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Australia & Pacific
It’s World Book Day! We’re big readers here at GZERO, and we suspect you might be as well. Alas, literature just doesn’t have the caché it once did, but in some ways we are living in a golden age of literacy. At no point ever in human history have so many people been able to read and write.
Some 87% of all people above age 15 were able to read as of 2022, up from 67% as recently as 1979. That’s a big bump, but wind the clock back a bit more to see just how far we’ve come. In 1820, the World Economic Forum estimates that just 12% of the world’s adults could read and write.
Have a look at recent progress in our chart, and don’t forget to crack open that book you’ve been meaning to get to today!
World Bank Group President Ajay Banga listens during the G-20 Finance Ministers and Central Bank Governors' Meetings at the IMF and World Bank’s 2024 annual Spring Meetings in Washington, U.S., April 18, 2024.
As the International Monetary Fund and World Bank spring meetings wrap up Friday in Washington, the two crucial global lenders face a few important challenges in the year ahead. GZERO has been on the ground to bring you the big takeaways.
A tale of two recoveries. The IMF’s global economic outlook is fairly rosy as a whole. Inflation is easing in the US and Europe, and 3.2% growth of global GDP is a respectable clip – especially given recent fears of a recession. The US and Chinese economies are both growing, even if Beijing is still struggling with persistent debt and property market woes.
But the recovery has yet to reach every corner of the globe. One-third of the lowest-income countries are poorer today than in 2019, before the pandemic. And because inflation has pushed up interest rates, the costs of servicing sovereign debt have skyrocketed, an especially heavy burden for lower-income countries. Bringing financial stability to these fragile situations is a key focus for the IMF and the World Bank.
Power up. The World Bank announced it is launching a massive $35 billion plan to connect 300 million people in Africa to electricity. It’s the kind of fundamental development work the World Bank excels at, and it will help put the continent on track to drive an increasing share of global growth in the coming decades.
But many of the African students who might benefit from lightbulbs to study by also lack access to basic medical care – in fact, more than half the population of the globe finds themselves shut out of formal healthcare, and another two billion struggle to afford it. The World Bank plans to bring quality care to some 1.5 billion people and bolster public health systems to create sustainable improvements.
A new approach. World Bank President Ajay Banga stepped into a delicate situation succeeding David Malpass, who courted controversy with his skepticism about climate change. Banga is the first president in over a decade coming in from the private sector and he's attempting to streamline processes and make the institution more agile and flexible, which may include merging the Bank’s keystone conferences into one.
We’ll keep you up to date on progress during the Annual Meetings this fall.
For more on the big takeaways from this year’s conference, watch Senior Writer Matthew Kendrick’s interview with Tony Maciulishere.
China shouldn’t “coerce or intimidate” the Philippines in the South China Sea, says US Ambassador
Tensions are rising between China and the Philippines over control of the South China Sea, which Beijing sees as its territory, and Manila as its exclusive economic zone. On GZERO World with Ian Bremmer, US Ambassador Nick Burns explained the US position that it is concerned about China’s aggression in the South China Sea, particularly at Second Thomas Shoal, a submerged reef where Manila deliberately beached a ship in 1999 and has used as a military outpost ever since.
“China should not seek to coerce or intimidate the government of the Philippines at Second Thomas Shoal,” Burns stresses, “The Philippines has an absolute right to resupply their forces.”
Burns emphasizes broad international support for the Philippines’ rights in the area, referencing the 1951 Mutual Defense Treaty between Washington and Manila. Tensions in the region have escalated sharply since Chinese and Philippine coast guard vessels collided in early March, injuring four Filipino crew members. Burns says China needs to act responsibly and commit to a peaceful resolution on the issue.Catch GZERO World with Ian Bremmer every week on US public television (check local listings) and online.
FILE PHOTO: Chinese Coast Guard vessels fire water cannons towards a Philippine resupply vessel Unaizah May 4 on its way to a resupply mission at Second Thomas Shoal in the South China Sea, March 5, 2024.
On Saturday, a Chinese coast guard vessel blocked two Philippine government ships near the country’s coast forover eight hours. The incident occurred at the boundary of the nine-dash line, a demarcation Beijing uses to assert its claims to the waters butwhich was dismissed by the Permanent Court of Arbitration in The Hague in 2016.
This latest dustup appears to be Beijing’s response to last week’s high-profile Washington summit between US President Joe Biden, Japanese Prime Minister Fumio Kishida, and President Ferdinand Marcos Jr. of the Philippines.The three leaders expressed “serious concerns about the People’s Republic of China’s (PRC) dangerous and aggressive behavior in the South China Sea,” and Marcos Jr. stressed the trilateral relationship would “change the dynamic” in the region.
“Any attack on Philippine aircraft, vessels, or armed forces in the South China Sea will invoke our Mutual Defense Treaty,” Biden said.
Beijing has already engaged in risky blockings and using water-cannon attacks that have injured sailors. The Philippines has become increasingly vocal about its sovereignty claims, especially around strategic areas including Second Thomas Shoal, a point of recurring friction between Philippine forces and the Chinese Coast Guard. On Thursday, China’s foreign ministry accused Marcos of reneging on a bilateral understanding on the Second Thomas Shoal issue, setting the scene for Saturday’s standoff – and, no doubt, more to come in future.Australian Prime Minister Anthony Albanese and New South Wales Premier Chris Minns join other politicians as they lay flowers at the scene of Saturday's mass stabbing at Bondi Junction, Sydney, Australia April 14, 2024.
6: Australia is reeling from one of the country’s deadliest mass killings after six shoppers were stabbed to death at a mall in Sydney on Saturday. The attack left several others injured, including a baby who is in intensive care. The assailant, who was shot dead by police, was known to authorities and had been diagnosed with a mental illness as a teenager.
25: Pakistan has the highest cost of living in Asia, according to a report from the Asian Development Bank, and it’s only set to grow with a crushing 25% inflation rate. Authorities have hiked interest rates to 22% to try to alleviate the problem, but Pakistan’s economy will likely require further support from the International Monetary Fund.
14.9 billion: Shareholders in US Steel overwhelmingly voted to approve an offer from Nippon Steel to acquire the company at about $55 a share — but don’t expect the deal to close anytime soon. US President Joe Biden has expressed opposition to the deal, which could cost him crucial support from steelworkers in upper Midwestern swing states like Michigan, Pennsylvania, and Wisconsin.
200 million: Wholesaler Costco is estimated to be selling over $200 million worth in one-ounce gold barsevery month, according to an analysis by Wells Fargo. Those who made their purchases in the fall, when Costco was selling the bars for around $2,000 each have earned a nice bit of profit, as gold has surged to over $2,300 an ounce since March.Philippine President Ferdinand Marcos Jr., U.S. President Joe Biden and Japan’s Prime Minister Fumio Kishida are pictured ahead of their trilateral summit at the White House in Washington on April 11, 2024.
Washington and Tokyo promised Manila they would help secure its seas and upgrade its infrastructure at their trilateral summit in Washington on Thursday — all big gestures, but what do they look like from Beijing?
Political winds have shifted against China in the Philippines since President Ferdinand Marcos Jr. came to power in June 2022. His predecessor, Rodrigo Duterte, allegedly sealed a secret deal with China that is now at the center of a dangerous conflict in the South China Sea.
Duterte allegedly agreed not to send reconstruction supplies to a beached ship that Manila uses to control the disputed South Thomas Shoal. Marcos said Wednesday he was “horrified” by any deal that tells Manila what it can do on its own territory, but his attempts to resupply the hulk in March were intercepted by Chinese ships, resulting in injuries. If an incident like this turns deadly, it could spark a war that brings in America and Japan, hence the show of unity in Washington.
Beijing also sees the South Thomas Shoal as a sovereignty issue, and nothing Joe Biden or Fumio Kishida promised today is likely to change China’s tune. China’s Foreign Ministry spokeswoman Mao Ning on Thursday reiterated warnings against violating Beijing’s claims in the South China Sea.
On Monday — the day that Prime Minister Justin Trudeau told reporters that Canada is interested in joining the AUKUS defense alliance — documents were released at a public inquiry that showed that Canada’s intelligence agency believes China “clandestinely and deceptively interfered in both the 2019 and 2021 general elections.”
Also on Monday, as Chinese ships carried out exercises in disputed waters in the South China Sea, the US, UK, and Australia announced that they were talking to Japan about inviting that country to participate in Pillar II of the security pact.
China’s growing military and political belligerence is rattling other countries, and they are responding by drawing together in a way that would have been out of the question a decade ago.
Neighbors under pressure
Pillar I of AUKUS, which was announced in 2021, is a collaboration between Australia, the Americans, and the Brits aimed at adding a powerful new capacity to Australia’s military: nuclear-powered (though conventionally armed) submarines. This is a huge spend for Australia — $368 billion over 30 years — that carries an inherent political risk. And to make the deal, Canberra had to blow up relations with France by abandoning a deal to buy French subs. The Aussies only did that after a year of tense political and economic confrontations with China that left decision-makers in that country gravely concerned about its future in a neighborhood dominated by Beijing. Australia’s back was against the wall.
Like Australia, Japan is being driven to closer cooperation with the United States by its concerns about an increasingly powerful and assertive China. Japan’s trade-focused economy depends on international shipping passing freely through the South China Sea, for instance, where China has been clashing with the Philippines.
So Tokyo has reason to be interested in Pillar II of the AUKUS arrangement, which focuses on defense technology sharing, including quantum computing, hypersonic missiles, artificial intelligence, and electronic warfare — all areas where China presents a technological challenge, and where Japan could offer expertise.
With China rapidly expanding its military, Japan has decided to break with its post-war pacifist tradition and dramatically increase defense spending.
Northern lightweights
Canada is also opening its checkbook, but at a much smaller scale, which would explain why the AUKUS partners are making a point of talking about doing business with Japan, rather than Canada.
Nobody is talking about adding other countries as full members, Australian Prime Minister Anthony Albanese said Tuesday, but proceeding on a project-by-project basis.
Historically, Canada spends little on defense, falling well short of the 2% of GDP that NATO members have all agreed to spend. In an increasingly dangerous world, though, pressure is mounting for Canada to step up, and on Monday, Trudueau’s government did roll out a five-year plan to bring defense spending up to 1.76% of GDP by 2030, up from 1.38% last year.
Allies welcomed the announcement, but there was nothing significant enough to make Canada a much more desirable partner for AUKUS, says Eugene Lang, a former Liberal defense official turned Queens University professor. Officials are interested.
“I just don’t know that we're doing anything to get their attention,” he says. “What they're doing in AUKUS is investing in developing brand-new technologies. To my knowledge, Canada has not got any specific money set aside for any of that.”
University of Ottawa Professor Thomas Juneau, who has interviewed allied officials about Canada’s potential role in AUKUS, found that Canada is increasingly seen as a free rider in defense and intelligence circles. It’s not surprising that Japan was invited before Canada, he says.
“It's really normal for AUKUS to bring in Japan before Canada because Japan is not only a much bigger country than we are, but it's right next to China.”
Wolf warriors
On the other hand, because of its Five Eyes intelligence-sharing experience, Canada could more easily cooperate with AUKUS than Japan, says Graeme Thompson, a senior analyst with Eurasia Group.
And while it may not be spending enough money to be taken seriously, the Trudeau government has moved to be more circumspect in its relationship with China, limiting Chinese investment in critical minerals and being cautious about research projects.
“The scales have fallen from a lot of politicians’ eyes in the West,” Thompson says. “The question remains, how do you have constructive diplomatic and economic relations with Beijing, while at the same time competing with them geopolitically and seeking to build up and maintain deterrence?”
China will object to the new alliances being organized around it, but don’t expect Beijing to stop buying sabers and rattling them.
“China has a rising economy, so the idea that its rising economic power wouldn't come with rising geopolitical ambition is a fantasy, and we've kind of believed in that fantasy for a while, not just in Canada but in other Western countries,” says Juneau.
“But it was a fantasy all along.”
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