31 October 2012

China's Decennial Leadership Transition Begins in Nine Days

In less than two weeks, the 18th Chinese Communist Party Congress will begin in Beijing.  At the Congress, Xi Jinping will likely be chosen to serve as the Party's General Secretary; Li Keqiang is also expected to be named to a senior position on the Standing Committee of the Party's Political Bureau.  (The 24-member Politburo makes the key policy decisions in China while the Politburo's 9-member Standing Committee more-or-less runs China on a day-to-day basis).  Xi, moreover, is expected to be elected President of the People's Republic of China at next March's National People's Congress; Xi will then likely nominate Li to serve as his Prime Minister.

The senior Chinese political leadership changes every ten years.  As the new leaders of China, Xi and Li will face demands for further political and economic liberalization and conflict within the Party over whether and how those demands should be addressed.  At the same time, Xi and Li will have to address widespread corruption in Chinese government, banks and businesses, increased social and economic inequality, the gradual slowing of China's rate of economic growth, and China's long-ignored environmental problems:
 
http://www.economist.com/news/briefing/21565132-china%E2%80%99s-communist-party-preparing-its-ten-yearly-change-leadership-new-team

27 October 2012

Nigerian Oil

According to the CIA's World Factbook, Nigeria is the world's tenth leading producer of oil and eighth leading oil exporter.  Sadly, much of Nigeria's oil wealth is wasted.  Thieves steal at least an eighth of Nigeria's annual crude oil output.  The multinational corporations that pump and refine Nigeria's oil systematically underpay the royalties and taxes they owe the Nigerian government.  Corrupt officials in the Nigerian government and in Nigeria's state-owned Nigerian National Petroleum Corporation pocket hundreds of millions of dollars each year from the royalties and taxes that the MNCs do pay.  Finally, much of the oil revenue received by the Nigerian government is spent subsidizing the price of gasoline -- a subsidy that disproportionately benefits middle and upper-income Nigerians.  (Classical economic theory would suggest that a cash transfer program would be of greater benefit to poor Nigerians and would not have the effect of encouraging the overuse of gasoline).  Meanwhile, reforms championed by Nigerian President Goodluck Jonathan and Nigerian Finance Minister Ngozi Okonjo-Iweala have been watered-down or stymied:

http://www.economist.com/news/middle-east-and-africa/21564906-goodluck-jonathan-says-he-wants-reform-oil-industry-really

26 October 2012

What the Chinese Government Doesn't Want Its Citizens to Know

Chinese Prime Minister Wen Jiabao has long enjoyed a populist image; he is referred to as "Grandpa Wen" or as "the People's Premier" by the Chinese press.  Yet many members of Wen's family -- including his mother, wife, son, daughter, younger brother, brothers-in-law, sister-in law, daughter-in-law, and the parents of his daughter-in-law -- have become fabulously wealthy during Wen's career as a senior Chinese official.  Their wealth has grown particularly rapidly since Wen became Prime Minister in 2003.  This morning, The New York Times published an article detailing the Wen family holdings; the Times estimates the value of the family's investments, conservatively, at $2.7 billion.

The Chinese government reacted swiftly to the publication of the Times article, blocking access in China to the English and Chinese-language websites of the Times, and attempting to block all mention of The New York Times or Prime Minister Wen on China's popular mini-blog service, Sina Weibo:

http://www.nytimes.com/2012/10/26/world/asia/china-blocks-web-access-to-new-york-times.html?_r=1&ref=global

24 October 2012

Wukan: After the Revolution

In December 2011, mass protests in the Chinese village of Wukan forced the removal and detention of the corrupt Chinese Communist Party officials who had governed the village for decades.  Competitive elections for village leadership positions and for a village assembly soon followed, and the protest leaders became the village's new officials.  Since then, however, things haven't gone smoothly:

http://www.economist.com/news/china/21564871-year-after-their-uprising-wukan%E2%80%99s-leaders-see-drawbacks-democracy

21 October 2012

Arrest of Boko Haram Militant Demonstrates Sect's Long Reach

Shuaibu Muhammed Bama, a member of Boko Haram, an armed Muslim sect that has terrorized northern Nigeria in recent years, was arrested Thursday night at the home of a Nigerian Senator.  (Nigeria's military spokesman did not name the Senator at whose home Bama was arrested; Nigerian press reports, however, identified the Senator as Ahmed Zanna of the ruling People's Democratic Party, or PDP).  The arrest underscored reports that Boko Haram enjoys the sponsorship of prominent Nigerian officials; in January, Nigerian President Goodluck Jonathan stated that Boko Haram had infiltrated the Nigerian government, including the military and law enforcement agencies.  Another northern Nigerian Senator, Mohammed Ali Ndume, currently faces prosecution for concealing his knowledge about Boko Haram operations from Nigerian law enforcement officials.  In 2010, Ndume joined the PDP; he had previously been a member of the opposition All Nigeria Peoples Party (ANPP).

http://www.washingtonpost.com/world/africa/nigeria-military-soldiers-in-northeast-arrest-boko-haram-sect-member-at-senators-home/2012/10/20/782aff90-1aab-11e2-ad4a-e5a958b60a1e_story.html


20 October 2012

Referendum on Scottish Independence Set for 2014

In 2014, Scottish voters will be asked whether Scotland should become an independent country.  An article in this week's issue of the British edition of The Economist examines the arguments that will likely be made by the Scottish National Party to persuade Scottish voters to vote for independence, and by Labour, the Conservatives and the Liberal Democrats to persuade Scottish voters to remain part of the United Kingdom:

http://www.economist.com/news/britain/21564852-scotland-ponders-whether-independence-and-separation-are-same-thing

Mexican Murder Rate Begins to Fall

In 2009, the Mexican government identified 37 men it believed were running drug gangs.  Since then, security forces have captured or killed 23 of them; two others have been killed by members of rival organizations.  Nonetheless, Mexico's murder rate remains twice as high as it was in 2006, when Mexican President Felipe Calderón took office.  While the arrest or death of a cartel's mid-level enforcers may result in a decline in the number of homicides committed by the organization, the elimination of its leader often sets off a bloody war for control of the gang by its top lieutenants.  Nonetheless, there is some good news; Mexico's murder rate has fallen by 8% this year -- the first decline in the murder rate since the war on narco-trafficking began:

http://www.economist.com/news/americas/21564897-most-wanted-men-mexico-are-tumbling-will-crime-follow-suit

United Russia Sweep in Resumed Russian Gubernatorial Elections

Russia is a federation of 83 republics, krais, oblasts, federal cities and okrugs (generally referred to as "regions.")  Each region has a governor and an elected legislature.  In 2004, Vladimir Putin (then, as now, president of Russia) eliminated the popular election of regional governors; instead, the governor of each region was appointed by the Russian president, subject to the approval of the regional legislature.  This measure was one of a series of measures taken to centralize power in the Russian federal government following the 2004 Beslan school massacre.  Last spring, former Russian President Dmitri Medvedev (who now serves as Russia's prime minster) restored elections for Russia's regional governors.  This reform was adopted in response to the anti-government demonstrations that followed the announcement of seemingly fraudulent results in the December 2011 Russian State Duma elections and the apparent padding of Putin's margin of victory in the March 2012 presidential elections.

On 14 October, Russia held five gubernatorial elections (its first gubernatorial elections since 2004) and elections for six regional legislatures.  Putin and Medvedev's party, United Russia, swept the field.  The way that United Russia ensured its victory in those elections revealed how Putin and Medvedev intend to maintain political control of Russia's regions, notwithstanding the introduction of gubernatorial elections:

http://www.economist.com/news/europe/21564889-lost-elections-and-another-arrest-give-opposition-more-problems

11 October 2012

Iran and Nuclear Weapons

Iran is producing enriched uranium.  Most experts believe that Iran is enriching uranium in order to be able to produce nuclear weapons at some point in the future; whether Iran has already decided to produce nuclear weapons is a matter of conjecture.  At the same time, however, Iran continues to refuse to cooperate fully with International Atomic Energy Agency inspectors.  This has led the United States, the European Union and other countries to impose increasingly tough economic sanctions against Iran; these sanctions, along with the Iranian government's own mistakes in policy, have led to severe economic problems in Iran.

Moreover, if it becomes clear that Iran intends to produce nuclear weapon, it faces attack by Israel and/or the United States; Israel and the United States, however, differ as to what Iranian actions would warrant a military response:

http://www.economist.com/node/21564229

10 October 2012

Socialism with Chinese Characteristics (State Capitalism)

China's state-owned enterprises (SOEs) account for more than one-third of Chinese output. Chinese SOEs are able to borrow (from state-owned banks) on more favorable terms than privately-owned businesses, and are carefully protected by the Chinese government from competition from both privately-owned Chinese firms and multinational corporations. Officially, Chinese state-owned enterprises are highly profitable. Some experts argue, however, that most Chinese SOEs would lose money were it not for Chinese government subsidies, which may take the form of free rent, tax breaks and preference in government procurement contracts, as well as below-market loan interest rates. Although the number of SOEs in China has fallen dramatically over the past 20 years, the SOEs that remain are some of the largest companies in the world (by sales revenue); their dominance in such key industries as telecommunications has actually grown over the past six years:

http://www.economist.com/node/21564274

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