Opinion

America’s Broken Democracy

NEW YORK – US President Donald Trump’s ravings against the 2015 Paris climate agreement are partly a product of his ignorance and narcissism. Yet they represent something more. They are a reflection of the deep corruption of the US political system, which, according to one recent assessment, is no longer a “full democracy.” American politics has become a game of powerful corporate interests: tax cuts for the rich, deregulation for mega-polluters, and war and global warming for the rest of the world.


Six of the G7 countries worked overtime last week to bring Trump around on climate change, but Trump resisted. European and Japanese leaders are accustomed to treating the US as an ally on key issues. With Trump in power, it is a habit they are rethinking.

But the problem goes beyond Trump. Those of us living in the United States know first-hand that America’s democratic institutions have deteriorated markedly over the last several decades, beginning perhaps as far back as the 1960s, when Americans began to lose confidence in their political institutions. US politics have become increasingly corrupt, cynical, and detached from public opinion. Trump is but a symptom, albeit a shocking and dangerous one, of this deeper political malaise.

Trump’s policies embody mean-spirited priorities that are widely backed by the Republican Party in the US Congress: slash taxes for the rich at the expense of programs to help the poor and working class; increase military spending at the expense of diplomacy; and allow for the destruction of the environment in the name of “deregulation.”

And, indeed, from Trump’s perspective, the highlights of his recent trip abroad were signing a $110 billion arms deal with Saudi Arabia, berating other NATO members for their supposedly insufficient military spending, and rejecting the pleas of US allies to continue in the fight global warming. Congressional Republicans broadly cheer these frightening policies.

Meanwhile, Trump and the Republican-controlled Congress are trying to rush through legislation that would deprive more than 20 million people of health care, in order to cut taxes for the richest Americans. Trump’s newly proposed budget would slash Medicaid (health insurance for the poor), the Supplemental Nutrition Assistance Program (food for the poor), foreign assistance (aid for the world’s poorest), funding for the United Nations, and spending on science and technology. Trump would, in short, gut the federal programs for education, training, the environment, civilian science, diplomacy, housing, nutrition, and other urgent civilian priorities.

These are not the priorities shared by most Americans – not even close. A majority wants to tax the rich, maintain health coverage, stop America’s wars, and fight global warming. According to recent polling data, Americans overwhelmingly want to stay in the Paris Climate Agreement, which Trump has pledged to leave. Trump and his cronies are fighting public opinion, not representing it.

They are doing this for one reason, and one reason only: money. More precisely, Trump’s policies serve the corporate interests that pay the campaign bills and effectively run the US government. What Trump signifies is the culmination of a long-term process whereby powerful corporate lobbies have bought their way to power. Today, companies like ExxonMobil, Koch Industries, Continental Energy, and other mega-polluting companies no longer need to lobby; Trump has handed them the keys to the State Department, the Environmental Protection Agency, and the Energy Department. They also hold senior congressional staff positions.

Much of the corporate money can be traced; the rest flows anonymously, as “dark money” that avoids public scrutiny. Supreme Court justices who themselves were frequently wined and dined by corporate donors gave the green light to keep these corrupt flows secret in their infamous Citizens United decision.

As investigative journalist Jane Mayer has documented, the largest source of dark money is the tandem of David and Charles Koch, who inherited the highly polluting Koch Industries from their father, a man whose business history included building a major oil refinery for Germany’s Nazi regime. The Koch brothers, with a combined net worth of some $100 billion, have spent freely for decades to take over the US political system, mobilizing other right-wing corporate interests as well.

When it comes to tax policy and climate change, the Republican Party is almost completely in the hands of the Koch brothers and their oil-industry cronies. Their immoral aim is simple: to cut corporate taxes and deregulate oil and gas, regardless of the consequences for the planet. To achieve these goals, they are prepared to try to remove millions of poor people from health-care coverage, and even more shockingly, to put the entire planet at dire risk of global warming. Their evil is chilling, but it is real. And Trump is their factotum.

Before Trump’s recent foreign trip, 22 Republican senators sent him a letter calling for the US to withdraw from the Paris climate accord. Almost all receive significant campaign funding from the oil and gas industry. Most of them probably depend directly on donations from the Koch brothers and the lobbying organizations that they secretly finance. As the Center for Responsive Politics, a public-interest group, has shown, spending by oil and gas companies on federal candidates in the 2016 election totaled $103 million, with 88% going to Republicans. This of course includes only the funds that can be tracked to particular donors.

The rest of the world urgently needs to understand America for what it has now become. Behind the formal structures of a once-functioning democracy is a political system run by corporate interests with the cynical aims of cutting taxes on the rich, selling weapons, and polluting with impunity. In Trump, they have found a shameless frontman and TV personality who will do their bidding.

It is now the job of the rest of the world to say no to America’s reckless corporate greed, and of Americans themselves to reclaim their democratic institutions by pushing dark money and corporate malevolence from their midst. Given the small (52-48) Republican majority in the Senate, the Democrats and just three honest Republicans would be in a position to block most or all of the Trump-Koch agenda. The situation is therefore salvageable, though it remains highly dangerous. Americans –and the world – deserve much better.

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and the UN Sustainable Development Solutions Network.

By Jeffrey D. Sachs

Trump’s Magic Budget

CAMBRIDGE – US President Donald Trump’s administration has now released its budget plans for fiscal year 2018. Among the details provided in the document, entitled America First – A Budget Blueprint to Make America Great Again, are projections for the expected path of gross federal debt as a percentage of GDP, which is shown to decline from its current level of about 106% to about 80% in 2027. Debt held by the public is expected to mirror this path, shrinking from 77% to 60% over this period.


Unfortunately, neither projection is credible. A sustained and marked decline in government debt (relative to GDP) would be welcome news for those of us who equate high indebtedness with the kind of fiscal fragility that reduces the government’s ability to cope with adverse shocks. But, as many critics have pointed out, the economic assumptions underlying the Trump administration’s benign scenario appear improbable. In fact, they are also internally inconsistent.

The Trump budget assumes a steady spell of 3% GDP growth, which appears to be at odds with the prevailing trends of weakening productivity performance, slowing population growth, and a significantly lower level of labor force participation. These factors are all reflected in recurrent downward revisions to potential GDP growth by institutions such as the Federal Reserve and the Congressional Budget Office (CBO).

A new study by the non-partisan Committee for a Responsible Budget presents a very different outlook for US deficits and debt from the one contained in Trump’s budget blueprint. It estimates that under realistic economic assumptions from the CBO, debt in Trump’s budget would remain roughly at current levels, rather than falling precipitously (as deficits would remain above 2% of GDP, rather than disappear by 2027). Furthermore, the study shows that relying on assumptions that are more in sync with the consensus economic outlook implies a deficit of 1.7-4% of GDP by 2027, with debt at 72-83% of GDP.

So far, the chorus of criticism directed at the administration’s budget document has largely focused on its optimistic forecasts for GDP growth. But let’s accept, for the sake of argument, that the United States economy is operating well within its production possibility frontier, owing to various tax and other inefficiencies, and that eliminating or significantly reducing such distortions could significantly boost growth. (A recent IMF study, for example, concludes that countries can raise productivity by improving the design of their tax system, and that eliminating such barriers would, on average, lift countries’ annual real GDP growth rates by roughly one percentage point over 20 years.)

But, even giving the administration the benefit of the doubt and accepting the possibility of sustained 3% GDP growth for the US, another set of critical assumptions drive the rosy deficit and debt projections produced by the Office of Management and Budget (OMB): the expected level and path of interest rates. To state the obvious, lower interest rates imply lower debt servicing costs, which in turn mean lower nondiscretionary outlays, smaller deficits, and lower debt.

On the surface, the projections for short- and long-term (ten-year) interest rates embedded in the 2018 budget are in line with the prevailing Blue Chip forecasts. In effect, for fiscal year 2018, the budget assumes slightly higher short-term rates than the consensus.

In fact, the budget assumes the best of all worlds, not the Blue Chip one in which interest rates remain low but GDP growth ambles along at around 2%. With real (inflation-adjusted) interest rates remaining near record lows, a marked increase in long-term growth, as the administration forecasts, would be historically anomalous.

In the OMB document, the real interest rate on three-month Treasuries is expected to stay below 1% over the decade. Furthermore, in that projection, the term premium disappears almost entirely. At present, ten-year Treasuries offer more than three times the yield on three-month Treasuries. Over the medium term, the budget assumes that ten-year rates will be barely above their three-month counterpart. Historically, flat yield curves have been associated with tight money and high-interest-rate policies.

What kind of policies and environment can deliver significantly faster growth and inflation, without any pressure on interest rates?

A combination of solid growth and sustained low real interest rates was the norm in the US for much of the 1940s-1970s, when (as I have documented elsewhere) financial repression prevailed, owing to heavily regulated capital markets and an accommodative central bank.

In contrast, if history is a guide, a policy mix characterized by financial de-regulation (a Trump favorite) and an independent central bank facing potential full employment and overheating would be a harbinger of higher interest rates. And with higher interest rates comes a heavier debt-service burden (substantially heavier than in the past, given current debt levels), wider deficits, and higher debt.

There seems to be a serious internal inconsistency in the high-growth/low-real-interest-rate scenario presented in Trump’s 2018 budget plan. If not, contrary to the administration’s public statements, financial markets will have to live with a heavy dose of financial repression in the years ahead. Carmen M. Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

By Carmen M. Reinhart

The Best Investments We Can Make

DUBAI – The desire to make a difference is born of a fundamental belief in something greater than ourselves, and by the concern that we all have for the wellbeing of our fellow humans.


As an Arab woman, I find it impossible to sit back and watch – or worse, turn away – as parts of the Middle East suffer through such a difficult time in the region’s already troubled history. Millions of innocent people have been displaced from their homes, and millions more are being driven across national borders into an uncertain and unstable future. Their need for help is clear.

To be sure, we can only do so much as individuals. But by uniting around common goals, we have the power to create effective initiatives, and improve lives. And I have always believed that education and social entrepreneurship are two areas where we can have the greatest sustainable, long-term impact. Together, these sectors create opportunities at every level of society, from refugees who are unable to complete their studies, to professionals seeking to further their career prospects or pursue an innovative vision.

The ongoing conflict in Syria has driven a vast number of refugees into camps that have evolved from temporary dwellings into makeshift cities. A prime example is the Za’atari Camp in Jordan, which now hosts 80,000 residents; but similar camps can be found in Lebanon and other countries around the region. Mass forced migration is not just a challenge for Syria’s immediate neighbors. As refugee flows have turned a local crisis into a global issue, Europe’s political, economic, and social fabric has been tested, too.

When refugees are torn away from their daily lives, they lose the chance to pursue an education. To address this problem, organizations such as the Unite Lebanon Youth Project (ULYP) are now identifying children from refugee camps who have the potential to complete their formal education and influence those around them. With an education, these young people will be better equipped to effect positive change in their communities, now and in the future.

The ULYP has close ties to prestigious institutions such as the American University of Beirut, which has long been regarded as an incubator for successful entrepreneurs in the region. The ULYP, which I support by funding annual scholarships, acknowledges that education is neither the only solution nor a quick fix. Accordingly, the project takes a long-term approach, and makes investments in individuals who one day could benefit larger communities. After all, it is better to teach people to fish than simply to feed them.

Similarly, after someone has been empowered with the knowledge and financing to start their own company, they can start thinking about the greater good – at which point the true value of entrepreneurship becomes apparent. Entrepreneurship is powered by dreams and aspirations, vision and ideas. And although financial support is important, it is not the only ingredient in the recipe for success. Entrepreneurs also need access to talented mentors and support networks.

It was with this idea in mind that I joined the board of Endeavor UAE, a global nonprofit from the United States that empowers entrepreneurs around the world. Endeavor’s beneficiaries are not run-of-the-mill businesspeople, but rather those with the potential to become role models. We support individuals who can inspire their colleagues and peers, and improve their communities.

Not every entrepreneur will be successful. But by giving the brightest young business leaders financial support and access to a global network of mentors, we can help them realize their potential to transform the economies of entire countries. Moreover, this creates a virtuous circle, because today’s entrepreneurs can identify the entrepreneurs of tomorrow, and furnish them with the capital they need to change lives in the future.

I have always believed that with success comes a responsibility to think about the wider world. In July 2015, I returned to my alma mater, the London Business School, to launch a scholarship that will support students in the MBA and Executive MBA programs. In the same way that a Palestinian or Syrian refugee might complete their studies through the ULYP, or a young innovator might receive guidance through Endeavor, I hope that LBS students will be empowered to build a better future for us all.

We live in an ever more interconnected global economy, and on an increasingly unequal and unstable planet. Our goal should not be just to make money, but also to make a difference.

Muna Al Gurg, a businesswoman and philanthropist, is the chairwoman of Young Arab Leaders UAE, a member of the board of the Al Gurg Foundation and the Emirates Foundation, and a founding board member of the nonprofit initiatives Hub Dubai and Endeavor UAE.

By Muna Al Gurg

Trump’s Magic Budget

CAMBRIDGE – US President Donald Trump’s administration has now released its budget plans for fiscal year 2018. Among the details provided in the document, entitled America First – A Budget Blueprint to Make America Great Again, are projections for the expected path of gross federal debt as a percentage of GDP, which is shown to decline from its current level of about 106% to about 80% in 2027. Debt held by the public is expected to mirror this path, shrinking from 77% to 60% over this period.


Unfortunately, neither projection is credible.

A sustained and marked decline in government debt (relative to GDP) would be welcome news for those of us who equate high indebtedness with the kind of fiscal fragility that reduces the government’s ability to cope with adverse shocks. But, as many critics have pointed out, the economic assumptions underlying the Trump administration’s benign scenario appear improbable. In fact, they are also internally inconsistent.

The Trump budget assumes a steady spell of 3% GDP growth, which appears to be at odds with the prevailing trends of weakening productivity performance, slowing population growth, and a significantly lower level of labor force participation. These factors are all reflected in recurrent downward revisions to potential GDP growth by institutions such as the Federal Reserve and the Congressional Budget Office (CBO).

A new study by the non-partisan Committee for a Responsible Budget presents a very different outlook for US deficits and debt from the one contained in Trump’s budget blueprint. It estimates that under realistic economic assumptions from the CBO, debt in Trump’s budget would remain roughly at current levels, rather than falling precipitously (as deficits would remain above 2% of GDP, rather than disappear by 2027). Furthermore, the study shows that relying on assumptions that are more in sync with the consensus economic outlook implies a deficit of 1.7-4% of GDP by 2027, with debt at 72-83% of GDP.

So far, the chorus of criticism directed at the administration’s budget document has largely focused on its optimistic forecasts for GDP growth. But let’s accept, for the sake of argument, that the United States economy is operating well within its production possibility frontier, owing to various tax and other inefficiencies, and that eliminating or significantly reducing such distortions could significantly boost growth. (A recent IMF study, for example, concludes that countries can raise productivity by improving the design of their tax system, and that eliminating such barriers would, on average, lift countries’ annual real GDP growth rates by roughly one percentage point over 20 years.)

But, even giving the administration the benefit of the doubt and accepting the possibility of sustained 3% GDP growth for the US, another set of critical assumptions drive the rosy deficit and debt projections produced by the Office of Management and Budget (OMB): the expected level and path of interest rates. To state the obvious, lower interest rates imply lower debt servicing costs, which in turn mean lower nondiscretionary outlays, smaller deficits, and lower debt.

On the surface, the projections for short- and long-term (ten-year) interest rates embedded in the 2018 budget are in line with the prevailing Blue Chip forecasts. In effect, for fiscal year 2018, the budget assumes slightly higher short-term rates than the consensus.

In fact, the budget assumes the best of all worlds, not the Blue Chip one in which interest rates remain low but GDP growth ambles along at around 2%. With real (inflation-adjusted) interest rates remaining near record lows, a marked increase in long-term growth, as the administration forecasts, would be historically anomalous.

In the OMB document, the real interest rate on three-month Treasuries is expected to stay below 1% over the decade. Furthermore, in that projection, the term premium disappears almost entirely. At present, ten-year Treasuries offer more than three times the yield on three-month Treasuries. Over the medium term, the budget assumes that ten-year rates will be barely above their three-month counterpart. Historically, flat yield curves have been associated with tight money and high-interest-rate policies.

What kind of policies and environment can deliver significantly faster growth and inflation, without any pressure on interest rates?

A combination of solid growth and sustained low real interest rates was the norm in the US for much of the 1940s-1970s, when (as I have documented elsewhere) financial repression prevailed, owing to heavily regulated capital markets and an accommodative central bank.

In contrast, if history is a guide, a policy mix characterized by financial de-regulation (a Trump favorite) and an independent central bank facing potential full employment and overheating would be a harbinger of higher interest rates. And with higher interest rates comes a heavier debt-service burden (substantially heavier than in the past, given current debt levels), wider deficits, and higher debt.

There seems to be a serious internal inconsistency in the high-growth/low-real-interest-rate scenario presented in Trump’s 2018 budget plan. If not, contrary to the administration’s public statements, financial markets will have to live with a heavy dose of financial repression in the years ahead. Carmen M. Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

By Carmen M. Reinhart

The Hunger Bonds

CAMBRIDGE – Investing often creates moral dilemmas over goals: Should we aim to do well or to do good? Is it appropriate to invest in tobacco companies? Or in companies that sell guns to drug gangs?


The recent popularity of so-called impact investment funds, which promise to deliver decent returns while advancing social or environmental goals, is based on this unease. Foundations often find that these investment vehicles help them to do good both with the money that they spend on philanthropy and with the endowment assets that yield the returns on which their philanthropy depends.

Nowadays, it is emerging markets as an asset class that should make people morally queasy. Should decent people put their money in emerging-market bond funds?

The returns of the JP Morgan Emerging Market Bond Index (EMBI+) are heavily influenced by what happens in Venezuela. The reason is simple: while Venezuela represents only about 5% of the index, it accounts for about 20% of its yield, because the yield on Venezuelan debt is about five times larger than that of other countries in the index, a reflection of the huge risk premium that Venezuela faces. Moreover, the price volatility of Venezuelan debt – the highest in the EMBI+ – accounts for a disproportionate share of the index’s daily price movements.

You might invest in the EMBI+ because it promises higher returns, or because you want to make your savings available to a larger segment of humanity. But if you do, you will root for Venezuelan debt, which means wishing for really bad things to happen to Venezuela’s people.

As has been widely reported in the media, Venezuela is experiencing one of the most calamitous economic collapses ever, accompanied by massive doses of political repression and human-rights violations. So investing in the EMBI+ means that you rejoice when Wall Street analysts inform you that the country is literally starving its people in order to avoid restructuring your bonds.

Your happiness is easily explained: Venezuelan imports, after having collapsed by 75% from 2012 to 2016, are down more than 20% in the first quarter of 2017. That’s good news for you as an EMBI+ investor, because it means that more money is left to service your bonds. Meanwhile, Venezuelans are involuntarily losing weight and searching for food in garbage piles. Sure, it’s a humanitarian catastrophe. But, to you, it’s a fabulous investment opportunity.

Now assume that you want to hold Venezuelan debt because you are hoping that President NicolásMaduro will lose power and that a more sensible, democratically minded government, more in line with your moral compass, will emerge. Even in that case, you will still want the gains from Venezuela’s future recovery to be used preferentially to service the old debt issued to finance the corruption and national destruction brought about by Maduro and his predecessor, Hugo Chávez. You will not be rooting for the recovery of livelihoods that Venezuelans deserve after having lived through this nightmare.

You will also be rooting for US judges to seize assets and impound money to pay you. In fact, analysts who are bullish on Venezuelan debt have been lobbying the government and opposition leaders with an implied threat: even considering a restructuring of your bonds, they point out, will allow those managing your assets to cause havoc in Venezuela.

If you are a decent human being, investing in Venezuelan bonds should make you feel “mildly nauseous,” to borrow a phrase recently used by former FBI Director James Comey while testifying to the US Congress. Emerging-market fund managers feel a similar discomfort. They currently spend a disproportionate share of their time “getting the Venezuelan call right,” because their bonuses are based on their over-performance relative to the index – of which Venezuela is the main driver.

The less morally burdened among them bask in the recognition they receive for having been right to predict that Maduro’s government would decide to starve its people rather than restructure the bonds you hold. Analysts and bondholders have also lobbied the government and the opposition not to seek financial support from the International Monetary Fund, for fear that the international community will demand that you accept a significant “haircut” on your investment, as has been required of Greece’s creditors.

That would probably not be “good for the credit.” Analysts and bondholders have also lobbied the opposition-controlled National Assembly to recognize Venezuela’s external debt in exchange for the freedom of political prisoners, implying that the payment of your bonds can be secured through ransom.

So, should you stop investing in emerging-market funds just because 5% of your savings would go toward financing Venezuela? Clearly, this would punish other countries that are innocent bystanders in the Venezuelan mess. There must be a better way.

There is. The solution is to demand that JPMorgan immediately exclude Venezuela from the emerging market bond indexes it calculates, thereby freeing fund managers from the need to compare their performance with hunger bonds. Over time, JPMorgan should introduce a Decent Emerging Markets index, which would save you from moral anguish by ensuring that only countries adhering to minimal standards of respect for their citizens are included. The DEM would allow you to root for higher returns on your savings without wishing for human misery. You could do well, without feeling bad.

Ricardo Hausmann, a former minister of planning of Venezuela and former Chief Economist of the Inter-American Development Bank, is Director of the Center for International Development at Harvard University and a professor of economics at the Harvard Kennedy School. 

By Ricardo Hausmann

Manchester’s Bright Future

MANCHESTER – I am a proud Mancunian (as the people of Manchester are known), despite the fact I haven’t lived there permanently since I left school for university when I was 18. I was born in St. Mary’s hospital near the city center, was raised in a pleasant suburb in South Manchester, and attended a normal primary and junior school in a nearby, tougher neighborhood, before attending Burnage for secondary school. Thirty-eight years after I attended Burnage, so, apparently, did Salman Abedi, the suspected Manchester Arena bomber.


The atrocity carried out by Abedi, for which the Islamic State has claimed credit,is probably worse than the dreadful bombing by the Irish Republican Armythat destroyed parts of the city center 21 years ago, an event that many believe played a key role in Manchester’srenaissance. At least in that case, the bombers gave a 90-minute warning that helped avoid loss of life. Abedi’sbarbaric act, by contrast, killed at least 22 people, many of them children.

In recent years, I have been heavily involved in the policy aspects of this great city’s economic revival. I chaired an economic advisory group to the Greater Manchester Council, and then served as Chair of the Cities Growth Commission, which advocated for the “Northern Powerhouse,” a program to link the cities of the British north into a cohesive economic unit. Subsequently, I briefly joined David Cameron’s government, to help implement the early stages of the Northern Powerhouse.

I have never attended a concert at the Manchester Arena, but it appears to be a great venue for the city.Just as Manchester Airport has emerged as a transport hub serving the Northern Powerhouse, the arena plays a similar role in terms of live entertainment. As the sad reports about thoseaffected indicate, attendees came from many parts of northern England (and beyond).

In the past couple of years, Manchester has received much praise for its economic revival, including its position at the geographic heart of the Northern Powerhouse, and I am sure this will continue. Employment levels and the regional PMI business surveys indicate that, for most of the past two years, economic momentum has been stronger in North West England than in the country as a whole, including London.Whether this is because of the Northern Powerhouse policy is difficultto infer; whatever the reason, it is hugely welcome and important to sustain.

To my occasional irritation, manypeople still wonder what exactly the Northern Powerhouseis. At its core, it represents the economic geography that lies within Liverpool to the west, Sheffield to the East, and Leeds to the northeast, with Manchester in the middle. The distance from Manchester to the center of any of those other cities is less than 40 miles (64 kilometers), which is shorter than the London Underground’s Central, Piccadilly, or District lines. If the 7-8 million people wholive in those cities – and in the numerous towns, villages,and other areas between them – can be connected via infrastructure, they can act as a single unitin terms of their roles as consumers and producers.

The Northern Powerhouse would thenbe a genuine structural game changer forBritain’s economy.Indeed, along with London, it would be a second dynamic economic zone that registers on a global scale. It is this simple premise that led the previous government to place my ideas at the core of its economic policies, and why the Northern Powerhouse has become so attractive to business here in the United Kingdom and overseas.

It is a thrilling prospect, and, despite being less than three years old, it is showing signs of progress.In fact, given the broader economic benefits of agglomeration, the Northern Powerhouse mantra can be extendedto the whole of the North of England, not least to include Hull and the North East. But it is what I often inelegantly call “Man-Sheff-Leeds-Pool”thatdistinguishes the Northern Powerhouse, and Manchester, which sits at the heart of it, is certainly among the early beneficiaries.

Despite this, I have frequently said to local policy leaders, business people, those from the philanthropic world, and others that unless the areas lying outside the immediate vicinity of central Manchester benefit fromregional dynamism, Greater Manchester’s success will be far from complete. Anyone wholookslittle more than a mile north, south, east,or west of Manchester’s Albert Square – never mind slightly less adjacent parts such as Oldham and Rochdale – can see that much needs to be improved, including education, skills training, and inclusiveness, in order to ensure long-termsuccess.

Whatever the warped motive of the 22-year-old Abedi,who evidentlyblew himself up along with the innocent victims, his reprehensible act willnot tarnish Manchester’s bright, hopeful future. I do notclaimtounderstand the world of terrorism,but I do know that those who live in and around Manchester and other cities need to feel part of their community and share its aspirations. Residents who identify with their community are less likely to harm it – and more likely to contribute actively to itsrenewed vigor.

Now more than ever, Manchester needs the vision that the Northern Powerhouse provides. It is a vision that other cities and regions would do well to emulate.

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK Treasury Minister, is Honorary Professor of Economics at Manchester University and former Chairman of the British government's Review on Antimicrobial Resistance.

By Jim O’Neill

The Plant-Based Solution to Hunger

BERLIN – The way we eat in the industrialized world is unhealthy, unjust, and unsustainable. Far too much of the meat we consume is produced under questionable ecological, ethical, and social conditions. And now our industrial model for meat production is being exported to the global south – especially India and China – where meat consumption is rising among these countries’ emerging middle classes.


Worldwide, 300 million tons of meat are produced each year, and the United Nations Food and Agriculture Organization estimates that the annual amount will increase to 455 million tons by 2050 if demand continues to grow at the current rate. Such large amounts of meat can be produced only on an industrial scale, and at high social, political, and ecological costs.

Meat production is a tremendously inefficient use of agricultural land, because considerably more plant-based food is needed to feed livestock than we would need to feed ourselves directly through a plant-based diet. For example, producing one kilogram of chicken meat, pork, or beef requires 1.6, three, and eight kilograms of animal feed, respectively. This pits farmers and animal-feed producers against one another in a fierce competition over land.

Meanwhile, the production of soy – the world’s most important animal-feed grain – rose from 130 million tons in 1996 to 270 million tons in 2015, with 80% of output going to meat production, especially in China (70 million tons) and Europe (31 million tons). This expansion of soy agriculture, as a result of the growing demand for meat, is driving up land values. Consequently, in the global south, common land is being privatized, rainforests are being destroyed to make room for agricultural cultivation, and international agribusinesses are expropriating the land that one-third of the world’s people still rely on for their livelihoods.

Animal-feed production, and the intensive cultivation of agricultural land that it requires, is not only destroying ecosystems and reducing biodiversity; it is also fueling climate change. Worldwide, our industrial agriculture system produces an estimated 14% of the world’s greenhouse-gas emissions; including emissions indirectly linked to deforestation, and those associated with fertilizer production, increases that share to 24%. Moreover, the extensive use of fertilizers and pesticides – 99% of the world’s soy is genetically modified, and is routinely treated with pesticides – is also contaminating ground-water sources, destroying biodiversity, and eroding the soil.

We can no longer ignore the external costs of this system. If we are serious about addressing climate change and securing every human being’s right to proper nutrition and food security, we must challenge the presumption that an industrial agricultural model, let alone meat, is necessary to feed the world.

In fact, that presumption has little merit. The UN Environment Programme estimates that, by 2050, an area between the size of Brazil and India will have to be repurposed into cropland if current food-consumption trends continue. But if the 9.6 billion people expected to inhabit the planet by then were to have a plant-based diet, industrial meat production could be abandoned and all of them could be fed without the need for any additional agricultural land.

For many people, the competition for land is a fight for survival. Land access, which is more unevenly distributed than incomes, is a deciding factor in whether someone suffers from malnutrition: 20% of households that experience hunger do not own land, and 50% of people who experience hunger are small-scale farmers.

The industrial agriculture system’s production chains must be replaced with local, decentralized, and sustainable production chains. It is incumbent upon governments to prioritize people’s right to food and nutrition above private economic interests. People should not lose their livelihoods and food security for the benefit of agribusiness profits.

To move toward an ecologically sustainable and socially equitable agricultural model, we can leverage existing political frameworks, such as the European Union’s Common Agricultural Policy. As it stands now, large-scale industrial meat producers are profiting extensively from EU subsidies; but these subsidies could be redirected as investments in decentralized meat and grain production chains that adhere to a more sustainable model.

Doing so requires recognizing that realistic alternatives to industrial agriculture do exist. For example, “agroecology” – a system based on traditional and indigenous knowledge that is passed down through the generations – is easily adaptable to all geographic circumstances. In fact, in 2006 Jules Pretty of the University of Essex found that this mode of production can increase harvest yields by 79%.

But, to implement this shift, governments must ensure that all people have guaranteed access to land and potable water, and they need to create political frameworks to promote ecologically and socially just agricultural models – which, by definition, excludes industrial agriculture.

The challenge of feeding every human being should not be viewed in opposition to – or as somehow ruling out – questions of social justice and the future of the planet. Poverty, malnutrition, and hunger are a result of politics, not scarcity. Barbara Unmüßig is President of the Heinrich Böll Foundation.

By Barbara Unmüßig

The Six-Day War at 50

NEW YORK – The world is about to mark the 50thanniversary of the June 1967 war between Israel and Egypt, Jordan, and Syria – a conflict that continues to stand out in a region with a modern history largelydefined by violence. The war lasted less than a week, but its legacy remains pronounced a half-century later.


The war itself was triggered by an Israeli preemptive strike on the Egyptian air force, in response to Egypt’s decision to expel a United Nations peacekeeping force from Gaza and the Sinai Peninsula and to close the Straits of Tiran to Israeli shipping. Israel struck first, but most observers regardedwhat it did as a legitimate act of self-defense against an imminent threat.

Israel did not intend to fight on more thanonefront, but the war quickly expanded when both Jordan and Syria entered the conflict on Egypt’s side.It was a costly decision for the Arab countries. After just six days of fighting, Israel controlled the Sinai Peninsula and the Gaza strip, the Golan Heights, the West Bank,and all of Jerusalem. The new Israel was more than three times larger than the old one. It was oddly reminiscent of Genesis: six days of intense effort followed by a day of rest, in this casethe signing of a cease-fire.

The one-sided battle and its outcomeput an end to the notion (for some, a dream) that Israel could be eliminated. The 1967 victory made Israel permanent in ways that the wars of 1948 and 1956 did not.The new statefinally acquired a degree of strategic depth.Most Arab leaders came to shifttheir strategic goal from Israel’s disappearance to its return to thepre-1967 war borders.

The Six-DayWar did not, however, lead to peace, even a partial one. That would have to wait until the October 1973 war, which set the stage for what became the Camp David Accords and the Israel-Egypt peace treaty. The Arab side emerged from this subsequent conflict with its honorrestored; Israelis for their part emerged chastened. There is a valuable lesson here: decisive military outcomes do not necessarily lead to decisive political results, much less peace.

The 1967 war did, however, lead to diplomacy, in this case UN Security Council Resolution 242. Approved in November 1967, the resolution called for Israel to withdraw from territories occupied in the recent conflict – but also upheld Israel’s right to live within secure and recognized boundaries. The resolution was a classic case of creative ambiguity. Different people read it to mean different things. That can makea resolution easier to adopt, but more difficult to act on.

It thus comes as little surprise that there is still no peace between Israelis and Palestinians, despite countless diplomatic undertakings by the United States, the European Union and its members, the UN, and the parties themselves.To be fair, Resolution 242 cannot be blamed for this state of affairs. Peace comes only whena conflict becomes ripe for resolution, which happenswhen the leaders of the principal protagonists are both willing and able to embrace compromise. Absent that, no amount of well-intentioned diplomatic effort by outsiders can compensate.

But the 1967 war has had an enormous impact all the same. Palestinians acquired an identity and international prominence that had largely eluded them when most were living under Egyptian or Jordanian rule. What Palestinians could not generate was a consensus among themselves regarding whether to accept Israel and, if so, what to give up in order to have a state of their own.

Israeliscould agree on some things. A majority supported returning the Sinai to Egypt. Various governments were prepared to return the Golan Heights to Syria under terms that were never met. Israel unilaterally withdrew from Gaza and signed a peace treaty with Jordan. There was also broad agreement that Jerusalem should remain unified and in Israeli hands.

But agreement stopped when it came to the West Bank. For some Israelis, this territory was a means to an end, to be exchanged for a secure peace with a responsible Palestinian state. For others, it was an end in itself, to be settled and retained.

This is not to suggest a total absence of diplomatic progress since 1967. Many Israelis and Palestinians have come to recognize the reality of one another’s existence and the need for some sort of partition of the land into two states. But for now the two sides are not prepared to resolve what separates them. Both sides have paid and are paying a price for this standoff.

Beyond the physical and economic toll, Palestinians continue to lack a state of their own and control over their own lives. Israel’s objective of being a permanent Jewish, democratic, secure, and prosperous country is threatened by open-ended occupation and evolving demographic realities.

Meanwhile, the region and the world have mostly moved on, concerned more about Russia or China or North Korea. And even if there were peace between Israelis and Palestinians, it would not bring peace to Syria, Iraq, Yemen, or Libya.Fifty years after six days of war, the absence of peace between Israelis and Palestinians is part of animperfect status quothat many have come to accept and expect.

Richard N.Haass is the president of the Council on Foreign Relations and the author, most recently, ofAworld Worldin Disarray: American Foreign Policy and the Crisis of the Old Order.

By Richard N. Haass

Is Trump Palestine’s New Hope?

RAMALLAH – On his recent visit to Washington, DC, Palestinian leader Mahmoud Abbas surprised many by heaping praise onUS President Donald Trump. Speaking through a translator, Abbas called Trump, who had promised to “get done” a peace agreement between Israel and Palestine,“courageous” and wise, and lauded Trump’s “great negotiating ability.” “Now, Mr. President,” Abbas concluded in English, “with you we have hope.”


The question, of course, is whether that hope is warranted. After all, in his own public statement,Trump made no reference to the two-state solution, and his vague declarations about peace (mentioned 11 times) included notso much as a hint about the need for Israel (also mentioned 11 times) to end its illegal settlement construction.And, in fact, Trumpfell back in his statements on that asymmetrical phrasing he has so often used in the past: Israel and the Palestinians.

The reality is that Trump has long been giving Palestinians reason to worry. During his election campaign, Trump spoke about moving the United States embassy to Jerusalem and condemned the outgoing Obama administration’s decision to abstain from voting on a United Nations Security Council resolution denouncing Israeli settlements (rather than vetoing it). Once elected, Trump appointed as US ambassador to Israel his bankruptcy lawyer,David Friedman, who has a long history of supporting right-wing Israeli causes (even donating to a West Bank settlement).

Yet Abbas was silent about these issues. The mere fact that Trump had invited him to the White House so early in the administration seemed to provide reason for optimism. And Trump had already directed some attention to resolving the Israeli-Palestinian conflict, tasking his son-in-law and trusted (though wholly inexperienced) adviser Jared Kushner with brokering a peace agreement.

Of course, promises to broker peace are nothing new for a US president. But Trump is no ordinary US president. Many Palestinians are encouraged by the fact that he does not seem bound by the usual lobby-influenced ideologies and commitments of US political parties. In their view, a US president who puts “America first” surely will see the absurdity of spending so much political and financial capital on Israel, which provides little strategic benefit to the US, at the cost ofgreater instability in the Middle East.

Trump’s image as a dealmaker reinforces this hopeful narrative. While his promises to strike “the ultimate deal” are not backed by much detail, they remain appealing to Palestinians, who have grown frustrated with a peace process thathas had little impact beyond allowing Israel to expand and consolidate its occupation of Palestinian land.

This is not to say that Palestinians blindly trust the Trump administration to determine their fate.On the contrary,Abbashas worked diligently to strengthen his own position, meeting with Egyptian President Abdel Fattah el-Sisi and Jordanian King Abdullah II five timesbetween Trump’s inauguration and the visit to the White House. When Sisi and Abdullahvisited Trump, each reiterated the position included in the 2002 Arab Peace Initiative: Israel should withdraw fully from the occupied territories, in exchange for normalization of relations with Arab League countries. At the March 29 Arab League summit in Jordan, they and other Arab leaders underscored the need for an independent Palestinian state on the 1967 borders, with East Jerusalem as its capital.

With such efforts, Abbas hoped to underscore the real goals that must be pursued, countering Israeli attempts at diversion. For example, Israeli Prime Minister Binyamin Netanyahu has been calling on the Palestinian Authority to halt social benefits to the families of prisoners who killed Israelis, attempting to portray those allocations as some kind of payoff. Abbas’s praise of Trump at the White House may be another tactic for keeping Trump on track.

It is too early to tell if Abbas’s approach to the Trump administration will succeed. Some might argue that Trump’s decision to make Saudi Arabia, rather than Israel,the destination of his first trip abroad as US president reflects a new view of the region (though he will head to Israel immediately after).

When interviewed by Reuters on his first 100 days in office, Trump said that the US presidencyhad turned out to bea much harder job than he had anticipated. But the negotiations between Israelis and Palestinians need not be. After all, we know what a deal must entail: an independent Palestinian state, secured through land swaps, and a creative solution to the Palestinian refugee issue.

The main obstacle to an agreementhas been insufficient political will on the part of the US to push for the needed compromise. Palestinian leaders hope that Trump, a businessmanobsessed with his legacy,will finally display the needed resolve, using the full clout of the US presidency to secure the“ultimate deal.”

DaoudKuttab, a former professor at Princeton University and the founder and former director of the Institute of Modern Media at Al-Quds University in Ramallah, is a leading activist for media freedom in the Middle East.

By DaoudKuttab

Trump’s Strongman Weakness

NEW YORK – US President Donald Trump has made his affinity for authoritarian leaders abundantly clear. When Trump entertained Abdel Fattah el-Sisi at the White House in April, he praised the Egyptian military ruler for doing “a fantastic job.” And after Turkish President RecepTayyipErdoğan declared a narrow victory in a referendum to approve a significant expansion of the presidency’s powers, Trump called to offer his congratulations.


Trump has also extended an invitation to Philippine President Rodrigo Duterte, who is presiding over a “war on drugs” that has so far resulted in thousands of extrajudicial killings by the police. And he has continued to speak of Chinese President Xi Jinping in glowing terms, ever since the two met in April at Trump’s Mar-a-Lago resort.

Trump has openly praised these and other strongmen, not least Russian President Vladimir Putin. But praise is not the same thing as policymaking; and, until this month, Trump and his advisers had left us guessing as to whether his enthusiasm for authoritarian leaders would actually lead to a change of course for US foreign policy.

We now have our answer. In a recent speech to his department’s employees, Secretary of State Rex Tillerson clarified the administration’s position on human rights. Since the mid-1970s, US law has required all presidential administrations to promote internationally recognized standards of human rights as a matter of US foreign policy. But in addressing this very issue, Tillerson ignored US law and various international treaties that the United States has adopted.

In describing the Trump administration’s “America first” approach, Tillerson indicated that the US will no longer emphasize human rights when it interacts with other countries on security and economic issues. “If we condition too heavily that others must adopt this value that we’ve come to over a long history of our own,” he said, “it really creates obstacles to our ability to advance our national security interests, our economic interests.”

But US policymakers’ options for dealing with a country where systematic abuses take place are not limited to imposing American values on that country’s government. And, frankly, it’s difficult to see how simply telling Sisi, Erdoğan,or Duterte to adopt American values would do much good. But Tillerson does not seem to recognize that those countries, too, have agreed to abide by internationally accepted values, and to respect human rights.

• So, rather than imposing its values, the US can and should call on governments it works with to adhere to the commitments that they made when they ratified the Charter of the United Nations and other international treaties, such as the UN Convention Against Torture.

When Sisi’s forces kill hundreds of peaceful protestors in the streets of Cairo, they are violating values that their own government pledged to respect. The same goes for Erdoğanwhen his government imprisons more journalists than any other government in the world; and for Duterte, when he encourages his police forces and other “vigilantes” to carry out death-squad-style killings.

Another fallacy in Tillerson’s State Department remarks is the suggestion that human-rights promotion conflicts with US national-security and economic interests. What Tillerson misses is that praising the likes of Sisi, Erdoğan, and Duterte without also mentioning their human-rights abuses is not the same thing as adopting a neutral stance. Rather, it signals to all of those suffering under authoritarian governments that the US condones those governments’ repressive practices – a position that could damage US national-security and economic interests over the long term, by undermining America’s global respect and prestige.

Of course, when confronting particularly pressing and dangerous foreign-policy challenges, it may be appropriate to set aside human-rights concerns temporarily. For example, if the Trump administration is serious about persuading North Korea to abandon its efforts to develop nuclear weapons and intercontinental ballistic missiles, then denouncing that regime’s gross abuses is not a strategic priority.

But leaving those abuses unmentioned is a far cry from endorsing or openly condoning Kim Jong-un’s reign of terror. Giving Kim a free pass would never be justified. And yet that is precisely what Trump has been giving other authoritarian leaders. Sadly, as Tillerson has made clear, Trump’s admiration for such leaders will now be an animating force of official policy.

AryehNeier is President Emeritus of the Open Society Foundations.

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