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Recent crises have shown us the need for a more resilient economy

It has taken a global pandemic and a war in Europe for the UK to rethink its economic security strategy. Now, more than ever, the Government should pursue a more balanced trading relationship which factors in national security concerns.

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Vladimir Putin’s devastating invasion of Ukraine has torn up the rulebook and shaken the international system to its core. It, alongside a global pandemic, is a watershed moment that has upended popular assumptions about the global economy.

Weaponised interdependence

To the detriment of European security, the belief that commerce is good for peace and vice versa has proven to be an illusion in the case of Russia. Instead, reliance on Russian natural gas has rendered the continent strategically vulnerable. Roughly 40% of Europe’s total, Russian gas imports amount to an economic umbilical cord.

Moscow has weaponised its interdependence with its Western neighbours by delivering a stark ultimatum: pay for gas in rubles or be cut off. As Putin tosses over the chessboard and wreaks untold devastation on Ukraine, European leaders are left to reconsider how to balance the desire for economic growth with the non-negotiable need for national security.

Energy enters the remit of national security when energy insecurity affects a state’s governing policies. In the case of Putin’s intimidation tactics, this is clearly the case. There are several examples where greater reliance on Russia has translated to weaker action taken, such as Hungary and Slovakia’s 12-month stall on the EU’s oil embargo.

Although not immune from international fluctuations, Britain was able to take quick and decisive action precisely because of its relative independence from Russian energy sources (in 2021 Russian imports made up 9% of oil and of 4% gas used in the UK).

Pandemic re-shoring

Situating the pandemic in a historical context, some analysts speculate that it could mark a 1914-type turning point for globalisation. The pandemic was not only a public health crisis but also an economic one, with a global trade collapse. International trade plunged by 8.9% in 2020, the lowest trough since the 2008 global financial crisis.

Just-in-time processes broke down and manufacturers ‘reshored’ to settle supply-chain chaos. Three-quarters of companies have increased the number of their British suppliers in the past two years, according to a survey by trade body Make UK. Once a settled issue, international trade is now very much unsettled as governments consider whether to use policy tools to relocalise global value chains.

What next?

Since at least 1820, when merchants from the trading cities of London, Manchester, and Glasgow petitioned for the abolition of all duties, free trade has remained an essential part of Britain’s economic history. As a liberal market economy, the UK consistently ranks as one of the most open economies in the world. Total trade makes up more than 60% of the country’s GDP and its dominant services sector thrives under these conditions. Post-Brexit, the Government has rolled-over or negotiated free trade agreements with a catalogue of countries, ranging from Kosovo to Australia. By the end of 2020, the Government had signed off 38 FTAs with 97 countries.

Particularly given its geopolitical position, it would be deeply problematic for the UK to withdraw economically and ‘trust no one’. A whole host of international organisations, from the OECD to the World Bank, have clamoured against re-shoring because of the believed economic fallout that would ensue. Measures commonly taken, such as subsidies and tariffs, are conventionally thought to create economic distortions which actually reduce, rather than protect, the income of countries.

Left unconstrained, globalisation has proven to present a serious national security risk. Rather than return to the old ways, the UK must learn from the lessons of the pandemic and the war in Ukraine. When investors wish to mitigate risks, they diversify their portfolios; the same should apply to countries. A more balanced strategy, which diversifies the country’s trade in areas concerning national security, would help secure a position of strength on the international stage. Clear parameters will need to be set out, such as defining what constitutes a national security risk. By working with businesses, the Government can ensure more flexible adjustment to changing demand and improve risk preparedness.

When it comes to broadband, this new strategy is much more of a reinterpretation than it is a rethink. In 2020, the Government set out its 5G Diversification Strategy. Backed by an initial £250m, the objective was to “grow our telecoms supply chain while ensuring it is resilient to future trends and threats”. This plan demonstrates a willingness across Whitehall to mitigate risks to national security.

Co-opting this idea for energy security, the Government should employ different energy sources, suppliers and transportation routes to prevent overdependence on a single resource or provider. This considered approach could help ensure a strong Britain in an age of uncertainty.

Luke Jones co-founded York Global Affairs while studying Politics with International Relations at the University of York.

Compromises on Ukrainian EU and NATO membership may be needed to secure peace

Eventual Ukrainian EU membership combined with a commitment to NATO neutrality could provide a compromise that enables Kyiv to honour the spirit of Maidan and facilitate Ukraine’s geopolitical shift away from Russia, without being a gift to Putin’s propaganda machine.

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If Ukrainian forces can repel Russia’s latest invasion, one question will loom large: when countries said that they stood with Ukraine, did they really mean it? A path towards Ukrainian EU membership is the only way to answer this question with a definitive ‘yes’.

Can the EU fast-track Ukraine’s membership?

President Volodymyr Zelensky has called on the EU to grant his country membership immediately. Such a decision would create a whole series of issues, notably in the Western Balkans. Countries such as Albania have spent over a decade waiting for EU membership. Despite receiving Tirana’s application for membership in 2009, the EU only opened negotiations over membership with Albania’s government in 2020.

This delay is attributable in part to the EU’s stringent membership criteria. Applicants must demonstrate certain levels of institutional transparency and financial market strength before they can be granted candidacy. Applicants from the Western Balkans must also meet criteria regarding good neighbourly relations and regional cooperation.

While Ukraine’s crisis has dominated recent headlines, it’s important that the traumatic stories emerging from Mariupol and Bucha don’t overshadow the EU’s existing relationships in the region. There is still sympathy for Moscow throughout parts of the Western Balkans. Appearing to give a Ukrainian application special treatment could risk pushing several countries further into Vladimir Putin’s arms. This would be an absolute disaster.

Economic considerations

Then there’s the EU’s economic position to consider. Even before Russia’s recent invasion, Ukraine’s GDP stood at less than $160bn. That put it below several neighbouring EU members in terms of productivity (in 2020 Romanian GDP was just over $248bn, Poland’s over $596bn, and French more than $2.6tn). While many EU citizens stand with Ukraine, they may not support the economic risks that Ukrainian economic integration would pose.

While EU support for Ukraine’s recovery looks certain, integrating Ukraine into the EU as a member is much more of a long-term project.

Perhaps the EU could give Ukraine a transitional membership. This membership would be guaranteed after the successful completion of various reforms over a defined period of time. This would avoid the ‘queue-jump’ problem without risking the symbolic damage of refusing a post-war Ukraine access to the European family.

A possible path to peace

Eastern Europe already carries enormous risk, with the potential for conflict spilling over into nearby NATO states and submerging Europe in even more tragedy and heartbreak. In the worst case scenario, Europe could face nuclear or chemical warfare.

There are at least two things the UK can push for to encourage Russian de-escalation and assist Ukraine’s journey towards EU membership.

First, requiring Russia to retreat only as far as its 23 February positions in Ukraine, rather than withdrawing fully, before discussing sanctions relief. This would incentivise Russia to approach negotiations in earnest. It could also minimise the risk of a disorderly Russian retreat from much of Ukraine and provide an opportunity to deliver life-saving aid to besieged cities such as Mariupol.

Second, assisting President Zelensky in the development of what he has called “preventative sanctions”. Rather than a new iron curtain, these sanctions would essentially create an iron shutter. Russia would only gain access to Western markets if it respectfully acknowledged both Western values and the sovereignty of its European neighbours. The trigger for increasing sanctions would no longer be land warfare. It would be acts of psychological and information warfare such as nuclear blackmail.

These two policy adjustments would provide Russia with a way back from its current pariah status, if it respected Ukraine’s decision to turn West.

Granting Ukraine EU membership without also requiring their NATO neutrality would be fuel for Putin’s propaganda machine, allowing him to falsely accuse the EU of complicity in plans to threaten Russia. EU membership combined with NATO neutrality, however, would contribute to discrediting Putin’s lies. If Ukraine is willing to sacrifice prospective NATO membership in peace talks, Russia need not worry about NATO weapons appearing across their neighbour’s eastern border.

EU membership alone would merely enter Ukraine into a trading arrangement with its Western neighbours. That shouldn’t pose any military threat to Moscow.

Ukraine’s decision to turn West is clear. The need to make that transition without risking a never-ending war with Russia is unquestionable. EU membership for Ukraine could provide a viable middle-ground and, ultimately, a road to long-term peace.

Tom O’Brien FRSA is a copywriter and researcher.

How Brexit poses risks to the EU’s climate policies

The UK’s departure from the EU is posing significant challenges to the latter’s usually strict environmental policies and climate change mitigation strategies.

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Brexit has usually been evaluated in terms of its economic, trade, security and diplomatic implications. It is significantly less well-analysed in relation to climate change impacts. This is likely to continue as long as climate change is not regarded as a security threat.

Brexit poses three major challenges to the EU’s environmental policy. Firstly, in attaining its greenhouse gas (GHG) emission targets. Secondly, its impact on the Emission Trading System (ETS). Thirdly, its impact on the EU’s green finance.

The UK has one of the most ambitious GHG reduction targets when compared to its European counterparts. The UK’s sixth carbon budget seeks to cut 78% of emissions by 2035, bringing it closer to its net-zero target by 2050. Furthermore, the Climate Change Act sets a legally binding emission reduction target of 80% below 1990 levels by 2050. Similarly, the EU is seeking to achieve net-zero emissions by 2050. The European Commission has adopted several legislative proposals, including an intermediate target of a 55% reduction in GHG emissions by 2030. The extent to which Brexit will affect the EU’s environmental ambitions will require a careful analysis in the coming years, however.

In the short run, it is unlikely that Brexit will affect the EU’s emission reduction goals, as Brussels managed to meet its 2020 targets without Britain. The long-term impact, however, is contested. The EU27 is expected to increase its GHG emission targets by 4.5%, amounting to over 138MtCO2 equivalent.

Both the EU and the UK’s climate policies so far have been shaped by their constructive interaction. Britain’s strong leadership in the EU has made the EU ETS and single energy market possible. The EU ETS is considered the cornerstone of low-carbon innovation and covers over 40% of EU27’s GHG emissions. Interestingly, the UK’s divorce from the EU ETS is estimated to hamper Britain’s own businesses. British businesses are spending over £75 (€90) per tonne of carbon emission, whereas companies in the EU are paying a carbon price of €85. The EU ETS is well-established with greater liquidity that covers all heavy industries, which makes it more cost-effective relative to Britain’s carbon policy.

Although the EU pioneered the low-carbon innovation policy, it now needs to enhance its own ETS to fulfil its 2050 ambitions. Brussels is posed with the twin challenge of amending the present ETS and incentivising its industries towards low-carbon emissions. Post-Brexit, the EU’s environmental leadership will be further tested due to its close association with negative environmental power. Negative environmental power refers to a country’s capacity to carry the potential to invariably harm climate mitigation strategies, for example by pursuing large-scale deforestation policies. According to an The European Environment – state and outlook 2020 report, Europe’s contribution to environmental degradation is greater than any other region in the world.

Going forwards, it is important for Britain and the EU to constructively engage in achieving climate targets through better coordination on two fronts: the emission trading systems and sustainable finance regimes.

In terms of the EU27, there has been a steady increase in renewable energy consumption and a steady decrease in fossil fuel based energy consumption since 2010. In 2020, renewables overtook fossil fuels in the EU27 market, a significant development in the green energy transition. Nevertheless, the impressive stride of the EU is still slow for achieving 55% GHG reductions and climate neutrality by 2030 and 2050 respectively.

The UK is not aligning itself with the EU’s Sustainable Finance Disclosure Regulation, creating its own green finance regime instead. The Government has stated its intention to make a more ambitious emission trading system than the EU that would make it stand out as a global climate leader. This has created several uncertainties within the British companies. According to India Redrup, policy manager at trade association Energy UK: “If you are a power operator in the UK, you are looking at a Black Hole looking at the lack of carbon price signal”.

Post-Brexit, Britain will have a monumental challenge of establishing the UK ETS which is more robust and cost-efficient for the companies. As a way forward, the two regimes should aim to either co-benefit or complement their respective efforts, rather than hampering the present mitigation policies.

Akshay Honmane is a climate change and foreign policy researcher, currently studying for an International Relations masters at the London School of Economics.

Ukraine’s suffering is a humanitarian crisis. The UK must respond accordingly

The UK government needs to plan for incoming Ukrainian migrants immediately, including creating expedited processes for asylum seekers and developing national integration strategies.

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A humanitarian crisis is rapidly unfolding on the Ukrainian border. At the time of writing, the UNHCR has estimated that over a million Ukrainians have fled the country to nearby countries, including Poland and Romania. This will surely increase in the coming weeks and months. Indeed, UNHCR predicts over 4m Ukrainians will leave the country over the course of the conflict.

This will have substantially more impact in Europe than the previous Syrian refugee crisis. While that conflict saw around 6m refugees flee Syria, most of them fled to bordering states, and only a small proportion reached Europe in subsequent waves of migration. This time round, nearly all the anticipated 4m refugees will flee to Europe and over a more acute time frame. It will be much harder for European nations to control this immigration, given there are comparatively few natural barriers and borders blocking the way of Ukrainians.

Thankfully, European countries have been quick to grasp the humanitarian dimension of this conflict. Poland has welcomed Ukrainians – and even their pets – without any paperwork and the EU has agreed to take in Ukrainian refugees for up to three years without asylum. This 180 degree turn from the policies dominating the Syrian crisis was spurred on by the demographic make-up of Ukrainians. As a predominantly white, Christian nation that is part of a European identity, it is easier for governments to gain public and political support for taking in refugees in a way they did not during the Syrian crisis.

Yet, the UK government has been slower to act than their European counterparts. Boris Johnson and his cabinet have continued to address the conflict primarily through economic procedures and military rhetoric. The humanitarian dimension is, to all intents and purposes, an after-thought in the eyes of the Prime Minister. In his first speech addressing the conflict, he announced “a massive package of economic sanctions” to end Vladimir Putin’s military aims. Only in the final moments of his speech did he mention the Ukrainian people directly, without concrete policy, but instead that our “thoughts and prayers” were with them.

This has not been followed up with a significantly expedited visa processes for Ukrainian refugees. Though the Home Office announced they would increase the number of staff working in UK visa application centres to help address the needs of Ukrainian refugees, many were quick to point out that they had not introduced new emergency application processes and Ukrainians would generally have to apply under existing routes. These are often complicated processes which require substantial paperwork and have long turnaround times. In a tone-deaf move, there has also been no re-consideration of the Nationality and Borders Bill, a piece of legislation that will allow the Government to return asylum seekers and refugees arriving illegally in the UK to their country of origin. It is currently in its latter stages of being drafted into law, although specifics of the Bill could still be amended.

It is disheartening that Johnson’s post-EU Britain is acting less decisive on this matter than the EU is. His inability to act on the humanitarian dimensions of the Ukrainian conflict are out of line with the globally relevant Britain he platforms.

There are three things the UK government must do to turn this around. First, they need to set-up an expedited process for asylum applicants immediately, ideally removing visa requirements for Ukrainian refugees. Failure to do so may lead to more illegal crossings of the English Channel than has been seen in previous years. Second, they need to develop a national integration strategy at pace, bolstering support to community organisations and the third sector. This will need to address both needs of Ukrainian refugees, such as food and shelter in the short-term, then employment and language courses in the long-term. Finally, the government needs to reconsider the Borders Bill, a piece of legislation that will prevent countless refugees from reaching the UK safely.

Somewhat reassuringly, there are hints that the public would approve of these measures. Thousands of protestors filled Trafalgar Square this weekend, showing their support for the Ukrainian people. A recent poll by YouGov showed that six-in-ten Britons would support a scheme to resettle Ukrainians. There is also support from a range of politicians, including Labour MPs and Mayor of London Sadiq Khan, to provide safe and efficient routes to refugees for UK sanctuary.

Rarely are politicians given such easy opportunities to win favour with the public and on the world stage. Unfortunately, Boris Johnson can’t see past his own myopic framing of the situation to take this opportunity. In the end, it is the Ukrainian people who bear the consequences of his inadequacies unless he changes course.

Spencer Rutherford is a researcher in the field of global health, with expertise in refugee health and post-conflict reconstruction, and experience working in Lebanon and India. He is currently based in London and works as a Research Manager with Ipsos in their Public Affairs department. All views are his own.

How the West should respond to Russia’s adhocracy

Responding effectively to Russian interventionism abroad requires understanding its governance. Russia is an adhocracy – a decentralised regime defined less by top-down commands than by bottom-up opportunism – with oligarchs acting on President Vladimir Putin’s perceived interests to earn patronage. Approaching adhocracy requires resolve; the UK and its allies must establish a strong deterrence and clearly elucidated red lines to prevent conflict.

Russian opposition politician Boris Nemtsov was in sight of the Kremlin when he was killed. Crossing the Bolshoy Moskvoretsky Bridge around midnight, he was intercepted by an assassin who shot him four times before jumping a barrier and fleeing the scene.

Nemtsov’s muder shocked Moscow. Even Putin seemed stunned, condemning the “shameful” killing and announcing he would take “personal control” of the investigation.

Then came the cover-up. In three days the Federal Security Services had a list of suspects, including one Zaur Dadaev, the former deputy commander of Sever, a police battalion under the authority of Chechen strongman and Putin ally Ramzan Kadyrov. As suggestions of a connection between Kadyrov and the killing started circulating, the Chechen leader did little to dispel them, instead describing Dadaev as a brave soldier and devoted Muslim.

The investigation stalled. Further suspects were swept under the rug and the murder’s mastermind was unmasked as Ruslan Mukhudinov, a personal driver never found for questioning. Zaur Dadaev was sentenced to twenty years in prison. Case closed.

This rapid reversal exposes the reality of Russia’s governance structure. As researcher and author Mark Galeotti has argued, Russia is not a centralised autocracy but an opaque ‘adhocracy’. Members of Putin’s inner circle do not necessarily act on direct orders from the President. Instead, they entrepreneurially seek opportunities to advance his perceived interests and earn patronage.

This system permits Putin plausible deniability. But it can also cost the Kremlin. In the case of Boris Nemtsov, an ally embarrassed the regime by incorrectly interpreting the President’s description of opponents of the war in Ukraine as “national traitors” and assassinated one hours after he called for demonstrations against the ongoing conflict.

Adhocracy is equally evident in Russian foreign policy. Although the annexation of Crimea was state-led, the subsequent war in the Donbas has been sustained by entrepreneurial oligarchs such as Evgeny Prigozhin, who link separatists in Luhansk with the mercenaries that provide them men and arms. Despite denying involvement in such exchanges, Prigozhin recently bankrolled an action film dramatising the exploits of an infamous mercenary organisation, the Wagner Group, in a romanticised Luhansk.

It is unclear what Russia will do next in Ukraine. Putin’s desire to bring the country back into Russia’s sphere of influence is established, the President arguing Russians and Ukranians are “one people – a single whole” in a July article. The most recent mobilisation is more comprehensive than April’s, and there is evidence of combat preparations in the field modifications made to Russian armour, which correspond with Ukrainian capabilities. Yet Ukraine is better armed and trained than in 2014, and the publicity and slow pace of Russian movements might imply more diplomatic aims.

In such an uncertain environment, the risk of escalation relates to Russia’s adhocracy. The danger is that a powerful political opportunist acts on Putin’s increasingly bellicose rhetoric, oversteps the mark as Kadyrov did, and causes a major European conflict.

Approaching an adhocracy and avoiding this outcome requires resolve from Britain and its allies. More specifically, it requires a strong deterrence and clear red lines.

A strong deterrence means more than stern words like ‘severe consequences’. It means threatening to cut Russia off from the SWIFT banking network and ban lending to and business with Russian state-controlled banks. It means stressing to Russia that any intervention in Ukraine would force NATO to reassure its eastern members with more military support, creating the kind of border build-up that Moscow is keen to avoid.

This deterrence should come with clear conditions of use, established by the UK and European allies in partnership with the USA (which Russia sees as the West’s most influential actor on Ukraine). These red lines should include military incursions, but extend to blockades of strategic towns such as Mariupol as well as hybrid tactics such as cyberattacks on government offices or crucial infrastructure, similar to those carried out in 2015 and 2017.

Combined, these measures might alter the cost-benefit calculus not only of the Russian President but, crucially, of the adhocrats that make up his entourage, clarifying the fact that any opportunistic interventions in Ukraine would cause the Kremlin pain instead of earning them preferment.

Against adhocracy, strategic ambiguity invites instability. Strength and clarity are the best tools if the UK wants to stop the next shots in the dark escalating into a continental conflict.

Dylan Rogers is a member of Agora’s Democracy & Governance programme.

The UK risks repeating America’s disenfranchisement disaster

The Elections Bill introduced in 2021 includes a requirement for voters to show certain forms of ID when at a polling station. Voter ID laws are an unnecessary hindrance to the voting process, dissuading new voters and minority voters. There is little evidence of electoral fraud in the UK. Evidence from abroad shows that these laws often have an effect on voter turnout. Participation in the electoral system should be encouraged and aided, not blocked.

Impact on turnout

The proposal to introduce voter ID laws will have a disproportionate impact on underrepresented voters, as otherwise unnecessary pieces of identification are less commonly held by those from minority groups. Between 7.5-24% of the electorate do not hold a required form of ID, depending on how acceptable ID is categorised. Adding another step to the voter registration process, which should and does try to be a relatively painless process, risks dissuading many voters.

This proposed law would apply to all voters in general elections, as well as those going to the ballot box in English local elections. Scottish First Minister Nicola Sturgeon has said that she would not introduce ID requirements in Scotland, which creates a complication given that local and national elections are regularly held at the same time. If voters believed they could not vote in any election without ID, they might not turn up on polling day, and lower turnout for Scottish local elections could be a side effect.

As well as reducing voter turnout by 1-2% in certain American states, studies have found that it also leads to lower voting turnout by voters who incorrectly believe that they have the wrong form of ID. Thus, the appearance of formal barriers has the consequence of making voting seem like an intimidating and difficult process.

The holding of ID often has trends which correlate to racial background, socioeconomic class, and profession. As these factors often align with voting direction, there are also certain correlations between the holding of ID and the party voted for. Take drivers’ licenses for example. There is an association between holding a driver’s license and voting patterns (not holding: 57% Labour, 27% Conservative voting).

The over-estimated problem of voter fraud

The UK does not have a significant problem with voter fraud and, as such, this proposed law is a distraction from the issue of voter turnout and political education. Reported incidence of election fraud is low, and prosecution lower still; many instances are resolved locally without further action required. The proposed ID checks are countering a problem that hardly exists, and will only negatively impact turnout in the groups that already struggle with high turnout (first time voters being a significant one). It will cost an extra £40m in election expenses, money that could be better used to encourage higher levels of voter registration.

Again, America tells a cautionary tale. The US has seen similar attempts involving the requirement of voter ID checks, many of which have been struck down in the courts as restrictive or targeted, and many states have seen countless problems during elections stopping potential voters from casting their votes. The proposals in the UK are likely to create serious and harmful effects that are greater than the supposed problem they are seeking to resolve.

The US has received criticism on an international level for its restrictive voting laws and voting rights violations. If the UK goes ahead with measures that hinder the ease of voting then it will rightfully receive similar international attention and assessment for such a move.

Mathilda Walters is a recent graduate of the University of Oxford. She works in political fundraising and campaigning.