by Daniel Korski | May 1, 2009 | East Asia and Pacific, Europe and Central Asia, Global system
At the G20 summit one prospect frightened most of the delegates more than their inability to stem the economic downturn: that China would emerge as the de facto “indispensible power”, to use Madeline Albright’s erstwhile phrase about the US.
China’s call for the Renmimbi to replace the dollar as the world’s reserve currency, and its limited fiscal stimulus were triumphs for Chinese diplomacy. And while delegates mingled in the Excel Centre, the Chinese navy was busy spelling out long-range ambitions, including plans to build large combat warships, next-generation aircraft and sophisticated torpedoes, the offensive intent of which should be clear to all.
So what should our China policy be? That is the question my ECFR colleagues John Fox and Francois Godement attempt to answer in a new report. I asked John, a former British diplomat and China expert a few questions. (more…)
by Alex Evans | May 1, 2009 | What we're watching
[youtube]http://www.youtube.com/watch?v=MKNbi-_Mxo8[/youtube]
by Alex Evans | May 1, 2009 | Influence and networks
John Authers has an interesting observation this morning:
For years, a global influenza epidemic was at or near the top of the list of geopolitical risks that scared markets. That epidemic is here, with each day bringing news that the risk of a pandemic has intensified. How has the market brushed it off?
The S&P 500 is up 33 per cent since its March nadir. April is on course to be the best month for US stocks since 1987. More to the point, the flu has barely dented stocks in Mexico, which plainly stands at risk of severe economic damage from a disease that has been linked to the deaths of almost 200 of its citizens. In dollar terms, Mexican stocks are down 4.5 per cent since the outbreak was confirmed, having risen 57 per cent in the preceding six weeks – a tiny impact on a market primed for a correction.
If markets can survive news like this, optimism must be well entrenched.
But is it warranted? Albert Edwards, a bearish strategist at SocGen, notes elsewhere in today’s FT that,
The current pop in the market is not dissimilar to the many bear market rallies between 1929-1933 where signs of economic stabilisation were met with strong 25 per cent rallies … This optimism was subsequently crushed.
Meanwhile, Alain de Botton is also warning against optimism today, albeit from a somewhat more philosophical perspective:
It is time to recognise how odd and counter-productive is the optimism on which we have grown up. For the last 200 years, despite occasional shocks, the western world has been dominated by a belief in progress, based on its extraordinary scientific and entrepreneurial achievements. On a broader perspective, this optimism is a grave anomaly. Humans have spent most of recorded history drawing a curious comfort from expecting the worst. In the west, lessons in pessimism have derived from two sources: Roman Stoic philosophy and Christianity. It may be time to revisit some of these teachings, not to add to our misery but precisely so as to alleviate our sorrow.
Jules has been arguing the same thing for a while, too – his interview on Stoicism with Martha Nussbaum a couple of months back is especially recommended (find it on Jules’s blog here).
by Mark Weston | May 1, 2009 | Africa, Climate and resource scarcity
Just a quickie on the Madagascar coup from a Royal Africa Society talk I attended on Tuesday. According to Volatiana Rahaga, who is president of the Association of Malagasy Residents in the UK (all 100 of them), news of South Korea’s deal to buy up a large chunk of Madagascar’s arable land may never have filtered through to the public had it not been for a pesky FT journalist.
The FT’s Javier Blas reported on the deal when the negotiations had almost finished. Until then, nobody in Madagascar knew anything about it. When members of Ms Rahaga’s group read Blas’s article, they e-mailed the news to colleagues in France (which has a much larger Malagasy diaspora). The latter then told their friends and relatives back home about it, and the brown stuff promptly hit the fan. At first, the recently-ousted president, Marc Ravalomanana, denied that any such deal was going through; when he was eventually forced to tell the truth, it was too late. Everyone assumed the worst – that he and his cronies were making millions from the plan at the expense of the Malagasy public, who not only would not be compensated but would face an increased risk of food shortages once they surrendered all that farmland.
As an environmental consultant based in Antananarivo told me, this failure to communicate the deal doomed it, and public anger about the sell-off was partly responsible for the coup that deposed Ravalomanana this spring. In today’s wired up world, it seems, even authoritarian African governments can no longer count on a monopoly on information.
by Jules Evans | May 1, 2009 | Conflict and security, Global system, Middle East and North Africa, North America
Justin Webb at the BBC speculates whether this interesting article at Salon.com by Andrew Bacevich, professor of international relations at Boston University, illustrates the “secret underpinning” of Obama’s foreign policy.
Bacevich’s article takes issue with the idea of the American century, as famously put forward by Henry Luce in a 1941 issue of Life magazine, which suggested that America should be “the Good Samaritan to the world”. Bacevich writes:
In its classic formulation, the central theme of the American Century has been one of righteousness overcoming evil. The United States (above all the U.S. military) made that triumph possible. When, having been given a final nudge on Dec. 7, 1941, Americans finally accepted their duty to lead, they saved the world from successive diabolical totalitarianisms. In doing so, the U.S. not only preserved the possibility of human freedom but modeled what freedom ought to look like.
The idea was obviously a defining influence on neo-con thinking, like the Project for a New American Century.
Bacevich suggests:
The problems with this account are twofold. First, it claims for the United States excessive credit. Second, it excludes, ignores or trivializes matters at odds with the triumphal story line.
The net effect is to perpetuate an array of illusions that, whatever their value in prior decades, have long since outlived their usefulness. In short, the persistence of this self-congratulatory account deprives Americans of self-awareness, hindering our efforts to navigate the treacherous waters in which the country finds itself at present. Bluntly, we are perpetuating a mythic version of the past that never even approximated reality and today has become downright malignant. Although Richard Cohen [a Washington Post columnist] may be right in declaring the American Century over, the American people — and especially the American political class — still remain in its thrall.
Meanwhile, the Republican party has renewed its attack of Obama’s first 100 days of foreign policy, in an advert that looks like it was made by Adam Curtis, maker of The Power of Nightmares.
