A woman lights a candle in tribute to the victims of the 16 February bomb at a Sufi shrine in Sindh province © Getty Images
A dozen suicide attacks in just over a week this month have sparked anger in Pakistan at the failure of the government and the military to pursue a sustained counter-terrorism campaign with a strategic plan and narrative. Instead, they blame neighbouring countries and allow some militant groups to go untouched in the country.
The height of anguish for many was the February 16 explosion at a Sufi shrine in Sindh province that killed 88 people, including 20 children, and wounded another 250. The shrine is one of the most revered in south Asia.
The attack with the strongest political message was outside the Punjab parliament in the heart of Lahore, where security is tight. Fifteen people were killed — including seven police officers — and more than 100 wounded. It was a humiliation for the government. Read more
The Greek prime minister Alexis Tsipras © Getty Images
Seven years after the start of the Greek crisis, it’s not easy to follow what’s going on between the International Monetary Fund, the eurogroup of finance ministers and the Greek government. The negotiating process is being impaired by so many contradictions and a Catch-22. Read more
Women and children queue for Unicef nutrition clinic on the outskirts of Maiduguri, Nigeria © Getty Images
The world’s leadership crisis is deepening. In the US, public support for an activist role in shaping and maintaining the global order has been eroding for years. That natural process would have continued if Hillary Clinton had been elected, but Donald Trump and his push for an “America First” foreign policy have quickened it.
European leaders are far too busy working through the lengthening list of their own problems to take up the slack. China is becoming more active on the world stage, particularly by expanding trade and investment ties that encourage stability, but its leaders remain focused on maintaining political control during a period of far-reaching economic change. Complicating matters further, the accelerating divergence of values and perceived interests among the US, Europe, and China limits their ability and willingness to work together. Read more
German Chancellor Angela Merkel at the Malta summit, where she spoke of a 'multi-speed' Europe © Getty Images
I am a self-professed EU nerd. In the past 25 years I have been intimately involved in EU academia, civil service and politics. One of the re-emerging themes of integration is differentiation or core Europe; that is, not all member states need to do the same things at the same time. As it happens, it was the subject of my doctorate at the London School of Economics in 2000.
The debate on core Europe has a tendency to pop up regularly — usually when one or more of five issues are on the Union agenda: the common currency, foreign policy, immigration, enlargement or trouble makers. Time to deepen integration, without the participation of everyone, the argument goes. Read more
US President Donald Trump © Getty Images
Donald Trump’s recent conciliatory call with Xi Jinping on the “One China” issue came as tensions between the two were escalating. Contrasting political systems and cultural norms have always made it difficult for the two nations to work together. Ironically, with President Trump’s election and President Xi’s consolidation of authority, the potential for conflict is now greater not because of these differences but because of commonalities in their aspirations.
Both seek to elevate the profile of their countries — Mr Xi by achieving his “Chinese Dream” and Mr Trump by fulfilling his promise to “Make America Great Again”. They are also trying to enhance their power base within their respective political systems: Mr Trump by making repeated references to the strength of his electoral victory and Mr Xi by being named as a “core” leader. Read more
Janet Yellen © Getty Images
This week’s semi-annual congressional testimony by Federal Reserve chair Janet Yellen won’t signal a policy shift. Coming just two weeks after she chaired the Federal Open Market Committee, Ms Yellen is likely to reiterate the guidance provided on February 1. But, if lawmakers focus on certain issues, economists and markets could gain further insights, including on the tug of war between reflationary forces and the risk of stagflationary ones. Specifically, here are five issues that warrant consideration. Read more
End product of the supply chain © Getty Images
Unilateralism in the realm of economic policy can too often prove very damaging, particularly in the international arena. For much of the post-war period, rigorous attempts were made to establish multilateral rules — specifically designed to avoid accusations of unilateralism — based on the reasonable idea that the removal of tariffs and quotas would ultimately contribute to higher living standards for all involved.
Successive rounds of the so-called GATT talks delivered exactly what economists had predicted. Importantly, there was no return to the unilateralist policies of the interwar period, when individual countries attempted to set rules that only triggered retaliation from others. Smoot-Hawley’s tariffs and Imperial Preference had seemingly been consigned to the history books. In this new open environment, trade flourished and living standards soared. The US, arguably the chief sponsor of the whole process, ended up a major winner: its living standards tripled in the second half of the 20th century. Read more
© Getty Images
Over the past few weeks, market chatter has been preoccupied with speculation over the dire consequences of a strong dollar in a world of rising US isolationism and protectionism.
President Donald Trump’s promise of a multi-hundred billion dollar fiscal stimulus in infrastructure and, in response, the prospect of three US Fed rate hikes through 2017 will support a strengthening dollar. But while this should help exporters to the country do well, the mounting protectionist stance — including plans for border taxes — will block cheaper imports. Worse, a rising currency would hurt countries with dollar-denominated debt by raising their costs, precisely when their export revenues fall as they face steeper US trade barriers. Read more
Afghan police guard the governor's compound in Kandahar after the bombing in Jamuary © Getty Images
The United Arab Emirates is still in shock three weeks after five of its diplomats and aid officials were killed in a terrorist bomb blast in Kandahar while they were handing out relief goods.
At least seven Afghan officials were killed while the governor of Kandahar, Humayun Azizi, and the UAE ambassador Juma al-Kaabi were wounded. Mr Azizi’s deputy, Abdul Ali Shamsi, a rising political star, was also killed.
There were several firsts, even for a devastated country like Afghanistan which has experienced every kind of warfare. Never before in the 39 years of conflict had Arab diplomats been attacked, let alone killed. In the past, Arab states have been friendly to the Taliban, and supportive of Kabul’s government. Read more
Unloading sugar under the Marshall Plan © Getty Images
From time to time the world changes before our eyes, and we fail to see it. At other times the shift is so evident that we can’t miss it. This time around we can see the disorder after Brexit and the US presidential elections, but struggle to understand what kind of a world order will emerge.
You do not have to hold a doctorate in international relations to understand that from the start President Donald Trump is shifting the balance of power in world politics. It is simple: you cannot lead the world or be a champion of globalisation if you reject them both.
The executive orders on trade, pipelines and immigration are only the beginning of the new nativist US agenda. Judging by his statements on Nato and the EU, Mr Trump has little faith in international institutions. I disagree with him on many things, but at the same time I respect democracy. We should face the realities of a new America. Read more
Not foreseen: Pink pussy hats in vogue at the post-inauguration protest in Washington © Getty Images
In 1945, as thoughts in a shattered world started to turn toward creating the postwar order, Friedrich Hayek published in The American Economic Review an important article, “The uses of knowledge in society”. It concerned the difference between the free market system and central planning. Not surprisingly, he concluded that the market had greater merit.
His argument turned on what economists would now call information asymmetries. Organising an economic system was not a question of an omniscient mind selecting the most efficient use of resources to satisfy known needs and wants, but rather, “[H]ow to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.” The problem of economic organisation is not demand and supply but rather who knows what about demand and supply. Read more
Protectionist sentiments are intensifying in the US where the rhetoric of the incoming administration blames China for America’s large trade deficits and job losses. In contrast, most policymakers in Europe have advocated a more considered position to placate populist feelings.
That both the US and to a lesser extent the EU have such deficits provides some credibility for the concerns but the logic is flawed. Aside from their bilateral deficits, there are differences between the two because the EU is now generating large overall trade surpluses while America’s persistent overall deficits have triggered bouts of insecurity in which China has become an easy target. The EU story is also more complicated because some members have significant bilateral deficits with China but others — such as Germany — are running large surpluses. This explains why anti-China sentiment in the EU is more diffuse.
There is no direct link between the emergence of America’s overall trade deficits and China’s surpluses. Neither is it true, as some claim, that China’s accession to the World Trade Organisation in 2001 gave it an unfair advantage. Read more
Russia's President Vladimir Putin © Getty Images
After the Soviet Union was defeated by the Afghan mujahideen and its 10-year occupation ended in a humiliating retreat by the Red Army in 1989, Russia pulled back from the region. Now it is rebuilding its position as a battle for influence heats up. Read more
Now is the time to embrace dissent and talk to those who disagree with us Read more
Islam Karimov, Uzbekistan's president in 1991 © Getty Images
Twenty-five years ago this month, the five Central Asian states were cut off from the Soviet Union and forced to stand on their own. It was a shock to their systems. Read more
Photo: Charlie Bibby
Controversy continues to erupt over President-elect Donald Trump’s use of Twitter to convey appointments to his cabinet. He is also using social media to announce future economic and political policies and his random thoughts, including frequent attacks on individuals who criticise him. Read more
Pro Europe protesters dressed as Supreme Court judges demonstrate outside the Supreme Court in London.
I spent a couple of days in Brussels last week on my quest to understand the implications of Brexit. Having now visited London, Berlin, Frankfurt and Warsaw, I can only conclude that the more I learn, the more worried I am. Read more
China's economy grew 6.7 percent in the third quarter of 2016
Concerns about China’s ballooning debt indicators have been cycling on and off for nearly a decade. BIS put out an alert in September about China’s increasing “credit to GDP gap,” a warning that the pace was excessive relative to historical trends. Add to this worry the dependence of some banks on wholesale borrowing and re-emergence of shadow-banking and it is easy to understand why some observers have raised the possibility of a destabilising “Lehman moment.” Read more
China is known for its patience. A century is but a page in the book of its history. We Europeans are much more edgy. First we lamented that our manufacturing jobs were stolen by China. Then we worried about the Chinese shopping spree for raw materials in Africa. And now we are trying to come to terms with the fact that China is buying European businesses in all shapes and forms. Read more
Chancellor of the Exchequer, Philip Hammond reads through his Autumn Statement on November 22, 2016 in London, United Kingdom
Call it the “better late than never” Autumn Statement. Back in 2010, George Osborne promised that the public debt would peak as a share of GDP by 2013-14. Philip Hammond, his successor, says it won’t start to fall until 2018-19, and part of the slow progress is explained by a decision to spend several billion more a year on increasing productivity. Mr Hammond’s decision to borrow more to invest is welcome, but it is also comes at least five years too late. Read more