International Relations Blog

The surprise selection on Wednesday of an Argentine, Cardinal Jorge Mario Bergoglio, as the new pope shifted the gravity of the Roman Catholic Church from Europe to Latin America in one fell swoop, and served as an emphatic salute to the growing power of Latinos across the Americas.

The new pope took the name Francis and is the 266th pontiff of the church. He is the first pope from Latin America, and the first member of the Jesuit order to lead the church.

“I would like to thank you for your embrace,” the new pope, dressed in white, said in Italian from the balcony on St. Peter’s Basilica as thousands cheered joyously below. “My brother cardinals have chosen one who is from far away, but here I am.”

The selection electrified Latinos from Los Angeles to Buenos Aires, and raised the hopes especially of those in Latin America, where 4 of every 10 of the world’s Catholics now live.

But the choice also may provide a strategic boost to the church in the United States, where its following would have lost ground in recent decades were it not for the influx of Latino immigrants, who have increasingly asserted themselves as a cultural and political force, and played a critical role in President Obama’s re-election.

The significance of the choice was not lost on church leaders. “It’s been more than 500 years since the first evangelization, and this is the first time that there is a pope from Latin America,” said Archbishop Jose Gomez of Los Angeles, who is originally from Mexico.

“It’s a huge role that we never had before,” he said.

The new pope, known for his simple, pastoral ways and his connection to the poor, is in some ways a contrast to his predecessor, Benedict XVI, an aloof theologian who resigned the office — the first pope to do so in 598 years — saying he no longer felt up to the rigors of the job. Read more…

As published in www.nytimes.com on March 13, 2013 (a version of this article appeared in print on March 14, 2013, on page A1 of the New York edition with the headline: New Pope Shifts Church’s Center of Gravity Away From Europe).

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

Renaming Venezuela’s currency as the “strong bolivar” sounded like a bad joke back in 2007. Fast forward to 2013 and that “rebranding” seems almost grotesque in light of how weak the Latin American currency really is.

In February of 2013, the Hugo Chávez regime devalued its currency for the seventh time, bringing the fixed exchange rate from 4.3 to 6.3 bolivars to the dollar. The real market exchange rate, though, gives Venezuela’s currency a much lower valuation, closer to closer to a 25/1 rate.

Now, with the socialist leader dead, his legacy will still hunt Venezuela in many ways. In terms of monetary policy, his regime managed to accumulate an inflation of 528% between 2003 and 2011. Such scandalous figure was followed by a 20% inflation rate in 2012. The outlook for 2013 is even worse, with estimates of a 30% rise in prices.

Food shortages are the norm, and price controls only make matters worse. The government has avoided popular unrest by extending subsidies and government programs, yet such scheme is simply not sustainable without historically high oil prices.

What should Venezuela do next in order to contain inflation and have a more stable monetary scenario? Ideally, the denationalization of money would be the best way to allow families and businesses to conduct their day-to-day operations in whichever currency they so desire.

Besides that best case scenario, two other options come to mind: on the one hand, imitating Ecuador’s experiment with dollarization; on the other hand, pegging the currency to a basket of U.S. dollars and oil prices. Both would be steps in the right direction, but they would have to be adopted along with three key reforms: end of price controls, reduction of public expenditures and economic liberalization.

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

By Rolf Strom-Olsen, Academic Director for the Humanities at IE School of Arts and Humanities

I have to admit that until very recently the sound “mooc” made me think, not of some bold experiment in democratising educational opportunity, but rather of the great Mookie Wilson, who, despite being a Met, was one of the great ballplayers of the eighties and, incidentally, the batter whose ground ball ended up defining the 1986 World Series (yes, we’re still looking at you Bill Buckner!).

But move over Mookie, the world of the Massive Open Online Course has arrived. And not that long ago either. If we excavate on Wikipedia, as the site for internet archaeology, we find that the term garners an article only in 2011, and, for a long time thereafter, is tended to by only a few ardent enthusiasts (there is even the obligatory suggested deletion for new articles of uncertain value). However, the MOOC has had a fast ascent into the world of higher education since then, propelled by:
(1) the remarkable success of several high profile sites that have become focal points for online course in drawing offerings from very reputable institutions;
(2) angst-ridden hand-wringing about the very future of the academy, largely playing out in the pages of publications like the CHE; and
(3) apparently significant public buy-in.

When I was approached by my institution to offer a class in the uncertain world of MOOCs, it was this last point – public interest – that was largely unknown to me. I mean, how many people are there that want to follow an online class in Aboriginal Worldviews and Education or Combinatorial Game Theory?

Ok, so I know the answer to that now. Lots! Really an astonishingly large number, as in (cf. Douglas Adams) vastly, hugely, mind-bogglingly large. Coursera, the platform on which my class appears, generates enrolments of certainly tens, and for some of the more popular courses, perhaps hundreds of thousands of participants. Now the drop out rate is also very high – which makes sense, since the model encourages more or less blanket enrolment for any class that seems even remotely appealing, followed by mass exodus when the reality of listening to people like me for six weeks kicks in.  But when you have 50,000 people signed up, even a 95% dropout rate leaves you with 2,500 following the class. Which makes such courses an order of magnitude bigger than the typical large college lecture class.

Read more…

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

Throughout the second half of the 20th century and the first decade of the 21st century, asymmetric warfare became a central issue in international affairs. States are now trying to adjust their security agenda to the new threats represented by non-state actors, yet the learning process is long and sustainable solutions are hard to find.

In the field of economics, a similar situation is slowly unfolding. Developed economies had grown accustomed to a world were free market capitalism was the norm. Regardless of the several examples of state intervention that undermine such regime of economic liberalism, radical proposals of socialist and interventionist thinkers had slowly been forgotten and discarded.

This “end of history” scenario did move several emerging economies towards the laissez faire paradigm, yet some of these new actors have adopted their own alternative model in what most authors call “state capitalism”. Superpowers like China are a good example of this hybrid were the state now enforces economic dirigisme in a more complex way. Central planning is no longer the norm in these countries, so the private sector can actually develop through capitalist means, but only as long as it stays under direct or indirect control by the State.

Since “state capitalism” is an asymmetric challenge to free market capitalism, it is only normal than economic tensions go up as both models gravitate towards each other. Protectionism remains the most obvious example of what may happen if both systems are unable to coexist, yet another troublesome scenario that is often overlooked is that of monetary tensions.

Developed economies should be aware of this. In most aspects, capitalist countries hold the advantage over “state capitalist” countries because their higher degree of competition enhances efficiency in the market and thus promotes a more vibrant and dynamic economy. However, in the field of monetary policy, the State holds a monopoly over money in both models, thus eliminating what could be a very important comparative advantage for the more developed economies.

It is true that China’s manipulation of the yuan has upset several capitalist economies. However, central bankers in those countries can hardly make a case against monetary manipulation while they apply all sorts of discretionary measures (i.e. quantitative easing) to try and tackle the on-going crisis. In the end, both systems are guilty of the same sin: manipulating their currencies to avoid painful yet necessary reforms.

In the end, if the capitalist countries want to remain ahead of the “state capitalism” bloc, they must free their monetary system and allow currency competition once and for all. While this important step is not yet taken, holding a monopoly over money will lead to an underperforming economy were inflation is the norm, asset bubbles boom and bust in a recurrent way and socioeconomic progress is mediocre.

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