Daily Archives: January 30, 2020

A Foreign Policy for All

Strengthening Democracy—at Home and Abroad
By Elizabeth Warren – Around the world, democracy is under assault. Authoritarian governments are gaining power, and right-wing demagogues are gaining strength. Movements toward openness and pluralism have stalled. Inequality is growing, transforming rule by the people into rule by wealthy elites. And here in the United States, many Americans seem to accept—even embrace—the politics of division and resentment.

How did we get here?

There’s a story Americans like to tell ourselves about how we built a liberal international order—one based on democratic principles, committed to civil and human rights, accountable to citizens, bound by the rule of law, and focused on economic prosperity for all. It’s a good story, with deep roots. But in recent decades, Washington’s focus has shifted from policies that benefit everyone to policies that benefit a handful of elites. After the Cold War, U.S. policymakers started to believe that because democracy had outlasted communism, it would be simple to build democracy anywhere and everywhere. They began to export a particular brand of capitalism, one that involved weak regulations, low taxes on the wealthy, and policies favoring multinational corporations. And the United States took on a series of seemingly endless wars, engaging in conflicts with mistaken or uncertain objectives and no obvious path to completion.

The impact of these policy changes has been devastating. While international economic policies and trade deals have worked gloriously well for elites around the world, they have left working people discouraged and disaffected. Efforts to promote the United States’ own security have soaked up huge resources and destabilized entire regions, and meanwhile, U.S. technological dominance has quietly eroded. Inequality has grown worldwide, contributing to an unfolding nationalist backlash that seeks to upend democracy itself. It is little wonder that the American people have less faith in their government today than at any other time in modern U.S. history. The country is in a moment of crisis decades in the making.

To fight back, we need to pursue international economic policies that benefit all Americans, not merely an elite few. We need strong yet pragmatic security policies, amplified by diplomacy. And the United States can no longer maintain the comfortable assumption that its domestic and foreign policies are separate. Every decision the government makes should be grounded in the recognition that actions that undermine working families in this country ultimately erode American strength in the world. In other words, we need a foreign policy that works for all Americans.

The urgency of the moment cannot be overstated. At home and abroad, democracy is on the defense. The details of the problem vary from place to place, but one cause stands out everywhere: the systematic failure to understand and invest in the social, political, and economic foundations on which democracies rest. If we do not stand up to those who seek to undermine our democracy and our economy, we will end up as bystanders to the destruction of both. more>

Why the recent debt buildup is a concern

By Peter Nagle – Since 2010, debt in emerging market and developing economies has grown to record highs.  Current low interest rates —which markets expect to be sustained in the medium term—appear to mitigate some of the risks associated with high debt. However, emerging market and developing economies (EMDEs) also face weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood of the current debt wave ending in crises and, if crises were to take place, to alleviate their impact.

Global debt reached a record-high of about 230 percent of global GDP in 2018.  Total EMDE debt also reached an all-time high of about 170 percent of GDP in 2018, an increase of 54 percentage points of GDP since 2010.

Over the past fifty years, there have been four historical waves of debt accumulation:  1970-89, 1990-2001, 2002-09, and since 2010. The latest wave, which started in 2010, has been the largest, fastest and most broad-based increase of the four.

Rapid increases in debt are common among EMDEs. Between 1970 and 2009, the sector accumulating debt shifted from the public to the private sector. However, since 2010, both governments and private sectors have rapidly accumulated debt. more>

Updates from McKinsey

Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages
By James Manyika, Susan Lund, Michael Chui, Jacques Bughin, Jonathan Woetzel, Parul Batra, Ryan Ko, and Saurabh Sanghvi – The technology-driven world in which we live is a world filled with promise but also challenges. Cars that drive themselves, machines that read X-rays, and algorithms that respond to customer-service inquiries are all manifestations of powerful new forms of automation. Yet even as these technologies increase productivity and improve our lives, their use will substitute for some work activities humans currently perform—a development that has sparked much public concern.

Building on our January 2017 report on automation, McKinsey Global Institute’s latest report, Jobs lost, jobs gained: Workforce transitions in a time of automation (PDF–5MB), assesses the number and types of jobs that might be created under different scenarios through 2030 and compares that to the jobs that could be lost to automation.

The results reveal a rich mosaic of potential shifts in occupations in the years ahead, with important implications for workforce skills and wages. Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging—matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.

  1. What impact will automation have on work?
  2. What are possible scenarios for employment growth?
  3. Will there be enough work in the future?
  4. What will automation mean for skills and wages?
  5. How do we manage the upcoming workforce transitions?

We previously found that about half the activities people are paid to do globally could theoretically be automated using currently demonstrated technologies. Very few occupations—less than 5 percent—consist of activities that can be fully automated. more>

Updates from ITU

At Davos, UN Broadband Commission advocates for financing inclusive meaningful connectivity for sustainable impact

ITU – The ITU UNESCO Broadband Commission for Sustainable Development examined new financing models that would help accelerate ‘meaningful universal connectivity’ on the sidelines of the Annual Meeting of the World Economic Forum in Davos, Switzerland.

Today, an estimated 3.6 billion people remain offline. The majority of the unconnected live in least developed countries, where an average of just two out of every ten people are online.

The Commissioners agreed that targeted efforts are needed to lower the cost of broadband, as well as innovative policies to finance the rollout of broadband infrastructure to unconnected populations. Collaboration among diverse stakeholders will be key to making universal and meaningful connectivity a reality for all.

“We are on the verge of a new era that requires quick, effective and innovative financing instruments to connect the remaining unconnected. The old ways can no longer work in this era and we can no longer afford having anyone left behind,” said Paula Ingabire, Minister of ICT and Innovation, Republic of Rwanda, representing President Paul Kagame, who Co-Chairs the Commission. more>

Related>