Group items tagged

Our analysis confirms that unequal exchange is a significant driver of global inequality, uneven development, and ecological breakdown.

Today, we are told, the world economy functions as a meritocracy: countries that have strong institutions, good markets, and a steadfast work ethic become rich and successful, while countries that lack these things, or which are hobbled by corruption and bad governance, remain poor. This assumption underpins dominant perspectives in the field of international development (Sachs, 2005, Collier, 2007, Rostow, 1990, Moyo, 2010, Calderisi, 2007, Acemoglu and Robinson, 2012), and is reinforced by the rhetoric, common among neoclassical economists, that free-trade globalization has created an “even playing field”.

Emmanuel and Amin argued that unequal exchange enables a “hidden transfer of value” from the global South to the global North, or from periphery to core, which takes place subtly and almost invisibly, without the overt coercion of the colonial apparatus and therefore without provoking moral outrage. Prices are naturalized on the grounds that they represent “utility”, or “value”, or the outcome of “market mechanisms” such as supply and demand, obscuring the extent to which they are determined by power imbalances in the global political economy. Price differentials in international trade therefore function as an effective method of maintaining the patterns of appropriation that once overtly defined the colonial economy, allowing blame for “underdevelopment” to be shifted onto the victims.

Historians have demonstrated that the rise of Western Europe depended in large part on natural resources and labour forcibly appropriated from the global South during the colonial period, on a vast scale. Spain extracted gold and silver from the Andes, Portugal extracted sugar from Brazil, France extracted fossil fuels, minerals and agricultural products from West Africa, Belgium extracted rubber from the Congo; and Britain extracted cotton, opium, grain, timber, tea and countless other commodities from its colonies around the world – all of which entailed the exploitation of Southern labour on coercive terms, including through mass enslavement and indenture. This pattern of appropriation was central to Europe’s industrial growth, and to financing the expansion and industrialization of European settler colonies, including Canada, Australia, New Zealand and the United States, which went on to develop similarly imperialist orientations toward the South (e.g., Naoroji, 1902, Pomeranz, 2000, Beckert, 2015, Moore, 2015, Bhambra, 2017, Patnaik, 2018, Davis, 2002).

for every unit of embodied resources and labour that the South imports from the North they have to export many more units to pay for it, enabling the North to achieve a net appropriation through trade. This dynamic was theorized by Emmanuel (1972) and Amin (1978) as a process of “unequal exchange”.Emmanuel and Amin argued that unequal exchange enables a “hidden transfer of value” from the global South to the global North, or from periphery to core, which takes place subtly and almost invisibly, without the overt coercion of the colonial apparatus and therefore without provoking moral outrage. Prices are naturalized on the grounds that they represent “utility”, or “value”, or the outcome of “market mechanisms” such as supply and demand, obscuring the extent to which they are determined by power imbalances in the global political economy. Price differentials in international trade therefore function as an effective method of maintaining the patterns of appropriation that once overtly defined the colonial economy, allowing blame for “underdevelopment” to be shifted onto the victims.

Following Dorninger et al. (2021), we use a “footprint” analysis of input–output data to quantify the physical scale of raw materials, land, energy and labour embodied in trade between the North and South, looking not only at traded goods themselves but also the upstream resources and labour that go into producing and transporting those goods, including the machines, factories, infrastructure, etc.

Grounding our analysis in the physical dimensions of unequal exchange is important for several reasons. First, these resources – raw materials, land, labour and energy – embody the productive potential that is required for meeting human needs (use-value) and for generating economic growth (exchange-value). Physical drain is therefore ultimately what drives global inequalities in terms of access to provisions, as well as in terms of GDP or income (see Hornborg, 2020). Second, this approach allows us to maintain sight of the ecological impacts of unequal exchange. We know that excess energy and material consumption in high-income nations, facilitated by appropriation from the rest of the world, is causing ecological breakdown on a global scale. Tracing flows of resources embodied in trade allows us to determine the extent to which Northern appropriation is responsible for ecological impacts in the South; i.e., ecological debt (Roberts and Parks, 2009, Warlenius et al., 2015, Hornborg and Martinez-Alier, 2016).

Due to the growing fragmentation of international commodity chains, monetary databases on bilateral gross trade flows have been criticised for not accurately depicting the monetary interdependencies between national economies (Johnson and Noguera, 2012), i.e., the amount of a countries’ value added that is induced by foreign final demand and international trade relations. Trade in Value Added (TiVA) indicators Johnson and Noguera, 2012, Timmer et al., 2014 are designed to take into account the complexity of the global economy. The TiVA concept is motivated by the fact that, in monetary terms, trade in intermediates accounts for approximately two-thirds of international trade. Imports (of intermediates) are used to produce exports and hence bilateral gross exports may include inputs (i.e., value added) from third party countries (Stehrer, 2012). TiVA reveals where (e.g., in which country or industry) and how (e.g. by capital or labour) value is added or captured in global commodity chains (Timmer et al., 2014).

TiVA, which is sometimes referred to as the “value footprint”, is the monetary counterpart of the MRIO-based environmental footprint because both indicators follow the same system boundaries, i.e., all supply chains between production and final consumption of two countries including all direct and indirect interlinkages. Moreover, in contrast to global bilateral monetary trade flows, TiVA is globally balanced, meaning that national exports and imports globally sum up to zero. This is an important feature of the TiVA indicator that facilitates more consistent and unambiguous assessments.

for every unit of embodied raw material equivalent that the South imports from the North, they have to export on average five units to “pay” for it

For land the average ratio is also 5:1, for energy it is 3:1, and for labour it is 13:1

Table 1. Resource drain from the South.ResourceNorth → South flows 2015South → North flows 2015Drain from South in 2015Cumulative drain from South 1990–2015Raw material equivalents [Gt]3.3715.3912.02254.40Embodied land [mn ha]527.421,349.01821.5932,987.23Embodied energy [EJ]21.5543.5121.06650.34Embodied labour [mn py-eq]31.11219.22188.125,956.62

in the year 2015 the North’s net appropriation from the South totalled 12 billion tons of raw materials, 822 million hectares of land, 21 exajoules of energy (equivalent to 3.4 billion barrels of oil), and 188 million person-years equivalents of labour (equivalent to 392 billion hours of work). By net appropriation we mean that these resources are not compensated in equivalent terms through trade; they are effectively transferred gratis. And this appropriation is not insignificant in scale; on the contrary, it comprises a large share (on average about a quarter) of the North’s total consumption.

significant consequences for the global South, in terms of lost use-value. This quantity of Southern raw materials, land, energy and labour could be used to provision for human needs and develop sovereign industrial capacity in the South, but instead it is mobilized around servicing consumption in the global North.

Eight hundred and twenty-two million hectares of land, which is twice the size of India, would in theory be enough to provide nutritious food for up to 6 billion people, depending on land productivity and diet composition

material use is tightly linked to environmental pressures. It accounts for more than 90% of variation in environmental damage indicators (Steinmann et al., 2017), and more than 90% of biodiversity loss and water stress (International Resource Panel, 2019). Moreover, as Van der Voet et al. (2004) demonstrate, while impacts vary by material, and vary as technologies change, there is a coupling between aggregate mass flows and ecological impact. Net flows of material resources from South to North mean that much of the impact of material consumption in the North (43% of it, net of trade) is suffered in the South. The damage is offshored.

Industrial ecologists hold that global extraction and use of materials should not exceed 50 billion tons per year (Bringezu, 2015). In 2015, the global economy was using 87 billion tons per year, overshooting the boundary by 74% and driving ecological breakdown. This overshoot is due almost entirely to excess resource consumption in global North countries. The North consumed 26.71 tons of materials per capita in 2015, which is roughly four times over the sustainable threshold (6.80 tons per capita in 2015). Our results indicate that most of the North’s excess consumption (58% of it) is sustained by net appropriation from the global South; without this appropriation, material use in high-income nations would be much closer to the sustainable level.

In consumption-based terms, the North is responsible for 92% of carbon dioxide emissions in excess of the planetary boundary (350 ppm atmospheric concentration of CO2) (Hickel, 2020), while the consequences harm the South disproportionately, inflicting dramatic social and economic costs (Kikstra et al., 2021b, Srinivasan et al., 2008). The South suffers 82–92% of the costs of climate change, and 98–99% of the deaths associated with climate change (DARA, 2012)

Net appropriation of land means soil depletion, water depletion, and chemical runoff are offshored; net appropriation of energy means that the health impacts of particulate pollution are offshored; net appropriation of labour means that the negative social impacts of exploitation are offshored, etc (Wiedmann and Lenzen, 2018). In the case of non-renewable resources there is also a problem of depletion: resources appropriated from the South are no longer available for future generations to use (Costanza and Daly, 1992, World Bank, 2018), which is particularly problematic given that under conditions of net appropriation economic losses are not offset by investments in capital stock (cf. Hartwick, 1977). Finally, the extractivism that underpins resource appropriation generates social dislocations and conflicts at resource frontiers (Martinez-Alier, 2021).

the value of resources and labour cannot be quantified in dollars, and there is no such thing as a “correct” price.

Prices under capitalism do not reflect value or utility in any objective way. Rather, they reflect, among other things, the (im)balance of power between market agents (capital and labour, core and periphery, lead firms and their suppliers, etc); in other words, they are a political artefact

While prices by definition do not reflect value, they do allow us to compare the scale of drain to prevailing monetary representations of production and income in the world economy.

Fig. 2 shows that drain from the South in 2015 amounted to $14.1 trillion when measured in terms of raw material equivalents, $5.1 trillion when measured in terms of land, $3.6 trillion when measured in terms of energy and $20.3 trillion when measured in terms of labour.

Over the period 1990–2015, the drain sums to $242 trillion (constant 2010 USD). This represents a significant “windfall” for the North, similar to the windfall that was derived from colonial forms of appropriation; i.e., goods that did not have to be produced on the domestic landmass or with domestic labour, and did not have to be bought on the domestic market, or paid for with exports (see Pomeranz, 2000, Patnaik, 2018). While previous studies have shown that the price distortion factor increased dramatically during the structural adjustment period in the 1980’s (Hickel et al., 2021), our data confirms that since the early- to mid-1990’s it has tended to decline slightly. This means that the increase in drain during the period 1990–2007, prior to the global financial crisis, was driven primarily by an increase in the volume of international trade rather than by an increase in price distortion.

Table 3 shows that, over the 1990–2015 period, resources appropriated from the South have been worth on average roughly a quarter of Northern GDP.

the North’s reliance on appropriation from the South has generally increased over the period (despite a significant drop after the global financial crisis), whereas the South’s losses as a share of total economic activity have generally decreased, particularly since 2003, due to an increase in South-South trading and higher domestic GDP creation or capture within the South, both driven largely by China

Aid flows create the powerful impression that rich countries give benevolently to poorer countries. But the data on drain through unequal exchange raises significant questions about this narrative.

net appropriation by DAC countries through unequal exchange from 1990 to 2015 outstripped their aid disbursements over the same period by a factor of almost 80

for every dollar of aid that donors give, they appropriate resources worth 80 dollars through unequal exchange. From the perspective of aid recipients, for every dollar they receive in aid they lose resources worth 30 dollars through drain

The dominant narrative of international development holds that poor countries are poor because of their own internal failings and are therefore in need of assistance. But the empirical evidence on unequal exchange demonstrates that poor countries are poor in large part because they are exploited within the global economy and are therefore in need of justice. These results indicate that combating the deleterious effects of unequal exchange by making the global economy fairer and more equitable would be much more effective, in terms of development, than charity.

In an equitable world, the resource trade deficit that the North sustains in relation to the South would be financed with a parallel monetary trade deficit. But in reality, the monetary trade deficit is very small, equivalent to only about 1% of global trade revenues, and fluctuates between North and South. In effect, this means that the North achieves its large net appropriation of resources and labour from the South gratis.

The question of sectoral disparities has been moot since the 1980s, however, as industrial production has shifted overwhelmingly to the South. The majority of Southern exports (70%) consist of manufactured goods (data from UNCTAD; see Smith, 2016). Of all the manufactured goods that the USA imports, 60% are produced in developing countries. For Japan it is 70%. We can see this pattern reflected also in the industrial workforce. As of 2010, at least 79% of the world’s industrial workers live in the South (data from the ILO; see Smith, 2016). This shift is due in large part to the rise of global commodity chains, which now constitute 70% of international trade. Between 1995 and 2013, there has been an increase of 157 million jobs related to global commodity chains, and an estimated 116 million of them are concentrated in the South, predominantly in the export manufacturing sector (ILO, 2015). In other words, during the period we analyse in this paper (1990–2015), the South has contributed the majority of the world’s industrial production, including high-technology production such as computers and cars. And yet price inequalities remain entrenched.

if Northern states or firms leverage monopoly power within global commodity chains to depress the prices of imports and increase the prices of final products, their labour “productivity” appears to improve, and that of their counterparts declines, even if the underlying production process remains unchanged. Indeed, empirical evidence indicates that real productivity differences between workers are minimal, and cannot explain wage inequalities (Hunter et al., 1990).

wage inequalities exist not because Southern workers are less productive but because they are more intensively exploited, and often subject to rigid systems of labour control and discipline designed to maximize extraction (Suwandi et al., 2019). Indeed, this is a major reason why Northern firms offshore production to the South in the first place: because labour is cheaper per unit of physical output (Goldman, 2012).

the terminology of “value-added” is a misnomer. In international trade, TiVA does not tell us who adds more value but rather who has more power to command prices. And in the case of global commodity chains, TiVA does not indicate where value is produced but rather where it is captured (Smith, 2016).

our analysis reveals that value in global commodity chains is disproportionately produced by the South, but disproportionately captured by the North (as GDP). Value captured in this manner is misleadingly attributed to Northern economic activities

rich countries are able to maintain price inequalities simply by virtue of being rich. This finding supports longstanding claims by political economists that, all else being equal, price inequalities are an artefact of power. Just as in a national economy wage rates are an artefact of the relative bargaining power of labour vis-à-vis capital, so too in international trade prices are an artefact of the relative bargaining power of national economies and corporate actors vis-à-vis their trading partners and suppliers. Countries that grew rich during the colonial period are now able to leverage their economic dominance to depress the costs of labour and resources extracted from the South. In other words, the North “finances” net appropriation from the South not with money, but rather by maintaining the prices of Southern resources and labour below the global average level.

Patents play a key role here: 97% of all patents are held by corporations in high-income countries (Chang, 2008:141)

In some cases, patents involve forcing people in the South to pay for access to resources they might otherwise have obtained much more affordably, or even for free (Shiva, 2001, Shiva, 2016).

In the World Bank and the IMF, Northern states hold a majority of votes (and the US holds a veto), thus giving them control over key economic policy decisions. In the World Trade Organization (which controls tariffs, subsidies, and patents), bargaining power is determined by market size, enabling high-income nations to set trade rules in their own interests.

ubsidized agricultural exports from the North undermine subsistence economies in the South and contribute to dispossession and unemployment, placing downward pressure on wages. Militarized borders preclude easy migration from South to North, thus preventing wage convergence. Moreover, structural adjustment programs (SAPs) imposed by the World Bank and IMF since the 1980s have cut public sector salaries and employment, rolled back labour rights, curtailed unions, and gutted environmental regulations (Khor, 1995, Petras and Veltmeyer, 2002).

SAPs, bilateral free trade agreements, and the World Trade Organization have forced global South governments to remove tariffs, subsidies and other protections for infant industries. This prevents governments from attempting import substitution, which would improve their export prices and drive Northern prices down. Tax evasion and illicit financial flows out of the South (which total more than $1 trillion per year) drain resources that might otherwise be reinvested domestically, or which governments might otherwise use to build national industries. This problem is compounded by external debt service obligations, which drain government revenue and require obeisance to economic policies dictated by creditors (Hickel, 2017). In addition, structural dependence on foreign investors and access to Northern markets forces Southern governments and firms to compete with one another by cutting wages and resource prices in a race to the bottom.

structural power imbalances in the world economy ensure that labour and resources in the South remain cheap and accessible to international capital, while Northern exports enjoy comparatively higher prices

Cheap labour and raw materials in the global South are not “naturally” cheap, as if their cheapness was written in the stars. They are actively cheapened

the analysis obscures class and geographic inequalities within countries and regions, which are significant when it comes to labour prices as well as resource consumption. The high levels of resource consumption that characterize Northern economies are driven disproportionately by rich individuals and affluent areas, as well as by corporations that control supply chains, and enabled by internal patterns of exploitation and unequal exchange in addition to drain through trade (Harvey, 2005). For example, there are marginalized regions of the United States that serve as an “internal periphery” (Wishart, 2014). It would also be useful to explore the gender dynamics of unequal exchange within countries. These questions cannot be answered with our data, however.

This research confirms that the “advanced economies” of the global North rely on a large net appropriation of resources and labour from the global South, extracted through induced price differentials in international trade. By combining insights from the classical literature on unequal exchange with contemporary insights about global commodity chains and new methods for quantifying the physical scale of embodied resource transfers, we are able to develop a novel approach to estimating the scale and value of resource drain from the global South. Our results show that, when measured in Northern prices, the drain amounted to $10.8 trillion in 2015, and $242 trillion over the period from 1990 to 2015 – a significant windfall for the North, equivalent to a quarter of Northern GDP. Meanwhile, the South’s losses through unequal exchange outstrip their total aid receipts over the period by a factor of 30.

support contemporary demands for reparations for ecological debt, as articulated by environmental justice movements and by the G77

True repair requires permanently ending the unequal distribution of environmental goods and burdens between the global North and global South, restoring damaged ecosystems, and shifting to a regenerative economic system.

It is clear that official development assistance is not a meaningful solution to global poverty and inequality; nor is the claim that global South countries need more economic liberalisation and export-oriented market integration. The core problem is that low- and middle-income countries are integrated into the global economy on fundamentally unequal terms. Rectifying this problem is critical to ensuring that global South countries have the financial, physical and human resources they need to improve social outcomes.

democratize the institutions of global economic governance, such as the World Bank, IMF and WTO, so that global South countries have more control over trade and finance policy.

end the North’s use of unfair subsidies for agricultural exports, and remove structural adjustment conditions on international finance, which would help mitigate downward pressure on wages and resource prices in the South while at the same time enabling Southern countries to build sovereign industrial capacity

a global living wage system, and a global system of environmental regulations, would effectively put a floor on labour and resource prices

Reducing North-South price differentials would in turn reduce the scale of the North’s net resource appropriation from the South (in other words, it would reduce ecologically unequal exchange), thus reducing excess consumption in the North and the ecological impacts that it inflicts on the South.

Structural transformation will only be achieved through political struggle from below, including by the anti-colonial and environmental justice movements that continue to fight against imperialism today

By directly acquiring mines, accumulating equity stakes in natural-resource companies, making long-term agreements to buy mines’ current or future production (known as “off-take agreements”), and investing in new projects under development, Chinese firms traded much-needed capital for outright control or influence over large shares of the global production of these resources. Despite China’s slowing growth and a major pullback in its foreign direct investment in other sectors, the government has maintained robust financial support for resource acquisition; mergers and acquisitions in metals and chemicals hit a record high in 2018.

China lacks significant reserves of three resources vital to its tech ambitions: cobalt, platinum-group metals, and lithium. It has successfully employed two strategies to secure control of them. One is driven by China’s state-owned enterprises (SOEs), which use development finance and infrastructure investment to embed themselves in higher-risk countries, establishing close ties with government leaders. The second is investment by state-linked private firms in market-based economies. Both strategies have shown agility and an ability to effectively adapt to local circumstances to achieve the same end.

Chile is home to 57 percent of the world’s known lithium reserves, the world’s largest known concentration, and SQM controls roughly half the country’s production

DRC is home to nearly two-thirds of the world’s cobalt production and half of its known reserves. Those resources are the prime target of investors for the booming battery industry. Over a decade of steady engagement, China has staked out a dominant position by developing strong political ties and investing in production assets and related infrastructure

China’s SOEs and private firms have made at least eight major equity and off-take plays in platinum-group metals in the Bushveld Complex. Such investments in South Africa’s highly concentrated and strategic resource deposits have helped make metals the country’s leading source of export growth, with nearly 50 percent of its metal exports going to China—tying South Africa’s economic welfare directly to Chinese investment.

the three countries where nearly 90 percent of global lithium production and more than three-quarters of the world’s known lithium reserves are located: Chile, Argentina, and Australia. In just six years, China has come to dominate the global market: More than 59 percent of the world’s lithium resources are now under its control or influence

China now owns or has influence over half of the DRC’s cobalt production, and has a massive stake in its mining industry. Six months ahead of the presidential elections, the event also sent a strong message to candidates about China’s deep investment in copper and cobalt mining—which constitutes 80 percent of the DRC’s export revenue and thousands of jobs—and its capacity to influence the future of the DRC’s economy

Natural resources are abundant in China; it is the No. 1 producer and processor of at least ten critical minerals and metals that are essential to high-tech industries and upon which China’s commercial and strategic competitors depend. To reinforce its strength, Chinese firms are acquiring mines and output from the next-largest producers and reserves, giving China both an economic edge in the next high-tech industrial revolution and increasing geopolitical power.

In a cash-strapped industry, Chinese firms are financing mine expansion and new development in exchange for a guaranteed supply of lithium in both mature and emerging markets. In Argentina, where President Mauricio Macri is eliminating mineral export taxes, reducing corporate tax rates, and allowing profit repatriation, China is establishing a dominant position in the nascent sector with “streaming deals,” which provide development capital in exchange for future lithium yields to help projects get off the ground. Chinese firms, led by Ganfeng, have stakes in 41 percent of the country’s major planned projects that account for 37 percent of Argentina’s reserves. This raw-material strategy is already coming to fruition: Lithium export volumes from Argentina to China rose nearly fourfold from 2015 to 2017, and China has secured access to the country's lithium for the longer term.

This same strategy, combined with asset acquisition, has also been successful in Australia, whose proximity to China, significant lithium reserves, and broad political support for mining investment have attracted Chinese investment. Tianqi and Ganfeng have established stakes in 91 percent of the lithium mining projects underway and 75 percent of the country’s reserves, including some of the world’s largest.

Though the final agreement included restrictions on Tianqi’s board and committee participation and its access to SQM’s sensitive data, Tianqi’s equity position still confers considerable influence over SQM.

Perhaps the best-known example both of China’s natural-resource dominance and its willingness to exploit it is rare-earth elements, a group of 17 elements that (despite their name) are commonly found, but rarely in concentrations that can be economically extracted. They are important materials for the defense, aerospace, electronics, and renewable energy industries. Over the past two decades China has produced more than 80 percent of the world’s production of rare-earth elements and processed chemicals. In 2010 it cut off exports to Japan amid rising tensions over the East China Sea, and the following year it imposed export quotas that threw governments and manufacturers into a panic. But with the exception of Japan, the attention to this critical vulnerability was short-lived, and little action was taken by other countries reliant on imports to diversify their resources or develop minerals action plans of their own.

China declared rare-earth elements a strategic resource in 1990 and prohibited foreign investment in the sector. Six state-owned enterprises control the industry, and the government cut production quotas in 2018 by 36 percent. With global demand for rare-earth elements projected at a compound average growth rate of more than 17 percent to 2025, a supply crunch is likely approaching—and China is already securing other nations’ supplies

While Russia strictly limits foreign participation in rare-earth element development, Chinese firms have accumulated off-take agreements and stakes in rare-earth element mines in Australia and Brazil

in 2017, China’s Shenghe Resources and two U.S. private equity firms acquired the sole U.S. and North American rare-earth element producer and processor, Molycorp, and its idled mining operations at Mountain Pass, California.

In 2016, China’s Yellow Dragon Holdings Ltd. co-invested with Bushveld Minerals, the primary vanadium developer in South Africa’s massive Bushveld Complex, to acquire Strategic Minerals, which owned the Vametco vanadium mine and plant. Yellow Dragon subsequently increased its investment in Bushveld Minerals and has become the fifth-largest shareholder. The holdings deepen China’s influence over South Africa’s vanadium resources and its role in the country’s emerging high-tech sector

China’s position is even stronger in graphite, a crystalline form of the element carbon whose high conductivity makes it a major component in electrodes, batteries, and solar panels, as well as industrial products such as steel and composites. For the last 20 years, China has been the leading global supplier of graphite, representing nearly 70 percent of the world’s production in 2018 and 24 percent of its reserves. While synthetic graphite, which is produced from petroleum coke, is an alternative, unfavorable economics constrain its use

New projects are concentrated in Mozambique, where the world’s largest graphite mine and fourth-largest known reserves are located. Already, Chinese firms have secured off-take agreements with the three major developers in Mozambique for the majority of their graphite production, and they are financing new development.

Japan is 90 percent reliant on China for its graphite

This resource consolidation could determine whether China is able to overcome the last major hurdle to achieving its ambitions: a competitive semiconductor industry.

Semiconductors can be pure elements or compounds and altered with impurities to improve their conductivity. Several materials are now being used to improve speed and performance, including rare-earth elements, graphite, indium, gallium, tantalum, and cadmium. China is the dominant producer of five out of the six, controls more than 75 percent of the world’s supply of three, and is consolidating control over them all

Should China succeed technologically, its capacity to scale production and flood markets (as it has already done with solar panels and wind turbines) has serious implications not only for leading semiconductor producers, but also for national security, if Chinese-manufactured chips are embedded in the devices upon which our data-driven lives, our economies, and our defense systems increasingly depend. While government and industry officials have started to restrict semiconductor sales and scrutinize Chinese acquisition of technology firms—e.g., the United States’ temporary ban on selling semiconductors to ZTE, or the recent flare-up over Huawei —such moves are strengthening China’s resolve to develop its domestic industry. More attention should be paid to its efforts to consolidate critical raw materials and the computing power they confer.

In April, U.S. government officials announced plans to meet with lithium industry leaders and automakers with the intention of developing a national electric-vehicle supply chain strategy. It is a start.

“Trade barriers will create extreme volatility,” warned Torero. “[They] will make the situation worse. That’s what we observe in food crises.”

problems could start to be seen within weeks and intensify over the following two months as key fruit and vegetables come into season

“Fruit and vegetables are also very labour intensive, if the labour force is threatened because people can’t move then you have a problem.”

“We need to have policies in place so the labour force can keep doing their job. Protect people too, but we need the labour force. Major countries have yet to implement these sorts of policies to ensure that food can keep moving.”

Countries such as the UK, with a sinking currency and high level of imports, are also likely to see food price rises unless the government takes action or retailers absorb some of the costs

Individuals can also play an important role, by avoiding panic buying and hoarding of food, and cutting down on food waste. Buying too much fresh farm produce that then goes off before it can be eaten will just exacerbate food supply problems, he said. “Individuals should only buy what they need to avoid food waste.”

In the UK, some farming leaders have called for a “land army” of workers to replace a shortfall of workers that could reach 80,000, according to one estimate, if the 60,000 seasonal workers recruited from abroad in normal years are prevented from coming, and if some British workers fall ill.

Andre Laperriere, executive director of Global Open Data for Agriculture and Nutrition, which provides data on food and agriculture, said the government must make plans to ensure the food supply chain functioned smoothly.“Empty shelves in supermarkets should not be much of a concern,” he said. “It is not a supply problem – it is a logistics problem. There is enough supply for all, as long as everyone stays calm and stops hoarding. We may tend to waste food if we hoard more than required, and hoarding would also artificially increase food prices because of the pressure on the supply chain.”

“The food sector comes under the critical infrastructure sector, along with healthcare and emergency services,”

the roots of today's global economy really go back to 1973, when the United States went off the gold standard and most countries moved from fixed to floating exchange rates. Floating exchange rates meant that the era of managed trade was over. The global economy moved into a new phase driven by market forces. The oil exporting countries of the Gulf were the first to benefit as the market price for oil quadrupled between 1973 and 1974. China came to the party just a few years later. Since then the global economy has become more and more open. After the currency liberalisation of 1973 came a huge increase in international trade and then, in the 1990s, in foreign investment. Both trade and investment peaked in 2007-2008

Annual global FDI is down roughly 50 percent from its 2007 peak of just over $3 trillion. It's still much larger than it was in the 1990s or earlier decades, but global FDI has stabilised at roughly the levels of the early 2000s.

These days China has to compete with India, Southeast Asia, Latin America and even Africa for scarce foreign investment dollars

China's export-oriented garment industry employs about 10 million people. These jobs are increasingly threatened as companies move production to lower-cost countries such as Vietnam

China has been the most visible beneficiary of the increasing globalisation of the global economy. Soon it may be the most visible victim of deglobalisation

Since 2014, when sanctions following the annexation of Crimea forced Putin to find new markets and partners beyond the West’s regulatory reach, Russia has made a concerted effort to expand into Africa. It hasn’t had much effect. Today, only 3.7 percent of Russian goods end up in Africa. With more than 2.7 percent getting gobbled up by North Africa, a paltry fraction is destined for the bulk of the continent. It’s even worse in reverse, as African goods account for just 1.1 percent of Russian imports. The Sochi summit was supposed to change all this. However, there’s not much to suggest that it will. Of the $12.5 billion in deals that were allegedly signed, most were only memorandums of understanding that may never get off the ground.

Other than arms, of which Russia continues to be the continent’s key supplier, there is little it has to offer and less that Africa will take. For now, it’s hard to see how Putin’s plan to find new partners, make more money, and restart the Russian economy will succeed.

“The superpowers that are competing on this continent will determine the future of the world’s agenda,” Russian State Duma Deputy Anton Morozov awkwardly announced to a room full of African officials on the second day of the summit.

treating African states as easy-to-manipulate pawns is not only ethically and intellectually questionable—it’s also strategically silly

Judd Devermont of the Center for Strategic and International Studies explained, “The Russians go all in on the incumbent.”

As Omar al-Bashir was fighting to hold on to his blood-soaked dictatorship in the recent revolution, Russian actors swooped in with a misinformation plan to save him. They didn’t, and today Bashir is behind bars. Although the Russian-Sudanese relationship has resumed, it was a costly error in a country that can offer not only gold and oil, but also the Red Sea naval base that is one of Putin’s top priorities.

In 2018, associates of Yevgeny Prigozhin, the man who is believed to have masterminded Russian interference in the 2016 U.S. presidential election, trotted out similar tactics to disrupt a race in Madagascar. The idea was to use a troll farm to influence voter opinion by manipulating online media. However, in a nation where internet penetration is just 9.8 percent, about a quarter of what it is on average across the continent, the troll farm did not make a dent. The Kremlin’s candidates went on to lose, and subsequent allegations of bribes to Malagasy officials further sullied the Russian image.

There are plenty of problems with this framing, not least the way it portrays Africans as passive political objects, rather than actors in their own right

Although Putin has had success with many of his assertive endeavors in Europe and the Middle East—polarizing publics, aiding politicians, annexing eastern Ukraine, and turning the tide of the Syrian civil war—his aggressive maneuvering in Africa has come with clear costs. “When Russia overplays its hand, Africans have distanced themselves,” Devermont said.

African states naturally have their own political preferences that are not always up for sale or at one leader’s mercy. When Russia courts ruling elites and tries to undermine democratic elections, it ignores basic trends on the continent. In the latest round of polling from Afrobarometer, Africa’s leading public survey firm, 75 percent of respondents expressed their commitment to free and fair elections.

Today, just 0.0005 percent of Africans believe that Russia serves as the best development model for their country, an Afrobarometer spokesperson told Foreign Policy. What’s more, the spokesperson said, the percentage of Africans who believe that Russia has the greatest foreign influence in their country was “lost among the ‘Others.’”

As role models and political partners, the United States and China are leaps and bounds beyond Russia. Polling from Afrobarometer shows the United States to be the most desired development model on the continent, attracting approval from 30 percent of Africans. China, meanwhile, comes in second with 24 percent. The rankings reverse for greatest foreign influence: 23 percent of Africans believe China to be the most prominent noncolonial power in their country, while 22 percent of Africans believe the United States holds that distinction.

there is a clear path for Putin to catch up—with Washington at least. Last year, U.S. President Donald Trump announced a large military drawdown that comes even as there is crucial anti-terrorism work left to do against Boko Haram in the west, al Shabab in the east, al Qaeda in the north, and the Islamic State in the south. In addition, Trump has shown total diplomatic indifference to the continent, having not sent a senior aide to Africa since former Secretary of State Rex Tillerson visited last year (and was fired while he was there), having never paid a visit himself, and having filled the key role of the ambassador to South Africa with a fashion designer and Republican donor with no diplomatic experience.

As with U.S. missteps in the Middle East, Trump’s Africa policy, or lack thereof, has paved the way for Russia’s rise. “It’s another case where we’re withdrawing and Putin is moving in to fill the vacuum,” McFaul, the former ambassador, said

Regularly referencing its own encounters with Western imperialism, Beijing has proved quite adept at using a global south narrative to paint its engagement with Africa as one of mutual respect and noninterference.

At the 2015 and 2018 Forums on China-Africa Cooperation, Chinese President Xi Jinping declared his goal of “the building of a new model of international partnership” and changing “the global governance system.”

China has what Russia does not and what the United States, preoccupied with other problems, has been unwilling or unable to use: cash

One thing the great-power framing also fails to take into account is how African states, like all states, can maintain multiple partnerships. It is a basic diplomatic fact that offers particular benefits in Africa, McFaul said, given that the “U.S., Russia, and China play in different lanes.” Nigeria, which announced a new arms agreement in Sochi, is one such beneficiary. At the same time as Russia can equip the country to provide security in its volatile oil-rich southeast, China has helped fund and build its oil infrastructure, and the United States has bought its oil by the billions of dollars. On second look, the mistaken zero-sum framing becomes a positive-sum bonanza.

“We want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere,”

goods traded within Africa were more processed than the raw materials exported from the continent to China, India, Europe and other major trading partners

“Policymakers have understood that, although trade on the continent is limited, this is value-added trade,” he said. “This is where the jobs are coming from, as opposed to trade with the rest of the world, which is mostly commodities.”

Jeffrey Peprah, chief executive of Volkswagen, Ghana, said he hoped eventually to export cars assembled in Accra to other west African countries.

For the agreement to work, one western diplomat said the free trade zone must benefit producers in smaller, poorer countries as well as those in more industrialised parts of the continent. Many countries saw the free trade area as a way of boosting their exports but few had embraced the corollary that they would need to import more, the diplomat said.

enabled the port over the past four months to ship close to a million tons of Ukrainian grain, most of it arriving by barge down the Danube River. But with 20 times that amount still blocked in Ukraine and the summer harvest season fast approaching in Romania itself and other countries that use Constanta for their exports, Dolghin said it’s likely the pace of Ukrainian grain shipping through his port will slow

solutions discussed in Kyiv, Iohannis said, included speeding up Danube barge shipments, increasing the speed of their unloading at Romanian ports, new border crossings for trucks with Ukrainian grain and reopening a decommissioned railway linking Romania with Ukraine and Moldova

Much of the global economy is operating free of artificial enhancements. Lower-skilled workers confront bleak opportunities and intense competition, especially in the United States. Even as recent data shows middle-class Americans are finally starting to share in the gains from the recovery, incomes for many remain below where they were a decade ago

technological disruption and economic upheaval are now at work in an era of scarcity

The worst financial crisis since the Great Depression has left banks from Europe to the United States reluctant to lend. Real estate bonanzas from Spain to Southern California gave way to a disastrous wave of foreclosures, eliminating construction jobs. China’s slowdown has diminished its appetite for raw materials, sowing unemployment from the iron ore mines of Brazil to the coal pits of Indonesia.

Trade did not cause the breakdown in economic growth. Indeed, trade has helped generate what growth remains. But the pervasive stagnation has left little cover for those set back by globalization.

China’s entry into the World Trade Organization in 2001 unleashed a far larger shock, but a construction boom absorbed many laid-off workers.

“We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers and we need to have policies to address them.”

Corporations that used China to cut costs raised their value, enriching executives and ordinary investors. Today’s Headlines Wake up each morning to the day’s top news, analysis and opinion delivered to your inbox. Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. Sign Up Receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. You are already subscribed to this email. View all New York Times newsletters. See Sample Manage Email Preferences Not you? Privacy Policy The casualties of China’s exports are far fewer, but they are concentrated. The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.

Even among those who support trade, doubts are growing about its ability to deliver on crucial promises. A 2014 Pew Research Center survey of people in 44 countries found that only 45 percent of respondents believed trade raises wages. Only 26 percent believed that trade lowers prices.

Workers employed in major export industries earn higher wages than those in domestically focused sectors.Americans saw their choice of products expand by one-third in recent decades, the Federal Reserve Bank of Dallas found. Trade is how raspberries appear on store shelves in the dead of winter.

In the fallout, the United States maintained limits on unemployment benefits, leaving American workers vulnerable to plummeting fortunes. Social welfare systems have limited the toll in Europe, but economic growth has been weak, so jobs are scarce.

automation has grown in sophistication and reach. Between 2000 and 2010, the United States lost some 5.6 million manufacturing jobs, by the government’s calculation. Only 13 percent of those job losses can be explained by trade, according to an analysis by the Center for Business and Economic Research at Ball State University in Indiana. The rest were casualties of automation or the result of tweaks to factory operations that enabled more production with less labor.

if robots are a more significant threat to paychecks, they are also harder to blame than hordes of low-wage workers in overseas factories.“We have a public policy toward trade,” said Douglas A. Irwin, an economist at Dartmouth College. “We don’t have a public policy on automation.”

China’s relentless development was turning farmland into factories, accelerated by a landmark in the history of trade: the country’s inclusion in the World Trade Organization.The W.T.O. was born out of the General Agreement on Tariffs and Trade, a compact forged in 1947 that lowered barriers to international commerce in an effort to prevent a repeat of global hostilities.In the first four decades, tariffs on manufactured wares plunged from about 35 percent to nearly 6 percent, according to the Federal Reserve Bank of Chicago. By 2000, the volume of trade among members had swelled to 25 times that of a half-century earlier.

Mexico — home to about 123 million people — was not big enough to refashion the terms of trade. When China joined the W.T.O. in 2001, that added a country of 1.3 billion people to the global trading system

The anti-trade backlash, building for years, has become explosive because the global economy has arrived at a sobering period of reckoning. Years of investment manias and financial machinations that juiced the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity.

Chinese imports eliminated nearly one million American manufacturing jobs between 1999 and 2011. Add in suppliers and other related industries, and the total job losses reach 2.4 million.

Mr. Trump vows to slap punitive tariffs on Chinese goods. But that would very likely just shift production to other low-wage countries like Vietnam and Mexico. It would not turn the lights on at shuttered textile plants in the Carolinas. (Even if it did, robots would probably capture most of the jobs.)

Trade Adjustment Assistance, a government program started in 1962 and expanded significantly a dozen years later, is supposed to support workers whose jobs are casualties of overseas competition. The program pays for job training.But Mr. Simmons rolls his eyes at mention of the program. Training has almost become a joke. Skills often do not translate from old jobs to new. Many workers just draw a check while they attend training and then remain jobless.

European workers have fared better. In wealthier countries like Germany, the Netherlands, Sweden and Denmark, unemployment benefits, housing subsidies and government-provided health care are far more generous than in the United States.In the five years after a job loss, an American family of four that is eligible for housing assistance receives average benefits equal to 25 percent of the unemployed person’s previous wages, according to data from the Organization for Economic Cooperation and Development. For a similar family in the Netherlands, benefits reach 70 percent.

Yet in Europe, too, the impacts of trade have been uneven, in part because of the quirks of the European Union. Trade deals are cut by Brussels, setting the terms for the 28 member nations. Social programs are left to national governments.

In China, farmers whose land has been turned into factories are making more steel than the world needs. Advertisement Continue reading the main story In America, idled steel workers are contemplating how to live off the land.

a provision that would enable multinational companies to sue governments for compensation when regulations dent their profits.Esso, a subsidiary of Exxon Mobil, the American petroleum company, has operations in the Netherlands. Suppose the government went ahead with plans to limit drilling to protect the environment?“They could sue the Dutch state,” he fumed. “We are not so sure in the Netherlands whether we want to give the multinationals so much power. We are a trading country, but it’s not always that trade should prevail against quality of life.”

the longshoremen fret about robots

Now, many longshoremen sit in glass-fronted offices set back from the docks, controlling robotic arms via computer terminals.

The robots will win in the end, because robots never strike. Robots improve with time.

Trade deals, immigrant labor, automation: As Mr. Arkenbout sees it, these are all just instruments wielded in pursuit of the same goal — paying him less so corporations can keep more.“When they don’t need me anymore,” he said, “I’m nothing.”

Oman is desperate to diversify away from its oil and gas dependency. Research by the US Energy Information Administration puts Oman’s known crude oil reserves at 5.6bn barrels. While this is only enough to rank the country 21st in the world, its economy is disproportionately dependent: oil and gas accounts for nearly half of the country’s GDP, 70% of exports and between 68% and 85% of government revenue.

“Several dozen new cities are being constructed in the Middle East, mainly to transition away from the petroleum industry to a variety of other industries, including tourism, manufacturing, education and hi-tech,” says Dr Sarah Moser, a McGill University geography professor and author of an upcoming atlas of new cities.

Duqm sits on the Arabian Sea near the Strait of Hormuz, the gateway to the Persian Gulf – and the world’s most glaring oil supply chokepoint. Nearly a fifth of the world’s oil currently flows through this passage, ever prone to disruption. If the Duqm project succeeds, the shipping industry would be able to dock at the gates of the Middle East without needing to go all the way inside.

attracted the attention of Beijing’s much heralded Maritime Silk Road. More than three-quarters of Oman’s crude oil exports go directly to China.

While Duqm was never very densely populated, around 3,000 Bedouin – mostly fishermen and semi-nomadic herders – called the area home before the bulldozers arrived. These villages have now been demolished and the Oman government has built a new, modern town for them to relocate to. The houses look as if they were copied and pasted from Muscat – bright, white buildings two storeys high with garages and ornate gateways. There is a mosque in the centre. The houses stand empty. The local Bedouin prefer their traditional way of life – and want space to keep camels.

even with the creation of the new organization and increased energy exploration, the Eastern Mediterranean has a long way to go to truly become the kind of energy hub that many in the region and even in Brussels hope to see. The European Union’s top energy official, for instance, has repeatedly pointed to the Eastern Mediterranean’s potential as an alternative source of energy to importing gas from Russia, and Egypt dreams of again becoming an exporter of natural gas to Europe, as it was until 2012

grandiose plans, such as a pipeline snaking across to southern Europe via Crete, keep colliding with political and economic realities. Deep waters and high costs make building a pipeline to Europe an expensive proposition

Another option to market the gas would be to build liquefied natural gas (LNG) terminals; liquefied gas can be shipped on tankers around the world. But the problem, aside from the upfront cost of building the expensive infrastructure needed to superchill natural gas, is the economics of the gas trade, especially when it comes to competing with Russian energy supplies to Europe. LNG costs a lot more than natural gas shipped through a pipeline, and Russian gas is especially cheap.

Europe’s dependence on Russian energy is growing,

Tapping its own natural gas fields would enable Cyprus to replace costly energy imports and power its economy. Israel has already turned its first offshore gas discoveries into a new, cleaner source of electricity, and the country hopes to phase out coal entirely over the next decade. Egypt, too, is using domestic natural gas resources to keep the lights on and factories running, and natural gas demand there is expected to keep growing and potentially gobble up whatever is produced by additional offshore discoveries.

Modi’s efforts to spark international responses to the coronavirus may also be rooted in a desire to alter the way his government is perceived abroad. New Delhi has suffered blow after blow to its global image in recent months following a series of controversial policy moves. These include the revocation of the autonomy of India-administered Kashmir; the passage of a new citizenship law that critics believe discriminates against Muslims; and the government’s silence in the face of India’s most deadly communal violence in several decades. This has garnered negative international media coverage and criticism from political leaders around the world who fear New Delhi is taking the world’s largest democracy in an authoritarian direction.

While his regional initiative has enjoyed some forward movement, thanks to several SAARC states having pledged modest contributions to the new emergency fund and India’s deployment of assistance to South Asian states, it will inevitably be hobbled by the India-Pakistan spat. During the videoconference, Pakistani Health Minister Zafar Mirza called on India to change its policies in Kashmir in order to prevent the spread of the coronavirus there—a comment that didn’t sit well with New Delhi.

Modi’s push for the G-20 videoconference could end up benefiting Beijing—a G-20 member with more capital and resources for global outreach than India—by giving it a high-powered forum to amplify its messaging

most countries are understandably too focused on the coronavirus at home to focus on coordinated responses abroad

OPEC and Russia bargained for months, but talks finally broke down after Moscow refused to limit its oil production to help stabilize oil prices in the wake of the slump in global oil demand caused by the COVID-19 pandemic. Calculating that it could hurt Russia enough to force it back to the negotiating table, Saudi Arabia boosted its daily oil output by 20 percent, flooding the market with oil. Not to be intimidated, Russia responded with a short-term increase in its own oil output (possibly to strike back at Saudi Arabia or to force some American shale-oil companies out of business or both). As a result, oil prices collapsed. The futures price for West Texas Intermediate crude touched a remarkable -$37 per barrel. Although beneficial for oil consumers, the Russia-Saudi Arabia oil price war was a reminder of the influence that state-driven oil producers still had over the world’s energy security.

a single country, China, has gained control over much of the world’s production and processing of the cobalt, graphite, lithium, manganese, and nickel used in lithium-ion batteries, the type of electricity-storage devices favored by electric-vehicle manufacturers today.

Chinese companies now control almost half of the DRC’s cobalt output, which constitutes over two-thirds of the world’s production. Perhaps of greater concern, China has come to dominate the refining and processing of those minerals. Eighty percent of the cobalt sulphates and oxides used for lithium-ion battery cathodes are processed in China.

China’s monopoly can be largely attributed to its relatively low energy costs and less stringent environmental regulations.

Though China controls a smaller share of the world’s production of lithium than that of other minerals, it has been buying up stakes in lithium mines around the globe.

Moving up the value chain, it is expected to build 101 of the 136 lithium-ion battery manufacturing plants that are currently planned over the next decade

n 2010, China abruptly restricted its rare-earth metal exports to Japan, nominally to protect the environment. But after a lengthy review, the World Trade Organization ruled against China’s restrictions. Since then, worries about relying on China as a strategic-minerals supplier have continued to grow. Sometimes, China feeds those fears. In one 2019 incident, China’s state-run Global Times flaunted the country’s dominance over rare-earth metals as a strategic weapon against other countries with the headline “China gears up to use rare-earth advantage.” Such not-so-veiled threats from government-linked media only fan suspicions that China will behave no better than Russia or Saudi Arabia—and possibly worse.

In 2019, the U.S. Department of State launched the Energy Resources Governance Initiative to “promote resilient and secure energy resource mineral supply chains” for all kinds of renewable energy and battery storage technologies.  The initiative’s membership has grown to include Australia, Botswana, Canada, Peru,

the world appears to be swapping its old dependency on OPEC and Russia, a fractious bunch that until recently was losing power to American oil-shale upstarts, for a new one on China, a single country with a one-party government

a wide array of initiatives have emerged as a direct response to China’s Belt and Road to undermine and dilute China’s infrastructural prowess: the U.S. International Finance and Development Corporation, the EU’s “Asia Connectivity Initiative,” the EU-Japan “Partnership on Sustainable Connectivity and Quality Infrastructure,” the U.S.-Japan-Australia “Blue Dot Network,” the India-Japan “connectivity corridors” and myriad other coalitions. None of these existed even three years ago. Roads have always been the pathways of conquest; now they are the battlefield of competitive connectivity. 

A repeat of the Cold War would surely not play out as favorably for the U.S. as the last one. America is politically polarized and is the world’s largest debtor nation. Its most recent major wars have been disasters and its military needs time to rebuild and adjust to new adversaries and tactics. And many of its erstwhile allies from Europe to Asia are far more vested in China than America is and don’t trust it to lead a consensus-based global coalition.

Bogging down the adversary while moving stealthily towards one’s objective has been an axiom of Chinese diplomacy for generations. But there is little stealth anymore in China’s land grabs, island-building and wolf-warrior diplomacy

With China’s suppression of information about the coronavirus painting it into a corner, Beijing no longer feels it has anything to lose and is going for broke: moving on Taiwan, Hong Kong, the Senkaku Islands, India’s borders and other disputes while the rest of the world is off-kilter, girding itself for a new Cold War with America. China’s leadership has convinced itself that West-leaning powers seek to encircle it militarily, splinter it internally and destabilize the Communist Party. This is the classical psychological spiral at the heart of any security dilemma in which each action taken by one side elevates the perceived insecurity of the other. 

in dozens of visits to Beijing, I have found my interlocutors unable to grasp this basic psychological fact. While many societies admire China’s success and are grateful for China’s role in their development, none want to be like China, nor be subservient to it. It’s an argument that’s fallen on deaf ears in Washington, too. And as with America’s experience of benevolent nation-building, China’s policy of intimidating neighbors into feebly muting their own interests has predictably backfired

American strategists have been far more fixated on China’s presence in Africa and South America rather than developing a comprehensive strategy for reassuring China’s neighbors and supporting their own efforts to stand up to it.

What the U.S. and Europe do have in their favor is that they are territorially secure while China is not. China has 14 neighbors, all of which harbor deep suspicions of its motives even as many (especially Russia) cooperate with it.

Despite the immense economic leverage China has accrued vis-a-vis the many states along its perimeter, it is the complexity of having so many neighbors that constrains China more than its increasingly sophisticated military arsenal suggests. Maintaining global influence is much harder when you are fighting a 14-front war in your own neighborhood. 

From Malabar to Pearl Harbor, the U.S., Japan, Australia, India and numerous other countries have been deepening their coordination in the Indo-Pacific maritime domain. The “quad” coalition features joint strategic patrols and hardware support for the navies of Vietnam, the Philippines and Indonesia in the South China Sea. This summer, ASEAN foreign ministers finally graduated from their usually limp communiques watered down by Chinese pressure and reaffirmed that the U.N. Convention on the Law of the Sea must be the basis for arbitrating maritime disputes. 

Boundary agreements are rarely perceived as fair by both sides, yet such settlements have the virtue of enabling counties to mature towards functional cooperation.  

Precisely because the U.S. and EU have imposed such stiff restrictions on Chinese investment, China has redirected its outbound capital portfolio ever more towards its more proximate Asian domain. And in the wake of the COVID-19 crisis, once fast-growing countries face capital outflows and weak global demand amid ruptured supply chains. The West may be squeezing China out of some markets, but China’s balloon is inflating across Asia as it lowers tariffs on all its Belt and Road trading partners

Laos and Cambodia, two of Asia’s poorest countries, have become all but wholly owned subsidiaries of China, even as China’s Mekong River dams have ravaged their agriculture through volatile water flows and chemical pesticides. With stronger technical and diplomatic assistance, these countries could demand that Chinese investments reinforce their sustainability and local businesses. 

It was always going to be an uphill battle for China to be perceived as a benevolent superpower. Unlike America or the European Union, China is wholly unconvincing as a multiethnic empire. It systematically squelches diverse identities rather than elevating them. Furthermore, though China is an ancient and rich civilization, it coexists with other Asian civilizations with equally respectable glory. None will ever bow to the others, as Japan learned the hard way in the 20th century. Every time China gains an inch of territory, it loses a yard of credibility. The essence of geopolitical stability is equilibrium, and the pathway to it follows the logic of reciprocity. 

China’s assertiveness signals neither an inevitable new Cold War nor a new unipolar hegemony. Rather, it is one phase in Asia’s collective story and the global shift towards multipolarity.

Never has Eurasia been ruled by a single hegemon. The Mongols came closest 700 years ago, but the 14th-century Black Death fractured its disparate khanates, and the Silk Road fell idle. Today again, a pandemic has emerged from China, but rather than shut down the Silk Road, we should build many more of them among dozens of Eurasian nations rather than in and out of China alone. All roads need not lead to Beijing.

Total global foreign direct investment has not returned to its highs more than a decade ago.

globalization is complex, and not every indicator points in the same direction. The intensity of trade in goods is down, but in services it’s up. The flow of data across borders has risen dramatically, even as countries like China and Iran seek to restrict it. International travel and study abroad were at all-time highs before the coronavirus pandemic

Globalization is often blamed for financial crises—not only the global one of 2008, but also the 1997 Asian crisis and others in Russia, Turkey, Ecuador, Cyprus and elsewhere

expanded inequality both among nations and within them

consume more energy and produce higher greenhouse-gas emissions

since 2003, the world has seen successive outbreaks of SARS, swine flu, MERS, Ebola, and the Zika virus

many of those benefits are diffuse and taken for granted, while the costs—lost manufacturing jobs, for instance—remain concentrated. And those on the losing end of globalization now have a new political voice: populist parties promising sovereignty, nationalism, and local solutions, as well as a weakening of elite-led, seemingly unaccountable international institutions

Many see COVID-19 not as a cause around which the world’s governments should rally, but rather as the most dramatic example of an already broken globalized system.

it is easy to imagine governments around the world broadly rethinking international travel, migration, supply-chain risk, export controls, information sharing, and more—in short, key components of globalization itself. The new watchword is likely to be risk reduction rather than cost reduction.

Fragile supply chains are not an indictment of globalization per se, but of the way companies have become dependent on single sources of supply

economic integration will still take place, but it will continue to shift from the global to the regional and bilateral level

How to protect workers without undermining globalization’s economic benefits, including a higher standard of living, remains an unsolved question.

Closed borders, travel bans, paralyzed supply chains, and export restrictions have prompted many to ask whether globalization itself might fall victim to the coronavirus.

globalization was already in decline well before the outbreak, having reached its peak before the 2008 global financial crisis and having never recovered since then

The worldwide interconnectedness of goods, services, capital, people, data, and ideas has produced undeniable benefits. But during this pandemic, the risks of dependency have fully entered the public consciousness

the pandemic has demonstrated the fragility of supply chains, prompted national responses rather than cooperative international ones, and reinforced nationalist arguments for reshoring manufacturing and more limited migration

increase intracontinental trade—an area in which Africa lags far behind the other continents.

a new era in which the AU can finally leverage its collective economic clout in its political relationships with the rest of the world. Now is the time for African leaders to take stock of their existing relationships and examine whether they are helping the AU achieve its Agenda 2063 vision, a 50-year strategic plan with goals closely linked to the U.N. Sustainable Development Goals for 2030 that were adopted in 2015.

The 2019 Africa SDG Index finds that “Across the board, African countries perform comparatively well in terms of sustainable production and consumption as well as in climate action … but perform poorly in goals related to human welfare” such as poverty, hunger, and affordable and clean energy.

evidence that EU priorities for African development do not correspond to the continent’s areas of greatest need. The joint institution between the EU and the African, Caribbean, and Pacific countries for agricultural development ostensibly strives to “advance food security, resilience and inclusive economic growth in Africa, the Caribbean and the Pacific through innovations in sustainable agriculture,” yet the solutions it envisions would be marginal improvements, not transformational changes

Strengthening the value chains of small and medium-sized agribusinesses is desirable but not optimal, as it reinforces the existing trade dynamic of exporting raw materials to Europe. In sum, EU agricultural development policy is largely a neocolonial enterprise committed to protecting its own agricultural market and producing value-added goods for export; it is a greater vehicle for European soft power and merchant interests than for African capacity-building.

The current architecture through which EU institutions have in recent years provided about $6 billion in annual aid to Africa—its second-largest source of multilateral donations—also stunts African economic integration and divides the continent politically

the Emergency Trust Fund for Africa, which diverts 73 percent of the European Development Fund toward combating the European migration crisis at its external points of origin

participating in the African, Caribbean, and Pacific Group prevents Africa from working with Europe toward African-oriented solutions. Involvement in this top-down, donor-recipient framework deprives Africa of agency and leaves it vulnerable to its patron’s priorities

New European Commission President Ursula von der Leyen made a symbolically significant trip to AU Headquarters in Addis Ababa a week after taking office in December 2019. She came bearing a $188 million aid package for health programs, electoral systems, environmental policies, and economic development initiatives to buoy her message that the EU is going to be more than just a source of handouts from now on: “The African Union is a partner I count on and I look forward working within the spirit of a true partnership of equals.” If that sounds familiar, it’s because the EU has been deploying this flattering talking point of a “true partnership of equals” for more than a decade.

despite not wanting to talk about migration in Addis Ababa, von der Leyen is continuing the post-Cotonou negotiations that began in 2018—which inject aid conditioned on migration control as a central plank of the relationship between the EU and the African, Caribbean, and Pacific states

The AU and its members have other options. Both China and the United States offer models of development assistance that meet Africa’s development needs better than the European Union’s. The European Development Fund won’t vanish, and slow-growing Europe is ill-positioned to compete with China’s largesse on infrastructure projects.

As many countries begin partially reopening their economies, traffickers may now be in a position to become more powerful than ever. With economies in distress and many businesses facing ruin, cash-rich narcos may be able to cheaply buy their way into an even bigger share of the legitimate economy.

“There has always been a stock, it’s a very organized chain. It’s the way to control everything, especially the price. The stocks are on beaches such as Tarena [near the border with Panama], banana plantations, in the jungle. The stashes are everywhere,”

Traditionally, smugglers have used small, very fast speedboats, as well as fishing vessels and submarines, to ply their northern route. Lockdowns have made these methods harder to use, mainly for logistical reasons. So instead, smugglers are turning back to older, slower routes that are often broken up in parts.

Unlike exports to the United States, cocaine bound for Europe is typically moved in legal air and sea cargoes, especially fast-moving fresh goods such as flowers and fruit. The latter, as food, has continued to move unimpeded during the pandemic, helping feed Europe’s 9.1 billion euro-a-year cocaine habit. Colombia’s banana industry, for example, has been exempt from local lockdown measures, allowing cocaine to keep moving through the crop’s supply chain. “[Anyone] in the authorities or security that meddles with this route goes down,” said Rául, the Gulf Clan member, adding that people who are paid off to facilitate the smuggling of cocaine have an incentive to keep the drugs flowing. “Everybody eats,” he said.

Mexican cartels have used the crisis as a public relations opportunity. People associated with the cartels, including the daughter of imprisoned Sinaloa cartel chief Joaquín “El Chapo” Guzmán, have publicly distributed food and other essential items to the poor. Meanwhile, the country’s drug violence continues unabated, claiming an average of 80 lives per day.

In March and April, Spain seized over 14 tons of cocaine in inbound shipments — a figure six times higher than the same period the previous year, said Manuel Montesinos, the deputy director of Customs surveillance at the Spanish Taxation Agency. “We are very struck by the frenetic pace,” Montesinos said. “Almost every day we receive alerts of detections of suspicious operations.”

Ramón Santolaria, the head of anti-narcotics at Spain’s national police in Catalonia, said cocaine traffickers may have mistakenly assumed that the pandemic would have reduced monitoring at ports. The cartels “have to continue exporting,” Santolaria said. “They are like a company. They can’t store everything in their countries, since it would be very risky.”

Italy has fallen silent as a point of arrival, despite being home to mafia groups that dominate Europe’s cocaine trade. Seizures dropped by 80 percent over the months of March and April compared to the same period last year

“Italy did not receive much via ports or airports and that is because during lockdown we have been controlling them a lot,” said Marco Sorrentino, the head of anti-mafia department of Italy’s financial police, the Guardia di Finanza. Italian crime groups have shifted their operations to Spain, where they have large “colonies” according to Sorrentino. “Italian mafias and their partners thus sent cocaine mainly to Algeciras or Barcelona, and then from there they moved it on wheels to the rest of Europe and to Italy,” he said. “As cover-up they used trucks filled with fresh fruits or also soy flour,” which resembles cocaine.

At the street level, lockdowns have played havoc with cocaine sales — but have also failed to stop the trade. But in some cases at least, dealers’ adaptations may have actually put them in a more profitable position than before, as cocaine users are desperate and confined at home. “Even though they don’t lack product, they have raised prices a bit and are cutting it more,”

The solution? Delivering it to customers in the guise of food orders, or couriered by essential workers carrying documents that give them permission to move around freely. Dealers have also staked out positions in socially distanced queues outside supermarkets — one of the only permitted places to gather in public under Italy’s strict lockdown rules, which began easing up in early May.

The main dark web marketplaces have seen an increase in sales of roughly 30 percent since lockdown measures started coming into effect worldwide

“Private citizens who are in need and won’t have access to a bank loan will be victims of loan sharks,” he said. “But what worries us the most is that licit companies might be in need, and be approached by mafia organizations that will propose to become minority shareholders.” “And once this happens, they actually take over the whole company,”