Economics & Business Archive

The U.S. Treasury Department asserted earlier this month that informal financial transactions through networks known as hawala are helping Iran evade international sanctions. In an email interview, Roger Ballard, a consultant anthropologist and director of the University of Manchester’s Center for Applied South Asian Studies who has written extensively on hawala, explained the long history of these networks and how they currently operate. WPR: What purposes are the hawala networks in Iran used for, and what volume of transactions passes through them? Roger Ballard: For well more than a thousand years, traders operating throughout the Indian Ocean region have routinely […]

After a decade of gradual rapprochement anchored by booming bilateral energy ties and close coordination on combating Kurdish separatists, Iran and Turkey are struggling to maintain a veneer of mutual amity and cooperation. In recent months, Iran and Turkey have shown growing signs of estrangement. At the heart of their differences lie the Syrian crisis and Ankara’s gradual alignment with the West’s efforts to check Iran’s nuclear ambitions. The two neighbors continue to be bound, however, by a complex and deepening state of energy interdependence, which explains why both sides continue to exercise a measure of self-restraint in their engagements […]

As the conflict in Syria continues, with the United Nations reporting a dramatic increase in the numbers of refugees fleeing the country, Syria’s economy, too, is a victim of the violence. And its chances of recovery are looking slim. “Syria is now fully a war economy that displays all the features of a country in conflict,” Samer Abboud, assistant professor of history and international studies at Arcadia University, told Trend Lines in an email interview. “There is increased informality and black market activity, an increase in criminality and markets for violence, families trying to cope under these conditions by whatever […]

With peace talks engaged for the first time in a decade, and the Revolutionary Armed Forces of Colombia (FARC) at its weakest point in history, Colombia’s once-stifled oil and mining sectors have taken off, enabling oil production to reach a record of 1 million barrels per day in late-December. Yet the extractive industry has found itself increasingly targeted by the FARC and other rebels who are seeking to force concessions from the government, putting foreign investment, now at all-time highs, at risk. The FARC are suspected in the bombing of a gas pipeline in La Guajira in Northeastern Colombia on […]

Though Russian oil production continues to rise and is currently approaching Soviet-era levels, forecasts predict it will soon peak and then decline, causing potential problems both for global oil importers and the Russian government’s budget. Averting this decline will require applying more-advanced production techniques to existing fields and exploiting new ones in the Arctic Ocean and elsewhere. Russia’s oil companies will be unable to accomplish this transformation on their own, however. To do so, they will need to secure greater foreign investment and partnerships offering more-advanced technologies and the exposure to better management skills. The benefits of increased foreign investment […]

A sense of optimism is palpable in Japan as Prime Minister Shinzo Abe takes the country’s helm for a second time. Yet as his government promises to create more jobs and invest in emerging technologies to get the country back on its feet once and for all, the reality is that Japan cannot afford to spend its way out of lackluster growth. What the country really needs is sweeping social change that will tap into the power of women in the labor market and bold leadership to make painful cuts to welfare spending. The fact that Abe’s Liberal Democratic Party […]

Since assuming power in early 2011, Myanmar’s government, led by President Thein Sein, has focused its energies on the domestic agenda: rejuvenating the economy, liberalizing the political system and bringing an end to the decades-long ethnic conflicts along the country’s periphery. In tandem with these reforms, however, Naypyidaw has also endeavored to rebalance its foreign relations, with a particular emphasis on improving ties with the United States and members of the European Union, as well as important Asian neighbors such as Japan and India. China, which forged a close economic and political relationship with Myanmar during the 1990s and 2000s […]

Although it is difficult to predict the precise course of Venezuela’s current leadership transition, it is almost certain that President Hugo Chavez will pass away within the coming weeks or months. His departure will impact not only Venezuela, but also the Bolivarian Alliance for the Americas (ALBA), the regional bloc that Chavez founded to promote his vision of Bolivarian socialism. While conventional wisdom assumes these impacts will be mostly negative, this is not necessarily the case. In fact, another outcome is possible: A rejuvenated ALBA could take shape, one centered on a new coalition of pragmatists and restructured around economic […]

Since the election of reformist President Benigno Aquino, the Philippine economy has been on an unprecedented upswing, defying almost all earlier forecasts. Today, the country is among the fastest-growing economies in the world, expected to grow by up to 8 percent this year. No wonder the Philippines is seen as the next Asian tiger economy and is expected to attain a much-coveted “investment grade” rating this year. The emerging consensus among experts is that the increasingly positive economic outlook is a result, first, of the Aquino administration’s good governance agenda focused on tough anti-corruption reforms and, second, of the larger […]

In a recent WPR feature essay on economic integration and security competition in Asia, Amitav Acharya used our article in Foreign Policy, “A Tale of Two Asias,” as a conceptual framework for thinking about the future of this dynamic and important region. But his piece, “Why Two Asias May be Better Than None,” misunderstands or fails to address many of our key arguments. On some points, we agree with Acharya. For example, he notes that Japan “started the process” of economic integration in Asia, or what we call “Economic Asia,” and “still plays a vital role in it.” We made […]

BUENOS AIRES, Argentina — On Wednesday evening, hours before she flew to Havana to symbolically visit regional ally Hugo Chávez, Argentine President Cristina Kirchner was in Mar del Plata, Buenos Aires province, to celebrate the return of the naval ship Libertad. The ship had been impounded in Ghana at the request of NML Capital — an unpaid creditor from Argentina’s $100 billion default in 2002. The frigate’s homecoming, facilitated by an international maritime court ruling, was a victory for Kirchner’s self-proclaimed “national and popular” project. Her government refuses to pay so-called vulture funds such as NML, which bought up debt […]

On Dec. 5, the U.S. House Foreign Affairs Subcommittee on Europe and Eurasia heard testimony from American Enterprise Institute resident scholar Michael Rubin on Iran’s influence in the South Caucasus. While Rubin detailed Iran’s close ties to Armenia and contrasted them to Iran’s uneasy relationship with Azerbaijan, he closed his testimony with unexpected warnings of a potential Georgian alignment with Iran (pdf). “The victory of [Prime Minister] Bidzina Ivanishvili’s Georgian Dream party in October 2012 elections threatens to radically reorient the Republic of Georgia, which, under President Mikheil Saakashvili, has been reliably pro-Western,” cautioned Rubin, adding that Ivanishvili’s pledge to […]

In the most direct admission by a high-ranking Iranian government official that international sanctions are imposing a heavy burden on the economy, Iranian Minister of Industry Mehdi Ghazanfari called the latest round of sanctions “crippling” at a gathering of provincial governors on Jan. 10. His remarks were a clear break from his previous statements, in which he downplayed the impact of sanctions. Ghazanfari said the latest round of sanctions have been far more costly than previous ones, pointing in particular to three new sets of sanctions imposed in 2012: financial sanctions, especially those targeting Iran’s central bank; oil export restrictions; […]

For the first time, Colombia’s civil society has been invited to contribute to peace negotiations between the government and the rebel Revolutionary Armed Forces of Colombia (FARC), with the discussion focused on the root cause of the country’s war: land reform. Hosted by the United Nations and the National University of Colombia, the Forum for Integral Agrarian Development was held in Bogota from Dec. 17 to 19. Not only did the forum place land reform at the center of peace negotiations, at least for the moment, it also has the potential to give the peace process legitimacy in the eyes […]

Brazil recently launched a $480 million effort to develop precision missiles and rockets, part of a larger effort to revitalize its defense sector. In an email interview, Salvador Raza, a former Brazilian naval officer and current adjunct professor at National Defense University, and Peterson Silva, a doctoral student at the University of Sao Paulo, discussed the state of the Brazilian defense sector. WPR: To what degree is Brazil independent in terms of arms production, and what systems does it need to import? Salvador Raza and Peterson Silva: Brazil has developed significant know-how in the production of relatively sophisticated defense products […]

The Arctic is melting faster than anyone predicted. The World Meteorological Organization announced that ice melt in the Arctic reached a new record in 2012 when an area of ice larger than the continental United States vanished between the months of March and September. The seasonal thaw contributed to a new record in regional shipping as well, with more vessels than ever hauling cargo between Europe and Asia across the top of the world. And international energy companies spent record time searching for oil and gas beneath the frigid waters. But in spite of these trends, the Arctic probably won’t […]

In mid-December, Brazilian President Dilma Rousseff made her first official visit to France amid speculation that the French-made Rafale might beat out competition from the U.S. and Sweden for a Brazilian fighter jet tender. In an email interview, Antonio Ramalho, an expert on Brazil-European Union relations at Brasilia University, explained the obstacles and opportunities facing the France-Brazil bilateral relationship. WPR: With new presidents in office in both countries, what are the main opportunities and obstacles facing the bilateral relationship? Antonio Ramalho: The main opportunities relate to their common views regarding the role of government in actively promoting economic growth through […]