Reuters blog archive
By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Investors consider geopolitics the most important risk to financial markets over the next year. That judgment, reported in a Barclays survey this week, shows people taking greater cues from headlines than numbers.
It’s easy for market participants to work themselves into a panic. A calmer analysis suggests the level of geopolitical risk has only increased from negligible to minor over the last six months. In the bank’s similar poll of more than 900 investors at the end of last year, war and foreign policy decisions barely registered compared to hand-wringing over a diminished flood of U.S. Federal Reserve money and a weaker China.
The biggest apprehension now is that problems in Iraq will infect the whole Middle East, and then the worldwide oil market. Even including Turkey, though, the region’s economy will account for only 6 percent of global GDP measured at market prices, according to the IMF.
from Ian Bremmer:
America and China are the world’s two major powers, with the largest economies and militaries. The stakes are high for them to practice what they preach on foreign policy: their words and actions influence the global economy, as well as the behavior of allies and enemies.
The problem: Xi Jinping and Barack Obama want to have their foreign policy cake and eat it, too. For both leaders, international engagement isn’t top of mind: they want to downplay their global leadership roles in order to focus on more pressing concerns at home.
from Expert Zone:
(This piece comes from Project Syndicate. The opinions expressed are the author’s own)
Next month, India will complete its marathon election. A new government is expected to assume power at the end of May, and, if the polls prove correct, the Bharatiya Janata Party (BJP), which has named Narendra Modi as its prime ministerial candidate, will lead that government.
from Mark Leonard:
This week, Germany’s foreign policy establishment struck back against a public they say has become increasingly insular, self-satisfied and pacifist. In surprisingly blunt language, German President Joachim Gauck took to the stage last Friday at the Munich Security Conference to declare: “While there are genuine pacifists in Germany, there are also people who use Germany’s guilt for its past as a shield for laziness or a desire to disengage from the world.”
Gauck asked if Germany’s historical sins mean that it has more, rather than less, responsibility to defend the fragile foundations of an economy and a peaceful world order from which it has disproportionately benefited. In the speech, Gauck was attacking without naming the former Foreign Minister Guido Westerwelle, whose talk of a “culture of restraint” and strong opposition to euro zone bailouts were attempts to channel Germany’s public mood of disengagement.
from David Rohde:
The secretary of state's critics call him arrogant, undisciplined, and reckless -- but his relentlessness in pursuit of negotiations might produce some of the most important diplomatic breakthroughs in years.
When John Kerry succeeded Hillary Clinton as secretary of state in February, Clinton’s emotional departure from the State Department received blanket media coverage. Kerry’s arrival received next to none.
By Rob Cox and Christopher Swann
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Fracking may be changing U.S. foreign policy. The abundant supply of hydrocarbons made accessible by hydraulic fracturing has nudged the United States the closest it’s been to energy independence in a generation and also creates a buffer for the global oil price. While all of this is relatively recent, the shift may give Uncle Sam new latitude in handling knotty affairs in Syria and throughout the Middle East.
from The Great Debate:
Israel’s recent attacks on military targets in Syria have made clear the widening regional dimensions of Syria’s civil war. They have also fueled debate about whether the United States should intervene. Look, some say, Israel acts when it sets red lines, and Syria’s air defenses are easy to breach. Israel’s involvement has energized those, like Senator John McCain (R-Ariz.), who argue for U.S. military intervention in Syria. Unfortunately, the interventionists are drawing the wrong lessons from the Israeli actions.
The first misconception is that the Israeli strikes showed how Israel stands by its red lines in ways that bolster its credibility – a sharp contrast to the perceived equivocation of President Barack Obama’s stated red line that the use of chemical weapons in Syria would be a “game changer.”
from Jack Shafer:
Today's edition of the New York Times visits Tehran and reports on page one that the economic sanctions leveled against Iran by the United States are not working — if by working one means that the country shows any signs of ditching its nuclear program.
Oh, it's not like the sanctions have completely flopped: Inflation is gargantuan, and the currency has melted. But the Times reporters find that Iran's citizens have yet to riot over prices. New high-rises are rising high over Tehran and a Chinese-built highway interchange is similarly soaring. Shops are filled with goods, and new eateries seem to be opening daily. In response, the Obama administration has decided to do the thing it does when sanctions don't work (and not working is something sanctions frequently do): It's adding more sanctions. (Print headline: "U.S. Ratchets Up an Economic War Against Tehran; Web headline: "U.S. Increases Pressure of Economic War on Tehran.")
from The Great Debate:
Israel did not bomb Iran last year. Why should it happen this year?
Because it did not happen last year. The Iranians are proceeding apace with their nuclear program. The Americans are determined to stop them. Sanctions are biting, but the diplomatic process produced nothing visible in 2012. Knowledgeable observers believe there is no "zone of possible agreement." Both the United States and Iran may believe that they have viable alternatives to a negotiated agreement.
While Israel has signaled that its "red line" (no nuclear weapons capability) won't be reached before mid-2013, it seems likely it will be reached before the end of the year. President Barack Obama has refused to specify his red line, but he has made it amply clear that he prefers intensified sanctions and eventual military action to a nuclear Iran that needs to be contained and provides incentives for other countries to go nuclear. If and when he takes the decision for war, there is little doubt about a bipartisan majority in Congress supporting the effort.
from David Rohde:
The return of protests, tanks and death to the streets of Cairo this week is harrowing. So is the power of the rampant conspiracy theories that cause Muslim Brotherhood members and their secular opponents to sincerely believe they are defending Egypt’s revolution. Both sides are behaving abominably.
Criticisms of President Mohamed Mursi’s foolish and unnecessary power grab and rushed constitutional process are legitimate. So are complaints that the country’s secular opposition is poorly organized, lacks majority support and refuses to compromise.