Mar 2009
US, Russia: Great Depression of Tensions?
Handshake
Signs that strained ties between Washington and Moscow may be starting to relax, but what comes of supposedly thawing relations remains to be seen, Mark C Partridge writes for Diplomatic Courier.
By Mark C Partridge for Diplomatic Courier
Over the past six years, relations between the US and Russia have declined dramatically. Despite then-President George W Bush's declaration he could look at his Russian counterpart, Vladimir Putin, and "get a sense of his soul," a yawning gap developed between the two countries as each leader became more assertive in their aims and actions.
Bush brushed aside Russian objections to the Iraq war, pressed for NATO expansion in Ukraine and Georgia, and, most egregiously for the Kremlin, pursued a missile defense shield in Poland and the Czech Republic. These moves were seen as America encroaching on Russia's traditional sphere of influence.
Putin responded by pressing for energy dominance in Eastern Europe and central Asia, and cooperated with Iran. By 2008, talk of a "new Cold War" was on the rise.
This trend looked like it would continue even though the two presidents were leaving office. Putin, an ex-KGB officer, handpicked his successor, Dmitry Medvedev, and has remained a powerful figure in Moscow's domestic and foreign policy. In August, Russia fought Georgia in the face of western condemnation.
In America, Bush's successor showed little warmth to Russia during his campaign. In the wake of the Georgian war, then Senator Barack Obama spoke of weakening Russia by lending "financial and concrete assistance" to former Soviet states and the need to reduced oil consumption "that reduces the amount of petro dollars that they [Russia] have to make mischief around the world."
However, tensions between these old nemeses look to be easing.
One reason is that the primary players are still adjusting to the new dynamics. In Russia, there are signs, though small, that the new president is stepping out of the shadow of his mentor. Medvedev, a lawyer who promised to fight corruption during his tenure, recently replaced underperforming governors, even those loyal to Putin.
He has also rebuked the prime minister for straying beyond his mandate by inserting himself into foreign policy discussions. "The final responsibility for what happens in the country and for the important decisions taken would rest on my shoulders alone and I would not be able to share this responsibility with anyone," said Medvedev.
Some hope that he will be amenable to the West and democracy at home.
Similarly, Obama has ratcheted down the bellicose rhetoric since winning the presidency in November. During his inauguration speech, he promised to "extend a hand" to traditional adversaries if they unclenched their fist. Vice President Joe Biden continued the metaphorical rapprochement at a speech celebrating the 60th anniversary of NATO, a body that Russia sees as a threat to its interests.
"The last few years have seen a dangerous drift in relations between Russia and the members of our Alliance," said Biden. "It is time to press the reset button and to revisit the many areas where we can and should work together.
"We will not agree with Russia on everything […].We will not recognize a sphere of influence.
"But the United States and Russia can disagree and still work together where our interests coincide."
He went on to list a number of areas where the two countries could cooperate, including in the fight against the Taliban and nuclear nonproliferation.
The first signs of the "hand" pressing the "reset button" arose this week on the news that the White House sent a letter to Medvedev reportedly promising to cancel the missile shield in return for cooperation in pressing Iran to stop its nuclear drive.
A Russian official stated, "Medvedev appreciated the promptness of the reply and the positive spirit of the message."
One reason for this change of tact must be the faltering economy. The stream of bad economic news for the US continues unabated. The new administration estimates the budget deficit at a record US$1.75 trillion, or 12.3 percent of the overall economy. In response, the US government is stepping back and adjusting its priorities, identifying areas and projects that are essential and shelving those that are superfluous.
Though his department received a marginal budget increase, Defense Secretary Robert Gates has set about "reducing cost, dealing with programs that are being poorly executed [...] (and ensuring) the balance between current or future needs." Analysts expect there to be cuts to a number of "white elephants," including missile defense.
Russia has also been battered by the economic storm. It was the worst performing stock market of 2008, losing over 75 percent of its value. The ruble has suffered on capital flight in the wake of the Georgian crisis and falling price of oil, costing the Kremlin billions as it fought to prop up its currency.
In this environment, both governments will be looking to maximize their efforts on primary objectives. For Obama, he clearly wants to stymie Iran's nuclear ambitions, stabilize Afghanistan, while stimulating the domestic economy.
Chatham House's Robin Niblett believes that "the United States will play to its strengths, run up less against the limits to its leadership potential and still change to its advantage the context within which its opponents must then operate."
For its part, Russia would also like to stabilize its economy, and making nice with the West could be a step towards increasing foreign investment. Thus, Moscow is more likely to cooperate and remove areas of conflict--at least with the U.S. Furthermore, its power has waned as energy prices have fallen on weak demand.
There will still be areas of conflict and concern, particularly in Eastern Europe. For example, Ukraine continues to suffer despite loans for the International Monetary Fund. The country's leadership has been pushing to enter both NATO and the European Union, much to the disgust of Putin. Given its current troubles, Ukraine would be a tempting target for increased Russia influence. By refocusing its resources and energies on major initiatives, Obama could be giving up Kiev to the Russian sphere of influence.
The question going forward will be: will these overtures come to anything?
Publisher
Diplomatic Courier (DC)
This article was published originally at The Diplomatic Courier: A Global Affairs Magazine in Washington, DC. For more articles, special reports, and global resources please visit www.diplomaticourier.org.
Copyright The Diplomatic Courier. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
| Drifting towards Recession |  |  |  |
| Written by Dike Onwuamaeze | |
| Sunday, 01 March 2009 | |
Some economic indicators show that the Nigerian economy will witness a sharp contraction this year and a possible recession next year Contrary to the anticipated growth rate of 8.9 percent projected in the 2009 budget, the Nigerian economy faces a bleak future. The economy is expected to witness a sharp contraction this year and a possible recession in 2010 if the global economic crisis continues unabated. Some vital economic indicators point to this direction. They include declining terms of trade, rising interest rate, growing inflation and deteriorating exchange rate. Others are increasing capital flight, reduction in investment level, falling crude oil prices and a return to the accumulation of foreign debt. In January, the state governments, who have a combined N700 billion budgetary deficit to contend with in the 2009 fiscal year, suffered more than 30 percent reduction in their monthly share from the federation account. “The economy may not go into recession this year. But contrary to the optimism of senior government officials, the economy may experience significant contraction in that the high growth rates recorded in the past few years may slow down significantly. And if government spending is adversely affected by dwindling finances this year, then the recessionary effect on the rest of the economy may be significant,” Mike Obadan, professor of Economics, University of Benin, said. Speaking at the recent Nigerian Economic Society’s roundtable on the implications of the global financial crisis on the Nigerian economy, Obadan said that the crisis would have an adverse effect on Nigeria through three major channels linking the Nigerian economy to those of the rest of the world. These are the goods, factor and assets markets. Viewed from the goods market angle, Obadan, who was a former director-general of the Nigeria Centre for Economic Management, said “the country is currently experiencing an adverse term of trade due to its over reliance on crude oil sales.” Nigeria, as a net exporter of oil, would enjoy the benefits of selling at a higher price, but when prices fall as is currently the case, it loses. “Changes in the world prices, whether favourable or not, will not only affect the economy by changing the standard of living but will also exert a direct impact on inflation and resource allocation within the Nigerian economy,” he said. On the assets market, the professor of economics said that Nigeria would suffer capital flight because some Nigerians would choose to keep their wealth abroad despite legal and physical obstacles. The rate of capital flight would be increased by the normal behaviour of capital to migrate to economic regions with better rewards on investment. According to him, the visible pressure from capital flight would be upward adjustment of interest rates, depreciation in the exchange rate and the depletion of the country’s foreign reserve. Obadan said that these channels that linked the country to the global economy would also bring economic contagion to Nigeria. “Contagion, relates to the transfer of financial effects across countries more strongly than economic fundamentals could explain. As a result of various channels of linkages with the rest of the world, even a country that has strong macro-economic fundamentals, good regulatory frameworks and has managed its economy well, can be a victim of global financial crisis through contagion,” he said. He averred that the current financial crisis has not only shown that globalisation is not an unmixed bag of blessings, but has also proved that unbridled free market with little or no governmental regulation is hurtful to the global economy on the long run. Its negative fallout, he said, could be more telling on developing countries, which have no safety nets to cushion its recessional impact. He suggested that the time was ripe for the unseen guiding hands of market forces to be moderated by the seen hands of government regulation. He contended further that though markets may be important and market incentives could indeed, be powerful, they were neither all pervasive nor have all the answers. In other words, the market is not a magic wand for resolving all economic problems. He said that if left unchecked, market forces could yield socially deleterious outcomes. “In the real world, in the absence of the expected checks and balances, the market system does not work perfectly,” he said. The various inadequacies of the market should provide a basis for government intervention in the free market economies. According to him, the unfettered pursuit of free market principles in the United States of America, USA, slackened government regulatory ability and rendered it ineffective to dictate and stem the financial crisis. Consequently, the crisis spread from the USA to Europe through the channels of financial globalisation to plunge the world into a crisis some analysts have described as the biggest since the Great Depression of the 1930s. Obadan pointed out that the crisis would affect Nigeria through dwindling government revenue, high inflation and interest rates as well as a return to accumulation of foreign debt. “Government’s plan to borrow $500 million from the international capital market in 2009 to finance the projected fiscal deficit, which has been approved by both chambers of the National Assembly, may mark the beginning of the country’s unsustainable debt path as it is not clear if the economic managers have learnt any lesson from the past,” he posited. He warned the Nigerian government that it could not afford to play the ostrich in the present circumstances and suggested that a contingency plan for a possible bailout of banking institutions be put in place. This would take the form of injection of funds into sick banks through shares acquisitions, which should be bought back when they recover. If the bailout becomes inevitable, it will aid the recovery from recession and ensure safety of jobs, savings and pensions. The bailout plan would serve as a hedge against any adverse effect that may result from linkages between Nigerian banks and foreign financial institutions. Even so, the economics professor insisted that the capital market should be allowed to sort itself out through market mechanism. His reason: “most of the share prices were manipulated and overpriced and did not reflect the intrinsic values of the shares. It will be hardly justifiable to use tax payers’ money to bail out speculators.” He said that the current situation demanded adherence to prudent fiscal policy from the government. According to him, the bloated and obviously unimplementable budgets, like the 2009 budget, only lend credence to Nigerian’s unseriousness as economic managers. “They portray a penchant for profligacy and corruption which makes public spending inefficient and ineffective,” he said. Nonetheless, Ndi Okereke-Onyiuke, director-general of the Nigerian Stock Exchange, NSE, is intensifying her lobby to secure a bailout for the troubled capital market. Last month, she took her campaign to the House of Representatives to impress on lawmakers the need to package a bailout plan for the market. She said that a similar package facilitated the recovery of African Petroleum few years ago.
|
Long before Tata Motors, there was Sipani’s DolphinLivemint - 22 hours ago Five years later, the Maruti 800 hit the roads and went on to transform India’s automobile industry, until then dominated by Hindustan Motors Ltd, ... Mahindra, Tata Motors in vehicle finance pact with BoBEconomic Times - Mar 20, 2009 20 Mar 2009, 2003 hrs IST, PTI MUMBAI: Auto majors Mahindra & Mahindra and Tata Motors on Friday said they have signed vehicle finance agreement with Bank ... Tata Motors ties up with Andhra Bank Hindu Business Line Tata Motors sign pact with SBBJ, Andhra Bank Rupee Times Tata Motors revs up its Nano plansCNET News - 17 minutes ago by Jonathan Skillings The Tata Nano may be small in stature, but it could be a big deal for car buyers in India. Mumbai-based automaker Tata Motors on ... Tata Motors gets environmental guidelines for Nano plantHindu - Mar 19, 2009 Gandhinagar (IANS): Tata Motors, which is building its Rs.20-billion Nano small car plant in Gujarat's Sanand, has been slapped with a list of environmental ... In Conversation: Ratan Tata on cars beyond Nano Economic Times Tata Motors Nano To Be Profitable; Delivery From JulyWall Street Journal - 4 hours ago His comments came as Tata Motors, India's largest auto maker by sales, said Monday that the first Nano owners will drive away with the minicar in July ... Nano launch lifts Tata Motors scripSify - 10 hours ago Mumbai: Shares of Tata Motors soared as much as eight per cent on the domestic bourses in the morning trade on Monday as the company is scheduled to launch ... Stocks to watch: Satyam, Tata Motors, IOCMyiris.com - 13 hours ago Blazing a new trail in the automobile sector in India, Tata Motors will launch its Rs one lakh small car, Tata Nano in Mumbai today. ... |
Pranab Mukherjee ropes in advertising agency for poll campaignHindu - 12 hours ago Kolkata (PTI): In an effort to lend a professional touch to his poll campaign in Jangipur, West Bengal Congress President Pranab Mukherjee has roped in an ... Pranab reaches Jangipur for election campaign IBNLive.com Pranab Mukherjee campaigns in West Bengal Newstrack India Pranab do not underestimate CPIM Economic Times Bengal to borrow 40% more from market despite RBI alertEconomic Times - 10 hours ago KOLKATA: West Bengal has decided to borrow 40% more in 2009-10, despite Reserve Bank of India's warning that the state may face repayment pressure from 2017 ... Congress-Trinamool tie-up a desperate move: BoseHindu - 20 hours ago KOLKATA: The electoral tie-up between the Trinamool Congress and the Congress in West Bengal for the coming Lok Sabha elections was a desperate move for ... What people want? Ask Biman, Mamata The Statesman Biman twin salvos at poll panel and US Calcutta Telegraph Congress, TMC to launch joint poll campaignEconomic Times - Mar 21, 2009 KOLKATA: External affairs minister and West Bengal Pradesh Congress Committee (WBPCC) president Pranab Mukherjee on Saturday said the Congress and Trinamool ... 'We will win at least 70% seats' Business Standard Trinamool to campaign with Cong hand, parties chalk out dream plan Expressindia.com Bengal CEO logs on to blogosphereExpressindia.com - 18 hours ago Kolkata The Chief Electoral Officer (CEO) of West Bengal has literally assumed the avatar of a CEO (Chief Executive Officer). ... Adani Wilmar eyes Rs 600 cr asset expansion over next yearBusiness Standard - 22 hours ago It plans to double the capacity of its port-based refinery unit at Haldia in West Bengal to 1600 tonnes a day by December 2009. Total outlay on the project ... Adani Wilmar looks to acquire assets Livemint Adani eyes buyouts to double capacity Calcutta Telegraph Two killed, 16 injured in West Bengal blastReuters India - Mar 18, 2009 KOLKATA (Reuters) - A blast near an insurgency-hit region of West Bengal close to the Bangladesh border killed at least two people and wounded 16 on ... One killed, nine injured in bomb blast in West Bengal Khabrein.info 1 killed, 3 injured in West Bengal blast Newspost Online West Bengal voters' lists flawed: MamataSify - Mar 19, 2009 Kolkata: Trinamool Congress chief Mamata Banerjee Thursday alleged that the voters lists in West Bengal were flawed and that a large number of people had ... Nandigram opens door for change in Bengal: Mamata Hindu Business Line 46000 bogus voters in Kolkata: Mamata Economic Times |
Climate change posersEconomic Times - Mar 15, 2009 Braving arrest with Hollywood stars is a diversion. Declaring true victory over global warming will take a lot more pragmatism, and a lot more work. The Real G20 Agenda: From Technics to PoliticsMorungExpress - Mar 20, 2009 But the sheer scale of the current recession makes them look more of a diversion than a strategy for restoring financial stability, improving global ... SFIO asks 24 cos to explain Satyam linkEconomic Times - Mar 15, 2009 Apart from SFIO, capital market regulator Sebi and ED are also independently investigating into the affairs of Satyam, which prior to the scam was India’s ... From cricket to nuclear politicsSunday Times.lk - Mar 7, 2009 The Lahore episode was a diversion from the internal politics of Sri Lanka. It is the Western provincial election campaign which is underway, ... Nepal-India Water Meet Begins in New DelhiHimalayan Times - Mar 11, 2009 A Nepali delegation led by Water Resources secretary Shankar Prasad Koirala left for the Indian capital on Wednesday. Secretary of Central Water Resources ... Hemisphere GPS Reports Record RevenuesInside GNSS - Mar 19, 2009 “Over the long term, supply and demand will favor agriculture, even without biofuel effects on prices,” Koles said, noting the diversion of some food crops ... The greening of Markets: Role of Financial MarketsMyNews.in - Mar 10, 2009 Awareness on CDM in India also continues to remains poor. ‘'The Protocol says Annex-I countries are to invest capital in renewable energy technology to be ... 'Countdown with Keith Olbermann' for March 5, 2009MSNBC - Mar 6, 2009 Meantime, Republican House Leader Boehner today is decrying the diversion without ever saying what the diversion is. REP. JOHN BOEHNER, ® HOUSE MINORITY ... Green cars could kick-start stalled motor industryguardian.co.uk - Mar 2, 2009 It will be a welcome diversion from the financial crisis," said analyst Rebecca Wright of Global Insight. But, amid all the new green models on display, ... |
Indian economy staring at deflation. Is it good news?Times of India - Mar 19, 2009 ... Indian context saying that the present trend of decline in inflation was not because of any improved efficiency in the economy but because of falling ... Record low inflation will help policy formulation: Ahluwalia India Infoline.com Economy will recover by 2010-11, says expertHindu - Mar 21, 2009 Srinivasan said here on Saturday that he foresaw Indian economy recovering by 2010-11, if the elections gave favourable results and if the monsoon was good. ... Will Indian economy recover from meltdown soon?IndianCatholic - Mar 22, 2009 By Ashok Handoo Is the Indian economy showing early signs of revival or a turnaround? It may be too early to say yes, but the figures thrown up in recent ... Nano a hit? Yes and no say US auto criticsTimes of India - 1 hour ago While Motown’s misgivings may not be germane for the Indian market, it is important for Tata’s plans to introduce European and American models of the Nano ... It's a good time for a Nano-priced car Marketplace IPL choice may be England; S Africa thinks it is 'standby'Hindu - 3 hours ago New Delhi (IANS): England appears to be the favourite to host the second edition of the Indian Premier League (IPL) as the Cricket South Africa chief ... Recession-hit England to benefit from IPL Cricketnext.com England favourites to host IPL Telegraph.co.uk Small-cap, Mid-cap stocks outperformNDTV.com - Mar 21, 2009 IMF said the Indian economy is slowing fast and the outlook for the next year remains uncertain. The main upside risk was a larger-than-anticipated impact ... Economy: Good News may Not Last Khaleej Times A deepening economic crisisHindu Business Line - 22 hours ago ... a sentiment which has been fuelled by reports of what is happening in the world outside, specifically by the fear that the Indian economy cannot be left ... Worst yet to come for Indian economy: Moody’sHindu - Mar 20, 2009 In its latest research report, Moody’s Economy.com has said: “The positive sentiment is expected to be short-lived, as India essentially only started ... Too early for India to talk about rebound: Moody's Economic Times Will slowdown impact tax collections?Business Standard - 22 hours ago Indian economy grew at 5.3 per cent in the third quarter of 2008 compared to 7.8 per cent growth in the first half, suggesting that higher GDP growth rates ... Indian economy to grow by 6 per cent 2008-09: The EconomistPress Trust of India - Mar 20, 2009 Gurgaon, Mar 20 (PTI) The Indian economy is expected to grow by 6 per cent in the current fiscal, over a percentage point below the government estimates, ... India should not fear deflation, says EIU Times of India |
Global Meltdown
It’s becoming a legacy issue for older Americans: what type of planet are we leaving our children? One of the nation’s top reporters on the environment ...
www.aarpmagazine.org/lifestyle/global_meltdown.html - 35k - Cached - Similar pages -A Global Meltdown | Mother Jones
I wrote a little post yesterday rounding up some of the bad economic news from around the world (exports plummeting in Japan, Italy rescuing ...
www.motherjones.com/kevin-drum/2009/02/global-meltdown - 86k - Cached - Similar pages -allAfrica.com: Nigeria: President - How Nigeria Can Survive Global ...
While restating that the challenges of the global economic meltdown are real, the President called on Nigerians to take advantage of it and ...
allafrica.com/stories/200903080012.html - Similar pages -BBC NEWS | Business | IMF in global 'meltdown' warning
12 Oct 2008 ... The world is facing financial "meltdown", the International Monetary Fund warns, as it offers help to credit-starved countries.
news.bbc.co.uk/2/hi/business/7665515.stm - 66k - Cached - Similar pages -Global meltdown causes rush for gold - The Financial Express
20 Oct 2008 ... New Delhi, Oct 19: The host of problems in the global economy, like the subprime meltdown, the financial crisis downturn in the equity ...
www.financialexpress.com/news/global-meltdown-causes-rush-for-gold/375354/ - 58k - Cached - Similar pages -Impact of the Global meltdown on Business in the IT/ITES sector
18 Nov 2008 ... The subprime crisis and the subsequent meltdown has been the... | Impact of the Global meltdown on Business in the IT/ITES sector ...
www.nasscom.in/Nasscom/templates/NormalPage.aspx?id=55199 - 67k - Cached - Similar pages -Global meltdown continues: Fear over future of HBOS as 100000 City ...
16 Sep 2008 ... Fear over future of HBOS after 40% share price fall while analysts warn 100000 City jobs could go.
www.guardian.co.uk/business/2008/sep/16/hbosbusiness.bankofenglandgovernor - 104k - Cached - Similar pages -Indian venture capital cos feel global meltdown heat - Money ...
29 Sep 2008 ... Indian venture capital cos feel global meltdown heat, As valuations fall and capital doesn?t come easy, pace of deals made between ...
www.livemint.com/2008/09/29213813/Indian-venture-capital-cos-fee.html - 91k - Cached - Similar pages -Global meltdown: How the cookie will crumble
23 Sep 2008 ... For the next two years the whole world, including India, is expected to reel under the effect of the current financial crisis.
www.rediff.com/getahead/2008/sep/23money.htm - 31k - Cached - Similar pages -Global meltdown causes financial tsunami
The meltdown has sent shock waves across the world, with economy after economy gasping for breath. There are rise in the number of job layoffs and cost ...
www.merinews.com/catFull.jsp?articleID=149780&catID=8&category=Business - 47k - Cached - Similar pages -
Did you mean to search for: Global meltdown
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Next |
Meltdown has adversely affected Goa economy: KamatZee News - 1 hour ago "Our economy has been effected adversely with global meltdown. The mining industry saw sluggishness in the export of iron ore from the state which is not ... Cheapest car makes official debutThe Press Association - 2 hours ago Hit by the global meltdown, Tata Motors, which owns Jaguar Land Rover, recently announced its first quarterly loss in seven years, and it hopes the Nano ... The one-lakh car Nano is here! SamayLive Nigeria’s Fast Food Sector Feels the Heat of Global MeltdownVanguard - 16 hours ago Financial Vanguard authoritatively gathered that heat arising by the meltdown has forced operators in the sector to start trimming their payrolls in the ... Bharti Airtel withstands meltdownSify - Mar 20, 2009 After tapping the high-potential metros first, the company has moved further down the pyramid into other circles. Its network now covers approximately 79 ... Will Indian economy recover from meltdown soon?IndianCatholic - Mar 22, 2009 But as Shri Pranab Mukherjee pointed out, this is a global crisis and “Global crisis requires a global response and India is playing its own role in ... Stimulus packages for corporates cannot be justified'Times of India - Mar 20, 2009 Apte was delivering the keynote address at the inaugural function of a three-day international meet on Global meltdown' organised by the University of ... Experts flay govt bailout packages Pune Newsline Designers in Delhi ready to face global meltdownLittle About - Mar 19, 2009 New Delhi, Mar 19 (ANI): Sales of luxury clothes have gone down as people have started feeling the pinch of the global economic downturn, but designers at ... A guide to G20 protests in Londonguardian.co.uk - 3 hours ago The organisers' aims are set on their website: "G20 Meltdown calls for the G20 ministers to own up to their mistakes and admit that their global dominance ... Unions press G20 to take new tack BBC News Stop these broken promises New Statesman China Voices Support For New Global Currency To Replace Dollar Prison Planet.com Global meltdown takes its toll on Nepali foreign employmentNepalnews.com - Mar 22, 2009 It seems the global economic meltdown has finally taken its toll on Nepali foreign employment sector. It is reported that the number of Nepali migrant ... Happy huesTimes of India - 2 hours ago Not just Singh, but even fashion guru Raghavendra Rathore was prodded by the widespread despair because of upsets like the global meltdown, ... Did you mean: Global meltdown |
No comments:
Post a Comment