English football: a proxy battleground for feuding Gulf states?

English football: a proxy battleground for feuding Gulf states?

The six Gulf Co-operation Council (GCC) states have used their oil exports revenues of the past years not only to spend lavishly but to plan for a peaceful and serene future.  So English football: a proxy battleground for feuding Gulf states?

Decades earlier, low oil prices meant economic disaster for a region that once controlled the world’s leading energy supplies impacting their sovereign wealth fund holdings.  The ‘rentier’ states had to cope, some for the first time, with rising budget deficits.  They had to conjure up policies to make good use of the classic rentier state economy involving a reduction in their dependence on oil revenues. A historical shift was handled quite artfully with notable policies of diversification of the respective economies and eventually getting hold of some ‘Soft Power’.  Education, Sports and TV Entertainment or News channels amongst many other sectors of human activities were not precisely only bad earners in terms of Dollars.  While there seems to be no question about the proceeds from the sector as mentioned earlier’s sales, these might have been central to the development of the Gulf States rivalries, eventually leading to the enduring present day blockade of Qatar.

So: English football: a proxy battleground for feuding Gulf states?

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Simon Chadwick, University of Salford

There’s nothing like a Saturday night scoop to get social media buzzing. Revelations that a Qatari investor wants to acquire a stake in Leeds United certainly did. If the story is correct, then it seems Qatar Sports Investments (QSI), which already owns French club Paris Saint-Germain (PSG), is interested in buying shares in the Yorkshire based English Championship football club.

In some ways, we shouldn’t be surprised by the report, as Leeds United’s current majority shareholder, Italian Andrea Radrizzani, is thought to be seeking a buyer for his holding in the club. Indeed, some reports suggest that he may be negotiating with as many as six parties with a view to them buying a stake.

That a Qatari group is showing interest should be no surprise either; after all, the Yorkshire outfit already has a partnership with the small Gulf nation’s Aspire Academy. Over the last two years, rumours have been recurrent that big money from Doha will, sooner or later, be invested.

Hence, it was the timing of the latest rumour’s emergence that was actually more revealing than the rumour itself. It came after a tumultuous week in football (and sport more generally) which was stitched together by a narrative stretching from Manchester, through Paris, to Doha and Abu Dhabi.

A big week for Qatar

The previous weekend, Abu Dhabi-owned Manchester City won the English FA Cup, which ensured the club secured an unprecedented domestic treble of trophies (alongside the club’s Premier League title and Carabao Cup win). City’s success, however, was very quickly tempered by stories that UEFA may ban the club from the Champions League for what are alleged to be serious breaches of the European football governing body’s Financial Fair Play regulations.

Later in the week, news came through that two PSG board members – Nasser Al-Khelaifi and Yousef Al-Obaidly – are being investigated on suspicion of corruption in connection with Qatar’s bid to host the 2019 IAAF World Athletics Championship in Doha. Significantly, Al-Khelaifi is president of PSG but also chairman of QSI (the Qatari investment group behind the alleged Leeds bid) and a member of UEFA’s executive committee. Al-Obaidly is chief executive of the Qatari media group beIN.


Read more: Football may be caught in the crossfire between Qatar and the Saudis


It was quite a week for the Qataris, as news also broke that FIFA will concede during its forthcoming council meeting that the 2022 World Cup will be contested by 32 teams. FIFA had been pressing for an increase in tournament size to 48 teams, though this would have necessitated Qatar sharing the tournament with at least one other country. Qatar, though, is currently engaged in an acrimonious feud with its near neighbours, notably the United Arab Emirates (UAE), Saudi Arabia and Bahrain, so FIFA’s capitulation was effectively a victory for Qatar over its rivals.

The Gulf feud is ongoing, having broken out two years ago following a visit to Riyadh by a bellicose Donald Trump. Since then, all manner of tactics have been used by the countries involved, ranging from heavy political lobbying in Washington DC through to an online war in which misinformation has been spread.

The spat has spread into sport, too. Frequent reports allegedly spread by pro-Saudi consultants have sought to discredit Qatar’s World Cup hosting by making dubious claims about its ability to stage the tournament. Meanwhile, BeIN has fallen victim to a massive and concerted bootlegging operation instigated by BeoutQ, which appears to be a Saudi Arabian-backed pirate channel that has stolen the Qatari broadcaster’s content.

The feud spreads

Qatar hasn’t stood idly by in the face of such provocation, often spending lavishly both to demonstrate its oil and gas fuelled economic strength and to project its soft power. The world record breaking transfer of Brazilian international Neymar, from FC Barcelona to PSG, is the most potent symbol of this, as the government in Doha set out to shift attention away from its rivals while simultaneously making a statement about the aspirations of Qatar.

As such, the news that QSI may be circling Leeds United doesn’t seem to be about a Qatari penchant for Yorkshire puddings, nor is it merely a nice opportunity to generate some Saturday night clickbait. Rather, it suggests the opening of another front in a feud which, instead of resolving itself, appears to be intensifying. Rather than being the dawn of a new era for Leeds United, the club may consequently be on the cusp of being drawn into a bitter battle of competing geopolitical interests.

The dense network of connections and conflicts between the likes of Qatar Sports Investments, Saudi Arabia, UEFA and Abu Dhabi may therefore be about to span the English Pennines, sparking a new War of the Roses between Yorkshire and Lancashire. Given the on-off speculation about Saudi Arabia’s purchase of Manchester United, and Abu Dhabi’s continued lavishing of its wealth upon Manchester City (as well as its rumoured acquisition of Newcaste United), these Gulf states are strengthening their hold over Lancashire, the western side of the Pennines, and possibly further north too.

In buying Leeds United, their rival, Qatar, would be shoring up its own defences in neighbouring Yorkshire, meaning that the Gulf region’s proxy war could spill over into English football. Thus, as fans on both sides of a historic English divide anticipate the prospect of their clubs’ battle for supremacy, they should remain mindful that Elland Road and the Etihad Stadium could become modern day proxy battlefields in a new stand-off between the houses of York and Lancaster.

Simon Chadwick, Professor of Sports Enterprise, University of Salford

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Costs of Corruption running deep in the MENA

Costs of Corruption running deep in the MENA

The IMFBlog on May 28, 2019, is about a world phenomenon that seems to still be present in all walk of life throughout the world. The Costs of Corruption running deep in the MENA, have been amplified by the hydrocarbon-related rentier economies to a point where only a defossilisation of the respective economies could somehow reduce their extent. In the meantime, costs of corruption running deep in the MENA seem to go unattended to. Anyway here is this IMFBlog article.

Corruption and Your Money

The costs of corruption run deep. Your taxpayer dollars are lost in different ways, siphoned off from schools, roads, and hospitals to line the pockets of people up to no good.

Equally damaging is the way it corrodes the government’s ability to help grow the economy in a way that benefits all citizens.

And no country is immune to corruption. Our Chart of the Week from the Fiscal Monitor analyzes more than 180 countries and finds that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.

The chart shows that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption.

A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP.

These are just two examples that demonstrate that political will to build strong and transparent institutions can turn the tide against corruption. The Fiscal Monitor shines a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption.

The costs of corruption run deep.

Where there is political will, there is a way

Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector.

Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption:

Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations.

Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency.

Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top.

Keep pace with new challenges as technology and opportunities for wrongdoing evolve. Focus on areas of higher risk—such as procurement, revenue administration, and management of natural resources—as well as effective internal controls. In Chile and Korea, for example, electronic procurement systems have been powerful tools to curtail corruption by promoting transparency and improving competition.

More cooperation to fight corruption. Countries can also join efforts to make it harder for corruption to cross borders. For example, more than 40 countries have already made it a crime for their companies to pay bribes to gain business abroad under the OECD anti-corruption convention. Countries can also aggressively pursue anti–money laundering activities and reduce transnational opportunities to hide corrupt money in opaque financial centers.

Curbing corruption is a challenge that requires persevering on many fronts, but one that pays huge dividends. It starts with political will, continuously strengthening institutions to promote integrity and accountability, and global cooperation.

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Costs of Technologies reshaping Energy-related Investment

Costs of Technologies reshaping Energy-related Investment

Following on the ever-increasing ease of accessibility of all renewables-hardware, the costs of technologies reshaping energy-related investment per The International Energy Agency’s World Energy Investment 2019 report have mainly affected and/or facilitated the surging demand for even more power. In effect, it is in the developing world, including, the MENA region where the market seems to be the highest, that this is happening before our very eyes. Hence this article of the World Economic Forum.

A general view of the DanTysk wind farm, 90 kilometres west of Esbjerg, Denmark, September 21, 2016. Picture taken September 21, 2016. To match EUROPE-OFFSHORE/WINDPOWER  REUTERS/Nikolaj Skydsgaard - D1BEUNDQTLAA
The costs of technologies are reshaping energy-related investment
Image: REUTERS/Nikolaj Srkydsgaad

The world invested almost $2 trillion in energy last year. These 3 charts show where it went

By Charlotte Edmond, Formative Content.

22 May 2019

The world invested $1.8 trillion in energy last year, with spending on renewables stalling, while oil, gas and coal projects increased.

The International Energy Agency’s World Energy Investment 2019 report shows overall global investment in energy stabilised in 2018 after a recent decline, with the power sector continuing to make up the biggest proportion of this spending. Much of that investment has been fueled by the world’s rapidly increasing demand for electricity.

Investment in coal increased for the first time since 2012, despite reduced Chinese spending to focus on power generation.

When it comes to cleaner fuels, there was little movement in the overall investment in renewables and no net addition to capacity, driven in part by the falling costs of some technologies. But production of biofuels, which has fallen behind the IEA’s sustainable development targets, saw a rise in investment last year.

The agency’s report also showed minimal increases in energy efficiency investments, with spending on transport efficiency remaining constant even though sales of electric vehicles are motoring upwards.

Indeed, the IEA warns there is a “growing mismatch between current trends and the paths to meeting” the world’s climate goals laid out in the 2016 Paris Agreement and “other sustainable development goals.”

The changing landscape

The costs of technologies are reshaping energy-related investment, as the chart below demonstrates.

Some of the most marked changes have been seen in the power sector, where there have been dramatic falls in the costs of solar, onshore wind and battery storage.

Prices for some efficient goods such as light-emitting diodes (LED) and electric vehicles have continued to fall, too. But investment in efficiency innovations is still being held back by governmental policy and financing challenges.

On the other hand, there has been little change in the costs of nuclear power projects and carbon capture and storage – a technology that aims to trap greenhouse gases before they enter the atmosphere.

Who invests the most?

China remained the biggest market for energy investment last year, even as the US is rapidly catching up, the IEA report said.

Increases in oil and gas — particularly in the shale sector — have driven the bulk US investment. By contrast, China is putting much of its money into low-carbon projects, with big investments in nuclear power and renewables.

India is the most rapidly growing market for investment. Elsewhere, investment in energy generally has fallen in recent years in Europe, the Middle East, Southeast Asia and sub-Saharan Africa, according to the agency.

Have you read?

China’s Global Investments Declining Everywhere Except for the MENA

China’s Global Investments Declining Everywhere Except for the MENA

Foreign Policy’s INFOGRAPHIC published this article written by AFSHIN MOLAVI on May 16, 2019. It is about China’s Global Investments Declining Everywhere Except for the MENA as clearly showing in Three charts highlight Beijing’s growing interest in the Middle East and North Africa.

As Chinese President Xi Jinping concluded the latest high-level Belt and Road gathering of world leaders in Beijing last month, China’s signature project has seemingly entered a new phase: worldwide acceptance of the Belt and Road Initiative (BRI) as a fact of international life (like it or not). So, with the wind at its back, is China doubling down on its investments worldwide? Not exactly. The total value of China’s global investments and construction contracts actually fell by $100 billion in 2018, according to data analyzed from the American Enterprise Institute’s China Global Investment Tracker. Just about every region saw a significant decline in Chinese investment or construction projects except, surprisingly, for one: the Middle East and North Africa (MENA).

A flurry of Chinese investment and construction projects in the MENA region over the last three years has made it a key geoeconomic partner for Beijing. But surely, in pure volume terms, the MENA region could not have attracted as much Chinese economic activity as sub-Saharan Africa or East Asia, right? Think again. The MENA region ranked as the second-largest recipient of investment and Chinese construction projects worldwide after Europe in 2018, as the chart below shows.


MENA’s Growing BRI Clout

In 2018, the Middle East and North Africa leapfrogged other emerging markets as a destination for BRI projects.

SOURCE: AEI CHINA GLOBAL INVESTMENT TRACKER, 2005-2018; COMPILED AND CONCEIVED BY AFSHIN MOLAVI.

The MENA region ranked ahead of traditional BRI stalwarts East Asia and sub-Saharan Africa last year, recording $28.11 billion in new projects. The region still lags behind both those regions as a whole since the launch of BRI in 2013 and dating back to 2005, but a three-year surge has brought it in closer proximity to the top of the table. That could mean a windfall for Chinese state-owned construction companies as the majority of MENA projects involve construction, rather than foreign direct investment.

Of the 2018 MENA total, nearly three-quarters was targeted at Egypt, the United Arab Emirates, and Saudi Arabia. Those three countries also make up half of the “$20 billion club”—the group of countries with more than $20 billion worth of projects from China dating back to 2005.


Chinese Investment in MENA Countries

MENA countries with more than $20 billion worth of investment and construction projects by Chinese firms since 2005.

SOURCE: AEI CHINA GLOBAL INVESTMENT TRACKER, 2005-2018; COMPILED AND CONCEIVED BY AFSHIN MOLAVI.

The list here is heavily skewed toward regional oil producers, with the exception of Egypt, and most of China’s projects in the region involve construction rather than investment. Despite a recent setback, Chinese state-owned enterprises will likely play a prominent role in Egypt’s ambitious infrastructure program, including the building of a new, gleaming capital city just outside Cairo. Chinese construction companies were vitalin President Abdel Fattah al-Sisi’s ambitious Suez Canal economic zone project.

At the Belt and Road Forum last month, Chinese enterprises also announced a new $3.4 billion investment to build a trade hub for Chinese goods in Dubai’s Jebel Ali Port, as well as a manufacturing and processing hub for animal and agricultural products for the food industry. China’s dramatic ramp-up of projects in the UAE suggests that it sees the country as an important piece of its Belt and Road logistics network.

Other significant nodes of China’s economic footprint in the region are Israel ($12.19 billion), Kuwait ($10.43 billion), and Qatar ($7.27 billion), according to data analyzed from AEI’s China Global Investment Tracker for the years 2005-2018.

China is pouring a lot of concrete and cement into construction projects in the region but what of Middle East exports to China? How is China affecting the bottom line of key MENA states?

The answer broadly: If you have oil or gas, China is likely to be a major export destination.


Exports to China From MENA Countries

China has emerged as a vital export destination for several countries in the Middle East and North Africa. For these countries below, China made the top five in 2018.

SOURCE: IMF DIRECTION OF TRADE STATISTICS; COMPILED AND CONCEIVED BY AFSHIN MOLAVI.

Major oil and gas producers generate significant revenues from Beijing, and China ranks as the top export destination for Saudi Arabia, Iran, Kuwait, and Oman, according to an analysis of data from the International Monetary Fund’s Direction of Trade Statistics.

In some cases, key U.S. allies such as the UAE send nearly three times more exports to China than to the United States, and for Kuwait, Qatar, and Oman, the gap is even starker, with nearly eight times, nearly nine times, and nearly 28 times, respectively, more goods exported to China than to the United States.

For Saudi Arabia, the difference in 2018 was less stark, sending some 30 percent more exports to China than to the United States, according to an analysis of IMF data. Expect this gap to widen as the United States continues to ramp up domestic oil production.

Meanwhile, most North African countries still maintain an export profile heavily dependent on Europe rather than on China, and Israel sends four times more goods to the United States than to China.

You can expect this map to get to darker shades of red over the next decade, particularly as China’s demand for energy—especially natural gas—continues to grow.

Afshin Molavi is a senior fellow at the Foreign Policy Institute of Johns Hopkins School of Advanced International Studies and the editor and founder of the New Silk Road Monitor blog.

10 Scenarios for the MENA region in the year 2050

10 Scenarios for the MENA region in the year 2050

Bracing for MENA’s Future: 10 Scenarios for the Year 2050

10 Scenarios for the MENA region in the year 2050 as elaborated and written by @Eubulletin | Thursday, May 9th, 2019

Scenarios are imagined futures that can demonstrate how current actions may lead to dramatically different outcomes, but also serve as useful tools to help guide strategy and shape the future. This analysis lays out long term scenarios (2050) for the Middle East and North Africa (MENA). These conclusions point towards greater conflict and contentious state-society dynamics, regional fragmentation and shifting centres of gravity, the region’s embeddedness in global rivalries and disruptive socio-economic and environmental international trends.

Unstoppable Climate Change

By 2050 climate change will be a decisive global reality, but its impact will differ from one region to the other. The countries of the Middle East and North Africa (MENA) will be among the most affected: the effects will be felt across the region in the form of extreme weather phenomena, heat waves and droughts, desertification, severe water shortages and a rise in sea level. One of the most vulnerable areas will be the Nile Delta, where a sea-level rise of about 50 cm could force 4 million Egyptians to resettle to other areas. The region’s governments and societies will have to deal with scarcity of natural resources, including food, price volatility and the risks associated with new pandemics.

Post-Oil World

By 2050, a post-oil world order will be in place due to profound changes in the global energy market. Such a new order will not be triggered by a lack of supply: on the contrary, fossil fuel production may even increase for a time, thanks to the exploitation of new reserves, innovative investments in oil and tar sands, the popularization of LNG and fracking development projects beyond the United States. Prices may remain relatively low for some time despite the high demand from emerging economies. But in the longer term, the main driver of decarbonisation will be the gigantic steps forward in technological innovation for renewable energy production and storage capacities, which will be more popular due to global awareness of the climate change.

An Urbanized Region

The MENA region is characterized by high urbanization. Some 60 percent of the population was already urban by 2018 and this trend will not be reversed by 2050. While we are already familiar with “Mega Cities” such as Cairo and Istanbul, new ones will surpass the 10 million people benchmark. Baghdad and Khartoum, each with 15 million inhabitants, will be two of the fastest-growing cities in the region. The capacities of urban spaces to accommodate this new reality will depend on the pace of growth but even more on the resources deployed by local and national authorities to upgrade basic infrastructures such as public transport, sanitation and housing.

Digitalization and Automation

Technologization will be a global megatrend by 2050. Automation and Artificial Intelligence will radically transform job markets in most countries. The MENA region will be particularly affected by those trends due to the already high (and seemingly persistent) unemployment and underemployment rates, particularly among young people. While the Gulf region and Israel may adapt more easily to these changes, other countries, with large working populations, strained job markets and insufficient governance could face major social problems. Infrastructural investment, business culture, education and regulation will also determine the ability to adapt to these megatrends.

Religiosity, Individualization and Citizenship

Societal trends in the MENA in 2050 will result from the complex interplay between endogenous and exogenous variables. Fragmentation and centrifugal dynamics are likely to shape both the religious and the secular camps as well as societies as a whole. Individualization processes, among which the fact that religious or non-religious choices will be the result of each person’s preferences, and the contestation of intermediate authorities (such as religious bodies) will further fragment each camp. In any case, attitudes towards religion will continue to be a major driver of societal and political dynamics and remain a highly contentious issue.

Strong or Fierce States

Attempts to erode or complement the role of states in the region will continue. This is likely to happen by efforts to curtail their size and prerogatives. Next to this, challenges to the authority of states will prompt analysts and pundits to speculate on the weakening or outright collapse of the state system and the redrawing of the regional order. Yet, MENA states could prove more resilient than some expected. By 2050, controlling the state will remain the main and often only guarantee for elite survival. State agents (state elites, the public sector, security apparatuses) and the dynamics revolving around them (clientelism, state capitalism) will remain predominant in the region compared with other parts of the world.

Managing the Effects of Today’s Conflicts

It is impossible to determine which of the conflicts current today will be solved by 2050 and which will still be in place – let alone to predict new ones that may emerge. Nevertheless, we can take it for granted that the effects of today’s conflicts will continue to be felt in the MENA countries in 2050. Even in those cases where effective solutions have been put forward, the post-conflict trauma will mark one or more generations. In addition, new drivers of conflict are very likely to come to the forth, but all these phenomena can turn into either sources for risks or opportunities depending on how they are managed by regional and international actors.

China: Primus Inter Pares

By 2050, China is likely to be the world’s largest economy. Its annual growth rate will have remained considerably steady, keeping in check internal tensions associated with inequality and governance deficits. After almost four decades since its inception, the Belt and Road Initiative has the potential to drastically transform the socio-economic landscape of the Asian continent and of the MENA region. On the basis of the positive returns of China’s initial investments in the 2020s, the MENA authorities’ willingness to engage with China will further increase.

Game-Changing Africa

By 2050, the African continent could be home to 2.5 billion people. This is twice as many as in 2019. Nigeria’s population will have reached 400 million and may rank 14th among the world’s largest economies. The number of African workers will have already surpassed that of China. African mobility will be a major issue, both in terms of rural exodus and international migration. Africa’s weight in global affairs will be one of the game-changers of the following decades. The MENA region will naturally look southwards, both in terms of opportunities and risks. Not only will the MENA care more about African affairs, African leaders will also have a say in the evolution of the Middle East and the Maghreb.

Europe and the MENA Region: A Family Issue

Geographic proximity will remain a key factor in the relations between Europe and the MENA region. What is likely to change is the intensity of the societal bonds between these two spaces and what governments and the people make of it. By 2050, the proportion of Europeans with some sort of MENA background will be much higher than it is today. Such people will no longer be perceived as second- or third generation migrants but as Euro-Arabs, Euro-Turks, Euro-Kurds and Euro-Amazighs. This diversity will not only be present at the level of the general population but also among the two generations of new political and economic elites. The intensity of the connections between the EU and the region could further grow if some countries of the MENA region become members or reinforce their association with the EU.

The World’s Next Big Growth Challenge

The World’s Next Big Growth Challenge

The economic performance of lower-income developing countries will be crucial to reducing poverty further. Although these economies face significant headwinds, they could also seize important new growth opportunities – especially with the help of digital platforms.

Here is The World’s Next Big Growth Challenge by Michael Spence published on Project Syndicate on May 1, 2019.

MILAN – The global economy is undergoing very large structural shifts, driven by three megatrends. One is the digital transformation of the foundations on which economies are built and run. Another is the growing purchasing power and economic strength of emerging economies, and China in particular. Lastly, there are broad-based political-economy trends, which include rising nationalism, various forms of populism, political and social polarization, and a possible breakdown of the multilateral framework within which the global economy has functioned since World War II.

The media devote most of their attention to the economic, social, and regulatory challenges arising from these megatrends, and to the trade, investment, and technology tensions between China and the United States. Yet a significant share of the world’s population lives in poor countries, or in poorer parts of developing countries. Furthermore, the rapid reduction in global poverty over the past three decades is primarily the result of sustained growth in developing economies.

The future growth prospects of today’s early-stage (that is, lower income – some growing and others not) developing countries will be of huge importance in reducing poverty further. Although these countries face significant headwinds, they could also seize important new growth opportunities – especially with the help of digital platforms.

The headwinds are certainly considerable. For starters, advances in digital technologies – robotics, machine learning, sensors, and vision – directly threaten the labor-intensive manufacturing and assembly upon which lower-income, non-resource-rich economies have traditionally relied.

Moreover, climate change has had its greatest economic impact in the tropical and subtropical regions where most lower-income countries are located. The effects of global warming are highly disruptive in fragile economies, and, taken together, constitute a major new obstacle to growth.1

Fertility rates, meanwhile, remain astonishingly high in some countries, especially in Sub-Saharan Africa. In a few of the poorest – Niger, Mali, and the Democratic Republic of Congo – the rate is 6-7 children per female. The resulting flood of new entrants to the labor market is far outstripping the number of jobs available.

No known growth model can accommodate or keep up with this kind of demographic surge. Even sustained economic growth of around 7% per year won’t be enough. And although fertility tends to decline as incomes rise, that does not happen immediately. Empowering women, therefore, may be the most effective way of starting to address the challenge.

Conflict also disrupts growth. Although many conflicts appear to have a religious or ethnic basis, some scholars believe that their root cause may be economic, with ethnic divisions serving as a way to exclude other groups from access to scarce resources and opportunities. Whatever its source, inequality of opportunity has a highly disruptive effect on governance and hence growth.

But these obstacles are not insurmountable. For one thing, developing countries now have huge potential export markets in middle-income countries, and no longer depend entirely on advanced economies for access to global markets.

There is also a renewed awareness of the importance of infrastructure in enabling growth. In addition to roads, railways, and ports, electricity and digital connectivity are crucial. In this regard, the rapid expansion of cellular wireless technology, combined with the installation of high-capacity undersea broadband pipes around Africa, represents major progress. Meanwhile, China’s “Belt and Road Initiative” – though criticized by much of the West, and the United States in particular – could bring dramatic improvements in physical and digital connectivity to Central Asia and parts of Africa.

Further advances in critical infrastructure will create important growth opportunities for developing countries via e-commerce, mobile payments, and related financial services. The experience of China strongly suggests that these digital platforms, and the ecosystems that develop around them, are powerful engines for incremental, highly inclusive growth.

China, of course, is a very large, homogenous market. If smaller, lower-income developing countries are to benefit from equally rapid inclusive growth, the digital platforms will have to be regional and international in scope.

Some are starting to emerge. Jumia, a Nigeria-based e-commerce platform covering 14 African countries, recently went public on the New York Stock Exchange, amid considerable excitement. True, the company faces similar obstacles to those that Asian and Latin American platforms previously had to overcome, including a lack of reliable payment systems, low trust between buyers and sellers, and logistics and delivery bottlenecks. But the experience of other regions shows that these shortcomings can be addressed over time.

The bigger risk to these platforms stems from the inevitable and necessary increase in regulation of the Internet around the world. In particular, diverse national regulatory regimes may inadvertently or deliberately disrupt or block the international development of e-commerce ecosystems, hurting lower-income countries in the process. Avoiding the creation of such unintended obstacles should therefore be a high priority for the international community.

Today’s lower-income countries already face a tough task in trying to emulate the impressive growth of developing economies before them. An underperforming global economy, and rising national and international tensions, will make that task even harder. If the world is serious about reducing poverty further, it must pay far more attention to their progress.

Michael Spence, a Nobel laureate in economics, is Professor of Economics at NYU’s Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, Senior Fellow at the Hoover Institution at Stanford University, Advisory Board Co-Chair of the Asia Global Institute in Hong Kong, and Chair of the World Economic Forum Global Agenda Council on New Growth Models. He was the chairman of the independent Commission on Growth and Development, an international body that from 2006-2010 analyzed opportunities for global economic growth, and is the author of The Next Convergence – The Future of Economic Growth in a Multispeed World.