Economics & Business Archive

The protests in Ukraine and Venezuela and the unveiling this week by Defense Secretary Chuck Hagel of the Obama administration’s budget request to Congress would appear to be separate and unrelated events. Yet they are linked by the challenge those developments pose to the strategic assumptions that serve as the foundation of the fiscal year 2015 U.S. defense budget. The United States can no longer afford a strategy that hedges against all possible risks. The fiscal crunch, combined with the need to divert an ever-growing portion of the defense budget to personnel, health and pension costs and away from procurement—particularly […]

The late Venezuelan President Hugo Chavez once tried to insult his country’s next-door neighbor Colombia by calling it the “Israel of Latin America.” But the Colombian president said he found the comparison an honor. “I admire the Israelis,” said President Juan Manuel Santos, characterizing the misfired epithet as a “compliment.” Santos made his comments last summer, when he had traveled to Israel to sign a bilateral free trade agreement. The visit, as one might expect, brought a flurry of mutually admiring remarks among the countries’ leaders. But what might have seemed as a one-off burst of flattery has continued to […]

More than anything else, grand strategy is about balancing risk. In a world of limited resources, countries cannot have everything they might like to have, or achieve everything they might like to achieve. They cannot defend perfectly against every threat, or spend robustly on every priority at home and abroad. This is why grand strategy requires policymakers to choose—to make judgments about what risks a country can accept, and what risks it cannot. This is precisely the dilemma illustrated by Secretary of Defense Chuck Hagel’s speech on the defense budget on Feb. 24. As Hagel made clear, the armed forces […]

Last week’s U.S.-Mexico-Canada trilateral summit resulted in a communique that among other things called for increased energy cooperation on the continent. In an email interview, Jed Bailey, managing partner of Energy Narrative, a research and consulting group focusing on Latin America’s energy sector, explained the recent history of and next steps for North American energy integration. WPR: What has been the recent trajectory of energy integration in North America? Jed Bailey: Energy integration across North America has steadily strengthened for several decades as cross-border trade has grown in electric power and natural gas as well as oil and oil products. […]

Three months after Iran reached an interim agreement with the U.S. and its negotiating partners in the P5+1 to limit Iranian nuclear capabilities, the two sides announced last week that they had agreed upon a framework for negotiation of a final comprehensive agreement. In remarks in Jerusalem following the announcement, U.S. Undersecretary of State for Political Affairs Wendy Sherman said that these negotiations, scheduled to begin March 17, will be “very tough” and “will go on through July.” At the same time, a report from the International Atomic Energy Agency (IAEA) assessed that, in the agency’s judgment, Iran is complying […]

When he took office in 2010, Colombian President Juan Manuel Santos trumpeted mining as a “locomotive” that would drive the economy forward. Recently though, the Santos administration dealt a series of harsh blows to the country’s No. 2 coal exporter, Alabama-based Drummond Co., in response to a series of legal blunders committed in 2013. Coming down this hard on a company like Drummond is an unprecedented move for Colombia’s government, signaling that from here on out, multinationals that come to mine the country’s natural resources could face a new, hard-line stance when they don’t play by the rules. The Drummond […]

This year started on a particularly pessimistic note in Cyprus. In December 2013, the latest attempt by the United Nations to bring the island’s Greek and Turkish Cypriot leaders back to the negotiating table had foundered. The two sides had been unable to reach an agreement on the wording of a joint statement that would have laid down the parameters for a renewed attempt to reunify the island. At the core of the dispute was a disagreement on the nature of sovereignty in any settlement. While the two sides have long agreed that any solution would see the creation of […]

Speaking to a crowd in Tel Aviv last month, former Israeli National Security Adviser Yaakov Amidror emphasized a common Israeli concern about future conflicts. “Whatever will be the scenario,” he said, Israel “will have to deal with many missiles and rockets.” But, he added, Israel now faces “a new scenario” because “the numbers now are so different.” He pointed especially to Hezbollah’s arsenal, estimated by some senior Israeli officials at 100,000 projectiles. Israel has therefore been building up its layered active defense systems, and last week an Israeli firm unveiled the newest layer at the Singapore Air Show: the laser-based […]

Why does the North Korean regime still exist, and how much longer will it last? These questions have been asked continuously for nearly a quarter-century, since the fall of the Berlin Wall in 1989 and the collapse of communist regimes in Eastern Europe, the People’s Republic of Mongolia and the Soviet Union itself over the following two years. In July 1994, North Korea’s founding leader, Kim Il Sung, died, and soon thereafter North Korea entered a period of famine that lasted three years and killed hundreds of thousands, if not millions, of North Korean citizens. Yet the regime carried on, […]

The Iranian revolution of 1979 that overthrew the last ruler of the Pahlavi dynasty was one of the largest mass movements of the 20th century. This massive “participation explosion,” however, did not culminate in the creation of a democracy. The Islamic Republic that replaced the absolute monarchy was an authoritarian populist theocracy that began to consolidate its power very rapidly in the aftermath of the revolution, liquidating all the major opposition to its monopolization of political power. With the revolution having run its course, the political behavior of the Islamic Republic vacillates between pragmatism and revolutionary idealism, maintaining ideological adherence […]

In addition to the magnificent opening ceremony and the admirable performance of the athletes on display at the Winter Olympics, Sochi has seen a remarkable show of solidarity between the host, Russian President Vladimir Putin, and his most important visitor, Chinese President Xi Jinping. The Chinese government is underscoring the foreign policy significance of Xi’s decision to go to Sochi, which marks the first time a Chinese leader has attended a major foreign sporting event. The visit is Xi’s first foreign trip this year, and Russia was also his first foreign destination after becoming president last year. Since then he […]

China’s unveiling of its fourth research base in Antarctica this weekend has produced a flurry of interest in the Chinese polar program. The broad consensus among analysts is that Beijing’s intent is more about gaining sway over long-term rule-making than furthering science. As Lily Kuo writes in Quartz, “China’s Antarctic aspirations are likely for status and more importantly, leverage over a distant future when the region opens up.” In a briefing for WPR last month, Anne-Marie Brady, editor-in-chief of the Polar Journal, outlines the impact of China’s Antarctic expansion, which also includes a newly announced fifth station. She writes: The […]

The recent International Court of Justice (ICJ) decision on the Chilean-Peruvian maritime boundary dispute closed one chapter of a trilateral territorial dispute that has festered among Chile, Peru and Bolivia for more than a century. But while Chile and Peru mend fences, similar progress between Chile and Bolivia has not materialized. Less than a decade ago, geopolitical tensions surrounding the dispute played a part in blocking Bolivia from participating in a clear market solution to Chile’s natural gas crisis. Today, that dynamic has deteriorated for Bolivia: The region’s shifting energy market realities have removed what leverage Bolivia had in its […]

Late last year, the European Union and the Russian Federation ushered in a new period of intense geopolitical rivalry, driven largely by pressure from the escalating disorder in Ukraine and the possible collapse of that country’s government. Despite assurances by top leaders of continued dialogue, the rhetoric from politicians, the press and expert communities on both sides is now disturbingly reminiscent of rivalry from Europe’s bloody past, including the run-up to World War I, exactly 100 years ago. The root causes of Russia-West confrontation over the post-Soviet space have been consistent for the past two decades. First, there is not […]

The most recent replenishment of the World Bank’s International Development Association, a fund through which the bank provides grants and loans to poor countries, involved attempts to enlist more support from the so-called emerging donors—developing countries that have only recently begun giving aid to other developing countries. In an email interview, Sadika Hameed, who works with the Project on Prosperity and Development at the Center for Strategic and International Studies, explained how developing countries contribute to each other’s economic growth through trade and aid. WPR: What has been the recent trajectory of “South-South” trade? Sadika Hameed: Following the financial crisis […]

Revelations about Russian and Chinese missile tests last month raised alarm among analysts and lawmakers. The tests underscored that cutting-edge missile systems remain an area of active competition among high-end military powers as Russia and China try to catch up with the capabilities of the United States. Russia is in the midst of an ambitious modernization of its nuclear arsenal, including the development of several new long-range missile systems. Recent Russian flight tests of a new ground-launched cruise missile, reported last week, may put Russia in violation of the 1987 Intermediate-Range Nuclear Forces (INF) Treaty. The treaty prohibits both Russia […]

With growth still lagging after the financial crisis, countries in the developed and developing worlds alike are looking to new trade agreements, closer financial integration and reforms to global economic governance to raise their economic outlooks. This WPR special report looks at the prospects for the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership, the Pacific Alliance and the future of the dollar, among other topics, through articles published in the past year. Trade and Integration Opportunity Knocks for Obama on TradeBy Edward AldenJan. 8, 2013 With TPP and TTIP, U.S. and EU Reassert Control Over Rules of Global TradeBy […]