The post Shalomov and Pelayo in the Jerusalem Post appeared first on Atlantic Council.

​​​​​What you should know

• Nicaragua: On February 9, the Ortega-Murillo regime released and expelled 222 political leaders, priests, students, and other dissidents to the United States.
• US-Brazil relations: Presidents Biden and Lula da Silva met on February 10, during which they underscored the importance of strengthening democracy, promoting respect for human rights, and addressing the climate crisis.
• Ecuador: Ecuadorians rejected all eight items on a constitutional referendum backed by President Lasso, signaling anti-incumbent sentiments and the clout of pro-Correísmo opposition political forces.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Annual inflation reached 98.8 percent, while activities in the construction and manufacturing sectors continued to decline.  
• Brazil: The government met with Mexico, Germany, Colombia, Chile, the World Bank, and the Inter-American Development Bank (IDB) to explore issuing green bonds this year. 
• Belize: The government launched two new projects in cooperation with Taiwan, a business support program focused on women and micro, small, medium-sized enterprises (MSMEs), and a flood warning system for disaster prevention.  
• Colombia: 2022 GDP growth is estimated to be 7.9 percent, down from 2021’s 10.8 percent growth. In 2023, growth is expected to further decline to 1.05 percent. 
• Peru: Continuing protests and supply shortages have led several mines to suspend or reduce operations, threatening copper production.  
• Suriname: President Santokhi expressed willingness to collaborate with neighboring Guyana on oil and gas exploration and development to position the Caribbean as an energy hub. 

In focus: Inflation and infighting

As regional inflation continues, political pressures are leading to criticism of central bank policy in Brazil and Colombia. Recently-elected presidents Lula and Petro have both questioned rate hikes as a method to tackle inflation, suggesting more flexible targets and alternative policies. The governor of Colombia’s Central Bank, Leonardo Villar, expects the region to require continuing tight monetary policy, which critics argue may complicate other policy goals such as growth. Roberto Campos Neto, president of the Central Bank of Brazil, has expressed his willingness to coordinate with the Lula administration to achieve growth and control inflation. 

Despite the public clashes, central bank policy in both countries remains independent. In Brazil, a 2021 law protects central bank autonomy and is unlikely to be repealed. In Colombia, the central bank has maintained a course independent of presidential advice for two decades. 

Health + Innovation

• Colombia: President Petro presented a health reform to Congress that seeks to improve primary care, expand access to treatment, raise healthcare worker salaries, and fight corruption by eliminating private sector management of payments.
• Brazil: Nearly three years since COVID-19 claimed the life of its first victim, the country has for the first time registered zero pandemic-related deaths in a day on February 12.
• Jamaica: The Bureau of Standards launched the Jamaican Standard Specification for Telemedicine, which provides the framework through which telemedicine may be safely practiced while upholding the integrity of the medical profession.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 18, 2023 appeared first on Atlantic Council.

On February 10, Scowcroft Strategy Initiative Nonresident Senior Fellow Jamie Metzl appeared on Fox News to discuss the need for a bipartisan 9/11-style commission investigating the origins of the COVID-19 virus. He asserts that the noncompliance of the Chinese government is cause for worry, and further investigation is the best means to prepare for – or even stop – a future pandemic. Metzl stresses that this is a bipartisan issue that has seen agreement and consensus among members of both sides of the aisle. He also notes the lack of transparency on the part of the NIH in the work they were minimally funding in the Wuhan Institute of Virology.

Fellow

Jamie Metzl

Nonresident Senior Fellow for Technology and National Security

Scowcroft Center for Strategy and Security Scowcroft Strategy Initiative

China Defense Technologies

The post Metzl on Fox News discussing the need to investigate the origins of COVID appeared first on Atlantic Council.

​​​​​What you should know

• PAHO: Dr. Jarbas Barbosa took office on February 1 as the health organization’s new director, pledging to work in partnership with member states to end the pandemic and ensure that the region’s health systems recover stronger than before.
• IMF: The organization raised its global growth forecast to 2.9 percent, up from its original 2.7 percent. The outlook is also better for the region’s two major economies: up 0.2 percent for Brazil, to 1.2 percent, and a half point for Mexico, to 1.7 percent.
• Migration: The 250,000 migrants that irregularly crossed into Panama through the Darien Gap in 2022 represents a record high that is nearly double the 133,000 entries recorded in 2021.

Monitoring economic headwinds and tailwinds in the region

• Mexico: The national statistics agency reported that the economy grew 0.4 percent in Q4 of 2022 compared to the previous quarter.
• Argentina: The government will leverage new gas exports to Chile, and potentially Brazil, to improve its trade balance and pay down debt.  
• Brazil: Alongside Argentina, the government is floating the development of a common currency linking the two countries to facilitate trade. 
• Colombia: The Minister of Mines and Energy Irene Velez announced at Davos that the country will no longer approve new oil and gas exploration contracts.
• Jamaica: Third-quarter GDP grew by 5.9 percent over 2022 due to a resurgent tourism sector, which has boosted hotels, restaurants, and services, among other sectors.  
• Peru: Ongoing protests and road blockades have cost the country $550 million since the ousting of President Pedro Castillo last December. 
• Transatlantic ties: German Chancellor Olaf Scholz visited Argentina, Brazil, and Chile, to discuss the EU-Mercosur trade agreement and support for Ukraine. 

In focus: Energy expansion in Trinidad and Tobago

On January 24, the United States licensed Trinidad and Tobago to develop a natural gas project off the coast of Venezuela in the Dragon field region. The project will support overall Caribbean energy security, with a requirement that some of the produced gas must be exported to Jamaica and the Dominican Republic. To comply with US sanctions, Trinidad will pay for the gas with humanitarian aid. 

Atlantic Council experts reacted immediately, emphasizing the importance of this move towards meeting Caribbean energy demand. You can read more here. 

Health + Innovation

• Haiti: As of January 17, the Ministry of Public Health and Population has reported over 24,400 suspected cholera cases.
• Education: A World Bank study shows that by 2045, nearly 5 million people across LAC would fall into poverty due to pandemic-induced learning losses.
• Brazil: The Health Ministry announced that it will roll out bivalent COVID-19 booster shots as early as February 27.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 6, 2023 appeared first on Atlantic Council.

Security

Satellite imagery indicates a build-up of air defense missile systems in southern Russia

Ukraine defense minister warns of new Russian offensive

New Russian fortifications indicate a spring offensive could be on the horizon

Tracking narratives

Russia alleges US bioweapons created COVID, targets Ukrainians

Pro-Russia Telegram channels target Israel following Iran strike

Italy targeted by Russian accusations as Rome prepares new weapons package for Ukraine

Satellite imagery indicates a build-up of air defense missile systems in southern Russia

Satellite imagery reviewed by the DFRLab suggests a new build-up of air defense missile systems in Russia’s southern military region between Rostov-on-Don and Krasnodar. The DFRLab used radar imagery forensics to detect and approximate the relocation of air defense systems near the Azov Sea. As noted by University College London Professor Ollie Ballinger, missile batteries tend to cast recognizable turbulence signals on radar imagery when their systems are activated. This phenomenon has also been documented in the Middle East and the Baltic Sea.

The Sentinel-1 satellite of the European Space Agency collects satellite imagery using radar technology. As military systems also use radar electromagnetic wavelengths in the 5gHz range, referred to as the C-Band in NATO nomenclature, these are exploitable as open-source evidence for military activity and weapons deployment.

The DFRLab monitored for deployments of such systems near a field south of Oktyabrskaya in Russia’s Krasnodar Oblast. These systems were likely located close to a military airbase. While the DFRLab cannot confirm their presence in this area nor identify the exact systems, other interference signal patterns along the eastern border of Luhansk and Donetsk could also be interpreted as evidence of more electromagnetic radar-casting defense systems.

—Valentin Châtelet, Research Associate, Brussels, Belgium

—Ruslan Trad, Resident Fellow for Security Research, Sofia, Bulgaria

Ukraine defense minister warns of new Russian offensive

Ukrainian Defense Minister Oleksii Reznikov warned that Russia might attempt to launch a new offensive before the first anniversary of the Ukraine invasion on February 24. According to Reznikov, Russia is concentrating as many as 500,000 troops along Ukraine’s borders, significantly exceeding the declared 300,000 soldiers. Reznikov speculated that the offensive could come from the east and the south simultaneously. The minister also emphasized that military assistance from allies is needed to repel a possible attack.

Ukrainian military intelligence also stated that Ukraine expects a new wave of fighting in the next two months. Meanwhile, Russian President Vladimir Putin held a meeting to discuss the restoration of infrastructure in Crimea, Belgorod, Bryansk, and Kursk following Ukrainian shelling. He noted that his administration is prioritizing ending Ukrainian shelling along border regions.

On the evening of February 1, Russian forces struck the center of Kramatorsk with a rocket. Three civilians were killed and more than 20 people were injured. At least eight apartments were damaged, with one destroyed. 

Meanwhile, Russian offensive operations have restarted in various locations. In the direction of Kupiansk, the Russian army shelled Dvorichna, Synkivka, Ivanivka, Kyslivka, Kotlyarivka, Tabayivka, Pischane, Novoselivske, and Stelmakhivka. The Russian army continued to attack villages and pressed Ukraine’s army positions toward Lyman, Zaporizhzhia, Kherson, Vuhledar, Avdiivka, and Bakhmut.

—Valentin Châtelet, Research Associate, Brussels, Belgium

—Ruslan Trad, Resident Fellow for Security Research, Sofia, Bulgaria

New Russian fortifications indicate a spring offensive could be on the horizon

Russian armed forces have dug trenches in Zaporizhzhia and Kherson Oblasts that the DFRLab has reviewed extensively on social media and satellite imagery. The southern flank in the Russian-occupied Zaporizhzhia Oblast has seen a rise in the build-up of trenches and fortifications stretching from Polohy to Vesele. The DFRLab identified massive underground structures in three different locations, pointing at a Russian reinforcement in their southern positions.

On January 27, trenches stretching twenty-one kilometers and circling Berdyansk’s airport tipped off OSINT researchers to Russia’s expected escalation on the southern flank. The DFRLab identified and documented two other occurrences of defensive build-ups on the eastern bank of the Dnipro River.

Between mid-December and January 31, 2023, Russian soldiers dug up underground trenches in an odd-B shape in the vicinity of Vesele, a village forty kilometers northeast of Melitopol. The DFRLab identified two structures, along with other fortifications across neighboring fields north of Vesele. The other structure, located west of the underground trenches, seems to resemble a defense base immediately connected to the village by a road.

In Mykhailivka, a city facing Zaporizhzhia from the other side of the riverbank, the DFRLab located similar trenches and fortifications. These stretch up to fifteen kilometers long, protecting the entire city near the front line.

—Valentin Châtelet, Research Associate, Brussels, Belgium

—Ruslan Trad, Resident Fellow for Security Research, Sofia, Bulgaria

Russia alleges US bioweapons created COVID, targets Ukrainians

On January 30, Russia’s Ministry of Defense published a collection of conspiracy narratives alleging the United States operates a biological weapons program. The ministry published the initial text on the free and anonymous blogging platform telegra.ph, developed by Telegram for sharing long-form posts. 

The post begins with allegations that the US is involved in the emergence and spread of COVID-19. It names various US agencies and Microsoft founder Bill Gates as key actors in the pandemic. The ministry claims to have acquired more than “20,000 documents, reference and analytical materials, as well as surveyed witnesses and participants of the US biological programs.” The post concludes that these materials “confirm that the Pentagon aimed at creating elements of a biological weapon, and testing it on the population of Ukraine and other countries along the perimeter of the Russian borders.”

The defense ministry shared some of its “evidence” via the cloud service Disk Yandex. The link contains three folders containing unverified documents. The folders are titled “virological studies,” “experiments on Ukrainian citizens and military,” and “Rift Valley fever epidemic.” 

The Facebook account of the Russian embassy in the United States amplified the narrative and shared the documents. The documents also found their way to Kremlin propaganda platforms.

The DFRLab has tracked many instances of Russia spreading falsehoods about the US operating a biological weapons program since the start of the pandemic; Russia now employs similar narratives to justify its war against Ukraine.

—Eto Buziashvili, Research Associate, Tbilisi, Georgia

Pro-Russia Telegram channels target Israel following Iran strike

Pro-Russia Telegram channels targeted Israel following a suspected Israeli drone strike against an Iranian ammunition factory on January 28. A few weeks earlier, the United States sanctioned Iran’s defense and aviation sector for supplying Russia with drones that are being used against Ukraine.

The Telegram channels responded to the Iranian strike by spreading anti-Israel and antisemitic narratives. Russian military blogger Roman Saponkov endorsed calls for the “demilitarization of Israel.” The account Операция Z (“Operation Z”) used antisemitic expressions to describe Jewish people. Elsewhere, Kremlin propagandist Vladimir Solovyev shared a post accusing Israel of providing shelter to “Nazis from the ‘Azov’ terrorist group.” Other pro-war channels shared graphic photos with claims that Wagner had found the bodies of Israeli and Polish mercenaries fighting in Ukraine.

—Eto Buziashvili, Research Associate, Tbilisi, Georgia

Italy targeted by Russian accusations as Rome prepares new weapons package for Ukraine

Russia’s chief diplomat in Italy accused the country of engaging in anti-Russian discrimination, in an apparent attempt to pressure Italy to stop backing Ukraine and sway public opinion in favor of Russia. Earlier this week, Russian ambassador to Italy Sergey Razov published an open letter, ostensibly in response to comments made by Defense Minister Guido Minister Crosetto on why Ukraine needs international support. Razov accused the Italian government of putting in place “discriminatory restrictions” against Russian citizens. The letter was published on the Facebook account of the Russian embassy in Italy; at the time of writing, it had received more than 2,200 likes, 792 comments, and 698 reshares. 

In January, Italian media outlet Decode39 reported that the Russian embassy in Italy had published a series of social media posts “targeting Italy’s supposed military supplies to Ukraine in a bid to cast doubt on Rome’s logistical support and its effectiveness on the battlefield.” The social media posts were widely reshared and amplified the Kremlin narrative that falsely paints Ukrainians as “neo-Nazis.”   

Italy is poised to send a new package of military aid to Ukraine. “According to Defense Minister Crosetto, the package will contain air defense systems, namely Aspide surface-to-air missiles and the more advanced SAMP/T missile shield, of which some components will be supplied by Rome and others by Paris.  

Mattia Caniglia, Associate Director for Capacity Building, Brussels 

The post Russian War Report: Satellite imagery indicates a build-up of air defense missile systems in southern Russia appeared first on Atlantic Council.

In his recently published issue brief Health attaches are the missing link in global diplomacy, South Asia Center non-resident senior fellow Dr. Edmond Fernandes argues that health attaches are the missing piece in diplomacy to strengthen global health infrastructure. He asserts that the system would benefit from having trained medical experts as health attaches to be the first line of communication between countries on the subject of global public health.

To launch the issue brief, the South Asia Center convened a panel of experts including academics and practitioners along with the author to assess the issue while reflecting on the wider need to prioritize global health diplomacy.

This program was recorded on January 17, 2023.

Featuring

Dr. Edmond Fernandes
Non-Resident Senior Fellow
Atlantic Council’s South Asia Center

Amb. Mustapha Jawara
Ambassador Extraordinary and Plenipotentiary to India with Accreditation to Sri Lanka, the Maldives, and Bangladesh
Ministry of Foreign Affairs, The Gambia

Dr. Rebecca Katz
Professor and Director of the Center for Global Health Science and Security
Georgetown University

Dr. Syed Muntasir Mamun
Chief Innovation Officer & Director General, International Trade, Investment & Technology, ICT
Ministry of Foreign Affairs, Bangladesh

Moderated by

Dr. Amita Vyas
Non-Resident Senior Fellow
Atlantic Council’s South Asia Center

The South Asia Center serves as the Atlantic Council’s focal point for work on the region as well as relations between these countries, neighboring regions, Europe, and the United States.

Learn more

Related content

Issue Brief Dec 5, 2022

Health attaches are the missing link in global diplomacy

By Dr. Edmond Fernandes

Given the globalized nature of the modern world, with frequent travel and people living outside their home countries for extended periods for a variety of reasons, standardizing a healthcare liaison from one’s home government would be a crucial step in internationalizing public health diplomacy.

Coronavirus Human Rights

New Atlanticist Sep 8, 2022

How South Asian countries can protect their migrant workers abroad

By Elaine Zhang

India, Pakistan, and Bangladesh have a role to play in creating safer and more prosperous conditions for their citizens working abroad.

Human Rights Inclusive Growth

SouthAsiaSource Jun 27, 2022

COVID-19 and tourism in the Himalayan & Indian Ocean countries of South Asia 

By South Asia Center

While in 2019 tourism was among the fastest growing sectors in South Asia, the pandemic resulted in billions of dollars in losses across the region. To understand these developments, the South Asia Center brought together a panel of experts to discuss COVID-19 and the future of tourism in the Himalayan and Indian Ocean Countries of South Asia.

Climate Change & Climate Action Coronavirus

The post How a health attache can elevate global health diplomacy appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: The Supreme Court will investigate whether former President Jair Bolsonaro incited the January 8 attack on Congress and other government buildings in Brasilia.
• Peru: People—mainly from remote Andean regions—descended on the nation’s capital to protest against President Dina Boluarte in support of her predecessor and demand elections and structural change in the country.
• Trade: The value of goods exported from Latin America and the Caribbean (LAC) increased at an estimated rate of 18.8 percent in 2022, a downward trend from 27.8 percent in 2021, due to higher prices and low volumes.

Monitoring economic headwinds and tailwinds in the region

• Argentina: The government will buy back overseas bonds equivalent to over $1 billion to improve its debt profile, looking to send a positive signal to markets despite low reserves levels.
• Brazil: Vice President Alckmin said that Lula’s administration wants to remove a key tax on manufacturing and importing, the IPI, as part of a broader tax reform package. 
• Guyana: The government announced $43.4 billion in funding for a new natural gas power plant, alongside distribution infrastructure improvements, to promote business and development. 
• Multilaterals: During his inauguration, new Inter-American Development Bank (IDB) president Ilan Goldfajn announced three key priorities for the bank: social issues, climate change, and sustainable infrastructure. 
• Mexico: The 2023 North American Leaders Summit concluded with new agreements to promote sustainability, strengthen supply chains, and respond to migration. 
• Peru: The national statistics institute (INEI) said the economy expanded 1.7 percent year-on-year in November, marking a slight slowdown from the rise of 2.0 percent in October.

In focus: LAC in Davos

Latin American and Caribbean public- and private-sector leaders gathered alongside their counterparts from across the world in Davos, Switzerland, for this year’s Global Economic Forum. Colombia’s finance minister Jose Antonio Ocampo used the opportunity to push for a stronger agreement on minimum taxes for multinational companies. Brazil’s finance minister, Fernando Haddad, and environmental minister, Marina Silva, discussed Brazil’s positive economic outlook, environmental stewardship, and desire for regional integration. 

Spanish prime minister Pedro Sánchez also delivered a speech, in which he emphasized Spain’s role in building ties between Europe and Latin America, as Spain prepares to take over the Presidency of the Council of the European Union later this year. 

Health + Innovation

• Vaccines: The Canadian government will donate $33.4 million to the Pan American Health Organization (PAHO) to increase access to COVID-19 immunizations for populations across the region. This donation is in addition to a prior contribution of $40 million in 2021.
• Belize: The country will celebrate 34 years of relations with Taiwan through the construction of a new general hospital in San Pedro.
• Nutrition: A new United Nations report found that 22.5 percent—or 131.3 million people—of the region’s population cannot afford a healthy diet, citing a country’s income level, the incidence of poverty, and level of inequality as contributing factors.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 21, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: On January 1, Luiz Inácio Lula da Silva was sworn in as president for a third term after defeating incumbent Jair Bolsonaro.
• Outlook: According to the Economic Commission for Latin America and the Caribbean (ECLAC), economic growth will continue to slow in 2023 and reach 1.3 percent.
• Venezuela: The opposition-led legislature dissolved the interim government led by Juan Guaidó. The vote signaled that members of the opposition had lost faith in Guaidó’s ability to oust Maduro. The United States will continue recognizing the 2015 National Assembly as the last remaining democratic institution in Venezuela.

Monitoring economic headwinds and tailwinds in the region

•  Brazil: In 2022, trade surplus reached a record high of $62.3 billion. Total exports also reached a 335 billion high, helped by a boost in prices in the agriculture and livestock sector.
• Argentina: The IMF disbursed a tranche of $6 billion from its $44 billion program with Argentina, citing positive indicators including falling inflation, a better trade balance, and foreign reserves. 
• Colombia: Minimum wage will increase by 16 percent this year, to $242.7 per month. President Petro said the move would boost an economy slowed by inflation. 
• Dominican Republic: The S&P upgraded the country’s credit rating from “BB-“ to “BB,” highlighting its strong recovery from the pandemic and long-term growth potential. 
• El Salvador: The government will receive a $150 million loan from the CAF development bank, designed to strengthen its education system in the wake of the pandemic.  
• Peru: The government launched a $1.6 billion plan to increase welfare and investment in regions gripped by protests following the ouster of former president Pedro Castillo. 

In focus: Nearshoring opportunities in the Americas

With the next North American Leaders Summit (NALS) set for this incoming week (January 9 and 10), nearshoring – the relocation of supply chains closer to the United States – is rising in importance.

Rising costs of and delays during shipping, coupled with the pandemic, have made businesses in the United States wary of relying on supply chains across the Pacific. As a result, some 400 companies explored reshoring to Mexico from Asia in 2022. Mexico’s manufacturing sector is now larger than it was before the pandemic, and Mexican exports to the United States have rapidly increased. Firms such as Walmart have already relocated some business to Mexico, while Tesla is planning a new factory in northern Mexico. NALS will pay particular attention to the electric vehicle production chain in North America.

Health + Innovation

• Chile: In an effort to curb the spread of the BF.7 COVID-19 subvariant, travelers coming from China are now required to show a negative PCR test.
• Haiti: Over 14,700 suspected cholera cases have been reported since December. Nine in every ten cases are from areas hit hard by food insecurity.
• PAHO: Most countries in LAC invest less than the minimum 6 percent of GDP in health and allocate less than 30 percent of the health budget to the first level of care as recommended by the regional health organization.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 7, 2022 appeared first on Atlantic Council.

Trilateral cooperation among the United States, Japan, and South Korea has proved challenging over the years, owing largely to historical tensions. As a result, this project has sought perspectives from next-generation leaders of the three countries to define areas where targeted, flexible, and informal cooperative arrangements can provide clear mutual benefit to all. This issue brief calls for enhanced cooperation with likeminded allies and partners in order to counter shared challenges and advance mutual interests across the areas of security and defense, science and technology, and global public goods. Taken together, several essential themes emerge.

Future cooperation should center on tackling shared challenges including addressing an increasingly belligerent China through proactive yet constructive methods. In the security and defense sector, the three countries should prepare for Chinese economic reprisals by forming a united front. With regard to S&T, to protect against authoritarian threats, including those presented by China’s increasing technological prowess, the three countries should utilize multilateral frameworks, like IPEF, as tools to ensure the safety and security of scientific research and data. For public goods, the trilateral partnership can diversify away from Chinese supply chains by ally-shoring and information-sharing with trusted allies.

Given the historically fraught relationship between South Korea and Japan, the United States can act as a mediator to facilitate cooperation in areas of high benefit and low sensitivity. In security and defense, the trilateral partnership should address less-sensitive, shared security challenges, which include but are not limited to maritime incursions, crisis contingency planning, and cybersecurity. S&T can explore these new frontiers and safeguard free and fair principles for digital connectivity and data governance. Although public goods are less subject to domestic political pushback, the trilateral group’s actions are more likely to succeed if they are small, yet meaningful, such as implementing the democratic building blocks.

Lastly, trilateral cooperation requires both top-down institutionalization and bottom-up support from the general populace. With respect to defense and security, trilateral summits at the head-of-state level must be coupled with gaining public support. For S&T, the private sector can help advance collaboration, while the public sector helps each country remain in the bounds of domestic feasibility to prevent regional conflict. With global public goods, long-lasting trilateral progress requires coupling high-level government dialogues with civil society engagements.

Related content

In-Depth Research & Reports May 27, 2021

Enhancing US-Japan cooperation on global supply chains

By Miyeon Oh, James Hildebrand

Mounting US-China tensions and the COVID-19 pandemic have led to growing calls in the United States and among its allies and partners, including Japan, to address the vulnerabilities in global supply chains critical to national security and economic competitiveness.

Defense Industry Defense Technologies

Report Sep 17, 2021

Beyond the peninsula: Prospects for US-ROK regional cooperation in the Indo-Pacific

By Miyeon Oh

This report assesses the prospects of US-ROK regional cooperation in the Indo-Pacific under South Korea’s New Southern Policy (NSP) and US Indo-Pacific strategy, providing recommendations for policymakers in Washington and Seoul on enhancing US-ROK economic engagement outside of the Korean peninsula.

Digital Policy East Asia

Report Dec 3, 2019

Strategic estrangement between South Korea and Japan as a barrier to trilateral cooperation

By Dr. Cheol Hee Park

Demand for trilateral cooperation between the United States, South Korea, and Japan is on the rise. However, political willingness and capacity for trilateral cooperation are declining.

Elections Indo-Pacific

Indo-Pacific Security Initiative

The Indo-Pacific Security Initiative works with US, allied, and partner governments and other key stakeholders to shape strategies and policies to mitigate the most important rising security challenges facing the region, including China’s growing threat to the international order and North Korea’s destabilizing nuclear weapons advancements. IPSI also addresses opportunities for cooperation in the region, such as transforming regional security architectures, harnessing emerging technologies, and developing new mechanisms for deterrence and defense cooperation.

Explore the Program

The post A next-generation agenda for US-ROK-Japan cooperation appeared first on Atlantic Council.

The post Webster in China-Russia Report: China reportedly planning to boost economic ties with Russia appeared first on Atlantic Council.

​​​​​What you should know

• Peru: President Castillo was ousted by lawmakers after he sought to dissolve Congress ahead of an impeachment vote.
• Brazil: The Economy Ministry rejected assertions by President-elect Lula’s transition team that Bolsonaro’s outgoing administration was leaving government finances “bankrupt.”
• Social outlook: A recent Economic Commission for Latin America and the Caribbean (ECLAC) report projects that by the end of 2022, LAC will have 201 million people living in poverty – an increase of 15 million compared to the pre-pandemic situation.
• ICYMI: On December 7, the Atlantic Council launched a paper on improving tax policy in LAC. Read it here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: signed a new information-sharing agreement with the US designed to root out tax evasion. It could increase tax revenue for Argentina by $1 billion US.
• Barbados: concluded new funding arrangements with the IMF, $113 million US to continue its fiscal reform package and $189 million US towards its climate change response.
• Brazil: President-elect Lula announced that Fernando Haddad, former minister of education and mayor of São Paulo, would be his finance minister.
• Mexico: announced that additional consultations on the USMCA energy dispute would be held through early January, to ensure continued investment and confidence.
• Peru: was placed under a state of emergency after protests gripped the country. Political upheaval led S&P to lower the country’s economic outlook to “negative.”
• Transatlantic relations: Argentina called for reviewing the potential EU-Mercosur trade agreement, highlighting threats to local auto industry and barriers to agricultural exports.
• Uruguay: criticized Mercosur’s inaction on trade agreements with large economies, drawing criticism for its own independent negotiations with China and to join the TPP.

In focus: Guyana’s carbon credits

Guyana is the first country to issue carbon credits designed to prevent forest loss and the first under the ART’s REDD+ Environmental Excellence Standard to ensure integrity and independent verification. The Hess Corporation, which is a partner in an oil consortium led by ExxonMobil that operates in Guyana, will purchase $750 million US of these credits. This move reflects how resilient growth, balancing between the opportunities in the energy sector and protecting its valuable environment, has become a priority in light of climate change and stresses like the COVID-19 pandemic.

These credits will support Guyana’s Low Carbon Development Strategy, with 15 percent of the revenues set aside for indigenous communities. With some 18 million hectares of forest, Guyana is a major carbon sink, and has previously worked with Norway to protect this resource. The new credits reflect Guyana’s status as a “High Forest, Low Deforestation” country, another first.

Health + Innovation

• Argentina: Transport Ministry officials recommended all passengers travelling on public transportation to return to wearing face-masks amid a spike in COVID-19 cases.
• Universal Health Day: The Pan American Health Organization (PAHO) director called on the region to redouble efforts towards achieving universal health as they begin to rebuild from the pandemic.
• Mexico: The state of Nuevo Leon reintroduced the mandatory use of face masks in closed public spaces as the number of COVID-19 infections and other respiratory diseases rise.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 17, 2022 appeared first on Atlantic Council.

Simultaneously, their COVID-related deaths were only a fraction of those experienced throughout the rest of the world. However, as more infectious but less deadly variants emerged, one-by-one those other countries had outbreaks of their own and were ultimately forced to abandon the policy. China, with its immense state resources and powerful social controls, maintained its zero-COVID approach.

Successfully controlling case numbers bred complacency. In 2022 other countries built capacity to manage the virus through robust vaccination campaigns targeting the elderly, new therapeutics and treatments, and rising natural immunity. In contrast, China’s own policy approach, such as the lockdown of its most populous city Shanghai, appeared increasingly chaotic and oppressive. 

Zero-COVID has also become disastrous for the Chinese economy. For the first time since 1989, Beijing signaled it may miss its annual growth target of 5.5 percent, in part, because of its COVID restrictions. In recent days outraged citizens’ feelings transformed from waves of online anger into the largest protests China has seen in decades across Beijing, Shanghai, Shenzhen, and other cities and university campuses. 

So why then has Beijing maintained its zero-COVID approach that has led to historic protests and a stifled economy? 

Vaccinations

On its face, China has managed an incredibly successful vaccination campaign. As of November 11, 90 percent of China’s population had received two jabs, with 63 percent also receiving a booster. The United States has only fully vaccinated around 68 percent of its population with 34 percent also receiving a booster. China’s current vaccination rate is higher than any large nation when they began their respective openings. However, unlike other nations including the United States, China has been unable to encourage substantial vaccine uptake by its most vulnerable population groups, namely seniors. 

China’s elderly population’s vaccination status remains the primary hurdle preventing a safe removal of the country’s COVID restrictions. While senior vaccination rates largely match the rest of the country, their booster status continues to lag. This is especially treacherous for Beijing as China resists the use of Western mRNA vaccines, the backbone to the US and European COVID health response. They instead rely on less effective, homegrown Chinese vaccines. As the chart below demonstrates, Chinese-made vaccines are only able to match the protection offered by mRNA vaccines such as the BioNTech-Pfizer vaccine in seniors after three doses. To prevent the surge of elderly deaths, China must roll out widespread booster campaigns to inoculate its seniors ahead of any reduction in its zero-COVID policies. 

Beijing began taking steps to address this in late October. Regulators authorized the world’s first inhalable COVID vaccine which they hope will increase uptake among seniors with vaccination hesitancy. Following recent widespread protests, China has doubled down on these efforts and its top epidemic prevention body urged local governments to focus on getting the country’s elderly vaccinated against COVID. However, until China is able to get booster shots into the arms of its 254 million seniors, and particularly those older than eighty, Beijing risks a wave of deaths if it loosens restrictions. 

Health care infrastructure

Even with an effective vaccination campaign, China’s health care system is not prepared to manage the inevitable nationwide COVID outbreak that will follow any easing of its strict COVID restrictions. Because of Beijing’s current approach, China has focused its resources on containment and failed to build the robust defenses needed to treat severe cases in a mass outbreak. Since early 2020 China has heavily invested in a colossal construction campaign to build field hospitals which are designed to house and treat mild and asymptomatic COVID cases. This stands in contrast to governments such as those of the United States and European Union which directed asymptomatic and mild cases to isolate at home, easing the burden on their health care systems, and focusing on building care infrastructure and treatment capacity for serious cases. Now, as protests force Beijing to begin pivoting towards reopening, the country’s health care system has been caught flat-footed.

China lacks both the treatment capacity and the personnel to handle an intense COVID surge. China has 3.1 nurses per one thousand people, below developing economy peers such as Brazil which have 7.4 nurses per one thousand people—and a far cry from developed nations like Germany which have fourteen nurses per one thousand people. China also lacks the critical care beds needed to treat a surge. Demand for intensive-care beds could reach fifteen times the current capacity during a surge according to a study published in May. While vaccination rates have improved since then, they are still not high enough to prevent hospitals from being overwhelmed.    

China’s infrastructure deficit is further complicated by the country’s urban-rural divide. Rural areas have, on average, nearly 30 percent fewer doctors per one thousand people than China’s cities. They also still need major infrastructure investments as demonstrated by a $300 million loan the Asian Development Bank approved earlier this fall to improve public health services in poorer, rural regions in China after earlier waves of COVID exposed gaps in the state health system. Worryingly, the bank’s experts identify “admission surges that can negatively affect patient care and overburden facilities” as one of the motivating factors for the investment. 

China may not be able to build the staffing and treatment capacity needed under the timeline Beijing may adhere to following widespread protests. But it could still turn to stockpiling antiviral drugs and therapeutics such as the drug Paxlovid to help manage a future COVID wave. 

Towards a safer exit from zero-COVID

The coming winter will be the key test for Chinese policy makers. A late-November model suggests that if China were to lift strict restrictions now, Omicron could infect between one hundred and sixty million and two hundred and eighty million people—resulting in some 1.3 million to 2.1 million deaths, largely among unvaccinated seniors. 
Despite this, Beijing seems resolved in shifting away from its zero-COVID approach. To do this safely, it should prioritize pragmatic preparations, otherwise it risks a large, deadly wave of COVID infections such as the one Hong Kong experienced in spring 2022. When Hong Kong began repealing its COVID restrictions it lacked a concrete plan for exit. Its infrastructure was woefully underprepared and the policy directions its government provided were outdated and unrealistic. For example, even at the peak of its outbreak, the city continued to isolate mild cases in hospitals, exacerbating capacity issues and leaving those with severe infections underserved leading to a spike in deaths.

Beijing has appeared to learn from the city state’s mistakes and taken some initial steps to facilitate a safer exit from zero-COVID. On December 6th the CCP announced new policies aimed at accelerating vaccination among the elderly as well as a nationwide expansion of rules that allow home isolation for asymptomatic and mild infections, already allowed in Beijing after its quarantine facilities ran out of space. 

China should continue to prioritize the transition from preventing the spread of COVID towards the treatment of serious cases. Crucial areas to watch include Beijing’s ability to rollout an aggressive vaccination campaign focused on booster shots for vulnerable groups; the approval of new vaccines that either increase uptake or are more effective—such as China’s first homegrown mRNA vaccine; growth in China’s stockpile of COVID treatments; and updated guidance on the health risks of COVID and how hospitals and public health officials ought prioritize treatment. After 3 years of zero-COVID, a surge in cases may be inevitable but, through prudent policy and good preparations, a surge in deaths may still be avoided.

Niels Graham is an Assistant Director with the Atlantic Council GeoEconomics Center focusing on the Chinese economy.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

Learn more

The post The numbers that drove China’s Zero-COVID policy appeared first on Atlantic Council.

In contrast to many countries currently living with the COVID-19 virus, Chinese leader Xi Jinping has tried to reduce infections to zero with his “dynamic” zero-COVID policy. Preventing infections in China over the past few years, according to the Chinese government, meant locking people in their homes and welding their doors, sending those exposed to COVID-19 to quarantine camps, and lining millions of people up for tests each day, sometimes in the freezing cold. Xi’s policy has in turn contributed to China’s slower-than-predicted economic growth rate and high youth unemployment. 

After a fire erupted in November in an apartment building in Urumqi, Xinjiang—a city that was under a one-hundred-day lockdown—and ten residents perished, protests spread widely across major cities in China. Protesters clashed with police and epidemic workers, calling for the end of the lockdowns and some even demanding Xi’s resignation. Since the peak of the protests, Beijing has detailed plans to relax COVID-19 restrictions and reduce testing requirements. 

To discuss the recent lockdown demonstrations in China, DFRLab Resident China Fellow Kenton Thibaut moderated a panel at the Digital Forensic Research Lab’s 360/StratCom this year. Maya Wang, associate director at Human Rights Watch, observed that dissatisfaction with the COVID-19 restrictions has grown steadily over the three years of strict enforcement. “The bottled-up energy essentially exploded,” she remarked. However, it was not just the fire that prompted the unrest. Wang explained that prior grievances also laid the groundwork for the protests today, such as the twenty-seven people killed in the crash of a bus carrying people to quarantine in September and the Sitong Bridge protest before the China’s Twentieth Communist Party Congress. 

On why Xinjiang became the focal point for the large protests, Sheena Greitens, associate professor at the LBJ School of University of Texas Austin, stated that Xinjiang was a test case for Xi’s national-security concept. According to Greitens, the Chinese leader’s strategic goal appeared to be to prevent large-scale protests from spreading between locations, economic classes, and ethnic groups. Yet the fire, Greitens added, brought commonality and solidarity between the Han majority in the rest of China and the Uyghur minority in Xinjiang. She added that these protests tested the security apparatus and revealed shortcomings in the system. “I don’t think that this means the system overall has failed,” said Greitens. The capabilities the Chinese government have built are still useful for interrupting protests and punishing individuals who have participated.  

Xiao Qiang, research scientist and the founder of US-based China Digital Times, also underscored the importance of the Sitong Bridge protests for inspiring the messages in the recent protests. Xiao said the Sitong Bridge and the current demonstrations were “so different from previous ones in the last thirty years” because their focus went beyond COVID-19: They also targeted the government’s censorship and Xi’s leadership. He also recounted how information about the protests flowed across borders. Protesters circumvented the Chinese internet firewall using virtual private networks (VPNs) to send videos to volunteer activists worldwide, he explained. For example, a Twitter user in Italy quickly reposted protest videos sent by protesters and then sent the videos “immediately back to China so that people in the city almost in real time know where the protests are,” Xiao explained. This fluid information environment, he added, overwhelmed the Chinese censorship mechanisms. 

While the crackdowns on these large-scale mobilizations have been much less harsh than crackdowns in 1989, Greitens cautioned against painting the regime as becoming more tolerant of opposition, remarking that the Chinese Communist Party has shifted punishment from public spheres, such as the protest areas, to “individualized, targeted private spaces that we can’t see.”  

As the protests wound down, some observers were disappointed by the results and that there has been no structural political change. But Wang offered more nuance: “Even in the West… things do not change overnight,” noted Wang. “People should not expect any differently from China. People should also not discount the inspiration that these protests brought… The protests are important this time because they give people hope they are not alone,” she said. 

As everyone in China has been affected by the lockdowns in some way, the protests have also included people from all walks of life. Xiao highlighted the participation of students across eighty university campuses, indicating the extent to which young people disagree with the direction Xi is taking China. The students, he said, do not see the same hope for their future given what they perceive as China’s current trajectory. The gender dynamics underpinning the protests were also striking, with Wang noting that women in China are becoming more vocal and organizing protests: “The participation of women is often the central muscle that keeps these movements going in many parts of the world,” she said. 

The post Holes in the great fire wall: Dissent and protests in China appeared first on Atlantic Council.

The health attaché will serve as the prime representative and advocate for healthcare, development, human rights, and trade for the people represented by the embassy or mission in the host country. Given the globalized nature of the modern world, with frequent travel and people living outside their home countries for extended periods for a variety of reasons, standardizing a healthcare liaison from one’s home government would be a crucial step in internationalizing public health diplomacy.

The attaché will also further multilateralism by supporting embassies and/or high commissions via a health security and development angle. This work will intersect within a domestic and international setting by providing intellectual support on global health outcomes to local and national officials and work to build bilateral ties on issues of shared medical, public health, pharmaceutical, technological, and academic interests across the health and development sectors. As an individual, the health attaché should carry a strong track record on public health and healthcare issues, and be a local citizen of the receiving country. The health attaché’s professional philosophy will speak a language of social progress where health is portrayed as a means of investment as opposed to expenditure, where human life is valuable beyond dry statistical means, and where sensible engagement serves to inform classic diplomacy that puts people ahead of political goals.

The office of a health attaché must have dual goals: to strengthen bilateral relations among and within countries; and to improve public health systems with health intelligence inputs that have the potential to influence outcomes, while also providing local assistance to country nationals who may need help.

Today’s health attaché must be a person with sound knowledge of understanding diseases and global health outcomes as well as have keen interest in the processes of understanding national priorities with sound solutions for policies that have impact at scale.

The South Asia Center serves as the Atlantic Council’s focal point for work on the region as well as relations between these countries, neighboring regions, Europe, and the United States.

Learn more

Related content

New Atlanticist Sep 8, 2022

How South Asian countries can protect their migrant workers abroad

By Elaine Zhang

India, Pakistan, and Bangladesh have a role to play in creating safer and more prosperous conditions for their citizens working abroad.

Human Rights Inclusive Growth

SouthAsiaSource Jun 27, 2022

COVID-19 and tourism in the Himalayan & Indian Ocean countries of South Asia 

By South Asia Center

While in 2019 tourism was among the fastest growing sectors in South Asia, the pandemic resulted in billions of dollars in losses across the region. To understand these developments, the South Asia Center brought together a panel of experts to discuss COVID-19 and the future of tourism in the Himalayan and Indian Ocean Countries of South Asia.

Climate Change & Climate Action Coronavirus

Annual Report May 10, 2022

South Asia Center

By Atlantic Council

2021 was a pivotal year for South Asia, as the US defeat in Afghanistan reinforced Washington’s historically security-centric focus in the region.

The post Health attaches are the missing link in global diplomacy appeared first on Atlantic Council.

​​​​​What you should know

• Economic outlook: The head of the UN Economic Commission on Latin America and the Caribbean (ECLAC) said that the region’s stagnation is ”worse than the 1980s” due to weak investment, low productivity, and inadequate education.
• Mexico: Remittances sent from workers abroad surpassed $5.35 billion in October, beating economists’ forecast on US job strength.
• #ProactiveLAC: On Wednesday, December 7, the Atlantic Council will host a virtual conversation on LAC’s economic outlook, fiscal policy, and small and medium-sized enterprises in uncertain times. Register here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Upcoming legislation is set to encourage investment in its liquified natural gas sector, as demand, driven by the war in Ukraine, continues to grow. 
• Bolivia: The country lowered its 2023 growth forecast from 5.1 to 4.8 percent, as an ongoing strike in Santa Cruz has led to over $780 million in losses.  
• Chile: During the recent high-level dialogue with the United States covering migration and sustainable development, both parties agreed to relaunch their bilateral Science, Technology, and Innovation Council. 
• Dominican Republic: The United States will block sugar imports from Central Romana, the Caribbean nation’s largest employer, accusing it of using forced labor. 
• Ecuador: The government is considering a new financing deal with the International Monetary Fund (IMF) for 2023, as its current agreement is set to expire at the end of 2022.  
• Guyana: According to new ECLAC data, the country recorded the highest FDI growth in the Caribbean in 2021, and now accounts for half of all Caribbean FDI, thanks to its booming hydrocarbon sector.  
• Peru: Farmers and truckers set up roadblocks to protest rising gas and fertilizer prices, driven up by the war in Ukraine.  
• FDI: In a 2022 ECLAC report, Foreign Direct Investment (FDI) in Latin America and the Caribbean (LAC) rose by 40.7 percent in 2021 but fell short to achieve pre-pandemic levels.

In focus: Venezuelan thaw

Last weekend, the United States granted Chevron a six-month license to expand operations in Venezuela after the Maduro government agreed to resume talks in Mexico City with the country’s opposition. The two sides signed an agreement to use frozen Venezuelan assets for humanitarian relief as well.  

The United States has framed this policy shift as a “targeted” response to promote “concrete steps” forward by the parties meeting in Mexico City. At the same time, the energy crisis driven by Russia’s war in Ukraine has elevated Maduro’s–-and Venezuela’s –-importance in a time of rising oil demand.  

Health + Innovation

• ICYMI: On November 16, the Atlantic Council launched a report with actionable recommendations for improving immunization program outcomes and financing in the region. Read it here.
• Uruguay: Health authorities issued a recommendation that immunocompromised patients and over 50 year-olds should take their fifth dose of the COVID-19 vaccine.
• Food insecurity: An ECLAC report found that 56.5 million people in LAC are impacted by hunger.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 3, 2022 appeared first on Atlantic Council.

On November 30, IPSI Senior Fellow Dexter Tiff Roberts appeared on Complete Intelligence to discuss the origins and context of the protests in China. Roberts highlights “the deep economic malaise,” in addition to frustrations over COVID-zero, as key factors that contributed to the protests. Moreover, he remarks on the significance of a sense among young people in China that the Chinese Communist Party and Beijing are not infallible.

Fellow

Dexter Tiff Roberts

Nonresident Senior Fellow

Global China Hub Indo-Pacific Security Initiative

China Chinese

The post Roberts Discusses China Protests on Complete Intelligence appeared first on Atlantic Council.

They won’t be locked down. Protests against China’s zero-COVID policies have spread across the country, with some demonstrators even calling for Communist Party General Secretary Xi Jinping to step down. Today, police sought to more forcefully clamp down on protests in Beijing and Shanghai. How far could the protest movement go, what kind of threat does it pose to Xi’s government, and what should the world expect next? Our experts are on the case.

• John Culver (@JohnCulver689): Nonresident senior fellow at the Global China Hub and former US national intelligence officer for East Asia
• Michael Schuman (@MichaelSchuman): Nonresident senior fellow at the Global China Hub and contributing writer for the Atlantic magazine
• David Shullman (@DaveShullman): Senior director of the Global China Hub and former US intelligence official focused on East Asia

Man in a box

• How did we get here? The Chinese Communist Party (CCP) is “boxed in by its zero-COVID policy,” John tells us: It has tried to stamp out the spread of the disease with lockdowns and refused to import Western vaccines, and any change in course would be an unacceptable admission of defeat on those fronts.
• But staying the course has resulted in unrest from “the brave tip of the iceberg” of protesters, numbering mostly in the hundreds, John says. “In some ways, this is the situation for which Xi and his predecessor built the hardened party-state. But like even the biggest bank, they can’t survive a run in the form of major, persistent protests everywhere all the time.” 
• It all adds up to “the greatest challenge to Xi’s power since he first claimed China’s helm a decade ago,” Michael says.
• The protests also undermine Xi’s claims that China’s COVID management “has demonstrated the effectiveness of China’s authoritarian system in comparison to democracy,” Dave says, “and more broadly put the lie to the argument frequently (and increasingly) repeated by Chinese officials that the Chinese people overwhelmingly approve of Party rule and its approach to governance.”

Subscribe to Fast Thinking email alerts

Sign up to receive rapid insight in your inbox from Atlantic Council experts on global events as they unfold.

• Email*
• Name
  This field is for validation purposes and should be left unchanged.

Crack down and shake up

• A “practical course” for the CCP to pursue would be to carry out a “selective crackdown” now and ease it over time, John says. A date to watch is the Chinese New Year celebration in late January: “If they prevent travel on a large scale, their security nightmare will deepen, but travel could create superspreader events nationwide.”
• Michael points out that the measures announced so far to ease—or “optimize,” as the regime calls it—the zero-COVID policy are generally tweaks to the existing system, such as reductions in certain quarantine periods. “I think the government is going to have to introduce more fundamental changes to really make a difference,” he says. “As long as the pandemic strategy relies on arbitrary detentions and business closures, people’s lives and livelihoods will continue to face disruptions, and public discontent could continue to rise. Furthermore, as long as the leadership demands infections must be kept at or near zero, local officials will still feel pressured to take whatever steps they can to suppress the virus on their watch. And that means continued abuses.”
• In the videos of the protests that have leaked out so far, John sees only local police and health officials trying to quell the crowds—not the “huge anti-riot force” of the People’s Armed Police (PAP). “When we see the PAP in Beijing, Shanghai, or other major cities, that will demarcate an intensifying crisis.” 

Shades of 1989

• While Dave cautions that the protest activity “does not mean we are witnessing the beginning of the end of the Communist Party,” he says a crackdown by internal security forces including the PAP “would likely set the groundwork for even more repressive policies across the board as the Party-state’s rule becomes more brittle and reliant on the threat of brute force and information control to maintain power.”  
• We’re starting to see comparisons to the mass student protests of 1989 that led to leadership divisions in the Chinese government and the Tiananmen Square massacre. “If there’s going to be a major 1989-scale political crisis, it will have to start at the top, not from the grassroots,” John says, and there’s little appetite from elites to challenge Xi so soon after he solidified his power at the Party Congress in October.
• “But there’s a perfect storm potential where the regime relies on the stick, doesn’t provide hope or a plan to get out of zero-COVID hell, and protests spread, build, and are sustained,” John adds. He cautions, though, that it will be hard for those outside China to gauge any political splits in Beijing beyond assessing who shows up for major events or spotting criticism dribbling out from former top Chinese leaders.
• In such a scenario, the Chinese government could send in the People’s Liberation Army (PLA), as it did during the Tiananmen massacre. “If you see the PLA rolling into cities, that means the regime is ready to kill people to stay in power, but their initial goal would be to avoid that by cowing” the public, John says. “No competent regime pushes their military, no matter how loyal, into repeated confrontations with the people—it’s a card they can only play a few times before the guns could start to swing the other way.”

The post Is China facing another Tiananmen moment? appeared first on Atlantic Council.

​​​​​What you should know

• Regional recovery: Of the 20 million people in Latin America who fell into pandemic-induced poverty, only 7 million have escaped it during the recovery.
• Nicaragua: The United States announced new sanctions on its mining industry in response to continued repression, targeting its largest export, gold.
• Brazil: Incumbent President Bolsonaro and former President Lula de Silva will face off in a second-round run-off election this Sunday. Join us Monday for post-election analysis.

Monitoring economic headwinds and tailwinds in the region

• Brazil: The government nominated its former central bank director, Ilan Goldfajn, for the presidency of the Inter-American Development Bank. Also nominated is Alicia Bárcena, former head of ECLAC, by Mexico.  
• Cuba: The United States granted $2 million in humanitarian assistance to assist in the country’s  recovery from Hurricane Ian last month. 
• Ecuador: The government secured joint IDB-EU funding for an energy interconnection project with Peru, estimated to save $61 million annually through reduced fossil fuel use. 
• Jamaica: The country welcomed a $300 million investment by Huawei in an effort to double down on its goal of digital transformation.
• Peru: Ongoing political instability prompted a new negative rating for its credit outlook, attributed to cabinet reshuffling and impeachment attempts against President Pedro Castillo. 
• ECLAC: This week, the Economic Commission for Latin America and the Caribbean (ECLAC) redoubled its commitment to transform development models for productive regional transformation during its thirty-ninth session.

In focus: Transatlantic ties

A recent report highlights the potential for strengthening European investment and connections with LAC, focusing on three main pillars: digital connectivity, cybersecurity, and digital rights. Emphasizing the key opportunity of Spanish leadership through Spain’s upcoming presidency of the EU, the report also explores the potential of the EU-LAC Digital Alliance planned for 2023. 

At the same time, the EU High Representative for Foreign Affairs, Josep Borrell, attended the fourth EU Investment Forum in Montevideo this week. He used the opportunity to reaffirm European commitment to a free trade agreement with Mercosur.  

Health + Innovation

• Ecuador: The latest country to drop all travel restrictions and return to pre-pandemic entry policies for foreigners.
• Brazil: Brazilians paid tribute in São Paulo to COVID-19 victims. To date, Brazil has lost 680,000 lives to the pandemic.
• Recovery: The World Bank granted Guatemala a recovery loan for healthcare and social services in the wake of the COVID-19 pandemic.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 30, 2022 appeared first on Atlantic Council.

The inner workings of high-level Chinese politics are a black box. China watchers, not unlike the Kremlinologists of yesteryear, are forced to sift through dinner-party gossip and the front pages of the People’s Daily for clues about who’s in and who’s out. Winners in the backroom brawls of China’s politics are never certain until they are revealed at Chinese Communist Party congresses every five years. It is remarkable that even today, with China a rising world power and second-largest economy, that its political process remains so opaque.

This time around, with the much-anticipated twentieth Congress scheduled for an October 16 opening, the picture is clearer than usual. It has been widely believed for some time, both inside and outside of China, that current Communist Party General Secretary Xi Jinping will break with modern precedent and extend his reign into a third, five-year term. Xi, who also serves as the country’s president, has been working toward this outcome for years. In 2018, for instance, he engineered a constitutional reform to eliminate term limits on the presidency. His propaganda machine has elevated the status of Mao Zedong, who ruled practically without challenge from the founding of the People’s Republic in 1949 to his death in 1976. Xi Jinping Thought, a compendium of his ideas, is required reading in Chinese schools. Meanwhile, Deng Xiaoping, the leader who championed a more collective form of governance, has been downgraded in the government’s public messaging. Clearly, Xi has been laying the groundwork for renewed one-man dominance of China’s political system.

Of course, the results of the upcoming Congress cannot be determined with metaphysical certitude. The world will have to wait for the latest big reveal, like always, to see if Xi still rules the roost. Perhaps more importantly, the global community will find out who else will sit on the all-powerful Standing Committee of the party’s Politburo with him,¹ to gauge how much control he will command in coming years. However, barring unforeseen circumstances, world leaders should expect to see Xi at global forums for at least five more years.

The implications of Xi’s continued grip on power are tremendous for both China and the world. The decisions he makes in Beijing will reverberate well beyond China’s borders to influence the global economy, the development of technology, international governance, and war and peace. At this stage in China’s political cycle, the world would usually ask: Who will rule China? This year, the important question is: What will Xi do with his power?

Return of one-man rule

To appreciate the importance of the twentieth Congress, it is critical to understand how dramatically Xi has altered the way China is governed. Beginning in the 1980s, the Communist Party fostered a system of collective leadership, in which power was shared within the party and between the party and state apparatus. This system was developed to include regular, peaceful transitions of power from one leadership team to another at congresses held every five years. Top leaders stayed in their official posts for no more than ten years. The system was a reaction against the turmoil of the first three decades of the People’s Republic. Mao ruled as more than a dictator—he was practically a Communist demigod; his every word was gospel. However, allowing one person to wield such immense power proved catastrophic for China. Mao’s Great Leap Forward (1958-61), an ideologically motivated attempt to catapult a poverty-stricken China into the ranks of the rich by mass movements, left some 30 million Chinese dead from famine. He followed that up in 1966 with the Cultural Revolution, a campaign to uproot the stubborn vestiges of an old, corrupt China (and solidify Mao’s own political position), which resulted in a decade of widespread violence and economic paralysis. By the time of Mao’s death in 1976, China was exhausted, desperately poor, and dangerously isolated.

The reformers who eventually succeeded Mao, led by Deng Xiaoping (a victim of the Cultural Revolution himself), reacted against the trauma of one-man rule. “It is not good to have an over-concentration of power,” Deng said in a 1980 speech on this subject. “It hinders the practice of socialist democracy and of the Party’s democratic centralism, impedes the progress of socialist construction, and prevents us from taking full advantage of collective wisdom.”²

The Communist Party still dominated—that was the unfortunate lesson of the massacre in Tiananmen Square in 1989—but within the party and state, space opened for greater debate on policy. That allowed for a wider range of expertise to influence the policy process and earned the Chinese state a reputation as a “technocracy”—a finely tuned, generally pragmatic, and usually predictable policymaking machine. It is impossible to separate China’s tremendous economic success from the emergence of this collective governance system.

Xi has thoroughly altered this system. He has sidelined other major figures in the governing order and claimed their power for himself. For instance, in the past, the premier, the number two position in the ruling hierarchy, took responsibility for economic matters. The current person in that post, Li Keqiang, was widely expected to take on this role when Xi’s leadership team first took control in 2012. However, under Xi, Li has become a marginal figure. Xi has grasped control over the policymaking process across all sectors by dominating high-level commissions of top leaders on various areas of policy and by promoting allies and loyalists into key positions throughout the party and state apparatus.³ 

Xi’s grip on policy has been further enhanced by the relentless promotion of his personality cult. Xi is presented to the Chinese people (and from there, the world) as a brilliant theoretician who possesses the wisdom to achieve the rejuvenation of the Chinese nation and resolve the most complex problems facing the international community. Xi’s ideas, encapsulated in Xi Jinping Thought, echo Mao’s Little Red Book in the way they have become the source of extensive study and fawning reverence. Xi’s mere utterance can send officials and bureaucrats scampering to decipher and implement his wishes. 

To a great degree, what Xi wants, Xi gets. As a result, Chinese policymaking has become increasingly dependent on the decisions and desires of a single individual. That has already rendered the direction of Chinese policy less predictable. 

Anticipating the course of Chinese policy has thus become a matter of identifying Xi’s priorities—whether national, ideological, or personal. In a sense, the current system of Chinese governance is exactly what Deng and his fellow reformers intended to avoid. China and its vast population have again been set adrift on the whims of a single individual.

The future of zero-COVID

Attempting to read Xi’s mind is a dangerous (and thankless) task. Yet any attempt to assess the direction of Xi’s China must give it a whirl. Fortunately, after a decade in charge, Xi has left a lengthy record of speeches, initiatives, and actions that offer a foundation from which to peer into the future of Xi’s agenda. Of course, as with the stock market, past performance cannot determine what might come with certainty. Xi could break with his own precedents and shift course in the face of new challenges and circumstances, or he could come under enough pressure internally or externally to compel him to revise his agenda. At the same time, he has expressed a slate of ideas and beliefs that can help the beleaguered China watcher more comfortably envision the course upon which he could take the country. The fact that Xi is more ideologue than pragmatist also makes it somewhat safer to assume his past practice will continue into the future.

Still, there remains some expectation (or hope) both within China and elsewhere that Xi will change aspects of his policies once he secures his coveted third term. This thinking holds that Xi will have greater flexibility in policy choices once his own authority is locked on track. This possibility is discussed most often in relation to Xi’s most prominent program: zero-COVID.

Xi’s insistence that his government keep COVID cases at or near zero has prevented a major pandemic on the scale suffered in most other countries. However, the continuation of the zero-COVID policy nearly three years since the epidemic’s initial outbreak in Wuhan has suppressed economic growth, badly damaged small businesses, and fomented widespread public frustration. Speculation has persisted for some time that Xi might be willing to ease the strict pandemic controls—which include recurring lockdowns of major cities, long quarantines for travelers, and repetitive testing—after the upcoming Congress. That expectation is based on the assumption that Xi has insisted on maintaining zero-COVID for personal political motivations. After having touted zero-COVID as a great success both at home and abroad, Xi became “boxed in” by a political narrative that ties him intimately with the approach.⁴ This has made it difficult for him to change course from a political perspective, especially ahead of the Congress. A major outbreak before Xi’s anointment would simply be too embarrassing for him to risk. With the Congress behind him, the argument goes, Xi will be freed to adjust or even lift zero-COVID to address pressing economic concerns.

Yet there are equally good reasons to suspect zero-COVID is here to stay, at least in some form. Five years ago, there was similar chatter that Xi would return to liberal economic reform once he claimed his second term. Instead, he moved further from that path. Xi may calculate that that political narrative in which he defeated the virus where other, mere mortal leaders failed will continue to be too useful to his stature to lift zero-COVID, even after the Congress. He also seems to believe that abandoning the policy would have negative political consequences for the Communist Party more broadly, A late July 2022 Politburo meeting concluded the policy needed to be addressed within a political perspective. After all, the party markets itself to the Chinese public as infallible; ditching zero-Covid could appear an unacceptable admission it has erred.

There is also a possibility that Xi is committed to zero-Covid because he believes it is best for China, or his vision of what China should be. The assumption underlying much of the debate about zero-COVID is that the leadership wants to find an off-ramp but has not managed to do so. There are some members of the political and business elite who would support a loosening of the COVID strictures. However, Xi has continually reiterated that zero-COVID is the best policy for China, even as its economic and social costs mount, and the approach appears to present possible political downside as well. The two-month lockdown of Shanghai earlier this year provides a telling example. Despite these problems, Xi has shown a consistent tendency to tighten the state’s grip over society to advance his ideological agenda of a refashioned China and to solidify his personal grip on party and state. Zero-COVID has been and can continue to be a convenient tool to achieve his goals. For instance, while business leaders may be troubled by the growing isolation of China due to restrictions on travel and quarantines for travelers, Xi may see these measures as a way to limit foreign influence—a physical cordon on dangerous outside ideas and information to match the digital Great Firewall. Note that Beijing reduced the quarantine period for incoming travelers in June but has not eased restrictions on Chinese nationals’ outbound travel, introduced in May. Furthermore, Xi may find the enhanced monitoring of the populace and empowerment of local, community-level officials in the name of pandemic prevention useful to tighten state control over society. That suggests zero-COVID, or a form of it, may become a fact of life in China. It is likely that a number of its restrictions and rules will be retained to the benefit of Xi’s surveillance state but to the detriment of personal privacy.

The future of economic policy

Another element in the debate about zero-COVID is the current miserable condition of the Chinese economy. The International Monetary Fund (IMF) forecasts gross domestic product (GDP) will expand a mere 3.3 percent in 2022. Zero-COVID is a major contributing factor to this slowing growth. Its persistent lockdowns and restricted travel have suppressed consumption, supply chains, and small business, especially in the service sector. The assumption among many China experts is that at some point, Beijing will have to loosen COVID controls to alleviate the deepening economic problems.

However, Xi appears to be deviating from past practice in regard to the importance of economic growth as a policy goal. China watchers have been conditioned over the past three decades to assume the Chinese leadership will prioritize economic development over all other issues. The Communist Party has long marketed the country’s high growth rates as a mark of its competence and legitimacy. Further, the party’s obsession with social stability prompted officials to fear the joblessness and discontent caused by weak economic conditions. Amid zero-COVID, however, Xi has signaled that economic development may no longer be the party’s No. 1 priority. In recent months, even as Li, the premier, has exhorted local officials to resurrect economic growth, the party has also been willing to accept economic sacrifices in order to maintain the zero-COVID stricture.

That could be part of a much broader and critical shift in the direction of Chinese policy. Going forward, the pursuit of economic development may be balanced, or even downgraded, relative to political, security, and social concerns.⁵

Such a shift has major implications for China’s economic relations with the rest of the world. It explains why Xi has replaced the long-standing, guiding principle of “reform and opening up” with a new mantra of “self-sufficiency.” Xi will almost certainly continue to stress the need to reduce China’s vulnerabilities to the outside world by substituting imports with homemade alternatives. As Xi once said: “The essence of the new development dynamic is realizing a high level of self-reliance.”⁶ Xi will therefore persist in his efforts to develop Chinese technologies through state-led industrial policies with their heavy subsidization of local high-tech industries, despite their massive waste of resources and underwhelming results thus far.

That suggests two important trends for economic policy in Xi’s third term. First, he will continue to prioritize economic security over economic efficiency—in other words, he is willing to sacrifice growth for political objectives. Second, Xi’s economic agenda will also foment greater competition with the United States and other advanced economies in cutting-edge technologies—most of all semiconductors. Chinese policymakers will persist in pursuing tactics, such as forced technology transfer and subsidization, that are a cause of trade friction with Washington. Overall, Xi’s economic policies will have the effect of limiting the further integration of the Chinese economy into the global economy, likely increasing disputes with trading partners, encouraging foreign governments to impose restrictions on business investment and trade with China, and capping the ability of Chinese companies to go global.

Xi’s penchant for political control will influence the course of economic policy in other ways as well. He has partially reversed domestic economic liberalization, and instead, he is reasserting a level of state influence over the private sector. The most visible manifestation of that trend has been the imposition of greater regulation on many sectors of the economy over the past two years. That campaign constrained the ability of some companies, especially in technology, to expand, or, in the case of private education services, even survive. Global investors wonder if the harsh crackdown has finally run its course. But that is the wrong question to ask. Xi has displayed a wariness of private enterprise distinct from his recent predecessors. He has spoken of the need to “prevent the disorderly expansion and unchecked growth of capital,”⁷ and he appears to fear that the growing wealth and influence of private companies and entrepreneurs could present a threat to the Communist Party’s dominance. Xi may intend to subordinate the private sector to the interests of the state and party. Under Xi, the Communist Party adopted a policy to enhance its control over the management of private companies. Xi has also elevated the narrowing of income disparities, between both income groups and regions of the country, to priority status in Beijing’s economic agenda with his campaign for “common prosperity.” Although the policy platform to achieve “common prosperity,” remains a vague work-in-progress, the prominence placed on this idea is a signal that Xi disapproves of the unfettered expansion of personal wealth generated through entrepreneurship and private enterprise. Such an attitude is detrimental to economic development since it discourages entrepreneurial activity and innovation. As in all countries, however, pressuring the rich makes for good politics, and Xi seems to revel in such populist exploits. Though Chinese officials have stressed that “common prosperity” is not a code for soaking the wealthy, its main achievement thus far has been arm-twisting major private firms to divert more profits into charitable causes. Expect Xi to persist in these populist causes as a method of bolstering his credentials as a “man of the people.”

Xi and Taiwan

All the factors discussed above add up to slower growth, and a problem for the Communist Party. The leadership will no longer be able to justify their repression with the promise of economic benefit. The party’s implicit social contract with the public—let us rule and we will make you rich—could break down. Xi must instead find other sources of “performance legitimacy,” or other measures of the party’s right to rule, and new endeavors to rally support for and redirect frustration away from the Communist regime.

It has become fairly obvious over the course of Xi’s term that he is attempting to capitalize on nationalist causes as a substitute for economic development and the new source of party legitimacy. Much of Xi’s public discourse focuses on achieving national rejuvenation. This goal goes beyond simply gaining wealth to restoring China’s greatness on the world stage. Inevitably, such appeals to nationalism lead to the issue of Taiwan. Claiming Taiwan has long been a top priority for the People’s Republic, but Xi appears to be elevating the issue even higher on Beijing’s to-do list. Further, he is doing so in potentially dangerous and destabilizing ways. Beijing has not held any serious dialogue with Taipei since the current Taiwanese President, Tsai Ing-wen, took office in 2016. Instead, Xi has chosen to increase diplomatic and military pressure on Taiwan in an attempt to prevent Tsai from extending her government’s international stature and ties to other countries, especially the United States. Since mid-2020, Xi has launched a concerted campaign of military intimidation by routinely sending squads of jets buzzing near the island and holding drills in the surrounding waters. Beijing has intensified efforts to isolate Taiwan’s government on the international stage. For example, China employed economic coercion against Lithuania after the Baltic nation strengthened ties with Taipei. China’s protests reached a fever pitch in response to US House Speaker Nancy Pelosi’s visit to Taiwan in early August 2022. Accusing Washington of undermining the idea of “one China,” Beijing threatened the United States with unspecified countermeasures and staged extensive military exercises surrounding Taiwan, creating the effect of a blockade for the first time.

All parties are blaming one another for this escalation. Yet it is undeniable that the Xi administration has purposely chosen a more hostile, militant approach to the Taiwan question. Xi’s posture could be driven by a fear that the island is being drawn ever more tightly into the United States’ orbit and away from China’s. A debate has erupted among foreign policy analysts over whether Washington is fanning those fears, inadvertently or otherwise, by its persistent displays of support for Taiwan’s democratic government. As is the case with much of Xi’s foreign policy, however, his assertive approach has created the very situation he intends to prevent. Rather than convincing Tsai to submit, Xi reinforced Taiwan’s determination to gain greater international support, and prodded other governments, including the United States, to express and provide that support. In August 2022, for instance, the administration of US President Joseph R. Biden opened formal trade negotiations with Taiwan. 

It does not appear that Xi perceives or accepts the counterproductive nature of his Taiwan policy. He seems committed to coercion, viewing this as his best method of preventing Taiwan’s drift toward Washington. One reason could be that appearing “tough” on Taiwan bolsters his domestic political stature. Another could be that other options are unappealing. If he is unwilling to make compromises with the Tsai administration, he may see dialogue as a dead end.

Once Xi secures his third term, the big question is how much pressure he will bring to bear on Taiwan. Beijing’s reaction to the Pelosi visit offers contradictory clues. On the one hand, Beijing’s military exercises crossed red lines, most of all in the People’s Liberation Army’s decision to blockade the island. This move suggests Xi may be aiming to create a “new normal” in the Taiwan Strait, in which the Chinese military exerts greater control in the waterway and intensifies its harassment of Taipei’s government. On the other hand, Beijing restrained its military from taking certain risks during those exercises. For instance, no planes entered Taiwan’s airspace. That indicates that Xi, fearing actual conflict, may place limits on how drastically he wishes to alter the status quo.

Either way, the emerging cycle of reaction and counterreaction is potentially creating a downward spiral into heightened tensions in the Taiwan Strait. Barring some unforeseen and tectonic shift in policy in Washington and Taipei, Beijing’s more assertive attitude to the Taiwan issue will likely continue in Xi’s third term. This raises the frightening prospect of conflict over Taiwan, either accidentally—such chances increase with the intensity of Beijing’s military harassment—or by design. The centralization of power in Xi Jinping raises the possibility that he could decide a military solution to the Taiwan problem is necessary perhaps to bolster his own political position. With the highest ranks of the Chinese government stacked with loyalists, he could encounter little internal opposition to such a drastic course of action.

That is speculation, of course, but the direction of Xi’s Taiwan policy is transforming the risk of war over the fate of the island from an outside possibility to a more urgent danger to the security and stability of East Asia.

Xi and the world

The more aggressive position on Taiwan is part of a much wider shift in China’s foreign policy under Xi’s guidance. When Xi took power a decade ago, the United States was still China’s partner. Since then, Xi has transformed Washington into China’s chief adversary. The finger-pointing goes both ways as to which side is to blame. Xi’s government admits to no responsibility for soured relations, but it is indisputable that Xi’s policies have played an outsized role in causing the US-China rift. His predatory industrial programs, aggressive pursuit of contested territorial claims in the South China Sea, and his friendship with Russian President Vladimir Putin, which persists despite Russia’s invasion of Ukraine, have all contributed to strained relations. 

Xi is not likely to become any friendlier. He appears to believe the United States is determined to suppress China’s rightful ascent into a global power. The Chinese political and academic elite seem to be convinced that the US is in inexorable decline, and Washington is trying to “keep China down” in order to cling to its wobbly hegemony. This thinking permeates many of Xi’s foreign and economic policies. His “self-sufficiency” drive is meant to protect China from what he sees as Washington’s nefarious designs to use the United States’ economic heft and technological advantages to restrain China’s economic advance. His partnership with Putin is designed to decrease his economic reliance on the West and enlist Moscow as a partner in his quest to undermine the US-led world order. Xi’s latest diplomatic projects, the Global Security Initiative and Global Development Initiative, aim to replace the norms and rules of the current liberal order with a system more favorable to autocratic regimes and the expansion of Chinese power. Barring a dramatic turn in US policy to capitulate and align with Beijing’s interests, none of these efforts to overthrow Pax Americana are likely to change in Xi’s next term. The more powerful Xi becomes, the more they may intensify.

To many inside and outside of China, Xi’s anti-US sentiments have set the stage for a dangerous gamble. Still relatively poor and far behind in technological development, China needs friendly relations with the United States and its allies and partners in Europe and the Asia-Pacific to continue to achieve economic progress. However, Xi probably does not see it that way. An adversarial relationship with the United States is, in many respects, beneficial to Xi’s political standing, especially at home. The narrative of Xi’s personality cult is that he is the man with the will and the wisdom to attain the “Chinese dream” of national rejuvenation. Too long a victim of the West, China will now seize its moment to overcome its enemies and restore its greatness. This epic drama requires a villain and the United States (along with its allies, especially Japan) can play that role nicely. It is clear that Xi wants the Chinese public to despise and distrust the United States. Chinese media has become a constant anti-US propaganda machine, painting Washington as resolutely hostile, and US society as violent, racist, and unjust. By pushing such messaging, while raising the Great Firewall ever higher to constrain the flow of outside information into the country, the Chinese state is attempting to reshape and control Chinese public opinion about the United States. Xi, as the star of this show, is often portrayed as standing firm against the big, bad Americans, finger-wagging the US president, for example, on Taiwan. Around the world, too, Xi can portray China as a better alternative to the (supposedly) decaying and irresponsible United States, and himself as the statesman to usher in a new era. By pursuing this course, Xi aims to rally other nations already hostile to Washington and transform himself into the leader of a new global order, with China at its apex.

This narrative may serve Xi’s political interests, but it does not bode well for his relations with Washington since it makes serious dialogue or compromise almost impossible. The main goal of Beijing’s current diplomacy appears to be gaining compliance from other governments to align with Xi’s goals, and it often degenerates into threats, warnings, and demands. Much of the fiery rhetoric may, again, be directed at a domestic audience to bolster Xi’s credentials as a diehard defender of the nation. It may also be motivated by Beijing’s growing conviction of the inevitability of its rise and belief that eventually, even the most recalcitrant nations will have to submit. Whatever the cause, five more years of Xi’s foreign policy almost certainly means five more years of increasing conflict with many of the world’s major economic and military powers. This includes not only the United States and its allies, but also emerging nations that feel threatened by Beijing’s aggressiveness, such as India and Vietnam.

Conclusion

In his decade at China’s helm, Xi Jinping has brought about drastic changes in Beijing’s governance, economic agenda, and foreign policy. There is little evidence at this point that he intends to alter course. Instead, there is more reason to believe that the more entrenched Xi becomes in his position, the more aggressively he will pursue his agenda at home and abroad. The only caveat is whether current poor conditions in China—a slowing economy, the strains of zero-COVID, and greater tensions with the international community—have weakened him enough to allow other factions with the Communist Party to place officials into senior positions who can check his power and alter his policy program. That will not be known until the upcoming Congress. Such an outcome is certainly possible. Yet policymakers around the world would be wise to approach the twentieth Party Congress with the assumption that Xi stays in charge and in control.

Working under this assumption means the world’s China watchers will need to adjust the way in which they understand the process of policymaking in Beijing. To an increasing degree, Beijing’s decisions will be Xi’s decisions. Determining what the Communist government will or will not do is becoming a process of figuring out what fits with Xi’s personal political calculations and ideology. As shown by zero-COVID or “wolf warrior” diplomacy, Xi will make policy choices that may be beneficial to his own political standing, or helpful for his vision for China’s future, but harmful to the country in many other respects. In a system heavily dominated by Xi loyalists, the degree of policy debate may narrow, creating “echo chamber” conditions that shield Xi from the real impact of his choices and the information he requires to make sound decisions. 

It is also likely that Xi’s third term will see a continuation, and possibly an intensification, of the trends already underway in Chinese policy. In foreign affairs, that means greater hostility to the United States and its global allies, closer relations with Russia and other autocratic regimes, more aggressive pursuit of regional territorial claims and other interests, and heightened tensions over Taiwan. With the economy, Xi will almost certainly remain cool to liberalization and persist with state-led industrial programs, the fixation on self-reliance, and heavier control of the private sector. In general, Xi’s third term will likely see rising nationalism and continued decoupling from the world in business, information, culture, education, and even personal exchanges. 

Perhaps the biggest unanswered question about Xi’s third term is: what happens five years from now, when China is again due for another leadership shuffle? Having flushed the party’s collective governance system down the political toilet, Xi has created uncertainty over how leaders will be selected and how the country will be governed in the future. Can the system of collective rule be reestablished? Or will Chinese politics become a contest of competing strongmen? 

A case can be made that Xi, by holding onto power, has merely restored China to its usual norm. The era of collective leadership can be seen as a brief aberration in a political environment more often dominated by an individual. At the same time, many in the political and business elite in China likely remain wary of a reversion to the days of Mao, when the fate of the nation rested in the unreliable hands of a single leader. Perhaps pressure will mount in coming years to restore greater balance within Chinese governance. Or perhaps Xi will manage to quash any further resistance and rule for life. After four decades of walking a fairly predictable path, Xi is sending China into the unknown.

Global China Hub

The Global China Hub researches and devises allied solutions to the global challenges posed by China’s rise, leveraging and amplifying the Atlantic Council’s work on China across its 15 other programs and centers.

Explore more

Related content

Report May 11, 2022

China’s faltering “zero COVID” policy: Politics in command, economy in reverse

By Jeremy Mark, Michael Schuman

Could Beijing’s doubling down on the “zero COVID” policy undermine the narrative of China’s superiority in responding to the pandemic—and the image and stature of Xi’s rule?

China Coronavirus

Report Jul 28, 2022

Cooperation with China: Challenges and opportunities

By Michael Schuman, David O. Shullman

Cooperation with China should focus on areas where our interests still align and where we can keep Beijing grounded in the international system. Like-minded allies and partners must pair such efforts with commitments to defend against China’s violations of international norms, impose costs on irresponsible behavior, and strengthen themselves and current global institutions to compete effectively and uphold liberal values.

China Economy & Business

New Atlanticist Oct 3, 2022

Why China’s leadership must respond to the country’s property crisis

By Jeremy Mark

The country’s rapidly metastasizing property downturn threatens to engulf heavily indebted developers, homeowners, financial institutions, and local governments.

China Economy & Business

The post What Xi Jinping’s third term means for the world appeared first on Atlantic Council.

Neutralizing even one of these crises can be confounding and perilous. Some countries, unfortunately, face them all at once, fighting on multiple fronts. That usually keeps them from attending to the longer-term task of giving people the knowledge, skills, access to health care, and opportunities they need to live out their full productive potential. Investing in resilient, shock-responsive systems is critical to protect human-capital gains and improve resilience to future shocks.

Niger is an example of a country that faces many complex and interconnected challenges. Shocks and crises are increasingly frequent and overlapping in Niger, disrupting efforts to sustain broad-based growth, build human capital, and reduce poverty. Regional instability has led to the displacement of families and the closure of schools, threatening social stability and increasing insecurity; that, in turn, complicated Niger’s efforts to respond to the COVID-19 pandemic and worsened the food insecurity that is now affecting more than 4.4 million of the country’s people. Climate shocks have triggered localized flooding, while steady rises in temperatures threaten the more than 80 percent of Niger’s citizens who depend on agriculture for their nourishment and livelihoods.

The government of Niger is determined not to lose any ground in its steady climb to protect and invest in all its citizens by pressing ahead with programs and reforms that are having transformational impact on people’s lives. A great example of this is the Wadata Talaka safety-net program, a partnership between Niger and the World Bank that focuses on poverty reduction, resilience building, and women’s empowerment. The program provides monthly cash transfers to extremely poor households to smooth their consumption expenditures and improve their ability to cope with shocks. It also provides “economic inclusion” support—life and micro-entrepreneurship skills training, coaching, and support to village savings groups—and helps poor children get essential mental stimulation in their early years. Such programs can respond quickly to help poor and vulnerable families prepare for, cope with, and adapt to shocks such as the COVID-19 pandemic: As the virus spread, the program expanded to four hundred thousand households to protect them from the pandemic’s adverse economic consequences. The program is well-placed to assist poor households with rising food insecurity and climate shocks.

A successful response will need to include supporting women and innovation. Because women are the primary beneficiaries of Wadata Talaka, the program is an important vehicle for their empowerment. Evaluations of the economic inclusion program show that in the eighteen months since it began, it improved household consumption and food security. The total income of women beneficiaries has increased (by 60 to 100 percent, much of it from non-farm businesses), and there is strong evidence of gains in their mental health and social wellbeing.

To develop such systems reaching the poorest and most vulnerable, countries will need strong social registries and good enrollment, delivery, and payment systems, often leveraging technology. The government of Niger is fully committed to these efforts. For example, responding to climate change, Wadata Talaka was the first program of its kind in West Africa to use satellite data to quickly anticipate drought hotspots and provide emergency funds more quickly than usual (three months ahead of the traditional response) to help people before they entered the lean season. Research is currently underway to measure the impact of that speed.

At a time when countries are forced to contend with the ebb and flow of shocks like climate change, pandemics, conflict, or food price increases, investments in social protection systems are more critical than ever. Niger’s programs serve as an example of just how impactful such adaptive systems can be.

Ouhoumoudou Mahamadou is the prime minister of Niger.

Mamta Murthi is vice president for human development at the World Bank.

The post How Niger’s safety net helps its most vulnerable citizens thrive amid crises appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: Incumbent Jair Bolsonaro and former President Luiz Inácio Lula da Silva will face off in presidential elections this Sunday, October 2. See more below.
• 4.1 million: The number of people facing food insecurity in the English and Dutch-speaking Caribbean. This amounts to 57 percent of the total population.
• Diplomatic relations: Colombia and Venezuela reopened their border to vehicles transporting goods following several years of politically-induced closure.

Expert take: Looking ahead at Brazil’s presidential election

From state-level representatives to Congressional members to the next president, Brazilians have their work cut out for them this Sunday. Brazil’s economy is rebounding but new challenges still lie ahead. Political leadership and the innovative economic policies that come with it will be vital to navigating these challenges, particularly in an uncertain and evolving global context.

Clouded by an extremely polarizing political campaign, polls suggest the contest will be between former President Luiz Inácio Lula da Silva and incumbent President Jair Bolsonaro. On the economic front, President Bolsonaro proposes a continuation of his economic priorities, doubling down on a business-friendly, open-market economy. On the other hand, former President Lula will adopt a pragmatic approach with a focus on a social agenda, targeting hunger and poverty levels. The challenge, regardless of who wins on October 2 or October 30 (if there is a second round), is in Congress, which will likely be highly fragmented. In that regard, the pandemic will continue to play a role in politics with the economy – and fiscal responsibility – at the top of the priority list for the next administration.

Staff

Valentina Sader

Deputy Director, Impactful Programming and Brazil Lead

Adrienne Arsht Latin America Center

Brazil Corruption

Monitoring economic headwinds and tailwinds in the region

• Honduras: The Central American Bank for Economic Integration (CABEI) issued a $200 million loan in order to mitigate fuel price pressures.
• Brazil: Despite a boost in activity as COVID-19 infections drop worldwide, real GDP growth projections for 2022 and 2023 are set to slow from 2.5 percent to 0.8 percent, respectively.
• Cuba: Hurricane Ian made landfall as a Category 3, knocking out power for the whole island. This comes after several months of intermittent blackouts due to failing power generators. 
• Mexico: AMLO announced an agreement with companies to freeze prices on key foods as the country battles inflation of 8.8 percent. 
• Paraguay: Officials met with the US for the first trade and investment council under their bilateral Trade and Investment Framework Agreement (TIFA) to discuss ways to deepen trade ties along intellectual property, agriculture, and the digital economy.  
• Ecuador: The government announced it reached a debt agreement with Chinese lenders, delivering $1.4 billion in debt service relief over the next three years. 
• Argentina: The International Monetary Fund (IMF) reached an initial agreement on reviewing the country’s debt restructuring, and is set to make $3.9 billion available upon completion. 

In focus: LAC-Europe Relations

Several meetings covering transatlantic relations with Latin America and the Caribbean convened on the sidelines of last week’s United Nations General Assembly, including the Fifth Forum on Latin America, the United States, and Spain in the Global Economy, and AALAC’s side event “From Ukraine to the Americas: Fortifying recovery against global shocks.”  

Spain’s Prime Minister, Pedro Sánchez, spoke with Colombian president Gustavo Petro about issues affecting both Latin America and Spain, including climate change and supply chains. Spain is set to hold the next presidency of the European Union, and hopes to revitalize EU-LAC ties. At the Atlantic Council’s event, Josep Borrell, Vice President of the European Commission, spoke about the EU’s willingness to work with LAC on key issues worsened by the Russian invasion of Ukraine, such as food insecurity and gas shortages. Both discussions focused on the importance of relocating supply chains to ensure stability. 

Health + Innovation

• Argentina: A laboratory manufacturing Russia’s Sputnik V COIVD-19 vaccine announced it would halt the production line to target other types of diseases.
• PAHO: Ministers of Health and other high-level authorities from around the Americas met on September 26 for the organization’s 30^th Pan American Sanitary Conference. At the conference, Dr. Jarbas Barbosa da Silva Jr. of Brazil was elected new Director for PAHO.
• COVID-19: Life expectancy in LAC for 2022 fell 2.9 years, from 75.1 years in 2019 and 72.7 years in 2021.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 1, 2022 appeared first on Atlantic Council.

On September 22, IPSI Senior Fellow Dexter Tiff Roberts published, “At stake in the U.S.-China rivalry: The shape of the global political order,” in The Washington Post. This is a book review of three China books: Revolution and Dictatorship: The Violent Origins of Durable Authoritarianism, by Steven Levitsky and Lucan Way; Xi Jinping: The Most Powerful Man in the World, by Stefan Aust and Adrian Geiges; and Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, by Josh Chin and Liza Lin.

Fellow

Dexter Tiff Roberts

Nonresident Senior Fellow

Global China Hub Indo-Pacific Security Initiative

China Chinese

The post Roberts Reviews China Books appeared first on Atlantic Council.

​​​​​What you should know

• US-Mexico relations: The second High-Level Economic Dialogue between the two countries met on Monday, after it was relaunched last year. More information below.
• Chile: On September 4, citizens rejected a proposed constitution which would have significantly altered its social and economic landscape. 
• SME: Our latest publication, Unlocking Small and Medium-Sized Enterprise Potential in Latin America and the Caribbean outlines practical, forward-looking policy recommendations needed for SMEs to fully become engines of socioeconomic prosperity.
• UNGA 77: As leaders from 193 member states address pressing challenges, fortifying recovery against global shocks should be among top priorities. Next Monday, September 19 at 12:00 ET, tune in to our special event featuring the European Commission’s Vice President Josep Borrell, Spanish Foreign Minister José Manuel Albares, US Under Secretary of State for Economic Growth, Energy and Environment Jose W. Fernandez, Guyanese Foreign Secretary Robert M. Persaud, and more.

Monitoring economic headwinds and tailwinds in the region

• El Salvador: One year after adopting Bitcoin as legal tender at market highs, the crypto currency has lost over half its value.
• Colombia: The state oil company, Ecopetrol, asked regulators to temporarily halt fracking projects. President Petro promised to end fracking and is making a fourth legislative attempt to do so.  
• Brazil: Growth in services and industry led the country to exceed its second-quarter forecast by a third, with GDP growing at 1.2 percent. 
• Belize: The government will host a technical mission from Taiwan to support the sustainable development of Belize’s blue economy including fishery resources.
• Barbados: The government hosted the inaugural Africa-Caribbean trade and investment forum on September 1, in a determined effort to formalize trade, air, tourism, and other links between the two.
• Argentina: “Superminister” Massa received a $1.2 billion loan proposal from the Inter-American Development Bank (IDB) as he visited Washington to meet with lenders. Inflation is expected to reach 95 percent this year. 

In focus: US-Mexico High-Level Economic Dialogue

US officials, including Secretary of State Blinken and Secretary of Commerce Raimondo, met with their Mexican counterparts Secretary of Foreign Relations Ebrard and Secretary of Economy Clouthier, in Mexico City on September 13. Conversations focused on continental integration, strengthening supply chains, and economic opportunities between the US, Mexico, and northern Central America. The delegations paid special attention to electric vehicle production, information technology, and improving border infrastructure. 

Notably absent from the main discussion points was the ongoing dispute over Mexico’s energy policy, which the US and Canada raised through USMCA in July. While both the US and Mexico signaled optimism after the meeting, no official advances have been announced. The parties have until October 3 to reach an agreement before a formal panel is convened to evaluate the dispute.  

Health + Innovation

• Monkeypox: 16 percent of more than 50,000 confirmed cases worldwide were registered in Latin America the first week of September.
• World Health Organization: As the number of reported deaths from COVID-19 hit an all-time low globally since March 2020, the head of the organization said that the end of the pandemic is now in sight.
• Jamaica: The government hosted a three-day Caribbean Public Health Agency (CARPHA) conference to share research and insights into the COVID-19 pandemic.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: September 17, 2022 appeared first on Atlantic Council.

​​​​​What you should know

•  2.7 percent: The average economic growth expected for Latin America and the Caribbean (LAC) in 2022—a considerable setback from the region’s robust economic recovery in 2021 of nearly 7 percent.
• Diplomacy: Colombia and Venezuela officially re-established relations.
• Chile: On Sunday, Chileans will vote to approve or reject a new draft constitution. If approved, the text will replace the 1980 legal charter written under the military government of Augusto Pinochet.

Monitoring economic headwinds and tailwinds in the region

• Guyana: The economy is expected to grow by 52 percent on the back of oil exploration.
• Paraguay: President Mario Benítez vetoed legislation to incentivize cryptocurrency mining, citing concerns about its sustainability and value for the economy. 
• Andes: The Andean Community of Nations (CAN) encouraged Chile, Venezuela, and Argentina to join the bloc at its meeting this month, and accepted Turkey as an associate state. 
• Argentina: The government announced a program to encourage formalization, allowing workers to maintain their social benefits for a year after shifting from all-cash to official payroll jobs. 
• Chile: The International Monetary Fund (IMF) issued a $18.5 billion credit line as a precautionary measure against global uncertainty.
• Brazil: The Fertilizer Congress discussed the impact of the Russian invasion of Ukraine, focusing on its National Fertilizer Plan to reduce dependency on imports and logistical improvements. 
• Mendoza: The Argentine province’s tax authority began accepting stablecoins – cryptocurrencies pegged to another reference asset – last week as a step towards more digitalization and crypto use in Argentina.   

In focus: India looks for partners in LAC

India’s Minister of External Affairs, Subrahmanyam Jaishankar, visited Paraguay, Brazil, and Argentina last week – the first major Indian trip to the region in nine years. Key areas of discussion included cooperation on trade, defense, and pharmaceuticals. The trip began with Jaishankar opening a new Indian embassy in Asunción and meeting with Paraguayan officials. 

In Brazil, he emphasized the region’s potential as a “business hub” for India while meeting with private-sector organizations, and reached agreements on broadcasting and taxation. At his last stop in Argentina, Jaishankar discussed security collaboration, joint production of material, and the possibility of Argentina acquiring India’s domestic fighter jet. Jaishankar and his Argentine counterpart, Santiago Cafiero, also agreed on hosting bilateral conferences on pharmaceutical production, and explored Argentina’s role in vaccine manufacturing. 

Health + Innovation

• Mexico: COVAX will send 10 million doses of Pfizer COVID-19 shots for children by the end of September.
• CanSino Biologics: The Chinese pharmaceutical company, which sells a one-dose shot in Mexico, is seeking approval for an inhaled version of the COVID-19 vaccine.
• Honduras: Spain issued a $70 million loan to fortify the Central American country’s health infrastructure.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: September 3, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• World Bank Group: In its just-completed fiscal year, the bank deployed $20.7 billion to support LAC as it continues to grapple with economic slowdown, rising inflation, and deepening food insecurity.
• Argentina: With inflation at 70 percent and rising, Argentina secured a CAF loan of $740 million US for infrastructure and social programs.
• Mexico: In an effort to strengthen ties, Canada and Mexico launched the first High-Level Economic Dialogue on August 15.

Monitoring economic headwinds and tailwinds in the region

• Chile: Economists predict a potential recession as the Central Bank’s GDP data came in below expectations in Q2 of 2022.
• El Salvador: The country shifted from being a net energy importer to a net exporter, due to energy projects on the Lempa River and its membership in the regional energy market Central American Electrical Interconnection System (SIEPAC).
• Peru: Forecasts showed that the country will cease being LAC’s fastest growing major economy–a title it has held since 2011–as political turmoil undermines government management and investor confidene.
• Colombia: President Petro proposed higher taxes on top earners, a wealth tax, and an export tax on minerals, with revenue going to reduce the deficit and cover new social spending programs.
• Dominican Republic: FDI grew 8 percent in the first half of 2022 compared to 2021, and was 20 percent higher compared to 2019. Growth was mainly in tourism, industry, and mining.
• Cuba: The government is allowing limited foreign investment in wholesalers, and will consider public/private retail ventures, in an attempt to reduce shortages.

In focus: CARICOM and non-tariff barriers

President Irfaan Ali of Guyana and Prime Minister Keith Rowley of Trinidad and Tobago met in Port of Spain ​ahead of Trinidad​ and Tobago’s second Agri-Investment Forum and Expo. Ali and Rowley announced a ​joint task force ​to reduc​e non-tariff trade barriers, a systemic inter-regional issue that limits the free flow of goods between CARICOM governments. This ​task force’s announcement comes on the back of CARICOM’s intent to reduce its food import bill by 2025 by 25% by eliminating such barriers as part of efforts to strengthen food security ​in the region. 

Health + Innovation

• PAHO: The Organization hosted a regional workshop aiming to strengthen preparedness and response to future respiratory virus pandemics in LAC.
• Peru: The Supreme Court ruled against mandatory proof COVID-19 vaccinations in the workplace citing violations to workers’ rights.
• Honduras: The latest recipient of 149,760 COVID-19 vaccine doses through the COVAX mechanism.
• Brazil: The federal police accused President Bolsonaro of discouraging compliance with pandemic-linked health measures.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: August 23, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Colombia: On Sunday, President-elect Gustavo Petro will be sworn in as the new president.
• Mexico: The government will have spent $28 billion during 2022 in programs and gasoline and electricity subsidies to tame inflation.
• Argentina: Sergio Massa was appointed to head a new “super-ministry” created by combining the current Economy, Productive Development, and Agriculture ministries. The previous economy minister lasted less than a month in the role.

Monitoring economic headwinds and tailwinds in the region

• Brazil: Higher-than-expected growth rates and increasing concerns over inflation are likely to push the central bank to continue raising interest rates.
• Trinidad and Tobago: S&P raised its outlook on the country’s bonds from “negative” to “stable” in light of its resiliency against multiple shocks.
• Panamá: The government announced price controls on 72 food products in response to ongoing protests, with the goal of reducing rising costs by 30 percent. Negotiations with the protestors continue. 
• Colombia: Incoming Economy minister José Antonio Ocampo said “a great tax reform” was necessary, and pointed to tax evasion as a major concern for his office.   
• Honduras: A municipal government outside the capital established a “Bitcoin Valley” to train local businesses in using and managing cryptocurrency, joining El Salvador in cryptocurrency experiments.
• Bolivia: Minister of Finance and Economy attributes a low 1.2 percent inflation in the first half of 2022 to subsidies encouraging agricultural production and on fuel.  

In focus: Alliance for Development in Democracy expands work

Last week, the members of the Alliance for Development in Democracy – The Dominican Republic, Panamá, and Costa Rica – announced a new Consultative Dialogue on Supply Chains and Economic Growth with the United States. This group will work with the private sector to attract nearshoring investments and boost supply chain resiliency. Representatives from the three countries met with the US Chamber of Commerce to provide input on the Chamber’s work on supply chains.  

The founding members and the United States also celebrated the entry of Ecuador into the project. Ecuador announced its accession at the Ninth Summit of the Americas in June. 

Health + Innovation

• Monkeypox: Over 1,395 cases have been confirmed across LAC, accounting for 6 percent of the total global count.
• COVID-19: Reported cases across the region have decreased by 41 percent week-on-week as of August 4.
• Donations: To date, the United States has donated over 70 million vaccine doses to 30 countries across the Western Hemisphere.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: August 6, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Food prices: In May, the price of wheat increased 90 percent year-on-year in Argentina and Chile, amid rising food inflation and the ongoing war in Ukraine.
• US-Mexico: President Biden and President Andres Manuel Lopez Obrador met last week and committed to facilitating trade between their countries and relaxing trade costs.
• Brazil: Congress approved a $7.6 billion spending bill that President Bolsonaro hopes will lift his lagging re-election hopes.

Monitoring economic headwinds and tailwinds in the region

• Costa Rica: President Chaves resumed the process to join the Pacific Alliance trade bloc. He hopes it will open Costa Rica to the global economy and trade more with China. 
• Canada: After raising concerns about Mexico’s business environment for mining, energy, and biotechnology sectors, Canada is exploring a possible Canada-Mexico High Level Economic Dialogue. 
• Mexico: The US Trade Representative expressed concerns over Mexico’s energy reforms appearing to violate USMCA, and will request formal consultations on the dispute.  
• Panama: Protests against rising prices, especially for fuel, continued to block portions of the Pan-American Highway.
• Peru: A forecasted 3.6 percent growth continues, despite plummeting copper prices and global economic uncertainty. 
• Cuba: Periodic blackouts continue due to lack of capacity in the country’s power grid, weakened by lack of maintenance, fires at generators, and high fuel prices. 
• Colombia: The incoming head of the national tax and customs agency, DIAN, said that President-elect Petro’s proposed tax reform will raise $10.9 billion annually.
• Chile: The Central Bank stepped in to support the nation’s currency after it plummeted to a record low, fueling inflation. Read more below.

In focus: Chile’s economy

While Boric’s newly appointed government faces plummeting approval rates, Chileans are struggling to cover the costs of soaring food and energy prices. In the last month, the Chilean peso lost more than 17 percent of its value against the dollar and its most important export—copper— faced an international price drop of 30 percent.    

On July 18, a $25 billion liquidity injection came into effect, and is expected to last until September. The hope is that the injection will contain the fall of the peso and bring stability to local markets. Thus far it has worked – the announcement boosted the peso, which closed with a 7.8 percent gain last Friday. The government has announced it will continue monitoring the situation given the challenging domestic and international context as well as Chile’s limited foreign exchange reserves.   

Health + Innovation

• Antigua and Barbuda: Minister of Health Sir Molwyn Joseph advised governments in the Caribbean to add the COVID-19 vaccine to the regime of regular immunizations for children.
• Brazil: SINOVAC, a Chinese COVID-19 vaccine, was authorized for emergency use in children between 3 and 5 years old.
• Omicron: The Pan-American Health Organization (PAHO) warned of the growing number of COVID-19 cases driven by BA.4 and BA.5 subvariants despite overall cases decreasing in the Americas.
• PAHO: Director Carissa F. Etienne announced a three-step plan to work with member countries to bolster regional capacity to manufacture vaccines and medical tools.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: July 23, 2022 appeared first on Atlantic Council.

Key points

• The US military, particularly the National Guard, is instrumental in responding to natural disasters in the United States. As climate change increases the severity and frequency of major disasters, the unique capabilities of the military to conduct disaster response will be in even higher demand.
• The Biden administration’s shifting focus to great-power competition could draw resources and attention away from improving domestic disaster response capabilities, even as these requirements become increasingly urgent. A significant amount of materiel and units need to be available to ensure that effective disaster response can be carried out domestically. Large-scale deployments abroad could endanger national disaster response and ultimately reduce the ability of the United States to successfully engage in future conflicts.
• The administration should link the planned National Climate Strategy to the National Security Strategy, avoid double-counting units in force planning, develop clear guidelines for when military support is needed for domestic disaster assistance and when it can be withdrawn, and ensure that the National Guard is empowered to train for disaster response.

What’s the issue?

Climate change poses a fundamental threat to US national security, according to the Department of Defense (DoD), the Department of Homeland Security, and others. A recent National Intelligence Estimate cautioned that climate change will “exacerbate geopolitical tensions, social instability, and the need for humanitarian aid” around the globe. In addition to heat waves, droughts, flooding, and ocean acidification, the United States will face larger, more frequent, and more severe wildfires and hurricanes.

Although policy makers’ awareness of the impacts of climate change has grown, US leaders pay less attention to the more immediate burdens imposed on the US military by climate-driven disasters. In 2019, the National Guard logged more than 2.1 million days supporting state and federal homeland missions, responding to sixty-three natural disasters—including seven hurricanes or tropical storms, nineteen floods, twenty winter storms, and twelve fires. In 2020 (the most recent year for which data are available), the Guard spent 10.9 million days responding to various emergencies, which included running a large portion of the country’s COVID-19 response. Battling summer blazes has become a yearly routine for thousands of National Guard servicemembers: in the last five years, the Guard’s personnel requirements for fire suppression have increased more than tenfold. In 2021, fires in the western United States required 170,000 person hours of firefighting by the National Guard, up from 14,000 person hours just five years earlier. Military aircraft, which play a substantial role in aerial firefighting, are being called upon more and more often as US wildfires become more frequent and intense. Hurricanes, which are increasing in strength due to climate change, have also required major mobilizations. In response to Hurricane Sandy in the fall of 2012, 24,000 DoD personnel were mobilized, a larger force than the active-duty military of Norway. Even optimistic forecasts predict that hundreds of thousands of refugees will seek asylum in the United States in the face of climate disasters in Latin America; active-duty units have already been diverted to support border control efforts and help process refugees.

Today’s military planners must contend with two potentially conflicting demands: growing requirements for the US military to respond to disasters and the effort to restructure the force for great-power competition.

Amidst the expanding need for military capabilities at home, the military’s responsibilities are expected to expand even further abroad because of climate change. According to a recent DoD climate report, civil authorities will require increased military support from Northern Command and Indo-Pacific Command in response to climate threats in the near future.

Today’s military planners must contend with two potentially conflicting demands: growing requirements for the US military to respond to disasters and the effort to restructure the force for great-power competition. In the Interim National Security Strategic Guidance, President Joe Biden made clear that he would continue shifting the focus of US forces to potential conflict with China and Russia, writing “In the face of strategic challenges from an increasingly assertive China and destabilizing Russia, we will assess the appropriate structure, capabilities, and sizing of the force. . . ” The military challenges posed by China and Russia are immense in their own right, but they cannot be accurately evaluated without considering the omnipresent and growing needs at home for US military capabilities.

Why does it matter?

The readiness of US forces and the ability to maintain the security and productivity of the homeland are critical factors for any and all future conflicts. Policy makers plan for both wars and disasters under the assumption that military resources will be available for such efforts. However, these plans fail when expected resources are otherwise deployed. For example, firefighters in Oregon usually rely on air support from military Chinook helicopters, but during the massive summer wildfires of 2021, these aircraft were 7,000 miles away, participating in the evacuation of Afghanistan, leaving the firefighting response dangerously under-resourced. Conversely, hundreds of active-duty soldiers, including mechanized infantry, have been called upon to fight wildfires in California. If the United States was engaged in a major war, military officials would have to make a choice: reduce warfighting capacity by tasking military resources to disaster response or face major domestic disruption by deploying disaster-response resources overseas.

Compounding the challenge of both responding to disasters and overall readiness is the burden posed by the immediate effects of climate change. The US Navy has for years been raising the alarm that their operations are threatened by rising sea levels, with one report identifying 128 US naval bases under threat and eighteen likely to be fully submerged by 2100, including the Navy’s largest base, Naval Station Norfolk. In 2019, 30 percent of the US Air Force’s F-22 Raptor fleet had to be relocated, with four of the planes severely damaged, after a category five hurricane hit Tyndall Air Force Base in Florida. Almost every building on the base was damaged, and 70 percent had to be bulldozed. A 2019 after action “fire season” review by the Readiness Division at Fort Wainwright in Alaska found that wildfires had prevented critical training from taking place at the base, with two Pacific Air Forces fighter squadrons unable to conduct important exercises in July 2019. And In April of this year, a massive fire consumed 15 percent of the Army’s Fort Hood, requiring thousands of hours of firefighting by military personnel. Less than a month later, Joint Base San Antonio had to be evacuated due to a large fire. Rising sea levels, stronger storms, and increased risk of fires all negatively affect readiness for the military’s primary missions and can harm the military’s ability to provide effective disaster assistance.

What is the solution?

Considering the growing burden from climate change and the challenge of reorienting the military to a focus on great-power competition, policy makers should consider the importance of having units and platforms available for disaster response, as well as ensuring that the US military is prepared to handle a wide range of disaster contingencies. Four specific recommendations are outlined below.

1. Do not discount disaster response in force planning. Policy makers value DoD’s planning and estimates, and these may inform decisions on whether and how to engage in a great-power war. Policy makers should consider that deploying US military units and assets overseas can degrade the ability of the United States to respond to domestic disasters, which can in turn undermine warfighting capabilities. Last year, for example, eight C-130s were deployed for weeks at a time fighting wildfires, flying 945 sorties, with an additional four conventional C-130s required to assist those outfitted to drop fire retardant. Units and assets that could be deployed to fight a major war and are also needed at home to manage the increasing burden of disaster response should not be double counted. Planners should consider changing the primary mission of certain Guard units to disaster response and develop contingencies for replacing those units with civilian volunteers in extreme situations when those Guard units are needed elsewhere. Large-scale deployments abroad, without trained civilian replacements, could endanger national disaster-response and ultimately reduce the ability of the United States to successfully engage in future conflicts.

2. Reemphasize disaster response training for the National Guard. As a central component in US disaster relief, the National Guard should be prepared and empowered to take on the increasing burden of climate-driven disasters. However, changes to the Guard have instead oriented them towards federal missions instead of state-focused disaster relief, with one former J3 Functional Advisory Council Chairman saying in an interview, “The Guard without the State nexus has transformed into the Army Reserve.” Recently, the Chief of the National Guard Bureau affirmed this transformation is purposefully occurring, stating, “We’re here to fight and win our nation’s wars. At the end of the day, that’s why the National Guard exists.” The training priorities for Guard units have commensurately shifted, with emphasis placed on federally required training (behavioral and policy-driven training), requisite readiness periods (such as the Army Combat Fitness Test and Basic Marksmanship), and individual and collective training, leaving little time and money for domestic mission training. This leaves Guard units far less able to conduct important trainings, such as with state’s search and rescue teams, and less prepared for the types of missions they will be increasingly called upon to accomplish.

3. Consider force posture in the National Climate Strategy. The Biden administration had planned to release a national climate strategy this year, but congressional politics appear to have upended those plans. Although policy makers’ focus on the NCS has understandably centered on how the United States can meet the administration’s emissions reduction goals, the document should also include a clear explanation of how the administration plans to structure disaster response and increase capabilities and how those plans align with the National Security Strategy and National Defense Strategy. In linking the documents, policy makers should review the NATO Climate Change and Security Action Plan, which deftly connects climate change with increased security threats and challenges to operation readiness. The NCS should consider how the US government can best leverage the US military for both climate mitigation and disaster response. Clear expectation-setting at the strategic level will help with planning in both DoD and in disaster-response agencies like the Federal Emergency Management Agency (FEMA) and the United States Forest Service (USFS), enabling them to effectively work together to leverage their capabilities. The Modular Airborne Fire Fighting System (MAFFS) program is an example of the importance of interagency coordination: DoD provides the C-130s at the request of the USFS, which manages the MAFFS that the planes are outfitted with to fight fires.

4. Develop guidelines for when military assets can be withdrawn from disaster relief. FEMA, as the lead agency coordinating major disaster response, should develop indicators as part of the National Incident Management System’s National Response Framework for when military assets can be withdrawn from disaster-relief activities and responsibilities handed over to civilian actors. These indicators should be informed by those used in international disaster response and would improve planning and budgeting for disaster-response operations. A streamlined process for rotating units and assets out of disaster zones will help ensure maximum availability for units’ primary missions and reduce costs. The use of 32 USC § 502(f) authorities for National Guard disaster responses, which keep units under state command but are fully funded by the DoD (and can operate under a mission assignment from FEMA, such as during the COVID-19 response), should be limited to avoid the Guard further becoming seen as a standing force that can fully replace the civilian role in disaster management. 

Assumptions Testing Series

The New American Engagement Initiative’s Assumptions Testing series explores some of the foundational beliefs that guide US foreign policy. By questioning the conventional wisdom, and exposing these assumptions to close scrutiny, the series aims to open a new seam in the policy debate and generate a more lively, fruitful, and effective strategic dialogue – one that is capable of producing a sustainable, nonpartisan strategy for US global engagement.

Reality Check Series

The New American Engagement Initiative’s Reality Checks are short briefs dedicated to exploring a particular policy or set of policies, assessing their efficacy, and, where appropriate, proposing alternatives. Reality Checks are published regularly and tied to the news of the day or derive from NAEI’s Assumptions Testing series. All are succinct and straight-to-the-point. The briefs are designed for busy professionals anxious for pragmatic and timely policy options.

Engagement Reframed Series

The New American Engagement Initiative’s Engagement Reframed policy briefs reimagine and reframe the US approach to the world beyond traditional, narrow notions of US military dominance to fashion an achievable and sustainable form of US leadership in a world of many capable actors.

The post Reality Check #13: Great-power competition threatens climate disaster response appeared first on Atlantic Council.

The post Lakhani quoted in The Print: Pakistan’s start-up industry is collapsing appeared first on Atlantic Council.

One of the key problems facing the Ukrainian authorities is a lack of access to information. Unfortunately, Ukraine’s Ministry of Health no longer has a comprehensive picture of the medical situation in occupied regions of the country. This makes it difficult to get insights and assess the scale of the healthcare problems in areas under Russian control. Nevertheless, assessments of the available evidence and an awareness of the general situation in Russian-occupied Ukraine can help identify the top priorities for Ukrainian and international healthcare professionals. 

One of the most significant risks comes from the possible spread of pathogens. As temperatures reach seasonal highs throughout July and August, human contact with blood-sucking insects and ticks becomes more common. This often leads to the spread of infectious diseases.

Another major problem is limited access to drinking water. This increases risks posed by contaminated water and also makes it difficult for people in occupied regions of Ukraine to maintain desirable standards of personal hygiene and sanitation. This can cause mass outbreaks of diarrhea, hepatitis A, cholera, and other infections.

Due to Russia’s military strategy of carpet-bombing Ukrainian towns and cities into submission, basic infrastructure has been severely damaged in much of occupied southern and eastern Ukraine. Many areas now have limited access to drinking water, while remaining water supplies are often not subject to normal treatment.

The risk of a cholera outbreak is believed to be particularly high in Mariupol, a Russian-occupied Ukrainian port city in Donetsk Oblast with a pre-war population of almost half a million that was largely reduced to rubble during a brutal Russian siege. According to the Mariupol municipal authorities, the city’s 22 pumping stations were all destroyed during the fighting, while sewage treatment and drainage systems are also unable to function properly. Large numbers of dead bodies remain trapped beneath the rubble and are decomposing, further complicating the city’s precarious healthcare situation.

Subscribe to UkraineAlert

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

• Name
  First Last
• Email*
• 
  
  
• Name
  This field is for validation purposes and should be left unchanged.

Russia’s invasion has displaced millions of Ukrainians and thrown large numbers of people together in ways that create potential for healthcare emergencies. Concentrations of children with different vaccination status during evacuation procedures risks fueling outbreaks of vaccine-preventable illnesses such as measles and diphtheria.

COVID-19 also remains an issue. Prior to the Russian invasion, only 35% of the Ukrainian population had been vaccinated, representing one of the lowest rates in Europe. A sharp increase in COVID cases could lead to overcrowding in hospitals at a time when healthcare facilities are desperately needed to care for military and civilian casualties. 

Meanwhile, possible delays in the diagnosis and treatment of tuberculosis are a matter of considerable concern. In particular, if patients stop taking their medications due to impaired access to medical care in occupied parts of Ukraine, this can lead to a rise in cases of antibiotic-resistant tuberculosis.

Similarly, people living with HIV cannot afford to stop taking their medications. Skipping doses may lead to the reappearance of strains resistant to treatment which pose a high risk not only to current patients but to those who may contract the disease in the future.

Large numbers of abandoned livestock are further complicating the healthcare situation in wartime Ukraine and increasing the threat from animal-borne diseases. The uncontrolled movement of animals or their undisposed carcasses, as well as the destruction of wildlife habitats, can lead to the spread of pathogens among humans along with wild and domestic animals. 

Eurasia Center events

Online Event Thu, July 20, 2023 • 8:00 am ET

After Vilnius: What’s next on Ukraine’s path to NATO?

Eastern Europe NATO Security & Defense Ukraine

International support for Ukraine has so far focused on the provision of weapons along with humanitarian aid efforts for those displaced by the fighting. Looking ahead, it is vital that Ukraine’s partners also help to address the growing healthcare issues created by the Russian invasion.

The list of medical items currently required by Ukraine is long. This includes diagnostic kits, rapidly deployable field hospitals, immunobiological drugs for the treatment of the diseases like diphtheria, tetanus, botulism, and malaria, as well as vaccines for routine immunization (including against hepatitis A and cholera), disinfectants, portable water treatment systems, and means for pest control.

In order to establish a healthcare system capable of responding to epidemic risks, the Ukrainian parliament is set to finalize the second draft of a law on public health that features over 850 proposals from MPs and 400 proposals from international experts.

In preparation for the second reading, experts from the WHO, USAID, the Ukrainian Ministry of Health, and the Ukrainian Public Health Center are involved in finalizing the draft law. Considerable revisions remain before this law can be implemented. This sizable task will require further support from the international community.

Ihor Kuzin is Ukraine’s Deputy Minister of Health and Chief State Sanitary Doctor.

Further reading

UkraineAlert Jun 30, 2022

Goodwill gestures and de-Nazification: Decoding Putin’s Ukraine War lexicon

By Peter Dickinson

From “goodwill gestures” to “de-Nazification” and “reclaiming Russian lands,” the Atlantic Council’s Peter Dickinson decodes some of the key phrases from the lexicon of Putin’s Ukraine War into plain English.

Central Asia Conflict

UkraineAlert May 27, 2022

South Ukraine holds the key to Putin’s dreams of a new Russian Empire

By Taras Kuzio

The biggest European battles since WWII are currently raging in eastern Ukraine’s Donbas region but the ultimate outcome of the Russo-Ukrainian War is likely to be decided hundreds of miles to the south.

Civil Society Conflict

UkraineAlert Jul 6, 2022

Ukraine defies Russia and launches electricity exports to EU neighbors

By Aura Sabadus

Ukraine’s remarkable wartime synchronization with the electricity grid of continental Europe moved up a gear at the end of June with the landmark launch of commercial electricity exports to neighboring Romania.

Conflict Energy Markets & Governance

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia and Central Asia in the East.

Learn more

The post Russian-occupied regions of Ukraine at risk from infections and epidemics appeared first on Atlantic Council.

​​​​​What you should know

• Argentina: Economy Minister Martin Guzmán resigned.
• 79 percent: The share of Latin America and the Caribbean’s (LAC) children whose learning foundation falls short of their current schooling year.
• 27.9 million: The number of acutely food-insecure people in LAC as of June 2022, a six-fold increase compared to pre-pandemic levels of 4.3 million in early 2020.

Monitoring COVID-19 economic recovery in the region

• Peru: The Central Bank is expected to raise its interest rate by half a percentage point as inflation hits 25-year high.
• Mexico: Annual inflation hit a 21-year high in June 2022, suggesting the central bank will have to continue its monetary tightening to take spiraling consumer prices.
• Brazil: Unemployment fell below 10 percent for the first time since 2016, beating  projections. 
• Ecuador: Government officials met with indigenous protestors after President Guillermo Lasso lifted a state of emergency and agreed to new spending on fertilizers, health, and education.  
• Colombia: President-elect Petro nomination of José Antonio Ocampo as finance minister received positive reactions. Ocampo previously served as finance minister, advised centrist candidate Sergio Fajardo, and worked for ECLAC. 
• Jamaica: The Statistics Institute (STATIN) reported 8.2 percent GDP growth during the 2021-22 fiscal year driven by a boost in tourism and an ease in COVID-19 restrictions.
• El Salvador: The government’s bitcoin holdings have lost about 60 percent of their presumed value during the recent market plunge. 
• 15 percent: The share of adults in LAC that made a digital utility payment for the first time since the pandemic outbreak, nearly twice the developing economy average.

In focus: Argentina’s economy

Argentina’s economy minister, Martin Guzmán, resigned on July 3. Guzmán led Argentina’s recent debt negotiations, including its $44 billion restructuring deal with the International Monetary Fund (IMF). His departure also highlights alleged tensions within the governing coalition, including with Vice President Cristina Fernández de Kirchner, who has repeatedly criticized the administration’s economic policies . Argentina faces inflation of over 60 percent and pressure on exchange rates. 

President Fernández named Silvina Batakis, former economy minister in the provincial government of Buenos Aires and ally of Fernández de Kirchner, as Guzman’s replacement. Debt negotiations scheduled to take place in Paris were cancelled and will be rescheduled in light of the change.  

Health + Innovation

• Uruguay: A court ruled that the government and Pfizer must disclose the exact components of the COVID-19 vaccine in light of an injunction to halt vaccination among children aged five and over.
• PAHO: Over 1.6 billion COVID-19 vaccine doses have been administered in member countries, 17 of which have passed the 70 percent target for national vaccination rate. 
• Peru: A mandatory mask mandate was reinstated amid a fourth wave of COVID-19 infections.
• Bolivia: Over 2,000 new cases of COVID-19 have been reported since June, the highest number of infections since the fifth wave of the pandemic started last month.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: July 9, 2022 appeared first on Atlantic Council.

While in 2019 tourism was among the fastest growing sectors in South Asia, the pandemic resulted in losses of over fifty billion dollars to regional gross domestic product. In particular, the Maldives, Bhutan, Sri Lanka, and Nepal saw between a 70 and 80 percent reduction in tourist arrivals in 2020. Furthermore, the United Nations World Tourism Organization projects a return to pre-COVID arrival levels in 2023 at the earliest, indicating a long recovery for this critical economic sector. 

To explore these issues, the Atlantic Council’s South Asia Center brought together a panel of experts to discuss COVID-19 and the future of tourism in the Himalayan and Indian Ocean Countries of South Asia.   

This program was recorded on June 21, 2022.

Featuring

Dr. Aishath Shakeela
Senior Lecturer
Griffith Business School, Griffith University, Brisbane, Australia

Dr. Manoj Samarathunga
Senior Lecturer
Faculty of Management Studies, Rajarata University of Sri Lanka

Saurav Raj Pant
CEO
National Study Center, Kathmandu, Nepal

Damcho Rinzin
Chief Tourism Officer
Tourism Promotion Division, Tourism Council of Bhutan

Moderated by

Dr. Rudabeh Shahid
Non-Resident Senior Fellow
Atlantic Council’s South Asia Center

The South Asia Center serves as the Atlantic Council’s focal point for work on the region as well as relations between these countries, neighboring regions, Europe, and the United States.

Learn more

Related content

Interview May 25, 2022

An interview with the Honorable Prime Minister of Bhutan, Dr. Lotay Tshering

By South Asia Center

The South Asia Center hosts the Honorable Prime Minister of Bhutan Dr. Lotay Tshering to discuss his government’s strategy for economic growth, environmental preservation, and engagement with the international community.

Energy & Environment Indo-Pacific

SouthAsiaSource May 12, 2022

Rising sea levels and the climate crisis in Bangladesh, the Maldives, and Sri Lanka

By South Asia Center

The South Asia Center brings together a panel of experts to discuss the effects of climate change on the economy, food and energy security, and migration in Bangladesh, the Maldives, and Sri Lanka.

Bangladesh Climate Change & Climate Action

SouthAsiaSource Mar 22, 2022

How Maldives, Nepal, and Sri Lanka are seeing their relationships with India and China

By South Asia Center

Join the Atlantic Council’s South Asia Center for a discussion on how Maldives, Nepal, and Sri Lanka are understanding the geopolitical nature of their relations with India and China as well as how these relationships may evolve in the coming years. 

China Economy & Business

The post COVID-19 and tourism in the Himalayan & Indian Ocean countries of South Asia  appeared first on Atlantic Council.

​​​​​What you should know

• Food insecurity: According to the World Food Programme, 14 million people across 13 LAC countries will reach extreme food-insecure status in 2022 amid the ongoing global food security crisis exacerbated by inflation and the war in Ukraine.
• Colombia: On June 19, Gustavo Petro was elected as the first leftist president ever, marking a shift away from the country’s decades of political traditions.

Expert take: What a Petro administration means for Colombia’s economy

Gustavo Petro’s victory marks a turning point in Colombia, a traditionally conservative country where consecutive governments have focused on tackling insecurity and violence. Though the Colombian economy has bounced back from the pandemic, informality and inequality levels remain high. Nearly half of the population—and nearly 60 percent among the poorest—think the country’s economic outlook is getting worse. Petro’s economic plan includes structural reforms designed to promote a more inclusive and environmentally responsible economy.

President-elect Petro’s fiscal priorities includes a tax reform that would increase tax collections by 5 percent by taxing wealthy landowners and eliminating tax exemptions/benefits for companies. On the energy front, Petro’s plan to ban oil and gas exploration could create a large fiscal vacuum by depriving Colombia of nearly half of its export revenue. Other significant reforms may include extending subsidies for low-income people, making the government the employer of last resort, and land reforms.

A main immediate priority for the incoming administration will be to safeguard Colombia’s economic recovery. Since 2020, increases in unemployment and informality pushed 3.5 million households into poverty. Amid rising food and fuel prices coupled with global supply chain disruptions, inflation rose to 9.2 percent in April—a 21-year high. While Colombia’s economy is set to grow 5.8 percent this year, the fastest among major Latin American economies, Petro will have to navigate a complicated road ahead, especially given a divided Congress likely resistant to radical reforms.

Staff

Valentina Sader

Deputy Director, Impactful Programming and Brazil Lead

Adrienne Arsht Latin America Center

Brazil Corruption

Monitoring COVID-19 economic recovery in the region

• Ecuador: The Ministry of Energy and Mines declared force majeure to the country’s entire hydrocarbons value chain amid nationwide strikes and protests. Economic loss stands at $17 million since the protests started due to 609 halted oil wells.
• El Salvador: The value of its $105 million investment in Bitcoin fell by more than 50 percent.   
• Mexico: AMLO criticized the central bank’s interest rate increases, which are expected to continue next week to curb inflation.
• Dominican Republic: Economic growth is expected to reach 5 percent in 2022, despite 9.5 percent inflation and nearly $950 million spent on food and fuel subsidies since 2021.
• Argentina: Wheat harvest costs have risen by 40 percent, driven in part by fertilizer shortages.  
• Brazil: Inflation reached 11.7 percent in May. The central bank once again increased interest rates by .5 percent while promising further hikes to combat rising prices. 

In focus: Ecuador’s economy

Ecuador’s economy looked strong earlier this month, with the government on track to outperform its deficit guidelines. However, political instability undermined that forecast after the country’s foreign bonds lost nearly 17 percent of their value over the past month.  

Protesters demanded fuel subsidies and a stop to privatization, and mining and oil projects. In addition to protest-induced road closures, demonstrators forced the state oil company to temporarily cease production. In response, President Lasso offered increased payments to the poor, fuel and fertilizer subsidies, and loan forgiveness. 

Health + Innovation

• 11 percent: The increase in COVID-19 cases in the Americas over the past week. At least 11 countries and territories have yet to reach 40 percent vaccine coverage.
• Barbados: Prime Minister Mia Mottley is the latest regional leader to test positive for COVID-19.
• Colombia: President Iván Duque announced that the COVID-19-induced health emergency measure will be lifted as of July 1, 840 days after it was first declared in 2020. 
• Mexico: Foreign Minister Marcelo Ebrard is the latest Mexican cabinet member to contract COVID-19.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 June 26, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Summit of the Americas: The Biden administration announced a new economic framework  for Latin America and the Caribbean (LAC), focusing on climate change, workers’ rights and supply chains.
• Food security: Guatemala, Honduras, Nicaragua and Peru will face considerable challenges in the coming months as countries deal with the global impact of the Ukraine crisis on food and fuel prices.
• ECLAC: The United Nations commission increased its projection for poverty in LAC for 2022 to 33 percent, citing economic disruptions caused by the conflict in Ukraine.

Monitoring COVID-19 economic recovery in the region

• Colombia: The peso and stock exchange closed higher on May 31, in the first session since the initial round of presidential elections/ Business-friendly construction magnate Rodolfo Hernández advanced to the run-off.
• Mexico: Financial inclusion levels have declined since 2018 despite a burst of financial startups hoping to ‘bank the unbanked’ and COVID-induced digitalization. Cash still dominates 90 percent of transactions under $25 and 78.7 percent of payments over $25.
• Ecuador: High commodity prices and returning tourism have boosted the economy, which is on track to meet IMF deficit guidelines. This year’s deficit is expected to be less than 2 percent of GDP, down from 4 percent in 2021 and 7 percent in 2020. 
• Venezuela: Farmers in Venezuela are missing approximately one third of their fertilizer needs as supplies from Russia are cut off by international sanctions.
• Regional outlook: The World Bank predicts that growth in LAC will slow to 2.5 percent in 2022 and 1.9 percent in 2023 as input costs rise and economic policies tighten. Expectations in the Caribbean are more favorable, at 6.9 percent for 2022 and 6.5 in 2023.  
• Argentina: The Fernandez administration suggested a new tax on companies profiting from the impact of the war in Ukraine to reduce the country’s deficit and control inflation.
• Chile: The Central Bank raised its benchmark rate 75 base points to 9 percent to confront inflation, continuing a trend of increases now amounting to 8.5 percentage points since last July. 

In focus: Americas partnership for economic prosperity

President Biden will use the Summit of the Americas to launch the Americas Partnership for Economic Prosperity, a regional pact to “rebuild… economies from the bottom up and middle out.” The framework will focus on supply chain resilience, confronting climate change, and mobilizing regional investment to renew the “social contract” in the region. It will include $300 million for fighting food insecurity and more cooperation with the Inter-American Development Bank.

According to a White House press release, the Partnership seeks to reduce non-tariff trade barriers by improving customs transparency and regulation. This mirrors last month’s Indo-Pacific Economic Framework for Prosperity, but is likely to disappoint countries like Ecuador and Uruguay, whose free trade agreement (FTA) negotiations with the US have stalled.  

Health + Innovation

• Pandemic response: Leaders in the hemisphere adopted an “Action Plan on Health and Resilience in the Americas” to help prevent, prepare for, and respond to future pandemic threats and other health emergencies.
• Uruguay: President Luis Lacalle Poe is the latest regional leader to contract COVID-19 ahead of the Summit of the Americas leaders meeting.
• Cuba: Officials lifted a two-year mask mandate following a successful vaccination drive that contributed to a sharp drop in cases in the last few weeks.
• Brazil: People over 50-years old are now eligible for a fourth COVID-19 vaccine shot.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 June 11, 2022 appeared first on Atlantic Council.

The war in Ukraine, combined with the lingering effects of the pandemic, means that 2022–23 has become a watershed moment for the growing gap between rich and poor countries. Owing to the increased political instability in many regions, the democratic backsliding that has occurred in Africa, Latin America, and other regions throughout the developing world in recent years is likely to intensify. The stakes are high for the West: China will be the default winner unless Western countries do more to support developing countries. Bearing little responsibility for the Russian invasion of Ukraine, the developing world should not be victimized by it. Nor can the West afford to see its own weakening economic growth prospects exacerbated by the collapse of developing economies.

• At least 107 developing countries—home to 1.7 billion people—are now being threatened by at least one of three crises: food, energy, and/or finance. Sixty-nine countries, or 1.2 billion people, are severely affected by all three crises, according to a report by the Deputy United Nations (UN) Secretary-General. The World Bank now predicts that a quarter of a billion people could be pushed into extreme poverty this year—an upwards revision of 77 million—due to the fallout from the war in Ukraine.
• The UN’s Food and Agriculture Organization and its World Food Program have also cited the Ukraine war as exacerbating the already steadily rising food crisis with Ukraine unable to export its grain supplies, which account for 12 percent of the planet’s wheat, 15 percent of its corn, and half of its sunflower oil. The Western embargo on Russian oil has stoked market fears about maintaining adequate energy supplies, boosting the global price for energy, even in countries such as the United States, which are not dependent on Russian imports.
• The flawed international financial system—which is unprepared for the worsening conditions of the Global South—is greatly in need of reform. The increasing costs borne by the developing countries as a consequence of the sanctions and slowdown in global growth could drive an even deeper wedge between advanced and developing economies than that caused by the pandemic. Without efforts by the Biden administration and other Western governments to assuage their growing plight, developing countries risk becoming more dependent on China, even as Beijing has fewer resources to expend on development assistance due to its own economic slowdown.  

A growing debt crisis

Borrowing heavily at low interest rates to handle the health crisis, developing countries are now in the worst possible position while Western central banks raise interest rates, the dollar appreciates at the most rapid rate in years, and inflation is sending the prices of essentials like food and energy beyond easy reach. Sri Lanka recently became the first Asia-Pacific country in decades to default on foreign debt; unfortunately, other developing countries are likely to follow suit.

Having borrowed record amounts to offset the COVID pandemic’s health and social costs, developing countries’ capacity to service their external debt deteriorated during 2020. The external-debt-to-export ratio increased in 121 out of 127 developing countries for which data exist between 2019 and 2020. In 51 countries this indicator stood above 250 percent in 2020, which lies above the risk threshold of 240 percent used by the International Monetary Fund (IMF) for low-income countries in its Debt Sustainability Framework (DSF). Thirty percent of poorest countries’ debt is at variable rates, increasing the exposure to central bank rate hikes, according to the World Bank. Many developing countries are cutting spending in critical areas such as education, threatening their long-term economic growth.

Countries that appear vulnerable to a sudden crisis, according to the UN Conference on Trade and Development (UNCTAD), due to a combination of large rollover pressures and a large debt-service-to-export ratio include Angola, Egypt,  Mongolia, Pakistan, and Sri Lanka. Three of these—Angola, Egypt, and Pakistan—already have long-term IMF programs in place.

The United States and other Western countries need to take the lead on their own. After all, it is in the West’s self-interest not to see its own weakening growth prospects further damaged by the collapse of the developing world.

About 104 countries have been net food importers for some time. These countries had a total of $1.4 trillion in external public debt at the end of 2020, and they face $153 billion in projected debt-service payments in 2022, which can be jeopardized if international food prices continue to rise. Some economists warn that the magnitude of food supplied must be on the level of that provided under the Marshall Plan, which saved Western Europe from communism after the Second World War.

So far the Global South has not experienced any significant capital flight, despite signs that monetary policy will tighten substantially this year. Instead of waiting for another “taper tantrum” as happened in 2014 and 2018, the Biden administration and its allied partners should agree on a plan to deal with such an eventuality, which could happen without much warning.

The West should prepare for an extended crisis

The G20’s Debt Service Suspension Initiative expired at the end of 2021, leaving the Common Framework for Debt Treatment as the main debt-relief instrument despite only three countries having signed up, and none of these has gotten its debt successfully restructured. With the effects of the Ukraine crisis deepening these countries’ fiscal distress, the UN is recommending that the Debt Services Suspension Initiative be extended for at least two years and the Common Framework be dramatically enlarged. A broad range of middle-income emerging and developing economies that are currently ineligible should be considered for the Common Framework. In addition, access limits should be raised for the Rapid Credit Facility and Rapid Financing Instruments, and those limits should be extended to at least 2024.

Overseas development assistance by advanced countries was at record levels in 2021. Nonetheless, the Ukraine crisis, coming on the heels of the pandemic, is putting an end to the brief economic recovery that many countries saw in 2021–22. The world’s economic prospects would be troubled even without the war in Ukraine and Russian sanctions. Inflation was already a growing worry because of the initial robust pandemic recovery and supply constraints, and with the lockdown spreading in China to counter the Omicron variant in 2021-22, global economic growth was already being downgraded in most forecasts before the Ukraine war.

• There remains a shortfall of some $15 billion in funding for the Access to COVID-19 Tools Accelerator and the World Health Organization target of vaccinating 70 percent of the world’s poorer populations has still not been met. The pandemic started developing economies on a downward economic path. There is an assumption, because mortality is falling in the United States and Europe, that the threat is waning—but the spread in China and other Asian countries is a reminder that the pandemic has not been conquered. The possibility of more virulent variants appearing in the future poses an ongoing threat for further economic dislocation.
• Humanitarian organizations worry that the war in Ukraine will divert too much aid from other urgent needs. Maurice Amollo, a Nigeria-based official with the humanitarian aid group Mercy Corps, praised the “swift” response to the Ukraine crisis and “the generosity in Europe and the United States and beyond.” At the same time, he told Voice of America “we are also getting a little concerned that resources and diplomatic support will inevitably be diverted away from millions of other deserving and vulnerable communities around the world into Ukraine.” For example, Denmark will defer 40-50 percent of its development aid that had been destined for West Africa to boost aid for Ukraine. Sweden—one of the few countries along with Denmark that provides more than 0.7 percent of its GDP in development aid (the UN-recommended level)—has recently announced cuts to its assistance for others due to its funding for Ukrainian refugees. 
• The appropriation of $58 billion for the baseline international affairs budget by the US Congress is only a 1 percent increase over last year’s appropriation despite growing inflation, and it’s less than both lawmakers and the White House had previously outlined. The bill includes $6.9 billion for the State Department and US Agency for International Development to assist Ukraine, which means reductions for other recipients. Five billion dollars in emergency COVID-19 funding for the rest of the world was stripped out at the last minute. There is a plan to vote on those funds separately later on, but “it’s not clear if there’s enough support to approve them.”
• According to the IMF’s April 2022 economic update, “downside risks to the global outlook dominate—including from a possible worsening of the war, escalation of sanctions on Russia, a sharper-than-anticipated deceleration in China as a strict zero-COVID strategy is tested by Omicron . . . moreover, the war in Ukraine has increased the probability of wider social tensions because of higher food and energy prices, which would further weigh on the outlook.” Employment and output for all countries will typically remain below pre-pandemic trends through 2026. “Scarring effects are expected to be much larger in emerging market and developing economies than in advanced economies—reflecting more limited policy support and generally slower vaccination [rates]—with output expected to remain below the pre-pandemic trend through 2026.”

China “wins” out of default?

During the past decades, Chinese influence in the developing world, particularly in Africa and Asia, has grown quickly, making Beijing the most important external partner for many in the Global South. China is the largest trading nation in the world and, as shown by its current slowdown, developments there negatively affect trading partners in Africa and Latin America. How China fares can either lift other countries up or suppress growth elsewhere.

China is the world’s largest official creditor, with outstanding claims in 2017 surpassing the loan books of the IMF, World Bank, and of all other 22 Paris Club governments combined. In recent years, for the 50 most-exposed countries, Germany-based Kiel Institute estimates that debt owed to China has increased from less than 1 percent of debtor country gross domestic product (GDP) in 2005 to more than 15 percent in 2017. A dozen of these countries now owe debt of at least 20 percent of their nominal GDP to China. Most deals are opaque, making it hard to estimate actual amounts of debt owed to China. An estimated fifty percent of China’s lending to developing countries has been assessed to be unreported.

China’s overseas lending boom

The Kiel Institute judges, however, that China’s lending boom has come to an end, having peaked in 2019. China announced that it had extended debt relief to developing countries worth a combined $2.1 billion under the G20 program—the highest among the group’s members in terms of the amount deferred—but much of the time it provides an extension on repayment. The restructuring and defaults have strongly risen since 2019, according to the Kiel Institute.

Many have criticized Chinese lending as an effort to entice developing states to take on more debt than they can handle and thereby become dependent on China. The London-based Chatham House undertook a comprehensive study of Chinese lending and concluded that “China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives; and developing-country governments and their associated political and economic interests determine the nature of BRI [Belt-and-Road Initiative] projects on their territory.” The Chatham House study assesses that in the case of Sri Lanka and Malaysia—”the two most widely cited ‘victims’ of China’s ‘debt-trap diplomacy’”—the debt burdens “arose mainly from the misconduct of local elites and Western-dominated financial markets.”

US options for getting ahead of the unfolding crisis

The United States and other Western countries have an opportunity to demonstrate their concern to debt-ridden developing countries through immediate relief and pushing the G20 to take action over the medium term. Because of the dysfunction within the G20 over Russia’s participation, whether G20 finance ministers will even meet next month in Indonesia is unclear. The United States and other Western countries need to take the lead on their own. After all, it is in the West’s self-interest not to see its own weakening growth prospects further damaged by the collapse of the developing world.   

1. The amount of extra money to be distributed by advanced countries from the IMF’s $650 billion allocation of special drawing rights (SDRs) has unfortunately so far fallen short of expectations, after the G20 group of large economies reported combined pledges of $60 billion. According to a Financial Timesreport, “the amount, to be disbursed through the voluntary channeling of special drawing rights, does not match the $100bn set as a ‘global ambition’ by the G20 last year . . . and less than a quarter of the $290bn given to members of the G7 group of advanced economies.” China has pledged a quarter of its SDR allocation to Africa and is playing the role of a provider of liquidity by buying SDRs held by poorer countries. Meanwhile, Republicans in Congress have so far blocked the Biden administration from disbursing the US portion of SDR to poor countries. The administration should try to find ways around Republican opposition.
2. The United States also has an opportunity to help with lending through the International Development Association (IDA), the concessional lending arm of the World Bank. The United States ”reclaimed its position as IDA’s top donor, pledging $3.5 billion over three years to support pandemic response and an economic rebound in the world’s poorest countries.” Nonetheless, it is up to Congress to deliver on its past commitment and make a partial first installment this year toward the latest US three-year pledge. Donor contributions are a very good value because they typically mobilize four additional dollars in IDA commitments to poor countries. From 2010 to 2020, China went from being IDA’s thirtieth- to its sixth-largest donor. US contributions had been drifting down before this latest commitment.
3. Debt relief is a harder challenge. David Malpass, World Bank head, has called for a new global cooperative approach and mechanism for providing an early orderly resolution of debt problems and prevent unnecessary defaults. A more permanent solution would mean convincing Beijing to join an internationally agreed-upon mechanism and be transparent about all its lending. Moreover, low- and middle-income countries owe five times as much to commercial creditors as to bilateral ones. The G20’s common framework could be a vehicle so long as there is a common will to use it. Otherwise, creditors will worry it “will just become a covert means of redistribution to other lenders unwilling to play ball.”

It must be recognized that “China has provided more debt relief through the G20’s Debt Service Suspension Initiative than any other country and has bilaterally negotiated up to US $10.8 billion of relief with debtor countries since the onset of the pandemic.” Debtor countries need to assume more responsibility, but the United States and its European allies need to take charge too and not allow a debt crisis, which is already roiling Sri Lanka, to expand and spread, becoming a major challenge for the global financial system. Germany as current G7 president and Indonesia as G20 head have a special responsibility, but the United States should also take a lead, demonstrating its concern for the plight of so many in the developing world.

Stiff costs for all

A “lost” decade for over half of humanity is in no one’s interest. The growing instability in Sri Lanka is a foretaste of what could happen in other countries that are increasingly leveraged and facing rapidly increasing food, energy, and other costs. The Associated Press and National Public Radio have reported that “people have been forced to queue for hours every day to buy essentials. Doctors have warned of a crippling shortage of life-saving drugs in hospitals, and the government has suspended payments on $7 billion in foreign debts due this year alone.” According to the World Bank, “Since the start of the COVID-19 pandemic, the world has seen a series of massive setbacks to stability in regions across the world: from Asia and Africa to Latin America and the Caribbean and more recently in Eastern Europe.” Even before Russia’s assault on Ukraine produced a record number of refugees, as of mid-year 2021, the United Nations High Commissioner for Refugees estimated that “global forced displacement has likely exceeded 84 million by mid-2021, a sharp increase from the 82.4 million reported at end-2020.” Many went to other developing countries, but a significant number sought refuge in advanced economies.

Scraping by with higher debt servicing and the growing costs of food and energy supplies, developing countries have little to spare for investment in renewables and other climate-change-related mitigations and adaptations, particularly as advanced economies have not met their target of providing $100 billion in annual climate-change support for developing countries. 

An opportunity, if not a responsibility

The West’s relatively poor record on getting vaccines out to Africa and elsewhere gave the impression of self-interest. Although the West is by no means responsible for the unprovoked Russian invasion, Ukraine should not be the only target for Western redress. The war in Ukraine may turn out to be an inflection point in more ways than anticipated. The West, which is currently taking care of its own economic problems and ignoring the plight of the developing world, is undermining its influence elsewhere among a majority of the world’s population. In recent years over half of the world’s economic growth has been powered by developing countries, giving others—principally China—an opportunity to expand their influence while undermining democracy prospects in developing nations. Without strong middle classes, democratization will be impeded, and the backsliding that has already occurred will be hard to overcome.

Assumptions Testing Series

The New American Engagement Initiative’s Assumptions Testing series explores some of the foundational beliefs that guide US foreign policy. By questioning the conventional wisdom, and exposing these assumptions to close scrutiny, the series aims to open a new seam in the policy debate and generate a more lively, fruitful, and effective strategic dialogue – one that is capable of producing a sustainable, nonpartisan strategy for US global engagement.

Reality Check Series

The New American Engagement Initiative’s Reality Checks are short briefs dedicated to exploring a particular policy or set of policies, assessing their efficacy, and, where appropriate, proposing alternatives. Reality Checks are published regularly and tied to the news of the day or derive from NAEI’s Assumptions Testing series. All are succinct and straight-to-the-point. The briefs are designed for busy professionals anxious for pragmatic and timely policy options.

Engagement Reframed Series

The New American Engagement Initiative’s Engagement Reframed policy briefs reimagine and reframe the US approach to the world beyond traditional, narrow notions of US military dominance to fashion an achievable and sustainable form of US leadership in a world of many capable actors.

The post Engagement Reframed #7: Defending democracy and countering China requires US and Western support for a beleaguered developing world appeared first on Atlantic Council.

​​​​​What you should know

• Argentina: Annual inflation is expected to reach 60 percent this year. Prices have already risen 23.1 percent since January 1, indicating a stagnated recovery.
• PAHO: Launched the Information Platform on Health and Migration in the Americas initiative to help countries safeguard the right to health of migrants in the region.

Monitoring COVID-19 economic recovery in the region

• Mexico: Recorded a 25 percent increase in remittance flows following an increase of transit migrants en route to the United States in 2021.
• Brazil: Inflation reached 12.1 percent, far above the 3.5 percent target. The Central Bank will likely continue to raise interest rates after already raising rates to 12.8 percent from a 2.0 percent record low in March 2021.
• Colombia: Estimates indicate the economy grew about 7.5 percent in the first quarter of 2022, a decrease from 10.8 percent at the end of 2021.  
• Uruguay: The Central Bank increased its benchmark interest rate to 9.3 percent, signaling that borrowing costs will keep rising as monetary policy tightens to fight inflation.
• Chile: Congress approved an increase in the minimum wage to address soaring inflation. Transitional compensation will help small and medium businesses adjust to the change.

In focus: Remittances flows to Latin America and the Caribbean

Remittances to Latin America and the Caribbean (LAC) surged to $131 billion in 2021, a 25.3 percent increase from 2020 due to the strong job recovery for foreign-born workers in the United States. Countries registering the highest growth rates included Guatemala (35 percent), Ecuador (31 percent), Honduras (29 percent), and Mexico (25 percent).

Remittances are a major source of hard currency for LAC, which is one of the top remittances receiving region in the world. For some countries, including El Salvador, Honduras, Jamaica, and Haiti, remittance flows represent at least 20 percent of GDP. In 2022, remittances are expected to increase by 9.1 percent, though downside risks remain, including the costs of cross-border remittance flows.

Health + Innovation

• 918,000: The number of new cases recorded last week in the Americas, a 27.2 percent increase over the previous week.
• Argentina: Health Minister Carla Vizzotti announced a fourth wave of COVID-19 as weekly recorded cases increased by 92 percent.
• Food crisis: In 2021, nearly one million more people faced food insecurity in El Salvador, Guatemala, Haiti, Honduras, and Nicaragua due to rising food prices coupled with COVID-19’s economic effects.
• Central America: In the last week, new COVID-19 infections rose by 80 percent.
• 120,000: The number of new COVID-19 cases recorded in Brazil from May 9-15, a nine percent increase over the previous week.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 May 21, 2022 appeared first on Atlantic Council.

Table of contents

Introduction
The party wins
CCP credibility on the line
Model for the world?
Evading responsibility
Vaccine diplomacy’s threat to china
Economics in a time of zero COVID
Consumptive consumption
Property downturn: Frost on snow
The policy toolbox: Half full or half empty?
Zero COVID’s international implications
Conclusion
About the authors

Introduction

After COVID-19 emerged in Wuhan two years ago, it spread rapidly around the world, infecting hundreds of millions and taking over six million lives.¹ After subduing the initial outbreak, China shut its door to the pandemic by imposing a strict regime of residential lockdowns and business shutdowns, quarantines, mass testing, and stringent border controls.

The response—which Beijing calls “dynamic clearing” (动态清零),² but is widely known as zero COVID—succeeded in keeping the virus at bay for nearly two years. It is a policy that Chinese president Xi Jinping and his minions have used to fortify China’s aspirations to global leadership and to solidify Xi’s unchallenged political position atop the Chinese Communist Party. The policy’s initial effectiveness—after the initial Wuhan outbreak killed several thousand Chinese citizens³.—provided a wellspring of propaganda for Beijing to declare the superiority of its policies and political system as competitors, most notably the United States, struggled at times to contain the disease.

Yet the emergence of highly infectious coronavirus variants—first Delta beginning in late 2021, and then Omicron in March and April—has strained the zero-COVID policy past the breaking point. Outbreaks spread across the nation in March, leading local governments to impose lockdowns affecting the twenty-five million inhabitants of Shanghai, the economic powerhouse of Shenzhen, and provinces from Hainan in the south to Jilin in the northeast.⁴

The outbreaks have raised the very real possibility that the zero-focused approach can no longer contain the pandemic. There are even reports that a new, homegrown strain of Omicron has emerged.⁵

The rationale for the zero-COVID policy was anchored, in part, in the reality of China’s ill-equipped public health system. The country has 2.7 nurses per one thousand people, well below the average of 11.5 in the advanced economies, and only 4.4 intensive care beds per one hundred thousand people versus 25.8 in the United States and 33.9 in Germany.⁶ By early January 2022, nearly 2.9 billion doses of Chinese-produced COVID-19 vaccines had been given to the country’s 1.4 billion people, and another 1.41 billion doses sold or donated abroad as of March 21, 2022.⁷Yet those vaccines, based on an inactive form of the virus, have become generally less effective as the COVID-19 virus has evolved. Tests have showed that the two Chinese vaccines offered only limited protection against variants.⁸

So far, Beijing has resisted making use of the foreign-made mRNA vaccines that have proven so effective. Instead, it has pinned its hopes on developing China’s own version of the shots—a biomedical achievement that has proved difficult to replicate.⁹

Nonetheless, the zero-COVID policy allowed China to return to normal life for many months. It enabled China’s export machine to emerge from the nationwide shutdowns of early 2020 and shift into high gear to meet global demand for masks, mobile devices, and other stay-at-home products. Chinese factories helped power nearly 8 percent gross domestic product (GDP) growth in 2021, another achievement that Beijing has trumpeted as exemplifying China’s superior governance.

At the same time, China faced contagion of a different sort—a spreading economic slowdown that the export boom could not offset. Zero COVID has had a deep impact across various sectors of the economy—especially the entertainment, restaurant, tourism, and other service industries that represent the country’s largest share of employment. At the same time, this slowdown is exacerbating the deepening problems of China’s all-important property and construction sectors. Moreover, the widening shutdowns have produced new worries about “new bottlenecks in global supply chains,” as the International Monetary Fund (IMF) highlighted in its April 2022 World Economic Outlook.¹⁰

Now the pandemic’s reemergence threatens to deal a new blow to the economy that could combine with what appears to be the growing frustration of many Chinese with unrelenting lockdowns and other disruptions to daily life. This could undermine the narrative of China’s superiority in responding to the pandemic—and the image and stature of Xi’s rule.

The party wins

After the initial COVID-19 outbreak erupted in Wuhan in January 2020, the spiraling crisis appeared a potential threat to the Chinese Communist Party. Since its leaders characterize themselves as infallible, they perceive any major social disorder or high-profile policy failure as a danger to their legitimacy and control. A public health fiasco that takes the lives of a significant number of people could have presented a serious risk to the party’s implicit contract with its citizens: give us full political power and we’ll take care of you.

As the pandemic reached crisis proportions in Wuhan during the early stages of the outbreak, the threat became more and more apparent. Public revelations—rare in China’s tightly monitored media environment—exposed that the government, at both the national and local levels, had badly mishandled the initial response and allowed the virus to spread. A quarantine in Wuhan was imposed only after five million residents had already departed from the city, carrying the mysterious pathogen with them.¹¹

Worst of all, the unfolding tragedy appeared to be a result of the party’s authoritarian governance. Li Wenliang, a Wuhan doctor, had recognized the new virus and shared that critical information in an online chat group in late December 2019. Local authorities forced him to recant his claim. The government seemed to place its own image above the public good. This doctor, who contracted COVID-19 and died soon afterward, became a folk hero—and a lightning rod for criticism of the regime. ¹²His ill-treatment suggested that China’s authoritarian system itself was a contributing factor to the terrifying outbreak. The stench of a scandal reached all the way up to Xi. A Communist Party journal suggested that Xi was directly involved in managing the government’s policy toward the outbreak in early January, thus implicating him in the bungled response.¹³

The existential threat to party rule resulting from the COVID-19 outbreak is at the very core of its zero-tolerance policy. Though it is true that the leadership had to be concerned about an uncontrolled pandemic that overwhelmed the poorly resourced hospital system, the party also needed to protect itself, both from the potential fallout of a nationwide health crisis that would raise doubts about its competence, and the deeper risk that its governance system would be tarnished and then questioned by the public at large. The threat had to be eliminated, at all costs.

Once the government mobilized against the virus, it did so with an intensity and severity unmatched almost anywhere else. The strict practices eventually put in place—large-scale lockdowns and quarantines of major cities, limitations on domestic and international travel, an effective border closing, testing on a mass scale, detailed tracing of cases—were draconian. Yet they were effective in containing the pandemic in a relatively short period of time, and then preventing its reemergence.

By mid-March 2020, new cases in China reached zero,¹⁴ and keeping them there became a political imperative. Once the party had extinguished the coronavirus menace, it desperately wanted to prevent a resurgence.

The apparent success of the heavy-handed coronavirus lockdowns offered the party an opportunity to rewrite the political narrative of the pandemic. The original story—of an autocratic state that sacrificed people’s lives for its own interests—was redrafted into the very opposite. Now the state was willing to sacrifice anything for the national interest. Even better, an authoritarian state had the capabilities, skill, and leadership to implement a successful policy that prevented a widening crisis and saved lives. The battle with COVID-19 was transformed into another triumph of the Chinese people against the odds, a national struggle that would pave the road to national rejuvenation. All thanks to the Communist Party, of course. A white paper on China’s COVID-19 experience released by the State Council in June 2020 characterized the anti-pandemic effort as an “all-out people’s war” won “through painstaking efforts and tremendous sacrifice” and achieved “under the leadership of the CPC.”¹⁵ Xi, in his 2021 New Year’s address, proclaimed that “we put people and their lives first to interpret the great love among humans. With solidarity and resilience, we wrote the epic of our fight against the pandemic.”¹⁶ After all, the party cares most about the common people. As Premier Li Keqiang put it in a speech to the National People’s Congress in May 2020, the economic cost of the coronavirus-control policies “is a price we must pay, and a price worth paying” because “life is invaluable.”¹⁷

CCP credibility on the line

The tragedy-to-triumph script composed by the Communist Party has had tremendous political consequences. The party tied its credibility to the zero-COVID policy. An outbreak, and thus a failure of the policy, equated to a failure of the party and its governance. COVID-19 cases became a measure of the party’s merit and legitimacy, similar to economic growth statistics—proof that it can deliver real results to the Chinese people and therefore has a right to rule.

That has had several real-life effects on the Chinese political, economic, and social system. First, the zero-COVID strategy became entrenched and inflexible. Easing up and risking a renewed outbreak would potentially erupt into both a public health challenge and a political crisis. That made moderating the approach to suit new circumstances problematic and helped to encourage sometimes extreme and excessive responses by local governments. For instance, officials kept strict lockdowns in place in the metropolis of Shanghai in 2022 and in Xi’an in late 2021, largely prohibiting  their millions of residents from leaving their homes, even as households ran short of food.

As a result, China has become “stuck in time,” still shutting down cities and restricting cross-border travel while much of the rest of the world is learning to live with COVID-19 and striving to restore normal life, business, and mobility. The economic toll has mounted as disruptions to business operations and daily life continued (see more below).

Secondly, the policy may have further entrenched the Communist Party in Chinese society. Not only do its top cadres have a success to market to the public, the pandemic offered an opportunity to tighten political and social control. New systems to track people’s movements—established in the name of public health—can easily be utilized for more sinister purposes. Citizens must scan QR codes to get into office buildings, restaurants, and shops—good for hunting down COVID-19 cases, or the party’s critics. Citizens require “health codes,” generated through apps such as WeChat and Alipay, in order to travel and access events and buildings—which could be used to limit the movements of targeted individuals. Such requirements may not be removed once the coronavirus epidemic has finally passed, leaving the party with extra monitoring tools, and a populace more accustomed to being overtly tracked.

Third, zero COVID may have bolstered the stature of Xi and increased his chances of claiming a third term at the twentieth Communist Party Congress later in 2022. Xi has become personally tethered to the policy and its success. The victory over the coronavirus was not just a win for the party, but for Xi specifically. The State Council’s white paper proclaimed in its opening paragraphs that “General Secretary Xi Jinping has taken personal command, planned the response, overseen the general situation and acted decisively.”¹⁸ Such statements are somewhat boilerplate in Communist documents, but in a political climate in which Xi has concentrated political power in his person, the buck, in reality, has nowhere else to stop.

That, too, has added inflexibility to the zero-COVID approach. A failure of the policy would translate into a personal political disaster for Xi himself. It should come as no surprise that he appears to be committed to upholding the policy and has insisted it continue. Josh Chin of The Wall Street Journal reported in late 2021 that Xi was furious when government officials suggested softening zero COVID and finding ways to live with the virus, accusing them of being too lax.¹⁹ In mid-April 2022, as economic and social pressure was building to ease a near-total lockdown of Shanghai, Xi insisted zero-COVID should not be relaxed.²⁰

Now, as the government seeks to limit the excesses, and thus the economic cost, of zero COVID, the politics of the policy loom large. As noted above, Chinese authorities have solid public health reasons for maintaining the approach. Yet equally important is the party’s fear of political fallout from a renewed outbreak. As the recent surge in cases in Shanghai and Hong Kong sadly shows, past success at virus-fighting is not a guarantee of future performance. With an inadequately vaccinated populace (more on that below), the new coronavirus variants could easily take hold in China—and undermine the party’s neatly crafted political narrative as well. It is a risk the party is unlikely to take. That means the government may soften zero COVID only on the margins and continue to react with speed and severity to any inkling of growing infections.

Model for the world

The Communist Party recognized that its refashioned narrative of the pandemic could potentially burnish its image abroad as well as at home. Its self-proclaimed zero-COVID triumph quickly entered Beijing’s increasingly assertive propaganda campaign to promote China as a global leader and model for the rest of the world.

The messaging began only weeks after the initial Wuhan outbreak. In March 2020, the state-owned China Daily opined that Beijing’s methods of quick detection and quarantine could halt the global pandemic: “Countries, especially those in the West, should pay due attention to these principles, and waste no more time in applying them,” it recommended.²¹ A month later, Liu Xiaoming, then China’s ambassador to the United Kingdom, penned an essay for the Financial Times entitled “China Has Valuable Lessons for the World in How to Fight Covid-19.”²²In it, he touted China’s lockdown method of containment and claimed: “the initial success in China has bolstered international confidence in beating the virus.” The messaging also tried to present China as a more responsible global leader than the United States, more committed to the global good and international cooperation. For example, Beijing highlighted its support for the World Health Organization (WHO) to differentiate itself from the Trump administration, which criticized and then withdrew from the body.

As zero COVID continued to keep the pandemic at bay, while the United States and other countries struggled to contain the virus, Chinese state media and the regime’s supporters claimed China’s success as a mark of the superiority of its governance system, especially compared to democracy. Hu Xijin, then editor of the Global Times, a Communist Party-run news outlet, wrote in May 2021 that the normality of life in zero-COVID China was a “display of the competitiveness of China’s approach of governance,” especially in light of the failed response in the United States. That, he continued, stripped Washington of the right to criticize China’s political system. “The highest human right—the right to life—has never been the top priority in the [United States],” he wrote. “American leaders, please have some sense of shame.”²³

If China’s superior coronavirus-busting skills were a sign of its ascent as a world power, an additional line of argument went, then America’s inability to contain the virus was an indication of its corresponding decline. Xinhua, the official news agency, added Washington’s inept pandemic response to a list of failures, including domestic social disparities and botched foreign interventions. “The ‘shining city’ has been seeing its halo fading away,” the commentary contended.²⁴

Financier Eric Li, in an essay for The Economist in December 2021, used the high number of COVID-19 deaths in the United States, Brazil, and India compared to China as primary evidence that liberal democracy is failing while the Chinese governance system (which he attempted to characterize as a form of democracy) is succeeding. “Some may object that this [low number of COVID-19 deaths in China] was because China restricted freedoms more than ‘democracies,’ ” Li wrote. “But what kind of democracy would sacrifice millions of lives for some individuals’ freedom not to wear masks? It is precisely in this way that liberal democracy is failing its citizens.”²⁵

In order for this narrative to stick, however, the Chinese leadership and its propaganda machine had to contend with the inconvenient truth that the pandemic began on their own soil, and was allowed to spread by their own mistakes. Just as this undeniable reality had presented a danger to the Communist Party’s domestic standing, so, too, it could tarnish its international reputation and stature. The regime’s critics tried to make certain of that by reminding the world Beijing should be held responsible for the global pandemic.

The party’s solution was an attempt to alter the historical record and sow confusion about the virus’s origins. Instead of the home of the initial outbreak, China tried to paint itself as the world’s savior. In mid-March 2020, Xi told the United Nations secretary-general that “China’s extraordinary response has bought precious time for other countries to fight the virus,” according to the Foreign Ministry’s official summary of the conversation.²⁶ Liu, in his Financial Times essay, wrote that critics who accused China of being responsible for the epidemic did so out of ignorance. “I believe those who seek to stigmatize China owe the Chinese people an apology,” he contended.²⁷

Officials and state media strove to disassociate the virus from its first appearance in Wuhan and sow confusion about its origins. For instance, they went on an offensive against the use of the terms “Wuhan virus” or “Chinese virus.” In March 2020, when President Trump called COVID-19 the “Chinese virus” in a tweet, a spokesperson for China’s Foreign Ministry derided it as “stigmatization.” The ministry urged the United States to “immediately correct its mistake and stop making unwarranted accusations on China.”²⁸ A few days later the ministry claimed that the Chinese people and international community “explicitly oppose linking the virus with any specific country or region.” Playing up sensitivity in the West to discrimination, the spokesperson went on to say that “some in the [United States] who can still see things clearly have publicly opposed the saying of ‘Chinese virus,’ pointing out that it is bald-faced racism and xenophobia.”²⁹ In May 2020, the ministry released a notice called “COVID-19, 15 Truth [sic] You Need to Know,” with the first “truth” stating that “Wuhan city in China first reported COVID-19 cases, but that doesn’t mean the virus originated in Wuhan.” It continued to assert that “there is no certain conclusion as to the origin of COVID-19,” and “there is no evidence that China is the source of the virus that caused COVID-19.”³⁰

Evading responsibility

The narrative, however, required even more embellishment. If the virus did not originate in China, then where did it come from? How did it get to Wuhan? Knotty questions indeed for the avid Chinese propagandist. The government and its state-controlled media grasped at any shred of scientific inquiry that suggested the origins of the virus could be traced to other countries, and actively spread misinformation.

Foreign Ministry spokesperson Zhao Lijian tweeted an unfounded conspiracy theory that the COVID-19 virus was brought to Wuhan by members of the US Army.³¹In March 2022, Li Yang, counsellor at the information department of China’s Foreign Ministry, turned to Twitter to spread the conspiracy theory that American pharmaceutical firm Moderna created the virus and demanded an explanation from the United States.³²Officials also pushed the idea that the COVID-19 virus was transmissible on imported refrigerated food. The attempts to blame the outside world for local outbreaks continues. In recent months, officials have suggested Chinese were infected by the virus lurking on or in international mail.³³

How much progress this campaign achieved in changing the pandemic’s narrative is questionable. In a fourteen-nation survey conducted in 2020 by the Pew Research Center, a median of 61 percent of the respondents thought Beijing handled the pandemic poorly, while unfavorable views of China reached all-time highs in many countries in the poll.³⁴ In certain respects, the propaganda campaign may have had negative consequences for China, both at home and abroad.³⁵

First, the international blitz may have reinforced the inflexibility of the zero-COVID strategy. By using the policy’s success as evidence of its superior system, the leadership likely feared that the image of the party would be damaged if China experienced a major, uncontrolled outbreak. In that eventuality, the Chinese authoritarian model would be no better than the democracies Beijing has routinely mocked. That may have made it more difficult to adjust or move on from the zero-COVID policy, with all the resulting economic and social consequences.

Second, the campaign, in certain respects, exposed Beijing as an irresponsible power rather than a constructive one. So desperate was the leadership to avoid responsibility for the pandemic that it hindered the efforts of the international community to investigate and learn from the pandemic. Apparently, the party equated calls for an investigation with an attempt to undermine its reputation and rule.

Beijing has resisted an independent inquiry into the COVID-19 virus’s origins since the earliest stages of the pandemic in 2020,³⁶ and when China’s leaders eventually consented, they tightly controlled the activities and access of a visiting WHO team of experts in early 2021 and refused to fully cooperate. For instance, Chinese authorities denied the investigators potentially valuable raw data on early COVID-19 cases.³⁷ WHO Director-General Tedros Adhanom Ghebreyesus—who has generally avoided public criticism of China—admitted in a 2021 briefing that the investigative team was frustrated with their access to raw data while in China. “I expect future collaborative studies to include more timely and comprehensive data sharing,” he said.³⁸Beijing then rejected a WHO plan for further study of COVID-19’s origins in mid-2021.³⁹

Beijing was so fearful of an international inquiry that when the government of Australia called for one in 2020, Beijing resorted to economic coercion to arm-twist Canberra to change its position. In the end, the campaign to avoid blame for the pandemic may have hurt the Communist Party’s international reputation rather than enhanced it and fueled speculation about the true origins of COVID-19.

So, too, did the often rabid tone of Beijing’s messaging. Comments from officials and official media often appeared to mock other countries for their struggles to contain COVID-19, and seemed insensitive to their suffering. One especially egregious social media post on an account linked to the Communist Party juxtaposed two images—one of a rocket launch in China, the other a photo of COVID-19 victims being cremated in India. The text read: “Lighting a fire in China VS lighting a fire in India.” The post, made at the depths of India’s pandemic crisis, sparked outrage and was deleted.

At times, Chinese officials and state-media organs seemed to revel in the rising death toll in the United States. “America is coming back!” Diplomat Li Yang tweeted sarcastically amid a renewed surge in the United States in 2021. “Yes, thanks to a series of political manipulations, America is coming back at almost the peak of its epidemic!!!”⁴⁰ In its quest to promote itself, the Chinese government too often denigrated others—hardly a method of winning hearts and minds.

Vaccine diplomacy’s threat to China

Perhaps the most damaging aspect of China’s COVID-19 policy was its “vaccine diplomacy.” Beijing clearly recognized that the pandemic offered an opportunity to expand Chinese political influence and “soft power” around the world, especially with developing countries, and to use homemade vaccines to market its companies and technology. Two companies, state-owned China National Pharmaceutical Group (Sinopharm) and private Sinovac Biotech, were at the center of the effort. With the United States distracted by its fight against the virus, Beijing was able to get a jump-start on a program to export China’s own vaccines, largely for sale but also as humanitarian aid.⁴¹ The leadership and state media routinely publicized China’s efforts to provide vaccines to developing nations, so as to portray the country as a caring and responsible great power. Xi himself played a part in this campaign, for instance, outlining his administration’s largesse in a speech before the Global Health Summit in May 2021.⁴²

Certainly, some recipients of China’s vaccines were grateful for Beijing’s assistance, especially when the US products were not yet widely available for export in early 2021. Indonesian President Joko Widodo received his Sinovac jab in January 2021—which was duly promoted by Xinhua.⁴³ According to data from the World Trade Organization and International Monetary Fund, China exported more than double the number of doses as the United States (though not as many as the European Union),⁴⁴notching more than a third of total vaccine exports.

Yet the achievement was marred by a lack of transparency and outdated technology. Studies have suggested that China’s vaccines are somewhat less effective than their Western competitors (especially if not boosted). One recent study by two Hong Kong universities made the claim that even three doses of the Sinovac vaccine do not provide adequate protective antibodies against the Omicron variant.⁴⁵ Chinese firms used an older method to develop their vaccines and did not have the capability to match the more advanced mRNA technology of Pfizer/BioNTech and Moderna products. In the end, Beijing’s attempt to show off its technological prowess instead revealed it still lags behind that of the major advanced economies.

The most problematic consequence of China’s “vaccine diplomacy,” however, threatens China’s own people. The Chinese government chose to vaccinate its citizens with only Chinese vaccines. That may have left China more vulnerable to outbreaks, especially of the new variants.

Beijing did have other options. Another Chinese firm, Fosun Pharmaceutical, reached an agreement with BioNTech to form a joint venture to supply the latter’s mRNA vaccine in China from a Chinese factory with the capacity to produce one billion doses a year, but Chinese regulators never approved the vaccine for use in China. (Beijing has not sanctioned any foreign vaccines for domestic distribution.) Vaccines, of course, are not a simple solution to the COVID-19 problem, but if China’s large population was better vaccinated, it would likely offer the leadership more flexibility in adjusting the zero-COVID policy. Without that, it is it all but impossible to reopen China’s borders to freer international travel as long as COVID-19 continues to rampage worldwide—and complicates efforts to balance zero-COVID control measures with the need to bolster slowing economic growth. It also makes it challenging for Beijing to find an exit route from the policy without risking a major public health crisis.

In an ironic twist, the Communist Party’s desire to promote itself on the world stage has come back to haunt it at home. From the start, China’s leaders viewed the pandemic in geopolitical terms and sought to capitalize on what they perceived to be a moment of weakness in the United States to score points in its intensifying global competition with Washington. Instead, while much of the rest of the world is learning to live with COVID-19 and other nations protect people through vaccines and advanced treatments, Beijing is badly behind the curve, still locking down cities and maniacally tracking cases as it was two years earlier. Rather than a leader, China has become the laggard.

The Chinese leadership and its supporters believe that the United States was willing to sacrifice hundreds of thousands of lives to an ideological commitment to freedom, or the definition of it to which some Americans adhere. They like to contrast the US approach to their own by claiming they base decisions on science. Yet China’s leaders made many key choices for political reasons and based on ideological precepts—most critically, the vaccine program, driven by Xi’s desire for self-reliance and the demands of competition with the United States. These decisions are having serious consequences for China’s current and future approach to COVID-19. The government must find a new course as the economy and society strain under the weight of pandemic restrictions, but it has left itself limited room to respond to changing circumstances.

Economics in a time of Zero COVID

The Chinese economy appeared to rebound smoothly from nationwide shutdowns during the early stages of the COVID-19 pandemic. As the virus spread from Wuhan through Europe, North America, and the rest of the world, China’s industrial sector returned to full output and supplied record amounts of exports to a world desperate for the protective gear and stay-at-home products that helped many people weather the pandemic.

China’s growth in 2020 slowed to only 2.2 percent—largely reflecting the impact of the first-quarter lockdowns—but it roared back later in the year and into 2021. GDP in 2021 expanded about 8 percent, with exports surpassing $3.3 trillion, including a single-month record in December 2021 of $340.5 billion.⁴⁶However, domestic consumption—which has been identified by the government as a crucial driver of growth and the key to a rebalancing of the economy away from its export-driven model—never really recovered its pre-pandemic vitality as households tightened their purse strings and small businesses suffered. The pandemic was one reason for this disparity in economic performance, but there were other forces at play.

Nonetheless, the headline numbers provided plenty of reason for Beijing’s propagandists to proclaim the superiority of the country’s tough pandemic response. “Protecting lives will always be a priority, and it is acceptable that the economy is sacrificed more or less when necessary,” declared researcher Lu Xiang of the Chinese Academy of Social Sciences in an article that echoed a common government refrain. “After all, the economy can bounce back, but can life?”⁴⁷

Indeed, as the Delta variant began to seep through China’s tightly sealed borders last year, the zero-COVID policy was imposed with increasing frequency. Lockdowns hit important cities like Xi’an and Tianjin, disrupting semiconductor and automobile production.⁴⁸ Global supply chains that run through some of the world’s largest container ports like Ningbo and Shenzhen were hit by delays that sparked sharp increases in shipping costs.⁴⁹

This year, however, it was Omicron’s complete shutdown of Shanghai, Shenzhen, and Dongguan in Guangdong province, and auto production center Changchun in the northeast that truly drove home the reality that the zero-COVID policy had failed to protect the Chinese people. For the first time since 2020, China publicly recorded COVID-19 deaths.⁵⁰

The damage to the economy quickly mounted. By one estimate, Shanghai represents 3.8 percent of China’s GDP and one-fifth of the country’s trade. Guangdong accounted for nearly one-quarter of total exports in 2021. Shanghai and Shenzhen together are the beating heart of China’s financial markets.⁵¹

Consumptive consumption

The reality is that even before the Omicron outbreaks, China’s export surge has masked serious economic weaknesses that became increasingly evident during the second half of 2021, many of them the direct result of the country’s strict response to COVID-19.⁵²Travel and tourism plummeted, and retail sales and household spending on restaurants, tourism, and other forms of entertainment all fell. Even though many Chinese returned to public spaces after the early lockdowns, the ailing sectors of the economy did not experience the same return to strong growth experienced by manufacturing.

Numbers compiled by the Rhodium Group highlight this slowdown: compounded growth of per capita consumption has declined to 5.8 percent during the two years of the pandemic compared with an average of 8.4 percent in the period leading up to 2020. Rhodium points to significant declines in consumption beginning in the third quarter of 2021.⁵³

The first quarter of 2022 brought more bad news. While the economy expanded 4.8 percent, retail sales posted the worst contraction since COVID-19’s 2020 emergence in Wuhan. The latest outbreaks and lockdowns likely will reverberate through the economy as the year continues.⁵⁴In mid-March, Goldman Sachs estimated that regions facing COVID-19 restrictions represented more than 30 percent of China’s GDP, and that was before the April outbreaks.⁵⁵

China’s small businesses appear to be bearing the brunt of the downturn. One analysis of business registration data reported that only 1.3 million new small businesses registered in the first eleven months of 2021, while 4.4 million small businesses deregistered. In 2020, 6.1 million new businesses registered and 4.5 million deregistered.⁵⁶

This is important because small and medium businesses represented about 80 percent of China’s urban jobs in 2013—overwhelmingly in the service sector.⁵⁷Notably, employment in that sector grew more slowly than in the industrial sector last year for the first time since 2012.⁵⁸ Nationwide unemployment has been on the rise, with young job seekers facing a particularly difficult job market.⁵⁹

Nor has China’s industrial juggernaut been immune from the steadily deepening downturn. The Caixin/Markit Manufacturing Purchasing Managers’ Index for January showed that factory activity recorded the sharpest contraction since the early months of the pandemic, although it returned to growth the next month. The measure for new export orders contracted for eight straight months through March—a trend that partly reflects reduced foreign demand for pandemic-related products.⁶⁰

The IMF warned about the likely continued impact of the pandemic in its most recent report on the Chinese economy: “The pandemic will continue to impede the recovery of consumption—especially services—before loosening its grip in 2023, which will require a combination of more efficacious vaccines and relaxation in the zero-tolerance strategy toward the virus” (italics added).⁶¹ The IMF forecasts that China’s economy will grow 4.4 percent in 2022, significantly below Beijing’s declared target at the March meeting of the National People’s Congress of “around 5.5 percent.”⁶² The IMF number, which is a downgrade from its January 2022 forecast of 4.8 percent growth, is attributed, in part, to the impact  of zero COVID.⁶³

Property downturn: Frost on snow

The causes of China’s slowdown—and the reasons for worry about the economy—run much deeper than the pandemic.

Most importantly, China’s property sector is facing a complicated and deepening crisis that has sharply reduced real estate investment, home purchases and housing prices, and construction activity. The downturn has caused several developers to default on dollar-denominated bonds and renminbi obligations, which has only made matters worse. The situation poses a threat to the balance sheets of many local governments and has contributed to the drop in consumer confidence and spending. The succession of shocks—property crisis and COVID-19 restrictions—is  best described by the Chinese idiom: to add frost to snow(雪上加霜).

Property investment in China has been one of the world’s greatest one-way investment bets over the past generation. Hundreds of millions of Chinese have become homeowners, leading to the concentration of 70 percent of urban wealth in real estate.⁶⁴More than 25 percent of China’s GDP is generated by the real estate sector and construction industry. The IMF estimates that “about a quarter of both total fixed investment and bank lending went to property” during the five years before the pandemic.⁶⁵

Developers have taken on vast amounts of debt even as local governments have come to depend on revenue from land sales to them in order to finance essential services. Nonbank financial institutions and so-called local government funding vehicles (LGFV)—the same local governments that sell the land—also have heavy exposure to property investment. To make matters worse, about one-third of home purchases involve presales that builders use to finance construction, turning homeowners into creditors and immensely complicating developers’ balance sheets.⁶⁶

This massive buildup of debt—the troubled China Evergrande Group amassed over $300 billion of liabilities before defaulting on dollar debt in 2021—presents a serious risk to China’s economic and financial stability.⁶⁷Notably, it was Beijing’s effort to contain those risks that precipitated the downturn that swept across the property sector in 2021. Among the official actions were restrictions on mortgage lending in major cities, and a sharp tightening of controls on lending to developers that created the so-called three red lines, which sparked a severe, industry-wide credit squeeze.⁶⁸ By the end of 2021, Fitch Ratings reported, ten Chinese property developers had defaulted on dollar-denominated bonds issued abroad, and in assessing the risks facing the country, Fitch singled out the vulnerability of LGFVs.⁶⁹

The government effort to rein in the real estate sector—which it is relaxing⁷⁰—has had predictable consequences. The country’s one hundred largest property companies have reported sharp falls in sales: down 39.6 percent on a year-to-year basis in January after falling 35.2 percent the month before. Construction output in the final quarter of 2021 dropped 2.1 percent, while the real estate sector fell 2.9 percent. In February 2022, prices fell for both new and older homes in seventy major cities, and the total value of new mortgages declined for the first time since 2007.⁷¹

In March, with COVID-19 lockdowns and other restrictions wreaking new havoc on the real estate industry, new home sales dropped 29 percent.⁷²Meanwhile, the IMF reports that developers’ stock of presold, but unfinished, housing is nearly equivalent to the total number of homes completed since 2015.⁷³ The widening ripple effects of the property downturn is only adding to the loss of confidence that consumers and businesses are feeling from the pandemic.

The policy toolbox: Half full or half empty?

The risks from the combination of zero-COVID policies and the property downturn are evident. Demand across several sectors of the economy is in danger of contracting further, unemployment could continue to rise (especially affecting the tens of millions of migrant workers who depend on construction and gig economy jobs), and the financial sector could come under stress as property companies struggle. The government’s longstanding effort to rebalance the economy away from investment and manufacturing, and toward consumption could falter even more.

Slower growth will also strain government resources, especially at the local level where officials have been saddled by Beijing with many new responsibilities over the past year. For example, under the zero-COVID policy they are expected to assume the cost of testing, surveillance, contract tracing, and quarantines.⁷⁴

In addition, Xi’s policies intended to reduce inequalities in income and social services put the onus on local authorities to provide increased spending on education, health, housing, and other social services.⁷⁵ That also doesn’t take into account the potential impact of problems with LGFVs, whose total debt is estimated at between 39 trillion and 53 trillion renminbi ($6.13 trillion to $8.33 trillion). Local governments recently have been using LGFVs to buy land at auctions when private bidders have stayed away.⁷⁶

The government’s actions in the face of these threats have at times suggested complacency. It was noteworthy, for example, that even as the economy faced the unprecedented challenges of pandemic and property downturn, Beijing chose to launch a heavy-handed campaign aimed at reining in the country’s largest private-sector companies. The government used fines and bans for previously ignored regulatory transgressions to target e-commerce and tech platform conglomerates that are major employers and sources of business dynamism. The campaign has had a severe impact on business confidence and financial markets.⁷⁷

In its “report card” on the Chinese economy released in February, the IMF said of the government policies: “The multitude, timing, seemingly uncoordinated, and discretionary nature of these [regulatory] interventions, [are] viewed by market participants as undercutting the role of private enterprises and has led to heightened policy uncertainty and financial market volatility. The lack of a clear, coordinated, and well-communicated policy response to financial stress faced by large property developers, following efforts aimed at reducing leverage in the real estate sector, has added to the uncertainty.” This is blunt language for an institution normally known for gentle criticism in its economic assessments of individual countries.⁷⁸

The government has responded to the deepening slowdown, but the measures so far have disappointed markets. The People’s Bank of China (PBOC) announced in January that it would “open its monetary policy toolbox wider, maintain stable overall monetary supply and avoid a collapse in credit” to help sustain growth.“⁷⁹. It followed by cutting key lending rates.⁸⁰Subsequently, the central bank has held off on further rate cuts.“⁸¹

Then at the March National People’s Congress, Premier Li announced a package of fiscal measures, including tax cuts and increased spending—including trillions of yuan of direct transfers to local governments that will lose revenue because of the tax cuts—to help stimulate growth, with the government’s usual focus on infrastructure.⁸² These measures may provide some relief to the construction sector, but it will take more than additional highways and high-speed rail lines to boost an economy struggling with slack consumer demand and a slumping housing market.

As the Yicai business newspaper said of infrastructure investment in a rare moment of Chinese media candor: “Poor-efficiency investment has not been uncommon in past years, wasting resources to some extent. Thus, local governments should not blindly boost their investments, expecting better outcomes.”⁸³Meanwhile, tax cuts will offer small comfort to locked-down businesses that have no customers.

Soon after the Congress’s rubber-stamping, it was hardly surprising when investors—with foreigners in the lead—stampeded for the exits.⁸⁴That resounding no vote caused the Chinese leadership to respond with a series of measures to lift the markets, including assurances from Vice Premier Liu He that the crackdown on Internet companies would end soon, steps to prevent a property market collapse, and direct support for the stock market.“⁸⁵The government also announced a postponement of the trial introduction of a property tax in some locales that was to be the precursor to a national levy.⁸⁶ COVID-19’s continued spread—and especially the Shanghai lockdown—only caused further uncertainty, and the State Council and PBOC were forced to offer warnings about the economy to the nation.“⁸⁷

The recent turbulence has tarnished Beijing’s reputation for effective economic policymaking, and with COVID-19 spreading again, and pessimism on the rise, China is likely to face more and more challenges from an economy that is increasingly buffeted by bad decisions and “the slings and arrows of outrageous fortune.”⁸⁸

Zero COVID’s international implications

The global economy will not be immune to China’s economic problems, the most immediate concern of which is the impact of its zero-COVID policy. While the Chinese government so far has managed to keep factory output going, the battle against the variants at China’s ports has added new stresses to global supply chains.⁸⁹ Wait times have lengthened for container vessels in Chinese waters, and air freight costs have at times risen sharply.⁹⁰Some ships are bypassing Chinese ports altogether because of delays. The Shanghai lockdowns also have added to the delays—and hit local manufacturers—by severely affecting trucking into the Yangtze Delta.⁹¹ In addition, the war in Ukraine has disrupted rail shipments to Europe over train lines built under China’s Belt and Road Initiative—only increasing the load on the country’s harbors.⁹²

While some multinational corporations have privately praised China’s efforts to contain COVID-19, the most recent lockdowns have affected operations across the board. A March 29-30 survey of US businesses operating in China nationwide and in Shanghai, conducted by the American Chamber of Commerce in the People’s Republic of China (known as AmCham China) and AmCham Shanghai, showed that 99 percent of respondents reported being “impacted” by outbreaks, with 81 percent of manufacturers reporting “slowed or reduced production.” In addition, 85.5 percent of manufacturers were experiencing “disrupted” supply chains.⁹³ The worsening situation led the European Chamber of Commerce to send a letter to Vice Premier Hu Chunhua expressing concern about the social and economic costs of the pandemic.“⁹⁴

Businesses worldwide are fretting at the cost of China’s port delays. It isn’t just a matter of deliveries to the United States, Europe, and other destinations. China’s imports are affected as well. By mid-February 2022, products ranging from raw materials to the electronics components essential for China’s vast industrial base were sitting at anchor in Chinese waters.“⁹⁵

The burden of zero COVID is beginning to influence long-term planning for companies that have become accustomed to China as a production base. Stephen Lamar, CEO of the American Apparel and Footwear Association, says that the policy is adding to the pressure that his member companies are facing to move production out of China—coming on top of US tariffs on imports from China and official pressure to disconnect from Chinese suppliers in Xinjiang.

There also is the problem of the severe restrictions on travel to China, which makes running businesses much harder. The longer zero COVID remains in place, Lamar says, the more his members will look to shift to other countries.⁹⁶

The impact of supply-chain problems on inflation—especially port and land-shipping delays in the United States—have been well documented for industries like semiconductors and food.⁹⁷Several factors beyond those issues have contributed—ranging from rising oil prices to pent-up consumer demand. If China’s response to the latest outbreaks causes additional delays to cause price pressures to build, that would be an unwelcome international development, especially as some of the supply-chain backups elsewhere are untangled. Similarly, the rising cost of raw materials caused by the Ukraine war may soon be reflected in China’s export prices.

The deeper worry for the global economy stems from slowing Chinese demand. The implications of a steeper-than-expected drop in Chinese growth and a slowdown in construction would be a blow to economies still struggling to emerge from the pandemic-induced slowdown of 2020—especially developing countries. It would also add further uncertainty to a global economy adjusting to the shocks from Russia’s invasion of Ukraine.⁹⁸

Conclusion

Zero COVID has been a tremendous success for the countless deaths it has prevented. Yet two years after its initial formulation, the strategy is facing its most severe test. Significant outbreaks across the country—most notably in the business capital of Shanghai—have stretched government resources and public endurance. The sagging economy has become a more pressing concern as continued lockdowns and disruptions hamper production and consumption, and weigh on the country’s fragile property market. The latest outbreaks, and the problems they have presented, suggest that China’s leaders may need a new strategy, or at the very least, an adjustment to the zero-tolerance approach.

The leadership appears to recognize that need. While remaining committed to the zero-COVID policy, Beijing has begun experimenting with methods to minimize the economic uncertainty it creates. For instance, authorities instituted a more limited lockdown in Shenzhen than in some other cities, and permitted some factories to remain open using a “closed-loop” formula. Many ports have continued to operate at a level that keeps imports and exports moving—albeit with some delays. The government approved Pfizer’s new anti-viral drug, Paxlovid, in February (though not its mRNA vaccine) as well as several rapid COVID-19 tests, indicating it may be looking to further moderate its coronavirus strictures.

Nevertheless, China’s leaders will likely struggle to move on from zero COVID, as the especially draconian lockdown in Shanghai showed all too clearly. With an under-vaccinated populace—only about half of those over 80 years of age have received the required shots⁹⁹—and a feeble, state-heavy healthcare system, a shift away from the zero-COVID policy risks a major public health crisis. Politically, too, the leadership will find it challenging to break with the policy. Having touted it as a measure of its competence and proof of its legitimacy, both at home and abroad, the Communist Party might perceive threats in relaxing zero COVID. The party may also see a major outbreak in China as a diplomatic embarrassment. With the historic party leadership congress looming later this year, Xi will have to calculate what course best serves his chances of securing an extended term in office—continuing to strive for zero COVID, or relaxing pandemic restrictions to bolster a slowing economy and assuage public frustration.

The response to the severe lockdown of Shanghai also reveals how a continuation of zero COVID presents new risks to the Communist Party. The lockdown generated an unusual level of public protest, both on the streets and online, as well as resistance to some of the program’s more excessive elements, such as separating children who have tested positive for COVID-19 from their parents. The anguish of the people of Shanghai, suffering without food and basic necessities, generated sympathy and concern around China and the world, and fostered an impression that China’s governance was becoming increasingly inhumane. The Communist Party appeared unable to respond to the mounting difficulties—both in regard to the swelling humanitarian problems and angry public reaction. While making minor concessions on some aspects of its practices, the party mainly responded with greater force to impose its will, treating Shanghai as if it was a city in rebellion. The saga exposed both the limits of the government’s ability to continue its zero-COVID policy, and the limits of the Chinese people to tolerate it. The Communist Party arrived at its zero-tolerance approach to eliminate risks to its image and legitimacy; now it must find ways to moderate its COVID-19 policy to eliminate new risks resulting from those policies.

In that sense, zero COVID has shown us the strengths and weaknesses of China’s political and social system. At a time of crisis, the state was able to marshal resources and impose a level of societal control that few other governments around the world have the capacity (or the will) to match. Yet as is true with authoritarian regimes more generally, China’s government is trapped by policy inflexibility brought about by the dearth of public participation in politics and policymaking. That inflexibility is contributing to an economic downturn that is undermining the Chinese Communist Party’s assertion that it alone can deliver prosperity to the Chinese people. Worse still, decisions on COVID-19 policy could be influenced by the political needs of one man—Xi Jinping, and his quest for unprecedented power. Proponents of Chinese authoritarianism held up zero COVID as a sign of that system’s superiority, but the strategy may also prove to be one of that system’s greatest tests.

About the authors

Fellow

Jeremy Mark

Nonresident Senior Fellow

GeoEconomics Center

Africa China

Fellow

Michael Schuman

Nonresident Senior Fellow

Global China Hub

China Economy & Business

Image: A worker in a protective suit stands behind barriers sealing off a residential area under lockdown, following the coronavirus disease (COVID-19) outbreak in Shanghai, China March 29, 2022. REUTERS/Aly Song

The post China’s faltering “zero COVID” policy: Politics in command, economy in reverse appeared first on Atlantic Council.

​​​​​What you should know

• Chile: President Boric aims to tame surging fuel costs that have driven annual inflation to a 14-year high, as global commodity costs spike in the aftermath of Russia’s invasion of Ukraine.
• New normal: Countries have lifted mask mandates and restrictions on mass gatherings and travel requirements after two years.
• “Staggering inequality”: The core factor behind the region’s disproportionate COVID-19 deaths according to a new Amnesty International report. LAC accounts for 8.4 percent of the global population and 28 percent of coronavirus mortality.

Monitoring COVID-19 economic recovery in the region

• Chile: March GDP expanded 7.2 percent, above market expectations due mostly to post-pandemic reopenings and relative stabilization of goods prices.  
• Colombia: The Central Bank raised benchmark rates to 6 percent to combat inflation.
• Mexico: According to numbers released by INEGI, the national statistical agency, March trade balance was $1.1 billion lower than in February. This dip in the trade surplus reflects March’s low non-oil exports and an overall stalled recovery.
• Brazil: Amid electoral uncertainties and international turmoil around Russia’s invasion of Ukraine, growth remains weak­ (forecasted as 0.3 percent for 2022 due to inflation)
• Venezuela: Emboldened by surging oil exports that are fueling economic growth and helping keep the foreign-exchange rate steady, the government is pushing citizens to use the Bolivar more by implementing a 3 percent tax on US dollars.

In focus: The rise of crypto in LAC

In 2021, El Salvador became the first country in the world to authorize the use of bitcoin as a legal tender. Despite a lukewarm response from Salvadorian businesses and investors, the Panamanian Congress ratified a law approving the use of bitcoin and eight other cryptocurrencies for paying taxes and for paying transactions—the legislation is now waiting for presidential approval.  

Argentina’s largest private bank, Banco Galicia, and Brubank SAU, announced that they will allow customers to purchase cryptocurrencies starting May 2, 2022.  As bitcoin usage and adoption spreads across the region, the International Monetary Fund urged El Salvador to remove Bitcoin’s legal status, citing  “large risks for financial and market integrity, financial stability, and consumer protection”. 

Health + Innovation

• 25 percent: The share of COVID-19 deaths reported globally between April 25 – May 2 that was from the Americas.
• COVAX: In the agency’s latest allocation, Mexico will not receive Pfizer vaccines to inoculate minors. Health officials are exploring new alternatives, including direct contracts with Pfizer and Cuba for its Abdala vaccine.
• May 12: The date Belize, Germany, Indonesia, Senegal, and the United States, will host the second global COVID-19 summit.

Expert take: CARICOM at the forefront of the second global COVID summit

Belize’s inclusion as a co-chair of the second global COVID summit is a model for how to use multilateral channels to address shared, international challenges. Belize is the current Chair of the Caribbean Community (CARICOM) – a group of 14 independent Caribbean countries – and will be tasked with representing the views of a region that is among the most vulnerable to the pandemic’s health and economic effects. Most CARICOM members are dependent on tourism – which came to a halt during the pandemic – and are reliant on importing medical equipment and services. Therefore, working with allies and adopting a regional approach to the pandemic was a necessity for CARICOM countries. This is the perspective that Belize will bring to the Summit. It will emphasize the importance of regional coordination and elevate the views of small states, ensuring that commitments resulting from the Summit account for the unique challenges facing other developing countries. In many ways, the inclusion of the CARICOM chair can be a blueprint for how the world addresses other global challenges, like the ongoing energy crisis and climate change.

• Wazim Mowla, Assistant Director of the Adrienne Arsht Latin America Center’s Caribbean Initiative

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 May 7, 2022 appeared first on Atlantic Council.

“67% of all of AfDB climate finance goes toward adaptation frameworks, specifically in supporting the development of climate resilient infrastructures.”

 “In Congo the people finance all infrastructure projects, of which the same resources will be used to finance development and construction of infrastructure obliging Congolese to face indebtment.”

“We need more private actors, commercial and bankable projects, in order to create sustainable long term solutions through interagency partnerships.”

“Zambia is working very hard on creating conditions that are conducive within the country for the production of electrical motors to be produced internally.”

“The pandemic created an opportunity, presenting the potential to improve our health systems throughout Africa which has shifted the World Bank’s focus on investing in facilities to produce vaccine from the continent.”

“The Ukraine crisis has presented an opportunity to produce wheat and soya products for consumption, and possibilities for export, while there is a downsize in terms of other commodities to replace what revenue is grossly affected.”

 “What is clear from the Ukraine crisis is the direct exposure of African economies to the situation is not as deep as it seems, however the global inflation caused by the war is impacting the continent’s economies regardless where urban areas are affected most.”

Find the Spring 2022 Meeting Dialogues recap below!

Watch the full events below.

Online Event Wed, April 20, 2022 • 11:30 am ET

A conversation with Scott A. Nathan, CEO of the US Development Finance Corporation

A discussion on the 2022 IMF and World Bank Group Spring Meetings and the economic situation of the African continent in a post-COVID-19 context.

Africa Coronavirus Economy & Business International Financial Institutions

Online Event Fri, April 22, 2022 • 8:30 am ET

A conversation with Akinwumi Adesina, President of the African Development Bank

A timely discussion on the 2022 IMF and World Bank Group Spring meeting key learnings and the economic situation of the African continent in a post-COVID-19 context and of the war in Ukraine.

Africa Coronavirus Economy & Business International Financial Institutions

Online Event Tue, April 19, 2022 • 9:30 am ET

A conversation with H.E. Anatole Collinet Makosso, Prime Minister of the Republic of Congo

A discussion on the economic situation of the Republic of the Congo on the occasion of the 2022 Spring Meetings of Washington DC.

Africa Coronavirus East Africa Economy & Business

Online Event Thu, April 21, 2022 • 10:00 am ET

A conversation with H.E. Situmbeko Musokotwane, Zambia Finance Minister

A discussion on the 2022 IMF and World Bank Group Spring Meetings and the economic situation of the Republic of Zambia and the African continent after the historic election of President Hakainde Hichilema.

Online Event Wed, April 27, 2022 • 12:30 pm ET

A conversation with Vice President Saulos Klaus Chilima of the Republic of Malawi

A discussion on H.E. Saulos Klaus Chilima’s vision for Songwe Hill rare earth mine project and global implications, addressing climate change leading up to Cop27, and the digital transformation of Africa.

Africa Climate Change & Climate Action Democratic Transitions Economy & Business

The post Africa Center’s 2022 Spring Meeting Dialogues appeared first on Atlantic Council.

​​​​​What you should know

• Over two-thirds: The share of people in Latin America and the Caribbean (LAC) that have received two COVID-19 vaccine doses.
• PAHO: COVID-19 cases and deaths declined in the Americas despite increases in North America.
• Second COVID-19 summit: Co-hosted by Belize, Germany, Indonesia, Senegal, and the United States, this global gathering intends to build momentum for vaccine donations and end the “acute phase” of the pandemic.

Monitoring COVID-19 economic recovery in the region

• Colombia: According to the national statistical agency (DANE), economic activity continues to increase. The February 2022 Economic Activity Indicator expanded 8.1 percent year-on-year (y/y) across all sectors.   
• Peru: February GDP growth reached the highest rate in five months, totaling a 4.9 percent y/y increase. However, according to the National Statistics Institute (INEI), demand for construction fell 2.5 percent y/y, reflecting low private and public investment in infrastructure and residential construction projects.  
• Chile: Inflation rate in March exceeded the highest projections by 0.7 percent to 1.9 percent month-to-month (m/m). This spike reflects overall increases in food, energy, and core good prices. 
• Mexico: According to the National Institute of Statistics and Geography (INEGI), y/y inflation rate in March reached the highest levels since 2001. Scotiabank analysts expect inflation to hit 8.3 percent by the end of the year.
• Guyana: Cumulative economic growth rate since the onset of the pandemic reached 72 percent—highest among all countries in the region—thanks to offshore oil discoveries.

In focus: Inflationary shocks strike Latin America and the Caribbean

Inflation among Latin America’s largest economies reached its highest levels in 15 years. According to the World Bank, energy and food were the main contributors to inflation in 2021, accounting for more than 90 percent of inflation in Costa Rica, 75 percent in Paraguay, and 66 percent in Brazil.  Projections suggest that inflation will increase further in 2022 due mainly to rising global commodity prices, supply chain disruptions, and the Russia-Ukraine War.

A cause for concern: The reverberations of high inflation in the region are regressive, with low income households expected to experience steeper costs-of-living. This could exacerbate already prevalent social discontent.

Health + Innovation

• P.1 variant: The highly contagious Brazilian variant is driving the surge in cases in South America and some Caribbean countries. Cumulative cases in the sub-region are approaching 23 million.
• Brazil: The Butantan Institute and Fiocruz Health Institute face supply constraints amid mounting pressure to scale up vaccine roll-out.
• Covaxin: Ocugen, a biotechnology company, gained rights to market its COVID-19 vaccine in Mexico following Emergency Use Authorization from health authorities.
• Mexico: Senior government officials confirmed that certain groups of people may be eligible to receive a second COVID-19 booster shot.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 April 23, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• 67.6 percent: The share of Latin America and the Caribbean’s population that is fully vaccinated against COVID-19.
• BRICS: Brazil, Russia, India, China, and South Africa launched a Vaccine Research and Development Centre to promote cooperation in the development and production of COVID-19 vaccines—a move that will increase vaccine distribution and access for Brazil and the region at-large.
• Learning crisis: A new report revealed that schools in middle-income Latin America remained closed the longest globally (75 weeks and over), setting students behind by 12 months.
• Costa Rica: Economist Rodrigo Chaves will take office as President on May 4, amid growing social discontent and concerns over national debt.

Monitoring COVID-19 economic recovery in the region

• Chile: While GDP expanded 6.8 percent year-to-year (y/y) in February, non-mining activity dropped 0.8 percent month-to-month (m/m) and services declined 1.2 percent, signaling weaker activity and possible technical recession on the eve of the constitutional referendum.
• Peru: In March, inflation rates reached a 28-year high following a 1.5 percent m/m increase. The government also announced fuel and food tax cuts as farmer and trucker demonstrations escalate across the country.  
• Colombia: February employment data indicated that labor participation and job recovery are returning to pre-Covid levels. Two of three recovered jobs went to women.  
• Mexico: The trade balance in February rebounded to a $1.3 billion surplus following January’s record-level, omicron-induced deficit.
• Venezuela: Petroleum exports decreased 4 percent m/m in March after customers returned crude cargoes due to poor oil quality.

In focus: Latin America and the Caribbean’s protagonism in nearshoring efforts

Latin America and the Caribbean (LAC) is increasingly becoming a destination for companies seeking to circumvent global supply chain disruptions. U.S. toy-producer, Mattel, is the latest company to nearshore its operations, announcing a $50 million plan to expand its manufacturing plant in Monterrey, Mexico. The new site in the State of Nuevo Leon will overtake the company’s other manufacturing hubs in China, Vietnam, and Malaysia and become the company’s largest production center. Similarly, U.S. clothing retailer GAP Inc. announced it will shift its sourcing away from Southeast Asia in favor of Mexico and Central America. Factory closures and port congestions in Vietnam had prompted a hike in transportation costs.

Health + Innovation

• Saint Lucia: Officials rescinded pre-entry COVID-19 testing requirements for fully vaccinated visitors following a decrease in cases.
• Colombia: The government is facing calls to issue a compulsory license, allowing public agencies and drugmakers to get license-free access to the Pfizer COVID-19 pill.
• Uruguay: President Luis Lacalle Pou announced the end of the national health emergency first established in 2020, following pandemic easing.
• Bolivia: Nearly 50 percent of the population has received a second COVID-19 vaccine dose while virus-related mortality rates remain at 0.6 percent.
• Vaccines: Mexico’s representative to the World Trade Organization (WTO) said that any WTO COVID-19 immunizations agreement should go beyond intellectual property waivers.
• CDC: Seven countries in the region were moved down from Level 4 to Level 3 travel advisory, an indication of pandemic easing.

Vaccination by the numbers

Percentage of population with booster shot: Chile (87) #1 worldwide, Uruguay (66) #6 worldwide, Cuba (56) #20 worldwide, Argentina (44) #40 worldwide, Peru (43) #43 worldwide, Brazil (39) #45 worldwide, Costa Rica (39) #47 worldwide, Panama (35) #53 worldwide, Ecuador (31) #59 worldwide, El Salvador (26) #70 worldwide, Dominican Republic (22) #72 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (92) #4 worldwide, Cuba (88) #8 worldwide, Argentina (82) #18 worldwide, Uruguay (82) #19 worldwide, Peru (81) #22 worldwide, Ecuador (80) #27 worldwide, Costa Rica (79) #28 worldwide, Brazil (77) #36 worldwide, Panama (72) #49 worldwide, Colombia (70) #55 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 April 13, 2022 appeared first on Atlantic Council.

On April 5, Forward Defense nonresident senior fellow Max Brooks co-authored an article in the Washington Post with Lionel Beehner and John Spencer, titled, “Opinion: Ukrainians should be on the lookout for a new battlefield enemy: Disease.” The authors discuss the threat of disease outbreak and biological warfare in Ukraine, and recommend emergency sanitation supplies and hygiene manuals to build up resilience.

If we want to help the Ukrainian resistance, we shouldn’t be sending them only Javelins and body armor. 

Max Brooks, Lionel Beehner, and John Spencer in the Washington Post

Fellow

Max Brooks

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Crisis Management National Security

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

Learn more

The post Brooks in the Washington Post on the threat of disease in Ukraine appeared first on Atlantic Council.

On April 5, Atlantic Council senior vice president and Scowcroft Center director Barry Pavel was quoted in a Vox article titled, “Why experts are terrified of a human-made pandemic — and what we can do to stop it.” Pavel warns that acts of bioterrorism will become more frequent as technology progresses and barriers to entry decrease.

Fellow

Max Brooks

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Crisis Management National Security

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

Learn more

The post Pavel in Vox on bioterrorism threats appeared first on Atlantic Council.

​​​​​What you should know

• 248 million: The number of people in Latin America and the Caribbean (LAC) that have yet to receive a single COVID-19 vaccine dose.
• Mexico-Russia: President Andrés Manuel López Obrador is moving forward with a plan to domestically package Sputnik V COVID-19 vaccines.
• Paxlovid: Thirty-five companies signed agreements with Pfizer for its newly licensed oral COVID-19 treatment, allowing for production of a generic, low-cost version in low-income nations. 

Monitoring COVID-19 economic recovery in the region

• Argentina: The Senate signed an agreement with the International Monetary Fund (IMF) to refinance $44 billion in debt days before a potential default. The agreement comes after a 4.7 percent increase in consumer prices in February, compared to 3.9 percent in January. The 12-month rolling inflation hit 52.3 percent in February. 
• Brazil: The Central Bank raised interest rates to 11.75 percent and indicated its intent to end the aggressive cycle of interest rate increases during its next meeting in May.
• Chile: GDP growth slowed in Q4 despite record growth in 2021. Higher private consumption increased the imports of durable goods, expanding the current account deficit to -6.6 percent of GDP up from -1.7 percent in 2020.
• Colombia: The National Statistics Administrative Department (DANE) published its January 2022 survey of economic activity, indicating continued growth amid economic recovery.  Beverages, pharmaceutical products, and paper-related products were the best-performing industries, accounting for 30 percent of overall growth.
• Peru: An ease of COVID-19 mobility restrictions and the reactivation of hospitality and transportation industries contributed 1.2 percentage points to January’s 2.9 percent GDP increase. However, uncertainty within the political environment caused a credit rating downgrade to BBB by Standard & Poor.

In focus: Reverberations of the Russian invasion of Ukraine in regional economies

Increased global commodity prices resulting from the Russian invasion of Ukraine could produce short-term benefits for the region’s commodity exporters. However, these gains will likely be counterbalanced by rising inflation and supply-chain disruptions. While Latin America is less reliant on Ukrainian and Russian wheat exports relative to Africa and the Middle East, skyrocketing fertilizer prices could significantly hurt Latin American agricultural producers and raise food prices regionally. Brazil, the world’s largest fertilizer importer, has begun to push local fertilizer output as global prices soar.

Higher import prices may affect not only net oil importers like Chile, but crude oil exporters like Colombia. Argentina and Ecuador, which had planned to cut fuel subsidies this year to comply with IMF conditionality, could now be faced with a difficult choice amid higher prices. According to the IMF, Latin America’s poorest countries will be hardest hit by the conflict-driven economic fallout due to inflationary pressures and increased food prices.

Health + Innovation

• Caribbean: Ten countries have yet to reach the World Health Organization’s (WHO) goal of 40 percent vaccination coverage in 2021.
• Trinidad and Tobago: The latest country to announce the relaxation of COVID-19 restrictions.
• Mexico: Government officials reported 1,684 new confirmed cases, the lowest single-day count in 2022 so far, bringing the total number of confirmed cases to 5,566,669.
• 10,000: The number of COVID-19 vaccine doses Taiwan donated to Saint Lucia and St. Vincent and the Grenadines to help Caribbean allies combat the pandemic.
• Brazil: Following determinations from its scientific committee, Rio de Janeiro is relaxing the use of masks as the COVID-19 pandemic wanes.

Vaccination by the numbers

Percentage of population with booster shot: Chile (81) #1 worldwide, Uruguay (62) #9 worldwide, Cuba (54) #18 worldwide, Argentina (41) #40 worldwide, Brazil (35) #46 worldwide, Peru (34) #47 worldwide, Panama (33) #49 worldwide, Costa Rica (32) #51 worldwide, Ecuador (29) #62 worldwide, El Salvador (23) #69 worldwide, Dominican Republic (21) #70 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (91) #6 worldwide, Cuba (87) #8 worldwide, Argentina (82) #15 worldwide, Uruguay (82) #16 worldwide, Ecuador (79) #27 worldwide, Peru (79) #31 worldwide, Costa Rica (77) #32 worldwide, Brazil (75) #38 worldwide, Panama (70) #50 worldwide, Colombia (68) #55 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: COVID-19 March 29, 2022 appeared first on Atlantic Council.

Read more about our expert

Millennium Leadership Fellow

Junaid Nabi

Senior Researcher, Harvard Business School

Millennium Leadership Program

Coronavirus Disinformation

The post Nabi in World Economic Forum: We need global solutions for global challenges – why Omicron is a lesson for us all  appeared first on Atlantic Council.

​​​​​What you should know

• 65.5: The share of Latin America and the Caribbean’s population that is fully vaccinated.
• PAHO: New COVID-19 cases in the Americas dropped by 32 percent in the last week, while deaths fell by 10 percent.
• 6 million: The global COVID-19 death toll as the pandemic enters its third year—Brazil has recorded 652,400 confirmed deaths, the second highest in the world.

Vaccination by the numbers

Percentage of population with booster shot: Chile (77) #1 worldwide, Uruguay (56) #17 worldwide, Cuba (53) #20 worldwide, Argentina (38) #41 worldwide, Brazil (32) #48 worldwide, Peru (32) #49 worldwide, Panama (28) #57 worldwide, Costa Rica (26) #61 worldwide, Ecuador (24) #67 worldwide, El Salvador (22) #68 worldwide, Dominican Republic (21) #69 worldwide, Colombia (16) #71 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (91) #5 worldwide, Cuba (87) #7 worldwide, Argentina (81) #17 worldwide, Uruguay (79) #24 worldwide, Ecuador (78) #27 worldwide, Costa Rica (76) #31 worldwide, Peru (75) #37 worldwide, Brazil (74) #41 worldwide, Colombia (66) #59 worldwide, El Salvador (66) #61 worldwide. Source: nytimes.com

Vaccinations per capita (vaccines administered per 100 people): Cuba (309) #1 worldwide, Chile (259) #2 worldwide, Uruguay (220) #14 worldwide, Argentina (209) #25 worldwide, Peru (192) #38 worldwide, Brazil (187) #40 worldwide, Costa Rica (185) #42 worldwide, Ecuador (184) #44 worldwide, Panama (165) #58 worldwide, El Salvador (159) #62 worldwide, Colombia (152) #65 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

Health + Innovation

• Caribbean: Ten countries have yet to reach the World Health Organization’s (WHO) goal of 40 percent vaccination coverage in 2021.
• Trinidad and Tobago: The latest country to announce the relaxation of COVID-19 restrictions.
• Mexico: Government officials reported 1,684 new confirmed cases, the lowest single-day count in 2022 so far, bringing the total number of confirmed cases to 5,566,669.
• 10,000: The number of COVID-19 vaccine doses Taiwan donated to Saint Lucia and St. Vincent and the Grenadines to help Caribbean allies combat the pandemic.
• Brazil: Following determinations from its scientific committee, Rio de Janeiro is relaxing the use of masks as the COVID-19 pandemic wanes.

Economies in focus

Economic Impact

• The International Labor Association established that the pandemic-induced labor market crisis in the region disproportionately impacted women, with 4.2 million of the 23.6 million jobs lost for female workers still to be recovered.
• While the rise in global commodity prices due to the Russian invasion of Ukraine could benefit exporters across Latin America, it will also likely raise inflation rates.
• The International Monetary Fund (IMF) warned that the Peru’s economic outlook remains uncertain despite a 13.3 percent GDP growth in 2021.

Economic Recovery

• Brazil came out of recession with a GDP growth rate of 0.5 percent during Q4, setting GDP growth for 2021 at 4.6 percent.
• Major Latin American currencies stood up to a weaker dollar as the war in Ukraine pushed oil and commodity prices higher.

Social transformations: Emergence of care policies in Latin America and the Caribbean

• The pandemic provided a political window to discuss the implementation of state-sponsored care policies, which before the pandemic, had been noticeably absent in the region. Prior to 2020, Uruguay was the only country in the region to possess an institutionalized care system.
• Over the last two years, Argentina created a federal care system, Bogota instituted a district care system, Costa Rica developed a National Child Care and Development Network, and the Mexican Chamber of Deputies approved a national care system.

The post Aviso LatAm: COVID-19 March 13, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• 100 million: The milestone number of COVID-19 vaccine doses delivered by the Pan-American Health Organization through COVAX to Latin America and the Caribbean (LAC).
• Cases: COVID-19 infections in the Americas declined by 31 percent last week, an encouraging trend tempered by a 5.6 percent rise in deaths.
• ICYMI: A new report, featuring key regional insights from Brazil, Central America, Mexico, and Trinidad and Tobago details how US and Chinese vaccine diplomacy in LAC fared during the pandemic.

Vaccination by the numbers

Percentage of population with booster shot: Chile (71) #1 worldwide, Uruguay (55) #17 worldwide, Cuba (51) #20 worldwide, Argentina (36) #41 worldwide, Brazil (29) #52 worldwide, Peru (28) #53 worldwide, Panama (26) #59 worldwide, El Salvador (21) #64 worldwide, Dominican Republic (20) #65 worldwide, Ecuador (20) #66 worldwide, Colombia (15) #68 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (90) #5 worldwide, Cuba (87) #7 worldwide, Argentina (80) #21 worldwide, Uruguay (78) #26 worldwide, Ecuador (78) #28 worldwide, Costa Rica (74) #36 worldwide, Brazil (73) #42 worldwide, Peru (71) #44 worldwide, Colombia (66) #59 worldwide, El Salvador (66) #60 worldwide. Source: nytimes.com

Vaccinations per capita (vaccines administered per 100 people): Cuba (307) #1 worldwide, Chile (252) #2 worldwide, Uruguay (219) #14 worldwide, Argentina (205) #27 worldwide, Brazil (183) #39 worldwide, Ecuador (179) #41 worldwide, Peru (177) #43 worldwide, Costa Rica (170) #50 worldwide, Panama (161) #58 worldwide, El Salvador (157) #62 worldwide, Colombia (151) #64 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

Health + Innovation

• Paraguay: The second country in the world to grant emergency use authorization to the Taiwanese-manufactured Medigen vaccine.
• Moderna: In a bid to expand vaccine reach in LAC, the lab announced a distribution deal with Adium, an Uruguayan pharmaceutical company.
• 1.5 million: The number of students returning to their classrooms in Paraguay, many of them for the first time since the onset of the pandemic.
• 14: The number of PAHO member countries that have vaccinated 70 percent or more of their population against COVID-19.
• Brazil: Life expectancy decreased 4.4 years due to the effects of the second surge of COVID-19, which peaked in April 2021.
• Panama: 73 percent of public schools will welcome nearly 1 million students to the classroom following two years of remote learning.
• AstraZeneca: Brazil’s Health Ministry delivered the first batch of COVID-19 vaccines made in-country following a 2021 technology transfer deal with the British-Swedish company.

Economies in focus

Economic Impact

• Brazil’s consumer prices continue to increase despite aggressive contractionary policies. Further adjustments to control inflation are expected.
• Mexican annual inflation likely rose in the first half of February after declining during the previous eight weeks, supporting predictions that the country’s central bank will keep increasing rates in line with the US Federal Reserve.

Economic Recovery

• Colombia’s GDP expanded 10.6 percent in 2021, according to Colombia’s national statistics agency, the highest level of national GDP growth in the last 115 years.
• Peru’s economy grew 13.3 percent in 2021. However, monthly data points to a deceleration in growth, with a modest 3.4 percent growth in 2022. 
• The Organisation for Economic Cooperation and Development (OECD) expects Mexico to rebound to pre-pandemic growth levels by Q3 of 2022.

Social transformations: Startup companies in Latin America and the Caribbean are fueling the region’s hiring boom

• Latin America’s unicorns are driving a regional hiring boom as unprecedented investment allows local companies to expand recruiting efforts and hunt for talent outside of their own borders. 
• Hiring for positions such as software engineer and account executive in Latin America increased by 286 percent in the second half of 2021, more than in any other region in the world.
• The number of international companies hiring in Latin America grew by 156 percent in the second half of 2021, more than anywhere else worldwide due to the opportunities created by the transition to remote work. 

The post Aviso LatAm: COVID-19 February 25, 2022 appeared first on Atlantic Council.

Introduction 

COVID-19 has laid bare the competing strategies and practices of the United States and China to amass further clout in Latin America and the Caribbean (LAC). In many ways, the pandemic is quickly accelerating a regional trend seen over the last decade: China uses its growing economic and diplomatic muscle to provide an alternative to US activities and interests. The implications of diverging COVID-19 responses, notably at the onset of the pandemic’s rise in the region, will reverberate beyond the health sector. What might the differing US and China pandemic approaches portend for future influence in the region? 

For the United States and China, the pandemic has opened new opportunities to deepen regional ties. Both countries’ assistance eventually centered on vaccine diplomacy, but China was first out of the gates in offering vaccinations beyond its borders. 

For LAC, its interactions with the United States and China during the pandemic are emblematic of broader trends: China provides an alternative to LAC during crisis moments; and regional leaders use US-Chinese competition to their advantage. Both instances are visible in the region, including in the four geographic areas analyzed in the following pages: Central America, Trinidad and Tobago (T&T), Brazil, and Mexico. In each case, distinct US and Chinese engagement at various stages of the pandemic—along with the host countries’ own actions and reactions—have yielded short-term results and some that are likely to persist. 

In Central America, China provided strategic diplomatic messaging alongside vaccine shipments, but the United States donated more vaccines. In T&T, Chinese vaccines were accompanied by a new loan, and the country’s prime minister applied a pragmatic approach to acquire vaccines from both the United States and China. For Brazil, laboratory-to-laboratory agreements highlighted a different version of vaccine diplomacy: one that occurs at the subnational level. In Mexico, numerous diplomatic exchanges occurred alongside substantial vaccine purchases from US and Chinese manufacturers. 

Vaccine-related diplomacy also contributes to an evolving discussion about the different ways China and the United States more broadly engage the region—and vice versa. Starting from a low base, Chinese engagement with LAC has focused on and grown significantly in diplomacy, trade, and investment over the last decade. China is either the first- or second-largest trading partner for many countries in the Americas and a top source of foreign direct investment among its allies. Current US strategy in the region similarly reflects a new sense of deploying diplomatic tools to advance hemispheric prosperity, while doing so as part of a broader vision that reflects partnering to address global challenges—from climate change and the instability that sparks migration to shoring up democracy and addressing corruption. Overall, the region’s proximity, shared peoples, history, and borders with the United States provide greater depth and multidimensionality to the relationship. Consequently, vaccine diplomacy represents a greater marginal opportunity for China to broaden and deepen regional ties.

Central America (Belize to Panama) 

By María Eugenia Brizuela de Ávila

Central America has a deeper and more extensive relationship with the United States than China. Bilaterally and through COVAX (the international cooperative program), the United States donated and supplied more vaccines to Central America than China.¹ Migratory flows through the region to the US-Mexico border and strong economic linkages make Central America a strategic location for US interests. Remittances, the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), in which the United States enjoyed a goods trade surplus of $7 billion,² migratory flows, and shared tourism demonstrate these multifaceted US-Central American ties. In addition, the effectiveness of US-origin vaccines is positively rooted in people’s minds.  

US-China competitive dynamics in Central America have been on full display since the pandemic. The US government announced $310 million in humanitarian assistance to El Salvador, Guatemala, and Honduras in April 2021.³ China has donated its own vaccines to diplomatic allies in Central America and sold at least 1.5 million Sinovac doses to El Salvador.⁴ China also cut attractive deals to deliver its vaccines at cheaper prices than US vaccines. Moreover, Beijing announced that it would provide $1 billion in financing to LAC countries to help them purchase Chinese vaccines, as discussed in the Trinidad and Tobago case study. Overall, US donations, including through COVAX, to Central America have totaled an estimated 16.8 million doses compared to China’s total donations to Central America of 1.75 million doses.⁵

Vaccine shipments opened a new avenue for China to strengthen diplomatic ties. Chinese officials conflate the number of vaccine doses they donate and sell to other countries. Combining donations with purchased shipments allows China to capitalize on the optics of vaccine deliveries. Take El Salvador as an example. Although China only donated 750,000 vaccine doses to date, subsequent arrivals of El Salvadoran-purchased Chinese doses (totaling 5 million) were greeted with uncommon fanfare. On one occasion, purchased Chinese vaccines were delivered to El Salvador by a leased plane owned by the New England Patriots, a National Football League team.⁶ The plane use drew significant international media attention, accentuating the perception that China was leading vaccine supply in LAC. More broadly, while US deliveries also received media attention, Chinese vaccine shipments (both purchased and donated) made a stronger public impression than most US donations delivered via COVAX.⁷ 

To bridge this perception gap, US vaccine donations to Central America need to be more geo-strategically competitive. Bilaterally, the United States can expand its commitment to regional recovery by helping overcome in-country logistical challenges associated with vaccine administration. Many mRNA vaccines donated by the United States, such as the Pfizer vaccine, require ultracold-storage freezers to house them. Donations that come with the requisite equipment or training could build appropriate capacity for national and local governments to increase vaccination rates and reduce wastage. Additional support could include providing supplementary supplies like needles and alcohol pads and securing customs arrangements.

As the pandemic continues and more COVID-19 assistance is needed, vaccine diplomacy has laid the groundwork for China to broaden engagement with Central America. In December 2021, this played out with Nicaragua switching its diplomatic relations from Taiwan to China, and resulted in a donation of 200,000 vaccines less than a week later.⁸ Taiwan’s three remaining Central American allies (Honduras, Belize, and Guatemala) surely took notice. The swiftness and growing scale of Chinese support in moments of crisis—pandemics, climate events, or economic hardship—is likely to put additional pressure on Taiwan and its allies. When faced with resource constraints, these Central American countries, under stress, might see a pivot to China as advantageous to secure needed assistance for their citizens.⁹

The US response to the region during the pandemic complemented its approach in combatting the root causes of migration flows by improving security conditions and boosting economic prosperity. To advance US interests during future global events, it must be among the first to deliver aid, rethink how it communicates shipments, and identify additional political or economic accompaniments to enhance bilateral relations with Central American countries. 

Trinidad and Tobago 

By Riyad Insanally

In March and April 2021, Dr. Keith Rowley, as both chair of the Caribbean Community (CARICOM) and T&T’s prime minister, wrote to US President Joe Biden, spoke with US Congresswoman Maxine Waters, chair of the House Committee on Financial Services, and engaged with senior White House officials about vaccine access for the Caribbean.¹⁰ He also spoke with Chinese President Xi Jinping and China’s ambassador to T&T in March 2021.¹¹ US discussions eventually resulted in a letter from President Biden acknowledging the Caribbean’s need for vaccines while engagement with China was met with action – a $204 million loan and a total donation of 300,000 Sinopharm vaccines to T&T in May and June 2021.¹²

The loan stipulated that at least 15 percent of the money should be used to purchase “goods and services from China,” which included Sinopharm vaccines, allowing T&T to purchase an additional 800,000 doses.¹³ China’s loan had fewer restrictions than one offered by the International Monetary Fund (IMF), which T&T rejected. The IMF loan had a lower interest rate but required structural readjustments that the T&T government felt it could not afford.  

Distribution of US personal protective equipment (PPE) occurred earlier, but China donated vaccines first. US vaccines arrived on June 14 and August 14. The first donation was a mere 480 doses, which arrived on the same day as 200,000 from China. Unsurprisingly, Chinese and Trinidadian media criticized the US donation.¹⁴ China’s diplomatic coup was only partially reversed when a larger US donation of 305,370 vaccines (from a promised 908,000) arrived on August 12, coinciding with a visit by Admiral Craig Faller, then-commander of US Southern Command.¹⁵ A second US batch (304,200) arrived on December 9, 2021.¹⁶ The US donations to T&T are part of a larger four-million dose promise to CARICOM countries (excluding Haiti), compared to just over a million from China. 

The United States often seems to take its relationship with the Caribbean for granted when it should be paying closer attention. Indeed, especially with China’s vaccine diplomacy, the United States should be wary of losing goodwill and influence in CARICOM to China’s benefit. The Caribbean is regarded as the US’s third border and, in addition to the region’s geostrategic importance, the US enjoys a trade surplus of $6.5 billion with CARICOM. T&T, a longtime US ally, sits in a strategic area in the Caribbean. It shares a maritime border with Venezuela, a key reason why Rowley maintains relations with the Nicolás Maduro regime, and T&T is a frequent destination for Venezuelan refugees.¹⁷ As a larger Caribbean economy, T&T is a valuable trade partner, especially for US goods and services from Florida. 

Yet limited or slow engagement during the pandemic has decreased US standing in T&T and the Caribbean. Rowley maintains a policy of autonomy in T&T’s relations with the United States and China, noting that they are “never a case of one or the other . . . as we look after the interest of the people of T&T.” Small states like T&T cannot afford to depend on one power. In an international system marked by asymmetrical relationships, these states maintain a diversity of relations.¹⁸

Renewed US commitment to T&T and the Caribbean opens the door for the United States to increase its support to help preserve the region’s health and to build back better after the pandemic. To counter Chinese influence, the United States must compete better and smarter. For instance, had US bilateral vaccine donations started sooner, they would have had a significant impact in Caribbean countries, given their smaller population size relative to Latin American neighbors—and that would have been a quick win for the United States and a meaningful first step toward health security and economic recovery. Consistent and sustained US support, via foreign aid and knowledge sharing, would help Caribbean countries better prepare for this and the next pandemic, as well as other sustainable growth challenges aggravated by pandemic-like shocks. 

Brazil 

By Claudia Trevisan

In Brazil, vaccine dynamics centered on cooperation agreements with US, Chinese, and British manufacturers. Domestic production afforded Brazil greater control over the timing and consistency of vaccine supply—a fluctuating variable elsewhere in LAC. US and Chinese vaccine donations to Brazil are minimal relative to the rest of the region. Save for the US donation of three million doses of Johnson & Johnson’s vaccine announced on June 23—barely 1% of the 407 million doses distributed so far—Brazil’s remaining 404 million doses were acquired commercially.¹⁹ While China did not donate vaccines to Brazil, it was the source of the active pharmaceutical ingredient used in several million AstraZeneca and CoronaVac shots.²⁰

The Brazilian experience also illustrates that while geopolitics and domestic politics are ever present, they come second after practicality and medical urgency. 

China played a prominent role early in Brazil’s immunization campaign.²¹ Through laboratory-to-laboratory collaboration, Sinovac and Butantan—a government-owned laboratory in the powerful state of São Paulo—signed an agreement in September 2020.²² As a result, Sinovac-CoronaVac, an inactivated virus vaccine pioneered in China, was the first vaccine administered in Brazil on January 17 (with AstraZeneca’s vaccine arriving a week later). CoronaVac remained the most commonly applied vaccine in Brazil until July 2021, becoming instrumental in the reduction of deaths from a seven-day average of 3,124 on April 4 to 1,565 on July 1.²³ Although President Jair Bolsonaro repeatedly questioned the efficacy of the Chinese vaccine and preferred the AstraZeneca vaccine for the immunization campaign, limited supply at the time forced the inclusion of CoronaVac, purchased through negotiation with China by his political opponent, Joāo Doria (governor of São Paulo).²⁴

In parallel with the CoronaVac arrangement, Brazil successfully applied its “formula” of direct partnership with Chinese manufacturers to other foreign vaccine manufacturers. In mid-2020 the federal government entered its own agreement with AstraZeneca, a British-Swedish company, through a partnership with the state-owned laboratory Fiocruz.²⁵ In August 2021, US-based Pfizer and its German partner BioNTech signed a letter of intent with a Brazilian private laboratory called Eurofarma to produce vaccines in Brazil.²⁶ The Butantan laboratory also is finalizing its own vaccine, ButanVac, developed in part with technology from the American hospital Mount Sinai.²⁷

Furthermore, these laboratory-to-laboratory partnerships built technological and production capacity in Brazil, resulting in a level of COVID-19 vaccine self-sufficiency unseen in most LAC nations. It could enable Brazil to become a “launching pad” for vaccine exports and possibly donations. Sinovac and Butantan’s agreement is a prime example. The president of the Butantan Institute projects that most of the 100 million Sinovac-CoronaVac doses produced yearly will be exported to Latin America and Africa beginning in 2022. Not unlike the United States and China, Brazil’s ability to produce vaccines itself could eventually allow it to advance foreign policy objectives and build goodwill with other countries in need.

Brazil’s unique case illustrates three important points. First, limited US and Chinese vaccine donations yielded less traditional vaccine diplomacy competition. Second, laboratory agreements uncover a different type of vaccine diplomacy: one that occurs at the subnational level (CoronaVac’s initial use). Finally, vaccine dynamics in Brazil involved more international players than the United States and China, as the AstraZeneca agreement demonstrates. 

Mexico

By Bosco Marti

US and Chinese engagement with Mexico has been visible before and throughout the pandemic, including memorable milestones such as the North American Leaders’ Summit. Early on, Mexico sought help from the United States – its most important and reliable ally – to buy needed PPE equipment and N-95 masks. US support did not immediately materialize due to both countries’ similar peaks in caseload. This created pockets of diplomatic opportunities for other countries including China. Since China had an earlier first wave of COVID-19 infections, it had “off-cycle” pandemic peaks that allowed it to provide vaccines and other supplies when Mexico needed them the most. A Mexico – China air bridge was established via Aeromexico to secure the needed PPE materials.²⁸ US support eventually came, as Mexico was the first Latin American country to benefit from vaccine donations.²⁹ By September 2021, the United States had donated 10.9 million vaccine doses; in contrast, China sold vaccines via purchasing agreements.³⁰ In total and to date, Mexico has received (donated and purchased) more than 250 million vaccine doses across all foreign sources.³¹

Accompanying those vaccine purchases were diplomatic exchanges and new agreements between Mexico and China. In April 2021, Chinese legislator Li Zhansu held talks on vaccines and other foreign policy issues with Oscar Eduardo Ramirez Aguilar, the speaker of Mexico’s Senate.³² In September 2021, Mexican Foreign Secretary Marcelo Ebrard spoke with his counterpart in China, Foreign Minister Wang Yi, about vaccines and other foreign policy priorities.³³ Such high-level executive and legislative exchanges reveal the depth of China-Mexico pandemic diplomacy, which has brought about new accords. For example, Mexico and China signed an important medical cooperation agreement in April 2021.³⁴ The agreement is intended to expedite regulatory requirements for vaccines and medical devices shipped between the two countries. 

For its part, the United States supported Mexico’s fight against the pandemic through vaccine donations and broader health collaboration. For instance, at the North American Leaders’ Summit (which also included Canada), a key deliverable was continued cooperation to increase vaccine donations throughout the hemisphere, strengthen medical supply chains, prepare for the next pandemic, promote equitable economic growth, and coordinate on migration issues. On one hand, the interconnectedness of US-Mexico health and prosperity represents a unique edge for the United States over China. On the other, Mexico-China relations arguably benefited from a more singular focus on vaccine arrivals and Mexican media coverage of it.³⁵  

Overall, Mexico skillfully navigated US-China dynamics during the pandemic to its advantage. Before the March 2021 US vaccine donation, President Andrés Manuel López Obrador had asked the Biden administration for help but it was slow in coming (US vaccines came later that month).³⁶ As he had with the PPE request, he turned to China to purchase a batch of twenty-two million doses. This was an important point in the triangular dynamics of relations among the United States, China, and Mexico—indicative of Mexico’s agency and ability to independently negotiate with other countries should it deem US responses insufficient to Mexican needs. Similar power dynamics were observed in 2017, when then-Mexican President Enrique Peña Nieto visited China amid faltering trade negotiations with Washington. 

Looking ahead, vaccine and health collaboration will continue to provide China and the United States with additional pathways to engage LAC. However, unlike many LAC countries where China has made considerable commercial headway, Mexico is unique in the scale and scope of its economic relationship with United States—by far its largest trade and investment partner—as well as shared history, culture, and other interests.³⁷ Thus, the US remains a reliable partner to Mexico despite the initial delayed start in vaccine provision, due to the depth and breadth of interlocking ties and both countries’ incentives in maintaining them. A pivotal element related to the dynamics among these three nations during and after the pandemic is a game of (distant) catch-up: will the United States be more successful in leveraging vaccine diplomacy to cement Mexico ties, or will China be more successful in using it to diversify and upgrade existing relations with Mexico?

Conclusion

The pandemic itself may be an anomaly, but US-Chinese-LAC dynamics during it are not a unique event. US and Chinese COVID-19 assistance and vaccine diplomacy are part of a broader trend in the triangular relationship. LAC proximity means that the United States will always have an interest in the health of the hemisphere. China’s growing global reach means that it will not ignore an entire region that holds considerable resources. Meanwhile, since LAC governments are disproportionately affected by global circumstances—such as climate change, economic swings, and the economic fallout from the pandemic, in particular—these leaders will always seek support from willing partners. 

While the pandemic exemplifies the opportunities created by global trends for US and Chinese engagement in LAC and their different strategies, it also underscores the role of pragmatism (local needs and perceptions) in driving LAC policies and actions. At the early height of the pandemic, the quantity and timing of vaccine shipments and bilateral diplomatic engagements had two likely implications: helping to shape citizens’ perceptions of US and Chinese support;³⁸ and potentially improving perceptions of US and Chinese support during future global events and disasters. Understanding these implications provides more tools to US and LAC policymakers as they aim to better serve the hemisphere’s needs.  

The case studies provide the following broader insights into these dynamics. 

• LAC leaders court the United States and China: LAC governments are using US-Chinese dynamics to their advantage. The impact on the health of LAC citizens and on regional economies created an urgency among leaders to secure resources, vaccines, and assistance. LAC leaders initially sought aid from China and other allies because US vaccines had not arrived. Yet even when US vaccines arrived, LAC governments remained engaged with China. Although US material support was limited or slow in some cases, it eventually grew. The United States continued to engage the region by providing pandemic assistance and cooperation on other issues, such as migration, security, and climate change. Thus, the pandemic highlights an important trait in US-Chinese-LAC relations: regional governments do not view China as a replacement for the United States—or vice versa—but as an additional or alternative source of external support. 
• The number of bilateral vaccine shipments (donations plus purchases) matter: The scale and number of Chinese vaccine shipments to LAC is an important point. The implications are twofold: bilateral vaccine shipments were greeted by regional media headlines and provided more opportunities for Chinese officials to meet with local leaders and government ministers; and the public places greater emphasis on being vaccinated rather than where the vaccine was developed (whether donated or purchased). Many US donations, including several supplied through and co-branded with the multilateral COVAX facility, did not generate similar impact in public perception. In addition, only ten LAC countries are qualified for the COVAX Advance Market Commitment (“AMC”) mechanism, designed to cover the purchase of vaccine doses by qualifying low-income countries. The remaining LAC countries signed self-financing agreements with COVAX. Those that did qualify for COVAX’s AMC mechanism received smaller and delayed quantities relative to larger, quicker Chinese shipments. 
• Timing and consistency are key: While LAC benefited from assistance by both the United States and China early in the pandemic, Chinese vaccines arrived first. Delivering vaccines before the United States allowed China to build goodwill with regional leaders and caused LAC citizens to question the timing of US donations. Second, timely Chinese shipments highlighted sustained and consistent support to LAC—something the region routinely calls for from the United States. Whereas China’s COVID-19 PPE assistance was followed by vaccine shipments, US bilateral vaccine support came after a monthslong gap. 
• Diplomacy is the perfect complement: Chinese assistance to LAC was usually accompanied with media headlines and coincided with high-level and subnational diplomacy. In El Salvador and T&T, for example, China used photos with national ministers and speeches at LAC airports during vaccine arrivals to bring national and international media attention to its actions. The United States used a similar model during its vaccine shipments, though in most cases with less fanfare. However, China also engaged more diligently and directly with LAC leaders. Xi called LAC leaders when they were infected with COVID-19 to promise vaccine donations, and to discuss other accompaniments including new loan agreements. Former President Trump rarely engaged with LAC during the pandemic, and Biden’s interactions were limited mostly to multilateral settings, whereas Xi’s interactions were bilateral. 

Acknowledgments 

We would like to thank the Atlantic Council for the opportunity to share regional perspectives and analyses on US and Chinese support during the COVID-19 pandemic. As regional governments look to the international community for support, we hope this report can shed a light on best practices and strategies to engage with LAC countries. 

At the Atlantic Council, we would like to thank Jason Marczak and Pepe Zhang for their leadership and guidance; Susan Cavan and Beverly Larson for editorial assistance; and Donald Partyka and Nancy Messieh  for design support, particularly in the infographic process. Finally, a special thank you to Isabel Bernhard whose editorial guidance, thought leadership, and valuable analysis underpinned many of the unique ideas in this report. Her contribution was critical to the report’s ideation, development, and completion. 

About the authors

María Eugenia Brizuela de Ávila (“Mayu”) is a Non-resident Senior Fellow at the Adrienne Arsht Latin America Center, as well as a former and first female Minister of Foreign Affairs of El Salvador. She also possesses extensive experience in the private sector as a former president of an insurance company, a former president of a private bank, and an independent director on several bank boards in El Salvador and Honduras. Her expertise across diplomacy and development has been recognized by the Aspen Ministers Forum, Vital Voices, and the Adrienne Arsht Latin America Center. She holds a law degree from the Universidad Dr. Jose Matias Delgado in El Salvador and additional academic titles from the University of Cambridge, the Sorbonne, and INCAE. 

Riyad Insanally is a Non-resident Senior Fellow at the Caribbean Initiative of the Adrienne Arsht Latin America Center. He was Guyana’s Ambassador to the United States and Permanent Representative to the Organization of American States from 2016 to 2021. Ambassador Insanally was a career diplomat for over 31 years and received Guyana’s third highest award, the Cacique’s Crown of Honour, in 2019 for his service to diplomacy and international relations. He studied Modern Languages and Latin American Studies and holds MA and MPhil degrees from the University of Cambridge and a PhD from Harvard University.  

Claudia Trevisan is the executive director of the China-Brazil Business Council (CEBC). As a career journalist with over 30 years of experience, she has worked as a correspondent for leading Brazilian newspapers in the United States, China, and Argentina and authored two books on China. Claudia received her master’s degree from the School of Advanced International Studies/Johns Hopkins University in 2019, followed by one year as a non-resident fellow at SAIS’s Foreign Policy Institute. 

Bosco Martí is a Non-resident Senior Fellow with the Atlantic Council’s Adrienne Arsht Latin America Center and is the global director of institutional affairs and communications for Aleatica, a multinational transportation infrastructure operator. Martí served for six years as executive director for Mexico and the Dominican Republic at the board of directors of the Inter-American Development Bank and the Inter-American Investment Corporation. He has also held senior positions in Mexico’s Ministry of Foreign Affairs and the Office of the President. Martí holds a BS in industrial engineering from Universidad Iberoamericana in Mexico City. 

Wazim Mowla is the assistant director for the Caribbean Initiative at the Adrienne Arsht Latin America Center, where he works on the Caribbean and China portfolios. Mowla holds a bachelor’s degree in international relations and a master’s degree in history from Florida International University, where he is currently a nonresident scholar for the Jack D. Gordon Institute for Public Policy. Mowla provides frequent commentary for US and Caribbean media outlets.  

Related content

Issue briefs and reports May 12, 2021

China-LAC Trade: Four Scenarios in 2035

By Tatiana Prazeres, David Bohl, and Pepe Zhang

Executive Summary Trade between China and Latin America and the Caribbean (LAC) experienced dramatic growth since the early 2000s. Going forward, China is poised to solidify its position as a leading regional trading partner.  By 2035, trade values will likely reach unprecedented levels. This, accompanied by greater Chinese investment and financial flows, will further increase […]

China Economy & Business

New Atlanticist Dec 10, 2021

Nicaragua has cut ties with Taiwan and backed Beijing. What’s next for China’s diplomatic offensive?

By Dan Peleschuk

Our experts break down what swayed Nicaragua, what China has to gain, and what the United States stands to lose.

China Latin America

Reality Check May 14, 2021

Reality Check #6: The consequences of an ‘America First’ vaccine policy

By Evan Cooper, Mathew Burrows

The Biden administration has been slow to distribute surplus COVID-19 vaccine doses to countries in need or to facilitate foreign manufacturing of vaccines, squandering a diplomatic opportunity and potentially endangering US security.

China Coronavirus

The post US-China vaccine diplomacy: Lessons from Latin America and the Caribbean appeared first on Atlantic Council.

​​​​​What you should know

• Vaccination: Despite regional vaccination rates reaching almost two thirds of the population, fourteen countries have yet to reach the 40 percent coverage threshold.
• 200 million: The number of vaccines the Pan American Health Organization (PAHO) is on track to procure for the region, urging governments to prepare efficient and well-targeted immunization campaigns.
• #ProactiveLAC: While digital transformation holds tremendous promise for the region, unlocking its benefits will require a coordinated public-private effort. Tune in to our virtual event on Thursday, February 17 at 9:00 a.m. ET, featuring Inter-American Development Bank President Mauricio Claver-Carone, Mastercard’s Executive Vice President of Market Development of Latin America and the Caribbean Kiki del Valle, and Oracle Latin America’s Executive Vice President Luiz Meisler.

Vaccination by the numbers

Percentage of population with booster shot: Chile (68) #1 worldwide, Uruguay (54) #15 worldwide, Cuba (50) #21 worldwide, Argentina (31) #40 worldwide, Peru (25) #50 worldwide, Brazil (25) #51 worldwide, Panama (24) #57 worldwide, Dominican Republic (19) #59 worldwide, El Salvador (19) #60 worldwide, Ecuador (17) #61 worldwide, Paraguay (13) #66 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (90) #5 worldwide, Cuba (87) #7 worldwide, Argentina (78) #21 worldwide, Uruguay (78) #22 worldwide, Ecuador (77) #27 worldwide, Costa Rica (74) #37 worldwide, Brazil (72) #42 worldwide, Peru (71) #44 worldwide, El Salvador (65) #58 worldwide, Colombia (64) #61 worldwide. Source: nytimes.com

Vaccinations per capita (vaccines administered per 100 people): Cuba (305) #1 worldwide, Chile (248) #2 worldwide, Uruguay (217) #11 worldwide, Argentina (199) #29 worldwide, Brazil (176) #40 worldwide, Ecuador (175) #41 worldwide, Peru (173) #43 worldwide, Costa Rica (167) #49 worldwide, Panama (157) #60 worldwide, El Salvador (155) #61 worldwide, Colombia (146) #65 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

Health + Innovation

• Spikevax: Colombia agreed to procure an additional 10.8 million doses of Moderna’s COVID-19 vaccine, with one million doses arriving in Q1 of 2022.
• “TOGETHER Trial”: An international collaboration led by researchers in Brazil and Canada is applying innovative testing methods to determine existing medications’ effectiveness at treating COVID-19.
• Uruguay: The Public Health Ministry is campaigning to boost COVID-19 vaccination in 150 interior localities from 11 departments.
• María Elena Bottazzi: This Honduran microbiologist and Nobel Peace Prize nominee successfully created the Corbevax vaccine for COVID-19, a patent-free drug designed for the poorest global communities.
• 149 percent: The increase in the number of COVID-19-related deaths between December 2021 and January 2022 in Brazil, according to the Health Ministry’s latest epidemiological report.
• Honduras: President Xiomara Castro is the latest regional leader to contract COVID-19 amid the spread of the omicron variant.
• Bolivia: Roughly half the population hasn’t received a single dose of the COVID-19 vaccine, due to generalized distrust, misinformation, and other religious motives.
• Flora Growth: A cannabis-based drug aimed at COVID-19 prevention that seeks emergency use authorization in Colombia.

Economies in focus

Economic Impact

• The International Monetary Fund (IMF) slashed its 2022 Latin America economic growth forecast, giving the region a 2.4 percent economic growth estimate — significantly lower than the 6.8 percent regional expansion in 2021. 
• According to the International Labour Organization (ILO), between 60 and 80 percent of jobs recovered by the third quarter of 2021 were part of the informal sector.  
• Inflation in Colombia reached a five-year high in January 2022 according to the national statistics agency—the highest level since 2016.  

Economic Recovery

• Brazil’s central bank raised its interest rate by 150 basis points to counter rising inflation–the eighth consecutive hike since it began monetary cycle tightening.
• The ILO estimated that Latin America’s unemployment rate will reach 9.6 percent – higher than pre-pandemic levels but lower than the 10.6 percent reported in 2020.  

Social transformations: Latin American countries embrace online learning

• According to the Coursera 2021 Impact Report, Mexico, Brazil, and Colombia were among the top ten countries globally with the most registered students on the online learning platform.
• With a 39 percent growth figure, Latin America surpassed both North America and Europe in new user registration for Coursera. Paraguay led this trend globally, with 98 percent new user growth.
• UBITS, a Colombian startup that provides an online learning platform for corporate training, partnered with Mercado Libre and Coursera to provide virtual upskilling opportunities to employees in the region.  

The post Aviso LatAm: COVID-19 February 12, 2022 appeared first on Atlantic Council.

The post Warrick quoted in USA Today on trucker protests against vaccine mandates in Canada appeared first on Atlantic Council.

What is the opportunity?

The COVID-19 pandemic continues to rage around the globe, taking millions of lives. A better US-organized campaign to vaccinate the world’s population could drastically lower the risk of even more dangerous variants than Delta and Omicron threatening global health. With its mRNA vaccines proving to be more effective than others, the United States is well positioned to lead an international vaccination effort. Doing so, however, will require an increased commitment. A quick distribution of vaccines throughout the world would not only save millions of lives, including those of Americans, but it would also spur a global economic recovery and create diplomatic windfalls for Washington. 

Vaccines produced in the United States have proven their effectiveness in combating the pandemic. The efficacy of the Pfizer-BioNTech and Moderna vaccines at preventing serious illness, including from the Omicron variant, makes them one of the greatest medical innovations in world history. Nevertheless, all immunity wanes; thus time is of the essence. Getting as many people as possible vaccinated in the next few months will reduce the circulation of the virus as well as the potential for more mutations to occur. 

Each mutation poses the threat of creating a deadlier and more transmissible version of the virus, which could prolong and exacerbate the pandemic. Mutations could also render current vaccines less effective—as has occurred with the Omicron variant—and repeatedly set back vaccination drives. Rapidly vaccinating as wide a swath of a population as possible is crucial for preventing new, harmful variants.

A concerted US effort could be the tipping point for getting the pandemic under control, which would position Washington to play a leading role in global health reform.

In addition to being a moral imperative, reducing vaccine inequality would also give the global economy a much-needed boost. An analysis by the United Nations Development Program found that economic recovery is expected to occur more quickly in countries with high vaccination rates: global GDP is expected to increase by approximately $7.93 billion for every one million people vaccinated. As International Monetary Fund (IMF) Managing Director Kristalina Georgieva said last year, vaccine policy is economic policy. The cost of manufacturing and distributing vaccines—estimated by Organisation for Economic Co-operation and Development Chief Economist Laurence Boone at $50-$70 billion—pales in comparison to the potential economic upside. The cost of not doing so is even more stark. According to the Congressional Budget Office, premature deaths and lost productivity caused by the pandemic will cost the United States alone $7.63 trillion over the next decade. Another analysis projected that the United States will lose $16 trillion from the effects of COVID, with Microsoft developer David Cutler and economist Lawrence Summers calling the pandemic, “the greatest threat to prosperity and well-being the United States has encountered since the Great Depression.”

Studies already support a strong correlation between increased economic activity and higher vaccination rates. A group of IMF economists examined how the administration of vaccines correlated with rates of daily nitrogen dioxide (NO₂) emissions—an indicator that is strongly linked to industrial production and that can be used to measure overall economic activity. They found a significant correlation between increased NO₂ emissions and higher vaccination rates. For every shot the United States can administer around the world, the global economic outlook—including the outlook for the US economy—improves.

Meanwhile, if the United States seizes the moment and takes a leading role in vaccinating the world’s population, Washington could experience a diplomatic boon. China, Russia, and India have all recognized the goodwill and other benefits associated with donating vaccines to other countries. A concerted US effort, appropriately branded and publicized, could be the tipping point for getting the pandemic under control. In addition to the lives saved and the economic benefits, such an effort would position Washington to play a leading role in global health reform, helping to forge a system that could more quickly and effectively respond to future pandemics. Eric Lander, President Joe Biden’s science advisor and director of the White House Office of Science and Technology Policy, has called for better early warning systems, operational vaccines within 100 days of detection, and more home diagnostic kits in order to avoid another tragedy like the current pandemic. 

Why now?

Now is the opportune time for the United States to take the lead because health experts have increasing doubts about the effectiveness of China’s Sinopharm and Sinovac vaccines against the variants. China is scrambling to develop its own mRNA vaccine owing to widespread lack of trust, even among its own public, in its existing vaccines. Pre-clinical trial tests with two Chinese mRNA vaccines under development—Walvax and Abogen—show a robust antibody response against coronavirus during the animal-testing phase. Analysts disagree about how fast Chinese pharmaceuticals could produce at scale the mRNA vaccines should their human trials prove successful. 

Although COVID-19 Vaccines Global Access (COVAX)—a worldwide initiative aimed at creating equitable access to COVID-19 vaccines—recently distributed its billionth dose, it missed its overall 2021 target of 2 billion doses because of a lack of donated supplies from rich countries. The World Health Organization (WHO) is calling on companies and governments to help reach a vaccination target of 70 percent of each country’s population by the end of 2022. Africa remains the continent lacking the most coverage, with less than 10 percent of its population having been vaccinated. Africa accounts for almost two-thirds of the global total of new HIV infections, which makes the continent particularly vulnerable to the spread of the virus and forces it to combat two public health emergencies at once.       

India’s Serum Institute, which produces most of the vaccines for COVAX, had to stop its exports last April in order to supply the domestic market, which was struck by a large second wave. It resumed exports in October but has had difficulty getting vaccines to countries in need due to a lack of cold storage facilities in many of those receiving countries. In October, more than 160 former world leaders and global figures called on the United Kingdom (UK) and other rich countries to immediately airlift millions of surplus COVID vaccines to less-developed nations. Even if that happens, many poor countries lack the logistics and cold-storage facilities necessary to provide vaccinations to millions of people a day. Recently, the new Novavax vaccine has been shown to be effective against Omicron (with three shots); Novavax could also help alleviate the logistics problem because it can be stored in a conventional refrigerator. COVAX has ordered 1.1 billion doses to be manufactured by the Serum Institute while the UK, the United States, and European countries other than the UK have booked orders for 60 million, 110 million, and up to 200 million doses, respectively.

For some time, the WHO has complained about rich countries ignoring the plight of poor countries that cannot afford the cost of Western vaccines and must instead rely on COVAX or donations from other sources to meet their needs. Owing to the recent decisions by Western countries to order additional booster doses for their whole populations, including in some cases even young children, experts estimate that there will be a three billion–dose shortfall globally in the first quarter of 2022, further delaying the timetable for vaccinating poor members of the global population. As of mid-December, the number of boosters dispensed in the world’s richest countries had grown by 5.5 million each day, and COVID boosters in rich countries outnumbered all the vaccine shots given in poor countries. In the United States, booster shots have been authorized for children twelve years old and up. 

The Biden administration announced last November a plan to invest billions in US companies making mRNA vaccines to be given to poor countries. Early reports indicated Moderna and Pfizer were studying the plan, while critics questioned how fast production could ramp up to produce the extra doses. The administration’s goal is to produce one billion extra doses in 2022, but in the last few weeks, administration officials have reportedly been worried that the growing demand for boosters will squeeze out the capacity for producing extra doses for poor countries. Critics charge that the United States should be able to provide enough doses to meet its own needs and those of other nations, particularly because it is in Washington’s interest to have the bulk of the world’s population vaccinated. Nongovernmental organization advocacy groups have called on the Biden administration to pursue a government-owned, contractor-operated manufacturing model if companies such as Pfizer and Moderna are able to boost their production for developing countries. 

How to make it happen

The United States can immediately take several steps to increase global vaccination rates. An article featured in Harvard Business Review in mid-2021 offered a number of ways to increase global vaccine supply, many of which remain relevant today and are discussed below, along with additional ideas for diversifying supplies and encouraging wider distribution:

1. Improve the flow of raw materials essential for production of vaccines. Late last April, the United States announced that it would ease restrictions on the export of raw materials needed for India’s Serum Institute to produce the Covishield vaccine based on AstraZeneca’s design. A typical vaccine-manufacturing plant uses around 9,000 different materials sourced from some 300 suppliers across approximately thirty different countries, according to an International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) estimate. The absence of just one of these elements can have a crippling impact on production. Indian vaccine makers struggled to access materials before the US export ban was eased even as Pfizer and Moderna, two American pharmaceutical companies, benefited from a key raw material from India for their mRNA COVID-19 vaccines. Recently, vaccine manufacturers have warned that limits on raw materials are constraining their ability to produce new doses. Those constraints would deepen if the manufacturers had to produce a new vaccine to counter a more potent variant. The United States and its allies should push for an international agreement that requires all countries to remove trade barriers that disrupt the global flow of both materials for making vaccines and ancillary supplies. 

2. Expand vaccine-manufacturing capacity. As noted, boosting production is especially important for developing countries which, outside of India, lack the ability to produce vaccines. To be sustainable, such facilities need to achieve “cost economics,” which would involve producing not just COVID vaccines but others for combating current and future diseases. Harmonizing regulatory processes could speed up the production and distribution of vaccines during emergencies. The WHO emergency-use-listing procedure provides a global mechanism to streamline regulatory pathways, but many countries require local clinical trials as well as additional steps before authorizing a vaccine.  

3. Encourage allies and partners to grant the TRIPS waiver. Although many experts believe increasing manufacturing outside existing centers in the United States, Europe, and India should be the priority, it is important for Washington to encourage its allies and partners to support the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS Agreement waiver proposal at the World Trade Organization (WTO). Doing so would temporarily waive intellectual property rights protections for technologies needed to prevent, contain, or treat COVID-19—including vaccines and vaccine-related technologies. The waiver would allow WTO member states to issue licenses to firms other than those that hold a particular patent to produce and market a patented product without the prior approval of the patent-rights holder; this allowance would encourage pharmaceutical firms in the developing world to produce COVID vaccines. More than one hundred low-income countries support the waiver, but most rich countries, including Australia, Canada, EU members, Japan, and the UK are opposed. The United States announced its support last May but has not gone much further than rhetoric.

The success of the mRNA vaccines gives the United States an opportunity to rebuild its soft power. President Biden has talked about the United States becoming the vaccine producer for the world, saying at an international conference on COVID, “I made—and I’m keeping—the promise that America will become the arsenal of vaccines as we were the arsenal of democracy during World War II.” Biden and his administration should work with the international community, not just allies and partners, to make sure that the WHO meets its goal of getting 70 percent of every country’s population vaccinated by the end of 2022. Achieving such a goal faces stiff challenges, and there will always be domestic demands, but a combined effort in which the United States takes a lead is possible. After all, at the height of the Cold War, the two opposing antagonists, the United States and the Soviet Union, cooperated to end polio—the scourge of children in both countries and around the world at that time. What was possible then should certainly be doable today.

Assumptions Testing Series

The New American Engagement Initiative’s Assumptions Testing series explores some of the foundational beliefs that guide US foreign policy. By questioning the conventional wisdom, and exposing these assumptions to close scrutiny, the series aims to open a new seam in the policy debate and generate a more lively, fruitful, and effective strategic dialogue – one that is capable of producing a sustainable, nonpartisan strategy for US global engagement.

Reality Check Series

The New American Engagement Initiative’s Reality Checks are short briefs dedicated to exploring a particular policy or set of policies, assessing their efficacy, and, where appropriate, proposing alternatives. Reality Checks are published regularly and tied to the news of the day or derive from NAEI’s Assumptions Testing series. All are succinct and straight-to-the-point. The briefs are designed for busy professionals anxious for pragmatic and timely policy options.

Engagement Reframed Series

The New American Engagement Initiative’s Engagement Reframed policy briefs reimagine and reframe the US approach to the world beyond traditional, narrow notions of US military dominance to fashion an achievable and sustainable form of US leadership in a world of many capable actors.

The post Engagement Reframed #1: Vaccinate the world appeared first on Atlantic Council.

​​​​​What you should know

• Around two-thirds: The share of Latin America and the Caribbean’s (LAC) inhabitants who are fully vaccinated against COVID-19.
• Davos Agenda 2022: Increasing COVID-19 vaccination rates, swift economic recovery, and integrating climate action in public policies were among the key priorities outlined for the region at the World Economic Forum’s (WEF) annual meeting.
• #ProactiveLAC: Unlocking the potential of small and medium-sized enterprises is critical to the region’s economic reactivation and long-term prosperity. Tune in to our virtual event on Wednesday, February 2 at 2:00 p.m. ET, featuring Vice President of Dominican Republic Raquel Peña, Coca-Cola Latin America President Henrique Braun, Development Bank for Latin America’s Vice President of Sustainable Development Julián Suárez, and more.

Vaccination by the numbers

Percentage of population with booster shot: Chile (65) #1 worldwide, Uruguay (51) #12 worldwide, Cuba (43) #23 worldwide, Argentina (25) #43 worldwide, Peru (21) #49 worldwide, Brazil (20) #50 worldwide, Panama (20) #52 worldwide, El Salvador (19) #55 worldwide, Dominican Republic (16) #57 worldwide, Ecuador (13) #61 worldwide, Paraguay (11) #62 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (89) #4 worldwide, Cuba (86) #7 worldwide, Uruguay (78) #21 worldwide, Argentina (76) #24 worldwide, Ecuador (76) #26 worldwide, Costa Rica (72) #39 worldwide, Brazil (71) #43 worldwide, Peru (69) #45 worldwide, El Salvador (65) #56 worldwide, Colombia (61) #70 worldwide. Source: nytimes.com

Vaccinations per capita (vaccines administered per 100 people): Cuba (298) #1 worldwide, Chile (244) #2 worldwide, Uruguay (212) #11 worldwide, Argentina (190) #30 worldwide, Ecuador (170) #40 worldwide, Brazil (169) #42 worldwide, Peru (168) #44 worldwide, Costa Rica (163) #47 worldwide, El Salvador (154) #59 worldwide, Panama (152) #61 worldwide, Colombia (139) #68 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

Health + Innovation

• 2 million: The number of vaccine doses Chile agreed to purchase from Moderna. Chile has begun offering a second booster shot despite already boasting one of the world’s highest COVID-19 vaccination rates.
• Omicron: Since January 14, ten countries in South America have reported record-high cases as the variant continues to strain health systems.
• Bolivia: Public hospitals are operating at 50-70 percent capacity due to high infeciton rates among health personnel.
• Carnival: Rio de Janeiro postponed the world-famous festivities to late April as the number of coronavirus cases in Brazil continues to rise.
• Caribbean: Nearly 15 countries and territories were added to the US Centers for Disease Control and Prevention’s highest travel risk category due to the ongoing surge in COVID-19 cases.
• Argentina: On January 24, President Alberto Fernandez launched a National Vaccination Campaign against COVID-19 to ensure a full and safe return to in-person classes.
• Paraguay: President Mario Abdo Benitez is the latest regional leader to contract COVID-19 amid the spread of the omicron variant.

Economies in focus

Economic Impact

• In 2022, Brazil’s economy is projected to grow at only 0.9 percent, the slowest rate in the region, according to analysts from Focus Economics. 
• Bloomberg Economics and several regional banks estimate that Mexico entered a technical recession, putting a halt to a brief recovery from the pandemic. 
• On January 25, the International Monetary Fund warned that Argentina is at risk of high inflation “becoming entrenched.” It is expected to reach 54.8 percent at the end of 2022. 

Economic Recovery

• According to the Association for Private Capital Investments in Latin America, startup funding tripled from 2019 to a record $15 billion in 2021 as venture capitalists look to invest in emerging markets.
• Following growth in 2021, Peru’s finance minister said he expects the nation’s economy to grow between 3.5 and 4.0 percent.
• In 2022, the World Bank expects the Guyanese economy to expand by 49.7 percent, the largest in the Caribbean. 
• To stave off regional inflation, Uruguay’s Central Bank raised its benchmark interest rate 75 basis points in January with plans to return to neutral rates early in the second quarter. 

Social transformations: Bringing Silicon Valley to Latin America and the Caribbean

• According to the open finance platform Belvo, Latin America is one of the most fertile regions for fintech innovation. 
• Investment received by the fintech sector in Latin America jumped from $3.1 billion in 2020 to more than $9.7 billion in the first three quarters of 2021.
• Brazil, Mexico, and Colombia are already working on their open banking regulation with results expected throughout 2022. 

The post Aviso LatAm: COVID-19 January 29, 2022 appeared first on Atlantic Council.

The Scowcroft Center for Strategy and Security’s New American Engagement Initiative (NAEI) has a twofold mission: to challenge prevailing assumptions underpinning US foreign policy; and to point to alternative paths, different priorities, and a re-allocation of resources when needed to support new modes of US global engagement with allies and partners to shape the global future.

Our work is premised on the view that the United States—indeed, the world—is at a notably disruptive moment in history. An unprecedented technological revolution has accelerated the redistribution of global wealth and power in a multipolar world. Global institutions have frayed and fragmented, and America’s military and economic preeminence has begun to erode. By questioning underlying assumptions, the NAEI team will stimulate new ways of thinking about US foreign policy and recommend solutions that employ all elements of American power and influence.

NAEI’s Assumptions Testing series of issue briefs delves into major assumptions guiding US policies, including the motivations and behavior of revisionist powers; the US role in sustaining the global order; the effectiveness of coercion and deterrence; and the importance of democracy promotion. These in-depth briefs in turn inform two types of short policy briefs aimed at busy policymakers and opinion leaders:

• The first, NAEI’s Reality Check series, focuses on specific flaws in current policy. The series has covered a range of issues—from the US military posture in the Persian Gulf to the provision of security-sector assistance to foreign partners—and identifies specific needed reforms as well as pitfalls to avoid.
• NAEI’s newest publication series, Engagement Reframed, will suggest new ways to frame and execute America’s global role. As the title implies, the series will reimagine and reframe US engagement in the world beyond traditional, narrow notions of US military dominance to fashion a viable type of leadership in a world of many capable actors.

The Engagement Reframed series will develop new approaches for nonmilitary engagement with allies and partners, including rethinking the institutions of US foreign policy making and implementation, the specific issues and problems the United States faces, and the ways in which the scaffolding of the international system might be renovated or reengineered. These concise policy briefs will address how to employ the full range of tools at the disposal of the United States and its like-minded network. All follow a basic structure:

1. What are the challenges and opportunities? What opportunities for engagement are US policymakers currently missing? How might different modes of engagement—or new methods of interacting with others—alter or improve existing US policy?
2. Why now? The field of debate on US foreign policy is crowded with urgent problems. The Engagement Reframed series will stress important issues, explain the critical need for change, and highlight why a particular opportunity is worthy of policymakers’ attention.
3. How to make it happen. The United States is no longer the world’s sole dominant power; this series is aimed at operationalizing the concept of primus inter pares (first among equals). Learning how to operate in this multipolar world of many capable actors involves making choices. Engagement Reframed will inform these choices by considering when to take the lead or share burdens with others—solving collective-action problems through diplomacy and identifying how to enfranchise other actors to find a stable balance of interests.

The Engagement Reframed briefs planned for 2022 include:

Vaccinate the world by Mathew Burrows and Evan Cooper

The United States remains the best-positioned country to lead a global vaccination drive to counter the spread of COVID-19. With poor countries in serious need of vaccines, and China’s Sinopharm, Russia’s Sputnik, and the Johnson & Johnson vaccines deemed ineffective in initial trials at fighting the Omicron variant, the United States could reap a significant diplomatic, economic, and public health windfall if it contributes to the global vaccination effort more aggressively by donating its effective vaccines, increasing foreign production capacity of such vaccines, and bringing together donor countries to revamp the global health system. In the short-to-medium term, such measures could significantly help stem the financial costs of the pandemic by preventing economies from shutting down. Over the longer term, such an effort would yield diplomatic gains by establishing the United States as a responsible leader in global health and as the premier developer of medical innovations.

Appoint a European SACEUR by Kelly Grieco

Like every American president for six decades, President Joe Biden has called for Europe to shoulder a larger part of the defense burden. US efforts to press Washington’s European allies to do more have largely fixated on one measure: defense spending levels. At the 2014 NATO summit in Wales, NATO members pledged to spend at least two percent of their gross domestic product on defense by 2024. Despite demanding that its European allies contribute more to their own defense, Washington has thus far refused to seriously consider a more equitable distribution of leading positions in NATO’s military organization. Put differently, the United States cannot have it both ways; it cannot demand that Europe do more yet still retain full military leadership of the alliance. This paper explores arguments for the appointment of a European Supreme Allied Commander Europe (SACEUR) and offers recommendations for rebalancing NATO responsibilities and commands.

Engage on Ukraine’s Future by Emma Ashford

In recent years, Ukraine has become a core flashpoint between Russia on the one hand and the United States, as well as Washington’s European allies, on the other. From the George W. Bush administration’s 2008 attempt to bring Ukraine into the NATO membership process, to the 2014 dispute over a European Union (EU) association agreement that prompted the Maidan Revolution, the question of whether Ukraine will move toward the West or retain its traditionally close ties to Russia has been fraught with controversy. The end result has been a war on Ukrainian soil and political and economic limbo for Ukraine, which cannot benefit fully from its ties with either Russia or the West. This paper steps back from security questions to explore novel ideas for economic integration of Ukraine into Western markets—giving the country the access it desires—while reassuring Russia that this will not necessarily entail full EU membership or the cessation of trade with Russia itself.

Move beyond great-power competition in Africa by Aude Darnal and Ambassador Rama Yade

Following two decades of US foreign policy primarily dominated by the global war on terrorism, Washington’s strategic competition with Beijing has motivated a shift in US engagement with the rest of the world. In Africa, the United States retains its military and security approach toward armed conflicts and instability, but the US government has increasingly framed its exchanges with the continent within the concept of great-power competition. Though the Biden administration recently affirmed that it will not ask African countries to choose between China and the United States, it has also warned some of them about their partnerships with the Asian power. Framing US engagement with the continent through the lens of great-power competition is a mistake because it implies that African countries are merely pawns in the international system. This brief explores opportunities for greater US engagement with African countries in such sectors as diplomacy, technological innovation, trade, global health, and climate change—all issues where they are valuable partners.

Bring back America’s diplomatic superstars by Evan Cooper

American culture has tremendous influence around the world, but successfully leveraging that power for diplomatic gain requires that the US government work strategically with American artists and businesses. The Jazz Ambassadors program of the 1950s and 60s—sponsored by the Department of State to promote US values globally—provides a useful model that should be applied to how the department approaches cultural diplomacy today. By partnering with some of the most popular American artists and companies, the State Department could facilitate exhibitions of American freedom of expression and artistic talent, advancing US values while helping to improve damaged perceptions of the United States abroad.

Rethink space governance by Robert A. Manning

We have entered a new era in space that is racing ahead of the world’s ability to govern it. 2021 marked an inflection point, as US and Chinese rovers explored Mars, and a Russian anti-satellite weapons test created 15,000 pieces of space debris. Private sector activities ramped up, too, including Elon Musk’s Space X activities and the Starlink mini-satellites nearly colliding with a Chinese space station. Not least, the National Aeronautics and Space Administration (NASA) launched the spectacular Webb telescope. In short, the already explosive growth of activities in space will only accelerate in this decade. Yet the only universally subscribed law governing space is the 1967 Outer Space Treaty, now outdated by both technology and politics. Meanwhile, nations are passing laws to grant claims on moon real estate and resources, the private sector is gearing up to mine asteroids and the moon, and increasing space debris threatens space assets on which the functioning of civilization increasingly depends—from global positioning systems and military command and control to the Internet and automatic teller machines. NASA has embarked on a noble effort to update rules for operations in space, the Artemis Accords, signed by thirteen US allies and partners, but the agreement omits major space powers: China, France, Germany, India, and Russia. All parties should begin with a recognition of their mutual vulnerability and admit the urgent need to manage and remove space debris. Beyond that, the United States has an opportunity to lead efforts with partners and allies to update global space governance before space becomes a Wild West free-for-all.

Expand US relations with the Caribbean by Aude Darnal and Wazim Mowla

In recent years, the United States’ engagement in the Caribbean has been largely inconsistent and limited to only a handful of countries. From the limited and delayed collaboration during the COVID-19 crisis, to the poor response to migration flows from the Caribbean, Washington has shown the limits of its current strategy to partner with the region. In parallel, increased engagement in the region by rival powers has raised the Caribbean’s profile inside the Beltway. Although the Biden administration should not look at Caribbean countries through the prism of great-power competition, it should seize the opportunity to strengthen and redefine, when necessary, a comprehensive strategy grounded in mutual interests. From climate change to trade, investment, and diplomacy, the Caribbean and the United States share common challenges and opportunities that can only be addressed or transformed into gains through cooperation.

Get creative on European security architecture by Emma Ashford

Six months ago, the Biden administration began the process of re-engaging with Russia on questions of strategic stability, including the core issues of arms control and cyber warfare. Talks have been ongoing, and a number of working groups have been set up on specific topics. Recent events, however, suggest the need for engagement on a broader set of issues rather than exclusively on arms control. Repeated Russian military buildups near Ukraine—and Moscow’s proposed outline of a revised European security architecture—suggest that the time might be ripe for revisiting the conversations from the 1990s about conventional security in Europe. Nonetheless, Moscow’s proposed language for such an agreement is likely to be largely unacceptable to Western states. This paper explores the Russian proposal for a new European security architecture and suggests areas where compromise might be found.

Other topics to be explored in the series include demographics and immigration, a plan for improving global infrastructure, relations with North Korea, governance in space, and US public attitudes toward trade, while working with allies and partners to build leverage to reshape world order.

Assumptions Testing Series

The New American Engagement Initiative’s Assumptions Testing series explores some of the foundational beliefs that guide US foreign policy. By questioning the conventional wisdom, and exposing these assumptions to close scrutiny, the series aims to open a new seam in the policy debate and generate a more lively, fruitful, and effective strategic dialogue – one that is capable of producing a sustainable, nonpartisan strategy for US global engagement.

Reality Check Series

The New American Engagement Initiative’s Reality Checks are short briefs dedicated to exploring a particular policy or set of policies, assessing their efficacy, and, where appropriate, proposing alternatives. Reality Checks are published regularly and tied to the news of the day or derive from NAEI’s Assumptions Testing series. All are succinct and straight-to-the-point. The briefs are designed for busy professionals anxious for pragmatic and timely policy options.

Engagement Reframed Series

The New American Engagement Initiative’s Engagement Reframed policy briefs reimagine and reframe the US approach to the world beyond traditional, narrow notions of US military dominance to fashion an achievable and sustainable form of US leadership in a world of many capable actors.

The post Engagement Reframed: Introduction appeared first on Atlantic Council.

On January 18, 2022, Wazim Mowla and Pepe Zhang co-authored an article in the Georgetown Journal of International Affairs, “Latin America and the Caribbean’s Asymmetrical Engagement with China during the COVID-19 Pandemic.”

“Through strategies of problem re-definition and autonomy enhancement, LAC governments used regional and international forums to draw attention to the needs of the developing world and small states—an example of their ability to asymmetrically influence global politics and bilateral relationships,” Mowla and Zhang write.

More about our experts

Staff

Wazim Mowla

Associate Director, Caribbean Initiative

Adrienne Arsht Latin America Center

Caribbean China

Staff

Pepe Zhang

Senior Fellow

Adrienne Arsht Latin America Center

China Coronavirus

The post Wazim Mowla and Pepe Zhang in the Georgetown Journal of International Affairs: Latin America and the Caribbean’s Asymmetrical Engagement with China during the COVID-19 Pandemic appeared first on Atlantic Council.

​​​​​What you should know

• Omicron: The presence of the COVID-19 variant has been confirmed in at least 27 countries and territories across the region as of January 10.
• Second booster: As the world grapples with a surge in COVID-19 cases, Chile and Brazil are administering a second booster shot, citing initial use of less-effective Chinese-made vaccines.
• 60 percent: The share of fully vaccinated population in Latin America and the Caribbean as of January 2.

Vaccination by the numbers

Vaccinations per capita (vaccines administered per 100 people): Cuba (280) #1 worldwide, Chile (238) #2 worldwide, Uruguay (204) #10 worldwide, Argentina (179) #30 worldwide, Ecuador (162) #41 worldwide, Brazil (160) #43 worldwide, Costa Rica (159) #45 worldwide, Peru (158) #46 worldwide, El Salvador (150) #56 worldwide, Panama (143) #62 worldwide, Dominican Republic (132) #70 worldwide. Source: nytimes.com

Percentage of population fully vaccinated: Chile (88) #4 worldwide, Cuba (86) #7 worldwide, Uruguay (77) #21 worldwide, Argentina (74) #28 worldwide, Ecuador (74) #31 worldwide, Costa Rica (71) #39 worldwide, Brazil (69) #45 worldwide, Peru (67) #48 worldwide, El Salvador (65) #55 worldwide, Panama (58) #70 worldwide. Source: nytimes.com

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

Health + Innovation

• Ecuador: The first country in Latin America to declare COVID-19 vaccination mandatory for its population and all foreign travelers.
• Colombia: The latest country to reduce COVID-19 booster vaccine waiting time to four months after completing initial vaccinations.
• 134,439: The record number of daily COVID-19 infections registered in Argentina on January 11 – 34,000 more than the record set the previous week.
• Brazil: Health Minister Marcelo Quiroga announced that Omicron has become the predominant strain in the country.
• President López-Obrador: Amid the latest wave of infections fueled by the Omicron variant, Mexico’s president tested positive again after overcoming COVID-19 in early 2021.
• 46.7 million euros: The loan Cuba expects to receive from the Central American Bank for Economic Integration (CABEI) to help bolster its COVID-19 vaccine program and ramp up production.
• 701 percent: The increase between weekly caseloads in Guyana from December 29 to January 5.

Economies in focus

Economic Impact

• On January 7, top investment firms reduced their predictions for Brazil’s 2022 economic growth from 0.36 percent to 0.28 percent following a technical recession in Q3 2021. 
• On January 11, the Central Bank of the Argentine Republic raised its inflation estimate to 54.8 percent for 2022. 

Economic Recovery

• The market for online patient telecommunication services in South and Central America is expected to reach $278.9 million by 2027 from $79.7 million in 2019. 
• Vice President Harris announced that new private sector investments to boost economic recovery and curb migration in Central America now reach $1.2 billion. 
• The Organisation for Economic Co-operation and Development (OECD) projects Mexico’s economy to expand by 3.3 percent in 2022, fueled by an improvement in the labor market and a rise in vaccinations. 

Social transformations: Digitalization as a tool for regional recovery

• The COVID-19 pandemic highlighted the need for greater digital access in Latin America and the Caribbean. In 2021, less than 50 percent of the region had fixed broadband connectivity. 
• In their Caribbean Quarterly Bulletin Regional Overview, the Inter-American Development Bank (IDB) estimated that closing the digital access gap between Caribbean economies and OECD member countries could increase the region’s GDP by about 6 to 12 percent.
• Increasing digital access allows for distance learning, digital cash transfers, telemedicine, and online public services—critical not only during the pandemic but for long-term regional prosperity. 

The post Aviso LatAm: COVID-19 January 15, 2022 appeared first on Atlantic Council.

In case you missed it, please read our year-end special edition of State of the Order: Looking Back on 2021, available here.

Reshaping the order

This month’s topline events

Biden’s Democracy Summit. President Biden hosted more than one hundred world leaders for a virtual two-day Summit for Democracy, with an agenda focused on countering authoritarianism, promoting human rights, and combating corruption. EU Commission President Ursula von der Leyen followed Biden in welcoming participants to the summit, which kicked off what the administration is calling a “year of action” that will culminate in a second planned in-person summit in late 2022.

• Shaping the order. The Summit served to rally democracies as the world faces fifteen consecutive years of a democratic recession. While it did not produce any significant new initiatives, it helped advance the Biden administration’s efforts to set the global agenda around a narrative of strategic competition between democracy and autocracy – increasingly the frame around which many US allies and partners are orienting their own foreign policies.
  
• Hitting home. In the aftermath of the January 6 insurrection and a deeply polarized electorate, the United States is facing its own challenges to democracy at home which must be addressed, even as it seeks to promote democracy overseas.
• What to do. As it prepares for a second summit later this year, the administration should seek support for a global democratic charter, while concentrating on a more focused set of issues to drive summit action, such as pushing back on autocratic coercion and countering disinformation. It should also explore ways to formalize a network or alliance of democracies to sustain momentum behind this series of summits.

Russia’s NATO Gambit. Russia outlined sweeping new proposals calling for the redrawing of European security arrangements, including a NATO guarantee not to allow any new nations to join the alliance and a halt to all NATO military activities in Eastern Europe. US and NATO officials dismissed the proposals, but during a phone call with Russian president Vladimir Putin, Biden agreed to further discussions, including through the NATO-Russia Council and the Organization for Security and Cooperation in Europe (OSCE).

• Shaping the order. Putin seeks to undermine the basis of an undivided Europe that emerged at the end of the Cold War. With Russian troops positioning for a potential re-invasion of Ukraine, Moscow’s proposals appear aimed at pressuring the US and its allies to formalize a Russian sphere of domination in Eastern Europe – which runs contrary to the principle that sovereign nations have the right to determine their political and security arrangements without coercion or interference from outside powers.
• Hitting home. Americans benefit from a world in which nations are free from threats of coercion and invasion, and where a strong and stable Europe serves as a vital trading partner.
  
• What to do. As it engages Moscow to explore the possibility of a reasonable diplomatic solution, the Biden administration and US allies should reject any outcomes that would give the Kremlin veto power over NATO expansion or defense posture, and should push back on Russia’s attempts to carve out a sphere of influence in Eastern Europe.

Beijing Olympics Boycott. The United States announced a diplomatic boycott of the 2022 Winter Olympics in Beijing to protest China’s human rights abuses, particularly in Xinjiang, where China has engaged in crimes against humanity against the Uyghurs. Australia, Canada, Japan, Britain, and several other European governments joined in the boycott, but other key allies, including France, Germany, and South Korea, have not.

• Shaping the order. The boycott is a symbolically significant move that showcases Beijing’s oppressive human rights practices and sends the message that China will not be treated as a legitimate member of the global community of nations while it engages in atrocities against the Uyghurs. But it also risks exposing a divide between the US and its allies on dealing with China, which Beijing will seek to exploit.
  
• Hitting home. The boycott precludes government officials from attending the Olympics but will not affect the ability of US athletes, who have been training for years, to compete in the games.
  
• What to do. The Biden administration should continue to encourage allies to join the Olympics boycott, which would have a far greater impact if leading democracies act in unison. As the games begin, Washington should also look to issue a joint statement of concern among allies over Beijing’s human rights abuses to ensure this remains front and center.

Quote of the month

“[A]s a global community for democracy, we have to stand up for the values that unite us… [W]e’re bringing together leaders from more than 100 governments… to lock arms and reaffirm our shared commitment to make our democracies better… and to make concrete commitments of [how] to strengthen our own democracies and push back on authoritarianism.”

– President Joe Biden, Summit for Democracy, December 9, 2021

State of the Order this month: Unchanged

Assessing the five core pillars of the democratic world order    

Democracy (↑)

• As part of the Kremlin’s campaign to stifle political dissent, Russia’s Supreme Court ordered the shutdown of a venerable and respected human rights organization, Memorial, which was established during the Gorbachev reform era to document Stalin’s great terror and Soviet (and later Russian) human rights abuses.
• Beijing forced the closure of the most prominent pro-democracy media outlet still operating in Hong Kong, and arrested and sentenced media professionals and activists as part of its continuing assault on democratic institutions.
• As described above, the United States, Canada, Britain, Australia, Japan, and other nations announced a diplomatic boycott of the 2022 Winter Olympics in Beijing to protest China’s human rights abuses against the Uyghurs. Separately, President Biden signed the bipartisan Uyghur Forced Labor Prevention Act which bans imports from Xinjiang.
• Also as described above, President Biden hosted more than one hundred world leaders for a virtual two-day Summit for Democracy, with an agenda focused on countering authoritarianism, promoting human rights, and combating corruption.
• With the summit focusing global attention on the challenges facing democracy, overall the democracy pillar was strengthened.

Security ()

• A new round of diplomatic negotiations between Iran and leading powers resumed in Vienna, as Israel’s defense minister ordered his forces to prepare for a potential military option if negotiations fail to constrain Iran’s nuclear advances.
• Russia maintained its military buildup near the Ukrainian border, while Biden warned Putin that it would pay a “heavy price” should Russia invade Ukraine.
• In a 90-minute video call, their second of the year, Vladimir Putin and Xi Jinping reaffirmed mutual solidarity in the wake of rising tensions with the US and its allies. Xi reportedly backed Putin’s push for security guarantees over Ukraine.
• While several troubling developments appear to be on the horizon, the security pillar this month remained unchanged.

Trade ()

• South Korea will seek to join the CP-TPP, joining a growing list of applicants for the Asia-Pacific free trade agreement, including China and Taiwan – though the United States has so far refused to rejoin.
• The US-China Phase One Deal, which entered into force in February 2020, expired this month amid criticisms that China failed to meet its obligations to a more balanced trade relationship.
• Overall, the global trade pillar was unchanged.

Commons (↓)

• The highly contagious Omicron variant became the dominant COVID strain in several countries around the world, including the United States, leading to an unprecedented rise in coronavirus cases and prompting new lockdowns and travel restrictions.
• Russia vetoed a UN Security Council resolution calling for climate change to be treated as a threat to international peace and security. India also voted against the measure, while China abstained.
• With Omicron spreading, the global commons pillar was weakened.

Alliances (↑)

• G7 foreign ministers, meeting in Britain, issued a joint statement condemning Russia’s military buildup and “aggressive rhetoric towards Ukraine.”
• In a call with Ukrainian president Volodymyr Zelensky, Biden reaffirmed US support for Ukraine. Separately, Biden reassured the leaders of nine eastern flank NATO allies — Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia – of America’s commitment to collective defense.
• Olaf Scholz was sworn in as Germany’s new chancellor, replacing Angela Merkel after 16 years as leader of Europe’s largest democracy. Scholz joined Biden’s Summit for Democracy and later spoke to Biden in a phone call during which the two leaders reportedly discussed Russia’s military buildup and transatlantic cooperation.
• Overall, the alliances pillar was strengthened.

Strengthened (↑)________Unchanged ()________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order     

• Janet Yellen and Samantha Power, in the Washington Post, argue that defending democracy requires comprehensive, disciplined US leadership to combat corruption at home and abroad.
• Michael Schuman, writing in The Atlantic, warns of China’s increasingly aggressive efforts to erode and rewrite the US-led rules-based order.
• Michael Fullilove and Hervé Lemahieu, in Foreign Affairs, contend that the United States is outpacing China in terms of power and influence in the Indo-Pacific.

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• Ahead of the Summit for Democracy, Ash Jain, Matthew Kroenig, and Jonas Parello-Plesner launched a report, An Alliance of Democracies: From Concept to Reality in an Era of Strategic Competition, proposing an Alliance of Democracies to strengthen democratic cooperation and position the free world for success against revisionist autocracies.
• Fred Kempe, in CNBC, previews 2022 as a year where democracies, particularly the US, must adapt and regroup to defend the rules-based order against autocrats’ geopolitical ambitions.
• Rose Jackson, in testimony to the US Senate Subcommittee on Communications, Media, and Broadband, provided key recommendations to address the harms posed to democracies by digital technologies and misuse of social media platforms.
• Andrew Marshall, in the New Atlanticist, discusses how the latest NATO-Russia standoff could redefine European security and the transatlantic relationship.
• Nicole Bibbins Sedaca, in The Bulwark, argues that the Summit for Democracy’s impact will be defined by its ability to catalyze a new global movement for democratic action.
• In a Strategic Insights Memo, Ash Jain contends that the Summit for Democracy served as a capstone for the Biden administration’s efforts to frame a global narrative around the growing strategic competition between democracy and autocracy.

__________________________________________________

The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

If you would like to be added to our email list for future publications and events, or to learn more about the Democratic Order Initiative, please email AJain@atlanticcouncil.org.

The post State of the Order: Assessing December 2021 appeared first on Atlantic Council.

The year 2022 will be one of change across the Western Hemisphere. From presidential elections in Brazil and Colombia to newly elected presidents taking office in Chile and Honduras, regional leaders will be looking at new ways to rebuild economies from the COVID-19 pandemic while balancing mounting social pressures. So, what might or might not be on the horizon in 2022?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll and see how your opinions shape up against our predictions.

How might key presidential elections shake out? Will regional economies recover to pre-pandemic growth rates? What might be the outcome of the US-hosted Summit of the Americas, and will Caribbean voices play a larger role than in previous gatherings? Will the region expand its ties with China?

Take our ten-question poll in less than five minutes!

Question #1: Caribbean – Will Vice President Kamala Harris make her first trip to the Caribbean in 2022?

Question #2: Central America – Will the United States have confirmed ambassadors in all three northern Central American countries (currently only Guatemala) by year-end 2022?

Question #3: Chile – Will the new Chilean constitution be approved when put to a referendum?

Question #4: China and Latin America – Considering Nicaragua’s newly established China ties, will the three other Central American countries that currently recognize Taiwan—Belize, Guatemala, and Honduras—also switch recognition to China?

Question #5: Colombia – Will Colombia’s presidential election go to a second round?

Question 6: Economy – Can the region recover pre-pandemic growth rates in 2022?

Question #7: Mexico – Will Mexico remain the United States’ top trading partner throughout the next year?

Question #8: Bitcoin – Following in El Salvador’s footsteps, will support for Bitcoin tender grow in the region?

Question #9: Venezuela – Will Nicolas Maduro return to the negotiating table in Mexico City?

Question #10: Brazil – Will President Jair Bolsonaro win another term this year?

Bonus Question: Will Latin America and the Caribbean be represented in the final of the World Cup?

Our answer to question #1: YES

In 2022, the Biden-Harris administration will look for big wins and opportunities to expand its leadership in the Americas. This is achievable in the Caribbean with a high-profile visit, which would optimally be accompanied by a major policy announcement from Vice President Harris. President Joe Biden was the last vice president to visit the region, where he focused his time discussing the Caribbean Energy Security Initiative.

The stage is set for a similar visit to occur with Vice President Harris. Economic recovery is slow, vaccine hesitancy is increasing, and other actors, such as China, are playing a more active role in the Caribbean. Regional leaders often note that US attention is inconsistent, and that few high-profile US officials travel to the Caribbean. A visit and subsequent policy announcement that aids the Caribbean in its time of need would build on recent conversations between the Vice President and Prime Minister of Trinidad and Tobago Keith Rowley (virtual) and Prime Minister of Barbados Mia Mottley (in person).

Our answer to question #2: NO

Given President Nayib Bukele’s recent personal attacks against President Biden and other US government officials, including Ambassador Jean Manes and current Charge d’Affaires Brendan O’Brien, it is unlikely that the United States will confirm all ambassadors to the Northern Triangle countries. President Bukele’s attacks were a response to the Biden administration’s decision to add Osiris Luna Meza, the chief of the Salvadoran penal system and vice minister of justice and public security, and Carlos Marroquin, chairman of the Social Fabric Reconstruction Unit, to the Specially Designated Citizens and Blocked Persons List. Both Salvadoran officials are accused of having a direct relationship with gangs, including MS-13. In Honduras, however, a new administration under President-elect Xiomara Castro provides a renewed sense of cooperation between the United States and the Central American country.

Our answer to question #3: YES

Once the constitutional draft is finalized by summer 2022, the Constitutional Convention will vote to approve or reject the new legal charter. If the body rejects the new constitution, Chile will keep its current one. However, if it is approved, the group will present the document to the newly elected head of state, who, in turn, will issue a call for a national referendum in which Chileans will vote to approve or reject the new constitution. Voting will be mandatory, and the new constitution will move forward only if an absolute majority is achieved.

While 78.3 percent of voters cast their ballot in favor of a new constitution in 2020, rising polarization and inefficiencies within the Constitutional Convention have left thousands of Chileans disenchanted with the reform process. However, the desire for fundamental changes remains high. If the new legal charter is approved by Chilean voters, it will be put into effect shortly after the vote through a formal ceremony. However, if Chile votes to reject, the 1980 Constitution written under Augusto Pinochet will remain in place. With just one opportunity to get the new constitution approved, the convention will attempt to generate a moderate bill that will stimulate consensus among the political left and right.

Our answer to question #4: NO

It is unlikely that all three of Taiwan’s Central American allies will switch recognition to China in 2022. But, considerations of international benefits, domestic political agency, or both may prompt a change in at least one of the countries. Internationally, US COVID-19 vaccine donations far outstripped those of China, sending a reassuring message to Taiwanese allies in the region.

But, Chinese vaccine diplomacy—including early, well-publicized vaccine sales and shipments—and broader medical, humanitarian, and economic assistance could still prove alluring for countries in need. Despite running with a pro-China message, Honduran President-elect Xiomara Castro recently declined to switch diplomatic recognition from Taiwan to China. Absent any external shocks, Belize, Guatemala, and Honduras will likely attempt to maintain the status quo for as long as possible, favoring Taiwan while leaving the door open for closer ties with China. This delicate balancing act has served to remind larger countries not to take their allegiances for granted and will continue to do so. But, it will be increasingly tested, as seen with Nicaragua, in the critical and uncertain year ahead.

Our answer to question #5: YES

There has yet to be an election in Colombia’s history in which a president is elected in the first round. Senator Gustavo Petro, who served as mayor of Bogotá (2012–2014), leads the left-wing political party Colombia Humana, and was the runner-up in the 2018 presidential election against incumbent President Ivan Duque. With nearly 42 percent of the vote, Petro has positioned himself as the candidate with the greatest support from Colombian voters.

However, Petro currently polls at 25.4 percent, which is not enough for an absolute majority that will grant him the presidency in the first round. Petro will most likely go to a second-round vote against a center-right or center-left candidate, potentially former Mayor of Bucaramanga Rodolfo Hernández or former Governor of Antioquia Sergio Fajardo. To date, Hernández polls at 11 percent and Fajardo at 7 percent. As recommended by the Atlantic Council’s US-Colombia Task Force, co-chaired by Senators Roy Blunt and Ben Cardin, strengthening the alliance between Colombia and the United States ahead of 2022 presidential elections is paramount to safeguard Colombia’s gains in terms of development, rule of law, and democracy. Regardless of election results, the United States should continue to position itself as Colombia’s strongest ally, advancing stability and prosperity at home and abroad.

Our answer to question #6: YES

Led by its five major economies, regional gross domestic product (GDP) is on track to return to pre-pandemic levels in 2022, though per-capita income will likely not recover until 2023. Key uncertainties may alter this outlook: the extent of success in vaccination and pandemic management, stimulus trade-off between continued support and fiscal discipline, labor markets (currently experiencing slower recovery than GDP), inflation, electoral outcomes, and external conditions including evolving investor appetite and commodity prices.

The region as a whole is not expected to return to pre-pandemic growth trajectories in the coming years, signaling permanent output losses due to COVID-19. In a divergent recovery, smaller and vulnerable states, such as those in the tourism-dependent Caribbean, are experiencing an even slower return to normal. Lastly, Latin America and the Caribbean (LAC) should set an ambitious agenda beyond “recovery”—given unimpressive pre-pandemic growth rates and patterns—and, rather, seek ways to accelerate development and build forward in a more inclusive, productive, and sustainable way.

Our answer to question #7: YES

It is likely that Mexico will remain the United States’ top trading partner throughout 2022. Mexico currently holds the top position—overtaking China in February 2021—with Canada in the second spot, lagging behind by $2.9 billion in total trade. COVID-19 significantly hindered US-Mexico trade—which largely relies on land trade via trucks and railcars—due to the pandemic-induced land-border closures to “non-essential” traffic. As of November 8, 2021, however, the United States reopened its borders to non-essential traffic and booming commerce is expected along the border. Moreover, US-Mexico trade topped $545 billion through October 2021 (the most recent data available), an increase of over 24 percent from one year earlier. Given the highly integrated nature of US-Mexico trade in the automotive and energy sectors, coupled with the efforts in border cities and ports to increase capacity and efficiency, trade is likely to continue to grow between the United States and Mexico.

Our answer to question #8: YES

Bitcoin presents an attractive option for countries in Latin America and the Caribbean, yet those countries will not replicate El Salvador’s approach. The government of El Salvador claimed that adopting Bitcoin would reduce financial exclusion and high remittance fees. These issues also affect the entire region. The World Bank predicted that remittances to Latin America and the Caribbean rose 21.6 percent in 2021, costing roughly $6.9 billion in remittance fees. According to the International Monetary Fund (IMF), financial inclusion in the region falls below global averages, and is exacerbated in the Caribbean due to the de-risking of correspondent banks. The worsening effects of climate change will also likely generate support for a decentralized virtual currency, as remittances typically increase following natural disasters, alongside decreased access to financial institutions.

Despite Bitcoin’s allure, its implementation in El Salvador has been marred by technological unreliability, weak financial regulations, and high price volatility. Politicians in Paraguay, Mexico, and Panama have already introduced legislation to regulate Bitcoin’s use as legal tender, and more will follow in 2022. As support for Bitcoin rises, so will debates on its social and environmental risks. Countries across the region will chart their own paths instead of following El Salvador’s playbook.

Our answer to question #9: YES

Although, the latest round of negotiations in Mexico has been suspended since October 2021, a combination of long-term incentives will likely propel Maduro to negotiate with the Venezuelan Unitary Platform—the umbrella organization encompassing the main political opposition parties in the country. Maduro seeks access to capital, legitimacy, guarantees against prosecution, and division within factions of domestic opponents—all of which he can accomplish through negotiations.

However, these factors are not the only ones at play in determining Maduro’s negotiation participation. After the highly visible diverging strategies within the opposition during the recent regional elections—and Julio Borges’ recent resignation and call for the interim government’s dissolution—Maduro might decide to simply wait out further erosion of opposition unity, instead of engaging with it directly. The success of such a strategy, if taken, would enhance the regime’s monopoly on power.

Our answer to question #10: Too early to call.

The odds are not in his favor, but it’s too early to say. Recent polls suggest that President Bolsonaro and former President Luiz Inacio Lula da Silva will face each other in a second round of elections, repeating the 2018 Bolsonaro versus Workers’ Party (PT) duel. However, this time around, former President Lula, as the PT candidate, is leading the way in early polling. Both candidates have a strong support base, but former President Lula’s history with corruption and President Bolsonaro’s mismanagement of the pandemic and current economic hurdles also give them significantly high rejection rates.

Third-way candidates, such as President Bolsonaro’s former minister of justice, Sergio Moro—famous for leading the Car Wash Operation that put President Lula in jail—is running on an anticorruption, center-right platform. Those Brazilians who in 2018 voted for President Bolsonaro as a “vote against corruption” might be more inclined to seek other alternatives. Current high inflation and unemployment rates might also play against President Bolsonaro’s reelection. Having said that, it will likely be a close race, and there is still a long way to go until elections in October 2022.

BONUS QUESTION ANSWER: YES

Brazil and Argentina are the only Latin American counties that have already qualified for the 2022 World Cup. In the Caribbean, Jamaica seems to be the only country with a chance of qualifying. While it is impossible to know who will be in the final (RIP Paul the Octopus), Brazil and Argentina are always strong contenders.

The post Spotlight: Latin America and the Caribbean – Ten questions for 2022 appeared first on Atlantic Council.

On December 30, 2021, Pepe Zhang was quoted in a BBC News Mundo article, “Los 3 pilares de la expansión china en América Latina y el Caribe en dos años de pandemia” (“The 3 pillars of Chinese expansion in Latin America and the Caribbean in two years of the pandemic”).

Quoted in Spanish, Zhang’s remarks translate as follows: “Although FDI flows from China have slowed during the pandemic, trade relations remain robust and resilient. It’s likely that 2021 will be another record year for trade between China and LAC.”

More about our experts

Staff

Pepe Zhang

Senior Fellow

Adrienne Arsht Latin America Center

China Coronavirus

The post Pepe Zhang in BBC News Mundo: Los 3 pilares de la expansión china en América Latina y el Caribe en dos años de pandemia appeared first on Atlantic Council.

On December 23, Atlantic Council nonresident senior fellow and Future of DHS Project director Thomas S. Warrick published an article in the Hill titled “Pentagon must act to prevent extremist recruitment of unvaxxed service members.” In the article, Warrick and co-author Javed Ali argue that, while unvaccinated US servicemembers poses a threat to military readiness, requiring vaccinations could potentially outcast unwilling military personnel and leave them susceptible to extremist recruitment.

Fellow

Max Brooks

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Crisis Management National Security

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

Learn more

The post Warrick in the Hill on preventing extremist recruitment appeared first on Atlantic Council.

By Mathew Burrows and Anca Agachi

Pandemics have often proven turning points in history. The Black Death in the 1300s helped undermine feudalism, while some believe the Spanish flu tipped the balance in favor of the Allied cause in the final days of the First World War. Yet the current one has been less a disruptor than an accelerator of trends that were already fraying the fabric of the post-Cold War international system long before the outbreak of SARS-CoV-2. 

Two grueling years into the pandemic, it feels like we’ve seen it all. But it may just be that we ain’t seen nothing yet. Many of COVID-19’s effects on twenty-first century human civilization, in fact, are not yet visible. Much of the non-Western world still awaits sufficient vaccines, and the fallout from pandemic-induced economic downturns will unfold over the course of years, just as the repercussions of the 2008 global financial crisis did. Meanwhile, Sino-US hostility exacerbated by the public-health crisis raises the specter of large-scale conflict after decades of relative peace among the world’s most powerful states. Also suffering serious and hugely consequential setbacks: the march of globalization and the multilateralist architecture designed after World War II to maintain peace.

So what lies ahead? Well into the 2020s, COVID-19 will cast a long shadow over communities, workplaces, markets, battlefields, and negotiating rooms. But even as the centrifugal forces driving the world away from multilateralism and toward multipolarity accelerate, the future is not fixed. We humans have agency in shaping it.

Here, building on our work on strategic foresight and global trend analysis inside the US intelligence community and outside government, we envision three alternative worlds in 2030. The intention is not to predict what’s coming next, but rather to highlight the factors that could lead the world in one direction or another—and thus provide insights that can spur strategists to prepare for possible challenges, plan for potential opportunities, and pursue a brighter future by making prudent decisions in the present. Instead of a crystal ball, what we offer are portals to different universes.

The scenarios in this ten-year forecast are informed by ten significant trends outlined below that are already transforming today’s world and likely to shape the world a decade from now as well.

Ten trends shaping the current and future world

Three alternative worlds in 2030

Mathew Burrows is the director of Foresight at the Scowcroft Strategy Initiative and the co-director of the New American Engagement Initiative within the Atlantic Council’s Scowcroft Center for Strategy and Security.

Anca Agachi is an associate director at the Transatlantic Security Initiative within the Scowcroft Center for Strategy and Security.

Related content

Atlantic Council Strategy Paper Series Dec 21, 2021

Six ‘snow leopards’ to watch for in 2022

By Peter Engelke

Because it receives little attention in the press, the snow leopard does not appear significant enough to warrant much scrutiny as a driver of change and shaper of the future. Yet just like the real cat in the wild, the figurative snow leopard is something that could sneak up and vividly remind us that it exists.

Climate Change & Climate Action Coronavirus

Atlantic Council Strategy Paper Series Dec 21, 2021

The top twelve risks and opportunities for 2022

By Mathew Burrows, Robert A. Manning

With ongoing vaccination challenges in much of the world and the worrying emergence of the Omicron variant, along with supply bottlenecks plus rising inflation and debt, the pandemic continues to exert its relentless push and pull on a beleaguered world.

Climate Change & Climate Action Conflict

The post Welcome to 2030: Three visions of what the world could look like in ten years appeared first on Atlantic Council.

By Peter Engelke

It’s one of the rarest animals on earth. Nicknamed the “ghost of the mountains,” the legendary snow leopard lives at high altitudes in Central Asia. The solitary existence, elusive disposition, and near-perfect camouflage of these beautiful cats make them a rare sighting even for locals and wildlife biologists who are trained to find them. Since it is most often out of sight and therefore out of mind, the snow leopard is the kind of animal that might be forgotten—until it suddenly appears as if out of nowhere.

In the world of global foresight, which is my area of focus at the Atlantic Council, I think of a “snow leopard” as a known but underappreciated—perhaps even forgotten—phenomenon. Because it receives little attention in the press, the snow leopard does not appear significant enough to warrant much scrutiny as a driver of change and shaper of the future. Yet just like the real cat in the wild, the figurative snow leopard is something that could sneak up and vividly remind us that it exists. 

The snow leopard is distinct from two other concepts in global foresight. First, it is unlike the “black swan,” which is an extreme event with no historical precedent. In contrast to the black swan, the snow leopard does not have to be a single discrete event at all. And although both the snow leopard and the black swan arrive on the scene with great impact, the snow leopard’s arrival is preceded by plenty of information— if we look hard enough—suggesting that it might be just around the corner. Second, the snow leopard overlaps with the concept of “weak signals,” often defined as the early signs of a trend that could alter the future. But it extends beyond early emergent signs to include long-underestimated phenomena. 

Consider technological disruption, which we frequently envision as a thunderbolt event but more often unfolds as a gradual, under-the-radar process. Rather than occurring at lightning speed immediately after a technology is invented, disruptive impact tends to become evident during the scaling phase that follows a long, less visible gestation period of testing and experimentation. The COVID-19 vaccines are the exception that proves the rule. They astonished the world for good reason, given the stark contrast between the fast pace of their development under emergency conditions and the typically slow development of other vaccines. Even so, the messenger RNA laboratory research that formed the scientific basis for these vaccines goes back more than thirty years. 

The intermodal shipping container, a key enabler of the modern global economy, is a good example of a snow leopard. Invented in 1956, the standardized shipping container took more than a decade to prove its worth in terms of dramatically speeding up transshipment processes compared with previous methods and hence significantly lowering costs. It took even longer for this technology to find global scale via the now-ubiquitous complex of specially modified ships, ports, cranes, tractor trailers, and railway cars that have given the container its transformative economic power. The humble shipping container drove the late-twentieth century globalization wave, upending economic sectors and even entire national economies. Barely noticed while it was happening, containerization became one of the most important technologically based disruptions of the past century.

So what snow leopards should you keep your eyes peeled for in 2022 and beyond? Check out my list of six to watch closely in the year ahead.

Although the recent COP26 conference in Glasgow, Scotland, staged by the United Nations Framework Convention on Climate Change (UNFCCC), produced some promising carbon-reduction pledges, none were binding on the countries that made the commitments. But the conference also underscored that a vanguard of climate-conscious governments—subnational governments, to be precise—are taking decisive action. For well over a decade, the world’s largest cities have been organizing to confront a problem that they are particularly vulnerable to, even as they have largely created it (cities account for roughly 70 percent of global carbon emissions). Cities and city associations (C40 Cities is the best-known association) have been among the most consistently vocal and visible actors at the various COP conferences in calling for stringent emissions reductions. Such demands are neither hollow nor hypocritical. The same cities that are demanding bold UNFCCC actions have been busy banning gas- and diesel-powered vehicles from city centers, creating zero-emission bus fleets, crafting green building codes to regulate the carbon that is embodied in the materials used to make buildings (concrete, steel, glass, etc.), building partnerships with major corporations to reduce carbon emissions, and otherwise engaging in the hard work of resilience-focused climate adaptation. In so doing, city governments have positioned themselves at the innovative cutting edge on climate, seeing opportunity rather than heartache in the transition to a zero-carbon world. National governments will always have a critical role to play in countering climate change, but while they receive the most attention they are actually behind the curve.

In May 2021, the biotech firm Oxitec released genetically engineered mosquitos into the Florida Keys ecosystem—the first experiment of its kind in the United States. It was the latest attempt to genetically engineer mosquitos to prevent or at least reduce the incidence of mosquito-borne diseases, which include some of the deadliest diseases on earth: malaria, Zika, the West Nile virus, dengue, and yellow fever, to name only a few. Oxitec’s method (which is far from the only methodology under development) focuses on reducing the mosquito’s ability to reproduce itself, with each generation yielding fewer female mosquitos (females bite humans, males do not). After decades of laboratory research, the genetic manipulation of mosquitos is now starting to be scaled. And regulators are taking serious notice. In May 2021, the World Health Organization (WHO) issued new guidance for research to “ensure that the study and evaluation of genetically modified mosquitoes as public health tools is safe, ethical and rigorous.” As the WHO cautions, there are real risks involved in genetic engineering—in this case involving both human health and broader impacts on other species and natural ecosystems. Nonetheless, the hope remains that a new and (tentatively) promising era of communicable disease control might be in the offing. 

For decades, Silicon Valley has been at the top of a global tech-innovation pyramid dominated by cities and regions in rich countries. But the base of that pyramid has been growing to encompass more places in more countries around the world. Various governments from Kenya to Egypt to Vietnam have been supporting their fledgling tech-startup ecosystems, in some cases for years and more than occasionally with real success. Just as important has been grassroots entrepreneurialism enabled by the Internet, mobile phones, digital service platforms, and a widespread “maker” outlook. Across the Global South, these entrepreneurs—often women and youth—have created tech-based innovations to address local needs ranging from quick access to micro-scale financing to bespoke material products (“makers” are those interested in manufacturing their own material inventions using tools that they acquire and make themselves). In the process, they have helped build and expand startup ecosystems in cities ranging from Accra, Ghana to Amman, Jordan—places where governments have wisely encouraged such activity via support and investment. Venture capitalists now comb the world looking for investment opportunities, as Silicon Valley tech firms build digital platforms to assist grassroots startups in far-flung locations. Most importantly, governments, firms, and individuals the world over have come to understand that there is a recipe for uncorking their own innovative potential and, in so doing, joining the ranks of the world’s wealthier countries. All this is a positive development, with more people in more places using tech-based skills and tools to create economic and social opportunity and, in the process, build wealth and reduce poverty.   

It’s not just the stuff of science fiction. Lab meat, not to be confused with plant-based meat substitutes, is grown in huge steel bioreactors using a small number of stem cells taken from a real living animal—a cow, fish, chicken, pig, etc. The result is honest-to-goodness meat, genetically identical to animal meat, albeit grown without the animal itself involved. First introduced to the world a decade ago as a proof of concept (and one that cost exorbitant sums of money), lab meat has since undergone a great deal of study and refinement, not to mention cost reduction. With billions of dollars in venture-capital investment behind it, the nascent industry stands on the cusp of commercial scaling. Why does lab meat matter? Because it has real potential to upend several of the biggest and most important industries in the world: livestock, aquaculture, and commercial fishing. By separating meat production from animal harvesting, lab meat would have enormous impact on land and freshwater use, wildlife, and carbon emissions, in addition to the potentially significant benefits to animal welfare and public health. (Since lab meat is grown in sterile conditions, for example, there is no need for the antibiotics that are used on farms.) Beef, chicken, and fish variants of lab meat now exist, as do factories in Singapore and the United States that are ready to produce tons of product. All that stands in the way of lab meat becoming mainstream is reducing cost a bit more, winning over skeptical consumers, and gaining regulatory approval. Admittedly, all are real hurdles, but few in the industry believe any are insurmountable.

The history of environmentalism has been marked by long stretches of professional dialogue and elite-centric policy focus punctuated by waves of high-visibility public activism. Environmentalism’s most famous and consequential episode of public activism occurred in the late 1960s and early 1970s, during a period that also featured the antiwar and (in the United States) civil-rights movements. Now, in the twenty-first century, there is good reason to expect the resurrection of a mass global environmental movement. Growing popular worry about climate change and its ever more obvious impacts, combined with the slow pace and limited ambition of governmental responses, provide the backdrop for rising fear and frustration. In this climate, the Swedish teenager Greta Thunberg sparked a global youth protest wave through her simple acts of individual demonstration. Other signs of the coming global movement have darker overtones. Extinction Rebellion, a global climate-action network based in the United Kingdom, sees itself as fighting a last-ditch battle for all of humankind. Such phenomena increasingly reflect the Zeitgeist of our times. Findings from a 2021 survey of 10,000 youth across ten countries found that the clear majority (nearly 60 percent) said they were “extremely” or “very” worried about climate change. Lest the jaded reader think that the worriers are spoiled rich kids living in rich places, consider that the countries with the highest percentages of young people expressing such concerns were the Philippines (84 percent), India (68 percent), and Brazil (67 percent). The 2020s are ripe for an uprising.

In 2020, after many years of decline or at least stasis in their ranks, the number of hungry people in the world spiked by an estimated 118 million to 161 million. The culprit? The global economic downturn caused by the COVID-19 pandemic. Although the pandemic by itself is unlikely to have a permanent impact on global hunger, this episode points toward chronic vulnerability, especially for the world’s poor, regarding the most fundamental of all goods: food. In the decades to come, that vulnerability could get much worse because of a likely squeeze on global food availability. Climate change is set to reduce crop yields even as growing wealth and population increase global demand for food. For the world’s poorest people living in the most climatologically fragile countries, these intersecting trends could produce a nightmare of hunger, desperation, and conflict that could spill over borders and threaten entire regions. The encouraging news is that there are real countermeasures—including public and private investments, on-site planting and harvesting methods, and innovative approaches to soil and forest management—that can make local food systems more just, productive, climate-resilient, and ecologically sound. None of these solutions will be easy to implement. But the first step in addressing a snow leopard is recognizing that it exists.

Peter Engelke is the deputy director and senior fellow for foresight at the Scowcroft Strategy Initiative within the Scowcroft Center for Strategy and Security.

Related content

Atlantic Council Strategy Paper Series Dec 21, 2021

Welcome to 2030: Three visions of what the world could look like in ten years

By Anca Agachi, Mathew Burrows

Well into the 2020s, COVID-19 will cast a long shadow over communities, workplaces, markets, battlefields, and negotiating rooms. But even as the centrifugal forces driving the world away from multilateralism and toward multipolarity accelerate, the future is not fixed. We humans have agency in shaping it.

Climate Change & Climate Action Coronavirus

Atlantic Council Strategy Paper Series Dec 21, 2021

The top twelve risks and opportunities for 2022

By Mathew Burrows, Robert A. Manning

With ongoing vaccination challenges in much of the world and the worrying emergence of the Omicron variant, along with supply bottlenecks plus rising inflation and debt, the pandemic continues to exert its relentless push and pull on a beleaguered world.

Climate Change & Climate Action Conflict

The post Six ‘snow leopards’ to watch for in 2022 appeared first on Atlantic Council.

By Mathew Burrows and Robert A. Manning

It’s been more tug-of-war than clean break, but 2021 will mark the year rich countries began extricating themselves from the COVID-19 crisis. With ongoing vaccination challenges in much of the world and the worrying emergence of the Omicron variant, along with supply bottlenecks plus rising inflation and debt, the pandemic continues to exert its relentless push and pull on a beleaguered world. All the while the formidable geopolitical problems that world was wrestling with pre-COVID—from spiraling tensions between the West and China and Russia to the dearth of international action to counteract climate change—haven’t gone away. Just the opposite.

So what will 2022 bring?

Drawing on our many years of experience in forecasting global trends and developments at the US National Intelligence Council, where we were tasked with providing US leaders with long-range analysis and insight, we have identified the top twelve risks and opportunities in 2022 for the world from a US perspective. (Note also what doesn’t appear in these lists; potential crises over Taiwan’s status or North Korea’s nuclear weapons could be catastrophic, but in our judgment these long-simmering issues are unlikely to come to a boil in 2022.) We’ve ordered the scenarios by importance and assigned each a probability; “medium” means a 50/50 chance that the scenario will occur within the next year.  

Top risks

The lack of COVID-19 vaccination in developing countries triggers new variants that are potentially more contagious and lethal

Although a small majority of the world’s population has now gotten at least one dose of a COVID-19 vaccine, some regions are in far better shape than others; in Africa, for example, just 12 percent of the population had received at least one dose as of December. Developed countries have largely failed to protect their weaker and poorer counterparts. The COVAX global vaccine coalition, for instance, has distributed just 400 million doses, far short of an initial 2021 goal of 1.9 billion. At the current rate, African populations won’t be largely vaccinated until sometime in 2023 or later, which likely will lead to lower economic growth and political instability. Besides reflecting shamefully on the West’s humanitarian values, the large numbers of unvaccinated could prove highly dangerous for Western citizens. The Delta variant, first detected in India and far more contagious than past strains, quickly spread worldwide, overwhelming hospitals in rich countries and even breaching the defenses of those already vaccinated. The Omicron variant, which was first identified in southern Africa, now appears much more contagious than Delta, although its severity has yet to be fully determined. The longer much of the global population remains unvaccinated, the greater the chance of virus mutations that produce more contagious, severe, or vaccine-evasive variants. Even if vaccination coverage greatly increases, many experts believe we should be prepared to live with an endemic threat from COVID-19.  

Probability:

Russia attacks Ukraine

Russia’s large military buildup near its border with Ukraine has heightened concerns that Russian President Vladimir Putin sees in his neighbor “unfinished business.” Putin has written that Ukraine is not a true nation and that “Russians and Ukrainians were one people—a single whole.” If Putin, who seems increasingly mindful of shaping his legacy, were to act on such instincts, he has a spectrum of options for weakening Ukraine and thus keeping the country in Russia’s sphere of influence and as a dependable buffer against NATO. Ramped-up US/NATO political and military support for Ukraine or a near-confrontation in the Black Sea between Russian and NATO forces may tempt Putin to call the West’s bluff. Some observers argue that Russian fears of potential retaliatory measures—such as the cancellation of the Russian Nord Stream 2 gas pipeline to Germany, US sanctions against Russian banks or the secondary market for Russian debt, and increased NATO deployments to neighboring NATO states—would deter Russian military aggression. But in Putin’s mind passion to avenge what he sees as US betrayal through NATO expansion in the former Soviet space may override the likely costs of an intervention. In escalating severity, possible Russian intervention scenarios include: 

• military threats or aggression to press for negotiated reductions of US/NATO military support for Ukraine and talks on other issues of contention; 
• military and economic coercion (taking advantage of Europe’s dependence on Russian gas, for instance) to forcibly implement the Russian interpretation of the Minsk agreements, including a Ukraine that remains neutral between East and West and some degree of autonomy for the Donbas region in a federated Ukraine;
• and a full-scale Russian military invasion to seize control of Ukraine and/or put in place a Russia-friendly government.

Probability:

As China peaks, its economy sputters—sparking global disruptions

For all the fear of a rising China, its weakness may pose the greatest risk. President Xi Jinping’s crackdown first on the tech sector and now on the property sector, which accounts for some 29 percent of China’s economy, highlights the fragility of the country’s economic system. The concern is that energy shortages, demographic decline, declining growth and productivity, and debt (exemplified lately by the beleaguered property giant Evergrande but running much deeper in a country saddled with total debt that is 290 percent of its gross domestic product) reflect an outdated economic model. Yet Xi may see needed market reforms promised in 2013, but then rejected, as too difficult politically to implement. Instead, the Chinese Communist Party (CCP) has opted for bolstering state-owned enterprises and control of the private sector—despite private firms serving as a major source of growth and innovation in the past. Some national-security analysts fear that Xi may compensate for lower growth with a more aggressive military policy toward Taiwan and beyond in order to shore up the CCP’s nationalist legitimacy. But an economically struggling China could also unravel global stability: China has driven some 30 percent of global growth for the past decade. As well as being more confrontational, a weak China could thus tank economic growth around the world, while disrupting financial markets and supply chains. The attendant lost wealth and jobs could spark unrest and/or intra-party turmoil in China as well.

Probability:

Afghanistan collapses, and the United States can’t escape its consequences

Afghanistan is enduring an unprecedented humanitarian crisis, and possible state collapse looms in 2022. According to the United Nations’ World Food Program (WFP), 23 million Afghans faced imminent starvation before the winter—forecast to be severe—even began. It is difficult for the World Bank and other development agencies to directly assist Afghans due to the country’s chaotic payments system and international prohibitions on aiding the Taliban. The United Nations warns that Afghanistan’s banking system may be nearing collapse, endangering humanitarian-relief efforts. The Afghan economy (except the drug trade) is at a standstill, after the US exit cut off some $8.5 billion a year (40 percent of the country’s gross domestic product) and the International Monetary Fund froze some $9 billion in foreign assets. The Taliban is contending with rival jihadist groups such as the Islamic State, raising the risks of increased terrorist activity around the world—including possible attacks against US interests as well as those of Russia and China. According to the United Nations, there are now at least 2.6 million Afghan refugees—mostly in Iran and Pakistan—and another 3.5 million internally displaced people, and the worsening situation in the country could propel more refugees to Europe.

Probability:

Developing countries suffer more severe economic troubles and a rash of political instability

The second-biggest casualty from COVID-19—after the more than five million people who have died from it—is the global middle class. The Pew Research Center estimates that the pandemic-induced recession left 131 million more people in poverty. Even those who have managed to hang on to the middle class in the developing world are poised to confront spiraling economic insecurity due to the political and economic aftershocks of the pandemic, which will continue to range for some time in many of these countries. India, which has shed 32 percent of its middle and upper-middle classes combined, could finish 2021 with a gross domestic product that’s 5.2 percent smaller than it would have been without the pandemic. Rising inflation in the United States and Europe threatens to further destabilize economies in the developing world at a time when they need to recapture lost growth. If the Federal Reserve and European Central Bank raise interest rates to counter inflation, past patterns suggest that capital will swiftly leave poorer countries for higher returns with less risk in richer countries. These countries would then face a Catch-22: As the economists Rabah Arezki and Jean-Pierre Landau wrote for Project Syndicate, “Policymakers can either let their currencies depreciate, which would fuel inflation, or hike interest rates, which would adversely affect growth and debt sustainability.” The international community will need to inject funds into poorer countries to stabilize their currencies and help them navigate a dangerous period. Without such help, political instability will gather momentum, bringing down several governments. 

Probability:

Oil tops $100 per barrel

Predicting boom/bust cycles in the oil market is always hazardous. There are conflicting forecasts, with the US Energy Information Agency foreseeing a drop from a price of eighty-four dollars per barrel of Brent crude oil this fall to sixty-six dollars per barrel by this time next year, while many private-sector analysts and hedge funds are betting on a prolonged price spike. The proximate causes of the current price increase are the 2021 surge in demand after a pandemic-driven drop, limited production hikes by the Organization of the Petroleum Exporting Countries (OPEC), and the effects of several years of declining investment in oil and gas. An insightful recent study highlights new risks posed by longer-term structural changes in the energy industry—from inflation, recession, and debt defaults to energy-security concerns—as OPEC and Russian state-owned oil firms dominate investment and production, and thus the geopolitics of oil, amid a protracted global transition to clean energy.

Probability:

The world fails to meet its climate goals from the inconclusive Glasgow summit

Global carbon emissions have grown by 60 percent since the Kyoto Protocol was signed in 1997, and the climate-change accord from this year’s twenty-sixth UN Conference of the Parties (COP26) in Glasgow doesn’t assuage concerns about the risks of accelerated climate change or the likelihood of achieving the goal of curbing average temperature rise to less than 2 degrees Celsius above pre-industrial levels. Prior to COP26, if all pledges from the 2015 Paris climate deal had been met (few were), global temperatures were still projected to rise 2.7 degrees Celsius by 2100. World leaders projected a new seriousness at COP26, with its final agreement calling for the “phasing down” of coal and separate agreements aiming to slash deforestation and methane emissions, establish global rules for carbon trading, and foster US-China climate cooperation. Despite this progress, the pledges were all characteristically vague. The International Energy Agency has issued a detailed roadmap for reaching net-zero emissions by 2050, which will require an end to new oil and gas projects by next year—along with a tripling of investment in solar and wind energy to $4 trillion and a quadrupling of investment in smart grids by the end of this decade. Such progress is technically possible, but politically highly improbable absent dramatic new action well beyond what was agreed to at COP26.

Probability:

A bifurcated world emerges, but it’s not a repeat of the Cold War with the Soviets

Washington has fallen in love with the idea of re-running the Cold War, undoubtedly with the same ending of the West triumphing. Some focus on what’s different between the economically anemic Soviet Union and today’s omnipresent China—a top economy and major high-tech innovator, along with its status as the world’s number-one trading power and capital exporter—should cause the Beltway to rethink the merits of a bifurcated world. The Chinese economy has grown so interdependent with US and Western economies that all would suffer in such a world. China was America’s largest trading partner for goods last year, at $559.2 billion, and Wall Street is also getting in on the action, with BlackRock raising one billion dollars in September for China’s first foreign-run mutual fund. 

Meanwhile, Chinese leaders are frantically trying to de-Americanize China’s supply chains. China’s biggest vulnerability is its lack of a high-tech chip industry. But since cutting US supplies would hurt American manufacturing, the Biden administration has been hesitant to hit Beijing there. Should the gloves come off—as some in Washington advocate—it’s unlikely that China will be brought to its knees. What could instead result is a bifurcated world where we are all poorer and more prone to conflict. US businesses would miss out on new opportunities in China and perhaps elsewhere in Asia. The division would also come in the form of digital blocs, producing a race to the bottom and different standards concerning robotics, quantum computing, artificial intelligence (AI), and bioscience (such as CRISPR gene editing). The notion that Europe would follow the United States down this road is dubious given the dependence of Germany and others on trade with China, twined with the European Union (EU)’s preference for using regulation to address Chinese practices it disagrees with rather than decoupling economically from China. In a Cold War with China, happy endings are far from guaranteed.  

Probability:

Food insecurity worsens, propelled by COVID-19, climate change, and conflict

As we warned last year, a combination of the pandemic, extreme weather, and violent conflict is stoking food insecurity. Fifteen million more people are now at risk of starvation relative to before the pandemic started in 2019, according to the World Food Program. In November, the WFP warned that forty-five million people are on the brink of famine across forty-three countries, with higher food and transportation costs straining the budgets of families and aid organizations alike. One of the main drivers of this year’s increase has been the humanitarian catastrophe in Afghanistan, which is now home to the world’s worst food crisis. Over the next decade, the World Bank has said that food systems need a $300-350 billion per year “transformation” to reduce greenhouse-gas emissions and protect the environment while also feeding a world population set to grow to ten billion by 2050.  

Probability:

More countries slip from their current fragile state into failure

The countries at the top of each year’s Fund for Peace Fragile States Index rarely change. Yemen, Somalia, and Syria (in that order) reappeared again on its 2021 list under “very high alert,” and many would argue that they have tipped over into state failure. Even some of the countries in the next tier of “high alert” are close to if not already experiencing state failure: South Sudan, Democratic Republic of Congo, Central African Republic, Chad, Sudan, and Afghanistan. Worryingly, such large countries as Ethiopia and Nigeria are not too far behind—and their collapse would trigger major regional convulsions. It’s clear that the underlying conditions that we know cause state failure are worsening and metastasizing in these countries. Propelled by increasing drought and water scarcity, a food crisis (see above) is spreading; without vast investment in more capable food systems, we should expect such crises to occur well beyond the highest-alert countries. Armed conflicts are also becoming increasingly protracted, intense, complex, and dangerous to civilians. COVID-19 is an added burden, increasing the poverty rate in many poorer countries and pushing debt to record levels. It’s easy to become inured to doomsaying, but in 2022 the dismal outlook looks warranted.    

Probability:

Western efforts to revive the Iran nuclear agreement fail

The Iranian government has issued escalating demands for the United States to ease sanctions and grant assurances prior to Tehran assenting to a new deal to curb its nuclear program, even as the regime increases its nuclear-enrichment efforts. Israeli cyberattacks on Iranian nuclear facilities—and Iran’s response to those activities—are escalating. Congressional pressure is building on President Joe Biden to impose tougher sanctions on Iran and to take action against Iranian sanctions-breaking activities such as oil sales to China. Military action against Iran’s nuclear program by the United States or Israel cannot be ruled out. Iran, meanwhile, has the ability to conduct drone and missile attacks against Gulf oil facilities and US military bases—and to use Hezbollah or other surrogates to engage in a shadow war with Israel. If tensions deepen, there’s always the chance that miscalculations or inadvertent clashes lead to a major military confrontation with Iran. 

Probability: