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Energy & Economics
Mexico City, MEXICO - Jan 14 2025 : A post titled “Indonesia Joins BRICS Group of Emerging Economies” is displayed on an iPhone from the BRICS website.

Indonesia’s Membership in BRICS: Strengthening Emerging Economies and Elevating the Global South

by Amrita Jash

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Indonesia’s inclusion in BRICS enhances the representation of the Global South and strengthens efforts to reform global governance institutions. This move positions the bloc as a stronger platform for collaboration among developing nations. On 7 January, Indonesia officially joined the BRICS grouping. In welcoming Indonesia, the Brazilian Government issued a statement, saying: “With the largest population and economy in Southeast Asia, Indonesia shares with other members a commitment to reforming global governance institutions and contributes positively to deepening South-South cooperation.” With full membership, Indonesia has become the first country in Southeast Asia to join BRICS. Currently, Thailand and Malaysia are official partners, but not full members. Indonesia’s Ministry of Foreign Affairs in its statement said the BRICS membership is “a strategic step to improve the collaborations and cooperation with other developing nations, based on the principle of equality, mutual respect, and sustainable development.” Economically, this could mean an increase of 0.3 percent growth to GDP, and the expansion of Indonesia’s access to BRICS markets. Geopolitically, it provides Indonesia a bargaining position in the global arena as well as a platform to voice the aspirations of the Global South. For BRICS, Indonesia’s membership adds another feather to its hat by bringing in greater representation of the Global South to its multipolar vision. This makes it imperative to assess the trajectory of the grouping. What started as an acronym “BRIC,” coined by Jim O’Neill in 2001 in the report “Building Better Global Economic BRICs,” the grouping was projected in the next decade to grow significantly. Founded in 2009 by the four countries—Brazil, Russia, China, and India—the bloc’s first expansion came in 2010 with the joining of South Africa. In the last 16 years, BRICS has graduated from being a popular buzz word in international politics to a significant platform of emerging economies representing the “Global South.” What is noteworthy is that BRICS is not yet a formal multilateral organisation like the United Nations, World Bank or the Organisation of the Petroleum Exporting Countries (OPEC), but increasingly there has been a greater demand among states (mostly developing countries) to join this club of emerging economies. Despite its informality, what made BRICS relevant in the international order was the 2008 financial crises, which raised scepticism and concerns over the dollar-dominated monetary system. This invariably challenged the effectiveness of the West-led Bretton Woods institutions given the suffering of the United States and Europe in the wake of the financial crisis. In contrast, the BRICS economies showed resilience. The first BRIC summit was held in Yekaterinburg in 2009, where the Joint Declaration put forward the desire of BRIC countries to develop “an incremental, proactive, pragmatic, open, and transparent dialogue and cooperation” that is “conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity.” This was reaffirmed at the most recent 16th BRICS Summit held in October 2024 in Kazan. With the indicative expansion of its institutional framework and functionaries since 2009, the most significant outputs have been the New Development Bank (NDB), which provides developmental funds to countries; the Contingent Reserve Arrangement (CRA) with a resource pool of US$100 billion, which provides a mutual support mechanism for short-term balance of payments pressures, enhancing the financial safety net of member countries; and the Strategy for BRICS Economic Partnership 2025 for effective integration of BRICS enterprises into global and regional value chains. A significant milestone was the call, during the 15th BRICS Summit in Johannesburg in 2023, for the expansion of BRICS by inviting new states to join. Another, in 2024, was the deliberation on the formation of the BRICS Cross-Border Payments Initiative (also known as BRICS Pay), where BRICS countries would trade with each other without converting to US dollars by utilising blockchain technology and tokens to circumvent the SWIFT financial payment system. Although BRICS Pay is still only a concept, its development would seriously undermine the US dollar’s long-standing dominance. Today, the inter-governmental organisation boasts of 10 full members with the inclusion of Egypt, Ethiopia, Iran, and the United Arab Emirates in January 2024, and Indonesia in January 2025; and has nine official partner countries—Nigeria is the ninth partner country of BRICS (admitted on 17 January 2025), joining Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Thailand, Uganda, and Uzbekistan. Statistically put, BRICS member countries comprise about 45 percent of the world’s population, 28 percent of the global economy, and collectively they produce more than a third of the world’s crude oil. And if Saudi Arabia joins the group (which it is yet to consider the BRICS invitation), the grouping would then produce some 43 percent of global crude oil. This growth among emerging nations is set to widen the gap between BRICS+ and the G7 nations. As IMF estimates suggest, BRICS+ will account for 37.6 percent of world GDP at purchasing power parity in 2027, compared with 28.2 percent for the G7. This will signify a shift in economic power towards emerging economies, enhance intra-BRICS trade and regional networks rather than relying on G7 markets, and also lead to the creation of alternate alliances and institutions. Apart from expanding its membership, BRICS has also broadened its agenda beyond economics to include global challenges. The two main pillars of BRICS are practical cooperation in various fields through meetings of Working Groups and Senior Officials, and consultation on matters of shared interests through meetings of Leaders and Ministers of Finance, Trade, Health, Science & Technology, Education, Agriculture, Communication, and Labour, among others. The intra-BRICS collaboration now includes social welfare, intellectual property, tourism, science & technology, culture, outer space, think tanks, and internet governance and security. With BRICS+, emerging economies are establishing new standards for order making. In other words, despite its informal existence, BRICS has emerged as a strong contestant for building an alternative discourse on global governance—one that is non-western. The expansion gives BRICS a greater economic and demographic weight as well as a stronger voice to the Global South, potentially reshaping discussions in institutions like the UN and WTO. However, the long-term success of an expanded BRICS will depend on its ability to balance diverse interests and act as a unified voice on the global stage. This article was published under a Creative Commons Licence. For proper attribution, please refer to the original source

Energy & Economics
DAVOS, SWITZERLAND - OCTOBER 31, 2021: Building of the Davos Congress Center, place of the world economic Forum wef

Davos 2025 as a Concentrated Expression of Geopolitical Uncertainty

by Vladislav Belov

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском From January 20 to 24, 2025, the traditional World Economic Forum (WEF) took place in Davos. The organizers registered approximately 2,000 participants from over 130 countries, including around 1,600 executives from major corporations, among them 900 CEOs. The political agenda of the WEF was supported by more than 50 heads of state and government. As part of the official program, about 300 sessions were held, 200 of which were broadcast live. Press accreditation was granted to 76 media companies. For official events, 28,043 square meters of space were allocated, accommodating 117 meeting rooms and 23 lounge areas. Additionally, several participating companies (such as HSBC, EY, and Cognizant) rented additional venues separately for their own events. WEF President Børge Brende, announcing this meeting, emphasized that in 2025, due to geopolitical conflicts, ongoing economic fragmentation, and the acceleration of climate change, the forum would be held under conditions of exceptionally high global uncertainty for the first time in decades. The theme of the Forum was “Cooperation in the Age of Intelligence”. On January, WEF experts presented four reports. The first one, a traditional report and the 20th edition, analyzed the most significant global risks and threats facing the international community. The study is based on a survey of over 900 experts from various fields and covers short-term (2025), medium-term (until 2027), and long-term (until 2035) perspectives. The key risks identified for these periods include the following:- in 2025 the most serious threat for most respondents is interstate armed conflicts, followed by extreme weather events and geoeconomic conflicts, including sanctions and trade measures;- by 2027 key risks include disinformation and fake news, which undermine trust in institutions and intensify social polarization, tension, and instability, as well as an increase in cyberattacks and espionage cases;- by 2035 environmental threats are a major concern, including extreme weather events, biodiversity loss, ecosystem destruction, critical changes in Earth's systems, and natural resource shortages. Additionally, technological risks such as the negative consequences of artificial intelligence and other advanced technologies are highlighted.The authors emphasize the need to strengthen international cooperation and increase resilience to global threats. According to them, rising geopolitical tensions, climate challenges, and other risks require coordinated global action to prevent the escalation of existing issues and the emergence of new crises. The second report presents the perspectives of leading experts on the global economic outlook for 2025. They predict moderate economic slowdown, driven by geoeconomic fragmentation and protectionist measures. The most resilient economic growth is expected in the United States and South Asian countries, while Europe, China, and Latin America may face significant challenges. Inflation is projected to rise in most countries, primarily due to increased government spending and shifts in global supply chains. Most experts consider a further escalation of the U.S.-China trade war likely, along with continued regionalization of global trade, leading to the formation of more isolated economic blocs and reduced global interdependence. While experts acknowledge the high potential of artificial intelligence (AI), they emphasize the need for greater investment in infrastructure and human capital to fully leverage its benefits. The third study provides a comprehensive analysis of employment issues. The main conclusion is that ongoing changes, global trends and new technologies will cause 92 million people to leave the labor market worldwide by 2030, but will also create 170 million new jobs. One of the challenges in this regard is the need to improve skills and train for new specialties. The fourth report assesses the state of global cooperation across five key areas: trade and capital, innovation and technology, climate and natural capital, health and well-being, and peace and security. After analyzing more than 40 indicators, the authors conclude that due to heightened geopolitical tensions and instability, overall cooperation remains at the same level. However, positive trends are observed in areas such as climate, innovation, technology, and health. Davos as a Symbolic Benchmark of Switzerland Despite existing criticism, the Davos Forum remains a key platform for the annual interaction of leading figures in global politics, business, and the expert community. Without Switzerland's neutral status, the Davos Forum likely would not exist. However, it was Klaus Schwab, who founded the World Economic Forum (WEF) on January 24, 1971, who played a crucial role in transforming this event and its host location into one of Switzerland’s comparative advantages in political and economic terms. Despite his advanced age, Schwab continues to be an active ideologue and architect of Davos, moderating key discussions while fine-tuning his creation and addressing annual criticism. Yet, he has his own limitations—despite Switzerland’s neutrality and his personal reputation for impartiality, Schwab once again refrained from inviting Russian representatives, even at the level of individual entrepreneurs and experts. Such a move, rather than formal attempts to broaden participation and accessibility, could have enhanced the forum’s status. The participation of a Russian delegation would have been particularly relevant in this critical year for global politics, marked by the unpredictable presidency of Donald Trump, which is set to shape most geopolitical and geo-economic processes worldwide. Including Russian representatives could have strengthened the WEF’s competitive standing, but once again, it did not happen. The Swiss leadership highly values the opportunities that the Davos platform provides, particularly in the realm of foreign policy and, most notably, foreign economic relations. In September 2024, both chambers of the Swiss Parliament—the Council of States (the smaller chamber) and the National Council (the larger chamber)—decided to continue state support for the World Economic Forum (WEF) in Davos and allocated budget funding for the period 2025–2027. During the discussions, lawmakers emphasized that the event strengthens Switzerland’s role as a global hub for international dialogue, while also having a positive economic impact on the Graubünden region. As the host country of the forum, Switzerland actively leverages it to advance its own interests. This year, six out of the seven members of the Swiss Federal Council (Cabinet of Ministers) attended the WEF. As part of the European Free Trade Association (EFTA), Swiss Economy Minister Guy Parmelin signed free trade agreements (FTAs) with Kosovo and Thailand, bringing Switzerland’s total number of FTAs to 37. There are also plans to adapt and update the existing FTA with China. One of Bern’s key priorities remains securing an FTA with the MERCOSUR bloc. As a result, a focal point of this year’s WEF was Argentine President Javier Milei, who, during an “exceptionally warm bilateral meeting,” invited Swiss President Karin Keller-Sutter to visit Buenos Aires in 2025. The Trump Factor The opening of the current WEF coincided with the inauguration of Donald Trump, who, in recent months, has made numerous provocative statements and promises, swiftly beginning their implementation upon taking office on January 20. The U.S. president signed nearly 100 executive orders, including the repeal of 78 regulations enacted by his predecessor, Joe Biden. Among these were directives for all federal agencies and departments to address rising living costs and to end government-imposed censorship of free speech. The most significant orders included the U.S. withdrawal from the Paris Climate Agreement and the World Health Organization, as well as the declaration of a state of emergency at the U.S.-Mexico border to enforce strict immigration controls. In one way or another, the presence of the “new-old” president was felt across nearly all discussion platforms at the forum. On January 23, Donald Trump addressed the participants of the Davos Forum via video conference, outlining the following agenda:- NATO defense spending: Member states should increase their defense budgets from 2% to 5% of GDP to ensure a more equitable distribution of financial burdens within the alliance.- Trade tensions with the EU: The EU and its member states treat economic relations with the U.S. unfairly. European business regulations, including tax policies, disadvantage American companies, particularly in the tech sector, prompting Trump’s call for tariffs on European imports.- Criticism of the EU’s Green Deal: Labeling it as a “new green scam”, Trump emphasized that the U.S. would ramp up oil and gas production and expand power plant construction to become the “capital of artificial intelligence and cryptography”.- Oil prices and the Ukraine conflict: Trump suggested that lower oil prices from Saudi Arabia could help resolve the Ukraine conflict and urged Saudi leadership to take necessary steps, emphasizing their responsibility in the matter.- Tariffs on companies outsourcing production: Countries whose companies manufacture outside the U.S. will face tariffs to incentivize production relocation to American soil.- China's role in Ukraine: Trump called on China to support ending the Ukraine conflict, while stating his own efforts to mediate a peace deal between Russia and Ukraine.- U.S. domestic policy shift: A large-scale deregulation program is underway in the U.S., including tax cuts and potential elimination of diversity, equity, and inclusion (DEI) initiatives, which Trump views as discriminatory.Trump’s speech elicited mixed reactions among forum participants. His focus on protectionist policies and sharp criticism of international partners raised concerns about potential consequences for the global economy, particularly among European attendees. Additionally, his stance signaled an escalation in the strategic rivalry between Washington and Beijing, which is expected to play out through potential trade conflicts, tensions in the South and East China Seas, continued arms sales to Taiwan, and other geopolitical developments. The Europe Factor   At Davos, Europe is traditionally represented by the European Union, with the United States as its primary political and economic partner. Ursula von der Leyen, re-elected as President of the European Commission and beginning her new term on December 1, 2024, addressed the forum on January 21. Her speech largely responded to challenges outlined by Donald Trump before the WEF began, setting out the EU’s key priorities for the coming years: overcoming economic stagnation, enhancing competitiveness, and further integrating the single market across all 27 member states. A central theme of her address was the “Competitiveness Compass” initiative, first introduced in late 2024. This strategy, shaped by recommendations from Mario Draghi’s influential report, aims to drive economic reform and growth within the EU. The European Commission planned to unveil the full document by the end of January. At Davos, Ursula von der Leyen effectively introduced the concept of “Europe United” as a counterbalance to “America First” and cautioned the U.S. against igniting a trade war with the European Union. She emphasized the importance of early engagement and dialogue on shared interests, stating: “Our priority will be to initiate discussions as early as possible, focusing on common interests and readiness for negotiations. We will be pragmatic, but we will always adhere to our principles. Protecting our interests and defending our values is the European way”. At the same time, the European Commission president highlighted the high level of interdependence between the European and American economic models. She underscored that the era of global cooperation has given way to intense geostrategic competition, stating: “The world's largest economies are competing for access to raw materials, new technologies, and global trade routes—from artificial intelligence to clean technologies, from quantum computing to space, from the Arctic to the South China Sea. The race is on”. Christine Lagarde, President of the European Central Bank (ECB) emphasized that Brussels must be prepared for U.S. trade tariffs which are expected to be more “selective and targeted”, especially given the “existential crisis” facing the EU economy. She also noted that the ECB is not overly concerned about the impact of inflation from other countries, including the U.S., on the eurozone. The UK was also represented at Davos, with its delegation led by Chancellor of the Exchequer Rachel Reeves. She used the trip primarily to promote Britain’s economic landscape, focusing on the country’s political and economic stability, its business-friendly environment, and recent government efforts to reduce regulatory barriers—all under the central message: “Now is the time to invest in Britain”. However, the extent to which this narrative aligns with reality remained beyond the scope of the Forum. The true assessment was left to the executives of major corporations with whom Reeves held meetings, including JPMorgan and Goldman Sachs, discussing investment opportunities in the UK's infrastructure and green projects. Additionally, the UK delegation engaged in negotiations aimed at restoring and strengthening ties with sovereign wealth funds and private investors from the U.S. and the Gulf states. The Ukraine Factor Due to the ongoing Ukraine conflict, Davos once again served as a prelude to the Munich Security Conference, which traditionally takes place in early February in Bavaria. While the war and Donald Trump’s influence shaped many discussions, Ukraine was not the central focus of the forum, resulting in a somewhat reduced emphasis compared to previous years. Ukraine’s interests at the World Economic Forum (WEF) were primarily represented by V.Zelensky, who took it upon himself to “educate” European politicians and “interpret” the signals previously sent by Donald Trump. His focus was on defense spending, emphasizing that a significant portion should go toward supporting the Kyiv regime, the presence of foreign troops on Ukrainian territory, and the need for “real security guarantees”. In the first days after taking office, the U.S. president made several key clarifications regarding his previously stated 24-hour timeline for resolving the Ukraine conflict — this period has now been significantly extended. The reason lies in the fact that, regardless of the revocation of Zelensky’s well-known decree, Ukraine must have a head of state authorized to negotiate and officially confirm any agreements or their outcomes. As of late January, no such figure was present in Kyiv, and Washington is aware of this reality. Switzerland, while emphasizing its neutral status (despite being designated by Russia as an “unfriendly state”), consistently maintains that it provides Ukraine only humanitarian aid and diplomatic support at Kyiv’s request. At the 2024 WEF, the well-known Bürgenstock Conference was announced, which later took place in the summer. However, in 2025, no similarly large-scale initiatives were introduced. Nevertheless, discussions at the Forum once again touched on the possibility of granting Switzerland the right to represent Kyiv’s interests on the international stage. Additionally, it was reported that a Swiss-Ukrainian memorandum was signed, with Ukrainian Economy Minister Yulia Svyrydenko representing Kyiv. The agreement focuses on the participation of Swiss private businesses in Ukraine’s reconstruction efforts. V.Zelensky used Davos as an opportunity to meet with world leaders, including German Chancellor Olaf Scholz, who had recently blocked additional aid to Ukraine. However, his main competitor in Germany’s upcoming snap Bundestag elections, Friedrich Merz, was more open to the idea of support, and Zelensky also held a discussion with him. Both meetings were held behind closed doors, and no details were disclosed. Meanwhile, German Green Party leader Robert Habeck managed to avoid an impromptu conversation with Zelensky, who had attempted to engage with him on the spot. At a January 23 briefing, Russian Foreign Ministry spokesperson Maria Zakharova commented on V.Zelensky’s speeches at Davos 2025, describing them, among other things, as “narcotic madness”. The Germany Factor Germany, still holding its position as the political and economic leader of the European Union, was represented at Davos by key political heavyweights: Chancellor Olaf Scholz, Economy and Climate Protection Minister (and Vice-Chancellor) Robert Habeck, and CDU/CSU Chairman Friedrich Merz. All three have been selected by their respective parties as key candidates for chancellor in Germany’s snap Bundestag elections scheduled for February 23, 2025. Given this, it was no surprise that they used the Swiss platform as part of their election campaigns. The current head of the German government had an objective advantage: he delivered a keynote speech on behalf of Germany, in which he focused on the presence of traditional standard factors (the largest economy in the EU; efficient small, medium and large businesses; government support for investments; low level of government debt), which should help to overcome the crisis. Regarding the United States, he declared his interest in maintaining close relations with the new administration, but “without false fawning and servility”. D. Trump and his team, according to him, will keep the whole world on edge in the coming years, but the German leadership will be able to cope with this. O. Scholz's main message is that constructive European-American interaction “is of decisive importance for security throughout the world and is the engine of successful economic development”. It is noteworthy that there were many empty seats in the hall and after the Chancellor's speech there were no questions for him for a long time, which greatly surprised the moderator of the session, K. Schwab. O. Scholz's closest associate, Finance Minister J.Kukis, who was appointed to this position to replace K. Lindner, who was dismissed in early November 2024, was participating in the Forum. He was unable to provide any special pre-election support to his boss during the Forum, and did not distinguish himself in any special way. Incidentally, K. Lindner himself preferred to remain in Germany and continue to fight there for the votes of voters, which are extremely necessary for the liberals to overcome the five percent barrier and get into the Bundestag. F.Merz, who is very likely the future head of the German Cabinet, and his possible future deputy R. Habeck also sought to prove their chances of winning the elections during their speeches. O. Scholz and F.Merz organized meetings with leading representatives of German business, trying to show which of them understood their problems better and was ready to solve them constructively. Despite all their differences, they were united on one issue - the need to soften the provision on the “debt brake” enshrined in the Basic Law (Constitution) and increase support for entrepreneurs. External observers considered that F.Merz was more convincing, including regarding the transatlantic economic vector. R.Habeck unexpectedly engaged in self-criticism during the podium discussion, stating that he initially believed that the difficult economic situation in the country was due to a short-term cyclical crisis, but it turned out that this was a consequence of a long-term structural crisis. Such “self-education” of the minister cost Germany dearly. During the Forum (January 22) in the Bavarian town of Aschaffenburg, an Afghan refugee subject to deportation committed a crime, killing a child and an adult who was protecting him. This event pushed the issue of migration regulation to the top of the election campaign agenda. Unexpectedly, F.Merz found himself in a sticky situation, when his parliamentary request as the leading representative of the opposition in the current Bundestag for stricter controls at the external borders of the FRG could only count on success with the support of the unpopular Alternative for Germany and the center-left Sahra Wagenknecht Union. From Davos, Olaf Scholz traveled to Paris for a meeting with Emmanuel Macron. The French president was unable to attend the Forum due to domestic political circumstances and the need to manage the situation on the ground. The two leaders discussed the prospects for cooperation between their countries in strengthening their economic and political frameworks, as well as the European Union as a whole. None of the three key chancellor candidates managed to present a clear vision for Germany’s economic and political future, one that would be based on creativity, radical progress, technological breakthroughs, and prosperity—transforming the country into an innovation powerhouse not only for Europe but for the collective West as a whole. This means that Germany risks falling behind, failing to establish itself as an economic model capable of competing on equal terms with Donald Trump’s transforming North American economic space.Under Friedrich Merz, Olaf Scholz, and Robert Habeck, Germany faces the danger of remaining trapped in the past, relying too heavily on its post-war economic miracle—Made in Germany—which was achieved through the brilliance of ordoliberal economists and engineers. Davos 2025 made it clear that leaning solely on past achievements is no longer enough to drive a radical leap toward the future. If the German political elite, represented by the “handshake” established parties, remains in such reactionary positions in relation to the need for qualitative changes in economic policy, then the German standard will have no chance to take a leading place among the world's innovation locations. Here we will briefly indicate that, according to the estimates of the authors of the global risks report, the main ones for Germany are (in descending order): a shortage of highly qualified labor, recession / stagnation of the economy, illegal migration, disinformation, and a shortage of energy resources. They are the ones that largely determine the content of the current election campaign for the German parliament. The China Factor Among the political heavyweights representing the countries of the Global South at Davos 2025, the participation of the Chinese delegation, led by Vice Premier of the State Council of the People's Republic of China Ding Xuexiang, stands out. In his keynote speech, he emphasized Beijing's commitment to economic globalization, which is “not a zero-sum game, but a process of mutual benefit and common progress” and declared that protectionism does not lead to success, and trade wars have no winners. Among the key messages were that China is economically attractive, does not seek a trade surplus, is ready to import more competitive and high-quality goods and services to achieve balanced trade, is open to investment from foreign companies, and is ready to solve problems faced by both domestic and foreign firms. While condemning protectionism, he emphasized the importance of multilateralism and the role of the UN. While mildly critical of the “new-old” US president, he never mentioned him by name. Ding repeatedly referred to Xi Jinping, including his initiatives on global development and security. As part of the Forum, Ding Xuexiang hosted a private luncheon with top global financiers and business leaders, including the CEOs of BlackRock, Bridgewater Associates, JPMorgan, Blackstone, and Visa. Discussions centered on China’s ongoing economic reforms, efforts to stabilize the real estate market, stimulate domestic demand, and attract foreign investment. Experts noted that global business leaders responded positively to Ding Xuexiang’s statements, signaling growing confidence in China’s economic direction. In general, he fulfilled the standard mission assigned to him: to increase the international community's confidence in China's economic policy and confirm its role as a key player in the global economy. At the same time, the Forum participants remained concerned about a slowdown in China's economic growth, especially in the context of a possible increase in tariffs by the United States. The Artificial Intelligence Factor One of the leitmotifs of the forum, along with rethinking economic growth, industrial development prospects, climate and restoring trust, were discussions on the rapid development of AI, its impact on the labor market, prospects and challenges associated with the integration of this technology into various sectors of the economy. Experts identified a few trends that will emerge by 2030. AI and automation will increase the demand of enterprises for specialists in the field of AI, big data analysis, digital marketing, and cybersecurity. About half of the current skills of such employees in these areas may become obsolete, which suggests the need for timely adaptation of secondary and higher education to such a challenge. Employees whose professions will become unclaimed due to automation, especially in traditional sectors, will have to undergo advanced training programs. Special attention in the expert sessions was given to the ethical aspects of AI application and the related problems of developing the necessary standards. Issues of international cooperation took an important place, including in the context of ensuring a fair distribution of the benefits of AI application, as well as minimizing the potential risks it generates for society (for example, possible discrimination and bias in algorithms, as well as the protection of users' personal data). In terms of geopolitical rivalry in the field of AI, the global race for leadership in this area, which has already begun between the United States, China and several EU countries, was discussed. Experts pointed out the concerns of the leaders of the latter regarding the need to strengthen the positions of European companies in this area. Strategies for government stimulation of innovation and support for businesses developing AI were discussed. In addition, the participants in the discussions considered the possibilities of using artificial intelligence technologies to achieve sustainable development goals, including combating climate change, improving healthcare and increasing resource efficiency. Examples of using AI to monitor the environment, optimize energy consumption, develop new methods of treating diseases, and improve various aspects of life were of interest. *** The World Economic Forum 2025 in Davos was predictably held under the sign of global challenges, the Ukraine conflict, and increased economic competition, set against the backdrop of geopolitical and geoeconomic changes. Børge Brende, summarizing the event, accurately noted that the current time is “a moment of serious consequences and uncertainties”. This is largely linked to the return of Donald Trump to the White House. At the Forum, the United States’ priorities in strengthening national interests were outlined, including the goal of reducing import flows. This move drew criticism from the European Union and other participants, who expressed growing concerns about the escalation of trade conflicts and the fragmentation of the global economy. The President of the European Commission highlighted the prospects for strengthening the EU’s competitiveness and increasing its independence, considering the intensifying rivalry between the American and Chinese economic spheres. In this regard, representatives of China advocated for reducing trade tensions and strengthening regional alliances, while Germany emphasized the current risks facing its economic standard, outlining the difficulties of finding ways to minimize them. The Ukrainian conflict once again became one of the central topics, but with the formal support of the leaders of the collective West, delegations from the global South showed a restrained reaction to V.Zelensky's speech and messages. Discussions about AI became quite meaningful. Overall, Davos 2025 and its participants confirmed the important role of the WEF as a platform for discussing global challenges and finding constructive answers to them. The need for collective efforts to solve the most pressing issues was noted. One of B. Borge's final messages: the only way to achieve progress in solving global problems is to work together and “find solutions that will make the world a better place”. It is evident that Russia could have significantly contributed to enhancing the effectiveness of this approach.

Energy & Economics
Reading, Berkshire, England - June 04, 2018, representation of trade tariffs imposed by the United States of America on steel and aluminium imports

Trump’s 25% tariffs on Canada and Mexico amp up the risk of a broader trade war

by Markus Wagner

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском It’s official. On February 1, US President Donald Trump will introduce a sweeping set of new 25% tariffs on imports from Canada and Mexico. China will also face new tariffs of 10%. During the presidential campaign, Trump threatened tariffs against all three countries, claiming they weren’t doing enough to prevent an influx of “drugs, in particular fentanyl” into the US, while also accusing Canada and Mexico of not doing enough to stop “illegal aliens”. There will be some nuance. On Friday, Trump said tariffs on oil and gas would come into effect later, on February 18, and that Canadian oil would likely face a lower tariff of 10%. This may only be the first move against China. Trump has previously threatened the country with 60% tariffs, asserting this will bring jobs back to America. But the US’ move against its neighbours will have an almost immediate impact on the three countries involved and the landscape of North American trade. It marks the beginning of what could be a radical reshaping of international trade and political governance around the world. What Trump wants from Canada and Mexico While border security and drug trade concerns are the official rationale for this move, Trump’s tariffs have broader motivations. The first one is protectionist. In all his presidential campaigning, Trump portrayed himself as a champion of US workers. Back in October, he said tariff was “the most beautiful word in the dictionary”. This reflects the ongoing scepticism toward international trade that Trump – and politicians more generally on both ends of the political spectrum in the US – have held for some time. It’s a significant shift in the close trade links between these neighbours. The US, Mexico and Canada are parties to the successor of the North American Free Trade Agreement (NAFTA): the United States-Mexico-Canada Agreement (USMCA). Trump has not hidden his willingness to use tariffs as a weapon to pressure other countries to achieve unrelated geopolitical goals. This is the epitome of what a research project team I co-lead calls “Weaponised Trade”. This was on full display in late January. When the president of Colombia prohibited US military airplanes carrying Colombian nationals deported from the US to land, Trump successfully used the threat of tariffs to force Colombia to reverse course. The economic stakes The volume of trade between the US, Canada, and Mexico is enormous, encompassing a wide range of goods and services. Some of the biggest sectors are automotive manufacturing, energy, agriculture, and consumer goods. In 2022, the value of all goods and services traded between the US and Canada came to about US$909 billion (A$1.46 trillion). Between the US and Mexico that same year, it came to more than US$855 billion (A$1.37 trillion). One of the hardest hit industries will be the automotive industry, which depends on cross-border trade. A car assembled in Canada, Mexico or the US relies heavily on a supply of parts from throughout North America. Tariffs will raise costs throughout this supply chain, which could lead to higher prices for consumers and make US-based manufacturers less competitive. There could also be ripple effects for agriculture. The US exports billions of dollars in corn, soybeans, and meat to Canada and Mexico, while importing fresh produce such as avocados and tomatoes from Mexico. Tariffs may provoke retaliatory measures, putting farmers and food suppliers in all three countries at risk. Trump’s decision to delay and reduce tariffs on oil was somewhat predictable. US imports of Canadian oil have increased steadily over recent decades, meaning tariffs would immediately bite US consumers at the fuel pump. We’ve been here before This isn’t the first time the world has dealt with Trump’s tariff-heavy approach to trade policy. Looking back to his first term may provide some clues about what we might expect. In 2018, the US levied duties on steel and aluminium. Both Canada and Mexico are major exporters of steel to the US. Canada and Mexico imposed retaliatory tariffs. Ultimately, all countries removed tariffs on steel and aluminium in the process of finalising the United States-Mexico-Canada Agreement. Notably, though, many of Trump’s trade policies remained in place even after President Joe Biden took office. This signalled a bipartisan scepticism of unfettered trade and a shift toward on-shoring or re-shoring in US policy circles. The options for Canada and Mexico This time, Canada and Mexico’s have again responded with threats of retaliatory tariffs. But they’ve also made attempts to mollify Trump – such as Canada launching a “crackdown” on fentanyl trade. Generally speaking, responses to these tariffs could range from measured diplomacy to aggressive retaliation. Canada and Mexico may target politically sensitive industries such as agriculture or gasoline, where Trump’s base could feel the pinch. There are legal options, too. Canada and Mexico could pursue legal action through the United States-Mexico-Canada Agreement’s dispute resolution mechanisms or the World Trade Organization (WTO). Both venues provide pathways for challenging unfair trade practices. But these practices can be slow-moving, uncertain in their outcomes and are susceptible to being ignored. A more long-term option for businesses in Canada and Mexico is to diversify their trade relationships to reduce reliance on the US market. However, the facts of geography, and the large base of consumers in the US mean that’s easier said than done. The looming threat of a global trade war Trump’s latest tariffs underscore a broader trend: the widening of the so-called “Overton window” to achieve unrelated geopolitical goals. The Overton Window refers to the range of policy options politicians have because they are accepted among the general public. Arguments for bringing critical industries back to the US, protecting domestic jobs, and reducing reliance on foreign supply chains gained traction after the ascent of China as a geopolitical and geoeconomic rival. These arguments picked up steam during the COVID-19 pandemic and have increasingly been turned into actual policy. The potential for a broader trade war looms large. Trump’s short-term goal may be to leverage tariffs as a tool to secure concessions from other jurisdictions. Trump’s threats against Denmark – in his quest to obtain control over Greenland – are a prime example. The European Union (EU), a far more potent economic player, has pledged its support for Denmark. A North American trade war – foreshadowed by the Canadian and Mexican governments – might then only be harbinger of things to come: significant economic harm, the erosion of trust among trading partners, and increased volatility in global markets.

Energy & Economics
Close up to a Port Vila city with a yellow pin needle into Vanuatu country political map

Election 2025: Earthquake aftershocks expose high cost of Vanuatu’s democracy

by Anna Naupa

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Vanuatu’s self-sabotaging political class has left the country struggling to deal with social and economic shocks of recent natural disasters. Out of the rubble of the 7.3 magnitude earthquake that hit Vanuatu’s capital Port Vila on Dec. 17 and the snap election due on Jan. 16, a new leadership is required to reset the country’s developmental trajectory.  Persistent political turmoil has hampered the Pacific nation’s ability to deal with a compounding set of social and economic shocks over recent years, caused by climate-related and other natural disasters.  The earthquake is estimated to have conservatively caused US$244 million [VUV29 billion] in damage, and the Vanuatu Government’s ability to pay for disaster response, the election, and resume public service delivery will require strong, committed and stable leadership.  Prior to the devastating quake and dramatic dissolution of parliament on Nov. 18, economist Peter Judge from Vanuatu-based Pacific Consulting warned of an evolving economic emergency. Vanuatu’s US$1 billion economy faced a concerning decline in government revenue from value-added tax, down 25% on the previous year.  This was a ripple effect from the decline in economic activity after the collapse of national airline Air Vanuatu last May, as well as the falling revenues from the troubled Citizenship by Investment Program. Both were plagued by lack of oversight by parliamentarians. In 2024, Vanuatu is expected to record about 1% economic growth, as it struggles to climb out of the red and back to pre-pandemic levels. Conversely, Vanuatu has a much more positive, although somewhat contradictory democratic profile.  According to the Global State of Democracy Initiative, Vanuatu is one of the more democratic states in the Pacific islands region, and currently ranks as 45th in the world.  But this performance comes with a significant price. Leadership turnover is frequent, with 28 prime ministerial terms in just 44 years of statehood, 20 of those in the last 25 years, the highest frequency of change in the Melanesian region.  The impacts of disrupted leadership and political instability are highly visible. Government decision-making and service delivery is grindingly slow. In Vanuatu’s Parliament, the legislative process is frequently deferred due to regular motions of no confidence, with several critical bills still awaiting MPs’ attention. Last October, for example, the Vanuatu Government proposed a 2025 budget 10% smaller than 2024’s, due to reduced economic activity and declining government revenue.  Parliament was unable to approve this year’s budget due to its sudden dissolution on Nov. 18, only two-and-a-half years into a four-year political term. This is the second consecutive presidential dissolution of parliament, the previous one in 2022 also occurring barely two-and-a-half years into its term.  The Bill for the appropriation of the 2025 budget now awaits the formation of the next legislature for approval. In the meantime, earthquake recovery and election management costs accumulate under a caretaker government.  With deepening economic hardship and industries facing slow economic growth across multiple sectors, voters are looking for leadership that can stabilize the compounding cost of living pressures.  The new government will need to urgently tackle overdue, unresolved issues pertaining to reliable inter-island transport and air connectivity, outstanding teacher salaries and greater opportunities for the nation’s restive youth.  The youth unemployment rate is at 10.7% and rising. Democracy with political stability is the holy grail for Vanuatu. But attaining this legendary and supposedly miraculous prize comes with costs attached. In response to civic and youth activism in late 2023 calling for political stability and transparency, the last parliament approved a national referendum to make political affiliation more accountable and end party hopping. The rules come into force in the next parliamentary term for the first time. The referendum passed successfully on May 29, 2024, but cost US$2.9 million. The 2022 snap election required US$1.4 million and the 2025 poll is expected to require another US$1.6 million. While revenue from candidature fees of US$250,000 does cover part of these costs, each legislature transition also weighs on the public purse. The current crop of outgoing 52 parliamentarians were paid out US$1.62 million in gratuities and benefits – around US$31,000 per MP – even though most did not see out their full terms. Vanuatu’s average annual household income in 2020 was US$9,000. Whatever the outcome of the 2025 snap election, the incoming government will need to refocus attention on stabilising the trajectory of Vanuatu’s economy and development. The next legislature – the 14th – will need to commit to stability in the interests of Vanuatu’s people and the nation’s development. The most immediate priorities for a new government should be the passage of the 2025 national budget and the implementation of an earthquake recovery and reconstruction plan.  In the 45 years since throwing off the British and French colonial yoke, citizens have enthusiastically done their duty at elections in the expectation of a national leadership that will take Vanuatu forward. Now their faith appears to be waning, after the 2022 poll saw voter turnout - a key indicator of the health of a democracy - dropped below 50% for the first time since independence.  This election therefore needs to see a return on the considerable investment made in Vanuatu’s democratic processes, both in terms of financial cost to successive governments and donors, and more to the point, a political dividend for voters.  Copyright ©2015-2024, BenarNews. Used with the permission of BenarNews. 

Energy & Economics
Selective focus of the 2015 United Nations Climate Change Conference, COP 21 or CMP 11 logo on a mobile screen stock image: Dhaka, BD- Feb 27, 2024

Ten Years After the Paris Agreement: The Tragedy of the Overshoot Generation

by Marcelo de Araujo , Pedro Fior Mota de Andrade

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The Paris Agreement will be ten years old in 2025. It is a good opportunity, then, to reassess the feasibility of its long-term goals and understand what they mean for the current and for the next generations. In a very optimistic scenario, if the goals of the Paris Agreement are achieved, the climate crisis will have been solved by the end of the 21st century. In the meantime, though, the crisis will worsen, as temperature overshoot is very likely to occur by the middle of the century. During the overshoot period, our planet’s average temperature exceeds 1.5°C above pre-industrial levels, which is the threshold proposed by the Paris Agreement. At the end of the overshoot period, which could last from one to several decades, the temperature will begin to fall until it eventually stabilises at 1.5°C at the turn of the century (IPCC 2023, 1810). Expectedly, the success of the Paris Agreement would greatly benefit the “post-overshoot generation”, namely the generation that will live in the first half of the 22nd century. But to ensure the success of the Paris Agreement, the generation that will live in the overshoot period – the “overshoot generation” – will have to remove an enormous amount of GHG (Greenhouse Gases) from the atmosphere. For now, though, it is unclear whether CCS (Carbon Capture and Storage) technologies will be available at a scale that might enable the overshoot generation to achieve the long-term goals of the Paris Agreement. To aggravate the problem, the overshoot generation will also probably have to rely on as-yet untested geoengineering technologies to promote their own survival. As we can see, conflicting interests of three different generations are at stake here, namely: (1) the interests of the current generation, (2) those of the overshoot generation, and (3) the interests of the post-overshoot generation. Given the unequal distribution of power across generations (Gardiner 2011, 36), it is likely that the current generation will tend to further their own interest to the detriment of the overshoot generation, even if, in the end, the climate policies enforced by the current generation do indeed fulfil the interests of the post-overshoot generation. The best possible world is one in which the goals of the Paris Agreement are achieved. Yet, depending on the choices that we make today, the best possible world could also mean the worst possible world that human beings will ever have met on our planet. That will be the fate of the overshoot generation, squeezed between the self-serving policies of the current generation and the climate hopes of the post-overshoot generation. The implications for international relations are momentous, as we intend to show in this article. Possible pathways The Paris Agreement did not establish a concrete deadline for the achievement of the goals set out in Article 2, namely: Maintain the increase in the global average temperature well below 2°C above pre-industrial levels, and make efforts to limit this temperature increase to 1.5°C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change. The scientific community generally understands that the Paris Agreement aims at climate stabilization at the end of the 21st century. There are two main reasons for this. The first is a constraint imposed by our planet’s climate system. The second is a constraint imposed by agreed upon principles of justice. As for the first reason, we have to bear in mind that an immediate reduction of GHG emissions would not be followed by an immediate decline of global temperature (Dessler 2016, 91). Even if all countries decided to eliminate their respective emissions today, the global temperature would continue to rise for several decades, until it begins to recede and stabilises at the turn of the century. As for the second reason, the Paris Agreement assumed that developing countries could not immediately reduce their own emissions without compromising their own development and the prospect of eradicating poverty. Thus, the Paris Agreement also established in Article 4 that each country could continue to emit GHG until their respective emissions peaked as soon as possible. After peaking, emissions should be rapidly reduced. Thus, the attempt to achieve the goals set out in Article 2 well before the end of the 21st century might turn out to prove inconsistent with the reality of our planet’s climate system and unfair towards developing countries. The problem, however, is that the Paris Agreement did not establish a specific pathway for the achievement of its long-term goals (Figure 1). There is, indeed, a multitude of pathways, but many (if not most) of them involve an overshoot period (Geden and Löschel 2017, 881; Schleussner et al. 2016). And as there are “different interpretations for limiting global warming to 1.5°C”, there emerges the question, then, as to which interpretation could do justice to the conflicting claims of the three different generations considered as a whole, namely the claims of the current generation, those of the overshoot generation, and the claims of the post-overshoot generation (Figure 2). There has been much discussion now on the concept of a “just transition”. But this debate has focused entirely on the claims that the members of the current generation can raise against each other, and not on claims that could be raised – or presumed – across the three generations referred to above. The IPCC (Intergovernmental Panel on Climate Change) Glossary from 2023, for instance, contains a specific entry on this topic: “Just transitions. A set of principles, processes and practices that aim to ensure that no people, workers, places, sectors, countries or regions are left behind in the transition from a high-carbon to a low carbon economy” (IPCC 2023, 1806). The IPCC entry ends with some considerations regarding past generations: “Just transitions may embody the redressing of past harms and perceived injustices”. Interestingly, though, the entry says nothing about the normative implications of a just transition for future generations. A 2023 United Nations document defines the concept of just transition along similar lines (United Nations Economic and Social Council 2023, 3, 12–13). But, again, it understands “just transition” in terms of claims that stakeholders within the current generation, whether at national or international level, can raise against each other. As for the international level, the United Nations document makes the following statement concerning the concept of just transition as applied to international relations: “As countries pick up the pace of their climate change mitigation strategies, it is critical that developed countries do not transfer the burden of the transition onto developing countries” (United Nations Economic and Social Council 2023, 8). The problem, however, is that, as a matter of justice, it is equally critical that the current generation does not transfer the burden of the transition onto the overshoot generation, even if that burden, in the end, turns out to benefit the post-overshoot generation. Such an unequal distribution of burdens across three generations would certainly conflict with the requirements of intergenerational justice (Moellendorf 2022, 161–70; Meyer 2021). Overshoot generation and retroactive mitigation One might perhaps argue that no extra burden is being imposed on the overshoot generation, for the current generation is already having to face challenges that the overshoot generation, supposedly, will not have to face. The overshoot generation, one might suggest, will inherit from the current generation all the benefits resulting from the energy transition, but without having to bear the costs that the transition imposes on the current generation. The idea here is that by the middle of this century global emissions will have already peaked and will be declining at an accelerated pace, towards stabilisation at 1.5°C above the pre-industrial level at the end of this century. Thus, the overshoot generation can arguably reap the benefits of green energy, as long as the current generation remains free, at least for the time being, to emit GHG further, which is necessary to finance the human and technological development that the overshoot generation will need later. This claim, however, overlooks a crucial fact about the climate crisis – a fact that has not been given due attention in the public debate on climate policies. In a very optimistic scenario, the overshoot generation will not have the burden of reducing their own emissions because they will be able to rely on carbon-free energy. The problem, however, is that the overshoot generation will still have to retroactively mitigate the emissions of previous generations – including, of course, the emissions of the current generation. We call this process “retroactive mitigation”, for what is at stake here is not reduction and phasing out of one’s own emissions, but the removal of massive amounts of GHG, which previous generations failed to mitigate in the past. In a 2014 report, the IPCC realised that simply reducing GHG emissions would no longer be enough to preclude irreversible climate change. Removal of GHG would also be necessary (IPCC 2014, 12). The IPCC called attention to yet another problem: it was unclear whether CCS (Carbon Capture and Storage) technologies, including DAC (Direct Air Capture), could be deployed on a global scale in time to avoid a climate disaster. In a 2018 report, the IPCC was even less confident about the future development and scaling-up of CCS technologies (IPCC 2018, 136). To make matters worse, two further factors must be taken into consideration. (1) Recent studies show that there are practically no pathways left for the achievement of the Paris Agreement goals without the massive deployment of CCS (Smith et al. 2023). And (2) it has become increasingly probable that the overshoot generation will also have to deploy geoengineering technologies to cope with ever more frequent heatwaves (Moellendorf 2022, 161–70). It could perhaps be argued that afforestation and preservation of existing forests could be used instead of CCS technologies. However, the amount of land and water that would be necessary for the creation of new forests is probably larger than the amount of land and water available. Moreover, the attempt to create new forests on such a large scale might compromise the water and food security that the overshoot generation will need to promote their own climate adaptation (Shue 2017, 205). It is also necessary to take into account the amount of time new forests need to grow, not to mention the risk of fire. In this case, forests stop absorbing GHG and become GHG emitters themselves (Gatti et al. 2021). Implications for international relations In the aftermath of the Second World War, human being’s capacity to trigger catastrophic events at a global scale became increasingly apparent. As Garrett Hardin aptly put the problem in 1974: “No generation has viewed the problem of the survival of the human species as seriously as we have” (Hardin 1974b, 561). But while even realist thinkers such as Hans Morgenthau and John Herz argued for international cooperation in the face of global threats, Hardin himself advanced what he called the “lifeboat ethics”. According to Hardin, instead of engaging in international cooperation, richer states should behave like lifeboats and resist the temptation to help individuals from poorer states to cope with environmental disasters or famines. This, he argued, might undermine richer states’ capacity to secure their own survival (Hardin 1974a; 1974b). In his The Limits of Altruism: An Ecologist’s View of Survival from 1977, Hardin resumes his criticism of international cooperation to alleviate the plight of poorer states: We will do little good in the international sphere until we recognize that the greatest need of a poor country is not material: call it psychological, moral, spiritual, or what you will. The basic issue is starkly raised in a story of personal heroism that unfolded in South America a few years ago (Hardin 1977, 64). Hardin goes on to recall the 1972 Andes plane crash, turned into a feature film in 2023. Hardin suggests that the passengers who had survived the crash would not have taken the initiative to save their own lives had they not heard on the radio that the search efforts to rescue them had been called off. Hardin’s conclusion is this: “This true story, I submit, bears a close resemblance to the moral situation of poor countries. The greatest gift we can give them is the knowledge that they are on their own” (Hardin 1977, 65). Hardin, of course, does not take into consideration the extent to which richer states themselves may be responsible for the plight of poorer states. Hardin’s self-help approach to international relations is in line with political realism. But when major realist thinkers themselves addressed the question of human survival, around the same time Hardin advocated his lifeboat ethics, they came to entirely different conclusions. Authors such as Morgenthau and Herz realized that nation-states had become unable to protect their own citizens in the face of global catastrophes triggered by the depletion of the environment or the outbreak of a nuclear war. As Morgenthau put the problem in 1966: “No nation state is capable of protecting its citizens and their way of life against an all-out atomic attack. Its safety rests solely in preventing such an attack from taking place” (Morgenthau 1966, 9). In a 1976 article on the emergence of the atomic age, Herz made a similar point: “Nuclear penetrability had rendered the traditional nation-state obsolete because it could no longer fulfill its primary function, that of protection” (Herz 1976a, 101). Both Morgenthau and Herz argued for international cooperation – or perhaps even the dissolution of the system of states (Morgenthau 1978, 539) – as the better strategy to avert global catastrophic risks (Herz 1976a, 110; 1976b, 47). Herz later also theorized about the concept of “ecological threat” and argued for the development of a new interdisciplinary field, which he aptly named “survival studies” (Herz 2003; Seidel 2003; Laszlo and Seidel 2006, 2–3; Graham 2008; Stevens 2020). During the overshoot period, as heatwaves and other climate-related extreme events become more severe and frequent, people in poorer countries are likely to suffer the most. Mass migrations are likely to occur on an unprecedented scale (Vince 2022). Given the current popularity of anti-migration measures both in the United States and Europe, it is imaginable, then, that the lifeboat ethics will strike a chord with future conservative governments. That would be an error, for the assumption that governments will be protecting their own citizens by way of making their borders impenetrable to climate migrants is misleading. The “ecological threat” cannot be held back by higher walls. Lifeboat ethics will make everyone worse-off. Back in the 1960s, Martin Luther King may not have had climate change or mass migration in mind, but his words strike us as even more poignant now: “We may have all come on different ships, but we’re in the same boat now” (as quoted by former American President Barack Obama). There is only one boat, carrying three generations of hopeful passengers with equal legitimate claims to a better climate. It is a long journey. Let us not allow our only boat to go down. Final remarks The scenario in which the overshoot generation will have to live is not an encouraging one, but it is even less inhospitable than the scenario that the post-overshoot generation will have to face if the goals of the Paris Agreement are not met. It is up to the current generation to make sure that the overshoot period is as short as possible, and that the overshoot generation will not only be in a position to adapt to unprecedented climate scenarios in the history of human civilization, but also fulfil hopes of the post-overshoot generation. Figures Figure 1: Pathways compatible with the goals of the Paris Agreement (IPCC 2018, 62). FIGURE01  Figure 2: Pathways that would limit global warming to 1.5°C (IPCC 2018, 160).   Acknowledgements Marcelo de Araujo thanks Prof. Darrel Moellendorf for the invitation and the Alexander-von-Humboldt Foundation for the financial support. Support for this research has also been provided by the CNPq (The National Council for Scientific and Technological Development) and FAPERJ (Carlos Chagas Filho Research Support Foundation). An earlier draft of this article was presented at the University of Graz, Austria, Section for Moral and Political Philosophy, in 2024, with thanks to Prof. Lukas Meyer for the invitation. Pedro Fior Mota de Andrade benefited from financial supported provided by CNPq (National Council for Scientific and Technological Development). References Dessler, Andrew Emory. 2016. Introduction to Modern Climate Change. Second edition. New York, NY, USA: Cambridge University Press. Gardiner, Stephen. 2011. A Perfect Moral Storm: The Ethical Tragedy of Climate Change. Oxford: Oxford University Press. Gatti, Luciana V., Luana S. Basso, John B. Miller, Manuel Gloor, Lucas Gatti Domingues, Henrique L. G. Cassol, Graciela Tejada, et al. 2021. ‘Amazonia as a Carbon Source Linked to Deforestation and Climate Change’. Nature 595 (7867): 388–93. https://doi.org/10.1038/s41586-021-03629-6. Geden, Oliver, and Andreas Löschel. 2017. ‘Define Limits for Temperature Overshoot Targets’. Nature Geoscience 10 (12): 881–82. https://doi.org/10.1038/s41561-017-0026-z. Graham, Kennedy. 2008. ‘“Survival Research” and the “Planetary Interest”: Carrying Forward the Thoughts of John Herz’. International Relations 22 (4): 457–72. https://doi.org/10.1177/0047117808097311. Hardin, Garrett James. 1974a. ‘Lifeboat Ethics: The Case against Helping the Poor’ 8 (September):38–43. ———. 1974b. ‘Living on a Lifeboat’. BioScience 24 (10): 561–68. ———. 1977. The Limits of Altruism: An Ecologist’s View of Survival. Bloomington: Indiana University Press. Herz, John. 1976a. ‘Technology, Ethics, and International Relations’. Social Research 43 (1): 98–113. ———. 1976b. The Nation-State and the Crisis of World Politics: Essays on International Politics in the Twentieth Century. New York: D. McKay. ———. 2003. ‘On Human Survival: Reflections on Survival Research and Survival Policies’. World Futures 59 (3–4): 135–43. https://doi.org/10.1080/02604020310123. IPCC, ed. 2014. Climate Change 2014: Mitigation of Climate Change Working Group III Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. New York: Cambridge university press. https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_full.pdf. ———. 2018. ‘Global Warming of 1.5°C. An IPCC Special Report on the Impacts of Global Warming of 1.5°C above Pre-Industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change, Sustainable Development, and Efforts to Eradicate Poverty’. Edited by V Masson-Delmotte, P Zhai, HO Pörtner, D Roberts, J Skea, PR Shukla, A Pirani, et al. Intergovernmental Panel on Climate Change. https://www.ipcc.ch/sr15/. ———, ed. 2023. ‘Annex I: Glossary’. In Climate Change 2022 – Mitigation of Climate Change, 1st ed., 1793–1820. Cambridge University Press. https://doi.org/10.1017/9781009157926.020. Laszlo, Ervin, and Peter Seidel, eds. 2006. Global Survival: The Challenge and Its Implications for Thinking and Acting. 1st ed. Change the World. New York: SelectBooks. Meyer, Lukas. 2021. ‘Intergenerational Justice’. The Stanford Encyclopedia of Philosophy. 2021. https://plato.stanford.edu/archives/sum2021/entries/justice-intergenerational/. Moellendorf, Darrel. 2022. Mobilizing Hope: Climate Change and Global Poverty. New York: Oxford University Press. Morgenthau, Hans. 1966. ‘Introduction’. In A Working Peace System, D. Mitrany, 7–11. Chicago: Quadrangle Books. ———. 1978. Politics among Nations: The Struggle for Power and Peace. New York: Alfred Knopf (Fifth Edition, Revised, 1978). Schleussner, Carl-Friedrich, Joeri Rogelj, Michiel Schaeffer, Tabea Lissner, Rachel Licker, Erich M. Fischer, Reto Knutti, Anders Levermann, Katja Frieler, and William Hare. 2016. ‘Science and Policy Characteristics of the Paris Agreement Temperature Goal’. Nature Climate Change 6 (9): 827–35. https://doi.org/10.1038/nclimate3096. Seidel, Peter. 2003. ‘“Survival Research:” A New Discipline Needed Now’. World Futures 59 (3–4): 129–33. https://doi.org/10.1080/02604020310134. Shue, Henry. 2017. ‘Climate Dreaming: Negative Emissions, Risk Transfer, and Irreversibility’. Journal of Human Rights and the Environment 8 (2): 203–16. https://doi.org/10.4337/jhre.2017.02.02. Smith, Stephen, Oliver Geden, Gregory Nemet, Matthew Gidden, William Lamb, Carter Powis, Rob Bellamy, et al. 2023. ‘State of Carbon Dioxide Removal – 1st Edition’, January. https://doi.org/10.17605/OSF.IO/W3B4Z. Stevens, Tim. 2020. ‘Productive Pessimism: Rehabilitating John Herz’s Survival Research for the Anthropocene’. In Pessimism in International Relations: Provocations, Possibilities, Politics, edited by Tim Stevens and Nicholas Michelsen, 83–98. Cham, Switzerland: Palgrave Macmillan, Springer Nature. United Nations Economic and Social Council. 2023. ‘Committee for Development Policy Report on the Twenty-Fifth Session (20–24 February 2023)’. Supplement No. 13 E/2023/33. Official Records. New York: United Nations. https://documents.un.org/doc/undoc/gen/n23/088/80/pdf/n2308880.pdf. Vince, Gaia. 2022. Nomad Century: How Climate Migration Will Reshape Our World. First U.S. edition. New York: Flatiron Books. The text of this work is licensed under  a Creative Commons CC BY-N

Energy & Economics
Industrial Container Cargo freight ship, forklift handling container box loading for logistic import export and transport industry concept

A Quick Note on Trade and Inequality

by Dean Baker

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Oren Cass, the head economist of Compass, had a column in the New York Times today touting Donald Trump’s proposed tariffs. The gist of the piece is that “free trade” has not worked out as economists’ textbooks promised and we should look to take a different path. As someone who was very critical of the major trade deals of the last three decades, I would say that they did work out very much as the economists’ textbooks promised. But they were also not “free trade,” and imposing high tariffs will not help us going forward. First, the economists’ textbooks did not promise that everyone would benefit from opening trade. They show that there would be a redistribution from some types of workers to other types of workers and/or capital. There is a famous article, co-authored by the first American Nobel Prize winner Paul Samuelson, that laid out this theoretical argument more than 80 years ago. Economists pushing NAFTA, China’s entry into in the WTO, and other recent trade deals always waved off the logic of the Stolper-Samuelson model, or alternatively promised government policies to offset the distributional impact of trade openings. As a practical matter, the policies (mostly trade-adjustment assistance) were one or two orders of magnitude too small for the job. We saw millions of workers displaced in manufacturing, as our trade deficit ballooned from 1997 to 2007. Communities across the industrial heartland were devastated as the factories that supported them downsized or shut altogether. We can have lengthy debates about the motives of working class people who switched from Democrats to Trump voters, but the fact that Democratic presidents pushed trade policies that destroyed millions of good paying jobs for non-college educated workers is not really in dispute. While it is important to recognize the damage caused by trade deals of the last three decades, it is also essential to recognize that these were not “free trade” deals even though this is what their proponents like to claim. These deals did little or nothing to free up trade in highly paid professional services, like the services of physicians or dentists. As a result, while our manufacturing workers get paid less than their counterparts in Western Europe, our physicians get paid more than twice as much as doctors in countries like Germany and Canada. The trade deals were all about lowering barriers to trade in manufactured goods, with the predictable effect of lost jobs and lower wages for manufacturing workers. But when it came to discussions of lowering the barriers to foreign doctors and foreign-trained professionals working in the U.S., most of the “free-traders” would suddenly get really dumb, as though they didn’t understand the concept of free trade. And to be clear, the economics textbooks tell us the same thing about free trade in professional services as they say about free trade in cars and shoes. If we paid our doctors the same as doctors in West Europe it would knock more than $100 billion a year ($1,000 per family) off our national health care bill. But we don’t have free trade in physicians’ services. But it gets worse. Even as we were lowering barriers to trade in manufactured goods, we were increasing barriers to trade in intellectual products in the form of longer and stronger patent and copyright protections. These protections are government-granted monopolies, 180 degrees opposite of free trade. Yet somehow every major “free trade” deal of the last four decades included provisions making these monopolies longer and stronger both in our trading partners and in the United States. The effect of longer and stronger patent and copyright protection is to redistribute income from the rest of us to those in a position to benefit from them. Bill Gates would probably still be working for a living if the government didn’t threaten to arrest people who copied Microsoft software without his permission. And to be clear, there is an enormous amount of money at stake. The higher prices from patent and copyright monopolies almost certainly cost us more than $1 trillion a year. They cost us more than $500 billion ($4,000 per family) in the case pharmaceutical alone. Patent and copyright monopolies do serve a purpose. They provide an incentive for innovation and creative work. But they are not the only way to provide this incentive. For example, we support more than $50 billion a year in biomedical research through the National Institutes of Health and other government agencies. Most importantly for this argument is the recognition that patent and copyright monopolies are government policies that should be treated as such. We can argue whether they are the best policy, but they are certainly not free trade, and it is a lie to call them free trade. Tariffs and the Trump Route Forward Getting the free trade story right is important for what we think is the best route going forward. The fact that reducing trade barriers in manufacturing was bad for non-college educated workers doesn’t mean that raising those barriers now will be good news for these workers. The wage premium that manufacturing workers had enjoyed in years past had largely disappeared. This means that if we get back jobs in the auto industry or textile industry, there is little reason to think these jobs will pay better than alternative jobs in warehouses or health care. High tariffs just mean that all workers will be paying higher prices for a wide range of goods in order to shift a relatively small number of other workers into not especially good-paying jobs in manufacturing. The reason manufacturing jobs were good paying jobs was because these jobs were far more likely to be union jobs than other private sector jobs. In 1980 more than 30 percent of manufacturing jobs were unionized, compared to 15 percent for the rest of the private sector. Today, the gap is just 8.0 percent compared to 6.0 percent. That’s still a difference, but not one that has much impact. If we got back another 1 million manufacturing jobs as a result of tariffs, a very big lift, it would translate into roughly 20,000 more union workers. That’s a pretty small drop in the bucket in a labor force of more than 160 million. If we want to reverse the rise in inequality of the last four decades, we should make use of those economics textbooks rather than ignoring them, as Mr. Cass advocates. We should do everything possible to have freer trade in highly paid professional services, exposing our most highly paid workers to the same sort of competition, both domestically and internationally, that our factory workers have long faced. And we should look to shorten and weaken the patent and copyright monopolies that have shifted so much income upward and made items like prescription drugs incredibly expensive. In the absence of patent monopolies, drugs would almost always be cheap, patent monopolies make them expensive. We also need to pursue other mechanisms for supporting innovation and creative work. This is the conversation that we need to have and one that unfortunately will not take place in the pages of the New York Times or other leading media outlets. In fact, the econ textbooks have much to teach us if we actually pay attention to what they say and don’t use them selectively to push a class agenda. Originally published on CEPR (https://cepr.net/publications/a-quick-note-on-trade-and-inequality/) under the Creative Commons Attribution 4.0 International License.

Energy & Economics
Mexican exports to the United States. Mexican goods

Faced with Trump’s tariffs − and crackdowns on migration and narcotrafficking − Mexico is weighing retaliatory options

by Scott Morgenstern

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Donald Trump has made clear his intent to supercharge his “America First” approach to foreign policy in his second term – and Mexico looks set to be at the tip of the spear. While many of Trump’s predecessors have also followed a “realist” strategy – that is, one where relative power is at the forefront of international relations, while diplomatic success is viewed through how it benefits one’s own nation – the incoming president has displayed an apparent unwillingness to consider the pain that his plans would inflict on targeted countries or the responses this will engender. Trump’s proposed policies threaten Mexico in three key ways: First, his goal of deporting millions of migrants would put tremendous pressure on Mexico’s economy and society as the country tried to absorb the influx. This would be exacerbated by his second threat, a sharp increase in tariffs, which could devastate the critical export sector of Mexico’s economy. And third, Trump has floated the idea of using U.S. military power to confront narcotraffickers within Mexico, which would directly impinge on Mexico’s sovereignty and could generate more violence on both sides of the border. But as a scholar of Latin American politics and U.S.-Latin American relations, I see several options that Mexico could use to push back on Trump by imposing high costs on U.S. interests. Indeed, Mexican President Claudia Sheinbaum has already signaled how she may counter Trump’s policies. The most obvious tools are ending cooperation on drugs and immigration and imposing tariffs of her own. She could also revoke some of the decades-old tax and labor privileges that have benefited U.S. businesses operating within Mexico. And finally, she could play the “China card” – that is, in the face of worsening U.S.-Mexico ties, Mexico could turn to Washington’s biggest economic rival at a time when Beijing is seeking to assert more influence across Latin America. From conciliation to confrontration Of course, a worsening relationship is not inevitable. During Trump’s first term, Mexico’s then-president, Andrés Manuel López Obrador, maintained a constructive relationship with the U.S. administration. In fact, Lopez Obrador was surprisingly cooperative given Trump’s at times hostile rhetoric toward Mexico. For example, he helped facilitate the Trump administration’s “Remain in Mexico” program for those seeking asylum in the U.S. and also accepted Trump’s demands to renegotiate NAFTA and give it a title reflecting U.S. leadership: the United States-Mexico-Canada Agreement, or USMCA. Sheinbaum, who took office on Oct. 1, 2024, started with a cautious approach to her relationship with Trump. She congratulated Trump on his victory and urged dialogue with the incoming U.S. president. “There will be good relations with the United States. I’m convinced of that,” she told reporters on Nov. 7, 2024. But Trump hasn’t been conciliatory. In addition to talk about dumping millions of immigrants across the border, he announced on social media on Nov. 24 that he would impose a 25% tariff on Mexican and Canadian goods – a move that would effectively abrogate the USMCA. That post seemingly ended Sheinbaum’s cautious approach. In a strongly worded response, the Mexican president cautioned that she would respond in kind. A trade war, she noted, would harm the economies of both countries; progress on immigration and drug trafficking required cooperation, not threats, she added. The impact of tariffs Sheinbaum has said she wants to avoid a trade war, but Trump’s threats have led her nonetheless to talk about how a trade war would begin. This trade war, plus other costs Sheinbaum could impose on U.S. investors, would also likely foment a coalition of opposition within the U.S. business community – a group that has been a key ally of Trump. Trump’s stated goal of putting high tariffs on goods coming from Mexico is to encourage businesses that currently exploit lower employment costs in Mexico to relocate to the northern side of the border. But that approach ignores the impact that retaliatory tariffs and investment controls would have on U.S.-based companies that rely on the Mexican market. It would have several negative effects. First, a tit-for-tat tariff war would generate inflation for U.S. and Mexican consumers. Second, it would disrupt the integration of markets across North America. As a result of the elimination of tariffs – a key component of both NAFTA and the Trump-era USMCA – markets and the production of goods across North America have become highly interconnected. The trade treaties severely reduced barriers to investment in Mexico, allowing significant American investment in sectors such as agriculture and energy – where U.S. companies were formerly prohibited. Further, manufacturers now rely on processes in which, for example, the average car crosses the border multiple times during production. Similarly, agribusiness has developed symbiotic practices, such that grains, apples and pears are predominantly grown in the United States, while tomatoes, strawberries and avocados are grown in Mexico. Given these processes, the U.S. now exports over US$300 billion of goods and services per year to Mexico, and the stock of U.S. investments in Mexico reached $144 billion in 2023. If Trump abrogates the trade deals and imposes tariffs, he might convince investors to spend their next dollars in the U.S. But if Mexico imposes tariffs, business taxes or investment restrictions, what would happen to investors’ farms and factories already in Mexico? Past experience suggests that any disruption to supply chains or U.S. export markets would awaken strong business opposition, as analysts and business groups have already recognized. Trump is not immune to pressure from U.S. businesses. During his first administration, companies successfully opposed Trump’s attempt to close the border, arguing that slowing the flow of immigrants also meant slowing trucks full of goods. Security and immigration On the issue of the border and immigration, while Trump has issued threats, Sheinbaum has stressed the importance of cooperation. Currently, the Mexican government expends significant resources to patrol its own southern border, not to mention dealing with the many potential migrants who gather in its northern cities. Mexico could demand more support from the U.S. in exchange for this work, plus the costs associated with welcoming back the estimated 4 million Mexicans who are currently in the U.S. without proper documentation. The deportation of undocumented immigrants that Trump has repeatedly promised will require other types of cooperation, such as processing border crossings, and Mexico could slow-walk this process. Mexico has already signaled that it will withhold processing of non-Mexicans. The two countries have a history of collaboration in addressing the illegal drugs trade – but here too there have also been tensions. Toward the end of Trump’s first term, for example, a Mexican general was arrested in the U.S. on drug charges. After a diplomatic uproar, he was returned to Mexico and released. In late November, Sheinbaum noted that she and Trump had discussed security cooperation “within the framework of our sovereignty.” But Trump’s campaign rheotric seemed less concerned with Mexico’s sovereignty, floating the idea of sending troops to the border or even deploying them within Mexico to counter narcotraffickers. That would clearly enrage Mexico, with consequences that would extend far beyond a willingness to cooperate on the issues of drug trafficking. A chance for China? One country that stands to benefit should U.S.-Mexican relations deteriorate is China – an issue that Mexico could exploit. China is now the first or second trading partner with nearly every country in Latin America, including Mexico. The value of U.S.-Mexico trade is over $100 billion a year, but the growth of Chinese imports into Mexico has been limited somewhat by rules-of-origin provisions in NAFTA and the USMCA. A U.S.-Mexican trade war could weaken or end any incentive to keep Chinese goods out. Further, if the doors to the United States are narrowed through tariffs and hostile rhetoric, China’s car parts and financial services would clearly become even more attractive to Mexican businesses. A U.S.-Mexican trade war, in short, would augment Beijing’s access to a market on the U.S. border. A coalition of the concerned? In sum, if Trump goes through with his threats, the result will be costs to consumers and businesses, plus a new opportunity for China. This is likely to foment a coalition of industries, investors, consumers and foreign policy experts concerned with China – many parts of which supported Trump’s campaign.

Energy & Economics
The Prime Minister, Shri Narendra Modi in a bilateral meeting with the Chinese Communist Party general secretary & president of China, Mr. Xi Jinping, in Tashkent, Uzbekistan on June 23, 2016.

India-China Economic Interdependence: Collaboration Amid Rivalry in Global Supply Chains

by Seema Khan

Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Despite escalating geopolitical tensions, India and China maintain a paradoxical relationship of economic interdependence. This dynamic reveals a delicate balance where strategic competition coexists with pragmatic cooperation, driving global supply chains and sustaining mutual economic benefits. The India-China relationship is characterised by both cooperation and competition, with economic ties often at odds with geopolitical tensions. In recent years, the relationship has been marked by increasing rivalry and mistrust, particularly following the 2020 border clashes in the Galwan Valley. This incident led to a significant deterioration in bilateral relations, resulting in India implementing economic measures against China, including banning numerous Chinese mobile applications and imposing stricter scrutiny on Chinese investments. However, in a recent development, India and China have agreed to resolve the Line of Actual Control (LAC) issue and move forward, signalling a potential thaw in tensions. While this thaw is good news, economic interdependence has persisted even with tensions running high, as evidenced by the continued high levels of bilateral trade. This paradoxical situation, where economic necessity coexists with strategic competition, underscores the multifaceted and often contradictory nature of India-China relations in the contemporary global context. Often described as “cooperation amid competition,” the relationship has important implications for both countries and the wider global economy. Their mutual interdependence plays a crucial role in global supply chains and consumer markets. India and China have robust trade relations, with China being one of India’s largest trading partners. Bilateral trade reached US$114.2 billion in 2021-22; and in 2022-23, China remained India’s largest source of imports, with its share increasing to 30 percent from 21 percent over the past 15 years. This relationship is characterised by Chinese imports of manufactured goods and electronic components, which are essential for India’s consumer market. India’s imports from China include machinery, telecom equipment, and electronic products, which are integral to its growing consumer electronics sector. The trade dynamics between the two countries ensure that Indian markets have access to affordable and diverse consumer goods, while China benefits from a large export market. This economic relationship encompasses various sectors, including manufacturing, pharmaceuticals, and technology, and has become particularly evident during global supply chain disruptions, such as those caused by the COVID-19 pandemic. In the technology sector, Indian and Chinese companies have formed several alliances. Many Indian companies rely on Chinese components and raw materials for their production processes. For instance, India’s electronics and automotive industries heavily depend on imports from China for semiconductors, display panels, and other critical components. Chinese technology firms like Xiaomi, Oppo, and Huawei have significant operations in India, contributing to the smartphone and electronics market. These companies not only import finished products but have also established manufacturing units in India, creating jobs and contributing to the local economy. Additionally, collaboration in the tech sector extends to software and app development, with Chinese investments in Indian startups fostering innovation and growth. Chinese investments have played a crucial role in India’s startup ecosystem, with companies like Alibaba and Tencent holding significant stakes in Indian unicorns. While recent policy changes have led to a decline in Chinese investments, existing collaborations continue to influence India’s digital economy. The pharmaceutical industry represents another area of significant cooperation. India, known as the “pharmacy of the world,” relies heavily on Active Pharmaceutical Ingredients (APIs) imported from China. Approximately 70 percent of India’s API requirements are met through Chinese imports. This collaboration is essential for maintaining the global supply of affordable generic medicines, particularly for developing countries. Both India and China have maintained a cooperative stance despite their political rivalries in the renewable energy sector. This collaboration is crucial for India’s ambitious renewable energy targets and global climate change mitigation efforts. China, as the world’s largest producer of solar panels and components, plays a vital role in India’s rapidly expanding solar market. In 2022, China exported solar cells and modules worth $3.89 billion to India, accounting for approximately 62.6 percent of India’s total solar imports. This interdependence is critical for India’s solar energy growth, with the country’s installed solar capacity reaching 66 GW by the end of 2022. Conversely, India’s burgeoning renewable energy market provides significant opportunities for Chinese manufacturers and investors. The collaboration extends beyond mere trade; Chinese companies have also invested in Indian solar projects and manufacturing facilities. For instance, LONGi Solar, a leading Chinese solar technology company, has established a solar module manufacturing plant in India with a capacity of Two GW. This interdependence in the renewable energy sector underscores the complex nature of India-China economic relations, where mutual benefits coexist with competitive dynamics. As both countries strive to meet their climate commitments and energy needs, their cooperation in this sector remains a critical factor in the global transition to clean energy. Last, the India-China economic relationship is integral to global supply chains, particularly in consumer markets. Their collaboration ensures cost-effective production, with Chinese components allowing Indian manufacturers to produce goods at competitive prices. The Indian electronics industry depends on Chinese semiconductors and circuit boards to assemble smartphones and other consumer electronics, ensuring they remain competitively priced. Quick market access due to large consumer bases in both countries further provides significant opportunities for businesses in both countries and beyond. Despite a competitive and conflictual relationship, trade between the two countries is a common factor that keeps them connected and facilitates the flow of technological know-how. In Asia, where the two countries have a combined population of more than 2.4 billion, their manufacturing capabilities play a crucial role in maintaining competitive global supply chains. This symbiotic relationship ensures the smooth functioning of supply chains, keeping costs low and availability high for consumer goods worldwide. Despite persistent geopolitical tensions and competitive dynamics, the India-China economic relationship underscores a paradox of interdependence. Much like the US-China dynamic, their collaboration in trade, technology, manufacturing, and renewable energy reveals a complex but mutually beneficial relationship. This interdependence sustains global supply chains, ensuring cost-effective production, technological innovation, and affordable consumer goods. By leveraging their manufacturing strengths and large consumer bases, India and China remain critical to global economic stability and growth. Even amid strategic competition, their economic ties highlight the pragmatic necessity of cooperation in an interconnected world. This article was published under a Creative Commons Licence. For proper attribution, please refer to the original source.

Energy & Economics
With Interim President of Burkina Faso Ibrahim Traore. Photo: Alexander Ryumin, TASS

Russian and waiting

by William Decourt , Spenser Warren

Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Western missteps in Africa are creating an opening for Russia to deepen its influence. Recent protests against International Monetary Fund (IMF)-imposed austerity measures have rocked several African states. Kenya, a long-time partner of the United States and a key contributor to UN peacekeeping operations in Haiti, experienced violent clashes between government security forces and anti-austerity protestors over tax hikes in a controversial finance bill. Simultaneously, many protesters saw Kenyan engagement in Haiti as footing the bill for American security interests while ordinary Kenyans struggled to make ends meet. Soon after, similar protests against IMF measures spread to Nigeria. Analysts and locals are concerned that spreading protests may threaten stability across Africa. Citizens of other countries continue to voice their displeasure with the political and economic status quo through protest (in Mozambique) and at the ballot box (in Botswana). IMF loans come with significant stipulations, including reforms to financial systems and governance. Critics of these conditions frequently malign the IMF as a violator of sovereignty. Changes to economic and governing models, combined with high debts and economic stress, increase the costs of everyday products and diminish purchasing power across the continent. To many ordinary citizens, the West is benefiting from the fruit of African resources while hindering Africans’ access to the global economy. Publics in these countries demand alternatives to IMF funding, protesting governments to oppose IMF-imposed austerity. Youth, an increasingly important demographic, are especially active. Many of these young people are college-educated but fail to secure adequately paid employment in skilled industries. The informal economy is growing but increasingly separated from formal and international economies. IMF austerity measures are driving the continent to economic crisis and protest that may have lasting effects anathema to US foreign policy and the liberal international order. Some already see China as a viable alternative, although public opinion of Chinese influence is mixed. Elsewhere, faded Cold War memories make Russia a relatively unknown economic and political alternative. So, while recent Western actions in Africa have put long term relationships at risk, Russia is slowly increasing its influence on the continent. In fact, the Kremlin has already taken action and is engaged in the politics surrounding the various debt crises in African nations. African countries owe debts to multiple international actors, including Russia. However, Moscow has forgiven debts owed by many of these countries, coupling debt relief with additional economic benefits, including an influx of grains and energy resources. It has also deepened defense cooperation with several African countries. This cooperation often includes contracts for weapons sales and the deployment of irregular military units, including the Wagner Group. Diplomatic actions such as the above have led some protestors to see Russia as a viable alternative to IMF funding and partnerships with the US and Europe. In a visual representation of this phenomenon, protestors have been seen waving Russian flags at mass gatherings across Africa. Russia appears to receive the greatest support in the Sahel, where governments have failed to curb political instability and deliver on economic development promises. Publics in the region were already angry with the continued postcolonial military presence of France, and Russia took advantage. Mass publics are not the only actors seeking alternatives, ruling elites also see Russia as an attractive partner. Russian defense cooperation and the presence of irregular forces bolster these regimes in the face of increasing civilian protests over poor governance or human rights. Still, Russia has not yet made the gains it could. The war in Ukraine is hurting Africans and contributing to economic stress as global grain prices have skyrocketed. Some perceive Russia as exacerbating the problems of failed governance through its use of Wagner Group formations to back corrupt officials, protect corporate interests, and bolster unpopular governments. Russian interest in the region is also less significant than in the Middle East, Eastern Europe, or the Arctic, where Russia has more proximate strategic, economic, and political goals. Rather than rushing in, Russia’s economic presence in Africa is slowly advancing Moscow’s goals on the international stage. When Russia sought to undermine financial, technological, and energy sanctions from the West as a result of its invasion of Ukraine, it turned to Africa to find new consumers for food products, energy, and arms. Already, in the wake of the invasion, only half of the continent voted to condemn Russia. Such voting patterns at the UN indicate greater support for Russia in Africa than in other regions around the world, even if distrust of Russia remains high in some parts of the continent. Forecasted crises could increase Russian influence on the continent as well. Shocks generated by the African debt crisis could become a proximate cause for geopolitical and geoeconomic shifts. Rapid demographic changes and disastrous climate events (e.g., droughts and floods) exacerbate existing economic and migratory challenges. Since the tentacles of Russian economic and security influence, as well as misinformation, are already present in Africa, such future crises could pull multiple African states further into Russian orbit, and away from Western countries and institutions. Further alignment of African states with Russia would have several drawbacks. Russia would discourage democratization and use security assistance to bolster dictators across the continent. Environmentally sustainable development is also likely to be hampered. Russia may increase the extraction of natural resources in environmentally damaging ways. Additionally, Russian energy exports will be oil and gas, eroding the already significant investment and progress in green energy development many African political economies have made. As Western missteps create openings for Russia to gain a foothold in Africa, they also set the stage for other global powers to capitalize on the vacuum. Chinese-built infrastructure in Africa also contributed to debt burdens, but unlike Western approaches tied to IMF austerity measures, China is recalibrating its strategy. By shifting to smaller projects with lower debt exposure and promoting green energy development overseas, China positions itself as a more appealing partner. This strategy not only bolsters China’s domestic solar and EV industries but also enhances its soft power by responding to local economic needs. Moreover, as Western policy blunders alienate African publics and governments, both Russia’s and China’s influence may grow. Russia’s gains in the region could indirectly strengthen China’s position by fostering broader skepticism of Western-led systems, aligning African leaders more closely with Beijing’s geopolitical goals, including its stance on Taiwan. Africa is a burgeoning continent. One in four humans will be African by 2050. If the US and Europe pass on opportunities to engage with a continent of emerging green development powers and an increasingly educated demographic bulge, Western policies will undermine their own power and influence in the international order. Russia’s quiet increase in trade and security assistance offers an established alternative. Meaning ultimately, both Russia and China, may play the long game, gaining incremental support from a region of one billion people at a time. This work is licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0) [add link: https://creativecommons.org/licenses/by/4.0/]

Energy & Economics
Trump - Putin - Flags

The World Awaits Change

by Andrei Kortunov

Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском “Changes! We’re waiting for changes!” proclaimed Viktor Tsoi nearly 40 years ago, at the dawn of the Soviet perestroika. If one were to summarize the multitude of diverse and contradictory events, trends, and sentiments of the past year in a single phrase, it would be that the modern world is eagerly awaiting change. Much like the former USSR in the 1980s, few today can clearly define what these changes should entail or what their ultimate outcome will be. Yet, the idea of maintaining the status quo has evidently found little favor with the public over the past year. This impatient anticipation of change was reflected, for instance, in the outcomes of numerous elections held over the past 12 months across the globe. In total, more than 1.6 billion people went to the polls, and in most cases, supporters of the status quo lost ground. In the United States, the Democrats suffered a resounding defeat to the Republicans, while in the United Kingdom, the Conservatives were decisively beaten by the Labour Party. In France, Emmanuel Macron's once-dominant ruling party found itself squeezed between right-wing and left-wing opposition, plunging the Fifth Republic into a deep political crisis. The seemingly stable foundations of political centrism were shaken in Germany, South Korea, and Japan. Even the party of the highly popular Indian Prime Minister Narendra Modi failed to retain its parliamentary majority after the elections, and in South Africa, the African National Congress led by Cyril Ramaphosa also lost its majority. Pessimists might argue that abandoning the status quo in itself solves no problems, and the much-anticipated changes, as the final years of the Soviet Union demonstrated, do not necessarily lead to positive outcomes. Replacing cautious technocrats with reckless populists often backfires, affecting those most critical of the entrenched status quo. Optimists, on the other hand, would counter that the rusted structures of state machinery everywhere are in desperate need of radical modernization. They would add that the costs inevitably associated with maintaining the existing state of affairs at all costs far outweigh any risks tied to attempts to change it. The international events of the past year are also open to various interpretations. Pessimists would undoubtedly point out that none of the major armed conflicts carried over from 2023 were resolved in 2024. On the contrary, many of them showed clear tendencies toward escalation. For instance, in late summer, Ukraine launched an incursion into the Kursk region of Russia, and in mid-November, the U.S. authorized Kyiv to use long-range ATACMS missiles against targets deep within Russian territory. Meanwhile, the military operation launched by Israel in Gaza in the fall of 2023 gradually expanded to the West Bank, then to southern Lebanon, and by the end of 2024, to parts of Syrian territory adjacent to the Golan Heights. From the optimists' perspective, however, the past year demonstrated that the disintegration of the old international system has its limits. A direct military confrontation between Russia and NATO did not occur, nor did a large-scale regional war break out in the Middle East, the Taiwan Strait, or the Korean Peninsula. The economic results of 2024 are equally ambiguous. On one hand, the global economy remained heavily influenced by geopolitics throughout the year. The process of “technological decoupling” between the U.S. and China continued, and unilateral sanctions firmly established themselves as a key instrument of Western foreign policy. On the other hand, the world managed to avoid a deep economic recession despite the numerous trade and investment restrictions. Global economic growth for the year is expected to reach around 3%, which is quite respectable for such turbulent times, especially considering that the long-term effects of the COVID-19 pandemic have not yet been fully overcome. In 2024, the average annual global temperature exceeded pre-industrial levels by more than 1,5 °C for the first time, crossing another critical “red line”. However, the UN Climate Change Conference (COP29) held in November in Baku fell short of many expectations. At the same time, China reached its peak carbon emissions by the end of the year, achieving this milestone a full five years ahead of previously announced plans. In the past year, the UN Security Council managed to adopt only 12 resolutions, mostly of a humanitarian nature, clearly reflecting the declining effectiveness of this global governance body. For comparison, in 2000, the Security Council approved 29 resolutions, including key decisions on conflict resolution in the Balkans and Africa. At the same time, 2024 saw continued efforts to explore new formats for multilateral cooperation, including mechanisms within the BRICS group, which held its 16th summit in Kazan for the first time in its newly expanded composition. With enough imagination, one can easily find evidence in the past 12 months to confirm any omen or superstition traditionally associated with leap years. However, all these signs and superstitions predicting upheavals and catastrophes—while aligning with the pessimistic conclusions about the year now ending—do not apply to the year ahead. Human nature, after all, tends to lean more towards optimism than pessimism; if it were the other way around, we would still be living in caves. As they bid farewell to a difficult and challenging year, people around the world continue to hope for better times. And the mere act of hoping for the best is already significant in itself. As Johann Wolfgang von Goethe aptly remarked, “Our wishes are forebodings of our capabilities, harbingers of what we are destined to achieve”. Originally published in Izvestia.