Insight and Analysis

December 2016

By Jeremiah J. Baronberg

When it comes to its vast natural resources, the African continent and its people have experienced a long and tragic history of exploitation. While changes and improvements have occurred in recent years, this immoral and unsustainable imbalance often continues to play out today.

But in this arena of natural resources, what if emerging trends in energy sources, global markets, international trade, and new technologies could come together to solve a problem that would benefit local communities and foreign consumers and investors alike?

That is the challenge that one innovative company, Mozambique Renewables (MoRe), is committed to addressing.

Mozambique, which is located in southeast Africa and bordered by the Indian Ocean, remains one of the poorest and most underdeveloped countries in the world despite being endowed with rich and extensive natural resources. The vast majority of its rural population lives on less than USD $1.25 a day and lacks basic services such as access to safe water, health facilities, and schools.

UK-based MoRe and its CEO, Patrick Munroe, have identified an opportunity presented by the traditional practice in Mozambique of burning crop by-products and grasses in the dry season, which has contributed to toxic air pollution and the degradation of arable land across the country. MoRe believes that this situation is ripe for transformation and has set out to leverage the abundance of crop residues, weed species, and giant grasses in Mozambique and to turn them into a valuable, truly sustainable, and high volume biomass fuel -- as an alternative to coal and hydrocarbons -- for energy uses, worldwide.

By doing so, MoRe envisions the creation of an entirely new rural economy that can in turn benefit hundreds of thousands of the poorest people in Africa.

Mozambique and MoRe are well positioned to respond to the increasing global demand for biomass as an energy source. For example, in the UK, the demand for biomass for electricity generation currently exceeds 5 million tons (Mt) per year, of which much is sourced from abroad, usually from forests in the United States and in Europe. In Europe, the EU’s National Renewable Energy Action Plans for member states also provide an opportunity for African exported biomass to support climate policy objectives as well expand the use and prevalence of domestic local renewable energy sources and users.

Among the abundant biomass crops in Mozambique -- that have been until now regarded as unusable weeds and have been burned off, but which now are being accorded significant commercial value and will be harvested by local communities and farmers -- include cotton stalks, sorghum stems, giant grasses such as “elephant grass” and thatching straw, and sugarcane bagasse.

Currently operating primarily in the northern province of Nampula, MoRe has met with village communities, including farmers, leaders, and chiefs and with local government officials to listen to challenges associated with lack of employment and environmental damage. As a result, it has formed partnerships with local farmers who will grow and sell their crops -- as opposed to burning them -- to MoRe for their transformation into plant-based energy “pellets.” These pellets, which in turn can be used to power customers’ biomass boilers, release carbon dioxide that they had previously absorbed in their plant/grass form, effectively creating a natural carbon neutral “capture and release cycle.” Global markets are increasingly recognizing the attractiveness of biomass pellets, which are known to have a wide range of uses, from cooking to heating to electricity generation.

In each of these approaches -- local community engagement and empowerment, social and economic development, environmental stewardship, and sustainable international trade -- MoRe is setting a positive example of how globalization can indeed be made to work for the benefit of many.

MoRe is listed on the Social Stock Exchange, the world’s first regulated exchange dedicated to businesses and investors seeking to achieve a positive social and environmental impact through their activities.

For more information about Mozambique Renewables, please visit www.mo-re.uk or contact MoRe at hugh.paton@mo-re.uk +44 (0)7773 384 388.

December 2016

By Karen A. Tramontano with Jeremiah J. Baronberg

“I appreciate the Trustees of the Global Fairness Award for recognizing a lifetime devoted to development...Let 2017 be a year of continued fight for fairness for the most vulnerable among us, and those left behind in this world.”
-Dr. Ngozi Okonjo-Iweala, accepting the 2016 Fairness Award.

Globalization brings opportunity, but not for all.

So how can we make our global economy work better for everyone?

That was the question I struggled with after leaving the Clinton White House in 2000.

After much reflection and advice from stakeholders and with support from incredible partners, we were able to found a nonprofit organization—the Global Fairness Initiative (GFI)—that has made addressing this challenge our core mission. Since 2002, our vision at GFI has been to promote a more equitable, sustainable approach to economic development through programs to reduce poverty, enfranchise informal communities, and advance human rights and livelihoods.

Along the way, GFI—led by its talented and devoted staff—has challenged many preconceived notions, questioned basic ideologies and practices, and has put new ideas on the table. GFI’s basic premise is that economic globalization can and should work to improve the lives of impoverished populations around the world, creating jobs and economic opportunities. We focus in the economy, working primarily in the informal sector, and are committed to improving people’s livelihoods, globally. Our international projects hinge on forging critical relationships between stakeholders and facilitating dialogue where such interaction once may have seemed impossible.

Over the last 15 years, GFI has grown to become an organization that has built a track record of success through innovative programs that reduce poverty, enfranchise informal communities, and advance human rights and livelihoods.

In 2010, GFI hosted its first Fairness Award ceremony in Washington, DC (which was held at the Kennedy Center and where Secretary Hillary Rodham Clinton presented Ela Bhatt with the first award) to honor exceptional leaders whose work and life have opened opportunity and access to poor and marginalized communities. By honoring these outstanding individuals, GFI hopes to inspire a new generation of leaders to dedicate themselves to economic justice, fairness, and equality.

Honorees are selected from among both grass-tops leaders who have enabled and supported marginalized communities and grassroots leaders who have led communities in building a stronger voice and finding a place in our global community. Together, these honorees represent the power of bringing together top-down opportunity and bottom-up leadership to improve the lives of working families around the globe.

At this year’s 2016 Fairness Award, hosted at the historic Howard Theater (see this article on its storied history) in Washington, DC, GFI honored three outstanding individuals whom I have come to know for their dedication, commitment, and deep humanity:

Randi Weingarten, President of the American Federation of Teachers, AFL-CIO, who leads the 1.6 million member teachers union, including spearheading its international work to combat child labor and advocate for better schools around the world.

Dr. Cristina Liamzon, Coordinator of the Leadership and Social Entrepreneurship Program (LSE), who leads its efforts to build a global community of empowered Filipino migrant workers through leadership and entrepreneurship training.

Dr. Ngozi Okonjo-Iweala, who as former Nigerian minister of finance helped rid her native country of $30 billion of debt and now as chair of the Global Alliance for Vaccines and Immunization (Gavi) is fighting to save lives by making immunizations available to millions of children around the world.

GFI thanks its many friends and supporters and salutes the 2016 honorees in their ongoing quest to make our world a better -- and fairer -- place for all.

Bravo!

About the Fairness Award

The Fairness Award was founded on the mission and values the Global Fairness Initiative (GFI), which has worked with local partners and communities throughout the world to advance fair wages, create equitable access to markets, secure social protections, and tackle public policy barriers to generate opportunity for the working to end the cycle of poverty and exploitation. This vision of enabling “local solutions for a global economy” is central to the selection and recognition of Fairness Award honorees whom we celebrate for their exemplary leadership and example. Proceeds from the Fairness Award go directly to support GFI’s collaborative and innovative programs that change lives and the way charitable work is done by giving nations and local people ownership of their success.

Learn more at: www.globalfairness.org.

November 2016

By Sarah Tralins

For over a decade, Brazil’s popular politician and former president Luiz Inacio ‘Lula’ da Silva has led the Workers Party (PT) to electoral success and implemented of a far-reaching social agenda aimed at reducing poverty while increasing spending on education and healthcare. However, this October, Brazilian voters dealt a sweeping rejection to the country’s former ruling party in municipals elections across the country.

The PT’s losses reflect widespread mistrust of the PT party and of the country’s political system. The deep economic crisis, the impeachment of Lula’s successor President Dilma Rousseff for alleged budget violations, and the ongoing Lava Jato (‘Carwash’) corruption probe that led to investigations of over 40 politicians, including Lula himself, have contributed significantly to this splintered environment.

As the political tides shift in Brazil, it remains to be seen whether political and economic discontent will lead to the decline of populist rhetoric appealing to the middle class as well as to impoverished and rural voters. More than 114 million Brazilians voted in 5,568 cities for a total of over 16,000 candidates for mayor and over 460,000 candidates for city council. Tellingly, the PT’s share of mayoralties fell by more than 50 percent this year compared to 2012.

In parallel with the PT’s decline, the country has seen a sharp increase in support for right-wing candidates as well as elevated numbers of absenteeism and null or blank protest votes, which is surprising in a country where voting is mandatory from ages 18-70.

The election’s clear winners were current President Michel Temer’s centrist Brazilian Democratic Movement Party (PMDB) and the center-left Brazilian Social Democratic Party (PSDB). The PMDB gained the most mayoralties in local elections, thus increasing the prospects of passing crucial fiscal reforms to cut spending and address increased levels of inflation, debt, and social spending burdens.

The strong party alliance that the PT had forged with President Temer’s centrist PMDB and the PSDB in the hopes of solidifying a foundational base for the legislative agenda of both the Executive and Congress is now defunct. This will make passing new legislation more difficult because the PMDB-PSDB alliance now lacks the numbers required to block opposition alliances in Congress. As a result, the Palácio do Planalto, the official workplace of the President of Brazil, may become paralyzed from responding effectively to the macroeconomic and political challenges the country faces.

The elections also saw the rise of less ideologically mainstream and non-traditional candidates as voters exposed growing political fragmentation among over 30 parties vying to capitalize on a desire for political renewal. Additionally, this was the first election in which the Supreme Court campaign finance ruling from last year that eliminated corporate campaign financing was in place. The funding gap was filled by wealthy candidates who declared up to 10 percent of their income to campaigns and evangelical churches that increased their personal donations.

For example, in Belo Horizonte, Brazil’s fourth-largest city, a former chairman of a local football club will face the team’s former goalkeeper in a run-off at the end of the month. In Rio de Janeiro, Marcelo Crivella, an evangelical missionary and gospel singer who supports condemning homosexuality, toughening abortion laws, and privatizing education and who is associated with the Brazilian Republican Party (PRB), is heavily favored to win the mayoral contest against Marceo Freixo, a member of the left-wing breakaway faction of the PT, the Socialism and Liberty Party (PSOL). In São Paulo, Brazil’s largest city, mayor-elect João Doria (PSDB), a celebrity businessman with no background in politics, contributed over $900,000 USD to his own campaign.

This apparent tilt to the right, seen as an increasing trend in Latin America, has made national elections in Brazil more unpredictable than ever. Open discontent about and low expectations for politicians have altered the political arena and subsequent rhetoric, furthering divisions among politicians. In a country that faces deep macroeconomic challenges and endemic corruption in its political class, it is proving increasingly difficult to implement structural reforms and to respond efficiently and effectively to societal dissatisfaction.

Strong leadership and long-term political and economic strategic planning can effectively shift Brazil’s future. The question now is whether the electoral success of centrist and conservative parties and candidates can take on this role successfully.

November 2016

By Gabriella Ippolito

For the final state visit of his presidency, U.S. President Obama hosted Italian Prime Minister Matteo Renzi on October 18th at the White House. Among the glittering number of attendees and a fabulous menu planned by celebrity Chef Mario Batali, President Obama and Prime Minister Renzi made formal remarks, expressing the two countries’ long-standing friendship and alliance in NATO.

President Obama also voiced support for the prime minister in his current referendum battle in Italy saying, “The upcoming referendum to modernize Italy’s political institutions is something the United States strongly supports because we believe that it will help accelerate Italy’s path towards a more vibrant, dynamic economy, as well as a more responsive political system.”

In this year of referendums, Italy’s has not been under quite as intense a global spotlight as were other referendums, such as the British referendum on the EU that led to Brexit or the Colombian referendum on the peace process. Still, if it passes, it could drastically change Italian politics. As a “constitutional referendum,” the winner will be decided by a simple majority, regardless of the number of voters who participate on December 4th. At stake is the very size and design of the Italian Parliament. Considering Italy has a population of almost 60 million people, its parliament of 945 members (630 deputies and 315 senators) is quite large and many, including Prime Minister Renzi, say this has made it unwieldy and inefficient.

If the referendum passes, the Italian Senate will shrink to 100 senators and the practice of appointing of “senators for life” will be abolished. The remaining senators will not be elected directly but instead will be regional appointees who will wield power only over regional matters. This change is seen as helping to streamline the governing process in Italy because legislation will no longer bounce from one chamber to the other as it currently does in Italy’s bicameral system. According to Mr. Renzi, this particular change will allow for the passage of difficult but necessary economic reforms. Should the referendum pass only the chamber of deputies will have the power to call for a vote of no confidence, currently either chamber can and Italy is one of very few Parliamentary democracies with this system in place; this has led to many governments falling. This change would strengthen the executive's ability to govern. The referendum also includes cost-saving initiatives that aim to restrict government expense. 

Mr. Renzi is the leader of Italy’s centrist Democratic Party (PD), the largest party in the Italian Parliament with 301 deputies. The party by-and-large supports the referendum, although some PD members in the left wing of the party have broken with the prime minister. Aligned against the referendum are Italy’s next three largest parties. This includes the far-right Northern League (Lega Nord) led by Matteo Salvini, the center-right Forza Italia party led by former Prime Minister Silvio Berlusconi, and the ideologically unaligned 5 Star Movement led by comedian Beppe Grillo. Combined, these parties have 160 deputies in parliament. They argue that the proposed reform is illegitimate, that it will lead to greater conflicts between the state and regions, and that it will concentrate too much power in the hands of the executive.

In explaining the reasoning behind the referendum, Prime Minister Renzi has stated that if the referendum fails, he will resign. In doing so, Mr. Renzi has effectively correlated the success of the referendum with achieving his policy goals. This conflation has clouded the rationale for opposition to the actual substance of referendum, with many of those against it now describing their logic as simply opposing Renzi’s continued tenure as prime minister.

Italy’s ongoing economic troubles, high unemployment, and Mr. Renzi’s bailout of a number of Italian banks last year have all damaged his popularity significantly. If elections were held today, the anti-establishment, anti-European Union 5 Star Movement could become the largest party in parliament. Its leaders have said that if the referendum fails, Mr. Renzi should immediately leave office and snap elections should be held immediately.

Seven out of eight recent polls in Italy show opposition to the referendum winning with an average of 54 percent voting against and 46 percent voting in favor. However, almost nine percent of respondents say they are still undecided with a month left until the vote. A win for “No” would almost certainly lead to Mr. Renzi’s resignation as prime minister, followed by a caretaker government and general elections in early 2017.

Considering that Italy has had 63 governments in the past 70 years, the referendum attempts to change the system. Whether or not Renzi is able to convince the Italian people remains to be seen.

November 2016

By Sally A. Painter with Jeremiah J. Baronberg

International conferences can often bring together like-minds for conversations that resemble echo chambers where participants hear much of what they already know or believe. The 12th annual Baltic Forum hosted in Latvia, which I had the opportunity to participate in this October, aims to bridge that divide by bringing together a diverse group of participants and panelists who might otherwise not have the opportunity to learn from one another.

Click here to watch Sally Painter's remarks at the 2016 Baltic Forum in Latvia.

This year’s gathering was attended by delegates from across the Baltic region, Russia, Ukraine, the European Union, and the United States and included experts from national and local governments, academia, think tanks, private sector, and the media. As one of the few Americans attending, I found the presentations and discussion particularly illuminating and refreshing, in no small part due to the chance to hear the Russian perspective, to which we in the West are often not privy. In light of the myriad of current tensions in Western relations with Russia (Syria, Ukraine, NATO, and cybersecurity to name a few), the focus of this year’s event was timely: “Russia-EU: the challenges of interdependence and the setting of a new agenda.”

Presenters shared perspectives ranging from efforts to reduce tensions and improve security in the region to solving frozen conflicts such as Ukraine-Crimea to the importance of expanding economic and trade ties and cooperation (notwithstanding the current situation of sanctions and reprisals) between Russia and Europe. The Russian perspective, which is important to hear, was characterized by a feeling that its actions and policies are misunderstood on the global stage, its desire to be treated with respect and on equal footing, and a foreboding sense that Western (read: NATO and EU) interests – both economic and military – are increasingly aligned against Russia, often in an aggressive and confrontational posture.

My own comments focused on the potential foreign policy approach of the next U.S. administration from a Democratic candidate position, which while continuing to work multilaterally, is likely to chart a more activist and proactive stance based on strong engagement and U.S. global leadership. While reasserting a strong commitment to the Transatlantic partnership, the next U.S. president will need to identify areas for cooperation with Russia, which could include arms control, action on climate change, and enhancing forums where the U.S. and the West can participate and dialogue with Russia. These could include such forums as the OSCE and the NATO-Russia Council to discuss Russia’s place within the European security architecture while enabling its legitimate security interests to be heard with the goal of decreasing tensions and opening up additional lines of cooperative communication.

Events such as the Baltic Forum and other similar envisioned gatherings and exchanges are needed today more than ever. Forums such as these that bring Western representatives together to dialogue with their Russian counterparts can help build a foundation of international values and norms focusing on mutual respect and the rule of law that we can all share and use to guide policy and relations. In this way, we can work together jointly towards solutions instead of allowing our challenges to build ever widening chasms of distrust.

Fortunately, the participants at the Baltic Forum all committed to continuing to support this important gathering and dialogue for years to come. I very much look forward to being a part of this community and to building relationships with its participants in the future.

October 2016

By Karen A. Tramontano and Jeremiah J. Baronberg

This September, Sally and I had the honor and pleasure of attending the 12th and final Clinton Global Initiative (CGI) meeting in New York City. After over a decade of supporting its mission, many have used this milestone to reflect on its incredible legacy, which truly has changed both “the conduct and the impact of modern philanthropy,” as President Clinton acknowledged in his closing address.

As the president spoke, I agreed with his recollection that none of us who were there at the initiative’s early beginnings could have imagined the trajectory this journey would eventually take. The final tally counts over 3,600 commitments that are improving more than 435 million lives across more than 180 countries. These numbers are truly amazing.

But what is just as impactful is the undeniable imprint that CGI has made in building what President Clinton has referred to as a “culture and spirit of possibility.” CGI helped usher in a new approach to philanthropy by bringing together people and organizations that before had too often looked at the subject from a zero-sum orientation. That is, they saw their philanthropic endeavors from a narrow, competitive perspective in which one person’s gain was another person’s loss.

CGI championed the exact opposite perspective—ideas which the president recalled from the book “Nonzero: The Logic of Human Destiny,” by Robert Wright—that in the 21st century, the games that work best in an inter-dependent world are non-zero-sum games. That is, in order for you to win, others have to win too.

It is with this ethic and value proposition in mind that CGI has had its greatest impact. By bringing so many diverse participants to the table—from across business, labor, government, multi-lateral organizations, foundations, nongovernmental and civil society organizations, who had previously operated too often in their own spheres—CGI fostered a new spirit of collaboration and creative cooperation that opened the door to limitless positive impact.

While this model of partnership may sound simple and obvious to us today, it most certainly was not a given, nor the norm, when CGI first started down this path.

At Blue Star Strategies, the model for our work is similar. Partnership, partnership, partnership. We know that none of our work would be possible without it.

As I watched the president’s closing address at this year’s gathering, I felt inspired and grateful to be part of this community yet also sad that this unique platform is coming to a close. It is vital that its mantle live on, in some way, to continue to enable, encourage, and foster opportunities for people to come together in a spirit of collaboration and partnership.

In President Clinton’s words, “You have to keep the spirit alive, the work alive, the spirit of possibility…”

Let us each pledge to do all we can to keep the spirit of CGI alive and well for generations to come.

October 2016

By Sean Keeley

At a time when European solidarity is facing challenges both internal (e.g., Brexit) and external (e.g. the refugee crisis), the future of the European Union has never appeared so uncertain. While there is no shortage of European leaders who are committed to a strong EU and want to see it succeed, too often this message has failed to connect with Euroskeptic citizens.

This October marks the 80th anniversary of the birth of former Czech president Vaclav Havel, a visionary European leader whose steady leadership guided his country through a period of immense change. Yet in 2016, when a proliferation of crises threatens the credibility and durability of the European project, the question remains: who will take up Havel’s mantle and guide Europe to a more prosperous future?

On the sidelines of September’s United Nations General Assembly in New York, Sally Painter participated in a strategic dialogue session on these and related questions at the 2016 Concordia Summit, a forum that convened leaders from business, government, and nonprofits to examine global challenges and identify avenues for collaboration.

At the Summit, Sally served as a conversation lead on the broad topic of “The Future of Europe” alongside a prestigious group of co-panelist leaders that included Dutch Member of European Parliament Marietje Schaake, First Vice President of the European Union Commission Frans Timmermans, and former First Lady of Ukraine Kateryna Yushchenko. From Sally’s perspective, the present crisis can be traced back to three factors: 1) the traumatic aftershocks of the 2008 financial crisis; 2) an absence of effective European leadership in response, and 3) the disconnect between policies proposed by leaders and average citizens, who increasingly feel left behind.

In the wake of the global financial crisis, Sally argued, two things were needed above all: leaders who would take the initiative to deal with the crisis, and thoughtful policies that would address average citizens’ concerns and help them share in their countries’ prosperity. Instead, the most common response has been a form of the blame game, as governments have picked easy scapegoats, ranging from big banks to immigrants, depending on the country. Many European citizens today do not feel secure in their livelihoods and governments have failed to tailor policies that respond to citizens’ real economic concerns. The tendency to demonize the other has only made the problem worse, contributing to the wave of populist backlash now sweeping across Europe.

If we are to positively shape the future of Europe, Sally argues, we need to acknowledge the mistakes of the recent past, while taking inspiration from those who have shepherded Europe through earlier crises. One such figure is the great Vaclav Havel, who served as the first president of the independent Czech Republic. Havel was a visionary and charismatic leader who understood the importance of crafting a positive, confident agenda for his citizens. His unwavering commitment to Transatlantic solidarity, his support for Western values, and his commitment to a strong and expanding NATO should inform a newly revitalized strategy for Central and Eastern Europe today.

As we reflect on Havel’s legacy, we should heed his wise words about the need to craft a “European identity.…a new and genuinely clear articulation of European responsibility, an intensified interest in the very meaning of European integration in all its wider implications for the contemporary world.” Havel’s is a compelling vision for this European identity, but there is still work to be done—and it will be up to a new generation of leaders to carry his vision forward into the 21st century.

October 2016

Jeremiah J. Baronberg

In September, heads of state and leaders from around the world came together for the annual United Nations General Assembly in New York, intent on addressing an impressive agenda of international concerns. The body is also set to elect its next Secretary General from among a diverse slate of potential candidates. 

Concerns for the basic human rights of workers and inclusive economic growth for societies around the world were high on the agenda at this year’s gathering. The International Labour Organization (ILO) – together with the Prime Minister of Sweden Stefan Löfven and the Organization for Economic Co-operation and Development – announced the launch of a new partnership, The Global Deal Initiative, aimed at addressing challenges in the global labor market and enabling more of the world’s population to benefit from the advances brought by globalization.

Click here to watch ILO Director-General Guy Ryder speak about The Global Deal Initiative.

The Global Deal was designed with the UN’s sustainable development goals (“SDG”) in mind, especially SDG-8 on “Decent Work & Economic Growth.” But what is most innovative about the initiative is its multi-stakeholder platform approach: by bringing together governments, businesses, and unions, it holds the promise of a much-needed holistic understanding of the complex linkages between markets, globalization, and workforces.

While not an organization itself, the Global Deal will serve as a platform to provide political direction, scale existing processes, and highlight opportunities for cooperation. For example, the Global Deal will encourage an ethic of cooperation and collaboration among its partners, which now include governments such as Austria, Bangladesh, Cambodia, Canada, and Tunisia; global companies and employer organizations such as H&M and The B Team; and trade unions such as the International Trade Union Confederation.

Each has committed to engage in various forms of “social dialogue” – such as transparent communication, negotiation, consultation, and information exchange – to promote joint solutions aimed at reducing inequalities, increasing productivity, and enhancing long-term opportunity, security, and development. These models for interaction that are rooted in mutual respect and trust have been shown to build social cohesion by helping employees and employers negotiate cooperatively about rights and obligations, labor conditions and wages, and to resolve disputes peacefully.

In many industries, for example, the majority of managerial and leadership positions are held by men. In the textile and apparel industries, over 70 percent of women hold lower-level positions, including sewing and cutting clothing. The Global Deal will not only empower women but also enhance their opportunity for upward mobility in the workforce. This is critical to achieving gender equality in the global labor market.

By supporting such innovative cross-sector initiatives and ensuring that the different players involved are engaging together constructively, the Global Deal initiative can help reduce economic disparities while advancing growth and productivity, in turn benefiting society at large. Inspiring examples found in places such as Angola, Cambodia, and Chile, among others, showcase how new found problem-solving skills are creating empowered workers and translating far beyond the workplace itself and into families, communities, and societies.

Shifts in the global labor market and workforce due to globalization and technological innovation are an unavoidable fact of our increasingly interdependent world. But where social, human rights, and business perspectives have too often been seen as being in competition, the Global Deal initiative offers an alternative and unique win-win approach.

In this way, it is a promising milestone in the ongoing effort to improve lives and jobs and to ensure economic opportunity and prosperity for future generations and societies to come.

July 2016

At July’s NATO summit in Warsaw, much attention was given to the Alliance’s vulnerable eastern flank. For example, President Obama announced the deployment of an additional 1,000 U.S. troops to Poland, and Canadian Prime Minister Justin Trudeau announced that Canada would be sending an additional 450 troops and armored vehicles to Latvia, as part of a multinational battalion to reassure Eastern Europe. While these new deployments signal a welcome commitment to bolster the alliance in the east, NATO’s southern flank received less attention.

Montenegro was the exception that proves the rule. The small Balkan country was formally invited to join the alliance in December 2015, and the Warsaw summit served as a celebratory capstone to the country’s achievements. If all goes according to plan, the ratification process will be complete by next spring. To critics who have doubted NATO’s vision in recent years, Montenegro’s membership offers an encouraging sign that NATO’s open door policy is still alive and well.

At the same time, the Warsaw summit brought little progress to another NATO-aspiring Balkan country, Macedonia. For years, Macedonia has taken the difficult steps necessary to prove its readiness to join the alliance. It has committed hundreds of troops to fight alongside NATO allies in Afghanistan and Iraq—approximately 2,700 in Afghanistan and 500 in Iraq. It has made substantial, targeted increases to its defense budget to align its military with NATO standards. And it has earned a popular mandate to pursue NATO membership: according to polls conducted by the International Republican Institute, over 80% of the Macedonian population supports NATO membership.

Despite this progress, Macedonia’s entrance into NATO has long been obstructed by the objections of a single member, Greece, due to the longstanding naming dispute it has with Macedonia. NATO leaders have repeated the same message since 2008, claiming that Macedonia will be able to join once the dispute is resolved. The message is beginning to try the patience of Macedonia’s leaders.  The country’s president, Gjorge Ivanov, once again pointedly boycotted this year’s NATO Summit for what he saw as a lack of respect for Macedonia’s efforts.

Macedonia’s cabinet ministers represented the country at Warsaw, reaffirming Macedonia’s continuing commitment to NATO. Still, the much-delayed accession process has opened a rift that does not bode well for other aspiring members. This year, Serbia and Kosovo did not even send representatives to the summit. Bosnia and Herzegovina’s membership prospects have stalled due to the government’s failure to transfer military facilities from the local level to the central government, and NATO leaders have not taken active steps to move the process forward. Without bold leadership, these countries’ membership bids could remain stuck at a time when fortifying NATO’s southern flank is more crucial than ever. Admitting Macedonia, on the other hand, would both reinforce the alliance’s solidarity and signal to other wavering landlocked Balkan states that NATO membership remains an attainable goal.

Moreover, countries on NATO’s southern flank will be vital to resolving the alliance’s future security challenges, which was recognized by existing NATO allies at Warsaw. At a recent event in Washington, Bulgarian Foreign Minister Daniel Mitov explained that his country’s goal for Warsaw was to make the Black Sea region a strategic priority for the alliance. NATO allies on the Black Sea include Bulgaria, Romania, and Turkey. All have been faced with a renewed threat from Russia, especially after the annexation of Crimea in March 2014. Bulgarian military leaders now commonly refer to Crimea as the “largest Russian aircraft carrier,” recognizing that the territory allows Moscow to more easily project force in the Black Sea. Russia has taken notable steps to beef up its military presence in the region and is undergoing a modernization program for its Black Sea Fleet, to be completed by 2020.

These threats, compounded by the continued flow of refugees into Europe from the Middle East, ensure that NATO’s southern flank will be the source of both challenges and opportunities for the alliance for years to come. The decision to expand the alliance and finally admit Macedonia could have a profound impact on NATO’s future security. There is no guarantee that Macedonia will wait forever for NATO membership, the alliance’s leaders would do well to recognize this reality, fix the wrongs of the past, and move for Macedonia to finally join NATO—a move that would have positive ripple effects for other Balkan states and for the alliance as a whole.

July 2016

In 2017, Ecuador will elect a new president and vice-president and every seat (137) in the National Assembly is up for reelection.   While current president Rafael Correa (Alianza Pais party) initially seemed interested in seeking a third term (he took office in 2007) he has since announced that he will not seek reelection nor push through the constitutional change that would remove presidential term limits.  Though Correa has made recent statements indicating that he may still seek reelection many discount his intentions and say that he is trying to avoid a lame duck presidency. With his current popularity hovering around 30 percent (down from a high of 81 percent when he was first elected), he would not want to jeopardize his legacy by losing an election.  

President Correa’s popularity decline could be correlated with the global fall in oil prices, from $115 per barrel in June 2014 to less than $35 in February of 2016.  While not as petro-reliant as neighboring Venezuela, Ecuador does rely on oil revenues to fund generous social programs; petroleum remains the nation’s main export product.  Though the country has made strides in healthcare and education under Correa, Ecuador has not diversified its exports away from commodities which created and deepened the current recession. 

The country has already started to take some austerity measures. For example, many public servants, who were hired during a hiring spree by President Correa when he doubled the public sector, have lost their jobs. The IMF predicts that Ecuador’s GDP will contract by 4.5 percent in 2016 and 4.3 percent in 2017 and that unemployment will grow, indicating that more austerity measures will be necessary.   

The unsteady economic climate however has created a political opening. While Correa has dominated politics in Ecuador for almost a decade, his administration will end allowing a new generation of politicians to seek Ecuador’s highest office.  The first round of voting for president will take place on February 19, 2017.   If a candidate receives equal to or more than 50 percent of the vote, or 40 percent of the vote and more than 10 percent more than the next candidate, then that candidate becomes the president.  However, if no candidate receives the required percentage of the vote, then the two candidates who received the highest percentages of the vote will proceed to the next round, called the ballotage.

Currently, there are over a dozen “pre-candidates” running for president in Ecuador.  Because politicians are allowed to file until November 18, it is expected that there will be even more candidates when voters go to the polls.  Within the large group currently running, a few candidates have risen to the top. 

Lenin Moreno, who served as Vice President under President Correa from 2007-2013 is running on the Alianza Pais ticket, and is currently leading in the polls with 44 percent.  Moreno is more popular than Correa and has tried to distance himself from Correa’s policies.  For example, he has highlighted his work as the UN Special Envoy for Disabilities, a position which he still holds. Moreno is paraplegic and was nominated to the 2012 Nobel Peace Prize for his advocacy on behalf of people with disabilities in Ecuador. Jorge Glas, Correa’s current vice president, is also a pre-candidate to the presidency, however, his polling has been negligible and he is not perceived as a leading candidate. 

The center-right candidates are far below Moreno in the polls. The leading candidates are Cynthia Viteri, of the Social Christian party with 16 percent, and Guillermo Lasso, of the Creating Opportunities (CREO) party with 14 percent.  Both Viteri and Lasso are from the countries largest city Guayaquil. Viteri is in the National Assembly and Lasso is a banker. Viteri and Lasso’s competing candidacies show how divided the opposition and center-right is in Ecuador because the candidates profiles are quite similar. Both are business friendly and running on platforms that aim to jumpstart the economy.  All of the other pre-candidates are polling at less than 4 percent.    

Looking at current polls, it appears that President Correa’s party (Alianza Pais) will maintain power, but the Ecuadoran election is over seven months away and during that time many things could change.  Whoever becomes the next president will have to work to diversify Ecuador’s economy and reduce the nation’s reliance on petroleum to stimulate an economic recovery, regardless of party affiliation.  The only things that seem certain are that the next president will face many obstacles and that political change will occur because the era of “Correaismo” is over.