Author: ColinTwiggs

From Yezid Sayigh:

….the convergence of multiple factors over the past two decades or more has strained the ability of many Arab states to accommodate growing pressures within longstanding power balances, making the current phase of transition inherently far more dangerous for them. Most threatening have been the explosion of populations—generating a massive youth bulge, coupled with dwindling employment opportunities, productivity, and skills, ever-widening income disparities driven by crony economic liberalization and predatory privatization, and the erosion or dissolution of social pacts under the cumulative impact. The decline in disposable surplus wealth—especially net income from oil production, but also other forms of rent—has been so sharp, indeed, that even formerly privileged patronage networks and social constituencies have suffered.

…..incumbent rulers treat constitutional frameworks as entirely malleable, capable of being moulded and remoulded endlessly to meet the obvious purpose of maintaining and legitimizing their political power. But…. this approach no longer works. In this context, contests over access to social resources and economic opportunity have become increasingly bitter in a growing number of Arab states, reflected in the intensification of communal politics—sectarian, ethnic, regional, and tribal. It is proving impossible to restore even the kind of imposed false “social peace” that held Arab states and their societies together previously, even when significant numbers of people are ready to accept the old mix of coercion and co-optation again in order to regain a semblance of normalcy and stability.

Indeed, although the previous governing order has ceased to function or is on its way out in these states, replacing them with a new set of mini-states based on partition or cantons along communal lines may not offer a real solution. Sadly the initially hopeful experiences of Iraqi Kurdistan or South Sudan, for example, merely replicated the patterns they sought to break away from. This underlines that Arab states can no longer be reconstructed according to past blueprints, even when powerful external actors attempt to restore them. A world war turned the Ottoman Arab provinces into modern nation-states a century ago, but today they are being unravelled by many, highly localized wars that have yet to run their course. Their causes long predate the Arab Spring, which has been unfairly accused by some of bringing about this grim prospect, and will result in protracted conflict, instability, and a fundamental inability to reach a new socio-political equilibrium within many Arab societies for years to come.

Read more at: http://carnegie-mec.org/2015/11/19/crisis-of-arab-nation-state/im36

Source: The Crisis of the Arab Nation-State-Carnegie Middle East Center – Carnegie Endowment for International Peace

From Mark Spiegel at the Federal Reserve Bank of San Francisco:

The recent slowdown in China’s economic growth has caused a great deal of concern, particularly among global trade partners that export to China. On November 3, China’s President Xi Jinping announced that expected real GDP growth over the next five years would be no lower than 6.5%, which is one-half percentage point lower than the previous estimate. The industrial sector has been particularly weak as it has expanded by only 0.2% over the past year. In addition, imports to China continue to fall dramatically, as shown in Figure 1. Import values in October 2015 were almost 19% lower than they were in October of the previous year.

However, a number of analysts (for example, Lardy 2015) have argued that concern about the slowdown in the Chinese economy–and the associated reduction in Chinese imports–is overblown. Instead, they point to the resilience in the country’s service sector. This sector has indeed been a source of relative strength, with reported growth of 11.9% over the past four quarters.

In this Economic Letter, I show that the strength of China’s service sector is not likely to provide much support for gross exports from the rest of the world over the short term. The steep recent decline in China’s imports is consistent with the country’s growth pattern across different sectors. There has been a strong positive relationship between slower growth in gross imports and slower growth in industrial output over the past 15 years. However, imports and service outputs do not show a significant relationship. These results hold both for imports from non-commodity exporting advanced economies and for advanced and emerging market economies that export commodities to China. Therefore, from the rest of the world’s point of view, an increase in China’s service sector does not offset a similar magnitude decline in its industrial sector….

Read more at Economic Research | Global Fallout from China’s Industrial Slowdown

From Ben Judah, author of Fragile Empire: How Russia Fell In and Out Love With Vladimir Putin:

In the summer of 2012, Vladimir Putin returned as Russia’s president, after four years of playacting as a pliant prime minister. I spent time in St Petersburg trying to sift through his murky myth. Everyone who knew him, everyone who had worked with him – I wanted to track them down. My calls usually rang unanswered. When old voices picked up they abruptly hung up on hearing my requests. It was like chasing a ghost. The old, hard-bitten police chief who worked with him in St Petersburg in the 1990s was still a little stunned by Putin’s rise. “I thought he was just an insignificant official at the time.” The city’s town-hall orator, another former colleague of Putin’s, also remained baffled. “When he became president I threw open my photo album to see us together. But he wasn’t in a single one. He’d slipped out of every frame. I sometimes wonder if he even has a reflection in the mirror.”

….Putin acknowledges that the KGB evaluated him as a man with stunted emotions. His instructors concluded he was at risk, not of succumbing to the temptations of women or drink, but because of his pervasive “lowered sense of danger”. He was also classified as a man unhelpfully unsocial…. This, I fear, is what makes him so ruthless.

Read more at:Ben Judah: The ruthlessness of Vladimir Putin

From Richard Kozul-Wright, author of Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development:

Global debt has grown some $57 trillion since the collapse of Lehman Brothers in 2008, reaching a back-breaking $199 trillion in 2014, more than 2.5 times global GDP, according to the McKinsey Global Institute……

Much of the concern about debt has been focused on the potential for defaults in the eurozone. But heavily indebted companies in emerging markets may be an even greater danger. Corporate debt in the developing world is estimated to have reached more than $18 trillion dollars, with as much as $2 trillion of it in foreign currencies. The risk is that – as in Latin America in the 1980s and Asia in the 1990s – private-sector defaults will infect public-sector balance sheets….

Read more at What To Do About Debt by Richard Kozul-Wright – Project Syndicate