ESADEgeo Daily Digest, 20/07/2018

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Foreign Policy – Keith Johnson / With Trump going soft on Nord Stream, Congress moves to kill the pipeline

  • Lawmakers in the US Congress are rolling out a new slate of sanctions that could kill the Nord Stream 2 pipeline and boost US energy exports to Europe.
  • Republican Senators John Barrasso and Cory Gardner introduced a bill that would make mandatory US economic sanctions on companies building the Nord Stream pipeline. The bill also seeks to streamline the export of more US natural gas to allies such as Japan and members of NATO.
  • Separately, Democratic Sen. Bob Menendez said Thursday that he will introduce a new bill to put teeth into the existing but still unused sanctions on Russian energy.
  • “Nord Stream 2 has now advanced to the stage when it could be stopped only by US sanctions,” said Vaclav Bartuska, the energy ambassador for the Czech Republic. “Otherwise it’s going to be built.”

Financial Times – Najmeh Bozorgmehr / Trump sanctions bolster influence of Iran’s Revolutionary Guards

  • The US decision in May to cease implementation of the Iran nuclear deal (JCPOA) has strengthened the hand of hardline Iranian factions, in the clerical and judicial establishment as well as in the Revolutionary Guards, who always said it was a mistake to strike a deal with the US.
  • Iranian President Hassan Rouhani has had no choice but to get closer to the Guards. His change of tone was evident during a recent visit to Switzerland, when he raised the possibility of Iran disrupting the transit of tankers in the Gulf if Tehran was hit with oil sanctions.
  • This prompted Brigadier General Qasem Soleimani, commander of the Guards’ elite Quds Force, to praise Rouhani for talking “like the man I knew before”, even offering to kiss the president’s hand.
  • For now, Iran’s supreme leader, Ayatollah Ali Khamenei, appears to be backing Rouhani to stay in power in order to maintain stability. But he may not allow the president to pursue another international deal.
  • Foreign Policy – Mahsa Rouhi / Iran hawks should be careful what they wish for

South China Morning Post – Jason Furman / The evidence is clear: anti-immigration is bad for economic growth

  • The toxic nationalism that is spreading in many of the world’s advanced economies will exacerbate the economic slowdown that fuelled its emergence.
  • The evidence on this issue is clear: immigration makes a strong contribution to economic growth. Moreover, immigration is more necessary than ever, because of population ageing and lower birth rates.
  • Immigrants boost per capita gross domestic product by increasing productivity. The reason is that immigrants are much more likely to be entrepreneurial and start new businesses.
  • In addition, the evidence suggests that immigrants do not reduce wages for native-born workers. In fact, it is more likely that immigrants increase wages overall.
  • Turning the current vicious circle into a virtuous one will depend, at least in part, on making immigration more compatible with inclusive forms of nationalism.

The Economist / As inequality grows, so does the political influence of the rich

  • In a recent study, Derek Epp and Enrico Borghetto find that political agendas in Europe have become less focused on redistribution even as inequality has risen. Though both inequality and public concern about it are increasing, politicians seem less interested in grappling with the problem.
  • Rather than increasing pressure on politicians to do something about skewed income distributions, rising inequality might instead boost the power of the rich, thus enabling them to counter the popular will. Epp and Borghetto call this phenomenon the “negative agenda power” of the rich.
  • An analysis of US campaign donations carried out by Lee Drutman found that fewer than 30,000 people account for a quarter of all national political donations from individuals and for more than 80% of the money raised by political parties.
  • Walter Scheidel argues that, across human history, inequality inevitably rises until checked by disasters like wars or revolutions. However, this may be too pessimistic. The rich are not all-powerful, or uniform in their determination to keep distributional policies off the agenda.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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