Economics & Business Archive

Earlier this month, Mike Pompeo became the first American secretary of state to visit the Federated States of Micronesia, where he announced that Washington had begun negotiations to renew important security pacts that it maintains with several Pacific island nations. These agreements, known as Compacts of Free Association, grant the U.S. exclusive military access to the land, air and sea routes of Micronesia, as well as Palau and the Marshall Islands. China has recently tried to deepen its economic and diplomatic ties with these countries, which together are known as the Freely Associated States. In an email interview, Michael S. […]

It is a question that has lingered since the European debt crisis: Can the European Union and eurozone shore up their institutional crisis-response capabilities without another political or economic emergency to provide the impetus? If June’s eurozone summit in Brussels was any indication, the answer remains no. At the meeting, the eurozone leaders agreed to establish the Budgetary Instrument for Convergence and Competitiveness, or BICC, a mechanism that ostensibly allows the eurozone to redistribute funds among member states. But compared to the lofty ambitions of French President Emmanuel Macron and others who have long advocated for a centralized eurozone budget, […]

Is Laos on the edge of an economic boom, or a bust? Six of the 11 countries in Southeast Asia have an external debt higher than the developing world average of 26 percent of gross national income, according to a report last year by FT Confidential Research, an independent research service from the Financial Times. Laos was the worst offender, with an external debt of 93.1 percent of its GNI. Laos was also weakest when it came to its ability to repay loans. Its ratio of external debt to exports, an important indicator, was 327.9 percent. Foreign currency reserves are […]

Editor’s Note: Guest columnist Edward Alden is filling in for Kimberly Ann Elliott this week. The trade war between the United States and China has entered a new and dangerous phase. Both countries have moved from using tariffs and other trade sanctions in a reasonably strategic fashion in order to try and strengthen their negotiating position into a series of punitive measures designed to inflict significant economic harm on the other. As markets signaled last week, with stocks taking a roller coaster ride and bond yields plunging, the risks of an unconstrained economic conflict have risen substantially. Like all wars, […]

Of the many paradoxes surrounding China today, the trajectory of its massive Belt and Road Initiative has become one of the most puzzling. Even as the expansive plan has become essentially synonymous with Chinese foreign policy in general, it remains increasingly difficult to nail down with precision what, exactly, it is. The Belt and Road Initiative today is most readily identifiable as an infrastructure development program, since media coverage tends to focus on flagship projects like ports and power plants, as well as the fallout when some of them go awry. But while Chinese Communist Party leaders hail the scheme […]

Explore how U.S.-China relations have evolved in the Trump era. Download your FREE copy of U.S.-China Rivalry in the Trump Era today. Integrating China into the liberal trade order was expected to have a moderating effect on Beijing. Instead, under President Xi Jinping, China has asserted its military control over the South China Sea and cracked down on domestic dissent, all while continuing to use unfair trade practices to boost its economy. Download U.S.-China Rivalry in the Trump Era today to take a deeper look the relationship, the Trump administration’s policy, and a glimpse at what the future may hold. […]

Christine Lagarde took over the top spot at the International Monetary Fund eight years ago in the midst of two crises. The first was an internal crisis of leadership: Her predecessor, Dominique Strauss-Khan, had just been forced to step down amid sexual assault allegations, only four years into his tenure. The second crisis was external: Europe’s economy was reeling after an initial bailout of Greece hadn’t resolved its debt crisis and political tensions between Athens and Brussels threatened to upend any future deal. Now, Lagarde is leaving the fund to become the likely next chair of the European Central Bank. […]

Editor’s Note: This article is part of an ongoing series on immigration and integration policy around the world. The kingdom is looking to address high youth unemployment by pushing for the "Saudization" of certain industries, particularly in the private sector. Saudi Arabia announced plans late last month to ban foreign workers from certain jobs in the hospitality sector. The move is the latest in a series of policy shifts designed to tackle the kingdom’s high unemployment rate by boosting private sector hiring for Saudi citizens, after many years of relying on cheap foreign labor. But many analysts are skeptical that […]

Two weeks after the release of new government data showing a sharp rise in deforestation in the Brazilian Amazon, hundreds of indigenous women occupied a government building in Brasilia on Tuesday to protest what they called President Jair Bolsonaro’s “genocidal” environmental policies targeting their communities. The following day, a contingent of over 1,000 indigenous women joined some 100,000 other demonstrators in Brazil’s Women’s March on the streets of the capital. “We are all warriors on the front lines of this struggle against today’s political situation, which is so adverse to our peoples,” said Sonia Guajajara, who works with the organization […]

In this week’s editors’ discussion on Trend Lines, WPR’s Judah Grunstein, Frederick Deknatel and Laura Weiss talk about President Donald Trump’s decision to postpone a new round of tariffs on China, and what it says about his subordination of U.S. foreign policy to the needs of his reelection campaign. They also discussed the challenges facing newly elected Guatemalan President Alejandro Giammattei, and Deputy Prime Minister Matteo Salvini’s faltering attempt to force new elections in Italy. If you like what you hear on Trend Lines and what you’ve read on WPR, you can sign up for our free newsletter to get […]

Last week, the United Nations’ independent fact-finding mission on Myanmar released a new report that documents the economic interests of the Myanmar military and the global network of countries and companies that are financing the country’s genocidal “clearance operations” against the Rohingya, a predominantly Muslim ethnic minority. The report urged U.N. member states to impose an arms embargo on Myanmar and financial sanctions on the country’s military-owned companies. But according to David Scott Mathieson, a Yangon-based independent analyst who focuses on a range of human rights, conflict and peace issues in Myanmar, the mission’s findings are unlikely to significantly alter […]

Rarely has the world seen a single-day market crash like the one in Argentina this week. Investors stampeded for the exits Monday, devastating markets for Argentina’s stocks, bonds and currency, following the outcome of a primary election that strongly suggested President Mauricio Macri will lose his reelection bid. At one point, Argentina’s Merval index had dropped a staggering 48 percent, the second-biggest single-day loss anywhere in the past 70 years. When the day was over, the Merval had lost more than a third of its value, bonds had fallen 20 percent and the peso had crashed to new record lows. […]

NEWRY, Northern Ireland—One of the main attractions at the local museum in Newry, a bustling market town some 40 miles south of Belfast, is an old wooden sign. Painted on a chalky white background, its tall red letters proclaim in Irish, then in English: “Custaim: Stad, Customs: Stop.” For decades, this sign stood on the road between Newry, in Northern Ireland, and Dundalk, in the Republic of Ireland, demarking the twisting, 500-kilometer border between the two countries. The sign was taken down when Ireland and the United Kingdom joined the European Union’s single market in 1993. By the time the […]

Newly installed British Prime Minister Boris Johnson is eager to negotiate a trade deal with the United States. But should he be? And what price is he willing to pay? Other countries—China, Japan and the U.K.’s neighbors in the European Union—are all negotiating with the U.S. under duress. They seem to be doing their best to stall things for as long as possible in the hope that President Donald Trump won’t be reelected next year. By contrast, British International Trade Secretary Liz Truss and Foreign Secretary Dominic Raab came to Washington last week to push for trade negotiations to start […]

In mid-July, government officials inaugurated operations at the sprawling Mirador mine in southern Ecuador. An open-pit copper, gold and silver mine in the Zamora-Chinchipe province near the Peruvian border, Mirador’s reserves reportedly include 3.2 million tons of copper, 3.4 million ounces of gold and 27.1 million ounces of silver. The amount of copper makes it Ecuador’s largest copper mine, but still smaller than the massive copper mines in Chile and Peru. The mine, which can already produce 10,000 tons of minerals per day, is expected to increase its output to 60,000 tons per day and potentially earn the Ecuadorian government […]

As vacation photos from exotic locales pile up in Facebook and Instagram feeds this summer, it’s easy to take far-flung tourism for granted. Well-heeled friends riding elephants in Thailand or camels in Giza might as well be at the Jersey shore or beside a lake in the Adirondacks. Mass international tourism, like the free flow of goods, services, money and data, has become a hallmark of globalization. This is neither accidental nor trivial. The ability of those with means and passports to travel the world is a function of international cooperation. It is also a force for global understanding, a […]

Small, landlocked Paraguay has been engulfed in a political storm that has seen both its president and vice president nearly impeached in recent weeks. The crisis began on July 23 when Pedro Ferreira, the head of the National Electricity Administration, the state-owned energy company known as ANDE, resigned. Ferreira claimed that he was being pressured to add his signature to a secret energy deal with Brazil that had been negotiated behind closed doors by high-ranking officials in May. Ferreira described the deal as constituting “high treason.” The agreement, which was cancelled by Paraguay and Brazil on Aug. 1 as the […]