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What drives in-country inequality?

Posted By Martin Duys, Tuesday, March 10, 2020

Martin Duys, a member of our Emerging Fellows program inspects the drivers of in-country inequality in his third blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

When income inequality is discussed in casual conversation, people are generally referring to in-country inequality - the measure of how income is distributed amongst the population of a single country. The factors that drive in-country income inequality are multiple, interrelated, complex, and sometimes contradictory. Some factors tend to be more prevalent in advanced economies and others are more influential in emerging markets and developing countries (EMDCs). Geography, political history, and even culture also play a role.

 

The International Monetary Fund (IMF) has attempted to identify, measure, and rank the most important factors driving in-country income inequality. They conclude that over the past thirty years the three dominant factors have been: labour market flexibility, financial deepening and technological progress - in that order.

 

Flexible labour markets allow firms to reallocate resources and create conditions that encourage a certain amount of economic dynamism, but they also put tend to put the salaries of workers, and especially low skilled workers, under pressure. The primary beneficiaries of increased labour market flexibility tend to be those in the top ten percent of the income distribution. In EMDCs labour markets that are too rigid can create conditions that encourage informality resulting in increased levels of inequality. There is a strong body of evidence to suggest that labour market regulation (a legislated minimum wage, unionisation, and compulsory social security contributions) tends to improve income distribution. Labour market flexibility ranks as the most important factor in EMDCs and the second most important in advanced economies.

 

Financial deepening - increasing the provision and sophistication of financial services - is associated with increased inequality in EMDCs (ranked third), largely because the beneficiaries of this deepening tend to be those at the higher end of the income distribution. In advanced economies, where levels of financial inclusion are historically higher, the impact of financial deepening is not as significant, and it is only ranked fourth.

 

Advances in technology generate economic growth by increasing productivity. They also shed jobs through increased automation and require higher skill levels to run them. This ‘skill premium’ increases levels of income inequality as jobs shift from low-skilled workers at the bottom end of the income distribution to more skilled, better paid workers. Technology is the second most important factor in EMDCs. Although it is ranked only fourth in advanced economies, the skill premium factor which is as a direct result of technological advances, is the single most important driver of income inequality in advanced economies.

 

Globalisation, seen as more a reinforcer than a driver, is a fourth contributing factor. It creates circumstances that sometimes increase and sometimes decrease inequality. Trade liberalisation increases economic activity, generates economic growth, and decreases income inequality. Offshoring increases income inequality in the country outsourcing the manufacturing as it sheds jobs at the lower end of the salary spectrum, but the new jobs created in the offshore economy tend to decrease income inequality there. Although not fully understood, financial globalisation is thought to cause increased income inequality in both advanced and EMDC economies.

 

Many would expect education to appear on the list of the most influential factors, but the impact improving levels of education equality has on income inequality is dependent on a number of other variables that can dilute its impact. These variables include the size of the investment made in education, whether it is made by individuals or governments, and the level of return on the investment.

 

Although there are common themes in the sources of income inequality, there are no generalised lessons to be learned that can be taken from one successful attempt at addressing the issue and applying the same strategies uncritically elsewhere. Each country has its own unique mix of interrelated and intermingled factors and needs to be analysed and understood on its own merits.

 

© Martin Duys 2020

Tags:  country  economics  inequality 

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How does the BRI fit into history?

Posted By Carl Michael, Friday, March 6, 2020

Carl Michael inspects the historical roots of Belt and Road Initiative in his third blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The ancient version of the Belt and Road Initiative (BRI), the ‘Silk Road’, would not have existed were it not for the domestication of silk-moths in China as well as the domestication of horses and Bactrian camels in Central Asia. From a historical perspective, China is a country which has the longest continuous history of any of the great ancient civilizations. It has preserved its culture and writing system over three millennia and continues to evolve energetically. The ‘Silk Road’ provided China with connections with other civilisations and for centuries there were periods of being open and being closed to the influence of Central Asia, as demonstrated by the existence of the ‘Great Wall’.

 

Some of the earliest recorded accounts of the ‘Silk Road’ relate to armed expeditions from China to adjoining areas during the Han dynasty period. Later accounts from the Jin dynasty era were recorded by the monk Faxian, who travelled by both foot and ship between China and India. Faxian’s writings show that the ‘Silk Road’ provided major trade, cultural and religious connections between states all along the routes. Subsequent accounts of travel by the scholar Xuanzang during the Tang dynasty era show how important the ‘Silk Road’ was in the heart of Asia, though its importance subsequently declined for economic and political reasons. Trade focus then slowly shifted to maritime routes during the Song and Yuan dynasty eras when control of Central Asian regions became weaker in comparison with previous eras.

 

The advent of the Mongol empire was like a whirlwind which disrupted not only the ‘Silk Road’ but the heart of Asia and China itself. The disruption created a free flow of people, ideas and goods which stemmed from the flexible Mongol cultural, political and economic model and this integrated the heart of Asia as never before. The Mongols forcefully unified diverse people groups and integrated them into a new global power system centered on the Asian heartland instead of the coasts. The Yuan dynasty which followed on from this then changed China profoundly and spurred global innovations in monetary systems. Marco Polo’s accounts date from this era and these provide personal insights into the era. The subsequent Ming dynasty era saw a relative decline in the importance of the ‘Silk Road’ proper with more emphasis on naval expansion and maritime trade routes. These eventually extended to the Indian Ocean and Mediterranean Sea with Admiral Zheng-He making a number of armed voyages with large fleets. Chinese trade and exploration reached its peak during this period.

 

During the subsequent Qing dynasty period less energy was expended on trade routes and ‘ownership’ of the routes between East and West was absorbed into the nascent European colonial systems during the ‘Vasco da Gama era’, which only ended with the return of sovereign control of Hong Kong to China. Russian dominance in Central Asia caused a decline in the use of traditional land routes and the state of affairs continued until that dominance diminished.

 

Till relatively recently China was a dominant entity not only economically but culturally. Interaction with foreign powers continued to be based on the Chinese way of strategic thinking based on unilateral historical concepts such as ‘Guanxi’ and ‘Tianxia’ which could be traced through the Yuan era and then back to the time of Confucius. China only fully integrated into the world system when it joined the WTO at the turn of the last century, at which point the ’Silk Road’ was reborn as the BRI, on the back of the growth of Chinese power resulting from its cultural, economic and political resurgence.

 

© Carl Michael 2020

Tags:  Belt and Road Initiative  China  Silk Road 

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What currently characterizes the Heartland?

Posted By Kimberly Kay Daniels, Tuesday, March 3, 2020

Kimberly Daniels, a member of our Emerging Fellows program checks the key features of Heartland phenomenon in her second blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Eurasia’s Heartland is a living organism of complex interconnected systems, which shapes the geopolitical environment by which it is itself shaped. It is characterized to some degree by the interaction of demographic, socio-cultural, political, economic, and technological changes that impact the Heartland as a whole. To another degree, it also is characterized by the impact it has on its geopolitical environment.

 

Demographically, the Heartland includes populations in Russia, twelve other Slavic East European countries, three other Caucasus countries, five Central Asian countries, Mongolia, and parts of Turkey, Iran, Afghanistan, Pakistan, and China. Over 500 million people strong, the Heartland spans the spectrum of contrasting demographic trends. Low fertility rates, aging populations and workforces, and year-to-year improvements in education are matters of reality in some countries. By contrast, the realities of other countries exist as higher fertility rates, high mortality rates, and a decline in educational achievements. These and other demographic trends impact socio-cultural changes in the Heartland.

 

Socio-culturally, the Heartland is a system of complex diversity. Its spoken languages include Slavic Indo-European dialects, Mongolic, Turkic, Arabic, and native Himalayan dialects. Its religions, those professed and or practiced, are Orthodox Christianity, Islam, Buddhism, Hinduism, Folk Religion, and atheism. Its historical transitions, from social migration patterns to the rise and fall of political empires, have fueled competing cultural preferences for Turkish clannism, Mongolic pastoralism, or Russian nationalism. There are efforts toward increased gender equality in Eastern Europe, and struggles between radicalization and social inclusion among youth in countries such as Afghanistan and Iran. Such complex socio-cultural diversity could be the environmental force that brings together nations to co-create a desirable future, yet impedes the political transformation to a unified Heartland.

 

Politically, the Heartland is shaped by the opposing tug of differing ideologies. On one side is Russia, geographically situated on the continents of Europe and Asia. Neither identifying as belonging solely to one or the other, it culturally identifies with both. Adamantly against Westernization, Russia has pushed for Eurasianism. It’s an ideology premised on extending Russia’s influence and power, while driving world dominance from the West to the East. On the other side are Eastern European countries that support Westernization and opportunities for knowledge sharing, trade, economic growth, etc. Between these ideologies is Turkey, strategically positioned between Europe, the Middle East, and Asia. Turkey aligns its political or military agenda with Russia when cooperation works to its advantage, yet it also is a bridge to connecting the West and the Middle East. Some Heartland governments are authoritarian and others democratic. From one side to the other and in-between, political ideologies in the Heartland have shaped the competing economic systems of communism and capitalism, with influences of socialism from China.

 

Economically, the Heartland has systems that thrive and others that merely survive. Deposits of hydrocarbon, minerals, coal, oil and natural gas reserves have supported the thriving economies of Russia, Poland, Kazakhstan, and others. These countries alone had GDP values worth over five percent of the world’s economy in 2018. The agrarian economies of Kyrgyzstan and Tajikistan reflect lower GDP values. Not only have they incurred rising amounts of external debt for survival, they also depend on income earned by citizens who work abroad and send money home. In the past, proximity to the old Silk Road trade routes boosted the economies of some Heartland countries. Today, China’s New Silk Road or Belt and Road Initiative (BRI), and other technological advancements, could help many more nations across the Afro-Eurasian World Island to thrive.

 

Technological change in the Heartland’s geopolitical environment is spurring multiple pathways of change. In addition to the BRI, developments in artificial intelligence, robotics, blockchain, advanced-tech agriculture, and green infrastructure could open up new possibilities. Such possibilities could include new job creation, more international cooperatives, improved trade relations, or increased drug-trafficking. Undoubtedly, these changes will influence a geopolitical environment in a future increasingly characterized by competition among world powers for power, control, or dominance.

 

The Heartland is a living system. It is characterized by the interaction of changes to and the impact it has on its geopolitical environment. These demographic, socio-cultural, political, economic, and technological changes influence increasingly complex system impacts. Likewise, they will impact the Heartland’s future, starting with its past.

 

© Kimberly “Kay” Daniels 2020

Tags:  Heartland  politics  power 

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Are Asia’s economic growth and expansion sustainable?

Posted By Travis B. Kupp, Thursday, February 27, 2020

Travis Kupp, a member of our Emerging Fellows program checks the sustainability of Asia’s economic growth in his second post for our EF blog. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

What goes up must come down, or so they say. Asian economies have expanded over the last half-century, especially in the South and East, positioning the continent as the modern leader of global economic growth. Much of the rest of the continent has an imminent opportunity to benefit from this success in exchange for certain concessions. Regardless, the region must now discover how to make this position sustainable in two senses: maintaining its trajectory while weathering societal and political change and addressing the impacts of increased consumption on the environment. Contrary to popular belief, there exists no technological silver bullet to solve for this conundrum.

 

China is the posterchild of Asia’s economic potential. Since opening up to the world in the 1970s, its growing production and trade has lifted hundreds of millions out of poverty leading to a massive increase in standard of living and therefore, critically, consumption. India is on a similar course. In both countries, the rise in disposable income for these many millions has created an extremely attractive market for goods and services along with a favorable financial climate for entrepreneurship. A wealthier and better educated populace has led naturally to a rise in more skilled labor and associated jobs. Southeast Asia is set to reap the benefits of this shift as demand for its low-end manufacturing increases.

 

Asia’s growth has led to regional integration and a vast realignment of international economic alliances. If geo-economics is in fact war by other means, then China is rapidly becoming one of the most battle-hardened nations on earth. The state is simultaneously flexing its influence through the Belt and Road Initiative (BRI), so called “trade wars,” and other significant foreign investments while learning from its mistakes in each area. The BRI may project the benefits of East Asia’s growth more intensely into the Central and Western Asian nations. Then again, it could also entangle China in far-flung conflicts to protect its investments if it does not carefully manage its relationships, especially with its neighbor India.

 

The central importance of China to Asia’s economic hopes presents a major systemic risk. The rest of Asia, and much of the world, has become to varying degrees vulnerable to abrupt changes in the nation. Over the next decade, for instance, China needs to find a solution to its population’s declining birth rate and increased life expectancy. A more favorable policy toward immigrants could help mitigate this looming crisis but may require or introduce societal liberalization that could be politically destabilizing. Sudden regime change, however triggered, would create a significant hurdle to sustained economic growth across the region.

 

The deeper existential risk lies in the impact of growth on the environment. While modern technologies have made significant strides toward lessening the ills of industry, they are unlikely to keep pace with the increasing demand for goods. Environmental concerns only influence consumption patterns in wealthy nations to the extent that they are economically viable to the consumer and do not compromise standards of living. The question then becomes whether the ruling parties of Asian nation states are prepared to sacrifice their economic gains in the name of environmental stewardship. The broad multilateral cooperation required to effectively mitigate climate change and environmental degradation makes it is possible, and dangerously plausible, that continued development may ultimately win out.

 

Asian economic leadership has an uncertain future, but the outlook is not without hope. Even if the Chinese engine of Asia’s economic miracle stalls and internal and external political realignment ensues, it is possible that this could usher in a wave of more sustainable growth, in both senses of the word. New policies, rather than technologies, to address shifting demographics and a changing global climate are likely to be the key deciding factors of what future unfolds. Asia’s economy may have room to grow yet.

 

© Travis Kupp 2020

Tags:  Asia  economics  sustainability 

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What are the environmental changes fueling the shift?

Posted By Tyler Mongan, Tuesday, February 25, 2020

Tyler Mongan, a member of our Emerging Fellows program inspects change drivers that facilitate the Great Game in his second post for our EF blog. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

It is estimated that the Arctic could experience ice-free summers as early as 2050. However, the changes in the region are not uniform, resulting in an uneven distribution of stakeholder nation accessibility to trade routes, fisheries, and trillions of dollars in natural resources. Although the Arctic is considered a single region, in reality it is a climate with diverse zones. The maritime areas are opening at a faster rate, specifically along the coasts of Norway and Russia. One of the more important geopolitical consequences of this uneven ice-melting is that the Northern Sea Route (NSR), which links Northeast Asia and Northwestern Europe, is rapidly increasing in accessibility. This will also reduce shipping times between Northeast Asia and Northeastern North America via the Greenland, Iceland, and the United Kingdom (GIUK) Gap.

 

The opening of the NSR has allowed Russia and Norway to expand their Arctic operations over the past decade with investments in gas and oil infrastructure, deep-water ports, and arctic ships, including ice-breakers, that are essential for navigating the iceberg populated seas. These developments increase the potential for the NSR to become a viable alternative to the Suez Canal trade route, and could cut transportation times from 15 to 10 days.

 

On the opposite side of the circle, the Northwest Passage (NWP), primarily linking Canada, USA and Northeast Asia, is opening at a slower rate. Infrastructure Investment and resource accessibility in the region is more limited. Opening of the NWP, or even a Transpolar Passage, would benefit Chinas trade operations and increase its role in the region. The uneven pace of ice melting favors investments in the Russian and Norwegian owned regions, with investment in North American regions remaining more uncertain.

 

Even with the increase in ice-free zones in the Arctic and the promise of shorter transportation times, the steady increase in vessels utilizing the routes must factor in new costs and risks into the investment equation. Access to new routes will be subject to transit and insurance fees, depend heavily on ice-breaker escorts and infrastructure, and will have limited search and rescue support. At the same time, the Arctic routes offer shipping companies the opportunity to utilize larger shipping vessels. Currently, ship capacity is constrained by the Straits of Malacca, the world’s second busiest waterway. With larger shipping vessels utilizing the Arctic sea routes, companies could offset the increase in costs by reducing the freight cost per unit.

 

Along with continued opening of new sea routes, stakeholder nations are also looking for opportunities to extend their Exclusive Economic Zone (EEZ) to claim a future stake in the resources hidden below the melting ice. It is estimated that 13 percent of the worlds undiscovered oil and 30 percent of its undiscovered gas are in the Arctic. Current Arctic mining operations of minerals, precious metals, and construction materials (rock, stone, sand, and gravel) could also expand.

 

Due to warmer waters pushing into the High North and changes in nutrient conditions and water currents, Arctic fisheries are transforming. Some harvest sites are experiencing an increase in stock productivity, while others are seeing a decline as fish migrate north to find colder water. For example, Greenland has seen an influx of Bluefin tuna and mackerel into their fishing region, boosting their export revenue. With the melting ice, fishing vessels will be able move further north to follow the changing migration patterns, but this could result in disputes over EEZ lines. If history repeats itself, we could see Cod War like scenarios.

 

If the ice continues to melt in the Arctic, competition in the region is more likely to be about access to transportation routes, oil/gas deposits, precious natural resources and fisheries, than it is about claiming new territory. The borders of stakeholder nations in the arctic region are well established. However, current organization structures, such as the Arctic Council and the U.N. Convention on the Law of the Sea (UNCLOS), are weak buffers of potential Great Game conflicts.

 

The Arctic region is both an environmentally and geopolitically complex system; melting ice does not equal decreased costs and accessibility does not equal economic feasibility. A reversal of ice-melting trends would rapidly shift the trajectory of infrastructure development, sea route access, and fish migration patterns. And the hunt for trillions of dollars of undiscovered natural resources beneath the melting ice could be another Eldorado.

 

© Tyler Mongan 2020

Tags:  Arctic  Great Game  natural resources 

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Why might it beneficial to leverage talent in Africa?

Posted By Sarah Skidmore, Friday, February 21, 2020

Sarah Skidmore, a member of our Emerging Fellows program checks the merits of leveraging talent in Africa through her second blog post in our EF blog. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

In leadership and management circles, the term talent is associated with the aptitude, skills, and competencies of a workforce. And, collectively speaking, the year 2050 will see no shortage of talent in Africa. The culturally rich continent is projected to claim 25% of the global population in that year. The sheer volume of the talent serves as a critical and dramatic driver of change for a continent seeking to flourish in the next three decades.

 

When thinking of talent, African leaders may choose to embrace a strengths-based perspective. Leaders who embrace this perspective recognize that their collective workforce resembles the composition of strengths from the group. By relying on the principles of humanism, strengths-based leaders recognize that all individuals have unique value; and when used appropriately, their value betters themselves and the group.

 

A strategic way for a group to evolve over time is by investing in talent. One approach available to African leaders is to 1) craft a vision for a desired future, 2) recognize the strengths of their collective workforce, and 3) identify ways to develop the talent to align with the desired future. Alignment, in this sense, allows for greater potential. Leveraging talent is essential for any group working towards a long-term vision - such as unlocking African potential by 2050. Benefits of talent development include unraveling new thought patterns, an influx of collaboration, an increase in alternative solutions, additional skills afforded to the group, and unlocking unknown potential. Consider the unforeseen flourishing that may arise as African thinking infiltrates the liberal democracies and autocratic systems present within much of the developed world.

 

Empowerment is strongly linked to development. Currently, sub-Saharan Africa holds the title for highest out-of-school rates of children through to secondary school in the world. 2050 welcomes an era where the majority of students will have access to, be enrolled in, and actively participating in education – whether in person, online, or a mix method approach to schooling. Shifts toward greater gender equality offer a powerful force. Gender equality will impact education access as well as shift African family life. Consider the importance of empowerment to help combat rising inequality while encouraging social stability across a geography marked with notable tribalism and inter-group contention. As the Africa Rising movement continues to gain momentum and propel the continent forward, African empowerment may be shaped by influences such as persistence, endurance, diversity, cultural richness, a shared history, and more. The unique shared experience through the Africa Rising movement offers the world a new take on empowerment that is unprecedented to human civilization.

 

To unlock this potential by 2050, the future must evolve past the countervailing pressures that have stunted growth over the centuries. In the past fifty years alone, consider events plaguing Africa including the Ethiopian famine of 1980s, the Rwandan massacre of the 1990s, the Sudanese civil war of the 2000s as well as the Ebola outbreak and the HIV epidemic. A mixture of intra-continental forces along with monumental foreign forces, racism, and corruption have restricted Africa from truly flourishing.

 

Shifting is happening and will continue to happen as African talent advances. The shifting moves Africa beyond wars, conflicts, and disasters. The shifting embraces hygiene and healthcare; educational and vocational training; and entrepreneurial ventures. The shifting is a sign that a future of flourishing is possible. And, the shifting connotes a very different future to come, one far richer in human talent than the past century could imagine. By leveraging talent, Africa is better positioned to handle disruption, including the disruptive climate change looming within the planet.

 

© Sarah Skidmore 2020

Tags:  Africa  development  talent 

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Who are the stakeholders in the Arctic Region?

Posted By Tyler Mongan, Monday, February 17, 2020

Tyler Mongan, a member of our Emerging Fellows program initiates publishing a series of blog posts aimed at knowing if the Great Game moves to the Arctic by 2050. This is his first post in our EF blog inspecting the key players of the game. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Melting ice is not the only thing to watch for in the Arctic region. Geopolitical stakeholders are positioning to take advantage of the newly accessible natural resources, fisheries and transportation routes in the high north, sending a signal that the “The Great Game” could be shifting to the Arctic.

 

The “Great Game,” describes the power struggle between great nations as a “game of sorts.” Originally it represented the geopolitical struggle between British and Russian Empires over territories, transit routes and natural resources in Central Asia. With the collapse of the Soviet Union in the late 1990’s, a “New Great Game” seemed to emerge, as Western Powers strategically befriended the oil and resources rich nations of the former Soviet Republics. Again, Central Asia became the center of geopolitical strategy and conflict, and this time with new players; Russia, China and North America.

 

Currently, China’s Belt and Road Initiative (BRI) is expanding beyond Central Asia through the “Ice Silk Road”, while Russia continues to invest heavily in transportation infrastructure to support the opening trade routes in the Arctic region. There are signals that The Great Game is quickly moving outside the sphere of the Central Asian Heartland, all the way to the High North.

 

As ice-free zones in the Arctic circle continue to widen year after year, Russia, China, North American and European nations are quickly mapping out and implementing strategies to gain access to undiscovered natural resources, fisheries, trade routes, and strategic geographical and military positions. Unlike the original Great Game, potential conflicts may be mitigated by The Arctic Council, which was created in 1996 as a forum for promoting cooperation, coordination, and interaction among the Arctic states. On the surface it seems nations are cultivating a collaborative environment based on the rule of law, however, several nations have already taken strategic steps to secure and expand their piece of the Arctic, increasing the potential for conflict in the region.

 

Russia claims that the Northern Sea Route (NSR), which connects Northeast Asia with Northwestern Europe, has been historically established as part of the Russian Federation. With the NSR opening, transportation would be diverted from the Suez Canal, reducing travel time from 15 to 10 days. The NSR would also provide Russia with direct access to the Pacific Ocean, increasing the viability of extracting and exporting oil and gas and other natural resources from the Arctic.

 

China is forming strategic bilateral partnerships to expand its sphere of influence on the region. China claims to be a “near Arctic state" and in 2018 unveiled the “Polar Silk Road,” an extension of the BRI. China continues to legitimizes itself as an important player in the Arctic region through financial investments in Russia and expanding scientific research in Norway and Iceland.

 

The Western Powers are taking a more cautious and measured approach in the Arctic region. North American nations have established a 5-year moratorium (ending in 2021) on offshore drilling in the Arctic, due to growing environmental concerns and a shift in focus on renewable energy sources. The United States and Canada also favor stakeholder cooperation to ensure that transit routes remain open and safe for international trade.

 

Canada, Denmark and Russia have made well-researched claims of ownership of the North Pole, with the intention of extending their Exclusive Economic Zone (EEZ) to secure the future rights to newly accessible natural resources and fisheries. Norway has also petitioned the U.N. to extend their EEZ. Six Arctic indigenous communities have Permanent Participation Status with the Arctic Council. However, without a stakeholder nation champion, the role that Indigenous people play in shaping Arctic geopolitics may be severely limited.

 

As the melting ice opens up the Arctic region to increased exploration and exploitation, geopolitics in the Arctic region will continue to heat. Although Russia, China, North America and European nations claim to favor a rule-of-law based approached to Arctic development, there are signals that the Great Game is being played in the Arctic, with increasing conflict over stakes in future transit routes, fisheries and natural resources as they become more accessible.

 

© Tyler Mongan 2020

Tags:  Arctic  Great Game  natural resources 

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What are the drivers of migration in the past?

Posted By Kevin Jae, Friday, February 14, 2020

Kevin Jae, a member of our Emerging Fellows program inspects the drivers of migration in his second post for our EF blog. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Migration is an overdetermined phenomenon. Unlike a science experiment, we are unable to identify a series of dependent and independent variables to construct a predictive framework. As with many complex, real-world problems, we can turn towards history for inspiration. History may not repeat itself in perfect imitation, but the present moment often sounds out like a variation of the past. With a patient ear, we may be able to detect a melody, a theme, a musical structure - this will help us better understand and contextualize migration in the contemporary world. The melodies of the pre-historic past are too faint to hear out. With this in mind, we can listen to the migrations of the past century for our purpose.

 

Migration can be roughly categorized into migrations by push factors and by pull factors. This conceptual framework separates the migrations that happen by necessity (the push factors) and the migrations that happen by choice (the pull factors). Push factors include poverty and military conflict. In these cases, migrants find the prospects of the unknown better than the present circumstances before them. An example of the former are the two million Italian migrants travelled to the United States in between 1900 and 1910. One case of the latter is the Vietnam War and spread Vietnamese diasporic populations all across the world. Pull factors include voluntary, long-term immigration for a better life and short-term movements of skilled labour across national boundaries. The former are immigrants to Canada and the latter are expats. However, whether migration happens by push factors or by pull factors, in none of these situations was migration a predictable and foregone conclusion. The historical circumstances that provide the impetus for migratory desires are elusive and they escape hard predictions. One must maintain constant vigilance to multifarious trends. The future is constantly being shaped and reshaped.

 

Historical circumstances are only one part of the dialectic. Migration does not happen in a vacuum: there is always a political and institutional structure that facilitates and guides the flow of these migratory desires. The German gastarbeiter (guest worker) program in the mid-20th century was created to address labour gaps, leading to the Turkish migration to Germany. One purpose of the European Union was for the creation of a free market for capital flows and labour. While history provides the drivers of migration, the political and institutional framework of the present moment directs to where migrants are driven.

 

On a more fundamental level, political and institutional structures define the discourse of migration. Above, migration was separated into those by push factors and by pull factors, but even this is an artificial categorization. Intolerable political and economic circumstances may push migrants away from the home country and pull them to one that will improve their situation, but there is no moment when migrants by necessity transform into migrants by choice. Participants of the German gastarbeiter program may have left because of a lack of economic opportunities and because of their desire to earn higher wages. Politics and clever framing play a significant role as an intermediary force. Additionally, institutions, whether national or international, provide the larger structure for migration. Even when migrants do not use these formal frameworks - by crossing illegally, for instance - these transgressions are negatively defined by the established institutional structure. Migration and migrants are ultimately a political category for analysis.

 

What are the drivers of migration in the past? Above, two separate dimensions that drive migration are discussed. The first are the historical circumstances that create the impetus for migration. While we can make careful conjectures about latent migratory events, one must be nimble and open to multiple possible futures. The second is the institutional and political structure. The institutional and political structure fundamentally defines the discourse of migrants and migration. Through it, migratory desires are directed to a tangible destination.

 

© Kevin Jae 2020

Tags:  Canada  migration  population 

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What drives between-country inequality?

Posted By Martin Duys, Tuesday, February 11, 2020

Martin Duys, a member of our Emerging Fellows program inspects the drivers of inequality among countries in his second blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The factor that plays the most critical role in determining a person’s income is the country in which they live. It has more influence than the persons parents’ economic circumstances (the second most important factor) and far more than any effort they may make to improve their situation through education. Geography is more important than class, or level of education, in determining income.

 

Between-country inequality has never been as extreme as now. Just before the start of the industrial revolution, the average income in the wealthiest countries (at the time Holland and the United Kingdom) was roughly three times higher than the poorest. Described as analogous to the ‘Big Bang’ rates of economic growth and average incomes exploded in countries that industrialised. Now the difference in average income between the rich industrial nations and those that have failed to industrialise is a multiple of one hundred.

 

From the second half of the twentieth century other factors have also contributed to driving between-country income inequality. The political and institutional instability experienced in some countries after decolonisation caused economic stagnation and in some cases, decline. In the Soviet Block and other socialist countries, socialism failed to lift income levels significantly.

 

There are factors driving a decrease in between-country inequality. Sustained economic growth since the 1980s in China and India has had an enormous impact. In China alone, the number of people whose incomes have doubled is ten times that in the United States over the same period.

 

In gross terms, the gap between rich and poor countries continues to grow. China's economy would need to grow by eighteen per cent to generate the same value created by a one percentage point increase in the GDP of the United States. This is an almost impossible task for any economy no matter how ‘on fire’ it is.

 

An assumption of neoclassical economics has been that globalisation would improve levels of between-country inequality. Poor countries with cheaper labour forces would attract more foreign direct investment (FDI), because corporations looking to increase returns by lowering production costs would invest. The result would be increased local income levels and decreased inequality. Emerging countries would also ‘slip-stream’ on the technological advances of richer countries by copying their innovations and avoiding the need for expensive research and development. They would also be able to avoid adopting dead-end technologies that proved unsuccessful or were quickly superseded by superior technologies. Unfortunately, these assumptions have not been borne out by reality.

 

In what is termed the “Lucas paradox” FDI has not flowed as expected from high-income to low-income countries. Instead, it has to tended to flow from high-income countries to other high-income countries, and even from low-income to high-income countries. Technology adoption by developing countries has not been an equaliser as expected. Royalty payments for new technologies tend to flow from the poorer adopting countries to the more affluent countries that own the intellectual property.

 

The failure of the focus is shifting to include institutional and cultural considerations. The goal is to create an environment fertile for innovation, technology, and economic growth. Whether this new approach improves levels of between-country inequality remains to be seen.

 

© Martin Duys 2020

Tags:  country  economics  inequality 

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What is causing a changing climate?

Posted By Johanna Hoffman, Friday, February 7, 2020

Johanna Hoffman, a member of our Emerging Fellows program detects the causes of climate change in her second blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Climate change comes in two forms. There is the kind caused by natural processes, and there is the kind created by humans. The former has been happening for millennia, produced by a range of factors from the sun’s energy output to shifts in the earth’s orbit. Since the late 18th century, however, that type of climate change has been supplanted. The industrial revolution and its innovations in manufacturing, production, transportation, power use, and more has led to rapid increases of pollutants, carbon dioxide and other emissions that trap heat in the atmosphere, known as greenhouse gases. For millennia, atmospheric carbon dioxide had never been above 325 parts per million. By 1950, levels had blown far past. Since then, massive changes in land use, such as the proliferation of parking lots and other paved surfaces, have made land absorb more sunlight, which our increasingly greenhouse gas filled atmosphere cannot adequately release. As a result, global temperatures continue to rise.

 

Most of this warming has occurred in the past 35 years, with the five warmest years on record all taking place since 2010. Much of this increased heat and greenhouse gas has been absorbed by our oceans. Since 1969, the top 700 meters of ocean water have warmed more than 0.22 degrees Centigrade and taken in 25% of emitted carbon dioxide. While these numbers may not seem drastic, the impacts are significant. The great ice sheets of the Artic, Antarctic and Greenland are melting at unprecedented rates, with some scientists predicting that the Arctic will be completely free of summer ice within fifteen years. This melting is not restricted to the poles. All across the globe, from the Alps to the Himalayas to the Andes and the Rockies, glaciers are retreating. Satellites show that spring snow cover in the Northern Hemisphere has declined over the last half century, with snow melts starting earlier, putting fresh water access for hundreds of millions at risk.

 

As glaciers have melted and ocean waters have warmed, seas have continued to rise. Today, seas are roughly 8 inches higher than they were in 1900, making many low-lying countries such as Bangladesh and the Maldives increasingly uninhabitable. A deadly side effect of this rising and warming is ocean acidification. As the ocean absorbs atmospheric CO2, it becomes more acidic in its chemistry. Over the last 150 years, the acidity of surface ocean waters has increased by about 30 percent, creating harsher environments for wide swaths of animal life. Cetaceans, fish species, crustaceans and more are all adversely affected by acidic conditions, threatening the lives and livelihoods of all those who rely on our oceans for sustenance and support.

 

The climatic changes spurring these shifts mean more than melting glaciers and rising seas. They mean that the current fires devastating the entire continent of Australia will become the norm in regions around the world. They mean that heat waves and severe storms will grow in intensity. They mean that floods will grow more frequent and more powerful, leaving more people inundated for longer periods of time. They mean that more drought will threaten more of our food supplies. They mean that the world that we knew is changing into some more unpredictable and more unwelcome to human habitation that we have ever seen before.

 

© Johanna Hoffman 2020

Tags:  climate change  CO2  nature 

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