"Any way the wind blows" - Queen, Bohemian Rhapsody
The past few years have been quiet something. The war in Ukraine – the major event in Europe this year – but COVID 19, the ramifications of the 2008 financial crisis, and 9/11 and its consequences (most notably the war on terror). This all in the context of large-scale changes such as the rise of China (and along with it, much of the ‘global-South’), the increasing consciousness with regards to climate change, and the increasing of global inter-connectedness in many areas (i.e., ‘globalization’). The first few decades of the century have been noteworthy; but presumably that can be said of all periods. It made me think of the Martin Luther King Jr. quote, “We are not makers of history. We are made by history.”
In Europe and the US, the return of inflation has clearly marked 2022. The impact has varied – in the EU for example, in November 2022 according to Eurostat, annual inflation rates varied from 6.7% in Spain to 23.1% in Hungary. GDP growth – after a post-COVID 19 bump – has largely reduced to zero in both the EU and the US. The cause(s) of inflation have been much debated and thus there is no clear consensus on how to address this. Both the ECB and US Fed have aggressively increased their lending rates. However, there is no clear consensus on what fiscal policy should be and the role of central banks with regards to some of the less conventional measures (in the Eurozone). For Europe, it is clear that an important factor is the war in Ukraine and its impact on energy provision and energy prices. But this is also impacting the rest of the world and geopolitics.
The most evident impact has been on energy. In addition to the price increase (as mentioned – an important part of the inflationary pressures, at least in Europe), the cutting-off of / reduction of access to Russian energy (most notably gas) has pushed Europe in particular to access other sources and change its approaches. Another notable impact has been on food prices globally, both directly through the reduction in provision of specifics staples but also via the provision of fertilizers. The inflationary pressure has pushed both the US Fed and the ECB to increase interest rates and this is impacting economies around the globe who borrow in US dollars and / or Euro’s. Exiting the current low rates makes funding debt service harder for developing countries and emerging markets – some have not been able to return to the markets in 2022.https://findevlab.org/the-coming-debt-crisis/. The case of Ghana is illustrative. The war in Ukraine is also re-defining alliances and international relations. NATO (or ‘the West’) seems to have emerged as a more functional structure than many had expected. Russia has seemingly intensified its relations with Iran and North Korea, in particular with regards to weapons. Finally, China, India, and much of the rest of the world has in general tried to take a ‘neo-non-aligned’ position with regards to the war.
Where does all of this leave us for 2023? Some random thoughts: 1) The above, combined with the (relatively) low growth in China mean that development perspectives (in particular for non-energy economies) in developing countries are not good; and this good have political ramifications 2) The previous point + the direct tensions between the West and Russia over Ukraine mean that the perspectives for cooperation on global governance issues (e.g. climate change) are not good; 3) A particularly contentious US presidential elections in 2024 (with primaries to be announced between end 2022 and early 2023; conventions to take place summer 2024) means that the US is likely to be focused on internal affairs the 2nd half of 2023.
28.12.2022, Brussels, Belgium.
I just finished reading Daniel Yergin’s, ‘The New Map – Energy, Climate and the Clash of Nations’. A very instructive read on the impact of current developments in the energy sector and climate measures. The development of shale gas is presented as a key development – essentially turning the largest energy importer, the US, into an exporter. The dependency of China on energy imports and its (resulting) push to renewables is another important factor, as is the role of Russia as a large energy provider. The Middle East remains a complex situation, sitting on important reserves but with an uncertain future.
The war in Ukraine has been instructive. The relationship between the west and Russia – with the continued engaging in energy trade from both sides – is noteworthy. Both sides remain dependent even if in (indirect) conflict.
Another interesting thing to look at is the impact of the energy transition. Some energy producers / exporters risk loosing revenue and influence. Other minerals (e.g. used in the production of batteries) become more important and countries with key reserves of these become important economic and strategic actors (e.g. Chili with important reserves of Lithium and Copper). Interestingly, China is also an important source country for some of these minerals. The EU even has a strategy for these critical raw materials.
Some African countries could benefit from these developments (i.e. with reserves of these raw materials) but others could loose (i.e. if the interest in traditional energy drops). Of course, all the traditional risks (bad governance, Dutch disease, how to move up the value chain and create jobs, etc.) even if a country is ‘lucky’ in this regard. The future geopolitical landscape is also – as always- difficult to predict (another interesting read in this regard).
18.04.2022, Brussels, Belgium.
I just finished reading Noah Feldman’s book, ‘The Arab Winter: A Tragedy’. A very interesting read reflecting on the results of the Arab Spring. With the exception of Tunisia (though at this point even that could be reviewed), the book concludes, the result has been (renewed) dictatorship, civil war, extremist terror, and at times all three. A sobering and depressing analysis. Yet the book does note that for the first time in modern history the Arabic-speaking people to real free and collective political action. So even if the results may not be what was hoped for, it probably is an important political development.
For me – not following the events in great detail – it was a good way to catch up. Not only on the events but also with a bit of a meta-perspective. Last summer the Economist magazine had a special on the ‘Arab World’. It’s opening article, ‘A misshapen square’ (referring to Cairo’s Tahrir Square which was at the heart of its 2011 revolution against Mubarak) concludes that Arab states suffer of ‘external weakness’, ‘internal brittleness’, and a ‘crisis of identity’. The states and their economies cannot deliver the economic growth needed, the rulers lack legitimacy, and the ‘death’ of Arab nationalism has left a gaping hole. Feldman’s analysis of ISIS as a ‘utopian’ (but of course extreme nihilistic and Islamist) movement is interesting in this perspective. An interesting and important region to keep an eye on, both from a European and African perspective.
19.03.2022, Brussels, Belgium.
After months of Russian military buildups close to its borders with Ukraine (and in Russia’s ally, Belorussia), two days ago it finally happened – Russia invaded Ukraine.Though inevitably, in particular of late, I have done some reading on the issues (and I would strongly recommend the satirical ‘The Death of Stalin’) I’m not nearly familiar enough with them to arrive at any strong conclusions (or at least they are not particularly interesting to share).But I’ll permit myself a few general points and EU / Africa relevant ones:
26.02.2022, Brussels, Belgium.
I started a blog a while ago by stating that, “The past few weeks, and arguably the past years, have not been kind to the Sahelian countries.” After Mali, Chad, Guinea, Sudan, Burkina Faso has now had a coup d’état. Guinea Bissau faced an attempted coup yesterday. (I’ll leave out Myanmar for geographic reasons – but the ‘coup’ seems to be back).
Each case has its particularities and specificities. In Chad, the death of the former long-term dictator clear was the very definition of an institutional crisis. In Sudan, after a popular uprising against the former dictator, the country is going through a complex transition. (One has to note the heroic courage of the Sudanese people). In Guinea the former president (elected democratically) had modified the constitution to allow himself a third term as president. In Burkina Faso though a democratically elected president (after a popular uprising against the former dictator) has been removed in a coup. It is clear that both the armed forces and much of the population was frustrated with the president’s difficulties in dealing with the (growing) terrorist menace spilling over from Mali. Of course, the fact that the army that failed in dealing with the terrorists is taking control is somewhat ironic.
To me, a few things stand out;
02.02.2022, Brussels, Belgium.
I just finished reading ‘Hidden Hand’ by C. Hamilton and M. Ohlberg. Briefly summarized, the book is an explanation of influence operations by the Chinese communist party around the world and it essentially argues that this is a specific and urgent issue for the West. The book makes provides an extensive overview of how the Chinese government and security services are organized with regards to influencing foreign governments and societies. The links with economic interests and the Chinese abroad are particularly interesting. The book – in particular for someone not particular versed in the subject – is a very good introduction and overview. The book is convincing in its argument that the Chinese communist party makes the Chinese ‘state’ different than a ‘regular’ state / government and that they put extensive effort in espionage and lobby abroad. It is something that is an issue, and arguably one that is somewhat underappreciated.
Where the book is weaker is regarding how the nature of the Chinese efforts is different than that of other powers. Espionage (industrial or otherwise), influencing (through financing NGO’s, thinktanks, students, etc.) are not a uniquely Chinese phenomenon. And attacking the Chinese of trying to get more influence in international organizations is of course somewhat hypocritical if we look at the state of IMF / World Bank governance and the UN Security Council.
For both the EU and Africa, the big question is how to deal with this. Clearly ‘size’ is an issue, and hence (supra-national) unity becomes more important. This is of course relevant both with regards to the US and China. Both Europe and Africa benefit from multilateral governance – a bigger issue and concern when the two major global players have at best an opportunistic relationship with this.
01.01.2022, Brussels, Belgium
I just finished reading ‘Empty Planet’ by D. Bicker and J. Ibbitson. Briefly summarized, the book essentially argues that the demographic challenge is not rapid population growth (as is often argued) but the opposite. The book makes a strong case that this is already the case (or a near certainty in the short-term) in many countries (including large population ones like China). Moreover, while we are used to deal with population growth – we have grown beyond numerous population milestones that predicted our certain demise since Robert Malthus – this is hardly the case for decline at the rate we will face it.
Some link the decline in population growth to increases in inflation and others to slower technological progress. It is becoming such a source of concern that some countries are making drastic policy changes. Of course, it should be noted that some point out that the changes in the demographic pyramid could be managed through better health (at old age) and other changes (such as remote work and the increased use of technology).
What does that mean for Africa and development? First, while Africa has a demographic opportunity, it is certainly not automatic that it will reap the benefits. The demographic shift needs to be accompanied by significant investment to reap the potential benefits. Secondly, Africa’s population growth could help address the foreseen labor gap in Europe, but this necessitates reflection and policy action in a wide range of areas such as migration and education. Who would have thought that within a decade or so, when we speak of a ‘migration crisis’ we will not be speaking of too many migrants but too few…
26.6.2021, Brussels, Belgium
A year on after we first heard about the new coronavirus. Here in Europe, we are still facing significant restrictive measures. These range from school closures, limits on group size, limits to travel and face masks remain ubiquitous. It seems just like yesterday we were in Niamey, deciding if it was better to stay or to go due to the pandemic.
But while the developed world has suffered, a big question was how developing countries would fare. I have touched on this in the past blogs. In terms of direct health impact, the impact outside of the West has been mixed. But even though the impact has been significant in some countries and region, the absolute worst-case scenario that some feared has been avoided so far. However, there is some evidence that the economic impact could be significant. This has been argued by the IMF, and the UN fears a ‘lost decade’. This even after here too, there was some initial optimism.
An interesting and valuable contribution to this reflection has been a recent research article by Egger et al. In it they present data from household surveys that were conducted in 9 developing countries in Asia, Africa, and Latin America. This is particularly valuable as headline economic data is sketchy at best from developing countries and it is challenging to understand how this reflects on how people are living.
They note that, ‘A full 50 to 80% of sample populations in Bangladesh, Burkina Faso, Colombia, Ghana, Kenya, Rwanda, and Sierra Leone report income losses during the COVID-19 period. If these effects persist, then they risk pushing tens of millions of already vulnerable households into poverty… By April, many households were already unable to meet basic nutritional needs.’ Not only is there the risk that progress made on poverty reduction will be lost (as argued above in the UN commentary), but the authors note that, ‘Following on decades of steadily increasing incomes across major world regions, the sharp rise in global poverty in 2020 that we document is unprecedented. The median proportion of respondents across our sample countries experiencing reduced income is a staggering 67%, and negative effects are experience by households across the socioeconomic spectrum.’
I started working on development issues in 2004, on South East Asia. I remember how in Indonesia – even 7 years after the Asian financial crisis – people would still reflect on how it impacted their lives. The poverty rate increased from 17% to 24% in some 2 to 3 years and Indonesia ended up having a much reduced poverty reduction rate going forward (see this paper, for example). Politically this also resulted in many changes – arguably the 1999 secession of East Timor (and the war), the end of the Suharto regime, and the rise of terrorism (e.g., the 2002 Bali bombings) were all at least in part linked to the economic developments.
We shall see what that means for the post-covid world around the globe.
05.04.2021, Brussels, Belgium
Last Tuesday, the 1st of December, I started a new job. Working for the European External Action Service (EEAS), I am now a Policy Officer working on Africa. After three years in Niger I am very excited to now have this opportunity.
With regards to this blog, I have to reflect on what approach I will take and what is needed in terms of procedures. First of all, it goes without saying, that everything on this blog is strictly personal and in no way does it reflect the position of the EEAS or any other institution. Secondly, I will have to check if any particular permission is needed for this type of activity (and if so, get it). Finally, I might want to “angle” the perspectives taken in the blog – for example avoid topics that might be particularly controversial. (I have not yet made up my mind on the latter).
Nevertheless; food for thought. But a good “problem” to have!
6.2.2020, Brussels, Belgium
Online encampment of A. S. Barry. Disparate and not-so-disparate thoughts on international relations, development, writing, and life.