Re: Anne Pence

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Thanks Stu -- I will follow up. Adding Laura. On Mon, Feb 22, 2016 at 3:28 PM, Eizenstat, Stuart <[email protected]> wrote: > Dear Jake, > > > > I am sure everyone in the campaign breathed a sigh of relief after Nevada. > I hope that South Carolina and Super Tuesday will knock-out Sanders, and > allow Hillary to concentrate on a general election strategy. > > > > I want to strongly recommend that you add Anne Pence to one of the > campaign’s working groups -- particularly on economic policy, inclusive > growth and job creation. I have known and worked with her now for over 15 > years, first at State, and now at Covington. Anne was on my staff when I > was Undersecretary of State for Economic, Business & Agricultural Affairs > in the Clinton Administration, and continued with my successor, Ambassador > Al Larson, for a total of some 9 years. She handled international > economic and development policy as G8 policy advisor in support of our > roles as G8 Foreign Affairs Sous Sherpa. She was a civil servant who > remained in the Under Secretary's office (and accompanied the President’s > team at G8 prep meetings and Summits) because of her deep understanding of > international machinery used to advance our economic interests (G8/G20, > IFIs, UN, OECD, APEC and USAID and MCC), as well as sectors of key interest > to the U.S., such as the financial sector, energy, manufacturing, labor > markets, health, agriculture, high tech/IT and infrastructure. > > > > She's a superb talent, who is able to cover the full breadth of > international economic issues-- trade, investment, development assistance, > international finance, health, climate change/sustainable development, > anti-corruption, counter-terrorism finance, energy markets, as well as > the global market economic conditions and challenges. Anne is also > familiar with every USG agency involved in the international policy arena. > She is among the most creative at marshaling evidence and arguments, in > developing realistic initiatives, and in negotiating for consensus in > extremely complex situations -- internationally as well as within our > domestic bureaucracies. Anne is a Harvard-trained economist, with two > masters degrees, one in economics, and the second at the Kennedy School in > development. She is widely traveled, and has had direct experience with > every region of the world, including on initiatives to help create jobs and > stability in the Middle East. She's a huge asset, as well as collegial > to work with. Below is a recent article she wrote on the G20. > > > > Anne is co-hosting a fundraiser for Hillary this week, and has been a > strong supporter from the start. I really believe she would be a great > asset to the campaign. > > > > Best wishes, > > > > Stu Eizenstat > > > > > *Stuart Eizenstat* > > Covington & Burling LLP > One CityCenter, 850 Tenth Street, NW > Washington, DC 20001-4956 > T +1 202 662 5519 | [email protected] > www.cov.com > > > > > > > Can the G20 Pull the Global Economy Out of its Stall? > > *By Constance Anne Pence > <https://www.globalpolicywatch.com/author/apence/> on February 19, 2016* > > In recent days, Citi strategist Jonathan Stubbs and his colleagues have > warned that the global economy is trapped in a “death spiral.”[1] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn1> > Economist Mohamed El-Erian says that the era when policymakers could rely > upon growth from easy money provided by Central Banks is over, and went on > too long[2] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn2>. > Nouriel Roubini, also known as Dr. Doom for calling the mortgage crisis > before most others, believes that extreme volatility, sluggish growth, > deflationary pressures, financial stress and “unconventional” monetary > policies are part of a “new abnormal” that could last for years. [3] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn3> > William White, who heads the OECD’s Economic Development and Review > Committee, not only warned of a possible financial crisis before it hit, > but in 2012 wrote convincingly about the potential for “ultra-easy money” > policies to have the unintended consequence of making things worse over > time. [4] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn4> > > Larry Summers now sees a one-in-three chance of a global recession[5] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn5> > in the next three years. The IMF — known for somewhat rosy forecasting — > has again lowered estimates of global growth, as has the OECD.[6] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn6> > Yet, the IMF still projects over 3 percent annual global growth for 2016 > and 2017[7] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn7>, > while more pessimistic forecasts cluster at just under 3 percent.[8] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn8> > The U.S. economy puttered along at around 2.4 percent growth in 2015[9] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn9>, > with falling unemployment, real wage increases, strengthening bank balance > sheets and various other signs of economic life, which bring some hope to > the global economy. > > So, why the doom and gloom? And what, pray tell, could be done to dodge > another global recession? > > The underlying realities of the global economy are a lot like the > television commercial where an elderly woman cries out, “help, I’ve fallen > and I can’t get up.” Since the great recession of 2008-2009, policymakers > worldwide have relied upon liquidity flooded into global markets by Central > Banks to mitigate the severe damage of financial meltdown. With this, we > avoided global depression, but growth has yet to lift-off sustainably in > the years thereafter. Governments most certainly should have used those > years to ensure healthy financial sectors and balance sheets, to > rationalize public budgets, to invest in the productivity of their people > and economies, and to make major improvements in public and corporate > governance and institutional integrity. They should have acted boldly to > facilitate and reduce the cost of business start-ups, and to facilitate > financial inclusion and reduce the risk and cost of private investment, > including in infrastructure. But facing already hard-hit domestic > economies, tight budgets and political opposition, few did. And > policymakers now fear they have little monetary or fiscal ammunition, or > public support, with which to combat fearsome global economic clouds. > > Since the financial meltdown, already unhealthy levels of debt worldwide — > public, corporate and household — have continued to rise[10] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn10> > even as private investment, commodity prices and emerging economy stock > markets collapsed. Developing country equities lost $4.3 trillion in value > in Q3 of 2015 alone. Global unemployment rates meanwhile have remained > stuck at around 6 percent. [11] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn11> > International trade, a reliable indicator of economic vibrancy, has slowed > to a crawl due to low demand, a lack of trade finance and outright > protectionism. [12] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn12> > [13] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn13>Manufacturing > and industrial output too are down.[14] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn14> > And even if China manages a soft landing while transitioning industries > away from state-managed export production to a more market-oriented service > economy — no small feat — its economic slowdown will continue to have broad > impacts. China’s growth was responsible for about one-third of global > growth over the past seven years. Growth has to come from somewhere. > > Emerging markets had been the global economy’s best hope. But in 2015, > nearly $1 trillion in investment capital fled from emerging markets, the > first net outflow in 27 years. Oil prices have declined far steeper and > faster than predicted, but that hasn’t offset other strong headwinds, even > in oil importing countries. A strong dollar and weakening Chinese yuan > (despite some recent Chinese efforts to prop it up) only make it harder for > emerging markets to manage debt while trying to finance basic goods and > services. Trillions of dollars have been wiped off the books as stock > markets rise and fall precipitously, especially in emerging markets. And > despite extremely low interest rates, banks, investment funds, corporations > and people are hoarding cash, preferring to save rather than spend or > invest for higher yields. > > And make no mistake, though hundreds of millions escaped poverty in recent > decades (mostly in China), tens of millions have now fallen back into > poverty, in rich as well as poor countries. This includes millions in > Russia, a resource-rich country with skilled labor, where plummeting oil > prices and spending on guns versus butter have reversed economic gains. > Furthermore, deep and destabilizing inequalities persist globally, and are > worsening. Popular frustrations threaten to boil over in many countries — > as we saw during the Arab Spring. Today, the poorest half of the > population typically holds less than 10% of the wealth, in developed and > developing economies alike. Pew Foundation surveys[15] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn15> > find that some 75 to 90 percent of people believe inequality to be > extremely serious, and they fault their governments. > > And this “new abnormal” of stagnating growth, social immobility and low > confidence in institutions and leaders is dangerous. Along with the real > risk of another wrenching global recession comes risk of even greater > instability in a world plagued with high levels of geo-political > instability and great uncertainty. When people, political leaders and/or > specific groups feel disenfranchised, targeted or blamed for economic > dislocation and division, and helpless to make things better, they do not > react well. Results can include nationalism, nativism, extremism, > protectionism, military adventurism, conflict and violence. Such reactions > are already evident in today’s world. It’s not the first time. > > These dangers, and the economic cost and human suffering that would result > from a global economic “death spiral,” are neither inevitable nor > insoluble. There are substantial, untapped global assets and > opportunities for growth and progress. Thorny, persistent growth-barriers > — such as corruption and weak rule of law and property rights — could be > more effectively tackled rather than left to fester and undermine > productivity. Good and coherent, not perfect, policy approaches might > well encourage people to invest, take entrepreneurial risks to deliver new > goods and services that are wanted and needed, or to improve and deliver > existing products and services more efficiently. As Larry Summers > recently opined, however, we seem “stuck.” When times are tough > economically and geopolitically, coordinated action among responsible > governments may be most needed, but often hardest to achieve. But an > “every country for itself” policy approach simply won’t work to restart > economic engines. > > Fortunately, high-return opportunities for governments, communities and > private enterprise to work together and invest productively worldwide are > actually tremendous. Think about it: billions of people do not yet have > regular access to basics such as clean water, reliable transportation, > primary health care, electricity, literacy and useful skills, internet and > communications technology, financial services, sanitation, housing , proper > nutrition, a healthy natural environment, legal rights and accountable > governance, and freedom from violence and repression. And even where those > things are largely available, such as the United States and Europe, they > cost more than they should and do not provide the best results possible. > There are at least 20 highly-diverse countries with populations greater > than 40 million — e.g. Algeria, Argentina, Bangladesh, Brazil, China, > Colombia, the Democratic Republic of the Congo, Egypt, Ethiopia, India, > Indonesia, Iran, Kenya, Mexico, Myanmar, Nigeria, Pakistan, the > Philippines, South Africa, Tanzania, Thailand, Turkey, Viet Nam — where > creativity, drive and productivity have yet to be unleashed to anything > near the potential. And even in countries with slow-growing and aging > populations, there are plenty of unmet needs that markets could help to > address — for better health, more convenient, reliable goods and services, > and enriching social and cultural experiences. > > The real dilemma now is what can and should be done to get out of any > economic “death spiral.” It certainly will require instilling confidence > that an integrated global economy and pluralistic societies that value both > inclusion and competition can work, and deliver lasting improvements in > people’s everyday lives. Nobel laureate economist Hernando de Soto > recognized decades ago that a failure to integrate large swaths of people > into the formal economy, with their property rights established and > protected, would leave only an elite minority to enjoy the economic > benefits of the law and globalization. The productivity and assets of > those not included and protected by economic systems (tens of trillions of > dollars) would languish as “dead capital.” He knew all too well from > violent peasant rebellion in his native Peru that failing to build social > systems within which the poor (and the middle class, many would argue) can > be productive and meet basic needs, especially while others prosper > disproportionately, is a recipe for instability. And conflicted, divided > societies grow more slowly, which only makes things worse. No surprise > that all sorts of alarms are sounding just now. > > G20 Finance Ministers and Central Bank Governors meet at the end of this > month, February 26-27, in Shanghai. China chairs the G20 this year. G20 > members represent around 85 per cent of global gross domestic product, over > 75 per cent of global trade, and two-thirds of the world’s population. The > G20[16] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn16> > also includes many of the emerging markets with the greatest untapped > potential to help get us out of this “death spiral.” The G20 could commit > to specific measurable near- and longer-term steps and outcomes — together > and individually — that would steer the global economy towards more > confidence and certainty, and sustained growth, if they can agree together > to take some politically-difficult steps. As IMF Managing Director LaGarde > urges, we need a “New Partnership for Growth.”[17] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn17> > > Here are some growth-oriented policy initiatives and themes which could be > part of urgent, concerted G20 effort to fuel shared global growth, job > creation, financial stability and rising productivity: > > 1) I*nfrastructure with Integrity *— Trillions of dollars of investment > in new and rehabilitated infrastructure is needed worldwide, and good > infrastructure correlates directly with growth.[18] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn18> > It is estimated that redirecting savings toward efficient investment in > emerging market infrastructure alone could increase global GDP by around 7 > percent over the next 10 years.[19] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn19> > Some two-thirds of all Africans still have no access to electricity, > obviously a constraint to growth. But infrastructure spending is > notoriously a place in which to hide corruption, waste and over-spending. > With interest rates low, materials cheap and labor available, the G20 > should act on its own superb work to launch an “Infrastructure with > Integrity” initiative to match private investment (especially long-term > institutional capital) with projects in countries committed to competition, > transparency and supportive policies. Those countries and projects could > also be supported by bilateral and multilateral funding, project > development services, investment guarantees and risk insurance. Links to > the Open Government Partnership (OGP) Initiative and Construction Sector > Transparency (COST) initiative could help to reduce the risks that keep > private investors on the side lines and out of such investments. > > 2) *Trade and Investment Cost Reduction* — The World Bank and other > institutions have very useful ways of measuring the high cost and > counterproductive impacts of logistical, legal and regulatory and other > impediments to trade and investment and market entry barriers. The global > implosion of trade and investment levels (both domestic and foreign) > highlight the value of an urgent campaign to reduce such costs. By some > estimates, the stock of products subjected by G20 members to non-tariff > barriers and other less transparent restrictions is up by some 50 percent > since the global financial crisis. The new G20 Trade and Investment Working > Group could launch a program to support (with multilateral involvement) > programs and commitments aimed at measurably reducing these costs and > barriers at the national and regional level. > > 3) *Business Ecosystem Development *— Dynamic, inclusive economies > flourish best where the “business ecosystem” for private enterprises of all > sizes and types (including start-ups and disruptors) is healthy, > competitive and integrated across the value chain. A G20 focus on > analyzing and measurably improving and enabling such an “ecosystem” might > better promote comprehensive action on elements that together promote > efficiency and productivity — rule of law and property rights, > institutional capacity and accountable governance (both public and > private), sound and inclusive financial systems, efficient tax and > regulatory systems, human capital investment and sustainable natural > resource management. G20 Members could model success by auditing and > committing to improve measurably their own “business ecosystems,” building > on indicators and indices maintained by the World Bank and other > institutions. > > 4) *Strong Fundamentals for Balanced Growth* — The G20 has a Working > Group on the Framework for Strong, Sustainable and Balanced Growth, but its > crisis-era focus has been on near-term stabilization. It looks to be time > for a pivot to committed steps on structural reform. Fiscal sustainability > (which requires growth not just “austerity”), e.g. as regards entitlements > and broader tax bases; labor market revitalization and reform; greater > capacity for openness and innovation (e.g. intellectual property rights, > R&D, information and communications services, continuous access for all to > information and skills); strong bank balance sheets and greater financial > sector resilience to crises (including appropriate deleveraging — corporate > debt is very high in many emerging markets); and, international progress on > modernizing tax policies, e.g. faster global implementation of the OECD > Base Erosion and Profit-Shifting (BEPs) measures are all areas where > committed action could benefit broad-based global growth. > > 5) *Global Economic Coordination *— This deserves careful analysis, > because missteps could make things worse, and have unintended consequences, > as some argue regarding “ultra-easy” monetary policies. However, it is > clear that major economic imbalances co-exist along with tremendous > volatility in global markets. The falling value of China’s yuan and > strengthening US dollar are creating tumult and uncertainty, especially for > emerging markets. Emerging markets do not have access to reciprocal swap > lines between central banks and their financial safety nets remain weak. > This makes them more dependent on their FX reserves for financial > stability. Whether there are better approaches is worth G20 discussion. > At the same time, the complexity of financial markets globally, and > especially in in developed-country markets, is known to have increased. > Some believe that beyond the soundness of banks, the G20 need to examine > and address the degree to which another “black swan” financial crisis could > cause important segments of their financial markets to seize up from a lack > of liquidity. French economist Hélène Rey[20] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftn20> > believes that her research shows that global market openness and > integration has advanced to the point where there is now a “global > financial cycle” responsible for some 25% of movement in open economies, > including bubbles, booms and busts. That should give the G20 still more > incentive to define and promote financial sector health broadly, and to > consider the implications with respect to financial risk-taking. > > So, it is true that global economic conditions are very precarious. > Mohammed El Erian may well be right that we are at a critical “T juncture,” > where a wrong move, or lack of positive movement, could make recession all > but inevitable. But there is also a lot of room for helpful G20 steps to > achieve good if not perfect results, in part by reducing the enormous risk, > uncertainty and fear that now burdens consumers, producers and investors. > This is a test for the G20, and for China’s important role as an emerging > market leader. If the G20 can agree on concrete, effective, cooperative > steps, we may finally see the end of this dismal period of economic gloom > and doom, and less of the popular frustrations that appear to feed > dangerous instability and extremism. > > [1] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref1> > http://www.cnbc.com/2016/02/05/citi-world-economy-trapped-in-death-spiral.html > > [2] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref2> > http://www.cnbc.com/2016/01/26/mohamed-el-erian-warns-about-a-day-of-reckoning.html > > [3] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref3> > http://www.project-syndicate.org/commentary/market-volatility-in-global-economy-by-nouriel-roubini-2016-02 > > [4] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref4> > http://dallasfed.org/assets/documents/institute/wpapers/2012/0126.pdf > > [5] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref5> > https://hereandnow.wbur.org/2016/01/27/larry-summers-us-economy > > [6] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref6> > http://www.slideshare.net/oecdeconomy/oecd-interim-economic-outlook-february-2016-presentation > > [7] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref7> > http://www.imf.org/external/pubs/ft/weo/2016/update/01/ > > [8] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref8> > https://www.conference-board.org/data/globaloutlook/ > > [9] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref9> > http://www.tradingeconomics.com/united-states/gdp-growth > > [10] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref10> > http://www.mckinsey.com/insights/economic_studies/debt_and_not_much_deleveraging > > [11] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref11> > http://reports.weforum.org/outlook-global-agenda-2015/top-10-trends-of-2015/2-persistent-jobless-growth/ > > [12] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref12> > http://qz.com/544891/global-trade-has-fallen-to-recession-levels-oecd/ > > [13] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref13> > https://www.worldbank.org/content/dam/Worldbank/GEP/GEP2015a/pdfs/GEP2015a_chapter4_report_trade.pdf > > [14] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref14> > http://www.worldeconomics.com/SMI/Global-Manufacturing-SalesManagersIndex.efp > > [15] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref15> > http://www.pewresearch.org/fact-tank/2014/11/08/with-41-of-global-wealth-in-the-hands-of-less-than-1-elites-and-citizens-agree-inequality-is-a-top-priority/ > > [16] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref16> > Argentina, Australia, Brazil, Canada, China, France, Germany, India, > Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, > South Africa, Turkey, United Kingdom, United States, European Union. > > [17] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref17> > https://www.imf.org/external/np/speeches/2016/020416.htm > > [18] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref18> > http://siteresources.worldbank.org/EXTSDNET/Resources/infrastructure-background-note-G20.pdf > > [19] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref19> > Restoring and Sustaining Growth, prepared by Staff of the World Bank for > the G20, June 8, 2012 > > [20] > <https://www.globalpolicywatch.com/2016/02/can-the-g20-pull-the-global-economy-out-of-its-stall/#_ftnref20> > https://www.kansascityfed.org/publicat/sympos/2013/2013rey.pdf > > > > > > > > > > > > > > *C Anne Pence* > Senior International Advisor > > Covington & Burling LLP > One CityCenter, 850 Tenth Street, NW > Washington, DC 20001-4956 > T +1 202 662 5443 | [email protected] > www.cov.com > > > > > > >