Recommended Weekend Reads

February 17 - 19, 2023

We thought you might find the following useful reading. Let us know your thoughts and if you or a colleague want to be added to our distribution list. Have a great weekend.

·       “Asia’s Interest in Wholesale Central Bank Digital Currency – and Challenges to Cross-border Use” Carnegie Endowment for International Peace

As U.S. policymakers continue to examine the implications of China’s digital yuan in 2023, they should also take note of accelerating wholesale central bank digital currency (CBDC) research and development efforts across Asia. “Wholesale CBDC” refers to a digitized central bank liability designed for sizable (generally interbank) transactions and for which access is limited to certain financial institutions. India, Indonesia, the Philippines, and other Asian nations have launched Wholesale CBDC  pilot projects.

·       “Geo-Economic Fragmentation and the Future of Multilateralism” International Monetary Fund Staff Discussion Notes

Many in the markets continue to ask if we seeing a larger disintegration of global free trade as we have known it versus a global “re-wiring and re-calibration.”  The IMF explored this issue and possible ramifications.  It identifies multiple channels through which the benefits of globalization were earlier transmitted, and along which, conversely, the costs of policy-driven geoeconomic fragmentation (GEF)  and the consequences of GEF for the international monetary system and the global financial safety net. Finally, the Note suggests a pragmatic path forward for preserving the benefits of global integration and multilateralism.

Focus on Russia - 

·       “What Russia Got Wrong. Can Moscow Learn From Its Failures in Ukraine?”  by Dara Massicot, Senior Policy Researcher, RAND Corporation, Foreign Affairs

As the war in Ukraine drags on into its second year, the author argues that analysts must not focus only on Russia’s failures. The Russian armed forces are not wholly incompetent or incapable of learning. Indeed, there is strong evidence the Russian military has learned from its mistakes and made big adjustments. While they still are not been able to break Ukraine’s will to fight or impede the West’s materiel and intelligence support, Russia’s military could continue to adjust its strategy, “eventually snatching a diminished variant of victory from the jaws of defeat.”

·       “Russians abandon wartime Russia in historic exodus”  Washington Post

When Russian troops began pouring over the Ukraine border in February 2021, Russian civilians – many of them young, well-educated, and seen as the future of Russia, begin packing their bags and fleeing, worried about shut borders and martial law.  As many as one million Russians have fled in the last year including, according to the Russian government, more than ten percent of the country’s IT workers. Before the war, Russia’s population was in a spiral as one of the fastest declining in the world.

Charts of the Week

Russia’s Massive Population Exodus – Where Are They Going?: As the Washington Post piece above details, more than one million Russians have fled the country since the invasion of Ukraine.  While data shows, they have dispersed all around the world – with sizeable numbers going to the the UAE, Israel, and Argentina (which is experiencing a population boom of Russian “birth tourism” in a bid to gain joint-citizenship).  But the bulk of the émigrés have gone to these countries below:

The Post-COVID Return to Office Trend is Reversing:  As the risks of COVID began to recede, we all saw and experienced corporations pushing to get workers back into their offices.  As the chart below shows, data from LinkedIn shows that after the return-to-work trend rose last year, it has now begun to reverse.  This could be because more returning workers now want greater flexibility with their schedules and prefer to work from home more.

There are a variety of other factors possibly contributing to this, including weather, the cost of gasoline, and perhaps most importantly, after giving the office a try, workers were happier and likely more productive working from home.  As Axios reports, “It’s a sign that the balance between remote and in-person work will continue to oscillate with the times.”  In short, what many of us thought is true: Work will never be the same after COVID.

Recommended Book of the Week

“The American Imperative: Reclaiming Global Leadership through Soft Power”

by Daniel F. Runde

Full disclosure up front:  Dan Runde is an old and dear friend of mine. That said, writing a review of a friend's book is delicate stuff. It's like eating that friend’s cooking – it's either delicious, and you indulge, or it's terrible, and your mind races to think up fake allergies and/or a strange dietary restrictions you're on to get out of eating any more of their culinary disaster.

Thankfully, Dan made all this easy by masterfully cooking up a powerful, deeply thoughtful, and quite engaging proposal for America's role on the world stage. I happily indulged.

Of late, I've been frustrated by the flood of books on the market arguing about the loss of US power, how great power politics is once again upon us with enormous new security and economic risks, how globalization is over, how the world is falling apart, on and on – most without much in terms of thoughtful policy suggestions on how to deal with all these overwhelming challenges.   

That is what makes Dan's book so refreshing – he does not shy away from making suggestions. Instead, he gives a full-throated and authentic assessment of those challenges and very practical recommendations.  Dan has extensive experience contributing to all this, having worked at the World Bank, the US Agency for International Development, and, currently, as William Schreyer Chair in Global Analysis at the Center for Strategic and International Studies (CSIS).

Dan has achieved a lot in this slim little book – 219 pages excluding extensive footnotes and the index – and he has made a real contribution to the challenging debates, and decision-making needed now and in the future. I highly recommend it.