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anonymous

Persistent Security Problems In Ivory Coast - 0 views

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    "Analysis - Two years after taking power in Ivory Coast, Ivorian President Alassane Ouattara's efforts to pacify the country continue to be undermined by persistent unrest -- some of it perpetrated by elements of the president's own support base. Several recent attacks have also been attributed to supporters of former President Laurent Gbagbo, who was extradited to the International Criminal Court after contested elections in 2010. On April 12, protesters wearing army uniforms -- reportedly former members of the New Forces militia that fought to remove Gbagbo in 2011 -- disrupted traffic on the country's main north-south highway in the city of Bouake to demand payment for military service and integration into the government. Since taking office, Ouattara's regime has refashioned the New Forces as the Ivorian military -- now called the Republican Forces of Ivory Coast. Still, the government has faced frequent attacks, supposedly by Gbagbo loyalists, in Abidjan, other parts of southeastern Ivory Coast and west along the Liberian border. The attacks have targeted primarily government security patrols and outposts, such as an assault on a police station on the night of April 8 in Abidjan's Yopougon neighborhood. These incidents illustrate the breadth of discontent and the diversity of security risks in the fractured country. The president faces no immediate threat to his hold on power, but the lack of reconciliation in Ivory Coast -- especially its southern regions -- portends continued instability."
anonymous

Boston Bombing Suspects: Grassroots Militants from Chechnya - 0 views

  • Just after 10 p.m. on April 18, the Tsarnaev brothers were identified after having robbed a convenience store in Cambridge, Mass., just three miles from Boston, hours earlier. A Massachusetts Institute of Technology police officer, who responded to the robbery, was shot and killed and found in his car by fellow responding officers. The two suspects later hijacked an SUV at gunpoint, releasing the driver unharmed. Authorities later caught up to the suspects, and a car chase ensued.
  • Just after midnight, the car chase ended with a gunfight in Watertown, Mass. The suspects reportedly threw explosive devices at police, though it is not yet confirmed what types of explosives allegedly were used. During the firefight, Tamerlan Tsarnaev was wounded, taken into custody and later reported dead. Dzhokar escaped by driving the stolen SUV through the police barricade and remains at large.
  • According to The New York Times, the two men are from Chechnya. Their family also reportedly lived briefly in Makhachkala, the capital of Dagestan, before moving to the United States in 2002.
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  • Dzhokhar Tsarnaev's profile on VKontakte, a Russian social media website, said he attended school at the School No. 1 of Makhachkala, spoke English, Russian and Chechen and listed his worldview as Islam. A school administrator from the School No. 1 said the two suspects and their family had previously lived in Kyrgyzstan before moving to Dagestan.
  • Given that they are grassroots actors, there is likely only a small chance that the authorities will discover a formal link between the suspects and a state sponsor or a professional terrorist group, such as al Qaeda or one of its franchise groups.
  • Moreover, given what we have learned about the suspects and the nature of the improvised explosive devices they constructed, it is very likely that the authorities will find that the brothers had read and studied al Qaeda in the Arabian Peninsula's Inspire Magazine.
  • This case also highlights our analysis that the jihadist threat now predominantly stems from grassroots operatives who live in the West rrather than teams of highly trained operatives sent to the United States from overseas, like the team that executed the 9/11 attacks.
  • This demonstrates how the jihadist threat has diminished in recent years -- a trend we expect to continue.
  • There will always be plenty of soft targets in a free society, and it is incredibly easy to kill people, even by untrained operatives. In this case the brothers conducted an attack that was within their capabilities rather than attempting something more grandiose that would require outside assistance - and which could therefore have put them in jeopardy of running into a government informant as they sought help.  It is thus important for citizens to practice good situational awareness and to serve as grassroots defenders against the grassroots threat.
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    "The identity of the suspects in the Boston Marathon bombing -- Chechen brothers Dzhokhar Tsarnaev, 19, and Tamerlan Tsarnaev, 26 -- confirms several of our suspicions. From this profile, the simple nature of the attack, their efforts to rob a convenience store and their lack of an escape plan, we can conclude that they were what we refer to as grassroots militants. Despite being amateurs, such militants clearly still pose a significant threat."
anonymous

The Geopolitics of the Yangtze River: Conflicting Imperatives - 0 views

  • In the case of Yangtze development, an official from China's National Development and Reform Commission noted in May 2011 a shift in the focus of central government port development policy from the coast to the interior, adding that most of the opportunities for future port-related investment would be in cities along the Yangtze River.
  • Wuhan's 10-year port redevelopment program is set to consume a large percentage of that investment -- at $28.6 billion, the program accounts for around 70 percent of the country's total ongoing and planned port construction -- though another $4 billion to $5 billion has been set aside for dredging and port expansion everywhere from Chongqing municipality in southwest China to Wuhu in Anhui province.
  • The central government's heightened emphasis on inland waterway port expansion is incongruous with port throughput trends during the previous five-year period, 2007-2011.
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  • Not surprisingly, China's coastal ports dwarf inland ports in terms of both overall throughput and throughput growth. But more telling is that of the major Yangtze ports for which the National Bureau of Statistics provides freight traffic data, only three (at Chongqing, Yueyang and Wuhu) showed significant growth in throughput between 2007 and 2011.
  • Wuhan, the flagship of new port investment on the Yangtze as well as nationally, actually saw declines in both the number of berths and freight throughput during that period.
  • The apparent gap between central government policy prerogatives and the reality of port traffic growth trends exemplifies the way economic development policy under the Communist Party not only responds to present needs but also in many ways actively shapes future realities.
  • Going forward, the question for Beijing will be whether and to what extent it is able to realize its ambitious plans for the Yangtze River corridor and inland China as a whole. Even then, it is not clear that expanding and industrializing a handful of inland cities will reduce mounting economic imbalances or social tensions unless combined with significant changes to a range of other policies, including the hukou (or household registration) system and the fiscal and financial relationship between city, provincial and national governments. Significant changes to these policies will, in turn, meet steep resistance from entrenched bureaucratic interests. More fundamentally, such changes would likely unleash the social unrest that Beijing's entire political economic system is intended to manage.
  • port development in Wuhan is similar to projects like the Three Gorges Dam or the ongoing South-North Water Transfer Project, which seeks to divert up to 10 percent of the Yangtze River's flow to water-starved provinces in northern China. All three are attempts to reconcile immense geographic and environmental constraints with the ballooning demands (both consumer and industrial) of an enormous population and an ever-expanding economy -- all while providing enough jobs to maintain a degree of stability.
  • The problem, then, is not simply that the Chinese government's approach to economic development is inconsistent with the needs of the economy and population as a whole
  • Rather, it is that the needs of the economy -- growth with stability, and energy security despite energy demands that far outstrip domestic resources -- are themselves inconsistent and contradictory.
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    "Beijing pursues far-reaching development programs such as the industrialization of the Yangtze River region not always because they make economic sense -- often they do not -- but because it must do so to sustain the basic social and economic structures that secure the regime."
anonymous

North Korea Threatens to Attack the United States Again - 0 views

  • On March 29, North Korean leader Kim Jong Un placed the country's Strategic Rocket Forces on standby to strike the U.S. mainland and U.S. military bases in Hawaii, Guam and South Korea.
  • South Korea meanwhile is reportedly tracking increased activity at North Korean missile sites. Much of North Korea's behavior can be considered rhetorical, but it is nonetheless unclear how far Pyongyang is willing to go if it still cannot force negotiations through belligerence.
  • North Korean news agency Rodong Sinmun published several images of Kim at an emergency military operations meeting at 12:30 a.m. March 29.
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  • The images were published to show North Korean citizens the resolve of its leaders and to incite speculation abroad. However, including Texas on the maps suggests they were part of outdated attack plans; it is possible they were made during the administration of former U.S. President George W. Bush, when an attack on Texas held symbolic meaning.
    • anonymous
       
      My guess is this was intentional. The news was created for North Korean consumption, wherein the average citizen doesn't even understand the significance (other than a lot of strategic depth in the missle-flight). Possibly, it's meant to confuse *external* audiences since including Texas clearly exhibits that it's either outdated or meant to keep observers wondering about true intent.
  • North Korea has been stepping up its warnings of war, and the United States, acting within the framework of military exercises with South Korea, responded by signaling its commitment to South Korea's defense.
  • These signals included flights of B-52s on March 25 and flights of B-2As on March 28.
  • South Korean media has reported signs of activity around North Korean missile bases. If these reports are true, they would be consistent with the order to step up the alert level and with preparations for a missile test. It would also be consistent with North Korea's exploitation of foreign satellite and other intelligence observation capabilities to shape the psychological battlefield.
  • The North Korean announcement, coupled with the pictures of the war room, are intended to raise the level of concern to a level that forces the United States and South Korea to enter dialogue to de-escalate.
  • The North Korean nuclear test, the rejection of the Armistice Agreement, artillery and amphibious landing exercises and raising the missile alert level are all part of the same campaign.
  • However, there are few signs of real war preparation in North Korea, and the border at Kaesong remains open. The United States has responded to each North Korean provocation with a stronger signal of its own. So far, this is still a game of rhetoric. But Pyongyang's threats-for-rewards policy clearly is becoming less and less effective, and it remains to be seen how Pyongyang will react if it cannot maintain that policy.
    • anonymous
       
      The irony is that if the U.S. continues to behave this way, war may be *more* likely since NK is already heavily isolated and has been on the defensive for generations. "It sure would be a shame if this region became a warzone...." it seems to say.
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    "North Korea may conduct additional missile tests this weekend to heighten tensions on the Korean Peninsula and to force negotiations for de-escalation."
anonymous

Considering a Succession Plan in Russia - 0 views

  • Putin has worked since 2000 to consolidate Russia's government and political system under his leadership. Decisions regarding policy and strategy have for the most part been made by Putin himself, even as the country's networks of power circles and politicians have manifested themselves in various ways.
  • Over the past 13 years, Putin has shifted between the opposing camps as he has seen fit to strengthen and stabilize the country.
  • at the end of 2011 and the beginning of 2012, the consolidation of Russia faced social and political challenges with United Russia losing credibility in contentious elections, the rise of anti-Kremlin protestors and the fracturing of Kremlin clans into a string of conflicting groups.
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  • The Kremlin was forced to start an accelerated political restructuring in 2012 -- one entailing a countrywide effort to devise programs to plan for Russia's future.
  • The Kremlin launched a major domestic anti-corruption campaign that began targeting the government in an attempt to curb behavior that has had a long-term decaying effect on the country.
  • Russians believe good health to be an important aspect of one's ability to lead, and Putin's back trouble caused many in the Kremlin to panic. The Russian media and the Russian people had never seen Putin falter due to ill health. This was in stark contrast to his predecessor, former President Boris Yeltsin, who was plagued with health issues that negatively impacted his ability to run the country.
  • Though Russia has a formal electoral process to choose its leaders, in reality Putin makes the choices regarding leadership.
  • due to the intricate workings of the internal power circles -- and especially because Medvedev is a reformist, not a security hawk -- Medvedev was quickly deemed irrelevant, and Putin remained in power as premier.
  • Putin is not just a president; he is the ultimate arbitrator of Russia's factions and sectors. Before Putin could find a successor capable of assuming that role, he had to break down the existing power structure and create a new system through which a successor could rise.
  • Since the end of 2012, a new system – coined the Politburo 2.0 by widely followed Kremlin analyst Yevgeni Minchenko – has broken down much of the previous clan system and created an inner Kremlin circle of nine men, with Putin as its overall leader. This is not a formal system, like the Cabinet of Ministers, which implements Putin’s vision. It is rather a way to balance the most powerful decision-makers in the country, each with connections and power bases in politics, energy, finance and the military. Outside of the Politburo 2.0 are political circles from which Politburo members may draw support.
  • With a newer, though untested, system in place, the concept of succession is now being considered, and a vice presidency is seen as one possible solution.
  • The concept of a vice presidency that would lead into a successor role is fraught with peril for Putin's new Politburo 2.0. There has never been a formalized second-in-command position under Putin for which various power groups could vie.
  • Creating such a position will most likely lead to vicious competition between the power circles, as well as attempts to discredit the person who becomes vice president.
  • There is also a danger to Putin himself: Previous attempts to install a vice president have led to moves to overthrow the president.
  • The first attempt took place in 1990, during the last years of the Soviet Union, when Gennady Yanayev held the office under former President Mikhail Gorbachev. Yanayev turned on Gorbachev in 1991, taking part in the coup that at first made Yanayev acting president of the Soviet Union. This was before he was arrested and replaced by Yeltsin. Under Yeltsin, Alexander Rustokoi held the role of vice president from 1991-1993. He eventually attempted to overthrow Yeltsin in 1993 during two weeks of mass violence across Moscow ending with Rustokoi’s arrest.
  • With so many dangers related to creating a vice presidency, and with the new Politburo 2.0 still untested, it may be too early for the implementation of a new succession system in the Kremlin.
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    "Advisers to Russian President Vladimir Putin on Monday submitted proposals concerning a possible restoration of the office of vice president, a move that could create part of a succession plan for a post-Putin Russia."
anonymous

Time and the End of History Illusion - 0 views

  • “Middle-aged people – like me – often look back on our teenage selves with some mixture of amusement and chagrin,” said one of the authors, Daniel T. Gilbert, a psychologist at Harvard. “What we never seem to realize is that our future selves will look back and think the very same thing about us. At every age we think we’re having the last laugh, and at every age we’re wrong.”
  • There are several ways to explain these findings. It’s more difficult to predict the future than to recall the past; perhaps participants simply weren’t willing to speculate on something they felt uncertain about. It’s also possible that study participants overestimated how much they had changed in the past, making it seem as though they were underestimating their change in the future. However, the psychologists suggest that the end of history illusion is most probably explained by the fact that it just makes us feel better about ourselves:
  • On the other hand, French postmodern philosopher Jean Beaudrillard contends that Fukuyama’s modernist theory is no more than an illusion caused by our particular relationship with time. He writes that contemporary civilization has simply “lost” its sense of history:
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  • … one might suppose that the acceleration of modernity, of technology, events and media, of all exchanges – economic, political, and sexual – has propelled us to ‘escape velocity’, with the result that we have flown free of the referential sphere of the real and of history. … A degree of slowness (that is, a certain speed, but not too much), a degree of distance, but not too much, and a degree of liberation (an energy for rupture and change), but not too much, are needed to bring about the kind of condensation or significant crystallization of events we call history, the kind of coherent unfolding of causes and effects we call reality.
  • Once beyond this gravitational effect, which keeps bodies in orbit, all the atoms of meaning get lost in space. Each atom pursues its own trajectory to infinity and is lost in space. This is precisely what we are seeing in our present-day societies, intent as they are on accelerating all bodies, messages and processes in all directions and which, with modern media, have created for every event, story and image a simulation of an infinite trajectory.
  • Every political, historical and cultural fact possesses a kinetic energy which wrenches it from its own space and propels it into a hyperspace where, since it will never return, it loses all meaning. No need for science fiction here: already, here and now – in the shape of our computers, circuits and networks – we have the particle accelerator which has smashed the referential orbit of things once and for all.
  • Illusion or not, the Harvard study shows that a sense of being at the end of history has real-world consequences: underestimating how differently we’ll feel about things in the future, we sometimes make decisions we later come to regret.
  • In other words, the end of history illusion could be thought of as a lack of long-term thinking.
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    "In a paper published last week in Science, these researchers report on a study that asked participants to estimate how much their personality, tastes, and values had changed over the last decade, and how much they expected they would change in the next. Statistical analysis reveals what these psychologists call an "End of History Illusion": while we remember our past selves to be quite different from who we are today, we nevertheless believe that we won't change much at all in the future. The New York Times quotes:"
anonymous

Methodology | Stratfor - 0 views

  • We study the way in which geography and other forces constrain and shape people and nations. By analyzing the forces that affect world leaders, we can understand and often predict their actions and behaviors, which are far more limited than they might otherwise appear.
  • While the media concentrates on the subjective desires of leaders voiced at press conferences, Stratfor concentrates on the various constraints upon their behavior -- geographical, political, economic -- that are concrete but never admitted to publicly. Geopolitics allows us to place an event or action within a larger framework so that we can determine its potential significance, as well as identify connections among seemingly disparate trends.
  • Reports that showcase our geopolitical framework: Love of One's Own and the Importance of Place
    • anonymous
       
      This is an *invaluable* look at the phenomenon of nationalism.
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  • The Intelligence Process
  • Intelligence means three things to us.
  • First, it is our method for gathering and processing information, which includes open-source publications in countries and languages all over the world and a large network of contacts.
  • Second, intelligence is how we critically examine and evaluate the context and predictive value of information, and it is how we connect our higher-level, strategic geopolitical framework to current events and breaking developments.
  • Third, we maintain a disciplined methodology and net assessments oriented toward forecasting -- explaining not only why something has happened but also what will happen next.
  • We seek to understand a country and its leaders in their own right, without bias or agenda. We maintain a fresh perspective and continually challenge preconceived notions. Because of this approach, we frequently depart from the conventional wisdom of the Western media. To reinforce this discipline, we have set up deliberate intellectual tensions to maintain a healthy level of interaction and rigorous debate among our entire team, so that no assumption or piece of information goes unchallenged.
  • Reports that showcase empathetic analysis: Thinking About the Unthinkable: A U.S.-Iranian Deal Germany's Choice Hezbollah, Radical but Rational
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    "Stratfor's methodology begins with a framework for understanding the world and applies methods of gathering and analyzing information. The combination allows us to produce dispassionate, accurate and actionable insight for our clients and subscribers."
anonymous

The Expensive, Diminishing Threat of Somali Piracy - 0 views

  • Many factors have contributed to the decrease in pirate hijackings in 2012.
  • One factor is that shipping companies have begun equipping their ships with more countermeasures, namely armed guards.
  • For several years, commercial ships sailing in the Indian Ocean have used other countermeasures, such as fences, water cannons and adjusted tactics like disabling the ship.
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  •  But the widespread deployment of armed guards beginning in 2011 (guards had been used sparingly as far back as 2008) has a very close correlation to the recent decrease in hijackings.
  • government officials also attribute the drop-off in attacks and hijackings to better coordination between foreign naval patrols, which have made the waters off the Somali coast a less permissive environment for pirate operations.
  • With several years of practice, sailors from international missions such as the U.S.-backed Combined Task Force 151 and the EU-backed Atalanta mission as well as from the unilateral missions of China, Russia, Iran and others have had time to study pirate activity and become more efficient at stopping attacks.
  • Effectively patrolling such a large area requires intelligence and the development of a counterpiracy doctrine that includes going after the larger pirate vessels, called mother ships, that extend pirates' range and allow them to operate in rougher seas during the monsoon.
  • Three years ago pirates were largely uncontested, but now they face a more coordinated defense.
  • The armed guards and naval patrols have not eliminated piracy, but they have increased the costs of attacking and seizing a commercial ship. Because pirates are motivated more by profit than by any ideology, a decrease in profitability will deter them from engaging in the practice.
  • The new Somali federal government still lacks the capability to control pirate towns such as Hobyo and Haradheere, and its officials do not appear to want a strong Puntland doing it for them. 
  • In essence, the commercial shippers and naval forces have adopted a siege strategy -- they hope to starve the pirates of resources, forcing them to give up. Somali pirates held about 20 ships at any given time in 2010; they currently hold 11. As the pirates hijack fewer ships, and as armed guards make piracy more dangerous, the entire enterprise is looking less lucrative and appealing.
  • The problem with the siege strategy is that as soon as shipping companies or foreign naval forces let up on the pirates, they will go back to hijacking ships.
  • That means that about 13,000-23,000 ships are paying for armed guards to accompany them through the vulnerable areas, a roughly 10-day trip, at a cost of approximately $60,000 each time. Based on those figures, the total annual cost for shipping companies merely to deploy armed guards on their ships through the Gulf of Aden is between about $800 million and $1.4 billion. The total cost of piracy to the world in 2011, according to the One Earth Future Foundation's estimates, was between $6.6 billion and $6.9 billion. This estimate included $160 million for ransom payments; other preventative measures, such as rerouting ships or using more fuel to maintain higher speeds, made up the rest of the costs. In other words, the cost of preventing piracy off the coast of Somalia is substantially higher than the costs piracy inflicts.
  • The key component of the siege strategy is that it weakens the pirates' control over their land-based sanctuaries. Their power is connected to their revenue, so the decrease in revenue will decrease their power. The shipping companies and foreign navies hope that some other, less disruptive enterprises will eventually take root along Somalia's pirate-heavy coast.
  • The only force that has significantly challenged the pirates on land is the Puntland Maritime Police Force. Located in northeast Somalia, Puntland is much more stable than the south and is virtually independent. The Puntland Maritime Police Force had success in capturing pirates, destroying their staging bases along the beach, cutting off their supply routes and even, supposedly, attempting to seize hijacked vessels from the pirates.
  • Although Mogadishu is unable to control much of its territory, the new government doesn't want regional governments accumulating too much strength. In the end, a strong Puntland may be more of a risk to Mogadishu than pirates. 
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    "Piracy off the coast of Somalia has dropped off dramatically in 2012. Successful ship hijackings have decreased from 31 in 2011 (and 49 in 2010) to only four so far in 2012. Attacks against ships have also decreased, falling from 199 reported attacks in the first nine months of 2011 to 70 attacks over the same span in 2012 -- a 65 percent drop. However, diminished activity does not necessarily mean a decrease in the cost of sailing around the Horn of Africa. Somali pirates occupy a unique position, which is right along highly strategic global shipping lanes yet outside the reach of any national power. For international actors, it is politically and militarily easier to try to contain the Somali piracy threat than to eliminate it. But containment comes at a high cost."
anonymous

Sovereignty, Supranationality and the Future of EU Integration - 0 views

  • The European Union is an entity like no other in world history. After the end of World War II, the international system was configured around a series of multilateral organizations such as the United Nations, the International Monetary Fund and NATO. But the process of economic and political cooperation that West Germany, France, Italy, the Netherlands, Belgium and Luxembourg began in 1951 is fundamentally different from the rest of the post-war organizations.
  • The project was a direct challenge to the classical idea of ​​the nation-state and generated new forms of government and administration hitherto unknown.
  • Immanuel Kant believed that Europe would only overcome its constant state of war by achieving some form of political unity.
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  • From the Roman Empire to Nazi Germany, all the attempts to unify Europe meant war and conquest. It took World War II to convince the Europeans that the future of the Continent depended on overcoming age-old antagonisms and building a lasting political settlement to boost trade and prevent another war.
  • The central problem to be solved was the historical emnity between France and Germany
  • The French government understood that the only way to achieve lasting and sustainable economic growth in France was by ensuring a stable peace with Germany.
  • The European Economic Community, the institutional heart of the emerging continental unity, had three main objectives.
  • Its immediate goal was to create a customs union, which would eliminate trade restrictions between member states and establish a common external tariff for trade with the rest of the world.
  • It would also seek the consolidation of a common market, to allow the free movement of people, goods, capital and services.
  • Finally, it would seek the progressive coordination of social and fiscal policies among its members.
  • The rationale behind the European Communities was that if countries gave up sovereignty in specific areas, over time a greater amount of national prerogatives would be transferred to the supranational institutions.
  • Throughout the process, unanimity would be replaced by majority voting (so that the interest of the majority would overtake individual interests) and concessions of sovereignty would not be limited to economic issues, but also political and military affairs.
  • In other words, the process of European integration would progressively weaken the nation-state and its strategic interests.
  • Six decades later, many of these goals have been achieved.
  • The Commission, the Parliament and the Court of Justice today have powers that notably exceed those designed in the 1950s. More impressively, the European Union currently has 28 members, 17 of whom share the same currency. In 1945, with Europe in ashes and occupied by foreign powers, it was unimaginable to think that six decades later France and Germany would share the leadership of a continental alliance stretching from Portugal to Finland and Cyprus.
  • However, the remarkable growth of the European project did not bring about the abolishment of the nation-state that many analysts predicted.
  • EU institutions tend to generate their own agendas, which often go against the national strategies of some member states. As a result, the clash between national and supranational interests is often unavoidable.
  • This friction did not begin with the current economic crisis. In 1965, the French government withdrew its representation in the European Commission in protest of a plan that would give more power to Brussels in the management of the Common Agricultural Policy. To resolve the crisis, the Europeans reached an agreement under which a de facto veto power was given to member states on issues that were considered crucial to national interests. This agreement (commonly known as the Luxembourg Compromise) was designed to protect the intergovernmental nature of the European Communities and virtually froze the process of supranational integration in the 1970s and 1980s, until the Single European Act in 1986 introduced new mechanisms for qualified majority voting.
    • anonymous
       
      This paragraph is a good example of something I would never have known about otherwise. I wish I had been shown (much earlie) how history is shaped by the continuity and discontinuity of policies. Among, you know, an infinite soup of other variables. :)
  • On top of the traditional tensions between national governments and supranational institutions, in times of crisis member states also tend to distrust each other.
  • The creation of the euro has further complicated things. Seventeen countries with very different levels of economic development and competitiveness now share a common currency. This has particularly reduced Mediterranean Europe's room to maneuver, because it has deprived those countries of the possibility of applying independent monetary policy to tackle crises.
  • Governments must find a balance between their foreign policy objectives, pressure from the European Union and their desire to be re-elected -- which means decisions that may make sense for the future of the European Union (such as fiscal consolidation efforts) would probably not be made if governments consider them too unpopular among voters.
  • Other institutions, such as constitutional courts, often threaten to block decisions accepted by national parliaments. The recent investigation by the German constitutional court on the validity of the European Stability Mechanism and the decision by the Portuguese constitutional court to block some austerity measures promoted by Brussels and implemented by Lisbon are examples of this situation.
  • The deep unemployment crisis in the eurozone adds yet another complication to this problem. The European elites are still largely pro-European, and most of the voters in the eurozone want to keep the euro. But with the European Union's promise of economic prosperity weakening, its members have begun to rethink their strategies. Fidelity for the European project is not unbreakable. Nor is it strong enough to support an indefinite period of extremely high unemployment.
  • Despite its remarkable evolution, the European Union is still a contract. And contracts could be modified or even canceled if they stop being beneficial for their signatories.
  • Non-eurozone countries in Central and Eastern Europe have also begun to think of a more independent foreign policy. They remain formally aligned with the European Union and NATO, but the pursuit of closer ties with Russia is no longer taboo. And for most of them, joining the eurozone is no longer a priority.
  • Because of the pervasiveness of the nation-state, the future of the European Union will not be in the hands of the EU institutions, but in those of the same actors of 1951: France and Germany. Since the beginning of the economic crisis, Paris and Berlin have reiterated their commitment to the European Union, but as the economic downturn moves to the core of Europe, the differences between them become more obvious.
  • Like most economies in Mediterranean Europe, France's has lost competitiveness since the creation of the euro, and the common currency has led to a constant trade deficit with Germany. France will seek to change its relationship with Germany without breaking it (as Paris is still interested in containing Berlin), but Paris is increasingly aware that the European project should be remodeled.
  • In this context, Paris and Berlin will need to find a balance between their desire to preserve their alliance and the need to protect their national interests.
  • The Germans are interested in preserving their alliance with France and protecting the currency union because it benefits its exports to its neighbors and out of fear of the immeasurable financial consequences of a breakup of the eurozone.
  • Europe's main challenge will be to prevent these frictions from paralyzing the bloc. The European Union will also face the test of mitigating the alienation of its eastern members and closing the gap between eurozone and non-eurozone countries. In the meantime, Brussels and national governments will have to find ways to alleviate the bloc's corrosive unemployment crisis before it leads to dangerous levels of social unrest. In all these challenges, the European Union is running a race against time.
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    "Tensions between the European Commission and France have escalated in recent weeks. After Brussels suggested that Paris should apply structural reforms to reactivate the French economy, French President Francois Hollande said that the Commission cannot dictate policy to France. A few days later, the Commission's president, Jose Manuel Barroso, criticized the French pressure to exclude the audio-visual sector from the negotiations for a free trade agreement between the European Union and United States."
anonymous

Freakonomics: What Went Wrong? - 0 views

  • Oster’s work stirred debate for a few years in the epidemiological literature, but eventually she admitted that the subject-matter experts had been right all along. One of Das Gupta’s many convincing counterpoints was a graph showing that in Taiwan, the ratio of boys to girls was near the natural rate for first and second babies (106:100) but not for third babies (112:100); this pattern held up with or without hepatitis B. In a follow-up blog post, Levitt applauded Oster for bravery in admitting her mistake, but he never credited Das Gupta for her superior work. Our point is not that Das Gupta had to be right and Oster wrong, but that Levitt and Dubner, in their celebration of economics and economists, suspended their critical thinking.
  • In SuperFreakonomics, Levitt and Dubner use a back-of-the-envelope calculation to make the contrarian claim that driving drunk is safer than walking drunk, an oversimplified argument that was picked apart by bloggers. The problem with this argument, and others like it, lies in the assumption that the driver and the walker are the same type of person, making the same kinds of choices, except for their choice of transportation.
  • Such all-else-equal thinking is a common statistical fallacy. In fact, driver and walker are likely to differ in many ways other than their mode of travel. What seem like natural calculations are stymied by the impracticality, in real life, of changing one variable while leaving all other variables constant.
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  • This unavoidable tradeoff between false positive and false negative errors is a well-known property of all statistical-prediction applications. Circling back to check all the factors involved in the problem might have helped the authors avoid this mistake.
  • How could an experienced journalist and a widely respected researcher slip up in so many ways? Some possible answers to this question offer insights for the would-be pop-statistics writer.
  • Leave friendship at the door: We attribute many of these errors to the structure of the authors’ collaboration, which, from what we can tell, relies on an informal social network that has many potential failure points.
  • Don’t sell yourself short: Perhaps Levitt’s admirable modesty—he has repeatedly attributed his success to luck and hard work rather than genius—has led him astray. If he feels he is surrounded by economists more exceptional and brilliant than he is, he may let their assertions stand without challenge.
  • Maintain checks and balances: A solid collaboration requires each side to check and balance the other side. Although there’s no way we can be sure, perhaps, in some of the cases described above, there was a breakdown in the division of labor when it came to investigating technical points.
  • Take your time: Success comes at a cost: The constraints of producing continuous content for a blog or website and meeting publisher’s deadlines may have adverse effects on accuracy.
  • Be clear about where you’re coming from: Levitt’s publishers, along with Dubner, characterize him as a “rogue economist.”
  • Use latitude responsibly: When a statistician criticizes a claim on technical grounds, he or she is declaring not that the original finding is wrong but that it has not been convincingly proven. Researchers—even economists endorsed by Steven Levitt—can make mistakes. It may be okay to overlook the occasional mistake in the pursuit of the larger goal of understanding the world. But once one accepts this lower standard—science as plausible stories or data-supported reasoning, rather than the more carefully tested demonstrations that are characteristic of Levitt’s peer-reviewed research articles—one really has to take extra care, consider all sides of an issue, and look out for false positive results.
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    In our analysis of the Freakonomics approach, we encountered a range of avoidable mistakes, from back-of-the-envelope analyses gone wrong to unexamined assumptions to an uncritical reliance on the work of Levitt's friends and colleagues. This turns accessibility on its head: Readers must work to discern which conclusions are fully quantitative, which are somewhat data driven and which are purely speculative.
anonymous

Thirty More Years of Hell - 1 views

  • A Pew poll from a few weeks back asked Americans how they felt about capitalism versus socialism. The results said all you need to know about how much longer we’re going to have to wade through this misery. You guessed it: until the Boomers finally croak.
  • For maybe the first time in modern history, we now have a generation that actually has warmer feelings about socialism than it does capitalism: 49% to 46%.
  • And a few days later, amid a multi-billion dollar war on public sector workers, another poll was released demonstrating that a whopping 69% of Millennials think teachers are underpaid (compared to 56% for Americans of all ages).
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  • I first heard the “s”-word from by my sixth grade history teacher—this was in the early days of Yeltsin. She said socialism is when you have to wait in line for hours just for a Happy Meal.
  • Read the fine print: it’s 5% of wages, income from “investments” is excluded. Tax the poor wage-slave, spare the wealthy rentier. Americans still can’t see the play even with Buffett rubbing his secretary’s tax return in our faces.
  • And it’s a servitude from which we can never escape. Forget bankruptcy. Default on a student loan and the government will garnish your wages until they get it all back, plus interest. They can even go after your social security money, off limits for all other debts.
  • Mike Konczal sees this as just another sign of a “submerged state”—the unholy fertilizer that keeps the American libertarian discourse in full bloom. None of the “welfare,” but all of the “state.”
  • “After the Great Society program in the 1960s,” says Leo Panitch, “left-wing Democrats, rather than calling for more public housing to rebuild America’s cities instead called for the banks to lend money to poor black communities…one of the effects of winning those demands was a channeling of those communities more deeply into the structures of finance, the most dynamic sector of neoliberal capitalism.”
  • While a liberal looks upon the New Deal and Great Society generation as a pantheon of benevolent patriarchs, I see a bunch of technocrats who slapped together a crude simulacrum of social democracy and called it “free-enterprise.”
  • Unlike the nations of Western Europe, American workers failed to get a good deal of the social democratic compact written into law, which means it was all the easier to dismantle over here.
  • There are the wars, of course—now pretty much the only way for a good many of us to get a debt-free education.
  • Then there’s the ever-popular Drug War, always trolling for some fresh blood. The Millennials are, after all, the least white generation in U.S. history, making us perfect fodder for the country’s ongoing race war.
  • As The Wire’s David Simon has pointed out, it was Clinton—the first Boomer president—that passed some of the most draconian “anti-crime” laws. Even business in the for-profit juvenile prisons sector is a-boomin’. Same goes for our expanding network of privatized immigration detention centers—a direct beneficiary of the Tea Party campaign for a brutal crackdown on “illegals.”
  • Much of the Patriot Act itself was comprised of legislation creeping around the halls of powers well before 9/11, much of it written with the burgeoning “anti-globalization” movement
  • The fact is that being arrested is pretty much a rite of passage today—or the end-of-the-line for your hopes and dreams if you happen to be a darker shade of pale.
  • Which is why I love the Tea Party so much. They don’t dick around about any of this. It’s a full-scale generational war they’re after.
  • The Ryan Budget—and the GOP campaign around it—divides the American populace into “those who are 55 or older now, and those who are younger.” Meaning Boomers will receive Medicare and Social Security checks unchanged, whereas Millennials get the axe—despite the fact that many of us have been paying into these programs for the past 15 years. Let the record show that it was they who fired the first shot.
  • All of the hippies who skulked off into the world of children’s programming to ride out the counterrevolution have cursed us with both our potential salvation (respect for the commons) and our ultimate weakness (pacifist nonsense).
  • But mostly our decency stems from the fact that we’ve all been muzzled and defanged by student debt, slave wages and mass unemployment. Unlike our parents, we’ll never even get the chance to gobble up our own children and leave them with the tab.
  • Which is why, psychologically, this Great Depression of ours can never hurt us like it hurts them. I see it all the time: the unemployed Boomer thinks himself a loser. He’s spent his life watching his peers accumulate wealth and power. Now he feels like the rug has been pulled from under him. Something has gone terribly wrong. When he files for food-stamps, he feels exactly what the Ruling Class wants him to feel: shame and personal failing.
  • Whereas a Millennial shrugs and swipes the SNAP card at the farmer’s market for a quart of fresh cider and a pomegranate muffin. Why should she feel guilty?
  • We Millennials have all the same ludicrous delusions of grandeur as our parents, but now, we’re ready to shuck capitalist gospel out the window. The Boomers call us spoiled, and ask us to do more with less, telling us to tamper our dreams. But the best thing we Americans have going for us is our entitlement, sans the free-market faith.
  • Way back in 1892, Friedrich Engels knew that success was the real curse of the USA. And that a powerful, anti-capitalist left could never take off in this country until the game stopped paying out: “Only when there is a generation of native-born workers that cannot expect anything from speculation any more will we have a solid foothold in America.” Sound familiar? That’s what Occupy is for most of us—a guttural roar that capitalism will not do.
  • The Boomers are right that it all smacks of entitlement. We are entitled. The world, and this country in particular, is awash in capital. With the billions floating in and out of this city every day, it’s amazing that you can walk around Manhattan and not end up with at least a grand worth of cash sifting around in your shoes like beach sand. The big lie is that the coffers are empty and budgets must be balanced. What a fucking joke. American workers have spent hundreds of years building this country and amassing this wealth, and it’s about time we claimed the vast majority of it.
  • Conservative apostate David Frum recently characterized the contemporary GOP’s platform as “a going-out-of-business sale for the Baby Boomer generation.” Which is pretty much the Democrats’ platform too. They just have better table manners.
  • Boomers know what they’ve wrought. Climate change? Don’t believe the polls. They know it’s happening. Yeah, if you confront one of them, he might put up a denialist front for a couple of minutes. But keep pelting him and it all crumbles, giving way to “well, it’s too late.” Translated: “I’ll be on, or near, my deathbed when the shit really hits the fan. You, youngster, will be hauling your family across the country George Romero style, scavenging for orphans to sell off as catamites to the warlord chieftains.”
  • Documentary filmmaker Adam Curtis has spent the past few years chronicling this ghastly mutation step-by-step—unraveling the seemingly incongruous strands and the hideous parentage of Boomer ideology. Their embrace of American libertarianism—with all of its absurdities, vulgarities and utopianism—was the final cry for help.
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    "Generational analysis is bullshit. Or so I'm told. Fit for netroots liberals and horoscope clippers, maybe. And to be fair, it's mostly thinktank types who've been profiting off that whole Millennials Rising genre. One of the authors of that book is a former writing partner of Pete G. Peterson's, the octogenarian billionaire who has spent the last couple of decades trying to kick over the Social Security ladder before us young'ns can scamper up and collect. Most of it reads like a debriefing after a recon mission-you can feel them sizing us up, drawing up blueprints for the generational counterrevolution that we're living through right now."
anonymous

Recognizing the End of the Chinese Economic Miracle - 0 views

  • A crisis can exist before it is recognized.
  • The admission that a crisis exists is a critical moment, because this is when most others start to change their behavior in reaction to the crisis.
  • First, The New York Times columnist and Nobel Prize-recipient Paul Krugman penned a piece titled "Hitting China's Wall." He wrote, "The signs are now unmistakable: China is in big trouble.
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  • Later in the week, Ben Levisohn authored a column in Barron's called "Smoke Signals from China." He wrote, "In the classic disaster flick 'The Towering Inferno' partygoers ignored a fire in a storage room because they assumed it has been contained. Are investors making the same mistake with China?"
  • Meanwhile, Goldman Sachs -- where in November 2001 Jim O'Neil coined the term BRICs and forecast that China might surpass the United States economically by 2028 -- cut its forecast of Chinese growth to 7.4 percent. 
  • The New York Times, Barron's and Goldman Sachs are all both a seismograph of the conventional wisdom and the creators of the conventional wisdom. Therefore, when all three announce within a few weeks that China's economic condition ranges from disappointing to verging on a crash, it transforms the way people think of China.
  • Now the conversation is moving from forecasts of how quickly China will overtake the United States to considerations of what the consequences of a Chinese crash would be. 
  • Suddenly finding Stratfor amid the conventional wisdom regarding China does feel odd, I must admit. Having first noted the underlying contradictions in China's economic growth years ago, when most viewed China as the miracle Japan wasn't, and having been scorned for not understanding the shift in global power underway, it is gratifying to now have a lot of company.
  • One of the things masking China's weakening has been Chinese statistics, which Krugman referred to as "even more fictional than most."
  • China is a vast country in territory and population. Gathering information on how it is doing would be a daunting task, even were China inclined to do so. Instead, China understands that in the West, there is an assumption that government statistics bear at least a limited relationship to truth. Beijing accordingly uses its numbers to shape perceptions inside and outside China of how it is doing.
  • The Chinese release their annual gross domestic product numbers in the third week of January (and only revise them the following year). They can't possibly know how they did that fast, and they don't. But they do know what they want the world to believe about their growth, and the world has believed them -- hence, the fantastic tales of economic growth. 
  • China in fact has had an extraordinary period of growth. The last 30 years have been remarkable, marred only by the fact that the Chinese started at such a low point due to the policies of the Maoist period.
  • Growth at first was relatively easy; it was hard for China to do worse. But make no mistake: China surged. Still, basing economic performance on consumption, Krugman notes that China is barely larger economically than Japan. Given the compounding effects of China's guesses at GDP, we would guess it remains behind Japan, but how can you tell? We can say without a doubt that China's economy has grown dramatically in the past 30 years but that it is no longer growing nearly as quickly as it once did.
  • China's growth surge was built on a very unglamorous fact: Chinese wages were far below Western wages, and therefore the Chinese were able to produce a certain class of products at lower cost than possible in the West.
  • China had another essential policy: Beijing was terrified of unemployment and the social consequences that flow from it. This was a rational fear, but one that contradicted China's main strength, its wage advantage.
  • Growing the economy is possible, but not growing profitability. Eventually, the economy will be dragged down by its inefficiency. 
  • As businesses become inefficient, production costs rise. And that leads to inflation. As money is lent to keep inefficient businesses going, inflation increases even more markedly. The increase in inefficiency is compounded by the growth of the money supply prompted by aggressive lending to keep the economy going. As this persisted over many years, the inefficiencies built into the Chinese economy have become staggering. 
  • The second thing to bear in mind is the overwhelming poverty of China, where 900 million people have an annual per capita income around the same level as Guatemala, Georgia, Indonesia or Mongolia ($3,000-$3,500 a year), while around 500 million of those have an annual per capita income around the same level as India, Nicaragua, Ghana, Uzbekistan or Nigeria ($1,500-$1,700).
  • China's overall per capita GDP is around the same level as the Dominican Republic, Serbia, Thailand or Jamaica.
  • Stimulating an economy where more than a billion people live in deep poverty is impossible. Economic stimulus makes sense when products can be sold to the public.
  • The Chinese have maintained a strategy of depending on exports without taking into account the operation of the business cycle in the West, which means that periodic and substantial contractions of demand will occur. China's industrial plant is geared to Western demand. When Western demand contracted, the result was the mess you see now.
  • The Chinese can prevent the kind of crash that struck East Asia in 1997. Their currency isn't convertible, so there can't be a run on it. They continue to have a command economy; they are still communist, after all. But they cannot avoid the consequences of their economic reality, and the longer they put off the day of reckoning, the harder it will become to recover from it.
  • The Chinese are not going to completely collapse economically any more than the Japanese or South Koreans did. What will happen is that China will behave differently than before. With no choices that don't frighten them, the Chinese will focus on containing the social and political fallout, both by trying to target benefits to politically sensitive groups and by using their excellent security apparatus to suppress and deter unrest.
  • The Chinese economic performance will degrade, but crisis will be avoided and political interests protected. Since much of China never benefited from the boom, there is a massive force that has felt marginalized and victimized by coastal elites. That is not a bad foundation for the Communist Party to rely on.
  • The Chinese are, of course, keeping a great deal of money in U.S. government instruments and other markets. Contrary to fears, that money will not be withdrawn. The Chinese problem isn't a lack of capital, and repatriating that money would simply increase inflation.
  • Had the Chinese been able to put that money to good use, it would have never been invested in the United States in the first place.
    • anonymous
       
      I'm having a hard time following all the econ stuff, but I understand this to mean that the U.S. is 'old reliable': Not an investment of last resort, but an investment to run to when you don't have a sure thing.
  • Rather than the feared repatriation of funds, the United States will continue to be the target of major Chinese cash inflows.
  • In a world where Europe is still reeling, only the United States is both secure and large enough to contain Chinese appetites for safety. Just as Japanese investment in the 1990s represented capital flight rather than a healthy investment appetite, so the behavior we have seen from Chinese investors in recent years is capital flight:
  • money searching for secure havens regardless of return. This money has underpinned American markets; it is not going away, and in fact more is on the way. 
  • The major shift in the international order will be the decline of China's role in the region. China's ability to project military power in Asia has been substantially overestimated.
  • Its naval capacity is still limited compared with the United States. The idea that it will compensate for internal economic problems by genuine (as opposed to rhetorical) military action is therefore unlikely.
  • In our view, the most important shift will be the re-emergence of Japan as the dominant economic and political power in East Asia in a slow process neither will really want.
  • China will continue to be a major power, and it will continue to matter a great deal economically. Being troubled is not the same as ceasing to exist. China will always exist. It will, however, no longer be the low-wage, high-growth center of the world. Like Japan before it, it will play a different role.
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    "Major shifts underway in the Chinese economy that Stratfor has forecast and discussed for years have now drawn the attention of the mainstream media. Many have asked when China would find itself in an economic crisis, to which we have answered that China has been there for awhile -- something not widely recognized outside China, and particularly not in the United States."
anonymous

China's Hopes for Bridging the Taiwan Strait | Stratfor - 0 views

  • In recent years, military tensions between China and Taiwan have eased, and Beijing hopes that enhanced economic integration and the physical infrastructure it wants to build one day across the Taiwan Strait could bring the country a step closer to fulfilling a core geopolitical imperative by reuniting with the island.
  • The South China Morning Post reported Aug. 5 that in its recently approved National Highway Network Plan for 2013-2030, the State Council included two highway projects linking Taiwan to the mainland.
  • One involves the long-proposed Beijing-Taipei Expressway, which would start in Beijing and pass through Tianjin, Hebei, Shandong, Jiangsu, Anhui, Zhejiang and Fujian's Fuzhou before crossing the strait and reaching Taipei.
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  • Another inland route would start in Chengdu and pass through Guizhou, Hunan, Jiangxi and Fujian's Xiamen, and cross the Taipei-administered Kinmen archipelago before eventually ending at Kaohsiung in southern Taiwan.
  • The plan does not specify what kind of infrastructure -- a bridge or a tunnel, for example -- would be used to connect the mainland to Taiwan over the 180-kilometer (111-mile) strait, but since 1996, if not earlier, Beijing has publicly called for such infrastructure to be built.
  • Besides the massive economic costs associated with building a bridge or tunnel across the Taiwan Strait, security concerns, geologic vulnerabilities (due to earthquakes) and the sheer width of the strait present technical challenges to its construction. Even if the infrastructure were built, it is not clear that they would be economically justifiable given that airliners and ships are now allowed to travel across the strait frequently.
  • For decades, China and Taiwan had no official interaction at all, and infrastructure linking the two was something only Beijing wanted. Taipei viewed any bridge or tunnel link as a potential security liability, since it could enable easier access to the island by mainland military forces in times of crisis.
  • Combined with logistical challenges, the absence of direct relations between the two makes it extremely unlikely that the infrastructure will built any time soon.
  • Compared to the much more ambitious proposal to link the mainland to Taiwan via bridge or tunnel, the pipeline with Kinmen is not in itself very significant. However, it does offer an example of Beijing sacrificing what is superficially pragmatic for the sake of its strategic goals. In particular, Kinmen had once been the leading military frontier until the end of cross-strait military standoff in 1992, and Beijing believes that assisting the island can offer an example of cross-strait integration. Beijing also believes it could allow more Taiwanese residents to benefit from growing economic interaction with China without undermining Taipei's political independence.
  • While reunification remains the ultimate goal, it has been widely acknowledged among Beijing's political elites that, as long as the possibility of peaceful reunification remains, there is little urgency or strategic necessity in forcing a final resolution unless a serious crisis emerges between Taiwan and China.
  • Instead, Beijing is focusing on a more conciliatory approach to reinforce the concept of interdependence and prevent Taiwan from distancing itself from the mainland economically and politically.
  • A less hostile government in Taipei has also been important for Beijing's political legitimacy internationally. Moreover, China allowed a much more open market and more preferential trade and investment policies to Taiwan than the island nation would find elsewhere.
  • Currently, trade with China and Hong Kong accounts for nearly a third of Taiwan's economy, in part helping the island avoid further decline amid the global slowdown.
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    "More than six decades after Taiwan's estrangement from mainland China, the Taiwan Strait still represents the most physically formidable and symbolically inaccessible barrier to Beijing's objective of eventual reunification with the island. Over the course of its history, Taiwan switched hands from European and Japanese colonial occupiers before becoming the prospective battleground between China and Taiwan in the second half of the 20th century."
anonymous

Europe: What to Expect After Germany's Elections | Stratfor - 0 views

  • Germany's economic performance is tied strongly to external developments because of the country's reliance on exports.
  • Europe is Germany's largest customer, so the German economy depends on the strength of the European consumer base.
  • However, Germany's economy has not escaped the crisis unscathed. Over the past few years, German economic growth has slowed. According to the International Monetary Fund, Germany's GDP grew by only 0.9 percent in 2012, down from 4 percent in 2010.
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  • Strengthening domestic demand -- by raising wages, for example -- would limit its exposure to external risks, but it would also make German exports less competitive.
  • One option under consideration is the introduction of a minimum wage.
  • Berlin will also address its immigration issue.
  • Germany has actually seen an uptick of immigrants over the past few years due to its resilience to the crisis, but historically it has trouble retaining them. Any new government will have to introduce policies to retain immigrants while allaying fears that foreigners will abuse the national social security system.
  • A third priority for the new German government will be re-evaluating the country's energy strategy.
  • Because Germany has few domestic energy resources, the country's energy strategy is also part of its foreign policy. Infrastructure integration with other countries is important for German energy imports, as are bilateral relations with Russia, Germany's main oil and natural gas provider.
  • How effectively Germany integrates Europe will depend largely on its willingness to aid other European countries, particularly those in the eurozone.
  • Continued financial assistance is a crucial element in Germany's national strategy of ensuring cohesion in Europe and preserving the currency union.
  • Legal and institutional hurdles will limit Berlin's ability to be proactive in helping other countries. Even if there were general consensus among the political elite that Germany should provide aid more extensively, small opposition groups can challenge and delay assistance plans relatively easily.
  • To ensure survival of the eurozone, Germany will also try to preserve the Franco-German alliance. Historically, European integration meant solidifying German economic strength and French political leadership, but the European crisis has strained their relationship. The pressure Berlin will face in giving in to French demands, which include allowing more government spending, mutualizing debt and changing the European Central Bank's role to accept higher inflation and to more openly intervene in sovereign bond markets, will largely depend on how strongly the economic performance of both countries diverges.
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    "Much of Europe is eagerly anticipating the results of Germany's Sept. 22 parliamentary elections, but this anticipation may be somewhat misplaced. Of course, Germany's importance to Europe is well founded. It is Europe's largest economy and its main bailout creditor to struggling eurozone countries, so Germany's economic health is vital to the economic health of Europe as a whole. But the relationship goes both ways: Germany's economy relies on the free trade zone and on exports, which the rest of Europe can buy only if it can afford to do so. Thus any government in Berlin will continue to aid countries afflicted by the European crisis -- even at the risk of growing domestic opposition."
anonymous

China: The Next Phase of Reform - 0 views

  • The much-anticipated Third Plenary Session of the 18th Communist Party of China Central Committee concluded Nov. 12 after four days of closed-door deliberations among top political elites.
  • the initial information suggests China's leaders are seeking more significant changes in their policies
  • important policy changes include the establishment of a committee to guide the country’s comprehensive reform agenda, the establishment of an integrated National Security Committee responsible for coordinating public safety and national strategy, and the easing of the country's 33-year-old family planning policy to allow more couples to have a second child.
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  • The country's massive pool of cheap labor previously underpinned its economic and social transformation, but as China prepares to transition toward a consumer-based economy, its aging population is a problem.
  • China is now at a turning point. The country's economic growth has firmly cemented Chinese businesses and national interests around the globe. It has raised the living standards, but also the expectations, of China's citizens.
  • There is a growing sense of Chinese patriotism that exists beyond the confines of the Communist Party.
  • Modern forms of communication such as social media give Chinese citizens the ability to rapidly share successes and grievances across the country, to identify and single out cases of political corruption and to more actively keep the Party and leadership under scrutiny. At the same time, the expanded Chinese imports of raw materials and exports of commodities have substantially expanded China's active foreign interests, requiring a more nuanced and potentially a more activist foreign policy.
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    "The commitment and ability of China's leaders to follow through on new policies and to meet rising expectations will be tested as they strive to balance competing social, economic, political and security challenges. Three decades ago, China embarked on a new path, creating a framework that encouraged the country's rapid economic rise. The successes of those policies have transformed China, and the country's leadership now faces another set of strategic choices to address China's new economic and international position."
anonymous

Can Putin Survive? - 0 views

  • Part of the reason Putin had replaced Boris Yeltsin in 2000 was Yeltsin's performance during the Kosovo war.
  • Putin also replaced Yeltsin because of the disastrous state of the Russian economy.
  • Under Yeltsin, however, Russia had become even poorer and was now held in contempt in international affairs.
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  • The breaking point came in Ukraine during the Orange Revolution of 2004.
  • At that time, Putin accused the CIA and other Western intelligence agencies of having organized the demonstrations. Fairly publicly, this was the point when Putin became convinced that the West intended to destroy the Russian Federation, sending it the way of the Soviet Union.
  • The Russians worked from 2004 to 2010 to undo the Orange Revolution.
  • Russia's invasion of Georgia had more to do with Ukraine than it had to do with the Caucasus.
  • The invasion of Georgia was designed to do two things. The first was to show the region that the Russian military, which had been in shambles in 2000, was able to act decisively in 2008. The second was to demonstrate to the region, and particularly to Kiev, that American guarantees, explicit or implicit, had no value.
  • Washington wanted to restore the relationship in place during what Putin regarded as the "bad old days." He naturally had no interest in such a restart.
  • Instead, he saw the United States as having adopted a defensive posture, and he intended to exploit his advantage. 
  • If no Ukrainian uprising occurred, Putin's strategy was to allow the government in Kiev to unravel of its own accord and to split the United States from Europe by exploiting Russia's strong trade and energy ties with the Continent.
  • And this is where the crash of the Malaysia Airlines jet is crucial.
  • If it turns out -- as appears to be the case -- that Russia supplied air defense systems to the separatists and sent crews to man them (since operating those systems requires extensive training), Russia could be held responsible for shooting down the plane.
  • Putin must consider the fate of his predecessors.
  • Given current pressures, we would guess the Russian economy will slide into recession sometime in 2014. The debt levels of regional governments have doubled in the past four years, and several regions are close to bankruptcy. Moreover, some metals and mining firms are facing bankruptcy. The Ukrainian crisis has made things worse. Capital flight from Russia in the first six months stood at $76 billion, compared to $63 billion for all of 2013. Foreign direct investment fell 50 percent in the first half of 2014 compared to the same period in 2013. And all this happened in spite of oil prices remaining higher than $100 per barrel.
  • Putin has restored Soviet elements to the structure of the government, even using the term "Politburo" for his inner Cabinets.
  • The Politburo model is designed for a leader to build coalitions among factions.
  • Ultimately, politicians who miscalculate and mismanage tend not to survive. Putin miscalculated in Ukraine, failing to anticipate the fall of an ally, failing to respond effectively and then stumbling badly in trying to recoup. His management of the economy has not been exemplary of late either, to say the least. He has colleagues who believe they could do a better job, and now there are important people in Europe who would be glad to see him go. He must reverse this tide rapidly, or he may be replaced.
  • Putin is far from finished. But he has governed for 14 years counting the time Dmitri Medvedev was officially in charge, and that is a long time.
  • The wild card in this situation is that if Putin finds himself in serious political trouble, he might become more rather than less aggressive.
  • Those who think that Putin is both the most repressive and aggressive Russian leader imaginable should bear in mind that this is far from the case. Lenin, for example, was fearsome. But Stalin was much worse. There may similarly come a time when the world looks at the Putin era as a time of liberality.
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    "There is a general view that Vladimir Putin governs the Russian Federation as a dictator, that he has defeated and intimidated his opponents and that he has marshaled a powerful threat to surrounding countries. This is a reasonable view, but perhaps it should be re-evaluated in the context of recent events. "
anonymous

United States: The Problem of Aging Infrastructure on Inland Waterways - 0 views

  • This is not a new or unknown problem, but measures to address the problem have been limited, and there is no immediate, rapid solution.
  • The United States' inland waterways system -- more than 19,000 kilometers (12,000 miles) of navigable routes maintained by the U.S. Army Corps of Engineers overlaid with expansive farmlands -- has contributed greatly to the country's success. 
  • Most of these locks were constructed in the early 20th century, with an expected lifetime of 50 years. Seventy or 80 years later, many of these locks are still in operation.
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  • Under the current policy, the cost of maintaining this infrastructure falls to the federal government, but funding for major construction and rehabilitation projects on inland waterways is split equally between federally appropriated funds and money from a trust, the Inland Waterways Trust Fund, which currently secures revenue through a 20 cent tax on commercial barge operators' fuel.
  • Unlike the fund for inland waterways, the Harbor Maintenance Trust Fund has a surplus.
  • Because the trust fund is supplied from taxes on traded goods, ports that have higher traffic contribute more to the fund, but these ports are often not the ones that require the most dredging maintenance.
  • A total of $8 billion in projects, including flood prevention and port expansion projects, would be approved under the new House bill, while $12 billion in projects would be eliminated.
  • The U.S. Army Corps of Engineers estimates that it will cost $125 billion or more to revamp the entire inland waterway system. Some estimates show that just maintaining the status quo of unscheduled delays for the more than 200 locks on U.S. inland waterways would require an investment of roughly $13 billion dollars by 2020, averaging out to more than $1.5 billion annually.
  • The agricultural, coal, petroleum and fertilizer industries rely heavily on U.S. rivers to transport goods. Each year, more than 600 million metric tons of cargo, valued at roughly $180 billion, is handled along inland waterways managed by the U.S. Army Corps of Engineers.
  • According to the American Society of Civil Engineers, costs attributed to delays reached $33 billion in 2010 and are projected to rise to $49 billion by 2020.
  •  Since a single 15 barge tow is equivalent to roughly 1,000 trucks or more than 200 rail cars, shifting traffic from rivers to road or rail likely will increase congestion on these transportation routes.
  • Moreover, waterways remain the least expensive mode of long-distance transport for freight, with operating costs of roughly 2 cents per ton per mile compared to under 4 cents per ton per mile for rail and slightly less than 18 cents per ton per mile for truck.
  • However, as U.S. government funding for infrastructure spending has dropped significantly in recent years, increases in user fees, tolls or private funding likely will be needed to fully pay for all current and future necessary improvements to the U.S. inland waterways.
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    "The United States continues to face the problem of aging infrastructure on major water-based transport routes. A new waterways bill that is likely to be finalized soon -- the first such legislation since 2007 -- addresses some of the inefficiencies in the current system. However, the larger looming problem of insufficient funding remains. The U.S. inland waterways infrastructure is old, much-needed improvements have been delayed and the total cost of rehabilitation is expected to rise."
anonymous

The Caucasus Cauldron - 0 views

  • U.S. Secretary of State Hillary Clinton visited some interesting spots over the July 4 weekend. Her itinerary included Poland and Ukraine, both intriguing choices in light of the recent Obama-Medvedev talks in Washington. But she also traveled to a region that has not been on the American radar screen much in the last two years — namely, the Caucasus — visiting Georgia, Azerbaijan and Armenia.
  • Given that her visit to the region seems on the surface to have achieved little — and indeed, little seems to have been intended — it is worth taking time to understand why she went there in the first place, and the region’s strategic significance.
  • The Caucasus is the point where Russia, Iran and Turkey meet. For most of the 19th century, the three powers dueled for dominance of the region. This dispute froze during the Soviet period but is certainly in motion again. With none of these primary powers directly controlling the region, there are secondary competitions involving Armenia, Azerbaijan and Georgia, both among these secondary powers and between the secondary powers and the major powers. And given that the region involves the Russians, Iranians and Turks, it is inevitable that the global power would have an interest as well — hence, Hillary Clinton’s visit.
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  • Of all the regions of the world, this one is among the most potentially explosive.
  • Think of it as a cauldron framed by Russia, Iran and Turkey, occasionally stirred by Washington
  • The Caucasus region dominates a land bridge between the Black and Caspian seas.
  • The Greater Caucasus Mountains serve as the southern frontier of Russia. To the north of these mountains, running east to west, lies the Russian agricultural heartland, flat and without any natural barriers. Thus, ever since the beginning of the 19th century, Russia has fought for a significant portion of the Caucasus to block any ambitions by the Turkish or Persian empires.
  • In the chaos of the fall of the Soviet Union, various Georgian regions attempted to secede from Georgia with Russian encouragement. From the Georgian point of view, Russia represented a threat.
  • But from the Russian point of view, Georgia represented a double threat.
  • First, the Russians suspected the Georgians of supporting Chechen rebels in the 1990s — a charge the Georgians deny. The more important threat was that the United States selected Georgia as its main ally in the region.
  • In response to what it saw as U.S. pressure around its periphery, the Russians countered in Georgia in 2008 to demonstrate U.S. impotence in the region.
  • For its part, Azerbaijan cannot afford to fight a war against Russian troops in Armenia while it also shares a northern border with Russia. Azerbaijan also faces a significant Iranian problem. There are more Azerbaijanis living in Iran than in Azerbaijan; Iran’s supreme leader, Ayatollah Ali Khamenei, is a prominent Azerbaijani-Iranian. The Soviets occupied all of Azerbaijan during World War II but were forced to retreat under British and American pressure after the war, leaving most of Azerbaijan inside Iran.
  • The remainder became a Soviet republic and then an independent state.
  • The Azerbaijanis are deeply concerned about the Iranians. Azerbaijan is profoundly different from Iran.
  • We could put it this way: Bosnia and Kosovo were obscure concepts to the world until they blew up. Nagorno-Karabakh, South Ossetia and Abkhazia are equally obscure now.
  • They will not remain obscure unless strategic measures are taken. It is not clear to us that Clinton was simply making a courtesy call or had strategy on her mind. But the logic of the American position is that it should think strategically about the Caucasus, and in doing so, logic and regional dynamics point to a strong relationship with Azerbaijan.
  • For Azerbaijan, the burning issue is Nagorno-Karabakh. This is not a burning issue for the United States, but the creation of a stable platform in the region is.
  • Iran, which should be viewed as an Azerbaijani country as well as a Persian one, has two reasons to want to dominate Azerbaijan.
  • First, it would give Tehran access to Baku oil, and second, it would give Tehran strategic bargaining power with the Russians, something it does not currently have.
  • Altogether, the United States has the opportunity to forge a beneficial relationship with Azerbaijan that would put U.S. hands on one of Turkey’s sources of oil.
  •  
    "U.S. Secretary of State Hillary Clinton visited some interesting spots over the July 4 weekend." What it might have meant. By George Friedman at StratFor on July 7, 2010.
anonymous

The Limits of Public Opinion: Arabs, Israelis and the Strategic Balance - 0 views

  • The question has now become whether substantial consequences will follow from the incident. Put differently, the question is whether and how it will be exploited beyond the arena of public opinion.
  • the probability of an effective, as opposed to rhetorical, shift in the behavior of powers outside the region is unlikely. At every level, Israel’s Arab neighbors are incapable of forming even a partial coalition against Israel. Israel is not forced to calibrate its actions with an eye toward regional consequences, explaining Israel’s willingness to accept broad international condemnation.
  • On one side is Fatah, which dominates the West Bank. On the other side is Hamas, which dominates the Gaza Strip. Aside from the geographic division of the Palestinian territories — which causes the Palestinians to behave almost as if they comprised two separate and hostile countries — the two groups have profoundly different ideologies.
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  • Fatah arose from the secular, socialist, Arab-nationalist and militarist movement
  • Hamas arose from the Islamist movement.
  • at some point, Fatah will try to undermine the political gains the flotilla has offered Hamas.
    • anonymous
       
      This clearly qualifies as a prediction. Will await confirmation.
  • divergent opinions among what used to be called the confrontation states surrounding Israel — Egypt, Jordan and Syria.
  • Egypt, for example, is directly hostile to Hamas, a religious movement amid a sea of essentially secular Arab states.
  • Jordan views Fatah with deep distrust.
  • Syria is far more interested in Lebanon than it is in the Palestinians.
  • the Saudis and other Arabian Peninsula regimes remember the threat that Nasser and the PLO posed to their regimes.
  • Fatah doesn’t trust the Iranians, and Hamas, though a religious movement, is Sunni while Iran is Shiite.
  • Under these circumstances, the Israelis see the consequences of actions that excite hostility toward Israel from the Arabs and the rest of the world as less dangerous than losing control of Gaza.
  • A single point sums up the story of Israel and the Gaza blockade-runners: Not one Egyptian aircraft threatened the Israeli naval vessels, nor did any Syrian warship approach the intercept point. The Israelis could be certain of complete command of the sea and air without challenge. And this underscores how the Arab countries no longer have a military force that can challenge the Israelis, nor the will nor interest to acquire one. Where Egyptian and Syrian forces posed a profound threat to Israeli forces in 1973, no such threat exists now. Israel has a completely free hand in the region militarily; it does not have to take into account military counteraction.
  • And while the break between Turkey and Israel is real, Turkey alone cannot bring significant pressure to bear on Israel beyond the sphere of public opinion and diplomacy because of the profound divisions in the region.
  • The most significant threat to Israel is not world opinion; though not trivial, world opinion is not decisive. The threat to Israel is that its actions will generate forces in the Arab world that eventually change the balance of power. The politico-military consequences of public opinion is the key question, and it is in this context that Israel must evaluate its split with Turkey.
  • Egypt is the center of gravity of the Arab world, the largest country and formerly the driving force behind Arab unity. It was the power Israel feared above all others. But Egypt under Mubarak has shifted its stance versus the Palestinians, and far more important, allowed Egypt’s military capability to atrophy.
  • Turkey’s emerging power combined with a political shift in the Arab world could represent a profound danger to Israel.
  • The Israelis are calculating that these actions will not generate a long-term shift in the strategic posture of the Arab world.
  • If they are wrong about this, recent actions will have been a significant strategic error.
  • If they are right, then this is simply another passing incident.
anonymous

Iran: Competition from Ankara on the Palestinian Cause? - 0 views

  • There is no indication that this is more than rhetoric on the part of the Iranians — Iranian naval assets operating in the Mediterranean would be unprecedented and could be easily countered by Israeli naval forces.
  • It should be noted that Turkey appears intent to keep some distance from the Palestinian issue.
  • While Turkey may have no intention to become the defender of the Palestinians, the recognition it has received from other countries in the region is a worrying sign for Iran.
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  • Iran knows that ultimately, Turkey has far more resources and geopolitical advantages to be the true regional hegemon.
  •  
    June 6, 2010
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