soros essays

8/17/2019 Soros Essays

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The Case for Surge Funding

Project Syndicate, Feb 17, 2016

Important progress was made at the donors’ conference

for Syrian refugees convened in London on February 4.

But much more remains to be done. The international

community is still vastly underestimating what is needed

to support refugees both inside and outside the borders

of the !uropean "nion. To deal with the refugee crisis while putting the !"’s largely unused ### borrowing

capacity to better use re$uires a paradigm shift.

%ather than scraping together insufficient funds year

after year it is time to engage in &surge funding.'

Spending a large amount of money up front would be far

more effective than spending the same amount overseveral years. Frontloading the spending would allow us

to address the most dangerous conse$uences of the

crisis ( including anti)immigrant sentiment in receiving

countries and despondency and marginali*ation among

refugees ( more effectively. +a,ing large initial

investments would help tip the economic political and

social dynamics away from -enophobia and disaffectionand toward constructive outcomes that benefit refugees

and the recipient countries ali,e.

Surge funding has been used often to finance

immuni*ation campaigns. The International Finance

Facility for Immuni*ation IFFIm/ which borrows

against future government contributions to


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immuni*ation programs has raised billions of dollars

over the past several years to ensure that vaccination

campaigns are successful as soon as possible. In the long

run this is more effective than spending the sameamount of money in yearly installments. IFFIm provides

a convincing precedent for the current crisis.

# sudden large influ- of refugees can cause panic that

affects the general population the authorities and most

destructively the refugees themselves. The panic breeds

a false sense that refugees are a burden and a dangerresulting in e-pensive and counter)productive measures

li,e erecting fences and walls and concentrating refugees

into camps which in turn breeds frustration and

desperation among the refugees. If the global

community could fund large)scale concentrated

programs to address the problem the general public andthe refugees would be reassured.

# surge in spending is needed both in !urope and in

frontline states li,e 0ordan Lebanon and Tur,ey. The

necessary investments include an overhaul of the !"’s

asylum policy and improvement of its border controls.

In frontline states money is needed to provide refugees with formal employment opportunities health care and

education. If life for refugees is made tolerable in

frontline countries and they believe that an orderly

process is in place for gaining entry to !urope they are

more li,ely to wait their turn rather than rushing to

!urope and overwhelming the system. Similarly if the

refugee crisis can be brought under control the panic


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will subside and the !uropean public will be less prone

to support anti)migrant policies.

0ordan could provide a test case. # country of 1.2 millionpeople it is providing refuge to 3.1 million non)citi*ens

including .352 million Syrians and facing the influ- of

additional Syrians uprooted by %ussian bombing. #

combination of massive upfront direct financial

assistance enhanced trade preferences and temporary

debt relief is needed. # successful program for 0ordan

could demonstrate the international community’s ability to bring the refugee crisis under control opening the

way to similar programs for other frontline states

ad6usted on a case)by)case basis depending on local

conditions.

The approach suggested here would cost more than !"

member states can afford out of current budgets. #minimum of 748 billion 942 billion/ needs to be spent

annually in the ne-t :)2 years; but even larger amounts

would be 6ustified to bring the migration crisis under

control. In fact so far lac, of ade$uate financing is the

main obstacle to implementation of successful programs

in any of the frontline countries particularly in Tur,ey. billion/ other !" countries are running

deficits. =erman Finance +inister


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This enhances the merits of having recourse to the !"’s

largely unused ### credit. The migration crisis poses an

e-istential threat to the !". Indeed with the north

pitted against the south and the east confronting the west the !" is coming apart at the seams.


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Putin is a Bigger Threat to Euroe!s E"istence

than #sis

The $uardian, Feb 11, 2016

The leaders of the "S and the !" are ma,ing a grievous

error in thin,ing that president Aladimir utin’s %ussia

is a potential ally in the fight against Islamic State. The

evidence contradicts them. utin’s aim is to foster the

!"’s disintegration and the best way to do so is to flood

!urope with Syrian refugees.

%ussian planes have been bombing the civilian

population in southern Syria forcing them to flee to

0ordan and Lebanon. There are now 38888 Syrian

refugees camped out in the desert awaiting admission to

0ordan. # smaller number are waiting to enter Lebanon.

Both groups are growing.

%ussia has also launched a large)scale air attac, against

civilians in northern Syria. This was followed by a

ground assault by Syrian president Bashar al)#ssad’s

army against #leppo a city that used to have 3 million

inhabitants. The barrel bombs caused C8888 civilians

to flee to Tur,ey; the ground offensive could uproot

many more.

The families on the move may not stop in Tur,ey.

=erman chancellor #ngela +er,el flew to #n,ara this

wee, to ma,e last)minute arrangements with the

Tur,ish government to induce the refugees already in

Tur,ey to prolong their stay there. She offered to airlift


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388888):88888 Syrian refugees annually directly to

!urope on the condition that Tur,ey will prevent them

from going to =reece and will accept them bac, if they

do so.

utin is a gifted tactician but not a strategic thin,er.

There is no reason to believe he intervened in Syria in

order to aggravate the !uropean refugee crisis. Indeed

his intervention was a strategic blunder because it

embroiled him in a conflict with Tur,ey’s president

%ecep Tayyip !rdoDan which has hurt the interests of both.

But once utin saw the opportunity to hasten the !"’s

disintegration he sei*ed it. Ee has obfuscated his

actions by tal,ing of cooperating against a common

enemy Isis. Ee has followed a similar approach in

",raine signing the +ins, agreement but failing tocarry out its provisions.

It is hard to understand why "S and !" leaders ta,e

utin at his word rather than 6udging him by his

behaviour. The only e-planation I can find is that

democratic politicians see, to reassure their publics by

painting a more favourable picture than reality 6ustifies.The fact is that utin’s %ussia and the !" are engaged in

a race against time the $uestion is which one will

collapse first.

The utin regime faces ban,ruptcy in 38C when a large

part of its foreign debt matures and political turmoil

may erupt sooner than that. The president’s popularity


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which remains high rests on a social compact re$uiring

the government to deliver financial stability and a slowly

but steadily rising standard of living. and the subse$uent

rescue pac,ages for =reece the !" has learned how to

muddle through one crisis after another. But today it is

confronted by five or si- crises at the same time which


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may prove to be too much. #s +er,el correctly foresaw

the migration crisis has the potential to destroy it.


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The E% is on the &erge of Co''ase ( )n

#nter*ie+

The e+ -or. /e*ie+ of Boo.s, an 20, 2016

The following is a revised version of an interview

between George Soros and Gregor Peter Schmitz of the

German magazine


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not only in !urope but also in =ermany and even in her

own partyMis under attac,.

Schmitz +er,el used to be very cautious and deliberate.eople could trust her. But in the migration crisis she

acted impulsively and too, a big ris,. Eer leadership

style has changed and that ma,es people nervous.

Soros That’s true but I welcome the change. There is

plenty to be nervous about. #s she correctly predicted

the !" is on the verge of collapse. The =ree, crisistaught the !uropean authorities the art of muddling

through one crisis after another. This practice is

popularly ,nown as ,ic,ing the can down the road

although it would be more accurate to describe it as

,ic,ing a ball uphill so that it ,eeps rolling bac, down.

The !" now is confronted with not one but five or si-

crises at the same time.

Schmitz To be specific are you referring to =reece

%ussia ",raine the coming British referendum and the

migration crisis@

Soros es. #nd you haven’t even mentioned the root

cause of the migration crisis the conflict in Syria. Norhave you mentioned the unfortunate effect that the

terrorist attac,s in aris and elsewhere have had on

!uropean public opinion.

+er,el correctly foresaw the potential of the migration

crisis to destroy the !uropean "nion.


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badly needs fi-ing. This is a fact but it is not irreversible.

#nd the people who can stop +er,el’s dire prediction

from coming true are actually the =erman people. I

thin, the =ermans under the leadership of +er,el haveachieved a position of hegemony. But they achieved it

very cheaply. Normally hegemons have to loo, out not

only for their own interests but also for the interests of

those who are under their protection. Now it’s time for

=ermans to decide Ho they want to accept the

responsibilities and the liabilities involved in being the

dominant power in !urope@

Schmitz she was not

willing to allow the rescue of the !uropean ban,ing

system to be guaranteed on a !urope)wide basis becauseshe felt that the prevailing =erman public opinion would

be opposed to it. If she had tried to change public

opinion instead of following it the tragedy of the

!uropean "nion could have been avoided.

Schmitz But she wouldn’t have remained chancellor of

=ermany for ten years.


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Soros ou are right. She was very good at satisfying the

re$uirements and aspirations of a broad range of the

=erman public. She had the support of both those who

wanted to be good !uropeans and those who wanted herto protect =erman national interest. That was no mean

feat. She was reelected with an increased ma6ority. But

in the case of the migration issue she did act on

principle and she was willing to ris, her leadership

position. She deserves the support of those who share

her principles.

I ta,e this very personally. I am a strong supporter of the

values and principles of an open society because of my

personal history surviving the Eolocaust as a 0ew under

the Na*i occupation of Eungary. #nd I believe that she

shares those values because of her personal history

growing up under Kommunist rule in !ast =ermanyunder the influence of her father who was a pastor. That

ma,es me her supporter although we disagree on a

number of important issues.

Schmitz ou have been so involved in promoting the

principles of open society and supporting democratic

change in !astern !urope.


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ruling party in oland 0arosPaw Qac*yRs,i is ta,ing a

similar approach. Ee is not as intelligent as rbOn but

he is a canny politician and he chose migration as the

central issue of his campaign. oland is one of the mostethnically and religiously homogeneous countries in

!urope. # +uslim immigrant in Katholic oland is the

embodiment of the ther. Qac*yRs,i was successful in

painting him as the devil.

Schmitz +ore broadly how do you view the political

situation in oland and Eungary@

Soros #lthough Qac*yRs,i and rbOn are very different

people the regimes they intend to establish are very

similar. #s I have suggested they see, to e-ploit a mi- of

ethnic and religious nationalism in order to perpetuate

themselves in power. In a sense they are trying to

reestablish the ,ind of sham democracy that prevailed inthe period between the First and Second


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Qac*yRs,i’s oland are hostile to each other but they are

even more hostile to the principles on which the

!uropean "nion was founded.

Schmitz


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other fissures. Therefore the very survival of the !" is at

ris,.

Schmitz That’s an interesting point because Iremember that you used to be very critical of +er,el two

years ago for being too concerned with the interests of

her voters and establishing a =erman hegemony on the

cheap. Now she has really changed course on the

migration issue and opened the door wide to Syrian

refugees. That created a pull factor that in turn allowed

the !uropean authorities to develop an asylum policy with a generous target up to a million refugees a year

with the target open for several years. %efugees who are

$ualified to be admitted could be e-pected to stay where

they are until their turn comes.

Soros But we don’t have a !uropean asylum policy. The

!uropean authorities need to accept responsibility forthis. It has transformed this past year’s growing influ- of

refugees from a manageable problem into an acute

political crisis. !ach member state has selfishly focused

on its own interests often acting against the interests of

others. This has precipitated panic among asylum

see,ers the general public and the authoritiesresponsible for law and order. #sylum see,ers have been

the main victims. But you are right. +er,el deserves

credit for ma,ing a !uropean asylum policy possible.

The !" needs a comprehensive plan to respond to the

crisis one that reasserts effective governance over the

flows of asylum see,ers so that they ta,e place in a safeorderly way and at a pace that reflects !urope’s capacity


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to absorb them. To be comprehensive the plan has to

e-tend beyond the borders of !urope. It is less

disruptive and much less e-pensive for potential asylum

see,ers to stay in or close to their present location.

+y foundation developed a si-)point plan on this basis

and announced it at e-actly the same time as rbOn

introduced his si-)point plan but the two plans were

diametrically opposed to each other. rbOn’s plan was

designed to protect the national borders against the

asylum see,ers; ours sought to protect the asylumsee,ers.


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Soros In Eungary he has won hands down. +ore

disturbingly he is also winning in !urope. Ee is

challenging +er,el for the leadership of !urope. Ee

launched his campaign at the party conference inSeptember 382 of the Khristian Social "nion of Bavaria

the sister party of +er,el’s Khristian Hemocratic

"nion/ and he did so in cahoots with Eorst Seehofer the

=erman party chairman. #nd it is a very real challenge.

It attac,s the values and principles on which the

!uropean "nion was founded. rbOn attac,s them from

the inside; utin from the outside. Both of them are

trying to reverse the subordination of national

sovereignty to a supranational !uropean order.

utin goes even further he wants to replace the rule of

law with the rule of force. They are har,ing bac, to a

bygone age. Fortunately +er,el has ta,en the challengeseriously. She is fighting bac, and I support her not only

with words but also with deeds. +y foundations do not

engage only in advocacy; they see, to ma,e a positive

contribution on the ground.


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largely untapped ### borrowing capacity. The burden

of servicing the bonds could be e$uitably distributed

between member states that accept refugees and those

that refuse to do so or impose special restrictions.Needless to say that is where I remain at odds with

Khancellor +er,el.

Schmitz ou have retired from running your hedge fund

and devote all your energies to your foundation.


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family and many others/. Ee taught me that it’s much

better to face harsh reality than to close your eyes to it.

nce you are aware of the dangers your chances of

survival are much better if you ta,e some ris,s than if you mee,ly follow the crowd. That is why I trained

myself to loo, at the dar, side. It has served me well in

the financial mar,ets and it is guiding me now in my

political philanthropy. #s long as I can find a winning

strategy however tenuous I don’t give up. In danger lies

opportunity. It’s always dar,est before dawn.

Schmitz


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Schmitz Eow concerned are you that in the middle of all

these crises an important !" member state such as the

"Q is considering leaving the !uropean "nion@

Soros Aery. I am convinced that Britain should stay in

!urope not only for economic but even more for political

reasons. #n !" without the "Q would be a much wea,er

union.

Schmitz But surveys show a British ma6ority for a

Bre-it or British e-it from the !".

Soros The campaign for the Bre-it has deliberately

misled the public. Kurrently Britain has the best of all

possible deals with !urope. It has access to the common

mar,et where nearly half of "Q e-ports go while it is not

weighed down by the burden of having 6oined the

euro*one.

Schmitz


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than to be part of it. The campaign had the field to itself

because the government wanted to give the impression

that it is holding out for the best deal.

Schmitz For a long time !uropeMand the worldMcould

count on Khina as a growth and credit engine.

Soros Khina is still historically the most important

country. It still has very large accumulated foreign

currency reserves.

Schmitz #nd that will shelter the country@

Soros Khina is e-hausting these reserves very rapidly. It

also has an incredibly large reservoir of trust from the

Khinese population many people may not understand

how the Khinese regime actually wor,s but they believe

that a regime that has managed to overcome so many

problems ,nows what it is doing. But the reservoir of

trust is also being e-hausted at a remar,ably fast rate

because the leadership has made many mista,es.

resident i 0inping can carry on with his current

policies for another three years or so but during that

time Khina will e-ert a negative influence on the rest of

the world by reinforcing the deflationary tendencies thatare already prevalent. Khina is responsible for a larger

share of the world economy than ever before and the

problems it faces have never been more intractable.

Schmitz Kan resident i rise to the challenge@

Soros There is a fundamental flaw in i’s approach. Ee

has ta,en direct control of the economy and of security.


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If he were to succeed in a mar,et)oriented solution it

would be much better for the world and for Khina. But

you cannot have a mar,et solution without some

political changes. ou cannot fight corruption withoutindependent media. #nd that’s one thing that i is not

willing to allow. n that point he is closer to utin’s

%ussia than to our ideal of an open society.

Schmitz


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for recapturing the spirit of solidarity that characteri*ed

the !uropean "nion in its early days.

Schmitz +any critici*e "S resident Barac, bama for being too wea, toward %ussia.

Soros %ightly so. utin is a supreme tactician who

entered the Syrian conflict because he saw an

opportunity to improve %ussia’s standing in the world.

Ee was ready to ,eep pushing until he encountered

serious resistance. resident bama should havechallenged him earlier. If bama had declared a no)fly

*one over Syria when %ussia started to supply military

e$uipment on a large scale %ussia would have been

obliged to respect it. But bama was eager to avoid any

chance of a direct military confrontation with %ussia. So

%ussia installed antiaircraft missiles and the "S had to

share control of the s,ies over Syria with %ussia. oucould almost say that by shooting down a %ussian

fighter 6et Tur,ish president %ecep Tayyip !rdoDan did

bama a favor. utin had to recogni*e that his military

adventure had run into serious opposition and he now

seems ready for a political solution. That is promising.

There is also ISIS and the terrorist attac,s that threatento undermine the values and principles of our

civili*ation. The terrorists want to convince +uslim

youth that there is no alternative to terrorism and if we

listen to the li,es of Honald Trump they will succeed.

Schmitz I can’t help but as,. Ho you ,now Trump@


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Soros =oing bac, many years Honald Trump wanted

me to be the lead tenant in one of his early buildings. Ee

said &I want you to come into the building. ou name

your price.' +y answer was &I’m afraid I can’t afford it.' #nd I turned him down.

The Terrorists and eagogues 3ant us to be

Scared4 3e 5ustn!t $i*e #n4

The $uardian, ec 2, 201

pen societies are always endangered. This is especially

true of #merica and !urope today as a result of

the terrorist attac,s in aris and elsewhere and the way

that #merica and !urope particularly France have

reacted to them.

0ihadi terrorist groups such as Islamic State and al)

Jaida have discovered the achilles heel of our western

societies the fear of death. Through horrific attac,s and

macabre videos the publicists of Isis magnify this fear

leading otherwise sensible people in hitherto open

societies to abandon their reason.

Scientists have discovered that emotion is an essential

component of human reasoning. That discovery e-plains

why 6ihadi terrorism poses such a potent threat to our

societies the fear of death leads us and our leaders to

thin, ( and then behave ( irrationally.


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Science merely confirms what e-perience has long

shown when we are afraid for our lives emotions ta,e

hold of our thoughts and actions and we find it difficult

to ma,e rational 6udgments. Fear activates an oldermore primitive part of the brain than that which

formulates and sustains the abstract values and

principles of open society.

The open society is thus always at ris, from the threat

posed by our response to fear. # generation that has

inherited an open society from its parents will notunderstand what is re$uired to maintain it until it has

been tested and learns to ,eep fear from corrupting

reason. 0ihadi terrorism is only the latest e-ample. The

fear of nuclear war tested the last generation and the

fear of communism and fascism tested my generation.

The 6ihadi terrorists’ ultimate goal is to convince +uslim youth worldwide that there is no alternative to

terrorism. #nd terrorist attac,s are the way to achieve

that goal because the fear of death will awa,en and

magnify the latent anti)+uslim sentiments in !urope

and #merica inducing the non)+uslim population to

treat all +uslims as potential attac,ers. #nd that is e-actly what is happening. The hysterical

anti)+uslim reaction to terrorism is generating fear and

resentment among +uslims living in !urope and

#merica. The older generation reacts with fear the

younger one with resentment; the result is a breeding

ground for potential terrorists. This is a mutuallyreinforcing refle-ive process.


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Eow can it be stopped and reversed@ #bandoning the

values and principles underlying open societies and

giving in to an anti)+uslim impulse dictated by fear

certainly is not the answer though it may be difficult toresist the temptation. I e-perienced this personally when

I watched the last %epublican presidential debate; I

could stop myself only by remembering that it must be

irrational to follow the wishes of your enemies.

To remove the danger posed by 6ihadi terrorism

abstract arguments are not enough; we need a strategyfor defeating it. The challenge is underscored by the fact

that the 6ihadi phenomenon has been with us for more

than a generation. Indeed gaining a proper

understanding of it may be impossible. But the attempt

must be made.

Konsider the Syrian conflict which is the root cause ofthe migration problem that is posing an e-istential

threat to the !uropean "nion as we ,now it. If it was

resolved the world would be in better shape. It is

important to recognise that Isis is operating from a

position of wea,ness.


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crystal clear it is an egregious mista,e to do what the

terrorists want us to do. That is why as 385 gets

underway we must reaffirm our commitment to the

principles of open society and resist the siren song of theli,es of Honald Trump and Ted Kru* however hard that

may be.

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