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from MacroScope:

Of Iraq and Ukraine

Barack Obama’s message that any military support for Iraq’s besieged government is contingent on Prime Minister Nuri al-Maliki taking steps to broaden his Shi'ite-dominated government may be having an impact.

Just hours after Maliki's Shi'ite allies vowed to boycott any cooperation with the biggest Sunni party and his government had accused Sunni neighbour Saudi Arabia of backing "genocide", Maliki broadcast a joint appeal for national unity alongside Sunni critics of his Shi'ite-led government.

They have tried and failed to come together before but Shi'ite, Sunni and Kurdish leaders met behind closed doors and then stood somewhat frostily before the cameras as Maliki's predecessor read a statement denouncing "terrorist powers" and supporting Iraqi sovereignty.

Russian President Vladimir Putin and his Ukrainian counterpart, Petro Poroshenko, discussed a possible ceasefire in eastern Ukraine in an overnight telephone call after Kiev said it was treating an explosion on a pipeline carrying Russian gas to the rest of Europe as a possible "act of terrorism", intended to discredit Ukraine as a reliable supplier.

from Anatole Kaletsky:

Dalian Man

The Davos economic forum, held every winter in the Swiss Alps, allows its participants to look down at the world from above: topographically because of the high-altitude location, but also symbolically, because of the high incomes, high status or high-minded rhetoric that characterize the jet-setting global elite dubbed “Davos Man” by the American political scientist, Samuel Huntington. This week, however, I discovered a sub-species of Davos Man with a very different perspective. At the “summer Davos” that the World Economic Forum now organizes every year in China, participants look at the world sideways, from the East instead of down. The shift in viewpoint is striking, even for people who travel frequently to Asia, as I do, but rarely experience such total immersion in the eastern elite’s hopes and fears.

The biggest surprise at this week’s Dalian forum was the East-West divergence of opinion on the economic outlook, both in the months ahead and in the very long term. Western economists mostly believe that developing countries in general, and China in particular, are threatened by serious financial crises as U.S. monetary policy begins to be tightened, probably as soon as the Federal Reserve Board’s meeting next week. The consensus view is that emerging economies have invested and borrowed too much, taking advantage of the Fed’s easy money and will now face painful deleveraging similar to what Europe and the U.S. experienced five years ago. This deleveraging means, in turn, that the glory days for developing economies are probably over -- and most of these countries, perhaps including China, may never escape the “middle-income trap” that has prevented further progress in many developing economies. The trap starts to hobble growth when per capita incomes rise to around $10,000 and many of the obvious opportunities for catching up with Western productivity are exhausted. China’s is $9,160 according to the IMF.

from Ian Bremmer:

What do we know about China’s new leadership?

As China obsessives know, it is tough to read tea leaves when the water is as opaque as that surrounding China’s Politburo. In the wake of the Chinese leadership transition, we’re left to sift through the news in search of answers. There is plenty we do not know about the process or what its outcome will bring, but when it comes to underlying themes we can understand, it is possible to make some predictions.

Start with solidarity. In the most telling example of Chinese political unity, the Politburo, the elite political body that makes all of China’s major decisions, went from nine people to seven to consolidate control of the political process. The Communist Party is now more unified than before and is less likely to tolerate dissent from within. The stability of the Communist Party is paramount. All else will fall in line.

from Ian Bremmer:

Rocking the vote may not rock the boat

This week -- chads willing -- Americans will finally put an end to four years’ worth of electoral Sturm und Drang. Only then can the country begin to ask the question that matters much more than who will win: Will anything change? On foreign policy, it’s increasingly clear that the answer is, for the most part, no.

Likewise, this week -- politburo willing -- the Chinese will finally put an end to a year of bureaucratic angst. The powers that be hope that once a new president is installed, the Communist Party can put months of scandal behind it (Bo Xilai’s trial and Wen Jiabao’s family fortune, to name just a couple) and start to answer the question they’re most eager to put to bed: Will anything change in a new regime? On foreign policy, it’s increasingly clear that the answer is -- you guessed it -- for the most part, no.

from Breakingviews:

Clean break could give China reformists hope

By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China could benefit from a clean break. President Hu Jintao may quit his official positions in the ruling Communist Party when new leaders come in early next year, according to a report on Reuters. That would be a change from the path of his predecessor, Jiang Zemin. It would leave the incomers more room to make their mark, and push through reforms with less distraction from factional fighting.

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