With Afghan Collapse, Moscow Takes Charge in Central Asia

Along with Pakistan and China, Russia has gained broad influence in security matters at the expense of the United States and India.

By Andrew E. Kramer and Anton Troianovski

Russian troops participating in military exercises with Uzbekistan and Tajikistan this month near the Tajik-Afghan border.Credit...Didor Sadulloev/Reuters



DUSHANBE, Tajikistan — As the Afghan government collapsed this week in Kabul and the United States scrambled to speed up its evacuation effort, hundreds of Russian armored vehicles and artillery pieces were clearly visible hundreds of miles away, on the border with Tajikistan.

They were part of a high-profile military exercise taking place just 12 miles from a Taliban position, and they were there, a Russian general said, to make a point.

“They are all visible,” said Gen. Anatoly Sidorov, commander of the forces involved in the exercise. “They are not hiding.”

It will now be Russia, the exercises signaled, that will be shielding Central Asia from potential violence next door.

In the long post-Soviet jostling for power and influence in Central Asia sometimes called the new Great Game, an ever more dominant player has emerged from the chaos and confusion of Afghanistan: Russia, at least in security affairs.

“I wouldn’t say a wounded animal,” the Russian foreign minister, Sergey V. Lavrov, said on Tuesday of the withdrawal of NATO and the U.S. forces from Afghanistan. 

“But this is a group of countries that in a very painful and difficult way is giving up on the positions in the world they were used to for many decades.”

The Russian foreign minister, Sergey V. Lavrov, in Moscow last month. With the U.S. withdrawal from Afghanistan, Russia is wielding greater influence in Central Asia.Credit...Pool photo by Sergei Ilnitsky


The strengthening of Russia’s position in Central Asian security matters is part of a broader shift brought about by the Taliban’s rise to power. 

Russia, China and Pakistan all stand to gain influence in regional affairs with the West’s withdrawal, while the United States and India stand to lose.

“I’m thinking of this as a post-Western or post-U.S. space now,” said Alexander Cooley, director of the Harriman Institute at Columbia University, and an authority on Central Asia. 

“It’s a region transforming itself without the United States.”

And largely to Russia’s benefit.

For Moscow, the chaotic American withdrawal, while reminiscent of Russia’s humiliating 1989 retreat from Afghanistan after its disastrous 10-year intervention, was a propaganda victory on a global scale.

From Latin America to Eastern Europe, Russia has fought for influence by insisting that the United States cannot be trusted.

Nikolai Patrushev, the secretary of Russia’s Security Council, warned that America’s friends in Ukraine could soon also be disappointed.

“The country is headed toward collapse, and the White House at a certain moment won’t even remember about its supporters in Kyiv,” Mr. Patrushev said in an interview published on Thursday.

The rapid fall of President Ashraf Ghani’s government was also a vindication of Russia’s yearslong strategy of building a diplomatic relationship with the Taliban. 

As Western diplomats scrambled to flee Kabul this week, Russian officials stayed put, with the Taliban guaranteeing the security of the Russian Embassy.

“They made a good impression on us,” Russia’s ambassador in Kabul, Dmitri Zhirnov, said of his embassy’s new Taliban guards on Russian state television this week.

“They’re decent guys, well armed.”

At Russia’s most recent round of talks with the Taliban in Moscow, in July, the group pledged that its military gains would not be a threat to Russia or its interests. 

Russia hosted the Taliban for multiple rounds of talks even though the group is officially classified as a banned terrorist organization with Russia, making any association with it a potential crime.

“It’s pragmatism — and cynicism and double-think,” said Arkady Dubnov, a Russian expert on Central Asia, describing the Russian government’s strategy of building ties with the Taliban. 

“People are locked up in Russia for this kind of cooperation with a terrorist organization.”

Russia’s military exercises on the border represented another side of its strategy, a show of force to demonstrate its willingness to punish the Taliban if they should step out of line. 

“You can talk to the Taliban but you also need to show them a fist,” said Daniel Kiselyov, editor of Fergana, a Russian-language outlet focused on Central Asia.

Beyond Afghanistan, Russia still faces stiff competition from China’s debt and infrastructure diplomacy in Central Asia, a central thoroughfare of Beijing’s Belt and Road initiative. 

And the American oil companies Chevron and Exxon have been pumping crude in Kazakhstan for years. 

On Tuesday, China and Tajikistan announced a joint border-patrol exercise.

But Russia’s security presence is predominant. 

The sprawling military footprint the U.S. established in the former Soviet states of Central Asia to facilitate the invasion of Afghanistan has all but disappeared.

As Edil Baisalov, the Kyrgyz ambassador to Britain, put it succinctly in a telephone interview: “The great hour of America in Central Asia has long since passed.”

Huge U.S. military bases in Kyrgyzstan and Uzbekistan have long since closed down, along with a major supply line called the Northern Distribution Network that had stretched from as far away as the Baltic nations through Russia and Central Asia to northern Afghanistan.

As the U.S. military effort has wound down, so, too, has Washington’s political influence. 

The Biden administration made overtures this summer to four of the five former Soviet Central Asian countries — Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan — offering things like aid funding and Covid-19 vaccines in exchange for taking a share of 9,000 Afghan refugees. 

So far it has found no takers.

Some, like Tajikistan, gladly accepted the money and vaccines while still declining to take the refugees. 

Today, the Moderna vaccine is available free in government-run medical tents in village bazaars in the mountain region of Badakhshan in Tajikistan, residents say.

But nearby, Russian tanks and armored personnel carriers have been rumbling along the roads, kicking up dust, in an area to which Tajikistan denied the United States access during its military withdrawal.

Russian military helicopters in Tajikistan during the high-profile exercise near the border with Afghanistan this month.Credit...Didor Sadulloev/Associated Press


Through the summer, Russia’s leaders made clear who was calling the shots in regional diplomacy north of Afghanistan, while undercutting the Biden administration’s two initiatives in the region, the one on Afghan refugees and another on security aid.

At a conference in Tashkent, the capital of Uzbekistan, in July, Mr. Lavrov said he had discussed with Central Asian leaders the U.S. request to move some American military capabilities to their countries after the pullout. 

“None of our allies expressed any intention to expose their territories and populations to such risk,” he said.

Underscoring Russia’s growing sway in Afghanistan, Secretary of State Antony J. Blinken called Mr. Lavrov on Monday to discuss the evacuation of Americans from Kabul, the Russian Foreign Ministry said in a statement. 

Mr. Lavrov, the ministry said, described to Mr. Blinken Russia’s contacts “with representatives of all the main political forces in Afghanistan in the interest of helping to foster stability and rule of law.”

Soviet forces entering Uzbekistan in 1989 in their own ignominious retreat from Afghanistan, after a disastrous, 10-year intervention.Credit...Leonid Yakutin/Russian Ministry of Defense, via Associated Press


After the American-backed Afghan government collapsed on Sunday, Konstantin Kosachev, chairman of the Foreign Affairs Committee of the Federation Council, the Russian Senate, called in a Facebook post for strengthening a Russian-led military alliance with several Central Asian states, the Collective Security Treaty Organization.

“Russia can quickly restore its position in Central Asia,” Andrei Serenko, a reporter specializing in Afghan affairs at Nezavisimaya Gazeta, said in an interview. 

“It will put its security umbrella up in place of the disappearing American umbrella.”

Not everything is breaking Russia’s way in regional security matters. 

All things being equal, Mr. Dubnov said, Moscow would have been happy for the United States to remain in Afghanistan and for Washington to continue to shoulder the burden of preventing the country from becoming a haven for international terrorist groups. 

The Kremlin sees the possibility of Islamist extremists and drug traffickers crossing into post-Soviet republics in Central Asia, and from there into Russia, as a serious threat.

“It was of course a great deal for us when the Americans were doing the work of dragging the hotheads out of the fire over there,” Mr. Dubnov said.

The fear of a renewed threat was palpable this week at a small museum on Moscow’s outskirts dedicated to the Soviet Union’s disastrous, decade-long war in Afghanistan in the 1980s. 

Photographs of young men from the neighborhood who lost their lives line a memorial alcove, surrounding a shrine made of a tank track, an artillery box, spent shells and artificial roses.

“You all have left, and everything is on fire again,” said the museum’s director, Igor Yerin, addressing Americans. 

“You didn’t put out the fire. 

The fire is only burning hotter.”

U.S. soldiers departing for Afghanistan from a since-closed base in Manas, Kyrgyzstan, in 2012.Credit...Vyacheslav Oseledko/Agence France-Presse — Getty Images


But the deputy head of the Russian Parliament’s Foreign Affairs Committee, Dmitri Novikov, responding to E.U. diplomats’ concerns about rising Russian influence, said Western nations shouldn’t worry about Russia asserting itself in Afghanistan. 

There will be enough work to go around, he said.

“The painful problems that will exist there for decades to come won’t just be an internal problem,” he said, “but a problem for the whole world.”


Andrew E. Kramer is a reporter based in the Moscow bureau. He was part of a team that won the 2017 Pulitzer Prize in International Reporting for a series on Russia’s covert projection of power. @AndrewKramerNYT

Anton Troianovski is the Moscow bureau chief for The New York Times. He was previously Moscow bureau chief of The Washington Post and spent nine years with The Wall Street Journal in Berlin and New York. @antontroian 

 A mixed-up slowdown

The prospects for developing countries are not what they once were

Twenty years on, growth in the BRICs has slowed


In 2000 this newspaper wrote that “the most pressing moral, political and economic issue of our time is third-world poverty.” 

At the time, 28% of the world’s population lived in extreme poverty, which is to say on incomes of $1.90 a day or less. 

Nearly one billion of those 1.7bn people lived in India and China.

Just a year later, Jim O’Neill, then the chief economist for Goldman Sachs, a bank, grouped those two countries, along with Brazil and Russia, into one of the defining acronyms of the 2000s: the brics. 

Though at the time the quartet accounted for only 8% of global economic output, Mr O’Neill argued that, given their population, even modest growth in their output per person would increase that share significantly, and that such growth looked likely. 

Investors were urged to take note. 

So were policymakers.

By 2003 Goldman Sachs’s researchers were forecasting that the bric economies would, by 2025, have a combined gdp at least half that of the g6 (America, Britain, France, Germany, Italy and Japan). 

By 2040 they expected the brics to have pulled ahead. 

A dramatically different world was on its way, one in which the big emerging economies had pretty much caught up with the developed economies of the North in economic heft if not in terms of income per person.

The first prediction was too conservative. 

From 2000 to 2011, the brics grew on average by a startling 17% per year, in nominal us dollars at market-exchange rates, while the g6 grew at just 4%. 

They reached half the g6’s gdp by 2017, not 2025. 

In 2021, the imf projects, bric gdp will be worth about 57% of the g6’s (see chart 1). 

Last year China announced that it had eradicated extreme poverty. 

As of 2018 the number of people living in extreme poverty in India had fallen below the estimated 99m people living in extreme poverty in Nigeria. 

It is a historic achievement.


The 2040 prediction looks more troubled. 

Growth in advanced economies and developing ones slowed a lot in the 2010s. 

From 2011 to 2019, g6 growth fell by more than half to below 2% per year. 

Growth across the brics, on the other hand, dropped by nearly 70%, to just 5% per year.

The picture across other low- and middle-income countries looks broadly similar. 

From 2000 to 2011, the weighted average annual growth rate of gdp, in us dollar terms, was a robust 9% for emerging economies when the brics were excluded. 

Real income per person in developing countries as a fraction of real incomes in America (generally considered the ne plus ultra in economics) was 12.1% in 2001. 

By 2011 it was almost half again as much: 17.8% (see chart 2).


But by the time that measure reached its peak—18.4% in 2013—incomes in the Middle East, Central Asia and Latin America were already in decline relative to those in the United States. 

By the next year incomes in Africa were dropping further behind those in America, too. 

Only South and East Asia and the emerging parts of Europe have kept gaining on American incomes. 

For the developing world as a whole, real income per person has fallen back to 18.1% of what it is in America; not a terrible reverse, but definitely a stagnation.

Playing catch-up

The 2010s were hardly a terrible decade. 

Indeed in terms of emerging-market growth they were the second-best decade in history. 

The problem is that the 2000s were so much better. 

In terms of the impact on human lives, there can be few bigger questions than whether growth in the 2020s will return to the heights of the startling 2000s, hang around the levels seen in the adequate 2010s, or continue its downward trend. 

Such a trajectory would make talk of any significant part of the developing world “catching up” with the advanced economies look increasingly foolish.

Economists once thought that poorer countries ought naturally to catch up with richer ones. 

Becoming rich seemed little more than a matter of borrowing technologies from more mature economies and equipping workers with more capital, of both the physical and human sort.

Yet in the aftermath of the second world war joining the ranks of the rich was revealed to be harder for the previously colonised world than had been thought. 

Investors occasionally grew enthusiastic about the prospects for poorer countries, as in 1981, when a World Bank employee named Antoine van Agtmael coined “emerging markets” as an eye- (and money-)catching name for a new third-world investment fund. 

But only a few countries made the leap from poor to rich over the latter decades of the 20th century: a South Korea here and a Taiwan there.

It was against this background that the rise of the brics seemed truly startling. 

But it was hardly an overnight success. 

In the late 1970s China began a long process of economic liberalisation; India started relaxing state control over its economy in 1991. 

Debt and financial crises which had dealt devastating setbacks to growth from the 1970s saw a broad-based shift in policy across the developing world towards what is often referred to as the “Washington consensus”: becoming more open to trade and keeping government borrowing and inflation in check.

To this already healthy soil three further fertilisers were added. 

One was the arrival of persistently low interest rates and globalised finance, which provided a lot of money willing to seek out opportunities in emerging markets judged to be more stable than they had been. 

Another was a broad and sustained rise in commodity prices, which boosted the fortunes of many developing-world economies.

The third was explosive growth in trade. 

Manufacturing for export, a time-tested route to catching up, had once required the slow and difficult process of building up an indigenous industrial base. 

But as production processes once contained within a single plant or country spread out along global supply chains it became possible for poorer economies to begin producing for export by grabbing hold of small pieces of production networks, rather than recapitulating everything.

As a share of global gdp, trade rose from 39% in 1990 to 51% in 2000, eventually reaching a peak of 61% in 2008. 

China, through which most of the new supply chains ran, saw its share of global exports rise from about 2% to 9% over the same period. 

Its share of global gdp rose from 4% to 12%.

The added effects of two of the three fertilisers, the commodities boom and the boom in trade, both wore off in the 2010s. 

The imf’s index of commodity prices roughly tripled from 2000 to 2011. 

After that it began to fall, and in doing so exposed those economies which had enjoyed a superficial boom built on higher prices for their resource exports and easy credit.


Trade growth also slowed. 

Having recovered encouragingly after the global financial crisis of 2007-09, in the mid 2010s trade began to decline slightly as a share of global gdp (see chart 3). 

There were a number of reasons for this, but an important one was a decisive shift in Chinese policy. 

The pace of reform slackened; state intervention increased as the government made a push for self-sufficiency.

Slowdown boat to China

The Communist Party’s interest in reducing the role of state-owned enterprises, key to the dramatic increase in the size and importance of privately owned firms during the boom years, waned in the 2010s. 

Such firms generate lower returns on their assets than their private cousins while carrying higher levels of debt.

China’s failure to go on liberalising has slowed traffic on the most desirable path to development for the rest of the emerging world. 

If China had grown more and its consumption patterns had converged with those of advanced economies it would have become an ever greater market for other developing countries. 

But insufficient reform has also left consumption well short of the level common in economies with comparable incomes (like Mexico and Thailand), to say nothing of those in the rich world.

China’s domestic market, while still enormous, is thus substantially less massive than it might have been, and its imports a lot less than they could have been. 

To exacerbate matters China remains much more dependent on manufacturing than many comparably rich economies. 

Countries typically begin to shed some industrial production as incomes rise and producers seek out low-wage workers elsewhere. 

But China has resisted this trend, thanks partly to its stalled progress on reform and partly to a deliberate effort to become more self-sufficient.

An analysis by Shoumitro Chatterjee of Pennsylvania State University and Arvind Subramanian of the Centre for Global Development notes that, though China has not given up ground in terms of manufacturing exports in aggregate, it has ceded some market space in particularly labour-intensive manufacturing industries such as production of footwear, clothing and furniture. 

And yet its losses have, on the whole, been quite small, and have led to limited and concentrated gains in export-market share for other economies. 

China’s share of global footwear exports declined from 40% to 32.5% between 2008 and 2018, for example; Vietnam—the biggest beneficiary of changes in China’s export profile—captured 5.9 of the 7.5 percentage points in export space vacated by China.

China’s failure to import manufactured goods on the scale that might have been expected exacerbates what Dani Rodrik of Harvard University has dubbed premature de-industrialisation. 

Producing goods for export no longer seems able to propel a developing economy as far down the road towards rich-world incomes as was once the case. 

Low Chinese demand is far from the only factor. 

Greater manufacturing productivity has pushed the global price of manufactured goods down. 

It is increasingly common for even low-income countries to import them rather than learn to make them for others.

Very poor countries in Africa could still enjoy a big boost to productivity and incomes by increasing the role of manufacturing in their economies. 

But as Mr Subramanian notes, the development of machines which can handle ever more of the tasks now done by human workers at ever lower costs cannot help but limit the scope for convergence via industrialisation.

With the boosting effects of commodity prices and trade growth in abeyance, what of the third factor that kicked off the glory years of the 2000s: interest rates? 

They remain low. But a post-covid-19 rich-world boom, which would in general be a good thing for developing countries, carries some risks on that front. 

Some economists warn that big spending in America threatens to unleash inflation in a way which could force the Federal Reserve to raise interest rates earlier, and perhaps more sharply, than currently expected. 

The spread of high interest rates could wreak havoc, leading to crashing asset prices and drawing a lot of capital away from the emerging world.

Even a modest rise in American interest rates in coming years, prompted by healthy growth and falling unemployment, could catch out some overstretched governments, much as the Fed’s decision to stop stimulating the economy by buying assets led to acute discomfort for a “fragile five” nations (Brazil, India, Indonesia, South Africa and Turkey) in 2013.

But for now the risk of calamity seems to be low. 

Interest rates are an unreliable guide to future inflation, but yields on American government bonds have actually declined in recent weeks at all maturities. 

A robust recovery across advanced economies without a long-term shift towards higher interest rates is quite plausible as well as highly desirable.

Delta blues

If the effects of covid-19 are not felt in the form of developed-world monetary policy, though, they will still be devastating. 

In 2020 output across the emerging world fell by 2.1%. 

That average is skewed upwards, however, by the fact that China, having managed to contain its initial outbreak, actually saw its economy expand. 

Other major emerging markets fared far worse. 

India’s economy shrank by 7.3%, Brazil’s by 4.1%, South Africa’s by 7%. 

The World Bank estimates that the ranks of those living in extreme poverty are likely to have swollen by 150m.

Hopes for a robust turnaround in 2021 have foundered on the spread of the Delta variant and the slow pace of vaccination outside rich countries; more than half the developing-world population may still not be vaccinated by the end of this year. 

On July 27th the imf, which in April had expected India to grow by more than 12% this year, cut that estimate to 9.5%. 

Across the emerging world as a whole it expects 6.3% growth this year and 5.2% in 2022.

And the effects will linger. 

One of the conditions for catching up is investment in human capital; that has been badly hit by the pandemic. 

Although students around the world lost schooling time to the interruptions caused by the pandemic, those in the poorest nations suffered most. 

While children in advanced economies missed the equivalent of 15 or so days of instruction on average in 2020, those in emerging markets missed about 45 and children in low-income countries 70. 

Poor economies can scarcely avoid educational setbacks. 

The pandemic has also exacerbated problems of governance and political instability in much of the emerging world.


In the 1990s and 2000s, rapid growth in trade and output was associated with a decline in inequality between countries but a rise in inequality within them, emerging markets very much included. 

When growth slowed in the 2010s, the distribution of economic gains within economies became relatively more important in determining whether living standards continued to improve, stagnated or fell. 

A more fractious politics became the norm around the world, and countries slid either towards or further into autocracy. 

The democracy index produced by The Economist Intelligence Unit, a sister company, has declined every year from 2015 to 2020.

Politicians from the political fringes have enjoyed surprising success, often on the back of unrealistic promises. 

The policies they have pursued frequently undermine growth, from the surprisingly abstemious fiscal policy of Mexico’s Andrés Manuel López Obrador to the unexpected enthusiasm for welfare spending on the part of India’s Narendra Modi. 

Mr Subramanian sees increasing evidence that slower growth contributes to political instability, feeding a vicious cycle.

The costs of instability are likely to rise further before they fall. 

Unrest will in some cases limit governments’ ability to tackle pressing policy problems and could deter foreign investment. 

Reforms aimed at business at home, which have already declined, may become yet more rare. 

Across low- and middle-income countries, the cost of starting a new business, as a share of income per person, declined steadily in the 2000s, according to the World Bank’s Ease of Doing Business report. 

But it bottomed out in the 2010s well above that in rich economies and has not shifted since.

Should global financial markets turn on stressed economies, an absence of social consensus could prevent leaders from taking the macroeconomic steps needed to fend off a crisis. 

In the worst cases, political instability could deteriorate into internal or even interstate violence.

And this is before one accounts for climate change. 

Its economic costs are already detectable, will only grow, and are generally felt most heavily in poor countries. 

Emerging-market governments will face loss and damage, the fiscal burden of adaptation and, often, refugee flows. 

Both political instability and interstate tensions may well increase.

The winds of climate change

The first two decades of the millennium demonstrated that sustained, broad-based growth in developing economies was possible—a big surprise to some, and a boon for hundreds of millions. 

In the absence of the particular boosts it received in the 2000s, growth has slowed, and it now faces both the stumbling block of the pandemic and the persistent headwinds of climate change. 

But the last of those only serves to stress the moral case for the world as a whole to try to do better; development is at the heart of adaptation.

The catch-up pace of the 2000s may never be seen again. 

But if things do not worsen further it is still possible for the brics to match the output of the g6 by 2040 and for associated growth to spread out quite widely. 

The gate which was opened at the end of the 20th century has narrowed, but it has not shut. 

The challenges of passing through it, though, are undeniably greater than they were.

China lays down challenge to the west on crypto

Governments and private sector must adopt more unified approach in response to Beijing

Mohamed El-Erian

© FT montage; Bloomberg




The time has come for more western governments to stop dismissing the crypto revolution as some mix of illicit payments schemes and reckless financial speculation.

Instead, they should be more open to embracing the innovations of crypto and channelling them in a better direction for finance, the economy and society at large.

At the same time, crypto supporters need to recognise the growing systemic consequences of the continuing and future disruptions, deepening their engagement on regulatory and energy issues. They need to shift away from a “zero-sum” mindset where their gains can only come from the losses of the established financial system.

Overall, the policy debate in western economies over crypto remains too narrow relative to the importance of the issues in play and excessively polarised, with participants speaking different languages. This has intensified the underlying tug of war between accelerating private sector adoption and government/central bank discomfort.

As the former steadily increases, we have started to see divergence in the western world on the cost-benefit of trying to channel the crypto revolution towards improving financial services, making things even more complicated.

In contrast, China is pressing ahead with a more forceful, unified top-down vision, setting the stage for transformational dynamics that have the potential to extend well beyond the country itself.

What happens next will have profound implications for financial services, monetary policy, investment outcomes, payment platforms and the configuration of global reserve currencies. It will also influence the control and use of big data, as well as China-US technological and economic competition.

Three on-the-ground developments show how things are shaping up.

First, the technologies driving the crypto revolution, including digitally-distributed ledgers of transactions known as blockchains, are becoming more disruptive to a financial industry that has remained for too long relatively inefficient and a source of excessive profits.

The combination of regulatory moats that deterred industry entrants and traditional customer inertia are no longer strong enough to discourage a tech-driven wave of competition.

Second, despite their instability, cryptocurrencies are gradually becoming a larger part of investor portfolios via allocations to two buckets — risk-mitigating assets that are an alternative at the margin to gold and some government bonds; and opportunistic bets on non-correlated assets.

Third, cryptocurrencies are also somewhat more prevalent in the payments ecosystem. It’s worrisome for illicit payments (think of the growing number of ransomware attacks) but more positive for remittance transfers, where too many traditional channels remain slow and expensive. But the broader evolution into global currencies continues to be undermined by price volatility, lack of broad trust and regulatory concerns.

The big question now in whether crypto disrupters and regulators in the West will succeed in converging on a more unified approach.

The onus here falls primarily on the crypto world, which risks repeating the mistake that Big Tech has made — pursuing narrow business objectives without realising that their desired success will make them systemically important.

They will not get far with governments and central banks without incorporating stronger anti-money laundering safeguards. They also have to respond to concern about a potential erosion of monetary policy tools.

The need for governments and central banks to be open-minded is made more urgent by what China is doing. Officials in Beijing have understood the transformational power of the crypto revolution and wish to co-opt it in a holistic and highly directed manner.

By doing so, it confronts the west with a challenge that goes beyond China being quicker to develop better payments systems and a central bank digital currency — all of which are likely to jump borders. It could also pose a new problem for the dollar’s reserve currency status, as well as providing China with more control over sensitive big data and closing what remains of the technological gap.

Absent a more co-operative approach, both sides of the crypto world in the west may find their future being determined by what a faster-moving China is doing and intends to do.


The writer is president of Queens’ College, Cambridge and an adviser to Allianz and Gramercy

Time to Relax Global Travel Restrictions

Complex and ever-shifting restrictions make foreign travel a daunting proposition – more often than not for no good reason. Relatives continue to pass away without visits from loved ones, parents are isolated from children, and there are fewer jobs in travel-related activities.

Peter Boone, Simon Johnson



WASHINGTON, DC – Anyone who risks a visit to Canada these days needs to take care. 

Canadians are threatening six months in jail, and up to $750,000 in fines, for disobeying testing and quarantine rules upon arrival. 

In the United Kingdom, the health secretary warned that travelers arriving from outside the UK could face ten years in prison for inaccurately recording their previous whereabouts on entry forms. 

The Biden administration recently extended the outright ban preventing most non-Americans in Europe from traveling to the United States, with threats of fines and deportation for non-compliance.

These complex and ever-shifting restrictions make foreign travel a daunting proposition. 

Relatives continue to pass away without visits from loved ones, parents are isolated from children, and there are fewer jobs in travel-related activities. It is time to relax these rules in a responsible manner.

The risks from COVID-19 have been dramatically changed by vaccination. 

All vaccines authorized by the US Food and Drug Administration have proved well over 95% effective at preventing deaths, and over 90% effective at preventing serious disease, including against the more infectious delta variant. 

Vaccination lowers the overall infection fatality ratio (IFR), which measures deaths among infected people, from 0.41% to around 0.02%. 

(Because IFR varies significantly by age, we calculate these ratios from official data by age group, weighted by the age composition of the US population.)

Of course, vaccinating people with any kind of vulnerability, including those who are elderly or who live in congregate care settings, must remain a top global priority.

The COVID-19 vaccines do not fully prevent infections, but they do a good job of preventing severe illness. 

The US Centers for Disease Control and Prevention estimates that the 2019-20 influenza season caused 38 million infections, leading to 18 million medical visits, 400,000 hospitalizations, and 22,000 deaths. 

That implies a 0.06% IFR for the flu, more than double the IFR for COVID-19 once the vulnerable are vaccinated. 

There are still important open questions, including what percentage of people may suffer debilitating long-term COVID-19 symptoms. 

But the risks are now similar to those from diseases with which we already cope.

Epidemiologists have shown persuasively that wearing masks, social distancing, and generally avoiding close in-person contact reduces disease transmission. 

International arrivals do not disturb that outcome at all; if we have stopped spreading the disease, then new arrivals who follow our rules don’t change much.

In 2019, 241 million passengers arrived and departed the US by air, implying that an average of roughly 330,000 passengers entered the country per day. 

If all those 330,000 arrivals came from countries near the height of an infection cycle, and all symptomatic passengers still boarded the flight, then approximately 1% of those passengers (3,300 people) would be infected.

The US has recorded nearly 35 million infections in the roughly 500 days since the start of the pandemic, implying an average of around 70,000 new infections per day. 

The true number is probably double that, owing to undetected asymptomatic infections. 

If around 140,000 new infections of domestic origin per day is a reasonable estimate, the addition of up to 3,300 new cases is a minor blip.

Even though passengers on airplanes carry few infections (relative to the population size for large countries), some might argue that air travel is a breeding ground for infections, so we should ban it for that reason. 

There’s no doubt that traveling in confined quarters is a risk, but so are many other activities: eating in restaurants, swimming at a pool, inviting friends to your house, visiting an art gallery, etc. 

There’s little reason to isolate international air travel as the only activity to restrict severely. 

It seems far more sensible to take measures that make air travel safer.

The desire to keep out potential new variants of the disease is understandable but unrealistic. 

There are only a few countries that have managed a near-zero COVID outcome – notably island states like New Zealand and Australia. 

Most borders are far more porous. 

It is not people visiting relatives who ensure that all the variants will spread – it is our desire for French wines, Greek olives, Canadian maple syrup, and illegal drugs.

Approximately 30,000 trucks cross the US-Canada border each day, and another 18,000 travel between the US and Mexico. 

Similarly, roughly 10,000 trucks cross the UK border daily. 

Air freight and shipping raise contacts even further. 

To maintain a zero-variant policy would require quarantining all drivers, pilots, and other personnel, as well as halting all pedestrian, passenger car, and other traffic. 

The result would be further supply disruptions, higher prices (for construction materials, food, and autos, among other items), and job losses. 

There is no political support for such a policy.

We should stop pretending that international travel is the problem. 

Vaccines and treatments are keeping the variants in check, and we should keep funding promising work on boosters, new vaccines, treatments, and potential cures. 

Listening to public health advice is important. 

But our policymakers also need to focus on what really matters.


Peter Boone is Chair of Effective Intervention at the London School of Economics’ Center for Economic Performance.

Simon Johnson, a former chief economist at the International Monetary Fund, is a professor at MIT's Sloan School of Management and a co-chair of the COVID-19 Policy Alliance. He is the co-author, with Jonathan Gruber, of Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream and the co-author, with James Kwak, of 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown.