REIMAGINING DEMOCRATIC RESILIENCE
A SPECIAL 2024 NATO SUMMIT EDITION BY DIPLOMATIC COURIER | WORLD IN 2050
REIMAGINING DEMOCRATIC RESILIENCE
A SPECIAL 2024 NATO SUMMIT EDITION BY DIPLOMATIC COURIER | WORLD IN 2050
PUBLISHER & CEO
ANA C. ROLD
EDITOR-IN-CHIEF
SHANE SZARKOWSKI
EDITORS
JEREMY FUGLEBERG
MELISSA METOS
CONTRIBUTORS
MUBARAK AL-KUWARI
SULTAN BARAKAT
LISA GABLE
ALLY GOLAN
ERIC HONTZ
MARK LEONARD
KOAQUIM LEVY
RICHARD PONZIO
ADAM RATZLAFF
AIDA RIDANOVIC
STACEY ROLLAND
MARIETJE SCHAAKE
STEVEN SCHUURMAN
MANDEEP TIWANA
SIDDHARTH TIWARI
MOHAMED YOUNIS
ANDRÉS VELASCO
AXEL A. WEBER
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WELCOME BY
ANA C. ROLD
INTRODUCTION
SHANE SZARKOWSKI
GOVERNANCE
MUBARAK AL–KUWARI, RICHARD PONZIO, AND SULTAN BARAKAT
JOAQUIM LEVY, AXEL A. WEBER, AND SIDDHARTH TIWARI
ELECTION
WELCOME
BY ANA C. ROLD
In a world marked by rapid technological progress and interconnectedness, trust is what unites us. It plays a pivotal role in promoting collaboration, nurturing social harmony, driving economic growth, and upholding democratic values. But trust has been in fast decline.
Trust is the catalyst that fuels democratic institutions, so how do we restore it?
We are traversing an interesting time: both the challenge and the possibility is enormous and historic.
On one hand, the combination of exponential technologies and market economics, coupled with a super election year in which half the world’s population is voting in a major election, have created an environment where trust and reliable information struggle to flourish. The consequences: decline in public discourse, the disappearance of shared spaces for dialogue, and a rise in polarization and tribalism.
NATO headquarters. Photo by Adobe Stock.
On the other hand, the very exponential technologies that have bound us to this behavior can also be used to rewire the attention economy through a new set of incentives that reward trust-building behavior. If the algorithms have wired and rewarded us to unwittingly (or wittingly) spread misinformation, can we create inoculation tech to reward behavior that builds trust and spreads facts?
Our World in 2050 Brain Trust members and partners believe so.
This is the setting under which, together with our co-hosts the Community of Democracies, we set out to build a oneof-a-kind convening to shape future scenarios and imagine various futures of democracy together. Because when we can imagine the unimaginable we can also create contingencies and prepare better for the possibilities.
THERE’S MUCH WE CAN LEARN FROM NATO’S MODERNIZATION IN TACKLING 21ST-CENTURY CHALLENGES. AND THERE IS MUCH NATO LEADERS CAN LEARN FROM OUR BRAIN TRUST.
We are thrilled to be joined by a group of hard-working partners—The Center for the Study of the Presidency and Congress (CSPC), the Center for International Private Enterprise (CIPE), International Arts and Artists (IA&A), and William & Mary’s Whole of Government Center of Excellence—that are thinking of these futures from an innovative lens too.
We’re honored to be part of this intellectual exchange on the occasion of NATO’s Leaders’ Summit in Washington, DC. NATO stands out as a global institution leading innovation in the trust and disinformation arena. There’s much we can learn from NATO’s modernization in tackling 21st-century challenges. And there is much NATO leaders can learn from our Brain Trust who has pioneered innovation in the space of data and cyber security, mis- and disinformation, and governance models for the future. This exchange promises new opportunities for collaborative solution-making, and we’re proud to facilitate this valuable dialogue.
INTRODUCTION
BY SHANE SZARKOWSKI
For the past several years, NATO has been amid a period of strategic reevaluation—how to future—proof the alliance from a security perspective but also, increasingly, taking on a political role. The need to support alliance members in countering threats to our democratic institutions isn’t new. The level of threat to democracy today, however, is. As the threats to democracy intensify, NATO has turned its attention toward the impacts of internal threats to democracy and what can be done to foster greater democratic resilience.
This intensification of existing threats to democracy, and the apparently proliferation of new threats as the global polycrisis worsens, require we all reconsider how we think about governance, threat, and democratic resilience. This idea informed the production of Diplomatic Courier’s Future of Democracy Forum, co–hosted by Community of Democracies. It is also the key problematic we thought about while putting together the 2024 edition of our annual NATO Summit special edition.
| JULY 2024
NATO headquarters. Photo by Adobe Stock.
The polycrisis comprises a multitude of threats, including but not limited to: proliferating geopolitical competition and conflict, climate change impacts, societal fragmentation and extremist politics, economic uncertainty, disruption from AI, mental health crises, continued downstream disruptions remaining from Covid, and resurgent home–grown and international terrorism.
We think that action in three different spaces can have an outsize impact on most aspects of the polycrisis: institutional resilience, exponential technologies, and political economics. Deciding how to grapple with these challenges is a larger task than categorizing them, however. This compilation of analyses published by Diplomatic Courier explores different perspectives from experts and leaders around the world about our opportunities and challenges.
MORE THAN ANY TIME SINCE THE COLD WAR, DEMOCRACY APPEARS TO BE UNDER ATTACK, THOUGH THOSE WHO OPPOSE DEMOCRACY TODAY ARE FAR LESS RECOGNIZABLE THAN THEY WERE IN THE 20TH CENTURY.
It doesn’t seem controversial to say it feels as though today we are at a uniquely pivotal point in history. More than any time since the Cold War, democracy appears to be under attack, though those who oppose democracy today are far less recognizable than they were in the 20th century. Their tactics are more varied and more difficult to parse. Worse, some of the damage to our democratic institutions is internal as well.
It’s a complicated threat environment. We have to get our solutions right, fast, to help ensure the Future of Democracy arrives well.
We hope you find this special series of analyses useful to that end.
A BREAKTHROUGH OPPORTUNITY FOR GLOBAL GOVERNANCE
BY
MUBARAK AL-KUWARI, RICHARD PONZIO, AND SULTAN BARAKAT
Future World Exhibition at ArtScience Museum. Image by Robs from Unsplash.
Cyber technologies, especially artificial intelligence, make possible powerful new tools for problem solving. But they also raise serious governance challenges. In fact, unbridled competition for cyber primacy could leave everyone worse off—a kind of “tragedy of the commons.” It might even lead to confrontation.
Mitigating such risks is more urgent than ever. Cyber–tech is becoming faster, better, cheaper, and more widely used at a time when there are more violent conflicts underway than at any point since World War II. Moreover, existing peacebuilding tools seem to be losing their efficacy.
The United Nations’ well known shortcomings—such as insufficient resources, lack of formal authority, and incapacity to address the underlying causes of violent conflicts—are particularly glaring in Gaza, Ukraine, and Sudan.
The good news is that this year will bring important opportunities to confront the challenges we face. In
MITIGATING THE RISKS OF UNBRIDLED COMPETITION FOR CYBER PRIMACY IS ESPECIALLY URGENT
NOW
AMID ONGOING, VIOLENT CONFLICTS. LUCKILY THIS YEAR BRINGS
INITIATIVES AND OTHER OPPORTUNITIES FOR AI GOVERNANCE, RESTORING TRUST, AND PEACEBUILIDING.
September, global leaders will gather in New York for the UN’s Summit of the Future, where they will seek to restore mutual trust, address gaps in global governance, and strengthen multilateral institutions’ ability to cope with current and future challenges. The summit is expected to deliver agreement on a Pact for the Future, laying out a clear path forward for the international system.
Efforts are also underway to develop a Global Digital Compact, which was proposed in UN Secretary–General António
Guterres’s “Our Common Agenda” as a means of establishing a “shared vision of an open, free, secure, and human–centered digital future.” Together, these initiatives offer reason to hope for real progress on AI governance and international peacebuilding.
Success, however, will require the UN’s 193 member states not only to adopt these instruments but also to build upon them by pursuing ambitious innovations in global governance. In the Future of International Cooperation Report 2023, produced by the Doha Forum, the Stimson Center, and the Global Institute for Strategic Research, we call for one such innovation: an International Artificial Intelligence Agency (IA2).
The establishment of IA2 would boost visibility, advocacy, and resource mobilization for global AI regulation, and provide expert advice on cyber–tech agreements pursued by the UN General Assembly and Security Council. The agency would also monitor, evaluate, and report on AI industry safeguards, in compliance with an agreed international regulatory framework. And it would coordinate initiatives and frameworks on AI governance transnationally, in order to facilitate the sharing of best practices and lessons learned.
IA2 should be underpinned by the principles of safety, sustainability, and inclusiveness, and supported by an expert Intergovernmental Panel on Cyber and AI, modeled on the Intergovernmental Panel on Climate Change. The agency’s design should reflect any relevant recommendations from the UN Secretary–General’s AI Advisory Body, which will release its final report ahead of the Summit of the Future.
To bolster international conflict-management capabilities, we also propose transforming the UN Peacebuilding Commission into an empowered Peacebuilding Council, much as the then enfeebled Human Rights Commission was transformed in 2005 into a more capable Human Rights Council with an expanded mandate.
The Peacebuilding Council would have greater authority and responsibility to lead on conflict prevention, policy development and coordination, and resource mobilization for second- and third–order conflicts (such as Myanmar). This would enable the Security Council to focus squarely on first-order conflicts (such as Ukraine–Russia), which pose the greatest threat to international peace and security.
The Peacebuilding Council’s efforts would be aided by a 12 | JULY 2024
Peacebuilding Audit tool, modeled on the Human Rights Council’s Universal Periodic Review, which tracks UN member states’ human rights records. At the same time, the Peacebuilding Fund—the UN’s main instrument for investing in conflict prevention—must receive adequate, predictable, and sustained funding, including from assessed dues.
Pushback is to be expected, from both state and non–state actors. After all, we are living in a time of renewed great power rivalries and rising mistrust among influential groupings of countries in the Global North and South.
But recent achievements—in particular, the G20 New Delhi Leaders’ Declaration, which emerged from last September’s G20 Summit, and the Bletchley Declaration, which was adopted at the AI Safety Summit in November— suggest that political momentum can be marshaled to advance shared goals. It helps that both the Pact for the Future and the Global Digital Compact aim to fill global governance gaps that were identified as priorities in the Political Declaration adopted at last September’s Sustainable Development Goals Summit.
Cutting edge technologies are vital to progress on no less than 25 SDG indicators, and the entire 2030 Agenda for Sustainable Development depends on world peace. If we are to have any chance of achieving the 17 SDGs by the 2030 target date, we must mobilize such technologies to meet the governance and peacebuilding challenges of a rapidly changing geopolitical order.
About the authors
Mubarak Al-Kuwari is Executive Director of the Doha Forum.
Richard Ponzio is Director of the Global Governance, Justice, and Security Program, and a senior fellow at the Stimson Center.
Sultan Barakat is Director of the Global Institute for Strategic Research and Professor of Public Policy at Hamad Bin Khalifa University.
THE BRETTON WOODS INSTITUTIONS WE NEED
BY JOAQUIM LEVY, AXEL A. WEBER, AND SIDDHARTH TIWARI
Omni Mount Washington Resort in New Hampshire, where the Bretton Woods Agreement was signed.
Photo by Laura Peruchi on Unsplash.
On the 80th anniversary of the International Monetary Fund and the World Bank, we should reflect on what these Bretton Woods institutions have achieved since World War II. In addition to supporting unprecedented levels of global growth and poverty reduction, they have helped address and overcome myriad economic and financial crises. Now, we have an opportunity—and a duty—to take stock of their institutional mandates and ensure that they are equipped to meet the urgent challenges of the twenty–first century.
It is widely recognized that the “global commons” issues that transcend national borders (including climate change, pandemics, and migration) present the greatest challenge to the current multilateral architecture. Given the urgent and existential nature of the climate challenge, the imperative for collective action is urgent. Yet progress has been too slow.
A new report from the Bretton Woods Committee’s Multilateral Reform Working Group addresses the causes of this impasse and seeks a path forward. We identify “gaps” (in governance,
EIGHTY YEARS AFTER THE FORMATION OF THE IMF AND WORLD BANK, WE HAVE A DUTY TO CONSIDER THEIR MANDATES AND ENSURE THEY ARE EQUIPPED TO MEET MODERN CHALLENGES
implementation, and accountability) in both the public and the private sector, and we show why only a system wide approach to reform will suffice.
Rejecting the idea that new institutions might be created to fill these gaps, we conclude that the IMF and the World Bank are best placed to play a leadership role, owing to their global membership, financial firepower, and weighted voting structures. The recent G20 Independent Expert Group on Multilateral Development Banks has drawn similar conclusions, as has the Bridgetown Initiative. Without detracting from their existing mandates, the Bretton Woods institutions need to be further empowered. On the public sector side, the gap in governance stems from the lack of a coordinating function within the global commons,
especially when it comes to financial and economic policies to address climate change. To fill this gap, we propose creating ministerial level decision making “councils” at both the IMF and the World Bank. Given adequate political heft, these councils would address what is missing in the current architecture. The IMF’s two existing ministerial bodies, the International Monetary and Financial Committee and the Development Committee, are currently advisory; but they could transition to a decision making role.
The new councils would be more inclusive, giving more voice to middle- and low-income countries (MLICs). Member states would vote proportionally according to their quota share, but they would do so individually, rather than by constituency (as is the case under the current model). This would also enable “coalitions of the willing” to form around specific issues.
A second major public sector gap concerns implementation. Though many efforts to address global challenges are underway, their disparate nature means that the whole is less than the sum of the parts. The Bretton Woods institutions must be empowered to support MLICs as they work toward national goals such as expanding green energy, phasing out coal, accelerating climate adaptation programs, and protecting forests.
To that end, the IMF can help shape and assess the fiscal and financial frameworks according to which green policies and investments are adopted and implemented in advanced and developing economies. The World Bank can help with financing adaptation efforts, designing energy strategies, and introducing financial instruments to facilitate climate change mitigation in coordination with other multilateral bodies and the private sector. And regional multilateral development banks can expand their role by helping countries de–risk investments in climate related projects.
The third gap concerns accountability and how we measure impact. Accepting the principle that what gets measured gets done, we recommend that the IMF and the World Bank’s existing evaluation arms (working with their peers in partner institutions) start conducting systematic reviews of climate financing and implementation plans.
That brings us to the private sector, which also has an indispensable role to play. Most greenhouse gas emissions emanate from publicly listed corporations and state owned enterprises, and the bulk of climate financing will need to come from the private sector, including asset managers. The IMF and the World Bank again are uniquely positioned to help governments implement common standards, practices, and instruments, ultimately ensuring that private–sector efforts are aligned with global goals.
16 | JULY 2024
Filling gaps in the private sector’s current approach will require mandatory global disclosure standards (along the lines of what the International Sustainability Standards Board has proposed) to ensure accurate measures of private entities’ carbon footprints, net–zero goals, and corresponding asset allocations. Mandatory disclosure would provide more accurate price signals to capture the true costs of fossil fuels, as well as foster more public and private sector collaboration.
The IMF could further incorporate such monitoring in its surveillance work. Already a vocal proponent of carbon taxes, the Fund can offer objective assessments of the global macroeconomic and trade implications of cross border carbon adjustment taxes, the potential international sharing of their proceeds, and how such taxes can complement global carbon markets. Moreover, together with the World Bank, the IMF can develop tools to help MLICs respond to these regimes.
Throughout their 80–year history, the IMF and the World Bank have demonstrated their ability to adapt to changing global circumstances. In the face of increasingly complex global challenges, both must evolve to capitalize on their respective comparative advantages. In the case of climate change, especially, we believe they are the only global institutions that can mobilize public and private sector responses at the necessary pace and scale.
To fulfill these augmented roles, both institutions will need additional financial capacity. If they can focus on closing gaps in public and private sector governance, implementation, and accountability, they will amplify their own impact and secure future paid–in capital from their shareholders. We hope that all 190 member states meeting in the coming days for the IMF and World Bank Spring Meetings will recognize the need to strengthen both bodies.
About the authors
Joaquim Levy, a former finance minister of Brazil, is Co-Chair of the Bretton Woods Committee Multilateral Reform Working Group.
Axel A. Weber, Co-Chair of the Bretton Woods Committee Multilateral Reform Working Group, is a former chairman of UBS Group and president of the Deutsche Bundesbank.
Siddharth Tiwari, principal author at the Bretton Woods Committee Multilateral Reform Working Group.
ELECTION MONITORING IN CONTENTIOUS ELECTIONS
BY ADAM RATZLAFF
18 | JULY 2024
San Salvador, El Salvador. Image by 20143486 from Pixabay.
Across the globe, more elections will take place in 2024 than in any other year—marking what experts call a super election year. And the Americas are no exception, with general elections slated to take place in Panama, the Dominican Republic, Mexico, Uruguay, the United States, and Venezuela, as well as having already taken place in El Salvador. While elections are often viewed as evidence of democracy working, the state of democracy in many countries is endangered— with Freedom House marking 2023 as the 17th year that freedom has declined globally. One important tool for defending democracy is the use of electoral observation missions (EOMs). The Organization of American States (OAS) was the first organization to have an EOM—in the 1962 Costa Rican election—and continues to send missions to elections across the hemisphere. Given the shifting democratic threats and complex electoral dynamics, are these missions still relevant and should they occur in countries with questionable democratic tendencies?
IT’S A BIG ELECTION YEAR IN THE AMERICAS, BUT IN MANY STATES DEMOCRACY IS ENDANGERED. ELECTORAL OBSERVATION MISSIONS
MUST NAVIGATE THESE SITUATIONS CAREFULLY TO SUPPORT DEMOCRACY, BUT ALSO TO AVOID ACCIDENTALLY LEGITIMIZING UNFAIR ELECTIONS.
Faith in democracy in the 2024 election cycle
The 2024 super election cycle in the Americas comes at an interesting time. Although most countries in the hemisphere have robust electoral systems, politicians— from the United States to Brazil—have injected distrust into these systems and questioned electoral results. This elicits distrust in the political systems and as a result, the region has seen popular support for democracy decline. Faith in democracy has been so shaken that some regional leaders
have even suggested replacing democracy altogether—as El Salvador’s vice–president suggested in an interview shortly before his nation’s elections. The rise in disinformation has weakened support for democracy and creates challenges for ensuring free and fair elections amid an informed electorate. These factors, among others, have led to an increase in polarization—which in turn worsens the impacts of disinformation, views of democracy, and faith in the democratic process. While there are countries that are not democratic—such as Venezuela—the loss of faith in democracy poses deep challenges for electoral processes for both democratic and undemocratic countries.
This electoral cycle is interesting for another reason. In both Panama and the United States, major political candidates currently face legal challenges. In the United States, former President Donald Trump faces numerous charges related to his businesses and role in the 6 January insurrection, while former Panamanian President Ricardo Martinelli has been convicted of money laundering and is currently living in asylum in the Nicaraguan embassy. While Trump is allowed to run despite his legal challenges, Martinelli is banned from running in Panama. The criminal charges facing these candidates cast long shadows over the electoral processes in these countries. Similarly, bans on reelection have created new areas of democratic contestation.
Election monitoring as a tool for democrats and pseudo–democrats
Electoral observation missions can provide a useful corrective to concerns about election integrity. EOMs participate in the electoral process by visiting election sites, watching the electoral process throughout the election cycle, and reporting on irregularities. This can provide legitimacy to elections. However, there are limits to what an EOM can do. One of the biggest challenges is that organizations, like OAS, cannot simply send an EOM. Rather, they require the invitation and support of host governments. This can create challenges as those countries where democracy is under assault may opt not to invite observers. While the OAS is invited to participate in many elections across the region, it is not invited to observe all of them. Indeed, the OAS only started observing U.S. elections in 2016 and was notably not invited to observe the 2015 Venezuelan elections.
Additionally, EOMs face limitations in addressing the underlying challenges to democracy that go beyond election processes. While reports from EOMs note the
20 | JULY 2024
state of freedom of the press and democracy broadly, their primary focus is on the election itself and how the voting process is conducted. This can overlook very real challenges to the democratic process in a country beyond the election.
Electoral missions also run the risk of legitimizing elections that are not free and fair. Given that EOMs signal the fairness and quality of an election process, those with questionable democratic records may invite observers to gain legitimacy at home and abroad even if they may seek to manipulate the electoral process. This situation is what political scientist Susan Hyde refers to as the “the pseudo–democrat’s dilemma.” However, these pseudo–democrats may overestimate their own abilities to manipulate electoral results or the ability of EOMs to denounce their actions. For instance, the OAS observed and voiced concerns about the recent presidential elections in El Salvador. Civil Society groups used this report, and those from other EOMs, to pressure the Biden administration to take greater action on holding El Salvadorian democracy up to a higher standard.
OAS electoral missions have, however, come under fire in recent years—most notably during the 2019 Bolivian election. Despite the OAS not addressing underlying challenges to democracy in the country—what some referred to as a “slow–motion coup” that included efforts to eliminate term limits and challenges to freedom of the press—it sent a mission to observe the elections. When the EOM initially reported irregularities, protests erupted that resulted in the military pushing then President Evo Morales to resign. Since then, critics have questioned the OAS’s methodology and claim it supported a coup. This has created further polarization within the OAS and challenged its mission of supporting democracy in the Americas.
To monitor or not to monitor, that is the question
The evolving threats to election integrity and the limitations of EOMs, lead to important questions about the (f)utility of election monitoring as a tool for defending democracy. While there are limitations to what an EOM can do, they play a crucial role in protecting democracy. Organizations like the OAS are crucial for their ability to criticize electoral processes. When they do not play this role (or are not invited), other organizations have filled the void. This occurred in the 2015 Venezuelan elections, when the Union of South American Nations (UNASUR) “accompanied” the election despite having very different standards for monitoring and reporting—to the point that they must respect the principle
of non-intervention to the point that they can not publicly condemn electoral irregularities. This allowed the Venezuelan government to claim legitimacy despite deep concerns among democracy advocates.
This is not to say electoral monitoring cannot be improved— in the Americas and beyond. The OAS should encourage all member states to invite the OAS to observe every election so as to further discourage leaders with questionable democratic credentials from opting not to have an EOM. This can serve as a deterrent to electoral interference. Additionally, the OAS should expand its reporting to include annual reports produced by experts on the state of democracy in every member state. This can strengthen the OAS role as a defender of democracy in the region and limit the risk of legitimizing elections in contentious political environments. Finally, to strengthen the perception of EOMs broadly, different organizations conducting these missions should produce a joint report in addition to their own individual reports. This not only strengthens the perception of EOMs, but limits the political calculations and sensitivities that individual EOMs may face when reporting on particular states.
Despite the challenges that EOMs face and the risk of pseudo–democratic legitimation, defenders of democracy should embrace and expand the use of election monitoring. At a time when democracy is under assault, EOMs provide a useful tool for ensuring that elections are free and fair while providing a tool for the international community to validate and verify commitments to democratic norms. This provides policymakers with the tools to more effectively and consistently address democratic threats in the Americas and beyond.
About the author
Adam Ratzlaff is a correspondent for Diplomatic Courier focused on the Americas. In addition, he is a specialist and consultant in Inter–American affairs as well as a PhD candidate in International Relations at Florida International University.
HAS THE “POLYCRISIS” OVERWHELMED US?
BY MARK LEONARD
Photo by Issy Bailey on Unsplash.
This year’s World Economic Forum in Davos was even more exhausting and bewildering than usual. Politicians love to say that you should never let a crisis go to waste, but even they seemed overwhelmed by a conference agenda that aimed to capture the full sweep of today’s “polycrisis.”
The issue is not just that individual problems become more difficult to solve when there are many of them at once. It is that today’s crises are increasingly feeding one another and competing with one another for attention. Against the backdrop of rising geopolitical tensions and the escalating conflict in the Middle East, Houthi attacks on shipping in the Red Sea have become a source of unease across the global economy. Making matters worse, drought conditions in Central America—a byproduct of both cyclical weather patterns and the longer–run effects of climate change—have simultaneously curtailed shipping through the Panama Canal.
AT DAVOS THIS YEAR, IT WAS CLEAR JUST HOW MANY CRISES THE WORLD IS FACING—AND HOW EXHAUSTING IT IS BECOMING FOR LEADERS TO KEEP ABREAST OF ALL THAT’S GOING ON. THE SO–
CALLED “POLYCRISIS” OF CLIMATE CHANGE, MULTIPLE CONFLICTS, AND TECHNOLOGICAL DISRUPTION IS BECOMING OVERWHELMING.
In Gaza, the humanitarian consequences of the war have worsened by the day, with the Palestinian death toll now exceeding 25,000. On panel after panel at Davos, U.S. officials and assorted European and Arab diplomats outlined their visions for stopping the war through regional integration and a two-state solution.
At a time of waning American and European support for Ukraine’s defense, all this attention on the Middle East has left Ukrainian President Volodymyr Zelensky desperately trying to put his country back on the strategic map. Just ahead of the conference, Zelensky
organized a meeting of national security advisers, to whom he delivered an impassioned keynote speech. Ukrainian officials were then dispatched to participate in discussions on everything from artificial intelligence to global trade, always finding ways to tie the issue back to the war in Ukraine.
Ultimately, there was widespread agreement about what it will take to address the crises in both Ukraine and the Middle East. With respect to Gaza, the five key ingredients are: a deal to free the remaining Israeli hostages; progress toward regional normalization between Israel and its Arab neighbors; a realistic pathway toward a two-state solution; a regional effort to revitalize the Palestinian Authority; and a suspension of open hostility on Israel’s northern border with Lebanon.
As for Ukraine, U.S. Secretary of State Antony Blinken, in a conversation with the journalist Thomas Friedman, argued that the country would need to maintain a sense of perspective regarding EU and NATO membership. But Blinken also thinks the West has a responsibility to put Ukraine on a sound military, economic, and democratic footing. That all sounds eminently reasonable; but the biggest challenge is reconciling aspirations with political realities in this year of high–stakes elections. While Israeli Prime Minister Binyamin Netanyahu and Russian President Vladimir Putin seem determined to stick around forever, the reality is that Blinken himself could be a private citizen a year from now.
Weighing heavily on the audience’s mind was the crisis of American democracy. Donald Trump may not have been physically present in Davos, but that didn’t stop him from looming over the proceedings. Many questioned whether the Biden administration has enough political capital to pursue the solutions proposed by Blinken and U.S. National Security Adviser Jake Sullivan. And even if they can pursue their policy preferences, what would happen to them if Trump wins?
Of all the competing crises, however, the one that stole the show was AI. All the biggest names in the industry where there, including Sam Altman of OpenAI, Satya Nadella of Microsoft, former Google Executive Chairman Eric Schmidt, and DeepMind co–founder Mustafa Suleyman—among many others. In weighing the opportunities and risks involved, everyone present agreed that AI represents an entirely new—indeed, unprecedented—challenge.
There was no shortage of serious discussion about AI regulation, the appropriate role of the state, and what advancements to expect next. But I was most struck by the level of disagreement on how important AI will prove to be. While Suleyman and his fellow technologists believe that it is as consequential as fire or electricity,
the historian Niall Ferguson argued that AI—like crypto—has been completely overhyped.
Just as social media competes for individuals’ attention, so do global crises. As new, unexpected variables interact with one another in unpredictable ways, a sense of overload complicates the search for solutions. The fact that 2024 is an election super–year—with four billion people eligible to vote in more than 70 jurisdictions—adds even more uncertainty.
It is no surprise that people are anxious. A major new poll conducted by my own organization, the European Council on Foreign Relations, shows that the five big crises of the past 15 years (the post–2008 global recession, the 2015 migration crisis, Covid–19, the war in Ukraine, and climate change) have split Europeans into “crisis tribes.” In the process, they have forged new, frequently competing political identities.
We often complain that the politicians, business leaders, and diplomats who huddle annually in Davos are out of touch with everyday people. But in today’s attention economy, they are just as confused as the people they are meant to represent.
About the author
Mark Leonard is Co-Founder and Director of the European Council on Foreign Relations.
THE GLOBAL POLYCRISIS, EMPOWERMENT, AND GOVERNANCE REFORMS
BY MARK LEONARD
28 | JULY 2024
The UN General Assembly Hall. Tiwana argues the UN should be influenced by people as much as by governments. Photo by Dano on Flickr under CC BY 2.0 DEED.
The world is facing a polycrisis. Spreading wars, the threat of nuclear conflagration, rising repression, climate change, and searing economic inequality threaten to unravel centuries of human progress.
Why have things gone so wrong? From our perspective, the problem lies in the failure of global governance institutions. The UN and the International Monetary Fund–World Bank are out of touch with people’s needs and aspirations because they privilege state interests determined by political and economic elites. People around the world feel they have little say in how international decisions are made.
To pull us out of the polycrisis, global governance institutions need to urgently create better avenues for peoples’ participation and oversight. Here, we present a handful of key reforms to democratize the UN and international financial institutions in the
THE WORLD IS FACING A POLYCRISIS, AND THAT’S BECAUSE OUR GLOBAL GOVERNANCE
INSTITUTIONS PRIVILEGE STATE INTERESTS DETERMINED BY POLITICAL AND ECONOMIC ELITES.
TO FIGHT THE POLYCRISIS, GLOBAL
GOVERNANCE INSTITUTIONS
MUST BE INFLUENCED NOT JUST BY STATES, BUT BY PEOPLE.
spirit of the opening words of the UN Charter which begins with the words, “We the Peoples.”
First, the UN needs a Citizens Initiative to create pathways for people to influence its most powerful bodies: the General Assembly and Security Council.
A citizens initiative would be the most direct means of enabling people to shape decisions at the UN. Currently, government representatives raise concerns to the UN for consideration and action. That means the UN only deals with the issues filtered
through the prism of national interests determined by who controls the government of the day. But state interests don’t always align with people’s needs, and issues such as conflict, climate change or migration transcend borders.
The European Union has a Citizen’s Initiative which gives people the right to bring a legislative proposal before the European Commission. Proponents of such an initiative at the UN call for a minimum of 5 million signatures by people across multiple countries to bring an issue up for discussion.
In these times of rising authoritarianism and populism, the UN also needs a Parliamentary Assembly to enable directly elected people’s representatives to have a say in international decision making. The problem with current voting patterns at UN bodies like the General Assembly and Human Rights Council is that diplomats representing countries mostly answer to their political executive rather than their country’s people. That leads to skewed–and often hypocrisy filled–voting patterns on crucial issues like the Russian invasion of Ukraine and Israel’s war in Gaza.
A parallel Parliamentary Assembly would thus bring people’s voices to the UN without existing bureaucratic filters.
The Campaign for a UN Parliamentary Assembly recommends starting with a consultative body to gain buy–in and legitimacy, before eventually becoming a world parliament alongside the General Assembly to issue binding decisions.
While a Citizens Initiative and Parliamentary Assembly represent significant upgrades to the current system, there are less radical reforms to increase people’s participation and oversight too. Chief among these is the appointment of a UN civil society envoy, which is one of the five demands of the UNMute Civil Society initiative. Civil society organizations often speak for people’s interests, especially in countries where governments clamp down on civic space. But activists have long viewed UN decision–making as remote and inaccessible, full of bureaucracy with little transparency.
A designated envoy could champion our access in ways large and small by ensuring consistency across agencies and offices and by enhancing UN outreach to civil society.
Another key reform which would reduce state power at the UN in favor of people is weakening or eliminating the Security Council veto, either through voluntary relinquishment of veto powers or by allowing a General Assembly override.
Arbitrarily exercised by permanent members China, France, Russia, UK, and the U.S., the veto has become an obstacle to international cooperation, allowing the states that emerged victorious after World War Two to shield themselves or their allies from accountability for violating international norms. While veto reform would not directly give people a say at the Security Council, it would make it much harder for country representatives to back globally unpopular actions.
Like the UN, global financial institutions, especially the International Monetary Fund and World Bank, need crucial reforms to serve people around the world instead of a few powerful states. One place to start would be to diversify these institutions’ leadership beyond Europe and the U.S.
Turning these recommendations into reality will not be easy, but there’s a chance this year to make progress. In September, the UN will hold the Summit of the Future, described as a “once in a generation opportunity” to reform the global governance system. UN leadership and Summit co–facilitators Germany and Namibia should prioritize placing bold reform ideas like the ones above on the agenda.
Of course, it’s entirely possible that the Summit of the Future will fall victim to bureaucratic wrangling and the blatant assertion of national interests already impeding the multilateral system. But amid a polycrisis of global governance, the Summit is this year’s best chance to enable people, not just states, to make their voices heard at the UN.
About the author
Mandeep Tiwana is Chief Officer of Evidence and Engagement at CIVICUS, the global civil society alliance. As CIVICUS’s representative at the UN Headquarters in New York, he oversees the organization’s multilateral engagement and its global research and analysis.
TRANSFORMING DEMOCRACIES WITH THE POWER OF DIGITAL FLUENCY
BY AIDA RIDANOVIC
Photo by Issy Bailey on Unsplash.
In the digital age, a significant dichotomy has emerged between the technologically advanced “cloud world” dominated by young, tech–savvy enthusiasts and the traditional, heavily regulated bureaucratic systems that govern our societies. This divide is exacerbated by educational systems that fail to effectively incorporate civic education, creating a growing gap between the emerging digital natives and established political leadership. The concept of individualism, deeply rooted in American culture but less emphasized in Europe, further complicates this landscape, influencing how the new generation engages with technology and governance.
The impact of individualism
In the United States, the cultural emphasis on individualism fosters an environment where personal initiative and
FOR DEMOCRACIES, BRIDGING A GENERATIONAL DIGITAL DIVIDE MEANS CULTIVATING AN ENVIRONMENT WHERE TECHNOLOGICAL ADVANCEMENTS AND CIVIC ENGAGEMENT ARE INTERTWINED.
technological innovation are highly valued. This ethos encourages young Americans to not only engage with technology but also to become pioneers, driving forward technological advancements and their integration within governance systems. However, the decentralized nature of U.S. governance, while supportive of innovation, often lacks the cohesion necessary to harness these advancements effectively across various governmental layers.
Conversely, in the European Union, a more collective approach prevails, emphasizing consensus and regulatory compliance, which can inhibit the speed at which new technologies are adopted. Young Europeans, ready to contribute their technological expertise, often find themselves constrained by a system that prioritizes collective
decision–making over individual initiative, limiting their impact on bureaucratic processes.
Generation Z gaps and disengagement
The U.S. and the EU face challenges in their educational systems that contribute to a widening chasm between digitally literate youth and the political arenas they could influence. These systems often underemphasize critical thinking, creativity, and civic responsibilities—key skills for influencing and navigating complex governance landscapes. This educational shortfall is particularly problematic as it intersects with a generational divide: Generation Z is growing up deeply embedded in digital environments yet is increasingly alienated from traditional forms of political participation and influence.
This disconnect is not merely academic; it has real–world implications for governance. As young people feel less represented and less able to effect change through conventional political mechanisms, their willingness to engage and invest in these systems diminishes. This growing apathy among the youth can lead to a deeper entrenchment of the divide, with older policymakers often lacking a deep understanding of digital culture and technologies that shape the new generation’s lives.
Facilitating youth engagement in governance
Both the U.S. and the EU must reform their educational and governance frameworks to address this growing divide. Educating young people about digital literacy, civic responsibilities, and the importance of individual contributions within a collective governance framework is essential. Additionally, creating pathways for meaningful participation that leverage the technological fluency of younger generations can help bridge the gap.
European governance systems, in particular, could benefit from integrating more flexible, individual–driven approaches to innovation, allowing for a quicker adaptation of new technologies and making the system more responsive to the needs of younger citizens. In the U.S., enhancing strategic oversight and fostering a culture of collaboration between generations could improve the impact of individual efforts and ensure that innovations are more uniformly beneficial.
The path forward involves cultivating an environment where technological advancements and civic engagement are intertwined. By fostering an educational and political climate that values individual initiative and collective action, governance structures can become more effective and more reflective of the diverse populations they serve. This approach will not only help close the digital divide but also ensure the sustainability of democratic institutions in an increasingly complex global landscape, where the input and engagement of all generations are crucial for future stability and prosperity.
About the author
Aida Ridanovic is an international strategic communications expert with over 20 years of experience in stakeholder engagement, diplomacy, and global project management. She has worked with civil society organizations, governments, and international institutions in the U.S., EU, and the Middle East.
MAKING EMERGING TECHNOLOGIES SAFE FOR DEMOCRACY
BY MARIETJE SCHAAKE AND STEVEN SCHUURMAN
Photo by Christopher Burns on Unsplash.
Dozens of countries around the world, from the United States to India, will hold or have already held elections in 2024. While this may seem like a banner year for democracy, these elections are taking place against a backdrop of global economic instability, geopolitical shifts, and intensifying climate change, leading to widespread uncertainty.
Underpinning all this uncertainty is the rapid emergence of powerful new technologies, some of which are already reshaping markets and recalibrating global power dynamics. While they have the potential to solve global problems, they could also disrupt economies, endanger civil liberties, and undermine democratic governance. As Thierry Breton, the European Union’s commissioner for the internal market, has observed, “We have entered a global race in which the mastery of technologies is central” to navigating the “new geopolitical order.”
THE RAPID EMERGENCE OF POWERFUL NEW TECHNOLOGIES IS ADDING TO THE WIDESPREAD UNCERTAINTY IN WHAT SHOULD BE A BANNER YEAR FOR DEMOCRACY. POLITICAL LEADERS MUST LOOK BEYOND THE BALLOT BOX AND FOCUS ON MITIGATING THE LONG–TERM RISKS POSED BY EMERGING TECH.
To be sure, technological disruption is not a new phenomenon. What sets today’s emerging technologies apart is that they have reached a point where even their creators struggle to understand them.
Consider, for example, generative artificial intelligence. The precise mechanisms by which large language models like Google’s Gemini (formerly known as Bard) and OpenAI’s ChatGPT generate responses to user prompts are still not fully understood, even by their own developers.
What we do know is that AI and other rapidly advancing technologies, such as quantum computing, biotechnology,
neurotechnology, and climate–intervention tech, are growing increasingly powerful and influential by the day. Despite the scandals and the political and regulatory backlash of the past few years, Big Tech firms are still among the world’s largest companies and continue to shape our lives in myriad ways, for better or worse.
Moreover, over the past 20 years, a handful of tech giants have invested heavily in development and acquisitions, amassing wealth and talent that empowers them to capture new markets before potential competitors emerge. Such concentration of innovation power enables these few players to maintain their market dominance—and to call the shots on how their technologies are developed and used worldwide. Regulators have scrambled to enact societal safeguards for increasingly powerful, complex technologies, and the public-private knowledge gap is growing.
For example, in addition to developing vaccines and early detection systems to trace the spread of viruses, bioengineers are developing new tools to engineer cells, organisms, and ecosystems, leading to new medicines, crops, and materials. Neuralink is working on trials with chip implants in the bodies of disabled people, and on enhancing the speed at which humans communicate with systems through direct brain-computer interaction. Meanwhile, quantum engineers are developing supercomputers that could potentially break existing encryption systems crucial for cybersecurity and privacy. Then there are the climate technologists who are increasingly open to radical options for curbing global warming, despite a dearth of real–world research into the side effects of global interventions like solar radiation management.
While these developments hold great promise, applying them recklessly could lead to irreversible harm. The destabilizing effect of unregulated social media on political systems over the past decade is a prime example. Likewise, absent appropriate safeguards, the biotech breakthroughs we welcome today could unleash new pandemics tomorrow, whether from accidental lab leaks or deliberate weaponization.
Regardless of whether one is excited by the possibilities of technological innovation or concerned about potential risks, the unique characteristics, corporate power, and global scale of these technologies require guardrails and oversight. These companies’ immense power and global reach, together with the potential for misuse and unintended consequences, underscore the importance of ensuring that these powerful systems are used responsibly and in ways that benefit society.
Here, governments face a seemingly impossible task: they must oversee systems that are not fully understood by their
creators while also trying to anticipate future breakthroughs. To navigate this dilemma, policymakers must deepen their understanding of how these technologies function, as well as the interplay between them.
To this end, regulators must have access to independent information. As capital, data, and knowledge become increasingly concentrated in the hands of a few corporations, it is crucial to ensure that decision–makers are able to access policy–oriented expertise that enables them to develop fact–based policies that serve the public interest. Democratic leaders need policy–oriented expertise about emerging technology—not lobbyists’ framings.
Having adopted a series of important laws like the AI Act over the past few years, the EU is uniquely positioned to govern emerging technologies on the basis of solid rule of law, rather than in service of corporate profits. But first, European policymakers must keep up with the latest technological advances. It is time for EU decision–makers to get ahead of the next curve. They must educate themselves on what exactly is happening at the cutting edge. Waiting until new technologies are introduced to the market is waiting too long.
Governments must learn from past challenges and actively steer technological innovation, prioritizing democratic principles and positive social impact over industry profits. As the global order comes under increasing strain, political leaders must look beyond the ballot box and focus on mitigating the long–term risks posed by emerging technologies.
About the authors
Marietje Schaake, a former member of the European Parliament, is International Policy Director at Stanford University’s Cyber Policy Center and Practice Lead for Emerging Technology Governance at the International Center for Future Generations.
Steven Schuurman, Co-Founder and former CEO of Elastic, is Co-Founder of the International Center for Future Generations.
TO PROTECT TRUST IN INSTITUTIONS, FIRST DEFINE DISINFORMATION
BY STACEY ROLLAND
United States lawmakers are urgently focused on the rapid growth of artificial intelligence, recognizing that effective policy solutions to mitigate AI’s risks will require bipartisan agreement. These efforts at bipartisanship coincide and contrast with a contentious election year, with Democratic or Republican control of the White House and Congress up for grabs in November. Public trust in the U.S. electoral system is more critical than ever, and policymakers are primarily concerned with the potential for “disinformation” to undermine that trust.
Photo by Emily Morter on Unsplash.
Senate Majority Leader Chuck Schumer (D–NY) recently said about disinformation, “If we’re not careful, AI has the potential to jaundice or even totally discredit our election systems. If deepfakes are everywhere and no one believes the results of the elections, woe is our democracy. This is so damn serious.” Senator Amy Klobuchar (D–MN) of the Senate Judiciary Committee described the bipartisan urgency of tackling disinformation,
“This is a hair in the fire moment…AI has the potential to turbocharge the spread of disinformation and deceive voters. Whether you are a Republican or a Democrat, no one wants to see these fake ads or robocalls.”
While disinformation is acknowledged as a significant and increasingly urgent threat, the policy challenge lies in its subjective nature. Identifying disinformation first requires a consensus on what constitutes “truth” in a contentious political era and an increasingly polarized world. Different stakeholders can have varying interpretations of what qualifies as disinformation, making it potentially challenging to develop effective solutions to threats made to foundational public institutions.
Proposals under consideration in Congress, such as the Protect Elections from Deceptive AI Act, tie “disinformation” to “materially deceptive” AI–generated content. Other legislative proposals mandate disclaimers on AI–generated public content, allowing the viewer to decide the trustworthiness of the content and determine for themselves whether content falls within their own subjective definition of disinformation.
Although Republicans and Democrats generally concur that disinformation poses a threat, partisan opposition has emerged —arguing that these legislative measures infringe upon First Amendment rights and stifle innovation.
Clear and well–crafted definitions are not just a formality, but the very foundation of sound regulatory frameworks. As we navigate the complexities of emerging technologies, clear and universally accepted regulatory definitions are essential. Only through precise and balanced legislation can we protect our institutions from the threats posed by AI–driven disinformation while upholding our democratic values.
About the author
Stacey Rolland is a leading expert in emerging technology policy and strategy in Washington, DC.
BUILDING BETTER ETHICAL STANDARDS FOR AI, FOR DEMOCRACY
BY LISA GABLE AND ALLY GOLAN
In our rapidly evolving digital landscape, Artificial Intelligence (AI) represents both a formidable threat to and a significant opportunity for the health of democracy. One growing threat to our democratic systems is that of bad actors who would exploit AI to undermine our social fabrics.
The unchecked proliferation of AI language models has underscored the pressing need for robust ethical standards. Privacy, algorithm transparency, user safety, fairness, and inclusivity have often been sidelined amidst the rapid advancement of AI technologies. Establishing and pressure–testing clear ethical guidelines is paramount to ensuring that AI operates within ethical boundaries and contributes positively to the collective good.
Photo via Unsplash.
A multifaceted approach is warranted, one that safeguards free speech while enabling users to evaluate and mitigate bias and harmful content. Initially, we must focus on the detection and analysis of disinformation, biases, discrimination, hate speech, and deepfakes. We can develop sophisticated tools to identify and scrutinize harmful content in realtime by leveraging machine learning and natural language processing techniques. We can test these tools with users who represent multiple points of view to ensure free speech is protected.
Moreover, the proactive role of AI in engaging with misinformation can contribute to shaping public discourse. By actively confronting falsehoods and disseminating accurate information, AI–powered tools have the potential to steer conversations toward truthfulness and mitigate the spread of misinformation. This proactive stance not only curbs the proliferation of harmful narratives but also fosters a culture of accountability and accuracy within digital spaces, instilling public trust in the ability of AI to correct misinformation.
In addition to detection and engagement, implementing automated reporting systems is another pivotal step in protecting democratic countries and institutions from state or terrorist–backed threats. These systems, powered by AI, can swiftly identify and flag harmful content to hosting platforms, facilitating prompt intervention and moderation. Streamlining the reporting process allows platforms to respond effectively, maintaining the integrity of online discourse. Transparency tools are also vital in cultivating user trust and promoting informed decision–making. By providing insights into digital content’s origins, legitimacy, and credibility, these tools can equip individuals with the necessary resources to navigate the digital landscape discerningly. From source tracking to link verification and fact–checking, transparency tools empower users to critically evaluate information and contribute to a safer online environment.
AI is a double–edged sword. We must ensure that it aligns with our shared values to fortify democracy and uphold the highest standards of ethics and transparency. By prioritizing inclusivity, fairness, and accountability, we can ensure AI strengthens rather than undermines our institutions, fostering resilience, safety, and trust.
About the authors
Lisa Gable is a Diplomatic Courier Advisory Board member, Chairperson of World in 2050.
Ally Golan is the CEO of iintoo and a member of CHIEF member.
ADDRESS CORROSIVE CAPITAL TO FOSTER ECONOMIC RESILIENCE
BY ERIC HONTZ
Photo by Blind Man on Unsplash.
Easy money usually has a catch. A growing body of evidence supporting that logic is guiding new pushes to stem corrosive capital, foreign financing that exploits governance gaps and undermines the rule of law. From Argentina to Zambia, reports are pouring in about these kinds of investments, mostly from authoritarian sources, which are leaving recipient countries more vulnerable to economic and political manipulation.
Corrosive capital is a growing threat to economic security. Public and private sector actors are cooperating on solutions, but many proposals miss valuable history lessons.
These growing threats to economic security have prompted many governments, business leaders, and civil society groups to work together to develop approaches that will support greater economic resilience. Reports about potential policy
CORROSIVE CAPITAL IS A GROWING THREAT TO ECONOMIC SECURITY FROM ARGENTINA TO ZAMBIA. WHILE PUBLIC AND PRIVATE SECTOR ACTORS ARE WORKING TOGETHER TO ADDRESS THIS, SOME PROPOSED POLICY SOLUTIONS SKIP VALUABLE HISTORY LESSONS.
solutions and other measures often skip some valuable history lessons. A look at actions by Russia and China in recent years provides insights about patterns and typical practices of authoritarian lenders. This is yielding new thinking about protective efforts to fend off corrosive capital and instead attract constructive capital investments that lead to opportunity and greater prosperity.
The Russia model
Russia leveraged its economic ties to former Soviet states and the “near abroad” for much of the 1990s, however efforts later became somewhat curtailed amid internal economic
reorganization, privatization, and oligarchy. By President Vladimir Putin’s third term, Russia had developed an economic coercion playbook, which includes forced sales of state assets at deep discounts to Russian firms and skirting import–export standards. Examples include the sale of the Kyrgyz and Armenian gas pipeline networks to Gazprom for a pittance and inflated fuel prices by Lukoil in Bulgaria. Russia also pursued military actions in Georgia and Ukraine when its economic warfare did not accomplish foreign policy objectives.
The China model
Beijing has been conducting the world’s largest infrastructure program over the past decade, pumping more than one trillion dollars into projects in emerging markets through its Belt and Road Initiative. While the concept might have originated as a way for Chinese firms to invest and export following a global financial crisis, leaders quickly seized on the geopolitical opportunities. Key projects include ports for blue water naval vessels, rail projects secured by resources along the routes, mining operations, and telecom deals. Many projects have limited host government oversight, little public input, or involvement of local businesses and workers. Information about terms and costs are often scarce.
Creating dependencies
The strategic scope of these projects suggest an intent to create dependencies, handcuffing recipients to the authoritarian state investors. As in the case of Argentina, which attempted to scuttle two hydropower plants, and realized other infrastructure projects and Chinese Sovereign debt guarantees were cross collateralized. In Tajikistan, the government settled its debt to a Chinese state–affiliated firm through the grant of gold mining concessions.
In such cases, vulnerability to economic or political manipulation can worsen. And foreign investors offering constructive capital stay away, because they see rule of law eroding and transparency decreasing. They are not willing to risk going into operating environments with unreliable systems and shaky processes.
Previously measures such as sanctions and tariffs helped to protect sovereignty and security, but are considered much less effective now. That is in part because corrosive capital lenders are not playing by the same rules or adhering to universal standards. Coordinated action among governments, business leaders, and civil society that are committed to transparency and accountability is required.
Forging new business–led solutions
Many democracies are collaborating with the private sector to find direct and indirect pathways to addressing these new challenges involving transparency and accountability. For example, in Chile, a country rich in natural resources and with deep commercial ties to both the United States and China, the government will implement a new ultimate beneficial ownership registry. Japan has the Economic Security Promotion Act, which creates incentives and costs for business to better insulate the country from economic coercion and intellectual property theft.
Meanwhile, other countries are moving toward different forms of investment screening, Bulgaria being one of the most recent. Many of these initiatives include a strong anti–corruption component. And all of them can serve as models for countries to watch and possibly emulate, as more tools are needed to curb corrosive capital and support economic security and resilience.
About the author
Eric Hontz is Director of the Director of the Center for Accountable Investment at CIPE (Center for International Private Enterprise), where he oversees an array of programs that are helping countries and communities.
THE SUBMERGENCE OF EMERGING MARKETS
BY ANDRÉS VELASCO
Photo by Milos Prelevic on Unsplash.
It was an off–the–record, online conversation about the state of the world. Nobel laureates, former government officials, and hedge–fund managers held forth on geoeconomics, warfare, artificial intelligence, green investments, how to avoid the next pandemic, and other lofty topics. But here’s what struck me: two hours into the discussion, no one had yet uttered the phrase “emerging markets.”
China came up, of course, but only in relation to what might happen to Taiwan if Donald Trump returns to the White House. India’s alleged growth miracle last year went unmentioned. Turkey was mentioned only in the context of Middle East politics. South Africa? Nope. Brazil? Remind me: where exactly is Brazil?
What a contrast to the mood only a few years ago. I remember a dinner at the annual World Bank/International Monetary Fund meeting, during which a half–dozen European finance
NOT TOO LONG AGO, EMERGING MARKETS WERE HIGHLY SOUGHT AFTER BY INVESTORS EVERYWHERE. NOW, HOWEVER, THOSE ECONOMIES ARE SLOWING MORE QUICKLY THAN ADVANCED ECONOMIES
AND ARE LOSING THE ATTENTION OF INVESTORS—LARGELY DUE TO BAD DOMESTIC POLICIES.
ministers stared into their salads and feigned patience as a minor official from the People’s Bank of China received all the questions from the assembled investors. Back then, everyone wanted to talk about emerging markets. Their growth kept the world economy afloat when the economies of rich countries tanked in 2008–09 and again in 2020.
No more. Today, the fortunes of the world economy depend on the fortunes of the U.S. economy, with perennial underperformers Japan and Europe stuck in unglamorous supporting roles. Emerging markets are footnotes at best. One of the few “iron laws” we economists can utter with
confidence is: the richer the country, the lower its average growth rate. So, you might have expected the Chinas, Indonesias, Turkeys, and Brazils of this world to move from center stage, because they had grown richer and were now growing more slowly. Economists call this “convergence.”
But that is not what is happening. Middle–income economies are slowing long before they have become high–income economies. The culprit, for the most part, is bad domestic policies.
China is the most obvious example. When forced to choose between economics and the Communist Party, President Xi Jinping always chooses the party. And that is not because political stability is essential for continued growth. On the contrary, it is because continued growth might create challenges (real or imagined) to Xi’s control.
A place where one must worry about email being read, phone calls tracked, and a walk in the park surveilled is not a place where the world’s investors want to put their billions. Yes, Chinese researchers are quite advanced in some aspects of AI. But the AI financial feeding frenzy is happening in Silicon Valley, not Beijing.
India merits special attention. When I was in New Delhi late last year, the frothiness typical of a bull market was in the air. Official claims that the economy was growing at 7% and more during the third quarter surely contributed to the bullish atmosphere, which continues.
But there are at least two glitches with that happy story. First, the growth numbers are not believable, as Ashoka Mody has convincingly argued. Second, Prime Minister Narendra Modi is slowly but surely weakening Indian democracy’s secular and liberal foundations. The latest example was the massive spectacle, presided over by Modi, of the consecration of the Ram Temple in Ayodhya on the site where Hundi militants razed a mosque in 1992, provoking riots that left 2,000 people dead.
Another lesson economists repeat with reasonable certainty is that doing away with equal protection under the law is not good for long–term investment and growth. That lesson is becoming increasingly relevant for India.
You will not find a compelling growth story in Latin America’s two largest emerging markets, Brazil and Mexico, either. Poland, once the star performer in Central and Eastern Europe, barely grew at all in 2023. Indonesia and the Philippines have both been expanding at a respectable 5% clip, but in both
countries, growth is expected to decline, highlighting the difference between short–term macroeconomic management, which has improved in most emerging markets, and a long–term growth strategy, where most get a failing grade.
Yes, there are exceptions to this rule, but even they point to the overall departure from the spend–and–print fiscal and monetary policies of decades past. Until its election in May 2023, Turkey was still experimenting with the bizarre idea that fighting inflation requires cutting interest rates. But, after he secured another term in office, President Recep Tayyip Erdoğan appointed a serious finance minister, and the country turned toward common–sense policies. Predictably, equity prices soared.
In Brazil, Finance Minister Fernando Haddad has struggled to meet his ambitious fiscal targets. But the very fact that President Luiz Inácio Lula da Silva, whose foreign policy (think Russia–Ukraine) has been abominable, should allow Haddad to entertain ambitious fiscal targets is an improvement. Under President Javier Milei, even Argentina is trying to cut its fiscal deficit, though he may lack the votes in Congress needed to get the job done.
Independent central banks have made a huge difference, acting early and with the necessary strength to fight inflation, even when confronted with populist presidents (as in Brazil, Colombia, Mexico, and South Africa). In the recent inflationary cycle, the larger Latin American economies began to tighten monetary policy a year before the United States did. They are now well into the easing phase, with inflation (mostly) under control.
So, the larger emerging markets can expect mediocre growth and stagnant real wages, not spectacular debt crises. Convergence to high–income status now hangs in the balance. It is fashionable to say that the world has been getting less equal. In fact, while the U.S. or the United Kingdom may have become less equal, the world as a whole has become vastly more equal, as rapid growth in China, India, and other emerging economies pulled billions out of poverty. That welcome trend will be in danger if emerging markets enter a sustained slowdown, as now seems likely.
About the author
Andrés Velasco, a former finance minister of Chile, is Dean of the School of Public Policy at the London School of Economics and Political Science.
AMERICANS REMAIN COMMITTED TO NATO, CRITICAL OF UN
BY MOHAMED YOUNIS
NATO headquarters. Image courtesy of NATO Headquarters Brussels.
A47% plurality of Americans want to see the United States keep its current commitment to NATO, with 20% feeling support for the alliance should increase. Meanwhile, 16% think the U.S. should decrease its NATO commitment, and 12% would prefer that the U.S. withdraw from NATO entirely.
Americans’ overall support for NATO remains unchanged from the prior reading two years ago just before Russia’s broader–scale invasion of Ukraine and the additions of Finland and Sweden to the alliance. Compared to other similar trends from the 1980s and 1990s, major changes in support for the alliance have occurred among those wanting increased support and those wanting the U.S. to exit the alliance entirely.
AMERICANS’ VIEWS ON NATO AND THE UN—BROADLY COMMITTED TO NATO AND UNHAPPY WITH THE UN— HAVE REMAINED FAIRLY STABLE, DESPITE INTENSE POLITICAL DEBATES ON BOTH. BUT GALLUP RESEARCH FOUND THOSE VIEWS ARE TIED TO MORE THAN PARTY IDENTIFICATION.
The latest findings are from Gallup’s World Affairs poll conducted Feb. 1–20, 2024. During the polling period, Donald Trump, who has been critical of NATO in the past, indicated that if he is elected president, he would not defend NATO allies against Russia if they fail to contribute enough money to the alliance. Opinions on NATO were similar in interviews collected before and after Trump’s comments.
Republicans least supportive of NATO
A 53% majority of Democrats and pluralities of Republicans (46%) and independents (43%) support maintaining the United States’ commitment to NATO. Another 27% of Democrats and 24% of independents want to see the U.S. increase its commitment, but only 7% of Republicans share that view. Meanwhile, 26% of Republicans say the U.S. should decrease its support to the alliance, while 14% of independents and 9% of Democrats agree. One in six Republicans and a similar proportion of independents want the U.S. to withdraw from NATO.
Biggest changes from 2022 to 2024:
• Among Republicans, the biggest change is an increase in the percentage who want to keep the commitment as it is now (a 9–percentage–point increase from 37% to 46%) and a decrease from 22% to 16% who want to withdraw entirely.
• Among independents, the biggest change is a decrease in the percentage who want to keep the commitment as it is now (an 8–point decrease from 51% to 43%) and an increase from 16% to 24% to increase the commitment.
• Among Democrats, the changes are minimal, but there is a slight decrease in the percentage who want to increase the commitment (a 1–point decrease) and a slight increase in those who want to decrease the commitment (a 2–point increase).
Majority continues to disapprove of United Nations’ job
Americans’ views of another international organization, the United Nations, remain largely negative at a steady 58% say it is doing a “poor job” trying to solve the problems it faces, while 33% think it is doing a good job. Since 2003, around the start of the Iraq War, more Americans have rated the UN as doing a poor rather than good job.
While party identification influences views of both NATO and the UN, race and opinions of their country’s position in the world are important dimensions to views of the UN in particular. Specifically, white respondents, 62%, are significantly more likely to say the UN is doing a poor job than people of color, 49%. Also, those who are dissatisfied with the position of the U.S. in the world (72%) are far more likely than those satisfied (32%) to say the UN is doing a poor job.
Bottom Line
During his presidency, Trump criticized NATO and pressured allies to fulfill their financial commitments to the alliance. He has made similar statements recently, reigniting discussions about the United States’ commitment to NATO.
But since Russia’s invasion of Ukraine and the addition of two new members to the alliance, Americans’ views about the appropriate level of the U.S. commitment to NATO have remained mostly unchanged. While a majority want to either see current commitments kept consistent or increased, Republicans are more likely than Democrats to want a decrease in current levels of support or complete withdrawal from the alliance. Importantly, a slim majority of Republicans still favor increasing or keeping the U.S. commitment to NATO.
The United Nations’ job rating remains weak, influenced by party identification, white Americans more likely than Americans of color to say it’s doing a poor job, and those satisfied with the position of the U.S. in the world more likely to say it’s doing a good job tackling its mission.
About
the author
Mohamed Younis is a Senior Fellow with Diplomatic Courier’s World in 2050 and the former Editor-in-Chief of Gallup News.
CO-HOSTS
Ana C. Rold
CEO & Publisher
Diplomatic Courier & World in 2050
Thomas Garrett
Secretary General
Community of Democracies
CONVENING PARTNERS
Rep. Glenn Nye
President & CEO
Center for the Study of Presidency & Congress
Andrew Wilson
Executive Director
Center for International Private Enterprise
Kathryn H. Floyd
Director
Whole of Government Center of Excellence
William & Mary
Gregory Houston
President & CEO
International Arts & Artists at Hillyer