Connect with us

Economy

How climate is changing politics

Published

on

In the fall of 2019, Democratic Speaker of the US House of Representatives, Nancy Pelosi, went on record saying that competition for resources was turning ecology into a national security issue. A growing number of politicians and experts share her opinion.

While most countries worldwide take a “mixed” picture of the consequences, upsides and downsides of global warming amid an ever-growing rivalry between states, the environmental idea is becoming a convenient and attractive tool to discredit opponents. Moreover, for some pro-Nature organizations, the proclaimed requisite to ensure environmental protection outweighs any objective needs for the development of both individual territories and entire states. Sometimes it becomes almost impossible to draw a line between sincere idealism and “lobbying for a new type of corporate interests.” As a result, criticism of a development model based on the use of hydrocarbons actually becomes an instrument of competition promoting the interests of the “green economy,” which in recent years has often proved to be less than ecologically impeccable.

Russian President Vladimir Putin has repeatedly reminded the international community of what the advocates of an immediate change to the global energy system fail to mention. Paradoxically, climate change and demands for a rash change of political priorities to combat it both threaten to increase inequality between countries.

On the one hand, political instability caused by the increasingly changing climate throws into question the long-term plans for the socio-economic development of entire regions and even continents. According to the UN’s Food and Agriculture Organization (FAO), shortages of drinking water and large-scale human migration in search for a better live will emerge as the most pressing problems mankind will face in the near future. The regions where conflicts provoked by climate change will flare up in the coming years might include, among others, territories south of Russia’s borders and the Arctic.

On the other hand, less diversified economies, technological backwardness and outdated infrastructure put most economically underdeveloped and developing states at a disadvantage to the world’s most developed countries. The former argue, however, and with pretty good reason too, that many of the world’s most affluent countries keep using “dirty” technologies and production facilities in a bid to maintain their economic growth, including tax exemptions and even state subsidies. This is something ordinary citizens are well aware of, as is proved by the “green-oriented” political forces’ modest successes outside the “golden billion” states. In developed economies many people are wary of the high price of current “green” technologies, which promise not so obvious gains and only decades later at that,and politicians just can’t ignore this public sentiment. Finally, widespread forecasts of a global economic slowdown and even a possible recession are putting environmental problems on the back burner.

Besides, the much-trumpeted predictions of the imminent triumph of “green” technologies are not always grounded in reality. In February 2019, The Economist wrote that companies using traditional energy still generate more income compared to renewable energy projects. Global demand for oil continues to grow by an annual 1-2 percent, just like it has done the past 50 years. Most of the nature conservationists still move around in cars with internal combustion engines and fly on airplanes. Relying on some breakthrough developments and technologies whose prospects of mass-scale implementation remain dim would certainly be premature. The $300 billion that is currently being invested in renewable energy worldwide is just a drop in the ocean compared with investments in the development of fossil fuels. Finally, despite all high-profile statements regarding the introduction of electric vehicles, even in 2030, up to 85 percent of cars will still be running on the tried-and-true internal combustion engines.

In 2017, the US withdrew from the Paris climate agreement, and the Trump administration is now trying to breathe new life into the country’s coal industry. Even in many environmentally aware countries, broad sections of the public have not yet been convinced about the benefits of having to pay more for “green” goods and services. For example, the idea of stimulating economic growth by means of tax cuts is not popular with the high and mighty of the world’s leading economies. Meanwhile, experts consider monetary incentives, aimed at encouraging public support for technological and cultural changes aimed at reversing the global warming process as one of the most promising measures able to ease the skeptics’ fears. Therefore, assuring people that measures aimed at reducing harmful emissions will not cause a catastrophic blow to their personal well-being may prove a hard task. 

In this regard, many politicians, administrators and experts are wondering just how dramatic changes in the existing economic structure over several decades will be able to reverse the negative climatic phenomena and how much should we focus on political, economic and social measures that would help individual countries and associations of states adapt to the objective trends of nature. And, finally, whether this is not just an attempt by the developed countries to hamper their current and potential rivals’ progress under the guise of solving environmental problems.

During 2019, the conflict between West and East European countries over the issue of unification of their environmental policy was heating up threating to further split the European Union. It turned out that “EU subsidies are no longer part of its policy, but rather a kind of gift for loyalty. We are talking about the familiar divide-and-rule policy”, about an almost deliberate separation of EU states and regions, unwilling to unconditionally embrace decisions taken by the bloc’s leading countries and by Brussels. Simultaneously, the East European countries’ skepticism about the requirements of the earliest possible rejection of “dirty” technologies is fueled, among other things, by the example of Germany, where diversification of energy sources has effectively resulted in increased consumption of traditional fuels – coal and gas – with all the political and financial consequences this entails. This is due to the hasty closure of nuclear power plants that “green” generating units can’t fully compensate for.

In hindsight, one will have to admit that climate change has long influenced the fate of states and peoples. Some experts believe that the Late Antique Little Ice Age, “which began in the 5th century AD and lasted about a hundred years” could be a reason why the Byzantine Empire failed to maintain its growth. Today, access to fresh water is viewed as a leading factor that may spark conflicts both between countries and inside individual states. Since the mid-1990s, there have been forecasts that the 21st century wars will not be fought for oil, but for water. A population growth combined with an increase in the number of territories suffering from lack of water resources may lead to a significant increase in the number of refugees and internally displaced persons. This is a problem a number of regions of Africa and Eurasia, including Central Asia, Iran, Afghanistan and Turkey, may soon be grappling with.

Catastrophic climate change is already contributing to an increase in cross-border migration, which is contributing to the rise of political extremism.  Poor countries with growing populations are increasingly at risk of “political instability and violence.” The harmful effects of climate change can exacerbate economic turmoil in various parts of the globe. Meanwhile, population growth around the world may significantly outpace global economic growth, which, as many experts already predict, will result in a protracted period of stagnation at best. Overall, similar trends, which Republic.ru pointed to in 2019, give rise to political discourse about “the need to reconsider most of the existing paradigms,” and, very likely, “away from classical capitalism and towards even greater state regulation.”

Climate change, which provokes economic stagnation and intensifies cross-border and internal migration, can further embolden separatist movements in many parts of the world, including Europe. The fragmentation of countries into smaller territorial entities increases the risk of conflict, and sets the stage for outside intervention. Ultimately, the objective need for greater international cooperation in tackling global problems will face an equally objective upward trend in nationalism and isolationism.

For Russia, the Arctic offers a particularly important example of the geopolitical importance of the climate factor, as climate change is making this region increasingly accessible for economic development, while simultaneously making it vulnerable to new geopolitical challenges. Late this past summer, Bloomberg described the Arctic as “a region, whose growing importance is reshaping the world’s geo-economics.” As a result, the growing number of mineral exploration and development projects, as well as a projected increase in shipping volumes, will be ramping up competition, including military, between world powers.

There are other climate-related issues too. Russia also keeps reminding its foreign partners that, unlike the United States, it recently signed up to the Kyoto Protocol and, unlike the EU, has fully met its commitments under this accord. Inconsistencies in the assessment of the Russian forests’ and soil’s ability to absorb carbon dioxide are a matter of strategic importance. As the Expert magazine noted, Russian woodlands are an important factor in this country’s implementation from 2020 of the terms of the Paris Agreement under the UN Framework Convention on Climate Change, regulating measures to reduce carbon dioxide emissions into the atmosphere. The problem is that underestimation by foreign experts of the Russian forests’ CO2 absorption capacity can lead to the introduction by Western countries of a “carbon tax” on exported Russian gas.

Meanwhile, as President Putin noted during his traditional news conference summing up the results of the outgoing year 2019, Russia has “great advantages in the fight against climate change.” A “significant breakthrough” in the development of generating capacities in hydropower combined with vigorous development of gas production, including large-scale high-tech projects for LNG production, makes Russia the greenest in the world energy mix. And Moscow does not intend to stop there. By ratifying the Paris Climate Agreement, Russia reaffirmed its strong commitment to international cooperation in the field of climate change, aimed at creating a paradigm of harmonious relations with nature. Working together, the international community needs to find a balance between a clean and safe environment while simultaneously maintaining the competitiveness of countries, peoples and regions, and the interests of their long-term sustainable development.

From our partner International Affairs

Continue Reading
Comments

Economy

Pandemic Recovery: Whitehouse – Check-In or Check-Out Times

Naseem Javed

Published

on

Credit: Diego Rivera

Some 200 nations of the world are in serious economic pains of varying degrees; the images and narratives on social media makes the world appear small and spinning out of control, shrinking mental abilities to Tik-Tok tempo to fit small size screens. In reality, when global dialogues engage some 5000 languages, 2000 cultures, bouncing in 10,000 cities, 11,000 Chamber of Commerce, 100,000 trade associations and some five billion connected alpha dreamers extremely dynamic vibrancy appears. The world is immensely large, as only less than 5% its populace has ever travelled globally while 50% never went outside their own country. On social media, everyone is a certified global expert.

Nevertheless, some 200 nations are trying to change the world toward a better workable plateau, peaceful diversity, tolerance and some sort of balanced trade. The world is hungry seeking out untapped hidden talents of its local citizens, suppressed by the bad local policies. There are continents, oceans, jungles, animals and things, simply, so much, so large, so vast, a mind cannot fathom. Blessed are those who have open minds and souls. The rest self-imprisoned in their own minds, lost in the darkness of their own fears. The borderless world of commerce always needs colorfully smart; open to diversity to bounce in global space with national and global collaborations.  

Such doctrines lost during the last decades as economic disconnectivity blossomed under hologramic economies. Pandemic recovery, today, forces mobilization of the midsize business economy as a bold adventure on quality exportability based on upskilled citizenry. Occupationalism demands small and midsize manufacturing to uplift local grassroots prosperity. In the history of humankind, no other experiment of human endurance has ever been as successful as America; a century old, image supremacy of entrepreneurialism wasted when some 100,000 factories and Middle-Class America disappeared from the heartland. The manufacturing based economy laughed at over ‘information economy’ and hologramic adventuring. Deep study and new global age thinking is a perquisite.

Three types of new challenges

Nations without funding: It is almost a fact most governments from top to bottom are simply broke, and almost a fact most governments have already wasted their funds beyond their means. However, if we focus just on priorities, above programs are primarily not new funding dependent rather they are deployment hungry and execution starved. Any government anywhere in the world in the name of superior efficiencies can easily adopt digitization policy as a survival strategy and make all the processes highly affordable by bringing them on digital formats. The rain of free technologies is flooding the global markets. It is more about upskilling departmental leaderships to adapt to such opportunities, without fear.

Nations without infrastructure: Small percentages of nations have the infrastructure, rest assembling like Lego as they go. The internet connectivity or knowledge plug is almost everywhere. The lack of imagination and upskilling of the gatekeepers is a critical issue.

Nations without digitization: there are a majority of nations where mental attitudes are significant problems, fear of being replaced as redundant or fear of exposing lack of competence preclude any adventure on digitization. No nation will survive on economic progress without national digitization mandates.

Three types of new models: Start with the Marshall Plan thinking, the revolutionary models and national mobilization to catch up the last decade. Start with open debates and honestly frank analysis, no finger pointing. Start with a plastic award night, congratulate failures, and carry on as usual until the next pandemic.

When history becomes nothing, but agreed upon lies, culture as agreed upon fables, truth becomes taboo, dumb down narrative dominates, restless citizenry emerges.

Summary: Within next 50 days, the US Election will make global shock waves, no matter who wins…it will be the battles on acceptance and concession speech, the mail-order selection criteria my linger weeks or months in chaos… the Vaccines races may collide with bad results and delay the process to 2022. The economic recovery shaped W may bring reopening normalcy possibly in 2022. Tough and difficult times demanding critical thinking and mental endurance on all fronts. Study how national mobilization of mid size economy works in digital age.

Plan wisely and select right paths; but open bold and honest discussions, as masked and sealed lips are where most of the problems originally germinated. Move or get moved. 

Continue Reading

Economy

How India can get its growth back on track after the coronavirus pandemic

Published

on

The Covid-19 pandemic has led to exceptionally challenging times. World Bank projections suggest that the global economy will contract by 5.2% in the current year. India, too, is likely to be significantly impacted.

Covid-19 afflicted India when the economy was already decelerating. After growing at an average of 7% a year in the previous decade, growth decelerated to 6% in 2018-19, and fell further to 4.2% in 2019-20. Pre-Covid-19 slowdown was due to a number of factors: longstanding structural rigidities in key input markets, stressed balance sheets compounded by greater risk aversion among banks and corporates, and, more recently, growing vulnerabilities in thThe pandemic has rendered the outlook even more sombre. So is India’s growth story over?The pandemic has rendered the outlook even more sombre. So is India’s growth story over?

Two years ago, we analysed the long-term trends in India’s growth rates. Studying 50 years of data, we found that despite variations in the trend rate, growth accelerated steadily, with no prolonged reversals. Economic growth also became stable — both due to growth rates stabilising within each sector, and due to the economy’s transition toward the steadier services sector. Importantly, faster and more stable growth was evident across states without being concentrated, for the most part, in a few sectors or activities. Furthermore, periods of faster growth saw productivity gains and not just an increase in factor inputs. All these point to the long term resilience of India’s economy.

Several factors were instrumental in India’s growth story. First, India benefited from a growing working-age population. Second, its savings and investment rates continued to increase until the late 2000s. Third, the financial sector grew significantly, with a rising ratio of bank credit to GDP. Fourth, India was likely aided by its strong institutional base. Fifth, India’s trade-to-GDP ratio grew rapidly from the early 1990s, until world trade stalled due to the global financial crisis.

Finally, the macroeconomic policies, notably monetary and fiscal, were formulated under credible frameworks in the last decades, yielding impressive macroeconomic stability.

General State of Weakness

However, some of these factors have weakened in recent years. After the 2008-09 global financial crisis, specific weaknesses emerged in private investment, export performance and the banking sector. These have persisted for nearly a decade since. Investment rates and exports declined as a percentage of GDP. Worryingly, the vulnerability of the financial sector increased, resulting in anaemic credit growth.

Covid-19 has magnified these weaknesses. Disruption in economic activity has dented consumption, investment and exports. RBI’s financial stability report has cautioned that the financial sector is likely to bear a significant burden from the slowdown. What, then, is the short- and medium-term prognosis for India’s economy? How may the policy response be tailored?

As a response to Covid-19, extensive measures have been taken in the regulatory, fiscal and monetary policy areas. But there are limits to these relief and support measures, both in terms of their effectiveness and affordability. Recovery now will depend in equal measure upon unlocking the supply side, and on the containment of the virus itself.

Private investment in India is likely constrained by several factors, including financial sector inefficiencies, deleveraging, crowding out and regulatory policy framework. Removing these, and sector-specific constraints, and ensuring policy certainty will be important. While India has received healthy volumes of FDI, encouraging these further can spur both domestic investment and greater integration in global value chains (GVCs).

Exports were an important driver of growth prior to the global financial crisis. But its contribution has diminished since. The ratio of exports to GDP has been declining, with India’s share in global exports remaining stagnant, or even decreasing. India can improve its competitiveness in the world economy by boosting investment in infrastructure and bringing it at par with other global manufacturing hubs; further reforming land, labour and financial markets; upgrading the education system to equip its workforce with skills. Besides, a competitive exchange rate, deeper trade integration, and greater embedding into GVCs will assume significance.

In the financial sphere, Indian banks have seen subdued credit growth, and asset quality remains stressed. In the past few years, a number of measures have been announced — including the consolidation of banks, an asset quality review, timely resolution for specific institutions, strengthened oversight or forbearance (post-Covid-19) and equity infusions. These measures have improved the oversight of India’s financial sector and boosted financial inclusion. However, more needs to be done to improve the safety, depth and efficiency of financial intermediation.

Additional priorities include maintaining financial sector stability, undertaking specific reforms in the non-banking financial sector, deepening capital markets, enhancing the role of fintech and ensuring a more selective and strategic footprint for the public sector in the financial sphere.

Growth Rides on Reforms

There is nothing, however, that seems permanently broken in India’s growth model to warrant pessimism. Many of the deep-rooted structural factors that helped fuel the economy’s sustained growth during the past decades seem intact: demography, a large and diversified economy, still low-income levels that signify the potential to grow, a dynamic entrepreneurial class, political and geopolitical stability, a strong institutional base and credible policy frameworks.

With continued policy attention on reforms — which spur private investment, increase the economy’s competitiveness, promote greater integration into the global economy, and ensure an efficient financial sector — India can revert to the growth path of the past.

 Source: World Bank, The Economic Times

Continue Reading

Economy

COVID-19, major shifts and the relevance of Kondratief 6th Wave

Published

on

Covid-19 has changed the global strategic equations, it has impacted each part of human life so has it let us to ponder upon the Kondratieff cycles, as with Covid-19 there has started a new debate about sixth wave, which is about the importance of health sector, especially the biotechnology which is crucial for progress of society in future.

Henceforth, the countries that are working on these sectors know that the most important engine for our economic and social development will be health in the 21st century. For example we have USA that focused on these and now has created around 2/3rd of its jobs in health sectors along with that has invested about $3,500 billion on health sector back in 2017. Also a 2008 report said about 4,700 companies all across worked in  field of biotechnology whereby 42% were in North America, and 35% in Europe, which depicts these states long-term understanding of the emerging scenario as seen from the emergence of Coronavirus. But then the on the other side if we look into the health structure of underdeveloped states, we can easily conclude that these states will suffer the most if a global health issue emerges, and in the contemporary world it has emerged in the form of COVID-19.

COVID-19 has brought changes in the political and economic arrangement. It has not limited itself to the China from where it has been started but has impacted the whole world. The virus that is itself unseen has shaken the structure, with severe consequences for all states. No matter if it’s the USA that is the super power or any small states, the pandemic has divulged the capability and integrity of all in their response to the Covid-19. With some having the capabilities to deal with it, but most lacking in these sectors which resulted in huge loss not only of human life but also of resources. Time has come when the world is criticizing globalization at one hand because globalization is the reason for the spread of COVID-19. This has marked the end of one era with the emergence of a new one.

Mention below are some of the major shifts which Covid-19 has resulted in economic sectors in both the developed and the underdeveloped states, along with the major political shift that has led many to debate about the new structure of world after the crisis would be over.

The Covid-19 that was first reported in China, in November has changed the world completely and resulted in a lot of economic and political changes all across. For example the global economy due to Covid-19 crisis have a setback of $590 trillion. Apart from this many people lost their jobs, the household incomes have reduce, moreover World Bank report say nearly 49 million people will move into extreme poverty because of pandemic. Then World largest real estates are having economic problems, the Tourism industry has declined. An estimate showed the loss of about $1.2 to $3.3 trillion in this area of tourism all over world. Also report of International Air Transport Association predicted a loss of $63-$113billion. Moreover the oil sector also faced problem as it was for the first time that its price has gone negative. Henceforth, it can be predicted that once the pandemic is over the world will have a lot to calculate.

The impact of this crisis is seen in both core and periphery states. In core states like the US and china COVID-19 has brought huge economic impact but along with this also a question of who will act as the world saviour. As Chinese economy is expected to decline by 13% in February also the Belt and toad initiative is at halt, but still apart from the economic problem this pandemic has helped a core state like china to use the situation and move towards the status of Global power. Thus this struggle of Global saviour resulted in US and China at odds with each other. Indeed, COVID-19 has brought political repercussions along with economic consequences. When it comes to Europe the industrial production decline by 17%. Likewise USA is also effected by COVID-19 as by this pandemic about 39 million American have lost their jobs, also US economy seen to decline by 20% so US health sector has been in the eye of analyst for its failure to curtail the coronavirus. Then covid-19 has more devastating impact on peripheral states as there health care facility is not well developed. For example the GDP of Bangladesh fell by 1.1%, then many African states that look for tourism as a source of economy faced a loss of about $50 billion. Also 29 million in Latin America fell into poverty. Though they have been exploited in past but the need of the hour is that the world must help them.

Global dynamics are showing transformation amid coronavirus. The pandemic has shown how China is using its trump cards to transform the contemporary situation in its favour while bolstering its image as the “global saviour”. China’s emergence from the sick man of Asian to the positing of global saviour has opened the prospect of a tilt in the global status of Hegemon from US towards China. The question is that will the Chinese strategy amid COVID-19 will hinder the prestige of US who instead of acting as the global leader has shown a deterioration in its role in global governance.

The future of China’s pre-eminence in the global spectrum has been widened by the pandemic. All of this has been further bolstered by the broad rejection of Trump to engage in Europe and elsewhere. COVID-19 not only emerged as an impetus to shift the global dynamic but has helped China to strengthen its position. In response to the confident play by China, US hasn’t come up with any convincing tactics to prevent the increasing role of China in achieving its interest. Recently, a move by Trump administration to withhold US funds of around $400million will surely leave a gap, moreover will be an opportunity for china to bolster its position in WHO. Taking backseat in its global role amid pandemic, then the withdrawal from global treaties, and withholding of funds from WHO shows a pattern which will further create a vacuum for China to take advantage of the prevailing situation. 

The current international order set by US will be subject to testation as the changing shifts in the geopolitics have to be catalyzed by the COVID-19. For it is now the right time for us all to ponder the relevance of Kondratieff 6th wave in current scenario of Covid-19. As now the focus has diverted towards the health care system and biotechnology since the world has in current situation saw a blame game between states with few called corona virus as naturally occurring but some regarded it as ‘Chinese virus’. This has led to the realization that that warfare scenario has entered into discussion over biotechnology. So after the Covid-19 pandemic, the policy makers of both periphery and core state will work on new technological area which has the Medical technologies, Nanotechnologies, Biotechnologies etc. for the improvement in health sector will be crucial for the progress in future.

Conclusively, the current COVID-19 as a bioweapon has resulted in a clear impetus and will definitely bring a shift in the states attitude towards medical research and the multiple fields of technology in future, this is so because COVID-19 has created a ground for relevance of Kondratieff 6th wave.

Continue Reading

Publications

Latest

Trending