I’m back from Belgium. The Conference was spectacular and it was wonderful seeing so many former students who are busy saving various parts of the world. My speech was well-received at the University of Leuven. I’m tired, but very happy.
The relations between the West and Russia are becoming highly problematic, even dangerous. The Russians have apparently invaded Turkish airspace (Turkey is a member of NATO) and has stepped up aerial bombardment in Syria, apparently against anti-Assad forces supported by the West and not the forces of the Islamic State. Along with Russian provocations in Ukraine and the Russian probing of allied defenses in the Baltics and eastern Europe, the Russian flexing of military power is presenting a considerable challenge to the West. As of now there is little to suggest that the Russians are interested in outright war. But the lack of a coordinated Western response leaves open the possibility for miscalculation or accident.
Borders are an intrinsic part of the nation-state system. The delimitation of territory is both a solution to and a cause of war. In one of the most contested areas of the world, the Indian-Pakistani border, the border is so well-illuminated that it can be seen from space, one of the very few borders that are so obvious. The lights make the border easier to patrol and prevent people from passing through undetected. But the lights are also symbolic of a deep divide.
The British Home Secretary, Theresa May, gave a speech in which she argued that immigration into Britain was harming the economy and displacing British workers. She argued for tightening immigration rules to limit offers for asylum. Ms May is clearly positioning herself for a stronger position within the Conservative party, but her comments reflect the growing opposition to immigration in many parts of Europe. The Guardian did an analysis of her claims and found that many of them were not accurately portrayed.
Russia has announced that it will share intelligence with Iraq concerning operations against the Islamic State in both Syria and Iraq. The move caught American officials off guard and represents a distinctive move by Russia to secure its interests in the Middle East in a much substantive way than in the past. The move also represents a growing alliance between Iran and Russia, an alliance that shunts American interests to the side. The US will have to counter this chess move, but it is unclear what alternatives are viable for American policy.
The financial markets have suffered recently as China began selling some of its $3 trillion foreign reserves in order to cover budget losses from its recent economic slowdown. Now Saudi Arabia has started to sell some of its foreign reserves to compensate for budget deficits associated with the decline in the price of petroleum. The worry is that the sale of these assets, many of which are US Treasury bonds, could have the effect of forcing interest rate changes that could cause other countries to suffer economic slowdowns as well. The consequences of globalization are that economic misery spreads very rapidly in this world.
I will be in Belgium until 6 October so I won’t be posting while I am away. Unless something really weird or significant happens. So let’s hope that I won’t be posting until the 6th. Keep smiling.
Separatist parties have won a clear majority of seats within the Catalonian Parliament. The vote sets up a confrontation with the Spanish central government in December when national elections are scheduled for Spain. The parties currently in power did not do well in the Catalan elections, suggesting that their support has diminished since the last election in 2012. The Spanish constitution does not allow for secession (unlike the bid in Scotland for independence from the United Kingdom–a vote the separatists lost but was perfectly legal) and a bid for independence would likely be met with fierce resistance.
China has committed itself to a tough carbon trading scheme that will limit the emission of greenhouse gases that contribute to climate change. The Chinese have now matched the commitment of the US made last November to cut emissions 26 to 28 percent below 2005 levels by 2025. The twin moves are made by the top two greenhouse gas emitters on the planet and one can hope that other states will now be willing to make similar moves. The Chinese and the Americans also decided to commit substantial sums to help poorer countries to make changes to their greenhouse gas production.
Austria’s far-right Freedom Party came in quite strong in a state election in the country. The Freedom Party has averaged about 30% of the vote and many attribute its strong showings to its powerful anti-immigrant stance. Heinz-Christian Strache is the leader of the Freedom Party and he has consistently stated that he wishes to preserve Austria’s “Christian” identity. The Freedom Party is also forming a bloc in the European Parliament with other anti-immigrant parties such as the French National Front and the Dutch Freedom Party.
Gender equality is most commonly viewed as a social and cultural issue, but it is also a supremely important economic issue. The McKinsey Institute is one of the premier consulting firms in the world and it has just issued a new report entitled “How advancing women’s equality can add $12 trillion to global growth“. The report analyzes the economic impact of helping women achieve their fullest economic potential and it estimates that doing so “could add as much as $12 trillion, or 11 percent, in annual 2025 GDP. In a ‘full potential’ scenario in which women play an identical role in labor markets to that of men, as much as $28 trillion, or 26 percent, could be added to global annual GDP by 2025.” That figure is higher than some other, earlier, estimates, but the McKinsey report analyzes many more variables than has been done in the past.
Sustainable Development Goals light show at UN Headquarters
Former US State Department official, Christopher Hill, has written an essay examining the causes of the refugee crisis. Most of the blame falls on Syrian President Assad and his extremist opponents, the Islamic State and al Qaeda. But Hill also points out the responsibility of the Western powers, specifically France and the US, for not having a viable response to the politics of the Arab Spring which led to the organized protests in 2011. Not only in Syria but also in Egypt, the protests were left with unpalatable choices and the Western powers did little to help support those who favored more democratic forces.
Voters in the Catalan region of Spain will vote on whether Catalonia should declare its independence from Spain. Secessionist movements are not allowed under the Spanish constitution, and the central Spanish government has vowed to suppress any move toward independence. The region accounts for almost 20% of the Spanish GDP and the Catalan grievances against the Spanish government include a sense of economic exploitation as well as the suppression of Catalan cultural identity. If the vote favors independence both Spain and the European Union will be in for a rough ride.
The European Union is struggling to develop a coherent policy for dealing with the influx of refugees into the 28-nation union. As is does so, it has to operate within the context of international laws and obligations that have grown up in the world system since te end of World War II. Refugees are accorded certain rights in international law, and The New York Times has an excellent article on some of those requirements. Nonetheless, the EU decision to force sovereign states to take actions of which they disapprove raises questions about the political autonomy of the members.
US President Obama and Russian President Putin will meet on Monday at the annual meeting of the United Nations in New York. The meeting is likely to be intense as both Ukraine and Syria are on the agenda, and both sides disagree quite strongly over the appropriate courses of action in both cases. There is an interesting debate over who asked for the meeting. The Russians insist that the meeting was mutually agreed upon; the White House insist that Putin asked for te meeting because of the effects of the sanctions on the Russian economy. It is unlikely that anything substantive will be decided upon at the meeting, but simply meeting is a good sign. There are, however, rumors that the Russians and the Americans have reached a “tacit” agreement on Syria, but the details are unknown.
US President Obama is meeting with Chinese President Xi and the Chinese are bringing to the table a new conception of “great power” politics. The idea is bold and directly questions US dominance in world affairs. The significance of the proposal is that it represents an exercise in imagination which seems to be quite lacking in American diplomacy right now. I doubt that the Chinese ideas will be greeted warmly by the US, but it is encouraging that such discussions are being held. The Americans seem either unwilling or unable to conceptualize a different world order even though the power configurations in world politics seem to be changing quite rapidly.
The European Union (EU) has voted to require its members to accept refugees in order to avoid crippling the countries that are willing to take in refugees. The EU very rarely “votes” on measures: it prefers to work by consensus whereby the votes are simple confirmations of prior agreement. But there were five countries that voted against the measure: Hungary, Romania, the Czech Republic and Slovakia voted against the measure and Finland abstained. The vote, however, did not contain any enforcement measures and I suspect that the EU will not penalize those states that refuse additional refugees. The vote should be interpreted as a statement of intent and solidarity and not as a legal requirement.
The refugee crisis in Europe is also an index of a crisis for the Islamic State as the flood of refugees diminishes both the available manpower and financial resources available to the group. The Islamic State has said that those who leave for Western countries commit a “sin” and the number of young people leaving Syria far outstrips the number of young males and females entering Syria to join the caliphate. Ultimately, the Islamic State will have to address this drain on its resources, but the drain is perhaps also testimony to the loss of the attractiveness of the group.
The Pope’s visit to the US completely overshadowed the arrival of another guest to the US: Chinese President Xi Jinping who arrived in Seattle to dine with tech giants such as Bill Gates. President Xi will arrive in Washington soon (the Secret Service is certainly going to earn its keep this week) for meetings with US President Obama. The meetings between the two should be tense as they intend to discuss matters such as the South China Sea and charges that China commits cyber-espionage against US firms. Nonetheless, it is a good sign that the two sides are talking.
Brazil’s Guanabara Bay will be the site of many of the Olympic Games next year. Unfortunately, the Bay is an environmental disaster, and the Brazilian government does not seem to be taking effective steps to clean it up. If it isn’t cleaned up, then the image of Brazil will be sullied. Given the economic problems besetting the country and the political crisis that seems to have weakened the government, it seems unlikely that Brazil will be able to summon up the resources and the will to meet its responsibilities as host of the Olympic Games.
Guanabara Bay
China’s assertion of control over the South China Sea represents some major changes in policy from its earlier positions on maritime control. When China was a developing power, it shared many of the positions currently held by other developing powers such as Vietnam and the Philippines. But as a major power, its current policies conflict with those positions. The contrast is clear: China’s current stance on the United Nations Conference on the Law of the Sea (UNCLOS) is quite similar to the US positions in the early negotiations on the treaty. The US is not yet a signatory to UNCLOS but has announced that it will follow the rules of UNCLOS.
The left-wing party, SYRIZA, has apparently come in first in the Greek election with about 35% of the vote. The conservative party, New Democracy, conceded defeat and came in second. It is not entirely clear what the outcome of the vote will mean for Greece. The elections were called because a more radical wing of SYRIZA wanted a stiffer response to the German demands in the debt negotiations. It seems likely that SYRIZA will forge a coalition with the right-wing Independent Greeks party which is adamantly anti-austerity. We should probably expect that the debt negotiations will become more difficult in the next few months.
The ethnic mix of Europe seems to be going through a massive change because of the emphasis placed on the refugee crisis. But the ethnic mix of Europe was pretty well established prior to the crisis and, in a continent of 490 million people, it is hard to change the mix all that much. The Pew Research Center did an analysis of the ethnic mix in Europe prior to the crisis and the information is a good base from which to think about the impact of the refugees. One cannot deny that the flood of refugees is incredibly difficult to manage and accommodate in the short term. But it is unlikely that Europe will be transformed by it.
Laszlo Toroczkai is the mayor of Asotthalom, a town on the Hungary-Serbia border and he has produced a video designed to discourage refugees from coming to his town. He is a member of the 64 Counties Youth Movement (if you cannot read Hungarian, Google can translate the page) which is an ultranationalist group closely aligned with the Hungarian Prime Minister, Viktor Orban. The video is quite remarkable.
The commander of US naval forces in the Pacific, Admiral Harry Harris, told the US Senate Armed Services Committee that the US should challenge Chinese activity in the South China Sea. According to Reuters:
“‘I believe that we should exercise – be allowed to exercise, freedom of navigation and flight – maritime and flight – in the South China Sea against those islands that are not islands.’
“Asked if this meant going within 12 miles, he answered, referring to the artificial islands: ‘Depending on the feature.” He added: “Conducting that kind of … freedom-of-navigation operation is one of the operations we’re considering.'”
Admiral Harris has international law on his side, but one should expect the Chinese to respond quite forcefully to such a move.
Yesterday the US Federal Reserve Bank announced that it would not raise interest rates in the US above its current level of 0.0-0.25%. The Fed cited “global concerns” for the decision, a basis for which unnerved many investors. The effective interest rate of zero has been maintained since 2009 and such a low level has never occurred for such a long time in financial history. There is little question that the global economy is in uncharted territory right now and it is difficult to figure out what the future holds.
Mesopotamia, c 3000 BC: 20%
Babylon, Code of Hammurabi, 1772 BC: codified earlier Sumerian custom of 20%.
Persian conquest (King Cyrus takes Babylon), 539 BC: rates of 40+%.
Greece, Temple at Delos, c. 500 BC: 10%
Rome, Twelve Tables, 443 BC: 8.33%
Athens/Rome: circa the first two Punic Wars, 300-200 BC: 8%
Rome: 1 AD: 4%
Rome, under Diocletian, 300 AD: 15% (estimated)
Byzantine Empire, under Constantine, 325 AD: limit 12.5%
Byzantine Empire, Code of Justinian, 528 AD: limit 8%
Italian cities, c. 1150: 20%
Venice, 1430s: 20%
Venice, (Leonardo da Vinci paints “The Last Supper in Milan), 1490s: 6.25%
Holland, beginning of the Eighty Years’ War, 1570s: 8.13%
England, 1700s: 9.92%
US, West Florida annexed by the US, 1810s: 7.64%
US, circa World War II, 1940s: 1.85%
US, Reagan administration, 1980s: 15.84%
US, Fed does not hike rates in September, 2015: 0-0.25%
Zero interest rates are a manifestation of the sluggish growth in wages in the US and around the world. There actually has been incredible growth in some sectors of the economy, but those gains are not spread evenly across the population. The St. Louis Federal Reserve Bank provided statistics comparing corporate profits and wage growth in the US since 2009, the onset of the Great Recession. The chart is revealing:
It certainly does not appear as if wealth has “trickled-down.” But Jamie Dimon, CEO of one of the largest banks in the world, JP Morgan Chase, does not believe that the statistics reveal the truth. Bloomberg reports Dimon as saying:
“It’s not right to say we’re worse off,” Dimon said Thursday at an event in Detroit in response to a question about declining median income. “If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones.”
For the record, I do not have a smartphone (nor do I want one). And I suspect that most people would enjoy at least some share of the corporate profits since their labor produces those profits. But the corporations do not even need to be profitable for income inequality to get worse. Jeff Smisek, the former CEO of United Airlines, was forced to step down because of corruption charges. Even though United’s stock is down 15% this year, Smisek received the following severance package:
“United will hand Smisek nearly $5 million in cash plus other financial compensation that could top $20 million.
“In case he’s ever in the mood to travel, no problem. Smisek gets free first-class tickets on the airline for the rest of his life.
“He also gets free airport parking for life, health insurance until he’s eligible for Medicare in about four years and, oh yes, the keys to his company car.
Nice work if you can get it.
For those who have followed this blog for some time, it is no secret that I believe that climate change is occurring and have little patience for so-called “deniers“. One of the more persistent themes in the denial meme is that there has been a “pause” in the rise in global temperatures, presumably indicating that human activity cannot explain the variations in temperature since the warming process has not been “linear.” There are four new studies, one which tested the data with economists who were asked to review the data labelled as “agricultural” production (in other words, a test which presumably screened out bias on the issue of climate change), which emphatically refute the idea that there has been a “pause” in the rate of global warming.
World Politics News 