Global economy

  • Despite being accused of naivety in his foreign policy, Barack Obama is showing qualities associated with Henry Kissinger – the arch-realist of US diplomacy, writes Ed Luce
  • Whether by design or accident, Athen’s Syriza-led government has achieved deep European harmony – but this has not produced agreement on a strategy for dealing with the Greek crisis
  • Dubai is hoping to be a bridgehead for deals with Iran as international investors prepare for a gold rush with the prospect of an end to nuclear sanctions in sight
  • Secret files from the Islamic State of Iraq and the Levant (Isis) show how former officials under Saddam Hussein helped design a blueprint for the militant jihadi group’s meteoric rise (Spiegel Online)
  • Who or what abdicated power in Grimsby, once the largest fishing port in the world and now a target for the UK Independence party, leaving swathes of it to rot? (London Review of Books)

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Three weeks to go until the UK general election, and whatever the result – most likely no party with an overall majority in parliament – the remarkable thing is the serious underperformance of the ruling Conservatives.

The Conservatives inherited a nascent economic recovery in 2010 from a desperately unpopular Labour government that had been in power for thirteen years, and, despite questionable economic policies such as excessive austerity, narrowly managed not to screw it up.

But instead of building on their modest 36.1 per cent vote share in 2010, which forced them to form a coalition with the Liberal Democrats, polls now show the Tories struggling to break above 35 per cent. Read more

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The European Central Bank’s governing council is meeting against a backdrop of an improving eurozone economy. The ECB kept its benchmark interest rate at a record low 0.05 per cent and its deposit facility at -0.2 per cent on Wednesday and is expected to continue its €60bn a month landmark quantitative easing programme.

But it is not all optimism in the eurozone. The ECB’s bond buying has helped push German 10-year bund yields towards zero raising concerns about the potential for distortions in financial markets, while jitters over the growing possibility that Greece could default on a debt repayment provides a great deal for ECB President Mario Draghi to discuss at his press conference, which starts at 1.30pm UK time. By Ralph Atkins and Lindsay Whipp

 

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The publication of “The Second Machine Age” by Andrew McAfee and Erik Brynjolfsson last year sparked a debate over the impact of technological change on the workplace. The spread of computers, alongside the high unemployment rates experienced by many rich countries during the Great Recession, have raised fears that advanced economies may be heading for an age of mass joblessness. Capital is set to replace labour on an unprecedented scale – so the argument goes – squeezing wages while entrepreneurs and shareholders enjoy ever fatter profits. Read more

The death of Lee Kuan Yew, the founding father of modern Singapore, has focused attention on the economic miracle he helped to create.

In the three decades since Lee first became prime minister in 1959 until he stepped aside in 1990, per capita income in the city-state rose by a factor of 29, jumping from around $435 to more than $12,700. Nearby Malaysia only managed a ten-fold increase, from $230 to around $2400.

Yet economists remain divided over the causes behind this remarkable take-off.

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  • Lee Kuan Yew, the founder and patriarch of modern Singapore who has died at the age of 91, was one of postwar Asia’s most revered and controversial politicians
  • In a fight between whales, the shrimp’s back is broken, according to a South Korean expression that sums up the country’s struggle to balance its strategic relationships with China and the US
  • Can economic optimism return quickly enough in Europe to prevent the further rise of extremist political parties? asks Gideon Rachman
  • Despite brutal punishments under Saudi justice drawing comparisons to Isis, avenues for mercy are built into the system that allow reprieves (New York Times)
  • It is used by almost a tenth of the world’s population, gives a buzz equivalent to six cups of coffee and is a symbol of love. But the humble betel nut is also sending tens of thousands to an early grave (BBC)

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In his Budget speech to parliament on Wednesday, the UK chancellor George Osborne indulged in the traditional needling of his opponents on the opposite bench. Whether it was a dig at Ed Miliband, Labour leader, for his two kitchens, or at the party’s recent electioneering in a “women-friendly” pink van, his jokes at the opposition’s expense met with the usual roars of raucous approval from his own benches.

But the second biggest target of his needling was rather more surprising – our friends across the Channel. Read more

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The spectre of deflation is seldom something to fear, according to economists at the Bank for International Settlements who argue that evidence which shows how price falls persistently cause economic havoc is weak.

The risk of a vicious bout of falling prices is viewed as the biggest threat to the global economic recovery by many of the world’s top economic policy makers. Earlier this year, fears of years of weak price pressures led the European Central Bank to unleash a €1.1trn landmark quantitative easing package in the face of fierce resistance from the German economic and political establishment. Read more

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Remarks by the president of Chechnya have sparked theories that Boris Nemtsov, the assassinated Russian opposition politician, fell victim to infighting in an opaque regime

Policy makers in some of the world’s largest economies have devalued their currencies in a bid to boost export-led recoveries, but there is evidence lower exchange rates do not always work

An unprecedented environmental protest movement in a remote part of Algeria has disrupted the country’s multibillion-dollar shale programme, and is making political waves across the region

Four years after a nuclear disaster, Fukushima’s farmers are struggling to sell their produce despite decontamination efforts as the region tries to stand on its own two feet (WSJ)

Win or lose in Tikrit, Isis can only be defeated in Iraq by the Sunnis, writes Hassan Hassan (The Guardian)  Read more

China’s leaders are looking to the internet to offset sagging economic growth.

At the annual meeting on Thursday of the National People’s Congress, China’s legislature, internet and ecommerce merited a dozen mentions, culminating in Prime Minister Li Keqiang announcing an “internet-plus action plan”.

That, he promised, would “integrate the mobile internet, cloud computing, big data and the internet of things with modern manufacturing, to encourage the healthy development of ecommerce, industrial networks, and internet banking, and to guide internet based companies to increase their presence in the international market”.

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  • A drought in Brazil, which depends on hydropower for 70 per cent of its electricity, is sparking fears of water rationing and energy shortages that could hit economic growth
  • As public deficits rise, pressure to cut costly subsidies on fuel and other products is growing in developing economies. Morocco has shown other countries how the reform can work
  • He is close to Vladimir Putin and has described the European Union as the modern heir to the Third Reich – so why is Viktor Medvedchuk negotiating on behalf of Ukraine in peace talks? (NYT)
  • As China moves into the third year of its anti-corruption campaign, experts are worried that without the grease of bribes, projects are stagnating and the economy is taking a hit (Washington Post)
  • Grow vegetables extensively! North Korea has unveiled a list of 310 new political slogans covering every conceivable topic (Agence France-Presse)

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  • Greece’s privatisation programme, ordered under the terms of its international bailout, was falling far short of targets even before the country’s new left-wing government vowed to scrap further sales of state assets
  • Following Isis’ brutal execution by immolation of captured Jordanian pilot Muath al-Kasaesbeh, many in the country have called for a deeper military commitment against the jihadist group
  • Foreigners are leaving Russia in unprecedented numbers, reflecting a worsening economic outlook as western sanctions bite
  • The west’s inability to comprehend how Vladimir Putin sees the world means it has trouble thinking constructively about how to deal with him (The American Interest)
  • A convicted al-Qaeda operative has claimed that more than a dozen prominent Saudi figures were donors to the terror group and that a Saudi diplomat discussed with him a plot to shoot down Air Force One (NYT)

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