Month: November 2015

In Scotland, I was brought up to think of policemen as allies and to ask one for help when I needed it. Imagine my surprise when, as a 19-year-old on my first visit to the US, I was met by a stream of obscenities from a New York City cop who was directing traffic in Times Square after I asked him for directions to the nearest post office. In my subsequent confusion, I inserted my employer’s urgent documents into a trash bin that, to me, looked a lot like a mailbox.

Europeans tend to feel more positively about their governments than do Americans, for whom the failures and unpopularity of their federal, state, and local politicians are a commonplace. Yet Americans’ various governments collect taxes and, in return, provide services without which they could not easily live their lives.

Americans, like many citizens of rich countries, take for granted the legal and regulatory system, the public schools, healthcare and social security for the elderly, roads, defence and diplomacy, and heavy investments by the state in research, particularly in medicine. Certainly, not all of these services are as good as they might be, nor held in equal regard by everyone; but people mostly pay their taxes, and if the way that money is spent offends some, a lively public debate ensues, and regular elections allow people to change priorities.

Without effective states working with active and involved citizens, there is little chance for the growth that is needed to abolish global poverty

All of this is so obvious that it hardly needs saying – at least for those who live in rich countries with effective governments. But most of the world’s population does not.

State control
In much of Africa and Asia, states lack the capacity to raise taxes or deliver services. The contract between government and governed – imperfect in rich countries – is often altogether absent in poor countries. The New York cop was little more than impolite (and busy providing a service); in much of the world, police prey on the people they are supposed to protect, shaking them down for money or persecuting them on behalf of powerful patrons.

Even in a middle-income country like India, public schools and public clinics face mass (unpunished) absenteeism. Private doctors give people what (they think) they want – injections, intravenous drips, and antibiotics – but the state does not regulate them, and many practitioners are entirely unqualified.

Throughout the developing world, children die because they are born in the wrong place – not of exotic, incurable diseases, but of the commonplace childhood illnesses that we have known how to treat for almost a century. Without a state that is capable of delivering routine maternal and child health care, these children will continue to die.

Likewise, without government capacity, regulation and enforcement do not work properly, so businesses find it difficult to operate. Without properly functioning civil courts, there is no guarantee that innovative entrepreneurs can claim the rewards of their ideas.

The absence of state capacity – that is, of the services and protections that people in rich countries take for granted – is one of the major causes of poverty and deprivation around the world. Without effective states working with active and involved citizens, there is little chance for the growth that is needed to abolish global poverty.

Foreign aid
Unfortunately, the world’s rich countries currently are making things worse. Foreign aid – transfers from rich countries to poor countries – has much to its credit, particularly in terms of health care, with many people alive today who would otherwise be dead. But foreign aid also undermines the development of local state capacity.

This is most obvious in countries – mostly in Africa – where the government receives aid directly and aid flows are large relative to fiscal expenditure (often more than half the total). Such governments need no contract with their citizens, no parliament, and no tax-collection system. If they are accountable to anyone, it is to the donors; but even this fails in practice, because the donors, under pressure from their own citizens (who rightly want to help the poor), need to disburse money just as much as poor-country governments need to receive it, if not more so.

What about bypassing governments and giving aid directly to the poor? Certainly, the immediate effects are likely to be better, especially in countries where little government-to-government aid actually reaches the poor. And it would take an astonishingly small sum of money – about 15 US cents a day from each adult in the rich world – to bring everyone up to at least the destitution line of a dollar a day.

Yet this is no solution. Poor people need government to lead better lives; taking government out of the loop might improve things in the short run, but it would leave unsolved the underlying problem. Poor countries cannot forever have their health services run from abroad. Aid undermines what poor people need most: an effective government that works with them for today and tomorrow.

One thing that we can do is to agitate for our own governments to stop doing those things that make it harder for poor countries to stop being poor. Reducing aid is one, but so is limiting the arms trade, improving rich-country trade and subsidy policies, providing technical advice that is not tied to aid, and developing better drugs for diseases that do not affect rich people. We cannot help the poor by making their already-weak governments even weaker.

Angus Deaton is the 2015 Nobel Laureate in economics

The recent downgrade of Brazil’s credit rating to junk status was followed by a raft of articles heralding the crumbling of the BRICS (Brazil, Russia, India, China, and South Africa). How predictable: schadenfreude almost always follows bad news about the BRICS, whose members were once hailed as the world’s up-and-coming economic powerhouses and next major political force.

There is something deeper going on here. The world’s seeming obsession with the BRICS’ perceived rise and fall reflects a desire to identify the country or group of countries that would take over from the US as global leader. But, in searching for the ‘next big thing’, the world ignores the fact that the US remains the only power capable of providing global leadership and ensuring some semblance of international order.

Clearly, the BRICS are a thing. They are just not the thing

The story of the BRICS is a familiar one. It began as a technical grouping in 2001, when the British economist Jim O’Neill lumped them together (without South Africa) and gave them their catchy name for the sole reason that they were all large, rapidly growing emerging economies. But, recognising that economic power could translate into political influence, the BRICS held their first informal meeting in 2006, and their first leaders’ summit in 2009. The bloc was going places – or so it seemed. But seven years, seven summits, and one new member (South Africa joined in 2010) later, the significance of the BRICS remains hotly debated.

Cracks in the foundations
The disparities among the BRICS are well known. China’s economic output is nearly twice that of the rest of the BRICS combined, and roughly 30 times that of South Africa. Their governance models are vastly different, from India’s robust democracy to Russia’s illiberal model to China’s one-party system. Russia and China, both permanent members of the UN Security Council, have offered, at best, lukewarm support for the other BRICS’ aspirations to join them. And then there are its members’ bilateral disagreements, including a heated territorial dispute between India and China.

Nonetheless, the BRICS have acted in concert on more than one occasion. Last March, amid near-universal condemnation of Russia’s annexation of Crimea, the country’s BRICS counterparts – even those that had long supported the inviolability of borders and non-intervention – abstained from a UN General Assembly resolution affirming Ukraine’s unity and territorial integrity.

Three months later, the BRICS released their Leaders’ Summit Declaration condemning the imposition of economic sanctions on Russia by the EU and the US. Most concretely, the long-anticipated New Development Bank, run jointly and equally by the five BRICS countries, opened its doors in Shanghai in July. Clearly, the BRICS are a thing. They are just not the thing.

The BRICS arose at a time when much of the world, especially the advanced economies, was mired in crisis. The ‘fall of the West’ narrative ran alongside that of the ‘rise of the rest’. But the story has not played out quite as anticipated.

Economically, the BRICS are facing serious challenges. In addition to a well-documented growth slowdown, China has lately experienced considerable stock-market turmoil and currency devaluation. The Brazilian and Russian economies are contracting; South Africa’s growth has slowed; and India, though maintaining relatively strong growth, must undertake important reforms.

The BRICS have also failed to fulfil their promise of international leadership. At the beginning of the decade, Brazil showed a certain aspiration, along with Turkey, to press ahead with an alternative nuclear deal with Iran. But that proposal fell apart, and, amid pressure from corruption scandals and falling commodity prices, Brazil left the global stage.

South Africa and India also continue to punch below their apparent weight internationally (notwithstanding Indian Prime Minister Narendra Modi’s visibility). As for Russia, the only traditional world leader of the bunch, the Kremlin’s Ukraine policy has done severe damage to the country’s international profile – damage not even its possible diplomatic coup in Syria can undo.

Bricks don’t float
Only China has displayed an inclination to lead, as exemplified by President Xi Jinping’s visit to Washington DC last week, which produced major announcements on climate action, cyber security, and international development. China has also been pursuing initiatives like the Asian Infrastructure Investment Bank and the revitalisation of the Shanghai Cooperation Organisation. But China’s growing assertiveness, particularly in the South China Sea, has fuelled the perception that it is more of a threat than a leader. All in all, the BRICS no longer seem to be rising.

At the same time, the core of the West no longer seems to be declining. Although Europe remains mired in crisis and existential self-doubt, and Japan is still finding its feet after two decades of economic stagnation, the US is as relevant as ever. Indeed, no major global challenge – from conflict in the Middle East to climate change to global financial regulation – can be confronted without American engagement. America’s enduring dominance will rile many, and with good reason.

A quarter-century after the Cold War’s end, the world should have arrived at a more equitable and balanced way of getting things done. But it has not, and no other single power is in a position to take America’s place. Europe is too inward looking; China inspires too much suspicion; and India, despite showing signs that it is preparing for a greater global role, lacks enough international authority on its own. As a result, nearly 20 years after former US Secretary of State Madeleine Albright dubbed her country “indispensable”, it remains so.

The imperative now is for the US and the world to recognise this. Rather than focusing our attention on alternatives to US leadership, we should be emphasising its importance – an approach that would help to spur the US to rededicate itself to its international responsibilities. There have been hints that this impulse still exists – notably, the Iranian nuclear deal – but they remain inadequate to the challenges confronting the world.

The international order is at a crossroads. It needs the US to guide it – with ingenuity, initiative, and stamina – in the direction of peace and prosperity. Obsessing about who might eventually replace America is bound to get us all lost.

Ana Palacio is former Senior Vice President of the World Bank and member of the Spanish Council of State

Australia has a new prime minister – its fifth in just eight years. No Australian prime minister has served a full electoral term since 2007, and we have had four incumbents in the last 27 months alone. In June 2013, Labor Prime Minister Julia Gillard was defeated in a party-room vote by Kevin Rudd, who lost the post in the general election later that year to the conservative coalition’s Tony Abbott, who has now in turn been defeated in a party-room coup by Malcolm Turnbull.

This latest turn in our prime ministerial carousel has left Australians trying, yet again, to explain to bemused colleagues around the world how this stable bastion of Western democracy, and the world’s 12th-largest economy, could be engaged in such a pantomime. Is it something in the water that makes us want to treat our political leaders like disposable tissues?

There seem to be three different dimensions to the explanation. One is simply the local impact of the impatience that is becoming increasingly obvious in the world’s established democracies. The endless 24/7 media cycle and omnipresent social media are generating a taste for celebrity and an almost pathological preoccupation with current opinion polls, rather than serious political debate. Traditional parties and processes are finding it harder and harder to satisfy the demand for instant gratification.

Is it something in the water that makes us want to treat our political leaders like disposable tissues?

A second dimension is Australia-specific: the tension created by peculiarities of the country’s political system. A ludicrous three-year electoral cycle, shorter than almost anywhere else in the world, makes it almost impossible to govern in a campaign-free atmosphere. And party rules have allowed for leaders – including serving prime ministers – to be torn down overnight by their parliamentary colleagues (although this has now changed for Labor).

The remaining part of the explanation is undoubtedly local and personal: the character quirks that have contributed to each leader’s dramatic rise and equally spectacular fall.

Character quirks
Gillard proved herself to be a highly competent transactional politician: ruthless in grabbing the ascendancy when Rudd seemed to be faltering in the polls; highly effective in negotiating with cross-benchers to keep her minority government alive; and successful in gaining huge local and international attention for her passionate parliamentary assault on her opponents’ perceived misogyny. But on almost every major policy issue, she was tone-deaf in sensing the popular mood, and seemed to have no guiding principles attractive to either her party or the wider public.

Rudd, who wrestled the leadership back from her, is intellectually brilliant and, when on his game, a great campaigner who succeeded in minimising the scale of Labor’s loss in the 2013 election. But the wide respect he garnered internationally for his role in crafting the G-20 response to the global financial crisis did not help with his local colleagues, who saw him as too often incommunicative, obsessive, and lacking judgment in setting policy priorities.

The now-deposed Abbott, a muscular Christian alpha male with profoundly conservative social values, won the leadership of the Liberal Party, and the anti-Labor coalition, as the unexpected beneficiary of a three-way party split in 2009. But while Abbott was a spectacularly effective opposition leader as the Labor government unravelled, he proved himself utterly unable to manage his transition to prime minister, and was trailing badly in the opinion polls when he was ousted.

Abbott presided with slogans, rather than coherent policy, over a rapidly deteriorating economy. He was hyper-partisan, ran against public sentiment on issues like gay marriage and restoring knighthoods, and constantly alienated his ministerial colleagues with solo “captain’s picks” in support of unpopular people and policies.

He’s behind you
Abbott’s nemesis, Turnbull, now Prime Minister, stands in sharp contrast: sophisticated, highly successful in his past lives as a journalist, lawyer, and investment banker, and very popular – across party lines – with the electorate. He is a superbly articulate communicator, a past leader of the anti-monarchist republican movement, and as liberal in his political instincts as Abbott was conservative.

Nonetheless, he was a flop in his brief earlier incarnation as opposition leader in 2008-2009, widely seen as arrogant, non-consultative, and prone to spectacular errors of judgment. But Labor’s hopes that Turnbull will fail to learn from his earlier mistakes – and that the prime ministerial door will continue to revolve – seem likely to be disappointed, at least in the short term.

Turnbull knows that the great majority of his governing coalition does not share his liberal instincts, and that he will have to tread cautiously and collegially on policy change. But he is also smart and articulate enough to know that if he maintains self-discipline, and argues rather than asserts his case, he can change the paradigms.

A new hope
The hope for Australia is that this is a watershed moment, with both government and opposition realising that dumbed-down sloganeering and races to the populist bottom may win short-term advantage, but are ultimately counterproductive. What most voters want is political leaders who have a coherent guiding philosophy, a persuasive policy narrative, and a genuine commitment to a decent governing process.

For all its apparent attachment to superficial policymaking and tabloid personality politics, it is becoming evident that the Australian public is fed up with the political circus of recent years, and wants adults back in charge of the major parties. With Turnbull, and Labor’s Bill Shorten, we seem at last to have leaders right for the long haul. We will have to see whether that hope is realised, but the signs are encouraging. And a lot of other democrats around the world will be hoping that we pull it off.

Gareth Evans is Chancellor of The Australian National University & former Labor cabinet minister

© Project Syndicate 2015