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Open Think Tank Articles
Mark Furness: South Sudan celebrated its independence Saturday, but the world’s newest state now faces massive poverty and underdevelopment. The international community must act immediately before the fledgling country becomes the latest to crash onto the list of failed states.
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Editorial Team: A meeting at the German Foreign Office brought together the heads of its 228 foreign bureaus and leading members of the German business community. The reunion highlighted the central importance of exports for Germany’s economic health and foreign policy posture. As a resource poor country, Germany must rely heavily on the strength of its export sector to remain competitive internationally. Indeed, in spite of the financial crisis, German firms have performed astonishingly well: With the annual GDP growth rate expected to reach 3.5 percent, Germany’s economic strength remains the motor behind Europe’s political salience on the world stage. It is also crucial to Germany’s continued attractiveness as a reliable partner for U.S. policies.
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Marc Saxer: To use of the window of opportunity for establishing effective global governance, Europeans should accept that not all countries are willing to cede their sovereignty, but should work to increase the representation of emerging powers in multilateral structures.
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Memo 9: Afghanistan needs a continued international commitment to ensure its security and assist in economic and social development. The US, EU and Germany must focus on training local authorities. Cooperating with Iran and the Taliban remains a point of debate.
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Survey by Wall Street Journal: Economists are now debating the extent of the recession rather than its existence. Recent statistics seem to confirm concerns.
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Global Must Read Articles
Yemen is struggling with much more than insurgents and al-Qaida cells. ++ The unemployment rate is 35% and the population growth rate is 2.5%. ++ It is necessary for Yemen to diversify its economy away from the oil and gas sectors. ++ This can be done by stabilizing the city of Aden as a prominent deep-water port and free trade zone. ++ Improving security in the mining and mineral sector will
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China’s initial stance on the Arab Spring was grounded in Mao Zedong’s five principles of co-existence: advocate stability, support state sovereignty and favor a return to normalcy. ++ From opposing Libyan intervention to abstaining in its resolution and then returning to non-interference in Syria, China’s stance on intrastate conflicts is wobbly. ++ Beijing’s behavior can be
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Europe and the US remain each other’s most important markets despite the recession. The transatlantic economy generates close to $5 trillion in total commercial sales a year and employs up to 15 million workers in mutually “onshored” jobs on both sides of the Atlantic. The transatlantic economy is the largest and wealthiest market in the world: over 50% of world GDP in terms of
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The failure of the US congressional “super-committee” to agree on a comparatively small amount of budget cuts is both embarrassing and dangerous. ++ As parties now gear up for election campaigns, the public disgust with the battle line of Congress risks turning “poisonous.” ++ Both parties know that a balance of cuts and tax increases is the answer, but they are too
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Japan’s prime minister resigned Friday, becoming the sixth Japanese leader to step down in the past five years. ++ Already beset with $200 billion in reconstruction costs after the terrible March earthquake, Tokyo also faces a looming demographic crisis and now a leadership vacuum with implications reaching across Asia. ++ As the world’s third largest economy, Japan must stop
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Ukraine has come a long way from its Soviet legacy. Now, Kiev sets its sights on EU membership. ++ With an educated labor force and a “rich foundation in science and technology” along with its energy diversification capabilities and some of the world’s most fertile soil, Ukraine is positioned to play a prosperous role in the integrated European economy. ++ Kiev must still
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The world economy now depends less on the leadership of the US and Europe, and more on the domestic consumption of large developing markets. ++ Western policymakers should be wary of new monetary stimulus, as a weaker dollar could raise inflation rates in the BRIC countries, slowing the growth of their domestic demand. ++ To support high consumption in emerging markets, Western leaders should
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Thursday’s emergency EU summit created an immediate rescue package for Greece and a sliver of hope for Italy and Spain, but the euro’s stability in the long run depends on the taxpayers. ++ The heavily devalued national bonds of indebted states should be replaced by collective eurobonds, backed by all eurozone governments, to stabilize and attract investment. ++ This is unpopular
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South Sudan will celebrate its independence as the world’s newest nation Saturday. ++ But after the confetti drops, it will immediately become one of its most underdeveloped countries. A fifty-year civil war with the north has killed millions, and ongoing skirmishes in border regions threaten to weaken the new state. ++ Despite deep hatreds between south and north, though, there are also
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Germany’s economy is humming, its exports are at an all time high, and its corporations are among the most dynamic in the world. ++ And yet, Germany finds itself isolated from the global community. It sits on the sidelines while its closest allies intervene in Libya, it balks at helping Greece and it rejects Turkey’s bid to enter the EU. In other words, Germany is afraid of changing
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Tiny Israel has long depended on the United States for military aid and security. But Israel is also vital to the economic interests of the United States. ++ Despite being smaller than the state of New Jersey, Israel is a global leader in microchip design, military technology and water recycling, and many US companies depend on Israel for critical parts and services. ++ Now, in a time of acute
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According to established financial and economic theories, the three “Baltic tigers” were the ones who got everything right, prior to the international financial crisis. Estonia, Latvia, and Lithuania kept their state sectors small, promoted privatization, and pegged their currencies to the Euro. They reformed their tax and social security and joined the European Union in 2004. Their overall goal
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Obama decided to send two high level US officials to visit Syria and participate in “preliminary conversations.” ++ The decision is a complete shift from the Bush attitude. ++ It comes as a pleasant surprise to those who believe that the US should support Syria-Israel talks and use it as a stabilizer in the region, luring Syria away from Iran and into American arms. ++ Syria is also
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Chavez’s victory at a national referendum that will end presidential term limits is no big surprise considering that he controlled all aspects of the electoral process. ++ This success does not however mean that Chavez’s position will remain immune; the economic situation is grim, the murder rate extremely high and “the only certainty is more political turmoil in the months ahead.” ++ In
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The annual appointment in the Swiss mountains to discuss the future of the world economy arrives just in time to get to the heart of the financial crisis. ++ Unfortunately newly elected President Obama will not be present ++ At his inauguration speech, however, Obama reiterated his strong commitment to a market economy. ++ The same spirit ought to accompany the experts and politicians who
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Global power is increasingly spread-out and is tipping towards Asia. ++ This shift will shape Obama’s political agenda, forcing him to distance himself from unilateralism. ++ Asia is planning an alternative to the IMF and the US must acknowledge that it is losing economic decision-making power. ++ China can help to stabilize Afghanistan as it has close economic relations with the country.
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Having used the Internet with great success during his campaign, Obama has announced plans to build up the US’ Internet infrastructure to boost the economy. ++ The US only ranks 15th in the world in access to high-speed Internet. ++ Better access would “spread knowledge, promote entrepreneurship and make this country more competitive globally.” ++ As a supporter of
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Irrespective of slow gains in basic services
as well as little success in reconstruction, the conflict in Afghanistan is
still in full swing. High civilian and military casualties, severe food
shortages, millions of Afghans facing starvation and rising unemployment are
contributing to the destabilization of the war ridden country. The Asia
Foundation has conducted a survey to ascertain how
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China is spending its $586 billion stimulus plan on infrastructure development. ++ However, a steel and concrete stimulus will not provide long-term economic growth. ++ Instead, China should equally distribute ownership rights to the remaining 119,000 state-owned enterprises, valuing around $4 billion, and create a more transparent budget process through public hearings and
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By passing an economic rescue package, Congress intended to stabilize the banking system by “purchasing illiquid mortgages and mortgage-related securities.” ++ Rising unemployment, falling house prices and European economies in crisis have averted the desired outcome. ++ However, the next administration will have less trouble dealing with challenges as it will face a “more
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The Bush administration destroyed American goodwill abroad. ++ Obama is a welcome change, but there are limits to what “soft power” can achieve. ++ White House glamour will be useless if Asia stops buying US treasury bonds. ++ As the IMF slips out of American hands, so does world economic leadership and we return to a multi-polar world. ++ Soft power counts for little without economic backing,
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Actions undertaken by governments and central banks won’t be able to adress the financial crisis as other huge risks are threatening the financial system. ++ The world has benefited from over-consuming America, but the “US engine of growth” can’t be replaced by Asia, pushing the EU into a depression. ++ There is a need for macroeconomic and fiscal coordination at the EU
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It is no wonder that Barack Obama has won the presidential elections as he understood the failures of the current administration. ++ To make up for these mistakes Obama must replace Bush’s economic bailout plan by implementing a more transparent and controlled strategy. ++ His administration must take the leading role in adressing issues of climate change and “come up with
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A US recession is inevitable but stopping global downturn should be political leaders’ top priority. ++ Expansionary policies by the surplus economies of Asia and the Middle East could offset demand decline. ++ Coordinated expansion should include policy that prevents big banks from withdrawing credit overseas and swap lines between the US, EU, Japan and all main emerging markets. ++ The
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Gordon Brown and Alistair Darling “have shown us the way through this financial crisis.” ++ The British Prime Minister and his officials lead the world in assessing the financial crisis and quickly enacting an apt solution. ++ The problem: lack of capital in the banking system; Brown’s solution: equity injections, a type of temporary nationalization, with the first commitment of funds coming to
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Washington is bankrupt, fiscally and morally. ++ Socialism is in full swing, proving the free-market Republicans hypocrites. ++ Paulson wants Congress to grant the Fed $700 billion to buy private assets. ++ Such a move will only create more financial turmoil for the US and Europe in the future. ++ Moreover, the entire G8 is a financially “spent force.” ++ Yet, ironically the political landscape
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Due to high oil prices that make transport more expensive, US companies might stop outsourcing to Asia and give Mexico another chance. ++ China’s export taxes are rising, its workers are demanding higher wages and the Chinese currency is rapidly appreciating against the USD. ++ Therefore, Mexico is the better choice, but it also has to cope with challenges such as high raw material costs and
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The debate between individualism and collectivism seemed closed after the cold war, but if collectivist societies rise economically, the outnumbered individualists won’t continue to dominate. ++ Americans usually value individuals, rights, and privacy and Asians value relationships, harmony, and duty. ++ Scientists say the Western idea of individual choice is an illusion and the real key to
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India’s slide by two places in the global competitiveness ranking from 2007 to 2008 reveals the country’s infrastructural deficiencies. ++ “The government is unable to create infrastructure needed to sustain present levels of growth” especially with respect to primary education, energy, broadband networks, access to water, health, and the environment. ++ This is a threat
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As potentially non-economic agents, SWFs are threatening to affect the efficiency of the global market economy and distort the allocation of risk and resources. ++ Governance should remain adapted to the fund’s purpose and specific political and cultural setting, but increasing net returns will require transparency, and the professionalism and accountability of management, not further
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The rise of American philanthropy and foreign investment, as well as the need for raw materials are protecting Africa’s frontier economies from international economic volatility. ++ Yet a slowdown in the US and EU could lead to the decrease of the significant cash
infusion from immigrants. ++ And investors are undependable since they fear political turmoil in formerly stable Nigeria, Kenya and
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The IMF’s need for governance reform points to the EU’s lack of management of its external monetary policy. ++ Consolidating the representation of Eurozone members on the board - currently 15 members are awkwardly split among 8 chairs - would increase effectiveness, give the EU a voting power that truly reflects the euro’s strength on bond and currency markets, and strengthen the voice of
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As a reserve currency, the US dollar’s value was only sustainable while the economy was growing. ++ As many economists expect a recession, the Fed is moving aggressively to pump more liquidity into the US banking system. ++ This and increasing trade protectionism are adversely sustaining consumption, hindering capital formation and entrepreneurship, and halting the creation of wealth necessary to
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The world financial
markets’ present bout of turbulences should not hide the long-term and often brighter
trends:
Despite
occasional crises, global financial assets have expanded continuously over the
last decades. In 2006 alone, global assets increased by 17% to 167 trillion
USD.
The
growing importance of emerging countries’ financial markets and their
increasing integration in
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The US economy is facing a post-bubble recession rather than a cyclical downturn. ++ As homebuilders and consumers - a sector representing 78% of GDP, are being hit the hardest, the Fed’s monetary easing policies which favor consumption are proving ineffective. ++ The focus should be on exports and infrastructure spending instead of attempts to maintain unsustainably high rates of personal
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The struggling US economy has become a critical issue for America’s current and future leadership. Robert Reich, a professor of public policy at the University of California at Berkeley and a former US secretary of labour, argues that presidential hopefuls need to recognize that “middle-class families have exhausted the coping mechanisms” which have kept them afloat since the 1970’s.
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Debunking five traditional myths about the European economy, Steven Hill from the Washington Post, reassesses Europe’s economic position vis-à-vis the United States and the World. The “eurosclerotic” European Union is the world’s leading economic bloc, accounting for about one-third of all trade.
Traditionally considered unattractive to investors and uncompetitive, today’s Europe outperforms
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Education is a vital part of the UK economy, says Donald MacLeod in response to a report by the British Council. The report, compiled by Dr. Pamela Lenton of the University of Sheffield, reveals that the educational sector is worth more to the UK than financial services or the automotive industry. Home to world renowned universities and independent schools, the rising number of fee-paying
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