The Globalist http://www.theglobalist.com Daily online magazine on the global economy, politics and culture Sun, 26 Apr 2015 17:22:17 +0000 en-US hourly 1 Global Migration in Perspective http://www.theglobalist.com/people-on-the-move/ http://www.theglobalist.com/people-on-the-move/#comments Sun, 26 Apr 2015 06:00:48 +0000 http://www.theglobalist.com/?p=42225 By The Globalist

Back in 1900, immigrants made up 3% of the global population. What is the percentage today?

Credit: Baigal Byamba - www.flickr.comBack in 1900, immigrants made up 3% of the global population. What is the percentage today?

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By The Globalist

Back in 1900, immigrants made up 3% of the global population. What is the percentage today?

Credit: Baigal Byamba - www.flickr.com

Back in 1900, international migrants — people living in a country other than the one they were born in — accounted for approximately 3% of the world’s population. What is the percentage today?

A. 13%
B. 10%
C. 3%
D. 1%

A. 13% is not correct.

As of 2014, 13% of the total U.S. population was born outside the United States. Within the U.S. labor force itself, the share of immigrants is slightly larger, reaching 16%. This includes both very high-skilled workers (for example, doctors, scientists, engineers and computer programmers) and lower-skilled laborers (such as construction workers, farmhands and household workers).

In the United Kingdom, too, 13% of the population is foreign-born. This figure is fairly typical for many advanced economies. It is also much lower than the shares seen in the United Arab Emirates or Qatar, where 84% and 74%, respectively, of the resident population is foreign.

Beyond their contribution to the workforce of their new countries of residence, migrant workers also contribute significantly to their original home economies, usually through international money transfers. These workers regularly divert portions of their earnings to family back home. According to World Bank data, remittances to developing countries totaled $435 billion in 2014.

B. 10% is not correct.

About 10% of the European Union’s residents were born in a country, including EU member states, other than the one where they live now.

Media headlines in Europe each day feature stories of mounting refugee populations from the wars in Syria and Libya, as well as the tragic deaths of hundreds of people perishing on boats in the Mediterranean. While these problems are real and warrant immediate policy attention, a key part of the challenge is the prevailing public perception of immigration.

In France, for example, 10% of the population is foreign-born. However, according to opinion polls, people incorrectly believe that the share is more like 28%. In the UK, the gap between reality and perception is a bit smaller, with an actual 13% share of foreigners among the country’s population compared to an imagined share of 24%.

Spain’s case is very similar to France’s: The foreign-born population’s share is 12%, but people believe it is 24% — double what it actually is.

However, for all the political hand wringing in Europe, the reality-perception gap among major countries is actually far greater in the United States. There, the public believes 32% of its population is foreign-born, 19 percentage points greater than the actual share.

This misperception might be related to the fact that the United States has absorbed the single largest share of all current global migrants: 19% worldwide reside in the United States, trailed distantly by Russia and Germany with 4% to 5% each.

C. 3% is still correct.

Global migrants make up 3% of the world’s population. This means their proportion is essentially unchanged from where it was back in 1900, even though it has never been easier to move between countries.

In fact, migrants’ 3% share of the world population has remained stable for 55 years now, essentially after the disruptions of the world wars had settled back down.

However, given the significant growth in the overall world population, the absolute number of migrants is more than four times as large today as in 1900 — approximately 215 million now, while it was 50 million back then. The number of migrants worldwide is, in fact, greater than the entire population of Brazil, the world’s fifth-most populous nation.

Much of migration today is related to huge gaps in earning potential for workers with the same qualifications in advanced economies and developing economies. For example, nurses make seven times more in Australia than in the Philippines. And accountants earn six times more in the United Kingdom than in Sri Lanka — even when measured in terms of purchasing power parity.

D. 1% is not correct.

Japan is an outlier among advanced economies, which are usually magnets for migration. Just 1% of the country’s population is foreign-born, making it one of the few wealthy nations with a migrant share lower than the global average of 3%.

Other regions close to Japan’s level are Latin America and Sub-Saharan Africa. Both are emigration source regions and have average migrant populations of 1.4% and 1.8%, respectively, from outside their regions, although internal migration is higher.

Among OECD countries, 11% of their overall population consists of migrants, a share significantly above these regions and the global average of 3%.

However, 40% of all migrants living in OECD countries today actually came from a different OECD country. (Examples include citizens of one EU member state moving to another EU state or Canadians moving to the United States.) After internal OECD immigration, a further 26% of migrants come to the OECD from Latin America, 24% from Asia and 10% from Africa.

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Peru: Going Beyond Llamas and Machu Picchu http://www.theglobalist.com/peru-going-beyond-llamas-and-machu-picchu/ http://www.theglobalist.com/peru-going-beyond-llamas-and-machu-picchu/#comments Sat, 25 Apr 2015 12:51:28 +0000 http://www.theglobalist.com/?p=42176 By Tim Harcourt

Can Peru once again prove skeptics wrong and succeed in the world economy?

Credit: Sheep"R"Us  - www.flickr.comCan Peru once again prove skeptics wrong and succeed in the world economy?

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By Tim Harcourt

Can Peru once again prove skeptics wrong and succeed in the world economy?

Credit: Sheep"R"Us  - www.flickr.com

The world has a habit of underestimating Peru. In early times, the Spanish conquistadors struggled to overcome the Incas. Even in modern times, another empire – Coca Cola – tried to take on Inca Cola, Peru’s favorite soft drink, and failed miserably.

Coke in the end had to buy Inca Cola (if you can’t beat ‘em, buy ‘em!), as Peruvian consumers had their own idea of what constitutes the real thing.

In the 1978 Football World Cup, Scotland famously claimed it was going to Argentina to win the tournament but had an early trip home thanks to Peru winning in a shock result 3-1, with two goals from the legendary Teifilo Cubillas, the “Pele of Peru.”

There’s been an impressive economic growth rate averaging around 7% over the past eight years (notwithstanding a Global Financial Crisis-affected 0.9% in 2009). Inflation has been maintained at below 4% over the past couple of years. GDP and GDP per capita income levels continue to grow.

Looking to Asia

Peru’s resources base and strong trade links to Asia – particularly China, its number one trade partner – have been an important part of this story, as well as historically sound monetary and fiscal policies.

Poverty and income distribution issues remain, however, with high levels of unemployment (the official unemployment rate is 7.9%) and under-employment.

Peru now pursues an open regime in terms of trade and foreign investment and, as a Pacific country, looks as much to Asia and the Pacific Rim as to the rest of South America.

The economic and political outlook in Peru is in the best shape it’s been in in years, with a fair bit of consensus throughout the political class on the broad direction of macroeconomic policy.

Internal politics and infrastructure

But there are the major risks, too. In addition to the fluid political situation, which always has to be watched cautiously in Peru, there are practical issues.

For instance, there is the infrastructure gap – estimated to be worth $40 to $50 billion – that is causing capacity constraints and holding back development of the resources sector and Peru’s internal and external transport links.

The usual big miners are in Peru, like BHP Billiton, Xstrata Copper, Latin Resources, Metminco and Mundo Minerals, along with global engineering firms WorleyParsons, Ausenco and SKM.

In addition to the big miners, there are mining services exporters like Gekko, Ryco Hydraulics and Caterpillar Elpyinstone, who help provide technology, training and infrastructure to Peru’s burgeoning resources sector.

There are at least 45 to 50 Australian companies with a base (office, investment or project) in Peru, around the same number as in Chile about a decade ago. Many Australian companies are now undertaking an “Andean business migration strategy” of starting in Santiago and moving up to Peru, Ecuador and, nowadays, Colombia as well.

And, outside mining, a number of other Australian companies have a presence in Peru, including Orica Chemicals and Mining, Amcor PET Packaging, Codan (radio communications) and Southern Cross Alliance (a migration service).

Tourism alone doesn’t do the trick

Peru is learning that tourism is not enough and it needs to expand its profile beyond Ilamas and Machu Picchu. How Peru should position itself to find a Latin American niche in the Asian century is a question that has been exercising the minds of leading Peruvian business figures like Jose Antonio Blanco, CEO of Citibank Peru.

Blanco participated in the worldwide launch of inPERU, which aims to tell the strong economic story of Peru in recent years to attract investment. The delegation – which includes the Central Bank Governor as well as Peruvian business and community leaders – has been hitting the boardrooms of London, Europe and the United States hard and is looking to Asia next.

Blanco says, “We are a whole new economy now and we have a good story to tell investors, but we can’t wait for them to come to Lima – we have to go to where our customers are, and our potential investors. And it has to be about Peru, part of South America, part of APEC, but a Pacific nation, too, with our eyes on Asia.”

For Peru, it’s certain worth a shot as, after all, the world has a habit of underestimating it and coming off second-best. Just ask Scotland and Coca Cola.

Editor’s Note: This feature was adapted from Trading Places: The Airport Economist’s Guide to International Business, by Tim Harcourt, New South Publishing, 2014.

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Hydro Power Over Homes in Peru http://www.theglobalist.com/hydro-power-over-homes-in-peru/ http://www.theglobalist.com/hydro-power-over-homes-in-peru/#comments Sat, 25 Apr 2015 12:48:44 +0000 http://www.theglobalist.com/?p=38218 By The Globalist

The homes of the Ashaninka people are threatened by the construction of a hydroelectric dam in Peru.

The homes of the Ashaninka people are threatened by the construction of a hydroelectric dam in Peru.

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By The Globalist

The homes of the Ashaninka people are threatened by the construction of a hydroelectric dam in Peru.

Tomás Munita, born in Chile in 1975, is an independent documentary photographer primarily interested in social and environmental issues. He has worked in Latin America, Afghanistan, India and the Middle East. He has received numerous awards, among them three World Press Photo prizes.

•  •  •

Since the early 2000s, most of those displaced have returned to inhabit their villages along the banks of the Ene River.

Now, however, they face a new peril: a 2,200-megawatt hydroelectric dam that would flood much of the river valley, and once again force thousands of people to move their homes.

Ashaninka leaders are fighting the dam, demanding through Peru’s courts that the government disclose all feasibility studies and other information about the proposed project.

Although officials say that local people would benefit from electricity generated by the dam, it is already clear that most of its power would be exported to Brazil.

Text and photographs by Tomas Munita


Victoria Kubirinketu, an Ashaninka woman who also lives in Tsiquireni, walks back to her village after collecting bananas.


Ashaninka children watch the Ene River in front of their village, Boca Sanibeni. This area would be flooded by the proposed dam.






Tomás Munita, born in Chile in 1975, is an independent documentary photographer primarily interested in social and environmental issues. He has worked in Latin America, Afghanistan, India and the Middle East. He has received numerous awards, among them three World Press Photo prizes.

The Other Hundred is a unique photo-book project (order here) aimed as a counterpoint to the Forbes 100 and other media rich lists by telling the stories of people around the world who are not rich but who deserve to be celebrated.

Its 100 photo-stories move beyond the stereotypes and cliches that fill so much of the world’s media to explore the lives of people whose aspirations and achievements are at least as noteworthy as any member of the world’s richest 1,000.

Selected from 11,000 images shot in 158 countries and submitted by nearly 1,500 photographers, The Other Hundred celebrates those who will never find themselves on the world’s rich lists or celebrity websites.

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Is the U.S. – Not Iran – to Blame in Houthi Uprising? http://www.theglobalist.com/is-the-u-s-not-iran-to-blame-in-houthi-uprising/ http://www.theglobalist.com/is-the-u-s-not-iran-to-blame-in-houthi-uprising/#comments Fri, 24 Apr 2015 06:00:56 +0000 http://www.theglobalist.com/?p=42199 By Gareth Porter

The recent Houthi arms bonanza came from Saleh, not Iran.

Credit: Mr. Ibrahem - WikiMedia CommonsThe recent Houthi arms bonanza came from Saleh, not Iran.

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By Gareth Porter

The recent Houthi arms bonanza came from Saleh, not Iran.

Credit: Mr. Ibrahem - WikiMedia Commons

As the Saudi bombing campaign against Houthi targets in Yemen continues, notwithstanding a temporary pause, the corporate media narrative about the conflict in Yemen is organized decisively around the idea that it is a proxy war between Iran on one side and the Saudis and United States on the other.

USA Today responded like Pavlov’s dog this week to a leak by Pentagon officials that it was sending the aircraft carrier USS Theodore Roosevelt to the waters off Yemen, supposedly to intercept Iranian vessels carrying weapons to the Houthis.

Missing the mark

It turned out that the warship was being sent primarily to symbolize U.S. support for the Saudis, and the Pentagon made no mention of Iranian arms when it announced the move. But the story of the U.S. navy intercepting Iranian arms was irresistible, because it fit so neatly into the larger theme of Iran arming and training the Houthis as its proxy military force in Yemen.

News stories on Yemen in recent months have increasingly incorporated a sentence or even a paragraph invoking the accusation that Iran has been arming the Houthis and using them to gain power in the Gulf.

The State Department’s principal Deputy Assistant Secretary Gerald Feierstein nourished that narrative in Congressional testimony last week, depicting Iran as having provided “financial support, weapons, training and intelligence” to the Houthis. Feierstein acknowledged that the Houthi movement is “not controlled directly by Iran,” but claimed a “significant growth in Iranian engagement” with the Houthis in the past year.

Like most popular myths, the dominant narrative of the Houthi movement as Iranian proxy in Yemen is based on a kernel of truth: The Houthis share the Iranians’ dim views of American intentions in the Middle East and have sought to take advantage of the Hezbollah model to enhance their political-military effectiveness.

Houthis rise – myth and reality

But the assumption that the Houthis have been looking to Iran to train their troops or supply their need for weapons ignores the most basic facts of their ascendance. The Houthis built up their military forces from virtually nothing to as many 100,000 troops today through a series of six wars with Yemeni government troops.

In the process, they have not only become much better trained, but have acquired a vast pool of arms from Yemen’s black market. A United Nations Experts’ report earlier this year cites estimates that Yemen is awash with 40 to 60 million weapons. The Houthis were also getting a continuing stream of modern arms directly from corrupt Yemeni military commanders from 2004 through 2010.

And in their eagerness to conform to the general theme of an Iran vs U.S.-Saudi proxy war in Yemen, the media’s treatment of alleged Iranian arms to the Houthis has ignored the fact that the Houthis had forged an alliance by early 2014 with a far larger source of arms: former President Ali Abdullah Saleh. It was that alliance that propelled the Houthis into power last September, not their ties with Iran.

After Saleh was forced to step down as president in 2012, the government supposedly reorganized the military and Saleh’s son Ahmed Ali Saleh was ousted as commander of the Republican Guard. But in fact Saleh continued to control the military through his allies in most of the command positions.

When the Houthi advanced on Sanaa last September, it was all carefully choreographed by Saleh. The Houthis were able to take one Yemeni military facility after another without a fight and enter the capital easily.

Houthi weapon bonanza – a gift from America

In the process, the Houthis acquired a new bonanza of weapons that had been provided by the United States over the previous eight years. According to Pentagon documents acquired under the Freedom of Information Act by Joseph Trevithick, the Defense Department had delivered about $500 million in military hardware to the Yemeni military from 2006 on.

The gusher of new U.S. arms included Russian-made helicopters, more than 100 Humvees with the latest armor packages, hundreds of pickup trucks, rocket propelled grenades, advanced radios, night vision goggles and millions of rounds of ammunition.

A significant part of that weaponry and equipment was scooped up by Houthi fighters on their way into Sanaa and has been visible in the months since then. When the Houthis advanced into Aden April 1, residents reported seeing four tanks and three armored vehicles as well as rocket propelled grenades.

On 29 March after the Saudi bombing campaign had begun, the Houthis were reported to have had control of the Yemeni Air Force’s 16 fighter planes, of which eleven had been destroyed by the bombing.

In light of the reality that the Houthis are already flush with American arms that may be worth as much as hundreds of millions of dollars, the flurry of media excitement over the U.S. Navy sending another warship to intercept an Iranian flotilla of arms is an odd bit of burlesque that ought to be in an embarrassment.

The one concrete allegation that has been invoked by media stories in recent months is the case of a ship called Jihan 1, said to have been laden with Iranian arms, that was intercepted in early 2013.

A Reuters story last December cited a list of all the items on board provided by a “senior Yemeni security official,” which included Katyusha rifles, RPGs-7s, tons of RDX explosives and surface-to-air missiles.

Jihan 1 – murky claims

But the Hadi government never provided any evidence that the ship was sent by Iran or was intended for the Houthis. And most of the items mentioned were not even Iranian-manufactured weapons. The one odd exception was a reference to “Iranian-made night vision goggles.”

That fact suggests that the ship was intended to provide arms to al-Qaeda in the Arabian Peninsula, which carries out large numbers of terrorist bombings and would have needed the large supplies of RDX. The Houthis, on the other hand, are not known to have used that explosive.

The UN expert panel formed to support the UN Security Council sanctions against Houthi commanders and Saleh reported that it had been “unable to independently confirm the allegation” about the Jihan 1.

The Reuters story, published months after the Houthis had acquired a large portion of the Yemeni army’s American arms, quoted a second Yemeni security official as still claiming that Iranian weapons “are still coming in by sea and there’s money coming in through transfers.”

Reuters further claimed that a “senior Iranian official,” contradicting official Iranian denials, had told the news agency that “the pace of money and arms getting to the Houthis had increased since their seizure of Sanaa.”

The official allegedly said there were hundreds of IRGC personnel training the Houthis and six Iranian military advisers in Yemen. That part of the story appears suspicious, to say the least.

A story of convenience

The politically convenient story line that the Houthis are proxies of Iran is hardly new. As a U.S. diplomatic cable from Sanaa in 2009 reveals, the Yemeni government had waged a continuing campaign for years during its wars with the Houthis to persuade the United States that Iran and Hezbollah were arming and training the Houthis, but had never produced any real evidence to support the claim.

Ties between the Houthis and Iran undoubtedly exist, driven by a common distrust of American and Saudi roles in Yemen and the Houthis’ need for an ideology that would enhance their power.

But the slack-jawed media approach to the story – starting with its refusal to put the allegations of continuing Iran arms smuggling to the Houthis in the context of the Houthis bonanza of U.S. arms – has produced the usual fog of misinformation and confusion.

Editor’s Note: This article is adapt from “Houthi arms bonanza came from Saleh, not Iran,” published on April 23, 2015 on The Middle East Eye.

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Where Are the European Googles? http://www.theglobalist.com/where-are-the-european-googles/ http://www.theglobalist.com/where-are-the-european-googles/#comments Thu, 23 Apr 2015 06:00:50 +0000 http://www.theglobalist.com/?p=35482 By Mariana Mazzucato

Innovation in Silicon Valley is driven by public funding.

Credit: Denis Cappellin - www.flickr.comInnovation in Silicon Valley is driven by public funding.

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By Mariana Mazzucato

Innovation in Silicon Valley is driven by public funding.

Credit: Denis Cappellin - www.flickr.com

A big question for the past 20 years has been: Where are the European Googles? Why are all the funky, creative, dynamic, innovative companies like Apple, Amazon, Google and Facebook coming out of the United States and not out of Europe?

The three-part answer you will often hear is: Europe has lots of culture, good food and fashion, but it is not “entrepreneurial enough.” There are not enough “garage tinkerers.” Not enough high risk venture capital funds. This is mainly because we Europeans have too much state and not enough market.

This view, fed to us on a daily basis by the media and conservative politicians, ignores the fact that all the revolutionary technologies that make, say, the iPhone so smart were actually funded by government, the U.S. one in this case. It did not engage in narrow “market fixing” policies, but pursued “mission oriented” policies that catalyzed the creation of entirely new technologies and sectors.

As I tell in my book, DAS KAPITAL DES STAATES, you can surf the web anywhere you are with your iPhone, because the internet was funded by DARPA, part of the Department of Defence in the United States. GPS on your phone can tell you where you are anywhere in the world.

That was funded by the U.S. government’s Navistar Satellite Program. Siri, iPhone 5’s voice-activated personal assistant, and the user-friendly iPhone touch screen display were both also funded by the U.S. government.

Public sector funds for private sector advancement

Indeed, the Internet and even the word “nanotechnology” came from government. Of course, you need people like Steve Jobs to turn these visions and ideas into actual products, but it is wrong to think that these geniuses came out of nowhere.

Such entrepreneurs, as well as the venture capital funds that finance them, have often “surfed” massive waves of innovation that were essentially created by public money. Not admitting this fact is putting future waves at risk.

Take a recent example, Elon Musk’s Tesla S electric car benefitted from a large government-sponsored guaranteed loan ($465 million). Today Musk is the new hero of Silicon Valley. But a similar guaranteed loan, when given to the solar company Solyndra ($500 million), did not fare well.

While everyone has heard of the latter and uses it to bash government’s inability to “pick winners,” few talk about the successful Tesla loan. Yet, failures are inevitable with innovation. For every Tesla there are 20 Solyndras. For every Internet, there are many Concordes.

But while private venture capitalists can use the profits from the wins to cover the losses, the same has not held for the state. This is because we have not admitted its role as lead risk taker. This has created a situation where we socialize only the risks, not the rewards.

How can the government recoup its investment?

Economists believe that this return to such state funded investments will come back via taxes. Indeed, the jobs created by high tech companies like Apple and Google can create higher incomes and thus higher tax revenue. This is great.

But neither Google (whose algorithm was paid for by the tax payers) nor Apple pay much tax, compared to their own income. And indeed many such companies have been leaders in lobbying government to cut taxes—precisely through the wrong narrative of who the risk takers and innovators are.

So what to do? Besides making sure we fix tax loopholes, we must also think concretely about how to create more symbiotic ecosystems, a world where government doesn’t just de-risk the private sector, but also shares in both the risks and rewards.

This might come from income-contingent loans, the government retaining some equity/shares, retention of a golden share of the intellectual property rights or other means.

But it could also come from a better “deal” between government and business, where public investments are negotiated in return for reinvestment of corporate profits back into innovation—instead of hoarding cash and/or share buybacks which are both at record levels across the United States and much of Europe.

So what should Europe do? Limit hoarding and financialization (so private profits are reinvested); use the European Investment Bank to ‘direct’ the quantitative easing of the ECB into productive investments rather than just boosting of share prices; and think up concrete ways in which public investments can be devised in a portfolio manner so some of the upside success can fund the downside losses. Socialize risks and rewards.

In magazines such as The Economist, you sometimes hear about the state as Leviathan, almost like a big monster getting in the way of innovation. The real task ahead of all of us is to make this debate less ideological.

That requires us to understand the market as an outcome of public and private interactions. Rethinking a new relationship and deal between the state and the business, which will lead to the next big wave for future surfers to benefit from.

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France’s Message to Germany: Back to the 19th Century? http://www.theglobalist.com/frances-message-to-germany-back-to-the-19th-century/ http://www.theglobalist.com/frances-message-to-germany-back-to-the-19th-century/#comments Wed, 22 Apr 2015 06:00:16 +0000 http://www.theglobalist.com/?p=42167 By Stephan Richter

France takes exception to the words of German Finance Minister Wolfgang Schaeuble.

Credit: President of the European Council  - www.flickr.comFrance takes exception to the words of German Finance Minister Wolfgang Schaeuble.

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By Stephan Richter

France takes exception to the words of German Finance Minister Wolfgang Schaeuble.

Credit: President of the European Council  - www.flickr.com

Anybody who thought that we live in the early stages of the 21st century – and not in the middle of the 19th – must be sorely disappointed about the latest round of political rallying calls from Paris.

A chorus of voices stretching from the very left to the far right of French politics is united in demanding satisfaction from the German government. They say the “honor” of France has been compromised and that an apology is in order.

Also, senior politicians argue that the German ambassador must be called in immediately to make amends by receiving a protest note from the French government.

Choice words

What caused all this hoopla? Nothing more than a remark by Germany’s (actually Francophile) finance minister, Wolfgang Schaeuble, in Washington last week during the just concluded World Bank/IMF spring meetings.

At a discussion forum at the Brookings Institution, he risked the tongue-in-cheek remark that France would benefit if its parliament were “forced” to pass the long debated economic reform measures. But, Mr. Schaeuble added, that really isn’t in the realm of possibility in a democracy.

What was intended as a friendly assist to his fellow finance minister, Michel Sapin, and economy minister Emmanuel Macron, to get reforms moving ended up being perceived in France as an affront.

Even Mr. Sapin felt that he needed to respond that “France detests to be forced” – which, of course, is not what his German colleague had meant. What Schaeuble had wondered aloud is what it will take to get things done in France – a worry that, no doubt, Sapin shares.

Mr. Schaeuble has not been challenged to a duel as yet, at least not so far. But that is about the only positive thing to be said.

This tempest in a teapot really tells the world a lot about the precarious state of politics and economic policymaking in France.

All the more so when such a remark causes the head of the governing Parti Socialiste, Jean-Christophe Cambadélis, and Florian Philippot, the Number 2 of the Front National, the extreme right wing party in France, effectively to make common cause. Jean-Luc Mélenchon, the former PS firebrand, also jumped into the fray.

Variably accusing the German finance minister of “francophobia” and “a new level of arrogance” might make political hay domestically. But it does nothing to get the pervasive lethargy unstuck that has the French body politic and economy increasingly in its firm grip.

Make no mistake about it: It is not German “arrogance” to express concerns about the hyper slow-motion reform process. Mr. Schaeuble, who was born close to the Franco-German border and still has his home there, is very familiar with trends and developments in France.

He undoubtedly knows that, contrary to what many people with a more superficial understanding of France believe, the recent electoral successes of Mr. Sarkozy’s conservative party are by no means a sign of more reform mindedness.

No better under Sarkozy

The core of the electorate of Sarkozy’s UMP (which is likely to rebrand itself soon) consists of notaries and those other “protected” professions that are the target of opening up certain high-end labor markets. Those professions are very lucrative for the people who hold such positions, while their privileges and protections impose steep costs on the rest of the French economy.

These powerful professional groups can be counted on to extract their pound of flesh from whoever will be the conservative party’s leader to take back the French presidency. They will demand to stop even these limited reforms.

In the past, France was considered a statist society and economy because it relied far too much on the powers of the state to manage its economy. Now it is statist in the sense of static – none of the vested interests want to change anything about the particulars of the formula that served them well in the past.

The inevitable result of such statism is a France that stagnates. If that occurs, all the grand plans of Mr. Juncker and the European Investment Bank to revitalize the Eurozone economy via investments won’t amount to much.

All that Mr. Schaeuble really sought to express was his desire for a France that actively pursues changes at home to promote growth.

The 19th century style choice of sending protest notes and demanding apologies is definitely not useful.

It must truly pain Mr. Schaeuble to remember the times when the Germans and the French were in a tight competition for who had the smarter fiscal policy and the more innovative companies. That is very much the Europe – and especially the France – he wants.

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Eurozone: The Battle Over What Solidarity Means http://www.theglobalist.com/eurozone-the-battle-over-what-solidarity-means/ http://www.theglobalist.com/eurozone-the-battle-over-what-solidarity-means/#comments Tue, 21 Apr 2015 06:00:12 +0000 http://www.theglobalist.com/?p=42151 By Stephan Richter

Are two divergent economic cultures clashing inside the Eurozone?

Credit: EU Council Eurozone - www.flickr.comAre two divergent economic cultures clashing inside the Eurozone?

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By Stephan Richter

Are two divergent economic cultures clashing inside the Eurozone?

Credit: EU Council Eurozone - www.flickr.com

The Eurozone is not about “morality tales,” as is often stated. That term seeks to describe a German inclination to punish other nations for malfeasance. The German government is looking ahead. It is as interested as anyone to lay the groundwork now that the right structures are found for the future.

The Germans ultimately know that they will not see the Greek debt repaid. And they are doubtful about the ability of several other nations as well.

Why agree to a write-off?

For Germans, the key question about eventually agreeing to a debt write-off (or a partial collateralization of outstanding debts, say, over the 60% or 90% of GDP) is: To what end?

The very real worry is that, even if such a painful step were to be implemented, the “game” will just begin from scratch: Nations will not live up to their commitments, even on the basis of a “clean” balance sheet and an agreed upon macroeconomic framework.

That at least is the lesson from previous episodes when the concrete benefits resulting from strong moves toward European integration, such as a lowering of interest rates after the launch of the Euro, were effectively wasted in Greece and elsewhere after the turn of the millennium.

Structural issues – from overregulation to reliance on the “job-creating abilities of a bloated state sector — were simply not addressed. Instead, the monetary benefits that were intended to “lubricate” the domestic transformation were just (ab)used to preserve the status quo.

Wolfgang Schaeuble has seen all that from up close. And despite it all, he is a firm believer of offering help, provided the nations in question are making a serious effort to mend their ways.

However, the German finance minister is also an economic and political realist. While he can’t say so out loud, he know that at the core the struggle in Europe is about this: Does Europe consist of one economic culture that, while quite apart for the time being, ultimately moves toward each other?

That was the perhaps heroic and definitely optimistic assumption when the Eurozone was launched.

Too much optimism

Or is that assumption by now unrealistic?

What the Germans – and the many nations, mostly in Europe’s north that think along similar lines – are concerned about is that there are two distinct economic cultures.

One is more consolidation-oriented, with functioning and effective public administrations. Popular will in those countries, even if begrudgingly, is prepared to make the necessary adjustments to be successful in the global economy.

The other set of countries does not have the same features and is almost constantly in crisis mode, whether they are inside the Eurozone or not.

Their elites have basically decamped financially from their country and, to add insult to injury, have much of the political system at home under control. They and other vested interests close to the state sector form an unholy alliance to stand in the way of making sensible reforms.

As a result, it is not Greece, but the outcome of reforms in France that will ultimately decide about the need to fundamentally reconsider the future shape of Europe. Greece is but an opening gambit in a much larger battle.

Assigning the required shift in economic and political thinking to a perverted love of austerity or, alternatively, to German “nationalism” is absurd.

Germany’s Social Democrats, largely following in the footsteps of their Northern European brethren, decided in 2003 to allow for far more flexibility in their labor markets than they had grown accustomed to.

That was an expression of economic realism against the backdrop of rising competition in the global economy – and by no means not an outgrowth of nationalism.

Getting solidarity right

Finally, what the battle in the Eurozone boils down to is the proper understanding of “solidarity.”

Does solidarity mean to help those who got into trouble (temporarily), due to some adverse circumstances, and who are asking their partners for some help while they are focused on fixing things at home?

Or does “solidarity” mean that nations that are essentially unwilling and/or incapable of changing their underlying economic structures and political bargaining deals can preserve their political preferences – even if they don’t have the funds or capital available to do so?

That is what key people from the Greek left to the French left believe – some God-given “right” to be financially supported by others. They are in for a rude awakening. No nation is wealthy enough to engage in such a one-minded deal. It is the proverbial bottomless pit.

And that is precisely where Mr. Schaeuble draws the line. So do most other (Northern) European nations.

Editor’s Note: This article is adapted from “Germany’s France Problem.” Published on March 15, 2015 on Politico.com.

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Greece: Help from Putin? http://www.theglobalist.com/greece-help-from-putin/ http://www.theglobalist.com/greece-help-from-putin/#comments Mon, 20 Apr 2015 15:59:41 +0000 http://www.theglobalist.com/?p=42139 By Holger Schmieding

How realistic are Greek announcements about a big energy deal with Russia?

Credit: Пресс-служба Президента России - WikiMedia CommonsHow realistic are Greek announcements about a big energy deal with Russia?

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By Holger Schmieding

How realistic are Greek announcements about a big energy deal with Russia?

Credit: Пресс-служба Президента России - WikiMedia Commons

Don’t get overly excited about a story in some Greek and German media that Athens may get a €3-5 billion cash advance from Russia soon. First, a top Russian official poured cold water over these stories over the weekend. Second, such money would probably buy Greece time to make it to July without having to choose between Grexit or accepting EU/ECB/IMF conditionality.

But it would not change the underlying situation. Greece will not have access to bond markets for a long time to come. To pay its bills and avoid Grexit, it will have to strike a deal with its official creditors — that is, Europe and the IMF.

An unlikely tale

According to media reports, the Russian money would be an advance payment on future transit fees for a natural gas pipeline to be built partly through Greece by 2019. Well, 2019 is a long way into the future.

I would be surprised if Russia were really to pay Greece such an amount of money four years in advance for a risky project which still needs to be vetted by EU regulators.

Whatever the occasional daydreams of some Greek officials, it is extremely unlikely that Athens could get the additional €25-30 billion support package which it will likely need over the next 2-3 years, before it can fund itself on markets again from any other source than Europe and the IMF.

And to get a deal with its official creditors, the new Greek government will by and large have to return to the policies of the old Samaras government which had started to bear fruit last year.

At the IMF/World Bank meetings late last week, virtually everybody seemed to be telling the Greeks that they better get their act together and strike a deal with their official creditors.

Even U.S. president Obama, after some sort of non-committal comments first, re-affirmed that message shortly after meeting the Greek finance minister.

In the end, Greek Prime Minister Tsipras will have to make up his mind what he really wants — modernize his country or crash it into the abyss of Grexit.

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GE and Siemens: What Goes Around Comes Around http://www.theglobalist.com/ge-and-siemens-what-goes-around-comes-around/ http://www.theglobalist.com/ge-and-siemens-what-goes-around-comes-around/#comments Mon, 20 Apr 2015 06:00:51 +0000 http://www.theglobalist.com/?p=42135 By Stephan Richter

A curious role reversal between the U.S.’s and Germany’s largest industrial titans.

Credit: Jud McCranie - WikiMedia CommonsA curious role reversal between the U.S.’s and Germany’s largest industrial titans.

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By Stephan Richter

A curious role reversal between the U.S.’s and Germany’s largest industrial titans.

Credit: Jud McCranie - WikiMedia Commons

For several decades, beginning in 1981 when Jack Welch became General Electric’s CEO, there was one mantra in the world of transatlantic business: Siemens, the stodgy German industrial conglomerate founded in 1847, could not hold a candle to General Electric, the hyper-successful U.S. industrial conglomerate founded in 1862.

That mantra held until just now. In mid-April 2015, the U.S. company decided to move away from its long-term strategy of relying on its financial services unit. This was done, among other reasons, to stop being designated as a SIFI – a systemically important financial institution.

This designation, intended for financial firms so large that their failure might trigger a financial crisis, brings with it stringent requirements.

A new strategy

Faced with that reality, GE’s management decided to overhaul the strategy it has been wedded to for some decades. Forthwith, GE will re-focus on its industrial businesses.

Anybody who has followed this long transatlantic saga must have been intrigued by what Patrick Jenkins, the Financial Time’s finance editor, recently wrote under the headline “GE Capital tells a cautionary tale for shadow banks.” Expanding on his (unsurprising) conclusion that GE now looks more like its smaller German rival, Siemens, he offered up this stunner:

“If Mr. Immelt is lucky, the financial unit may even end up with a return on equity on a par with the 20% that Siemens Financial Services currently boasts.”

One can rest assured that nobody at GE ever saw the day coming when such a statement would be on point. And few people at Siemens would have ever hoped for it.

Whatever the future holds, GE has come to the end of a long and circuitous, but highly profitable ride of milking its financial services unit to the hilt. It was, quite literally, the “cow” that could always be used to “support” its profit targets in case the industrial businesses did not perform as planned.

A pivotal purpose of that exercise, of course, was to “manage” the stock price. That was not just good for shareholders, but also GE’s top brass, with key parts of their compensation tied to the share price.

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The Rise — and Fall? — of Google http://www.theglobalist.com/the-rise-and-fall-of-google/ http://www.theglobalist.com/the-rise-and-fall-of-google/#comments Sun, 19 Apr 2015 06:00:04 +0000 http://www.theglobalist.com/?p=42129 By The Globalist

Google’s dominance of the internet could bring them under threat of antitrust action.

Credit: Barabas - WikiMedia CommonsGoogle’s dominance of the internet could bring them under threat of antitrust action.

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By The Globalist

Google’s dominance of the internet could bring them under threat of antitrust action.

Credit: Barabas - WikiMedia Commons

Since its founding in 1998, Google’s rise has been meteoric. But has the company grown too big? There are those who argue that its dominance of key aspects of the Internet warrants antitrust action, whether by authorities in Europe, the United States or elsewhere.

Do you know what Google’s current market share is?

A. 92%
B. 79%
C. 71%
D. 44%

A. 92% is correct.

In Europe, Google accounts for more than nine of every ten Internet searches, according to web statistics firm StatCounter. When the European Commission formally charged Google on April 15 with violating EU antitrust laws, it alleged that the company’s dominance in search enables it to harm customers and competitors by favoring its own shopping comparison services over those of its competitors.

Compared to Google’s 92% market share, the second-ranking search engine, Microsoft’s Bing, is very small. It is used for less than 3% of all Internet searches in the EU. Microsoft also provides the results for the Yahoo search engine. Taken together, Microsoft provides the results for about 5% of European searches.

One of Google’s major competitive advantages in Europe is that it operates search sites for every major European language. (There are 24 official languages in the 28-member European Union.) While competitors such as Seznam in the Czech Republic or Vinden in the Netherlands are most useful to speakers of Czech and Dutch, they are not as well known to users outside their home countries.

Microsoft, Google’s primary competitor in Internet search, is itself no stranger to Europe’s antitrust authorities. Over the past decade, the European Commission has fined Microsoft €2 billion ($2.1 billion) for failing to comply with various antitrust rulings.

B. 79% is also correct.

As of early 2015, Google accounted for 79% of the Internet searches performed on desktop and tablet computers and mobile devices in the United States. While Google is thus the dominant search engine in its home market, its lead there is decidedly smaller than in Europe.

As in Europe, the Microsoft-provided results for Bing and Yahoo had a firm hold on second place, accounting for a combined 18% of all searches conducted in the United States. Fourth-ranked AOL accounted for a mere 0.4% of searches, according to StatCounter.

Microsoft’s share of U.S. searches has increased in recent months, a shift that has come at Google’s expense. This was, however, not the result of a newfound consumer preference for Bing or Yahoo over Google.

Instead, the shift occurred after Mozilla replaced Google with Yahoo as the default search engine in its Firefox web browser, the third-most popular browser worldwide. Mozilla reportedly made the switch because Yahoo agreed to share a greater percentage of its search revenues with Mozilla than Google had.

C. 71% is also correct.

Apple gets credit for having launched the smartphone revolution with the iPhone in 2007. However, in recent years Apple has progressively lost market share to smartphones running Google’s Android operating system.

In Europe, Android runs on 71% of mobile devices, followed by Apple’s iOS (21%) and Windows Phone (7%), according to IDC, a market analysis firm. In the United States, Android is even more prevalent, accounting for 77% of the mobile operating system market, compared to Apple’s 20% and Windows’ 3%.

While Google does not charge licensing fees to phone manufacturers, the Android mobile operating system ultimately contributes to Google’s bottom-line.

Approximately 90% of the company’s $66 billion in revenues in 2014 came from advertising on its web properties. And Android devices, when signed into a Google account and running Android apps, enable the company to collect a vast amount of data on users’ tastes and purchasing habits. This allows the firm to better target ads to consumers. Google also earns significant revenues by selling apps for Android devices.

D. 44% is also correct.

Google plays a dominant role in search and smartphone operating systems in Europe and the United States. Its Chrome web browser is also the market leader among web browsers in Europe and the United States — though its lead in this market is much narrower.

Chrome — which comes with Google set as its default search engine — has a 44% market share in Europe (matching its global market share) and 37% in the United States. Worldwide, none of its competitors — including Firefox, Safari and Microsoft’s Internet Explorer — have more than 15% of the market.

But while Google enjoys dominant positions for some of its core products in Europe and the United States, its position in China, the largest and fastest growing Internet market, is much weaker.

Google had a 30% share of China’s Internet search market in 2010, when the company announced it would no longer comply with China’s request to censor results. Since then, with many Google services blocked, its share has plunged to 2%, allowing home-grown competitors Baidu (72% of searches), Haosou (12%) and Sogou (9%) to grow in popularity.

Moscow-based Yandex now accounts for 41% of Russia’s Internet searches, a strong second to Google’s 50% market share. In contrast, in India, with its large population of English-language speakers, Google accounts for virtually all Internet searches, at 97%.

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The Risk that Glows in the Dark http://www.theglobalist.com/the-risk-that-glows-in-the-dark/ http://www.theglobalist.com/the-risk-that-glows-in-the-dark/#comments Sat, 18 Apr 2015 13:08:08 +0000 http://www.theglobalist.com/?p=42125 By Martin Hutchinson

It is fairly likely that by 2030 a nuclear attack will have hit one or more major Western cities.

Credit: Hohum  - WikiMedia CommonsIt is fairly likely that by 2030 a nuclear attack will have hit one or more major Western cities.

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By Martin Hutchinson

It is fairly likely that by 2030 a nuclear attack will have hit one or more major Western cities.

Credit: Hohum  - WikiMedia Commons

The proposed U.S.-Iran treaty is a useful reminder of various nations’ nuclear ambitions. Whatever the ultimate outcome of this particular effort, here is an uncomfortable forecast to ponder carefully.

It is fairly likely – perhaps a 25% probability — that by 2030 a nuclear attack on one or more major Western cities will have taken place.

The attacker will probably be either an independent terrorist group or an anti-Western minority element of the military in a country with nuclear weapons and imperfect control of its armed forces. Such an outcome is increasingly more likely in a future where more nations become nuclear powers.

Fallout

The casualty level for such an attack will be in the hundreds of thousands in the short term, and the low millions in the long term. Higher casualty levels in the tens of millions are unlikely, assuming the attacker has not developed the more complex and sophisticated thermonuclear weapon capability.

It is also possible that one or more uses of nuclear weapons will have taken place in the Middle East or around the Muslim/Christian divide in Africa.

The “foreign policy” question of how the West should respond to such an attack will depend on its details, and is in any case well above my “pay grade.” I will focus on the equally important question of what effect such a “successful” attack will have on the global economy.

It is overwhelmingly likely that the first successful nuclear attack, or possibly the first outside the Middle East/North Africa, will be made against one of about half a dozen major global cities.

As such, its victims are likely to include a sizable number of well-known people, as well as a disproportionately high number of victims in the financial services industry, media and politics.

The precise outcome will depend on which city is targeted, as will the predominant nationality of the victims. A Paris attack would produce different victims of an attack on New York, for example, while an attack on Los Angeles would be different again.

Post-attack changes

Absent a major war, only a few cities are overwhelmingly likely to be targeted by such an attack. The main economic response in view of such a risk would be to opt for more decentralization post-haste.

Overwhelming concentrations of financial, media and political power render a city especially vulnerable to nuclear attack, while smaller concentrations in regional cities are much less likely to attract the attention of potential bombers.

Given the capabilities of modern communications, in any case, the need for physical concentration in an activity is much less than it was 30 years ago.

Thus, the rational response at this stage ought to be that vulnerable institutions would decentralize – by moving to provincial cities.

In Britain, the overwhelming dominance of London would be ended, with the Bank of England perhaps moving to Manchester, while the London Stock Exchange, really at this stage a bunch of servers and some senior management, could be relocated, say, to Birmingham.

In the United States, the Federal Reserve Bank of Kansas City might become the central nexus of the overall Fed system.

Economically, such a response would be very healthy indeed, except for the cities that risk suffering, or by that time, may have suffered an attack.

Affordable real estate

The concentration of wealth in the half-dozen “world cities” has inflated their real estate costs beyond belief, and made them almost uninhabitable for all but the very (global) rich, and impossible for the young to settle down in unless they inherit a house.

For now, the property markets in such places are serious promoters of excessive inequality and represent serious blocks against social and career mobility. Decentralizing the countries in question beyond their “trophy” cities would be a major boon.

The long-term prognostications are gloomier. Unless some mechanism is found whereby nuclear proliferation can be reversed, nuclear weapons will proliferate further.

Eventually, some group will acquire one that merely wants to spread terror, without any notable political goal, in which case the restricted list of vulnerable cities will expand to include anywhere with a substantial population.

Thus, when investors are assessing global risks from here on out, nuclear proliferation is certainly one risk they should take very seriously.

Editor’s Note: This article is adapted from an article originally published on the True Blue Will Never Stain.

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Yemen: Youth Bulges and Geopolitics http://www.theglobalist.com/yemen-youth-bulges-and-geopolitics/ http://www.theglobalist.com/yemen-youth-bulges-and-geopolitics/#comments Sat, 18 Apr 2015 06:00:07 +0000 http://www.theglobalist.com/?p=42111 By The Globalist

A youth-heavy population in Yemen could spell increased insecurity in the future.

Credit: Rod Waddington - WikiMedia CommonsA youth-heavy population in Yemen could spell increased insecurity in the future.

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By The Globalist

A youth-heavy population in Yemen could spell increased insecurity in the future.

Credit: Rod Waddington - WikiMedia Commons

Between now and 2025, 600 million youth in the developing world will compete for just 200 million jobs. Much of this shortfall will occur in majority-Arab countries. Unemployed youths can easily turn into a risk to a nation’s and an entire region’s stability and security.

We wonder: Which country in the Middle East/North Africa region has the lowest median age?

A. Yemen
B. Egypt
C. Syria
D. Palestine

A. Yemen is correct.

The median age in Yemen is 18.6 years, according to the CIA World Factbook. This means that, as of last year, almost half of the 26 million Yemenis were under 18 years of age. Yemen’s median age is 19 years below the U.S. median age and 23.3 years below that of the EU.

Yemen’s economy is small and under-developed. The country has depended for many years on dwindling oil reserves and was unable to provide enough educational opportunities or legitimate jobs for its young people. In addition, Yemen’s government has been weak for quite some time.

As a result, the country has not been in a position to pursue suitable policies to address and mitigate the challenges associated with this stark demographic reality.

Now that a full-blown civil war has unfolded in Yemen and almost a dozen countries are currently participating in military operations in the country, it has become next to impossible to tackle the issue of the youth bulge in any meaningful fashion.

Even before this recent turn of events, Yemeni children were at serious risk of enslavement and abduction for human trafficking, not just in Yemen itself, but also in neighboring Saudi Arabia and Oman. Girls are kidnapped and forced into prostitution in Saudi Arabia’s hospitality and entertainment industry.

Young boys are also at risk of being forced into domestic servitude or prostitution. They bear the additional risk of being forced to fight in Yemen’s national army, clan militias and terrorist groups that operate in the country.

B. Egypt is not correct.

The median age in Egypt is estimated at 25.1 years. That means half the country’s population of 87 million was born in 1989 or later.

In contrast to their elders, those young Egyptians grew up during an extended period of peace following the 1978 Camp David Accords. The country’s armed forces also did not participate in any overseas military actions between the 1990-91 Gulf War and its 2014-15 intervention in Libya.

However, the country’s army began major domestic deployments in 2011 during the Arab Spring, which continue to the present day.

Egypt’s economy has been stalling for some time. In part, this is due to the military’s long and deep involvement in the country’s business and investment affairs, choking market competition. Youth unemployment in Egypt — which stood at 26.3% in 2010 – rose by almost half to 39% in 2013, according to the World Bank.

The country’s large armed forces cannot indefinitely continue to absorb large cohorts of unemployed young men, as was the practice in the past. The government, after all, wants to escape its debt problems and grow the economy. For that to become a realistic prospect, the military will have to unwind itself from the economy and job market.

C. Syria is not correct.

The years of civil war in Syria since 2011 – and the extensive refugee populations displaced by it – have made it difficult to reliably gauge Syrian population statistics. The median age of Syria’s 17 million people is estimated to be 23.3 years, according to the CIA World Factbook.

The World Bank estimated Syria’s youth unemployment rate at 30% in 2013. If and when the civil war ends, this issue — along with other labor market problems — is actually likely to worsen significantly.

Not only will there be more people than jobs, but there will also likely be a mismatch between workers and required skills. The intensity and scale of Syria’s civil war have permanently altered the educational trajectories of many young people in the country.

D. Palestine is not correct.

While not a fully recognized state, Palestine – i.e., the Palestinian Arab populations of the West Bank, Gaza Strip and East Jerusalem – has a median population age of about 20 years, although exact data are hard to come by.

In 2014, about four in 10 Palestinians were no more than 14 years old, according to the Palestinian Central Bureau of Statistics. Meanwhile, a further three in 10 were between 15 and 29 years old. This means that 70% of all Palestinians in the three areas of the country were born no earlier than 1985, just before the First Intifada.

Similar to Egypt, 38% of Palestinian youth were unable to find work as of 2013, according to the World Bank. Without a peaceful and permanent resolution to the Israel-Palestine territorial dispute, most of these young people are unlikely to be able to find civilian work. The wars have destroyed infrastructure and buildings, while the border restrictions with Israel prevent Palestinian workers from crossing easily to fill Israeli job openings.

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The Sand Lords of Dubai http://www.theglobalist.com/the-sand-lords-of-dubai/ http://www.theglobalist.com/the-sand-lords-of-dubai/#comments Sat, 18 Apr 2015 06:00:02 +0000 http://www.theglobalist.com/?p=38328 By The Globalist

As the working day comes to an end, workers in Dubai congregate to enjoy a bout of wrestling in the sand.

Imran Ahmed / The Other HundredAs the working day comes to an end, workers in Dubai congregate to enjoy a bout of wrestling in the sand.

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By The Globalist

As the working day comes to an end, workers in Dubai congregate to enjoy a bout of wrestling in the sand.

Imran Ahmed / The Other Hundred

Imran came to the UAE in 1976 in 
his early teens from Bangladesh. His interest in photography began to take a serious turn in early 2009, when he took to taking photos of life on the creek,
 the historic open harbor area in Deira, Dubai.

Eighteen months later this led to 
a book titled Dubai Creek, depicting the bustling commercial activity on one of the busiest part of this water inlet that once was the city’s economic lifeline.

•  •  •

Every Friday, the day of rest in the Muslim world, under the late afternoon sun, men from across the Indian sub-continent gather at a field of sand near the fish market in Deira, Dubai.

Mostly day laborers, taxi drivers or dock workers, they are part of the 7.3 million foreigners (5.7 million of them male) living in the United Arab Emirates – nearly eight times as many as the native population of 950,000.

They come to socialize with their compatriots, sometimes to play a game of cricket, but especially to enjoy a bout of wrestling, popularly known as kushti.

For a few hours, these “sand lords” are celebrities for the transient community assembled by Dubai’s construction boom. They flex their muscles for fun, entertaining and performing as much as fighting.

Text and photographs by Imran Ahmed







Imran came to the UAE in 1976 in
 his early teens from Bangladesh. His interest in photography began to take a serious turn in early 2009 when he took to taking photos of life on the creek, 
the historic open harbor area in Deira, Dubai. Eighteen months later this led to 
a book titled Dubai Creek, depicting the bustling commercial activity on one of the busiest part of this water inlet that once was the city’s economic lifeline.

The Other Hundred is a unique photo-book project (order here) aimed as a counterpoint to the Forbes 100 and other media rich lists by telling the stories of people around the world who are not rich but who deserve to be celebrated.

Its 100 photo-stories move beyond the stereotypes and cliches that fill so much of the world’s media to explore the lives of people whose aspirations and achievements are at least as noteworthy as any member of the world’s richest 1,000.

Selected from 11,000 images shot in 158 countries and submitted by nearly 1,500 photographers, The Other Hundred celebrates those who will never find themselves on the world’s rich lists or celebrity websites.

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Greece: Still Shying Away from the Hard Decisions http://www.theglobalist.com/greece-still-shying-away-from-the-hard-decisions/ http://www.theglobalist.com/greece-still-shying-away-from-the-hard-decisions/#comments Fri, 17 Apr 2015 06:00:54 +0000 http://www.theglobalist.com/?p=42119 By Holger Schmieding

Unless Mr. Tsipras bites the bullet on tough reforms, Grexit will certainly become a reality.

Credit:  Anastasios71 - Shutterstock.comUnless Mr. Tsipras bites the bullet on tough reforms, Grexit will certainly become a reality.

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By Holger Schmieding

Unless Mr. Tsipras bites the bullet on tough reforms, Grexit will certainly become a reality.

Credit:  Anastasios71 - Shutterstock.com

The chances that Greece will present a satisfactory list of reforms by April 20, so that Eurogroup finance ministers could endorse the list at their next meeting April 24, are getting smaller by the day.

Judging by the media reports, part of the problem seems to be that the Greeks actually sitting down with the EU/ECB/IMF representatives have little authority to decide major issues or that various parts of the Greek government contradict each other.

While the inexperience of the new government may partly explain this, it could also point to a further issue: Prime Minister Tsipras still seems to be shying away from the hard decisions.

The Greek government either has to shelve most of its unaffordable election promises and continue roughly with the policies pursued by the Samaras government before. In that scenario, it can then stay in the euro easily and pave the way for a renewed economic upturn.

Otherwise, it will run out of money and will eventually have to print its own new money (Grexit).

Lose/lose for Mr. Tsipras

Whatever Mr. Tsipras ultimately decides, or into whatever corner he gets himself by delaying any hard decision, in the end he will probably get into trouble with part of his own party anyway — either with the pro-euro realists or the anti-euro hardline communists.

Tsipras’s apparent reluctance to take a hard decision, reforms or Grexit, may partly be a negotiating ploy, hoping that Eurozone finance ministers will blink first. But as the Eurozone finance ministers showed on February 20, they are highly unlikely to blink.

In the meantime, the sheer uncertainty about the fate of Greece seems to be pushing the small country into a deeper recession, ultimately weakening its bargaining position. The Grexit risk has certainly not receded over the last three weeks. There is a 30% risk of a catastrophic Grexit instead.

In view of sometimes alarmist news reports about urgent deadlines, it is important to keep one basic fact in mind: As usual in Europe, there is no hard deadline. If no agreement is struck on April 24, Eurogroup finance ministers may still endorse a Greek reform program at an ad hoc gathering shortly thereafter or at their next regular meeting on May 11.

Even if Greece were to start missing some payments in May, as may happen, it might not trigger automatic and immediate withdrawal of ECB support for the banks — provided that, by that time, Greece had finally signaled that it will by and large meet the conditions attached to new support. But it is difficult to see how the current period of limbo could drag on beyond May.

Conclusion

Mr Tsipras will have to bite the bullet of serious reforms within the next four to six weeks if he does not want to go down in history as the prime minister who pushed Greece into a catastrophic exit from Europe.

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Can Iceland Save the World? http://www.theglobalist.com/can-iceland-save-the-world/ http://www.theglobalist.com/can-iceland-save-the-world/#comments Thu, 16 Apr 2015 06:00:27 +0000 http://www.theglobalist.com/?p=42103 By Daniel Stelter

The 2008-09 financial crisis forced Iceland to come up with profoundly new banking and monetary systems.

Credit: Control Arms - www.flickr.comThe 2008-09 financial crisis forced Iceland to come up with profoundly new banking and monetary systems.

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By Daniel Stelter

The 2008-09 financial crisis forced Iceland to come up with profoundly new banking and monetary systems.

Credit: Control Arms - www.flickr.com

Just a few years ago, Iceland became a focal point in the global financial crisis, when the small country’s banking system collapsed.

Sometimes, a profound crisis leads to great new insights and strategies. Such is the case with Prime Minister Sigmundur Davíð Gunnlaugsson’s decision to have a commission of economists come up with a proposal for a fundamental reform of Iceland’s banking and monetary system.

The solution they came up with — the introduction of “sovereign money”– has applications far broader than just for tiny Iceland. Why? Because it would strip banks of their ability to create money and instead would concentrate this power with the central banks only.

This is an ambitious goal, no doubt – but it is hugely important. In today’s world, banks can create nearly unlimited quantities of money out of thin air – that’s why we speak about “fiat money.”

Note then, when you get credit from your bank, the bank does not lend you money, which was saved before by someone else. Instead, the bank just creates the money by the act of crediting your account. Accordingly, most of the money we use was actually created by private banks. Only a small proportion was created by central banks such as the Fed and the ECB.

Since 1973, when the last link of money to gold was given up, we have seen an unprecedented credit boom leading to more financial crises. The report prepared for Iceland counts 147 banking crises in 114 countries since that year.

Credit growth has been significantly higher than economic growth, leading to the current debt problems of private and public sectors.

Central banks with limited power

In spite of all the headlines around quantitative easing in Europe and tapering in the United States, not to forget Abenomics in Japan, we have to keep in mind that in today’s world, central banks have only a limited and indirect way of influencing the process of money creation in the banking sector. The Bank of England pointed to this fact just recently.

The only means of influencing the process of “credit = money creation” is by setting standards like minimum reserves and interest rates: Measures like “quantitative easing,” where central banks buy assets like bonds and stocks, hoping to influence the real economy via the so called “wealth effect.”

Up to now, quantitative easing has not worked, as we can see in the United States. Yes, asset prices have gone up and the U.S. stock market is trading at lofty levels.

But real economic activity is still below pre-crisis trend and the labor force participation rate is significantly lower. In the case of another recession, the central banks have no ammunition left to fight it, as the IMF warned in its newest report.

No true reform of the banking system

In spite of all the soothsaying, seven years after the crisis we have made no real progress in fixing our monetary system. It can hardly be counted as progress that banks have gotten even bigger and that they thus have even more potential to blackmail taxpayers to rescue them in case of a new crisis.

Governments have tried to tighten relevant regulations, but with limited effect. In the 1930s, the Glass Steagall Act put the entire set of regulations onto 37 pages.

Today’s version, the Dodd Frank Act, tries to accomplish the same on 848 pages and the implementing regulations run an estimated 30,000 pages. That is a clear sign that banks still engage in way too many and far too complex activities — and will always look for loopholes.

For all their often very public wailing, banks continue to live in the best of both worlds. Profits remain private, whereas losses – cast as the costs of an unfortunate “accident” – will be borne by the public.

Only if banks could actually go bankrupt in case of mismanagement is it possible to envisage a continuation of today’s world of private money creation. Otherwise, it is time for a change.

It is not the first time in economic history that banks have overused their ability to produce money — and that over-indebtedness leads to significant economic problems.

Facing the Great Depression, a group of professors, including Henry Simons and Irving Fisher, drafted in 1936 the “Chicago Plan.” According to them, banks should be deprived of the ability to create money on their own and rather only lend out money that is truly deposited with them by savers.

In such a system, all money would be created by the central bank only. The goal they hoped for was a smoothing of the business cycle and fewer banking crises. In addition, a shift from the old to the new monetary system would allow reducing the debt overhang significantly:

    ■  Banks would have to back all lending with central bank money. As they don’t have the central bank money right now, they would have to borrow this money from the central bank.

    ■  In order to reduce their debt with the central bank, banks would hand over the government debt that they own to the central bank, which would effectively cancel it.

A financial system that is more stable and less crisis-prone, where debt problems are solved? That sounds too good to be true. And indeed, the proposal was not implemented when it was proposed in the 1930s, due to significant counter-pressure by banks. They did not want to loose the highly profitable business of creating money.

Sovereign Money to fix all problems?

This makes it even more interesting that, a few years ago in 2012, two economists from the IMF, Jaromir Benes and Michael Kumhof, revisited the Chicago Plan of Fisher and colleagues and calculated the effects with today’s technology.

The paper is a good read and includes a brief look into the history of money.

Money was always a result of credit transactions and not a means to barter. Boom and bust cycles as well as a tendency to wealth concentration are inherent in this monetary system. Debt restructuring and a ban on interest were already well known in ancient times as described in the Bible.

Even the idea of sovereign money is not new. Luminaries such as Benjamin Franklin, David Ricardo, Thomas Jefferson and later Nobel Prize winner Milton Friedman (1967) were supportive of the idea.

The econometric analysis of the Chicago plan with today’s tools came to a convincing result:

    ■  A switch to sovereign money would work and the benefits would be higher than envisaged by Irving Fisher and colleagues.

    ■  In the case of the United States, it would even be possible to reduce parts of the private debt load as the balance sheet of the banking sector equals about 200% of GDP – more than the outstanding government debt.

    ■  According to the research, the growth rate in the United States would be higher due to lower real interest rates, lower taxes and lower costs for monitoring the credit quality of banks. The core function of banks, the efficient allocation of capital, would continue to function well.

Basically, such a switch would equal a monetization of existing debt. This does not have to be inflationary, as the money was already created in the past and would not lead to additional credits and demand.

This view is shared by experts such as Adair Turner, the former Chairman of the UK Financial Services Authority and Martin Wolf, chief economist of the Financial Times.

Not a system for all

But would such a system enjoy the trust of the public? After all, central banks have contributed to the crisis by pursuing a continuously one-sided monetary policy of lowering rates at every minor crisis. And since 2009, this has had the effect of boosting asset prices with limited benefit on the real economy.

In addition, the central banks’ actual degree of independence from governments can well be doubted. It is too tempting for politicians to use easy money to boost government spending and short-term economic growth.

In the view of Jaromir Benes and Michael Kumhof, these risks do not speak against a shift to sovereign money. Of course, one should not let criminals like John Law be in charge of the central bank or finance wars with it. He was the infamous Scot who invented a paper monetary system to solve the financial problems of the French king in 1717.

In both cases, the growth rate of money would be too high, leading to devaluation.

I still believe that, in spite of the justified criticism of central banks, especially given their poor performance in light of the financial crisis, it is worthwhile to take a deeper look at sovereign money:

    ■  It might be the best and most efficient way to deal with excess debt levels in the western world.

    ■  It would be an efficient way to limit the risks of the banking sector.

    ■  It would break the link between governments and banks.

Iceland is not alone in driving towards a shift to sovereign money.

In Switzerland a group of activists is preparing a referendum. The supporters calculate that the government would earn seven billion Swiss Francs from depriving private banks of the right of money creation and giving it to the central bank.

Applied to the U.S. economy, this would equal about $180 billion – per year!

Irrespective of the outcome of the discussions in Iceland and Switzerland, both admittedly small countries, it is an encouraging sign that we start to discuss the fundamental principles of our economic system and the role of money, credit and banks. It is time to change the system.

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China at the Crossroads http://www.theglobalist.com/china-at-the-crossroads/ http://www.theglobalist.com/china-at-the-crossroads/#comments Wed, 15 Apr 2015 06:00:56 +0000 http://www.theglobalist.com/?p=42037 By Stephen S. Roach

By continuing its economic rebalancing, China could increase the scale of its economy by trillions of dollars.

Credit: SW1994 - www.pixabay.comBy continuing its economic rebalancing, China could increase the scale of its economy by trillions of dollars.

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By Stephen S. Roach

By continuing its economic rebalancing, China could increase the scale of its economy by trillions of dollars.

Credit: SW1994 - www.pixabay.com

China is at a major crossroads on its long journey to economic development. A still sluggish post-crisis global economy is at an equally critical juncture.

In an interconnected world, shifts in one economy have important implications for others. The interplay of these challenges could well pose the greatest test for the world economy since the Great Crisis and Recession of 2008-09.

For China, there can be no turning back. Yes, the costs of structural adjustment are taking their toll on the economy. This is not a temporary development – it is likely to persist for years.

A “new normal?”

It has become fashionable to refer to China’s transformational state as a “new normal.” Yet, there is nothing normal about the challenges and risks associated with the Herculean undertaking of structural change and reform.

To call this phenomenon normal, in my opinion, implies passive acceptance of wrenching change – in effect, a recipe for complacency. This transition is literally turning China’s 30-year miracle inside out.

Slower growth is an important by-product of Chinese rebalancing. The pace of economic activity has, of course, decelerated from 10% to 7%, and should remain at that reduced pace for the foreseeable future.

This downshift need not be interpreted as a sign of weakness. By rebalancing the economy toward more slowly growing consumption and services-led activity – a time-honored characteristic of most advanced economies – China is in the early stages of a decisive transition to a more sustainable growth path.

Employment will be the acid test of China’s ability to cope with the slowdown. About 45% of China’s population still lives in rural areas. With an average of 20 million people moving from the countryside to cities each year, the economy needs to grow fast enough to absorb those workers in its urban economy.

So far, that has not been a problem. China’s urban workforce increased nearly 13.2 million, on average, in 2013-14, well above the government’s annual target of 10 million – a target that has just been reaffirmed for 2015.

An important economic rebalancing

That outcome underscores one of the most important silver linings of Chinese rebalancing – a shift to labor-intensive services. The Chinese economy benefits because services activity requires about 30% more workers per unit of GDP than manufacturing and construction, combined.

And given that the services sector now is the largest and most rapidly growing segment of the Chinese economy, slower output growth has actually been accompanied by faster-than expected employment growth.

An increasingly services-led, rebalanced Chinese economy allows the country to sidestep the risks to social stability that might normally arise from an economic slowdown. As a result, it is much better positioned to withstand the transition to the next phase of its development journey.

The alternative is unthinkable. If China were to backtrack and attempt to resurrect the old hyper-growth model fueled primarily by manufacturing, investment and exports, the perils of the dreaded middle-income trap would loom increasingly prominent in the years ahead.

Unfortunately, this is an all-too-common experience for developing economies. The exceptions come from those who have the vision and the determination to change their growth models – recognizing that what works in the early stages of development is invariably stymied as economies approach the middle-income threshold.

There can be no mistaking that China’s rebalancing strategy is aimed at avoiding that pitfall.

At the same time, it would be foolish to ignore the risks that something might go wrong in the complex and delicate operation of Chinese rebalancing. Among the possibilities are a sharper than expected slowdown in economic growth, a whiff of deflation or a shortfall of foreign demand.

Mindful of these potential problems and in recognition that China has ample ammunition available to counter them, Beijing has selectively deployed monetary and fiscal stimuli.

In light of the global currency war that is now raging, however, it would be equally wise for China to refrain from currency depreciation. In a weak global demand climate, there is little to gain from such a policy reversal and plenty to lose if it inflames long simmering anti-China protectionist sentiment.

But the greatest danger is to fixate on risks and ignore the unique opportunities of this unprecedented transformation of the Chinese economy.

The benefits of rebalancing

For China, the benefits of a successful rebalancing to services and consumer-led activity are many. These include slower and less energy and resource intensive growth, an important breakthrough in the battle against environmental degradation and pollution, as well as more equitable and inclusive growth that comes from boosting worker incomes through rural-urban migration.

For the rest of the world, a rebalanced China offers a comparable array of risks and opportunities. To the extent that services move the needle from energy- and resource-intensive production to more of a commodity-lite growth model, there will undoubtedly be pressures on major resource economies such as Australia, Canada, Russia, Brazil, New Zealand, and many African nations.

Notwithstanding these negative repercussions, the global opportunities presented by a rebalanced China are nothing short of staggering.

If, for example, China stays the course of rebalancing by boosting the services share of its GDP from 48% at present to 56% by 2025 – actually a conservative estimate of what potentially could be a much larger shift – that would result in a $12 trillion expansion in the scale of its services sector.

Under reasonable assumptions of services deregulation and tradability – the latter a new twist for today’s Internet-linked services markets – that could open up between $4 and $6 trillion of China’s coming services bonanza to multinational global services providers.

Successful conclusion of a Bilateral Investment Treaty (BIT) between the U.S. and China is the best way to assure that possibility. If, however, BIT negotiations continue to founder, the Chinese services bonanza may go elsewhere.

Conclusion

In an interdependent era of globalization, that brings the story full circle: China’s rebalancing offers the potential for a new and important source of aggregate demand in a growth-starved post-crisis world.

That could be an especially important impetus for the major developed economies in coping with their own structural agendas and the associated dangers of what some fear to be a Japanese-like “secular stagnation.”

In conclusion, there are great benefits to be had if the world seizes the opportunities presented by Chinese rebalancing – and China does its part as well. Squandering such an historic moment would be the greatest tragedy of all.

Editor’s Note:Adapted from an article published on April 10, 2015 by China’s People’s Daily.

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Candidate Clinton: The Foreign Policy Dimension http://www.theglobalist.com/clinton-in-the-bush-league-on-foreign-policy/ http://www.theglobalist.com/clinton-in-the-bush-league-on-foreign-policy/#comments Tue, 14 Apr 2015 06:00:53 +0000 http://www.theglobalist.com/?p=42054 By Stephan Richter

Hillary Clinton should shift course on her foreign policy as she launches her second presidential campaign.

Credit: Italian Embassy - www.flickr.comHillary Clinton should shift course on her foreign policy as she launches her second presidential campaign.

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By Stephan Richter

Hillary Clinton should shift course on her foreign policy as she launches her second presidential campaign.

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From a global perspective, Hillary Clinton’s instincts on foreign policy, despite serving for four years as U.S. Secretary of State and eight years as a U.S. Senator, raise serious questions about what her presidency would look like.

That finding applies completely independent of the contrived Republican Party sideshow surrounding the September 2012 events in Benghazi.

The main concern – beyond the lingering damage of her 2002 vote for the catastrophic Iraq War – is that Mrs. Clinton is an unabashed advocate not just of American exceptionalism, but of American supremacy.

In Clinton’s view, the apparent purpose of America’s existence is to lead the world. That may be standard Republican Party mantra, but Democratic candidates should be enlightened enough – and honest enough with American voters – to know better. At a minimum, the rest of the world has moved on from that notion over the past 15 years.

What such vacuous quasi-imperial leadership claims result in has been amply demonstrated by George W. Bush. One positive outcome of his ill-fated leadership is that his country now has little appetite to repeat that experience, and the world will not tolerate it.

Hillary Clinton apparently hasn’t gotten that memo yet. To inoculate herself against charges of weakness, she is reported to be keen to attract the smarter part of Mr. Bush’s foreign policy thinkers for her pursuit of a more muscular foreign policy.

She sees that approach not only as a natural extension of positioning herself as the Obama Administration’s “hawk” while serving as U.S. Secretary of State, but also tactically as protection against the Benghazi (non-)issue becoming a campaign liability.

The broader question here is whether the Democrats – or even many independents – really want a candidate to be more like the Republicans on foreign policy.

None of this augurs well for her 2016 campaign – or possible presidency – on foreign policy. That won’t keep her from clinging to her positions.

The Russian Reset

One other item she seems settled with is the now (in)famous ““reset” with Putin’s Russia. According to the widely held perception, she engaged in an attempt to manage foreign policy not based on realism, but on a desperate PR attempt to do something “new.”

In fact, it turns out that, while she had a hand in it, she basically just carried out the mission of her two bosses. Vice President Biden was the first to use the phrase “reset button” and he said it was coming from “The White House.” Then President Obama used it, in reference to missile shield deployments, days before Clinton’s presentation to the Russian Foreign Ministry.

In this case, Clinton had the misfortune of being the person in all the photographs of the debacle, which now looks quite foolish in light of the subsequent developments in Ukraine. In retrospect, it makes her appear to be a soul mate of George W. Bush, the man who famously claimed to have looked into Mr. Putin’s eyes – and discovered his “soul” (as if the latter had one).

Despite that particular incident probably not being Mrs. Clinton’s fault, it provides further fodder to those who believe constant aggressive posturing is the only way to maintain American supremacy, security or dominance. She will be tempted to meet them on their terms to avoid defending the move’s merits, rather than making a case for diplomacy over misguided shows of force.

The Russian Reset did not, as hoped, restrain Russian threats in Eastern Europe. She is not likely to want to argue for such dovish measures again, even at the risk of missing some true opportunities for reconciliation with governments less backward than Putin’s regime.

Sexism and foreign policy

Indeed, one must also feel somewhat sorry for Mrs. Clinton. She does have to cope with that peculiar American case of latent sexism, which harbors doubts about women as the top leader.

The fact that this worry has been disproven in many nations around the globe and puts the United States into uncomfortable partnership with both modern Russia and China – both very “masculine-minded” regimes – really says it all about the irrelevance of such stereotypical thinking.

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Hillary Clinton’s Arduous Road to the White House in 2016 http://www.theglobalist.com/hillary-clintons-arduous-road-to-the-white-house-in-2016/ http://www.theglobalist.com/hillary-clintons-arduous-road-to-the-white-house-in-2016/#comments Mon, 13 Apr 2015 06:00:29 +0000 http://www.theglobalist.com/?p=30199 By Stephan Richter

The Democratic Party's likely 2016 presidential nominee faces many challenges.

(Credit: JStone - Shutterstock.com)The Democratic Party's likely 2016 presidential nominee faces many challenges.

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By Stephan Richter

The Democratic Party's likely 2016 presidential nominee faces many challenges.

(Credit: JStone - Shutterstock.com)

It is said that the 2016 race to become the next President of the United States is Hillary Clinton’s to lose. And just as it was in 2008 during the primaries, she may end up doing just that.

If that were the outcome, quite a few Democrats would be shocked. Much in the spirit of Obama’s election, they feel that having a woman as president is “the next box to be checked” in U.S. history. In that endeavor and hope, they are helped by the fact that the electoral odds in Presidential races tend to favor Democrats.

It is certainly an anomaly that the very country that led the global march for equal rights for women in the 1970s still has not had a woman as head of state or of government. That puts the United States in a league with the likes of China and Russia, two very paternalistic nations – and solidly behind nations such as Brazil, Indonesia, Pakistan and Bangladesh, not to mention Germany, the UK and France.

Unperturbed, Republicans are getting ready, guns blazing. Their “Stop Hillary” campaign aims at reawakening old fears. But they must also guard against coming across as patronizing, if not misogynistic, which is a real danger for them. While they proclaim to stay away from her gender and age, one can rest assured that this will be at the center of their whispering campaign.

Image makers will play a key role. A big effort will get underway to turn every wrinkle in every close-up shot of Clinton’s face into an extra doubt about her getting to the White House. Digital cameras and HDTV are not Clinton’s ally.

To overcome the “woman” issue once and for all, Hillary Clinton decided after the 2008 race to serve as U.S. Secretary of State. However, her service in that post did nothing to allay the concerns of doubters. Clinton haters keep hating her — and, via Benghazi and the “reset” with Russia, find further cannon fodder in her time at Foggy Bottom.

She is certainly a divisive figure. Described by some as a proven “militarist” and “corporatist” (as Ralph Nader has characterized her, professing his puzzlement over how she could possibly become the Democrats’ presidential candidate), Republican operatives like to cast her as part of a liberal-progressive cabal.

If nothing else, this underscores how deeply divided U.S. society really is. And how confused or careless people are about throwing around political labels.

Key Questions

Despite all that, Hillary Clinton is widely described as well prepared for the job – and she may very well be. Still, the list of doubtful questions is long indeed:

• How much in tune with the American people can a candidate be who has lived in a bubble of deference and behind a very strict U.S. Secret Service curtain at least since early 1991 – a full quarter century by the time of the election?

• How well does a woman connect with “the people” when raking in as much as $400,000 per speech, not just from corporations and business associations, but even universities?

• Further, at a time when many Democratic voters still have a hard time making ends meet, are they really comfortable with the idea of the Clintons as some kind of Democratic Party royalty?

And speaking of the Clintons, Hillary may have all of Bill’s intelligence, but she also has a spectacularly tin ear. Bill, as his personal transgressions have shown, is a very vain man. However, in contrast to his wife, he manages to mask that masterfully.

He is a natural born communicator. Hillary can drone on with a sense of entitlement to the throne that even Democrats find off-putting. All too often, when trying to be folksy, she comes across as studied, numbingly so.

In Washington and elsewhere, she is well known, even at policy events and dinner tables, to turn her attention, laser-like, just to the one or two people with deep pockets. It is as if she looks right through the others.

To avoid further feeding that impression of being ice-cold, she is planning to go on a listening tour in Iowa. In a reprise of what she did when she successfully ran to become U.S. Senator from New York, she wants to meet with voters in small groups and come across as genuine and approachable.

And even though Mr. Bush has been busily burnishing his conservative credentials with Republican primary voters, he has managed to speak rather authentically about voters’ concerns, while the presumption with Mrs. Clinton is always that this is a studied demeanor.

Personalities aside, what also plays out unfavorably for Hillary Clinton, even among Democratic voters, is that there is an assumption that it is ok for Republican Party candidates to come from rich and well-connected families, as is the case with the Bushes.

But when that wealth was not inherited, but made by the family itself, then it seems to have a stench of inappropriateness about it, even though the Bushes and the Clintons mainly made their money due to their connections.

The barbecue test

The ultimate test for presidential candidates in the United States is whom voters would rather want to have over in their backyard for an afternoon barbecue.

It is in this domain that Mr. Bush, her presumable Republican opponent, faces an advantage. He is the more affable guy (yes, guy), while Hillary faces a likability challenge.

This is an issue that may only break in the polls very late, as late as when people enter the voting booth. In a reflection of the surprising conservatism of American society, which is often considered so cutting edge (and, in many ways, is), there is still nervousness about a woman as commander-in-chief.

Despite several TV series and movies softening up the American people for a woman president, a doubt persists. It will be overcome one day — and shouldn’t even be factor in 2016. But it is.

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The Liberation of Bergen-Belsen: A Survivor Remembers http://www.theglobalist.com/the-liberation-of-bergen-belsen-a-survivor-remembers/ http://www.theglobalist.com/the-liberation-of-bergen-belsen-a-survivor-remembers/#comments Sun, 12 Apr 2015 06:00:16 +0000 http://www.theglobalist.com/?p=41891 By Frank Vogl

70 years later, a survivor of the atrocities of WWII recalls her experience.

Credit: Frank Vogl70 years later, a survivor of the atrocities of WWII recalls her experience.

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By Frank Vogl

70 years later, a survivor of the atrocities of WWII recalls her experience.

Credit: Frank Vogl

On April 15, 2015 it will be the 70th anniversary of the liberation by the British army of the Bergen-Belsen concentration camp in Germany. The famous British journalist, Richard Dimbleby, reported on BBC radio at the time, “I found myself in the world of a nightmare.”

I am writing this column as I listen to a recently released Supraphon CD by my cousin, Zuzana Ruzickova, as she plays Johann Sebastian Bach’s Chromatic Fantasia and Fugue in D minor. Madame Ruzickova is 88 today and lives in Prague and for close to 60 years, until her retirement a few years ago, she was one of the world’s most acclaimed harpsichord performers.

Her enormous global success is all the more remarkable, as she was constantly oppressed in Czechoslovakia for more than 40 years by the communist regime for being a Jew who refused to join the Communist party. She was a survivor of Terezin and Auschwitz and Nazi slave labor in Hamburg. Zuzana was a prisoner in Bergen-Belsen and at the time of its liberation, she was 18 and weighed 60 pounds.

Against all odds

Zuzana and her mother, Poldi, survived the Nazi camps, including four months at Bergen-Belsen, because, she says, “The spirit of Bach was always with me and kept me alive.”

In interviews, Zuzana recalls the days of liberation, “If Auschwitz was hell, Bergen-Belsen was another hell – this was the lowest part of hell. Nobody wanted us to survive. The weak and ill prisoners were not supposed to survive. But we did somehow.

“We were housed in military barracks – maybe 500 or even 700 people in one barrack – so it was not possible to lie down. If you wanted to sleep, you had to be like sardines and lie in the lap of another person.

There were already masses of dead bodies lying around. There was nobody giving us any food or any drink. There were heaps and heaps of dead bodies. The Germans already probably thought that the end of the war was coming, so they made pyres of those dead bodies and burned them.

And if you volunteered to get the dead bodies to the pyres, you got a cup of soup. My mother was too weak at that time, but I volunteered and I sometimes got the soup for her and for myself. But then even that stopped and we were starving.

Exhausted and sick, but saved

“When the British arrived, we were all absolutely starving. We had had nothing to eat. Nothing. It was in the evening that we heard some trucks and some tanks and because I knew some English, I stopped a truck and said, “Could you get some help for my mother?” because the whole camp was infected with typhoid and typhus and other plagues.

My mother was very ill. I was also sick but not as badly. We were all begging for food. They fed us, but for some people this was deadly, because they just could not digest proper food after starving for so many years.

“The British took my mother to a hospital. The doctors saw that I had the fever and thought it was malaria and they did not think I would survive. Somehow I recovered and it took me almost three weeks to find my mother.

But, in one hospital ward I also found my childhood cousin Dagmar. She was in the last stages of tuberculosis. So I managed to spend the last three days with her. Consoling her. Saying that we are going back to Pilsen (in Czechoslovakia).

“My mother was very ill and she recovered very slowly and she had to be in quarantine and so we could not leave for our return home to Pilsen until August. Even then she felt too weak to travel and she feared going home to find everyone we knew had been killed. But I convinced her by saying she had to go home for my sake.

The British are coming

“You know, the English were wonderful. The organization! This was a fighting army with only a few doctors and nurses, but everyone helped, with a lot of soldiers volunteering as male nurses. Everyone was so efficient. They got things organized so quickly in a place where there were thousands of ill people and thousands of dead bodies lying around.

“They got me some clothes and when I was a bit better, I acted as an interpreter. One evening they gave me a large meal and they took me to a tent to see a movie. It was the first time I saw a film in color.

“First, they played ‘God Save the King’ – I will never forget that. Later, I went back to my barracks and I was very sick. I was sick all night and I thought I might die. But I was also so happy – we were free.”

In 1956, Zuzana Ruzickova won the Munich International music competition and her career was launched. She would often perform in Bach’s home country of Germany.

She says, “When my father was dying (in Terezin camp in 1943), my mother said to him, ‘I hate all the Germans and I will get revenge for your life.’ My father said, ‘Don’t hate. Hate is something that poisons your soul. Leave the revenge to God.’”

Zuzana added, “I still feel that hating somebody is really poisoning yourself. Hate is a negative thing. You ought to avoid hate. Sometimes I really felt a little a bit characterless for not hating the Germans as much as I maybe should. But hating is a very negative emotion.

I was very often asked whether I could forgive a German, and I said first of all he would have to ask forgiveness. And then I would consider whether I had the strength to forgive. But maybe I could forgive sometimes. But not forget, never forget.”

Editor’s Note: Frank Vogl is in the process of making a film about the life of Zuzana Ruzickova

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At Home in Cuba’s Campoamor Theatre http://www.theglobalist.com/at-home-in-cubas-campoamor-theatre/ http://www.theglobalist.com/at-home-in-cubas-campoamor-theatre/#comments Sat, 11 Apr 2015 06:00:42 +0000 http://www.theglobalist.com/?p=37934 By The Globalist

Even though the last curtain fell in 1965, one man still calls Havana's Campoamor Theatre home.

Credit: Thomas HecknerEven though the last curtain fell in 1965, one man still calls Havana's Campoamor Theatre home.

©2015 The Globalist

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By The Globalist

Even though the last curtain fell in 1965, one man still calls Havana's Campoamor Theatre home.

Credit: Thomas Heckner

Photographer Thomas Heckner enjoys traveling and meeting people of different cultures to find out about their ways of living and surviving. “If my protagonists let me take part in their everyday life, I’m happy.” he says.

•  •  •

Central Havana’s Campoamor Theatre opened on October 20, 1921. For more than four decades, it was one of the country’s leading venues for music, theatre and poetry. Singer Rita Montaner, Cuba’s most popular performer from the 1920s until her death in 1958, enjoyed her first major show there in 1924.

But in 1965, six years after Fidel Castro took power in the Cuban revolution, its curtain fell for the last time and it became a garage for pedicabs and mopeds.

It was then that Reinaldo, now 52, started working in the building as a parking attendant. Then the garage, too, closed down. And so for more than 20 years, the former theatre has been his home. His living room is on the first floor in what was formerly a vanity room.

He has a wardrobe for clothes, a bed, a gas cooker, a television, a ventilator to cool the summer air and help keep off the mosquitoes, and — usually — electricity.

Like all Cubans, Reinaldo has a government rations book that guarantees him a supply of food, though not enough to survive. To make ends meet, he works as a cleaner in houses around his neighborhood or takes on other temporary jobs.

For 30 years, he has practiced the Chinese martial art, Tai Chi. Formerly taught by a master teacher, he now practices alone twice a day, for an hour in the morning and another hour in the evening.

Text and photographs by Thomas Heckner








Photographer Thomas Heckner enjoys traveling and meeting people of different cultures to find out about their ways of living and surviving. “If my protagonists let me take part in their everyday life, I’m happy.” he says.

The Other Hundred is a unique photo-book project (order here) aimed as a counterpoint to the Forbes 100 and other media rich lists by telling the stories of people around the world who are not rich but who deserve to be celebrated.

Its 100 photo-stories move beyond the stereotypes and cliches that fill so much of the world’s media to explore the lives of people whose aspirations and achievements are at least as noteworthy as any member of the world’s richest 1,000.

Selected from 11,000 images shot in 158 countries and submitted by nearly 1,500 photographers, The Other Hundred celebrates those who will never find themselves on the world’s rich lists or celebrity websites.

©2015 The Globalist

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