. “UNCTAD warns of policy-induced global recession.” October 3, 2022. Accessed January 14, 2023, https://unctad.org/news/unctad-warns-policy-induced-global-recession
  16. Ibid
  17. Ricardo Llaudes, Ferhan Salman, and Mali Chivakul. “The Impact of the Great Recession on Emerging Markets.” IMF. October 2010. Accessed January 4, 2023, https://www.imf.org/external/pubs/ft/wp/2010/wp10237.pdf 
  18. Buly Cardak and Vance Martin.”Once in a Lifetime? The Effects of the Global Financial Crisis on Household Willingness to Take Financial Risk.” Econ Rec, 95: 442-46. November 16, 2019. Accessed January 7, 2023 https://doi.org/10.1111/1475-4932.12506  
  19. Ricardo Llaudes, Ferhan Salman, and Mali Chivakul. “The Impact of the Great Recession on Emerging Markets.” IMF. October 2010. Accessed January 4, 2023, https://www.imf.org/external/pubs/ft/wp/2010/wp10237.pdf 
  20. Ibid

UNCTAD. “Trade and Development Report 2022.” Accessed December 29, 2022, https://unctad.org/tdr2022

June 4, 2023 0 comment
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AsiaDevelopmentEconomicsFeaturedGlobalizationInternational TradeInternetPrint ArticleTechnology

The Chip Shortage: a Lasting Symptom of COVID-19

written by Seher Alvi

Every day, the average person will come into contact with hundreds of chips. The term “chip”, which refers to the entirety of an integrated circuit contained within a microchip, has become somewhat synonymous in everyday conversation with semiconductors. This is in spite of the fact that semiconductors, which are elements that function in between insulators and conductors, are merely one element of a circuit, used to allow an electrical current to flow in some cases and not in others (1). Common semiconductors such as silicon, germanium, gallium arsenide, and others are used by the majority of manufacturers in building integrated circuits that are later installed in computers, cars, microwaves, and countless other devices. Many have complained that the COVID-19 pandemic has caused a shortage in semiconductors. In reality, the shortage has impacted microchips themselves, due to insufficient supply from manufacturing companies.

With the entire world on lockdown in the beginning of 2020, the transportation industry came to a grinding halt, and automotive manufacturers drastically cut down on their chip orders (2). The demand for chips, however, was simply relocated; as more and more people began to work from home and seek entertainment in quarantine, electronics and digital appliance manufacturers found themselves with an uptick in sales and sought an increased supply of microchips as a result (2). 

It’s important to note, however, that the complexity of chips and the subsequent cost of production can vary greatly depending on what the chip is being manufactured for. As semiconductor producers adjusted their factories according to the market’s appetite for sophisticated processors and electronic semiconductor circuits, their prices rose accordingly. When people began to emerge into the outside world and travel once more, the demand for transportation skyrocketed, and the vehicle market scrambled to create fresh stock for eager waiting customers. However, they found themselves faced with an insurmountable challenge: the chip factories which once churned out low-cost, simplified chips for cars were now focused on a new clientele, and their motors and navigation systems simply could not function without these advanced circuit mechanisms. 

This story of supply and demand racing to keep up with one another is by no means new. It is merely the typical cycle seen in any market. But why, then, has it gained so much visibility? The first answer is surprisingly simple; even though the auto industry only makes up 10% of the overall demand in chips, it’s extremely important to many leading world governments such as the United States’ and the U.K.’s, due to the great deal of domestic revenue it generates (3). As a result, many pieces of active legislation have actually been passed in an attempt to alleviate the circuit shortage. The CHIPS and Science Act of 2022, for example, provided over 50 billion dollars to American research and production of integrated semiconductor secrets, so that U.S. auto and technology manufacturers can source their supplies domestically without the added hassle of international imports (4). The widespread nature of chips in nearly every area of production and industry, be it transportation, electronics, and household goods, has also added to the notoriety of the scarcity issue. A surprising aspect of the chip market and its conspicuousness is its underlying involvement in the U.S.-China conflict. 

Over 50% of microchip manufacturing happens in one firm in Taiwan: the Taiwanese Semiconductor Manufacturing Company, or TSMC (4). This means that this small island is single handedly responsible for nearly a third of the United States’ digital computing power (2). As a result, the American motive behind protecting the nation’s sovereignty extends beyond a Good Samaritan dedication to upholding democracy, and ventures into the territory of capitalist self-interest. Even so, the political nature of public support for Taiwan cannot be ignored, given the salience of the issue. While it’s unlikely that China would destroy the chip plants in an invasion of Taiwan, considering their own reliance on the technology, they would most likely take control of them in order to profit. And considering the rocky nature of Chinese-American trade relations, there’s a high possibility that they may withhold the sale of chips to factories in the United States, forcing them to turn to Korean factories or other manufacturers elsewhere (4). 

At this very moment, the chip shortage appears to be following a cyclical pattern. Experts predict the surge in demand will subside as the pandemic recedes and the travel infatuation dies down, and the competition for semiconductor chips will die down accordingly (5). However, it will be interesting to see how this market, which is now proven to be extremely volatile, will be impacted by future world events, and if it will change further as a result. Perhaps Taiwan will lose their long-held monopoly, or perhaps will evolve to rely on some new innovation. Either way, it is certain that those in the forefront of the manufacturing industry will hold not only a great deal of economic power, but also an incredible amount of sociopolitical influence as well. 

  1. Sean Speer and Chris Miller. “Why are chips so important, anyway? Professor Chris Miller on the fight for the world’s most critical technology.” The Hub, November 24, 2022. Accessed February 17, 2023, https://thehub.ca/2022-11-24/why-are-chips-so-important-anyway-professor-chris-miller-on-the-fight-for-the-worlds-most-critical-technology/. 
  2. Tamera Max. “Understanding the Current Global Semiconductor Shortage, Preparing for the Future.” S&P Global, August 19, 2022. Accessed January 19, 2023, https://www.spglobal.com/engineering/en/research-analysis/understanding-the-current-global-semiconductor-shortage.html.
  3. Samuel K. Moore. “How and Why the Chip Shortage Will End, in 4 Charts.” IEEE, June 29, 2021. Accessed February 3, 2023, https://spectrum.ieee.org/chip-shortage.
  4. David Shepardson and Patricia Zengerle. “U.S. Senate passes bill to boost chip manufacturing, compete with China.” Reuters, July 28, 2022. Accessed January 27, 2023, https://www.reuters.com/business/majority-us-senate-backs-bill-boosting-chipmakers-compete-with-china-2022-07-27/.
  5. J.P. Morgan. “Supply Chain Issues and Autos.” August 11, 2022. Accessed February 3, 2023, https://www.jpmorgan.com/insights/research/supply-chain-chip-shortage. 
June 4, 2023 0 comment
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ChinaEast AsiaFeaturedGlobalizationInternetSecurityTechnologyUnited States

US Threatens Tiktok Ban Amid Increasing Tensions with China

written by Lillian Shen

The Biden administration is considering pressuring Congress to pass legislation that would grant the executive branch the direct authority to regulate TikTok as they see fit. This bipartisan bill is currently being drafted in the Senate. TikTok CEO Shou Zi Chew has testified in front of Congress. This shift comes after a growing push for greater restrictions on the social media platform in recent months. Other proposed bills are seeking to ban the app outright. In November, the FCC Commissioner admitted that he sees limited options going forward that don’t involve a ban. The United States already prohibits downloading TikTok on official devices, and a number of college campuses don’t allow social media platforms on their wifi networks. Now, the White House is considering further action. 

The United States is hardly the first country to consider restricting the social media platform. The EU and Canada have also banned the app from government devices. In 2020, India opted to ban TikTok altogether within its country, affecting the company’s reach in one of the world’s biggest markets. Despite this, TikTok currently has 1.5 billion users. Greater restrictions by Western governments could significantly limit this user base. 

The reason behind targeting TikTok? An issue of national security. TikTok is owned by ByteDance, a Chinese company. Government officials have cited certain Chinese laws that allow its government to demand user data from companies, such as location information about American citizens. There are also concerns about political influence campaigns that TikTok may be enabled to push a more China-friendly narrative within the app. Though the company has repeatedly insisted on its data privacy, governments are skeptical. An incident in December where ByteDance employees accessed TikTok’s data to discover the sources of Western journalists questioning the social media platform’s credibility, has only led to increased suspicion and threats of further action.

TikTok has dismissed these threats as nothing more than “political theater.” In addition to repeated statements promising their users’ data will be safe, the company has also been engaging in negotiations with the Council on Foreign Investment in the US and has submitted a 90-page proposal detailing its plan to protect consumer data. To address concerns about Chinese influence on content, the company uses a localized content moderation system. There are also plans for localized data centers worldwide, subjecting to TikTok to more stringent data safety laws. In a telling sign of their apprehension in light of the Biden administration’s restrictions, company executives have resorted to lobbying in Washington in hopes of favorable legislation, an arduous task given that American opinion on China is at an all-time low.  

The Biden administration must also consider the Chinese government’s response and the deteriorating relations between the two countries in recent years. Issues such as scapegoating over the COVID-19 pandemic and a stalemate over Taiwan have led to a strained relationship and a ban on Tiktok can further inflame tensions. China’s Ministry of Foreign Affairs has denied the idea that TikTok poses a security risk, and the Ministry of Commerce opposes any plan for TikTok to be sold to an American company. Furthermore, Chinese media personalities have accused the United States of Sinophobia as it continues to target TikTok. This government opposition indicates that an outright ban or any other action may further aggravate an already aggressive China. However, some experts doubt China’s commitment to protecting the company. Though measures have been taken to prevent TikTok’s sale to an American company without government approval, an outright ban does not threaten China’s plans. In these uncertain times, China’s response remains unclear. 

Opposition to the TikTok ban also exists domestically. Civil rights groups such as the ACLU are opposing the ban due to its potential violations of First Amendment rights. Fight for the Future, a nonprofit, believes that a singular ban unfairly singles out one app when the overall fight for data privacy should be more important. Some experts have echoed this sentiment, noting that while TikTok does collect user data, it is at a comparable level to American social media apps such as Facebook. The data is also imprecise and no different than the information that other companies sold to third-party companies. Currently, then, there is not enough danger to constitute a national security threat. 

Chew testified in front of Congress for hours, emphasizing TikTok’s commitment to data protection, freedom of speech, and transparency. However, the bipartisan group of lawmakers that questioned him seemed unconvinced, making TikTok’s future in the United States uncertain.  Yet Fight for the Future makes an important point that data privacy in general should be the priority. Perhaps instead of targeting TikTok, there can be better legislation that protects consumers overall.

May 16, 2023 0 comment
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In the Limelight: Threats to Utility Infrastructure Explained through Cape Town, South Africa and Jackson, Mississippi

written by Max Schaked

Telecommunications, electricity, drinking water, waste treatment: utilities are generally viewed as one of the more mundane aspects of modern infrastructure. Even so, they are basic rights that can stunt society when missing. Governments play a large role in these industries, including facility construction, production, and allocation as well as the regulation of private companies and the potential outsourcing of provider responsibilities. Utilities are not the flashiest aspect of bureaucratic work, and politicians typically don’t win or lose elections based on the state of their constituency’s waste treatment. In fact, utilities can be taken for granted, and the mere idea of the lights not turning on or the tap not running seems dystopian. Yet when natural disasters or mismanagement strain infrastructure, or when global prices and production fluctuate, that distant idea can become a reality — and people greatly suffer as a result. 

Currently, two major utility crises are on full display in two very different cities: Cape Town, South Africa and Jackson, Mississippi are struggling to provide electricity to their citizens. With Eskom’s Load Shedding policies in Cape Town, and Jackson’s neglected water sector, and both cities’ secession withdrawal from their existing utility systems foreshadow an unnerving future. 

The South African energy sector has never been well heralded for its efficiency. The nation’s electricity is more than 90% reliant on corporation Eskom, primarily owned by the government of South Africa. In fact, Eskom is so large that it not only generates almost all of its country’s electricity, but 30% of the continent’s. With a consumer-base this large, it’s not surprising that Eskom has spread its workforce thin, leading to complications in handling infrastructure renovations and electricity generation/allocation. As a result, the South African company was so overwhelmed in 2007 that it formulated an entirely new policy for the nation’s energy: “load shedding.” This policy can be explained as a purposeful power outage as a result of the company not having enough electricity to go around. 

Scattered “load shedding” has been a reality for South Africans for years now, but it’s become increasingly worse: blackouts have already amassed over 150 days in 2022 which has amounted to more than ⅓ of the entire year that citizens have been without electricity. Currently, Eskom is undergoing Stage 5 of load shedding, which means power will be cut from South Africans for 8 hours intervals every day. One of the major issues analysts have pointed out is that the corporation is highly reliant on aging coal-fired power plants that are prone to breaking down periodically. This, paired with the rising prices and falling availability of oil, has caused a violent storm for both Eskom and the nation of South Africa. Many banks, restaurants, hotels, and convenience stores that are vital to the livelihoods of South African citizens have been either shut down or conditionally operational, and the crucial agricultural sector of the nation is also in peril. AgriSA, the country’s predominant farming organization, has issued a statement stating that “pumping stations, irrigation, cooling, and other systems all depend on power supply. While some farmers have the means to move away from the power grid, most are unable to do so. This is especially true for the most vulnerable small-scale farmers.” Eskom’s issues will continue to plague the average quality of life for years after the blackouts end. 

Cape Town, which has experienced some of the worst of the blackouts, has taken the initiative to step away from Eskom. Mayor Geordin Hill-Lewis claims that having one centralized electric utility company in South Africa threatens its people when it cannot deliver, so they are pursuing other options. Hill-Lewis, in a statement earlier this year, announced that “The City of Cape Town will now pay cash to small-scale embedded generation (SSEG) customers for the excess energy they produce and sell back to the City.” While in the past, businesses who produced energy were required by law to still be net consumers of the City’s energy (receiving from Eskom), now they will be paid to be net producers, selling the energy they don’t use to Cape Town as a way to alleviate blackouts. Now, the city is working with its corporate allies in order to get the lights back on. 

Cityside water issues aren’t unheard of in the United States. Horror stories could be made from Flint, Michigan’s utility struggles. The present situation in Jackson, Mississippi highlights a continuous and systematic issue concerning American utility allocation. National attention is centered on a current EPA (Environmental Protection Agency) civil rights investigation into the State of Mississippi. Jackson’s water infrastructure has been shoddy for years — line breaks and bacteria exposure in the city have violated safe drinking standards since 2018 and Jackson has been under federal order since 2020 to fix these problems. The severity of the issue came to light in late August when its main water treatment plant failed and 180,000 people immediately had no access to running water. In response, Governor Tate Reeves called for citizens to switch to bottled water, but was slower to address the problem itself, or questions concerning why even though Jackson had been under “boil your water” notice for months before the shutdown, the state did little to nothing to improve or alleviate the situation. Most pipes in the city have been there since the 1950’s, which means they haven’t been upgraded or kept up in over half a century.

The EPA is currently looking into potential racial discrimination of the state government of Mississipi on the city of Jackson. The city is 82% black and is disproportionately black compared to the rest of the state. The national government had set aside millions of dollars in funding to go towards investing in Jackson’s utility infrastructure, but that money went through the state first. Utility funds find the desk of Governor Reeves before Jackson — and as a result of his decision-making, they haven’t made it to the city. Millions of dollars, and none of it is reaching its intended destination. So when Reeves stated in a groundbreaking ceremony at Jones Capital LLC Headquarters that it was “always a great day to not be in Jackson,” many found this statement hypocritical, disparaging, and downright racist. 

The current state of Jackson is one of recovery. A few weeks ago, officials approved $35.6 million in federal money for seven water/sewer infrastructure projects. Reeves still denies any blame at the state level for the conditions of Jackson and has made it clear that he believes the issues rest solely on the actions of local officials. As the investigation persists, the Jackson suburb of Byram has taken matters into their own hands — similar to the actions of Cape Town. They are so distraught and frustrated with the current state of their city’s utilities, they created their own water system. This highlights a larger insight gleaned from the water crisis outside just Jackson’s woes: a rising distrust in the government to provide for the general public and for money to end up where it needs to be. 

The utility dilemmas facing Cape Town, South Africa and Jackson, Mississippi are two sides of the same coin. Eskom’s severe load shedding is a byproduct of too much centralization in a government-owned company meant to provide basic needs and services to an entire citizenry. Jackson’s water crisis resulted from a decentralized system of infrastructure funding and money having to move through the hands of multiple officials before reaching its intended destination. In both instances, it’s the higher levels of government that act as the provider for the people with the city as the client. Having too many intricacies and obstacles along that path, or too little, jeopardizes a utility’s efficiency and long-term effectiveness. This explains both cases resulting in the city removing themselves from the existing system and replacing it with a “do it yourself” approach. 

Perhaps there is a middle ground in utility distribution, one that allows for competition and variety while also streamlining support for those systems. Adopting some balance is going to prove more crucial as environmental conditions worsen and utilities become simultaneously harder to provide. Investigations like the one in Jackson are a key contributor in fighting back against future mishandling and discrimination, but they need to take place before the problems arise. It’s time to be proactive about our utility systems, mundane as they may seem. Running water and power are at the core of daily life — they should be treated as such.

November 17, 2022 0 comment
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AuthoritarianismEconomicsFeaturedGlobalizationInternational TradePopulismPrint ArticleThe International Economy

The Free-Market Democracy Scam

written by Katherine Jones

“The Free-Market Democracy Scam” was originally published in our Fall 2021 Print Edition: Authoritarianism.

Our story starts in 2000, at the close of Bill Clinton’s second term in office. Clinton, a man who has been known to “see the world through rose-colored glasses,” saw a brighter, more democratic future for China.1 At the eleventh hour of his presidency, Clinton advocated the admission of China into the World Trade Organization (WTO), with the sincere belief that an open and free economy would lead to prosperity, and that prosperity would gradually force an increase in civil liberties.2 History has unfolded quite differently, yet Clinton was not wrong to see a connection between free markets and democracy. 

Where he may have miscalculated is the way in which these phenomena relate- perhaps free markets destroy democracy rather than create it. Perhaps Clinton should have expected that the rise of China, the first genuine competitor to U.S. economic supremacy since WWII, would slowly diminish the relative economic power of the United States. The ensuing “race to the bottom” would force the U.S. to introduce economic reforms that would reduce standards of living in order for our economy to remain internationally competitive. Such reforms would have sociopolitical consequences including increasing Americans’ appetites for authoritarianism. When all was said and done, China’s free-market may have reduced Americans’ civil liberties rather than building up their own.

Free markets, Free Men?

Free markets and democracy exist not as compliments, but largely in opposition to each other. At their core, the motives that govern markets and democracy almost always directly contradict one another. Democracy seeks to find the best outcome for the majority, capitalism seeks to satisfy individual self-interest.3 Democracy relies on the principle that we are all equal, capitalism inherently produces inequality.4 Democracy can break down free markets through punitive redistribution and regulation. Free markets break down democratic systems through poverty and inequality. 

Every “free market democracy” relies on the fragile balance between the interests of citizens and corporations, with the pendulum swinging back and forth depending on the era’s prevailing economic theory. In 1950s America, the more “democratic” Keynesian system of regulation and social welfare was popular. This was an era of strong unions and a robust middle class. By the 1970s, economists such a Milton Friedman interpreted the success of the 1950s and 60s to be due to democracy and capitalism reinforcing one another.5 A more “free market” focused ideology came into vogue. This period was characterized by deregulation, financialization, and an increasing frequency and severity of financial crises. Since the 1970s, this trend has only continued to intensify.

In modern-day America, we have levels of inequality that rival the pre-WWI era, stagnating wages, a breakdown in labor unions, and large-scale political discontent.6 However, our domestic economy tells only a fraction of the story. All other Western liberal democracies have, to some extent, suffered a similar fate. Globalization would have deteriorated regulatory and social welfare frameworks even if strong national policies had been maintained.

Globalization’s Caused Much More Than Discontent 

Free-market globalization has contributed to a breakdown in democratic accountability and produced instead governments accountable to, and run by, corporations, banks, and international organizations.

International trade has insidiously contributed to the breakdown of democratic accountability, by forcing countries to undercut the needs and best interest of their own citizens, in favor of more competitive economic policies. Take for example the corporate tax rate: large corporations pay almost zero tax, however countries are often hesitant to raise their tax rate, as businesses may then choose to base themselves in another country with a lower corporate tax rate. This phenomenon   is further applicable to labor rights, environmental protections, and many other components of the “ease of doing business.” Within this framework, there are more extensive rights granted to corporations than to people with respect to free movement and migration, the movement of capital, law enforcement, and more. 

Countries grant these special rights and privileges to not only corporations but often to international organizations and banks as well. Such was demonstrated during the Euro crisis when all of the countries within the Eurozone were accountable to the European Union over their individual sovereign governments. This policy required the Germans to pay the debts of the Greeks, and the Greeks to undergo harsh austerity, despite that neither of these policies would have been democratically feasible in their respective countries.7 In addition, the very premise that the Northern European countries were bailing out “The Greeks” or “The Irish,” veils that everyday citizens were required to bail out international financial institutions, demonstrating nation’s loyalties to banks over citizens.8

In tandem with this, banks, corporations, and International Organizations have all contributed to the direct deterioration of democratic systems, particularly in the global south. Countries within the global south have less developed economies than countries in the global north. For the last several centuries “free markets” in the global north have been subsidized by the imposition of exploitative and extractive policies in their “colonies,” then former “colonies.” These policies have resulted in structures of economic and political dependence that encumber many countries in the global south from maintaining free and open democracies. As an illustration, let’s say there’s an election in Latin America, and Western banks may favor one candidate over the other. Voters essentially must choose to pick the banks’ candidate or choose to undergo a painful recession.9 Any “choice” is an illusion. 

The Allure of Authoritarianism

As the global economy continues to erode democracy, many countries shift towards the authoritarian model. Authoritarianism’s growth in popularity in recent years could be due to its perceived superior ability to ensure economic growth. Authoritarian governments can execute the most favorable economic policies without winning elections, compromising with opposition parties, or contending with unfortunate voter decisions (such as Brexit.) In many ways, these authoritarian regimes have experienced unprecedented success. A 2009 IMF study shows that economic growth in capitalist authoritarian nations averaged 6.28% over the previous 15 years, whereas growth only averaged 2.62% in liberal democracies.10 In addition, there are individual case studies, such the China, boasting growth rates as high as 19.3%, which make authoritarianism appear as a guarantor of success.11

The growth of authoritarianism speaks to countries, and perhaps people, valuing economic prosperity over freedom. For those that have never known either this deal with the devil may be worth the price, yet what about those that already have both?

To the Republic, for which it stands…

People like authoritarianism; even in Western Democracies. Political theorist Robert Kuttner warns that support for right-wing extremists in Western Europe is even higher today than it was in the nineteen-thirties.12 According to a 2021 study from the Morning Consult, 26% of Americans are in favor of right-wing authoritarianism.13 The increase in authoritarian sentiment seems to be linked to the failures of free-market globalization, particularly the decline in voter power and the growth of inequality. According to economist Dani Rodrik, the issues that draw supporters to populism (authoritarianism more palatable precursor) are the same on both sides of the aisle: voters are “anti-globalization, anti-free trade, anti-immigration, and anti-Wall Street,” though it usually manifests in opposing ways.14 Rodrik explains that “When mainstream politicians are unable to generate meaningful responses to inequality, social exclusion and insecurity, populists of various ilk gain ground.”15 However, what’s interesting, and sad, is that this feeling of powerlessness leads people to cede even more power to strongmen. And there is a precedent for democracies developing in authoritarian regimes. Take for example ancient Rome, Hitler in Weimar Germany, Chavez in Venezuela, Papa Doc in Haiti, Mugabe in Zimbabwe, Erdogan in Turkey, and many more. As Socrates stated, “tyranny is probably established out of no other regime than democracy.”16

Potential Solutions 

What can we do to save the world’s democratic capitalist system? There are more ways in which we can reimagine the relationship between our economic and political systems to produce more favorable outcomes. 

On the international scale, The most desirable, and perhaps most unrealistic solution would be to establish democratically accountable global regulatory bodies to effectively create a fair and even playing field. We currently have organizations such as the World Trade Organization (WTO) and the International Court of Justice (ICJ) constructed to fulfill this role, that have in some respects fallen short and may be improved by democratic accountability and enhanced enforcement power. We additionally have national organizations such as the Securities and Exchanges Commission that are relatively effective and would be valuable to be expanded on a global scale.

However, in reality, compliance on a global scale would be near impossible to achieve. Worldwide solutions, in general, will be difficult to implement; it is possibly more productive to put forward domestic solutions. 

If our problem is globalization, the natural reaction may be to tend towards isolation. Yet, complete isolation is not feasible in the modern world due to global issues including cyberattacks, pandemics, terrorism, and climate change. The closest examples we see to isolation are pariah states such as Iran and North Korea. However, the world, and the United States, may be ready for a period of American withdrawal. A 2019 poll shows that “a plurality of Americans want the country’s role in the world to shrink or end altogether.”17 An American retreat could allow for more resources to be directed to education, cybersecurity, and social welfare, all of which would likely aid our ailing democracy. On the other hand, a retraction is risky as it could damage alliances, leave a power vacuum, and allow us to fall behind other countries. 

Perhaps we should instead abandon democracy altogether to save global capitalism. There are relatively more attractive forms of authoritarianism such as technocracy that may allow for a smooth transition. We have already experienced a huge growth in independent agencies unaccountable to the voter, such as the Environmental Protection Agency (EPA), the Federal Reserve, and the FDIC.18 This is potentially an interesting proposal in light of the many modern Americans who believe in ceding individual rights and freedoms for the collective good, for example removing the individual right to choose in terms of guns, abortions, or vaccines, for the sake of public health and safety. Should people give up the right to vote for the collective good? Should we all? 

Endnotes:

1. Joel Roberts. “Bill Clinton: The Optimist.” CBS News, June 25, 2004, https://www.cbsnews.com/news/bill-clinton-the-optimist/.

2. Brian Stauffer. “When the World Opened the Gates of China.” Wall Street Journal, July 27, 2018, https://www.wsj.com/articles/when-the-world-opened-the-gates-of-china-1532701482.

3. Wolfgang Merkel. “Is capitalism compatible with democracy?” Harvard University, July 26, 2014, https://projects.iq.harvard.edu/files/mobilized_contention/files/merkel_-_is_capitalism_compatible_with_democracy.pdf.

4. ibid.

5. John Weeks. “Free Markets and the Decline of Democracy.” Open Democracy, July 18, 2018, https://www.opendemocracy.net/en/can-europe-make-it/free-markets-and-decline-of-democracy/.

6. Michael Hirsh. “Why Trump and Sanders Were Inevitable.” Politico, February 28, 2016, https://www.politico.com/magazine/story/2016/02/why-donald-trump-and-bernie-sanders-were-inevitable-213685/.

7. Joseph Stiglitz. The euro: how a common currency threatens the future of Europe. WW Norton & Company, Inc. 2016.

8. Wolfgang Streek. “The Crises of Democratic Capitalism.” New Left Review, September 2011, http://piketty.pse.ens.fr/files/StreeckNLR2011.pdf.

9. Joesph Stiglitz. “Decades of free market orthodoxy have taken a toll on democracy.” The Guardian, November 5, 2019, https://www.theguardian.com/business/2019/nov/05/decades-of-free-market-orthodoxy-have-taken-a-toll-on-democracy.

10. John Lee. “Western v. Authoritarian Capitalism.” The Diplomat, June 18, 2009, https://thediplomat.com/2009/06/western-vs-authoritarian-capitalism/.

11. “GDP growth (annual %)- China.” The World Bank, 2020, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=CN.

12. Caleb Crain. “Is Capitalism a Threat to Democracy?” The New Yorker, May 7, 2018,  https://www.newyorker.com/magazine/2018/05/14/is-capitalism-a-threat-to-democracy.

13. Cameron Easley. “U.S. Conservatives Are Uniquely Inclined Toward Right-Wing Authoritarianism Compared to Western Peers.” Morning Consult, June 28, 2021, https://morningconsult.com/2021/06/28/global-right-wing-authoritarian-test/.

14. Michael Hirsh. “Why Trump and Sanders Were Inevitable.” Politico, February 28, 2016, https://www.politico.com/magazine/story/2016/02/why-donald-trump-and-bernie-sanders-were-inevitable-213685/.

15. ibid.

16. Andrew Sullivan. “Democracies end when they are too democratic.” New York Magazine, May 1, 2016, https://nymag.com/intelligencer/2016/04/america-tyranny-donald-trump.html.

17. Charles Kupchan. “Isolationism Is Not a Dirty Word.” The Atlantic, September 27, 2020, https://www.theatlantic.com/ideas/archive/2020/09/virtue-isolationism/616499/.

18. Yascha Mounk. “America is Not a Democracy.” The Atlantic, March 2018,  https://www.theatlantic.com/magazine/archive/2018/03/america-is-not-a-democracy/550931/.

January 31, 2022 0 comment
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AsiaEconomicsFeaturedGeopoliticsGlobalizationPrint ArticleThe International Economy

Bangladesh: The Cost of Democracy

written by Samriddhi Sapkota

“Bangladesh: The Cost of Democracy” was originally published in our Fall 2021 Print Edition: Authoritarianism.

When Bangladesh gained independence from Pakistan in 1971, most did not expect the nation to become one of the fastest-growing economies in the world. Then-U.S. National Security Advisor Henry Kissinger went so far as to name Bangladesh a “basket case,” as rampant poverty and deprivation made it seem as though the country could never catch up to its neighbors in South Asia. However, notably in the last few years, Bangladesh’s economic growth has given the country an image of unexpected and exceptional success. Before the COVID-19 pandemic contracted economies worldwide, Bangladesh’s GDP growth rates surpassed 7% for four consecutive years, outpacing Pakistan, India, and even China.1 Even after the onset of the pandemic in 2020, Bangladesh was still able to achieve a 5.24% growth.2

Yet, behind this veil of economic growth, Bangladesh has simultaneously been facing serious challenges to its democracy. Since coming into power, Prime Minister Sheikh Hasina and her party Awami League have been accused of presiding over a slew of human rights violations, including forced disappearances, extrajudicial killings, torture, and arbitrary arrests, including those of political opponents. The government is also considerably intolerant of any criticism or dissent, from both the media and the general public. As democratic institutions deteriorate and the nation slowly slips towards authoritarianism under Hasina, it is becoming clear that Bangladesh’s economic success has occurred despite political developments in the country, not owing to it. 

An Economic ‘Miracle’

As Kissinger initially predicted, Bangladesh’s economy heavily struggled in the first few decades of independence. Such was the case that when Bangladesh’s GDP growth rate surpassed that of Pakistan’s in 2006, it was dismissed as a fluke.3 Despite the dire expectations, Bangladesh’s GDP growth rate has continued to exceed Pakistan’s, and since 2020, also exceeds India’s. Bangladesh is now classified as a lower-middle-income economy and is set to graduate from the UN’s Least Developed Countries list by 2026, according to the World Bank.4

Bangladesh’s sustained economic growth can be attributed to several factors. One of the most important contributing factors has been the exemplary success of the garment industry, which employs about 4 million people and accounts for 84% of the country’s total exports.5 The garment industry has been a vital source of income and employment, particularly for Bangladeshi women. Unlike India and Pakistan, where cultural conservatism has stood as a long-time barrier to female participation, Bangladesh has made incredible efforts to encourage women to participate in the workforce. Since Bangladesh’s independence, the share of women in the workforce has risen from 3% to 36%.6 Female participation is especially high within garment manufacturing, as 80% of all workers are women.7

A key force for bringing about this effort is Grameen Bank, a renowned NGO that notably decided to give microfinance credits to the senior female member of each household. Investing in the country’s women has proven to be beneficial in many ways. The strides made in educating women and amplifying their voices have helped to redirect household expenditures to child welfare. As such, development factors such as average life expectancy and literacy rates have significantly improved, while malnutrition has decreased.8

Remittances have also served as a critical agent in Bangladesh’s growth. Bangladeshi migrant workers, most of whom work as low-skilled laborers in the Persian Gulf, send an average of $15 billion per year in remittances,9 accounting for over 6% of the nation’s total GDP.10 Remittances have proven to be a crucial source of income to ease both poverty and unemployment rates at home. While Bangladesh’s economic growth has seen abundant benefits as a result of these factors, there is also an imminent danger that progress may be reversed due to deteriorating political conditions in the nation’s government. 

Politics is A Dirty Game

The decline in Bangladesh’s democracy began during a two-year political crisis from 2006 to 2008, in which a military-backed caretaker government assumed control to address rampant corruption and political tension occurring during the election cycle.11 Under the 13th Amendment of the nation’s constitution, parliamentary elections are overseen by a non-partisan caretaker government that has power over state affairs for the 90 days in which the elections occur. The head of this caretaker government is the Chief Advisor, who is appointed by the President and is typically given to the last retired Chief Justice of the Supreme Court.12

During the 2007 election cycle, violence broke out after the Awami League, under Sheikh Hasina, set off a series of protests against the appointment of Justice K.M. Hasan as Chief Advisor. Hasan had a history of affiliation with the Bangladesh National Party (BNP), the Awami League’s main political opposition as well as the incumbent party at the time. The Awami League made claims that the BNP had been attempting to sway the election in their favor to maintain their control over the government.13

Because the two parties were not able to agree on a candidate for Chief Advisor, the position devolved to the president at the time, Iajuddin Ahmed.14 Yet, even President Ahmed was unsuccessful in abating the tension between the two parties to hold the elections. In fact, the Awami League eventually boycotted the elections altogether in early January 2007. The dire situation led military representatives to urge, and ultimately convince, President Ahmed to declare a state of emergency, step down from the Chief Advisor position, and relinquish power of the government.

Under the military-backed caretaker government, several fundamental rights guaranteed under the constitution were suspended and various politicians were arrested on suspicion of involvement in corruption.15 This included Prime Minister Sheikh Hasina, who was arrested on charges of extortion, as well as former Prime Minister Khaleda Zia, head of the BNP,  who was arrested on charges of corruption. Hasina was eventually released on parole in 2008 and went on to run in the 2009 elections after the military had relinquished power over the caretaker government. Prime Minister Hasina and the Awami League went on to win a landslide victory, winning 288 of the 300 seats in parliament, though this came along with widespread accusations of voter intimidation, ballot stuffing, and restrictions on opposition polling agents.16

The Awami League in Power

Since the conclusion of the 2006-2008 political crisis, the rivalry between the Awami League and the BNP has only intensified. The tactics utilized during the crisis to undermine the elections have not only set a precedent for all succeeding elections but also have enabled the Awami League to maintain its power over Bangladesh.

Since assuming office, Prime Minister Sheikh Hasina has removed almost all checks to her power. Amongst the greatest changes that she has made is her abolishment of the impartial caretaker government in 2011.17 Hasina claimed that the system was no longer beneficial to the Bangladeshi democracy, for the preceding military-backed caretaker government remained past the three months it was originally mandated. However, many viewed her actions as a method for which she and her party could directly intervene in the outcome of the elections. The lack of a caretaker government intensified political tensions during the 2014 parliamentary elections when the Awami League and the BNP could not agree on the appropriate mechanism to hold the election. As a consequence, the BNP boycotted elections, leaving more than half of the nation’s parliamentary seats uncontested. Voter turnout hit a record low due to the boycott and resulting violence. In the end, the Awami League won 232 of the 300 seats in parliament.18

Following the 2014 elections, the Awami League has also cracked down on its political opposition. Law enforcement officers have illegally detained, tortured, and killed thousands of activists from the opposition party, many times in secret for weeks at a time before formally arresting them. The government has also jailed many of its political opponents; most notably, the former prime minister and leader of the BNP, Khaleda Zia, was arrested once again on charges of corruption in 2018.19 This action severely damaged the BNP during the 2018 elections, when the party could not find an alternative candidate to run against Hasina. Consequently, the Awami League was able to once again achieve a landslide victory, winning 288 of the 300 seats.20

Alongside the crackdown of political opponents, the Awami League has also denied freedom of expression and association. In 2018, the government passed the Digital Security Act, granting law enforcement officials to arrest any individual that they believe has been or has the possibility of committing a crime or destroying evidence of a crime.21 The law also allows up to 10 years of imprisonment for digitally disseminating propaganda against Bangladesh’s Liberation War, the national anthem, or the national flag. Bangladeshi authorities have utilized the law to harass journalists, activists, and any other individual that criticizes the current government.22 In one case, a writer was arrested, denied bail six times, and finally died in prison when he criticized the Bangladeshi government for its response to the COVID-19 pandemic on his social media.23

Developments made in women’s rights are also at risk. While Bangladesh’s constitution provides religious freedom, Islamic fundamentalist groups within the country have continuously pressured the government to make strides towards becoming a “theo-democracy.” Particularly, BNP has a deep history of alliance with the Islamist party Jamaat-e-Islami, notorious for encouraging sexual separation.24 Although the ruling Awami League is founded upon the principles of secularism, Prime Minister Sheikh Hasina has, nonetheless, also been seen cozying up to other fundamentalist groups like Hefazat-e-Islam, which does not support the secularism that the Awami League supposedly advocates for.25 Adding onto this is the fact that the increase in women’s participation in the workforce has slowed in recent years. Women’s participation in the workforce increased by an average of 1.7% per year between 2005 and 2010, but that number has decreased to a 0.7% increase since then.26

Looking Ahead…

So what does this shift towards authoritarianism mean for Bangladesh’s economic growth? Given the fierceness of the rivalry between the Awami League and the BNP, and the overall disregard the government has in upholding democratic values, Bangladesh’s economy is at serious risk.

For one, the economic progress that the nation has made, while extraordinary, is not sustainable. Although the garment industry has been successful, extreme dependence on a single category of exports poses a dangerous risk to the economy. If any nation that imports garments were unable to continue purchasing from Bangladesh, the industry as a whole would suffer significant losses. Moreover, remittances are dependent on the availability of work for migrant workers. As the COVID-19 pandemic has demonstrated, work availability can decline rapidly according to the job environment. Finally, Bangladesh has faced difficulty in attracting foreign direct investment, which is key for sustainable growth. According to the World Bank, Bangladesh does not perform well in terms of compliance, quality, and reliability, which it considers to be essential for attracting foreign investment.27

The solution to these issues lies in attracting foreign direct investment, which would expedite the process of diversification into more complex products and decrease Bangladesh’s reliance on remittances, but this might be difficult given the political circumstances of the nation. This is because the act of silencing dissent, as the current government has done, often gives way to corruption and cronyism. News outlets may fear to report on suspicious practices, providing those willing to cozy up to the government countless opportunities to find protection despite not necessarily following ethical standards. With such great inequities in the system, the country risks losing all reliability, warding off foreign direct investment, and threatening to stunt the momentum that Bangladesh has accomplished in its economy. 

There is already evidence that demonstrates that such inequities exist in the current system. While the Awami League has been silencing its opposition, the party has simultaneously been providing its cronies with various benefits. Those with close ties to the party are easily able to secure bail, even for serious crimes, and are almost guaranteed to win if a case were to go to court. Moreover, the tax code is skewed in favor of rich and well-connected individuals, even though it is intended to depend on consumption rather than wealth. Corruption is so rampant in the nation that Transparency International gave Bangladesh a score of 26 out of 100 in its Corruption Perception Index in 2020, a measure that indicates the level of corruption within the public sector.28  

Economic data is beginning to reflect these inequities. The wealth gap has been exceptionally exacerbated by corruption under the Awami League, providing additional evidence that the economy is in jeopardy under the party. Between 2010 and 2016, the income of the richest households increased by a quarter, whereas the poorest household found theirs to decrease by a third.29 Large wealth gaps not only inhibit social mobility and equal opportunity but are also indicative of health and social problems. Nations that have severe class disparities also experience inequalities in public health and education, as these resources are more readily available to the rich than the poor. 

Wealth disparity is also associated with lower GDP growth rates in the long term. It is estimated that corruption knocks off an average of two percentage points from Bangladesh’s GDP growth every year.30 Considering the Awami League’s tight grasp on the government and the unjust practices it has utilized to maintain this power, cronyism can only be expected to worsen, leading to greater inequality and larger losses to Bangladesh’s growth.

Democratic Backsliding in Asia

The phenomenon of declining democracy is not limited to Bangladesh, however. This event seems to be a part of a larger trend observable in democracies throughout Asia. While Asia experienced widespread democratization during the 1980s and 1990s, the region has experienced an apparent shift away from democracy and towards rising authoritarianism in recent years. Even while general support for democracy and democratic principles continues to be high, forces such as inequality and elite corruption, domestic polarization, and restrictions on civil liberties are affecting democratic institutions in many contemporary Asian democracies.31

As seen in Bangladesh, rising wealth in countries such as Malaysia and South Korea has been accompanied by inequality and corruption. Not only has this led to a decay in the perceived legitimacy of democratic institutions throughout the Indo-Pacific, but it has also encouraged a rise in populist leaders that undermine democratic principles to consolidate power. Domestic polarization is also not limited to Bangladesh. Throughout Asia, polarization is observable across religious, ethnic, and political lines, which has increasingly been used by national leaders for their own political advantages. Lastly, civil liberties, such as freedom of assembly, formation of civil society organizations, religious institutions, and freedom of the press, have been heavily restricted.32 A 2018 study of the civil society sustainability in nine Asian democracies, which included Bangladesh, found that all similarly had recently passed restriction laws on the formation of new NGOs, arrested local activists, and had placed tight restrictions on freedom of speech.33

This trend is a serious cause for concern for democracy in Asia. Because democratic backsliding has been gradual rather than sudden, it often fails to ignite a call to action from the general public.34 Furthermore, this phenomenon occurs where opposition forces are already weakened by the party in power, which makes it increasingly difficult to gather a majority and fight back against the controlling party. For Bangladesh, this puts at stake not only the rights of its citizenry but also its economic development. The lack of available options to oppose the Awami League means that the Bangladeshi people may completely lose a voice in their government. Simultaneously, if power continues to consolidate under the current government, this leaves the nation’s economic development in grave danger of reversal.

Conclusion

Once dubbed a ‘basket case,’ Bangladesh has dramatically improved its prospects and seen incredible economic achievements for several years. Though the economy has incredible potential, the government’s shift towards authoritarianism leaves the future of Bangladesh’s development extremely vulnerable. Intense political competition between the Awami League and the BNP has produced continuous violations of democratic ideals, a pattern that has now become standard in their fight for political power. This has opened the door for immense corruption, a direct indicator of long-term economic contraction. Furthermore, because Bangladesh’s growth is not yet sustainable, a slide towards authoritarianism means that their economic successes are likely to be reversed. If the government proceeds to undermine its democracy in favor of bolstering the political elite without allowing any space for opposition voices, this will almost certainly come at the expense of all of its economic achievements and future development. 

Endnotes:

1. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians.

2. Vaishali Basu Sharma. “Bangladesh’s Economy: What Did It Do Differently To Ride Out the Pandemic?” The Wire, July 18, 2021, https://thewire.in/south-asia/bangladesh-economy-pandemic-gdp.

3. Kaushik Basu. “Why Is Bangladesh Booming?” The Brookings Institution, May 1, 2018, https://www.brookings.edu/opinions/why-is-bangladesh-booming/.

4. “The World Bank in Bangladesh: Overview.” The World Bank, October 3, 2021, https://www.worldbank.org/en/country/bangladesh/overview#1. 

5. Sahid Yusuf. “Bangladesh: Growth Miracle or Mirage?” Center For Global Development,  June 16, 2021, https://www.cgdev.org/blog/bangladesh-growth-miracle-or-mirage.

6. “Bangladesh’s Growth Has Been Remarkable, But Is Now At Risk.” The Economist, March 27, 2021, https://www.economist.com/leaders/2021/03/27/bangladeshs-growth-has-been-remarkable-but-is-now-at-risk. 

7. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians.

8. Kaushik Basu. “Bangladesh at 50.” The Brookings Institution, March 26, 2021, https://www.brookings.edu/opinions/bangladesh-at-50/.

9. Jason Beaubien. “They Pump $15 Billion A Year Into Bangladesh’s Economy — But At What Cost?” NPR, June 3, 2019, https://www.npr.org/sections/goatsandsoda/2019/06/03/722085193/they-pump-15-billion-a-year-into-bangladeshs-economy-but-at-what-cost.

10. Sahid Yusuf. “Bangladesh: Growth Miracle or Mirage?” Center For Global Development,  June 16, 2021, https://www.cgdev.org/blog/bangladesh-growth-miracle-or-mirage.

11. “Background Note: Bangladesh.” U.S. Department of State,  August 2008, https://2001-2009.state.gov/r/pa/ei/bgn/3452.htm.

12. “Bangladesh.” U.S. Department of State, January 20, 2017, https://2009-2017.state.gov/outofdate/bgn/bangladesh/74099.htm.

13. “Background Note: Bangladesh.” U.S. Department of State, August 2008, https://2001-2009.state.gov/r/pa/ei/bgn/3452.htm.

14. ibid.

15. ibid.

16. “Bangladesh Election: PM Sheikh Hasina Wins Landslide in Disputed Vote.” BBC, December 31, 2018, https://www.bbc.com/news/world-asia-46718393.

17. “Bangladesh Ends Caretaker Government Arrangement.” BBC, June 30, 2011, https://www.bbc.com/news/world-south-asia-13973576/.

18. “Bangladesh Election Violence Throws Country Deeper Into Turmoil.” The Guardian, January 6, 2014, https://www.theguardian.com/world/2014/jan/06/bangladesh-election-violence-awami-league.

19. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians.

20. ibid.

21. “Bangladesh: New Digital Security Act Imposes Dangerous Restrictions on Freedom of Expression.” Amnesty International, September 20, 2018, https://www.amnesty.org/en/latest/news/2018/09/bangladesh-new-digital-security-act-imposes-dangerous-restrictions-on-freedom-of-expression/.

22. “Bangladesh: Repeal Abusive Law Used in Crackdown on Critics.” Human Rights Watch, July 1, 2020, https://www.hrw.org/news/2020/07/01/bangladesh-repeal-abusive-law-used-crackdown-critics#.

23. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians. 

24. K. Anis Ahmed. “Bangladesh’s Choice: Authoritarianism or Extremism.” The New York Times, December 27, 2018, https://www.nytimes.com/2018/12/27/opinion/bangladesh-election-awami-bnp-authoritarian-extreme.html.

25. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians. 

26. ibid.

27. Gladys Lopez-Acevedo and Raymond Robertson. “Stitches to Riches? Apparel Employment, Trade, and Economic Development in South Asia.” The World Bank., https://www.worldbank.org/en/region/sar/publication/stitches-to-riches-apparel-employment-trade-and-economic-development-in-south-asia.

28. “Bangladesh.” Transparency International, 2020, https://www.transparency.org/en/countries/bangladesh#.

29. “As It Turns 50, Bangladesh Is Doing Well, Despite Its Politicians.” The Economist, March 27, 2021, https://www.economist.com/asia/2021/03/27/as-it-turns-50-bangladesh-is-doing-well-despite-its-politicians.

30. ibid.

31. Lindsey W. Ford and Ryan Hass. “Democracy in Asia.” The Brookings Institution, January 22, 2021, https://www.brookings.edu/articles/democracy-in-asia/.

32. ibid.

33. ibid.

34. Nancy Bermeo. On Democratic Backsliding: Journal of Democracy 27, no. 1 (2016): 5-19. doi:10.1353/jod.2016.0012.

January 3, 2022 0 comment
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Environmental ChangeEuropeFeaturedGlobalizationPopulismUnited States

Green Conservatism: A Political Paradox?

written by Katherine Jones

“The danger of global warning is as yet unseen, but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations.”

This quote was not spoken by Greta Thunberg, or Al-Gore, or anyone popularly associated with the environmental movement for that matter. This warning comes from Margret Thatcher, a conservative and neoliberal icon, who championed Reaganomics, but also happens to have pioneered the world’s first carbon emissions target. The environmental movement, though known today as deeply entrenched in leftist political ideology, was not so long ago the interest of conservatives the world over, from Thatcher to Nixon. Given the dire and undeniable progress of climate change, the right will eventually have no choice but to address it once more. Green conservatism has already taken root in Europe, and may become increasingly relevant in America as the Republican party charts it’s Post-Trump course. 

The Republican Hail-Mary?

The past 30 years of center-right climate denial have eclipsed the close historical relationship between environmentalism and conservatism. Traditional conservative ideology generally emphasizes pro-environmental positions including preservation of the countryside, stewardship, and maintenance of traditional ways of life. These ideals are evidenced in some of our nation’s notable conservative presidents. Abraham Lincoln established Yosemite as the first national park in 1864. Teddy Roosevelt, our “conservationist president,” established five new national parks, 150 new national forests and in total protected over 230 million acres of public land. Richard Nixon established the Environmental Protection Agency (EPA), and George H.W. Bush managed acid rain. It was only in the 1990s that the Republican party’s large scale skepticism, then denial, of climate science began. However the tide may be turning yet again.

In November 2020, disgraced former president Donald Trump lost his re-election bid, a rarity for an incumbent president. This bitter defeat represented a national rejection of the Republican Party’s current platform, evidenced by the unprecedented rate at which voters have changed their registration away from the Republican party, particularly in important and growing demographics. The Republican party has historically tended to do poorly with racial minorities, women, and the young. For example, of non-white voters that identified as Republican in 2018, only 62% remain Republican, whereas 21% flipped Democratic. In contrast, of the non-white voters that identified as Democrats in 2018, 78% remained and only 10% flipped Republican. Similarly, in 2014, college educated white women preferred a generic Democratic candidate for congress over a generic Republican candidate by 2 points. By 2018, this same demographic preferred a Democrat over a Republican by a striking 22 points. In order to retain relevance, the Republicans must maintain and expand their voter base.

Green politics would be a strategic place to start. The Republican anti-environmental position is ineffectual with younger generations, who care much more about climate change than their predecessors. 52% of millennial Republicans feel the federal government is not doing enough to address climate change, whereas only 31% of boomers hold this viewpoint. Additionally, environmental protection could be appealing to the Republican party’s Christian voter base, who see stewardship of the planet as providential. A Republican pivot on climate could even potentially pull in new and single issue voters, while still staying consistent with the party’s existing populist narrative.

Climate change could easily become a populist issue if it comes to be perceived as an anti-establishment issue. Instead of thinking of environmentalism as a product of globalists, the scientific establishment and multi-lateral bureaucrats, maintaining the environment could be framed as protecting the rights and property of everyday American hunters, fishers, and farmers against these elites. Republicans could call to attention the growing “climate apartheid” in which elites have the resources to protect themselves against climate change while the middle classes remain vulnerable. Take Hurricane Sandy for example. Low-income New Yorkers were helpless without power and healthcare while the Goldman Sachs headquarters was “protected by tens of thousands of its own sandbags and power from its generator.” Similar situations have happened all over the country, so this technique could applied on the local level as well.

Assuming climate change is eventually adopted as a right-wing issue, Republican politicians are still likely to differentiate their approach from the typical climate change mitigation strategies presented on the left. Republicans are likely to address climate change with a focus on “green capitalism.” “Green capitalism” is generally shorthand for an incentives based model rather than a regulations based model. This approach has been underutilized considering voter’s latent support for renewable energy, with 78% of millennial Republicans believing that the United States should prioritize renewables over fossil fuels. Additionally, many of these emerging green jobs and industries are moving into red states, enhancing the potential benefit for Republicans. Texas for instance, is one of the states with the largest renewable energy growth, with the wind and sun necessary to power such systems. 

A complete pivot on climate has not yet occurred within the Republican party, but there are signs that this shift is beginning. Starting in 2020, House minority leader Kevin McCarthy proposed three measures to slow warming. Recently, Republican senators Marco Rubio, Mitt Romney, and Lindsey Graham all joined the bipartisan Senate Climate Solutions Caucus. Mitch McConnell, the Republican Senate Majority leader during the Trump administration, stated on climate change: “I concur that it is happening and it is a problem. The argument is about how to best address it.” We can imagine how green conservatism may continue to develop in the states, by looking to Europe, where such an ideology has already taken hold. 

Our European Future

Austrian Chancellor Sebastian Kurz, the youngest Chancellor in Austrian history, and a hardline conservative, formed the one of the world’s first “green-black” coalitions on the national scale. A “green- black” coalition is a parliamentary power sharing agreement between a conservative, or “black” party, and an environmental, or “green,” party. While Austria represents the premier example of a green-black government, such an arrangement also exists in Ireland, and various regional governments of Germany. It is additionally expected that in Germany’s upcoming 2021 election, in which Angela Merkel has promised to step down, a green-black coalition will form. 

Green-black coalitions such as these have been marketed to voters as “marriages of convenience,” unions based on necessity rather than genuine compatibility. To some extent, this explanation is justifiable. Such coalitions are the result of a move away from center-left and center-right parties in Europe, towards more extreme green parties on the left, and populist parties on the right. Political polarization has taken shape all over Europe, even at the European Union level. In 2019, the center right and center left parties lost their majority in the European Parliament for the first time in 40 years. 

The “marriages of convenience” argument is bolstered by the painful sacrifices that have been required by green parties. In Austria, the parliament had to vote on whether or not to allow homeless child refugees after a crisis in Moira, Europe’s largest refugee camp. The ruling right wing party (with 37.5% of the seats) absolutely refused, and the green party (with 14% of the seats), was forced to vote against their platform, and also reject the refugees, in order to maintain the coalition. The green party, a very junior partner, lacks any political leverage. They must forgo broad left-wing goals, in favor of narrow environmental goals. To a certain degree, these sacrifices have paid off. Green-black coalitions have effectively enacted certain environmental policies. In Ireland the government promises to cut emissions by 7% per year. In Austria, they are working on ambitious plan to go completely carbon neutral by 2040.

Food for Thought— Eco-Fascism

However taken from a conservative viewpoint, one could make a claim that the greens did not make a “sacrifice” to deliver on their promises, but that curbing immigration actually works syncretically with their climate goals. Austrian Chancellor Kurz implied as much when he symbolically and rhetorically linked the issues of the environment and isolation, stating his government was: “protecting both the climate and the borders.”

In this, Kurz calls out an inconvenient truth for leftist environmentalists— that Green-black coalitions may intrinsically reflect a degree of compatibility between the policy goals of environmentalists and conservatives. These parties may not seemingly interact on the surface, but insidiously work together. For example, greens and blacks do often share a common belief in isolationism, albeit for different reasons. The greens are generally anti-imperialist whereas the blacks are anti-immigration. Justifications aside, this foundational similarity represents itself in harmonious policy goals. For example, Germany’s green party’s foreign policy is largely anti-interventionism and anti-China and Russia, much like Germany’s right wing. Moreover, Germany’s far-right AFD advocates for strengthening Germany’s social safety net, for example increasing paid parental leave, a typically left-wing pursuit. Overall, In terms of shared interests, both greens and blacks are generally in favor of “balanced budgets, the European ideal and a transatlantic orientation.”

These similarities are not coincidental, but meaningful. The degree of overlap invokes horseshoe political theory; that the extreme left and extreme right are more similar to each other than they are to the moderate wings of their respective parties. Certain controversial beliefs about diet, vaccines, and, pertinent here, the environment, are common on both the extreme left and right. The far-right “eco-fascists,” an ideology which promotes eugenics and isolationism to mitigate climate change, holds some traditionally left wing elements such as veganism, non-GMO and locally sourced foods, and anti-single-use plastic, while also touting anti-multiculturalism, white nationalism, anti-Semitism, and a reverence of Norse mythology.

This is not to state that all environmentalists harbor secret right wing tendencies, but instead that environmentalism is particularly vulnerable to fascist creep because of it’s historical, and in some communities lasting, connection to white supremacy. 

The Nazi party is often cited as the origin of eco-fascism. Richard Walther Darré, a Nazi ideologue, theorized the ideal of “blood and soil,” in which a nation has mystical connection and stewardship over the land. This original Nazi idea continues to shape and influence far-right climate rhetoric today. Marine Le Pen, of France’s far-right National Rally, has stated “who is rooted in their home is an ecologist,” again evoking a nationalistic racialized connection between a people and their country. This dialogue is in no way benign. These ideas have been directly referenced by a number of terrorists over the years, including in the manifestos of the Christchurch shooter, the El Paso shooter, and the Unabomber. The Christchurch shooter wrote that he believed in “Ethnic autonomy for all peoples with a focus on the preservation of nature, and the natural order,” and that “there is no nationalism without environmentalism.” Patrick Crusius, the El Paso shooter, wrote in his manifesto that “If we can get rid of enough people, then our way of life can be more sustainable.” 

Final Thoughts 

Given the rapid progress of climate change, Republicans will have to address the issue within the next decade, likely sooner. When that day comes, it will be a great opportunity for cooperation. Joint solutions will be necessary in order to reach climate goals. Yet, we must also be prepared against the xenophobic path set forth by Europe’s far-right.

The far-right has and will continue to cite immigration, particularly from the global south, as a climate issue, and exploit it as an excuse to refuse refugees. Refugees and large populations are not the reason for climate change. Big corporations and apathetic governments are. 

September 10, 2021 0 comment
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