Economics & Business Archive

Last weekend, three weeks of anxious waiting came to an end in Germany when the Social Democratic Party (SPD), in an unprecedented internal referendum, approved a coalition agreement with Chancellor Angela Merkel’s Christian Democratic Union (CDU). With the new German government sworn in on Tuesday, it is now possible to size up its key personnel and review its foreign and domestic policy agenda. After the federal election on Sept. 22, the victorious Merkel lost her preferred coalition partner when the liberal Free Democratic Party (FDP) failed to make the 5 percent threshold for representation in the Bundestag. As a result, […]

Recent developments have led some commentators to worry that China and the United States may stumble into a shooting match. Two events in particular have heightened tensions between Beijing and Washington: Last month, China proclaimed an air defense identification zone covering disputed territories in the East China Sea; then, on Dec. 5, a collision was narrowly avoided between the USS Cowpens and a Chinese naval vessel that was accompanying the Liaoning, China’s first aircraft carrier, on its maiden excursion into the South China Sea. Aware of the possibility of a clash that neither country wants, Chinese and American spokesmen have […]

Never again. That was the sentiment I remember hearing over and over from developing country officials following the tumultuous completion of the Uruguay Round negotiations in 1993 that led to the creation of the World Trade Organization (WTO) two years later. Once again, most of them believed, the United States and the European Union had dictated the final terms of a global trade agreement and forced it down the throats of the rest of the world. These countries were determined to have far more say in the shape of any future deals. For the past two decades, until this month’s […]

The Obama administration’s decision last week to continue the dual-hatted arrangement whereby a single military officer runs both the Cyber Command (Cybercom) and the National Security Agency (NSA) is the latest indication that the administration plans to make only modest changes in how the United States conducts offensive and defensive cyber operations in the aftermath of Edward Snowden’s revelations of NSA data collection. Instead, the administration’s aim will be to tighten security procedures to prevent yet another massive leakage of sensitive information from a rogue contractor such as Snowden, as well as to minimize further friction with friendly governments. Although […]

A concerted effort to portray the protests in Ukraine as a pivotal moment pitting the Euro-Atlantic community against a resurgent Russia has not gained much traction among the American public in general or the Obama administration in particular. Washington apparently has little interest in matching the Russian “bid” for Ukraine, despite dire warnings that a failure to do so will imperil the security of the Western world. Some of this may be due to “revolution fatigue” engendered after a decade of watching the promise of popular uprisings to usher in new eras of freedom, democracy and pro-American governments fade away. […]

The sacrifices of U.S. and NATO troops in Afghanistan have been widely reported, but the U.S. war effort has relied heavily on private firms to provide a variety of services, including armed security for convoys and installations. As NATO draws down in Afghanistan and struggles with budget constraints, the United States and others will almost certainly continue rely on these firms, which have attracted scrutiny and criticism over the years. “After the United States leaves Afghanistan, the private security industry will grow,” explains Sean McFate of the Atlantic Council in an email interview, given that “the United States and others […]

Heading into Sunday’s second-round presidential vote in Chile, there is one word that best sums up the energy policy debate in the Andean nation: diversification. That is, much like an individual pursuing a personal investment strategy, Chile is seeking an energy policy that brings increased diversity to its matrix. More specifically, security, efficiency and sustainability are the clear-cut issues facing policymakers and energy sector participants alike; Chile currently imports 97 percent of its fossil fuels and depends on hydropower for 42 percent of its electricity generation. In a twist to Sunday’s voting, President Sebastian Pinera’s successor is likely to be […]

A bill to reform Mexico’s energy sector passed both houses of Mexico’s Congress this week, bringing President Enrique Pena Nieto’s promised overhaul of the state-owned oil and gas industry a big step closer to becoming reality. The bill would usher in a dramatic opening of Mexico’s oil and gas industry, which was nationalized 75 years ago, and is hoped to revamp the country’s flagging oil production and attract billions of dollars in foreign investment. Mexico is currently the world’s ninth-largest oil producer and depends on the energy sector for one-third of its revenue, but inefficiency and corruption have plagued Pemex, […]

Often overlooked by some Western policymakers engaged with the Mideast peace process, water-sharing arrangements have served as a significant driver of regional tensions dating back to Israel’s founding in 1948. Control of water resources—vital to all manner of economic development, food production and basic human security—has loomed just beneath the surface of many of the region’s headline-earning events of the past 50 years. For example, one of the myriad outcomes of Israel’s triumph in the 1967 Six-Day War—Israeli control of the Golan Heights—brought control of key sections of the Jordan River watershed, one of the few reliable freshwater sources in […]

Last week, South Korea and Australia struck a tentative free trade agreement after resuming trade talks that had been frozen for more than three years. In an email interview, Jeffrey Robertson, a visiting professor at the Korea Development Institute School of Public Policy and Management, explained the state South Korea-Australia bilateral ties. WPR: What has been the recent trajectory of South Korea-Australia ties? Jeffrey Robertson: Until recently, there were four features common to every Australia-South Korea diplomatic function. First, the Australian side would reiterate that the relationship has a historical basis, beginning with visits of Australian missionaries to Busan during […]

Since Ukraine regained independence in 1991, analysts have often described the country as divided between a pro-European west and a pro-Russian east. Over the past two decades, elections and opinion polls have reflected that divide, though with some gradual blurring of the line. An interesting feature of the current political crisis, however, is that while pro-European sentiment grips the western and central parts of Ukraine, no alternate pro-Russian narrative has appeared with any force or passion. Like many things, the east-west divide in Ukraine oversimplifies. It is not strictly a divide between ethnic Ukrainians and ethnic Russians. The latter make […]

Last week, OPEC decided to leave its production ceiling unchanged at 30 million barrels per day (bpd), the target it set two years ago. On the face of it, this decision seems to reflect the self-proclaimed oil cartel’s satisfaction with current high oil prices. Over the past three years, OPEC has thrived with Brent crude averaging above $100 a barrel, boosting members’ revenues to record highs. High prices have even allowed the Vienna-based organization to become sloppy: OPEC stopped publishing individual country quotas five years ago, and most cartel members are producing all the oil they can; meanwhile, Saudi Arabia […]

The interim deal between Iran and the U.S.-led coalition of world powers has opened the possibility of Iran’s return as a regional power with normalized diplomatic and economic relations. This WPR special report examines the implications of Iran’s return to the club of nations. The Nuclear Issue Iran Nuclear Deal a Welcome First StepBy Judah GrunsteinNov. 25, 2013 In Congress, Obama Administration Faces Uphill Battle on Iran SanctionsBy Eric AunerNov. 15, 2013 The Evolution of Economic Coercion: From Sanctions to Targeted Financial MeasuresBy Javier SerratNov. 8, 2011 Can Risk-Averse EU Break Its Own Inertia on Iran Nuclear Talks?By Rouzbeh ParsiNov. […]

It is understandable that Japan views China’s “rise” with concern. On the list of Japan’s concerns are China’s rapidly growing military expenditure, its increased economic competitiveness, its geographic proximity to Japan and its historical track record of aggressive territorial assertiveness. The most recent manifestation of the tension between the two great powers was the Chinese declaration of an air defense identification zone in the East China Sea, above the Senkaku Islands claimed by Japan as well as China, which calls them the Diaoyu Islands. From the Japanese perspective, China’s behavior is illegal. But this is not the only area of […]

Much American analysis of the past week’s events in Ukraine has tended to focus on the advisability of removing President Viktor Yanukovych and getting Ukraine to sign an Association Agreement, including a free trade pact, with the European Union. But little attention has been paid to what might happen the day after. This thinking echoes the prevailing line a decade ago during the Orange Revolution, which assumed that everything would be fine once the protesters’ demands were met. Instead, the absence of a coherent, sustained Western approach in the aftermath of the Orange Revolution led to its unraveling. Ukrainian Deputy […]

The differing reactions in Israel and India to the recent six-power agreement with Iran highlight the only point of strategic divergence between the two long-time partners: the nature of engagement with a potentially nuclearizing Iran. While Israel has condemned the preliminary agreement and the potentially broader international rapprochement with Iran it signals, India has welcomed it with cautious optimism. More generally, while Israel perceives Iran’s nuclear posture as an existential threat, India sees it more as a geopolitical hindrance to increasing New Delhi’s strategic profile in Tehran. In recent years India and Israel seemingly agreed to compartmentalize these divergences, as […]

The violence that erupted during a coca eradication campaign in Apolo, Bolivia, in October was sadly reminiscent of the violence and conflict that characterized the “zero coca” policies of previous Bolivian administrations. By the time the confrontation ended, three members of the security forces and a doctor were dead, and nearly 30 people were wounded. Fortunately, the Apolo deaths are an anomaly, both because such violence is now extremely rare in Bolivia and because forced eradication is only taking place in very limited areas of the country deemed to have excess coca cultivation. Nonetheless, the incident illustrates the complex political […]