Recommended Weekend Reads
Entering the Age of Global Depopulation, The Surprising Resilience of Globalization, and How Brazil Could Become the Global Engine for Global Clean Energy Revolution
November 1 - 3, 2024
Global Demographics
The Age of Depopulation: Surviving a World Gone Gray Nicholas Eberstadt/Foreign Affairs
Although few yet see it coming, humans are about to enter a new era of history. Call it “the age of depopulation.” For the first time since the Black Death in the 1300s, the planetary population will decline. But whereas the last implosion was caused by a deadly disease borne by fleas, the coming one will be entirely due to choices made by people. With birthrates plummeting, more and more societies are heading into an era of pervasive and indefinite depopulation, one that will eventually encompass the whole planet. What lies ahead is a world made up of shrinking and aging societies. Net mortality—when a society experiences more deaths than births—will likewise become the new norm. Driven by an unrelenting collapse in fertility, family structures, and living arrangements heretofore imagined only in science fiction novels will become commonplace, unremarkable features of everyday life.
To Combat Demographic Decline, Moscow Must Focus on Mortality Rather than Fertility Jamestown Foundation
Russia’s continuing population decline means it will soon not have enough people to run its economy and fight in its wars. Russian President Vladimir Putin is talking ever more about falling fertility rates but doing little to decrease the increasingly high mortality rates. Russia’s birthrate reflects underlying social changes, such as urbanization, and is at about the same level as other industrialized countries. Its mortality rate, however, is far higher, in part due to Russia’s failure to support the health of its citizens. Putin is loath to address the mortality rate, as it would be both expensive and require him to change his goals in Ukraine. As a result, Russia’s demographic decline and the restrictions it will impose are likely to last as long as he remains in power.
Geoeconomics
The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation Brad Setser/Aspen Economic Strategy Group
This paper evaluates the current landscape of global trade and financial flows and proposes a set of reforms to support healthier forms of integration. Setser finds that, despite the growing bipartisan skepticism about the value of liberal trade, global economic integration remains surprisingly resilient. In fact, Setser argues, the immediate risk facing the global economy is more accurately described as unhealthy integration than fragmentation. Setser identifies two unhealthy forms of globalization that have proven to be resilient – those driven by corporate tax avoidance strategies and persistent trade and payment imbalances with China – and offers three policy reforms to address these risks.
Geopolitical fragmentation in global and euro area greenfield direct investment The European Central Bank
As companies and policymakers increasingly look at ways to reduce the vulnerability of their supply chains, understanding recent dynamics in greenfield investment is important as these may foreshadow a reconfiguration of global trade networks, the fragmentation of which could be particularly detrimental for the euro area. In the last decade, annual FDI outflows and inflows amounted to 1.4% and 0.6%, respectively, of euro area GDP and 1.0% and 1.2%, respectively, of global GDP excluding the euro area. The euro area is the largest source of outward greenfield FDI, accounting for 19% of global outflows in the last two years, followed by the United States, which accounted for 15%. Ex-ante, the effect of geopolitical fragmentation on the direction of FDI flows is ambiguous. On the one hand, firms and policymakers might look to friend-shore and/or near-shore production to make supply chains less vulnerable to geopolitical tensions or to safeguard their assets from potential future violations of property rights. On the other hand, firms might increase their investments in geopolitically distant countries, i.e., countries that take an observably different stance on foreign policy issues, if they think that future trade tensions might impede their access to local markets.
The gradual decline in dollar dominance could quicken OMIF
The dollar’s share in world currency reserves could decline until 2050 to 40-45% from around 60% at present, under scenarios discussed by the OMFIF advisory council. The gradual fall, alongside an increase in the importance of the euro and the renminbi, is seen as a natural consequence of the gradual reduction in America’s relative importance in the world economy. Factors that could speed up the fall include more aggressive action by emerging market economies to promote the use of non-dollar currencies as well as persistent US budget and current account deficits, according to participants at the advisory council meeting on 15 October. Kamala Harris and Donald Trump, the contestants in the US presidential election on 5 November, show little readiness to take action on this issue. Concerns about the use of US power over the dollar system in sanctions against Russia and allies in the war with Ukraine could worsen, as well as worries about ballooning American deficits, depending on the next White House incumbent. These anxieties are also helping spur the latest spurt in the gold price.
Not Picking Sides Is Paying Off For These Countries Bloomberg
Geopolitics is shaping the flow of trade and investment around the world in ways it hasn’t in decades, fueling talk of another Cold War. Sandwiched between a US-led Western Bloc and another dominated by Russia and China sit at least 101 nations that we’ve dubbed the “New Neutrals.” Members of this informal group are betting they can attract investment from both blocs and benefit economically if they avoid picking sides. And there’s evidence that’s happening. More than 100 nations are embracing a new kind of geopolitical neutrality. For many, it’s working.
Can BRICS Finally Take On the West? Foreign Policy
One of the more remarkable developments over the last 25 years is that an investment banker’s arbitrary acronym for a quartet of emerging market economies has become the rubric for rebellion. The BRICS countries—or BRICS+, since the original grouping of Brazil, Russia, India, China, and later South Africa has since further expanded to include four more members—are meeting this week for their headline summit in glitzy Kazan, Russia, on the banks of the Volga. On the agenda this year, the first full summit after the formal incorporation of Iran, Egypt, Ethiopia, and the United Arab Emirates into the bloc, will be the usual talk of creating a truly multipolar world order to challenge U.S. and Western hegemony. A big part of that, especially for sanctions-battered members such as Iran and Russia, will be efforts to come up with viable alternatives to the global dominance of the U.S. dollar.
Latin America
The Past, Present and Future of Soy in South America Americas Quarterly
Over the past five decades, the continent has become a soy-growing behemoth, feeding much of the world. But is the boom over? And what does it mean for South America?
What does the U.S. Election mean for Latin America? Canning House
Canning House is a UK-based think tank focused on Latin American. In their new paper, they consider the potential impact of either leading candidate's victory on Latin America and how the region sees the contest for the White House. This includes analysis covering: The Latino vote, The Border Czar story: success or failure?, Harris and Trump - global policy positions, The view from Mexico City, The Bolsonaro factor in Brasília, Outlook for the 'Northern Triangle', A tricky trio, How the rest of Latin America sees the race for the White House.
Brazil’s Critical Minerals and the Global Clean Energy Revolution the Wilson Center
Brazil has all the elements for becoming an engine of the rapidly evolving global energy transformation. The country boasts some of the world’s largest deposits of critical minerals essential to make possible the transition from fossil fuels. Brazil is already an exporter of some of these minerals. But beyond exporting raw materials, the country is also looking to develop critical minerals value chains at home, leveraging its leadership in renewable energy. In the process, Brazil could emerge as a trailblazer in green technology and climate change solutions.
