IWD 2021: Gender Parity Post-Pandemic by MG Publishing

GENDER PARITY POST-PANDEMIC

INTERNATIONAL WOMEN’S DAY 2021 SPE CIA L EDI TI ON I MARCH 2021

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D I P L O M AT I C O U R I E R .c o m

Welcome S PE CIA L INT E RN ATION AL W OM EN ’S DAY ISSUE I M ARCH 2021

Ana C. Rold Publisher & CEO

When I started my publishing career in Washington in the early 2000s, women occupied a very small fraction of the Washington publishing boardrooms. Back then, I never met a female publishing executive who did not have at least one horrifying sexist or abusive #metoo story. In the nearly two decades I have been in Washington I have seen professional women advance with breathtaking leaps and change the rules along the way. We may not have a woman occupying the Oval Office yet but there is good news: more and more women in executive positions has meant less tolerance of abusive behaviors in the workplace. The bad news: COVID-19 happened. The pandemic forced professional women—some two million in the United States alone—to leave the workforce altogether. World Bank data from 26,000 businesses collected across 50 countries shows women were more likely to close their businesses than men because of the pandemic and consequent social distancing policies. Even though American women hold a high share in management (41%) and company boards (28%), they rank at No. 18 (in a group of 29 countries ranked) in the most recent Economist Glass-Ceiling Index. America received poor marks chiefly because of parental leave and political representation. And the World Economic Forum reports that it will take 100 years to achieve gender parity in the workplace. This Women’s History Month and International Women’s Day we are seeing history flowing backwards. So, what can be done to reverse this trend? In this special issue we look at the post-pandemic world as an opportunity to build an equitable economy. Our cover story looks at the fields women are beginning to dominate and how women stand to benefit from the coming economic transformation. ●

MARCH 2021 04

D I P L O M AT I C O U R I E R .c o m

Contents S PE CIA L INT E R NAT IO N AL W OM EN ’S DAY ISSUE I M ARCH 2021

06 I Fields Women Are Beginning to Dominate By Kaitlyn Workman

14 I Saving Journalism From Big Tech

08 I First Ladies Have Always Been More Than Their Office

16 I Who Needs a Digital Dollar?

By Allyson Berri

10 I The Cost of Bleeding Silently: Women Need Menstrual Equity, Period.

By Kaitlyn Workman

12 I Engineering a 21st Century Global Renaissance

By Dominic Regester & Ana Rold

22 I The World Must Confront the Impending Climate Migration Disaster

By Taylor Owen

24 I What Could Cause a U.S.-China War?

By Barry Eichengreen

18 I From Video Clips to Multi-Million Dollar Assets: Understanding the NFT Craze

By Allyson Berri

20 I As Bitcoin’s Environmental Devastation Grows, Economic Solutions Are Needed

By Whitney DeVries

By Joseph S. Nye, Jr.

26 I When Your Neighbor Is Ill, Be a Good Neighbor

By Adam Ratzlaff

28 I New UAE Citizenship Law A Milestone for the Gulf

By Giorgio Cafiero &

Kristian Coates Ulrichsen

By Allyson Berri

Masthead Publishing house Medauras Global

EDITOR-at-large Molly McCluskey

publisher & ceo Ana C. Rold

CONTRIBUTING EDITORS Becky Graham Paul Nash Adam Ratzlaff Dominic Regester Winona Roylance Shane Szarkowski Shalini Trefzer Mercedes Yanora

Editorial Advisors Asmaa Al-Fadala Andrew M. Beato Fumbi Chima Dante A. Disparte Kerstin Ewelt Ghida Fakhry Sir Ian Forbes Lisa Gable Greg Lebedev Anita McBride Clare Shine

CONTRIBUTORS Allyson Berri Ethan Brown Giorgio Cafiero Whitney DeVries Barry Eichengreen Hannah Garfinkel Joshua Huminski Sarah Jones Alexander J. Langlois Joseph S. Nye, Jr. Taylor Owen Adam Ratzlaff Zach Saderup Kristian Coates Ulrichsen Daniel Wagner Kaitlyn Workman

Creative Director Marc Garfield senior photographers Michelle Guillermin Sebastian Rich

PUBLISHING. Diplomatic Courier magazine is produced by Medauras Global LLC, an independent private publishing firm. The magazine is printed six times a year and publishes a blog and online commentary weekly at www.diplomaticourier.com.

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ISSN. The Library of Congress has assigned: ISSN 2161-7260 (Print); ISSN 2161-7287 (Online). ISBN: 978-1-942772-01-9 (Print); 978-1-942772-02 (Online).

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D I P L O M AT I C O U R I E R .c o m G E N D E R PA R I T Y

FIELDS WOMEN ARE BEGINNING TO DOMINATE By Kaitlyn Workman

t’s no secret that the pandemic has placed significant hurdles in the way of women throughout the global job market by increasing unpaid domestic care burdens, exposing failures in social safety systems, and widening the gender poverty gap. According to the McKinsey Institute, 4.5% of women’s global employment is at risk compared to 3.8% of men’s employment. Women are losing jobs at a faster rate than men. Women are also at higher risk of infection, being dragged back into outdated gender roles and facing a steeper climb to equity than in the years before. The effects of COVID-19 are essential context to the fight for equality and will reverberate through a generation. However, focusing solely on the pandemic risks obscuring the preexisting fundamentals of the global job market which illustrate that women are making major gains. Women outnumber men in higher education globally, with women comprising more than 55% of postsecondary graduates in 39 of 47 countries studied by the United Nations Economic Commission for Europe. While gendered major choices persist, they are gradually declining between generations. One study from the University of Chicago found that MARCH 2021 06

among Baby Boomers born between 1950-1954, one in 20 engineering students was female. Today, the gap is down to one in five female engineering students. Women comprise over 70% of health and social care workers globally, and are more likely to be frontline healthcare workers, a 2020 United Nations report found. Death care— a traditionally male-dominated field —has in the last decade experienced fast changes as over 65% of US funeral care graduates are now women. This trend has also been mirrored in other nations such as South Korea as gendered taboos fade. An International Labour Organization report found that among desk-bound professions — including legal, cultural and social professions, business, administration and sales, hospitality, and craft work — there is near gender parity. Every major report on women in the workplace finds that gender inequality worsens at higher levels, with women representing only a quarter of the world’s leadership roles. Amid the pandemic, many companies have also reverted to male executive hires. In terms of global governance, women are currently on track to reach gender parity in ministerial positions in 2077, and in political and leadership

G E N D E R PA R I T Y

power in 130 years, according to a report from UN Women. The report also found that as women gain leadership roles, national political efficacy improves. Female leadership in business has also been proven to improve long-term performance, according to the World Economic Forum, demonstrating that a more feminine future is beneficial to everyone.

“Women outnumber men in higher education globally, with women comprising more than 55% of postsecondary graduates in 39 of 47 countries studied by the United Nations Economic Commission for Europe.”

A post-pandemic opportunity to build an equitable economy.

economic stimulus bills and over 90 have taken loans from the IMF, and direct stimulus checks, cash infusions to the global poor, food assistance and other immediate stabilization measures have become normalized. As less means-tested welfare gains political force, women and other underrepresented groups stand to reap the benefits. Stimulus bills have enjoyed broad popularity thus far, and universal basic income has seen a surge in support from both the World Economic Forum and the average person, according to the Pew Research Institute. Long-term economic stimulus presents opportunities to strengthen social welfare permanently and diminish poverty gaps, if political incentives and popularity endure beyond the virus.

Pushing for women’s excellence in the workforce will always be less efficient than valuing the essential work women already do. Unpaid women’s work is estimated to comprise between 10% and 39% of global gross domestic product, which is more than the transportation or manufacturing industries. Women are also more likely to work in the informal economy, where the average female worker makes only 47% of what the average informal male worker makes. COVID-19 exposed how women’s work is systemically devalued, but it presents policy roadmaps and popular momentum to build a more equitable economy for the future. Over 100 nations have passed COVID

Beyond stimulus, women also stand to benefit from ongoing economic transformation. The structural transformation of the global economy from traditionally male-dominated goods-based production to modern service-based transactions have boosted the demand for female workers. The expansion of home-based production, from child care to food preparation, have also given women jobs and given them the opportunity to enter the labor force and get jobs. The Global Gender Gap Report 2021 estimates that gender equity is 100 years away. The report also suggests that timeline can be accelerated by increasing women’s leadership, changing social and legislative attitudes towards unpaid domestic work, and providing women with the skills to succeed in the world of future jobs. While these changes come far too late and the future is fought for in every moment, a 2120 with gender parity is a heartening probability. ●

D I P L O M AT I C O U R I E R .c o m FIRST LADIES

FIRST LADIES HAVE ALWAYS BEEN MORE THAN THEIR OFFICE By Allyson Berri

n a country that still hasn’t seen its first female commander in chief, her story sticks out as an unconventional detour from her granted office. When her husband collapsed of exhaustion in the middle of a cross country tour, First Lady Edith Bolling Galt Wilson became the chief executive officer of an administration she conducted from the president’s bedside. Cabinet members began going through Mrs. Wilson to get to the president, and the First Lady would review any policy papers or pending decision before deciding which paperwork was important enough to pass on to her husband. And though Mrs. Wilson insisted that she never acted as more than a “steward” of the presidency, she ultimately ended up serving as the country’s chief executive until the end of her husband’s second term. As told from an era where women were on the eve of enfranchisement, Edith Wilson’s story seems surprising. And yet, Wilson’s story is one we are still telling today and from a perspective that has imagined far more than voting rights for women. In a podcast released earlier this year, American researcher Julia Sweig describes the critical role First Lady Ladybird Johnson played in her husband’s administration. Mrs. Johnson, Sweig reveals, was far MARCH 2021 08

more than a “saccharine Southern belle.” In fact, Ladybird was the one who encouraged her husband to run for the presidency after he inherited the office as vice president to President Kennedy, and she was the person who drafted the memo suggesting he only campaign for the office once. In her research on the former First Lady, Sweig has answered many questions about Mrs. Johnson in painstaking detail. The question today is, when we interrogate the lives of our past presidents’ wives, why are we still surprised by the answers? Take Jacqueline Kennedy-Onassis, for example. In the podcast, In Plain Sight: Lady Bird Johnson, Sweig contrasts Mrs. Johnson’s political engagement while serving as First Lady to Mrs. Kennedy’s apolitical approach. In the first episode of the series, for example, Sweig suggests that Kennedy’s choice to host a televised tour of the White House might have been inspired by a recommendation from Johnson. However, just because Mrs. Kennedy stayed away from the campaign trail did not mean that she didn’t pursue aspirations of her own. After the death of Kennedy’s second husband, shipping magnate Aristotle Onassis, she took a job as a book editor, first for Viking Press, and later for

FIRST LADIES

“next time you read an article detailing a first lady’s career accomplishments or roles in her husband’s administration, don’t be surprised. Such intrinsic success has always been a hallmark of the women who have held this office.”

Doubleday. Though Viking Press President Tommy Guinzburg was excited to bring Kennedy on board, he allegedly said, “You’re not really equipped to be an editor. It’s not that you don’t have the talent for it, the ability for it, but you don’t have the background and training…” Kennedy, however, had a lot more of the background for book publishing than Guinzburg thought. A gifted writer, she had written a series of essays in college that had won Vogue’s Prix de Paris contest. After college, she worked as the “Inquiring Camera Girl” for the Washington Time-Herald newspaper, taking pictures of people she met in Washington, DC, asking them questions about current events, and writing a column featuring their answers. Kennedy’s journalism experience served her well as a book editor, a career she maintained for almost two decades. Of course, Kennedy is not the only First Lady whose legacy as a hostess has concealed her other professional accomplishments. And accomplished, tactical first ladies are hardly a unique artifact of presidencies of the 20th and 21st centuries. Dolley Madison, wife of fourth president and constitutional framer James Madison, acted as her husband’s “tacit political partner.” She

once diffused an international incident, using her ties with diplomatic wives to soothe tensions that arose between Great Britain and the United States after then-President Thomas Jefferson snubbed the wife of a British ambassador at an 1803 dinner. In another instance, Mrs. Madison helped develop the relationship between her husband and War Hawk congressman Henry Clay by dipping snuff with the legislator. After Dolley Madison, other first ladies of the 19th century were notable for their careers as teachers and their devotion to education. Abigail Filmore was a teacher when she met her husband and future president Millard Fillmore in class. Once in the White House, Mrs. Fillmore oversaw the development of the White House library, a controversial feat considering the fact that Congress had opposed the development of a presidential library in the years preceding her husband’s election. Several decades later, another teacher would occupy the position of First Lady. Lucretia Garfield had met President James Garfield at college in Ohio and had feared losing her independence throughout their courtship. When the pair eventually married, Lucretia worked as a teacher until the birth of their first daughter, and she taught

French, algebra, and Latin before her ascent to the White House. Even though many first ladies have exhibited political acumen within the White House and career strengths outside of it, their presence in popular culture has overshadowed their strengths. For decades, visitors of the Smithsonian National Museum of American History in Washington, DC, have delighted in the First Ladies exhibition. When walking through the exhibit, which is defined by its large historical collection of dresses owned by various first ladies, it can be easy to see the garments and further solidify the stereotypical view that the wives of the American presidents were mere hostesses, as was their official role. However, in 2021, it’s time to adopt a more dimensional view of the office and recognize the many roles played by the women who have held the position. Over the past three centuries, American first ladies have been teachers, journalists, lawyers, and skilled political strategists. So next time you read an article detailing a first lady’s career accomplishments or roles in her husband’s administration, don’t be surprised. Such intrinsic success has always been a hallmark of the women who have held this office. ●

D I P L O M AT I C O U R I E R .c o m W O M E N ’ S H E A LT H

THE COST OF BLEEDING SILENTLY: WOMEN NEED MENSTRUAL EQUITY, PERIOD. By Kaitlyn Workman

very month, women bleed. It can be painful, exhausting, and embarrassing, but it can also be discriminatory and deadly. Shrouded in shame and relegated to hushed whispers, “period poverty” is an under-discussed tragedy impacting millions. By openly discussing the taboo, we can dispel stigma, provide resources and education, and work toward a world where menstruation is accepted and natural. Over 800 million women and girls menstruate each day. Despite this ubiquity, many nations — regardless of size or culture — suffer from a lack of education about and supplies for menstruation. Nations with less developed infrastructure often lack access to proper hygiene such as water and sanitation products. These shortages also harm female healthcare workers, who make up most of the global health industry. Lack of sanitation — and the resulting need to instead use unsafe materials like rags, paper towels, toilet paper and cardboard — can lead to higher levels of infection, higher risk of cancer, decreased and loss of fertility, and potentially-fatal toxic shock syndrome. Wateraid, an international development organization, estimates that dirty water and a lack of safe MARCH 2021 10

“menstruation often comes with major cultural taboos which banish menstruating women from cooking, touching water, religious and cultural activities, and community spaces. Some women are banned to sheds for the duration of their periods.” toilets are among the top five killers of women globally, with over 800,000 casualties each year. UNESCO reports that over 130 million girls are out of school due to inequality and poverty. Among other contributing factors, the World Health Organization found that a lack of proper supplies and education for menstruation leads to absenteeism as young girls skip class to take care of themselves. Informed consent and reproductive autonomy are far-off impossibilities in communities without sex education and supplies. Beyond the health risks, menstruation often comes with major cultural taboos which banish menstruating women from cooking, touching water, religious and cultural activities, and community spaces.

W O M E N ’ S H E A LT H

Some women are banned to sheds for the duration of their periods and only fed boiled rice, all while being feared and cursed by their communities and often left cursing themselves. Unsafe conditions may lead to exposure to the elements, mental health problems and premature death. Period poverty is far from exclusive to developing nations. One in ten women in the Netherlands between the ages of 12 and 25 are unable to afford menstrual products some of the time, and Reuters discovered that more than one in five US women struggle to afford tampons and pads every month. On the educational level, 49% of UK girls admitted to having missed at least one day of school due to menstruation, and one in ten women aged 14-25 could not afford tampons or pads. Over the course of life, women pay over $1,800 in menstrual supplies, and a portion of that money goes towards sales tax for “luxury items” — from which essential goods are usually exempted but tampons and pads are not. Low-income women and homeless women are disproportionately harmed by this choice. As the pandemic increased prices, many women have struggled for aid more than ever. Canada, Australia, India and South Africa ended their luxury taxes in the

last few years, with Britain joining them on Jan. 1, 2020. However, in nations like the United States, government assistance cannot be used to purchase menstruation products. In November of 2020, Scotland became the first nation in the world to offer universal free access to tampons and pads. New Zealand is nipping at its heels as it passed legislation to offer free menstrual products in every girls’ bathroom within three years. By 2030, the UK government plans to eliminate global period poverty, though success may still take many more years. In nations not offering universal access initiatives, stocking schools, workplaces, and other public spaces with accessible menstrual products is an effective start. Just providing universal access to menstrual products does not guarantee their use. The World Economic Forum explains that education is key, as women with products may be misinformed about them, not understand how to use them, or lack the privacy to safely and discreetly freshen up. Privacy, maturation and sexual education are natural extensions of womens’ autonomy. The United Nations patriarchy combines shame and stigma to limit women’s choices,

“Lack of sanitation—and the resulting need to instead use unsafe materials like rags, paper towels, toilet paper and cardboard—can lead to higher levels of infection, higher risk of cancer, decreased and loss of fertility, and potentiallyfatal toxic shock syndrome.” and that a “global shift” in norms and attitudes surrounding girls’ health is necessary. Strengthening sexual education processes and ensuring privacy rights for girls mark the future of menstruation legislation. A constructive, open dialogue about menstruation is another important step towards decoupling shame with a natural bodily function — whether it’s by initiating conversation with other women in your life about your time of the month or by helping them feel safe to discuss it around you. Shattering taboos by discussing women’s menstrual health frequently is vital to replacing coercive silence with constructive dialogue and eventually, empowerment. ●

D I P L O M AT I C O U R I E R .c o m GLOBAL RENAISSANCE

ENGINEERING A 21ST CENTURY GLOBAL RENAISSANCE By Dominic Regester & Ana Rold

rofound global changes took place in the 13th and 14th centuries that created key conditions that made the Renaissance in Europe possible. These included significantly increased interaction between countries and communities, the emergence and widespread adoption of new technology and innovation, and a major pandemic that had a huge impact on behavior and changed the balance of power and wealth in almost all affected societies. There are obvious parallels with what is happening in the world now. But if we are to convert the potential of what is happening now into a new renaissance, a new era of human flourishing, then it will almost certainly be achieved through collective effort and collaboration rather than individual acts of genius. When one thinks of the Renaissance, images of beautiful architecture and the names of artists and inventors that are widely recognized to this day come to mind. But the period of Renaissance was more than the proliferation of art and science. After the Dark Ages, a hunger for discovery drove the creators (artists, inventors, and intellectuals) together with the curators (merchants, politicians, and bureaucrats), creating the kind of MARCH 2021 12

socioeconomic growth that made an indelible mark in European society. As we navigate this new Renaissance of the 21st century, we imagine a virtual platform where Da Vinci, Michelangelo, and Newton are contemporaries and can meet regularly. We know well their individual contributions to humanity, but what would happen if they could collaborate? And how could humanity benefit from a new group of innovators, scholars, artists, and traders coming not just from the same centers in Europe but from emerging centers of innovation from Africa, Asia, Latin America, and all races, genders, and ages? If you accept that a culture of collaboration is going to be key to this then we need to find new ways of helping thinkers and innovators to connect. One of the more durable ideas from 2020 will be the importance of physical distance but social connectedness. More people in more places are more comfortable developing meaningful relationships with people they have never met in person than ever before. This is one of the reasons why new kinds of online networks are going to be crucial to this new era of human flourishing.

GLOBAL RENAISSANCE

As a greater part of many people’s lives has moved online there is a danger that we start to run on more frenetic digital time. There is a lot of talk of burnout and exhaustion. One of the really powerful things about effective, purpose driven networks are the ways in which members can draw energy from them, emotional (through connection), spiritual (through shared purpose), and mental (through stimulation and collaboration) energy levels can all be replenished and renewed though engagement and participation. One of the hallmarks of the centuries that preceded the European Renaissance was the emergence of cities or centers of learning that developed specializations and expertise in the translation and interpretation of classical learning. Online networks can play a role similar to that played by Alexandria, Toledo, or Palermo during the so-called Dark Ages—bastions of collaboration and exchange. Networks offer the chance to engage in both the breadth and depth of collaboration in ways that online workshops or conferences can’t. Online networks also create more equity of opportunity for participation, there are obviously still issues of access, but they are

“One of the more durable ideas from 2020 will be the importance of physical distance but social connectedness. More people in more places are more comfortable developing meaningful relationships with people they have never met in person than ever before.” fairer in other ways, such as when the time commitment is spread out rather than concentrated. For these reasons a lot of our work is currently focused on supporting and developing networks serving different kinds of purpose. Salzburg Global Seminar, an independent organization committed to “challenging current and future leaders to shape a better world” has recently launched two new networks. The first, in collaboration with World Urban Parks, is for Emerging Urban Leaders and will bring together a cohort of about 20 academics, activists, and disrupters who have ideas about how their cities could be improved and want to work together to support and refine one another’s ideas.

The second, in partnership with the LEGO Foundation and other partners, is for Education Policymakers who are interested in education reform leading to a breadth of skills (cognitive, physical, creative, emotional, social) in children’s education. The World in 2050 will build on the success of last year’s Innovation Olympics and is developing a network for the 34 winners and partners in the seven different challenge categories. In different ways the participants in all of these networks will sustain and support one another as they look to bring about changes and improvements in different areas. This is a time of convergent crises: the coronavirus pandemic, the climate crisis, the struggle for racial justice, the polarization of societies, and a global learning crisis. These crises have acted as a catalyst for potentially long-lasting innovations in many areas of our lives. We hope, with great humility, that these new networks, and the many others emerging at the moment, can contribute in different ways to a better future. ● Editor’s Note: The authors are both directly involved in the networks discussed in this article. The opinions are their own.

D I P L O M AT I C O U R I E R .c o m BIG TECH

SAVING JOURNALISM FROM BIG TECH By Taylor Owen

t is easy to forget that for a long time – long before Google and Facebook went head-to-head with the Australian government last month – there wasn’t a proven business model for the internet. That, after all, is why the dot-com bubble popped. But then Google and Facebook found a way to transform their biggest asset, user data, into a lucrative product: advertising that targets consumers with far more nuance and precision than traditional TV or print ads ever could. Much can be said about this type of micro-targeted advertising, its impact on society, and whether it should even be allowed. But one thing is clear: it has been wildly successful in commercial terms. Having captured almost all of the advertising revenue in the market, Google and Facebook are now two of the most profitable companies in history, so powerful that they can strong-arm many national governments. Because Google and Facebook have gained monopoly-like dominance over digital advertising in search and social networking, respectively, it is now next to impossible to bargain with them. Worse, a business model that is not based on the distribution of reliable information has come at the expense MARCH 2021 14

of reputable journalistic institutions and others in the business of providing this crucial public good. We are thus left with a dual market failure that harms not only the advertising business, but also democracy. To address both of these problems, the Australian government recently mandated that social-media platforms enter into negotiations to pay news publishers for their content, and introduced measures to ensure more transparency with respect to ad sales and algorithmic changes that could affect the news business. Implicit in this response is the idea that you can solve the market failures in both journalism and advertising by tackling the problem of market dominance. Though Australia offered a capitalist solution to the crisis in journalism, the Big Tech firms vehemently opposed the move. At the same time that Google and Facebook are running ads professing their support for new digital regulations, they both threw a tantrum as soon as a government actually proposed rules that didn’t align with their current business models. While Google initially threatened to leave the Australian market entirely, Facebook went with the nuclear option of blocking all news from its platform in Australia (both companies have since

BIG TECH

“Facebook and Google finally have had to come to the negotiating table. But Australia’s new media code does not solve the crisis in journalism. To do that, we will need to think even bigger than we currently are.”

backed down somewhat). Putting aside the disturbing implications of a media distributor blocking reliable information during a pandemic, neither company’s response is sustainable over the long term. If the platforms’ answer to regulation is to deny their users access to information, their products will become less attractive over time. Still, one can debate whether the Australian approach represents good public policy. On the surface, its “News Media Bargaining Code” is a fairly simple and potentially effective way to address a market failure by redirecting funds from platforms to publishers. The policy’s use of forced arbitration to level the playing field has many precedents in Australia, and certainly makes sense in principle. But this approach has three limitations that other countries should bear in mind before adopting similar models. First, mandated arbitration tends to privilege big publishers more than smaller, innovative companies and organizations that are pioneering new journalistic business models. Among the biggest news publishers in Australia (and thus one of the biggest beneficiaries of the new law) is Rupert Murdoch, whom no one would ever mistake for a champion of democracy or public-interest journalism.

Major newspapers tend to advocate policies that serve their (and their shareholders’) own interests, rather than the interests of independent journalism generally. In Australia’s case, the new media code says nothing about how licensing money from the platforms should be distributed, raising the possibility that smaller start-ups and innovators will be left out in the cold. A second problem with the Australian approach is that it encourages ad hoc and unaccountable deal-making that could result in platforms co-opting independent media organizations. We do not want publishers to become so dependent on the money they receive from platforms that they can no longer hold those companies to account. Finally, the Australian media code treats the market failures in advertising and journalism as one issue, when they are actually separate problems. Yes, Facebook and Google have amassed so much market power with their unrivaled ad delivery that they have managed to avoid entering into licensing agreements with publishers. But while mandated arbitration might address this particular problem, it would not suddenly restore the traditional news business model; nor would it do anything about the broader

range of platform-based harms, from disinformation to data-privacy violations and election interference. There are some easy fixes. Governments should not give platforms a get-out-of-jail-free card for making a “significant contribution” to the news-media ecosystem. Publishers should be mandated to use any revenue they gain through the code for journalism. And the arbitration panel could favor proposals from smaller organizations and those in “news deserts.” But a broader, more promising solution is for governments and platforms (by government mandate, if necessary) to pay into a civic media fund that would independently and transparently allocate funding to a broad range of journalistic outlets. If Facebook and Google are going to put billions of dollars into news, an independent and impartial body representing the public interest should distribute the money. That way, reputable publishers would receive support while remaining free from undue government or private influence. The Australian experience represents a significant step forward when it comes to reining in overly powerful digital platforms. Facebook and Google finally have had to come to the negotiating table. But Australia’s new media code does not solve the crisis in journalism. To do that, we will need to think even bigger than we currently are. ● About the author: Taylor Owen is Director of the Centre for Media, Technology and Democracy at McGill University and Host of the Centre for International Governance Innovation’s Big Tech podcast. Copyright: Project Syndicate, 2021.

D I P L O M AT I C O U R I E R .c o m D I G I TA L C U R R E N C Y

WHO NEEDS A DIGITAL DOLLAR? By Barry Eichengreen

he idea of a digital dollar has been in the air for some time now. Recently, it descended from the ether to the lips of US Treasury Secretary Janet Yellen and Federal Reserve Chair Jay Powell. At an event in February, Yellen flagged the idea as “absolutely worth looking at,” adding that the Federal Reserve Bank of Boston, in conjunction with academics at MIT, was already doing so. In Congressional testimony the following day, Powell called a digital dollar “a high priority project for us.” Some see this as another front in the technological cold war between the United States and China. The People’s Bank of China (PBOC) will almost certainly be the first major central bank to roll out a digital currency, in 2022 at the latest. If the US doesn’t move quickly, it will fall behind. America’s financial system will remain stuck in the twentieth century, damaging US competitiveness. The dollar’s position as the dominant international currency will be eroded by the ease of using China’s digital unit in cross-border transactions, and the US will squander a singular source of monetary and financial leverage. In fact, such concerns are either overblown or flat-out wrong. The PBOC’s main motivation for issuing a digital MARCH 2021 16

“Americans without credit cards and bank accounts, who rely entirely on cash, are denied not just financial services but other services as well.” renminbi is to create a governmentcontrolled alternative to two very large and loosely regulated digital payment platforms, Alipay and WeChat Pay. The ubiquity of Alipay and WeChat Pay raises the specter of the Chinese authorities losing control of payment flows through the economy. And because they use information on payments to inform their lending activities, their pervasiveness points to the possibility of the authorities losing control of financial flows and credit allocation more generally. Thus, the PBOC’s determination to issue a digital currency is part and parcel of the Chinese government’s decision last November to quash the initial public offering of Ant Group, Alipay’s corporate parent. The American government has no analogous worries. In the US, scores of different platforms, such as PayPal, Stripe, and Square carry out digital payments, which are ultimately settled

D I G I TA L C U R R E N C Y

by banks, and hence through Fedwire, the Federal Reserve’s in-house system for clearing interbank transactions. Visa, Mastercard, Discover, and American Express process the lion’s share of card-based payments, but their actual cards are issued by banks, which are regulated, limiting risks to the payments and financial system. Here, too, settlement occurs through Fedwire. Similarly, it is important to bear in mind how far the renminbi lags behind the greenback as an international currency. Currently, China’s currency accounts for a mere 2% of global cross-border payments, a negligible share compared to the dollar’s 38%. To be sure, the convenience of a digital renminbi would hasten its uptake in cross-border transactions. But that digital currency might also have a hidden backdoor, enabling Chinese authorities to track transactions and identify those undertaking them, discouraging use by third parties. Given this, it’s hard to see China’s digital currency as a game changer internationally. So, the decision to create a digital dollar would have to be justified on other grounds. The soundest justification is financial inclusion. Americans without credit cards and bank accounts, who rely entirely on

“The People’s Bank of China (PBOC) will almost certainly be the first major central bank to roll out a digital currency, in 2022 at the latest. If the US doesn’t move quickly, it will fall behind.” cash, are denied not just financial services but other services as well. Rideshare companies ask you to link your app to your credit or debit card; no card, no pick-up. And no bank account, no card. In this context, recall the difficulty the US Treasury had in getting pandemic relief checks to the unbanked. If everyone had a Federal Reserve-issued electronic wallet into which digital dollars could be deposited, this problem would be solved. Digital dollars could also address the exorbitant cost of cross-border money transfers. But foreign governments might be reluctant to permit their nationals to install the Fed’s digital wallet, because that would leave them and their central banks unable to enforce their capital controls, which they value as macroprudential tools.

Alternatively, the Fed’s digital wallet could be made interoperable with foreign digital wallets. But interoperability would require close cooperation between central banks on the details of technology and security. While there are efforts in this direction, making it work would be a daunting task, to say the least. Ultimately, such advantages should be weighed against the costs and risks of digitizing the dollar. If people shift their savings from banks to digital wallets, banks’ ability to lend will be hamstrung. Some banks will close, and small businesses that rely on banks for credit will have to look elsewhere. Moreover, a Fed-run network of retail payments would be a rich target for hackers and digital terrorists. Security and financial stability are of the essence, and it is not obvious that they can be guaranteed. All this is to say that while the case for a digital dollar may be worthy of examination by Yellen and Powell, it is hardly a slam-dunk. ● About the author: Barry Eichengreen is Professor of Economics at the University of California, Berkeley. His latest book is The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era. Copyright: Project Syndicate, 2021.

D I P L O M AT I C O U R I E R .c o m NON-FUNGIBLE TOKENS

FROM VIDEO CLIPS TO MULTI-MILLION DOLLAR ASSETS: UNDERSTANDING THE NFT CRAZE By Allyson Berri

he year was 1636, and in the Netherlands, the market was in a panic. The culprit? Exotic tulip bulbs, which had become a hot trading commodity among the Dutch upper class. According to one historian, the most expensive bulbs sold for as much as a nice house. Today, in 2021, the luxury goods market is being dominated by something equally puzzling and much less tangible. Non-fungible tokens, or NFTs, have become somewhat of a market craze recently, with prices soaring into the multimillion-dollar range. NFTs “can really be anything digital,” but they’re often video clips or albums, and many are stored in the Ethereum blockchain. However, while other items stored in the blockchain are fungible—a bitcoin, for example, can be traded for another identical bitcoin—NFTs are one-of-a-kind, more akin to limited edition baseball cards than cryptocurrency. Currently, much of the speculation surrounding NFTs exists in the art world, where the blockchain technology has become a mode for selling digital art. Last week, a 10-second video clip by the digital artist Beeple sold for $6.6 million, and Grimes sold her digital art MARCH 2021 18

collection as NFTs for $7,500 a piece. NFTs offer a complicated kind of worth, one that can be compared to valuable assets in the physical art world. Owning a video clip saved in the blockchain as an NFT gives you an opportunity to own the only original copy of that video clip, in the same way that only one museum can own a masterpiece like The Mona Lisa, even though many people can buy reproduction prints. What some have found confusing about NFTs, however, is that digital art is markedly different from physical art. Specifically, while there are obvious differences between a physical masterpiece like The Mona Lisa and its printed reproductions, a copy of a video clip is exactly the same as the original video clip. However, NFTs have unique properties that benefit both artists and buyers. NFTs have a feature which allows artists to receive a percentage of the piece every time it is sold in the blockchain and issued to a different cryptocurrency wallet. With some pieces selling in the millions, this sales cut could result in substantial revenue for artists. Additionally, buyers can treat the assets much like they might physical art, buying NFTs and selling them

NON-FUNGIBLE TOKENS

when their value increases. Buyers can also post a picture of the digital art online or even set it as their profile picture on a social media account. After all, as one expert described it, buying an NFT is more about “buying the property rights to the picture” than buying the picture itself. Unfortunately, much like the 17th century tulip craze, the NFT obsession might represent a price bubble as digital art continues to sell for ever-increasing prices. At OpenSea, a marketplace for NFTs, monthly sales increased $78.3 million between January and February this year. Last year, monthly sales for the assets only totaled $1.5 million a month. If the bubble bursts, the market collapse could hold major losses for investors who continue to bank on NFT prices rising. Popping the burgeoning NFT bubble, however, likely only holds real financial risk for a privileged few. Much like the tulips 400 years ago, NFT investment is primarily populated by luxury investors, buyers who have big bucks to spend on blockchain-based art. Though a market crash would be devastating to NFT investors who have sometimes placed millions on

“while other items stored in the blockchain are fungible—a bitcoin, for example, can be traded for another identical bitcoin—NFTs are oneof-a-kind, more akin to limited edition baseball cards than cryptocurrency.” digital kittens or ghost GIFs, such an event isn’t likely to have marketwide reach. A 2019 report from the Financial Stability Oversight Commission exploring “challenges to financial stability” found that bitcoin holds “very limited” implications for financial stability, perhaps because the cryptocurrency ecosystem is relatively small. NFTs, representing an even smaller sector of the cryptocurrency market, would likely have a similarly limited impact on the larger economy if the bubble burst. However, many can rest assured that if the NFT market collapses, it likely won’t cost those who chose to stay away from $6 million video clips and invested their earnings elsewhere. ●

D I P L O M AT I C O U R I E R .c o m BITCOIN

AS BITCOIN’S ENVIRONMENTAL DEVASTATION GROWS, ECONOMIC SOLUTIONS ARE NEEDED By Allyson Berri

t was designed to take the middle man out of digital monetary transfers. It began operating without a central bank or authority government in 2009, regulating itself through a digital ledger known as blockchain which records every transaction ever carried out in the currency. One media outlet said the money was “built on the premise of inefficiency.” However, every time a miner successfully verified a block of transactions, they were rewarded with a few units of bitcoin—each of which is now worth $45,000 dollars. The bitcoin mining process was designed to reward playing by the rules; however, following bitcoin’s rules provokes a high environmental cost. Verifying the cryptocurrency burns 37 million tons of CO2 each year. Its carbon footprint has been compared to countries like Poland, Argentina, and New Zealand. If bitcoin were a country, it would rank 30th in the world for energy consumption. Making matters worse, the currency has been praised by major stakeholders for its high economic value. Just last month, tech industry giant Tesla invested $1.5 billion in the MARCH 2021 20

cryptocurrency, skyrocketing bitcoin’s value to an all-time high. And as many continue to laud the currency’s economic benefits, its environmental effects serve as a devastating lesson on trusting the market to mind climate matters. Over a decade ago, before it carried adverse environmental implications, bitcoin began as a completely virtual cryptocurrency that miners could earn from the comfort of their own homes with an average laptop. However, bitcoin mining is competitive, with many working to verify blocks in the ledger and only one lucky winner. As more and more transactions were validated, the calculations needed to verify a block became more complicated and the bitcoin reward for solving a block shrunk. While bitcoin mining could be carried out on a household computer ten years ago, today, viable mining operations are conducted in warehouses filled with Application Specific Integrated Circuits (ASIC), or electric circuits designed for mining bitcoins. The majority of costs associated with earning the cryptocurrency comes from the energy it takes to run ASICs—a whopping 60 to 80

BITCOIN

percent of revenue from bitcoin mining ends up paying for the electricity it takes to run the process. The energy it takes to mine bitcoin results in the first of its many environmental costs. The high electricity costs incentivize miners to pick locations where energy costs are the cheapest. Bitcoin has encouraged new coal buyers in Australia, where formerly redundant mines have been reopened for power mining. Additionally, according to The Conversation, bitcoin mining has made natural gas more profitable in Siberia and led to the support of oil drilling in Texas. Currently, the majority of bitcoin mining— 61%, to be exact—is powered by fossil fuels. Additionally, though ASICs have become more energy efficient over time, their use results in environmental problems outside of energy use. ASICs can’t be repurposed for general computing when more efficient units come along. To avoid wasting money on energy costs, ASICs have to be replaced every year and updated with the most efficient models. Outdated units currently result

“Verifying the cryptocurrency burns 37 million tons of CO2 each year. Its carbon footprint has been compared to countries like Poland, Argentina, and New Zealand. If bitcoin were a country, it would rank 30th in the world for energy consumption.” in 11,500 tons of hazardous electronic waste each year. Many justify bitcoin’s high environmental costs with its equally high economic benefits. Fidelity Digital Assets once defended the cryptocurrency’s energy inefficiency by arguing that the process “gets you bitcoin in return.” However, as companies like Tesla and Fidelity continue to praise bitcoin’s growing value, those investing in bitcoin mining should be expected to pay for its environmental consequences. In its current form, bitcoin is producing what is known in

economics as externalities, or side effects of commercial activity that are not reflected in the costs of the final products. In the bitcoin market, the excessive amounts of CO2 created by mining serve as externalities that miners are not paying for as part of their business activities. If the bitcoin market is left unfettered, miners will continue chasing the cheapest sources of energy, increasing the use of fossil fuels and thus CO2 production. However, though the current environmental effects of bitcoin are grim, carbon taxes offer a potential solution. If states implemented taxes and make using cheap energy for bitcoin mining more costly, miners would be incentivized to switch to greener energy sources for their business activities. This taxation could help states strike a balance between economics and ecology, curbing cryptocurrency’s growing environmental devastation as we head into the next decade. ●

D I P L O M AT I C O U R I E R .c o m C L I M AT E M I G R AT I O N

THE WORLD MUST CONFRONT THE IMPENDING CLIMATE MIGRATION DISASTER By Whitney DeVries

he world needs to prepare for millions of people displaced by climate change. Every region around the world currently faces climate change threats from rising sea levels, changing precipitation patterns, increased heat waves, and amplified natural disasters. Climaterelated natural disasters account for the largest stressor inciting climate migration, displacing 17.2 million people in 2018. Displacement from climate change frequently occurs in East Asia, South Asia, and the Pacific. Additionally, the World Bank in 2018 predicted the three regions of Latin America, sub-Saharan Africa, and Southeast Asia will generate more than 143 million climate migrants by 2050. Many will migrate from poorer and more harshly affected regions to wealthier countries that can fight the worst effects of climate change in addition to regions with climates that will remain more mild. Rather than welcoming those who are fleeing disaster, countries are increasingly setting up walls and legal blockades to keep them out, further complicating the situation. Governments must prepare for mass climate migration or they invite widespread humanitarian disasters and an erosion of international security. MARCH 2021 22

“climate havens” will receive the influx of those displaced by climate change. These havens will be predominantly wealthier countries that can fight the worst effects of climate change and regions whose climate will remain moderate and livable. Climate migrants do not typically qualify as refugees, thus they lack the protections and status often extended to those fleeing other disasters. In popular usage, the terms climate migrants, climate refugees, and climate displaced tend to be used interchangeably to represent those displaced or those who migrate because of environmental stressors. However, the formal withholding of legal refugee classification for climate migrants downplays climate change’s human consequences and destabilizing aspects. The term “climate migrant” does not reflect the danger and duress of climate change that drives people to migrate. Creating a formal, legal classification of “climate refugee” would not only more accurately reflect the need for urgent action, it would

C L I M AT E M I G R AT I O N

also provide legal protections for those forced to move by climate change. However, becoming a classified refugee brings “a lot of baggage” because of the racism and discrimination against many seeking asylum. Since the term climate refugee does not currently exist legally, climate migrants will remain the predominant classification used despite the enormity of the issue. Climate migration often stays internal, although as climate migration increases more migrants will cross international borders. Temporary displacements from climate change-related disasters like wildfires and hurricanes count as climate migration. However, permanent migration arises from a complete loss of livability in an area due to climate change. For example, rising sea levels take away land areas, and desertification ruins food cultivability. The loss of livability in areas will create millions of climate migrants fleeing land that can no longer support their life, many of those fleeing being among the poorest of society. So-called “climate havens” will receive the influx of those displaced by climate change. These havens will be predominantly wealthier countries that can fight the worst effects of

“In 2018, the World Bank predicted the three regions of Latin America, sub-Saharan Africa, and Southeast Asia will generate more than 143 million climate migrants by 2050.” climate change and regions whose climate will remain moderate and livable. Wealthier countries and countries with mild climates will face millions of climate migrants coming to them for help, making it a global security concern. Global leaders and institutions increasingly accept that climate change represents the “gravest threat” to international peace and security. However, they have failed to take definitive action thus far. Leaders of the UN Security Council’s 15 members mentioned the droughts, floods, storms, and rising seas that will produce regional collapse and millions of climate migrants searching for safety. NATO Secretary-General Jens Stoltenberg also raised concerns about climate change on February 17, stating NATO must do more “to address the security implications of

climate change” because it “affects all of us.” The lack of definitive international action remains worrisome, although the growing acknowledgement by global leaders and organizations indicates a preliminary step to definitive action. Halting climate change remains the ultimate solution to prepare for the impending climate migration calamity. UN Secretary-General Antonio Guterres stated, “the science is clear: we need to limit the global temperature increase to 1.5 degrees Celsius by the end of the century.” Alleviating climate change would prevent people from being forced from their homes, and it would save our planet for future generations to come. Governments and people must solve climate change to avoid its consequences; if not, the world must prepare for the climate migration disaster upon us. ●

D I P L O M AT I C O U R I E R .c o m GEOPOLITICS: CHINA

WHAT COULD CAUSE A U.S.CHINA WAR? By Joseph S. Nye, Jr.

hen China’s foreign minister, Wang Yi, recently called for a reset of bilateral relations with the United States, a White House spokesperson replied that the U.S. saw the relationship as one of strong competition that required a position of strength. It is clear that President Joe Biden’s administration is not simply reversing Trump’s policies. Some analysts, citing Thucydides’ attribution of the Peloponnesian War to Sparta’s fear of a rising Athens, believe the U.S.-China relationship is entering a period of conflict pitting an established hegemon against an increasingly powerful challenger. I am not that pessimistic. In my view, economic and ecological interdependence reduces the probability of a real cold war, much less a hot one, because both countries have an incentive to cooperate in a number of areas. At the same time, miscalculation is always possible, and some see the danger of “sleepwalking” into catastrophe, as happened with World War I. History is replete with cases of misperception about changing power balances. For example, when President Richard Nixon visited China in 1972, he wanted to balance what he saw as a growing Soviet threat to a declining MARCH 2021 24

America. But what Nixon interpreted as decline was really the return to normal of America’s artificially high share of global output after World War II. Nixon proclaimed multipolarity, but what followed was the end of the Soviet Union and America’s unipolar moment two decades later. Today, some Chinese analysts underestimate America’s resilience and predict Chinese dominance, but this, too, could turn out to be a dangerous miscalculation. It is equally dangerous for Americans to over- or underestimate Chinese power, and the U.S. contains groups with economic and political incentives to do both. Measured in dollars, China’s economy is about two-thirds the size of the U.S. economy, but many economists expect China to surpass the U.S. sometime in the 2030s, depending on what one assumes about Chinese and American growth rates. Will American leaders acknowledge this change in a way that permits a constructive relationship, or will they succumb to fear? Will Chinese leaders take more risks, or will Chinese and Americans learn to cooperate in producing global public goods under a changing distribution of power? Recall that Thucydides attributed the war that ripped apart the ancient

GEOPOLITICS: CHINA

Greek world to two causes: the rise of a new power, and the fear that this created in the established power. The second cause is as important as the first. The U.S. and China must avoid exaggerated fears that could create a new cold or hot war. Even if China surpasses the U.S. to become the world’s largest economy, national income is not the only measure of geopolitical power. China ranks well behind the U.S. in soft power, and U.S. military expenditure is nearly four times that of China. While Chinese military capabilities have been increasing in recent years, analysts who look carefully at the military balance conclude that China will not, say, be able to exclude the U.S. from the Western Pacific. On the other hand, the U.S. was once the world’s largest trading economy and its largest bilateral lender. Today, nearly 100 countries count China as their largest trading partner, compared to 57 for the U.S. China plans to lend more than $1 trillion for infrastructure projects with its Belt and Road Initiative over the next decade, while the U.S. has cut back aid. China will gain economic power from the sheer size of its market as well as its overseas investments and development assistance. China’s overall

power relative to the U.S. is likely to increase. Nonetheless, balances of power are hard to judge. The U.S. will retain some long-term power advantages that contrast with areas of Chinese vulnerability. One is geography. The U.S. is surrounded by oceans and neighbors that are likely to remain friendly. China has borders with 14 countries, and territorial disputes with India, Japan, and Vietnam set limits on its hard and soft power. Energy is another area where America has an advantage. A decade ago, the U.S. was dependent on imported energy, but the shale revolution transformed North America from an energy importer to exporter. At the same time, China became more dependent on energy imports from the Middle East, which it must transport along sea routes that highlight its problematic relations with India. The U.S. also has demographic advantages. It is the only major developed country that is projected to hold its global ranking (third) in terms of population. While the rate of U.S. population growth has slowed in recent years, it will not turn negative, as in Russia, Europe, and Japan. China, meanwhile, rightly fears “growing old

before it grows rich.” India will soon overtake it as the most populous country, and its labor force peaked in 2015. America also remains at the forefront in key technologies (bio, nano, information) that are central to twenty-first-century economic growth. China is investing heavily in research and development, and competes well in some fields. But 15 of the world’s top 20 research universities are in the U.S.; none is in China. Those who proclaim Pax Sinica and American decline fail to take account of the full range of power resources. American hubris is always a danger, but so is exaggerated fear, which can lead to overreaction. Equally dangerous is rising Chinese nationalism, which, combined with a belief in American decline, leads China to take greater risks. Both sides must beware miscalculation. After all, more often than not, the greatest risk we face is our own capacity for error. ● About the author: Joseph S. Nye, Jr. is a professor at Harvard and author of Do Morals Matter? Presidents and Foreign Policy from FDR to Trump. Copyright: Project Syndicate, 2021.

D I P L O M AT I C O U R I E R .c o m G E O P O L I T I C S : L AT I N A M E R I C A

WHEN YOUR NEIGHBOR IS ILL, BE A GOOD NEIGHBOR By Adam Ratzlaff

nder the Trump administration, policy towards Latin America was marked by combative rhetoric, cutting of foreign aid, and an announcement of a return to the Monroe Doctrine that had been declared dead during the Obama administration. In many ways, this limited the ability of the administration to pursue a cooperative relationship with the region. While there may be some areas where the Trump administration’s approach to Latin America should be continued, the Biden administration needs to turn the page and shift U.S.-Latin American foreign policy. It is critical that the Biden-Harris approach to Latin America seeks to address the shared challenges facing the Western Hemisphere, particularly the COVID-19 pandemic. As many pundits and advocates have noted, there is a need for the Biden administration to resurrect Franklin Delano Roosevelt’s Good Neighbor Policy as an approach to relations with Latin America. Under the Good Neighbor Policy, FDR sought to discard U.S. interventionism in Latin America and ushered in a Golden Age of U.S.-Latin American cooperation. MARCH 2021 26

“Under the Good Neighbor Policy, FDR sought to discard U.S. interventionism in Latin America and ushered in a Golden Age of U.S.Latin American cooperation. The period was marked by reductions in trade barriers, mutual respect in foreign policy, and attempts to develop a shared Pan-American identity.” The period was marked by reductions in trade barriers, mutual respect in foreign policy, and attempts to develop a shared Pan-American identity. As with the Great Depression that FDR faced, the COVID-19 pandemic has significant impacts both at home and abroad. These two sides of the coin are also inextricably linked. As such, the Biden administration should create a Good Neighbor Policy for the 21st century that responds to the pandemic and benefits both the United States and Latin America for years to come.

G E O P O L I T I C S : L AT I N A M E R I C A

The Americas have been particularly hard-hit by the COVID-19 pandemic. In fact, the three countries with the highest number of COVID-19 related deaths are all in the Western Hemisphere: The United States, Brazil, and Mexico. While nations have sought to tackle the pandemic within their own borders, the virus easily crosses between countries, emphasizing the need to collectively respond to the crisis. The World Health Organization and the United Nations warn about vaccine nationalism and the slow vaccine rollout in many countries in the Americas as hindering these efforts. The United States should not only to promote vaccination efforts at home, but develop partnerships with labs across the Americas to manufacture and distribute the vaccine. This supports the recovery of the region and serves U.S. interests. As the United States vies for influence in Latin America vis-à-vis China, “vaccine diplomacy” can allow the United States to highlight its support for the region, an action that China has already undertaken. Providing aid and support to the region is also an important tool for bolstering the U.S. image in the region, particularly after the Trump Administration’s heavy-

“As the United States vies for influence in Latin America vis-à-vis China, “vaccine diplomacy” can allow the United States to highlight its support for the region, an action that China has already undertaken.” handed approach to the region. It is equally important that the United States work with the region to address the economic fallout of the pandemic. According to recent forecasts from the International Monetary Fund, the Latin America and Caribbean region experienced a 7.4% contraction in 2020 and is only expected to see GDP growth of 4.1% in 2021. The Americas are economically interdependent and responding to economic crisis requires ensuring that the economies of neighboring states are also recovering. The United States should promote trade and further integration within the Americas. While this has long been a goal of U.S. foreign policy, the pandemic recovery may encourage more states

to participate. However, another page should be taken from the Good Neighbor Policy—the United States should not create unequitable trading partnerships but respect the interests of all parties involved. FDR reduced tariffs unilaterally towards Latin America as a part of the Good Neighbor Policy and as a sign of friendship towards the region. Addressing the fallout of the pandemic in the United States and Latin America will not be a simple task, but working together to address them and respecting partners across the region will make the task more feasible. Creating a framework that allows for mutual respect and allows for disagreement on some issues can allow the Biden administration to usher in a new gilded age of U.S.-Latin American relations. While the challenges that the Americas face are great, addressing them offers the opportunity to rewrite InterAmerican affairs. ●

D I P L O M AT I C O U R I E R .c o m GEOPOLITICS: UAE

NEW UAE CITIZENSHIP LAW A MILESTONE FOR THE GULF By Giorgio Cafiero & Kristian Coates Ulrichsen

n January 30, the ruler of Dubai and Prime Minister of the United Arab Emirates (UAE) Sheikh Mohammed bin Rashed Al Maktoum announced a decision that will provide a select group of foreigners with a pathway to Emirati citizenship. Under a new amendment to the country’s citizenship law, foreigners whom the national authorities believe have made important contributions to the UAE’s development—such as investors, inventors, scientists, artists, intellectuals, and other professionals with specialized talents can become citizens of the UAE. This is the latest example of how the UAE is beginning to make significant changes in preparation for the eventual post-fossil fuel era. This amendment is a milestone in the UAE’s emergence as a major international hub for trade, finance, and culture. For the Emirates, this policy shift is designed to give a select number of highly skilled and wealthy foreigners a stake in the country’s future as part of a grander effort aimed at boosting the UAE’s economy. The National, an Abu Dhabi-based daily, published an editorial explaining the rationale behind this decision: “The UAE has set itself hugely ambitious developmental targets, aiming by 2071 to be one of most advanced nations in the world. MARCH 2021 28

While talent knows no borders, gathering world-leading expertise in one place catalyses innovation.” The UAE is a country where almost 90 percent of the population of nine million are foreign (mostly South Asian) residents. The country’s development has for decades relied on talent and innovation from abroad. Up until now, the UAE’s foreign residents have relied primarily on renewable visas tied to their employment in order to stay in the country. As a result, in 2020 the double whammy of COVID-19 and low oil prices resulted in a mass exodus of expatriates. A chief investment officer at the London-based emerging markets asset management firm Longdean Capital explained: “The model for expatriates used to be ‘let’s make as much as we can from this country then move home. The new mindset the government is trying to inspire is ‘if you give as much as you can to this country, you can call it your home.’” Foreigners cannot apply for citizenship. This process will be through appointments by local courts, executive councils, and the UAE cabinet. Staterun media specified the conditions that one must meet in order to gain Emirati citizenship. These require investors to own property in the country, and scientists, doctors, and specialists to

GEOPOLITICS: UAE

“For the Emirates, this policy shift is designed to give a select number of highly skilled and wealthy foreigners a stake in the country’s future as part of a grander effort aimed at boosting the UAE’s economy.”

meet certain criteria. In some cases, government entities must provide a letter of recommendation on behalf of an expatriate for him/her to receive citizenship in the UAE. If these conditions are violated, the Emirati citizenship can be revoked. This amendment permits dual citizenship, meaning that expatriates who become Emirati citizens are not required to give up citizenship of their home country. The UAE’s authorities released a statement explaining that these new citizens will be offered “a wide range of benefits includes the right to establish or own commercial entities and properties, in addition to any other benefits granted by federal authorities.” Yet it is unclear whether those who gain Emirati citizenship will have the same rights and access to the same benefits in the country’s generous welfare system as native-born Emiratis. Perhaps the answer to this open question will heavily influence the extent to which this major shift incentivizes these select foreigners to take advantage of the opportunity to obtain Emirati citizenship. Social Dynamics Arguably the most interesting and potentially far-reaching questions about this amendment to the UAE’s

citizenship law concern the possible social ramifications of this policy shift. Many Emirati nationals praised the change as a historic watershed for their country. But some had negative views on this shift and expressed that the UAE was “selling the country’s birthright” and “putt[ing] Emiratis’ future at risk,” according to Abeer Abu Omar of Bloomberg. What remains to be seen is if this issue leads to rare cases of dissent in the UAE, a country where public criticism of the government can result in extremely harsh punishments. There is a difficult balance that the Emirati authorities must strike. The wife of the ruler of Sharjah, Sheikha Jawaher Al Qasimi, made remarks on social media about citizenship issues that go to the heart of gender equality issues in the country. In the UAE, the children of Emirati women who have non-Emirati fathers are not automatically citizens of the country, unlike children who have Emirati fathers but whose mothers are foreigners. Although Sheikh Sultan Al Qasimi’s wife emphasized that she was not criticizing the UAE’s government, she wrote: “Naturalization of the children of female citizens. That’s a demand. Employment for Emirati citizens. That’s a demand.” Put simply, the leadership seeks to reap the economic benefits of granting

citizenship to wealthy individuals without creating much of a social disruption. “I think that this is a step that can only go so far, meaning that there are very few people who will actually get citizenship so as to not upset the local social fabric…the tribal balance is still something of concern for locals,” said King’s College London assistant professor Andreas Krieg. “It’s a balance to strike that I would say is difficult to strike for the Dubai government, hence you need to carefully select those people. It will not provide an avenue to those people who don’t have the financial means. It definitely doesn’t provide an avenue for those laborers who have been in the country for decades, or even with those with low-paid white-collar jobs. It’s really about trying to boost the economy, trying to keep the capital outflow to a limit and reversing the brain drain that’s happened over the last year over COVID-19 from Dubai.” Ultimately, it will require more time to understand how this policy shift impacts the UAE’s social fabric and how far the Emirati authorities go in terms of offering citizenship to foreigners. Although it remains unclear how much this amendment to the citizenship law will do in practice to reverse the economic impact of COVID-19 and low oil prices, this change could set an example for other Gulf Cooperation Council states where the plight of many people born in the region and who have lived there for many decades but cannot obtain citizenship remains an important issue. ● About the authors: Giorgio Cafiero is the CEO and founder of Gulf State Analytics, a geopolitical risk consultancy based in Washington, DC. Kristian Coates Ulrichsen is a Fellow for the Middle East at Rice University’s Baker Institute.

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Creating value for Switzerland, its economy and citizens Cisco Country Digital Acceleration Strategy #CiscoCDA #SwissCDA