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CGD in the News

February 12, 2019

China's Economy Is Booming, But It's Still Borrowing Heavily From The World Bank (NPR)

From the article:

The World Bank's mission is to lift countries out of extreme poverty. Few would say China fits that description these days. It's technically eligible for World Bank loans. But as NPR's Jason Beaubien reports, some people question whether China really needs the money.

JASON BEAUBIEN, BYLINE: China has cash reserves of some $3 trillion, yet continues to borrow significant amounts of money each year from the World Bank. Under the bank's rules, once a nation's per capita income tops $7,000, they're supposed to get weaned off the World Bank's subsidized loans. China passed that threshold in 2016.

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BEAUBIEN: The World Bank has specific issues that it's trying to influence globally, and one of them is climate change.

SCOTT MORRIS: China's the world's largest polluter today, and the biggest single category of expenditures for the World Bank is in this area.

BEAUBIEN: That's Scott Morris, a senior fellow at the Center for Global Development and the lead author of a new report on World Bank lending to China. He found that 38 percent of loans to China over the last three years were focused on what the bank calls global public goods, issues that extend beyond China's borders such as climate change, smokestack emissions and other industrial pollution. The fear is that if the World Bank disengages, China will scale back some of these environmental efforts. Morris says China recently has also turned to the bank for money for a wide range of projects involving education, agriculture and roads. It borrowed $200 million for a port and shipping container logistics park on the Yangtze River. There was even a loan to support heritage-based sustainable tourism.

Click here to listen

February 11, 2019

No-deal Brexit could sink much of Asia (Asia Times)

From the article:

As the United Kingdom (UK) heads towards a possible “no deal” Brexit, the uncertainty surrounding the terms of the UK’s imminent departure from the European Union (EU) is making waves as far away as Southeast Asia.

The German Development Institute, a think tank, recently estimated in a report that Cambodia could be one of the world’s biggest losers in the event of a “no-deal” Brexit. As many as 1.7 million people living in developing nations could descend into “extreme poverty” in the event, the think tank claimed.

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According to a recent report by the Centre for Global Development (CGD), a think tank, the “best-case scenario” for developing nations is that the UK quickly amends its existing cross-border legislation before March 29 so that its tariffs and duties for poorer nations simply replicate those of the EU’s preferential trade deals, like the EBA scheme.

This is not too difficult, the report states, but as “Brexit congests the parliamentary business schedule severely” politicians might not find the necessary time to make these changes. “Under this worst-case scenario, following no-deal, developing countries would lose all preferential access to the UK and face much higher…tariff rates,” it added.

Yet the stark question is whether trade with the world’s poorest nations, including Cambodia, is actually high on the list of the UK government’s priories right now – or even on that list. In 2016, the UK’s bilateral trade with Southeast Asia was worth around $41.8 billion. Around 68% of that trade was done with just three countries: Singapore (36.1%), Thailand (17.1%) and Vietnam (14.9%). Trade with Cambodia might be important for Phnom Penh, but its negligible for London.

February 8, 2019

The new Silk Road: China's campaign to dominate the global economy (Irish Examiner)

From the article:

In the barely-inhabited steppes of Central Asia, China is establishing the centre of its campaign to dominate the global economy, writes Ben Mauk

The Eurasian Pole of Inaccessibility is the point farthest from a sea or ocean on the planet.

Located in China just east of the border with Kazakhstan, the pole gets you at least 2,500km from the nearest coastline into an expanse of white steppe and blue-beige mountain that is among the least populated places on earth.

Here, among some of the last surviving pastoral nomads in Central Asia, the largest infrastructure project in the history of the world is growing.

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Critics have described the BRI as a new kind of colonialism or even part of a strategy of “debt-trap diplomacy,” seducing cash-poor countries with infrastructure projects that are unlikely to generate enough revenue to cover the interest on the loans that funded them.

That is the unhappy situation at the China-funded port of Hambantota in Sri Lanka, which the China Harbour Engineering Company took over after Sri Lanka fell behind on debt service.

The Center for Global Development lists eight countries that face high risk of “debt distress” from BRI projects that they can’t afford. Some experts view the camps and other security measures in Xinjiang as partly a reaction to the increased freight traffic now moving across the region.

Click here to read the report

February 8, 2019

US launches women's economic development initiative, questions remain (Devex)

From the article:

WASHINGTON — U.S. President Donald Trump signed a national security presidential memorandum on Thursday officially launching the long-discussed White House women’s economic empowerment initiative — the Women’s Global Development and Prosperity initiative, or W-GDP.

While the first government initiative of its kind was applauded by several aid advocates, it also raised a number of questions about how it fits into the administration’s broader foreign aid priorities, especially as the White House has repeatedly proposed cutting foreign aid budgets.

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Charles Kenny, a senior fellow at the Center for Global Development, wrote in a statement Thursday that the first two pillars of the initiative “seem to suggest a rebranding of existing funding for women’s economic empowerment efforts in USAID [U.S. Agency for International Development] and a repackaging of previously announced initiatives at the World Bank and Overseas Private Investment Corporation.”

“But the third pillar is potentially more encouraging,” Kenny said, adding that “quite what is being proposed in this area isn’t yet clear.” He suggested that there is a lot the U.S. can do to combat laws that require a man’s permission to participate in the economy, own property, or leave the house, including making legal reforms a precondition of trade agreements and passing legislation that would push the private sector to work on these issues.

February 7, 2019

Will Trump's nominee turn the World Bank against China? (Devex)

From the article:

WASHINGTON — In the wake of U.S. President Donald Trump’s announcement on Wednesday that he will nominate David Malpass to be the next president of the World Bank, Malpass’ record as a critic of the bank — and particularly of its relationship with China — has some staffers and development experts worried.

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“As a Treasury official, Malpass has sought to unwind seemingly every aspect of the World Bank’s relationship with China. As bank president, this would not be a viable posture toward his third-largest shareholder. Presumably, the Chinese will be seeking assurances about which Malpass they’re going to get,” Scott Morris, senior fellow at the Center for Global Development, wrote in an email to Devex.

 

February 7, 2019

David Malpass, US nominee for World Bank president and long-time China hawk, ‘will continue to take part in trade talks’ (South China Morning Post)

From the article:

David Malpass, a China hawk who is US President Donald Trump’s nominee to become the World Bank’s new president, will continue to play a “very important part” in trade negotiations with Beijing, senior US administration officials said on Wednesday.

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Despite the continuity between the administration’s and Malpass’s positions on the World Bank, his nomination has elicited strong opposition from some observers, who view him as a threat to multilateralism.

“An incorrigible arsonist will now be our fire chief,” tweeted W. Gyude Moore, Liberia’s former minister of public works. “Man spends his adult life denigrating multilateralism and now has the ‘pleasure’ of running one of its pillars.”

“David Malpass is a Trump loyalist who has committed economic malpractice on a wide range of topics, from dismissing the first signs of the 2008 global financial crisis to flirting with the abolition of the IMF,” Justin Sandefur, senior fellow at the Centre for Global Development, said in a statement.

Malpass also served as chief economist at the now-defunct investment bank Bear Stearns, which collapsed during the 2008 financial crisis. Seven months previously, he had written a commentary for The Wall Street Journal titled “Don't Panic About the Credit Market” that played down indications of the looming financial disaster.

“There is no case for Malpass on merit,” Sandefur said. “The question now is whether other nations represented on the World Bank’s board of governors will let the Trump administration undermine a key global institution.”

 

February 7, 2019

Ivanka Trump’s plan pledges $50 million of USAID money to pull 50 million women from poverty (Washington Post)

From the article:

Ivanka Trump, the daughter of the president and a senior White House adviser, announced a new global effort Thursday to help 50 million women in the developing world by 2025.

“This new initiative will for the first time coordinate America’s commitment to one of the most undervalued resources in the developing world — the talent, ambition and genius of women,” Trump wrote in an op-ed for the Wall Street Journal that announced the news. For the Women’s Global Development and Prosperity Initiative, the U.S. government will team up with several private companies such as UPS and Pepsi to “facilitate complementary private-sector investments to achieve our shared goals,” Trump said.

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“$1 per woman, or rather $0.02 per woman, once you subtract the money WalMart and others will spend on glossy, self-congratulatory advertisements,” Brad Simpson, a scholar at the Woodrow Wilson Center, wrote on Twitter.

“If you ever doubted the Trump Administration’s belief in aid effectiveness, think again: the new Women’s Global Development and Prosperity Initiative provides $50m a year from USAID to economically empower 50 million women worldwide by 2025,” Charles Kenny, a senior fellow at a Center for Global Development, wrote in his own tweet. “That’s just a dollar a year each!” Kenny added.

Nancy Lee, a former U.S. Treasury official who is now a fellow at the Center for Global Development, agreed that the $50 million in initial government funding is notably small, but she said she hoped that it could have a larger effect.

“Most important is to firmly embed empowering women across the programs of all of the agencies that are supposed to work together under this initiative,” Lee said. "If agencies actually have to look at how each project can boost benefits for women and girls and measure results carefully and consistently, that would truly transform U.S. development practice.”

February 6, 2019

Will David Malpass Run the World Bank or Ruin It? (Foreign Policy)

From the article:

The Trump administration continues chipping away at the multilateral institutions it derides as “globalist,” preparing to nominate as soon as Wednesday David Malpass, a World Bank critic, to become the next president of that very institution.

Malpass, currently the undersecretary for international affairs at the U.S. Treasury Department and a former chief economist at Bear Stearns investment bank, has faithfully echoed President Donald Trump’s denunciations of multilateralism run amok, taking aim at institutions such as the World Trade Organization and the International Criminal Court.

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“It’s the attitude people had 25 years ago, informed by a policy stance he had while working in the Reagan administration,” said Scott Morris, an Obama administration Treasury official who is now a senior fellow at the Center for Global Development. “He still sees the institution through that lens.”

Between his criticism of the bank’s practices and culture and his drive at Treasury to reduce U.S. financial contributions to the World Bank, “it’s hard to spin him as a friendly leader for the institution,” Morris said.

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Others noted that, while China may not need the money made available by the World Bank, those loans can nudge Beijing in directions that are broadly beneficial. Many of the World Bank loans, noted Morris of the Center for Global Development, are directed at efforts to reduce carbon emissions in China, the world’s biggest polluter. “China doesn’t necessarily need the money, it’s more the incentives those loans create,” he said.

At the same time, the World Bank has worked with China on President Xi Jinping’s signature project, the $1 trillion or more Belt and Road infrastructure program, in order to boost financial transparency and improve the quality of the projects that Beijing is underwriting—an effort that Malpass has been critical of.

“Malpass will certainly affect the relationship with China—what role will his World Bank play?” Morris asked.

“He actually does want to shrink the institution and lend to fewer countries,” Morris said. “So where would they go for alternative sources of financing? China is at the top of the list.”

February 6, 2019

Why can't pregnant women be vaccinated during epidemics? (Devex)

From the article:

NEW DELHI — The Democratic Republic of the Congo is currently facing the most severe Ebola outbreak in its history, with over 400 deaths confirmed since August, according to the World Health Organization. Much hope is pinned on a new vaccine — not yet licensed, but described by WHO as “safe and protective” — which has so far been used to immunize more than 60,000 people deemed most at risk of infection.

But one key group is denied access: Since the vaccine has not been tested for use during pregnancy, it is not being offered to pregnant women.

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Carleigh Krubiner, a policy fellow at the Center for Global Development and one of the lead authors of a recent report on maternal immunization, noted that pregnant and breastfeeding women are often at greater risk of exposure to the virus, because of caregiving responsibilities and proximity with children. “There's significant fear that's been documented among women [in DRC] who are unable to receive the vaccine and know they're at disproportionate risk of exposure just given some of the social roles,” she told Devex.

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Even as recently as the West Africa Ebola outbreak of 2014-2016, opportunities to “gather more robust data on pregnancy,” which could have helped to protect pregnant women the next time around, were missed, Krubiner said.

“There were recommendations to include pregnant women in those trials, especially given the risk-benefit calculus at the time, and ultimately for a whole host of reasons those recommendations were not taken up,” she said. “The cost of doing this research versus the cost of essentially denying women access to something that could be highly beneficial, there's really no comparison. We can't afford to leave this group unprotected.”

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“The development community [as funders and advocates] really does hold a lot of power to reshape the agenda in a way that is much more inclusive to address the needs of pregnant women and their babies,” Krubiner said.

While a small but rising number of vaccines are now being developed specifically for use during pregnancy, pregnant women are still rarely included in the development of vaccines targeted at more general populations. But with increasing attention being paid to vaccine research for epidemics — through initiatives such as the Coalition for Epidemic Preparedness Innovations, a public-private coalition that aims to speed up vaccine research, and WHO’s blueprint for research and development — there is an opportunity for change, Krubiner said.

“There's a lot of effort right now to try and bring to market new and innovative vaccines so that the next time there is an outbreak of Lassa fever or Nipah virus or even Ebola we will have more tools at our disposal … All of those efforts that are happening now can be leveraged to proactively include pregnant women in the response,” she said.

“I think we have a moment right now to learn from our past failures and to really change, to shift the paradigm.”

February 6, 2019

Trump pick sets up fight over World Bank (The Hill)

From the article:

President Trump’s pick to lead the World Bank could spark an unprecedented battle over the future of the multinational lender.

Trump is set to nominate Treasury Under Secretary David Malpass — a fierce critic of the World Bank — to serve as its next president, spurring concern within the development finance world.

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“There is no case for Malpass on merit. The question now is whether other nations represented on the World Bank’s board of governors will let the Trump administration undermine a key global institution,” said Justin Sandefur, a senior fellow at the Center for Global Development.

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Several leading development finance officials, including past candidates for the World Bank presidency, have already called on the board to oppose Malpass and break the tradition of American leaders.

Sandefur called Malpass “a Trump loyalist who has committed economic malpractice on a wide range of topics,” including in the lead-up to the 2008 financial crisis.

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