There have long been debates about the sustainability of the transatlantic alliance and accusations amongst allies of unequal contributions to burden-sharing. But since countries on both sides of the Atlantic have begun introducing new – and often major – military spending cuts in response to the economic crisis, concerns about the future of transatlantic defense cooperation have become more pronounced.A growing number of senior officials are now publicly questioning the future of NATO. In June 2011, in the midst of NATO’s operation in Libya, Robert Gates, then US Defense Secretary, stated that Europe faced the prospect of “collective military irrelevance” and that unless the continent stemmed the deterioration of its armed forces, NATO faced a “dim, if not dismal future”. Ivo Daalder, the US Permanent Representative to NATO, and James Stavridis, NATO’s Supreme Allied Commander Europe, have argued that “if defense spending continues to decline, NATO may not be able to replicate its success in Libya in another decade”. The alliance’s Secretary General, Anders Fogh Rasmussen, has warned that “if European defense spending cuts continue, Europe’s ability to be a stabilizing force even in its neighborhood will rapidly disappear”. While Norwegian Defense Minister Espen Barth Eide has claimed that “exercises have shown that NATO’s ability to conduct conventional military operations has markedly declined. […] Not only is NATO’s ability to defend its member states questionable, it might actually deteriorate further as financial pressures in Europe and the US force cuts in military spending”.In order to explore the validity of these claims, this report outlines trends in military spending across the EU since the onset of the economic crisis. It then analyzes the fallout of the downturn for the armed forces of NATO’s largest defense spenders – France, Germany, the United Kingdom and the United States.
Great Recession and Fiscal Squeeze at U.S. Subnational Government Level
Source: International Monetary Fund
The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States. It documents the sharp decline in tax revenue and discusses how states responded to close the budget gaps in order to obey the balanced budget provisions. It highligts the procyclical nature of this policy response, provides a brief comparison with subnational policy stances in other advanced economies, and discusses some options for making subnational fiscal policy less procyclical within the framework of current rules.
Europe’s New Fiscal Rules
Source: Organisation for Economic Co-operation and Development
Europe is putting in place a new system of fiscal rules following the euro area sovereign debt crisis and decades of rising government to debt-to-GDP ratios. These include the so-called “six pack” to upgrade the Stability and Growth Pact to a new Treaty incorporating the “fiscal compact”. Much of the discussion about the new rules has been procedural or theoretical. This paper shows what the rules will mean in practice under a realistic mediumterm scenario developed by the OECD. In the short term, fiscal consolidation will largely be driven by the current wave of Excessive Deficit Procedures. Only once these commitments are fulfilled will the new system of rules come into action. Although the rules are complex, the central pillar of the new fiscal rules will be the requirement to balance budgets in structural terms. These imply a tight fiscal stance over the coming years for many European countries by comparison with the performance achieved in past decades: almost all countries will have to be as disciplined as the few countries that managed to make meaningful progress in tackling high debt levels in the past. A further tightening of budgetary Medium-Term Objectives is likely in 2012, which will in many cases make the required fiscal stance even tighter. Over the very long term, the rules imply very low levels of debt. The requirements can thus not be considered to be a permanent approach. The methodology to calculate the structural balance has a number of weaknesses and discretion will be needed in implementing the rules.
Canada has weathered the global economic crisis comparatively well but will have to become more productive to sustain its high standard of living, according to OECD’s latest Economic Survey of Canada.
The report, presented today in Ottawa, notes that a timely fiscal stimulus, low interest rates, a solid banking sector and revenues from natural resources helped Canada return to a stable growth path after the global economic crisis of 2008-09. With rising real estate prices and high household indebtedness now posing new risks, the OECD projects that Canada’s economy will grow by around 2¼ per cent in 2012, and by around 2½ per cent in 2013.
The report identifies sluggish productivity growth as the main long-term challenge facing Canada’s economy. Per capita income has increased in recent years, as more people entered the labour force and oil and other commodity prices soared, pushing up the value of the Canadian dollar. However, the amount of labour, capital and natural resources needed to produce a unit of GDP has remained largely the same over the past few decades.
Canada’s overall productivity has actually fallen since 2002, while it has grown by about 30% over the past 20 years in the United States. At the same time, income has shifted towards the resource-rich western provinces, while the regional economies of Ontario and Quebec are still adapting to increased external competition resulting from the high exchange rate.
Report overview and data available for free download. Full report available for purchase.
The United States should do more to foster innovation and provide more equitable access to high-quality education in order to maintain its status as the world’s most vibrant and productive economy, according to OECD’s latest Economic Survey of the United States.
Data from the Survey suggest the United States is losing its cutting edge in innovation. This affects prospects for long-term growth and for maintaining living standards. Productivity in the U.S. is still growing faster than in most other OECD countries but growth has slowed down since the 1970s. Also, U.S. companies are no longer more likely to innovate than companies in other OECD countries.
Particularly worrying is the performance in education, which is essential to provide workers with the skills necessary to become more productive and to adapt to technological change. Attainment in tertiary education stagnated over the past three decades while it grew significantly in almost every other OECD country. Today, 22 out of 30 OECD countries surveyed have more graduates in science and engineering among the 25 to 34 year old workers than the United States.
Report overview and data available for free download. Full report available for purchase.
Source: Organisation for Economic Co-operation and Development
Growth in health spending slowed or fell in real terms in 2010 in almost all OECD countries, reversing a long-term trend of rapid increases, according to OECD Health Data 2012.
Overall health spending grew by nearly 5% per year in real terms in OECD countries over the period 2000-2009, but this was followed by zero growth in 2010. Preliminary figures for a limited number of countries suggest little or no growth in 2011. The halt in total health spending in 2010 was driven by a fall of 0.5% in public spending for health, following an increase of over 5% per year in 2008 and 2009.
While government health spending tended to be maintained at the start of the economic crisis, cuts in spending really began to take effect in 2010. This was particularly the case in the European countries hardest hit by the recession.
In Ireland, cuts in government spending drove total health spending down by 7.6% in 2010, compared with an average yearly growth rate of 8.4% between 2000 and 2009. Similarly, health spending in Iceland fell by 7.5%, as a result of a 9.3% reduction in public spending. In Estonia, following an average growth rate of nearly 7% per year from 2000 to 2009, expenditure on health dropped by 7.3% in 2010, driven by reductions in both public and private spending. In Greece, estimates suggest that total health spending fell by 6.5% in 2010 after a yearly growth rate of more than 6% on average since 2000.
World Bank’s Country Strategy for India (2013-16)
Source: World Bank
The World Bank is holding a series of consultations to seek inputs on its proposed Country Program Strategy (CPS) for India for 2013-2016. The CPS is the Bank’s roadmap for engagement in the country over the next four years. Oriented toward results, the CPS aims to support India’s development agenda of faster, sustainable and more inclusive growth as outlined in the government’s upcoming 12th Five Year Plan.
The CPS identifies key areas where the World Bank’s assistance can have the greatest impact on poverty reduction. This, in turn, determines the level and composition of the World Bank Group’s financial, advisory, and technical support to the country over a four-year period.
The CPS is developed in consultation with country authorities, civil society organizations, development partners, the media, the private sector, and other stakeholders. Consultations provide a platform for the World Bank Group to tap into the experience and knowledge of a broad range of stakeholders, and listen to their ideas about how the Bank can work with them to help the country meet its development challenges. Discussions not only cover the country’s long-standing development agenda but also the new challenges thrown up by unprecedented economic growth, and the recent slowdown.
Rio+20: The United Nations Conference on Sustainable Development, June 2012 (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
The United Nations (U.N.) Conference on Sustainable Development (UNCSD or “Rio+20”) convenes June 20-22, 2012 in Rio de Janeiro, Brazil. This conference marks the 20 th anniversary of the U.N. Conference on Environment and Development (UNCED) in Rio in 1992. Governments participating in the 1992 meeting politically endorsed the objective of “sustainable development” as achieving economic, environmental, and social development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Rio+20 begins from the premise and findings that the objectives of the 1992 Rio conference have not been achieved. The U.N.’s fifth Global Environmental Outlook, published in June 2012, found significant progress toward only four of 90 internationally-agreed goals associated with sustainable development. It found back-tracking on eight goals. Stakeholders widely agree that changes in policies and institutions are desirable to improve implementation, but do not agree on means. It seems unlikely that Rio+20 will produce any agreements that would require congressional action or be legally binding. Some proceedings, however, may engender congressional interest in concepts proposed for simultaneously achieving economic, social, and environmental objectives. Rio+20 could influence views and actions internationally on development paths and practices, thereby affecting regional and global economies, demand for development aid, transnational environmental issues, and conflict incidence and resolution. Therefore, Congress may take interest in the conference. In addition, proceedings may reference the non-binding, 1992 Agenda 21, produced at UNCED in 1992; media coverage could raise questions from constituents that Members may wish to address.
The Rio+20 organizers indicate that “[g]overnments are expected to adopt clear and focused practical measures for implementing sustainable development, based on the many examples of success we have seen over the last 20 years.” However, with strongly divergent views among the expected 115 Heads of State and up to 50,000 participants, Rio+20 may be more like a trade show than political negotiations. Indeed, some observers suggest that the conference may yield many deals among private participants. It is not expected to produce a treaty or any other binding commitments of national governments. Some observers wonder whether a meaningful communique can be successfully negotiated. High-level participants will be prompted to address issues that include
- the definition of “green economy,” and whether a definition gives adequate emphasis to social aspects (e.g., “fairness”) of sustainable development;
- whether “Sustainable Development Goals” (SDGs) should replace or supplement the Millennium Development Goals (MDGs), agreed by the U.N, General Assembly in 2000 and expected to end in 2015, as well as how SDGs might be negotiated, and what priorities might be set among them;
- how to reform international environmental institutions, particularly whether the United Nations Environmental Program should be strengthened;
- what actions, if any, might lead to improved implementation of existing sustainable development goals, given slow progress so far;
- whether governments may commit to greater financial and technological assistance to low-income countries to assist their sustainable development.
Source: United Nations High Commissioner for Refugees
A report released today by the UN High Commissioner for Refugees shows 2011 to have been a record year for forced displacement across borders, with more people becoming refugees than at any time since 2000.
UNHCR’s "Global Trends 2011" report details for the first time the extent of forced displacement from a string of major humanitarian crises that began in late 2010 in Côte d’Ivoire, and was quickly followed by others in Libya, Somalia, Sudan and elsewhere. In all, 4.3 million people were newly displaced, with a full 800,000 of these fleeing their countries and becoming refugees.
Worldwide, 42.5 million people ended 2011 either as refugees (15.2 million), internally displaced (26.4 million) or in the process of seeking asylum (895,000). Despite the high number of new refugees, the overall figure was lower than the 2010 total of 43.7 million people, due mainly to the offsetting effect of large numbers of internally displaced people (IDPs) returning home: 3.2 million, the highest rate of returns of IDPs in more than a decade. Among refugees, and notwithstanding an increase in voluntary repatriation over 2010 levels, 2011 was the third lowest year for returns (532,000) in a decade.
Viewed on a 10-year basis, the report shows several worrying trends: One is that forced displacement is affecting larger numbers of people globally, with the annual level exceeding 42 million people for each of the last five years. Another is that a person who becomes a refugee is likely to remain as one for many years – often stuck in a camp or living precariously in an urban location. Of the 10.4 million refugees under UNHCR’s mandate, almost three quarters (7.1 million) have been in exile for at least five years awaiting a solution.
+ Full Report (PDF)
WB Urges Developing Countries to Strengthen Domestic Fundamentals, to Weather Global Economic Turmoil
Developing countries should prepare for a long period of volatility in the global economy by re-emphasizing medium-term development strategies, while preparing for tougher times, says the World Bank in the newly-released Global Economic Prospects (GEP), June 2012.
A resurgence of tensions in high-income Europe has eroded the gains made during the first four months of this year, which saw a rebound in economic activity in both developing and advanced countries and an easing of risk aversion among investors. Since May 1st, increased market jitters have spread. Developing and high-income country stock markets have lost some 7 percent, giving up two-thirds of the gains generated over the preceding four months. Most industrial commodity prices are down, with crude and copper prices down by 19 and 14 percent, respectively, while developing country currencies have lost value against the US dollar, as international capital fled to safe-haven assets, such as German and U.S. government bonds.
So far, conditions in most developing countries have not deteriorated as much as in the fourth quarter of 2011. Outside of Europe and Central Asia and the Middle-East and North Africa, developing country credit default swap (CDS) rates, a key indicator of market sentiment, remain well below their maximums from the fall of 2011.
OECD launches updated version of Your Better Life IndexSource: Organisation for Economic Co-operation and Development
The OECD today released a new version of its pioneering Your Better Life Index– an online, interactive index that allows people to measure and compare their lives in a way that goes beyond traditional GDP numbers.
Launched last year, Your Better Life Index (watch video in English) enables people to compare well-being based on 11 topics – housing, income, jobs, community, education, environment, governance, health, life satisfaction, safety and work-life balance. The updated version, launched today as part of the 2012 OECD’s annual Forum and Ministerial Meeting, integrates data on gender and inequality and strengthens existing topics. Visitors to Your Better Life Index will now be able to compare their well-being priorities to those of other users by country, age and gender, and share their results. The updated Index also includes two new countries, Russia and Brazil. The Index is available in French and is embeddable for web sites and blogs.
“Your Better Life Index is an innovative approach toward measuring progress and comparing lives in a way that goes beyond traditional GDP measures,” said OECD Secretary-General, Angel Gurría. “This updated version helps strengthen the robustness of the Index by including data on gender and inequality and by extending it to new countries. We look forward to continue updating Your Better Life Index in the years to come and consolidating it as a reference tool in the promotion of better policies for better lives.”
Some of the key takeaways from the new version of the Index include:
- No matter which countries people live in, they value the most some combination of health, education and life satisfaction.
- Men and women who have used the Index value basically the same things.
- The wealthier you are, the more likely you are to make your voice heard in elections, but not by a huge margin.
- Men work more in the labour market and make more money than women, but women are better in other areas, they live longer, are better educated and in most places they are also happier.
- Inequality isn’t just about money, it affects other topics in Your Better Life Index.
This Report documents the findings of Task Group 164, which investigated the role and impact of psychological factors, including the psychology of risk, upon the risky health behaviours of military personnel on deployments. This report also discusses the underlying mechanisms for such behaviours, as well as the need for health interventions, training and education, and future research.
Cities contribute an estimated 70 percent of the world’s energy-related greenhouse gases (GHG). Their locations, often in low-elevation coastal zones, and large populations make them particularly vulnerable to the impacts of climate change. But cities often take steps, even ahead of national governments, to reduce GHG emissions. So it is with China’s cities, which are well placed to chart a low-carbon growth path to help reach China’s national targets for reducing the energy and carbon intensity of its economy. China’s cities will need to act on multiple fronts, in some cases scaling up elements of existing good practice, in others changing established ways of doing business. Actions affecting land-use and spatial development are among the most critical to achieving low-carbon growth as carbon emissions are closely connected to urban form. Spatial development also has very strong ‘lock-in’ effects: once cities grow and define their urban form, it is almost impossible to retrofit them because the built environment is largely irreversible and very costly to modify. Furthermore, cities need energy-efficient buildings and industries. They need a transport system that offers alternatives to automobiles. They need to shift to efficient management of water, wastewater, and solid waste. And they need to incorporate responses to climate change in their planning, investment decisions, and emergency-preparedness plans.
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Widespread inequalities mean that many young people in the WHO European Region and North America are not as healthy as they could be, according to a new report on the Health Behaviour in School-aged Children (HBSC) study, published by the WHO Regional Office for Europe.
“Adolescence is a crucial life stage, when young people lay the foundation for adulthood, whether healthy or otherwise,” said Zsuzsanna Jakab, WHO Regional Director for Europe. “This report shows us that the situation across Europe is not fair: health depends on age, gender, geography and family affluence. But it doesn’t have to be that way. This report gives policy-makers an opportunity to act to secure the health of the next generation. Once again, young people have used the opportunity provided by HBSC to speak. It now falls to us – who cherish their aspirations, ambitions, health and well-being – to act.”
Professor Candace Currie, HBSC International Coordinator, of the University of St Andrews, United Kingdom, said: “Inequalities in child and adolescent health call for international and national policies and action to give all young people the opportunity to maximize their current and future health and well-being. Health promotion programmes should be sensitive to age, gender and socioeconomic differences, and should aim to create a fair situation for all young people. This report is unique in the world as a comprehensive picture of young people’s health and well-being, and is vital as a sound body of evidence on which to base policy.”
The report gives the results of the 2009/2010 HBSC survey, covering 39 countries and regions across the European Region and North America. The survey collected data from 11-, 13- and 15-year-olds on 60 topics related to their health and well-being, social environments and behaviour. HBSC reports have been issued every four years since 1996.