Send your tips and thoughts: rheath@politico.com, or follow Ryan on Twitter. SPRINGBOARD TO WHAT? The International Monetary Fund and World Bank virtual spring meetings are now underway, aiming to set the tone for global economic policy-making for the rest of the year. There's no shortage of things to talk about in the limited virtual format. But there's also a risk of distraction : wherein ministers and economists deliver platitudes about interesting, important things they have no control over — like virus variants and vaccine distribution — instead of things they do influence, like stimulus plans and the IMF's goals. The good news: the IMF's global outlook report will on Tuesday announce that the global economy will grow quicker than previously expected in 2021, managing director Kristalina Georgieva said in curtain-raiser speech. There's a range of helpful video primers on Covid economic challenges here. The bad news: The Fund may be helping more countries than ever (there's been new financing for 85 countries and debt-service relief for 29 poor countries ), but during a crisis in which effective support is measured in the trillions, the world's "lender of last resort" has delivered only around $106 billion in financing. In other worlds, the IMF's policy actions have had relatively little systemic effect — massively overshadowed by other Covid impacts and stimulus. The main effort to address that — a push to inject $650 billion in liquidity into global government coffers — is criticized, including by Republicans in Congress, for delivering more to rich countries than to the middle and low income countries who most need support. The pressure is now on for IMF members to decide what the organization is going to be post-Covid: a lender of last resort, a global economic stabilizing force, an economic coach and cheerleader, or something else. A new playing field: While the IMF is often tinkering with its policy and finance tools, Covid is creating a more profound change — a new IMF debate playing field. Austerity hawks are no longer dominant and few topics are taboo: even Argentina feels entitled to come to the table with reform ideas — in the middle of its 21st IMF bailout. In essence: the world's governments are making major changes to how they tackle economic problems, and the IMF can't escape the tide. The radicals within: The surge of new ideas stretches beyond Covid, surfing the wave of frustration at capitalism going off the rails. Both the former governor and former deputy governor of the Bank of England are out with new books calling for system change. Mark Carney is focused on climate finance and corporate governance, and Minouche Shafik on equality between the global north and south. IMF stakeholders are split into three loose camps in what will surely be a years-long debate: • Those who want the IMF to stick to the austerity-driven economic surveillance it knows best. • Those — including Georgieva — who say the organization needs to get out of its textbooks and practice more real-world economics. • A more radical group that wants to junk the IMF's business model altogether This week will see Argentina trying to cut a new deal with the IMF, and Janet Yellen's debut among treasury ministers. But there are a number of problems being discussed online and in private conversations between ministers, IMF officials and academics. Let's take a quick look: Problem: Governments are spending trillions to prime their economies for the post-Covid recovery with Georgieva's support: she says "spend as much as you can" — but that leaves the IMF's credibility exposed when its bailouts insists on strict fiscal discipline. Possible solution: You tell Global Translations, quick thoughts to rheath@politico.com Problem: "Too many countries are falling behind" according to Georgieva, and the IMF lacks the lending capacity to support them. Possible solution: $650 billion in "Special Drawing Rights" — tokens that can be swapped for cash — allocated proportionally among IMF members. Problem: The stigma attached to needing IMF loans: which may be discouraging governments that need support from seeking it. Possible solution: A pandemic-branded IMF financial lifeline — to help quarantine both the stigma and the effects of the virus. Problem: the IMF's dependence on charging bankrupt governments to fund itself. Those fees include a 2 to 3 percent surcharge on top of the basic interest rate offered to needy governments, a "commitment fee" that ranges from 0.15 to 0.6 percent, and a "service charge" of 0.5 percent. Possible solutions : Cutting or ending some of the fees — Argentina's finance minister told Global Translations he's among those pushing for change — and increasing transparency around IMF deals. One model could be the recent increased transparency around trade deal negotiations. GLOBAL RISKS AND TRENDS CLIMATE CONCERN — NEED FOR A COP26 NEGOTIATING BUBBLE: Anyone who has participated in one of the previous 25 global climate conferences will tell you they are boisterous round-the-clock affairs, with hour-by-hour conversations in corridors among evolving groups, and line-by-line dissections of draft texts. In short: it's not something that's going to work on a Zoom call, or without a lot of preparation. If COP26 does happen via video conference, there are three additional downsides: one group of countries will have to do their negotiating in the middle of the night (because of time zone issues); it will be a struggle to keep 200 governments and many non-profits online with a stable internet connection at all times; and there would likely be a numbers cap. But getting the event to happen in person would also be a nightmare: the intense negotiations will start weeks in advance of the final November conference due to take place in Glasgow, Scotland. That's why a group of activists is arguing that a COP26 conference bubble needs to operate from about September onwards: so the key people really are face-to-face and Covid-free when the game begins in earnest. The only organization that will have experience of a bubble of that scale and global complexity by September will be the World Economic Forum (holding its own bubble event in Singapore in August). So, where to do it? COP26 co-organizer Italy is a logical place to host a COP26 bubble, said Earth Media executive director Michael Strauss to Global Translations, because it's already hosting a series of COP26-related events in September and an October G20 summit, where many key leaders will have a chance to give a political steer to the climate negotiations. The bubble would then have to be shifted to Glasgow in November. INDIA POSITIONS TO LEAD A CARBON CLEAN-UP BLOC: India's energy minister Raj Kumar Singh is trying to reframe the global climate debate, from a focus on future carbon commitments and goals, to a focus on calculations and allocations based on total (including historical) impact. He has floated the idea that Western governments must agree to suck carbon out of the air as part of a new global climate settlement. "They need to tell us what they will do by 2030," Singh told an international climate summit last week. HuffPost's Alexander Kaufman reports that this is the most direct carbon negative claim yet by a senior politician, and is based on India's view that rich countries got their riches by emitting about 80 percent of the carbon the world can afford to emit before hitting a potentially irreversible climate change tipping point. If the idea is to gain traction, the possible delivery mechanisms boil down to trees (plant and preserve more of them) and expensive tech investments (to suck the carbon out of air mechanically). JORDAN — DECIPHERING THE ROYAL FAMILY DISPUTE: Is it a coup plot, or a ruling family that can't tolerate any dissent? That is still not clear, though the Biden administration, via State Department spokesperson Ned Price quickly showed its support for the current monarchical regime, after the ruling family arrested nearly 20 people including a former crown prince over an alleged plot against King Abdullah II. Prince Hamzah, the former crown prince and a half brother of the King, was placed under house arrest. He said in a video statement that he was simply criticizing the government. Foreign Minister Ayman Safadi insists the prince wanted to overthrow the government, but did not provide evidence. Associated Press noted that "Hamzah is a popular figure in Jordan. He is seen as religious and modest, in touch with the common people and similar to his beloved father, the late King Hussein." Where do the two Queens stand? Queen Noor, Hamzah's mother (also step-mother of the King), is fiercely defending her son. The current queen, Queen Rania — a favorite of the Davos crowd — is going to have some trouble slotting back into glamorous photo-ops if Hamzah remains under arrest without evidence of a plot. BULGARIA — GOVERNMENT DEALT BLOW IN SUNDAY ELECTION: Bulgaria's election on Sunday has created a highly fragmented Parliament, and it leaves cener-right Prime Minister Boyko Borissov in a struggle to maintain power. Read more, from my POLITICO colleagues in Sofia and Brussels. REALITY CHECK — FACEBOOK NEEDS A BETTER EXPLANATION FOR DATA LEAK: The personal details of 530 million Facebook users , including 32 million Americans, have been posted online. Facebook claims it's old data and the problem's been fixed, but there are strong reasons to doubt that. For example, CNN's Donie O'Sullivan was shown phone numbers of senior CNN executives from their non-public Facebook data. The point: if you changed your phone number between 2019 and 2021, maybe you're safe. If you didn't, you could be at risk. Facebook spokesperson Andy Stone could not confirm to CNN that it had notified users of the problem back in 2019 — so you also may have no idea that you're at risk. BIDEN MEETS WORLD SANCTIONS ON ICC OFFICIAL REVOKED: The move pleased human rights groups and European allies. The U.S. is still not a party to the International Criminal Court and doesn't acknowledge its jurisdiction. ALL EYES ON GEORGIA — AGAIN: Voting restrictions, baseball boycotts, mass murders of Asian Americans, and the unanimous repeal of a citizen's arrest law which was created to help white Georgians prevent slaves from fleeing. INCLUSIVE RECOVERY SPOTLIGHT BIDEN LATEST STIMULUS PLAN — REDUCING INEQUALITY: The administration wants to boost productivity by boosting the nation's most underserved communities , reports Victoria Guida, including deeply Republican rural areas. It's about addressing an interconnected set of problems from hunger to environmental health hazards, to poor public transport options for workers to kids without the internet they need to learn. MUNICIPAL AND COOPERATIVE BROADBAND AS AN EQUALIZING FORCE: In America's often uncompetitive broadband internet market, service often costs more and reaches fewer people than in other rich countries. The U.S. is ranked 119th in the world — in the bottom half of global markets — for affordability. In the Biden administration's new infrastructure plan, $100 billion is earmarked to address those problems, using language like "the new electricity" for broadband (mirroring language first adopted by the EU 11 years ago) and redefining the problem as one anchored around low incomes and market failure, rather than as a simple function of geography. The money appears intended to help poorly served communities overcome rules in 20 mostly Republican-governed states that seek to limit municipal broadband. Many communities face rules that ban or limit local governments from deciding to roll out their own publicly-owned and operated networks if they feel private provision is insufficient. Australia tried a similar approach from 2009 onwards: creating a nationally owned broadband network to provide competition to private operators across sparsely-populated Australia. What happened? Mixed results — more people were served, but at slower speeds than could have been achieved if politicians hadn't interfered mid-way through the roll-out to save money. On March 11 Sen. Amy Klobuchar (D - MN) and Rep. James Clyburn (D - SC) announced a bill aiming $94 billion towards closing the digital divides (it's a good match to the Biden plan). House Republicans recognize there is a digital divide, but disagree with Democrat methods, mostly preferring to reduce red tape to increase the incentives for private investment. GLOBETROTTERS NORTH AND SOUTH KOREA LAUNCH JOINT BID FOR 2032 OLYMPICS: Brisbane, Australia was announced in February as the International Olympic Committee's preferred host city for the 2032 Summer Olympics, but that's not a final decision and the symbolism of the Korean move could give them a chance in the final vote. MORE SCRUTINY COMING FOR FREE-WHEELING FAMILY OFFICES: Maintaining mega yachts and minimizing taxes takes a lot of work! And it's about to get harder. Oversight of 7,000 "family offices" — which manage $6 trillion in wealth — "must be strengthened" said U.S. Commodity Futures Trading Commission official Dan Berkovitz. THE NEW US SUPERSONIC PRESIDENTIAL JET: The one that's still roughly 13 years away from delivery. EMPTY AMSTERDAM RECONSIDERS HOW MANY TOURISTS IT WANTS. DAVID CAMERON'S LOBBYING SCANDAL DEEPENS: After leaving office, the former U.K. prime minister lobbied a second UK Treasury minister for a loan for his friend and employer Lex Greensill. That could be a problem on it's own, but it's also emerged that Cameron's government handed a massive tender-free government contract to Greensill. The Times of London calls it the "biggest lobbying scandal in a generation." OOPS! Trump sanctioned an Italian pizzeria owner instead of a Venezuelan oil executive. OBITUARY — CHARLES HILL, GRAND STRATEGIST: the most important American diplomat you've never heard of, says Molly Worthern. BRAIN FOOD Andrew Yang's Asian-American Superpower: With a "a pedigree that Mayflower descendants would stab each other to obtain," Tina Nguyen writes: "we were two Asian Americans in New York City, eating in a restaurant run by Asian immigrants in a once-bustling neighborhood decimated by a year of Covid and "Wuhan Flu" slurs, all of us quietly worrying that at any unexpected moment, we'd be punched in the face for having the wrong eye shape." South Korea — reports of attacks on Asian-Americans focus on suspects' race. Hong Kong arrested 7 democracy activists: What Was Really on Trial? Thanks to editor Ben Pauker and Nahal Toosi. | 
No comments:
Post a Comment