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.

 

2016–The Harbinger of Troubled and Uncertain Times in 2017


December 20, 2016

2016–The Harbinger of Troubled and Uncertain Times in 2017

by Martin Khor@www.thestar.com.my

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‘It Is Our Soul’: The Destruction of Aleppo, Syria’s Oldest City : Information Clearing House: ICH
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The year 2016 will be remembered for the West ending its romance with globalisation, and its impact on the rest of the world.

JUST a few days before Christmas, it is time again to look back on the year that is about to pass. What a strange year it has been, and not one we can  truly celebrate!

The top event was Donald Trump’s unexpected victory. It became the biggest sign that the basic framework and values underpinning Western societies since the Second World War have undergone a seismic change.

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The established order represented by Hillary Clinton was resoundingly defeated by the tumultuous wave Trump generated with his promise to stop the United States from pandering to other countries so that it could become “great again”.

Early in the year came the Brexit vote shock, taking Britain out of the European Union. It was the initial signal that the liberal order created by the West is now being quite effectively challenged by their own masses.

Openness to immigrants and foreigners is now opposed by citizens in Europe and the US who see them as threats to jobs, national culture and security rather than beneficial additions to the economy and society.

The long-held thesis that openness to trade and foreign investments is best for the economy and underpins political stability is crumbling under the weight of a sceptical public that blames job losses and the shift of industries abroad on ultra-liberal trade and investment agreements and policies.

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Thus, 2016 which started with mega trade agreements completed (Trans-Pacific Partnership) or in the pipeline (the Transatlantic Trade and Investment Partnership between the US and Europe) ended with both being dumped by the President Elect, a stunning reversal of the decades-old US position advocating the benefits of the open economy.

2016 will be remembered as the year when the romance in the West with “globalisation” was killed by a public disillusioned and outraged by the inequalities of an economic system tilted in favour of a rich minority, while a sizeable majority feel marginalised and discarded.

In Asia, the dismantling of the globalisation ideal in the Western world was greeted with a mixture of regret, alarm and a sense of opportunity.

Many in this region believe that trade and investment have served several of their countries well. There is fear that the anti-globalisation rebellion in the West will lead to a rapid rise of protectionism that will hit the exports and industries of Asia.

As Trump announced he would pull the US out of the TPP, China stepped into the vacuum vacated by the US and pledged to be among the torchbearers of trade liberalisation in the Asia-Pacific region and possibly the world.

The change of direction in the US and to some extent Europe poses an imminent threat to Asian exports, investors and economic growth. But it is also an opportunity for Asian countries to review their development strategies, rely more on themselves and the region, and take on a more active leadership role.

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China made use of 2016 to prepare for this, with the Asian Infrastructure Investment Bank taking off and the immense Belt and Road Initiative gathering steam. Many companies and governments are now latching on to the latter as the most promising source of future growth.

The closing months of 2016 also saw a surprising and remarkable shift in position by the Philippines (and Malaysia too for a different set of reasons), whose new President took big steps to reconcile with China over conflicting claims in the South China Sea, thus defusing the situation – at least for now.

Unfortunately, the year also saw heart-rending reports on the plight of the Rohingya in Myanmar, and the deaths of thousands of Syrians including those who perished or were injured in the end-game in Aleppo.

On the environmental front, it is likely 2016 will be the hottest year on record, overtaking 2015. This makes the coming into force in October of the Paris Agreement on climate change all the more meaningful.

But there are two big problems. First, the pledges in the agreement are grossly insufficient to meet the level of emissions cuts needed to keep the world safe from global warming, and there is also insufficient financing to support the developing countries’ climate actions, whether on mitigation or adaptation.

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And second, there is a big question mark on the future of the Paris agreement as Trump had vowed to take the US out of it.

The biggest effect of 2016 could be that a climate skeptic was elected US President.In the area of health, the dangers of antibiotic resistance went up on the global agenda with a declaration and day-long event involving political leaders at the United Nations in September.

There was growing evidence and stark warnings in 2016 that we are entering a post-antibiotic era where medicines will no longer work and millions will die from infection and ailments that could once be easily treated by antibiotics.

The world will also be closing in a mood of great economic uncertainty. In 2016 the world economy overall didn’t do well but also not too badly, with growth rates projected at 2.4 to 3%.

But for developing economies like Malaysia, the year ended with worries that the high capital inflows of recent years are reversing as money flows back to the US. The first in an expected series of interest rate increases came last week.

All in all, there was not much to rejoice about in 2016, and worse still it built the foundation for more difficulties to come in 2017.

So we should enjoy the Christmas/New Year season while we can. Merry Christmas to all readers!

Martin Khor (director@southcentre.org) is executive director of the South Centre.

Killing the Mekong, Dam by Dam


November 30, 2016

Killing the Mekong, Dam by Dam

by Tom Fawthrop

Image Credit: Tom Fawthrop

SIPHANDONE, LAOS — Explorers, travelers, and traders have long been enchanted by the magical vistas and extraordinary biodiversity of the Mekong, especially here.

Swirling rapids roar through the surrounding forest to unleash the magnificent Khone Phapheng Falls in southern Laos. The surrounding myriad islands and forested islets, dotted among the tranquil waterways and braided channels of the Mekong, inspire awe and wonder. This is Siphandone (Four Thousand Islands) district of Southern Laos, nestled alongside the Cambodian border.

However, the serenity of Siphandone has recently been rudely disrupted by the dynamite-blasting of rocks, shattering the tranquil reverie of this ecotourism paradise.

Malaysia’s Mega-First and the Don Sahong Dam

The ugly intrusion of earth-moving trucks in this picturesque landscape has accompanied the launching of the Don Sahong dam, a joint venture of Malaysian company Mega-First (MFCB) and the government of Laos, in January 2016. The dam has gone ahead without approval from the Mekong River Commission and in defiance of wide-ranging protests from regional NGOs and downstream countries Cambodia and Vietnam.

In 2012 the bitterly contested first dam on the Lower Mekong, the Xayaburi dam, a $3.8 billion project based on Thai investment and controlled by Bangkok engineering company Ch.Karnchang, began its controversial construction.

According to scientists, both dams pose a major threat to fish migration and food security.

Chhith Sam Ath the Cambodian Director of the World Wide Fund for Nature (WWF), told The Diplomat, “The Don Sahong Dam is an ecological time bomb that threatens the food security of 60 million people living in Mekong basin. The dam will have disastrous impacts on the entire river ecosystem all the way to the delta in Vietnam.”

The Lao government plans to build nine dams on the mainstream Mekong, and hundreds more on other rivers and tributaries, claiming that this is the only path to development for one of the region’s poorest countries.

Just across the river from the Don Sahong dam site, on the Cambodian side of the Mekong, ecotourists gather at the Preah Romkel commune. This correspondent witnessed tourists poised with their cameras, trying to catch a glimpse of the three remaining Irrawaddy Dolphins clinging onto their fragile home despite being under daily siege from the dam-builders. This wetlands zone has been a popular destination for ecotourism in both Laos and Cambodia, but WWF warns that damming the Mekong will soon drive all the remaining dolphins to extinction.

The Malaysian dam developers and the Lao Energy Ministry have airily dismissed all the protests, claiming that their fish mitigation engineering – the expansion and widening of two other channels – can fix the problem.

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Irrawaddy or Mekong River Dolphin by Tammy Yee (pic above)

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The future site of the dam across the Sahong Channel is recognized by fishery experts as the only one out of seven braided channels of the Mekong that is deep enough and wide enough for large fish to migrate, providing effective fish passage around the rapids, rocks, and waterfalls year round. Now the dam construction has diverted all the water from the channel, and it will permanently block this natural fish migration route and passageway.

The Malaysian dam developers and the Lao Energy Ministry have airily dismissed all the protests, claiming that their fish mitigation engineering – the expansion and widening of two other channels – can fix the problem.

The Xayaburi dam also claims that its “fish-friendly turbines,” fish ladders, and locks can protect at least 28 species of fish that have been targeted for special attention by Poyry Energy the Swiss-based company hired to supervise the engineering and fish mitigation.

However the Poyry presentation and research by fish consultants Fishtek shows there are at least 139 fish species that would be blocked from swimming past the dam.

Fish mitigation on these two dams may look impressive in presentation videos, but Dr. Ian Baird, who has published many studies on Mekong fisheries, notes that “this is a high risk experiment, as these sort of mitigation measures have never been attempted before on tropical rivers.”

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The Mekong Crisis: When Ecology and Economy Suffer in Tandem

The mighty Mekong, flowing for 4,630 km through the heart of Southeast Asia, is in deep crisis. The delta in Vietnam is both shrinking and sinking.

The loss of nutrient-rich sediment is wrecking havoc on the delta region. All large dams trap sediment and deprive the downstream areas of vital nutrients. Vietnam is suffering from huge sediment loss, running at 50 percent less than the regular flow. Rampant sand-mining in Cambodia and Vietnam has also aggravated the delta’s acute sediment shortage.

The miraculous but fragile ecosystem that connects the Four Thousand Islands in Laos, Tonle Sap in Cambodia, and the delta in Vietnam is directly threatened by these two dams – the Don Sahong and the Xayaburi (in addition to all the damage done by six Chinese dams upstream from Laos). Now a third dam at Pak Beng has been announced by the Lao government.

A new WWF report has drawn attention to how the dramatic decline in the health of the Mekong is not only an ecological disaster, but also a serious threat to the economy of the region. With a fresh perspective on how ecology and economy are intimately linked together, the report reminds all stakeholders, “Economic growth in the Greater Mekong region depends on the Mekong River, but unsustainable and uncoordinated development is pushing the river system to the brink.”

WWF’s lead coordinator for Water and Energy Security in the Greater Mekong, Marc  Goichot, sees the delta as crucial to Vietnam’s economic future. “It produces 50 percent of the country’s staple food crops and 90 percent of its rice exports. It is one of the most productive and densely populated areas of Vietnam, home to 18 million people. Vietnam cannot lose the delta.”

But right now Vietnam is losing it. The delta is shrinking and unless there is a major policy turnaround on the Mekong, scientists in Can Tho have warned that 27 percent of its GDP, furnished by the delta, could evaporate during the next 20 years.

The strong momentum toward damming the Mekong has been greatly assisted by the widely held perception that dams are a reliable source of energy, producing great economic benefits.

The Mekong River Commission, the World Bank, and USAID have promoted dam-building with this approach, billed as “Sustainable Hydropower.”

The prevailing assumption has been that trade-offs, including negative environmental impacts, are inevitable, but we should not worry too much because improved environmental impact assessments (EIAs) and effective mitigation would provide adequate safeguards to protect ecosystems. It is only recently that researchers have been submitting these assumptions to closer scrutiny.

The credibility of this narrative is increasingly being challenged. Dr. Philip Hirsch a Mekong specialist, concluded after decades of inspecting dams that “some hydro-power impacts can simply not be mitigated – only compensated. And compensation systematically falls short.”

Most fisheries experts in the region familiar with the Sahong and Xayaburi dam projects consider that the mitigation experiment is a risky venture into uncharted waters and cannot be relied on to protect fisheries and the ecosystem.

Whereas the apparent benefits of hydropower can easily be quantified in terms of electricity, the financial losses inflicted by dams have been consistently underestimated or ignored by economists and governments.

The combined fisheries assets for the MRC countries are now valued at $17 billion and vital to the food security of tens of millions.

On the other side of the ledger, energy from 11 scheduled dams may yield economic benefits valued at $33.4 billion according to an international study on hydropower impacts on the Mekong based at Mae Fa Luang University in Chiang Rai.

But set against losses from a denuded river system and huge losses of fisheries, sediment, agricultural produce, and livelihoods, this same study predicts a loss of $66.2 billion, resulting in an overall negative impact of $21.8 billion if all 11 dam projects go ahead.

According to one of the three authors, Dr. Apisom Intralawan, “hydropower benefits have been over-stated in these figures (2015) and based on current economic data we are about to revise them.”

Hirsch confirms that “many studies show that the real costs of hydropower outweigh the benefits but the projects still go ahead.”

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Can The Mekong Survive?

Wetlands ecology specialist  Nguyen Huu Thien, a Vietnamese scientist based in the delta’s capital Can Tho, concluded The sure thing we know, if the delta cannot support its population of 18 million, then people will have to migrate – migrate everywhere. The dams are sowing the seeds of social instability in the region.”

The only way forward, says the Vietnamese Director of Hanoi’s Institute of Economics, Tran Ding Thien, is for Mekong countries to move beyond what he calls “the small-pond mentality.”

That seems unlikely at the moment. In Laos, Daovong Phonekeo, director general of Laos’ Department of Energy Policy and Planning, told Voice of America: “For the development of the Mekong River, we don’t need consensus!”

It is true that the 1995 Mekong Agreement does not provide for any veto on controversial dam projects, but it does enshrine principles of international river cooperation and good water governance that are undermined by the Lao government’s penchant for unilateralism.

Stuart Orr, WWF’s leader for Water Resources Practice, observes that “Water underpins our agricultural systems, our energy production, manufacturing, ecosystems, food security, and our wellbeing as humans. So if economic growth is to continue better river management is called for, that respects the limits of the ecosystem.”

Can the once mighty Mekong alter its currently blighted course of unregulated development, and this alarming rate of depletion of its natural resources?

“One step is that before we build any more dams, new green energy technologies need to be explored,” argues Hirsch. “It would be a tragedy to see the world’s greatest inland fishery destroyed for lack of imagination in applying cost-effective innovative solutions”

There also needs to be a new river-wide consensus that ultimately will have to include China.

Tran decries this small-minded approach, which clings to the “little pond of sovereignty” and cannot grasp the bigger picture of sharing water resources and respecting the whole river.

In this perspective of international scientific cooperation the Mekong should not belong to any one nation. As Tran, speaking at Mekong conference held in Can Tho in April, declared:

“If the Mekong is turned into a series of ponds and reservoirs, it is a loss not only for the region it is a loss for the world. The water that fuels the dams belongs to us all. We need to create an International Mekong Foundation and protect it.”

Tom Fawthrop is a freelance  journalist and film-maker based in Southeast Asia.

Killing the Mekong, Dam by Dam

The World Bank: Right Part of the Time and Wrong On Occasion on Malaysia


October 18, 2016

The World Bank: Right Part of the Time and Wrong On Occasion on Malaysia

by Dr Lim Teck Ghee

The World Bank’s occasional economic reports on Malaysia can generally be relied upon to offer sound analysis on the country’s economic development that is different from those emanating from our national sources. They provide a more critical perspective on entrenched policies or proposed new ones by stake players who should be independent and should not be beholden to the Malaysian government or any interest or lobby group.

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Two recent reports should be of interest to our policy makers. The first which came out in June this year affirmed the importance of leveraging on trade agreements and partnerships for the nation’s continuing economic prosperity.

The Economic Monitor report noted that

  • Malaysia is one of the most open economies in the world, with a trade to GDP ratio of 148% (from 2010 to 2014) compared to 58% in developing countries in East Asia and Pacific.
  • About 40% of jobs in Malaysia are linked with export activities.

Most Malaysians are aware of the importance of trade. But we have also seen the rise of uninformed and often xenophobic sentiments targeting the Trans-Pacific Partnership when it was being negotiated by the government. The Bank’s opinion on this and other similar agreements needs to be reflected upon.

In essence the Bank argues that implementation of new regional trade agreements can help Malaysia carry out key economic reforms and accelerate the country’s transition to high-income status. It notes that the new generation of regional trade agreements – including the Regional Cooperation Economic Partnership, Trans-Pacific Partnership and European Union Free Trade Agreement – will shape trade and investment over the next decade.

It also calls for commitment to these agreements which goes beyond tariff reduction This is because not only will they have a significant impact on attracting investment, and further open up market access for the country’s exports of goods and services; they can also be used to push for deeper reform in competition policy, services trade and support to SMEs that would otherwise be difficult to initiate.

The Bank rightly warns that the transition will not be easy and proactive measures will be needed to ensure wider benefits under the new regional trade agreements.

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Notwithstanding the problems and difficulties, it is important for our policy and decision makers to get the Bank’s message and stay the course of this road of reform if we want our economy to grow and become more resilient.

Reducing Vulnerabilities the Wrong Way

The latest Bank report – a newly released East Asia and Pacific Economic Update entitled “Reducing Vulnerabilities” – focuses on current global economic uncertainties; the risks that come from external developments as well as touches in its country chapter on Malaysia on our own home grown financial crisis arising from 1MDB which “could impact investors’ sentiments and divert the Government’s focus from needed reform, while an unanticipated sharp adjustment among households to a higher cost of living or a more pronounced softening in labour market conditions could also affect private consumption”.

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To alleviate the impact on the bottom 40% population, the Bank is recommending targeted measures “to support the most vulnerable households”. This, in its view, could include the introduction of “unemployment benefits [which] could help to improve matching in the labour market and provide support as the labour market softens” (https://openknowledge.worldbank.org/bitstream/handle/10986/25088/9781464809910.pdf; p.128).

Bank guidance on this issue is clearly off the mark if not plain wrong. Firstly, the nation’s finances are in no position to support a social welfare system providing benefits to the section of the population that is registered as unemployed or do not currently have a job. For now and the foreseeable future, the nation needs to exercise financial prudence and discipline in spending. In fact, the Bank itself has noted in the same report that recent increases in the minimum wage and public sector salaries would be difficult to sustain as the necessary fiscal consolidation continues.

Any social welfare or social protection system that is being proposed needs to be sustainable, financially viable and well targeted. In Malaysia it is especially important to ensure that the new proposed system does not become a political football and/or is open to wide scale fraud and abuse. Both negative possibilities are very likely given the present state of politics and governance in the nation.

A stronger and more rigorous defence of the proposal for the introduction of unemployment benefits by the World Bank with empirical data proving its case is necessary if it wants this policy recommendation to be taken seriously. For now, the advocates of this policy in the Bank may be comforted by the fact that a de facto unemployment benefits system already exists in Malaysia through the use of the civil service to employ hundreds of thousands of otherwise unemployed and unemployable school leavers, graduates and others primarily from the  Bumiputra community.  Poor Indians have been left out leaving them marginalized from the mainstream.

Such a system has been ongoing for at least the last 20 years and makes Malaysia a role model for countries in this field of racially targeted labour market intervention.

 

2016 US Presidential Elections: The Power Nativist Populism


October 17, 2016

2016 US Presidential Elections: The Power Nativist Populism

by Matthew J. Goodwin

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Don’t underestimate the power of nativist populism. That’s the harsh lesson we in Britain learned less than four months ago, when Brexit blew up in our faces and confounded nearly every prediction. It’s one the Austrians and French are learning even now, as they keep counting out (then are forced to count back in) right-wing populist backlashes to the establishment. And it’s the lesson that American pundits who are already predicting a comfortable victory for Hillary Clinton over the embattled Donald Trump—if not a historic landslide—should take on board before they start relaxing too much in the next few weeks.

Of course, every election, and country, is unique. And with little more than 20 days left until America elects its next president, there is reason for the new sense of confidence in the Clinton camp. In recent weeks, Trump has been engulfed by scandal, and Clinton’s position has strengthened considerably in the polls.

But recent elections outside the United States should check too much complacency in the Clinton camp, especially when the side that is perceived to be losing is preaching nativist populism to voters who have been economically left behind and feel culturally under threat from ethnic change. Voters, in other words, who are especially motivated to vote for change. Less than four months ago the United Kingdom held a national referendum on whether it should exit the European Union, known as Brexit. Ahead of that contest, the betting markets, pundits and media were united in predicting a comfortable win for the pro-EU side, who wanted the U.K. to remain in the EU. Most of the polls, too, put “Remain” ahead (especially polls conducted by telephone), while the few online polls that suggested a Brexit victory were dismissed as rogue outliers riddled with sampling errors. Pundits pointed to the unfavorable ratings of leading Brexiteers like Nigel Farage who, they argued, were too divisive for Brexit to win. Others pointed to how even most voters accepted there did not seem to be much of a plan for life after Brexit. The Remain camp, we were also told, had the superior ground game—it seemed to be knocking on more doors, had more offices and had a developed strategy for targeting young university towns.

These assumptions continued to guide the national debate right up until the contest itself. In the prediction markets, throughout the final week of the campaign, the percentage chance that Remain would win did not fall below 75 percent. In the final days, seven polling companies issued their “final” polls, none of which forecast the eventual result. In three cases, the result was within the margin of error, though only one had put Brexit ahead, while the remaining four had overestimated support for Remain. Every single poll, noted the British Polling Council, even those within sampling error, had overstated support for Remain. Even on the day of the vote, three polls put Remain ahead, one by a striking 10 points.

The betting markets were just as confident; on the morning of the referendum, they put Remain’s chance of victory at 76 percent and, by the close of voting, at 86 percent. When you asked voters who they expected to win, it was the same story; in the final 24 hours of the campaign, only 27 percent expected Brexit to triumph. Those who sought to keep Britain in the EU, having recruited President Barack Obama to their cause, expressed relief. An anxious Prime Minister David Cameron was told to relax.

Almost everyone was proved wrong by the massive turnout of Brexit voters, who had been derided by established politicians as loons and racists and who were not expected to be organized, especially at the polling stations. “Leave” won 52 percent of the vote across the U.K., and nearly 54 percent in England. This figure rocketed higher in poorer industrial and rural communities that had been cut adrift by globalization and felt under threat from unprecedented levels of immigration—the analogue to many Trump voters today (as even Trump himself has suggested, tweeting that he would soon be known as “Mr. Brexit”). Support for Brexit reached striking levels among those same groups of voters who are now backing Trump—nearly 60 percent among voters on low incomes, over 70 percent among manual workers and 75 percent among people with no qualifications. In forgotten England, the anti-elite and anti-immigration message had spread like wildfire. The left behind mobilized in a big way.

Turnout rates among poorly educated white voters threw cold water on the earlier claim that the angry white man would not show up, that he would be pushed aside by young cosmopolitans and the big cities. Overall turnout was high, at 72 percent, the highest for any U.K.-wide vote since 1992. Subsequent analysis of how this affected the vote suggests that Brexit won by mobilizing people who never normally vote, something that Trump hopes to emulate. The unexpectedly high turnout, especially in blue-collar communities, is why turnout models in the polls that were based on turnout at previous elections performed poorly; they failed to account for the mobilization of unlikely voters. Turnout was much higher among the Brexit-voting over-55s and strikingly lower among young voters who had promised to vote. Some estimate that whereas 64 percent of young people who were registered to vote did vote, this figure was 74 percent among people ages 55 to 64 and 90 percent among those ages 65 and above. In the aftermath of the Brexit victory, a petition emerged to overhaul the result through a second referendum. The largest number of signatures were in young and trendy areas like the London districts of Camden and Hackney, where voters had failed to turn out when it mattered.

The Brexit vote is a powerful reminder not only of how identity can trump economics but also of how supporters of populist insurgents are often more loyal than many think. While the pro-EU side had focused relentlessly on dry arguments about jobs, wages and appeals to economic self-interest, Brexit was pushed over the line by a campaign that tapped into an intense cultural angst among blue-collar, left behind and older voters. The core message of “Take Back Control” had resonated strongly among these voters who had long felt cut adrift from mainstream politics and under threat from rapid ethnic change. That culture was as important as economics was reflected in the fact that it was in communities that had experienced the most rapid ethnic change over the past 10 years where support for Brexit was often strongest. Presented with an opportunity to reassert their conservative values and disdain for a liberal mainstream, they took it. The intense power of this identity angst should have been diagnosed given that ahead of the referendum most voters readily admitted to pollsters that they would be willing to suffer an economic hit if, in turn, it meant they had greater control over borders and immigration. Political and media elites failed to diagnose the simmering anger and mistakenly believed that it could be soothed with appeals to rational choice.

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In the U.S. election, it is clear that the strategy of the Trump campaign is to rile up the passions of America’s disaffected in the same way—to the point where many people at his rallies are now saying they’re doubly motivated to go to the polls to ensure that the election isn’t “rigged,” as the candidate himself has been urging them to do.

Other experiences in Europe underline the durability of support for right-wing populists. Since the 1980s, the media and liberal progressives have written off anti-immigration and anti-elite populist parties, but they never go away and have only accumulated support. In Austria, since the mid-1980s, the populist xenophobic Freedom Party has sustained a strong following; today it is on the verge of possibly winning the presidential election in December. In France, Marine Le Pen is currently forecast to reach the final second-round of the presidential election next spring despite her party being widely written off after her father was defeated in the same contest in 2002 and then saw a drop-off in support in 2007. This durability flows from an economically disaffected, socially conservative, white, less educated and male electorate that has mobilized despite talk of its members’ alienation and apathy.

It is also worth noting another contest in Britain: In 2015, conventional wisdom had again mistakenly told us that the progressive, social democrat Labour Party would likely triumph. The polls and commentariat were united in claiming that no party would secure an overall majority, that Britain was thus headed for a hung parliament and that—most likely—there would be a coalition headed by the uninspiring but nonetheless competent Labour leader, Ed Miliband. Labour, we were told, also had a superior ground game (rooted in Labour’s promise to hold “four million conversations with voters in four months”). When some of the world’s most renowned political scientists gathered at a conference to share their increasingly sophisticated forecasts of the election, not a single one predicted the outcome—a majority Conservative government. The polls, too, had been wrong. A subsequent inquiry revealed they had consistently overestimated Labour support and were among the most inaccurate since election polling had begun in 1945. Their samples had too many “easier to reach” Labour voters and not enough harder-to-reach older and more socially conservative voters.

Donald Trump will most likely fail to win the presidency, not least because the mechanics of the race differ from those contests above in important ways. The electoral college stacks the deck against the Republicans; there is a sharp gender gap in current voting intention (which was not evident at Britain’s EU referendum); and the Trump candidacy is perhaps the most divisive in modern American history. But at the same time, recent history from across the Atlantic reveals why you should never dismiss the appeal of a populist insurgency, place blind faith in the polls and forecasts nor assume that populist voters will not mobilize when—in their eyes—it matters most. Anger goes a long way at the polls. Trump is still the underdog, but those who claim to be experts would still be foolish to completely write off the power of the revolt on the right.

Matthew J. Goodwin is Professor of Political Science at the University of Kent and Senior Visiting Fellow at Chatham House. He is author of Revolt on the Right: Explaining Public Support for the Radical Right in Britain.