Daily Archives: Sep 29, 2015

By John Heathershaw, University of Exeter

Central Asian democracy was dealt another critical blow this month, in open defiance of Western efforts and engagement.

It is clear that the United States and Western powers have abandoned political engagement in Central Asia in the face of a resurgent Russia and the increasing significance of China as creditor, investor and patron.

If ever there were evidence that Western states’ calls for development and democracy in Central Asia are now only heard in an echo chamber, the story of the demise of Tajikistan’s Islamic Revival Party (IRPT) is it. Read more

Emerging economies have little to be cheerful about these days, and while it wouldn’t do to put all the blame on China, what’s going on there makes for some grim economic weather.

China has embarked on an irreversible transition from rapid, investment-led growth to slower, more balanced growth; a transition that is utterly necessary in order for China to avoid a financial crisis of its own.

But the result is that China now just needs less of the stuff – commodities and intermediate manufacturing inputs – that it had previously been happy to buy from other developing countries. China’s sunshine has given way to cloud. Read more

One of the hottest topics for discussion at the United Nations General Assembly this week isn’t even on the official agenda. By the time of next year’s annual gathering the UN is expected to have chosen a new Secretary-General to replace Ban Ki-moon, who completes his second and final term shortly afterwards. The names of potential candidates, the qualities expected of them and even the rules of selection are now part of an intense debate that will take months of horse-trading to resolve.

Among those with a major stake in the outcome are the countries of Eastern Europe, the only one of the UN’s five regional groupings never to have held the job. Sidelined during the long decades of the Cold War and the post-communist transition, these countries feel that they deserve recognition for their success in transforming themselves into strong and independent nation states. What better way to throw off the past and confirm their new status than for one of their number to claim the World’s top diplomatic post? Read more

Commodity prices could well have further to fall, now China’s business model has changed. It is no longer aiming to achieve high levels of economic growth by operating an export-focused development model, supported by vast infrastructure spending. Instead, its New Normal policies aim to boost domestic consumption, by creating a services-led model based on exploiting the opportunities created by the power of the internet.

The only problem is that markets have failed to notice this change. They have fallen victim to the phenomenon of “anchoring” as identified by Nobel Prizewinner Daniel Kahneman, and assume the New Normal is similar to the Old Normal. Thus, much analysis on commodity markets still focuses on guessing “when will the rally begin?” Read more