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Understanding The Caucasus Region

Understanding The Caucasus Region

The Caucasus Region has been engulfed in a territorial dispute between Armenia and Azerbaijan over the…

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Understanding The Caucasus Region

The Caucasus Region has been engulfed in a territorial dispute between Armenia and Azerbaijan over the Nagorno-Karabakh region for decades now. Although flare-ups in the conflict have been recent, the root of the violence harkens back to the 1980s.

But, as Visual Capitalist's Avery Koop And Nick Routely explain below, this map allows us to step back and look at the region in its larger context.

While most media has focused on the tensions, this map breaks down the entire Caucasus region, providing key facts and information. What are the countries that comprise the region? What is the main economic activity in the area? How is the population distributed? Let’s begin.

The Basics

The Caucasus region is characterized by far-reaching mountain ranges, that have long separated people and created distinct ethnic, linguistic, and religious identities over thousands of years. Today, the region spans over three main countries: Armenia, Azerbaijan, and Georgia, and is bordered by Russia, Turkey, and Iran.

Focusing on the main three, here’s a look at some basic demographics:

  •  Azerbaijan Population: 10.4 million

  •  Armenia Population: 3.0 million

  •  Georgia Population: 4.1 million

Home to around 20 million, the Caucasus region touches the Caspian Sea to the East and the Black Sea to the West. It is an area distinctly situated between Europe, Asia, and the Middle East, but is defined by most categorizations as Central Asian.

Azerbaijan

Azerbaijan is the biggest country in the region, both in terms of land mass and population. The Nagorno-Karabakh region is located within the official borders of Azerbaijan, and is inhabited almost entirely by ethnic Armenians.

The majority of Azeris are Muslim, however, the country is considered one of the most secular Muslim countries in the world. Azerbaijani or Azeri is the most widely spoken language with more than 92% of people speaking it. Just over 1% in the country speak Russian and another 1% speak Armenian. Perhaps, unsurprisingly, a similar percentage share defines the amount of ethnic Russians and Armenians in Azerbaijan, at 1.5% and 1.3% respectively.

Armenia

Like both its neighbors, Armenia was founded at the fall of the Soviet Union in 1991. Unlike its neighbors, however, it is entirely landlocked.

The country is a majority Christian nation, with an ethnic makeup of nearly 98% Armenians and the most widely spoken language being Armenian, according to the government. The population count has fallen since the collapse of the USSR, and has been relatively flat in more recent years.

Georgia

Georgia is slightly smaller than Azerbaijan in size; the country shares a long border with Russia to its north and features a long coastline on the Black Sea.

Georgia’s population growth shares a similar story to many other former Soviet republics. While total population has decreased slightly over recent years, the growth in ethnic nationals (Georgians) has actually increased. The country is majority Christian and Georgian is the most popular language.

Where do People Live Across the Caucasus Region?

So how are these populations concentrated throughout the region? These cartograms from World Mapper, break it down by country:

Azerbaijan

Most people live in and around the capital Baku, a port city on the Caspian Sea. However, a number of people also live inland closer to the Armenian and Georgian borders.

Armenia

In Armenia the population heavily skews towards its capital city of Yerevan, which has a population of 1.1 million.

Georgia

Georgia’s population distribution is slightly more even than its neighbors with a preference towards the capital Tbilisi.

The Economy of the Caucasus Region

Now let’s dive into the economic activity in the Caucasus. In some parts, the region is oil-rich with access to resources like the vast oil fields in the Caspian Sea off Azerbaijan’s coast. In fact, the Baku-Tbilisi-Ceyhan Pipeline carries nearly 1 million barrels of oil from the oilfields to Turkey every day.

Stepping back, here’s a glance at regional GDPs:

  •  Azerbaijan GDP: $42.6 billion

  •  Georgia: $15.9 billion

  •  Armenia GDP: $12.7 billion

Azerbaijan is the Caucasus region’s biggest economy. It is the most economically developed country of the three, having seen rapid GDP growth since its transition from a Soviet republic. At its height in the early 2000s, the national GDP was growing at yearly rates of 25%-35%. Today, its oil and gas exports are proving extremely lucrative given the European energy crisis due to the war in Ukraine. Fossil fuels make up about 95% of the country’s export revenue.

Both Armenia and Georgia’s economies are considered emerging/developing and are dependent on many different Russian imports. However, according to the European Bank for Reconstruction & Development, both economies are expected to grow 8% this year.

Georgia’s economy has been recovering from the pandemic thanks to its burgeoning tourism industry, largely drawing Russian visitors. Additionally, in both Georgia and Armenia, the inflow of Russian businesses and tech professionals have boosted the economies.

A Brief Background

The three countries which encapsulate the region, Armenia, Azerbaijan, and Georgia, were each republics under the Soviet Union until its fall in 1991. Additionally, the regions of Dagestan and Chechnya in Russia, also located in the geographic sphere of the Caucasus, each maintain a distinct identity from Russia. Both regions are majority ethnically non-Russian and still face regular violence over their power struggle with the regional heavyweight.

In fact, many of the tensions in the region can be linked to Russian oppression, according to experts.

“Russian suppression of national resistance in the Caucasus has encouraged fundamentalist movements.”

– DR. JAMES V. WERTSCH (CAUCASUS SPECIALIST, UNIVERSITY OF WASHINGTON, ST. LOUIS)

In recent history, Russia even invaded Georgia during the opening ceremonies of the 2008 Beijing Summer Olympics, sparking conflict in the Ossetia and Abkhazia regions. The Russo–Georgian War is considered the first European war of the 21st century.

While the history of the Caucasus goes way back⁠—for instance, the kingdom of Armenia dates back to the 331 BC⁠—more recent events have been shaped by Cold War and subsequent fallout from the dissolution of the USSR.

The Nagorno-Karabakh Conflict

The tension over the Nagorno-Karabakh region began in the late 1980s and escalated into a full-scale war into the 1990s. In the early years of the conflict, approximately 30,000 people died. Since then, ceasefires and violence have arisen intermittently⁠—with the most recent end to the fighting in 2020. At least 243 people have been killed since then.

The conflict first began when newly independent Armenia demanded the region back from Azerbaijan, which was still a Soviet state at the time, as the population there was (and still is) mostly Armenian. Although not internationally recognized, a breakaway group has declared part of Nagorno-Karabakh as an independent state called the Republic of Artsakh.

Here’s a very brief timeline:

  • 1988-1994: First Nagorno-Karabakh War

  • April 2016: Four days of violence at the separation line

  • September-November 2020: War was reignited until Russia negotiated a ceasefire

  • September 2022: New clashes erupted resulting in hundreds of deaths

The conflict has bled out into the region—Russia is on Armenia’s side and Turkey on Azerbaijan’s. But new allies may be taking the stage as evidenced by Nancy Pelosi’s visit to Armenia in mid-September. Today, the region is divided between Azerbaijan, Armenia, and Russian peacekeepers, but is still officially Azerbaijani.

Tyler Durden Sun, 10/09/2022 - 08:45

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George Santos: A democracy can’t easily penalize lies by politicians

When candidates can get elected to Congress based on a mountain of lies they’ve told, is it time to reconsider whether such lies are protected by the…

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George Santos, in the middle, lied his way to winning election to Congress, where he took the oath of office on Jan. 7, 2023. AP Photo/Alex Brandon

George Santos is not the first politician to have lied, but the fables he told to get elected to Congress may be in a class by themselves. Historian Sean Wilentz remarked that while embellishments happen, Santos’ lies are different – “there is no example like it” in American history, Wilentz told Vox in a late-January, 2023, story.

Columnist Peggy Noonan wrote that Santos was “a stone cold liar who effectively committed election fraud.”

And now Santos has taken the dramatic step of removing himself temporarily from the committees he’s been assigned to: the House Small Business Committee and the Science, Space and Technology Committee. The Washington Post reports Santos told his GOP colleagues that he would be a “distraction” until cleared in several probes of his lies.

While Santos’ lies got some attention from local media, they did not become widely known until The New York Times published an exposé after his election.

Santos’ lies may have gotten him into hot water with the voters who put him in the House, and a few of his colleagues, including the New York GOP, want him to resign. CBS News reported that federal investigators are looking at Santos’ finances and financial disclosures.

But the bulk of Santos’ misrepresentations may be protected by the First Amendment. The U.S. Supreme Court has concluded that lies enjoy First Amendment protection – not because of their value, but because the government cannot be trusted with the power to regulate lies.

In other words, lies are protected by the First Amendment to safeguard democracy.

So how can unwitting voters be protected from sending a fraud to Congress?

Any attempt to craft a law aimed at the lies in politics will run into practical enforcement problems. And attempts to regulate such lies could collide with a 2012 Supreme Court case United States v. Alvarez.

A large, columned white building at the top of a grand, white set of stairs.
The U.S. Supreme Court has ruled that some false statements are ‘inevitable if there is to be open and vigorous expression of views.’ AP Photo/Manuel Balce Ceneta, File

Lies and the First Amendment

Xavier Alvarez was a fabulist and a member of a public water board who lied about having received the Congressional Medal of Honor in a public meeting. He was charged in 2007 with violating the Stolen Valor Act, which made it a federal crime to lie about having received a military medal.

The Supreme Court rejected the government’s argument that lies should not be protected by the First Amendment. The court concluded that lies are protected by the First Amendment unless there is a legally recognized harm, such as defamation or fraud, associated with the lie. So the Stolen Valor Act was struck down as an unconstitutional restriction on speech. The court pointed out that some false statements are “inevitable if there is to be open and vigorous expression of views in public and private conversation.”

Crucially, the court feared that the power to criminalize lies could damage American democracy. The court reasoned that unless the First Amendment limits the power of the government to criminalize lies, the government could establish an “endless list of subjects about which false statements are punishable.”

Justice Anthony Kennedy, who wrote the majority opinion in Alvarez, illustrated this danger by citing George Orwell’s dystopian novel “1984,” in which a totalitarian government relied on a Ministry of Truth to criminalize dissent. Our constitutional tradition, he wrote, “stands against the idea that we need” a Ministry of Truth.

Lies, politics and social media

George Santos, unlike Xavier Alvarez, lied during an election campaign.

In Alvarez, the Supreme Court expressed concern about laws criminalizing lies in politics. It warned that the Stolen Valor Act applied to “political contexts, where although such lies are more likely to cause harm,” the risk that prosecutors would bring charges for ideological reasons was also high.

The court believed that the marketplace of ideas was a more effective and less dangerous mechanism for policing lies, particularly in politics. Politicians and journalists have the incentives and the resources to examine the records of candidates such as Santos to uncover and expose falsehoods.

The story of George Santos, though, is a cautionary tale for those who hold an idealized view of how the marketplace of ideas operates in contemporary American politics.

Democracy has not had a long run when measured against the course of human history. From the founding of the American republic in the late 18th century until the advent of the modern era, there was a rough division of labor. Citizens selected leaders, and experts played a critical gatekeeping role, mediating the flow of information.

New information technologies have largely displaced the role of experts. Everyone now claims to be an expert who can decide for themselves whether COVID-19 vaccines are effective or who really won the 2020 presidential election. These technologies have also destroyed the economic model that once sustained local newspapers.

Thus, although one local newspaper did report on Santos’ misrepresentations, his election is evidence that the loss of news reporting jobs has damaged America’s democracy.

A piece of newspaper, burning up
With the news business in serious decline, citizens don’t get the information they need to be informed voters. iStock / Getty Images Plus

Lies that harm democracy

The election of George Santos illustrates the challenges facing American democracy. The First Amendment was written in an era when government censorship was the principal danger to self-government. Today, politicians and ordinary citizens can harness new information technologies to spread misinformation and deepen polarization. A weakened news media will fail to police those assertions, or a partisan news media will amplify them.

As a scholar of constitutional law, comparative constitutionalism, democracy and authoritarianism, I believe that Justice Kennedy’s Alvarez opinion relied on a flawed understanding of the dangers facing democracy. He maintained that government regulation of speech is a greater threat to democracy than are lies. Laws that targeted lies would have to survive the most exacting scrutiny – which is nearly always fatal to government regulation of speech.

Justice Stephen Breyer’s concurring opinion argued that a different test should be used. Courts, Breyer said, should assess any speech-related harm that might flow from the law as well as the importance of the government objective and whether the law furthers that objective. This is known as intermediate scrutiny or proportionality analysis. It is a form of analysis that is widely used by constitutional courts in other democracies.

Intermediate scrutiny or proportionality analysis does not treat all government regulations of speech as presumptively unconstitutional. It forces courts to balance the value of the speech against the justifications for the law in question. That is the right test, Justice Breyer concluded, when assessing laws that penalize “false statements about easily verifiable facts.”

The two approaches will lead to different results when governments seek to regulate lies. Even proposed, narrowly written laws aimed at factual misrepresentations by politicians about their records or about who won an election might not survive the high degree of protection afforded lies in the United States.

Intermediate scrutiny or proportionality analysis, on the other hand, will likely enable some government regulation of lies – including those of the next George Santos – to survive legal challenge.

Democracies have a better long-term survival track record than dictatorships because they can and do evolve to deal with new dangers. The success of America’s experiment in self-government may well hinge, I believe, on whether the country’s democracy can evolve to deal with new information technologies that help spread falsehoods that undermine democracy.

Miguel Schor does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Australian small companies outlook for 2023

Having not long finished the festive season and commenced a new year, many of us take the moments shortly after to reflect on the year that was, and also…

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Having not long finished the festive season and commenced a new year, many of us take the moments shortly after to reflect on the year that was, and also consider what we would like to see in the year ahead.

With that in mind I thought I would take a look back at 2022. Last year will likely be remembered for three key events, firstly it generally saw the world exit the pandemic cloud of COVID-19. Secondly, we saw the commencement of the war between Ukraine and Russia. Thirdly, we saw inflation return with a vengeance being quickly followed by one of the fastest tightening cycles in history by Central Banks. The official cash rate in Australia increased from 0.1 per cent in April 2022 to 3.10 per cent by the December meeting of the RBA.

This mix of events led to one of the strongest risk-off years we have seen since the Global Financial Crisis, there are few places for investors to find sanctuary with losses occurring across both growth and defensive assets alike.

Investor sentiment was broadly very negative during 2022, it is always a challenge for any growth (or risk) asset to perform well when the market doesn’t have an appetite for risk of any kind. 

 If we look specifically at the Australian small ordinaries index, its return for the calendar year of 2022 was negative 20.7 per cent. To give this context the ASX 100 declined by 3.9 per cent and the ASX 300 return was negative 6.1 per cent. It is fair to say that the risk on trade in Small Companies over the last few years moved into reverse in 2022. This was a consequence of the above macro factors, coupled with a more bearish investor and market.

What to consider for 2023?

In moving to our outlook for 2023 we need to initially consider the 3 points above and ask where we see them today and where they may evolve to over the next 12 months. With the final question being what impact this will have on equity market performance?

As a starting point it is fair to say that the impact of COVID-19 continues to pass and become more of a memory than a current issue. Even China who were the final strong hold have now moved to accept an existence with COVID-19 and they cope with re-opening and reintegrating with the rest of the world. As it stands today, we would expect the impact of COVID-19 to continue to diminish from here. One datapoint that has been interesting to follow over the pandemic has been a UBS Composite Supply Chain Indicator which is now in a strong downward trend and moving closer to pre-pandemic levels.

Supply chain stress

Source: UBS

A second example where we can see this is in spot indexes for international container freight costs which are now off roughly 80 per cent from their peak 18 months ago. This is interesting as it was one of the early contributors to the increase in inflation. As a leading cause it is positive to see this returning to more normal levels.

Next, we move to the war in Ukraine, which continues to grind along, and will no doubt continue to influence energy prices and broader speculation. Having said that, although the outcome is unknown, this is what at times in markets is called a known unknown. We are all aware of what is happening, many governments and countries are working around it. This is best seen in Europe where they continue to diversify their sources and supply of Energy, along with continued fast tracking of non-Russian dependent infrastructure. Short of a shock surprise, this event we can largely say has been priced into markets.

Finally, inflation and interest rates have been a biproduct of the above two events. These two arguably caused the most disruption to equity markets in 2022. At the time of writing the most recent inflation data for Australia was released last week and came out higher than consensus expectations with trimmed inflation (removing the most volatile items) coming in at 6.5 per cent against an expectation of 6.1 per cent.

At this point most major market commentators have the belief that we are likely to see two further interest rate increases in the first quarter of this year. Post this timeframe the speculation begins to grow; a portion believe inflation is going to be more stubborn and require further effort from Central Banks. Other market commentators believe that the remaining two expected rate increases will be sufficient to manage inflation, particularly given the delayed transmission mechanism we have here due to the nature of Fixed Rates and their term to reset.

Some also believe we may see interest rates start to fall in late 2023, which would become a tailwind for equities, in particular some of the growth names which had the toughest performance over 2022.

What can we expect from small caps?

Looking through all of this noise and to our outlook for Australian Small Companies for 2023 we think as always the starting point is important. At a market level we started 20 per cent cheaper than the same point in the prior year. Further to this we have seen some earnings downgrades in some parts of the market, where others have proven to be far more resilient than expected. Sectors like the Resource sector managed to grow their earnings over 2022. So in some pockets, we find valuations from a fundamental perspective to be very attractive.

While there is a belief that interest rates have further to go, we still see some significant risks in the more speculative parts of the market. This is mainly around companies that will have little control over their earnings power in the next 12 months, or are less mature and as a result less capable to weather the economic conditions ahead. Increasing interest rates are also not favourable for building stocks, or some consumer stocks (although some of the high-quality names will be resilient and based on valuation look interesting).  

Any companies that missed the market’s expectations on earnings were punished, if the company had to go as far as an earnings downgrade the market showed little mercy. We think this trend will likely continue into the February 2023 reporting season. These are risks we are aiming to avoid by assessing the quality of our investments and their earnings streams.

Looking further out, there is an argument that Australian Small Companies offer a significant investment opportunity for investors over 2023 if they wish to add some risk to their portfolios. They were the most sold down part of the market in 2022 so the valuation of this sleeve of the market looks attractive.

History tells us that once the economy has reached peak inflation, the peak of interest rates is usually not too much further into the future. If we do in fact only see two further rate rises from the RBA and inflation is contained then we will start to have a foundation that would be more solid and look to underpin a backdrop that would be conducive to a rally in equity markets.

As always we are not out of the woods and do expect some earnings challenges to come to the fore in February’s interim reporting season. Stock selection and active management will be critical to navigate this.

Should we see an improved outlook and also a reduction in interest rates later in the year we may start to see an improvement in investor and market sentiment. This is likely the final ingredient needed to see capital flows return more strongly to equities and in particular Small Companies.

Overall we continue to have a meaningful exposure to the Resource sector as we think that with China reopening and supply shortages still an issue for Europe in the medium term, coupled with the continued drive of decarbonisation that 2023 should be another supportive year for the sector.

We have quality exposures to structural growth companies that over a medium term investment horizon represent excellent value and are growing quality businesses. We believe we are closer to the end than the beginning of the inflation and interest rate story which over the course of 2023 we think will provide a favourable foundation for the market and the Montgomery Small Companies Fund.   

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Researcher helps build center for avian-influenza pandemic preparedness with NSF award

LAWRENCE — As humanity tries to find its footing after the COVID-19 pandemic, the University of Kansas is taking steps to help ready the United States…

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LAWRENCE — As humanity tries to find its footing after the COVID-19 pandemic, the University of Kansas is taking steps to help ready the United States and the rest of the world for future global health crises.

Credit: A. Townsend Peterson

LAWRENCE — As humanity tries to find its footing after the COVID-19 pandemic, the University of Kansas is taking steps to help ready the United States and the rest of the world for future global health crises.

A. Townsend Peterson, a University Distinguished Professor of Ecology & Evolutionary Biology and curator of ornithology at the KU Biodiversity Institute and Natural History Museum, is part of a team of researchers that earned funding from the National Science Foundation to establish the International Center for Avian Influenza Pandemic Prediction and Prevention, dubbed “ICAIP3.”

The mission of the new multi-institutional center is to tackle grand challenges in global health with a focus on avian-influenza pandemic prediction and prevention. Most famously, the 1918 flu pandemic showed influenza viruses that start off in birds can kill millions of humans. But avian influenza, or “bird flu,” has triggered outbreaks around the world in recent years that killed billions of poultry and wild birds, as well as hundreds of people.

“The COVID-19 pandemic has been a wake-up call for the world, highlighting the importance of investing in public health and the basic science underpinnings of public health,” Peterson said. “It has had a scale of economic and public health impact that is unparalleled in our lifetime. This center would have ongoing viral monitoring around the world, but particularly in regions that tend to give rise to pandemic flu strains. We would have a predictive understanding of which types of new bird flu strains have pandemic potential. You can imagine the value of monitoring wild bird populations and seeing all the standing variation in flu viruses, and being able to say, ‘Hey, this one virus — this is what we need to watch.’”

The ICAIP3 center will be supported by the Predictive Intelligence for Pandemic Preparedness (PIPP) initiative, part of the NSF’s efforts to understand the science behind pandemics and build the ability to prevent and respond to future outbreaks.

“We need to be thinking big-picture when it comes to pandemics,” Peterson said. “COVID-19 is just one example of many diverse pandemics that have occurred throughout history. The Spanish flu, the plague pandemics, typhoid fever and avian influenza are all examples of diseases that have had a significant impact on human health and the economy. We need to be proactive in our approach to understanding and preventing these types of outbreaks, rather than waiting for them to happen and scrambling to respond.”

The total award for the PIPP project is roughly $1 million. Aside from KU, the ICAIP3 project has partners at the University of Oklahoma, where the work is headquartered, as well as the U.S. Geological Survey, the University of California-Berkeley and the World Health Organization Collaborating Centre for Studies on the Ecology of Influenza in Animals and Birds with St. Jude Children’s Research Hospital.

Peterson said the collaborators aim to apply for additional funding once ICAIP3 has succeeded as a proof-of-concept during its initial 18-month phase, structured to align with the PIPP aim to explore ideas for later competition for center-level funding.

The team will work to establish ongoing viral monitoring around the world, focusing most on regions that historically give rise to pandemic flu strains. The goal is to build understanding of the types of new strains holding pandemic potential and help predict and prevent outbreaks in coming decades.

Peterson and his collaborators will test available computer models that track “spillover,” where a disease can spread between animal species (“reservoir-poultry spillover” happens when wild birds give a disease to chickens, for example). Next, the team will work to improve these modelling approaches and run spillover simulations.

“If we do this well, what will come out is a model of the geographic, operational and individual-scale behavior of a pandemic-potential virus,” Peterson said. “Part of that potential is — does it stay just in one place? Or does it spread? If it does spread, does it take years, or does it spread in days?”

In essence, the KU researcher likened the work to devising an early-warning system to benefit researchers and public health officials as they decide where to devote resources for maximum effect.

With avian influenzas, part of this work must incorporate data about birds’ migratory patterns.

“You get some early warning of an outbreak going on and you say, ‘Okay, we’re pretty sure it’s a specific hypothetical virus — now, what are its most likely patterns of behavior?’” Peterson said. “How quickly will it leak from wild birds into domestic birds? If it’s coming from Asia, where would we expect it to appear in the U.S.? If you had this thing spread in the summer and get up to Siberia, then the jump may be way down into the U.S. because some of those birds think eastern Siberia is western Alaska and migrate south into the Americas in the fall. We would have a model that’s far better than what we have right now.”

Along with integrating huge amounts of disparate data into improved computer models, the collaboration will aim to build a community of researchers around a “One-Health (Human-Animal-Environment Systems) approach” they said is needed take on “the complexity, dynamics and the tele-coupling of HAES across multiple spatial and temporal scales and organization levels.” Peterson said he hoped the work also would strengthen the nation’s ability to track disease in birds and other species, as well as safeguard public health and prevent societal disruption.

“What in our lifetime has had the scale of economic and public health impact compared to COVID-19?” Peterson said. “Maybe 9/11, if you could count the war efforts after that. We’re too young to have lived through the World Wars, which probably were on the same scale here in America. But what, since then — can you think of anything? If you want a stronger America, you make an America that has a strong public health system that can respond to socially driven health threats like vaccine hesitancy. Measles was gone, polio was gone, but now they’re popping up in communities that are less well-vaccinated. And we’ll see more mosquito-borne diseases — like West Nile virus, Zika, chikungunya and dengue — all of which have recently emerged in the U.S. and each in a very different way.”

 


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