GDP or GNH (The Bhutan Way)?


March 24, 2017

GDP or GNH (The Bhutan Way)–Maybe it’s Time to screw the  Economists and start looking at alternative ways to measure what makes life worthwhile

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Listen to this TED presentation by Chip Conley and reflect. I enjoyed it and wonder why we continue to measure only the measurable (the tangibles) and ignore the intangibles. As  someone who is trained in Economics (and does being taught this academic discipline make a economist?), I am wonder how it is that  I can be so misled and still have not abandoned GDP as a measurement of national wealth if I know it is misleading when intangibles matter more today. Maybe it is a force of habit. Should be I Aristotelian or Maslowian?  Let me know what you think.–Din Merican

 

Geo-Politics of Environment


March 19, 2017

The Geopolitics of Environment

by Giulio Boccaletti

https://www.project-syndicate.org/commentary/environment-economic-and-geopolitical-challenges-by-giulio-boccaletti-2017-03

Much of the world seems to be on edge. The West’s relationship with Russia, the future of NATO, the Syrian civil war and refugees, rising right-wing populism, the impact of automation, and the United Kingdom’s impending departure from the European Union: all of these topics – and more – have roiled public debate worldwide. But one issue – one might say the most significant of them all – is being ignored or pushed aside: the environment.

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That was the case at this year’s annual meeting of the World Economic Forum at Davos, Switzerland. Beyond a mention of the Paris climate agreement by Chinese President Xi Jinping, topics like climate change and sustainable development didn’t even make it to the main stage. Instead, they were relegated to side meetings that rarely seemed to intersect with current political and economic events.

Allowing environmental issues to fall by the wayside at this time of geopolitical and social instability is a mistake, and not just because this happens to be a critical moment in the fight to manage climate change. Environmental degradation and natural-resource insecurity are undermining our ability to tackle some of the biggest global issues we face.

Environmental insecurity is a major, though often underestimated, contributor to global instability. The UN High Commission on Refugees reports that natural disasters have displaced more than 26 million people per year since 2008 – almost a third of the total number of forcibly displaced people in this time period.

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Even the current refugee crisis has an environmental element. In the years leading up to the war, Syria experienced its most extreme drought in recorded history. That drought, together with unsustainable agricultural practices and poor resource management, contributed to the internal displacement of 1.5 million Syrians and catalyzed political unrest ahead of the 2011 uprising.

The link between environmental and agricultural pressures extends far beyond Syria. Over-reliance on specific geographies for agriculture means that food production can exacerbate environmental problems, or even create new ones. This can pit global consumer interests against local citizen interests, as it has along the Mississippi River, where fertilizer runoff from one of the world’s breadbaskets is contributing to concerns about water quality.

The connection goes both ways, with environmental conditions also shaping agricultural production – and, in turn, the prices of agricultural commodities, which represent about 10% of traded goods worldwide. For example, rising temperatures and altered precipitation patterns are already driving up the price of coffee. With the global land area suitable for growing coffee set to contract by up to half by 2050, price pressures will only intensify.

A sudden shift toward trade protectionism could drive up agricultural commodity prices further. Such an increase would affect farm-level household income, favoring some farmers while harming others. End consumers, particularly the poor and vulnerable, would also suffer.

Another reason why the environment should be at the center of economic debates is its role as the world’s single largest employer. Almost a billion people, just under 20% of the world’s labor force, are formally employed in agriculture. Another billion or so are engaged in subsistence farming, and therefore don’t register in formal wage statistics.

Any initiatives to support economic development must support this population’s transition toward higher-productivity activities. This is particularly important at a time when increasingly sophisticated and integrated technology threatens to leapfrog an entire generation of workers in some countries. Efforts to benefit this huge population must focus not only on training and education, but also on new models that allow countries to capitalize on their natural capital – the landscapes, watersheds, and seascapes – without depleting it.

Just as natural-resource insecurity can cause displacement and vulnerability, effective natural-resource management can support conflict resolution and sustainable economic development. On this front, efforts to achieve environmental remediation, to boost the resilience of rural communities, to advance sustainable agricultural production, and to support community-based environmental stewardship have all shown promising results.

Consider the Northern Rangelands Trust, an organization focused on creating community conservancies to enable sustainable and equitable land use in Kenya. NRT has helped pastoralist communities establish effective governance mechanisms for the environment on which they depend, reducing conflict over grazing rights, especially in times of drought.

For many communities, members’ relationship with the landscape in which they live is an integral part of their identity. With effective governance and planning, open dialogue, resource-sharing frameworks, and sufficient investment, including in skills training, these communities can translate this relationship into effective environmental stewardship – and build healthier and more secure societies.

The crises engulfing the modern world are complex. But one thing is clear: the environment is connected to all of them. Solutions will mean little without a healthy world in which to implement them.

 

APSIA Conference 2017 Keynote Address by Singapore’s DPM


March 5, 2017

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APSIA Conference 2017 Keynote Address by Singapore’s DPM Tharman Shanmugaratnam at LKY School of Public Policy

COMMENT:

Geo-Politics, Disruptive Social Developments and Technological Change: Has the Game Changed? Yes, that is easy part of the answer.  How we wish that life is simple and outcomes are predictable. But it is not. I  have been grappling a few questions. I asked myself questions like What has changed? How it has changed?  What is driving the change?What this change means to us in Asia.

China, North Korea, Islamic and Christian evangelism, terrorism and so on are making the headlines.I  also see increasing polarisation and the need for understanding and rebuilding trust. I expect our politicians to reconnect with people they are mandated to serve and  want leaders to lead with integrity, honesty and hope. Listen to DPM Tharman Shanmugaratnam for some insights.–Din Merican

 

 

Universal Values, not just Globalisation


February 26, 2017

Universal Values, not just Globalisation

 

We have been so obsessed – and this is a failing – by the economics of globalisation, the trade and finance and free movement of labour, that we do not give higher value to the fundamental human values and intercourse that are at risk.–Dr. Munir Majid

 

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THE gravest threat of the rise of nationalist populism is to the universal values and practices of a civilised world which took several decades to develop. It is this that modern tribalism in Europe and America seeks to cannibalise.

 We have been so obsessed – and this is a failing – by the economics of globalisation, the trade and finance and free movement of labour, that we do not give higher value to the fundamental human values and intercourse that are at risk.

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@http://web.stanford.edu/group/ccr/blog/2009/04/intercultural_communication_in.html

The world has become more possessed by economics than even Marx could have predicted. The disparity of income and wealth is as wide as he saw in post-industrial revolution Europe.

The political turmoil of Leninism, the rise of fascism, the Gulag and the Holocaust – and war – were some of the worst outcomes that followed.

We must recognise this looming threat. We will not get there unless we first recognise the main failing of globalisation, this obsession with economics.

Economic and financial benefit – however ill-distributed – was its driving force, mainly through trade, free movement of capital and labour. Such benefit did not become self-evident truth, however, as too many were left behind for too long.

Would it have made a difference had such benefit been better distributed? It would seem unlikely as non-economic values in the nation-state were disturbed as much as production and income structures were overturned.

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“Give us our country back”, is more than about economics. It is about the deemed imposition of global values and the perceived dilution of national character.

The appeal to nationalist populism, which last year saw the vote for Brexit and the election of Donald Trump as United States president, was primarily occasioned by globalised economic and financial supercharge which isolated the low income and divided societies while the top earners spirited away with handsome benefits, but the potent response came from nationalist reassertion against foreign threat.

Against loss of jobs to….Against loss of country to….Against loss of control because of….All because of globalisation. Global is foreign.

Universal values and international behavioural practices got to be associated with the ills of globalisation. This is the most dangerous threat to civilised world order.

The 1948 Universal Declaration of Human Rights, however extant its violation, for instance, well preceded the wave of globalisation. The 1951 Refugee Convention defines the rights of refugees and the obligations of states towards them which are now part of customary international law.

What might now seem mundane, the Universal Postal Union, was established in 1874, and now has 192 members as it serves a universal communication need. There are many others of this ilk.

Cross-border immigration took place to fill up jobs locals would not or could not do. The world was enriched by these kinds of common necessities, not by an enforcement of globalisation.

The point is that universal and international necessities were and are way ahead of the globalisation against which there is such massive revolt. Their values, standards and practices are in dire threat of being sacrificed on the altar of narrow populism.

We can talk too much about globalisation. It is far better now to talk less and do more – and not to use the term globalisation ad nauseam.

The kinds of demonstrations for the values of good society and nationhood across America and Europe that we have seen in response to rules of dictatorship, rules of violation of rights and universal values, against racism and acts of inhumanity, are significant signs that civilised standards of life will not be allowed to be trampled on and to die.

On the other hand, we must also do more “for” things, before we have to demonstrate for them. The good earth has been so much abused. We now talk about climate change and environmental protection. We need to look at the big picture of course, but we should also do more and more, and highlight more and more significant efforts that can and are being made to save the planet – for the good of mankind.

I know, as a significant example, of a documentary feature, Great Green Wall, being produced by acclaimed Oscar-nominated film-maker Fernando Meirelles, which proposes to tell the story of one of the most ambitious endeavours taking place on the edge of the Sahara desert: “A dream to grow a wall of trees and plants across the entire width of Africa, and stop the ravages of climate change firmly in its tracks.”

I know one of the persons involved at the start of the project in 2007 which when completed in 2030 will make the Great Green Wall the largest living structure on planet earth – three times the length of the Great Barrier Reef.

Businesses and governments should support and get involved in these kinds of global efforts to deliver goods that make and realise the point of universal values that are so much under attack from modern tribalism in the contemporary world.

There is no reason why the government and companies in China which so want to show global leadership cannot support projects such as the Great Green Wall or, indeed, embark on their own projects, such as to reclaim the Gobi desert.

There must in the world – especially among business corporations – be a greater realisation that value-at-risk is not just about dollars and cents. Yes, the good will ultimately come to the economy. But do not talk too much about it as if that is all there is.

Dr. Munir Majid,  Visiting Senior Fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is Chairman of CIMB ASEAN Research Institute.

The Paris Approach to Global Governance–Looking Back


January 28, 2017

The Paris Approach to Global Governance–Looking Back

by Anne-Marie Slaughter*

*Anne-Marie Slaughter, a former director of policy planning in the US State Department (2009-2011), is President and CEO of the think tank New America, Professor Emerita of Politics and International Affairs at Princeton University, and the author of Unfinished Business: Women Men Work Family

… In the United States, as a matter of domestic law, it is an executive agreement (The Paris Agreement on Climate Change), binding only on President Barack Obama’s administration. An executive-legislative agreement would have the same status as a treaty, except that a treaty must be ratified by two-thirds of the Senate, whereas an executive-legislative agreement must be adopted by the Senate and the House under the same rules that apply to all domestic legislation. An executive agreement made by one administration is not necessarily binding on its successor, but it would have to be explicitly repudiated.

…The Paris agreement is a sprawling, rolling, overlapping set of national commitments brought about by a broad conglomeration of parties and stakeholders. It is not law. It is a bold move toward public problem solving on a global scale. And it is the only approach that could work.–Anne-Marie Slaughter

As a former president of the American Society of International Law, I should bemoan the recent Paris agreement on climate change as a failure. By the standards of a traditional treaty, it falls woefully short. Yet its deficits in this regard are its greatest strengths as a model for effective global governance in the twenty-first century.

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The international legal gold standard is a treaty, a binding document that can be enforced by courts and arbitration tribunals. Such agreements comprise more than expressions of intent; they contain codified, enforceable rules, along with sanctions for non-compliance. Indeed, they must be ratified by national parliaments, so that they become a part of domestic law.

The Paris agreement is none of these things. In the United States, as a matter of domestic law, it is an executive agreement, binding only on President Barack Obama’s administration. An executive-legislative agreement would have the same status as a treaty, except that a treaty must be ratified by two-thirds of the Senate, whereas an executive-legislative agreement must be adopted by the Senate and the House under the same rules that apply to all domestic legislation. An executive agreement made by one administration is not necessarily binding on its successor, but it would have to be explicitly repudiated.

Moreover, unlike in a traditional international treaty, the obligations of the Paris agreement are not fixed. The point of carefully negotiating international agreements is that once they become law, they cannot be changed, except through formally agreed amendment processes. That permanence gives them authority. Yet the 195 signatories to the Paris agreement created a non-binding system for raising their individual obligations every five years. In other words, the parties are encouraged – but not required – to submit increasingly stringent revisions of their so-called Intended Nationally Determined Contributions (INDCs), based on their own judgment.

The Paris agreement also abandons the idea of “compliance” as a stamp of legality or illegality. The historic job of international lawyers and tribunals has been to determine whether a signatory to an international agreement is complying with its obligations. The Paris agreement essentially substitutes transparency for compliance, creating an “enhanced transparency framework” designed “to build mutual trust and confidence and to promote effective implementation.”

A subsequent article of the agreement does create a compliance mechanism, but specifies that it will be “expert-based” – meaning that assessment teams will include climate scientists and policy experts, as well as lawyers. Furthermore, it will be “facilitative,” functioning in a manner that is “transparent, non-adversarial, and non-punitive.” That sounds more like a support group than a disciplinary committee.

In short, by traditional international legal standards, the Paris agreement is essentially a statement of good intentions, setting forth aspirational goals to limit global temperature rise to 2° Celsius – or, ideally, 1.5°C – above pre-industrial levels. It is as far as could be from the Treaty of Vienna, the Treaty of Versailles, or even the treaties banning landmines and establishing the International Criminal Court. And that is precisely why it has a good chance of working.

Image result for the challenge of climate changeThe Challenge of Climate Change

For starters, tackling a problem as complex and fast-moving as climate change would be impossible with permanent, binding commitments. By the time an agreement could be hammered out – if it could be hammered out – the scale and features of the problem, not to mention the technologies that could be used to address it, would have changed. The new kind of global governance that the Paris agreement exemplifies, which substitutes rolling processes for fixed rules, is far better suited to the kinds of global problems we face today.

Likewise, in a world of 195 diverse countries – from the desperately poor or conflict-ridden to the highly developed – top-down obligations can never be uniform enough to work. Relying on bottom-up INDCs, which require the citizens and governments of each individual country to come together to determine what they can reasonably achieve, is far more promising.

But perhaps the most important shift made in the Paris agreement is from selective coercion to collectively supported competition. Instead of suing one another for failure to comply with a legal obligation, countries will try to outdo one another in their efforts to help address a shared problem. The transparency mechanism supports this shift, by allowing journalists, activists, scientists, concerned citizens, and climate-friendly businesses to engage in debates, publicize successes and failures, solicit help and advice, and offer support to lagging countries.

This highlights the final crucial feature of the new global governance model exemplified by the Paris agreement: The deal reached earlier this month (December, 2015), like the Conference of the Parties itself, is not only for governments. Although the agreement calls on governments to continue providing public finance through the official Green Climate Fund, individuals and entities are also playing a major role.

For example, Bill Gates made global headlines during the negotiations when he announced a $2 billion fund to invest in clean energy, financed by the Breakthrough Energy Coalition, a group of 26 global philanthropists and the University of California. The BEC heralds a new level of public-private partnership, with the investors working with the governments of some 20 countries – including the China, India, and the US – that already account for roughly 80% of global investment in clean energy and have now pledged to double their investments.

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It is no longer one of choice  but it is time for bold and decisive action

Negotiators in Paris recognized that business, philanthropy, civil society, academia, and ordinary people all have a role to play in addressing a major global challenge. Change is happening even on the government side, with municipal authorities often significantly outpacing their national counterparts, operating through vehicles like the C-40, a “network of the world’s megacities committed to addressing climate change.”

The Paris agreement is a sprawling, rolling, overlapping set of national commitments brought about by a broad conglomeration of parties and stakeholders. It is not law. It is a bold move toward public problem solving on a global scale. And it is the only approach that could work.

https://www.project-syndicate.org/commentary/paris-agreement-model-for-global-governance-by-anne-marie-slaughter-2015-12

 

2017 — A Thunderous Clash of Politics, Economies and Policies


January 6, 2017

2017 — A Thunderous Clash of Politics, Economies and Policies

Martin Khor is Executive Director of the South Centre, a think tank for developing countries, based in Geneva.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out. Credit: Diego Arguedas Ortiz/IPS.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out. Credit: Diego Arguedas Ortiz/IPS.

PENANG, Jan 2 2017 (IPS) – Yet another new year has dawned.   But 2017 will be a year like no other.

There will be a thunderous clash of policies, economies and politics worldwide.   We will therefore be on a roller-coaster ride, and we should prepare for it and not only be spectators on the side-lines in danger of being swept away by the waves.

With his extreme views and bulldozing style, Donald Trump is set to create an upheaval if not revolution in the United States and the world.

He is installing an oil company chief as the Secretary of State, investment bankers in key finance positions, climate sceptics and anti-environmentalists in environmental and energy agencies and an extreme rightwing internet media mogul as his chief strategist

US-China relations, the most important for global stability, could change from big-power co-existence with a careful combination of competition and cooperation, to outright crisis.

Trump, through a phone call with Taiwan’s leader and subsequent remarks, signalled he could withdraw the longstanding US adherence to the One China policy and instead use Taiwan as a bargaining card when negotiating economic policies with China.  The Chinese perceive this as an extreme provocation.

He has appointed as head of the new National Trade Council an economist known for his books demonising China, including “Death by China: Confronting the Dragon”.

Trump seems intent on doing an about-turn on US trade and investment policies, starting with ditching the Trans Pacific Partnership Agreement and re-negotiating the North American Free Trade Agreement.

Other measures being considered include a 45% duty on Chinese products, extra duties and taxes on American companies located abroad, and even a 10% tariff on all imports.

Martin Khor

Thus 2017 will see a rise in protectionism in the US, the extent still unknown.  That is bad news for those developing countries whose economies have grown on the back of exports and international investments.

Europe in 2017 will also be preoccupied with its own regional problems.  The Brexit shock of 2016 will continue to reverberate and several European countries facing elections will see challenges to their traditional values and established order from xenophobic and narrow nationalist parties.

As Western societies become less open to the world and more inward looking, developing countries should revise their development strategies and rely more on domestic and regional demand and investments.

As North-South economic relations decline, this should also be the moment for expanding South-South cooperation, spurred as much by necessity as by principles.

2017 may be the year when resource-rich China, with its huge Road and Belt initiative and its immense financing capacity, fills in the economic void created by western trade and investment protectionism.

But this may not be sufficient to prevent a finance shock in many developing countries now beginning to suffer a reversal of capital flowing back to the US, attracted by the prospect of higher interest rates and economic growth.

Several emerging economies which together received many hundreds of billions of dollars of hot money in recent years are now vulnerable to the latest downturn phase of the boom-bust cycle of capital flows.

Some of these countries opened up their capital markets to foreign funds which now own large portions of government bonds denominated in the domestic currency, as well as shares in the equity market.

As the tide turns, foreign investors are expected to sell off and transfer back a significant part of the bonds and shares they bought, and this new vulnerability is in addition to the traditional external debt contracted by the developing countries in foreign currencies.

Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.

As the local currency depreciates further, the affected countries’ companies will have to pay more for servicing loans contracted in foreign currencies and imported machinery and parts, while consumers suffer from a rapid rise in the prices of imports.

On the positive side, the currency depreciation will make exporters more competitive and make tourism more attractive, but for many countries this will not be enough to offset the negative effects.

Thus 2017 will not be kind to the economy, business and the pockets of the common man and woman.  It might even spark a new global financial crisis.

The old year ended with mixed blessings for Palestinians. On one hand they won a significant victory when the outgoing President Obama allowed the adoption of a UN Security Council resolution condemning Israeli settlements in occupied Palestinian territories by not exercising a veto.

The resolution will spur international actions against the expansion of settlements which have become a big obstacle to peace talks.

On the other hand the Israeli leadership, which responded defiantly with plans for more settlements, will find in Trump a much more sympathetic President.  He is appointing a pro-Israel hawk who has cheered the expansion of settlements as the new US ambassador to Israel.

With Trump also indicating he will tear up the nuclear power deal with Iran, the Middle East will have an even more tumultuous time in 2017.

Some countries will be hit by a terrible combination of capital outflow, reduced export earnings, currency depreciation and an increased debt servicing burden caused by higher US interest rates.

In the area of health care, the battle for affordable access to medicines will continue, as public frustration grows over the high and often astronomical prices of patented medicines including for the treatment of HIV AIDS, hepatitis C, tuberculosis and cancers.

There will be more powerful calls for governments to curb the excesses of drug companies, as well as more extensive use of the flexibilities in the patent laws to counter the high cost of medicines.

Momentum will also increase to deal with antibiotic resistance which in 2016 was recognised by political leaders meeting at the United Nations to be perhaps the gravest threat to global health.

All countries pledged to come up with national action plans to counter antibiotic and anti-microbial resistance by May 2017 and the challenge will then be to review the adequacy of these plans and to finance and implement them.

The new year will also see its fair share of natural disasters and a continued decline in the state of the environment.  Both will continue to be major issues in 2017, just as the worsening of air pollution and the many earthquakes, big storms and heat-waves marked the previous few years.

Unfortunately low priority is given to the environment.  Hundreds of billions of dollars are allocated for highways, railways and urban buildings but only a trickle for conservation and rehabilitation of hills, watersheds, forests, mangroves, coastal areas, biodiversity or for serious climate change actions.

2017 should be the year when priorities change, that when people talk about infrastructure or development, they put actions to protect and promote the environment as the first items for allocation of funds.

This new year will also be make or break for climate change.  The momentum for action painfully built up in recent years will find a roadblock in the US as the new President dismantles Obama-initiated policies and measures.

The Paris agreement, which was adopted in December 2015 and which came into force in record time in October 2016 as a demonstration of international concern over climate change, may face a major test and even an existential challenge in 2017, if Trump fulfils his election promise to pull the US out.

But Trump and his team will face resistance domestically including from state governments and municipalities which have their own climate plans, and from other countries determined to carry on without the US on board.

Indeed if 2017 will bring big changes initiated by the new US administration, it will also generate many counter actions to fill in the void left in the world by a withdrawing US or to counter its new unsettling actions.

Many people around the world, from politicians and policy makers to citizen groups and community organisers are already bracing themselves to come up with responses and actions.

Indeed 2017 will be characterised by the Trump effect but also the consequent counter-effects.

There are opportunities to think through, alternatives to chart and reforms to carry out that are anyway needed on the global and national economies, on the environment, and on geo-politics.

Most of the main levers of power and decision-making are still in the hands of a few countries and a few people, but there has also been the emergence of many new centres of economic, environmental and intellectual capabilities and community-based organising.

2017 will be a year in which ideas, policies, economies and politics will all clash, thunderously, and we should be prepared to meet the challenges ahead and not only be spectators.