Economics & Business Archive

In May 2008, the foreign ministers of Poland and Sweden proposed the Eastern Partnership, an initiative designed to foster ties between the European Union and six former Soviet republics: Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan. That August, a brief war broke out between Georgia and Russia, after which Russia formally recognized the Georgian breakaway enclaves of Abkhazia and South Ossetia as sovereign states. Seven years later, the region remains divided along these lines, with the EU offering a possible future for Russia’s former satellites, and Russia itself using military force and separatist proxies to prevent that from happening. Last […]

Earlier this month, Jamaica announced plans to expand regional trade ties through a framework agreement with Cuba and a deal that supplements the existing free trade agreement with Costa Rica. In an email interview, Krista Lucenti, an economist with the Inter-American Development Bank, discussed Jamaica’s trade policy. WPR: What are Jamaica’s main exports, and who are Jamaica’s main trade partners? Krista Lucenti: Jamaica exported roughly $2.3 billion in goods and services in 2014. Exports of goods are concentrated in bauxite, alumina and other non-traditional exports, including chemical, minerals and food processing exports, and represent nearly three-fourths of the total value […]

The past year has seen dramatic declines in the prices of global commodities. Between June 2014 and the beginning of this year, crude oil prices fell by 50 percent to around $50 a barrel. Similarly, mineral prices have seen a drastic fall since the peak of the “commodity supercycle” in early 2011. Between then and April of this year, iron ore prices fell by 70 percent, coal prices by 54 percent and copper prices by 40 percent. Many countries dependent on revenues from these commodities have been hit hard. Venezuela is unable to import food and medicine to satisfy the […]

Earlier this month the European Union launched its so-called digital single market, which aims to expand Europe’s digital economy through broad reforms. In an email interview, Fabian Zuleeg, the chief executive of the European Policy Center, a Brussels-based think tank, discussed the impact the new policy could have. WPR: What are the main goals of the European digital single market? Fabian Zuleeg: In its most basic form, the digital single market is about removing regulatory barriers, which prevent customers and businesses from fully realizing the potential of the developing Internet economy. But the ultimate goal of the digital single market […]

The BRICS grouping must rank as one of the oddest geopolitical blocs in history. It was born in 2001 from the mind of a Wall Street economist as little more than a mnemonic shorthand device to describe the growing importance of developing economies. Ever since, the five countries it comprises—Brazil, Russia, India, China and South Africa, a later addition—have been trying to transform their snappy acronym into a global player. Nobody has promoted the ambition to leverage the BRICS bloc into a source of influence more enthusiastically than Russian President Vladimir Putin, who sees the grouping as a potential vehicle […]

Ground zero in Ireland’s recent economic, political and social history can be traced to the night of Sept. 29, 2008. “The night of the bank guarantee,” as the Irish public came to call it, dramatically changed the country’s course. Before then, Ireland had enjoyed more than a decade of rapid economic growth, emerging from years of poverty to become one of Europe’s most dynamic economies, the so-called “Celtic Tiger.” Between 1990 and 2005, the employed population of Ireland increased from 1.1 million to 1.9 million. Gross domestic product soared, and gross national income per capita doubled between 1990 and 2000 […]

China is in negotiations with Djibouti to open a military base in the country, adding to its current roster of French, U.S., Japanese and EU military facilities. In an email interview, David Styan, lecturer in politics at Birkbeck College, University of London and author of the report “Djibouti: Changing Influence in the Horn’s Strategic Hub,” discussed Djibouti’s foreign relations. WPR: Who are Djibouti’s main regional partners? David Styan: The dominant regional partner is Ethiopia. Djibouti’s small economy is essentially a gateway; the vast majority of Addis Ababa’s fast-growing trade flows transit through Djibouti’s new container and oil terminals. China’s reconstruction […]

The Budget Control Act of 2011 (BCA), passed by the U.S. Congress and signed by President Barack Obama to resolve that year’s debt-ceiling crisis, instituted spending caps on the federal discretionary budget, including on defense, a traditional Republican priority. As an incentive for compromise, the legislation also established a lower set of caps that would come into force should Congress fail to reach an agreement on further spending reductions. Failure to respect these limits in any year’s budget appropriations would trigger automatic across-the-board cuts, known as sequestration, against which the initial BCA caps would pale in comparison. Defense sequestration, in […]

As part of its historic overhaul of Mexico’s energy sector, President Enrique Pena Nieto’s government has touted the potential for unprecedented levels of oil, gas and renewable energy investment. Yet Mexico should heed the lessons from other countries in Latin America about the need to engage indigenous communities as it develops and expands its energy sector. Across the region, when that has not happened, ensuing social conflict has disrupted the economy and often irrevocably damaged the relationship among communities, the government and the private sector. In Mexico, a failure to learn from others’ mistakes could put Pena Nieto’s ambitious economic […]

Latin America faces difficult choices over hydraulic fracturing, or “fracking,” as the region looks to expand its nascent shale gas and oil industry. To date, the United States and Canada have outpaced their southern neighbors in unconventional energy production. But Latin America, which holds approximately one-fourth of the world’s recoverable shale oil and gas reserves, appears poised to reap the benefits of the North American shale revolution in the coming decade. The urgency to start drilling might have eased in the short term, with lower energy prices making shale less competitive outside the United States. In the meantime, delays afforded […]

In the run-up to the June 30 deadline for a comprehensive nuclear agreement with Iran, alarmists in Washington, Tel Aviv and elsewhere are again warning of an imminent race to nuclear weapons capabilities in the Middle East—one that will occur in the guise of peaceful nuclear programs, as countries such as Saudi Arabia, Egypt and Turkey all rush to construct their first nuclear power plants. But the logic of chain-reaction proliferation in the Middle East is critically flawed. Equally flawed are assumptions that the region’s nuclear power aspirants are anywhere near having operational programs. Ambitious rhetoric aside, including Saudi Arabia’s […]

Canadian politics rarely draws international interest, unless a certain colorful former Toronto mayor is involved. But a snap election in the energy-rich province of Alberta this week shocked Canada and made headlines around the world. The Progressive Conservative (PC) party, which has held continuous control of the province since 1971, lost in a stunning upset to the left-of-center Alberta New Democratic Party (NDP). NDP leader Rachel Notley is set to be the premier—the equivalent of governor—of the heartland of Canadian conservatism and the home province of Prime Minister Stephen Harper, whose ruling Conservative Party faces tough federal elections this fall. […]

Last month’s ruling by the Supreme Court of Honduras throwing out a constitutional ban on the re-election of presidents is far from an innocent opening up of democratic possibilities. Rather, the court’s decision is another step in the ongoing, methodical destruction of the rule of law and constitutional order in Honduras, which began with the 2009 military coup that deposed the country’s democratically elected president, Manuel Zelaya. Most ominously, given his record so far, the court’s decision paves the way for President Juan Orlando Hernandez’s continued hold on power, even as the United States is shoring him up as a […]

When the independent rights-monitoring group Freedom House released its latest “Freedom of the Press” report last week, an accompanying world map carried an almost-hidden surprise. The color-coded depiction of media rights across the planet pointed to a predictable breakdown: Europe and North America looked placidly green, while the purple shades of repression dominated most of Africa, Asia and the Middle East. There was, however, a remarkable spot of green on the western edge of Africa. It looked out of place, as if it were a mistake. The small West African nation of Ghana, it turns out, is an anomaly of […]

When the United States assumed chairmanship of the Arctic Council last month, Secretary of State John Kerry declared that the U.S. government’s priority would be to manage the impact of global climate change on the region in cooperation with the other countries that have a major presence in the Arctic. Climate change is certainly an important issue, and one that is having a greater impact in the Arctic than in any other region. But as U.S. officials are aware, the tensions between the United States and Russia could impede their bilateral cooperation on this and other Arctic-related issues. Climate change […]

Last week, the value of Syria’s currency hit a record low against the dollar. On the black market in Damascus, dealers told Reuters, a dollar cost as much as 315 Syrian pounds. That wasn’t even as bad as other parts of Syria, where the currency traded for as much as 328 pounds to a dollar—a precipitous spike since the start of the year, when the rate hung around 220 pounds to the dollar. In 2011, when the uprising against Syrian President Bashar al-Assad began, it was around 47 pounds. The collapsing currency was the latest sign of the Assad regime’s […]

Chinese President Xi Jinping visited Pakistan last month to inaugurate the 1,800-mile China-Pakistan Economic Corridor (CPEC), which will stretch from the landlocked western Chinese province of Xinjiang to the Arabian Sea port city of Gwadar in Pakistan’s southwestern province of Baluchistan. The project, which includes investment deals worth up to $46 billion, has the potential to significantly alter the economic geography of the region, spur the next generation of Chinese growth and lift Pakistan out of its economic slumber. But it faces major challenges, including threats from violent ethnic separatists and jihadis, who will seek to play the role of […]