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What does a common agenda for global public goods in education look like?

What does a common agenda for global public goods in education look like? | Speevr

Last July, the U.N. secretary-general called for a focus on delivering more global public goods. Yet, 15 years after the International Task Force on Global Public Goods wrote its summary report, much work remains to shape debate and action in the education sector on this. Is education so heterogenous that each government must develop bespoke solutions? Or could some standards and systems be created globally and tailored for national and local implementation?

In 2016, the Education Commission found that only 3 percent of overseas development assistance for education was being spent on global public goods, compared with a full fifth in the health sector.
And yet the case for investment is strong. The global learning crisis is severe and expensive, and COVID-19 has exacerbated existing issues. Last year we estimated global losses in students’ future earnings as a result of school closures, finding they will impact those most in low-income countries. The World Bank has predicted a triple funding shock for investment in the sector as a result of the pandemic. Many school systems, particularly those in settings with limited connectivity and access to data and devices, have struggled to harness basic tech effectively in the last year. And the most vulnerable students, even in high-income countries, are least likely to benefit from online learning when they do have access to it.
We also know the sector can work toward meeting common global goals. For example, concerted government and NGO efforts for girls’ education has led to steady (if uneven) progress toward gender parity. Global and regional standards and assessment systems are increasingly strengthening our collective understanding of what learning looks like. And global research programs and groups like the Global Education Evidence Advisory Panel are now emerging with a focus on global public goods. Last year the Save Our Future Coalition explicitly called for donors to invest in public goods that can support and leverage reforms at the country level.
Current lack of investment—and the need to work collectively in the wake of a seismic shock for education—has inspired us to consider what a common agenda for global public goods in education might look like. We offer three foundational principles and a set of possible actions as a starting point for international education institutions, multilateral and bilateral donors, foundations, and corporations with global reach—all of whom should see this as part of their core business:
1. Put children, parents, and the education workforce at the center. Learning is about people, not institutions. Global public goods will have most impact when they put children at the center of an ecosystem of learning opportunities.
Making the shift from talking about the right to education, coined over 70 years ago, to the right to learn will help us focus on what matters most. We could put children at the center by creating unique learner identities (that they can access), allowing us to create personal learning records. Access to open-source tools—harnessing technology increasingly to personalize these—could transform foundational literacy and numeracy levels, as well as deliver stronger, better tailored teacher professional development. And a global qualification or standard could be used to recognize and celebrate excellence in novice teachers.
2. Provide digital platforms for education systems. While global businesses rely on an ecosystem of digital platforms to run increasingly complex supply chains (tailored but seldom developed in-house), education systems are still largely built from scratch. Open-source digital platforms could help countries strengthen governance, cut waste, improve interoperability, and drive up standards.
Actions in this area might include access to an open-source information management system that meets a global benchmark for providing the data needed to make evidence-based decisions. Meanwhile, a shared global standard to assess whether children are learning foundational skills would help systems target children at risk of being left behind with specialized interventions. And teachers will continue to need quality-assured lesson plans, instructional materials, coaching, and other support to help them.
3. Create a new compact with technology companies. The sector has profited significantly during the pandemic and played an increasingly important role in the provision of education. But companies’ support for learning can be piecemeal and seldom benefits the children who need it most. A global ed-tech compact could increase basic connectivity, drive up standards, and plow a share of private revenues into children’s learning.
Any such compact should include investment in universal connectivity, given the sector’s responsibility under the “Contract for the Web.” In the short term, the private sector should commit to working with governments to connect every school to the internet. At the same time, it will be important to create quality assurance for the growing number of platforms that offer search and distribution of digital educational resources.

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Finally, we call for the establishment of a global ed-tech fund, with Gavi as its inspiration. By investing in a model, technology companies could help transform access to quality tech-enabled learning for children who would otherwise be excluded. At the same time, the sector would be involved in shaping markets so that they work for the people who need them the most.
We offer these ideas to set out a possible common agenda for global public goods in education. As the U.N. secretary-general prepares to launch his priorities for a second term of office, we call on the education and technology sectors in particular to work closely together to shape, invest in, and deliver to the benefit of learners worldwide.

Bank regulator’s True Lender Rule undercuts bank regulatory protections and shelters predatory lending

Bank regulator’s True Lender Rule undercuts bank regulatory protections and shelters predatory lending | Speevr

A recent rule by the Office of the Comptroller of the Currency (OCC), a federal bank regulator, threatens to upend the rights and responsibilities between banks and their nonbank lender partners, displacing state regulators and subjecting consumers to predatory loans. The U.S. Senate has already, with a bipartisan vote, passed legislation to rescind the rule, using a mechanism called the Congressional Review Act (CRA). The House of Representatives is scheduled to vote on the measure this week to do the same, which would then send the legislation to the President’s desk for final approval. Passing this measure is needed to protect consumers and to preserve long-standing precedent permitting states to enforce their laws.

Banks regularly enter into partnerships with nonbank entities in carrying out their operations and providing services to customers. However, some nonbank lenders have attempted to use banks as vehicles to evade state laws, since banks are typically exempt from certain state laws by virtue of federal preemption. Some nonbanks have added the name of a bank to their loan documents and then claimed they are entitled to the bank’s preemption rights over state regulation and consumer protection laws, including usury limits.
This reached a peak in the early 2000s when some states moved to prohibit 400% interest payday loans. Some payday lenders responded by entering into agreements whereby they paid a small fee to a few banks to add their names to the loan documents and claimed preemption from these state laws. They combined this with mandatory arbitration clauses that effectively prevented consumers from being able to challenge these arrangements in court. Eventually, state regulators and attorneys general joined with federal regulators to shut down these arrangements. They won by utilizing legal precedent, dating back to at least 1825, that courts look at transactions to determine who was the true lender – the party with the predominant economic interest — and that state laws apply to the loan if the true lender was not a bank with preemption rights. At that time the OCC was adamant that preemption rights were not something that banks could lease out to nonbank entities for a fee. This shut down these so-called “rent-a-bank” schemes, and state laws were again enforced against these nonbank lenders.
In recent years, lenders have again sought to use these bank partnerships to avoid state regulation and laws. Last October, the OCC reversed its prior position by issuing a rule that seeks to displace this longstanding law by both asserting that the OCC has authority to override the court true lender doctrine and enacting a standard that would specifically grant preemption rights to nonbank lenders if they merely put the partner bank’s name on the loan document.
This rule would upend the current bank regulatory system without a coherent alternative. It would grant nonbank entities sweeping preemption without the chartering requirements or oversight requirements of banks.
Defenders of the rule claim the OCC will prevent banks from enabling predatory loans. The track record shows otherwise. One op-ed defending the OCC  states that the “OCC has shown itself willing to bring enforcement actions against banks that fail to exercise proper control.” The author provides a link to two enforcement actions, which were both taken nearly two decades ago. However, there are several high-cost rent-a-bank schemes that the OCC – and the Federal Deposit Insurance Corporation (FDIC) – have allowed to operate for the past few years while ignoring repeated entreaties from Congress, state officials, and consumer advocates to enforce the law.

During a recent congressional hearing, the former acting comptroller who issued the rule could not point to any enforcement actions when asked by Senator Elizabeth Warren (D-Mass.). The senator referred to the experience of a married couple who owned a small restaurant supply distributor in Massachusetts. They are immigrants, with a limited knowledge of English, who took out a loan with a 92% annual interest rate, well above Massachusetts’ usury cap of 20% that applies to nonbank lenders in the state. The non-bank World Business Lenders arranged the loan, set the terms, and collected the payments even though the name Axos Bank, an OCC-supervised bank, was on the loan document. The couple had to sell their house to get out from under the loan.
Similarly, a restaurant owner in New York is facing foreclosure as a result of a loan at 268% annual interest from World Business Lenders, which again is using the name of Axos Bank.
The FDIC and OCC have also made clear what they view as acceptable lending by jointly filing an amicus brief defending a rent-a-bank loan of $550,000 at 120% interest to a small business in Colorado, where the state has a rate cap far below that.
More broadly, the OCC has a long history of preempting state consumer protection law to the detriment to consumers and the economy, most notably in the run-up to the 2008 Financial Crisis. In recognition of this harm, the Wall Street Reform Act of 2010 “curtailed its power to preempt state laws, especially as to nonbank entities….”
Another claim by defenders of the rule, made recently on the U.S. Senate floor, is that banks in these partnerships would have to “assess a borrower’s ability to repay before making the loan” or “face serious consequences from their regulator….” The existence of around a dozen ongoing partnerships with loans near or far exceeding triple-digit interest rates indicates that unaffordable loans are being made without repercussions. So the evidence does not support that federal regulators will prevent an explosion of predatory schemes likes these should the OCC’s rule remain in place.
Abundant research from California, SEC filings, and elsewhere show that consumers are more likely to default on high-interest loans. High-interest lenders often target Black and Latino communities with products that pull people into financial quicksand. These loans are not responsibly underwritten, as a credit union in the deep south analyzed rent-a-bank loans taken out by their members and documented “a clear disregard for borrowers’ ability to repay.”
Nearly every state has an interest rate cap. These limits are seriously undercut by the OCC rule, so it’s unsurprising that state officials are pushing back. Eight state attorneys general have sued over the rule, which was hastily proposed and approved in just 100 days. The District of Columbia attorney general has sued nonbank lenders trapping his constituents in debt through rent-a-bank loans. He has alleged that OppFi and Elevate “misleadingly marketed high-cost loans” they made to thousands of D.C. residents.
A letter calling for Congress to rescind the rule was signed by a bipartisan group of 25 state attorneys general. The Conference of State Bank Supervisors (CSBS), which represents Republican and Democratic officials, sent Congress the same message, saying “the OCC should not erode state consumer rights and protections, particularly when it refuses to follow the process mandated by Congress to preempt those protections.”
The Biden administration has announced its support for the CRA resolution to repeal the rule, noting its harm to financial regulation and consumers.  The House of Representatives now has an opportunity to help protect consumers by approving the measure and sending it to the President’s desk for his signature.
The author did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. They are currently not an officer, director, or board member of any organization with an interest in this article.

Charting a new course in US-Africa relations: The importance of learning from others’ mistakes

Charting a new course in US-Africa relations: The importance of learning from others’ mistakes | Speevr

This is an exciting time for Africa. In early January 2021, the first shipments traded under Africa Continental Free Trade Area (AfCFTA) preferences left Ghana bound for Guinea and South Africa. Since its signing in March 2018, the rapid implementation of the agreement raises hopes of a more inclusive and prosperous future for the continent. How global trading partners support this project could set the tone of relationships for decades to come.

New times require a fresh approach…
The Biden administration is applying a healthy dose of fresh thinking to a number of Africa-relevant policy areas, from global taxation to intellectual property. In terms of trade, United States Trade Representative Ambassador Katherine Tai has already signaled a welcome new direction, stressing multilateral solutions over bilateral ones and emphasizing the importance of incorporating climate action in discussions on trade policy.
When it comes to U.S. trade with Africa, two linked items are on the agenda:

The administration has inherited plans to negotiate a stand-alone free trade agreement (FTA) with Kenya. The new Biden administration initially announced a review of all trade negotiations started under President Trump, and, in April 2021, Secretary of State Antony Blinken confirmed that talks with Kenya would proceed.
The Kenya agreement was conceived (by the Trump administration) as a blueprint for an FTA initiative designed to succeed the African Growth and Opportunity Act (AGOA), a trade preference scheme that has offered enhanced market access to qualifying African countries since 2000 but is due to expire in 2025.

For both geostrategic and economic reasons, the United States has a vested interest in ensuring the success of the AfCFTA and should avoid moves that might hinder that success. As the U.S. trade team weighs its options and fleshes out a new approach toward the African continent, we argue that, in light of the AfCFTA, bilateral FTAs with African countries should be reconsidered in favor of a continental approach. This recommendation chimes with the Biden administration’s preference for multilateralism and will, in turn, have implications for the future of AGOA.
For both geostrategic and economic reasons, the United States has a vested interest in ensuring the success of the AfCFTA and should avoid moves that might hinder that success.
The underlying problem with FTAs between African and high-income countries
The European Union’s and United Kingdom’s experiences of trying to negotiate FTAs with countries or regions in Africa offer some useful lessons for the United States to consider.
The EU has been trying to secure economic partnership agreements (EPAs) with Africa for over two decades. In principle, these agreements were supposed to be signed on a regional basis, but because of disparate economic interests within regional blocks and concerns in Africa over the ability to compete with firms in the EU on a level playing field, the process was met with considerable reluctance by African partners. The EPAs offered no additional market access for least developed countries (LDCs)—and simply obliged those countries (albeit over a generous timeframe) to open their markets to the EU.
As a consequence, beyond a handful of single-country deals (Cameroon, Côte d’Ivoire, Ghana), just two regional deals were signed—one with East and southern Africa in 2009 and one with southern Africa in 2016. None of this messy patchwork of deals coincided with existing regional economic communities. The seed was thus sown for considerable difficulties in implementation. The EU itself has gradually shifted the discussion toward a different, arguably more accommodating, framework: the Africa-EU partnership.

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To many commentators’ surprise, given the country’s post-Brexit political rhetoric, the U.K. missed a golden opportunity to chart a new course. Instead, for reasons of expediency and the desire to sign up quickly as many new trade deals as possible, it opted to roll over the unpopular EPA deals. This exercise has not proven at all straightforward and the newly inked U.K.-Kenya FTA faced hurdles in both the U.K. House of Lords as well as the Kenyan parliament. A legal case brought by small-scale farmers in Kenya is still pending.
On the part of African partners, bilateral deals have been seen as the product of necessity rather than forward-looking policy design. If we take the example of the U.K.’s deals with Kenya and Ghana, both countries are classified as “non-LDCs” and so, unlike neighboring countries in the East African Community (EAC) or Economic Community of West African States (ECOWAS), they do not qualify for the generous Everything But Arms preference scheme. The deals were signed not because they were seen as a gateway to accelerated export growth or diversification, but rather to protect existing market access for a handful of traditional, largely low value-add exports (flowers and vegetables for Kenya, bananas and tuna for Ghana).
FTAs between countries at vastly different levels of development are risky
In a well-argued piece, Brodo and Opalo (2021) recently claimed that the U.S. should make deals with Africa’s regional economic communities (RECs), an intermediate solution between bilateral trade agreements and a U.S.-Africa continental trade agreement. This approach is certainly preferable to signing bilateral FTAs, but also presumes that all countries within a REC feel both ready and prepared to enter into an FTA with the world’s preeminent high-income, high-productivity economy. Arguably, this presumption was the underlying mistake made by the EU when it embarked on EPAs with the African continent nearly two decades ago.

In reality, Africa’s RECs contain countries with different economic priorities, interests, and levels of development. LDCs across the continent have been extremely reluctant to sign FTAs with developed economies for fear that their nascent domestic industries will not be able to survive the competition—particularly in sectors like agriculture where levels of domestic support in developed countries are high. The majority of countries on the continent already have to sustain major structural trade imbalances with high-income countries, and signing FTAs, even if the liberalization is gradual, is only likely to exacerbate those imbalances, entrenching patterns of dependence on low-value commodity exports.
In considering its new policy toward the African continent, the U.S. administration should also take fully on board the lessons to be learned from the Free Trade Area of the Americas (FTAA), a megaregional trade agreement over a broad range of countries with very different levels of development and economic structures, which ended ignominiously without agreement in 2005 after over a decade of negotiations (Herreros, 2019).
FTAs with single countries undermine regional customs unions and create headaches for ACFTA implementation
Bilateral FTAs may be allowed under the terms of the AfCFTA, but this does not mean they are without cost. Regional-level customs unions such as that of the EAC and ECOWAS are extremely important building blocks toward wider continental trade integration. The practice of signing side deals with individual member states—especially if it becomes common practice—could undermine their common external tariffs and exacerbate division and tension.
Such side deals also complicate the implementation of the AfCFTA, which would lead to a heavy reliance on rules of origin to prevent trade deflection. It is also noteworthy that, as soon as its own customs union was formed in 1968, the EU no longer allowed member states to negotiate with third parties. Instead, in order to maintain internal coherence, the EU Commission took “exclusive competence” of external trade policy (Baldwin and Wyplosz, 2015).
The continental route—the preferred African option
Looking to the future, countries like Ghana and Kenya seeking to grow their industrial bases and increase their share of manufactures in exports may consider pivoting away from a reliance on these oversaturated and mature developed-country markets that are often fickle and already dominated by powerful multinational companies.
Instead, they should prioritize trade with the African continent through the AfCFTA, which, as UNECA Executive Secretary (and AGI Nonresident Senior Fellow) Vera Songwe (2019) observes, is much more likely to stimulate industrialization and much-needed creation of quality jobs. Despite the existence of preferential schemes to high-income markets like AGOA and the EU’s Everything But Arms, over the last two decades intra-African exports in manufactured goods have expanded by a factor of more than 5, much more rapidly than extra-African manufactured exports (Figure 1). By removing tariffs and reducing nontariff barriers on intra-African trade, the AfCFTA will provide a new impetus to this already ongoing process.

Toward a new US approach to trade relations with Africa
Rosa Whittaker, one of the architects behind AGOA, has recently claimed that:
“There is no appetite in Washington for AGOA’s unilateral trade benefits. In preparation for its 2025 expiration, AGOA needs to be renewed with smart trade reciprocity—pillar one. Some sectors have matured in specific countries thanks to AGOA and should, therefore, be considered for graduation from duty-free treatment.”
We beg to differ. AGOA has certainly proven to be an imperfect trade instrument: Outside fuels and minerals, the bulk of the export gains have accrued only to a small minority of countries, in a small range of industries—principally textiles. Nonetheless, at this juncture, that is no reason to adopt a “throw out the baby with the bathwater” approach and shift to fully reciprocal trade deals with Africa. The risk is that such policies will meet with the same resistance and opposition as the EU’s EPAs.
Instead of replicating the EU’s or U.K.’s flawed approaches, we argue that the Biden administration’s priorities would be better served by working with the African Union to design a fresh, forward-looking comprehensive partnership arrangement. An intermediate position would to be to start by addressing some of the flaws in existing AGOA market access (Laurence, 2013), and improving upon it—in other words, an updated, AGOA-style trade preference scheme made more predictable and with full continental cumulation in support of the AfCFTA. This policy would provide the necessary “breathing room” for Africa to consolidate its own process of regional integration first, after which a U.S.-Africa FTA could be explored.
This trade pillar could be embedded in a wider, new U.S.-African trade and development partnership that could include joint commitments on climate change and foreign and security policy, as well as ensure U.S. development support is coherent with Africa’s Agenda 2063 plans.
Reversing the retrenchment of US economic interests on the African continent
Finally, the U.S. has a long-term strategic interest in making sure that the AfCFTA is a success. The U.S. is a major investor on the African continent, and although foreign direct investment (FDI) stocks have been declining in recent years (principally because of low mineral and fuel prices globally, which have led to a degree of divestment in these sectors), in 2018, U.S. firms still held more than $44.4 billion in FDI stock in Africa, controlling assets worth $370 billion, making sales of $116.3 billion, and employing 370,000 people across the continent (U.S. Department of Commerce, 2021) (Figure 2). Yet, in recent years, China has been the most active investment partner, accounting for around double the estimated FDI flows to Africa compared with the United States (Madden, 2019).

The AfCFTA represents an opportunity to turn this trend around. Reflecting the vibrancy of the U.S. investor community on the continent, the U.S. has an extended system of chambers of commerce and business associations across 21 countries on the continent. Much as they did in Europe in the postwar period (Mold, 2000), U.S. firms could help act as cheerleaders to the AfCFTA, integrating their operations across borders and shifting the focus of their activities away from the extractive sector and toward higher-value added activities in services and manufacturing. Ford’s recent decision to invest $1 billion in its operations in South Africa is a sign of the confidence in the continental market. In aligning both its trade and investment policies toward Africa with the AfCFTA, the United States thus has a unique opportunity to support African unity and economic prosperity. It is an opportunity that should be seized.

Global Letter – Whither the WTO

Global Letter - Whither the WTO | Speevr

The WTO is not top of President Biden’s agenda; but neither is trade being neglected. Macro-series-Whither-the-WTO-June-2021 …   Become a member to read the rest of this article Username or E-mail Password Remember Me     Forgot Password

Digital currencies are transforming the future of money

Digital currencies are transforming the future of money | Speevr

Digital currencies like Bitcoin often make headlines for the massive swings in their value, but beyond the intrigue of skyrocketing and plummeting prices the rising popularity of cryptocurrencies poses serious questions for financial institutions and monetary policy. Eswar Prasad joins David Dollar for a conversation on the digitalization of money and what digital currencies could mean for the future of cash, international payments, and the strength of the U.S. dollar. Prasad also explains why some central banks have hesitated to introduce digital currencies while others have embraced them.

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Eswar Prasad

Senior Fellow – Global Economy and Development

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David Dollar

Senior Fellow – Foreign Policy, Global Economy and Development, John L. Thornton China Center

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FRANCE: The inconsequential regional elections

With a record-low turnout of 32%, the first round of the regional and departmental elections on 20 June should not be considered a bellwether of next year’s presidential contest. The poor showing of President Emmanuel Macron’s Republic on the Move (LREM) party and the worst-than-…   Become a member to read the rest of this […]