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U.S. This Year Had No Speakers at Davos Online World Economic Forum

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The World Economic Forum, which usually convenes annually in Davos Switzerland, had an online conference, during January 25-29. Speakers there included: Ursula von der Leyen, President, European Commission; Emmanuel Macron, President of France; Angela Merkel, Federal Chancellor of Germany; Shinzo Abe, Prime Minister of Japan; Xi Jinping, President of the People’s Republic of China; Vladimir Putin, President of Russia; Narendra Modi, Prime Minister of India; Lee Hsien Loong, Prime Minister of Singapore; Cyril M. Ramaphosa, President of South Africa; Christine Lagarde, President, European Central Bank; António Guterres, Secretary-General, United Nations; and Kristalina Georgieva, Managing Director, International Monetary Fund; as well as others. 

However, no speaker represented the United States. Wikipedia’s article on the WEF says that “Some 3,000 individual participants joined the 2020 annual meeting in Davos. Countries with the most attendees include the United States (674 participants), the United Kingdom (270), Switzerland (159), Germany (137) and India (133).[41]

Last year’s physical meeting in Davos included a (stunningly incongruous and inappropriate re-election campaign) speech by U.S. President Donald Trump, and also attendance by an official delegation consisting of Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, Labor Secretary Eugene Scalia, Transportation Secretary Elaine Chao, U.S. Trade Representative Robert Lighthizer, and White House senior advisors Ivanka Trump and Jared Kushner. 

Back on 8 February 2009, India’s Economic Times headlined “WEF sees need for govt intervention globally” and reported that, 

Fingers unanimously pointed towards the US as being the origin of the crisis; but it was also towards the US, who was missing at Davos, that the world looked to sort out the mess [the 208 crash]. President Obama was barely five days in office, while Economic advisor Larry Summers and head of the National Security Advisor General Jones were withdrawn, and Tim Geithner not confirmed as Treasury secretary.

US Federal Reserve head Ben Bernanke was absent at the meeting of central bankers.

Both Chinese Premier Wen and Russian Prime Minister Putin held the US responsible for the global economic crisis, focusing on the role of the dollar. Putin described over-reliance on the dollar as “dangerous”. Wen called for better regulation of major reserve currencies.

Concern was expressed as to how the US will pay for its bailouts in the long-term, for its stimulus packages could reach $1 trillion in over two years.

The resultant long-term fallout, and increased spending by the government would cause rise in interest rates and inflation. Experts warned of a sharp fall of the dollar if the United States budget deficits did not decrease, and savings did not increase.

Though none of those economic predictions about subsequent U.S. economic performance (which were based on economic theory, which hasn’t changed after the 2008 crash) happened, that global crash occurred because of the U.S., and it marked the end of the American century, even though America remains, as recently as 2019, one of the top two economic performers according to WEF’s own latest economic ranking (which is based upon economic theory), in the Global Competitiveness Report 2019 (see page 15 of their 666-page pdf). The 2020 Global Competitiveness Report abandoned WEF’s “Global Economic Competitiveness Index” rankings, instead of again calculating them on the basis of that false economic theory, because the countries that had been adhering the most to the existing economic theory (by their having the freest, least-regulated, markets) had been crippled the most by the Covid-19 pandemic during 2020, and because those two catastrophic global failures of existing economic theory —  in 2007-8 and 2020 — caused WEF to “pause comparative country rankings on the Global Competitiveness Index. Instead we take a fundamental look at how economies should think about revival and transformation as they recover and redesign their economic systems to enhance human development and compatibility with the environment.” It was now known that existing economic theory is a poor guide not only before an economic crisis but also during a recovery from one. (The U.S., for example, didn’t suffer the types of economic harms that the existing economic theory predicted, but instead different economic harms, which hit virtually everyone except America’s richest 1%, who emerged unaffected by the 2008 collapse and who boomed during the 2020 Covid-19 crisis though the U.S. economy suffered greatly from it.) However, economists will probably continue to apply existing economic theory. Getting punched twice in the face by applying a false theory will probably not be enough (unless lots of them become outright fired) to force them to replace it by a scientifically (that is, empirically) based alternative one. The existing theory serves the super-rich just fine, and they pay the economists. So, there’s no motivation to change the theory.

Anyway, there were some stunning contrasts between the proposed economic and broader social-science suppositions of the speakers at this WEF conference in 2021:

Ms. von der Leyen, as the President of the European Commission, is the (undemocratically appointed) President of the European Union, and is a strong adherent to economic theory, and therefore she concentrated her speech mainly on matters (especially about global warming and other environmental issues) that both economists and most of the world’s publics agree about, and she urged that more should be done to reverse global-warming trends than is being done, and that more should also be done to spread global wealth less unequally than is now done.

So, too, did Emmanuel Macron. So, too, did Angela Merkel. So, too, did Shinzo Abe. The boldest speaker who did not was Vladimir Putin. He spoke especially about the causes of the increased international tensions that endanger all of humanity, no mere platitudes:

We are seeing a crisis of the previous models and instruments of economic development. Social stratification is growing stronger both globally and in individual countries. We have spoken about this before as well. But this, in turn, is causing today a sharp polarisation of public views, provoking the growth of populism, right- and left-wing radicalism and other extremes, and the exacerbation of domestic political processes including in the leading countries.

All this is inevitably affecting the nature of international relations and is not making them more stable or predictable. International institutions are becoming weaker, regional conflicts are emerging one after another, and the system of global security is deteriorating.

Klaus has mentioned the conversation I had yesterday with the US President on extending the New START. This is, without a doubt, a step in the right direction. Nevertheless, the differences are leading to a downward spiral. As you are aware, the inability and unwillingness to find substantive solutions to problems like this in the 20th century led to the WWII catastrophe.

Of course, such a heated global conflict is impossible in principle, I hope. This is what I am pinning my hopes on, because this would be the end of humanity. However, as I have said, the situation could take an unexpected and uncontrollable turn – unless we do something to prevent this. There is a chance that we will face a formidable break-down in global development, which will be fraught with a war of all against all and attempts to deal with contradictions through the appointment of internal and external enemies and the destruction of not only traditional values such as the family, which we hold dear in Russia, but fundamental freedoms such as the right of choice and privacy.

I would like to point out the negative demographic consequences of the ongoing social crisis and the crisis of values, which could result in humanity losing entire civilisational and cultural continents.

We have a shared responsibility to prevent this scenario, which looks like a grim dystopia, and to ensure instead that our development takes a different trajectory – positive, harmonious and creative.

In this context, I would like to speak in more detail about the main challenges which, I believe, the international community is facing.

The first one is socioeconomic.

Indeed, judging by the statistics, even despite the deep crises in 2008 and 2020, the last 40 years can be referred to as successful or even super successful for the global economy. Starting from 1980, global per capita GDP has doubled in terms of real purchasing power parity. This is definitely a positive indicator.

Globalisation and domestic growth have led to strong growth in developing countries and lifted over a billion people out of poverty. So, if we take an income level of $5.50 per person per day (in terms of PPP) then, according to the World Bank, in China, for example, the number of people with lower incomes went from 1.1 billion in 1990 down to less than 300 million in recent years. This is definitely China’s success. In Russia, this number went from 64 million people in 1999 to about 5 million now. We believe this is also progress in our country, and in the most important area, by the way.

Still, the main question, the answer to which can, in many respects, provide a clue to today’s problems, is what was the nature of this global growth and who benefitted from it most.

Of course, as I mentioned earlier, developing countries benefitted a lot from the growing demand for their traditional and even new products. However, this integration into the global economy has resulted in more than just new jobs or greater export earnings. It also had its social costs, including a significant gap in individual incomes.

What about the developed economies where average incomes are much higher? It may sound ironic, but stratification in the developed countries is even deeper. According to the World Bank, 3.6 million people subsisted on incomes of under $5.50 per day in the United States in 2000, but in 2016 this number grew to 5.6 million people.

Meanwhile, globalisation led to a significant increase in the revenue of large multinational, primarily US and European, companies.

By the way, in terms of individual income, the developed economies in Europe show the same trend as the United States.

But then again, in terms of corporate profits, who got hold of the revenue? The answer is clear: one percent of the population.

And what has happened in the lives of other people? In the past 30 years, in a number of developed countries, the real incomes of over half of the citizens have been stagnating, not growing. Meanwhile, the cost of education and healthcare services has gone up. Do you know by how much? Three times. …

These imbalances in global socioeconomic development are a direct result of the policy pursued in the 1980s, which was often vulgar or dogmatic. This policy rested on the so-called Washington Consensus with its unwritten rules, when the priority was given to the economic growth based on a private debt in conditions of deregulation and low taxes on the wealthy and the corporations. …

According to the IMF, the aggregate sovereign and private debt level has approached 200 percent of global GDP, and has even exceeded 300 percent of national GDP in some countries. At the same time, interest rates in developed market economies are kept at almost zero and are at a historic low in emerging market economies.

Taken together, this makes economic stimulation with traditional methods, through an increase in private loans virtually impossible. The so-called quantitative easing is only increasing the bubble of the value of financial assets and deepening the social divide. The widening gap between the real and virtual economies … presents a very real threat and is fraught with serious and unpredictable shocks. …  I am thinking in particular of the labour market. This means that very many people could lose their jobs unless the state takes effective measures to prevent this. Most of these people are from the so-called middle class, which is the basis of any modern society.

In this context, I would like to mention the second fundamental challenge of the forthcoming decade – the socio-political one. The rise of economic problems and inequality is splitting society, triggering social, racial and ethnic intolerance. … In this case, society will still be divided politically and socially. This is bound to happen because people are dissatisfied not by some abstract issues but by real problems that concern everyone regardless of the political views that people have or think they have. Meanwhile, real problems evoke discontent.

I would like to emphasise one more important point. Modern technological giants, especially digital companies, have started playing an increasing role in the life of society. Much is being said about this now, especially regarding the events that took place during the election campaign in the US. They are not just some economic giants. In some areas, they are de facto competing with states. Their audiences consist of billions of users that pass a considerable part of their lives in these eco systems.

In the opinion of these companies, their monopoly is optimal for organising technological and business processes. Maybe so but society is wondering whether such monopolism meets public interests. Where is the border between successful global business, in-demand services and big data consolidation and the attempts to manage society at one’s own discretion and in a tough manner, replace legal democratic institutions and essentially usurp or restrict the natural right of people to decide for themselves how to live, what to choose and what position to express freely? We have just seen all of these phenomena in the US and everyone understands what I am talking about now. …

Unresolved and mounting internal socioeconomic problems may push people to look for someone to blame for all their troubles and to redirect their irritation and discontent. We can already see this. We feel that the degree of foreign policy propaganda rhetoric is growing.

We can expect the nature of practical actions to also become more aggressive, including pressure on the countries that do not agree with a role of obedient controlled satellites, use of trade barriers, illegitimate sanctions and restrictions in the financial, technological and cyber spheres.

Such a game with no rules critically increases the risk of unilateral use of military force. The use of force under a far-fetched pretext is what this danger is all about. …

Accumulated socioeconomic problems are the fundamental reason for unstable global growth.

So, the key question today is how to build a programme of actions in order to not only quickly restore the global and national economies affected by the pandemic, but to ensure that this recovery is sustainable in the long run. … 

It is clear that the world cannot continue creating an economy that will benefit only a million people, or even the golden billion. This is a destructive precept. This model is unbalanced by default. The recent developments, including migration crises, have reaffirmed this once again. …

The essence and focus of this policy aimed at ensuring sustainable and harmonious development are clear. They imply the creation of new opportunities for everyone, conditions under which everyone will be able to develop and realise their potential regardless of where they were born and are living

I would like to point out four key priorities, as I see them. This might be old news, but since Klaus has allowed me to present Russia’s position, my position, I will certainly do so.

First, everyone must have comfortable living conditions, including housing and affordable transport, energy and public utility infrastructure. Plus environmental welfare, something that must not be overlooked.

Second, everyone must be sure that they will have a job that can ensure sustainable growth of income and, hence, decent standards of living. Everyone must have access to an effective system of lifelong education, which is absolutely indispensable now and which will allow people to develop, make a career and receive a decent pension and social benefits upon retirement.

Third, people must be confident that they will receive high-quality and effective medical care whenever necessary, and that the national healthcare system will guarantee access to modern medical services.

Fourth, regardless of the family income, children must be able to receive a decent education and realise their potential. Every child has potential.

This is the only way to guarantee the cost-effective development of the modern economy, in which people are perceived as the end, rather than the means. …

Our priorities revolve around people, their families, and they aim to ensure demographic development, to protect the people, to improve their well-being and to protect their health. We are now working to create favourable conditions for worthy and cost-effective work and successful entrepreneurship and to ensure digital transformation as the foundation of a high-tech future for the entire country, rather than that of a narrow group of companies.

We intend to focus the efforts of the state, the business community and civil society on these tasks and to implement a budgetary policy with the relevant incentives in the years ahead.

We are open to the broadest international cooperation, while achieving our national goals, and we are confident that cooperation on matters of the global socioeconomic agenda would have a positive influence on the overall atmosphere in global affairs, and that interdependence in addressing acute current problems would also increase mutual trust which is particularly important and particularly topical today.

Obviously, the era linked with attempts to build a centralised and unipolar world order has ended. To be honest, this era did not even begin. A mere attempt was made in this direction, but this, too, is now history. …

I personally heard the outstanding European politician, former Chancellor Helmut Kohl, say that if we want European culture to survive and remain a centre of world civilisation in the future, keeping in mind the challenges and trends underlying the world civilisation, then of course, Western Europe and Russia must be together. It is hard to disagree with that. We hold exactly the same point of view.

Clearly, today’s situation is not normal. We need to return to a positive agenda. This is in the interests of Russia and, I am confident, the European countries. …

Europe and Russia are absolutely natural partners from the point of view of the economy, research, technology and spatial development for European culture, since Russia, being a country of European culture, is a little larger than the entire EU in terms of territory. Russia’s resources and human potential are enormous. I will not go over everything that is positive in Europe, which can also benefit the Russian Federation.

Only one thing matters: we need to approach the dialogue with each other honestly.

Also Xi Jinping spoke of need for basic changes, though he wasn’t as critical of standard economic and social theory as Putin seems to be. Xi broke his recommendations down into broad goals of bringing the world together in cooperation and reducing the supremacism (which includes both neoliberalism and neoconservatism) that The West has been advocating since the end of World War II:

The first is to step up macroeconomic policy coordination and jointly promote strong, sustainable, balanced, and inclusive growth of the world economy. …

The second is to abandon ideological prejudice and jointly follow a path of peaceful coexistence, mutual benefit, and win-win cooperation. …

The third is to close the divide between developed and developing countries and jointly bring about growth and prosperity for all. …

The fourth is to come together against global challenges and jointly create a better future for humanity. …

The earth is our one and only home. …

The problems facing the world are intricate and complex. The way out of them is through upholding multilateralism and building a community with a shared future for mankind.

First, we should stay committed to openness and inclusiveness instead of closedness and exclusion. Multilateralism is about having international affairs addressed through consultation, and the future of the world decided by everyone working together. To build small circles, or start a new Cold War; to reject, threaten, or intimidate others; to willfully impose decoupling, supply disruption, or sanctions; and to create isolation or estrangement, will only push the world into division and even confrontation. We cannot tackle common challenges in a divided world. …

Second, we should stay committed to international law and international rules instead of seeking one’s own supremacy. …

Third, we should stay committed to consultation and cooperation instead of conflict and confrontation. …

Fourth, we should stay committed to keeping up with the times instead of rejecting change. …

As a staunch follower of independent foreign policy of peace, China is working hard to bridge differences through dialogue, resolve disputes through negotiation, and to pursue friendly and cooperative relations with other countries on the basis of mutual respect, equality, and mutual benefit. …

There is only one earth, and one shared future for humanity.

Both Putin and Xi left lots of fill-in-the-blanks, because so much of what they were advocating is diametrically opposed to the basic thinking that pervades both in the Western Hemisphere and generally in Europe. However, there appears now to be considerable support at the World Economic Forum for abandoning the Washington Consensus (neoliberalism) and especially for abandoning its most dangerous and supremacist extension: neoconservatism (the U.S. brand of imperialism). America’s imperialism — via sanctions, coups, and outright military invasions — is the unmentioned and unmentionable context behind the speeches by all of these nations’ leaders. To the leaders in America, the primary international concern is that Russia needs to be “regime-changed,” and that any nation which isn’t hostile to Russia needs to be regime-changed now, so that Russia itself will subsequently be weakened and regime-changed itself. Ever since Putin came into office in 2000, Russia has resisted the U.S. regime’s goal of taking over Russia. And ever since at least 2006, America’s rulers have been aiming to conquer Russia militarily if lesser methods fail. And, by the time of 2017, the U.S. regime had already developed some of the essential technology which is specifically intended for that purpose (a blitz nuclear attack).

There is no greater global risk than a war between the United States and Russia; and this is especially recognized by the World Economic Forum, now. The WEF issued their “Global Risks Report 2021”, on 19 January 2021, based upon their “annual Global Risks Perception Survey, completed by over 650 members of the World Economic Forum’s diverse leadership communities.” The only global risk, among the 35 named “Global Risks” (which were listed on pages 87-89) in that Report, and which “respondents forecast risks will become a critical threat to the world” by a percentage (shown there on page 11) which was higher than the #2 “Infectious diseases” risk of 58.0% (which especially reflected the global Covid-19 pandemic), was “Weapons of mass destruction” (nuclear weapons): 62.7%. So: billionaires throughout the world are now being told that a war between the U.S. and Russia would probably be the worst thing that could possibly happen. This risk was labelled at the very top, not only of all risks, but specifically of “Existential threats.” (“Climate action failure” was also listed amongst the “Existential threats,” but only at 38.3%; and, so, the respondents were obviously quite unconcerned about the world that future generations — if future generations will exist — would be experiencing. Children and grandchildren of these people ought to be informed of this fact: our generation’s discounting the welfare of their generations.)

Consequently: perhaps the worries, the worst outcomes, that both Putin and Xi, each in his own way, are expressing concern about, won’t happen, despite the U.S. regime’s plans. This provides some reason for hope. 

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

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As Refugees Flee Central America, the Mexican Public Sours On Accepting Them

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Authors: Isabel Eliassen, Alianna Casas, Timothy S. Rich*

In recent years, individuals from Central America’s Northern Triangle (El Salvador, Guatemala, and Honduras) have been forced out of their home countries by extreme poverty and gang violence. While initial expectations were that the Lopez Obrador administration would be more welcoming to migrants, policies have slowly mirrored those of his predecessor, and do not seem to have deterred refugees. COVID-19 led to a decrease in refugees arriving in Mexico, and many shelters in Mexico closed or have limited capacity due to social distancing restrictions. Now that the COVID-19 situation has changed, arrivals could increase again to the levels seen in late 2018 or 2019, with overcrowded refugee centers lacking in medical care as potential grounds for serious COVID-19 outbreaks.

Mexico increasingly shares a similar view as the US on this migration issue, seeking ways to detain or deport migrants rather than supporting or protecting them. For instance, Mexico’s National Immigration Institute has been conducting raids on freight trains to find and detain migrants. Public opinion likely shapes these policies. In the US, support for allowing migrants into the country appeared to increase slightly from 2018 to 2019, but no significant majority emerges. Meanwhile, Mexican public opinion increasingly exhibits anti-immigrant sentiments, declining considerably since 2018, with a 2019 Washington Post poll showing that 55% supported deporting Central Americans rather than providing temporary residence and a 2019 El Financiero poll finding 63% supportive of closing to border to curb migration.

New Data Shows the Mexican Public Unwelcoming

To gauge Mexican public opinion on refugees, we conducted an original web survey June 24-26 via Qualtrics, using quota sampling. We asked 625 respondents to evaluate the statement “Mexico should accept refugees fleeing from Central America” on a five-point Likert scale from strongly disagree to strongly agree. For visual clarity, we combined disagree and agree categories in the figure below.

Overall, a plurality (43.84%) opposed accepting refugees, with less than a third (30.08%) supportive. Broken down by party affiliation, we see similar results, with the largest opposition from the main conservative party PAN (52.90%) and lowest in the ruling party MORENA (41.58%). Broken down by gender, we find women slightly more supportive compared to men (32.60% vs. 27.04%), consistent with findings elsewhere and perhaps acknowledgment that women and children historically comprise a disproportionate amount of refugees. Regression analysis again finds PAN supporters to be less supportive than other respondents, although this distinction declines once controlling for gender, age, education and income, of which only age corresponded with a statistically significant decline in support. It is common for older individuals to oppose immigration due to generational changes in attitude, so this finding is not unexpected.

We also asked the question “On a 1-10 scale, with 1 being very negative and 10 very positive, how do you feel about the following countries?” Among countries listed were the sources of the Central American refugees, the three Northern Triangle countries. All three received similar average scores (Guatemala: 4.33, Honduras: 4.05, El Salvador: 4.01), higher than Venezuela (3.25), but lower than the two other countries rated (US: 7.71, China: 7.26) Yet, even after controlling for general views of the Central American countries, we find the public generally unsupportive of accepting refugees.

How Should Mexico Address the Refugee Crisis?

Towards the end of the Obama administration, aid and other efforts directed at resolving the push factors for migration in Central America, including decreasing violence and limiting corruption, appeared to have some success at reducing migration north. President Trump’s policies largely did not improve the situation, and President Biden has begun to reverse those policies and re-implement measures successful under Obama.

As discussed in a meeting between the Lopez Obrador administration and US Vice President Kamala Harris, Mexico could adopt similar aid policies, and decreasing the flow of migrants may make the Mexican public respond more positively to accepting migrants. Lopez Obrador committed to increased economic cooperation with Central America days into his term, with pledges of aid as well, but these efforts remain underdeveloped. Threats to cut aid expedite deportations only risks worsening the refugee crisis, while doing little to improve public opinion.

Increasingly, the number of family units from Guatemala and Honduras seeking asylum in Mexico, or the United States, represents a mass exodus from Central America’s Northern Triangle to flee insecurity. Combating issues such as extreme poverty and violence in Central American countries producing the mass exodus of refugees could alleviate the impact of the refugee crisis on Mexico. By alleviating the impact of the refugee crisis, refugees seeking asylum will be able to navigate immigration processes easier thus decreasing tension surrounding the influx of refugees.

Likewise, identifying the public’s security and economic concerns surrounding refugees and crafting a response should reduce opposition. A spokesperson for Vice President Harris stated that border enforcement was on the agenda during meetings with the Lopez Obrador administration, but the Mexican foreign minister reportedly stated that border security was not to be addressed at the meeting. Other than deporting migrants at a higher rate than the US, Mexico also signed an agreement with the US in June pledging money to improve opportunities for work in the Northern Triangle. Nonetheless, questions about whether this agreement will bring meaningful change remain pertinent in the light of a worsening crisis.

Our survey research shows little public interest in accepting refugees. Public sentiment is unlikely to change unless the Lopez Obrador administration finds ways to both build sympathy for the plights of refugees and address public concerns about a refugee crisis with no perceived end in sight. For example, research in the US finds public support for refugees is often higher when the emphasis is on women and children, and the Lopez Obrador administration could attempt to frame the crisis as helping specifically these groups who historically comprise most refugees. Likewise, coordinating efforts with the US and other countries may help portray to the public that the burden of refugee resettlement is being equitably shared rather than disproportionately placed on Mexico.

Facing a complex situation affecting multiple governments requires coordinated efforts and considerable resources to reach a long-term solution. Until then, the Central American refugee crisis will continue and public backlash in Mexico likely increase.

Isabel Eliassen is a 2021 Honors graduate of Western Kentucky University. She triple majored in International Affairs, Chinese, and Linguistics.

Alianna Casas is an Honors Undergraduate Researcher at Western Kentucky University, majoring in Business Economics, Political Science, and a participant in the Joint Undergraduate/Master’s Program in Applied Economics.

Timothy S. Rich is an Associate Professor of Political Science at Western Kentucky University and Director of the International Public Opinion Lab (IPOL). His research focuses on public opinion and electoral politics.

Funding for this survey was provided by the Mahurin Honors College at Western Kentucky University.

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Indictment of Trump associate threatens UAE lobbying success

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This month’s indictment of a billionaire, one-time advisor and close associate of former US President Donald J. Trump, on charges of operating as an unregistered foreign agent in the United States for the United Arab Emirates highlights the successes and pitfalls of a high-stakes Emirati effort to influence US policy.

The indictment of businessman Thomas  J. Barrack, who maintained close ties to UAE Crown Prince Mohammed bin Zayed while serving as an influential advisor in 2016 to then-presidential candidate Trump and chair of Mr. Trump’s inauguration committee once he won the 2016 election, puts at risk the UAE’s relationship with the Biden administration.

It also threatens to reduce the UAE’s return on a massive investment in lobbying and public relations that made it a darling in Washington during the last four years.

A 2019 study concluded that Emirati clients hired 20 US lobbying firms to do their bidding at a cost of US$20 million, including US$600,000 in election campaign contributions — one of the largest, if not the largest expenditure by a single state on Washington lobbying and influence peddling.

The indictment further raises the question of why the Biden administration was willing to allow legal proceedings to put at risk its relationship with one of America’s closest allies in the Middle East, one that last year opened the door to recognition of Israel by Arab and Muslim-majority states.

The UAE lobbying effort sought to position the Emirates, and at its behest, Saudi Arabia under the leadership of Crown Prince Mohammed’s counterpart, Mohammed bin Salman, at the heart of US policy, ensure that Emirati and Saudi interests were protected, and shield the two autocrats from criticism of various of their policies and abuse of human rights.

Interestingly, UAE lobbying in the United States, in contrast to France and Austria, failed to persuade the Trump administration to embrace one of the Emirates’ core policy objectives: a US crackdown on political Islam with a focus on the Muslim Brotherhood. UAE Crown Prince Mohammed views political Islam and the Brotherhood that embraces the principle of elections as an existential threat to the survival of his regime.

In one instance cited in the indictment, Mr. Barrack’s two co-defendants, a UAE national resident in the United States, Rashid Al-Malik, and Matthew Grimes, a Barrack employee, discussed days after Mr. Trump’s inauguration the possibility of persuading the new administration to designate the Muslim Brotherhood as a designated foreign terrorist organization. “This will be a huge win. If we can list them. And they deserved to be,” Mr. Al-Malik texted Mr. Grimes on 23 January 2017.

The unsuccessful push for designating the Brotherhood came three months after Mr. Barrack identified the two Prince Mohammeds in an op-ed in Fortune magazine as members of a new generation of “brilliant young leaders.” The billionaire argued that “American foreign policy must persuade these bold visionaries to lean West rather than East… By supporting their anti-terrorism platforms abroad, America enhances its anti-terrorism policies at home.”

Mr. Barrack further sought to persuade America’s new policymakers, in line with Emirati thinking, that the threat posed by political Islam emanated not only from Iran’s clerical regime and its asymmetric defence and security policies but also from the Brotherhood and Tukey’s Islamist government. He echoed Emirati promotion of Saudi Arabia after the rise of Mohammed bin Salman as the most effective bulwark against political Islam.

“It is impossible for the US to move against any hostile Islamic group anywhere in the world without Saudi support…. The confused notion that Saudi Arabia is synonymous with radical Islam is falsely based on the Western notion that ‘one size fits all,’ Mr. Barrack asserted.

The Trump administration’s refusal to exempt the Brotherhood from its embrace of Emirati policy was the likely result of differences within both the US government and the Muslim world. Analysts suggest that some in the administration feared that designating the Brotherhood would empower the more rabidly Islamophobic elements in Mr. Trump’s support base.

Administration officials also recognized that the UAE, Saudi Arabia, and Egypt constituted a minority, albeit a powerful minority, in the Muslim world that was on the warpath against the Brotherhood.

Elsewhere, Brotherhood affiliates were part of the political structure by either participating in government or constituting part of the legal opposition in countries like Kuwait, Iraq, Yemen, Bahrain, Morocco, Jordan, and Indonesia.

The affiliates have at times supported US policies or worked closely with US allies like in the case of Yemen’s Al Islah that is aligned with Saudi-backed forces.

In contrast to UAE efforts to ensure that the Brotherhood is crushed at the risk of fueling Islamophobia, Nahdlatul Ulama, one of, if not the world’s largest Muslim organization which shares the Emirates’ rejection of political Islam and the Brotherhood, has opted to fight the Brotherhood’s local Indonesian affiliate politically within a democratic framework rather than by resorting to coercive tactics.

Nahdlatul Ulama prides itself on having significantly diminished the prospects of Indonesia’s Brotherhood affiliate, the Prosperous Justice Party (PKS), since the 2009 presidential election. The group at the time successfully drove a wedge between then-President Susilo Yudhoyono, and the PKS, his coalition partner since the 2004 election that brought him to power. In doing so, it persuaded Mr. Yudhoyono to reject a PKS candidate as vice president in the second term of his presidency.

Nahdlatul Ulama’s manoeuvring included the publication of a book asserting that the PKS had not shed its links to militancy. The party has since failed to win even half of its peak 38 seats in parliament garnered in the 2004 election.

“Publication of ‘The Illusion of an Islamic State: The Expansion of Transnational Islamist Movements to Indonesia’ had a considerable impact on domestic policy. It primarily contributed to neutralizing one candidate’s bid for vice president in the 2009 national election campaign, who had ties to the Muslim Brotherhood,” said militancy expert Magnus Ranstorp.

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Biden Revises US Sanctions Policy

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Official White House Photo by Adam Schultz

In the United States, a revision of the sanctions policy is in full swing. Joe Biden’s administration strives to make sanctions instruments more effective in achieving his political goals and, at the same time, reducing political and economic costs. The coordination of restrictive measures with allies is also seen as an important task. Biden is cautiously but consistently abandoning the sanctions paradigm that emerged during Donald Trump’s presidency.

The US sanctions policy under Trump was characterised by several elements. First, Washington applied them quite harshly. In all key areas (China, Iran, Russia, Venezuela, etc.), the United States used economic and financial restrictions without hesitation, and sometimes in unprecedented volumes. Of course, the Trump administration acted rationally and rigidity was not an end in itself. In a number of episodes, the American authorities acted prudently (for example, regarding sanctions on Russian sovereign debt in 2019). The Trump-led executives stifled excess Congressional enthusiasm for “draconian sanctions” against Russia and even some initiatives against China. However, the harshness of other measures sometimes shocked allies and opponents alike. These include the 6 April 2014 sanctions against a group of Russian businessmen and their assets, or bans on some Chinese telecommunications services in the United States, or sanctions blocking the International Criminal Court.

Second, Trump clearly ignored the views of US allies. The unilateral withdrawal from the nuclear deal with Iran in 2018 forced European businesses to leave Iran, resulting in losses. Even some of the nation’s closest allies were annoyed. Another irritant was the tenacity with which Trump (with Congressional backing) threw a wrench in the wheels of the Nord Stream 2 pipeline project. Despite the complicated relations between Moscow and the European Union, the latter defended the right to independently determine what was in its interests and what was not.

Third, concerns about sanctions have emerged among American business as well. Fears have grown in financial circles that the excessive use of sanctions will provoke the unnecessary politicisation of the global financial system. In the short term, a radical decline in the global role of the dollar is hardly possible. But political risks are forcing many governments to seriously consider it. Both rivals (Moscow and Beijing) and allies (Brussels) have begun to implement corresponding plans. Trade sanctions against China have affected a number of US companies in the telecommunications and high-tech sectors.

Finally, on some issues, the Trump administration has been inconsistent or simply made mistakes. For example, Trump enthusiastically criticised China for human rights violations, supporting relevant legislative initiatives. But at the same time, it almost closed its eyes to the events in Belarus in 2020. Congress was also extremely unhappy with the delay in the reaction on the “Navalny case” in Russia. As for mistakes, the past administration missed the moment for humanitarian exemptions for sanctions regimes in connection with the COVID-19 epidemic. Even cosmetic indulgences could have won points for US “soft power”. Instead, the US Treasury has published a list of pre-existing exceptions.

The preconditions for a revision of the sanctions policy arose even before Joe Biden came to power. First of all, a lot of analytical work was done by American think tanks—nongovernmental research centers. They provided a completely sober and unbiased analysis of bothха! achievements and mistakes. In addition, the US Government Accountability Office has done serious work; in 2019 it prepared two reports for Congress on the institutions of the American sanctions policy. However, Joe Biden’s victory in the presidential election significantly accelerated the revision of the sanctions instruments. Both the ideological preferences of the Democrats (for example, the emphasis on human rights) and the political experience of Biden himself played a role.

The new guidelines for the US sanctions policy can be summarised as follows. First, the development of targeted sanctions and a more serious analysis of their economic costs for American business, as well as business from allied and partner countries. Second, closer coordination with allies. Here, Biden has already sent a number of encouraging signals by introducing temporary sanctions exemptions on Nord Stream 2. Although a number of Russian organisations and ships were included in the US sanctions lists, Nord Stream 2 itself and its leadership were not affected. Third, we are talking about closer attention to the subject of human rights. Biden has already reacted with sanctions both to the “Navalny case” and to the situation in Belarus. Human rights will be an irritant in relations with China. Fourth, the administration is working towards overturning Trump’s most controversial decisions. The 2020 decrees on Chinese telecoms were cancelled, the decree on sanctions against the International Criminal Court was cancelled, the decree on Chinese military-industrial companies was modified; negotiations are also underway with Iran.

The US Treasury, one of the key US sanctions agencies, will also undergo personnel updates. Elisabeth Rosenberg, a prominent sanctions expert who previously worked at the Center for a New American Security, may take the post of Assistant Treasury Secretary. She will oversee the subject of sanctions. Thus, the principle of “revolving doors”, which is familiar to Americans, is being implemented, when the civil service is replenished with personnel from the expert community and business, and then “returns” them back.

At the same time, the revision of the sanctions policy by the new administration cannot be called a revolution. The institutional arrangement will remain unchanged. It is a combination of the functions of various departments—the Treasury, the Department of Trade, the Department of Justice, the State Department, etc. The experience of their interagency coordination has accumulated over the years. The system worked flawlessly both under Trump and under his predecessors. Rather, it will be about changing the political directives.

For Russia, the revision is unlikely to bring radical changes. A withdrawal from the carpet bombing of Russian business, such as the incident on 6 April 2018 hint that good news can be considered a possibility. However, the legal mechanisms of sanctions against Russia will continue to operate. The emphasis on human rights will lead to an increase in sanctions against government structures. Against this background, regular political crises are possible in relations between the two countries.

From our partner RIAC

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