Gaza, the World’s Most Dangerous Place for Children & more – 28th Nov 2023

Saluton from BA! This is Rorshok Multilateral Update from the 28th of November twenty twenty-three A summary of what's going down in the world's major multilateral institutions.

UNICEF Executive Director Catherine Russell has declared the Gaza Strip as the "most dangerous place in the world to be a child." On Wednesday the 22nd she reported that over 5,300 Palestinian children have been killed since the attack of Palestinian militants from Hamas. Israel has directed its retaliation mainly against Hamas in Gaza. Russell emphasized the devastating impact of violence on Gaza's children, which she described as catastrophic, indiscriminate, and disproportionate. She urged for an end to the fighting and humanitarian access to the region to prevent further loss of lives. Israel has agreed to a four-day ceasefire to allow humanitarian aid and hostage release, but tensions persist.

Next up, European Council President Charles Michel visited Hungary on Monday the 27th of November, amid tensions over rule-of-law concerns. Viktor Orbán, the Hungarian Prime Minister, recently threatened to disrupt the EU's policy towards Ukraine which includes the allocation of 50 billion euros towards the war-torn country, unless there is a "strategic discussion" on the approach to Ukraine. Orbán also linked Europe's support for Ukraine to that of the United States. Hungary has been expecting to receive 13 billion euros in EU funds as part of the Recovery and Resilience Fund, pending a decision on rule-of-law reforms. Some EU countries are considering bilateral deals for military aid if Hungary uses its veto on Ukraine, but this could undermine EU unity. Members of the European Parliament have called on the Commission not to release the frozen funds until Hungary meets set conditions regarding the implementation of reforms on its judicial system, and not yield to Budapest’s leveraging of the issue of Ukraine.

Moving on, according to David Arakhamia, leader of Ukraine's Servant of the People party and head of the Ukrainian delegation in the talks, Russia reportedly offered to end its invasion of Ukraine in April twenty twenty-two if the country abandoned its ambition to join NATO and adopted a neutral position. However, Ukraine's constitution currently commits it to NATO membership, making such a shift toward neutrality a constitutional change. Arakhamia stated that Ukraine lacked trust in Russia's sincerity and believed that security guarantees were necessary. Former UK Prime Minister Boris Johnson's visit to Kyiv in April twenty twenty-two influenced the potential cease-fire, with Johnson advising against signing any agreement with Russia and encouraging Ukraine to continue fighting. Talks stalled when Russian troops withdrew from Kyiv, revealing alleged war crimes.

The International Monetary Fund (or IMF) is considering increasing its financial support for Egypt due to the economic impact of the war in neighboring Gaza. Last month, Egypt was in discussions with the IMF regarding the possibility of raising its $3 billion dollar loan to over $5 billion. Kristalina Georgieva, the IMF Managing Director, mentioned that they are "seriously considering" augmenting Egypt's bailout during the Asia-Pacific Economic Cooperation summit in San Francisco. The conflict between Israel and Hamas has devastated Gaza's population and economy, and affected neighboring countries like Egypt, Lebanon, and Jordan due to the loss of tourism and higher energy costs. Egypt, the IMF's second-largest debtor, has seen a significant increase in its international debt over the past decade, reaching $164 billion as of September twenty twenty-three. The IMF has urged Egypt to implement fiscal reforms, including floating its currency.

In other news… Niger's military government has requested the West African regional court to lift sanctions imposed by its neighbors and the international community following a coup that ousted President Mohamed Bazoum in July. The Economic Community of West African States (or ECOWAS) imposed strict economic sanctions after the coup, which have caused severe hardships. The sanctions included border closures, suspension of financial transactions with West African countries, freezing of Niger's assets in external banks, and the withholding of hundreds of millions of dollars in aid. The government argued that these sanctions have harmed all sectors of Niger’s society, impacting children's education, healthcare, and businesses. The court is set to reconvene on the 7th of December to consider the matter further.

Still on the African continent, the Chair of the African Union (or AU) Azali Assoumani has emphasized the substantial need for internal investment within African nations at the G20 Compact with Africa (or CwA) summit in Berlin. While investment from G20 countries in African nations has exceeded pre-pandemic levels, it remains far below the peak of nearly $53 billion dollars reached in the twenty seventeen-twenty eighteen fiscal year. The CwA initiative aims to boost private investment in Africa by bringing together thirteen African members with representatives from G20 major economies, the IMF, the World Bank, and the African Development Bank. Assoumani defended Africa's acceptance of investment from China and called for more "positive competition" from Europe. He highlighted Africa's vast potential, including its young population and abundant natural resources. The summit featured eighteen African leaders and around 800 companies.

According to a G20 report, Multilateral development banks (or MDBs), such as the World Bank, may require an additional $100 billion dollars in capital to combat climate change and address geopolitical challenges. While MDBs can leverage existing capital, expand guarantees, and boost their lending capacity, eventually, they will need additional equity. Developing countries and private investors can cover part of the funding, but MDBs may still require $200 billion annually. To meet this demand, MDBs would need to triple their $100 billion dollar commitments made in twenty nineteen. These institutions are actively exploring ways to increase their capacity through measures like reducing minimum equity requirements and using hybrid capital, but navigating domestic politics and securing capital increases will be challenging.

The International Energy Agency (or IEA) has issued a report urging the oil and gas industry to make critical decisions about its role in the global energy transition. The report, released ahead of the COP28, outlines how the industry can align its emissions with the Paris Agreement's goals. It predicts that even with current policies, oil and gas demand will peak by twenty thirty, but rapid transition could steepen the decline. The industry faces increased risk and lower profitability as the energy transition progresses, with valuation potentially falling by 60% in a 1.5 Celsius scenario. However, it can play a vital role in scaling up clean energy technologies such as carbon capture, offshore wind, and hydrogen. To do so, it would need to allocate 50% of its capital expenditures to clean energy projects by twenty thirty.

The EU and the Mercosur bloc of South American nations are intensifying efforts to finalize a long-delayed trade treaty by early December. This move comes as both sides seek to capitalize on a moment of converging political interests. Negotiations over the landmark deal, known as the "cows for cars" agreement between the EU and the Mercosur bloc, have been ongoing for over two decades. The blocs reached an agreement in twenty nineteen but was derailed when the EU demanded additional environmental commitments from Mercosur before signing. However, recent political shifts and concerns have brought fresh uncertainty to the process, particularly with Argentina's new president-elect, Javier Milei, who has previously expressed intentions to withdraw from Mercosur. Nonetheless, officials in Brussels are hopeful of reaching a deal, especially after the collapse of the EU's trade deal with Australia, which has spurred momentum on both sides.

The World Health Organization (or WHO) has been monitoring a mysterious childhood illness in China since mid-October. China's National Health Commission reported a rise in respiratory diseases, mainly affecting children. Chinese authorities attribute this increase to the easing of COVID-19 restrictions, the arrival of winter, and the presence of known pathogens such as influenza, Mycoplasma pneumonia, respiratory syncytial virus (or RSV), and COVID-19. The WHO conducted an urgent investigation, finding an increase in child outpatient visits and hospital admissions due to Mycoplasma pneumonia since May, and RSV, adenovirus, and influenza since October. Chinese health authorities have not detected unusual pathogens or clinical presentations, and hospitals can manage the patient load. Enhanced surveillance for respiratory illnesses has been in place since mid-October, contributing to increased detection and reporting of respiratory illnesses in children.

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