Canada moves toward the AIIB

By David Bosco

Likely in deference to U.S. wishes, Canada declined the opportunity to be a founding member of the Asian Infrastructure Investment Bank (AIIB), the new Beijing-led multilateral lender. But it sure sounds like Ottawa is angling for membership now. And Chinese officials insist that the door remains open.

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The AIIB’s cautious first moves

China’s push to create the Asian Infrastructure Investment Bank (AIIB) generated intense speculation that Beijing was challenging the existing multilateral architecture. With the AIIB’s first annual meeting just weeks away, what does the early evidence suggest about the course it will take? Ankit Panda argues that the Bank’s first steps appear aimed at complementing rather than supplanting existing institutions.

 A year and a few weeks ago, the AIIB’s 57 founding members finalized its charter; in the final days of 2015, the members ratified the bank’s Articles of Agreement. Finally, early in the new year, the AIIB opened its doors for business. Now, just over three months into its operations, the AIIB has decided on its first projects. As I’d briefly discussed in April, the AIIB’s first projects have demonstrated that concerns a year ago in Washington and Tokyo may have been overstated. For now, the bank appears to be pursuing a modest and complementary approach in selecting its projects.

One of the bank’s first confirmed projects, the construction of a 64 kilometer stretch of a highway in Pakistan, demonstrates this. The AIIB will partner with the ADB, as Reuters reported last week. “I am delighted to take a further step forward in our partnership with ADB,” AIIB President Jin Liqun said in a statement posted to the AIIB’s website. Per the memorandum of understanding between the two banks, the AIIB will work with the ADB to cooperate on the highway, which will connect Shorkot to Khanewal in Pakistan’s Punjab province. The AIIB is also separately planning on co-financing projects with the World Bank and, on Monday, formally announced another co-financed project, this time with the European Bank for Reconstruction and Development, to improve roads along the “Tajikistan section of the Central Asia Regional Economic Cooperation Corridor, [near the border with Uzbekistan].”

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Turkey feuds with UN human rights officials

By David Bosco

Turkish officials are exchanging words with senior UN human rights monitors about the situation in the southeast of the country. Yesterday, the UN High Commissioner for Human Rights expressed alarm at the situation in the town of Cizre, in particular:

UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein said Tuesday that he had received a succession of alarming reports about violations allegedly committed by Turkish military and security forces in south-east Turkey over the past few months, and urged the Turkish authorities to give independent investigators, including UN staff, unimpeded access to the area to verify the veracity of such reports.

“More and more information has been emerging from a variety of credible sources about the actions of security forces in the town of Cizre during the extended curfew there from mid-December until early March,” Zeid said. “And the picture that is emerging, although still sketchy, is extremely alarming.”

For its part, the Turkish government insists that Zeid is misinformed and that UN officials are welcome to visit the area in question. “High Commissioner Zeid’s statements, which do not reflect the spirit of cooperation between Turkey and the U.N. in the field of human rights, are based on insufficient information and misdirection of biased circles,” a government official said. “In case he wishes, we would be pleased to host Mr. Zeid in our country in a way that would cover our Southeastern Anatolia region too.”

For detailed information on Turkey’s interactions with the UN human rights system, see here.

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The IMF arrives in Ukraine

With Ukraine’s new government in place, a team from the International Monetary Fund has arrived for talks on how to restart the country’s stalled loan program.

An International Monetary Fund team arrived in Kiev on Tuesday after the formation of a new Ukrainian government resolved a prolonged political crisis that had stalled the release of vital aid.

The mission’s visit was long awaited in the cash-strapped former Soviet country as it grapples with the costs of a two-year conflict in the pro-Russian separatist east and attempts to dig out of a dramatic economic swoon.

The Fund approved a new $17.5-billion (15.4-billion-euro) loan programme in March 2015 that included an initial lump payment of $5 billion and provided for the subsequent release of $1.7 billion every three months.

But Ukraine has so far only received $6.7 billion and seen no new disbursements since the second half of last year.

Anders Aslund explains what the Fund wants from the new government.

The Ukrainian parliament needs to pass a package of nineteen laws, involving public administration, deregulation, corporate governance, extending the list of state companies subject to privatization, and elements of judicial reform, to satisfy the IMF. Prime Minister Volodymyr Groisman has promised to have them adopted and seems to have secured parliamentary support.

The IMF greatly appreciates Ukraine’s energy reform. On May 1, the Ukrainian government finally unified both gas and electricity prices. After a quarter of a century, Ukraine’s influential gas traders can no longer buy the state through privileged arbitrage. No previous Ukrainian government policy has done so much to reduce corruption. Basically, this decision to unify prices should be sufficient for the IMF to offer the Ukrainian government a new tranche of $1.7 billion. Ukraine needs it badly to be able to start economic recovery.

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Disunity within the G4?

The discussions on reform of the United Nations Security Council are slogging on, with familiar battle lines in place. The central dispute remains between the Group of Four countries (G4) aspiring to permanent seats (Brazil, Germany, Japan, and India) and the Uniting for Consensus group, which is skeptical of new permanent seats. Within that struggle, an important subplot has been whether G4 unity can hold. The G4, after all, have quite different diplomatic alignments and very different prospects of actually securing seats.

Not surprisingly, a Pakistani newspaper sees signs of intra-G4 friction:

According to sources, the G4 countries appeared fending for themselves individually in the meeting. The Indian ambassador hardly received any help from the other three members of G4, with Germany not having intervened even once during the meeting that focused on critical issues of Security Council reform.

For a more balanced (and less breathless) account of recent exchanges, see here.

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“Transforming our World by 2030” Some thoughts on the post 2015 zero draft

By Martin Edwards

[Crossposted from Permanent Observer]

On June 2, the co-facilitators of the intergovernmental negotiations on the post-2015 development agenda released their zero draft of the outcome document for the September summit on the Sustainable Development Goals. The release of the document is timed for the start of the next round of intergovernmental negotiations, which are slated to start on June 22.

While the individual components of the outcome document have been circulated and debated for months, this is an impressive statement of what the final product will look like. Readers may also find Elizabeth Stuart’s early review of the zero draft of interest.

Rewriting the Rules
The authors of this 46 page document cannot be faulted for a lack of breadth. The post 2015 agenda is a call to think about development differently. It challenges what it means to be a state through Goal 16’s call for creating accountable and effective institutions. It challenges the Washington Consensus and the global discourse on austerity with a call for adequate policy space and social protection. Finally, it offers a vision of how global policy problems will be solved moving forward, not only through the process that created this document, but also in its insistence on multi-stakeholder governance. Moving forward, the future process of global problem solving is more inclusive.

Still Lots Left To Do
The use of the term zero draft is used to denote a work that is still in progress. Four pieces of this document do need further clarification. First, the co-facilitators have reintroduced revised targets that were previously scuttled in an earlier round of negotiations. Hopefully with a sense of the whole package, the fears that these revisions open the door to a full overhaul of the goals can be ameliorated. Second, there is an entire parallel process underway to turn these targets into measurable indicators that won’t be finalized until Spring 2016. Third, the weakest portion of the draft deals with follow up and review, and the roles of regional peer review and the High Level Political Forum need to be clarified. We also need to make sure that there are adequate resources to support the monitoring and review process. Finally, the whole SDG process turns on having data. It is not clear that there will be ample financial support for developing countries to upgrade their national statistical offices to get the data gathering job done.

An Unanswered Question: How do we connect the domestic and the international?
Charles Kenny noted that the SDGs lack a theory of change. While this is an ungainly term, it is a shorthand for saying that we need to better think about how creating global goals will translate into better policy outcomes within countries. Rather than being a shortcoming, this is already an issue that the UN knows about very well. The Universal Declaration of Human Rights was created with aspirational goals and no mechanism for monitoring. Despite these liabilities, it would be difficult to argue that the world would not be a different place had UDHR not been written. The challenge in turning even opaque goals into policy outcomes is two-fold: the public needs to be better informed about the goals in the first place, so that it can take action, and many of the issues that are the focus of the goals do not have strong domestic constituencies. Building stronger domestic coalitions to lobby for things like vocational skills, mental health, and road safety will take time.

An Unanswered Question: How will this play in the US?
The post 2015 agenda advances a very broad vision, and US politics seems to be moving radically away from it. Calls for universal health coverage, ratifying Law of the Sea, and even the very idea of government policies that increase productivity are certain to offend both free market fundamentalists and sovereigntists. We need only look at the local reaction to Agenda 21 to understand that even aspirational UN documents can rouse focused opposition. It will be vitally important for supporters of the post 2015 agenda to respond quickly to unfounded objections and create clear talking points to persuade skeptics.

A Plea for Critics
There will be reviews of the zero draft that are less positive than this one. The Economist has certainly been a critic of the SDG process, and a Fox News commentator termed the enterprise as a “multi-trillion-dollar U.N. bid to reshape the planet along largely socialist or progressive lines.” While such criticism is inevitable, our charge as educated citizens is to make the debate about the post 2015 agenda a constructive one. So, to the critics of this process, we need to ask: Where is your agenda? What would you do differently?

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What Washington did wrong (and didn’t do wrong) on the AIIB

By David Bosco

Today’s New York Times describes the remarkable appeal of Beijing’s most recent multilateral creation–the Asian Infrastructure Investment Bank (AIIB):

That the United States’ allies in Europe and Asia flouted Washington’s appeals not to join the bank has brought a sense of triumph to Chinese officials and scholars who say that China has now demonstrated it can construct a broad-based institution without the United States in the lead.

“This has shown China that you don’t always have to work your way with the United States, that you can work your way with the region and many others outside the region,” said Wu Xinbo, the director of the American Studies Center at Fudan University in Shanghai. “As long as people think what you are doing is beneficial and that you are providing for the public good, you don’t need U.S. approval.”

Washington basically undermined itself by failing to allow a bigger voice for China in the World Bank and the International Monetary Fund, said David Daokui Li, a former adviser to the People’s Bank of China who has a Ph.D. in economics from Harvard.

As U.S. allies around the world–including, recently, Israel–sign up for the AIIB, the consensus is hardening that its rise is not only an achievement for Beijing but an embarrassing defeat for Washington. Forbes contributor Jean-Pierre Lehmann puts it this way:

Washington’s colossal imbecility in opposing the bank has resulted in a colossal loss of face. It is, as suggested above, a spectacular own goal. It has eroded not only the US’ hard (financial) power, but also its soft power, leadership and prestige.

Amidst the chorus of criticism, however, it’s important to parse out what the key U.S. missteps were. The accounts above cite two quite distinct errors. First, there was an alleged failure to recognize Beijing’s growing influence adequately at the World Bank and International Monetary Fund. Then there is the argument the the United States erred by publicly expressing skepticism about the AIIB and set itself up for diplomatic embarrassment.

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It’s time for the United States to join China’s new multilateral bank

By Sarah Cleeland Knight

We learned last week that another key US ally, Australia, is poised to join the China-based Asian Infrastructure Investment Bank (AIIB). Australia joins a growing list of countries, including the United Kingdom, Germany, France, and Italy, that have decided to rebuff US concerns about the bank and become members. They have done so in the face of US concerns that the bank represents a clear challenge to the World Bank, an institution over which the United States and Europe have exercised near-hegemonic control.

China’s decision to create the AIIB – first announced in October 2014 – is unsurprising, as is the US’s decision to view the AIIB with suspicion. As realist theorists of international politics such as Robert Gilpin have long explained, countries that grow in power relative to their peers – as China has done so dramatically over the past two decades – will naturally strive for a commensurate increase in influence. Similarly, declining powers will clamor to hold on to the influence they carved out when they were at the apex of their power.

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The Security Council and the ICC: signs of movement?

By David Bosco

Last month, I wrote at some length about the possibility of a Security Council-mandated delay in any ICC investigation of Palestine. I argued that the United States would likely need to lead the push for a deferral, but that there might be some support among other Council members for such a move. A new report from Colum Lynch and John Hudson of Foreign Policy suggests that diplomats at the United Nations could be moving in that direction:

Ilan Goldenberg, a former member of the Obama administration’s Mideast peace team, told FP that Washington might be inclined to support a Security Council resolution backing a two-state solution as an alternative to the Palestinian effort to hold Israel accountable at the ICC.

“If it was done, it could protect Israel from a worse outcome,” he said.

Under this scenario, the United States would seek guarantees from the international community to hold off on ICC activity in exchange for a Security Council resolution outlining international standards for a final peace agreement between the Israelis and Palestinians.

As Goldenberg goes on to point out, it’s not at all clear that Israel would want a Council deferral, particularly if it’s coupled with other measures it doesn’t support. Because a deferral could only be for twelve months and would require renewal, the specter of ICC prosecutions would not be removed. In effect, the Council would hang the ICC over Israel’s head as an implicit threat of what could happen without movement on the peace process.

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Proposed SDG Governance Indicators: Rule of Law or Simply Rule?

By Martin Edwards

[Crossposted from Permanent Observer]

As work moves forward to complete the proposed Sustainable Development Goals, a working list of preliminary indicators for each of the goals recently circulated online. This list of indicators was developed by the UN Statistics Division and was shared with National Statistics Offices. Rather than talk about each of the goals and their indicators in detail, I will build on my previous discussions of the Governance SDG, which is Goal 16. As with the previous work, I will focus more on the expressly political elements of Goal 16, and put aside the peace and violence components of the goal. There are four points worth noting:

1) Official Statistics Have Their Limits.

Some of the public commentary on SDG 16 recognized an important issue at the outset. Many of the things that Goal 16 is intended to measure, namely measures of a state’s degree of transparency and accountability, do not have their basis in official state statistics. It is not hard to understand why this is the case. Even if national level measures of these concepts existed, some states would most certainly not release them. One of the findings of academic research on variations in levels of country transparency is that democratic regimes are more transparent, which is a finding that is robust across studies, measures, and model specifications.

As a result, some of the proposed indicators for some of the targets under Goal 16 (namely 16.3, 16.6, and 16.7) rely on public surveys that do not exist in many countries. These will need to be constructed, and there are financial implications for this, of course. But the larger point remains that our measures for these targets (Promoting rule of law and ensuring equal access to justice; Developing effective, accountable and transparent institutions at all levels; and Ensuring responsive, inclusive, participatory and representative decision-making at all levels) are based not on actual measures of these phenomena, but on perceptual measures of citizens of these phenomena. Responsiveness, transparency, and accountability will become what citizens think they are. Given that we live in a world in which state power is used to oppress as well as create, the danger of this becoming a largely semantic exercise is a real one.

2) Paths not taken in indicator development.

It is worth contrasting this approach with one articulated by Mary Hilderbrand in a paper developed for the Copenhagen Consensus Project. Many of the indicators proposed in this paper are based on existing measures developed elsewhere. The World Bank’s Worldwide Governance Indicators, Transparency International’s Corruption Perceptions Index, Freedom House country ratings, and data from the CIRI Human Rights Data Project are all included as possible indicators in addition to country surveys. As I note elsewhere, many additional indicators in this area exist, and many have been developed by academics in their own empirical research.

While relying on indices developed elsewhere may produce political problems (in that the UN Statistics Division would be largely endorsing already existing measures not developed by countries themselves), they do bring with them several important correctives. Not only are they are more likely to be impartial, but they might also bring us closer to actually measuring the concepts we’re trying to study. This is important in light of my next point.

3) The dangers of conceptual slippage.

One of the things that was genuinely exciting about the High Level Panel Report was its insistence on the importance of good governance as a development necessity:

Responsive and legitimate institutions should encourage the rule of law, property rights, freedom of speech and the media, open political choice, access to justice, and accountable government and public institutions.

This theme was restated in the Secretary General’s Synthesis Report:

We also know that participatory democracy, free, safe, and peaceful societies are both enablers and outcomes of development.

And herein lies a problem. The proposed indicators are not measures of political freedom or participatory democracy. In their stead are measures of state capacity. This is not necessarily a bad thing, since we know that stronger states are less prone to state failure. But from the standpoint of those advocating greater transparency and accountability, this is a case of overpromising and underdelivering. We will not know from the surveys for the indicators noted above whether countries are more or less free or whether there are actual choices at the ballot box.

4) The Coming Challenge.

The inherent limits of these proposed indicators invite both reflection and strategy. Our goal should be to get the indicators we need for the world we want. Even if we are left in a world of “second best” indicators for Goal 16, the challenge is to use other pieces of information from sources not referenced in the proposed list of indicators to call attention to their shortcomings. This is where many of the organizations that develop these indicators can play an important role to speak truth to measures.

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