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Governments must recognise that aid and investment are about more than just development

COVID-19 will stretch the world further apart. The developed world should proactively invest in the developing world to avoid further humanitarian disasters and seismic migration across the world.

COVID-19 knows no borders, but that does not mean its damage will be distributed equally. Rich countries can sustain debts because their borrowing debts are low and their bonds are seen as ‘safe haven’ assets by investors. Furthermore, countries that control their own currency, such as the UK and US, have a significant advantage as rich investors from developing countries will want to invest in ‘stable’ currencies should COVID-19 significantly shrink their own. This may cause the exchange rate of developing countries to plummet, meaning that debt becomes much harder to hold. This precarious economic situation will be exacerbated in three main ways.

Firstly, many developing countries rely heavily on the service sector of their respective economies, which has been stalled due to lack of consumer demand from social distancing measures. Developed countries tend to have comparatively smaller service sectors and have benefited from bailout schemes which have softened the blow for workers, but this comparative luxury is not afforded to many. Social distancing is not an option for many in the developing world.

Secondly, international humanitarian aid has dropped dramatically as a result of the crisis. NGO’s have not escaped the financial hardship that COVID-19 has caused with more than 40% of British international development NGOs saying they will collapse within six months if they receive no new financial support. Furthermore, the aid that remains cannot reach its intended recipients in many cases because of international travel bans and lack of available transportation. Countries such as Lesotho and South Sudan rely on international aid for infrastructure projects, which are now more dangerous to complete but increasingly necessary to control the spread of coronavirus.

Thirdly, due to the economic shutdown in developed countries, remittances have dropped significantly. Many migrants who moved away from their families in order to provide for them work in the service sector in the UK and other developed countries. With the service sector on hold to prevent the spread of COVID-19, so has the money going back to the developing world. The World Bank is predicting global remittances will drop by some 20% because of the impact of coronavirus, to $445bn in 2020 which Dilip Ratha, an economist at the World Bank, has described this decline as ‘unprecedented in history’.

Lebanon, whose economy is emblematic of all three issues outlined above, defaulted on its debt for the first time in its history last month after its currency collapsed, causing riots in Beirut. This was not because of COVID-19, but this economic and political instability is likely to be replicated in many other countries around the world. This may soon take hold in Nigeria, which has a population of almost 200m, where the Air Force have been deployed to tackle an insurgency in the North East of the country. Violence will exacerbate the spread of the virus, causing further economic and political instability.

The 2015 migrant crisis was handled poorly by European countries, with the sole exception of Angela Merkel’s Germany who, by allowing a million refugees to enter the country, recognised both the scale of the crisis and the political consequences of inaction. Europe can see another crisis looming and should take economic action now to prevent it. Its governments need to recognise not only that the virus will continue to spread if it is not suppressed everywhere, but also that the effects of possible economic and political instability will not be contained in the developing world (as the Arab Spring showed in 2011). There is both a moral obligation and a political necessity to invest in the developing world.

The World Bank Group and the International Monetary Fund have taken the first steps in this direction, with a $200bn package to regional development banks, and are encouraging creditors to suspend debt repayments until 2021 in order to provide much needed support to the poorest countries. The next decade will require national governments to rethink the integration between their international development, defence, and immigration policies, by prioritising investment and infrastructure over sanctions and military intervention. For example, investments in green energy startups and sustainable transportation will boost employment and help tackle the climate emergency. International cooperation on stabilising emerging economies through investment will require spending, but the expense will pale in comparison to the bill of inaction. The time to act is now.

Tom Whitting is Co-Coordinator for the Open Think Tank Network.

Reassessment of the UK’s sanctions regime is long overdue

Economic sanctions have been imposed on states – including Venezuela, Iran, and Cuba – by the US, EU, and UK for years. As the devastation of COVID-19 escalates, the morality of sustaining an economic sanctions regime is being challenged. The UK should embrace calls from the UN, lift economic sanctions indefinitely, and exert pressure on the US to follow suit (whilst holding the Trump administration to account for racial state-sanctioned violence).

For the first time in decades, every state faces the same monumental challenge: COVID-19. Globally, healthcare systems are being strained beyond capacity, as livelihoods are jeopardised. However, some states are uniquely penalised by economic sanctions in addition to the harrowing challenges to organisation and healthcare provision brought on by the pandemic.

The imposition of economic sanctions – the suspension of trade and financial relations – is often justified on grounds of democracy or human rights promotion and framed as a peaceful alternative to combat. In practice, economic sanctions often become a tool used by powerful states to coerce those viewed as a threat to their interests. The disastrous financial effects they inflict are often destabilising. Even under non-pandemic conditions, their use is highly contested and widely argued to be a far greater punishment to the citizens of a nation than their leaders. In Iran, economic sanctions have triggered a deep recession since reinstatement in 2018. Economically vulnerable Iranians are worst affected by these measures, yet they are entirely blameless.

The US has historically deployed an extensive sanctions regime, increasing in scope under the Trump administration. Many sanctions targets are arguably penalised for their ideological stance, with socialist Venezuela and Cuba a high priority. Such political motivations were recently evidenced by Trump’s attempts to barter a power-sharing agreement in Venezuela, in which economic sanctions would be lifted on the condition President Maduro step down. Shortly after this offer was refused, the US government sent warships to the Caribbean and indicted members of Venezuela’s government on charges of “narco-terrorism”. As well as being a highly disputed claim, it does not make sense for the US to target drug trafficking-crackdown efforts on Venezuela; there are more influenceable transit states (such as Colombia), with greater evidence of drug trafficking, to focus on. US government data even demonstrates that cocaine flows through Venezuela – beyond the control of government officials – have declined since 2017. In the context of a pandemic and recent denial of a critical IMF loan to Venezuela, economic sanctions and unwarranted geopolitical escalation are disastrous.

Despite a tumultuous political situation in Venezuela since April 2019, and widespread reports of human rights abuses, the actions of the US have exacerbated conflict and inflicted further economic suffering on citizens. The motivations for US economic sanctions remain highly politicised, often representing a broader attempt to interfere in matters of national sovereignty. There is no place for this amidst a global pandemic. Economic sanctions cost lives. Access to critical medical equipment becomes exponentially harder when states, companies, and financial institutions refuse to engage.

The pushback against the economic sanctions regime has risen in response to the pandemic. The UN has called on states to lift sanctions, and public petitions for the removal of sanctions on Iran and Cuba have received widespread support. The UK’s ‘special relationship’ and the recent upswing in diplomatic closeness with the US could prove pivotal in this sanctions debate. Thus far, the UK has taken steps to put pressure on the US to ease sanctions against Iran due to the pandemic, and a recent call from over 50 MPs to intervene against the US blockade of Cuba is promising.

Whilst putting pressure on the US to ease its economic sanctions against other states, the UK and EU governments should reassess their free arms trade relationship with the Trump administration. Recent Black Lives Matter protests against institutional racism and police brutality commencing in the US additionally impose foreign policy obligations on the UK government to instigate a police arms embargo. A call to end the export of policing equipment like rubber bullets and tear gas – currently utilised for internal repression – has been signed by 166 MPs across parties, and Scottish Parliament just passed a ban.

The UK sanctions regime needs to evolve; while economic sanctions cannot be condoned against states struggling under COVID-19, the free trade of rubber bullets and tear gas fuelling Trump’s oppressive response to protestors is equally unjustifiable. Failing to take these actions will result in inhumane and preventable loss of life for which the UK will be responsible. If international solidarity can be salvaged, and exclusionary economic sanctions lifted, perhaps dialogue with Iran, Venezuela, and Cuba could be resuscitated. Britain’s sanctions regime shouldn’t economically strangle citizens of recipient states, and neither should it allow citizens of its allies to become the targets of racialised state violence.

Holly Harwood is Agora’s Head of Outreach.

How cyber attacks are spreading alongside COVID-19

COVID-19 has presented the UK with an abundance of challenges, including numerous threats to the country’s cyber security which have developed alongside the pandemic. More must be done to combat these threats.

COVID-19 is being increasingly exploited by cyber actors. Vulnerable individuals continue to be conned. In February alone, victims in the UK lost more than £800,000 to COVID-19-related scams. In March, the National Cyber Security Centre (NCSC) was reported to have taken down more than 2,000 online coronavirus scams, including 471 hoax online shops which were selling “fraudulent virus-related items”.

There are other, serious threats to our online and offline presence. The security of remote platforms such as Zoom for sensitive commercial and government communication remains in doubt. A ransomware attack on a hospital in Brno, Czech Republic reminded the UK to not become complacent after the 2017 WannaCry attacks. In response, the NCSC recently released a joint advisory in cooperation with the United States’ Cybersecurity and Infrastructure Security Agency (CISA), pertaining to the exploitation of COVID-19 by cyber criminal and advanced persistent threat (APT) groups.

One of the most prominent cyber threats are phishing emails and sites. The NCSC has taken down over 470 fake online stores selling COVID-19-related items and 200 phishing sites designed to harvest user information in the last month. Google claims to be removing 240m coronavirus-themed spam messages and 18m malware and phishing e-mails daily. Scammers have most notably been circulating malicious e-mails under the pretense of the World Health Organisation, to exploit the public’s faith in trusted institutions. These e-mails advertise scam employment opportunities, request detailed information, or ask for donations or registration fees in return for funds or vague benefits. In response, the Government implemented its suspicious email reporting service (SERS) on 21 April which successfully led to the shutdown of 80 malicious web campaigns after 5,151 suspicious emails were reported on its first day of service.

The advice from the NCSC and CISA also observes a rise in cyberattacks on remote access infrastructures as the UK work force transitions to working from home. Cyber actors have exploited a range of known vulnerabilities in VPNs (Virtual Private Networks), which enable users to send and receive data shared across public or shared networks, and other remote working tools and software.

They have also been successful in hijacking online meetings, which has led to investigations after at least three Zoom meetings were infiltrated and images of child sexual abuse were projected onto screens. One group targeted were the Bristol-based Celebrate Recovery, whose Zoom meeting was disrupted by abuse images. While Zoom has been approved for everyday use, its vulnerabilities are still readily exploitable by malicious actors.

Ransomware attacks are a persistent risk to UK infrastructure. The 2017 WannaCry attack on the NHS affected 80 out of 236 hospital trusts across England, something the UK must not let this happen again as the country struggles with COVID-19.

This attack on a medical institution was not an isolated incident. In March, a hospital in the Czech Republic was hit by a ransomware attack which resulted in heavy disruption. An Illinois state health website was held hostage as hackers demanded a ransom to restore the system containing personal information of 210,000 patients. The NCSC is also aware of increasing attempts by APT groups – most notably China and Russia, who deny involvement – to exploit COVID-19 to penetrate government databases.

The NCSC details tips for defending against online-meeting hijacking, as well as providing guidance for individuals and organisations. However, more needs to be done to lower susceptibility to threats.

There are calls for the Government to further promote cybersecurity training, as it was recently discovered that 66% of remote workers have not been trained in cybersecurity in the last 12 months. Furthermore, the Government should continue to push businesses and organisations to update their cyberskills, with 48% of British organisations reporting that they were unable to carry out basic tasks defined in the Cyber Essentials Scheme, including setting up firewalls, storing data, and removing malware.

Particularly with the NHS tracing app in mind, the Government should be working closely with software developers to ensure that confidential information is not compromised. Moreover, the UK should continue to improve and secure its cyber security infrastructure, in order to avoid a repeat of the WannaCry scandal. All of these recommendations should be taken into consideration as the UK strives to be what the Government describes as “the safest place in the world to live and work online”.

Eleanor Wong is studying for a Masters in Peace Research and International Relations at the University of Tübingen.

Liberal democracies are stuck in the middle of geopolitical divergence

COVID-19 is precipitating the emergence of a new world order, characterised by waning American leadership and a shift of power towards China. In this context, Western democracies will be challenged on cooperation and unity.

Nobody was expecting this decade to begin with such domestic and international disruption. Currently, three billion people wait to be released from their homes, hoping for a short-lived quarantine. Regardless, the socio-political impact will be much longer lasting. COVID-19 has uncovered deficiencies of the post-industrial world order, showing that globalisation constantly hangs by a thread. In particular, the doubtful response from some international institutions has pushed certain economies and governments towards more isolationism. As countries envision their role in the post-COVID-19 world, the international stage is readjusting.

Multilateral world order

For the past fifty years, much of the world has tended towards a Western model of multilateralism and integration. International organisations and laws have become an integral part of the governance system, limiting warfare and improving living standards in many parts of the world. The economic and military dominance of the United States has made it a suitable example to follow in the pursuit of growing trade networks, intensive farming, nuclear dissuasion, and political liberalisation.

Withering leadership

Even before the current crisis, there were already signs of this world order dwindling. The digital revolution has challenged institutions’ legitimacy and distributed power into the hands of new actors. It has changed the way we work, trade, and learn. Such economic transformation has complemented the rise of China-centred Asia into a powerhouse of innovation and investment, which comes as the primary challenge to American leadership.

US President Donald Trump has tended towards an isolationist strategy rather than cooperation, pulling out of international alliances and institutions, most notably the Iran Nuclear Deal and Trans-Pacific Partnership, creating a vacuum for other nations to exert influence in strategic regions. Even if the upcoming American election were to turn the tide, four years of refusing multilateralism has deteriorated American leadership.

Opportunity for influence

These changes look set to be exacerbated by COVID-19. Trump’s EU travel ban and failed acquisition of vaccine patents will not be forgotten in Europe anytime soon. Political scientist Joseph Nye has been amongst those to criticise the Trump administration’s ‘America First’ position, which appears to focus more on competition with China than addressing the spread of the disease.

Alongside this, others have played a leadership-like role. In March this year, Europe emerged as the pandemic’s epicentre. In response, China sent aid and Russia deployed personnel to Italy before any EU member state. China has also made an effort to present itself as a reliable partner, increasing its involvement in international institutions and exporting masks and medical kits around the world.

China sees the pandemic as an opportunity to extend its influence and power. President Xi Jinping’s visit to Wuhan drew eyes to the efficiency of his state governance in fighting the virus. The CPC has found an opening to diffuse its propaganda, in the hope that its political system will come out strong. Nonetheless, China is already facing a resurgence in cases, and the resulting economic blow will be tough. Lack of certain medicines in Europe has sparked debate on Chinese overreliance. Industries are relocating closer to home or to other parts of Asia. It remains to be seen whether China can continue to dominate supply chains.

The place of Europe

In Europe, individual member state action and a sluggish initial response from Brussels prompted leaders such as Italian Prime Minister Giuseppe Conte and former European Commission President Jacques Delors to warn that lack of solidarity would have profound effects on the European project after the end of the crisis.

‘Westlessness’ was the slogan at the Munich Security Conference this year, or the decades long shift of power balance away from the old continent. The EU must use the period after the COVID-19 pandemic to provide momentum for finding a new purpose on the global stage, taking leadership on matters of climate change and data regulation. This can only be done as a united bloc. Current emergency measures should be used to reduce internal fragility.

A more independent Europe should increase collaboration with countries traditionally alienated by the US. In particular, French President Emmanuel Macron has called for more alignment with Russia and Turkey, who are reemerging as neighbouring poles of influence in their own right. The UK would also be best placed aligning with European allies, given Trump increasingly views Britain, much like the rest of the old continent, as a battleground against his Chinese rival.

Barnabé Colin is a graduate student at the LSE’s Department of Government.

The EU’s coronavirus economic travails will force a harder Brexit negotiating stance

Significant economic contraction in the EU, resulting from the COVID-19 pandemic, will strengthen the allure of the Eurosceptic message on the continent. To quell the popularity of Eurosceptic populist parties, EU institutions will be compelled to adopt an uncompromising stance in negotiations with the UK.

The economic impact of COVID-19 across Europe is exacerbating fault lines at the heart of the EU project. Despite EU finance ministers agreeing to support a €540bn package to support the bloc’s ailing economy, the proposal of ‘coronabonds’ – a financial mechanism that would serve to mutualise member state debt – has been strongly opposed by decision-makers in Berlin, Amsterdam, and elsewhere.

Opposition to greater pooling of financial risk is nothing new. During the debt crisis post-2008, the bailouts and accompanying conditions handed to countries such as Greece created huge friction between the northern and southern Eurozone member states. Monetary union without fiscal union posed a threat to European solidarity, whilst stoking the embers of Euroscepticism in Europe. Many of the underlying issues from that crisis remain unresolved, and so similar tensions could easily re-emerge. 

The Populist Opportunity

This curbing of economic agency has long been utilised by populist leaders, such as Matteo Salvini of Italy’s Lega Nord and Marine Le Pen of the Rassemblement National in France, to argue that the EU imposes unacceptable limits on national sovereignty.

Such criticisms are part of a broader populist narrative that the European project is inimical to national interests, with both Lega and RN frequently stoking anti-immigration sentiment through their criticism of the principle of freedom of movement.

Both Salvini and Le Pen have established their parties as serious contenders for governmental leadership in recent years. The inevitable economic slowdown resulting from stringent lockdown measures imposed in response to the coronavirus pandemic will serve to benefit these populist parties. According to projections from the IMF, France’s economy is expected to contract by 7.2% in 2020, with Italy’s economy contracting by 9.1%.

In Italy, in particular, an anti-EU shift in public opinion is striking. According to recent polls, 88% of Italians feel that Europe is failing to support Italy in the crisis, with 67% of Italians considering EU membership a disadvantage. If such trends continue, the legitimacy of the European project itself is at risk.

The EU’s double bind

European leaders are highly aware of this risk. On 16 April, Macron suggested that a failure by the EU to agree on how to fund a coronavirus relief package would threaten the EU as a political idea. His view appears to anticipate the credence that such a failure would lend Eurosceptic populist parties in Europe.

This challenge reveals an inherent contradiction at the core of another existential threat to the EU: the bloc’s future relationship with the UK. With the transition period due to end on 31 December 2020, the EU cannot afford to appear too flexible to UK demands at a time when Eurosceptic populist parties will be reaping the benefits of the economic fallout of the coronavirus crisis.

Conversely, if projections from the IMF prove correct and the EU economy shrinks significantly, an agreement allowing continued frictionless trade with the UK, mitigating against further economic damage, may begin to look attractive.

EU leaders thus find themselves in a double bind of economic versus political logic. Compromise too little with the UK, and the EU will find itself exacerbating an already deeply challenging economic situation, inadvertently emboldening the Eurosceptic message of EU economic impotency in the process. Compromise too much, and the EU will reinforce the legitimacy of the Eurosceptic vision that the economic benefits of the bloc can be decoupled from the political structure that underpins the European project.

Statements from Michel Barnier and European leaders suggest that, faced with this trade-off, the EU is incentivised to choose politics over economics. Since the outset of Brexit negotiations, the EU has not wavered on its red lines, making compromise at this stage seem unlikely. The possibility of the EU offering the UK an extension to the transition period has been mooted, with the aim of offsetting further economic uncertainty. Even if such an extension is accepted, however, the underlying political paradox will remain fundamentally unaltered.

Without defining a meaningful difference between the benefits afforded to members and non-members of the EU through the medium of the Brexit negotiations, populist parties will continually espouse the message that they can be next to successfully depart the bloc. The EU, faced with this existential challenge, will choose a stance that expresses political strength over economic flexibility.

Antonio Tucker holds a Masters in International Relations from the University of St Andrews

Where does energy from waste fit into the UK post-Brexit?

Britain’s circular economy strategy is part of a wider plan to mitigate climate change and will change how society operates; the materials we use, how we generate electricity, and how we consume and manage our waste.

The circular economy

The circular economy model is a key framework to realise a more sustainable future. It focuses on keeping materials and resources within the system for as long as possible or, if possible, indefinitely. As opposed to a linear model, where a resource is extracted, refined, consumed, and disposed, the circular model ensures the material is repurposed and reused either through recycling into another product, extraction of key metals and other materials, or potentially even conversion into energy. This approach is one of many potential catalysts for a sustainable future, where fewer virgin resources are extracted from rapidly depleting sources.

The role of waste

To fully embrace and refine this model, a major part of the circular economy is managing waste. The UK is currently following the EU strategy, with the aims to achieve a 60% recycling target for municipal waste by 2030. Landfill capacity is expected to expire by 2023 and, while newer sites will become available, they are not being opened fast enough to meet demand. The UK does not yet have its own strategy on dealing with waste management as part of the circular economy and, with the looming shadow of Brexit, it is unclear if these targets will be maintained or others developed.

Currently, UK policy is having a positive impact on waste. While 48% of total waste in 2016 was recycled and around 25% went to landfill – which includes municipal waste from construction and industry – the weightage amount is still too high to be sustainable. Municipal solid waste is defined as waste coming from homes, schools, shops and small businesses. Since 2010, there has been a 40% reduction in municipal waste sent to the landfill.

Energy from waste

One of the ways that we can reduce waste sent to landfill and support a more sustainable economy is by extracting energy from the waste for heating and electricity generation, a process known as energy from waste (EfW). The process outputs heat, which can be used for district heating, while the energy can be used to create steam, which is in turn used to generate electricity. Materials such as glass and metals, which do not combust in the process, are left at the bottom, known as bottom ash and can be used as aggregates in construction, with the remaining metals being sent for recycling.

There are many advantages of this approach. For instance, when we compare carbon emissions of EfW against sending waste to landfill, EfW has much lower emissions. Research on EfW has also shown that the health risks – cancerous and non-cancerous – from waste incineration are five times lower in comparison to landfill. Given that we are running out of landfill space, EfW can take as much as 60Mt out of landfill in the coming decade and be used to provide electricity to 1.8m homes. Currently, around 3.5m tonnes of waste are being sent abroad to be utilised to generate electricity, which the UK is then buying back.

There are still problems with EfW, the EU has recently removed EfW from its directives to be incorporated into the circular economy on the grounds that, compared to traditional fossil fuels, EfW produces twice as much carbon per unit of electricity generated, passing the limit set by the EU. Research into the technology involved in ensuring the emissions are purified is improving, however, and treatment of air pollution control (APC) residues may rectify some of these problems in the coming years.

What does this mean for the UK?

Weighing up the pros and cons, EfW should be a key part of the UK’s post-Brexit policies. Given we are unable to meet space demand for landfills, EfW will enable us to free up space and reduce the amount of CO2 emissions that would normally be generated. Exporting waste – to be turned into electricity and to be bought back – makes no sense when there is an option to reduce costs, provide investment opportunities, and create domestic capacity for baseline power generation.

EfW does not necessarily need to be a long term strategy for the UK. With society undergoing a transformation in the energy sector and climate being at the top of the agenda, using EfW in a short-to-medium term could provide a stepping stone to a cleaner world. While there are concerns about EfW emissions, a comprehensive national strategy needs to be developed to effectively place EfW in the future of the UK’s circular economy.

Usman Farooq is a data scientist at an international engineering consultancy.