Two recent Wilson Center On The Hill seminars focused on priority issues for countries in the developed and developing world, in light of the global financial crisis plaguing much of the world. Some 200 Capitol Hill staffers attended each session to hear Wilson Center experts offer their insights and participate in lively discussions. The January 30 panel looked at the developing world: global health, Latin America, and Africa. A February 6 panel assessed nations of the developed world: India, China, Russia and Brazil.
The Developing World
In Latin America and the Caribbean, economic growth has stalled and the prices of oil, minerals, and agricultural commodities have plummeted.
"Globalization and reforms in the 90s that opened the region's economies have integrated Latin America more deeply into the international financial system and into global markets," said Cynthia Arnson, director of the Latin American Program. "Reduced demand in the advanced industrial world, particularly for the primary commodities whose prices boomed in the last four or five years, has sent Latin American economies into a tailspin."
Throughout Latin America, there are calls for a new international financial architecture and for new thinking about the role of the state in the economy, whether the state should have a more permanent role in regulating markets, and finding ways to protect the most vulnerable sectors. In the United States, free trade agreements have become proxies in a larger struggle over the winners and losers in globalization, said Arnson. Bipartisan support for free trade will require stronger domestic policies to support U.S. workers.
"Global health and development in general are receiving unprecedented attention and funding," said Gib Clarke, coordinator of the Global Health Initiative but much more needs to be done. He said moving forward requires targeted funding and strengthening health systems. Billions of dollars globally are poured into fighting disease, particularly the top three killers in the developing world: HIV/AIDS, tuberculosis, and malaria. In addition, he underscored the need for increased attention to maternal and child health—access to birth attendants and obstetrics, better nutrition, access to vaccines, and family planning.
Clarke said funding must be flexible to target needs across the entire spectrum of the health sector. "You can put money toward problems, but your success will be limited by the strength of local and national health systems," he said. "Solid public health infrastructure requires having trained health workers, effective health policies, available supplies, solid health finance systems, and information systems." He said that since the poor are hardest hit during an economic downturn, investments in all of these areas are even more urgent.
The economic crisis has hit Africa hard. Africa experienced a sharp increase in aid under the Bush administration, a continuation of Clinton-era policies, and there is continuing interest in a bipartisan approach to building trade relationships, "so the continent would no longer be treated as a welfare case, but rather as a partner," said Africa Program Director Howard Wolpe. This requires expanding markets for African products, said Wolpe, as well as increasing Africa's capacity to produce, and strengthening its infrastructure.
Larger, oil-rich African nations are plagued by corruption, societal inequality, and long-term instability, Wolpe said. He suggested applying a policy analogous to the American Foreign Corrupt Practices Act to promote greater transparency and a boost to African development.
Wolpe said traditional strategies have failed to address the causes underlying the numerous conflict hotspots across the continent. He cited the Wilson Center's work in this area: a Leadership Training Initiative in Burundi, the Democratic Republic of Congo, and Liberia. The workshops aim to change the conflict mentality of key leaders by strengthening their negotiation skills while building trust and fostering a power-sharing consensus.
The Developed World
Unlike in many other countries, former President Bush was greatly admired in India. Therefore, Asia Program Director Robert Hathaway said, the Obama administration must overcome skepticism and distrust as it seeks to build on the momentum of India-U.S. relations of recent years. Hathaway did warn against "fuzzy talk" about U.S.-India relations, notably such rhetoric as "natural allies" and "sharing a strategic partnership." These expressions of hope do not fully represent the current reality, he said, and mask major policy differences on Iran, Pakistan, trade, global warming, Burma, and nonproliferation. He said Members of Congress talk about strategic partnership, but Indians use the same phrase to describe their relationship with China and Iran.
The global economic crisis has devastated much of the developed world, but India—not as dependent on exports as other leading countries—has been less buffeted by it. Hathaway said economic anxieties likely will encourage an inward-looking approach to economic questions.
China, however, has not been insulated from the economic crisis. Stapleton Roy, director of the Center's new Kissinger Institute on China and the United States, said the economic crisis has impaired China's export markets, causing factory closings, rising unemployment, and strains on the very large migrant labor population. Roy said China's leadership must play a stabilizing role to prevent further domestic decline. And, he said, "U.S. foreign policy will lack coherence if decisions we make now are not informed by longer-range goals as to where we want to go.
"Only the U.S. and Chinese economies have the scope and breadth to lift the world out of the severe economic downturn we are facing," Roy said. Therefore, it's vital that the stimulus measures both governments are implementing succeed.
In Russia, Prime Minister Vladimir Putin and his presidential successor, Dmitry Medvedev, have derived much of their support from strong economic performance. Thus the economic crisis threatens the regime's stability as unemployment and inflation rise, said Henry Hale, a Kennan Institute scholar.
"The current domestic arrangement is unlikely to be sustainable should the economic crisis deepen and endure," he said. "This creates an incentive for the regime to play up foreign threat as a way of galvanizing support at home despite the economic turmoil." Russians have a history of suspicion toward the West and NATO enlargement, but Putin has not yet tapped this as much as he might, Hale said. He deemed bilateral relations to be on "a low burn" but said Russia's leaders acknowledge being part of the international system is essential to recovery and prosperity.
The precarious situation "puts a premium on engagement with Russia," Hale said. He advises the United States repeal the "obsolete" Jackson-Vanik Amendment, a 1974 act that links Russia's emigration policies to normal trade relations, while advocating high democratic and human rights standards in Russia. Another positive step would be promoting scholar and citizen exchanges to promote mutual understanding.
Paulo Sotero, director of the Brazil Institute, said Brazil also is feeling the effects of the economic slowdown and recently announced its own stimulus package to boost investment and growth.
He said Brazil and the United States must pursue the unfinished agenda of global trade talks. He also cited a potential bilateral partnership on climate change. Already, half of the energy used in Brazil comes from renewable sources and Brazil is a leading producer of biofuels, including carbon-reducing ethanol.
Sotero said Brazilians favorably received the news of President Obama's election. Because Brazil is home to the largest African population outside of Africa, Sotero said, "I believe Brazil and Brazil-U.S. relations will be impacted in a unique way by the performance of the first black American president, particularly if President Obama is successful, which we expect he will be." The G-20 meeting in April in London will be "the first real opportunity to start building a new system that includes emerging countries such as Brazil and Mexico in the decision-making process," Sotero said.
Given the vast differences in national goals and outlooks across the globe, the Obama administration must take into account all of the variables amidst the stress of the economic crisis as it formulates policy and tries to build and strengthen multilateral relations.