By David Clark of the Russia Foundation
The tide of global democratic change, which at the start of the new millennium looked like an unstoppable force of nature, has been turned back over the last decade. How serious and prolonged this reversal turns out to be is open to question. What cannot be doubted is the direction of travel. In its most recent annual survey, the respected think tank Freedom House recorded a net decline in world freedom for the eighth year in a row. While political rights and civil liberties improved in 40 countries, they deteriorated in 54. Continue reading »
By Arturo Porzecanski of American University
José Antonio Ocampo, a former United Nations official and co-president with Prof. Joseph Stiglitz of Columbia University’s Initiative for Policy Dialogue, which promotes the adoption of heterodox economic policies in developing countries, recently wrote a guest post welcoming a UN General Assembly resolution calling for the launch of negotiations on a multilateral framework for sovereign debt restructuring. The resolution was Argentina’s initiative and it passed with the backing of a coalition of developing countries (the so-called G-77 plus China) in the wake of, as Ocampo put it, “the absurd decisions of a New York judge on Argentine debt.” Continue reading »
By Anil K Gupta and Haiyan Wang
Chinese president Xi Jinping’s visit to India this week will likely be the most significant meeting between the leaders of China and India since Rajiv Gandhi’s visit to Beijing in 1988. Indeed, India’s leading business daily has gone so far as to suggest that Xi will bring along with him commitments to invest $100bn over the next five years. But while ties between India and China are growing quickly, such estimates remain highly unrealistic and risk saddling this burgeoning relationship with unrealistic expectations.
An article in the Economic Times newspaper quotes China’s consul-general in Mumbai: “On a conservative estimate, I can say that we will commit investments of over $100bn or thrice the investments committed by Japan during our President Xi Jinping’s visit next week. These will be made in setting up of industrial parks, modernization of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries.” Continue reading »
By Francisco Rodríguez of Bank of America Merrill Lynch
In a provocative article published last week by Project Syndicate (Should Venezuela Default?), Venezuelan economists Ricardo Hausmann and Miguel Angel Santos make an interesting argument. They contend that Venezuela cannot meet all of its foreign currency obligations and is already defaulting on some of them. If authorities adopted a set of common-sense policies, they argue, these would include defaulting on the country’s foreign debt and making bondholders bear part of the burden of adjustment.
Default is the economic equivalent of major invasive surgery: an aggressive intervention with high risks and side effects which is only justified when it is indispensable for restoring an economy to health. Default makes sense only when a country is insolvent. Continue reading »
By José Antonio Ocampo of Columbia University
On September 9, the United Nations General Assembly approved a resolution to launch negotiations on a multilateral framework for sovereign debt restructuring. The vote was overwhelmingly in favour of the resolution: 124 in favour vs 11 against with 41 abstentions. But it was a deeply divided one. It was essentially approved with the votes of developing countries, but the no votes included the US, Japan, Germany and the UK; the remaining European Union members abstained.
This is, of course, a continuation of the saga of the absurd decisions of a New York judge on Argentine debt: the decision to force the country to pay on the original terms to holders of bonds not tendered at the 2005 and 2010 renegotiations, the ratification of this verdict by the New York Court of Appeals, and the decision of the US Supreme Court not to consider an appeal by Argentina against the latter decision. Continue reading »
By Shaomin Li, Ilan Alon and Jun Wu
Among democratic people, it is seen as self-evident that religious freedom is inviolable and must be protected even if we have to pay a high cost—including our lives—to do so. Naturally, witnessing the religion-related conflicts around the world, we tend to attribute them to a lack of religious freedom. Like political freedom and economic freedom, religious freedom is commonly viewed as a positive force that supports economic development.
However, our recent study on religious freedom and economic performance across countries shows that unrestrained religious freedom may not be a good thing, at least for economic growth. Continue reading »
By Scott Wallsten of the Technology Policy Institute
Mexico has long suffered from an underperforming telecommunications sector dominated by a single company, América Móvil. The new government made reinvigorating the sector a key reform goal. It added rules governing telecoms to Mexico’s constitution and last month the president signed a “secondary law” further detailing those changes.
Some parts of the law are promising. It creates a new, more independent and tougher regulator to replace a weak and often ineffective one. It introduces regulations that América Móvil saw as so costly that it announced plans to divest in order to avoid them – which could lead to the happy outcome of more competition with no need to impose the costly regulations. Mexico should be proud of these achievements.
Another part of the law, however, might undermine everything. Continue reading »
By Taras Kuzio of the University of Alberta
Friday’s abduction on Estonian soil of Eston Kohver, an officer in Estonia’s Internal Security Service, by “green men” – Russian special forces in uniforms without identification – was the latest instance of a tactic first used during Russia’s annexation of the Crimea in March. The timing of this act of international piracy was no coincidence, coming a day after US President Barack Obama’s visit to the country, when he promised Nato would defend the three Baltic states. Continue reading »
By Ben Aris of bne
The chances of a lasting ceasefire in the conflict in eastern Ukraine are looking better.
But the cessation of military hostilities will only mark the outbreak of a new fight: the gas war between Russia and Ukraine is about to restart and will probably come to a head in January, when Ukraine risks running out of gas. Continue reading »
By Taras Kuzio of the University of Alberta
Following Russia’s invasion of Ukraine the tide on the battlefield has turned against Kiev, with its armed forces and volunteer National Guard on the retreat. Russia’s next move could be to push towards Mariupol to create a land corridor from Russia through the Donbas to occupied Crimea.
Whatever steps Vladimir Putin, Russia’s president, takes next it is beyond doubt that two of Europe’s biggest countries are at war. Continue reading »
By Marcos Troyjo of Columbia University
The concept of “emerging markets” came up years ago as a driver of the future of the world. Demographics, territorial scale, low production costs, easy access to commodities – all were signs of impending change in the geo-economic axis.
Countries such as the Brics (Brazil, Russia, India and China) became the world’s “engines of growth”. Export-driven growth in China; a “transition economy” for Russia’s market; outsourcing and technological innovation in India; and “import substitution 2.0” in Brazil kept these economies booming – and social tensions quelled. Continue reading »
By Ian Dixon of Investec
Following his government’s first budget there has been much debate about the amount of change Narendra Modi, India’s new prime minister, will be able or willing to achieve. His supporters counter such scepticism by arguing that the government is just three months old and to expect radical change in such a short time after 10 years in opposition was always unrealistic.
On international debt markets, however, we have already begun to see a step change in attitudes towards Indian debt, particularly among UK investors. Continue reading »
By Eric Lascelles of RBC Global Asset Management
Globalisation was an unstoppable force over the past quarter century, marked by trade flows that grew at almost twice the clip of the global economy and by surging international capital flows, unleashing a torrent of demand and productive capacity. Emerging markets basked in outsized economic growth and rising standards of living. The developed world benefited from low prices, greater selection and cheap borrowing costs.
Since 2011, however, world trade has suddenly found itself on a much dimmer trajectory, merely matching the rate of global growth. Relative to the pre-2011 trajectory, exports have fallen a whopping $1.4tn behind schedule. Continue reading »
By Timothy Ash of Standard Bank
The crisis in Ukraine continues to go from one worst case scenario to the next with little sign of any near term prospect of compromise or resolution.
High hopes were set on Wednesday’s Minsk summit but little was achieved in effect – beyond a photo op for Vladimir Putin, Russia’s president, who spun a yarn that he is really, truly interested in peace, and in any event that Russia is in fact not a party to the current conflict. Continue reading »
By Stefan Jajecznyk and Taras Kuzio
As fighting in the Donetsk and Luhansk regions intensifies, the first foreign member of the Ukrainian military has become a casualty of Russia’s proxy war. Codenamed ‘Franko’, Mark Paslawsky who grew up in the Ukrainian diaspora in New Jersey and was a West Point-trained officer in the US Rangers, gave up his US citizenship for a Ukrainian passport and the chance to serve in the Donbas volunteer battalion, one of more than 20 in Ukraine’s newly formed National Guard.
Paslawsky (pictured above) was wounded by shrapnel on August 18 during a firefight with separatists and Russian paratroopers in the outskirts of the regional capital of Luhansk. With no air ambulance available he could not be saved by medics. He was buried this week. Continue reading »