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Canada possessed an interest in promoting stability in the face of a potential decline of U.S. hegemony in the Americas. Perceptions of declining U.S. influence in the region – which had some credibility in 1979-1984 due to the wildly inequitable divisions of wealth in some U.S. client states in Latin America, in addition to political repression, under-development, mounting external debt, anti-American sentiment produced by decades of subjugation to U.S. strategic and economic interests, and so on – were linked to the prospect of explosive events occurring in the hemisphere. Hence, the Central American imbroglio was viewed as a fuse which could ignite a cataclysmic process throughout the region. Analysts at the time worried that in a worst-case scenario, instability created by a regional war, beginning in Central America and spreading elsewhere in Latin America, might preoccupy Washington to the extent that the United States would be unable to perform adequately its important hegemonic role in the international arena – a concern expressed by the director of research for Canada’s Standing Committee Report on Central America. It was feared that such a predicament could generate increased global instability and perhaps even a hegemonic war. This is one of the motivations which led Canada to become involved in efforts at regional conflict resolution, such as Contadora, as will be discussed in the next chapter.

Peru’s last dictator, Alberto Fujimori, has pulled off a jailbreak years in the making—not by tunneling his way out of prison but by the graces of the country’s highest court. His early release in December is part of a broader problem in Latin America, where the line between governments and crime keeps getting blurrier.

The 85-year-old Fujimori was a little more than halfway through a 25-year sentence for greenlighting extrajudicial killings and kidnappings and embezzling $15 million during his decade-long rule, which ended in 2000. But Peru’s Constitutional Court was apparently unbothered by his unpaid debt to society. The court brought about his release by reinstating a years-old presidential pardon.

In 2012, media outlets in the Middle East reported the possibility of a war game involving Iran, Russia, China and Syria in the Mediterranean. It would be one of the largest war games ever planned, involving 90,000 troops, 400 aircraft, 1,000 tanks and hundreds of rockets.

While the war game did not materialize at that time, it was a signal to the US and other Western nations that the four Eurasian powers were drawing a line in the sand – and that line seemed to be Syria.

America’s assassination of Iran’s second-most powerful commander, Major General Qassem Soleimani, has sparked fears of a war in the Middle East.

But it is not just the United States that risks getting drawn into a conflict, given the emerging Moscow-Beijing-Tehran axis.

Nuclear Pre-emption If a hostile power (let’s say Iran, for sake of discussion) appeared to be on the verge of mating nuclear devices with the systems needed to deliver them, Israel might well consider a preventive nuclear attack. In the case of Iran, we can imagine scenarios in which Israeli planners would no longer deem a conventional attack sufficiently lethal to destroy or delay the Iranian program. In such a scenario, and absent direct intervention from the United States, Israel might well decide to undertake a limited nuclear attack against Iranian facilities.

Given that Iran lacks significant ballistic missile defenses, Israel would most likely deliver the nuclear weapons with its Jericho III intermediate range ballistic missiles. Israel would likely limit its attacks to targets specifically linked with the Iranian nuclear program, and sufficiently away from civilian areas. Conceivably, since it would be breaking the nuclear taboo anyway, Israel might target other military facilities and bases for attack, but it is likely that the Israeli government would want to limit the precedent for using nuclear weapons as much as possible.

When future historians think of the moment that marked the end of the liberal world order, they may point to the spring of 2020—the moment when the United States and its allies, facing the gravest public health threat and economic catastrophe of the postwar era, could not even agree on a simple communiqué of common cause. But the chaos of the coronavirus pandemic engulfing the world these days is only exposing and accelerating what was already happening for years. On public health, trade, human rights, and the environment, governments seem to have lost faith in the value of working together. Not since the 1930s has the world been this bereft of even the most rudimentary forms of cooperation. The liberal world order is collapsing because its leading patrons, starting with the United States, have given up on it. U.S. President Donald Trump, who declared in 2016 that “we will no longer surrender this country . . . to the false song of globalism,” is actively undermining 75 years of American leadership. Others in the U.S. foreign policy establishment have likewise packed their bags and moved on to the next global era: that of great-power competition. Washington is settling in for a protracted struggle for dominance with China, Russia, and other rival powers. This fractured world, the thinking goes, will offer little space for multilateralism and cooperation. Instead, U.S. grand strategy will be defined by what international relations theorists call “the problems of anarchy”: hegemonic struggles, power transitions, competition for security, spheres of influence, and reactionary nationalism. But this future is not inevitable, and it is certainly not desirable. The United States may no longer be the world’s sole superpower, but its influence has never been premised on power alone. It also depends on an ability to offer others a set of ideas and institutional frameworks for mutual gain. If the United States abandons that role prematurely, it will be smaller and weaker as a result. A return to great-power competition would destroy what is left of the global institutions that governments rely on for tackling common problems. Liberal democracies would further descend into disunion and thereby lose their ability to shape global rules and norms. The world that would emerge on the other side would be less friendly to such Western values as openness, the rule of law, human rights, and liberal democracy. A return to great-power competition is neither inevitable nor desirable. In the short term, the new coronavirus (and the resulting economic and social wreckage) will accelerate the fragmentation and breakdown of global order, hastening the descent into nationalism, great-power rivalry, and strategic decoupling. But the pandemic also offers the United States an opportunity to reverse course and opt for a different path: a last-chance effort to reclaim the two- centuries-old liberal international project of building an order that is open, multilateral, and anchored in a coalition of leading liberal democracies. For guidance, today’s leaders should look to the example of U.S. President Franklin Roosevelt. The collapse of the world economy and the rapid spread of fascism and totalitarianism in the 1930s showed that the fates of modern societies were tied to one another and that all were vulnerable to what Roosevelt, using a term that seems eerily prescient today, called “contagion.” The United States, Roosevelt and his contemporaries concluded, could not simply hide within its borders; it would need to build a global infrastructure of institutions and partnerships. The liberal order they went on to build was less about the triumphant march of liberal democracy than about pragmatic, cooperative solutions to the global dangers arising from interdependence. Internationalism was not a project of tearing down borders and globalizing the world; it was about managing the growing complexities of economic and security interdependence in the pursuit of national well-being. Today’s liberal democracies are the bankrupt heirs to this project, but with U.S. leadership, they can still turn it around. THE PROBLEMS OF MODERNITY The rivalry between the United States and China will preoccupy the world for decades, and the problems of anarchy cannot be wished away. But for the United States and its partners, a far greater challenge lies in what might be called “the problems of modernity”: the deep, worldwide transformations unleashed by the forces of science, technology, and industrialism, or what the sociologist Ernest Gellner once described as a “tidal wave” pushing and pulling modern societies into an increasingly complex and interconnected world system. Washington and its partners are threatened less by rival great powers than by emergent, interconnected, and cascading transnational dangers. Climate change, pandemic diseases, financial crises, failed states, nuclear proliferation—all reverberate far beyond any individual country. So do the effects of automation and global production chains on capitalist societies, the dangers of the coming revolution in artificial intelligence, and other, as-yet-unimagined upheavals. The coronavirus is the poster child of these transnational dangers: it does not respect borders, and one cannot hide from it or defeat it in war. Countries facing a global outbreak are only as safe as the least safe among them. For better or worse, the United States and the rest of the world are in it together.

Eighteen months into U.S. President Donald Trump’s administration, domestic and foreign policy analysts alike are in the midst of a bitter awakening: U.S. policy, whether social, economic, or international, may never be the same again. Among the most common refrains from the foreign policy cognoscenti is the warning that Trump has imperiled the liberal international order—the norms, rules, laws, and institutions that have supported U.S. power since 1945. The president’s vengeful unilateralism, we are told, is dismantling a cherished system that has brought peace and stability to the world. In his recent Foreign Affairs article (“The Myth of the Liberal Order,” July/August 2018), Graham Allison provides a useful corrective to this baleful narrative, joining a chorus of contrarian foreign policy thinkers who decry the “myth of the liberal order.” Defenders of the myth, Allison argues, mistakenly credit the liberal order with 70 years of great power peace and misattribute the motivations behind U.S. overseas engagement. The post–World War II system led by the United States was never fully liberal, international, rules based, or orderly. At its core, it was driven by a struggle for global dominance between the United States and the Soviet Union. It was the balance of power between these two nuclear behemoths—and U.S. hegemony in more recent decades—that prevented another world war. For Allison, Trump’s disregard for liberal values may be worrisome, but rather than dreaming of a bygone era of unrivaled liberal hegemony, the United States should focus on rebuilding a robust democracy at home. Although a welcome antidote to the many reverent paeans to the liberal international order and attendant calls for its pristine preservation, Allison’s critique does not fully rhyme with his conclusions. Liberal order may not have been the sole determinant of 70 years of geopolitics, but that does not warrant a wholesale dismissal of the concept as a matter of statecraft or scholarship. And although a restoration of the same liberal system propped up by an indispensable United States is a fantasy, U.S. grand strategy should not discard altogether the notion of international order, even if the world becomes more multipolar and the United States focuses on the defense of democracy at home. MORE THAN A MYTH Critics of the liberal international order are right to draw attention to this often praised but rarely scrutinized concept. Far from a single crystalline structure with ubiquitous reach, the post–World War II order emerged and evolved gradually over the course of the twentieth century. It was initially created as a largely Western project designed for postwar rehabilitation and flourished during the Cold War. It diffused into Asia, Africa, and Latin America following decolonization, cracked and listed during the economic stagnation of the 1970s, and claimed universalism only with its competitors’ demise in the 1990s. To obscure this often disjointed, 70-plus-year evolution by appealing to some monolithic ideal does little justice to the liberal order’s complex history. Yet this labyrinthine trajectory does not obviate the notion of liberal order writ large, whether as an analytic construct or as a grand strategic goal. Granted, the phrase “liberal international order” has always been shorthand for U.S. global leadership—a structure sustained by American power in service of largely Western preferences. As the most powerful state in the system, the United States has disproportionately shaped its rules while reserving the right to periodically flout them. But acknowledging this relationship does not imply that the international liberal system order is purely a reflection of raw power. Even as the U.S.-Soviet Cold War rivalry emerged from bipolarity, the United States’ embrace of liberal internationalism guided its approach to international institutions and structured cooperation within the Western bloc. Unrivaled in the unipolar moment, U.S. grand strategy has been more remarkable for its restraint than its unfettered exercise of coercive power, despite a slew of regrettable excesses. Indeed, the concept of international order is relevant even in a hard power world precisely because it is not reducible to unilateral U.S. interests or to the global distribution of military and economic might. Rather, it emerged and endured through many states’ collective efforts. Where rules are institutionalized in organizations or legal regimes, they reflect painstaking diplomatic efforts to identify convergent interests and codify standards of state behavior. Where rules develop organically, in norms or customary law, they reflect decades of strategic interaction, during which repeated patterns of conflict and cooperation have generated predictability. By design, the U.S.-led liberal system incorporated such attributes. As a result, it offered both stability and considerable political, economic, and security gains to other states. When Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel, Japanese Premier Shinzo Abe, and other U.S. allies invoke the beleaguered liberal order today, it is because they want to preserve those advantages. Far from dismissing the order as a mere euphemism for U.S. hegemony, they see their own national interests at stake in it. They also recognize that those interests cannot be protected without a powerful—and committed—United States. Even China, the order’s most formidable challenger-in-waiting, finds valuein selectively embracing its tenets. THE COMING ENTROPY? The liberal international order is a useful frame for understanding the contours and endurance of U.S. grand strategy over the past 70 years, but it will not persist immutably for another seven decades. Never having achieved the universal acceptance to which post–Cold War triumphalists aspired, the present order is threatened by adverse shifts in the balance of power: China is revisionist in its ascent, and Russia is revanchist in its decline. Global influence is shifting eastward, pushing the United States and Europe into second place. The formal and informal arrangements that govern interstate interaction—which is to say, the international order—must adapt to this new reality if it is to avoid abject decay. But changing power balances alone do not make the order’s demise a foregone conclusion. For the next several decades, the United States will still remain the world’s most powerful state in military, economic, and diplomatic terms. No other country will have the same capacity to shape international order, even as Washington will wield its authority on fundamentally different terms. Put differently, the twilight of the unipolar moment is not the same as the end of U.S. global leadership or preeminence. Given this, how the United States adapts its grand strategy to domestic turmoil and considerable flux abroad will matter a great deal for the future of global order. Other states, chief among them China, will cement their own power in regional and global rules and institutions. This trend is well under way, and some aspects of it are nonthreatening, such as when Beijing requests a greater voting share at the International Monetary Fund. Elsewhere, however, Beijing is fashioning new institutions governed by rules that are decidedly illiberal, as with its Belt and Road Initiative. It would be a grave mistake for the United States to abandon the idea of international order as an empty grand strategic ambition and settle for regional influence over its own neighborhood. Spheres of influence are a form of balance-of-power order but have historically been a fundamentally less stable one and would certainly degrade U.S. security and prosperity. Instead of letting rivals carve out spheres of influence, the United States needs a novel grand strategic vision that rejects both radical retreat and creativity-numbing nostalgia. Any new approach must account for rapidly shifting power relations and technological change. It should also reflect more critically on the universalist ambitions of post–Cold War U.S. grand strategy and may require a greater tolerance for regime diversity than liberal triumphalists could have possibly imagined at the apex of U.S. power. For the United States to lead abroad, it must also confront the dysfunction that is hollowing out support for internationalism at home. As we have argued, and as Allison rightly points out, Trump may be more avatar than architect of the United States’ domestic unraveling. To be sure, Trump’s transactional and visceral approach to foreign policy is itself wreaking havoc on the predictability underlying the postwar order and will require global recompense of epochal proportions from any new leader. But we cannot assess the extent or endurance of his destructiveness just 18 months into his term. What we do know is that Trump’s victory was not an isolated political shock—a fact that many analysts miss by fixating on Trump’s heterodox administration and anticipating his eventual exit. In some ways, Trump’s policies are merely a modern projection of old impulses, most notably the deep unilateralism of the Jacksonian school of foreign policy. Trump’s contemporary version, however, rests on populist and nativist impulses activated in part by socioeconomic dislocation that will only intensify. Automation and the changing nature of work, inequality, political and media polarization, and demographic changes are likely to intersect with an increasingly turbulent international environment, making it more difficult still to articulate a coherent foreign policy built around age-old liberal values and institutions. These domestic undercurrents must be faced squarely—not only for the sake of restoring a sustainable U.S. social compact but in order to build a consensus on the United States’ role in the world. NEW ORDER Less than halfway through Trump’s first term, the U.S. foreign policy establishment, cut off from the levers of power, watches in a state of shock as the country stumbles from one international indignity to another. But the domestic and international forces that carried Trump to power will accelerate with his presidency and outlast his tenure. The United States, in other words, is only just commencing a strategic reckoning, the likes of which it has not undertaken since the years immediately following World War II. In the new strategic environment, the old liberal order built on unrivaled U.S. power will no doubt prove obsolete and untenable. But that should not imply giving up on the system altogether—particularly since it has advanced U.S. interests at a lower cost than any known alternative. As in previous eras, the United States’ global power position will condition, but not predetermine, Washington’s strategic choices. In this process of reorientation, domestic renewal and international restoration are not, as Allison suggests, mutually exclusive. In fact, they are complements, and any serious reevaluation of U.S. strategy must address them simultaneously. The liberal international order may be less foundational than often argued, but it serves more than just narrative purposes. In its hour of duress, a new vision for U.S. strategy must assess threats and advantages at home and abroad and adapt the institutions that have been the foundation of American power. If successful, the United States will navigate an epoch of disruptive change, both domestic and international, in a manner that is peaceful and redounds to U.S. interests. It is a formidable task to be sure, but this moment demands no less.

Dziedzic 20 (Michael Dziedzic – Professor at the Air Force Academy, the National War College, and Georgetown University and Senior Fellow and Senior Program Officer at the International Institute for Strategic Studies, the Institute for National Strategic Studies, and US Institute of Peace, retired Colonel with over 20 years of experience in the international civil/military and stabilization field, including postings in a number of societies emerging from protracted conflict, including El Salvador, Bosnia, Kosovo, and Afghanistan. "Kleptocratic Regimes and National Security: A Pervasive Threat and How it Can be Neutralized," Schar School of Policy and Government at George Mason University. September 2020. ) *brackets to change % to percent

Kleptocratic Regimes: A Pervasive Threat to National Security ● Russian/Chinese kleptocracy, a systemic threat, and the general systemic threats posed by kleptocratic regimes One of the greatest threats to U.S. national security is the corrosive impact of kleptocracy on geopolitical order. Kleptocracy and financial secrecy have metastasized into an existential threat to our civilization. Vladimir Putin has “weaponized” use of corruption for geopolitical ends. The convergence of corrupt values and practices in the former Soviet Union, reformulated for the 21st century and exported to the West, now pose an encompassing threat. The economic power of kleptocrats like Putin is safeguarded in the West by our lack of transparency regarding the real owners of corporations which allows kleptocrats to launder their illicit revenue in shell companies. We must address these threats by enhancing transparency and closing off our financial system to those intent on damaging our country. ● Kleptocracy and the Link to Terrorism, Radicalization, Fragile States, and Political Instability Inherent in the nature of kleptocracies is massive diversion of public funds for private gain. The consequences – inadequate resources for public services, de-legitimization of the regime, and repression of dissent – fuel radicalization, state fragility, and conflict. Extremist groups draw on public anger at the abuse of power. Prominent current examples include the Houthi rebels in Yemen, the Taliban in Afghanistan, the Islamic State in Iraq and Syria, and Boko Haram in Nigeria. The most salient cases where kleptocratic actors have posed a clear threat to U.S. counter-terrorism and stabilization efforts are Afghanistan and Iraq. Systemic and high-level corruption – within governments we supported and funded – funneled revenue out of the domestic economy, further impoverished the country, hollowed out security institutions, undermined the legitimacy of the state, and fueled recruitment by insurgent and terrorist groups. Kleptocracy also has economic effects that slow growth, thereby undercutting political stability. Corruption distorts markets by adding costs and creating inefficiencies, and it deters Foreign Direct Investment. ● The “Convergence” among terrorism, organized crime, corruption and illicit power structures The convergence of terrorism, organized crime, corruption, and illicit power structures constitutes an alternative, parasitic, global political economy that represents an existential threat to societies based on the rule of law. Their effects have been exacerbated by the dramatic increase in the flow of goods and services, money, people, and data that have resulted from globalization. Terrorists and criminals take advantage of these same flow paths and are able to do so invisibly as their transactions are lost in the overwhelming volume of licit and illicit transactions. There is an increasing level of organizational collusion between international terrorist organizations, organized crime and networked insurgencies (e.g., Hezbollah and the Sinaloa cartel). This threat is compounded by the collusion of “mafia states” that utilize the traditional tools of statecraft, such as passports, airline and shipping registries, and diplomatic pouches, to provide free passage to engage in criminal activity. ● Criminalized Power Structures: Leading Spoilers of Peace and Stability Operations Criminalized power structures, defined as regimes that obtain and maintain power through exploitation of illicit revenue, have been responsible for obstructing or thwarting peace processes in at least 70% [percent] of the internal conflicts in which the United Nations has intervened since 1990.7 When the U.S. has been involved--and this has included both peace and stability operations--the figure rises to100% [percent] (i.e., Somalia, Haiti, Bosnia, Kosovo, Afghanistan, and Iraq). Both the U.S. and the international community chronically overlook this problem. In the ten case studies examined in Criminalized Power Structures: The Overlooked Enemies of Peace, almost five years elapsed before missions had the mandate and means to mount a strategy to confront their kleptocratic spoilers.8 Not only had the“golden hour” been squandered, the legitimacy of the mission had typically been severely compromised. This is perhaps the most likelyexplanatory factor for the 50% [percent] rate of return to conflict within five years after an international intervention, as claimed by Kofi Annan.9 ● Violent kleptocracy as the source of genocide “Violent kleptocracy” is a system of state capture in which ruling networks hijack governing institutions for the purpose of looting public coffers and natural resource wealth. The state is thus transformed from an institution that is supposed to provide social and educational services and employment opportunities for its citizens and to safeguard the rule of law into a predatory criminal enterprise that does quite the opposite. Ruling kleptocratic networks utilize violence to maintain power and repress dissenting voices leading to a propensity for conflicts to spiral out of control and precipitate mass atrocities and genocide. Terrorist organizations, militias, and rebel groups can also control territory and operate in a similar manner. The most prominent current examples in Africa are South Sudan, Sudan, Democratic Republic of the Congo, Central African Republic, and Somalia. Previous African conflicts that have metastasized under the influence of violent kleptocracies include Angola, Liberia and Sierra Leone. In all cases, the result has been destabilized/ungoverned regions, humanitarian crises, and gross human rights violations that have frequently led to mass atrocities and genocide.

Boose 21 – Chris Boose is a Business Development Service Agent at the Peace Corps. He was a Policy Fellow at the FACT Coalition at the time of writing. “Financial Secrecy Feeds Kleptocracy and Environmental Destruction. Now is the Time for the U.S. and the World to Act on Beneficial Ownership Reform” 11/3/21, FACT Coalition,

As the reminds us, the rapid move towards sustainability that the climate crisis demands can only be achieved through a committed rewriting of the rules of the global economy to recognize the importance of our shared planet. Yet, as the have revealed once again, criminals, kleptocrats, and the global elite play by a different rulebook that openly mocks international efforts to collectively address climate change and saps public faith in the institutions necessary to implement reform. Operating in financial secrecy, bad actors are free to profit from environmental degradation, and in doing so undermine the global fight against climate change. As global leaders make this week at COP26, it’s time that politicians promise to shine a light on global financial secrecy, particularly the use of anonymous shell companies, as a crucial climate reform. A favorite tool for financial crimes, anonymous shell companies sit at the heart of this global web of secrecy. Through the secrecy that shell companies provide, bad actors are able to engage in destructive extraction, shield themselves from public accountability, and siphon away natural resource revenues by corrupting and capturing political agendas around the world. We need strong beneficial ownership reforms to require corporations and similar entities list their true beneficial owners. Effective implementation of transparency reform, like the (CTA), in the U.S. and around the world, along with well-tailored information exchange requirements, is a necessary step in enforcing meaningful environmental protections. The Key to Hiding from Legal and Public Accountability Anonymous shell companies offer criminals a simple means to flout environmental regulation while avoiding legal and political accountability. This is particularly true when state capacity to enforce those regulations is weak as is often the case in resource rich, developing countries (including many of the same countries that lose out on global revenues from the ongoing on corporate taxation). By wrapping an illegal extraction operation in an anonymous shell company, criminals are able to put a layer of legal separation between them and on-the-ground violations of environmental regulations. Should a government ever step in to stop operations, criminals need only under a new shell company to throw authorities off their trail while the profits keep rolling in. Once the resource has been extracted, a network of still more shell companies are put to work laundering the commodities and the in annual criminal profits they raise. Bringing these schemes into the light would make it easier for governments to enforce environmental protections. Exposing true beneficial owners of shell corporations would also give the public and environmental advocates the information to name and shame corporations–especially those with –engaged in environmental destruction through complex webs of subsidiaries or through partnerships with other corporations with unsustainable business practices. Corporate duplicity undermines the public’s trust in environmental standards, the efficacy of non-governmental action, and our ability to make real change in the fight against climate change. Capturing the Political Agenda Shell companies also serve as a principal tool to disburse bribes and seize control of the political agenda. Untangling the secrecy that shell companies afford to criminals and kleptocrats is a difficult task for even the most committed environmental and climate activists. Still worse is that, by design, anonymous shell companies may facilitate corruption, acting as ideal vessels for bribery and other corrupt payments that compromise the very governments or officials tasked with protecting public resources or investigating environmental crimes. These tools are not reserved for autocrats and well-known kleptocrats; the 2016 Panama Papers revealed that 140 politicians from more than 50 countries relied on their own personal web of offshore companies to escape public accountability or worse. The list included democratically elected officials and autocrats alike from across the globe. Far from being dissuaded from secretive financial practices, politicians have been emboldened to exploit offshore accounts since the 2016 exposé. The recent found that a staggering 300 politicians used offshore accounts from over 90 countries. Once it has been put to use, the cost of this political capture can be staggering, from for presidential allies to being shuffled into private pockets. Lost Revenues and Broken Trust This global system of kleptocracy has tragic knock-on effects for a country’s ability to address the climate crisis. The loss of billions from public coffers drains away funds that might otherwise be put towards the massive climate investments needed to achieve drastic emissions reductions. Even in countries well equipped to invest in cleaner economies, we have seen that when budgets run tight, environmental protection is usually one of the first items on the political chopping block. Country’s pay a price in more than just dollars, however. Corruption scandals shatter the trust between a government and the people it represents. As accountability breaks down, so too does civil society’s ability to push public officials to adopt environmentally minded policies. Instead of advancing the interests of the people, corrupted public officials have incentives to keep their states dependent on extractive industries to maximize future gains from corruption. Again in turn, corrupt control of geographically fixed natural resources and further ostracizes the people from the government. Authoritarianism, kleptocracy, and dependence on destructive industries all go hand-in-hand in a vicious cycle.

By 2040, new technologies could reduce the total burden of disease by 6 to 10 percent.

Today’s interventions are the innovations of the past. Without them, healthy lifespans would not be as long as they are. Innovation continues to be critical to tackle diseases without known cures and to help increase uptake and adherence to interventions that work.

A year with little economic growth seems out of place and many countries now face a recession. Few realize that for most periods of human history economic growth has been zero or very gradual. Growth rates increased after the First Industrial Revolution, influenced by innovation in many areas including transportation, physics and chemistry. This also led the Western world to overtake China which rejected certain technologies such as the expansion of railroads. Economic growth either results from a population increase or higher productivity. With populations decreasing in many countries, higher productivity and efficiency becomes the solution and to achieve this innovation will play a critical role.

Global Economic Crisis

The private sector’s expertise in developing new products will need to be harnessed if we’re to meet targets for sustainable development. It’s hardly news to say the world is facing numerous urgent challenges. The experience of the global pandemic highlighted how vulnerable we all are to transmissible illnesses. The effects of climate change became more obvious than ever this year, from wildfires in Canada to floods in Germany. Toxic emissions and weather patterns combined this autumn in India, forcing Delhi into a form of lockdown due to air pollution. The challenges don’t end there. We could add protecting biodiversity, improving health and education, and spurring economic growth to the mix. All are crucial for sustainable development as the global population grows. These are big challenges but they’re not insurmountable. The political will is there as we can see from the increasing emphasis policymakers are putting on the UN’s Sustainable Development Goals (SDGs). This is an opportunity for the private sector to show its value in coming up with new products and solutions to make a sustainable future a reality. Innovation will be crucial. And investors in innovative companies could benefit. Innovation turns goals into reality Governments and policymakers have an important role to play in helping to set the agenda. We saw this last month at COP26 as countries firmed up their climate change commitments. But setting a target is one thing; achieving it is another. The development of Covid-19 vaccines is an illustration of this. Public sector support was an essential part of the picture but ultimately it was private companies who had the scientific expertise to turn their cutting edge mRNA capabilities into an effective vaccine against the virus. And then they needed to partner with other private sector companies to test, produce, and package these vaccines at scale. The success of the mRNA vaccines shows the importance of innovation. If we, as a society, are going to meet the SDGs, we can’t simply rely on tried and tested solutions. This is where the private sector comes in. To our minds, the Boston Consulting Group expressed it well: “Of all the forces that the private sector can bring to bear in attempting to advance the 2030 SDGs, by far the most powerful is its unique capacity to innovate quickly, attract capital to innovative solutions, and drive innovations at scale. That combination is hard to find in the public sector or the social sector, but it’s the private sector’s lifeblood.” Once-in-a-lifetime opportunity for investors Achieving the SDGs will require the development of entirely new technologies that don’t currently exist, or not yet at scalable levels. The climate crisis in particular, and the target of reaching net zero by 2050, means innovation is urgently needed right now. Developing new technology and products always contains an element of risk but taking risk – in anticipation of potential future reward – is what equity investing is all about: “When a social need can be tackled with a profitable business model, the magic of capitalism is unleashed. Answers to the many deeply rooted societal problems we face become self-sustaining and scalable.” (from Where ESG Fails, Porter, Serafaim and Kramer, Harvard Business School) Investors can make a positive impact by using their capital to support companies who contribute to finding these answers. We see a huge commercial opportunity for innovative businesses as demand for solutions to global problems will only intensify.

The concept of nuclear winter—a years-long planetary freeze brought on by airborne soot from nuclear bombs—has been around for decades. But the idea has been based largely on back-of-the-envelope calculations involving a total war between Russia and the United States. Now, a new multinational study incorporating the latest models of global climate, crop production and trade examines the potential effects of a lesser but perhaps more likely exchange between two nuclear-armed enemies: India and Pakistan. It suggests that even a limited war between them might cause unprecedented global food shortages and starvation lasting more than a decade. The study appears this week in the journal Proceedings of the National Academy of Sciences.

Of an estimated 14,000 nuclear warheads worldwide, close to 95 percent belong to the United States and Russia. India and Pakistan are thought to have about 150 each. The study examines the potential effects if they were to each set off 50 Hiroshima-size bombs—less than 1 percent of the estimated world arsenal.

Some thought the pandemic would expose the weaknesses of populist leaders. But they took very different approaches to managing COVID, and the evidence about the results is mixed. Brett Meyer (Tony Blair Institute for Global Change) finds that populist leaders who downplayed the pandemic in the early months had more cases and deaths, but so did those who adopted a serious but illiberal response. As with many aspects of COVID-19, it has been difficult to find clear and consistent information on how populist leaders have performed throughout the pandemic. While many early commentators argued that a public health emergency like COVID would sound the death knell for populists, they often focused on two of the populists who downplayed the virus, Donald Trump and Jair Bolsonaro, as evidence for their claims. But as my work and that of others has shown, their responses were not representative of most populist leaders. Of 17 populist leaders in power at the beginning of 2020, I found in my August 2020 report that only five downplayed COVID. Although most populists took it seriously, they still differed in how closely they abided by liberal democratic norms. I found that populist leaders in five countries — Hungary, India, the Philippines, Poland, and Turkey— had a serious but illiberal response to COVID, taking excessive emergency powers, harsh/biased enforcement measures, and cracking down on media. COVID has certainly affected several populist leaders, most notably Donald Trump, who lost the 2020 election in large part due to his erratic pandemic performance. But how have countries with populist leaders fared in terms of cases and deaths? Have their health and economic policies differed systematically from non-populist-led countries? And has the illiberal streak of several populist leaders continued? To investigate this, I rely on the Social and Political Correlates Project of the Institutions and Inequality Group at the Social Science Research Center in Berlin (WZB), which has made available open source code to produce a dataset that combines data on COVID health outcomes, policy data, and mobility data with data on countries’ political institutions, economic performance, social structures, and health infrastructure. Bosancianu et al (2020) analyse the social and political correlates of COVID mortality and find that measures of health infrastructure and interpersonal trust predict mortality outcomes but that many social and political variables, including populism, do not produce the hypothesised results. First, I examine the relationship between having a populist leader in power and COVID deaths/cases for all populists, then disaggregated by the categories that I identified in my August 2020 report, listed in Table 1 below: populists who downplayed the virus, those who took it seriously and had a liberal response, and those who took it seriously but had an illiberal response. I average and aggregate these data by country-month. Note: Although I coded the populist leaders of Israel, Serbia, and Sri Lanka as having taken a serious response to COVID that had some illiberal elements, these were to a much lesser degree than our illiberal responses and I combined these leaders with the serious-liberal group here. I mistakenly did not include Slovenian prime minister Janez Jansa as a populist in power in our August 2020 report. We included him in our year-end populism update report and have entered him in the data here as a populist who took a serious-liberal response. For each outcome variable and coding of populism, I include two sets of regression models: (1) a bivariate model; (2) a multivariate model with control variables and geographic and time fixed effects. I cluster standard errors at the country level in both. Bosancianu et al use a LASSO procedure to select covariates with the overall best predictive value for monthly deaths, which as of 5 July 2021 were respiratory disease prevalence, life expectancy, healthcare quality, healthcare spending per capita, and health data quality. I include these controls in my multivariate models, plus a control for population and fixed effects for 12 regions and for month. As of 5 July 2021, Bosancianu et al found a growing positive relationship between having a populist in power and COVID monthly deaths that fell just short of statistical significance in their multivariate models. Perhaps because of the small differences in our coding of populism (there are differences between their data and ours because we have updated our data since their project began), and/or my inclusion of regional/monthly fixed effects, I estimate a statistically significant association (p=.04) of just under 800 additional monthly COVID deaths under populist leaders (mean=221, SD=1,138). This result is largely driven by populists who downplayed the virus, who had approximately 2,200 additional monthly COVID deaths (p=.05). I find similar results for monthly cases. Populist leaders are associated with approximately 31,000 additional monthly cases (Mean=10,250, SD=64,380; p=.02). This result is driven both by populists who downplayed the pandemic (approximately 64,000 additional monthly cases; p=.11) and those who took it seriously but were illiberal (approximately 41,000 additional monthly cases; p=.05). Next, I turn to populists’ pandemic policy responses and to democratic violations. Data on policy responses come from the Oxford Covid-19 Government Response Tracker (OxCGRT), which includes information on containment/closure policies, economic policies, health system policies, and vaccine policies. Data on democratic violations come from VDem’s Pandemic Backsliding dataset (version 6). Their index is computed quarterly and includes a variety of components, including discriminatory measures, abusive enforcement, excessive emergency powers, spreading disinformation, and restrictions on the media. Because these outcome variables are government policies/actions rather than health, I include control variables from the Bosancianu et al dataset that should affect governments’ need/capability for action: deaths per million, GDP per capita, and number of veto points, plus region and time fixed effects. I average and aggregate the Oxford CGRT data at the country-month level. Because the VDem democratic violations data are quarterly, I average and aggregate these at the country-quarter level. While I find no evidence that populist leaders differed from others in their policy response, this null result conceals interesting heterogeneity. As we would expect, populists who downplayed the virus in the early months had less active policy responses — by about 13 points on the 0-100 point CGRT scale (mean=48, SD=21.9; p=.06). But consistent with their early serious response, serious-illiberal populists were approximately 6 points higher on the CGRT scale (p=.05). This suggests that their poor death/case performance was not due to their policy response. Turning to democratic violations, it’s perhaps no surprise to see that populists had more of them. This is consistent with existing research on democratic violations under populism both before and during COVID. While it’s also no surprise to see that the early illiberal populists scored .17 points higher on the VDem 0-1 scale (mean=.2, SD=.15; p<.00), populists who downplayed the virus in the early months were just as bad (also .17 points higher; p<.00). While the estimates are not always precise, I have found evidence that countries with populist leaders performed worse in terms of cases and deaths than those without them. These performances are correlated with actions taken early in the pandemic. Populists who downplayed the pandemic in the early months had more relaxed policy responses and more cases and deaths. The most striking finding is that despite having a more stringent policy response than other leaders, populists who were serious but illiberal in the early months had higher monthly cases and deaths. One explanation for these results is that they became less serious about their policy responses as the pandemic wore on and their countries had relatively few cases. We see evidence of this in Poland, where the government began to downplay health measures to open the economy, and India, where the government declared victory prematurely over the virus. Another possibility that merits further investigation is that because serious-illiberal populists all came to power by emphasising divisive socio-cultural issues, they allowed COVID to spread by looking the other way when their supporters wanted special exemptions for religious/cultural gatherings. Perhaps the best example of this is in India, where the Modi government enacted harsh lockdowns in the early weeks but then let the Kumbh Mela gatherings and rallies of political supporters take place. India’s tragic wave of COVID deaths followed shortly thereafter.

The Covid-19 health crisis has struck a world economy already suffering from sustained weakness. Extremely low interest rates, lackluster growth, and historically high levels of debt have characterized almost all of the advanced economies of the world even before the health crisis. Very low interest rates have complicated the economic policy response to the Covid-19 health crisis, as central banks have had little room to maneuver before hitting the effective lower bound. Our recent research argues that rising income inequality has played a central role in explaining such weakness. Many have argued that rising inequality is problematic for both fairness and political economy reasons, and we agree. However, our recent research argues that rising income inequality is also bad for the overall economy. (The two research studies are “The Saving Glut of the Rich and the Rise in Household Debt” and “Indebted Demand”.) This argument may sound puzzling. A typical argument in macroeconomics is that inequality is good for growth. According to this argument, the rich save more of their income, and such saving boosts capital investment. More capital investment means that we can produce more goods and services, and therefore have a stronger economy. Is this argument empirically accurate? Let’s focus on the United States. From the 1980s to recent years, the top 1% share of national income rose significantly. And indeed, the rich saved more of this income, generating a substantial rise in saving. So far, so good. But did investment in capital goods rise? This is where the traditional view breaks down. The investment to national income ratio (which includes both private and government investment) has actually fallen considerably since the 1980s. The savings of the rich have not translated into more capital investment. So where did the savings of the rich go? The answer: more borrowing by the non-rich (think, bottom 90% of the income distribution) and the government. The large rise in household debt up to the Great Recession was directly tied to the large increase in income inequality through the saving glut of the rich. After the Great Recession, the savings of the rich financed dissaving by the government. Inequality has driven the rise in both household and government debt through this “saving glut of the rich.” This game of lending is not sustainable. As the non-rich and the government continue to borrow from the rich, such borrowing creates a stream of debt service payments that go to the rich. This amplifies income inequality. Furthermore, the rich have a saving rate that is higher than the non-rich, and as a result these debt service payments that go from the non-rich to the rich weaken aggregate demand. The only way for the economy to maintain equilibrium in light of this depressed demand is to lower interest rates, which is exactly what has happened across the world as income inequality has risen. For a while, this lower interest rate strategy may work, as financial markets encourage more and more borrowing by the non-rich to sustain demand. Unfortunately, this debt dynamic has a dead end (or perhaps we should say a “debt end”). When interest rates hit their effective lower bound, it is impossible to lower interest rates further to encourage even more borrowing and consumption by the non-rich. The economy cannot maintain equilibrium unless output falls. The world then sees depressed economic growth. This is exactly what we see in the data. When economies around the world approached the effective lower bound on interest rates, economic growth weakened considerably. This simple logic explains how the persistent and large rise in income inequality leads to (a) rising debt levels, (b) falling interest rates, and (c) depressed economic growth. This simple logic also implies that attacking the rise in inequality directly is the most effective way at achieving a healthy economy in the long-term. Reduced inequality is good for fairness and political economy concerns, but policy-makers should also consider policies that help dampen income inequality for the sake of the overall economy. The framework we have developed implies that a sustained and successful effort to boost income levels of the non-rich would strengthen aggregate demand, boost output, and help economies leave the effective lower bound on interest rates.

Poor states can be high-risk zones that in a rapidly globalizing world may eventually, often indirectly, pose significant risks to far-away countries. How? People, goods, funds and information now traverse the planet with lightning speed. More than two million travelers cross an international border each day. Between 1950 and 2003, air traffic volume grew from twenty-eight billion passenger-kilometers flown to 2.99 trillion passengerkilometers.5 Over the past four decades, total seaborne trade is estimated to have more than quadrupled.6 These factors combine to increase Americans’ exposure to distant phenomena – transnational security threats that can arise from and spread to anywhere on the planet. These threats could take various forms: a mutated avian flu virus that jumps from poultry to humans in Cambodia or Burkina Faso; a U.S. expatriate who unwittingly contracts Marburg virus in Angola and returns to Houston on an oil company charter; a terrorist cell that attacks a U.S. navy vessel in Yemen or Somalia; the theft of biological or nuclear materials from poorly secured facilities in the former Soviet Union; narcotics traffickers in Tajikistan and criminal syndicates from Nigeria; or, over the longer term, flooding and other effects of global warming exacerbated by extensive deforestation in the Amazon and Congo River basins. Weak states such as these can function passively as potential incubators or conveyor belts for transnational threats. Dangerous spillovers from weak states could result in major damage to the U.S. economy. In a worst case scenario, such as a deadly pandemic, they could result in the loss of hundreds of thousands—if not millions—of American lives.

Day 1, Noon EST (9am PST): The power goes out across the entire continental United States. High voltage transformers have blown out everywhere. Within minutes, all 54 commercially operating nuclear power plants across the Nation have “scrammed” (i.e. shut down) their reactors, which is standard operating procedure during the loss of external electric power. Millions of TVs, laptops, and computers have shorted out. Cell phones and landline phones aren’t working. The Internet is down. Smoke is visible from a number of small fires across every community, but very few sirens from fire engines can be heard. Traffic lights are out, and a significant number of cars and trucks that were running are now inoperable and scattered about the roadways. Trains and subways are shutdown. ATMs don’t work, banks close, and Wall Street closes. The Emergency Broadcasting Service and 911 are not operating. First responders are unable to communicate, coordinate or respond, not that they could get anywhere on the clogged roadways. Many of the planes that were in the air have crashed, and those that didn’t must now attempt to land without help from air traffic control or ground radar. No one seems to know what’s going on. By nightfall, most homes, hospitals, and elderly care facilities are without running water. The nighttime sky is pitch black across America, and the stars seem eerily bright overhead.

Days 2-3: There’s a run on everything at the stores; those that are open will only accept cash or barter since debit card readers are non-functioning. There will be no trucks coming to resupply the stores, since canning facilities, distribution centers, and interstate trucking all rely on the electric grid to function. There are long lines at the very few gas stations that have emergency diesel generators powering their pumps. In homes without emergency backup power, anything remaining in refrigerators and freezers spoils and becomes unsafe to eat.

Food security is highly correlated with international security. Lasting food insecurity has been shown to lead to social unrest, food riots, radicalization, instability, and conflict. Most countries currently experiencing conflict are classified by the FAO as “low- income food deficit,” and they have high burdens of undernourishment. Nearly 75% of children under five who experience chronic undernutrition live in countries affected by conflict that can last for generations after war is over.27 It is therefore crucial for all countries to ensure that food security is a central priority in ensuring their own national security as well as international security and cooperation. Many conflicts that lead to food insecurity and famine are human-made, stemming from natural resource competition, poverty, or health system shocks, such as epidemics like HIV/AIDS, malaria, or Ebola. Conflict generates food insecurity by affecting food availability, access, and use. Food systems that are repeatedly put under stress by conflict tend to move from predictable food- value chains to instability and volatility.28 Violent armed conflict can lead to the destruction of crops, livestock, land, and water systems, as well as disruptions in infrastructure such as roads and other transportation modalities, markets, and the human capacity required for food production, processing, distribution, and safe consumption.29 Sometimes hunger is not only an indirect result of conflict but is itself used as a weapon of war.30 Many geopolitical conflicts cross the borders of different food systems. Fragile and failed nation- states influence, and are in turn influenced by, global market forces, and food security is often one of the first factors to be affected. While most conflicts result from human action, the trigger for conflict or crisis may be natural, such as a prolonged drought, or economic, such as the change in the price of a country’s major staple or cash crop. Price volatility can spark disorder and social unrest among urban communities unable to afford basic staples.31 On the other hand, hunger may also be viewed as a cause of conflicts, a perspective that has been far less studied.

While Kashmir continues to bleed, it has locked India and Pakistan into a prolonged conflict comprised of cease-fires, peaceful negotiations, violent uprisings, and crises with a nuclear dimension. In this paper, I used several variables that most broadly encompass domestic instability i.e. various tests ran against all the independent variables separately and then together in the final model support my hypothesis that domestic and economic instability influence the crises in Kashmir because when political leaders feel threatened, they use Kashmir as a territorial diversion as an effort to remain in power. When there is higher political unrest in both India and Pakistan, especially during election years, the number of crises in Kashmir increase significantly.

The results of my research emphasize the importance of domestic stability to prevent what can easily lead to a nuclear war. For key international mediators such as the U.S and UN, it is essential to make efforts in stabilizing the democracy in both India and Pakistan if they truly wish to curb another Indo-Pak war over Kashmir. Since my logit model shows that political unrest and elections have the deepest impact on crises in Kashmir, any state or organization that wishes to advance the resolution of the Kashmir issue should contribute to the process of free and fair democratic elections in both countries without involvement of other states and should attempt to maintain domestic stability by not igniting and highlighting domestic issues that contribute to riots and protests.

“First, it was COVID, and the aftereffects of COVID were supply chain problems and labor shortages … Then it was all about the Great Resignation, where everybody thought that they could just leave. And then you have a war. So there are still a lot of geopolitical issues … And then you have a recession looming, and the short-term thoughts and actions around that. And then you have all these companies doing a bunch of layoffs, which makes you ask yourself, ‘Do I need a bunch of layoffs just because everybody else is doing a bunch of layoffs?,’” said the general manager of a Fortune 1000 company. These comments reflect the roller coaster that tech companies have been riding, without a break, for the last few years. Chief among the worries for technology industry leaders today are macroeconomic uncertainties. In Deloitte surveys of tech industry leaders conducted in October 2022 and May 2023, macroeconomic issues ranked as the top strategic uncertainty facing companies over the next two to three years.1 In fact, in May 2023, 47% of leaders surveyed said that economic conditions facing their company today were worse than six months ago. In-depth interviews with 11 C-suite executives added perspective and insight to the data. On the whole, tech leaders seem to be waiting for more positive market news before they push new investments and riskier moves. They say they are more focused on return on investment, reducing costs, rebalancing their workforces, and leveraging automation technologies. This change in focus has seemingly ushered in a “moment of caution.” How that moment is dealt with today could dictate success or failure in the next wave of growth. Bracing for … something Almost three-quarters of the technology industry leaders surveyed said that their company was taking actions to prepare for an economic downturn. One exec said: “You slow down hiring; you slow down marketing; you bounce sales enablement; you try to just close the deals that you’ve got. You maybe delay some of your innovation a little bit to ride it out and to reserve some cash, and to make sure you’re sustainable enough to survive the market downturn. And so, we’ve been making a lot of proactive changes.” A downturn has been expected for a while, but the specifics and duration aren’t clear. Deloitte’s most recent economic forecast projects a slowdown, but ultimately a soft landing for the US economy—as long as key issues around labor markets, interest rates hikes, and the debt ceiling are addressed properly. Deloitte’s baseline economic scenario expects limited growth, with consumer spending focused on entertainment and travel and business investment focused on IT.2 Some leaders from large technology companies have been very open about their shift in focus toward efficiency, cost-cutting, reducing head count, and improving core products and services.3 Some execs from our cohort, however, see this environment as an opportunity to bet prudently on core competencies “I would say in the past we've placed a lot of bets, and some of those bets didn't pan out,” said one leader. “That's some of our pullback. We’re getting a bit more conservative, focusing on our core strengths at the moment … The belt is a little bit tighter, and it gives us a chance to retrench, dig in, do what we need to do a little bit better.” Whither innovation? Another exec described hesitation to invest in less-proven ideas. “I don't think it is necessarily a pullback, but more of a ‘let's not venture in too quickly.’ Let’s watch the industry and competition closely and not be bleeding-edge and jump ahead unnecessarily.” This type of short-term conservative thinking—especially the canceling of higher-risk projects—points to the possibility that innovation could suffer. If companies focus too narrowly and don’t pursue a broader innovation portfolio, however, they may miss building a foundation for the next big opportunity. In fact, a third of executives surveyed by Deloitte said that market shifts are primary triggers for transformation efforts.4 Recommendations for technology industry leaders to consider Don’t overcorrect. Cutting the least promising innovation projects and focusing on core products and services may represent a wise course, but in the quest to streamline operations and build cash reserves, don’t take too much attention away from expanding the business. Maintain focus on ways to increase existing revenue streams, enter adjacent markets, and perhaps enter new markets so as not to lose competitive advantage.5 Keep a focus on talent. Before reducing head count, companies should confirm they are utilizing talent optimally. It may be more cost-effective to retrain current talent than relaunch recruitment efforts once the market recovers. Even if layoffs become necessary, organizations should think strategically about the skills they could need to drive the next wave of growth and set the stage for flexible recruitment and retention. Ensure that efficiency serves a greater purpose. When looking to improve the efficiency of various systems and processes to drive cost savings, companies should maintain a long-term focus and drive changes that can help enable innovation in the future. Leaders told us that digital transformation efforts are still receiving a great deal of focus and investment. Technology companies are looking to boost efficiency and improve products and services through AI, cloud adoption, and process automation.