Moisés Naím is a senior associate at the Carnegie Endowment for International Peace.
© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Moisés Naím is a senior associate at the Carnegie Endowment for International Peace.
The enormous influence that Cuba has gained in Venezuela is one of the most underreported geopolitical developments of recent times. It is also one of the most improbable. Venezuela is nine times bigger than Cuba, three times more populous, and its economy four times larger. The country boasts the world’s largest oil reserves. Yet critical functions of the Venezuelan state are either overseen or directly controlled by Cuban officials.
The relationship goes beyond subsidies and advantageous business opportunities for Cuban agencies. Cuban officers control Venezuelaﾒs public notaries and civil registries. Cubans oversee the computer systems of the presidency, ministries, social programmes, police and security services as well as the national oil company, according to Cristina Marcano, a journalist who has reported extensively on Cubaﾒs influence in Venezuela.
Continue reading »
Latin America’s giant economy urgently needs someone like Facebook’s founder and chairman. Not to disrupt business models but to disrupt its immigration policies – like Mark Zuckerberg is now doing in the US.
The Facebook chief executive has launched an organisation called FWD.US whose aim is to lobby in favour of comprehensive immigration reform. This lobbying effort is not completely disinterested: one of the group’s goals is to make it easier for the companies supporting it to employ foreigners in the US. Continue reading »
Carmen felt both exhausted and thrilled. Exhausted because her 78 years made the 15-hour bus ride too long. And thrilled because she had voted in the presidential election. To do so, she had to travel from Miami to New Orleans. The journey was caused by President Hugo Chávez’ decision to close his country’s consulate in Miami. So the 20,000 Venezuelans who live there (most of whom are not Chávez supporters) had to choose between not voting or going to New Orleans… Continue reading »
The reality is that, despite many commitments by national leaders, the capacity of nation-states to coordinate their responses has dwindled. Problems may have gone global but the politics of solving them are as local as ever. It is hard for governments to devote resources to problems beyond their national borders and to work with other nations to address these challenges – while painful problems at home remain unsolved. Continue reading »
Mitt Romney is the presidential candidate of one of the world’s oldest and most powerful political machines. Henrique Capriles is the candidate of an ad hoc and inchoate amalgam of Venezuelan political groups. Yet confounding expectations, Mr Capriles has run a flawless campaign and on Sunday will confront Chavez with the strongest challenge he has ever faced at the polls. In contrast, Romney’s campaign, lavishly funded and full of the best political consultants money can buy, has suffered from endless gaffes, mistakes and miscalculations. So is there anything that Mitt Romney, the 65-year-old veteran of politics and business, can learn from a 40 year-old from a backward country with a deeply flawed democracy? Quite a bit, it turns out. Continue reading »
It is perfectly legitimate for Mr Lula to express his affection and admiration for Mr Chavez. Affects – like love – are blind and deserve respect. But it is not legitimate for Mr Lula to intervene in another country’s elections. That’s not what democrats do. And Mr Lula knows it. Or he should know it. Continue reading »
Despite its president’s fiery rhetoric, Argentina’s decision to renationalise YPF was not part of any overarching strategy. Cronyism, rifts between rival oligarchs, political expediency, populism and the wish to please a public resentful of the privatisations of the 1990s all played into the decision – which came in the context of a rapidly deteriorating economic and political situation.
Argentina suffers from high inflation, slowing economic growth, ballooning subsidies, price controls, capital flight, decaying infrastructure and a less than welcoming environment for foreign investors. Sooner or later the situation will become unsustainable. If Ms Fernández keeps postponing reform, her last years in office will be a nightmare – and YPF will be the least of her problems.
As it begins the search for a new president of the World Bank, the Obama White House risks repeating the very same mistakes that all too often in the past have led to the wrong person being appointed. Every time this process begins, those in charge ponderously – and mendaciously – announce it will be “open, transparent and merit-based”. They know this is not true, as some of the best candidates are automatically disqualified: only US citizens connected to the occupant of the White House at the time are considered and the process is closed, and only tenuously determined by merit.
So how does this flawed process work be reformed? In the past, it has led to the appointment of candidates who knew little about the bank. The consequences were confusion over its mission and obstacles in the way of providing assistance to countries in need. This is partly the result of the fact that those in charge of making – or influencing – the decision often base it on wrong notions about the ideal background of the Bank’s president.
Mr Obama should look for a professional who already knows this field, its ideas, players and traps, who has a vision for the World Bank rooted in practical experience with development and who has already run successfully a global, organisation. This is not the time or the place for ‘on-the-job-training’. Nor for paying back political favours. Continue reading »
The ancient Greeks thought that “those whom the gods wish to destroy, they first make mad.” For them, the surest way to destroy a person is to fill him or her with success, power, prosperity and fame. Excessive success induces inordinate self-confidence, which inevitably leads them to make disastrous mistakes and to failure. Hubris, they called it.
Many centuries later we got the Brics: poor countries whose economic and geopolitical success and influence – and hubris – is growing quickly. And its not just these countries. HSBC, reckons that if current trends continue, by 2050 the 100 largest economies in the world will include (in addition to the Brics and traditional leaders such as the US, Germany and Japan) countries such as the Philippines, Peru, Bangladesh and Colombia. Of course, the critical assumption is “if current trends continue”.
Here is where it is worth mentioning the meeting hosted by the World Economic Forum in Davos. After many years of attending these meetings, I have become a great believer in the existence – and the power – of hubris. I do not know if it is the gods or human nature, but success and failure are too frequently inextricably linked and the Davos meeting offers an extraordinary laboratory to observe the phenomenon.
As I was recently talking in Davos with Turks, Brazilians, Indians, Indonesians, Russians and Chinese, the symptoms of the many fallen celebrities who no longer stalk the corridors of this Swiss mountain town seemed just below the surface. Are the gods plotting to put these new arrogant characters in their place? Could it be that a crash is in the future of these emerging countries? Could this be one of the most important warnings coming from this year’s meeting on the Alps? Continue reading »
Inequality will be the central theme of 2012, topping the agenda of voters, protesters and politicians running for office.
There is nothing new in the fact that a few people have too much and too many have too little. In the past, this has been hidden from the population (the Soviet Union), tolerated (Latin America) and even celebrated (the US). But the economic crisis made the world more aware of the extent and scope of economic inequality. In 2012, peaceful coexistence with inequality will end and demands and promises to fight it will become fiercer.
The problem is how to lower inequality without harming other goals (investment, innovation, risk-taking, hard work). The fight for a more equal society was the goal of countless experiments that resulted in even more inequality, widespread poverty and loss of freedoms.
This year, elections will take place in 12 important countries, while Spain and China will also change leadership. Inequality will become part of electoral debates that will influence the conversation even in countries where it has long been taken for granted. Continue reading »
The elites didn’t revolt and the people didn’t take to the streets. What ended Silvio Berlusconi’s 17-year run as Italy’s most powerful man was the skyrocketing spread between Italian bonds and the German bunds. Had this stayed at under five per cent, Il Cavaliere would still be in power today.
Mr Berlusconi’s fall is another manifestation of the clash between global money and local politics. George Papandreou’s is another. Mixing the constrains of local politics with the demands of global money creates a witches brew whose effusions can topple governments and shape the global economy. Managing this tension is one of the major challenge of our time.
Money that moves at the speed of light, trade that moves nearby at the speed of cargo containers, governments that move at the speed of politics and labour that does not move much: this is Europe today. There are no easy solutions, no antidote to the problem. But if we are to try to avoid a repeat of the current crisis we must make local politics more attuned to global imperatives and make global finance more responsive to local needs. Continue reading »
Being stuck in traffic is more bearable if the other lanes are moving. If all lanes are jammed for a long time, tempers flare. And if the police eventually arrive and let a few selected cars get out of their lanes and move through a special path, a riot is likely to ensue. This in short is the sentiment that propels the Occupy Wall St protests, and we should take note.
The traffic jam metaphor for the political consequences of economic mobility was originally proposed by Albert Hirschman, the noted economist, to explain changes in tolerance for income in equality in poor countries. The idea is simple: even a modicum of social mobility – sparked by economic growth – buys patience and political stability in developing countries. As people see their neighbours improve their lot they are willing to wait for their turn.
This idea is now in theory applicable to some of the world’s wealthiest nations – except that the Occupy Wall Street crowds, the protesters in the City of London, or the Italian and Greek protesters are getting out of their “cars”, and clashing with the police not just because they see their “traffic lane” horribly jammed. It’s also because they are moving backwards. As they watch wealthy elite gets richer, they are getting increasingly angry. Continue reading »
|About this blog||Blog guide|