Archive for the ‘World Politics’ Category

30 April 2019   Leave a comment

Institutional Investor publishes an annual list of the world’s richest hedge fund managers. The amount of money these men (and they are all men) made in 2018 is staggering. We only have a rough idea of how rich the rich actually are (and the rich have no clue about how poor the poor actually are). But one also has to remember that these people did not produce anything nor did they employ a large work force. They all made money by manipulating money. It is also important to note that last year was a nad year for hedge funds.

NameAnnual Compensation

Ray Dalio

2019: $2 billion

James Simons

2019: $1.5 billion

Kenneth Griffin

2019: $870 million

John Overdeck, David Siegel (tie)

2019: $820 million 

Israel (Izzy) Englander

2019: $750 million

Crispin Odey

2019: $530 million

David Shaw

2019: $500 million

Chase Coleman

2019: $465 million

Alan Howard

2019: $390 million

There were widespread clashes between protesters and law enforcement in Venezuela as the Interim President, Juan Guaido, urged the Venezuelan military to stop supporting Nicolas Maduro. Guaido stood by Leopoldo López, an opposition leader who has been under arrest since 2014 for staging protests against the government. López claims that he was released by members of the military, lending credence to the idea that the military’s support for Maduro may be weakening. The Guardian published a graphic and disturbing video of military vehicles being driven into crowds of protesters. The US is apparently heavily involved in supporting Guaido, but the details of that support are not fully known. But Newsweek assesses the US position:

“White House national security adviser John Bolton has said that the U.S. was actively backing opposition forces seeking to overthrow Venezuelan President Nicolás Maduro.

Amid clashes Tuesday between Venezuelan security forces and defectors supporting U.S.-endorsed National Assembly leader Juan Guaidó, Bolton told reporters that the administration’s ‘principal objective’ was ‘the peaceful transfer of power,’ but reiterated President Donald Trump’s stance that ‘all options are on the table’ in ensuring Maduro was unseated.

“The U.S. has recognized Guaidó as acting president since January, cutting all ties with Maduro and targeting him with increasingly restrictive sanctions.

“‘We’re providing support in a variety of respects, certainly we have done everything we can to get humanitarian assistance into the country, we’re doing a lot of other things, some of which I’m not going to talk about,’ Bolton told said.”

The US involvement comes as both Cuba and Russia are increasing their involvement as well. The situation is becoming more intense and fraught as the violence escalates. The US should not become more involved in this power struggle–it has very little legitimacy in intervening in the internal affairs of states in Central and South America.

Alex Ward has written a very informative article for Vox on Japan’s recent defense build-up. With the encouragement of the US, Japan has been drifting away from the pacifist constraints imposed on it by the constitution written by the US at the end of World War II. States in East and Southeast Asia have not forgotten the behavior of the Japanese state during that war, and they are apprehensive about the change. In particular, the Chinese believe that the build-up is specifically intended to constrain Chinese power. Ward gives excellent background on Japan in world affairs to provide context for the recent decisions. It remains to be seen how far Japan can move in this direction; public opinion polls indicate that the Japanese population is still committed to a pacifist tradition.

Posted April 30, 2019 by vferraro1971 in World Politics

29 April 2019   Leave a comment

The Stockholm International Peace Research Institute (SIPRI) has released its annual report on military spending in 2018. Global military spending reached $1.8 trillion in 2018. The two largest spenders were the US and China and the two states accounted for half of the total for the world.

“Total global military spending rose for the second consecutive year in 2018, to the highest level since 1988—the first year for which consistent global data is available. World spending is now 76 per cent higher than the post-cold war low in 1998.* World military spending in 2018 represented 2.1 per cent of global gross domestic product (GDP) or $239 per person. ‘In 2018 the USA and China accounted for half of the world’s military spending,’ says Dr Nan Tian, a researcher with the SIPRI Arms and Military Expenditure (AMEX) programme. ‘The higher level of world military expenditure in 2018 is mainly the result of significant increases in spending by these two countries.’”

Interestingly, despite Russian President Putin’s rhetoric about Russian military capabilities, Russian military spending has declined. According to the Economist:

“The most interesting contraction is, however, in Russia. “Can they count?” President Vladimir Putin asked of his Western rivals in February. “I’m sure they can. Let them count the speed and the range of the weapons systems we are developing”. But despite the theatrical flaunting of new missiles, and NATO’s impressive rearmament to the west, SIPRI calculates that Russia’s defence budget actually shrank by 3.5% in 2018—putting it outside the top five for the first time in over a decade. This may be the result of a weakening rouble. But Russia’s long military spending spree seems to be drawing to a close. That is a sobering thought for Mr Putin.

The US is increasing its military spending at a rapid rate. According to National Public Radio:

” In 2018, Congress gave the military an additional $61 billion in appropriations — giving the U.S. what then-Defense Secretary Jim Mattis called ‘the largest military budget in history.’

“Trump this year has proposed increasing military spending by $33 billion — a 5% increase. At the same time, Trump is proposing cutting spending on diplomacy and development by $13 billion, or 23%. Trump has also criticized American allies in NATO for not spending enough on defense.”

It is difficult to imagine that pace of spending can persist for a long period of time, particularly since the US budget deficit has increased substantially in the last year. Forbes details the deficit: “The official estimated deficit for the year is supposed to be just under $1.09 trillion. If the current pace keeps up, the total could run to almost $1.4 trillion.”

The Spanish Socialist Party (PSOE) won the largest number of seats in yesterday’s national elections, but it fell short of amassing a majority. At the same time, however, the Spanish far-right party, Vox, achieved representation in the Parliament. Jacobin analyzes the rise of the party and places it in the context of European politics as a whole:

“Vox shares the same fundamental precepts as the other comparable formations in surrounding European countries. It is a nativist and ultranationalist force, deeply opposed to immigration and promoting a strongly Islamophobic message. In economic terms, it is much closer to the ultra-neoliberal doctrines of Jair Bolsonaro and US libertarians than to the protectionist measures promised by Marine Le Pen’s Rassemblement National (ex-Front National).”

It remains to be seen how the PSOE will manage a majority coalition. The uncertainty raised by the election (the 3rd Parliamentary election in 4 years) makes it difficult to predict. More than likely, any coalition will be fragile. European politics continues to defy clear analysis.

Posted April 29, 2019 by vferraro1971 in World Politics

26 April 2019   Leave a comment

US President Trump has thrown the support of the US to General Khalifa Haftar, the military commander Libyan National Army (LNA). In so doing, the US joins ranks with Saudi Arabia, the United Arab Emirates, and Kuwait and turns its back on efforts by the UN and some European allies to broker a cease-fire among the competing groups in Libya. Haftar also joins the ranks of dictators such as Kim Jong-un, Mohammad bin Salman, and Valdimir Putin that have received support from President Trump. The move also increases the odds that Libya will go through even more violence before it achieves any semblance of stability.

The Gallup poll on global attitudes toward stress, anxiety, and anger has been released and the results for the US indicate that these negative emotions are on the rise. According to the poll:

“More than half of United States respondents—around 55 percent—reported feelings of high stress the day prior to being polled, according to a Gallup press release, while 45 percent said they felt worried “a lot of the day,” and 22 percent said the same of anger.

“Americans’ stress levels were significantly higher than the global average of 35 percent, leaving the U.S. tied for fourth (alongside Albania, Iran and Sri Lanka) in Gallup’s ranking of the world’s most stressed populations. Greece topped the list at 59 percent, while the Philippines and Tanzania finished in second and third with 58 and 57 percent, respectively.

“In terms of worry, the U.S.’ 45 percent was ahead of the global average of 39 percent. Comparatively, 63 percent of the world’s most worried population, Mozambique, reported strong feelings of worry the day prior.

“Although Americans experienced anger at levels on par with the global average of 22 percent, this figure was still higher than in years past. On average, U.S. respondents were about half as likely to report strong feelings of anger as individuals from the countries topping Gallup’s list of the most angry global populations. Forty-five percent of respondents from Armenia reported feeling anger, while Iraq and Iran followed closely behind at 44 and 43 percent, respectively.

Some areas of the world are not in the dumps: “At the other end of the spectrum, Paraguay and Panama tied for most positive countries surveyed. Aside from Indonesia, the rest of the nations rounding out the top 10 also hailed from Latin America, reflecting what the report terms ‘the cultural tendency in the region to focus on life’s positives.’ As Gallup’s global managing partner Jon Clifton summarizes, Latin Americans may not always rate their lives highly, but in the end, they ‘laugh, smile and experience enjoyment’ better than anyone else in the world.”

Posted April 26, 2019 by vferraro1971 in World Politics

24 April 2019   Leave a comment

The South China Morning Post has an excellent article on China’s Belt and Road Initiative (BRI). The initiative is an ambitious attempt to revive the old Silk Road that dominated the global economy before the rise of European power. The article is very balanced, looking at the benefits and disadvantages of the effort for countries in southeast, south, and central Asia. It is also an attempt by China to reshape the global economy in ways that serve its interests better than the current liberal world order.

“The growth in investment in places like Cambodia comes despite mounting criticism and resistance, and underlines Beijing’s accelerated push for the world’s most ambitious project amid China’s economic wrangling with the United States and European powers and their unfolding geopolitical rivalry.

“Those ambitions will be in the spotlight this week when 37 heads of state, including Hun Sen and Russian President Vladimir Putin, head to Beijing for the Belt and Road Forum, the second of its kind in less than two years. But neither India nor the US will send senior representatives.”

As the week unfolds there will be more articles on the meeting in Beijing goes on. Keep an eye on how the BRI is received by the less wealthy states.

Climate change has been occurring since the beginning of the industrial revolution and the current situation is the result of the cumulative level of greenhouse gas emissions since the 18th century. There is no question which country is most responsible for the largest contribution to this cumulative problem. Carbon Brief has put together the video below which dramatically illustrates the US role. But pay attention to how rapidly China and India rise in the rankings.

Posted April 24, 2019 by vferraro1971 in World Politics

23 April 2019   Leave a comment

The Economist has a fascinating article entitled “Where growth is concerned, is population destiny?” It rightly points out that for much of the past, the more populous nations, such as CHina, were the center of the global economy. The period where European, and subsequently US dominance since the 1500s is an anomaly because these nations were much smaller. The question is straightforward:

“For centuries prior to the Industrial Revolution, Asia’s massively populous societies made the continent the world’s centre of economic gravity. Industrialisation in Europe and North America in the 19th century briefly knocked it from its perch. But now their collective economic might, measured in real output on a purchasing-power-parity basis, is forecast to account for more than half of global production by 2020. Was the West’s period of dominance an anomaly, which could only ever have been short-lived? Is population destiny?”

As economic activity shifts to Asia, it seems as if China is destined to return to its former place. But technological innovation propelled Europe to dominance and that dynamic seems to be independent of overall population density.

The National Academy of Sciences has published new research which indicates that climate change has exacerbated economic inequality in the world. It is a very technical article, but the authors detail the significance of their findings:

“We find that global warming has very likely exacerbated global economic inequality, including ∼25% increase in population-weighted between-country inequality over the past half century. This increase results from the impact of warming on annual economic growth, which over the course of decades has accumulated robust and substantial declines in economic output in hotter, poorer countries—and increases in many cooler, wealthier countries—relative to a world without anthropogenic warming. Thus, the global warming caused by fossil fuel use has likely exacerbated the economic inequality associated with historical disparities in energy consumption.”

I cannot say that I understood all the equations, but the findings are consistent with my own understanding of the dynamics of climate change. Climate change will definitely affect the poor and vulnerable far more than the people in rich countries who can probably afford to accommodate some of the worst effects of climate change. Jason Daley, writing for the Smithsonian magazine, provides clear examples:

“Warming for many economically powerful nations in the temperate region, including the United States, China and Japan, has pushed them into the perfect temperature ranges for economic output. Norway’s GDP, on the other hand, has grown an extra 34 percent due to warming and Iceland’s economic output is double what it would otherwise have been. That won’t last, the author’s warn, as temperatures increase over the next few decades.

“On the down side, India’s GDP is about 30 percent lower today than it would have been without rising global temperatures. Diffenbaugh tells McKenna that’s on the same order of magnitude as the impacts of the Great Depression in the United States. Lydia DePillis at CNN reports that Costa Rica, which according to the study has experienced a 21% lower GDP, has seen lower yields of coffee and more disease among the crop all due to increasing temperatures.”

Posted April 23, 2019 by vferraro1971 in World Politics

22 April 2019   Leave a comment

The Trump Administration has decided not to issue any waivers to countries buying Iranian oil. When the US decided to leave the Iranian nuclear agreement (Joint Comprehensive Plan of Action–JCPOA) last May, it re-imposed sanctions on Iran (even though Iran had not violated the agreement), but gave waivers to countries who wanted to import Iranian oil. Those waivers allowed Iran to continue exporting about 80% of its normal exports. The decision today ends that program and US Secretary of State Pompeo defended the move in these terms:

“We have made our demands very clear to the ayatollah and his cronies: end your pursuit of nuclear weapons, stop testing and proliferating ballistic missiles, stop sponsoring and committing terrorism, halt the arbitrary detention of US citizens. Our pressure is aimed at ending these and others and it will continue to accelerate until Iran is willing to address them at the negotiating table.”

The affected countries include India, China, South Korea, Japan and Turkey. The move will likely tighten up the global petroleum market–expect gasoline prices to go up as a consequence. The Europeans, however, are expected to try to evade the sanctions by setting up a payments program that the US cannot detect.

The US is threatening to veto a UN Security Council resolution on combatting the use of rape as a weapon of war. The resolution initially called for the creation of a monitoring body to investigate these crimes, but the section was stripped out by threats of vetoes by Russia, China, and the US. But the US is now threatening to veto the watered-down version because it contained a single reference to reproductive rights. According to The Guardian:

“In recent months, the Trump administration has taken a hard line, refusing to agree to any UN documents that refer to sexual or reproductive health, on grounds that such language implies support for abortions. It has also opposed the use of the word ‘gender’, seeking it as a cover for liberal promotion of transgender rights.”

The European states are adamant that the reference to reproductive rights. Again, according to The Guardian:

“European states, led by Germany, the UK and France, have been resisting abandoning the language on access to family planning and women’s health clinics, as they believe it would mean surrendering the gains of recent decades in terms of international recognition of women’s rights.

“’If we let the Americans do this and take out this language, it will be watered down for a long time,’ a European diplomat, who asked to remain anonymous because of the sensitivity of the negotiations, said. ‘It is, at its heart, an attack on the progressive normative framework established over the past 25 years.’

“’Until the Trump administration, we could always count on the Americans to help us defend it. Now the Americans have switched camp,’ the diplomat said. ‘Now it’s an unholy alliance of the US, the Russians, the Holy See, the Saudis and the Bahrainis, chipping away at the progress that has been made.’”

Let us hope that the US changes its position on this incredibly important resolution.

Posted April 22, 2019 by vferraro1971 in World Politics

21 April 2019   Leave a comment

Ukrainian comedian Volodymyr Zelensky won the presidential election in Ukraine by a landslide, gaining 70% of the votes against the current President, Petro Poroshenko. It was the second round of voting and 37 candidates were eliminated in the first round. The outcome was a humiliating defeat for Poroshenko since Zelensky has no political experience whatsoever. According to the BBC:

“Mr Zelensky, 41, is best known for starring in a political satirical drama called Servant of the People in which his character accidentally becomes Ukrainian president.

“He ran under a political party with the same name as his show.

“With no previous political experience, his campaign focused on his difference to the other candidates rather than on any concrete policy ideas.”

Zelensky thus becomes the most recent anti-politics leader of a country, joining such people as Macron in France and Trump in the US.

Volodymyr Zelensky

More than 200 people were killed in eight bombings in Sri Lanka that targeted Christians celebrating the Easter holiday. Sri Lanka is no stranger to violence as it endured a 26-year civil war between its majority Buddhist and minority Tamil populations that ended in 2009. But this outbreak of violence is unusual and unexpected. As of this writing, no group has yet claimed responsibility for the attacks, but the level of coordination in the bombing strongly suggests a well-organized group. Some of the attacks were suicide attacks indicating a very high degree of commitment. So far, authorities have arrested seven people.

Tomorrow is Earth Day. One way to measure the human strain on the earth’s resources is to think about what is termed the overshoot day which is “calculated by comparing humanity’s total yearly consumption (Ecological Footprint) with Earth’s capacity to regenerate renewable natural resources in that year (biocapacity).” As the chart below suggests, every year we use up the earth’s resources at a much faster pace.

Posted April 21, 2019 by vferraro1971 in World Politics

20 April 2019   Leave a comment

The yellow vest protests in France took place again, as they have since last November. The protests today, however, seemed to be revived as the protesters identified the $1 billion contributions from rich French citizens to rebuild the Notre Dame cathedral. The protesters assert that the contributions prove their point about income inequality in France, and that similar charity is not offered to ordinary French citizens. The question is legitimate and powerful: the rich can choose how to allocate their wealth, while the poor have no such options. Some of the protest sign revealed great anger: “‘Millions for Notre-Dame, what about for us, the poor?’ read a sign worn by a demonstrator. ‘Everything for Notre-Dame, nothing for the miserables,’ read another sign that evoked Victor Hugo’s well-known novel.”

Climate change protests continue in many cities across the planet, as the group, Extinction Rebellion, has organized non-violent events designed to obstruct daily life for many people. Over 750 people were arrested in England alone. The escalation of the tactics by some environmental groups represents an important shift in perspective. Disruption is a politically expensive tactic: those disaffected by the disruption will likely condemn it. But it is difficult to imagine a more compelling way to underscore the urgency for action. There were fewer such protests in the US and it will be interesting to see if the tactic takes hold in the US.

Posted April 20, 2019 by vferraro1971 in World Politics

19 April 2019   Leave a comment

Russia and China are not natural allies. They have years of conflict through which to view their relationship and they have fundamentally different social and economic patterns. But they do have shared interests. One such interest is the development of what is known as the Northern Sea Route, a sea lane through the Arctic. Russia controls about 50% of the Arctic Circle and China has a strong interest in developing a trade route that cuts weeks off of the traditional sea lanes through the South China Sea and the Indian and Atlantic Oceans. The two states are working hard to formalize this mutual interest: Russia is building up an infrastructure along the Northern Sea Route with Chinese assistance and the Chinese are very interested in getting access to Russian oil and natural gas. It remains to be seen, however, if the two states can overcome their mutual suspicions. But climate change has opened up the Arctic to great power politics.

Northern Sea Route

Francis Fukuyama is an astute analyst. I often disagree with his point of view, but I always find his arguments stimulating and provocative. He has written an essay for Eurozine on the different meanings of the word populist and how the term is used to describe many of the movements in the world today. He connects the economic dissatisfaction of many in liberal democracies with a need for cultural identity:

“This fear that immigrants are taking away our national identity is a theme that unites virtually all of the new populist movements. The reason that immigration is such a big policy issue for them is precisely because they feel that they used to define the national identity and that that is no longer true; that national identities are now being undermined not just by immigrants, but by the elites that support immigrants and want those immigrants to come in. And that defines the political contest that is ahead of us.”

Unfortunately, Fukuyama does not offer a solution to this conundrum, but I think his analysis is spot on.

Posted April 19, 2019 by vferraro1971 in World Politics

18 April 2019   Leave a comment

North Korea has requested that US Secretary of State Mike Pompeo should not be involved in future negotiations between the US and North Korea.
North Korean foreign ministry official Kwon Jong-gun referred to recent testimony by Pompeo who referred to North korean leader Kim as a tyrant. Kwon commented that Pompeo “spouted reckless remarks, hurting the dignity of our supreme leadership… to unveil his mean character”. According to the BBC:

“On Thursday, he [Kwon] said that if Mr Pompeo were to be involved in further talks, ‘the table will be lousy once again and the talks will become entangled’.

“‘Even in the case of possible resumption of dialogue with the US, I wish our dialogue counterpart would not be Pompeo but… [another] person who is more careful and mature in communicating with us,’ Mr Kwon said, according to the Korean Central News Agency (KCNA).

“During discussions in Pyongyang in July, Mr Pompeo was condemned for his ‘gangster-like’ insistence that the country move towards denuclearisation.”

Pompeo has not been notably successful in his negotiations with North Korea so perhaps a change would be a good move. But we should wait to see if the Trump Administration wants to hold a 3rd summit with Kim. At this point, it appears as if Administration officials want to see more tangible steps before another summit is held.

Reporters without Borders is a non-governmental group that monitors press freedom in the world and it publishes a annual report entitled “World Press Freedom Index”. The 2019 report highlights a steady deterioration of protections for journalists and publishers. The report argues:

“The RSF Index, which evaluates the state of journalism in 180 countries and territories every year, shows that an intense climate of fear has been triggered — one that is prejudicial to a safe reporting environment. The hostility towards journalists expressed by political leaders in many countries has incited increasingly serious and frequent acts of violence that have fuelled an unprecedented level of fear and danger for journalists.”

National Public Radio summarizes the sad state of affairs: “….only 24% of the 180 countries and territories in the assessment were classified as having a safe or satisfactory environment for the press.” The report has some harsh words for the US which dropped down to 48th place out of 180 countries.

“As a result of an increasingly hostile climate that goes beyond Donald Trump’s comments, the United States (48th) has fallen three places in this year’s Index and the media climate is now classified as “problematic” (orange). Never before have US journalists been subjected to so many death threats or turned so often to private security firms for protection. Hatred of the media is now such that a man walked into the Capital Gazette newsroom in Annapolis, Maryland, in June 2018 and opened fire, killing four journalists and one other member of the newspaper’s staff. The gunman had repeatedly expressed his hatred for the paper on social networks before ultimately acting on his words.”

“A free press can, of course, be good or bad, but, most certainly without freedom, the press will never be anything but bad.” 
― Albert Camus

Posted April 18, 2019 by vferraro1971 in World Politics