Economics & Business Archive

The United States and the Republic of Korea (ROK) have one of the most formidable and durable military alliances in the world. This alliance has preserved peace and stability in Northeast Asia and ensured nuclear restraint among Asian powers. It has weathered extreme domestic unpopularity in South Korea and pressures in Washington to reduce U.S. overseas defense obligations. During the lifetime of this military alliance, the junior partner has transformed from a war-battered, backward military dictatorship into a prosperous democracy with the world’s most-wired population and one of the world’s largest economies. Most American and Korean strategists agree that the […]

MILAN, Italy — ZAPATERO’S DEJA VU: The Italian general commanding part of a multinational NATO peacekeeping force in Kosovo learned from a newspaper story last week that he was losing 620 of his troops. They were the Spanish forces under his command, which Spain’s defense minister announced would be pulling out by the summer. The Italian press reported Madrid’s handling of the withdrawal decision as a breach of good manners, but the general was in good company. Turns out Defense Minsiter Carme Chacon and Prime Minister Jose Luis Rodriguez Zapatero even failed to notify members of the Spanish government. The […]

NEW DELHI — Two weeks ago, a ballistic missile blasted off from a warship sailing in the Bay of Bengal. Its target was Wheeler Island, a small enclave of land off the coast of India and home to one of India’s most important missile testing facilities. Within seconds of the launch, the Indian military’s radars and computer banks began tracking the supersonic rocket. Several computations later, an alarm triggered another “hot” missile on the island that, once launched, began pursuing the aggressor warhead. Some 70 kilometers above the earth’s surface, the two collided. The rocket’s debris fell through the sky, […]

Editor’s note: The following is an unsolicited response to the World Politics Review Briefing, “An Impeccable U.S.-China Incident at Sea.” As both a newsand analysis journal, WPR recognizes that some articles it publisheswill provoke differences of opinion and disagreements ofinterpretation. Our commitment is to airing all sides of acontested issue, so long as they are respectfully expressed.On March 10, 2009, the U.S. Navy surveillance ship Impeccable intruded into Chinese jurisdictional waters, inducing a confrontation with five Chinese ships. The incident raised tension in the South China Sea, which has been the site of international confrontations recently. According to the Chinese […]

A 2008 report entitled “World at Risk” garnered global headlines when it warned that, “It is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013.” The report (.pdf), issued by a bipartisan committee established by the U.S. Congress, argued that biological rather than nuclear weapons presents the greatest near-term international terrorism danger. The warnings of the U.S. Commission on the Prevention of WMD Proliferation and Terrorism were underscored by subsequent media reports that dozens of members of Al-Qaida in the Lands of the […]

SAN SALVADOR, El Salvador — The first leftist president-elect in El Salvador since the end of the 1980-1992 civil war says he will not nationalize major industries, as leftist leaders have done in Venezuela and Bolivia, but instead will guarantee property rights and seek support of business leaders. Mauricio Funes, a former CNN en Español correspondent, beat former police chief Rodrigo Avila by 2.6 percent in the March 15 election. He immediately sent signals that he’ll seek to maintain tight relations with Washington and Brazil. Critics fear Funes’ FMLN party, which was founded by Marxist guerrillas on the heels of […]

The U.S.-China naval confrontation in the South China Sea two weeks ago was only the latest in a series of military showdowns between the two countries in the past decade. And like the others before it, the skirmish — which according to initial reports had Chinese sailors stripping down to their skivvies before U.S. seamen — seemed harmless enough. But the quarrel came, if you will, amid tumultuous seas. Not long afterwards, Chinese Premier Wen Jiabao, troubled perhaps by Washington’s response to the financial crisis and its consequences on the broader U.S. economy, voiced concern about China’s massive economic investments […]

Up to $1.7 billion a year in oil money is set to flow into impoverished Cambodia, where 35 percent of the population lives under $1 a day and where this year’s national budget is only $1.8 billion. Yet in a country ranking a dismal 166 out of 180 on Transparency International’s annual corruption rankings, allegations of nepotism and cronyism are already surfacing around the country’s nascent oil sector, set to start production in 2012. Critics, like London-based watchdog Global Witness, claim the makings of a “resource curse” are in place, wherein a political elite will siphon profits that should be […]

BOGOTÁ, Colombia —The drug wars in Mexico “will intensify,” says the head of Colombia’s anti-narcotics police, Gen. Álvaro Caro. “It’s going to get worse,” Caro said during an exclusive interview about the wave of drug violence in Mexico. “The Mexican cartels are very structured, well armed and organized, and have the power to corrupt.” Last year alone, 5,400 people were murdered in the surge in drug violence in Mexico. Caro calls it “narco-terrorism,” and says it is “the price you pay for taking on the cartels.” It also results from changes made by Colombian drug kingpins to their transporting routes. […]

The ancient strategist Sun Tzu stated that the acme of military skill consists of defeating one’s enemy without actually engaging him in battle. China’s strategy for advancing its domination of the South China Sea resembles a modern-day attempt to put that advice into practice. With a weak but growing blue-water capability, China is carefully and deliberately promoting a vision that de-legitimizes the forward presence of the U.S. Navy in the region. Last week’s bold and dangerous maneuvers by Chinese government vessels to disrupt a military survey mission 120 km from its coastline is the latest example of that effort. The […]

SLOPPY STAFF WORK — Secretary of State Hillary Clinton burst into raucous laughter when Russian Foreign Minister Sergei Lavrov pointed out a translation error on the “Reset Button” she gave him as a joke gift. The joke was on her, however, and in private she was less good-natured about the sloppy staff work responsible for the error. For one thing, it started her off at something of a disadvantage, however slight, with her Russian counterpart. For another, it pointed up an unfavorable comparison with her predecessor: Russian-speaker Condi Rice would very probably have caught the error in time. Such snafus […]

SAN SALVADOR, El Salvador — Salvadorans go to the polls on Sunday, March 15, in a presidential election dominated by the country’s economy, already beginning to slow amid the economic crisis. The leading candidate in the race according to most polls is former TV-talk-show host Mauricio Funes. The party he now heads, the Farabundo Marti National Liberation Front (FMLN), evolved out of an umbrella group of leftist guerrilla factions active during El Salvador’s 12-year civil war. His opponent, Rodrigo Avila of the ruling right-wing party ARENA, has made Funes’ economic program a central focus of the campaign, calling the election […]

When finance ministers of the Group of Twenty nations come together on Friday to prepare for the upcoming G-20 summit, observers, journalists and analysts will no doubt focus on disagreements among the members over how to tackle the ongoing world economic crisis. After all, differing views on the best course of action have already stolen the headlines. To be sure, points of contention do exist and they could make for a tense meeting at West Sussex this weekend, as finance ministers struggle to come up with a productive and forceful agenda at the April summit in London. And yet, the […]

Secretary of State Hillary Clinton’s recent visit to Jakarta underscores the importance that the Obama administration appears to attach to Asia and to the U.S. relationship with Indonesia. Indeed, a broad-based, mutually beneficial partnership between the United States and Indonesia can and should be one of the foundations of America’s 21st century Asia-Pacific strategy. But in shaping America’s future relationship with that key country, U.S. policymakers should avoid the miscalculations that previously anchored the United States’ engagement to Indonesia’s anti-democratic, military-dominated elites. Throughout the Suharto dictatorship and even after his fall, U.S. relations with Indonesia suffered from inadequate attention to […]

As one of her final acts as U.S. secretary of state, Condoleeza Rice signed a nuclear cooperation agreement with the United Arab Emirates (U.A.E.) on Jan. 15, a deal touted by the Bush administration as a model for promoting peaceful nuclear energy while at the same time guarding against weapons proliferation. The Obama administration is still studying the accord before deciding whether to forward it to Congress for ratification into law. But the deal has won an unusual combination of support from both representatives of the U.S. nuclear power industry and select nonproliferation experts. Congressional reservations, however, remain. Persistent and […]

An Association of Southeast Asian Nations summit meeting concluded in Thailand on March 1 with a renewed consensus (.pdf) against protectionism and in support of free trade. In a rare moment of unity for the alliance’s 10 members, the ASEAN foreign ministers signed a free-trade agreement with Australia and New Zealand, while finance ministers of ASEAN Plus Three — China, Japan, and South Korea — expanded their emergency foreign currency fund from $80 billion to $120 billion. ASEAN’s anti-protectionist stance appears to be driven by concerns over exports to the United States, in light of President Barack Obama’s campaign promises […]

For the IMF, the global economic downturn could not have come soon enough. Two years ago, the Fund’s lending portfolio was a scanty $13 billion, down from $100 billion in 2003. As Argentina, Brazil, Uruguay, Indonesia, and the Philippines each paid off their loans early, the institution’s revenue stream slowed to a trickle. Since the institution’s operating costs are financed by fees and interest charged on its loans, its shrinking portfolio resulted in annual losses between $200 and $300 million. Forced to find alternative sources of income and reduce costs, the fund initiated plans to sell off some of its […]