Economics

This is a guest post by Ashlyn Anderson, research associate for India, Pakistan, and South Asia at the Council on Foreign Relations. India recently hosted a milestone summit attended by delegations from all fifty-four African countries. Confronting similar development challenges, India and the nations of Africa charted plans to deepen ties and unite to address shared global concerns. India is one of many countries keen to participate in Africa’s rise, and the third India-Africa Forum Summit signaled an alignment of interests and the potential for a closer relationship. Following the summit, the group released the Delhi Declaration 2015 along with the India-Africa Framework for Strategic Cooperation that outline their shared vision. The countries cited a common priority of inclusive economic growth, and strategies to address such development challenges as climate change, gender inequality, poverty alleviation, and terrorism. India and Africa share a long history most recently derived from their colonial experiences. India’s Jawaharlal Nehru, Egypt’s Gamal Abdel Nasser, Ghana’s Kwame Nkrumah, and the leaders of Indonesia and Yugoslavia founded the Non-Aligned Movement in 1960 based on the principles laid out at the Bandung Asian-African Conference in 1955. Since the end of the Cold War, in an era of increased globalization, the group has turned toward the issue of inequality in the international economic order. But the heyday of the movement has largely passed, and the convening of the first India-Africa Forum Summit in 2008 demonstrated the desire to take India’s relationship with the African continent forward using a different venue. Along with political ties, India and the African continent share many social links. A 2010 report from the Indian Ministry of Overseas Indian Affairs reported the Indian diaspora in Africa surpassing two million in 2001 with the largest concentrations in South Africa (1,000,000), Mauritius (715,756), and Kenya (102,500). Africans increasingly migrate to India for employment and education. India offered 50,000 additional scholarships at the 2015 summit to encourage Africans to study in India. India-Africa trade currently stands at nearly $72 billion, twice as much as five years ago but still small in comparison to the value of the China-Africa trade, over $200 billion. However, the resurgence of India’s economy and Prime Minister Modi’s diplomatic activism has positioned India as a rising economic power capable of rivaling China’s economic heft in Africa. Source: Bilateral Investment Statistics, United Nations Conference on Trade and Investment, 2012 India’s total foreign direct investment (FDI) in Africa places it among the continent’s top investors. However, Indian investment in Africa has not been without obstacles and a disproportionate amount of India’s Africa FDI stock is in Mauritius, an island strategically located in the Indian Ocean. A sample of Africa’s top investors below shows how emerging investors such as China, India, and Japan, stack up against some of Africa’s traditional investors. As Western countries adjust to slower economic growth and China reacts to its recent downturn and steps up its engagement with other areas such as Latin America, India has an opportunity to play a much larger role than in the past. India does not yet eclipse the presence of countries such as China or the United States in Africa, but the 2015 summit effectively elevates India-Africa ties. Invoking shared history and ideals, India and the nations of Africa will increasingly have the economic capacity and influence to advance a common agenda. At this year’s summit, India announced $10 billion in lines of credit would be extended to African nations over the next five years in addition to another $7.4 billion pledged in 2008. The announcements of $600 million in grant assistance along with a $100 million India-Africa development fund and a $10 million India-Africa health fund demonstrates India’s transition to a more active development donor and partner.

Rachel Brown is a research associate in Asia Studies at the Council on Foreign Relations. Amid the flurry of press coverage surrounding President Xi Jinping’s visit to the United States in September, his gift of a dawn redwood tree to be planted on the campus of the Global Innovation Exchange (GIX) program in Seattle received little attention. However, the GIX program, a collaboration between China’s prestigious Tsinghua University and the University of Washington, reflects a next step in China’s soft power strategy. Presenting a model for higher education has characterized global powers from nineteenth century Germany to the present day United States, and China now seems to be making a bid to promote its own educational model abroad. While over the past two decades, American and other foreign universities have flocked to establish campuses and centers in China, GIX will be the first outpost of a Chinese university in the United States. The GIX campus itself is still being built and designed, but when it opens in the fall of 2017, the school will host the second year of a dual degree program offering a master’s degree in technology innovation to approximately thirty students. There are plans to offer other programs and by 2025 to enroll 3,000 students. The initial program will cover the legal, technological, and entrepreneurial aspects of “Internet-connected devices,” playing to both Tsinghua’s strengths in business and computer science as well as the campus’ location in Seattle. Courses will be taught in English by faculty from both universities and the two universities will play equal roles in curriculum design, university administration, and admissions. GIX will be funded by a forty million dollar contribution from Microsoft as well as contributions from both Chinese and American companies. While GIX stands out as the first instance of a Chinese university establishing a physical presence in the United States, it fits into a pattern of recent initiatives to expand China’s global educational footprint. China’s domestic higher education system has been growing rapidly in both quantity and quality, and thus it is perhaps natural that the growth would continue into foreign markets. Affiliates of other Chinese universities have already been established in other nations including a campus of Soochow University in Laos, a branch of Xiamen University under construction in Malaysia, and a joint lab sponsored by Zhejiang University and Imperial College London in London. Chinese higher education has also internationalized in other ways. Central to the educational dimension of Chinese soft power have been Confucius Institutes, government-sponsored centers that promote Chinese language and culture abroad. Already, more than 480 Confucius Institutes operate in over 120 nations. Chinese universities also currently offer over one hundred online courses. Tsinghua University alone provides more than twenty online courses on the edX platform for massive open online courses. These classes include “China’s Perspective on Climate Change” and “Introduction to Mao Zedong Thought,” which has approximately 3,100 viewers. Courses such as these contribute both to the spread of Chinese views on certain topics and to raising the profile of Chinese institutions. But initial efforts to spread aspects of the Chinese education system globally have met resistance. Certain Confucius Institutes have triggered controversies surrounding academic freedom. Several universities in Canada and the United States, including the University of Chicago, decided not to renew Confucius Institutes at their schools, and the American Association of University Professors has argued for the closure of all American Confucius Institutes citing opaque contracts that lead universities to compromise their integrity. Not all of the online courses have been popular either, as some American students likened Tsinghua’s edX class on Mao Zedong Thought to propaganda. Similar controversies could also arise at GIX. While the leader of the project on the Chinese side, Zhang Tao, argues that one of the advantages of the collaboration is that Americans who hope to sell tech products in Asia will be exposed to Chinese preferences and business practices through courses with Chinese students and faculty, the program’s emphasis on technology also raises potential concerns. Particularly troubling are issues surrounding Internet censorship and intellectual property protection where practices in the two countries diverge sharply. Nevertheless, given the Chinese government’s commitment to expanding soft power through education, collaborations between Chinese and American universities on this side of the Pacific seem poised to spread.

Release of the text of the Trans-Pacific Partnership agreement (TPP) has launched the "tale of two treaties" saga so familiar when new trade and investment agreements appear—it is the best of treaties, it is the worst of treaties. Praise for and criticism of the TPP’s chapter on e-commerce form part of this saga, and the gap in rhetoric calls for scrutiny of the legal text in light of the chapter’s strategic goals and the political challenges it faces. The TPP’s strategic objectives include advancing trade and investment liberalization and counterbalancing China’s growing influence. The e-commerce chapter supports these objectives. With WTO negotiations stalled, the TPP provides a way to catalyze liberalization among countries representing forty percent of the global economy, which creates e-commerce opportunities, with expanding digital commerce generating new trade and investment possibilities. The chapter facilitates this dynamic because it will apply on an unprecedented geographic and economic scale. Strategic concerns with China include competition on global e-commerce. The e-commerce chapter is designed to preserve an open, global Internet and can be a model for future agreements. These objectives inform the politics surrounding e-commerce. By facilitating liberalization, critics argue the TPP privileges private over public interests, subordinates privacy to profits, and constricts policy space for welfare-enhancing regulation through substantive and dispute settlement rules that favor companies. Counterbalancing China does not require diluting privacy or empowering corporations at the expense of regulatory sovereignty. These critiques fuel the political debates that will determine whether countries ratify the TPP. Whether international agreements achieve their strategic objectives in politically palatable ways depends, in large part, on what they require countries to do. The TPP’s e-commerce chapter contains four types of provisions. First, the chapter supports liberalization by requiring non-discriminatory treatment, prohibiting customs duties for electronic transmissions, restricting various barriers to e-commerce, prohibiting requirements to use local computing facilities, and facilitating cross-border transfers of information. Second, the chapter balances liberalization with protection of other interests and values. It requires parties to adopt laws for electronic transactions, online consumer protection, and personal information protection. The chapter provides exceptions to liberalization obligations for measures implementing legitimate public policy objectives. Third, the chapter addresses e-commerce’s intersections with other cyber policy concerns. It requires parties to regulate spam e-mail, recognizes the benefits of consumer access to the Internet for e-commerce (net neutrality), and acknowledges cybersecurity’s importance. Fourth, disputes are subject to the TPP’s state-to-state and investor-state dispute settlement (ISDS) procedures. These provisions generate different legal effects. Some provisions create binding obligations, such as the mandate for non-discriminatory treatment of digital products. Other provisions are binding but less demanding, including those stating that parties “shall endeavour” to undertake specific actions. Still other provisions establish no binding obligations, such as those where parties simply recognize issues or agree they should or may behave in certain ways. Determining the meaning of binding obligations, and exceptions thereto, requires applying the complex jurisprudence on trade and investment treaties. The deeper analysis goes into the law, the harder it becomes to make sweeping statements about the chapter’s potential political and strategic importance. Controversies with trade and investment treaties often arise when liberalization obligations (e.g., market access) purportedly clash with public interest regulations (e.g., on health). Opponents of the e-commerce chapter argue the obligation on cross-border transfers of information could override privacy laws and permit corporations to challenge such laws under ISDS. For either of these things to happen would require challenges to privacy regulations to navigate numerous legal requirements and tests frequently interpreted and applied in ways not hostile to public interest regulation. In addition, challenges would unfold against the chapter’s requirement that each party adopt privacy laws that should be informed by principles developed by international bodies, which could include UN human rights treaties and mechanisms. A corporation challenging privacy laws under ISDS could not base its claim on the e-commerce chapter’s obligations on cross-border transfers of information. Instead, it would have to argue, for example, that privacy laws violated non-discrimination duties, failed to provide the minimum standard of treatment required by customary international law, or constituted an illegal expropriation—none of which seem likely given how privacy laws function. The investment chapter also provides that non-discriminatory regulations protecting legitimate public welfare objectives, which would include privacy, are not expropriations, except in rare circumstances. The treaty text, informed by the web of existing jurisprudence, does not ensure the e-commerce chapter will always operate with trade and investment objectives in political harmony with public interest regulations. Nor do the legal complexities assure that the e-commerce chapter will deliver the promised strategic benefits for the United States. But, with the text now in hand, the political viability and strategic consequences of “the most ambitious trade policy ever designed for the Internet and electronic commerce” have become pressing legal responsibilities of the digital age.

This is a guest post by Allen Grane, research associate for the Council on Foreign Relations Africa Studies program. The government of Kenya is tapping the country’s digital finance prowess to raise critical infrastructure funds. The National Treasury has teamed up with a local mobile money pioneer, Safaricom, to launch the so-called M-Akiba bond. It is the first government security carried exclusively on mobile phones. M-Akiba is a national economic solution that has the potential of filling-in for foreign investment. This is especially important in light of Standard & Poor’s recent lowering of Kenya’s credit rating outlook to negative due to depreciation of the Kenyan Shilling and a growing budget deficit. M-Akiba, like M-Pesa, which was developed in response to Kenya’s retail banking shortcomings, is another African tech-based solution to a regional finance challenge. This initiative is also significant in the aftermath of J.P. Morgan’s recent dropping of Nigeria from its local-currency emerging market bond index. That move could signal a waning of international interest in African bond markets, which have become more important to African government infrastructure financing over the last several years. Despite the continent’s rapid economic growth in the past decade, investors may be worried by the recent fall in commodity prices and China’s cooling economy, both of which are having secondary effects in Africa. In the midst of this potential downturn, African countries must find new ways to create investment. Kenya is seeking to do that with the M-Akiba bond, an original way to raise capital through its citizens while leveraging East Africa’s large, and ever-growing, mobile markets. Mobile platforms such as M-Pesa have been extremely successful in Kenya, where 75 percent of its citizens own cell phones and 60 percent of its population transact payments via M-Pesa. The Kenyan government argues that M-Akiba will not only help them tap into local investors for government bonds, but that it will allow more Kenyans to build personal savings (Akiba is the Swahili word for savings). M-Akiba lowers many of the hurdles to citizen investors purchasing government bonds. They no longer have to go through a financial intermediary (just their mobile phones) and the 3,000 Shillings ($29) entry price makes M-Akiba bonds more accessible than typical government bonds, priced at 50,000 Shillings (approximately $475). Similar to M-Pesa, which has become a leading example for digital payments providers around the world, the M-Akiba concept could become a model for developing economy government finance.

The Obama administration today released the full text of the Trans-Pacific Partnership (TPP), arguably the “largest regional trade accord in history.” The release, coupled with Obama’s statement that he intends to sign the deal, triggers two of the timelines set up by Trade Promotion Authority (TPA) legislation that Congress passed back in June. The first is the ninety-day clock. TPA requires the president to wait ninety days after announcing his intent to sign a trade deal before actually signing it. So while the United States and its eleven negotiating partners announced exactly one month ago that they had struck a deal, it’s still awaiting signatures. Indeed, the text is still being translated into French (for Canada) and Spanish (for Chile, Mexico, and Peru), and the lawyers might still make some technical corrections. The second timeline is a sixty-day clock. TPA requires that the terms of any trade deal be made public for at least sixty days before Congress can consider it. Because the administration released the text at the same time it announced its intent to sign the deal, the sixty-day clock has no practical effect. Does this mean that Congress will be taking up the legislation needed to implement TPP come early-February? Not quite. With the sixty-day clock already satisfied by then, Congress certainly could begin considering TPP once Obama signed it. But TPA does not require it to. Instead, the decision on when to formally begin deliberations rests with congressional leaders. Once they introduce the implementing legislation, Congress will have at most ninety days to hold an up-or-down vote. The legislation can’t be filibustered or buried in committee, so the common ways in which legislation gets killed on Capitol Hill won’t apply in this case. How quickly congressional leaders will move on TPP will depend partly on when the administration will have the implementing legislation ready. TPP is a big, complex document, and the implementing legislation likely will be as well. Even more important, congressional leaders (and the administration) will be looking to see if the votes are there to pass TPP. On that score, TPP is heading into the stiff political winds of Campaign 2016. Hillary Clinton, who once championed TPP, now opposes it, at least in its current version. Many Democratic lawmakers are feeling pressure to follow her lead. That pressure will likely grow as we move closer to Election Day. Republicans historically vote overwhelmingly for trade deals. But several GOP presidential candidates oppose TPP and the enthusiasm in GOP ranks for giving Obama a major legislative victory is low. So don’t be surprised if a vote on TPP gets kicked into a lame-duck session or even into next year and a new administration. That would undoubtedly generate a lot of lamenting about American political dysfunction and the damage being done to U.S. leadership in Asia. But don’t despair. There is precedent. NAFTA was signed in the waning days of George H.W. Bush’s presidency, and Congress didn’t approve it for a nearly a year. Bill Clinton and not Bush got to sign the final bill.

From the day he assumed office, Indian Prime Minister Narendra Modi made clear his priority on establishing strong ties across the South Asian region. His open invitation to the leaders of all the South Asian countries to attend his inauguration set the tone for a foreign policy focused on building economic ties and regional connectivity, a pragmatic bid to overcome South Asia’s longstanding problem as one of the least economically integrated regions in the world. Initial Indian diplomacy with Bangladesh and Nepal helped deliver gains toward a more consolidated South Asian region, at peace and focused on development and economics. Political change in Sri Lanka ended the divisive Rajapaksa era, one of increased tensions with India, and Colombo’s new government immediately expanded ties—with a strong trade component—with India. The South Asian Area of Regional Cooperation (SAARC) summit in November 2014 resulted in region-wide agreements on transportation connectivity, an important infrastructure step to enhancing economic ties. More than a year and a half later, however, political upheavals in Nepal, Bangladesh, and Maldives have disrupted progress in these countries. It is worth adding, though is of no particular surprise, that India’s efforts to establish trade and connectivity with Pakistan have not been successful. This is due to Pakistan’s own internal problems, but nonetheless impinges upon the broader regional goal. This post looks at where things stand following recent upheavals in the region. In short, instead of a larger area of growing economic cooperation, the narrative has shifted to serious political and security problems. Nepal: India and Nepal share an open border, allowing completely free trade and movement of citizens. Last fall, it appeared that after a highly successful bilateral visit, and then a successful SAARC summit in Kathmandu, Modi had cemented a positive era for India-Nepal ties. But the past six weeks have led to an ever-deepening crisis in New Delhi’s relations with Kathmandu, linked to Indian unhappiness over the new Nepali constitution, unveiled at the end of September. Nepal’s Madhesis, who live along the India-Nepal border, feel the new constitution does not adequately protect their rights. Madhesi protests along the border have been underway for weeks, and Indian diplomats have been straightforward with their objections to Nepal’s constitution, reportedly pressing for seven amendments. In October fuel trucks from India stopped entering Nepal, which Nepalis are united in calling a deliberate blockade (the Indian external affairs ministry has rejected that claim), the result of which led to fuel shortages and rationing across Nepal. By the end of October, Nepal had turned to China to supply fuel. The Indian government has come under criticism for “losing Nepal.” As of the first week in November, relations between Kathmandu and New Delhi were tense, and an Indian citizen was killed by Nepali police fire. And in an unprecedented move—India generally does not make extensive public criticism of other countries—India critiqued Nepal’s human rights record on November 4 in the UN Human Rights Council universal periodic review of Nepal. Bangladesh: New Delhi’s ties with Dhaka have strengthened over the past year and a half, most especially with the historic completion of the Indo-Bangladesh land boundary agreement. The previous Congress-led government in India had tried to regularize the border, but parliamentary objections from the then-opposition Bharatiya Janata Party (not to mention protest from the state government of West Bengal) thwarted legislation. Thankfully, once in power the BJP government chose to advance this bill. Tens of thousands of citizens are now able to live in regularized territory, not “enclaves” surrounded extraterritorially, and Dhaka and New Delhi have moved ahead on transshipment ties—including a new cross-border trucking agreement for cargo in specific “corridors.” But internal political upheaval and terrorism attacks in Dhaka could slow down this positive progress due to concerns about safety in Bangladesh. Assassinations of secular bloggers back in the spring first made international headlines. At the end of September and early October alarming assassinations of two foreigners took place in quick succession—the first, of an Italian aid worker, and the second, a Japanese farmer working on agriculture in Bangladesh. A bomb tore through a Shi’a procession in Dhaka on October 24. The self-proclaimed Islamic State took responsibility for these killings, but the Bangladeshi government has rejected this idea, and stated instead that the violence must be the work of domestic opposition. Hacking attacks on Bangladeshi publishers last weekend have further added to the climate of concern. To what extent these terrorist attacks will affect commerce is not yet clear, but they cannot be helpful. Bangladesh’s own domestic security challenges now top headline news rather than reports of economic progress. Maldives: An archipelago nation with only around 350,000 citizens, the Maldives economy is a small part of South Asia’s regional economic connectivity agenda. But its strategic location in the Indian Ocean sea lanes makes it a crucial partner. Its government has been mired in domestic political problems for years. After a November 2013 election in which former President Mohamed Nasheed led in the first voting round but narrowly lost in a runoff and graciously conceded, the Maldivian government has jailed him, prosecuted him in a kangaroo court trial, and convicted him on absurd charges of terrorism. The political situation in the Maldives has deteriorated further. The former vice president Ahmed Adeeb now stands accused of trying to assassinate the president, resulting in Adeeb’s arrest and later impeachment on November 5. On November 4 Maldives authorities declared a state of emergency for thirty days. * * * These are all significant setbacks to a focus on broader regional connectivity and a forward-looking trade agenda. How New Delhi handles the security implications and political landmines in its ties with these countries in the coming months will be a test of Modi’s strategic ambitions for South Asia, as well as an illustration of how a rising India will exercise power in the neighborhood. Follow me on Twitter: @AyresAlyssa

This was originally posted by my colleague and co-author Elizabeth Economy on CFR’s Asia Unbound blog. Liz is the C.V. Starr senior fellow and director for Asia studies at CFR. It seems like a distant memory now, but just one month ago, the international community was lauding China for stepping up its commitment to address climate change by pledging to initiate a cap-and-trade system for CO2 by 2017 and contributing $3.1 billion to a fund to help poor countries combat climate change. Now, however, the talk is all about the release of a new set of game-changing Chinese statistics on coal consumption. A New York Times headline blared: “China burns much more coal than reported, complicating climate talks.”  And the Guardian reported: “China underreporting coal consumption by up to 17%, data suggests.” What does all this mean? The short answer is nothing good. Here are just a few of the implications: Chinese statistics are as unreliable as ever. China analysts, myself included, often say, “We don’t necessarily trust the statistics, we just look at the trend line.” This coal consumption recalculation, however, means that even this somewhat weak effort at analytical credibility no longer holds. Seriously, how does one ignore six hundred million tons of coal consumed in just one year? There have been some terrific articles on the problems with Chinese statistics over the past month by Gwyn Guilford and Mark Magnier. And there was a great report by Bloomberg that laid bare the metrics that different economic analysts use to arrive at their calculations of Chinese gross domestic product (GDP), some of which use data such as rail traffic and electricity production. Unfortunately, China’s massive coal gap suggests that even these analyses are relying on questionable data. Assuming that Chinese industrial production and manufacturing statistics are accurate, the dramatic increase in coal consumption that is now reported suggests that the gains in Chinese energy efficiency, as well as the reductions in energy intensity (the amount of energy consumed per unit of GDP), that have been touted over the past decade are much less than assumed—or perhaps they are nonexistent. China’s pledge that its CO2 emissions will peak around 2030 is suddenly much less significant than it was one year ago—and even then many analysts argued that it wasn’t significant enough. After all, we are now dealing with a baseline of CO2 emissions that is substantially higher than we originally believed. The question now is whether China will adjust its commitment to meet its newly revealed contribution to the problem. It is now all the more important that whatever steps China commits to take to mitigate its contribution to climate change are in fact realized. Doubts already have been swirling around China’s promise to implement a cap-and-trade system and to ensure that 20 percent of all its energy derives from renewables by 2030. China needs to put these doubts to rest. Once you head down the rabbit hole of what is fact in China and what is fiction, it is very difficult to crawl back out again. If one is looking for a light at the end of the tunnel, however, let me suggest two: first, the U.S. Energy Information Administration (EIA) had already released statistics on Chinese coal consumption in September that suggested that China had underreported its coal consumption by 14 percent during 2000-2013. It also, however, suggested that coal consumption was nearly flat in 2014. If the EIA is right on that score, then there may be some merit to all the reporting that China is turning the corner on its coal consumption, and the world could see a plateau in CO2 emissions (albeit at a much higher level) earlier than 2030. Second, the mere fact that the Chinese government actually reported the change in coal consumption is a positive. The timing of Beijing’s announcement, right before the Paris climate talks, may be unfortunate. However, greater transparency from a government that thrives on opacity is always welcome.

This is a guest post by Aubrey Hruby and Jake Bright. They are the authors of The Next Africa: An Emerging Continent Becomes a Global Powerhouse. The role of technology in sub-Saharan Africa is growing. An emerging information technology (IT) ecosystem is reinforcing regional trends in business, investment, and modernization. There is a growing patchwork of entrepreneurs, startups, and innovation centers coalescing from country to country. Most discussions of the origins of Africa’s tech movement circle back to Kenya, which was home to several major technological innovations between 2007 and 2010. This innovation inspired the country’s Silicon Savannah moniker, and has provided an example for other African countries to follow. In 2007, Kenyan telecom company Safaricom launched its M-Pesa mobile money service to a market lacking retail banking infrastructure yet abundant in mobile phone users. The product converted even the most basic cell phones into roaming bank accounts and money-transfer devices. Within two years M-Pesa was gaining nearly six million customers and transferring billions annually. The mobile money service shaped the African continent’s most recognized example of technological leapfrogging: launching ordinary citizens without bank accounts into the digital economy. Shortly after M-Pesa’s launch, four technologists created the Ushahidi crowdsourcing app in response to Kenya’s 2007 election violence. The software that evolved became a highly effective tool for digitally mapping demographic events anywhere in the world. Ushahidi has since become an international tech company with multiple applications in more than twenty countries. In 2008, Erik Hersman, an Ushahidi co-founder, hatched Nairobi’s iHub innovation center after identifying the need for "[permanent information technology] community spaces…in major cities [for] young entrepreneurs. The nexus point for technologists, investors, [and] tech companies.” Since 2010, 152 tech companies have formed out of iHub. It has 16,000 members and on any day, numerous young Kenyans work in its labs and interact with global technologists. iHub gave rise to Africa’s innovation center movement, inspiring the upsurge in tech hubs across the continent. Another Kenyan milestone was the government’s 2010 completion of The East African Marine System undersea fiber optic cable project, which increased East African broadband and led to establishment of a national Information and Communication Technology (ICT) Authority. Today, Silicon Savannah is but one corner of sub-Saharan Africa’s tech scene. Across the region a Silicon Valley inspired network is developing. Nigeria is a hotbed for startup activity. Facebook recently announced an initiative to beam internet access to Africa from space. Silicon Valley investment is funneling into ventures from Kenya to South Africa. In total, our research highlights the existence of roughly two hundred African innovation hubs, 3,500 new tech related ventures, and $1bn in venture capital to a Pan-African movement of startup entrepreneurs. Our study also reveals growing connections between the United States and sub-Saharan Africa’s IT sector. Tech giants IBM, Microsoft, and Google are expanding business operations in the region and partnering with African innovation centers. Repatriated entrepreneurs from the U.S. contemporary African diaspora are leading many of the continent’s tech incubators and startups. All three of Africa’s most prominent ecommerce startups--Jumia, Konga, and MallforAfrica--were founded by Nigerians who earned their university degrees and initial private sector experience in the U.S. A noteworthy portion of the combined $300 million in venture capital to these entities comes from American investment firms, attracted to the opportunities of digital sales to the world’s fastest growing population expected to consist of 540 million smartphone owners by 2020. Following the lead of countries such as South Africa and Kenya there are growing expectations on African governments to flesh out plans and infrastructure for information and communication technologies. Countries such as Ethiopia, Nigeria, and Ghana are already feeling the pressure, conscious of the success of Silicon Savannah. Most of SSA’s tech applications are emerging as solutions to local challenges, but this is creating unforeseen opportunities for other markets. Business people and investors are using IT in Africa to solve longstanding socio-economic issues formerly relegated to the development sector. Aid-agency grants previously going to NGOs are already being diverted to social-venture African tech organizations. It is still early days for sub-Saharan Africa’s burgeoning IT sector. As it continues to connect with the region’s demographic and economic currents, expect tech to play an increasingly significant role in Africa’s business, politics, and international relations.

It seems like a distant memory now, but just one month ago, the international community was lauding China for stepping up its commitment to address climate change by pledging to initiate a cap-and-trade system for CO2 by 2017 and contributing $3.1 billion to a fund to help poor countries combat climate change. Now, however, the talk is all about the release of a new set of game-changing Chinese statistics on coal consumption. A New York Times headline blared: “China burns much more coal than reported, complicating climate talks.”  And the Guardian reported: “China underreporting coal consumption by up to 17%, data suggests.” What does all this mean? The short answer is nothing good. Here are just a few of the implications: Chinese statistics are as unreliable as ever. China analysts, myself included, often say, “We don’t necessarily trust the statistics, we just look at the trend line.” This coal consumption recalculation, however, means that even this somewhat weak effort at analytical credibility no longer holds. Seriously, how does one ignore six hundred million tons of coal consumed in just one year? There have been some terrific articles on the problems with Chinese statistics over the past month by Gwyn Guilford and Mark Magnier. And there was a great report by Bloomberg that laid bare the metrics that different economic analysts use to arrive at their calculations of Chinese gross domestic product (GDP), some of which use data such as rail traffic and electricity production. Unfortunately, China’s massive coal gap suggests that even these analyses are relying on questionable data. Assuming that Chinese industrial production and manufacturing statistics are accurate, the dramatic increase in coal consumption that is now reported suggests that the gains in Chinese energy efficiency, as well as the reductions in energy intensity (the amount of energy consumed per unit of GDP), that have been touted over the past decade are much less than assumed—or perhaps they are nonexistent. China’s pledge that its CO2 emissions will peak around 2030 is suddenly much less significant than it was one year ago—and even then many analysts argued that it wasn’t significant enough. After all, we are now dealing with a baseline of CO2 emissions that is substantially higher than we originally believed. The question now is whether China will adjust its commitment to meet its newly revealed contribution to the problem. It is now all the more important that whatever steps China commits to take to mitigate its contribution to climate change are in fact realized. Doubts already have been swirling around China’s promise to implement a cap-and-trade system and to ensure that 20 percent of all its energy derives from renewables by 2030. China needs to put these doubts to rest. Once you head down the rabbit hole of what is fact in China and what is fiction, it is very difficult to crawl back out again. If one is looking for a light at the end of the tunnel, however, let me suggest two: first, the U.S. Energy Information Administration (EIA) had already released statistics on Chinese coal consumption in September that suggested that China had underreported its coal consumption by 14 percent during 2000-2013. It also, however, suggested that coal consumption was nearly flat in 2014. If the EIA is right on that score, then there may be some merit to all the reporting that China is turning the corner on its coal consumption, and the world could see a plateau in CO2 emissions (albeit at a much higher level) earlier than 2030. Second, the mere fact that the Chinese government actually reported the change in coal consumption is a positive. The timing of Beijing’s announcement, right before the Paris climate talks, may be unfortunate. However, greater transparency from a government that thrives on opacity is always welcome.

Here’s a fun party game. The next time you are at a cybersecurity industry event—an evening event with an open bar—find one of the many lawyers in the room and ask them whether the Cybersecurity Information Sharing Act (CISA) would apply to internet service providers (ISPs). Every time one of them answers with “it depends,” take a shot. If the lawyers are any good, you’ll be hammered by the time you call for your Uber ride home. Here’s why. As I wrote about in my last post, for most companies, the problems that CISA is trying to solve don’t exist. Companies share tons of cybersecurity information with each other every day. They also use defensive measures that inspect their Internet traffic for malicious activity and block it. All in a day’s work for your average IT administrator. No one ever gets sued and no laws are being broken. But for ISPs, it’s not so simple. Under the Electronic Communications Privacy Act (ECPA), an ISP like AT&T, Verizon, or Comcast is a bit different than say, the Ford Motor Company. While Ford can look at all the traffic crossing its network, AT&T can’t. AT&T is a big dumb pipe that passes on packets no matter what is in them, be it malware, child pornography, or stolen copies of The Interview. The only traffic monitoring AT&T can legally do is what it can justify as necessary to keep those packets zipping along (the so-called “owner operator exception”) or if one of its customers has contracted with it to provide security services, thereby providing consent to be monitored. CISA, in one view, would allow ISPs to monitor all traffic for cybersecurity threats, operate defensive measures to stop those threats, and share information about these threats with the federal government. That, to Senator Wyden, and others looks a lot like mass Internet surveillance under the guise of a voluntary information sharing bill. Although CISA contains language in a series of notwithstanding clauses that would seemingly override ECPA, definitional problems create some doubt. The monitoring and defensive measures authorized by CISA can only take place on “information systems.” CISA defines information systems as “a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information.” It’s basically the same definition used from U.S law governing federal information systems. So, does the Internet backbone qualify as an information system under CISA? Is it a discrete set of resources? The words alone are confusing enough. Now place them in context. Many lawyers, though not all, will conclude that the definition pertains to Ford’s computer network but not AT&T’s Internet backbone. Some lawyers, though not all, will draw a distinction between information systems and “telecommunications systems”. To make things clear as mud, CISA’s drafters explicitly included one other type of information system in the definition—industrial control systems (ICS). Some lawyers, though not all, will view the fact that the drafters included the ICS definition as evidence that the existing definition was not all inclusive. If ICS need to be explicitly included, so would ISPs. If the bill goes forward with these definitions, whether CISA applies to ISPs will depend on where their lawyers come down on these definitions, how risk averse their CEOs are, and, ultimately, whether a judge agrees with the ISPs’ lawyers. With the bill headed to a conference with the House, a simple request to conferees: insert a clause in the definition that explicitly includes or excludes ISPs. It will save years of court battles and the livers of anyone who tries out this drinking game.