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22 January 2020   Leave a comment

There are reports that the number of people infected by the new coronavirus in China is spreading and that human-to-human transmission appears possible. This event is one about which I am totally unqualified to understand fully. I do not know the dynamics of such a disease nor does it appear as if even the experts can yet do an accurate threat assessment. But we have had experience with the spread of disease in the past: the 1918 Spanish flu pandemic; the bubonic plague in the 14th century; the HIV epidemic beginning in the 1980s; the Ebola outbreak in West Africa in 2014-16; and the SARS outbreak in China in 2003. Those outbreaks were devastating and costly to contain.

The world has taken some steps to address the problem of infectious diseases in a world in which people move around at astonishing speed. Global leaders established the Global Preparedness Monitoring Board (GPMB) in conjunction with the World Health Organization (WHO) and the World Bank. The creation of the GPMB was necessary because of the very high costs of containing a pandemic after it had already taken hold. Laurie Garrett writes:

“An enormous number of previously unknown viruses, such as the one that caused the 2003 epidemic of severe acute respiratory syndrome (SARS), have claimed the lives of people and animals around the world. In just seven years (from 2011 to 2018), for example, the WHO did battle with 1,483 epidemics.

“And the costs of containment, coupled with the disruptions’ general economic impact, have worsened, according to a GPMB study commissioned by the World Bank. The 2003 SARS epidemic exacted a toll of about $40 billion on the global economy, the 2009 swine flu epidemic reached about $50 billion, and the 2014-16 West African Ebola epidemic cost nearly $53 billion. An influenza pandemic akin to the 1918 flu would today cost the world economy $3 trillion, or up to 4.8 percent of global gross domestic product (GDP).

“Economically, wealthy nations have proven the most resilient in recent outbreaks, and the GPMB predicts that countries such as the United States and Germany could get through a devastating epidemic with less than 0.5 percent loss of GDP. But poorer nations—from India and Russia down to the countries of Central Africa—could lose up to 2 percent of their GDPs from the same hypothetical pandemic. The West African Ebola epidemic directly cost the hardest-hit countries—Liberia, Sierra Leone, and Guinea—$2.8 billion, knocking Sierra Leone’s GDP down a whopping 20 percent in 2015.”

The spread of the Wuhan coronavirus seems to be accelerating. According to LiveScience: “There are now 440 confirmed cases and 17 deaths linked to the virus in China, according to the BBC. That’s up from around 300 cases and six deaths reported just yesterday (Jan. 21).” The virus has also been detected in a number of countries: Thailand, Japan, South Korea, the US, and Taiwan. The world’s financial markets have been rattled by the spread of the virus and its potential for economic damage because of the necessary containment measures. There are legitimate fears of the spread of the virus because the outbreak coincides with the celebrations for the Chinese New Year which is the largest voluntary migration in the world every year: “Chinese New Year is a holiday that inspires humankind’s largest annual migration. Hundreds of millions of travelers jammed into very proximity — planes, trains, automobiles, ships — provide an ideal breeding ground for hostile pathogens….The weeklong holiday is a pivotal period for traveling, shopping and banquet-style feasts that generate growth around the nation. If tens of millions of mainlanders stayed home over the next 10 days, first-quarter GDP might suffer markedly.”

In such circumstances, it is difficult to assess the threat posed by the coronavirus. There are some reports that the incubation period may be as long as several days which makes containment very difficult–someone can travel without any symptoms and get through the containment measures. But as it unfolds, we will get a better idea of serious it actually is. The important thing is to not panic, but to follow the news seriously. Globalization has always been behind the spread of pandemics. The spread was slow during the Black Death of the 14th century. Spanish flu spread rapidly because of the movements of people associated with World War I. Today, diseases spread in a matter of days making containment very difficult.

Posted January 22, 2020 by vferraro1971 in World Politics

21 January 2020   Leave a comment

David Gioe has written a short essay on the failure of the publication of what has come to be known as the “Afghanistan Papers” to arouse public sentiment. Gioe notes that the publication of those papers by The Washington Post did not have the same effect as the publication of the Pentagon Papers on the Vietnam War in 1971. I wrote earlier about the publication of those documents and how they demonstrated that US policy makers had very little sense of any meaningful objectives in prosecuting the war in Afghanistan. Gioe makes three essential points about the differences between the Vietnam and Afghanistan Wars.

“First, there is little at stake for the overwhelming majority of the U.S. population with respect to the ongoing Afghan war. The war in Afghanistan is dragging on into its 19th year, but this would not be obvious from the media coverage, congressional hearings, Pentagon briefings or public activism. As one journalist put it, “From a political point of view, this war is about as important as storms on Saturn.” In contrast to the white-hot issue of the Vietnam War, especially on college campuses where widespread anti-war marches and protests were the norm, most Americans seem to have lost interest in what happens in Afghanistan.

“Unfortunately, apathy may be an entirely rational response. The American people have, broadly speaking, not been asked to serve in Afghanistan. They certainly have not been reluctantly drafted into service, nor asked to pay any sort of special or supplemental tax to cover the staggering cost of the war. The total bill of more than $2 trillion and the lives of more than 2,301 American service personnel seem ever more distant—although 16 U.S. service members died in Afghanistan in 2019. This is actually part of a larger trend that is marked by American uninterest in foreign policy more generally, with some studies revealing that at least 95 percent of Americans have little or no interest in foreign policy.”

Gioe’s second point was that the Afghanistan Papers did not reveal anything that an analyst who studied closely US actions in Afghanistan did not already know: “One need not read all of the SIGAR reports or other scholarship to plainly see that the Afghanistan mission was not going as military and civilian leaders were saying it was. As Jason Lyall noted in the Washington Post, ‘[N]one of these revelations are surprising. … In short, if you’re surprised by the Afghanistan Papers, you haven’t been paying attention.'” Gioe’s third point is that the Afghanistan Papers were released through a very mundane procedure known as the Freedom of Information Act. The release lacked the drama of Daniel Ellsberg’s heroic leaks which ultimately went to the Supreme Court.

Gioe is unquestionably correct in his analysis. But it is a sad commentary on the lack of public interest in a war that has lasted 19 years with little or not oversight or public input.

Marvin Ott has written a very good analysis of the current situation in the South China Sea and the Chinese efforts to claim sovereignty over a very large part of that sea. The Chinese claim (known as the “Nine Dash Line which is outlined in red in the map below) conflicts with virtually every other state that has claims on the Sea. Ott explains the significance of the “Nine Dash Line”:

“The South China Sea first becomes a factor in Chinese policy when a cartographer working for the Republic of China (ROC) government created a map with a broken line encompassing almost the entire South China Sea. The map was produced at a moment late in World War II when the allied powers were starting to position themselves for a postwar settlement – including new state boundaries. The line was never explained by the ROC (which had far greater concerns fighting for survival against Mao’s Peoples Liberation Army). When the PRC was established, it simply reproduced the same maps with the same dashed line, again with no explanation. In subsequent years, there were occasional attempts by journalists and scholars to obtain some clarification as to the line’s meaning – to little avail. As a result, the line was almost universally ignored. This was understandable, but a mistake, nevertheless. There were, in fact, a number of reasons to believe that the “nine-dash line” was intended to demarcate the maritime boundary of China. One of them – almost universally overlooked – was that the same line also encompassed Taiwan – which everyone knew China claimed as part of its sovereign territory. China’s official (and nonofficial) silence on this score was best understood in terms of a traditional, and very ancient, Chinese aphorism often cited by Deng: “Bide your time; conceal your capabilities; until you are ready to act.” China might intend to assert sovereign possession of the South China Sea, but in the thirty years following Deng’s accession, China lacked the power to enforce such an assertion. Until that changed, China best keep a low profile on the issue.”

The point is extremely important. There is no way to disentangle the issue of maritime sovereignty from the territorial issue of Taiwan. The US has taken a strong position on freedom of navigation in the South China Sea and has challenged the Chinese on the basis of international law. But that perspective ignores what is likely a more important issue for the Chinese–the status of what it regards as a rogue Chinese province.

Posted January 21, 2020 by vferraro1971 in World Politics

20 January 2020   Leave a comment

Origins has published a very good background piece on the Kurds. The Kurdish nation is cohesive and well-identified, but it lives under the control of four different states; Turkey, Iraq, Syria, and Iran. Kurds have aspired to their own state for over a century and, with the collapse of the Ottoman Empire in the early 20th century, a Kurdish state became possible. Those aspirations were stymied by the interests of the emerging state, Turkey, as well as by the imperial interests of Britain and France. The US has continued the practice of betraying the Kurds with the abrupt decision by US President Trump to abandon the region in Syria once patrolled by US troops. Kurds in Iraq also believe that the US has left them in the lurch.

Posted January 20, 2020 by vferraro1971 in World Politics

19 January 2020   Leave a comment

Marko Milanovic has written an essay for The European Journal of International Law entitled The Soleimani Strike and Self-Defence Against an Imminent Armed Attack. It is a very detailed legal brief on the issues raised by the US strike in Iraq on the Iranian general, Qassem Suleimani. Milanovic carefully parses through a number of contingencies relevant to assessing the legality of the attack. The essay is hamstrung by the lack of concrete information about the strike, but Milanovic goes through different circumstantial possibilities that affect the legal analysis. Despite the ambiguities, Milanovic argues that:

“….even if one accepts a broad theory of self-defence against an attack that is yet to occur, such as that espoused by the US government itself, the strike is likely to be unlawful. It is improbable that the US would be able to meet the factual requirements that it needs to justify the strike – in particular, there are serious doubts that there even was an imminent attack, and there are serious doubts that the method the US chose to resist that supposed attack was necessary under the circumstances. If such was the case, the US breached the prohibition on the use of force in Article 2(4) of the UN Charter vis-à-vis both Iran and Iraq. Finally, the post will look at the illegality of the threats of further use of force made by President Trump against Iran, which are unlawful both as a matter of the jus ad bellum and the jus in bello.”

The essay is a very useful road map of the issues raised by the attack and the conclusion is well-supported by both evidence and logic. It is doubtful that the Trump Administration really cares about international law but it is important for us all to think clearly about violence wielded in our names.

There have been protests in Lebanon since last October and the most recent protests left more than 300 people injured. The protests stem from a sense among the citizens of Lebanon that the political system–which guarantees certain government posts to specific sects–has completely atrophied, leading to a complete breakdown of government services. Basic services such as the provision of water, picking up garbage, and fighting wildfires seem to be beyond the capabilities of the government. The Prime Minister, Saad Hariri, resigned last October, but finding a viable replacement has proven to be a fruitless exercise. But the underlying economic weakness of Lebanon continues to aggravate the situation:

“Economic growth fell to 0 percent this year, according to Reuters, and the country carries a debt of about $85 billion. Its current GDP is $55 billion. Meanwhile, the unemployment rate for those under 35 has soared to 37 percent. The value of the Lebanese pound has fallen as prices increased, a monetary situation worsened by a dearth of US dollars.

“For the last 20 years, Lebanon has interchangeably used US dollars and the Lebanon pound thanks to a central bank policy that set the exchanged rate at about 1,500 pounds to the dollar, according to The New York Times.

“In theory, using both currencies should pose no problems. But to sustain the system, Lebanon has to continuously bring in new dollars, something it did in the past largely by wooing investors. The system began showing strain as local banks were required to honor high interest rates they had promised these investors. And it was further taxed by difficulty in finding new investors who weren’t frightened by regional turmoil.”

Lebanon is also a hostage to outside interests. Iran, Syria, Russia, and the US have all been involved with the domestic politics of Lebanon and many of the most active groups in the country act as agents of a foreign power. Under these circumstances, it is hard to imagine the Lebanese regaining control of their government.

Posted January 19, 2020 by vferraro1971 in World Politics

18 January 2020   Leave a comment

We know that climate change is occurring–we know why it is occurring and we can measure departures from the norm which give us a sense of the scale of the change. What we do not know is how humans will react to the change and the extent to which those reactions will involve violence and instability. Spiegel has run a very thought-provoking article on the effects of climate change on Lake Chad and how that change has affected the peoples of Nigeria, Niger, Cameroon, and Chad. The artile notes:

“In Chad, in Central Africa, a tragedy is playing out that will become increasingly common in the years to come: Existing conflicts over land and resources are being exacerbated by increasingly unpredictable weather. Here, it can be seen how global warming can fuel wars.

“One of the world’s worst humanitarian crises is unfolding on the shores of Lake Chad, according to the United Nations. In Nigeria, Niger, Cameroon and Chad, people are suffering from more than just extreme poverty. Boko Haram and other violent Islamist groups combined with corrupt governments and the absence of any functional state administration are making their lives hell — not to mention diseases, natural disasters and overpopulation. All these problems are now being made worse by climate change.”

Lake Chad serves almost 20 million people and the article recounts the myriad ways changes in climate have changed long-standing patterns of behavior. In many respects, those changes have led to open conflict as the sense of declining resources have led to acts of desperation. We all live in this period of change and managing the adaptive measures necessary will tax the legitimacy of governments and political systems. What seems to be clear is that those adaptive measures will always favor the interests of the rich and powerful to the detriment of the interests of the poor. World Oil quantifies the difference: “Climate-related disasters in high income countries caused $1.4 trillion in economic losses over the past 20 years, which shaved just 0.4% off economic activity, according to the UN Office for Disaster Risk Reduction. In developing nations, $21 billion of losses cut output by almost 2%.”

Posted January 18, 2020 by vferraro1971 in World Politics

17 January 2020   Leave a comment

The US and China have signed a “Phase 1” trade deal which, according to the State Council of the Chinese government will include the following:

“China and the United States have agreed on the text of a phase one economic and trade agreement based on the principle of equality and mutual respect.

“The text includes nine chapters: the preface, intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rate and transparency, trade expansion, bilateral assessment and dispute settlement, and the final terms, according to a statement issued by the Chinese side on Dec 13.

“Both sides have reached consensus that the US side will fulfill its commitments to phase out its additional tariffs on Chinese products, so as to achieve a switch from hiking to cutting additional tariffs.”

The agreement avoids the tariffs US President Trump had threatened to raise, but leave the already existing tariffs in place:

“While threatened tariffs on finished consumer goods such as clothes and electronics were avoided, the deal also reaffirmed the White House’s commitment to tariffs as an enforcement mechanism, leaving in place sanctions on $370 billion worth of Chinese imports for the foreseeable future.

“This gives American buyers of those goods — primarily parts for items made in the U.S. — a greater degree of certainty in their input costs, albeit not in the direction they wanted. Trade analysts said this means companies facing higher input costs would probably begin passing those along to consumers in the form of higher prices, if they had not done so already.”

The deal leaves a lot undetermined. China made promises on protecting intellectual property, but it made exactly the same promises when it joined the World Trade Organization in 2001. Similarly, the Chinese have promised to purchase US agricultural exports, but added an important caveat that those purchases depended on market conditions. And the enforcement of all the Phase 1 agreements is bilateral, not multilateral. That means that if there is a dispute about adherence to the agreement, the only enforcement mechanism is the threat of additional tariff increases or other constraints on trade. In short, it is not clear that the Phase 1 agreement really addresses the central issues that started the trade war in the first place.

It should have been obvious that the Chinese were not enthusiastic about the deal. President Trump had indicated earlier that he expected President Xi Jinping to sign the agreement and that the signing would be held in Beijing. Instead, the agreement was signed by Vice-Premier Liu He in Washington, DC which allows President Xi to override the agreement if he deems that action necessary or desirable. The two-year trade war does not appear to have accomplished much and that failure stems from a misunderstanding of the Chinese economy by the US. Zachary Karabell explains:

“The United States has fundamentally misread the relative strengths of both itself and China. It has acted as if Chinese exports to the United States are the key driver of the Chinese economy and hence tariffs are a potent weapon. As underscored by a recent McKinsey study, in fact, China has been aggressively, purposefully and successfully shifting from an export-driven economy to a consumer-driven one. Much of the gain of exports accrues to the multinational companies that source in China and not to the domestic Chinese economy, and more and more Chinese manufacturing activity is geared toward its own vast internal ecosystem. Tariffs certainly stung, but their greatest impact was not economic but rather as a signal to Beijing that the United States was no longer a reliable economic partner.”

It seems safe to say that a pause in the trade hostilities is a welcome step. But it is hard to make the case that the trade war has really accomplished much, and the mutual suspicion between the US and China has only deepened because of the dispute.

Posted January 17, 2020 by vferraro1971 in World Politics

16 January 2020   Leave a comment

The consulting group, Verisk Maplecroft, publishes an annual report entitled Political Risk Outlook, and the 2020 report has just been released. The report quantifies what we have been posting about recently–that civil unrest seems to be increasing globally. According to the summary of the report:

“Our quarterly Civil Unrest Index reveals that over the past year 47 jurisdictions have witnessed a significant uptick in protests, which intensified during the last quarter of 2019. This includes locations as diverse as Hong Kong, Chile, Nigeria, Sudan, Haiti and Lebanon….

“The number of countries rated extreme risk in the Civil Unrest Index has also jumped by 66.7%; from 12 in 2019 to 20 by early 2020. Countries dropping into this category include Ethiopia, India, Lebanon, Nigeria, Pakistan and Zimbabwe. Sudan, meanwhile, has overtaken Yemen to become the highest risk country globally.

“An ‘extreme risk’ rating in the index, which measures the risks to business, reflects the highest possible threat of transport disruption, damage to company assets and physical risks to employees from violent unrest. Most sectors, ranging across mining, energy, tourism, retail and financial services, have felt the impacts over the past year.

“The resulting disruption to business, national economies and investment worldwide has totalled in the billions of US dollars. In Chile, the first month of unrest alone caused an estimated USD4.6 billion worth of infrastructure damage, and cost the Chilean economy around USD3 billion, or 1.1% of its GDP.”

The forecast of the report is that these protests are likely to continue, and even to increase in number, in 2020:

“The pent-up rage that has boiled over into street protests over the past year has caught most governments by surprise. Policymakers across the globe have mostly reacted with limited concessions and a clampdown by security forces, but without addressing the underlying causes. However, even if tackled immediately, most of the grievances are deeply entrenched and would take years to address. With this in mind, 2019 is unlikely to be a flash in the pan. The next 12 months are likely to yield more of the same, and companies and investors will have to learn to adapt and live with this ‘new normal’.”

It remains to be seen to what extent these protests have common roots. All civil unrest is unique to each country, but the protests in 2019 all seem to grow out of concerns about corruption. Most governments have a miserable recent record of addressing that issue. When governments fail to stop corruption, the only real alternative for citizens is to take to the streets.

Posted January 16, 2020 by vferraro1971 in World Politics

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