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christine lagarde
Under Trump, America's Global Standing at Record Low
Two years later, Trump has failed to reverse America's decline
Jul 01, 2019
Make America Great Again? Don't count on it.
Donald Trump was partly voted into office by Americans who felt that the self-proclaimed greatest power on Earth was actually in decline -- and they weren't wrong. Trump is capable of tweeting many things, but none of those tweets will stop that process of decline, nor will a trade war with a rising China or fierce oil sanctions on Iran.
You could feel this recently, even in the case of the increasingly pressured Iranians. There, with a single pinprick, Supreme Leader Ayatollah Ali Khamenei effectively punctured President Trump's MAGA balloon and reminded many that, however powerful the U.S. still was, people in other countries were beginning to look at America differently at the end of the second decade of the twenty-first century.
Following a meeting in Tehran with visiting Japanese Prime Minister Shinzo Abe, who brought a message from Trump urging the start of U.S.-Iranian negotiations, Khamenei tweeted, "We have no doubt in [Abe's] goodwill and seriousness; but regarding what you mentioned from [the] U.S. president, I don't consider Trump as a person deserving to exchange messages with, and I have no answer for him, nor will I respond to him in the future." He then added: "We believe that our problems will not be solved by negotiating with the U.S., and no free nation would ever accept negotiations under pressure."
A flustered Trump was reduced to briefly tweeting: "I personally feel that it is too soon to even think about making a deal. They are not ready, and neither are we!" And soon after, the president halted at the last minute, in a distinctly humiliating retreat, U.S. air strikes on Iranian missile sites that would undoubtedly have created yet more insoluble problems for Washington across the Greater Middle East.
Keep in mind that, globally, before the ayatollah's put-down, the Trump administration had already had two abject foreign policy failures: the collapse of the president's Hanoi summit with North Korean leader Kim Jong-un (followed by that regime's provocative firing of several missiles over the Sea of Japan) and a bungled attempt to overthrow the regime of Venezuelan President Nicolas Maduro.
America's Global Standing at a Record Low
What's great or small can be defined in absolute or relative terms. America's "greatness" (or "exceptional" or "indispensable" nature) -- much lauded in Washington before the Trump era --should certainly be judged against the economic progress made by China in those same years and against Russia's advances in the latest high-tech weaponry. Another way of assessing the nature of that "greatness" and what to make of it would be through polls of how foreigners view the United States.
Take, for instance, a survey released by the Pew Research Group in February 2019. Forty-five percent of respondents in 26 nations with large populations felt that American power and influence posed "a major threat to our country," while 36% offered the same response on Russia, and 35% on China. To put that in perspective, in 2013, during the presidency of Barack Obama, only 25% of global respondents held such a negative view of the U.S., while reactions to China remained essentially the same. Or just consider the most powerful country in Europe, Germany. Between 2013 and 2018, Germans who considered American power and influence a greater threat than that of China or Russia leapt from 19% to 49%. (Figures for France were similar.)
As for President Trump, only 27% of global respondents had confidence in him to do the right thing in world affairs, while 70% feared he would not. In Mexico, you undoubtedly won't be surprised to learn, confidence in his leadership was at a derisory 6%. In 17 of the surveyed countries, people who lacked confidence in him were also significantly more likely to consider the U.S. the world's top threat, a phenomenon most pronounced among traditional Washington allies like Canada, Great Britain, and Australia.
China's Expanding Global Footprint
While 39% of Pew respondents in that poll still rated the U.S. as the globe's leading economic power, 34% opted for China. Meanwhile, China's Belt and Road Initiative (BRI) launched in 2013 to link the infrastructure and trade of much of Southeast Asia, Eurasia, and the Horn of Africa to China (at an estimated cost of four trillion dollars) and to be funded by diverse sources, is going from strength to strength.
One way to measure this: the number of dignitaries attending the biennial BRI Forum in Beijing. The first of those gatherings in May 2017 attracted 28 heads of state and representatives from 100 countries. The most recent, in late April, had 37 heads of state and representatives from nearly 150 countries and international organizations, including International Monetary Fund (IMF) chief Christine Lagarde and United Nations Secretary-General Antonio Guterres.
Leaders of nine out of 10 Association of Southeast Asian Nations attended, as did four of the five Central Asian republics. Strikingly, a third of the leaders participating came from Europe. According to Peter Frankopan, author of The New Silk Roads, more than 80 countries are now involved in some aspect of the BRI project. That translates into more than 63% of the world's population and 29% of its global economic output.
Still, Chinese President Xi Jinping is intent on expanding the BRI's global footprint further, a signal of China's dream of future greatness. During a February two-day state visit to Beijing by Saudi Crown Prince Mohammed bin Salman, Xi suggested that, when it came to Riyadh's overly ambitious economic plan, "our two countries should speed up the signing of an implementation plan on connecting the Belt and Road Initiative with the Saudi Vision 2030."
Flattered by this proposal, the crown prince defended China's use of "re-education" camps for Uighur Muslims in its western province of Xinjiang, claiming it was Beijing's "right" to carry out antiterrorism work to safeguard national security. Under the guise of combating extremism, the Chinese authorities have placed an estimated one million Uighur Muslims in such camps to undergo re-education designed to supplant their Islamic legacy with a Chinese version of socialism. Uighur groups had appealed to Prince bin Salman to take up their cause. No such luck: one more sign of the rise of China in the twenty-first century.
China Enters the High-Tech Race With America
In 2013, the German government launched an Industry 4.0 Plan meant to fuse cyber-physical systems, the Internet of things, cloud computing, and cognitive computing with the aim of increasing manufacturing productivity by up to 50%, while curtailing resources required by half. Two years later, emulating this project, Beijing published its own 10-year Made in China 2025 plan to update the country's manufacturing base by rapidly developing 10 high-tech industries, including electric cars and other new-energy vehicles, next-generation information technology and telecommunications, as well as advanced robotics and artificial intelligence, aerospace engineering, high-end rail infrastructure, and high-tech maritime engineering.
As with BRI, the government and media then publicized and promoted Made in China 2025 vigorously. This alarmed Washington and America's high-tech corporations. Over the years, American companies had complained about China's theft of U.S. intellectual property, the counterfeiting of famous brands, and the stealing of trade secrets, not to speak of the pressuring of American firms in joint ventures with local companies to share technology as a price for gaining access to China's vast market. Their grievances became more vocal when Donald Trump entered the White House determined to cut Washington's annual trade deficit of $380 billion with Beijing.
As president, Trump ordered his new trade representative, the Sinophobe Robert Lighthizer, to look into the matter. The resulting seven-month investigation pegged the loss U.S. companies experienced because of China's unfair trade practices at $50 billion a year. That was why, in March 2018, President Trump instructed Lighthizer to levy tariffs on at least $50 billion worth of Chinese imports.
That signaled the start of a Sino-American trade war which has only gained steam since. In this context, Chinese officials started downplaying the significance of Made in China 2025, describing it as nothing more than an inspirational plan. This March, China's National People's Congress even passed a foreign direct-investment law meant to address some of the grievances of U.S. companies. Its implementation mechanism was, however, weak. Trump promptly claimed that China had backtracked on its commitments to incorporate into Chinese law significant changes the two countries had negotiated and put into a draft agreement to end the trade war. He then slapped further tariffs on $200 billion in Chinese imports.
The major bone of contention for the Trump administration is a Chinese law specifying that, in a joint venture between a foreign corporation and a Chinese company, the former must pass on technological know-how to its Chinese partner. That's seen as theft by Washington. According to Senior Fellow at the Carnegie Endowment for International Peace Yukon Huang, author of Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong, however, it's fully in accord with globally accepted guidelines. Such diffusion of technological know-how has played a significant role in driving growth globally, as the IMF's 2018 World Economic Outlook report made clear. It's worth noting as well that China now accounts for almost one-third of global annual economic growth.
The size of China's market is so vast and the rise in its per capita gross domestic product -- from $312 in 1980 to $9,769 in 2018 -- so steep that major U.S. corporations generallyaccepted its long-established joint-venture law and that should surprise no one. Last year, for instance, General Motors sold 3,645,044 vehicles in China and fewer than three million in the U.S. Little wonder then that, late last year, following GM plant closures across North America, part of a wide-ranging restructuring plan, the company's management paid no heed to a threat from President Trump to strip GM of any government subsidies. What angered the president, as he tweeted, caught the reality of the moment: nothing was "being closed in Mexico and China."
What Trump simply can't accept is this: after nearly two decades of supply-chain restructuring and global economic integration, China has become the key industrial supplier for the United States and Europe. His attempt to make America great again by restoring the economic status quo ante before 2001 -- the year China was admitted to the World Trade Organization -- is doomed to fail.
In reality, trade war or peace, China is now beginning to overtake the U.S. in science and technology. A study by Qingnan Xie of Nanjing University of Science and Technology and Richard Freeman of Harvard University noted that, between 2000 and 2016, China's global share of publications in the physical sciences, engineering, and mathmatics quadrupled and, in the process, exceeded that of the U.S. for the first time.
In the field of high technology, for example, China is now well ahead of the United States in mobile payment transactions. In the first 10 months of 2017, those totaled $12.8 trillion, the result of vast numbers of consumers discarding credit cards in favor of cashless systems. In stark contrast, according to eMarketer, America's mobile payment transactions in 2017 amounted to $49.3 billion. Last year, 583 million Chinese used mobile payment systems, with nearly 68% of China's Internet users turning to a mobile wallet for their offline payments.
Russia's Advanced Weaponry
In a similar fashion, in his untiring pitch for America's "beautiful" weaponry, President Trump has failed to grasp the impressive progress Russia has made in that field.
While presenting videos and animated glimpses of new intercontinental ballistic missiles, nuclear-powered cruise missiles, and underwater drones in a March 2018 television address, Russian President Vladimir Putin traced the development of his own country's new weapons to Washington's decision to pull out of the 1972 Anti-Ballistic Missile (ABM) treaty with the Soviet Union. In December 2001, encouraged by John Bolton, then under secretary of state for arms control and international security, President George W. Bush had indeed withdrawn from the 1972 ABM treaty on the spurious grounds that the 9/11 attacks had changed the nature of defense for America. His Russian counterpart of the time, the very same Vladimir Putin, described the withdrawal from that cornerstone of world security as a grievous mistake. The head of Russia's armed forces, General Anatoly Kvashnin, warned then that the pullout would alter the nature of the international strategic balance, freeing up countries to restart arms buildups, both conventional and nuclear.
As it happened, he couldn't have been more on the mark. The U.S. is now engaged in a 30-year, trillion-dollar-plus remake and update of its nuclear arsenal, while the Russians (whose present inventory of 6,500 nuclear weapons slightly exceeds America's) have gone down a similar route. In that televised address of his on the eve of the 2018 Russian presidential election, Putin's list of new nuclear weapons was headed by the Sarmat, a 30-ton intercontinental ballistic missile, reputedly far harder for an enemy to intercept in its most vulnerable phase just after launching. It also carries a larger number of nuclear warheads than its predecessor.
Another new weapon on his list was a nuclear-powered intercontinental underwater drone, Status-6, a submarine-launched autonomous vehicle with a range of 6,800 miles, capable of carrying a 100 megaton nuclear warhead. And then there was his country's new nuclear-powered cruise missile with a "practically unlimited" range. In addition, because of its stealth capabilities, it will be hard to detect in flight and its high maneuverability will, theoretically at least, enable it to bypass an enemy's defenses. Successfully tested in 2018, it does not yet have a name. Unsurprisingly, Putin won the presidency with 77% of the vote, a 13% rise from the previous poll, on record voter turnout of 67.7%.
In conventional weaponry, Russia's S-400 missile system remains unrivalled. According to the Washington-based Arms Control Association, "The S-400 system is an advanced, mobile, surface-to-air defense system of radars and missiles of different ranges, capable of destroying a variety of targets such as attack aircraft, bombs, and tactical ballistic missiles. Each battery normally consists of eight launchers, 112 missiles, and command and support vehicles." The S-400 missile has a range of 400 kilometers (250 miles), and its integrated system is believed to be capable of shooting down up to 80 targets simultaneously.
Consider it a sign of the times, but in defiance of pressure from the Trump administration not to buyRussian weaponry, President Recep Tayyip Erdogan of Turkey, the only Muslim member of NATO, ordered the purchase of batteries of those very S-400 missiles. Turkish soldiers are currently being trained on that weapons systems in Russia. The first battery is expected to arrive in Turkey next month.
Similarly, in April 2015, Russia signed a contract to supply S-400 missiles to China. The first delivery of the system took place in January 2018 and China test fired it in August.
An Expanding Beijing-Moscow Alliance
Consider that as another step in Russian-Chinese military coordination meant to challenge Washington's claim to be the planet's sole superpower. Similarly, last September, 3,500 Chinese troops participated in Russia's largest-ever military exercises involving 300,000 soldiers, 36,000 military vehicles, 80 ships, and 1,000 aircraft, helicopters, and drones. Codenamed Vostok-2018, it took place across a vast region that included the Bering Sea, the Sea of Okhotsk, and the Sea of Japan. Little wonder that NATO officials described Vostok-2018 as a demonstration of a growing Russian focus on future large-scale conflict: "It fits into a pattern we have seen over some time -- a more assertive Russia, significantly increasing its defense budget and its military presence." Putin attended the exercises after hosting an economic forum in Vladivostok where Chinese President Xi was his guest. "We have trustworthy ties in political, security and defense spheres," he declared, while Xi praised the two countries' friendship, which, he claimed, was "getting stronger all the time."
Thanks to climate change, Russia and China are now also working in tandem in the fast-melting Arctic. Last year Russia, which controls more than half the Arctic coastline, sent its first ship through the Northern Sea Route without an icebreaker in winter. Putin hailed that moment as a "big event in the opening up of the Arctic."
Beijing's Arctic policy, first laid out in January 2018, described China as a "near-Arctic" state and visualized the future shipping routes there as part of a potential new "Polar Silk Road" that would both be useful for resource exploitation and for enhancing Chinese security. Shipping goods to and from Europe by such a passage would shorten the distance to China by 30% compared to present sea routes through the Malacca Straits and the Suez Canal, saving hundreds of thousands of dollars per voyage.
According to the U.S. Geological Survey, the Arctic holds petroleum reserves equal to 412 billion barrels of oil, or about 22% of the world's undiscovered hydrocarbons. It also has deposits of rare earth metals. China's second Arctic vessel, Xuelong 2 (Snow Dragon 2), is scheduled to make its maiden voyage later this year. Russia needs Chinese investment to extract the natural resources under its permafrost. In fact, China is already the biggest foreign investor in Russia's liquefied natural gas (LNG) projects in the region -- and the first LNG shipment was dispatched to China's eastern province last summer via the Northern Sea Route. Its giant oil corporation is now beginning to drill for gas in Russian waters alongside the Russian company Gazprom.
Washington is rattled. In April, in its latest annual report to Congress on China's military power, the Pentagon for the first time included a section on the Arctic, warning of the risks of a growing Chinese presence in the region, including that country's possible deployment of nuclear submarines there in the future. In May, Secretary of State Mike Pompeo used a meeting of foreign ministers in Rovaniemi, Finland, to assail China for its "aggressive behavior" in the Arctic.
In an earlier speech, Pompeo noted that, from 2012 to 2017, China invested nearly $90 billion in the Arctic region. "We're concerned about Russia's claim over the international waters of the Northern Sea Route, including its newly announced plans to connect it with China's Maritime Silk Road," he said. He then pointed out that, along that route, "Moscow already illegally demands other nations request permission to pass, requires Russian maritime pilots to be aboard foreign ships, and threatens to use military force to sink any that fail to comply with their demands."
An American Downturn Continues
Altogether, the tightening military and economic ties between Russia and China have put America on the defensive, contrary to Donald Trump's MAGA promise to American voters in the 2016 campaign. It's true that, despite fraying diplomatic and economic ties between Washington and Moscow, Trump's personal relations with Putin remain cordial. (The two periodically exchange friendly phone calls.) But among Russians more generally, a favorable view of the U.S. fell from 41% in 2017 to 26% in 2018, according to a Pew Research survey.
There's nothing new about great powers, even the one that proclaimed itself the greatest in history, declining after having risen high. In our acrimonious times, that's a reality well worth noting. While launching his bid for reelection recently, Trump proposed a bombastic new slogan: "Keep America Great" (or KAG), as if he had indeed raised America's stature while in office. He would have been far more on target, however, had he suggested the slogan "Depress America More" (or DAM) to reflect the reality of an unpopular president who faces rising great power rivals abroad.
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Twitter Users Ridicule First Daughter With #UnwantedIvanka Hashtag After Ivanka Caught on Video 'Boxing Way Above Her Weight'
"Being someone's daughter actually isn't a career qualification."
Jul 01, 2019
Social media users inserted images of Ivanka Trump into pictures of historical events to show how nepotism doesn't always translate into acceptance after a viral video of the First Daughter and senior White House advisor awkwardly interrupting a group of world leaders at the G20 summit went viral over the weekend.
The video, which was posted to Instagram by the office of French President Emmanuel Macron, shows Ivanka jumping into a conversation between Macron, Canadian Prime Minister Justin Trudeau, British Prime Minister Theresa May, and International Monetary Fund managing director Christine Lagarde. Ivanka was at the conference with her father, President Donald Trump.
According toThe New York Times:
In the clip, Ms. Trump seemed to be looking to find a place to jump into this diplomatic game of double Dutch. First Mrs. May spoke: "As soon as you charge them with that economic aspect of it, a lot of people start listening who otherwise wouldn't listen."
And then Ms. Trump jumped in: "And the same with the defense side of it, in terms of the whole business that's been, sort of, male-dominated."
Ms. Lagarde, who was standing next to the president's daughter, swiveled her head and blinked several times as she listened.
The video went viral over the weekend, with observers like Rep. Alexandria Ocasio-Cortez (D-N.Y.) pointing out that "being someone's daughter actually isn't a career qualification."
\u201cIvanka Trump appears to be trying to get involved in a talk among Macron, May, Trudeau and Lagarde (IMF head). \nThe video is released by French Presidential palace.\u201d— Parham Ghobadi (@Parham Ghobadi) 1561842039
The hashtag #UnwantedIvanka was started by Crooked Media's Erin Gloria Ryan, who asked her followers on Twitter to "please photoshop Ivanka the unwelcome interloper boxing way above her weight" in historical pictures.
"And hashtag it #unwantedivanka because these are delightful and deserve to be seen," tweeted Ryan.
Twitter users jumped at the opportunity, placing Ivanka at Lyndon Johnson's swearing in after the assassination of President John F. Kennedy....
Lincoln's assassination...
And the Yalta conference.
\u201c@morninggloria Yalta\u201d— Helen Kennedy \ud83c\udf3b (@Helen Kennedy \ud83c\udf3b) 1561921090
Of course, as lawyer Darren Kaplan noted, "you don't need photoshop" to show Ivanka inserting herself where she's unwanted.
"Here's an actual photo of Ivanka posing with an Olympic medal that someone else trained and sacrificed their entire life to earn," said Kaplan.
\u201c@morninggloria You don't need photoshop. Here's an actual photo of Ivanka posing with an Olympic medal that someone else trained and sacrificed their entire life to earn.\u201d— Darren Kaplan (@Darren Kaplan) 1561930167
Ivanka and her father returned to the U.S. on Sunday.
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Why Even Investment Funds Want More Corporate Tax Transparency
Multinational corporations must stop blocking further transparency so that governments can develop tax policies that address inequalities, as well as the populism and authoritarianism that flow from them
Apr 09, 2019
Who would dream of putting an end to the culture of secrecy, the opacity of multinational companies' accounts and the fortunes hidden in tax havens? The usual suspects, of course, tax justice activists - academics, churches, trade unions - angered by revelations such as the Panama Papers or Paradise papers. But not only: a recent report published by the Global Reporting Initiative (GRI) reveals that the most vocal advocates for tax transparency are... investment fund representatives. And we are not talking about small players: those in favour of voluntary corporate tax transparency reporting standards manage the equivalent of USD $10 trillion, about 12% of global annual GDP!
Investment fund managers know that the lack of tax transparency from multinationals often disguises underlying business failures. While it might help deliver executive bonuses, it exposes investors to unforeseen risks and may hide profits that should be returned as dividends. "Complex or opaque ownership and organisational structures hamper transparency and may compromise investors' fundamental financial analysis", said Norges Bank, one of the heavyweights in the sector, in a letter to the GRI.
Tax avoidance strategies, whether legal or not, have a high social and human cost that affects companies.
They also know that tax avoidance strategies, whether legal or not, have a high social and human cost that affects companies. Falling tax revenues mean less money for education, health, infrastructure, poverty reduction and climate change. And direct investment depends heavily on quality public infrastructure and a healthy and skilled workforce.
Since the 1980s, a powerful industry has developed out of sight in tax havens, where, according to the Tax Justice Network, USD $30 Trillion are currently hidden. That is more than double the GDP of the entire Eurozone economy, or over 150 times the annual amount estimated by economist Jeffrey Sachs required to end extreme poverty globally.
Deprived of funds crucial to their development, the countries in the global south are the biggest losers. But in terms of amounts, the most affected are the United States and European countries, where most of the multinational companies' workforce and consumers are located. The EU, for example, loses about 20% of its corporate tax revenue to tax havens, the equivalent, according to economist Gabriel Zucman ofhalf of public spending on higher education.
Last month, the International Monetary Fund (IMF) President, Christine Lagarde, said in a widely reported op-ed that "the ease with which multinationals seem able to avoid tax and the three-decade-long decline in corporate tax rates compromise faith in the fairness of the international system." In other words, it is toxic for democracy.
The funding gap created by tax dodgers must be paid for with higher contributions from the middle and working classes, making it much more difficult for these groups to save or accumulate wealth.
This is because the funding gap created by tax dodgers must be paid for with higher contributions from the middle and working classes, making it much more difficult for these groups to save or accumulate wealth. The richest one per cent now have more wealth than the rest of the world combined, as recently shown by Oxfam.
Facing public anger, the G20 and the Organization for Economic Cooperation and Development (OECD) have pushed for increased sharing between tax authorities, including country-by-country reporting on the profits and tax payments of the largest multinationals. Unfortunately, this norm will only apply to very large multinationals and their reports will not be publicly available, depriving all of us of a key resource in the fight for tax justice.
We are not told how much money is stashed away in tax havens, how much our governments know about it or what they are doing to fight against it, if anything. Worst of all, these exchanges rely on financial institutions, which are precisely the ones that help their clients hide their money.
As Lagarde argues, the rules of the global tax system need to be rewritten. But a democratic debate is impossible when key information is withheld from the public.
Yet corporations continue to resist even voluntary standards. Their main arguments are that the public might be confused by the information and that producing it would be a burden. Are we expected to believe that massive multinationals cannot produce tax reports containing information that any prudent corporation should already be collecting?
Multinational corporations must stop blocking further transparency so that governments can develop tax policies that address inequalities, as well as the populism and authoritarianism that flow from them. It is also an imperative for growth, since political instability deters companiesfrom investing. Transparency is today our only chance to restore confidence in our democratic institutions, and even, quite simply, to preserve them.
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