Archive for the ‘Global Economy’ Category

19
May

Argentina: A Smoother Ride

Written on May 19, 2016 by Waya Quiviger in Americas, Foreign Policy, Global Economy

Argentina is throwing itself back into the international economic community, after a 2002 default that thwarted the country’s access to world capital markets. The center-right Macri government, which came to power last December, is moving full speed ahead with economic reforms. And just last month, a U.S. appeals court cleared the way for Argentina to make payments on $9 billion in bonds – allowing the country to re-enter bond markets. This means big investment opportunities for Argentina’s northern neighbors.

The energy sector has extremely high growth potential. Argentina holds vast reserves of shale gas and oil and is seeking to bolster its renewables industry. However, unchecked energy subsidies swelled under the previous government – led by center-left President Cristina Kirchner – reaching 2.9 percent of GDP in 2014, according to the Argentine Budget Association. The association reports these subsidies accounted for more than 12 percent of 2014 federal spending, not including debt payments.

Just after taking office, President Mauricio Macri cut electricity subsidies to wholesale power distributors. A gradual and sustained increase in electricity and gas prices is planned for almost all sectors of the Argentine economy. Households that cannot afford the price hike will be able to continue paying a subsidized bill.

“The recent reforms in energy prices have sparked interest in investing in the energy sector, both on traditional and renewable energies,” says former Executive Director at the International Monetary Fund (IMF) and Cipher Brief expert Andrea Montanino. Read more…

 

Published on MAY 18, 2016 | KAITLIN LAVINDER in thecipherbrief.com

1
Apr

The definition of war, according to military scholar Gen. Carl von Clausewitz, is “an act of violence intended to compel [your] opponent to fulfill [your] will.” In other words, nation-states establish militaries so that they can force an opponent to do what they want. However, a military’s role can also be more complex than just fighting an enemy. Despite the fact that no major global war is currently being fought, many of the world’s nation-states still maintain large standing armies with hundreds of thousands of active military personnel. According to the International Institute for Strategic Studies, there are over 20 million military personnel on active duty throughout the world. If you take into account reserves and paramilitary forces, that number climbs to well over 60 million.

The first reason countries maintain large militaries is that nation-states cannot be too optimistic – they must be prepared for armed conflict and develop military capabilities according to their own unique threat environments. But the second reason is that national militaries often help maintain national unity.

Take China for example. China has a mass-mobilization army, the People’s Liberation Army (PLA), that was designed to fight a type of war that isn’t fought anymore. But the PLA is not just a military force – it is a political force too. It serves both as the ultimate guarantor of the Communist Party’s rule and it is an institution for advancement for poor Chinese young men with dismal prospects. The PLA has to be strong enough to fend off a potential attack from Russia or Japan – but before it can do that, the PLA must be part of the glue that holds China together. Without that stabilizing effect, China is at risk of fragmenting along regional lines, as it has numerous times through its history. Read more…

 

Published on 29 March in https://geopoliticalfutures.com

23
Mar

I HAVE worked for the United Nations for most of the last three decades. I was a human rights officer in Haiti in the 1990s and served in the former Yugoslavia during the Srebrenica genocide. I helped lead the response to the Indian Ocean tsunami and the Haitian earthquake, planned the mission to eliminate Syrian chemical weapons, and most recently led the Ebola mission in West Africa. I care deeply for the principles the United Nations is designed to uphold.

And that’s why I have decided to leave.

The world faces a range of terrifying crises, from the threat of climate change to terrorist breeding grounds in places like Syria, Iraq and Somalia. The United Nations is uniquely placed to meet these challenges, and it is doing invaluable work, like protecting civilians and delivering humanitarian aid in South Sudan and elsewhere. But in terms of its overall mission, thanks to colossal mismanagement, the United Nations is failing.

Six years ago, I became an assistant secretary general, posted to the headquarters in New York. I was no stranger to red tape, but I was unprepared for the blur of Orwellian admonitions and Carrollian logic that govern the place. If you locked a team of evil geniuses in a laboratory, they could not design a bureaucracy so maddeningly complex, requiring so much effort but in the end incapable of delivering the intended result. The system is a black hole into which disappear countless tax dollars and human aspirations, never to be seen again. Read more…

8
Mar

AT no point in recorded history has our world been so demographically lopsided, with old people concentrated in rich countries and the young in not-so-rich countries.

Much has been made of the challenges of aging societies. But it’s the youth bulge that stands to put greater pressure on the global economy, sow political unrest, spur mass migration and have profound consequences for everything from marriage to Internet access to the growth of cities.

The parable of our time might well be: Mind your young, or they will trouble you in your old age.

A fourth of humanity is now young (ages 10 to 24). The vast majority live in the developing world, according to the United Nations Population Fund.

Nowhere can the pressures of the youth bulge be felt as profoundly as in India. Every month, some one million young Indians turn 18 — coming of age, looking for work, registering to vote and making India home to the largest number of young, working-age people anywhere in the world.

Already, the number of Indians between the ages of 15 and 34 — 422 million — is roughly the same as the combined populations of the United States, Canada and Britain.

By and large, today’s global youth are more likely to be in school than their parents were; they are more connected to the world than any generation before them; and they are in turn more ambitious, which also makes them more prone to getting fed up with what their elders have to offer. Many are in no position to land a decent job at home. And millions are moving, from country to city, and to cities in faraway countries, where they are increasingly unwelcome. Read more…

By SOMINI SENGUPTAMARCH 5, 2016; Published in the nyt.com

8
Feb

The Global Economy’s New Abnormal

Written on February 8, 2016 by Waya Quiviger in Global Economy

Since the beginning of the year, the world economy has faced a new bout of severe financial market volatility, marked by sharply falling prices for equities and other risky assets. A variety of factors are at work: concerns about a hard landing for the Chinese economy; worries that growth in the United States is faltering at a time when the Fed has begun raising interest rates; fears of escalating Saudi-Iranian conflict; and signs – most notably plummeting oil and commodity prices – of severe weakness in global demand.

And there’s more. The fall in oil prices – together with market illiquidity, the rise in the leverage of US energy firms and that of energy firms and fragile sovereigns in oil-exporting economies – is stoking fears of serious credit events (defaults) and systemic crisis in credit markets. And then there are the seemingly never-ending worries about Europe, with a British exit (Brexit) from the European Union becoming more likely, while populist parties of the right and the left gain ground across the continent.

These risks are being magnified by some grim medium-term trends implying pervasive mediocre growth. Indeed, the world economy in 2016 will continue to be characterized by a New Abnormal in terms of output, economic policies, inflation, and the behavior of key asset prices and financial markets.

So what, exactly, is it that makes today’s global economy abnormal?


Read more at https://www.project-syndicate.org/commentary/market-volatility-in-global-economy-by-nouriel-roubini-2016-02#l46Twtl43buwogWP.99

Published on 4 Feb. by Nouriel Roubini in https://www.project-syndicate.org

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