Tag: Cooperation

How to get tech right in Europe?

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As our societies navigate challenging times and undergo widespread digital transformation, fostering growth in our homegrown tech businesses has never been more critical to achieving the wider goals of the European project.

Via EUTA. Kristin Skogen Lund, president, European Tech Alliance; CEO, Schibsted

The European Tech Alliance (EUTA) represents leading tech companies born and bred in Europe. We believe that with the right conditions, EU tech companies can enhance Europe’s resilience, boost our technological autonomy, protect and empower consumers, and promote European values such as transparency, the rule of law and innovation to the rest of the world.

The European Commission’s ambitious targets for 2030 in the Digital Decade program represent a vision for a sustainable and more prosperous digital future. However, more is needed if we are to achieve our goals.

Europe must boost its tech competitiveness over the next five years. To unlock European tech leadership both at home and beyond, we need to have an ambitious EU tech strategy to overcome growth obstacles, to make a political commitment to clear, targeted and risk-based rules, and to pursue consistent enforcement to match the globalized market we are in.

An EU strategy for European tech

We need a strategy for European tech that empowers digital companies to grow and use new innovation tools to deliver the best services and products, including personalized experiences, to their users. European tech companies are valuable assets for Europe. They deserve to be nurtured and supported.

Europe must boost its tech competitiveness over the next five years.

In practice, this could take on several forms. For instance, we need to unlock the power of data as a key lever for innovation while respecting consumer privacy. Privacy-enhancing technologies and pseudonymization should be further promoted by lawmakers and regulators to empower European companies to use data, grow and remain competitive.

A European strategy for talent to enhance European companies’ attractiveness could also be pursued. Developers should be pushing the limits of innovation, using their imaginations to improve the services and products from European companies, rather than focusing their unique talents on compliance tasks.

Lastly, EU tech companies should have a seat at the table when proposed rules affect their ability to invest in Europe and to provide good services, products and experiences. Bringing in expertise from the ground up would facilitate the growth of European champions at global, national and regional level.

Smart rules for a stronger Europe

The digital world is a fully-regulated sector with a wide range of new and updated rules. It is essential to give these rules time to play out before assessing their efficiency and impact on EU tech companies.

For instance, the EU’s consumer protection framework was recently updated with the ‘Omnibus Directive’. These new rules started applying from May 2022 onward only, yet they were up for another partial revision less than a year later. Businesses need time to put rules into practice, and lawmakers need time to analyze their effects in the real world, before amending the rulebook once again.

European, national and regional measures should complement each other, not clash or duplicate efforts. The ink of the Digital Services Act (DSA) was not even dry when some EU countries added extra layers of regulation at national level, such as the French law for online influencers and the proposed bill to secure and regulate the digital space. There must be a strong focus on avoiding national fragmentation where EU laws exist. Otherwise we are moving further away from a truly single market that is the cornerstone of European competitiveness.      

Where EU rules are needed, lawmakers should focus on concrete problems and be mindful of different tech business models, for example, retailers vs. marketplaces; new vs. second-hand goods, streaming vs. social media. Rules should address problems with specific business models instead of a one-size-fits-all approach or dictating specific product designs. Any proposed solution should also be proportionate to the problem identified.

Better enforcement for fairer competition

One of the big problems we face in Europe is ensuring a level playing field for all businesses, to achieve fair competition. The EU has enshrined these values in the Digital Markets Act (DMA). We must not lose sight of this ambition as we turn to the all-important task of enforcement of the DMA.

European, national and regional measures should complement each other, not clash or duplicate efforts.

Better cooperation should be encouraged between regulatory authorities at national level (for example, consumer, competition and data protection) but also among European countries and with the EU to ensure coherent application.

Now that the European Commission takes on the new role of rule enforcer, it’s of paramount importance to place a strong focus on independence, separate from political interests. This will ensure a robust and impartial enforcement mechanism that upholds the integrity of the regulatory framework.

What’s next?

European tech companies in the EUTA believe the EU can take two crucial steps for our competitiveness, so we can continue to invest in Europe’s technological innovation and European consumers.

First, the EU digital single market is incomplete, we need to avoid 27 different interpretations of the same EU rules. A strong harmonization push is needed for EU companies to grow faster across the Continent.

Second, we look toward the EU, national governments and authorities to bring economic competitiveness and innovation to the core of regulation, and then to enforce these rules fairly and equally.

EUTA members are companies born and bred in Europe. The EU is a crucial market and we are deeply committed to European citizens and European values. With our EUTA manifesto, we propose a vision so Europe can succeed, and our own European champions can grow and become global leaders.



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The state of the planet in 10 numbers

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This article is part of the Road to COP special report, presented by SQM.

The COP28 climate summit comes at a critical moment for the planet. 

A summer that toppled heat records left a trail of disasters around the globe. The world may be just six years away from breaching the Paris Agreement’s temperature target of 1.5 degrees Celsius, setting the stage for much worse calamities to come. And governments are cutting their greenhouse gas pollution far too slowly to head off the problem — and haven’t coughed up the billions of dollars they promised to help poorer countries cope with the damage.

This year’s summit, which starts on Nov. 30 in Dubai, will conclude the first assessment of what countries have achieved since signing the Paris accord in 2015. 

The forgone conclusion: They’ve made some progress. But not enough. The real question is what they do in response.

To help understand the stakes, here’s a snapshot of the state of the planet — and global climate efforts — in 10 numbers. 

1.3 degrees Celsius

Global warming since the preindustrial era  

Human-caused greenhouse gas emissions have been driving global temperatures skyward since the 19th century, when the industrial revolution and the mass burning of fossil fuels began to affect the Earth’s climate. The world has already warmed by about 1.3 degrees Celsius, or 2.3 degrees Fahrenheit, and most of that warming has occurred since the 1970s. In the last 50 years, research suggests, global temperatures have risen at their fastest rate in at least 2,000 years.  

This past October concluded the Earth’s hottest 12-month span on record, a recent analysis found. And 2023 is virtually certain to be the hottest calendar year ever observed. It’s continuing a string of recent record-breakers — the world’s five hottest years on record have all occurred since 2015. 

Allowing warming to pass 2 degrees Celsius would tip the world into catastrophic changes, scientists have warned, including life-threatening heat extremes, worsening storms and wildfires, crop failures, accelerating sea level rise and existential threats to some coastal communities and small island nations. Eight years ago in Paris, nearly every nation on Earth agreed to strive to keep temperatures well below that threshold, and under a more ambitious 1.5-degree threshold if at all possible. 

But with just fractions of a degree to go, that target is swiftly approaching — and many experts say it’s already all but out of reach.

$4.3 trillion  

Global economic losses from climate disasters since 1970  

Climate-related disasters are worsening as temperatures rise. Heat waves are intensifying, tropical cyclones are strengthening, floods and droughts are growing more severe and wildfires are blazing bigger. Record-setting events struck all over the planet this year, a harbinger of new extremes to come. Scientists say such events will only accelerate as the world warms. 

Nearly 12,000 weather, climate and water-related disasters struck worldwide over the last five decades, the World Meteorological Organization reports. They’ve caused trillions of dollars in damage, and they’ve killed more than 2 million people.  

Ninety percent of these deaths have occurred in developing countries. Compared with wealthier nations, these countries have historically contributed little to the greenhouse gas emissions driving global warming – yet they disproportionately suffer the impacts of climate change.  

4.4 millimeters  

Annual rate of sea level rise

Global sea levels are rapidly rising as the ice sheets melt and the oceans warm and expand. Scientists estimate that they’re now rising by about 4.4 millimeters, or about 0.17 inches, each year – and that rate is accelerating, increasing by about 1 millimeter every decade.

Those sound like small numbers. They’re not.  

The world’s ice sheets and glaciers are losing a whopping 1.2 trillion tons of ice each year. Those losses are also speeding up, accelerating by at least 57 percent since the 1990s. Future sea level rise mainly depends on future ice melt, which depends on future greenhouse gas emissions. With extreme warming, global sea levels will likely rise as much as 3 feet by the end of this century, enough to swamp many coastal communities, threaten freshwater supplies and submerge some small island nations.  

Some places are more vulnerable than others. 

“Low-lying islands in the Pacific are on the frontlines of the fight against sea level rise,” said NASA sea level expert Benjamin Hamlington. “In the U.S., the Southeast and Gulf Coasts are experiencing some of the highest rates of sea level rise in the world and have very high future projections of sea level.”  

But in the long run, he added, “almost every coastline around the world is going to experience sea level rise and will feel impacts.”

Less than 6 years

When the world could breach the 1.5-degree threshold

The world is swiftly running out of time to meet its most ambitious international climate target: keeping global warming below 1.5 degrees Celsius. Humans can emit only another 250 billion metric tons of carbon dioxide and maintain at least even odds of meeting that goal, scientists say. 

That pollution threshold could arrive in as little as six years.

That’s the bottom line from at least two recent studies, one published in June and one in October. Humans are pouring about 40 billion tons of carbon dioxide into the atmosphere each year, with each ton eating into the margin of error.  

The size of that carbon buffer is smaller than previous estimates have suggested, indicating that time is running out even faster than expected.  

“While our research shows it is still physically possible for the world to remain below 1.5C, it’s difficult to see how that will stay the case for long,” said Robin Lamboll, a scientist at Imperial College London and lead author of the most recent study. “Unfortunately, net-zero dates for this target are rapidly approaching, without any sign that we are meeting them.”

43 percent 

How much greenhouse gas emissions must fall by 2030 to hit the temperature target

The world would have to undergo a stark transformation during this decade to have any hope of meeting the Paris Agreement’s ambitious 1.5-degree cap. 

In a nutshell, global greenhouse gas emissions have to fall 43 percent by 2030, and 60 percent by 2035, before reaching net-zero by mid-century, according to a U.N. report published in September on the progress the world has made since signing the Paris Agreement. That would give the world a 50 percent chance of limiting global warming to 1.5 degrees. 

But based on the climate pledges that countries have made to date, greenhouse gas emissions are likely to fall by just 2 percent this decade, according to a U.N. assessment published this month. 

Governments are “taking baby steps to avert the climate crisis,” U.N. climate chief Simon Stiell said in a statement this month. “This means COP28 must be a clear turning point.” 

$1 trillion a year 

Climate funding needs of developing countries

In many ways, U.N. climate summits are all about finance. Cutting industries’ carbon pollution, protecting communities from extreme weather, rebuilding after climate disasters — it all costs money. And developing countries, in particular, don’t have enough of it. 

As financing needs grow, pressure is mounting on richer nations such as the U.S. that have produced the bulk of planet-warming emissions to help developing countries cut their own pollution and adapt to a warmer world. They also face growing calls to pay for the destruction wrought by climate change, known as loss and damage in U.N.-speak. 

But the flow of money from rich to poor countries has slowed. In October, a pledging conference to replenish the U.N.’s Green Climate Fund raised only $9.3 billion, even less than the $10 billion that countries had promised last time. An overdue promise by developed countries to deliver $100 billion a year by 2020 to help developing countries reduce emissions and adapt to rising temperatures was “likely” met last year, the Organization for Economic Cooperation and Development said this month, while warning that adaptation finance had fallen by 14 percent in 2021. 

As a result, the gap between what developing countries need and how much money is flowing in their direction is growing. The OECD report said developing countries will need around $1 trillion a year for climate investments by 2025, “rising to roughly $2.4 trillion each year between 2026 and 2030.”

$7 trillion 

Worldwide fossil fuel subsidies in 2022

In stark contrast to the trickle of climate finance, fossil fuel subsidies have surged in recent years. In 2022, total spending on subsidies for oil, natural gas and coal reached a record $7 trillion, the International Monetary Fund said in August. That’s $2 trillion more than in 2020. 

Explicit subsidies — direct government support to reduce energy prices — more than doubled since 2020, to $1.3 trillion. But the majority of subsidies are implicit, representing the fact that governments don’t require fossil fuel companies to pay for the health and environmental damage that their products inflict on society. 

At the same time, countries continue pumping public and private money into fossil fuel production. This month, a U.N. report found that governments plan to produce more than twice the amount of fossil fuels in 2030 than would be consistent with the 1.5-degree target. 

66,000 square kilometers

Gross deforestation worldwide in 2022

At the COP26 climate summit two years ago in Glasgow, Scotland, nations committed to halting global deforestation by 2030. A total of 145 countries have signed the Glasgow Forest Declaration, representing more than 90 percent of global forest cover. 

Yet global action is still falling short of that target. The annual Forest Declaration Assessment, produced by a collection of research and civil society organizations, estimated that the world lost 66,000 square kilometers of forest last year, or about 25,000 square miles — a swath of territory slightly larger than West Virginia or Lithuania. Most of that loss came from tropical forests. 

Halting deforestation is a critical component of global climate action. The U.N.’s Intergovernmental Panel on Climate Change warns that collective contributions from agriculture, forestry and land use compose as much as 21 percent of global human-caused carbon emissions. Deforestation releases large volumes of carbon dioxide back into the atmosphere, and recent research suggests that carbon losses from tropical forests may have doubled since the early 2000s.  

Almost 1 billion tons

The annual carbon dioxide removal gap 

Given the world’s slow pace in reducing greenhouse gas pollution, scientists say a second approach is essential for slowing the Earth’s warming — removing carbon dioxide from the atmosphere.

The technology for doing this is largely untested at scale, and won’t be cheap.  

A landmark report on carbon dioxide removals led by the University of Oxford earlier this year found that keeping warming to 2 degrees Celsius or less would require countries to collectively remove an additional 0.96 billion tons of CO2-equivalent a year by 2030.

About 2 billion tons are now removed every year, but that is largely achieved through the natural absorption capacity of forests. 

Removing even more carbon will require countries to massively scale up carbon removal technologies, given the limited capacity of forests to absorb more carbon dioxide. 

Carbon removal technologies are in the spotlight at COP28, though some countries and companies want to use them to meet net-zero while continuing to burn fossil fuels. Scientists have been clear that carbon removal cannot be a substitute for steep emissions cuts. 

1,000 gigawatts 

Annual growth in renewable power capacity needed to keep 1.5 degrees in reach  

The shift from fossil fuels to renewables is underway, but the transition is still far too slow to meet the Paris Agreement targets. 

To keep 1.5 degrees within reach, the International Renewable Energy Agency estimates that the world needs to add 1,000 gigawatts in renewable energy capacity every year through 2030. By comparison, the United States’ entire utility-scale electricity-generation capacity was about 1,160 gigawatts last year, according to the Department of Energy.

Last year, countries added about 300 gigawatts, according to the agency’s latest World Energy Transitions Outlook published in June. 

That shortfall has prompted the EU and the climate summit’s host nation, the United Arab Emirates, to campaign for nations to sign up to a target to triple the world’s renewable capacity by 2030 at COP28, a goal also supported by the U.S. and China.

“The transition to clean energy is happening worldwide and it’s unstoppable,” International Energy Agency boss Fatih Birol said last month. “It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us.”

This article is part of the Road to COP special report, presented by SQM. The article is produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.



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PTFE ban: The hidden consumer costs and employment losses

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As part of the EU’s landmark Green Deal package, the 2020 Chemicals Strategy for Sustainability called for an ambitious concept: achieving a toxic-free environment by 2030. A central pillar of this ambition is the proposal for a universal PFAS — per- and polyfluoroalkyl substances — restriction, addressing contamination and emissions from the controversial family of substances sometimes known as ‘forever chemicals’.

Action to tackle this family of chemicals is overdue, and European industry is ready to do its part. As the president of the Federation of the European Cookware, Cutlery and Houseware Industries (FEC), I welcome the initiative. FEC members pride themselves on providing safe and durable products to consumers, and were early to phase out these problematic substances. Despite this, the current restriction proposal still needs substantial changes to achieve its goals of protecting human health and the environment while balancing socioeconomic effects, impacts on carbon emissions and circularity.

While many elements of the proposed restriction are well justified, some risk damaging the EU industry’s competitiveness and hindering progress on the green and digital transitions, all while banning substances which are known to be safe. The European authorities need to understand the impacts of the proposal more thoroughly before making decisions which will harm consumers and the European workforce, and perhaps even result in worse environmental outcomes.

The current restriction proposal still needs substantial changes to achieve its goals of protecting human health and the environment while balancing socioeconomic effects.

As the most complex and wide-ranging chemical restriction in EU history, it is essential that the institutions take no shortcuts, and take the time to clearly understand the unintended environmental and socioeconomic impacts on every sector.

The PFAS restriction proposal is broad, covering over 10,000 substances, many of which were not considered part of the PFAS family in the past. In an effort to catch all possible problematic chemicals that could be used in the future, the member countries which proposed the restriction have cast a net so wide that it also includes substances which pose no risk. Even the OECD, the source of the broad scope used by the authorities, concedes that its definition is not meant to be used to define the list of chemicals to be regulated.

In addition to the legacy PFAS substances, which have serious concerns for human health and the environment, the proposal also includes fluoropolymers in its scope, which are not mobile in the environment, not toxic and not bioaccumulative — a stark contrast to the controversial PFAS substances at the center of contamination scandals across Europe and around the globe.

As the most complex and wide-ranging chemical restriction in EU history, it is essential that the institutions take no shortcuts.

Fluoropolymers are well studied, with ample scientific evidence demonstrating their safety, and unlike legacy PFAS, technologies exist to control and eliminate any emissions of substances of concern from manufacturing to disposal.

Fluoropolymers are not only safe, their safety is a primary reason for their widespread use. They provide critical functionality in sensitive applications like medical devices, semiconductors and renewable energy technology. They are also used in products we all use in our day-to-day lives, from non-stick cookware to electrical appliances to cars. While in some cases there are alternatives to fluoropolymers, these replacements are often inferior, more expensive, or have even more environmental impact in the long run. Where alternatives aren’t yet identified, companies will need to spend large sums to identify replacements.

In the cookware industry, for example, fluoropolymers provide durable, safe and high-performing non-stick coatings for pots, pans and cooking appliances used by billions of people across Europe and around the globe. Decades of research and development show that not only are these products safe, but their coatings provide the most high-performing, durable and cost-effective solution. Continued research and development of these products is one of the reasons that the European cookware industry is considered a world leader.

Fluoropolymers are well studied, with ample scientific evidence demonstrating their safety and … technologies exist to control and eliminate any emissions of substances of concern from manufacturing to disposal.

Given the critical role that fluoropolymers play in so many products and technologies, forcing a search for inferior or even nonexistent alternatives will harm the EU’s competitiveness and strategic autonomy. In the cookware industry alone, the restriction could cost up to 14,800 jobs in Europe, reduce the economic contribution of the sector to the GDP by up to €500 million, and result in a major shift of production from Europe to Asia, where the products would be made under much less stringent environmental rules. Consumers will also suffer, with new alternatives costing more and being less durable, requiring more frequent replacement and therefore resulting in a larger environmental impact.

Beyond this, companies that enable the green transition, deliver life-saving medical treatments, and ensure our technology is efficient and powerful will all be required to engage in expensive and possibly fruitless efforts to replace fluoropolymers with new substances. What would be the benefit of these costs and unintended consequences, when fluoropolymers are already known to be safe across their whole lifecycle?

Given the critical role that fluoropolymers play in so many products and technologies, forcing a search for inferior or even nonexistent alternatives will harm the EU’s competitiveness and strategic autonomy.

The scale of the PFAS restriction is unprecedented, but so are the possible unintended consequences. Industry has contributed comprehensive evidence to help fill in the blanks left by the initial proposal, it is now up to the institutions to take this evidence into account. With such a far-reaching initiative, it is essential that the EU institutions and the member countries thoroughly consider the impacts and ensure the final restriction is proportional, preserves European competitiveness and does not undermine the broader strategic objectives set for the coming years.

Founded in 1952, FEC, the Federation of the European Cookware, Cutlery and Housewares Industries, represents a strong network of 40 international companies, major national associations and key suppliers spread over Europe, including in Belgium, Croatia, France, Germany, Italy, Spain, Switzerland and the Netherlands. Our mission is to promote cooperation between members, and to provide expertise and support on economic and technical topics.



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Armenians find themselves pushed aside yet again

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Jamie Dettmer is opinion editor at POLITICO Europe. 

Last week, U.N. Secretary-General António Guterres warned that the world is “inching ever closer to a great fracture in economic and financial systems and trade relations.”

That may be so, but not when it comes to Azerbaijan.

A country a third of the size of Britain and with a population of about 10 million, Azerbaijan has faced few problems in bridging geopolitical divisions. And recently, Baku has been offering a masterclass in how to exploit geography and geology to considerable advantage.

From Washington to Brussels, Moscow to Beijing, seemingly no one wants to fall out with Azerbaijan; everyone wants to be a friend. Even now, as Armenia has turned to the world for help, accusing Baku of attempted ethnic cleansing in disputed Nagorno-Karabakh — the land-locked and long-contested Armenian enclave in Azerbaijan.

Warning signs had been mounting in recent weeks that Baku might be planning a major offensive, which it dubbed an “anti-terrorist operation,” and Armenia had been sending up distress flares. But not only were these largely overlooked, Baku has since faced muted criticism for its assault as well.

Western reaction could change, though, if Azerbaijan were to now engage in mass ethnic cleansing — but Baku is canny enough to know that.

Since Russia invaded Ukraine, Azerbaijan has been courted by all sides, becoming one of the war’s beneficiaries.

On a visit to Baku last year, European Commission President Ursula von der Leyen had only warm words for the country’s autocratic leader Ilham Aliyev, saying she saw him as a reliable and trustworthy energy partner for the European Union.

Then, just a few weeks later, Alexander Lukashenko — Russian President Vladimir Putin’s satrap in Belarus — had no hesitation in describing Aliyev as “absolutely our man.”

Is there any other national leader who can be a pal of von der Leyen and Lukashenko at the same time?

Aliyev is also a friend of Turkey; Baku and Beijing count each other as strategic partners, with Azerbaijan participating in China’s Belt and Road Initiative; and the country has been working on expanding military cooperation with Israel as well. In 2020 — during the last big flare-up in this intractable conflict — Israel had supplied Azerbaijan with drones, alongside Turkey.

That’s an impressive list of mutually exclusive friends and suitors — and location and energy explain much.

Upon her arrival in Azerbaijan’s capital last year, von der Leyen wasn’t shy about highlighting Europe’s need to “diversify away from Russia” for its energy needs, announcing a deal with Baku to increase supplies from the southern gas corridor — the 3,500-kilometer pipeline bringing gas from the Caspian Sea to Europe.

She also noted that Azerbaijan “has a tremendous potential in renewable energy” in offshore wind and green hydrogen, enthusing that “gradually, Azerbaijan will evolve from being a fossil fuel supplier to becoming a very reliable and prominent renewable energy partner to the European Union.”

There was no mention of Azerbaijan’s poor human rights record, rampant corruption or any call for the scores of political prisoners to be released.

Azerbaijan uses oil and gas “to silence the EU on fundamental rights issues,” Philippe Dam of Human Rights Watch complained at the time. “The EU should not say a country is reliable when it is restricting the activities of civil society groups and crushing political dissent,” he added.

Eve Geddie, director of Amnesty International’s Brussels office, warned: “Ukraine serves as a reminder that repressive and unaccountable regimes are rarely reliable partners and that privileging short-term objectives at the expense of human rights is a recipe for disaster.”

But von der Leyen isn’t the first top EU official to speak of Azerbaijan as such a partner. In 2019, then EU Council President Donald Tusk also praised Azerbaijan for its reliability.

Since Russia invaded Ukraine, however, the EU’s courting has become even more determined — and, of course, the bloc isn’t alone. Rich in oil and gas and located between Russia, Iran, Armenia, Georgia and the Caspian Sea, Azerbaijan is a strategic prize, sitting “on the crossroads of former major empires, civilizations and regional and global powerhouses,” according to Fariz Ismailzade of ADA University in Baku.

And Azerbaijan’s growing importance in the latest great game in Central Asia is reflected in the increase in foreign diplomatic missions located in its capital — in 2005 there were just two dozen, now there are 85.

For Ankara, and Beijing — eager to expand their influence across Central Asia — Azerbaijan is a key player in regional energy projects, as well as the development of new regional railways and planned infrastructure and connectivity projects.

Thanks to strong linguistic, religious and cultural ties, Turkey has been Azerbaijan’s main regional ally since it gained independence. But Baku has been adept at making sure it keeps in with all its suitors. It realizes they all offer opportunities but could also be dangerous, should relations take a dive.

And this holds for all the key players in the region, whether it be the EU, Turkey, China or Russia. The reason Baku can get on with a highly diverse set of nations — and why there likely won’t be many serious repercussions for Baku with this latest military foray — is that no one wants to give geopolitical rivals an edge and upset the fragile equilibrium in Central Asia. That includes its traditional foe Iran – Baku and Tehran have in recent months been trying to build a détente after years of hostility.

For the Armenians, so often finding themselves wronged by history, this is highly unfortunate. They might have been better advised to follow Azerbaijan’s example and try to be everyone’s friend, instead of initially depending on Russia, then pivoting West — a pirouette that’s lost them any sympathy in Moscow.

But then again, Armenia hasn’t been blessed with proven reserves of oil or natural gas like its neighbor.



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BRICS hypocrisy on offshore reform

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Andrea Binder is a Freigeist fellow and research group leader at the Otto Suhr Institute of Political Science at Freie Universität Berlin and the author of “Offshore Finance and State Power.” Ricardo Soares de Oliveira is professor of the International Politics of Africa at Oxford University and is currently writing a monograph titled “Africa Offshore.”

Of all the challenges in global governance discussed at the latest BRICS summit in Johannesburg, the role of offshore financial centers should have loomed large. Instead, the issue barely got a noncommittal half paragraph on page eight of the summit’s 26-page declaration.

In an example of breathtaking hypocrisy, BRICS countries rail against the global financial architecture but offer no collective action on offshore banking, and they also continue to be among its major users themselves.

Data leaks such as the Pandora Papers and Panama Papers have shown just how vast amounts of cash end up in jurisdictions that cater to wealthy nonresidents by offering secrecy, asset protection and tax exemption. And according to economist Gabriel Zucman $7.8 trillion — or about 8 percent of global wealth (and 40 percent of corporate profits) — are currently hidden in such tax havens.

What’s interesting is that a considerable share of this originates from BRICS and other developing countries. The U.N. Conference on Trade and Development, for instance, estimates that $88.6 billion leave Africa every year in the form of illicit capital flight, much of it ending up offshore.

The fact that this offshore world is underpinned by the interests of the rich world and also a majorly exacerbates global inequality should fire up BRICS countries.

And certainly, they are quite vocal in denouncing the role of offshore finance: In the 2020 Moscow Summit declaration, for instance, BRICS member countries reiterated their “commitment to combating illicit financial flows, money laundering and financing of terrorism and to closely cooperating within the Financial Action Task Force (FATF) and the FATF-style regional bodies […], as well as other multilateral, regional and bilateral fora.” They have also rightly called out the West for setting up these mechanisms decades ago.

In practice, however, whatever global multilateral action is currently being taken is at the level of the G7 and the Organisation for Economic Co-operation and Development — even if these ambivalent reforms are often protective of the West’s offshore interests. BRICS countries, meanwhile, do almost nothing, despite being the largest global source of capital flight, according to a 2014 report by Global Financial Integrity.

And this lack of multilateral action perfectly aligns with the way individual BRICS countries have engaged with the offshore world thus far.

Brazil currently stands as the world’s second largest borrower from offshore financial markets. India long accepted a double-taxation agreement with Mauritius, which enabled significant foreign direct investment and tax avoidance by the wealthy until 2016. The country also created of an offshore financial center in Gujarat. Meanwhile, Russia’s hydrocarbons are traded through opaque offshore jurisdictions, and its elites have notoriously thrived in such systems. Then, there’s perhaps the most significant — and counterintuitive — stakeholder in the offshore world, which is China. Its state-owned enterprises are major users of jurisdictions like the British Virgin Islands, where they register secretive subsidiaries.

In short, BRICS countries are just as implicated in the offshore world as the Western economies they lambast. The reality is that their governments and political elites both benefit from and need the offshore financial world — and there are four reasons for this:

First, these countries engage in institutional arbitrage by accessing more efficient institutions — and, sometimes, institutions that don’t exist domestically, like credible contracts or a non-political judiciary — offshore.

They also seek access to cheaper and less constrained financing in offshore money markets, where they get access to the U.S. dollar and international investors that are unavailable onshore.

Heavily hit by sanctions — as in the case of Russia since 2022 — the offshore world is also a lifeline for BRICS countries, allowing for the circumvention of punitive measures.

And finally, BRICS elites frequently use such facilities for their own personal purposes, including hiding illicit money and assets.

Thus, closing these discretionary offshore avenues may well have implications for their personal survival — or the survival of their regimes.

This is why multilateral action from BRICS members remains rhetorical at best. And unilaterally, they either do nothing, or selectively implement anti-offshore measures as political tools of regime consolidation and to punish rivals. While continuing to criticize the West, they also voice few qualms regarding the thriving offshore roles of Hong Kong, the United Arab Emirates or Singapore.

The latest summit declaration’s vague language of “international cooperation” and “mutual legal assistance” simply highlighted all this once more, and it even eschewed the previous declaration’s references to the FATF or anything smacking of coordination with the West.

And while de-dollarization was again bandied about, BRICS countries remain keen on access to offshore dollars. Moreover, several of the bloc’s newly admitted states have deeply problematic records when it comes to money laundering and illicit financial flows. This is especially true of the UAE — an aggressively growing offshore financial center with dense layers of secrecy, and which the FATF placed on its “grey list” due to “strategic deficiencies” in its efforts to counter money laundering.

Given all this, what are the chances of BRICS-initiated reform in this area? Realistically, the only reason they would take action is because they care about their own regime stability. Though offshore mechanisms may seem like useful short-term levers, their long-term impact is likely to have troubling consequences for their economies. In time, offshore finance supercharges inequality and begets financial instability, which can lead to the toppling of regimes. Brazil experienced this first-hand in the 1982 financial crisis, which had a significant offshore component.

Of course, Russia’s dependence on offshore financial facilities to circumvent sanctions means it can be written off as reformer. But one would hope that some of the others might belatedly come to see an enlightened self-interest in going beyond their rhetoric.

For now, however, even this seems highly unlikely as, in the immediate future, the availability of offshore services continues to come in handy, while their negative impact on domestic inequality remain largely hidden from public view.

Besides, fighting domestic inequality isn’t really a major concern for many of these governments anyway.



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Questions mount over latest migrant tragedy in Mediterranean

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Anger is growing over the handling of a migrant boat disaster off Greece last week that has become one of the biggest tragedies in the Mediterranean in years. The calamity is dominating the country’s political agenda a week ahead of snap elections.

The Hellenic Coast Guard is facing increasing questions over its response to the fishing boat that sank off Greece’s southern peninsula on Wednesday, leading to the death of possibly hundreds of migrants. Nearly 80 people are known to have perished in the wreck and hundreds are still missing, according to the U.N.’s migration and refugee agencies.

Critics say that the Greek authorities should have acted faster to keep the vessel from capsizing. There are testimonies from survivors that the Coast Guard tied up to the vessel and attempted to pull it, causing the boat to sway, which the Greek authorities strongly deny.

The boat may have been carrying as many as 750 passengers, including women and children, according to reports. Many of them were trapped underneath the deck in the sinking, according to Frontex, the European Border and Coast Guard Agency. “The ship was heavily overcrowded,” Frontex said.  

About 100 people are known to have survived the sinking. Authorities continued to search for victims and survivors over the weekend.

The disaster may be “the worst tragedy ever” in the Mediterranean Sea, European Commissioner for Home Affairs Ylva Johansson said on Friday. She said there has been a massive increase in the number of migrant boats heading from Libya to Europe since the start of the year.

Frontex said in a statement on Friday that no agency plane or boat was present at the time of the capsizing on Wednesday. The agency said it alerted the Greek and Italian authorities about the vessel after a Frontex plane spotted it, but the Greek officials waved off an offer of additional help.

Greece has been at the forefront of Europe’s migration crisis since 2015, when hundreds of thousands of people from the Middle East, Asia and Africa traveled thousands of miles across the Continent hoping to claim asylum.

Migration and border security have been key issues in the Greek political debate. Following Wednesday’s wreck, they have jumped to the top of the agenda, a week before national elections on June 25.

Greece is currently led by a caretaker government. Under the conservative New Democracy administration, in power until last month, the country adopted a tough migration policy. In late May, the EU urged Greece to launch a probe into alleged illegal deportations.

New Democracy leader Kyriakos Mitsotakis, who is expected to return to the prime minister’s office after the vote next Sunday, blasted criticism of the Greek authorities, saying it should instead be directed to the human traffickers, who he called “human scums.”

“It is very unfair for some so-called ‘people in solidarity’ [with refugees and migrants] to insinuate that the [Coast Guard] did not do its job. … These people are out there … battling the waves to rescue human lives and protect our borders,” Mitsotakis, who maintains a significant lead in the polls, said during a campaign event in Sparta on Saturday.

The Greek authorities claimed the people on board, some thought to be the smugglers who had arranged the boat from Libya, refused assistance and insisted on reaching Italy. So the Greek Coast Guard did not intervene, though it monitored the vessel for more than 15 hours before it eventually capsized.

“What orders did the authorities have, and they didn’t intervene because one of these ‘scums’ didn’t give them permission?” the left-wing Syriza party said in a statement. “Why was no order given to the lifeboat … to immediately assist in a rescue operation? … Why were life jackets not distributed … and why Frontex assistance was not requested?”

Alarm Phone, a network of activists that helps migrants in danger, said the Greek authorities had been alerted repeatedly many hours before the boat capsized and that there was insufficient rescue capacity.

According to a report by WDR citing migrants’ testimonies, attempts were made to tow the endangered vessel, but in the process the boat began to sway and sank. Similar testimonies by survivors appeared in Greek media.

A report on Greek website news247.gr said the vessel remained in the same spot off the town of Pylos for at least 11 hours before sinking. According to the report, the location on the chart suggests the vessel was not on a “steady course and speed” toward Italy, as the Greek Coast Guard said.

After initially saying that there was no effort to tow the boat, the Hellenic Coast Guard said on Friday that a patrol vessel approached and used a “small buoy” to engage the vessel in a procedure that lasted a few minutes and then was untied by the migrants themselves.

Coast Guard spokesman Nikos Alexiou defended the agency. “You cannot carry out a violent diversion on such a vessel with so many people on board, without them wanting to, without any sort of cooperation,” he said.

Alexiou said there is no video of the operation available.

Nine people, most of them from Egypt, were arrested over the capsizing, charged with forming a criminal organization with the purpose of illegal migrant trafficking, causing a shipwreck and endangering life. They will appear before a magistrate on Monday, according to Greek judicial authorities.

“Unfortunately, we have seen this coming because since the start of the year, there was a new modus operandi with these fishing boats leaving from the eastern part of Libya,” the EU’s Johansson told a press conference on Friday. “And we’ve seen an increase of 600 percent of these departures this year,” she added.

Greek Supreme Court Prosecutor Isidoros Dogiakos has urged absolute secrecy in the investigations being conducted in relation to the shipwreck.

Thousands of people took to the streets in different cities in Greece last week to protest the handling of the incident and the migration policies of Greece and the EU. More protests were planned for Sunday.



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Heads roll in Ukraine graft purge, but defense chief Reznikov rejects rumors he’s out

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KYIV — Heads are rolling in President Volodymyr Zelenskyy’s expanding purge against corruption in Ukraine, but Defense Minister Oleksii Reznikov is denying rumors that he’s destined for the exit — a move that would be viewed as a considerable setback for Kyiv in the middle of its war with Russia.

Two weeks ago, Ukraine was shaken by two major corruption scandals centered on government procurement of military catering services and electrical generators. Rather than sweeping the suspect deals under the carpet, Zelenskyy launched a major crackdown, in a bid to show allies in the U.S. and EU that Ukraine is making a clean break from the past.

Tetiana Shevchuk, a lawyer with the Anti-Corruption Action Center, a watchdog, said Zelenskyy needed to draw a line in the sand: “Because even when the war is going on, people saw that officials are conducting ‘business as usual’. They saw that corrupt schemes have not disappeared, and it made people really angry. Therefore, the president had to show he is on the side of fighting against corruption.”

Since the initial revelations, the graft investigations have snowballed, with enforcers uncovering further possible profiteering in the defense ministry. Two former deputy defense ministers have been placed in pre-trial detention.

Given the focus on his ministry in the scandal, speculation by journalists and politicians has swirled that Reznikov — one of the best-known faces of Ukraine’s war against the Russian invaders — is set to be fired or at least transferred to another ministry.

But losing such a top name would be a big blow. At a press conference on Sunday, Reznikov dismissed the claims about his imminent departure as rumors and said that only Zelenskyy was in a position to remove him. Although Reznikov admits the anti-corruption department at his ministry failed and needs reform, he said he was still focused on ensuring that Ukraine’s soldiers were properly equipped.

“Our key priority now is the stable supply of Ukrainian soldiers with all they need,” Reznikov said during the press conference.

Despite his insistence that any decision on his removal could only come from Zelenskyy, Reznikov did still caution that he was ready to depart — and that no officials would serve in their posts forever.

The speculation about Reznikov’s fate picked up on Sunday when David Arakhamia, head of Zelenskyy’s affiliated Servant of the People party faction in the parliament, published a statement saying Reznikov would soon be transferred to the position of minister for strategic industries to strengthen military-industrial cooperation. Major General Kyrylo Budanov, current head of the Military Intelligence Directorate, would head the Ministry of Defense, Arakhamia said.

However, on Monday, Arakhamia seemed to row back somewhat, and claimed no reshuffle in the defense ministry was planned for this week. Mariana Bezuhla, deputy head of the national security and defense committee in the Ukrainian parliament, also said that the parliament had decided to postpone any staff decisions in the defense ministry as they consider the broader risks for national defense ahead of another meeting of defense officials at the U.S. Ramstein air base in Germany and before an expected upcoming Russian offensive.  

Zelenskyy steps in

The defense ministry is not the only department to be swept up in the investigations. Over the first days of February, the Security Service of Ukraine, State Investigation Bureau, and Economic Security Bureau conducted dozens of searches at the customs service, the tax service and in local administrations. Officials of several different levels were dismissed en masse for sabotaging their service during war and hurting the state.     

“Unfortunately, in some areas, the only way to guarantee legitimacy is by changing leaders along with the implementation of institutional changes,” Zelenskyy said in a video address on February 1. “I see from the reaction in society that people support the actions of law enforcement officers. So, the movement towards justice can be felt. And justice will be ensured.” 

Yuriy Nikolov, founder of the Nashi Groshi (Our Money) investigative website, who broke the story about the defense ministry’s alleged profiteering on food and catering services for soldiers in January, said the dismissals and continued searches were first steps in the right direction.

“Now let’s wait for the court sentences. It all looked like a well-coordinated show,” Nikolov told POLITICO.  “At the same time, it is good that the government prefers this kind of demonstrative fight against corruption, instead of covering up corrupt officials.”

Still, even though Reznikov declared zero tolerance for corruption and admitted that defense procurement during war needs reform, he has still refused to publish army price contract data on food and non-secret equipment, Nikolov said.

During his press conference, Reznikov insisted he could not reveal sensitive military information during a period of martial law as it could be used by the enemy. “We have to maintain the balance of public control and keep certain procurement procedures secret,” he said.

Two deputies down

Alleged corruption in secret procurement deals has, however, already cost him two of his deputies.  

Deputy Defense Minister Vyacheslav Shapovalov, who oversaw logistical support for the army, tendered his resignation in January following a scandal involving the purchase of military rations at inflated prices. In his resignation letter, Shapovalov asked to be dismissed in order “not to pose a threat to the stable supply of the Armed Forces of Ukraine as a result of a campaign of accusations related to the purchase of food services.”

Another of Reznikov’s former deputies, Bohdan Khmelnytsky, who managed defense procurement in the ministry until December, was also arrested over accusations he lobbied for a purchase of 3,000 poor-quality bulletproof vests for the army worth more than 100 million hryvnias (€2.5 million), the Security Service of Ukraine reported.  If found guilty he faces up to eight years in prison. The director of the company that supplied the bulletproof vests under the illicit contract has been identified as a suspect by the authorities and now faces up to 12 years in prison if found guilty.

Both ex-officials can be released on bail.  

Another unnamed defense ministry official, a non-staff adviser to the deputy defense minister of Ukraine, was also identified as a suspect in relation to the alleged embezzlement of 1.7 billion hryvnias (€43 million) from the defense budget, the General Prosecutors Office of Ukraine reported.  

When asked about corruption cases against former staffers, Reznikov stressed people had to be considered innocent until proven guilty.

Reputational risk

At the press conference on Sunday, Reznikov claimed that during his time in the defense ministry, he managed to reorganize it, introduced competition into food supplies and filled empty stocks.

However, the anti-corruption department of the ministry completely failed, he admitted. He argued the situation in the department was so unsatisfactory that the National Agency for the Prevention of Corruption gave him an order to conduct an official audit of employees. And it showed the department had to be reorganized.

“At a closed meeting with the watchdogs and investigative journalists I offered them to delegate people to the reloaded anti-corruption department. We also agreed to create a public anti-corruption council within the defense ministry,” Reznikov said.

Nikolov was one of the watchdogs attending the closed meeting. He said the minister did not bring any invoices or receipts for food products for the army, or any corrected contract prices to the meeting. Moreover, the minister called the demand to reveal the price of an egg or a potato “an idiocy” and said prices should not be published at all, Nikolov said in a statement. Overpriced eggs were one of the features of the inflated catering contracts that received particular public attention.

Reznikov instead suggested creating an advisory body with the public. He would also hold meetings, and working groups, and promised to provide invoices upon request, the journalist added.

“So far, it looks like the head of state, Zelenskyy, has lost patience with the antics of his staff, but some of his staff do not want to leave their comfort zone and are trying to leave some corruption options for themselves for the future,” Nikolov said.

Reznikov was not personally accused of any wrongdoing by law enforcement agencies.

But the minister acknowledged that there was reputational damage in relation to his team and communications. “This is a loss of reputation today, it must be recognized and learned from,” he said. At the same time, he believed he had nothing to be ashamed of: “My conscience is absolutely clear,” he said.



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To go or not to go? Von der Leyen’s COVID committee dilemma

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There won’t be any severed horses’ heads but the European Commission president may soon receive an offer that she can’t refuse — at least without causing an institutional dust-up.

Last week, the coordinators of the European Parliament’s special committee on COVID-19 voted to invite Ursula von der Leyen to appear in front of the panel to answer their questions on vaccine procurement. 

It’s not a courtesy call. EU lawmakers want to shine a light on exactly what happened during those hectic months at the height of the pandemic in 2021, when the bloc was frantically searching for vaccine doses to protect its population from the coronavirus.

The committee’s chair, Belgian MEP Kathleen Van Brempt has said she wants full transparency on the “preliminary negotations” leading up to vaccine purchases — a reference to the Commission president’s unusual personal role in negotiating the EU’s biggest vaccine contract, signed with Pfizer and its partner BioNTech. An appearance would refocus attention on von der Leyen’s highly contentious undisclosed text messages with Pfizer’s chief executive.

It’s a topic von der Leyen has so far fiercely resisted opening up about — but the COVI committee invite could put the Commission president in a sticky situation.

All bark, no bite? 

On the face of it, von der Leyen could just say no. European Parliament committees don’t have many formal powers. They have no rights to compel witnesses to appear or to get them to tell the truth — and there’s no recourse if someone refuses to appear or lies in front of the committee.

Indeed, Pfizer’s Chief Executive Albert Bourla — with whom von der Leyen is reported to have conducted personal negotiations via text message — thumbed his nose at the committee more than once, and sent one of his employees instead.

Even when the Parliament does reel in a big name, the performance can be lackluster — like in the case of Facebook CEO Mark Zuckerberg who agreed to show up but then avoided answering most questions. That’s a far cry from how the U.S. Senate’s commerce and judiciary committees grilled the tech titan for hours. 

And the Commission president has already shown a penchant for being evasive when it comes the Pfizer negotiations, earning the Commission a verdict of maladministration from the European Ombudsman for its lack of transparency.

However, the fact that von der Leyen is an inter-institutional figure gives the Parliament more bite than with external guests — and may help tip the balance in the committee’s favour.

First, there’s precedent. While the Commission President usually appears in front of all MEPs at a plenary session such as in the annual State of the European Union speech, Commission presidents have appeared in front of committees in the past. Von der Leyen’s predecessor, Jean-Claude Juncker, for example, appeared in front of a special committee to answer uncomfortable questions over his role in making Luxembourg a tax haven. 

Secondly, the European Parliament is tasked with overseeing the EU’s budget. With billions of euros spent in the joint purchase of the vaccines, and part of those funds coming straight from the EU’s pockets, it’s hard to argue that there aren’t important financial considerations at play, and ones that the elected representatives of the EU should be allowed to scrutinize.

Then there’s Article 13 of the EU’s founding treaty, which calls for “mutual sincere cooperation” between the EU’s institutions. It’s a point that’s repeated in an inter-institutional agreement between the Parliament and the Commission, which states that the EU’s executive should also provide lawmakers with confidential information when it’s requested — like, for example, the contents of certain text messages.

The Commission has so far been tight-lipped. When asked last week about Ursula von der Leyen’s upcoming invite to the COVID-19 committee, a Commission spokesperson said “No such invitation has been received.”

Don’t shoot the messenger 

And, in fact, it’s now up to European Parliament president Roberta Metsola to decide whether the invite will ever reach von der Leyen’s hands. The request is on her desk and, per protocol, any invitation to appear must come from the president’s office.

Metsola, who belongs to the same political group as von der Leyen (the center-right European People’s Party), confirmed to POLITICO that she has received a letter from the COVI committee and “will look at it.” “I cannot pre-empt what my reply will be to that committee,” she said.

As long as proper form is followed, Metsola should “pass on the message,” said Emilio De Capitani, a former civil servant who for 14 years was secretary of the European Parliament’s civil liberties committee (LIBE).

“The question isn’t abusive,” said De Capitani.  

In theory, von der Leyen, who was elected to her role by the Parliament, relies on its mandate to stay there.

“There’s nothing strange about meeting with an organ of the Parliament,” the former Parliamentary official added. “Then it will be up to von der Leyen to ask whether the hearing is in public or, behind closed doors. She could also choose to address it in plenary.” 

For political operatives such as Metsola and von der Leyen, the optics of their actions are likely to play a major role in any decision. And this invite comes at the same time as the biggest scandal in the European Parliament’s history.

An assistant for one of the MEPs in the COVI committee said the drive for transparency produced by the unfolding “Qatargate” influence scandal gave extra force to the invite.

“It wouldn’t have had the same result without Qatargate,” said the assistant. “If she says no, it will only make the problem worse.” 

Not everyone agrees. Detractors say the Parliament has lost its moral standing. And that even if none of the MEPs in the COVID-19 committee are implicated, the institution is still weakened on the whole.

“I think this [Qatargate] will make it less likely for von der Leyen to cooperate with the Parliament,” said Camino Mortera-Martinez, head of the Brussels office at the think tank Centre for European Reform. She said the Commission president is riding high after weathering a pandemic, and now the war in Ukraine.

“The European Parliament in theory could force von der Leyen to appear by threatening to dismiss her — but how can they do that in the current climate?”

This article was updated Friday morning to include comment from Roberta Metsola.

Eddy Wax contributed reporting.



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Chairman FAO: Western powers pressure China’s UN food boss to grip global hunger crisis

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ROME, Italy — The Chinese head of a crucial U.N. food agency has come under intense scrutiny by Western powers, who accuse him of failing to grip a global hunger crisis exacerbated by Russia’s war in Ukraine.

Qu Dongyu, director general of the Food and Agriculture Organization, has alienated the Western powers that are the agency’s main backers with his technocratic leadership style and connections to Beijing that, in their view, have damaged its credibility and capability to mitigate the crisis.

POLITICO has interviewed more than a dozen U.N. officials and diplomats for this article. The critical picture that emerges is of a leader whose top-down management style and policy priorities are furthering China’s own agenda, while sidelining the U.N.’s Sustainable Development Goals.

Russia’s invasion of Ukraine in February was met with weeks of eerie silence at the FAO, and although the messaging has since changed, Qu’s critics say FAO should be showing stronger political leadership on the food crisis, which threatens to tip millions more people into hunger.

“Nobody actually takes him seriously: It’s not him; it’s China,” said one former U.N. official. “I’m not convinced he would make a single decision without first checking it with the capital.”

In his defense, Qu and his team say a U.N. body should not be politicized and that he’s delivering on the FAO’s analytical and scientific mandate.

Chairman FAO

Qu Dongyu was elected in 2019 to run the Rome-based agency, handing China a chance to build international credibility in the U.N. system, and punishing a division between the EU and the U.S after they backed competing candidates who lost badly. The election was clouded by allegations of coercion and bribery against China.

Now, as he prepares for a likely reelection bid next year to run FAO until 2027, Qu — who describes himself as a conflict-averse “humble, small farmers’ son” — is under intensifying scrutiny over his leadership during the crisis.

After three years of largely avoiding the headlines, Qu drew criticism from countries like France and the U.S. for his sluggish and mealy-mouthed response to Russia’s invasion of Ukraine, a massive exporter of food to developing countries.

The EU and U.S. forced an emergency meeting of the FAO’s Council in the spring in order to pressure the FAO leadership into stepping up to the plate, with Ukraine demanding he rethink his language of calling it a “conflict” and not a war. The communications division was initially ordered to keep schtum about the war and its likely impacts on food supply chains. In May, Ukrainians protested outside FAO HQ in Rome demanding Russia be kicked out of the organization.

At a meeting of the FAO Council in early December, countries like France, Germany and the U.S. successfully pushed through yet another demand for urgent action from FAO’s leadership, requesting fresh analysis of impact of Russia’s war on global hunger, and a full assessment of the damage done to Ukraine’s vast farm system.

China has not condemned Russia outright for invading Ukraine, while the EU and the U.S. use every opportunity in the international arena to slam Moscow for its war of aggression: Those geopolitical tensions are playing out across the FAO’s 194 member countries. Officials at the agency, which has $3.25 billion to spend across 2022 and 2023, are expected to act for the global good — and not in the narrow interest of their countries.

Qu is said still to be furious about the confrontation: “[He] is still upset about that, that really annoyed him,” said one ambassador to the FAO. “He sees the EU as an entity, a player within the FAO that is obstructing his vision.”

Qu featured on a TV screen inside the FAO headquarters in Rome | Eddy Wax/POLITICO

Though Qu has now adapted his language and talks about the suffering being caused by Russia’s war, some Western countries still believe FAO should respond proactively to the food crisis, in particular to the agricultural fallout from Russia’s invasion of Ukraine. The FAO’s regular budget and voluntary funds are largely provided by EU countries, the U.S. and allies like Japan, the U.K. and Canada. The U.S. contributes 22 percent of the regular budget, compared to China’s 12 percent.

Qu is determined to stick to the mandate of the FAO to simply provide analysis to its members — and to steer clear of geopolitics.

“I’m not [a] political figure; I’m FAO DG,” he told POLITICO in October, in an encounter in an elevator descending from FAO’s rooftop canteen in Rome.

FAO’s technocratic stance is defended by other members of Qu’s top team, such as Chief Economist Máximo Torero, who told POLITICO in May: “You are in a war. Some people think that we need to take political positions. We are not a political entity that is the Security Council — that’s not our job.”

Apparatchik

Qu can hardly be said to be apolitical, as he is a former vice-minister of agriculture and rural affairs of the Chinese Communist Party.

On top of his political background he has expertise in agriculture. He was part of a team of scientists that sequenced the potato genome while he was doing a PhD at Wageningen University in the Netherlands. In an email to POLITICO his professor, Evert Jacobsen, remembered Qu’s “enthusiasm about his country,” as well as is “strategic thinking” and “open character.”

Yet Western diplomats worry that many of the policy initiatives he has pushed through during his tenure map onto China’s foreign policy goals.

They say that the U.N. Sustainable Development Goals have been eclipsed by his own initiatives, such as his mantra of the Four Betters (production, nutrition, environment, life), and Chinese-sounding plans from “One Country, One Priority Product” to his flagship Hand-in-Hand Initiative.

Some Western diplomats say these bear the hallmarks of China’s Global Development Initiative, about which Qu has tweeted favorably.

Detractors say these are at best empty slogans, and at worst serve China’s foreign policy agenda. “If the countries that are on the receiving end don’t exercise agency you need to be aware that these are policies that first and foremost are thought to advance China, either materially or in terms of international reputation, or in terms of diplomacy,” said Francesca Ghiretti, an analyst at the Mercator Institute for China Studies (MERICS).

Insiders say he’s put pressure on parts of the FAO ecosystem that promote civil society engagement or market transparency: two features that don’t go down well in Communist China. The former U.N. official said Qu had subjected the G20 market transparency dashboard AMIS, housed at FAO, to “increased pressure and control,” causing international organizations to step in to protect its independence earlier this year.

The diplomat said Qu was trying to suffocate the Committee on World Food Security, which invites civil society and indigenous people’s groups into FAO’s HQ and puts them on a near-equal footing with countries. “What has he accomplished in two-plus years? You can get Chinese noodles in the cafeteria,” they said.

Flags at the entrance to the FAO headquarters in Rome | Eddy Wax/POLITICO

But at a U.N. agency that has historically been deeply dysfunctional, Qu is popular among staff members.

“Mr. Qu Dongyu brought a new spirit on how to treat staff and established trust and peace between staff and management,” said one former FAO official.

Even his sharpest critics concede that he has done good things during his tenure. He made a point of shaking every staff member’s hand upon his election, even turning up occasionally unannounced to lunch with them in the canteen that he’s recently had refurbished. There’s also widespread appreciation among agriculture policymakers of the high quality of economic work turned out by FAO, and support for his climate change and scientific agenda.

“The quality of data FAO produces is very good and it’s producing good policy recommendations,” one Western diplomat acknowledged.

FAO play

Three years into his term, there’s a much stronger Chinese presence at FAO and Chinese officials occupy some of the key divisions, covering areas such as plants & pesticides, land & water, a research center for nuclear science and technology in agriculture, and a division on cooperation between developing countries. A vacant spot atop the forestry division is also expected to go to a Chinese candidate.

Experts say those positions are part of a strategy. “China tries to get the divisions where it can grow its footprint in terms of shaping the rules, shaping the action and engaging more broadly with the Global South,” said Ghiretti, the MERICS analyst.

The EU Commission is closely monitoring trends in staff appointments and data collection. “He’s hired a lot of young Chinese people who will fill [the] ranks later,” said an EU diplomat.

Mandarin is heard more than before in the corridors of the Rome HQ, a labyrinthine complex built in the 1930s by Fascist dictator Benito Mussolini to house its ministry of overseas colonies.

Western diplomats and staffers past and present describe Qu as a poor communicator, who displays little care about engaging with or being accountable to countries and who tends to leave meetings after delivering perfunctory remarks, all of which leaves space for rumor and suspicion to grow.

Even those who acknowledge that Qu has made modest achievements at the helm of FAO still see his leadership style as typical of a Chinese official being kept on a tight leash by Beijing. The EU and U.S. criticized Qu’s move to push back an internal management review that was meant to be conducted by independent U.N. inspectors, and will now likely not emerge until after the next election.

And although FAO is still receiving bucketloads of Western funding, its fundraising drive specifically for rural families and farmers in war-torn Ukraine is still $100 million short of its $180 million target, a pittance in an international context — especially amid deafening warnings of a global food supply crisis next year. 

That’s partly because the U.S. and EU prefer to work bilaterally with Kyiv rather than going through FAO. “This is the time for FAO to be fully funded,” said Pierre Vauthier, a French agronomist who runs the FAO operation in Ukraine. “We need additional money.”

A plaque outside Qu’s fourth floor office at the FAO headquarters in Rome | Eddy Wax/POLITICO

There’s no love lost on Qu’s side, either. In June, he went on a unscripted rant accusing unnamed countries of being obsessed with money, apparently in light of criticism of his flagship Hand-in-Hand Initiative.

“You are looking at money, I’m looking to change the business model because I’m a farmer of small poor, family. You from the rich countries, you consider the money first, I consider wisdom first. It’s a different mentality,” Qu said, before complaining about his own salary being cut.

Asked repeatedly, Qu did not confirm to POLITICO whether he would stand for a second four-year term, but traditionally FAO chiefs serve at least twice and he is widely expected to run. Nominations officially opened December 1. The question is whether the U.S., EU or a developing nation will bother trying to run against him, when his victory looks all but inevitable.

There’s competition for resources between the World Food Programme (WFP), a bastion of U.S. development power, and FAO. A Spaniard, Alvaro Lario, was recently appointed to run the third Rome-based U.N. food agency, the International Fund for Agricultural Development, while WFP’s chief David Beasley is expected to be replaced by another American next year.

In any case, the countries that Qu will likely count on to be re-elected are not so interested in the political machinations of the West or its condemnation of the Russia’s war in Ukraine, which it seeks to impress upon FAO’s top leadership.

“Our relations with the FAO are on a technical basis and not concerned by the political positions of the FAO. What interests us is that the FAO supports us to modernize our agriculture,” said Cameroon’s Agriculture Minister Gabriel Mbairobe.

Other African countries defend FAO’s recent track record: “They’ve been very, very active, let’s be honest,” said Yaya A.O. Olaniran, Nigeria’s ambassador to the FAO. “It’s easy to criticize.”

This story has been updated.



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