Archive for the ‘Topics’ Category

22
Feb

By Diego Sánchez de la Cruz, alumnus of the Master in International Relations (MIR)Diego-SDLC2013.jpg(1)

A great deal of Spain’s current problems with public deficits were originated between 2007 and 2009. As the real estate bubble burst, the public sector went from a surplus of 1,91% of GDP to a deficit of 11,19% of GDP. Such budget breakdown equals to 13,1% of GDP.

The following chart shows this situation more clearly:

Chart 1

In 2009, Spain’s GDP amounted to slightly more than one trillion euros, which means that each percentage point equals to an increase in the budget deficit of around 10 billion. By then, public spending was higher than 46% of GDP, which means that the public sector was managing over 480 billion euros. If we compare the deficit with public expenditures instead of doing it with GDP, we find a gap of almost 30%.

Revenue data also shows how the end of the real estate bubble contributed to this scenario. Between 2007 and 2008, tax receipts fell from 41,1% to 36,7% of GDP. This drop of 4.4% is unmatched in any other developed countries, as seen in the following chart.

Chart 2

Falling state revenues amounted to 6,38% of GDP in just two years. However, during the same period, public spending rose by 6,7% of GDP. This means that half of the deficit can be blamed due to lower revenues while the other half is explained by additional public spending.

Nine of the thirteen points of the budget breakdown can be explained due to automatic adjustments in the spending associated with welfare programs. For instance, when unemployment goes up, so do unemployment benefits. However, 4,1 percentage points in this budget breakdown of 13,1% can be tracked back to higher spending that was non-related to already established government programs.

What does this mean? That final deficit number for 2009 could have been of 7,1%, which is almost 40% less than the 11,19% that was actually registered. In that scenario, an eight per cent cut in government spending would have been enough to lower public deficit figures below the 3% mark, which would be in compliance with Eurozone targets.

Diego Sánchez de la Cruz is an analyst at Libertad Digital. His work on international economics has been published in different media outlets.

20
Feb

By Leon Hadar

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Despite failures in Iraq and Afghanistan, some of the West’s most prominent intellectuals still operate under the assumption that liberal values are universal.

In his new magnum opus, The Better Angels of Our Nature: Why Violence Has Declined, Harvard psychology professor and Renaissance man Steven Pinker, highlights what he regards to be “the most important thing that has ever happened in human history.” Violence has declined and today “we may be living in the most peaceful era in our species’ existence.”

But Pinker’s decline-of-violence thesis reflects a more ambitious exercise: The professor aims to develop a grand theory, one that assumes that “we” or “humanity” or “our species” have all become part of “modernity,” defined as the sense that the old foundations of societies—family, tribe, tradition and religion—are being eroded by the forces of individualism, cosmopolitanism, reason and science.

In Pinker’s view, a global civilizing process is creating a new culture. This new way, which is more secular, more democratic, more commercial, more “feminized,” is becoming dominant worldwide, and explains why our civilization has become more conducive to peaceful coexistence. Forget the bloodbaths of the twentieth century, including two world wars, civil wars and genocides, Pinker argues. We are entering into the era of the New Peace, where violence against the “Other” national, ethnic, and religious groups, against women, children and even animals, will become a taboo. History has indeed ended and we’re all turning into one big, happy civilization.

If you have been residing for most of your life in the West and were educated and exposed to the dominant cultural currents, in places like the United States, Germany or Australia, the political civilization that Pinker is describing sounds familiar. Whether you are liberal or conservative, you would have to agree that our national societies have become less religious, more materialistic and effeminate—and that even (some) animals now enjoy legal protection.

To be sure, no one in his right mind would predict a war between the United States and Canada, or between Australia and New Zealand, or even between France and Germany anytime soon. Scotland may or may not secede from Britain in the near future. But the establishment of an independent Scotland (or Catalonia or Lombardy) will almost certainly not be preceded or followed by a civil war. Read more…

Leon Hadar, senior analyst at Wikistrat, a geostrategic consulting group, is the author of Sandstorm: Policy Failure in the Middle East

As published by The National Interest on February 19, 2013.

18
Feb

Can anyone stop Turtle Bay from fading into obscurity?

BY SUZANNE NOSSEL

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In early 2011, the United Nations seemed poised for a renaissance. After playing a marginal role in global conflicts in Iraq and Afghanistan, the U.N. Security Council was the epicenter for rapid-fire deliberations that yielded a historic resolution calling for “all necessary measures” to protect the Libyan people from President Muammar Qaddafi’s onslaught. The decision elevated the nascent global principle of an international “responsibility to protect” innocent civilians, warming the hearts of human rights activists who had for years sought to promote this new international norm. The Security Council’s action was decisive, timely, cutting-edge and backed by a wide consensus of world powers, established and emerging.

But the momentum dissipated almost as quickly as it had built. China, Russia and South Africa complained of having been hoodwinked into backing a resolution used to justify military intervention culminating in Qaddafi’s ouster. That ire stiffened Moscow’s spine for nearly two years of unbending resistance to any Security Council action on Syria. Two successive U.N. mediators for Syria, former Secretary General Kofi Annan and Algerian diplomat Lakhdar Brahimi, have been mostly ignored by both Syrian President Bashar al-Assad and the Security Council. The result has been to marginalize the U.N. as a force in the Arab transformations, relegating it to the sidelines of the world’s most volatile and pivotal region.

The U.N.’s paralysis over Syria is symptomatic of a wider malaise. As with the U.S. Congress, what happens or doesn’t at the U.N. is a function not of the institution itself, but of its members. While it’s fun to blame the bureaucrats at Turtle Bay, its problems originate not in New York but in capitals around the world. Despite a flurry of activity after September 11, the U.N. membership has for 12 years been unable to even agree on a definition of terrorism, leaving this manifestly global fight mostly to unregulated national efforts. Despite a series of large-scale summit meetings, the U.N. has failed to forge agreement on how to curb climate change. Successive rounds of stiffening U.N. sanctions have not broken the will of either Iran or North Korea to gain nuclear weapons. Although the U.N. is nominally part of the “Quartet” charged with addressing the Israel-Palestinian conflict, it was Egypt and the United States that mediated the latest flare-up in Gaza. In the backseat on so many of the major issues of the day, the U.N. doesn’t trend on Twitter or make top news, at least not in the United States. Indeed, of the more than 200 journalists listed as members of the U.N. press association, only about two dozen are affiliated with U.S. media outlets. Read more…

Suzanne Nossel is a former U.S. deputy assistant secretary for international organizations.

As published in www.foreignpolicy.com on February 15, 2013

 

14
Feb

By Zbigniew Brzezinski

Today, many fear that the emerging American-Chinese duopoly must inevitably lead to conflict. But I do not believe that wars for global domination are a serious prospect in what is now the Post-Hegemonic Age.

Admittedly, the historical record is dismal. Since the onset of global politics 200 years ago, four long wars (including the Cold War) were fought over the domination of Europe, each of which could have resulted in global hegemony by a sole superpower.

Yet several developments over recent years have changed the equation. Nuclear weapons make hegemonic wars too destructive, and thus victory meaningless. One-sided national economic triumphs cannot be achieved in the increasingly interwoven global economy without precipitating calamitous consequences for everyone. Further, the populations of the world have awakened politically and are not so easily subdued, even by the most powerful. Last but not least, neither the United States nor China is driven by hostile ideologies.

Moreover, despite our very different political systems, both our societies are, in different ways, open. That, too, offsets pressure from within each respective society toward animus and hostility. More than 100,000 Chinese are students at American universities, and thousands of young Americans study and work in China or participate in special study or travel programs. Unlike in the former Soviet Union, millions of Chinese regularly travel abroad. And millions of young Chinese are in daily touch with the world through the Internet.

All this contrasts greatly with the societal self-isolation of the 19th- and 20th-century contestants for global power, which intensified grievances, escalated hostility and made it easier to demonize the one another.

Nonetheless, we cannot entirely ignore the fact that the hopeful expectation in recent years of an amicable American-Chinese relationship has lately been tested by ever more antagonistic polemics, especially in the mass media of both sides. This has been fueled in part by speculation about America’s allegedly inevitable decline and about China’s relentless, rapid rise. Read more…

Zbigniew Brzezinski was national security adviser to President Jimmy Carter. His most recent book is “Strategic Vision: America and the Crisis of Global Power.

As published in www.nytimes.com on February 13, 2013.

13
Feb

By Diego Sánchez de la Cruz, Alumnus of the Master in International Relations (MIR)

Over the last years, a lot has been said about the Argentinian economy and it’s performance. Economists like Paul Krugman were fairly optimistic about the Latin American country’s future, while other international observers saw some things differently.

As time has gone by, the performance of the Argentinian economy has slowed down significantly and the enthusiasm about the “Kirchner Model” is now almost gone. Many of the more serious concerns doubts about it’s future began when The Economist announced that it would stop publishing official inflation data from Argentina, arguing that such figures were experiencing major political manipulation.

If we take a look at the official numbers, prices increase in Argentina at an annual pace of 11 per cent, a much higher rate than most other Latin American countries. However, according to independent studies, Argentina’s real inflation rate is said to be around 25 per cent – and rising!

The government does not seem concerned about this trend: many times, President Cristina Férnandez de Kirchner has rejected the need to “cool down the economy.” According to the Argentinian President, trying to contain inflation “only leads to poverty and unemployment, as we have seen for decades.

At the moment, the amount of 100 pesos notes in circulation is more than half of the total monetary base. In fact, analyzing the Argentinian Central Bank report for 2011, we see that the number of circulating 100 pesos notes has tripled over the last five years. Bloomberg has reported that the money supply grew at a rate of almost 40% in 2011, following years of 30% growth levels.

It is important to remember that 2011 was a presidential election year, which perhaps explains why 52% of the new pesos were used to finance government spending programs. This can explain, for example, that the official propaganda budget grew almost 85% in the months leading up to the election.

Meanwhile, the Argentinian currency is losing it’s purchasing power very fast: a U.S dollar bought three pesos in 2009, while the current exchange rate is closer to five… The President herself seems not to suffer the same fate as the rest of the country, since her family’s state has grown from 7 to 92 million pesos in just a decade. Unfortunately, the rest of the country is not doing so well.

Read more…

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