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

5
Feb

We Muslims like to believe that ours is “a religion of peace,” but today Islam looks more like a religion of conflict and bloodshed. From the civil wars in Syria, Iraq and Yemen to internal tensions in Lebanon and Bahrain, to the dangerous rivalry between Iran and Saudi Arabia, the Middle East is plagued by intra-Muslim strife that seems to go back to the ancient Sunni-Shiite rivalry.

Religion is not actually at the heart of these conflicts — invariably, politics is to blame. But the misuse of Islam and its history makes these political conflicts much worse as parties, governments and militias claim that they are fighting not over power or territory but on behalf of God. And when enemies are viewed as heretics rather than just opponents, peace becomes much harder to achieve.

This conflation of religion and politics poisons Islam itself, too, by overshadowing all the religion’s theological and moral teachings. The Quran’s emphasis on humility and compassion is sidelined by the arrogance and aggressiveness of conflicting groups.

This is not a new problem in Islam. During the seventh-century leadership of the Prophet Muhammad, whose authority was accepted by all believers, Muslims were a united community. But soon after the prophet’s death, a tension arose that escalated to bloodshed. The issue was not how to interpret the Quran or how to understand the prophet’s lessons. It was about political power: Who — as the caliph, or successor to the prophet — had the right to rule?

Published in the nytimes.com by

1
Feb

Lights Out for the Putin Regime

Written on February 1, 2016 by Waya Quiviger in Democracy & Human Rights, Europe, Foreign Policy, Security

Russian President Vladimir Putin poses for a selfie with members of the youth military patriotic club "Vympel" (The Pennant), November 4, 2015.

Russian President Vladimir Putin used to seem invincible. Today, he and his regime look enervated, confused, and desperate. Increasingly, both Russian and Western commentators suggest that Russia may be on the verge of deep instability, possibly evencollapse.

This perceptual shift is unsurprising. Last year, Russia was basking in the glow of its annexation of Crimea and aggression in the Donbas. The economy, although stagnant, seemed stable. Putin was running circles around Western policymakers and domestic critics. His popularity was sky-high. Now it is only his popularity that remains; everything else has turned for the worse. Crimea and the Donbas are economic hellholes andhuge drains on Russian resources. The war with Ukraine has stalemated. Energy prices are collapsing, and the Russian economy is in recession. Putin’s punitive economic measures against Ukraine, Turkey, and the West have only harmed the Russian economy further. Meanwhile, the country’s intervention in Syria is poised to become a quagmire.

Things are probably  much worse for Russia than this cursory survey ofnegative trends suggests. The country is weathering three crises brought about by Putin’s rule—and Russia’s foreign-policy misadventures in Ukraine and Syria are only exacerbating them.

First, the Russian economy is in free fall. That oil and gas prices are unlikely to rise much anytime soon is bad enough. Far worse, Russia’s energy-dependent economy is unreformed, uncompetitive, and un-modernized and will remain so as long as it serves as a wealth-producing machine for Russia’s political elite. Second, Putin’s political system is disintegrating. His brand of authoritarian centralization was supposed to create a strong “power vertical” that would bring order to the administrative apparatus, rid it of corruption, and subordinate regional Russian and non-Russian elites to Moscow’s will. Instead, over-centralization has produced the opposite effect, fragmenting the bureaucracy, encouraging bureaucrats to pursue their own interests, and enabling regional elites to become increasingly insubordinate—withRamzan Kadyrov, Putin’s strongman in Chechnya, being the prime example. Third, Putin himself, as the linchpin of the Russian system, has clearly passed his prime. Since his catastrophic decision to prevent Ukraine from signing an Association Agreement with the European Union in 2013, he has committed strategic blunder after strategic blunder. His formerly attractive macho image is wearing thin, and his recent attempts to promote his cult of personality by publishing a book of his quotes and a Putin calendar look laughable and desperate. Read more…

 

Published on Jan. 27 in foreignaffairs.com; Written by By Alexander J. Motyl

29
Jan

 

One day in 2008, a friend called to tell me that he thought the world might be coming to an end. He was not a religious fanatic; he worked in markets. Lehman Brothers had just gone bankrupt and the international financial system appeared to be in its death agony. As Marx might have put it, the final “crisis of capitalism” seemed to have arrived.

But the world did not end. The international proletarian revolution did not arrive either, though a few decades earlier, it might have done. Financial collapse on the scale of 2008 might, once upon a time, have inspired the formerly powerful revolutionary Marxist and near-Marxist political parties of western Europe to take to the streets. But because Marxism was so thoroughly discredited by the collapse of the Soviet Union, there was no appetite for radical revolution two decades later. Economic fashion, even on the political left, seemed to have moved on.

Fast forward eight years and the situation is drastically different. Many have noticed that the old-fashioned left is back. Syriza in Greece, Podemos in Spain and Jeremy Corbyn’s British Labour party all now contain radicals who would, if they could, renationalise industry and put an end to free trade. But the more remarkable and less obvious change is taking place on what we used to call the far right. The nationalist parties of Europe, long dismissed as fringe groupings, are now winning votes by adopting previously discredited “leftwing” ideas.

Exhibit A is France’s National Front. Though better known for its anti-immigration rhetoric, the party, under Marine Le Pen’s leadership, has also taken over some of the symbols of the old left, as well as some of its economic policies. A few years ago, the party began holding rallies on May 1, the traditional international socialists’ holiday.

At one of those rallies in 2014, Ms Le Pen attacked the “draconian policy of austerity” that favoured “globalised elites at the expense of the people”. She and her colleagues have also denounced the “neoliberal” policies that supposedly unite the French left, the French right and the EU. Instead, the National Front wants to replace the “establishment” with a “muscular state” that taxes imports and nationalises foreign companies and banks. Read more…

 

By Anne Applebaum; Published on Jan. 27 in www.ft.com

28
Jan

In late 2014, when I visited the Peshmerga on the northern Iraq frontline with Isis, the famed Kurdish warriors were in buoyant mood. After a wobble when the militant Islamists captured Mosul that June, the Kurds had restored their image by recapturing a swath of land where the jihadis had massacred, terrorised and displaced Iraqi ethnic minorities.

Iraq’s Kurds have proved the most reliable western allies in an anti-Isis struggle in which other regional forces have been at best ambivalent and at worst have colluded with the jihadis.

With the survival of the autonomous Kurdish enclave at stake, and their aspirations of statehood closer to being realised, the Kurds have not vacillated in their resolve. For that, they have been celebrated and supported by western governments.

This tale of determination makes the Peshmerga’s treatment of towns and villages seized from Isis all the more distressing.

Stories of abuse have trickled out but it was only a few days ago that I read a comprehensive account. A friend handed me a report she had written for Amnesty International based on more than a year’s investigation into the areas recovered by the Peshmerga.

Through visits, satellite imagery and interviews with displaced people, she found a disturbing pattern. Arab residents of these towns and villages who fled to the Kurdish north were deliberately prevented from returning; in several cases the Peshmerga have destroyed or allowed the destruction of homes to ensure that villagers had nowhere to return to.

The forced displacement of populations may amount to a war crime, according to Amnesty. Read more…

 

By Roula Khalaf; published on Jan. 27  in www.ft.com

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