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Attila Marjan

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Is our global humanitarian system in transition? If so, what are the key issues before the 2016 World Humanitarian Summit

“Today’s needs are at unprecedented levels and without more support there simply is no way to respond to the humanitarian situations we’re seeing in region after region and in conflict after conflict.”
António Guterres, the UN High Commissioner for Refugees

The world is preparing for the World Humanitarian Summit. The United Nations will host the event in Istanbul, in 2016. Before the meeting, regional consultations are held in several parts of the world hit by humanitarian crises. Expectations are high.The study forecasts how the EU can financially contribute to donor activities in the future taking into account the fact that there are too many humanitarian crises.

Recognising that the humanitarian landscape has changed tremendously over the past few decades, the UN Secretary-General, Ban Ki-moon initiated the World Humanitarian Summit (WHS) as a three-year initiative which will set the scene for a wide-ranging international discussion on how to adapt the humanitarian system to the new reality so that it serves the people in need more effectively.

The WHS has a two-fold objective:

1) secure commitment to a strategic agenda which makes humanitarian action fit for the challenges of 2016 and beyond;

2) develop stronger partnerships and seek innovative solutions to persistent and new challenges so that the agreed strategic agenda is implemented after the Summit.[1]

As Jemilah Mahmood − Head the WHS Secretariat at the UN Headquarters in New York – stated, “Now more than ever, we need to recognise the sheer magnitude of the problems we face in the humanitarian and developmental sectors, and focus our collective resources on solving them.” The WHS is an opportunity for governments, the UN and intergovernmental agencies, regional organisations, non-profits and civil society actors, the private sector, academia as well as people affected by crises to come together, take stock of humanitarian action, discuss the changing landscape, share knowledge and best practices, and chart a forward looking agenda.[2]

Before the Summit, through a two-year consultation process, the aim is to build a more inclusive and diverse humanitarian system by bringing all key stakeholders together to share best practices and find innovative ways to make humanitarian action more effective. The process is being managed by the UN Office for the Coordination of Humanitarian Affairs (OCHA).The European Commission’s Humanitarian Aid and Civil Protection Department (ECHO) is taking an active role in contributing to the discussion throughout the entire WHS process.[3]

The following agenda for consultations have been established:

  1. West and Central Africa − Côte d’Ivoire, 19-20 June 2014;
  2. North and South-East Asia − Japan, 23-24 July 2014;
  3. Eastern and Southern Africa – South Africa, 27-29 October 2014;
  4. Europe and Others − Hungary, 3-4 February 2015;
  5. Middle East and North Africa − Jordan, 3-5 March 2015;
  6. Latin America and the Caribbean − Guatemala, 5-7 May 2015;
  7. Pacific Region − New Zealand, June 2015;
  8. South and Central Asia − 3rd Quarter 2015;
  9. Global Consultation − Switzerland, October 2015.

Consultations will engage a broad range of partners, including people from affected territories, humanitarian actors, technical experts and the public through the WHS web platform. The key findings from both the regional and online consultations will be included in the final report of the Secretary-General that will set the summit agenda and influence the future of global humanitarian action.

Change is needed in the international humanitarian system as almost 25 years after UN General Assembly resolution 46/182 created the present humanitarian system – around the ERC, the IASC and a set of established core and guiding principles – the landscape of humanitarian action has changed considerably. Inter-related global trends, such as climate variability, demographic change, financial and energy sector pressures or changing geo-political factors have led to increased demand for humanitarian action. This focuses around three types of humanitarian realities: armed conflicts, disasters caused by natural hazards, and ‘chronic crises’ where people cyclically dip above and below acute levels of vulnerability. Each scenario has its own characteristics and challenges.[4]

In response to the challenges, humanitarian actors have sought to improve their services and maximize their impact on people in need. In particular, the 2005 Humanitarian Reform and more recently the IASC Transformative Agenda developed new approaches to working more accountably, predictably and effectively, and discussions to update international humanitarian legislation take place each year in the General Assembly. But there has been no collective exercise to take stock of the achievements and changes that have occurred since the current system was formed. Nor has a structured dialogue taken place between the four major constituencies that contribute to humanitarian action today: Member States (including affected countries, donors and emerging and interested partners); the global network of humanitarian organizations and experts; associated partners, (including private sector, religious charities, etc.); and, affected people themselves – as first responders, communities and civil society organizations, to think through how to address the current challenges. While the fundamental principles enshrined in General Assembly Resolution 46/182 will continue to guide our work, we need to explore how to create a more global, effective, and inclusive humanitarian system.[5]

The Summit hopes to engage states in commitments to a new range of global humanitarian policies and financing. The main aim of the Summit is to: “set an agenda to make humanitarian action fit for the challenges of the future, by broadening and deepening partnerships for those in need.” The Concept Note that is guiding consultations running up to 2016 has put innovation right at the centre of its work, and is focusing on four main themes: humanitarian effectiveness; reducing vulnerability and managing risk; transformation through innovation, and serving the needs of people in conflict.[6]

Humanitarian crisis

According to Humanitarian Coalition, humanitarian crisis is an event or series of events which represents a critical threat to the health, safety, security or wellbeing of a community or other large group of people, usually over a wide area. Armed conflicts, epidemics, famine, natural disasters and other major emergencies may all involve or lead to a humanitarian crisis that extends beyond the mandate or capacity of any single agency. Humanitarian crises can be grouped under the following headings: Natural Disasters (earthquakes, floods, storms and volcanic eruptions). Man-made Disasters (conflicts,plane and train crashes, fires and industrial accidents). Complex Emergencies (when the effects of a series of events or factors prevent a community from accessing their basic needs, such as water, food, shelter, security or health care). Complex emergencies are typically characterized by: extensive violence and loss of life; displacements of populations; widespread damage to societies and economies; the need for large-scale, multi-faceted humanitarian assistance; the hindrance or prevention of humanitarian assistance by political and military constraints; significant security risks for humanitarian relief workers in some areas.

The causes for a crisis are always context-specific and each crisis is different. Humanitarian crises usually require a multi-sectoral response. Complex emergencies pose many challenges to humanitarian actors, including access to vulnerable populations, human rights abuses and the possible presence of armed actors.[7]

Do we live in a safe or dangerous world?

Humanitarian crises in the world today − Syria, Iraq, Central African Republic, South Sudan and now Gaza − all demand immediate and massive humanitarian response. The crises are not only large-scale, affecting millions, but the conflicts also are complex, each with unique political realities and on-the-ground difficulties. They are not alone among crises competing for our attention. They are simply the biggest, pushing off the front pages other crises where human needs remain urgent: Darfur, Central America, Pakistan, Côte d’Ivoire, Democratic Republic of the Congo and Somalia.[8]The question is obvious: Do we live in a safe or dangerous world?

During 2012 − the most recent year for which there are data − the number of conflicts being waged around the world dropped sharply, from 37 to 32. High-intensity conflicts have declined by more than half since the end of the Cold War, while terrorism, genocide and homicide numbers are also down. And this is not simply a recent phenomenon. According to a major 2011 study by Harvard University’s Steven Pinker, violence of all kinds has been declining for thousands of years. Indeed Pinker claims that, “we may be living in the most peaceful era in our species’ existence.”[9]

Over the last decade, claims that the number and deadliness of armed conflict has declined since the end of the Cold War − while not uncontested − have become increasingly accepted. The most telling finding is that the number of high-intensity state-based conflicts − those that kill a thousand or more people a year − has declined by more than half since 1989.[10]

 

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Conflicts between states − especially high-intensity conflicts − have become very rare since 1989. There has been less than one interstate conflict per year on average since 2000, down from almost three during the 1980s.[11] Since the end of the 1990s there has been a growing – and increasingly heated – debate over recent and longer term trends in violence around the world. Proponents of what has become known as the “declinist thesis” argue that violence has declined; others accept the basic “declinist” thesis but challenge the explanations that seek to account for it.[12] But while large-scale organized political violence has declined over the past quarter of a century, some analysts argue that organized – and often transnational – criminal violence has increased. In fact, death rates in some countries exceed those in the deadliest wars currently being waged around the world.[13]

The rise of transnational organized crime is part of what has sometimes been described as “the dark side of globalization.” But the increase in global trade, investment, and other forms of transnational economic integration has also been associated with increased levels of human development, wealth and global freedom.[14] Globally, the number of conflicts had been stabilising at a relatively high level. However, because today’s conflicts are mostly low in intensity, global battle-death tolls have remained relatively low – despite a slight increase from 2010 to 2011.[15]

High-intensity conflicts have fluctuated at a relatively low level for most of the 2000s. The six high-intensity conflicts active in 2011 were located in Afghanistan, Libya, Pakistan, Somalia, Sudan, and Yemen. Some of these conflicts have been active, and among the most deadly, for many years. Only one of the high-intensity conflicts mentioned above – that in Libya – was directly related to the Arab Spring. The wars in Afghanistan, Pakistan, Somalia, and Yemen were associated with ongoing international and local campaigns against Islamist group while the violence in Sudan was mostly related to the events surrounding South Sudan independence, and, to a lesser extent, to continuing problems in the Darfur region.[16]

Most state-based conflicts today are intrastate conflicts, which are fought between the government of a state and one or more non-state armed group over control of government power or a specific territory. Many of the high-intensity conflicts in 2011 – such as the conflicts in Afghanistan, Somalia, and Yemen – were civil wars in which troops from other states participated in the conflict in support of one or more of the warring parties. On the other hand, in recent years, the Middle East and North Africa – the second-most-deadly region in 2011 – saw reported battle deaths triple, going from under 2,000 in 2010 to almost 6,000 in 2011. Part of the reason for this increase can be attributed to the events related directly and indirectly to the Arab Spring.[17]

 

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The number of conflicts in the Middle East and North Africa increased by two in 2011 with conflict onsets in Libya and Syria that were both related to the Arab Spring. Battle deaths in this region also increased in 2011. In addition to the Arab Spring conflicts in Libya and Syria, the increase was a result of the escalation of ongoing conflicts in Yemen, Iran, and Turkey.[18]

Researchers studying the Long Peace of the post-World War II period have identified growing international economic interdependence – manifest in the dramatic increase in international trade and foreign direct investment – as one important disincentive for interstate war in this period.[19]

Conflicts between states, as well as those between states and rebel groups, tend to dominate war-related news headlines. Most people’s understanding of the incidence of armed violence around the world comes from the media. But media reporting – not surprisingly – focuses on bad news. Violence makes headlines – its absence does not.[20] For the past two years world attention has focused on the escalating violence between Bashar al-Assad’s regime and armed opposition groups in Syria.[21]

Too many humanitarian crises challenge the sources and capacity

Kristalina Georgieva[22], EU Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, warns that there is “no light at the end of this tunnel: we must get used to a ‘new normal,’ where we face multiple challenges with finite resources.” We need to accept the reality of not having enough money to respond. With so many crises, the tendency is to focus on the latest and the “biggest” crises. A “crisis of the month” mentality has been replaced by “crisis of the week.” Numbers matter, so understandably our focus is drawn to large-scale crises. When hundreds of thousands of refugees flee a country, we respond. When smaller numbers are displaced by, say, a storm on a Pacific Island – even when proportionally a greater percentage of the population is affected − we tend to overlook it. A few years ago the International Federation of the Red Cross and Red Crescent Societies reported that 90 percent of all natural disasters have fewer than 50 casualties; numbers not sufficient to mobilize an international response but no less devastating to those affected. Too many crises have consequences. In 2012 the worry was how the international community would come up with the resources to meet humanitarian needs in Syria, estimated at $1 billion a year. Today, the appeal for Syria is over $6 billion with less than 25 percent funded by mid-year. Syria is far from the only crisis for which urgent appeals for funding are made. South Sudan, Central African Republic and Gaza are all desperate situations that need a robust international response.[23]

Too many crises also increase the demand for experienced staff. Humanitarian agencies find it daunting to maintain adequate stand-by capacity to respond to a wave of major disasters. Stand-by rosters are stretched. An overwhelming number of crises make it almost impossible for the international community to respond well − or even adequately − to the existing humanitarian disasters, much less to prepare for future ones. Humanitarian crises are influenced by political problems; the inability of our international political system to resolve these crises is stunning. The Responsibility to Protect populations from genocide, war crimes, crimes against humanity and ethnic cleansing has emerged as an important global principle since its adoption by the UN World Summit in 2005. The fact that there are too many humanitarian crises today is the result of a failure in global governance. Change is needed in the international humanitarian system and perhaps the World Humanitarian Summit in Istanbul in 2016 will provide an opportunity for fresh − and even radical − thinking about the way the system responds.[24]

The Brookings Institution assessed the global response to humanitarian crises. Throughout 2013, international humanitarian actors have faced major challenges responding to conflicts and natural disasters across the globe. Tens of thousands of people died in Syria and millions were displaced while international actors struggled to get access to desperate people. While escalating violence in such diverse countries as South Sudan, Iraq, Yemen and the Central African Republic may have received less media attention than Syria, these situations also posed particular challenges to the international community. At the end of 2013, the international community was mobilizing a major relief effort to respond to Typhoon Haiyan in the Philippines, a storm that affected more than 14 million people and displaced over 5 million. Beyond the headlines, there were dozens of long-standing conflicts and smaller disasters that impacted the lives of millions of people and overwhelmed the capacity of local responders to meet the security, food and health needs of victims. The slow and sometimes inadequate response to these emergencies raise challenging questions about the capacity of the humanitarian aid system to meet the needs of people most affected by these and other disasters.[25]

Speaking at the Dubai International Humanitarian Aid & Development Conference & Exhibition, Ross Mountain pointed out that in vulnerable countries food prices, urbanization, migration, the impact of climate change and population growth are all increasing. But as the challenges grow, the resources available in OECD countries − the traditional donors − to respond to humanitarian crises are shrinking. Nevertheless at OECD level budgetary constraints has not yet resulted in dramatic drop in humanitarian aid spending.

Given the increased scale of needs and vulnerability, a shift in attitude and working practices is needed to integrate anticipation, disaster risk reduction, preparedness and resilience into programmes. Many governments and many organizations still operate on a model that focuses on short-term crises, rather than looking at the longer term trends and their humanitarian implications. If we do not take a more participatory preventive approach, we will be responsible for countless avoidable suffering in the decades to come. Governments are increasingly linking humanitarian assistance to political, military or anti-terrorism objectives. Think Afghanistan, Yemen, Libya, Sudan, Somalia and the occupied Palestinian territory. In other cases, like Syria, governments and/or armed groups have increasingly denied access to humanitarian organizations. There has been an explosion of NGOs in recent years; but also a change in the donor landscape. The economic downturn in the West has meant a growing role for donors and organizations from the Arab and Muslim worlds, for example. This means two things. First, the international community needs to better, and “more respectfully”, engage these new players. The tendency on the part of many of us in the international community is to come thinking that money is to be given so that we, the experts, go back and do the work. The talk should be more about strategic partnerships and not about money. Forging smart and strategic partnership is one way for the international humanitarian community to better respond to today’s growing humanitarian challenges.[26]

International humanitarian funds

International humanitarian action − aiding and protecting people in armed conflicts and disasters − has expanded dramatically in the last twenty years to become a major global field. In 2012, official humanitarian aid totalled $17.9 billion dollars and reached 73 million people. Some 75 percent of these funds came from OECD governments, Saudi Arabia and Qatar. This makes states by far the largest contributors to humanitarian aid. The remaining 25 percent came from private funds. Around $3.3bn (18.75 percent) came directly from the donations of individual citizens, and $1.1bn (6.25 percent) from private foundations.The three largest state funders are the USA, EU and UK.[27]

According to the OECD’s report[28] published in April 2014 total development aid (which is a more comprehensive measure than humanitarian aid) rose by 6.1 percent in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of USD 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid. An annual survey of donor spending plans by the OECD Development Assistance Committee (DAC) indicated that aid levels could increase again in 2014 and stabilise thereafter. However, a trend of a falling share of aid going to the neediest sub-Saharan African countries looks likely to continue.

In all, 17 of the DAC’s 28 member countries increased their ODA in 2013, while 11 reported a decrease. Net ODA from DAC[29] countries stood at 0.3 percent of gross national income (GNI.) Five countries met a longstanding UN target for an ODA/GNI ratio of 0.7 percent. The United Kingdom increased its ODA by 27.8 percent to hit the 0.7 percent target for the first time. The United Arab Emirates posted the highest ODA/GNI ratio, 1.25 percent, after providing exceptional support to Egypt. Aid to developing countries grew steadily from 1997 to a first peak in 2010. It fell in 2011 and 2012 as many governments took austerity measures and trimmed aid budgets. The rebound in aid budgets in 2013 meant that even excluding the five countries that joined the DAC in 2013 (Czech Republic, Iceland, Poland, Slovak Republic and Slovenia), 2013 DAC ODA was still at an all-time high.

The largest donors by volume were the United States, the United Kingdom, Germany, Japan and France.  Denmark, Luxembourg, Norway and Sweden continued to exceed the 0.7 percent ODA/GNI target and the UK met it for the first time. The Netherlands fell below 0.7 percent for the first time since 1974. Net ODA rose in 17 countries, with the largest increases recorded in Iceland, Italy, Japan, Norway and the UK. It fell in 11 countries, with the biggest decreases in Canada, France and Portugal. The G7 countries provided 70 percent of total net DAC ODA in 2013, and the DAC-EU countries 52 percent. The US remained the largest donor by volume with net ODA flows of USD 31.5 billion, an increase of 1.3 percent in real terms from 2012.  US ODA as a share of GNI was 0.19 percent.  Most of the increase was due to humanitarian aid and support for fighting HIV/AIDS.  By contrast US net bilateral aid to LDCs fell by 11.7 percent in real terms to USD 8.4 billion due in particular to reduced disbursements to Afghanistan.  Net ODA disbursements to sub-Saharan Africa fell by 2.9 percent to USD 8.7 billion.

Nevertheless this survey also suggests a continuation of the worrying trend of declines in programmed aid to LDCs and low-income countries, in particular in Africa. CPA to LDCs and LICs is set to decrease by 5 percent, reflecting reduced access to grant resources on which these countries are highly dependent. Some Asian countries may see increases, however, so that by 2017 overall allocations to Asia are expected to equal those towards Africa. This will need special attention in the future

It is well-known that the European Union is the world’s leading provider of humanitarian aid. This aid, which takes the form of financing, provision of goods or services, or technical assistance, helps prepare for and deal with the crises such as natural disasters, disasters caused by human activity, or structural crises, outside the Union. The Union’s action comprises three instruments: emergency aid, food aid, and aid for refugees and displaced persons. ECHO coordinates this action and cooperates closely with partners who implement aid on the ground, in particular the United Nations and non-governmental organisations. EU Humanitarian aid policy is based on the principles of humanity, neutrality, impartiality and independence. EU Humanitarian aid must be coordinated with other policies so that it can be adapted to each situation and can contribute to long-term development goals. The EU contributes to developing collective global capacity to respond to crises. It commits to promoting reforms in the international humanitarian system, led by the United Nations, and in cooperation with other humanitarian actors and donors.

EU Humanitarian aid is financed from the ’Global Europe’ heading of the EU budget. This heading covers all external action by the EU such as development assistance or humanitarian aid with the exception of the European Development Fund (EDF) which provides aid for development cooperation with African, Caribbean and Pacific countries, as well as overseas countries and territories. As it is not funded from the EU budget but from direct contributions from EU Member States, the EDF does not fall under the MFF (the EU’s seven year framework budget).

International humanitarian funds generally are channelled through UN agencies (like the UN World Food Programme, UNICEF and UNHCR), the Red Cross and Red Crescent movement, and non-governmental organizations (NGOs). Humanitarian NGOs can be well known names like Oxfam, Medicines Sans Frontieres (MSF), the International Rescue Committee (IRC), CARE and Caritas, or they can increasingly be national and local NGOs that are growing fast in countries confronted by protracted conflict, chronic hunger or persistent natural disasters. Altogether, it is estimated that there are about 4,400 NGOs engaged in some form of humanitarian aid and around 274,000 humanitarian workers in the world today.[30] The expansion of humanitarian aid and protection under UN guidance means that the international humanitarian system is becoming a nascent form of global welfare for people suffering from war, chronic food insecurity and natural disasters. Humanitarian aid is now an internationally organized safety net for many millions of people living in extreme situations as terrorized civilians, displaced people and refugees, or the victims of natural disasters like floods and earthquakes. The humanitarian system has expanded in a relatively improvised fashion, and contains hundreds of different and competing moving parts. Its many agencies may share the same strategic humanitarian goals but they each have their own organizational interests that compete for funds, profile and operational terrain.[31]

The EU has begun to invest in these terms with its two initiatives: SHARE for the Horn of Africa worth Euro 270m in 2012/13 and AGIR for West Africa worth Euro 503m in 2012/13.21 The British Government’s Department for International Development (DFID) has also launched BRACED, a fund for NGOs to support people’s resilience to extreme climate change in sub-Saharan Africa and South Asia. This fund is targeting 5 million people and seeking applications from NGO-led consortia.[32] This resilience strategy needs help if it is to inspire genuine innovations in processes, products and paradigms for building resilience. Without such innovations, these new funds, and those that follow, will be a lost opportunity in which NGOs simply bundle up old project types in new resilience wrappers.[33]

Conclusion

Currently, the global community faces many challenges such as climate change, rapid population growth, urbanization, and water shortages. At the same time, there have global economic shifts, new actors engaged in humanitarian action, and tremendous improvements in technology. Given these challenges and opportunities, we need to improve how we respond to disasters and conflicts.[34]

In the last ten years, the funding requirements of inter-agency appeals have increased by 600 percent from $3 billion in 2004 to $17.9 billion in 2014. However, inter-agency appeal funding received in 2013 $8.3 billion. In the same amount of time, the number of people targeted for assistance has more than doubled. The crisis in Syria is one of the worst on record given the sheer size of damage in the country and the effect on the region. The Syria Response Plan was 209 times bigger than the average appeal. More than 150 agencies and aid groups are working with local partners and national authorities to provide relief to the Syrian people in the region. In 2013, African countries like DRC, Somalia, South Sudan, Sudan, these countries had previously received approximately 60 percent of appeal funding, though Syria response plans received 38 percent $3.1 billion.[35]

According to OCHA, crises are longer and more expensive. The crises in the Central African Republic, Iraq, South Sudan and Syria will remain top humanitarian priorities next year. The sharp rise in the number of people affected by conflict and of forced to flee and became dependent on humanitarian aid for their survival is expected to continue. The Global appeal for 2015 is $16.4 billion to help 57 million people in 22 countries. The UN and its humanitarian partners have launched an appeal for US$16.4 billion to help at least 57.5 million people affected by crises in 22 countries in 2015. As UN Humanitarian Chief Valerie Amos explained, “Over 80 percent of those we intend to help are in countries mired in conflict where brutality and violence have had a devastating impact on their lives…But the rising scale of need is outpacing our capacity to respond.”[36]

As far as the EU’s preparedness is concerned one cannot be overly optimistic. In November 2013, after the European Parliament voted through the Multiannual Financial Framework which determines the European Union’s (EU) common budget and priorities over the next seven-year period, the so-called CONCORD Report was published. The 2014-2020 period is the first budgetary framework negotiated under the Lisbon Treaty, giving additional power to the European Parliament. The Parliament’s vote marks the beginning of the final stages of the process leading to the ratification of the EU budget for the seven years. The CONCORD report, ‘EU Budget 2014-2020: Fit for the Fight against Global Poverty?’ recognises that the MFF is not just a financial tool but a key tool in strengthening the EU’s place as a global development actor. The 2014-2020 period will cover both the 2015 deadline for the achievement of the Millennium Development Goals and the EU’s target to spend 0.7 percent of collective GNI on development aid, making it a crucial budget for the EU’s relations with developing countries. And yet the budget available for external action comes up short of what is needed to fulfil the many priorities and global challenges. But in 2014 the situation has dramatically deteriorated when the European Union’s humanitarian aid and development aid programmes were compromised by EU debts, and budget cuts forecast for 2015. Since 2011, the European budget has been amassing unpaid bills, which continue to rise in value. The budget by the end of 2014 was 26 billion euro in arrears, €23 billion of which are owed to the cohesion policy. This impacts the whole spectrum of European politics.

Unpaid bills in the budget category of “Global Europe”, which includes development aid and humanitarian aid, have reached 1 billion euro. The lack of funds has also forced the EU to roll back some humanitarian aid programmes. Some projects in the Sahel region of Africa, the Horn of Africa and Haiti have been postponed,” the budget Commissioner announced.

The lack of funding will also affect other humanitarian aid programmes. The impact of the EU’s current constraints on humanitarian aid is already being felt by the beneficiary countries. For example, aid to Iraqi refugees in Jordan has been reduced. NGOs are signalling that food security operations in Somalia and Ethiopia are being delayed and that their priority level is being reduced,” she added. The strain on the 2014 budget is in danger of becoming even worse in 2015, as member states have proposed significant cuts to the European Commission budget. These cuts would leave the EU unable to pay its currently outstanding bills and those that would arise in the course of the 2015 budget. The cut of 2.1 billion euros, equivalent to 1.5 percent of the total approved expenditure for 2015, will affect a broad range of European projects, but spending on development aid and humanitarian aid will probably be the hardest hit by these proposed cuts. The total budget of the section “Global Europe” could be reduced by 10 percent, representing €384 million. The budget of EuropeAid, dedicated specifically to development aid, may lose 192 million euros; 12 percent of its funding[37].

Globally the next two and a half years offers social entrepreneurs a real opportunity to team up with affected populations and humanitarian agencies to engage in humanitarian innovation. The new products, processes, positions and paradigms that emerge can then be presented in the UN consultation process and get traction through the Summit.[38]


(*)Authors: Attila Marján, Ilona Szuhai

Attila Marján, Head of EU Department at the National University of Public Service, Budapest
Ilona Szuhai, Assistant Lecturer and Doctoral Student at the National University of Public Service, Budapest

 

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[1] http://ec.europa.eu/echo/en/news/world-humanitarian-summit-opens-online-consultation-european-region

[2] http://www.thestar.com.my/News/Nation/2014/05/07/Jemilah-Mahmood-to-head-UN-humanitarian-summit-secretariat/

[3] http://www.worldhumanitariansummit.org/whs_about

[4] WHS 2016 Concept Note, Draft September 2013. p. 1.

[5] Ibid.

[6] Dr Hugo Slim: Innovation in Humanitarian Action, p. 15. http://www.sbs.ox.ac.uk/sites/default/files/Skoll_Centre/Docs/essay-slim.pdf

[7] http://humanitariancoalition.ca/

[8] Elisabeth Ferris: Too many humanitarian crises not enough global resources. http://www.globalpost.com/dispatches/globalpost-blogs/commentary/too-many-humanitarian-crises-not-enough-global-resources.

[9] Human Security Report Project, Human Security Report 2013: The Decline in Global Violence: Evidence, Explanation, and Contestation, (Vancouver: Human Security Press, 2013). p. 119.

[10] Ibid., p. 49.

[11] Ibid., p. 24.

[12] Ibid., p. 15.

[13] Ibid., p. 49.

[14] See more on this in: Attila Marján: Europe’s Destiny − The Old Lady and the Bull. Johns Hopkins University Press, 2010.

[15] Human Security Report Project, Human Security Report 2013, cit. op. p. 86.

[16] Ibid., p. 86.

[17] Ibid., p. 87.

[18] Ibid., p. 94.

[19] Ibid., p. 33.

[20] Ibid., p. 34.

[21] Ibid., p. 95.

[22] Now, European Commission Vice-President.

[23] Elisabeth Ferris: Too many humanitarian crises not enough global resources. http://www.globalpost.com/dispatches/globalpost-blogs/commentary/too-many-humanitarian-crises-not-enough-global-resources.

[24] Ibid.

[25] Humanitarian Crises in 2013: Assessing the Global Response http://www.doctorswithoutborders.org/support-us/events/humanitarian-crises-2013-assessing-global-response

[26] AID POLICY: Humanitarianism in a changing world. http://www.irinnews.org/report/95237/aid-policy-humanitarianism-in-a-changing-world

[27] Slim, op. cit., p. 2.

[28] http://www.oecd.org/newsroom/aid-to-developing-countries-rebounds-in-2013-to-reach-an-all-time-high.htm

[29] Development Assistance Commitee

[30] Slim, op. cit., p. 2.

[31] Ibid., p. 3.

[32] Ibid., p. 22.

[33] Ibid., p. 9.

[34] http://www.worldhumanitariansummit.org/whs_about

[35] World Humanitarian Data and Trends 2014 – highlights. www.unocha.org/data-and-trends-2014.

[36] http://www.unocha.org/top-stories/all-stories/2015-global-appeal-164-billion-help-57-million-people-22-countries

[37] Euractive. http://www.euractiv.com/sections/development-policy/aid-programmes-hit-hard-european-budget-woes-309169

[38] Slim, op. cit., p. 16.

Hungarian economist, PhD in international relations. Based in Brussels for fourteen years as diplomat and member of EU commissioners’ cabinets. Two times visiting fellow of Wilson Center in Washington DC. University professor and author of books on EU affairs and geopolitics. Head of department, National University of Public Administration, Budapest.

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Economy

Agriculture Is Creating Higher Income Jobs in Half of EU Member States but Others Are Struggling

MD Staff

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Half of EU member states have leveraged the Common Agricultural Policy (CAP) to significantly reduce poverty and drive higher incomes in farming, while other countries are still lagging, according to the latest World Bank study.

The ‘Thinking CAP’ report details how new investments and services in farming, reinforced by the EU’s flagship agriculture policy, can drive down poverty and transform agriculture into a sector which can provide higher paying jobs for those who farm.

Hungary, Slovakia, Estonia, Denmark and the Netherlands are all examples of member states that have successfully modernized their agricultural sectors by providing advisory services, roads, secure property rights and access to education and health services in rural areas. Others, such as Bulgaria, Portugal, Romania, Slovenia and Greece, still have some way to go in reducing poverty and ensuring that agricultural work pays. They can do so by improving the basic conditions for a successful agricultural sector, which would improve the results of the financial investments available under the CAP. Other remaining member states fall in between these two categories – achieving a successful transformation or lagging behind.

“Agriculture and poverty in half of the member states of the EU no longer go hand-in-hand. It’s clear that the income gap between agriculture and other sectors is narrowing and in some countries, such as the Netherlands, agricultural work can pay more than jobs in other sectors,” says Arup Banerji, Regional Director for the European Union Countries at the World Bank. “Today, about half of EU member states recognize that farming can boost shared prosperity, while the other half still has some work to do to provide the basic conditions to bring about necessary structural changes.”

The World Bank report shows that the EU CAP is associated with improving employment conditions in farming. Decoupled payments – annual payments based on how much land a farmer uses – and the co-financing of on-farm investments do show clear links with improvements in agriculture. For instance, in the newer member states agricultural labor productivity growth increases from 3.1 percent to 4.7 percent per year with a 10 percent increase in this type of CAP spending. However, there are certain categories of subsidy – known as coupled payments, which reward farmers for producing a particular crop or livestock— for which the report could find no such association. In the past, these coupled payments also led to extreme overproduction and price distortion on global markets.

“Some countries are running before they can walk by issuing payments to farmers who don’t have the necessary infrastructure to effectively bring their products to market or to make the best use of their investment,” said Rogier van den Brink, Lead Economist at the World Bank. “However, the processes the CAP has put in place are impressive. The CAP casts a very wide net and reaches farmers in every far-flung corner of the EU. Because of this, improvements in the CAP along the lines of the recommendations outlined in our report will further strengthen its role as a powerful instrument of structural transformation.”

Going forward, the report says the monitoring of CAP funds should focus on delivering tangible results rather than confusing bureaucratic processes. This would also encourage the co-financing of private investment into CAP-supported projects which are in the public interest such as environmentally sound practices, organic farming and animal welfare.

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Economy

Economic Warfare and Cognitive Warfare

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Until not long ago, the Western world lived in the conviction that Liberalism was an end in itself, however, the new context of globalization suggests that political economics once again makes more sense, given that power relations in the economic sphere can no longer be ignored and  the idea that world trade is structured on supply and demand appears obsolete.

The world is changing. Situations change, and events and the ways of understanding politics change with them. Instruments change as well: if the aphorism of Clausewitz that war is politics conducted by other means once seemed valid, today we might say that politics (and economics) is war conducted by the means of information.

The threat is no longer limited to what we once thought and conceived in the geographical terms of one superpower attacking another. The threat today is asymmetrical, different, and changes continuously. It travels through the Internet, it is immediate, and above all, it threatens the entire system. It is not aimed at military or political targets but commercial, industrial, scientific, technological, and financial interests instead. This requires intelligence to structure itself around new duties: protect not only the entire system but also the weakest links in the chain of production.

All this requires changes in mentality and in operational processes, as well as continuous updating, especially at a business culture level. Most of all, it requires close interaction between intelligence and the private sector, despite the difficulties this entails.

The crisis we are currently undergoing, together with the industrial and commercial physiognomy characteristic of our era, requires us to consider the idea of “economic warfare” very closely.

It is essentially since the end of the Cold War that the balance of powers has been developed around economic issues: most governments today are no longer interested in occupying territory or dominating other peoples but rather building up technological, industrial and commercial power capable of bringing money and jobs to their own land.

Globalization has transformed competition from “gentle” and “limited” into authentic “economic warfare”.

Although this economic challenge reduces the areas available for military warfare, its ultimate goal of accumulating power and well-being is the same.

The national economic intelligence strategies recently adopted by numerous governments assign their private operatives central roles in maintaining security by providing them with information technology infrastructure and the primary asset in the digital age: data.

The step between protecting private economic activities and protecting national economic interests is a short one indeed.

Economic intelligence consists in coordinating a series of activities: collecting and processing information, monitoring competitors, keeping strategic information secret, and capitalizing knowledge for the purpose of controlling and influencing world economic environment. All this makes it a powerful weapon at the nation’s disposal.

The main players in economic warfare are:

First and foremost, the world’s nations, which remain the most influential regulators on the economic chessboard despite their relative decline in the life of nations and the various restrictions placed over them, such as those imposed by international organizations like the European Union. One important recent change is that now nations must take numerous stakeholders (NGO, international bodies, companies, mass media) into account. At any rate, they uphold the role of arbiter that all the other players only continue to emphasize by regularly imploring their intervention.

The world’s companies, which address the new hyper-competitive geo-economic scenario by using strategic information control as a weapon of competitiveness and economic security.

Civil society: the expansion of discussions on social issues regarding company activities (nutrition and well-being, technological progress and risks to public health industry, and the environment, transport and passenger safety, information technology and individual freedom), the mass use and democratization of Internet, and the growing involvement of the legal system in monitoring business operations, all increase the risks of hacking attacks against companies by hackers from civil society.  Including in the public discussion topics such as risks to the environment, sustainable development, socially responsible investment, and corporate social responsibility brings greater importance to the legitimacy of social questions.

The infosphere, which is not a category of physical persons or legal entities but instead a dynamic, that is the aggregate of interventions and messages spread through media and the worldwide web. The infosphere is a particularly insidious instrument similar to an amplifier that continuously jumbles and blends ideas, emotions, and impulses emitted by an infinite number of people without any real dominant subject and exerts a determinant influence – positive or negative as occurs – on individuals and organizations. When launched in the infosphere, a simple statement has the power to trigger ferocious argument, harsh political reaction, media crises, and damage to company reputations. The infosphere can become a particularly effective weapon of destabilization. We must never forget that a brand’s image and reputation are strategic components of the capital of a company that can affect its commercial and financial activities.

Which forms does economic warfare take?

Economic warfare is often confused with economic espionage, which despite being used as one of economic warfare’s weapons is hard to define both because the companies victimized are reluctant to publicize its incursion and because it is hard to circumscribe in juridical terms and therefore difficult to report.

A more commonly practiced form of economic warfare is the purchasing of companies. This may lead to authentic forms of surrounding the industries in any given territory through operations that reflect motivations of financial, economic and technological nature all at the same time.

Yet another form of economic warfare, which is both particularly widespread and insidious, is lobbying; in other words, an influencing strategy aimed directly at public decision-makers assigned to the drafting of regulations. Our nations are particularly plagued by the proliferation of regulations and one strategically important aspect of lobbying is attending and altering the process of creating, interpreting and/or applying regulations and legislative measures and directly or indirectly influencing public powers in every intervention or decision. International trade is largely based on influence, and therefore gaining closer access to decision-making centers has become an obligatory part of commercial competition.

All the practices above are included in influence strategy: influential communication is also the hardest to identify and oppose because it is perfectly legal. “Information war” is based on the following few simple principles that can wreck havoc when marshaled together:

  • moral argument, that is the possibility to induce a crisis on the basis of an ethical reasoning;
  • offending political correctness by disrupting the day’s cultural and psychological patterns;
  • choosing targets, in the sense that the weaker the legitimacy of the adversary’s capital, the more the information attack will provoke escalation in the media;
  • the degree of celebrity of the players;
  • the criterion of appropriateness or resonance of the environment.

The upheaval of the Western economies’ competitive system is not just a passing thing. A growing number of powers (China, India, Brazil, Turkey, Iran, Russia) is conditioning the rapid shift in international competition. More often than not, the choice of winning dominance in foreign markets prevails over restructuring the nation’s own domestic markets. This demonstrates the extent to which a power strategy can make a decisive difference in the context of economic competition. These new players in international competition hold a different view of the dialectic between power and market, the latter being seen as the primary means to the increment of power. This vision revives the basic principles of political economics, according to which the market is the only path to power and not the other way around that has been demonstrated in numerous cases (such as Russia’s Vladimir Putin’s use of energy resources for coercive bargaining and blackmail in 2009) and illustrates the limits  of the interpretative models of liberal economists whose analyses were focused on the effects of deregulation, mergers, or financial speculation involving gas prices, but fell short of the possible use of gas trade as a weapon.

The process of globalization is irreversible and fairly independent of what governments do.  Globalization is one thing, but the ideology of a global free market that may produce a higher growth rate than any other system but gives no importance to how such growth is distributed is another. The argument that the highest capitalistic growth distributes resources in the best possible way, in fact, was never very convincing. Even Adam Smith thought that there were certain things the market could not do and should not do.

Historically speaking, the balanced evolution of world industry was created not by liberalism but by its opposite. The United States and Germany both became industrial powers in the 19th century because they protected their industries until they were able to compete against the dominant economy of the day: Great Britain. Neo-classical economic theories are now in disfavor because the system has come to be disrupted by scarce control over international financial flows and investment procedures.

Now more than ever, we are witnessing a struggle between the forces of capitalism, which tend to overcome every obstacle, and political forces that operate through nation states and are obliged to regulate these procedures. The laws of capitalist development are simple: maximize expansion, profit, and increase in capital. Governments by nature have different priorities instead, and this generates conflict. Furthermore, the dynamic of the global economy is one that does not ensure the stability of its protagonists.

The nation-state system and the economy system coexist in constant tension and must adapt, but if there were no relative stability among states, the instability of a world organized along the lines of transnational economy would only increase. The real problem is not whether governments can control the international corporations operating inside their borders, but whether they are able to exert global control: when companies and governments clash, the latter must negotiate as if there were another nation seated before them.

Like religions and cultures, globalization is only a simplified answer to today’s conflicts and the challenges to security. Globalization has most certainly reduced the importance of military power since the end of the 20th century, whereas security – internal security in particular – has become a global public asset. In the age of information technology, interdependence, and ”smart goods over heavy goods”, the military force offers less and costs more. Economic, technological, and especially communicative competition is more important and determinant than military strength.

The globalization of information has contributed to changing the nature of warfare by making public opinion decisive. In the short term, geo-information has become more important than geo-economy because its effects are immediate and not always governable. This is also a post-Cold War phenomenon.

In this context, the economy is no longer the mechanism of security as it was during Cold War, but on the contrary, security now serves the economy in creating better conditions for the expansion and protection of globalization. The nature of security depends on the situation prevailing in each nation and varies from one region to another, according to the respective level of globalization.

Consequently, it is the process of globalization that has restored political economics to importance and re-sparked a discussion formerly considered closed, according to which the market is the path to power and not the other way around, as it becomes an instrument of power politics in the globalization of exchange. The accumulation of power through economic expansion is the driving force behind the new emerging nations.

Yet today’s economic context must come to terms with new offensive strategies that undermine the industrial basis of the market economy and draw attention to the predatory policies of what may be defined as authentic economic warfare.

It is in this context that all companies, regardless of size, can be said to suffer damage from the absence of an economic security culture that only the use of intelligence, as a tool in analyzing predatory completion, can provide.

Interpreting the notion of national security including also the safeguarding of national interests requires information and security services to be ready to protect big companies or those of strategic significance, which the French refer to as “companies of national strategic importance” or “national champions”. These companies often – but not always – have their own information or security organizations that help them survive fiercer and fiercer competition.

In any case, in the field of economic intelligence the rules between the services of the various nations are more flexible, and it is easier to refer to others merely as competitors, neither friend nor enemy. This field is currently in the process of development, and European economic intelligence is still in embryonic phase.

The evolution of the information society has profoundly modified the frame of conflict. In the opinion of American analysts like John Arquilla and David Runfeldt, experts in netwar at Rand Corporation, the nation that wins tomorrow’s conflicts will not be the one with the biggest bomb, but the one that tells the best story.

In this sense, Americans have been referring to the key concept of information dominance since 1997. Defined as the control of anything that may be deemed information, this doctrine aspires at the moulding of the world by standardizing international practices and regulations to the American model, with the objective of placing decision-making bodies under control.

These experts note that it is sufficient to observe how American public opinion was mobilized during the invasion of Kuwait by a disinformation process planned at military level, or more precisely, at the level of psychological warfare. Information manipulation processes allow certain facts to be marginalized, and for this reason the domination of information has become a top priority in defining American strategy.

We may consider how the war in Iraq demonstrated the importance that manipulating information has assumed in international relations. The accusations made by G. W. Bush against Saddam Hussein regarding the existence of weapons of mass destruction represent a textbook case in the history of disinformation.

On the other hand, we must be careful of jumping to conclusions about how cognitive warfare is waged: disinformation, or even worse, the manipulation and authentic distortion of information for the purpose of deceiving your adversary or ally is often mistakenly confused with the production of knowledge conceived to orient the rules of conduct.

In this regard, Harbulot emphasized the profoundly innovative role of information war in terms of strategy and its implications for companies.

It was naturally Harbulot’s intention to use cognitive warfare to protect the economic interests of French companies against their American competitors. If, in fact, conflicts ranging from the Gulf War to the War in Kosovo have demonstrated the overwhelming superiority of American military intelligence overseas, what room for maneuver remains open today for the managers of the intelligence service in Western Europe, who are responsible for defending the geo-economic interests of their nations against American interests? Harbulot’s answer is clear: this room for maneuver is constantly eroding, and a situation of near total paralysis has been reached in certain cases.

Closing this gap means modernizing the thought of Sun-Tzu, the Comintern, and Mao Zedong, and especially that of Winston Churchill, the first Western statesman to have orchestrated a plan for information warfare against Nazi Germany (Plan Jaël). In terms of disinformation, he represents British genius in deceiving the enemy on the dates and locations of invasion landings.

Naturally, the lack of legal provisions regarding the manipulation of knowledge raises serious concern for the economic security of European companies, which must consequently arm themselves with techniques capable of strategically managing economic information.

It is precisely in light of American political-military choices that French strategy discerned the need to define just what information war really is in the strictest terms. The expression used in French strategic context is “cognitive warfare”, which is defined as the capacity to utilize knowledge in circumstances of conflict.

In particular, the French School of Economic Warfare acknowledges in cognitive warfare the conflict between different capacities of obtaining, producing, and/or obstructing determined types of knowledge implicit in power relations that can be defined “weak against weak” or inversely, “weak against strong”.

Numerous examples that come from the world of industry testify that innovation in this field is not always necessarily made by the strongest. Naturally, the United States is the primary artifice of “strong against weak” cognitive thinking, such as, for example, in defense of its position as superpower at both military and informational level. This nation’s way of orienting its own and the other nation’s conduct implies its complete acquisition of the importance of cognitive warfare as the ability to have the images of single powers perceived by the world public opinion, a strong argument in the search for legitimacy that every democracy must acquire in national and international context. The United States has always – but especially after September 11 – stoked the legitimacy of its policies by emphasizing the defense of democracy and the need for global security as reasons to combat anti-democratic forces.

In today’s context of intense competition, destabilization plays a fundamental role. Harbulot suggests considering the example, that has become common practice in economic warfare, of a multinational company that decides to stop a competitor from developing a project in an emerging nation.

A cognitive warfare operation might take the following form:

Identification of the competitor’s weak points in the area in question (weaknesses may vary in nature: bribes paid to authorities, environmental pollution, failures to respect human rights). All the information collected must be verifiable and not give rise to fallacious interpretation.

The choice of the information attack procedure: if the cognitive aspect is considered, the following scenario may be imagined. The director assigned orders funds to be paid into a private foundation supported by the company. A trusted person at such foundation then channels this money to a NGO that has posed itself the objective of protecting the environment. The maneuver consists in then making the NGO aware of this dossier by indirectly providing it with verifiable (and therefore non-manipulated) information on the misdeeds of the competitor multinational. Through its Internet site, the NGO then sends negative messages against the competitor’s project. This is how the chain of knowledge is created. The next step required is knowing how to consciously activate it for the purpose of destabilizing the target.

The chief strength of the information attack lies not in deceiving or misinforming but instead in fomenting a pertinent dispute that has been demonstrated by objective facts. The level of conspiracy is limited to setting up and activating the information chain. The more “grounded” the diatribe is, the harder it will be for the adversary to demonstrate conspiracy, even if only in theory.

It is clear that the spread of new information technologies has brought competition exasperated levels and facilitated cognitive warfare, in such way triggering an unprecedented conflict that, in the opinion of the French analysts, exceeds even that of the Cold War.

Information has become another weapon in the art of war capable of making the difference between winning and losing, regardless of whether the conflict is military or economic.

Changes of such degree impose cultural revolution.

Then there is psychological warfare, one of the principal forms of information war. It is the most sophisticated because it relies essentially on human intelligence, in its capacity to understand possible actions for success by controlling the means of communication.

Little known and scarcely practiced in France, psychological warfare has never received much attention from the military establishment, which has often succumbed to the pressure of events or adversaries, as happened in Indochina and Algeria.

Psychological warfare employs every means available, from disinformation to deceit, from propaganda to interdiction, in clashes of various nature (from the battle against terrorism to conventional warfare and the subsidization of peace) and is moreover directed to public opinion for the purpose of conditioning or manipulating it.

The use of psychological weapons cannot be improvised and is based on an organized operative structure and conducted by specialized personnel and organizations.

Civil communication systems have by now reached levels of performance previously attained only by armed forces and governments. This has led to the accumulation of a critical mass such to enable a lowering of costs. For this reason, even if the conservation of certain autonomous military capacities is foreseen, the development of information systems for defense and intervention depends more and more on civil systems. This creates a vulnerability that might be underestimated in times of crisis or conflict.

The infosphere’s framework has become highly conflictual; information war has become inevitable and is waged with the function of appropriation (intelligence), interdiction (limitation of access to information) and manipulation (intoxication).

Economic intelligence provides a necessary response to a world with no more borders of time or space, where information is immediate and reaction time is zero. A re-organization of structures around the new dimension assumed by the relationship between information and intelligence leads to changes in both the decision-making system and the management of human resources. First and foremost of all, the revolution must be cultural in nature: perceiving information as a weapon to be incorporated into national defense strategy.

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Economy

“Made-in-Russia”: Securing Russia’s economic interests

Kester Kenn Klomegah

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Squeezed between the United States and European Union sanctions, Russia has been exploring effective ways to increase exports of its industrial products under “Made-in-Russia” program to traditional markets in Latin America, Asia and Africa. The primary strategic goal is to secure Russia’s economic interests abroad while at the same time support Russian industries in raising revenue to modernize Soviet-era industries. But increasing exports especially to African markets, Russia has to confront market competition from western players and Asian countries such as China, India and the Gulf states.

In a recent interview, Peter Fradkov, general director of the Russian Export Center (REC), has explained that Russia has been making every effort to avoid the “raw-materials” export model and focus on developing export-oriented industries and the launch of the Russian Export Center was a key step towards the development of a full-fledged national export support system.

The Soviet Union made a significant contribution to the social and economic development of African countries by building large industrial and infrastructure facilities and helping to establish national education and health care systems. However, in the 1990s the Russian-African relations came virtually to a standstill. At present, Russia’s foreign trade turnover with Africa is about 12 billion US dollars, which is a rather modest achievement. Nevertheless, the African continent remains a rather promising market for Russian industrial goods.

Admittedly, the Government authorities, and both Inter-Governmental Commissions and the REC, are primarily concerned with removing barriers for Russian exporters and opening up foreign markets for them in Africa. Reinforcement of positions of Russian exporters in Africa requires creation of certain conditions and the key task is penetration into the global market. For this purpose, the Russian Export Center has launched a program to promote Russian goods and services under a single country brand “Made in Russia” and in this context, Africa is a very important partner for us, though not an easy one.

He underscored the fact that “Russian manufacturers have a number of specific competitive advantages. Let’s take, for example, agricultural machinery. The main advantage of Russian products as compared to the counterparts by major foreign manufacturers is a lower price and almost the same level of capacity, quality and useful life.”

On the other hand, there are some difficulties still inherent in the Russia-African business partnership. According to Fradkov there are still insufficient awareness of the real economic opportunities, market conditions and specific counterparts in African markets by Russian businesses and poor awareness of capabilities of Russian partners for Africans.

“We are often faced with discriminatory barriers, which are there not because we are from Russia, but because we have just not thought about how to remove these barriers. Our primary task is to gradually change the thinking of Russian entrepreneurs, who are often skceptical about entering foreign markets, including Africa. Secondly, we strive to promote the image of Russia as a producer of diverse and high-quality products,” he underlined in the interview.

With new trends and directions in global business, African countries have to look to the Eurasian region as a huge market for exports as well as make efforts to consolidate and strengthen economic cooperation, says Tatiana Cheremnaya, the president of ANO “Center for Effective Development of Territories” and head of the working group on public-private partnership “Business Union of Eurasia” based in Moscow.

Cheremnaya discussed here three main points and are as follows: The problems of effective cooperation between Russia and Africa are political in nature. Thus, the strengthening of Russia’s position leads to the strengthening of its influence in the world, including in Africa and vice versa, sectional policy has significantly reduced Russian exports.

The second problem for the development of Russian-African business is the lack of competitiveness of Russia which allows working only in the low-budget segment. This is due to structural problems in the Russian economy, the need for modernization, the bulk of the products produced during the Soviet Union.

The third problem is competition from the United States, China and India as more developed countries with more advanced technological solutions, and from the European countries as the former “patrons” of African countries.

Russian President Vladimir Putin, taking part in a congress during the 11th Russian Business Week organized by the Russian Union of Industrialists and Entrepreneurs (RUIE) early February, discussed how innovative technology is reshaping the global business landscape. He, however, encouraged Russian industrialists and businesses participating in the forum to improve their business approaches in order have competitive advantages in the global market.

“This is the most important thing. And fundamentally fresh markets for goods and services will become available, and new leaders will appear as well. Naturally, competition will exacerbate. Clearly, in a situation like that, no one will be playing fair with their competitors, including in the global business environment,” Putin said.

Russia has trade centers established in Africa. But these Russian trade centers must necessarily embark on a “Doing Business in Africa” campaign to encourage Russian businesses to take advantage of growing trade and investment opportunities, to promote trade fairs and business-to-business matchmaking in key spheres in Africa.

Maxim Matusevich, an associate professor and director, Russian and East European Studies Program, at the Seton Hall University, told me in an interview that “in the past decade there was some revival of economic ties between Africa and Russia – mostly limited to arms trade and oil/gas exploration and extraction. Russia’s presence in Africa and within African markets continues to be marginal and I think that Russia has often failed to capitalize on the historical connection between Moscow and those African elites who had been educated in the Soviet Union.”

“It is possible that the ongoing crisis in the relations between Russia and the West will stimulate Russia’s leadership to look for new markets for new sources of agricultural produce. Many African nations possess abundant natural resources and have little interest in Russia’s gas and oil. As it was during the Soviet times, Russia can only offer few manufactured goods that would successfully compete with Western-made products. African nations will probably continue to acquire Russian-made arms, but otherwise, I see only few prospects for a diversification of cooperation in the near future,” added Maxim Matusevich.

Former Ethiopian ambassador extraordinary and plenipotentiary to the Russian Federation, professor Teketel Forssido has also explained that Russian businessmen think that business can be done from government to government levels (at the state levels) but in many countries business at the state levels has been complimented by private participation. Using government as an umbrella could be alright, countries such as India, China and others run businesses without government in Africa. The government, of course, has to clear the way for smooth business transactions.

“Russians are counting on the authorities to do business, but if they always rely on the state, business can be ineffective. That’s why Russians businessmen are slow as we have seen it,” he said.

According to Forssido Russia has to open its market for Africa and there are various ways to this. One surest way is to use the existing rules and regulations. The preferential treatments for agricultural products exist but Africans don’t use them. Then, individual countries have to negotiate with Russian government for their products to enter the market.

Further, the African regional economic blocs can be useful instruments because these blocs are very important and can work with their counterparts to facilitate trade between Africa and Russia. For instance, in COMESA and SADC zones in Africa, goods and services move freely, and now I think these blocs should look into the line of working as regional economic blocs with Russia.

“At the moment, China has done a lot in Africa despite worldwide criticisms. China is not the only player on the continent, but also India, Turkey and other serious players. But, when we talk about Russia, I think it’s not comparable. China has largely involved in Africa, practically in all sectors as we can see. We expect that Russia can do more if they want to, looking at their huge potential capability. They still have their own priorities, anyway,” he pointed out assertively.

As already known, Moscow’s long term goals include developing investment cooperation with African countries, widening the presence of Russian companies in the African markets through increased deliveries of industrial and food products, and enhancing Russian participation in driving the economic development of Africa. At the same time, Russia needs to look at simplifying access to its market for African countries.

In one of his speeches posted to the official website, Russian foreign minister Sergei Lavrov noted frankly in remarks: “it is evident that the significant potential of our economic cooperation is far from being exhausted and much remains to be done so that Russian and African partners know more about each other’s capacities and needs. The creation of a mechanism for the provision of public support to business interaction between Russian companies and the African continent is on the agenda.”

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