Archives for posts with tag: BRIC

Are Brazil and Mexico at the center of a Latin American schism?

07/06/2013 //

As it prepares for the 2014 World Cup, Brazil hosted Mexico’s national soccer team in the Confederations Cup recently. The hosts won 2-0 and clinched a spot in the semifinals of the Confederations Cup. This wasn’t the first victory of sorts that Brazil has secured over it’s Latin American rival: in May the World Trade Organization elected Brazil’s Roberto Azevedo to lead the body over Mexican Herminio Blanco. In a way this race best defined the terms of the rivalry between Mexico and Brazil and what defines their more broad motives in Latin America. Mr Blanco is known as a liberal advocate of free trade policy; he negotiated the country’s entry into the North American Free Trade Agreement (NAFTA). While Roberto Azevedo doesn’t necessarily contradict this view, Brazil has more protectionist trade policies than Mexico and Mr Azevedo was seen as more of a WTO insider than Mr Blanco. While the candidates’ respective nationalities certainly was not the deciding factor in this race, it is an example of the type of role that both nations compete for, both regionally and globally.

(Source)

While the WTO functions as a global body for deliberations on matters of trade, Latin America has no regional equivalent. Instead, there are various regional trade blocs such as Mercosur and the Andean Community of Nations (CAN) that seek to both increase regional trade (between member states) and global trade with their organization. Despite being the older of the two, CAN has recently lost influence, with Venezuela leaving in 2006 to join Mercosur. Bolivia has also recently applied for membership in the larger Mercosur trade bloc. These movements have empowered Mercosur, whose members now includes Brazil, Argentina, Venezuela, Uruguay, and Paraguay (on a suspended membership). These countries had a combined economic output of $3.59 Trillion in 2012, with Brazil having the largest single economy by far:

(Source)

Despite these countries having a reputation as fast-growing emerging markets, the trade bloc averaged just 2.18% GDP growth last year, with lower than expected growth in Brazil and Argentina pushing the average down. This is surprising because in the year prior the bloc averaged 5.16% in 2011, and while Brazil’s economic growth has been slower lately it is still a nation that Jim O’Neill compared favorably with China and India when he first proposed the concept of BRICs. So where does Mexico fit into all of this? Mexico is neither a member of Mercosur nor has it attempted to join it. Instead Mexico helped found The Pacific Alliance, a trade bloc that was created in 2012 and now includes Mexico, Chile, Colombia, Costa Rica and Peru. Combined these countries had a smaller but still considerable GDP of $2.96 Trillion in 2012. Like Brazil in Mercosur, Mexico’s economy looms large within the Alliance:

(Source)

If 2012 was a difficult year for Brazil and Mercosur the opposite was true of Mexico and the Pacific Alliance. The five nations averaged 4.94% growth last year, and 5.51% in 2011, and the Pacific Alliance actually accounted for more international trade than than Mercosur in 2011. When you break this trade down there are a number of interesting findings:

(For a country-specific breakdown refer here)

Despite the Pacific Alliance having an 18% smaller economy than Mercosur, the Alliance had 9% more total trade in 2011 (Source). Beyond this there are a few other important things to point out: the Pacific Alliance had more overall trade than Mercosur, but the two blocs had very different terms of trade. While Mercosur posted a narrow trade surplus of +1.9% (meaning they exported more than they imported) the Pacific Alliance posted a trade deficit of -1.3%. This comes despite the Alliance having more total exports ($586 Billion vs $505 Billion). When you break down these figures further, the relative strengths or “comparative advantage” of each country is exposed:

Mexico has the largest total exports by a long shot; despite having an economy that was 16% smaller than Brazil’s in 2011, its exports were 11% larger in that year. But beyond having a different level of trade, the composition of Mexico’s trade is quite different: 70% of its material exports were manufactured goods, while Brazil’s material exports are fairly evenly distributed between agriculture, fuels and mining, and manufacturing. More examples of comparative advantage come from other countries in these blocs: Venezuela has the fourth largest exports of this group yet its travel industry is less than half the size of smaller Costa Rica. Instead, Venezuela exports vast amounts of oil (categorized as fuel and mining goods), which makes up 93% of its material exports. Chile’s exports are similarly dominated by this category, with fuels and mining making up 62% of material exports. While Colombia’s underground wealth is worth $37 Billion, Argentina’s agriculture sector is worth even more in annual exports. All of these country specific findings are intriguing by themselves, but the overall trend that divides the two blocs is clear: the Pacific Alliance both trades more on average and more overall than Mercosur.

Beyond trade, the two blocs have political differences that are as notable as their trade differences. Mercosur is controlled by several charismatic and leftist governments, from the legacy of Hugo Chavez in Venezuela to Mrs. De Kirchner’s Argentina. The addition of Venezuela in particular has caused some analysts to ponder whether Mercosur exists solely as a trade bloc or if it has a more political role. “Mercosur is no longer about trade,” Johns Hopkins’ Riordan Roett, told the Council on Hemispheric Affairs. “The organization is more and more political and to some degree anti-American.”

Others have pointed out that the bloc hasn’t really done much when it comes to trade: the bloc has only signed regional trade agreements with Israel, Egypt and the Palestinian Authority. The protectionist policies used by some of the bloc’s members have also been criticized, sometimes by surprising sources. Uruguayan President José Mujica allegedly said protectionist policies under Argentine president Cristina Fernandez de Kirchner are “even worse” than they were under her deceased husband Nestor Kirchner. Whether or not this particular allegation is true, the bloc has had a trade imbalance that has heavily favored Brazil over other members: from 2002 to 2011 Brazil had a trade surplus of $36.8 Billion against other Mercosur members (Venezuela was not yet a member). While this might not be connected to protectionist policies and the imbalance has gotten smaller over time, concerns remain over trade imbalances, particularly in Venezuela, which had a $4 Billion trade deficit with Brazil last year.

(Source)

While the Pacific Alliance has not faced the same scrutiny, it’s pro-American orientation has been not gone unnoticed. The Alliance’s level of trade with the US is incomparably higher than Mercosur’s, Mexican-US trade alone dwarfs all trade between Mercosur and the United States. Beyond trade, the Alliance includes right-wing governments that have very close relations to the United States, particularly in Colombia and Mexico. The Pacific Alliance’s connection to American foreign policy has been criticized as unnecessarily dividing Latin America to its own detriment as America seeks to reaffirm its dominance in the Pacific.

Specifically, the Pacific Alliance’s support for the Trans Pacific Partnership (a trade treaty) has been criticized. The treaty has been called (both negatively and positively) the NAFTA of the Pacific. Currently only Chile, New Zealand, Singapore, and Brunei are the only full members but there is a large list of countries negotiating to enter in: Japan, Canada, America, Australia, Vietnam, Malaysia, Mexico, and Peru have all begun negotiation talks, and Costa Rica and Colombia have expressed interest in entering the treaty. With all of the Pacific Alliance members either seeking to be or already members of the treaty, where does opinion stand in Mercosur on the Trans Pacific Partnership? While the bloc itself has not condemned the treaty, it is perhaps telling that Brazilian Roberto Azevedo (the director-in-waiting to the WTO) himself criticized the treaty and said that it could derail broader trade liberalization globally.

While it seems unlikely that the two blocs will form into military alliances, dividing Latin America like the Warsaw Pact and NATO divided Europe, there are reasons to care about these developments. Latin America was itself badly hurt by the conflicts on the Cold War, and while this new division between the slightly more statist Mercosur and the market-led Pacific Alliance might not resemble the bad old days, it could set the region back. Most importantly, by dividing the region along political lines, the rival camps may impede regional integration that is needed to ensure both stability and prosperity across Latin America.

Tags BRIC, Economics, international relations, Latin America, Trade

Categories Uncategorized

2013: a year of global change?

02/18/2013 //

Well, it’s been a while! In my defense, I’ve moved across the world since I last wrote here, and I now have to contend with some very loud birds as I write this. But I have good reason to write now; so much has transpired since I last wrote. You’ll have to forgive me for the length of this blog post, if you read it in it’s entirety you’ll have digested over 3000 words, there’s just so much to write about. With a remarkable confluence of political transitions taking place across the globe, there seems now, even more-so than in 2012, a real opportunity that the world will look very different 12 months from now. From the reelection of Barack Obama to Xi Jinping’s ascent to top spot within the Communist Party of China, many regions appear poised for change and uncertainty. From Israel to Myanmar there has been no shortage of speculation and intrigue regarding what the future will bring. But while there have been notable transitions across the world, some regions seem to have experienced less upheaval than others… so far.

Europe

Twelve months ago the world was fixated on the volatility of the European debt crisis and what might happen if an anti-austerity party won in Greece. This did not come to fruition, and while the anti-austerity party Syriza became the official opposition, they remain far from power in Greece. With relatively mundane results in the other European elections (Czechs and Slovenes both elected remarkably boring presidents) you might wonder if Europe really belongs in a blog about political upheaval in 2013. The good news is that very soon that will change, thanks to a combination of factors in Italy’s general election on February 24th.

After resigning in 2011, few could have imagined that the scandal-ridden media mogul would return to politics, but underage prostitute scandals notwithstanding, Berlusconi will contest yet another election. He will lead the People of Freedom party against the social-democrat PD, which is leading in polls at the moment; but in an added twist he will be competing with two other unlikely figures for the job.

When Mario Monti was asked to form a technocratic government in the wake of Berlusconi’s resignation he was not expected to contest the election after his government implemented economic reforms, but on December 28th he announced he would run for Prime Minister under the “With Monti for Italy” party. While Monti’s entrance into politics may have been surprising, his background is very different from the leader of Five Star Movement. Beppe Grillo entered politics as a comedian and blogger, and has taken Italian politics by storm; at one point his party scored as high as 20% in national opinion polls, though its popularity has since waned. The Five Star Movement can be defined broadly as an anti-austerity party, though some of Grillo’s other policy prescriptions include more direct democracy and free internet. While few expect either Monti or Grillo to garner enough support for the top spot, their impact on the election could be vast.

Public polling has consistently placed the center-left Democratic Party (PD) in first place, but the latest polls hinted at the possibility of a hung parliament in the Senate, where seats are allocated on a regional basis. This would force Pier Barsani (leader of the PD) to form a coalition, either with Mario Monti or even Beppe Grillo, though this is unlikely. You might wonder why the election in Italy is getting so much attention when so many different political transitions have taken place. Italy sits in a unique place within the EU: while it has come under scrutiny for its large debt (only the US and Japan have more) and its sluggish economy (only Zimbabwe and Haiti grew more slowly from 2000 to 2010) it also commands the largest share of the Eurozone economy outside of Germany and France. It also holds the distinct role of being the largest Eurozone member that is currently undergoing harsh austerity, which is being administered by an unelected, technocratic government. France has already replaced the center-right government of Nicolas Sarkozy with Socialist Francois Hollande, in part because of his promise to transition Eurozone policy away from austerity. If a center-left government emerges in Italy, it might just be enough to move EU policymakers away from austerity, or at least away from its current manifestation. Lastly, Italy’s election matters because it precedes an election in Germany in September, where Angela Merkel’s center-right coalition has faced recent difficulties.

Middle East/North Africa

When revolutions swept the Arab world in 2011, it seemed like the greatest emotion expressed in the crowds was relief and optimism; since then, ambiguity has shrouded interpretations of events.

This picture was taken in Tunisia on Feb. 6th of this year (source: Reuters/Anis Mili). The killing of left-wing opposition leader Chokri Belaid has sparked the largest demonstrations in Tunisia since the government of Ben Ali was overthrown two years ago. The Islamist-dominated government has dissolved parliament in response to this, and is calling for fresh elections in the wake of the unrest. Elections that took place in Tunisia and in Egypt after their respective revolutions saw Islamist parties win the largest share of the vote. While the outcome of the election was not disputed (unlike Iran in 2009) within those countries or by observers, the conduct of the resultant governments has been very critical. Mohamed Morsi, the president of Egypt and member of the Muslim Brotherhood has seen his first term riddled with controversy ranging from his handling of the drafting of a new constitution, to recent violence between police and demonstrators. Instead of focusing on these internal debates taking place in Egypt and other MENA countries, I’d like to talk about the regional implications of recent political transitions.

Two countries that dominate media coverage of the Middle East and I think warrant special attention for their regional impact are Israel and Iran. Both countries have an awkward (to put it nicely) relationship with many of their neighbors, and both essentially exist on the opposite sides of a diplomatic arrangement with the US. Iran has counted on support from Hezbollah in Lebanon, the Assad regime in Syria, and Shi’a leaders in Iraq, surprisingly.

I mention Iraq as a surprise because this wasn’t always the case; before the US invasion in 2003 Saddam-governed Iraq was actually a fierce opponent of the Islamic Republic in Iran. From 1980-88 they fought a protracted war that cost half a million lives, both Saddam Hussein and the Ayatollah sought to overthrow the regime in the other country. After the first Gulf War, the US engaged in a policy of “dual containment” that attempted to limit the influence of both regimes simultaneously. While this strategy was broadly viewed as “stupid” and had limited success containing either regime, the effects of the US occupation in 2003 had a more dramatic impact on regional influence. Nouri al-Maliki, the current prime minister of Iraq, is Shi’a Muslim (the main religion of Iran) and has close ties to the Islamic Republic in Iran, he actually lived there in exile for most of the 1980s. With the elections in 2005, Iraq has become one of Iran’s closest regional allies and has even helped sustain the Assad regime in Syria, another close ally to Iran.

Iran’s relationship with the other Arab regimes has been far less fruitful. Egypt and Iran have had icy relations since the revolution in 1979. Most notably, the Islamic Republic named a street in honor of the man (Khalid Islambouli) who assassinated Egyptian president Anwar Sadat. A precursor to this diplomatic freeze was Egypt’s peace treaty with Israel in 1978, as Iran viewed (and continues to view) Israel as its greatest enemy. The ascent of the Muslim Brotherhood in Egypt has helped improve relations, but the two countries remain far from rapprochement thus far. Perhaps the biggest illustration of these complicated new relations came with Ahmadinejad’s visit to Cairo on Feb 5th.

While Ahmadinejad was given a warm reception by President Morsi, he was grilled by other political and religious figures, most notably for Iran’s continued support of the Assad regime in Syria. In many ways the paths of these two countries were destined to be complicated, by both history and their sectarian importance. One of the tenser moments during the visit occurred when the leader of al-Ahzar (one of the most respected Sunni institutions in the world) grilled Ahmadinejad over everything from Syria to the belittlement of Islam’s first caliphate. Egypt is the most populous Arab country, and in a way it represents the broader Sunni-Arab aspirations in the region. Iran has a similar population, and it’s religious institutions in Qom are viewed with comparable regard to al-Ahzar for Shi’a Muslims across the world. This theological rift turns political when it comes to Syria, where the two countries continue to be at odds over the future of the Assad regime. I don’t want to oversimplify matters excessively: the Muslim Brotherhood’s relations with some Sunni regimes in the Gulf have been frosty at times.

Under this backdrop, the Israelis voted on Jan. 22nd, with most expecting Benjamin Netanyahu’s new Likud-Beiteinu bloc would sweep to victory, however things were not that simple.

(source: Ilia Yefimovich/Getty Images)

The man pictured above is Yair Lapid, a TV presenter-turned politician who now leads the second largest party in Israel, Yesh-Atid (translated: There is a Future). While Yesh Atid was expected to win about 10 seats, he nearly doubled this total with 19. Most of Mr Lapid’s platform was very centrist, with broadly popular ideas like reducing corruption and reforming education getting mention. More controversially he also proposed ending the exemption on Haredi (ultra-Orthodox Jews) from military service and negotiating with the Palestinians with the goal of creating a two-state solution. This latter declaration is significant because even after tacitly accepting a two-state solution, Netanyahu has done very little to indicate that he takes the idea seriously. Even after reaffirming his commitment to two-state solution, he said that the Palestinian Authority needed to drop any preconditions on talks, even as his government moves ahead with the controversial E1 settlement plan.

Lapid has also differentiated himself from Netanyahu on Iran, saying the Likud leader has been too confrontational towards the Obama administration regarding Iran, saying “[Netanyahu] thinks he can drag America to do what it doesn’t want to do. He is leading Israel to war too soon, before it’s necessary.” While it is less clear what meaningful differences they have w-r-t Syria, the biggest question right now is what government, if any, can emerge from this fragmented election:

(Source: BBC) Coalition talks are expected to be very acrimonious as they have to first be led by Netanyahu (who won the most seats) who has been weakened by this electoral result. His list lost 11 seats and he is coming under scrutiny for his role in a variety of troubling and quite funny scandals. Whatever the outcome, the region faces a range of crises, from Syria’s civil war to the economic malaise that affects so many countries in the Middle East; now, more than ever, is a time for effective leadership in the region.

Asia

Perhaps more than any political transitions that have taken place this year (including the US election) changing of guard in China, Japan, and South Korea. Xi Jinping, Shinzo Abe, Park Geun-hye have all been elected to lead their countries in a time when East Asia represents an increasingly important economic area:

(source)

Unfortunately this increased economic importance is being supplemented with increasing hostility between the respective governments, with the Senkaku/Diaoyu dispute receiving a great deal of media coverage. While the dispute has been simmering for over a century, things came to a head when in September Japan decided to nationalize part of the island chain, setting off a diplomatic row with China that has caused alarm across the globe. While Japan’s purchase of the disputed islands from a private owner may seem like an obviously provocative act (it certainly was by China), the action was actually intended, however clumsily, to deescalate tensions. This is because the bellicose mayor of Tokyo, Shintaro Ishihara had stated his intention to buy the islands; Japan’s government feared he would use his ownership to provoke China publicly. Things have escalated quickly since then, with anti-Japans protests and boycotts enveloping China. Perhaps most disconcerting has been an allegation by Japan that China had targeted one of its vessels near the islands with it’s fire-control radar.

(Source: The Guardian)

History has played an increasingly important and often detrimental role in island disputes in East Asia; the Senkaku/Diaoyu dispute is only the most recent example. Last summer a series of symbolic gestures were taken by the South Korean government to underscore its control of the Dokdo/Takeshima Islands, whose control is disputed with Japan. What came next surprised many when South Korean President Lee Myung-bak said that were emperor of Japan to visit Korea he would demand an apology for Japan’s crimes in WWII. Lee is no longer in office, his party instead nominated Park Geun-hye to run in the 2012 Presidential election, which she won narrowly. She campaigned on a platform of economic liberalization but at deftly supported reforming the state’s relationship with the Chaeobol (powerful family-owned businesses). Perhaps more than her policies, she has been scrutinized for her own history: she is the daughter of the late dictator Park Chung-hee, a controversial figure in South Korea. She, like her predecessor has demanded that Japan apologize for its crimes in WWII, though her own nationalism is now being matched by a flamboyant counterpart in Japan.

Shinzo Abe was elected Prime Minister of Japan on a platform of expansionary economic policies (which have many left-wing champions) and a nationalist foreign policy. In October Abe visited the controversial Yasukuni Shrine, where some Class-A war criminals are enshrined; in the past he has suggested Japan should review its apology for using comfort women in WWII. Though he shelved this latter plan, his other, less symbolic proposal could signal bigger, more worrying development for neighboring countries. Shinzo Abe has suggested his government will review its interpretation of the Article 9 of the Japanese Constitution which under it’s current interpretation prohibits an act of war by the state. This has been justified as enabling Japan to engage in “global security operations” as well as allowing its military to engage in joint military operations with its allies, such as a strike on North Korea. It seems clear that while this might be accepted in Seoul and Washington, it will raise eyebrows in Japan’s biggest neighbor.

As alluded to earlier, the recent hostility between Japan and China has received most of the coverage in this region recently. In many ways the anxiety over the confrontation between Japan and China comes from the the transformation in roles the two countries have had economically:

Only fifteen years ago Japan laid claim to the largest economy in East Asia and despite it’s economic headwinds (the 90s were considered Japan’s “lost decade”) few anticipated the quickness with which China would overtake it. For perspective, in 1990 when Japan was considered the chief economic rival of the US, its GDP was $3.018 trillion compared to China’s $355 billion it’s growth rate was for that year was 5.57% compared with China’s 3.8%. Japan’s economic performance was so strong that it captured the fear and imagination of the American public, with popular books and films depicting a Japanese takeover of American businesses. But after 1990 events took a dramatic turn in East Asia; China (and to a lesser extent S. Korea) has overtaken Japan in GDP every year since:

Presiding over this record-breaking growth has been a series of modernizing figures in the Communist Party of China starting with President Jiang Zemin and Premier Zhu Rongji. Their role in directing China’s State Capitalist model cannot be understated, with their successors Hu Jintao and Wen Jiabao largely following the same path. With the exception of a brief period of slower growth in 2012 the Chinese economy has looked unstoppable, but this has not stymied the internal debate about the future of China’s economy. Lost in the controversy over Bo Xilai’s role in the murder of Neil Heywood was a vigorous debate about the direction of China’s economy. Bo’s governance of the Chongqing Province was seen as a good model by observers in China and abroad. The model was characterized by its high levels of foreign investment as well as large state-sponsored projects, and succeeded in producing levels of growth that beat the national average while he was premier there. Due to his dramatic downfall, his ideas will have to be debated by Xi Jinping and Li Keqiang, who will formally be declared President and Premier of China March this year. They will preside over not only the largest economy in East Asia, but also the largest military as well:

(you should really get this if you want to know more about global military spending) The Senkaku/Diaoyu Island dispute comes at a time of unprecedented disparity in military spending between the two countries, unfortunately it is being coupled with unprecedented nationalism on both sides. What is particularly worrying is how lightly both sides seem to be taking the risks of escalation, especially considering the US declaring itself treaty-bound to defend Japan’s control over the Senkakus. One can only hope that the negative externalities that are at stake will compel both sides to deescalate the dispute. This is important not only because of the risks of conflict, but because of the urgent need for cooperation among the three East Asian powers. North Korea’s nuclear test just last week and it’s threat to conduct more is perhaps the best current example of this need. The world’s most important economic region needs pragmatic leadership now more than ever, it is truly disappointing to see nationalism cloud what was otherwise considered such a promising future for the region.

In all of the examples of political transition I have mentioned here there seem to be forces that both promote the status quo as well as forces agitating for change. In this blog I focused on the forces agitating for change, in part because I find this more compelling. You might have noticed that there were many notable omissions from this blog, I certainly do not wish to underestimate the importance of these political transitions. From Myanmar’s democratic reforms to Enrique Peña Nieto returning Mexico’s presidency to the PRI are just as important to the future as Japan’s recent elections. I will not, however, apologize for omitting the recent election in the United States. Due to my own interest/connection to US politics, I followed the election very closely. If you did not and would enjoy some analysis, I suggest you look somewhere else for relevant coverage: here are a few of my personal favorites.

Tags asia, balance of power, BRIC, china, EU, international relations, middle east, Syria

Categories Uncategorized

Measuring potential influence in various international organizations (extra spergy)

05/12/2012 //

When I took my first class on International Relations in college I was especially excited to participate in a exercise at the end of the term: everyone in class would get into groups and simulate a regional conflict with individuals acting as certain countries. I got Turkey, and it was my job to negotiate Georgian membership in NATO. The group included someone playing Georgia, the US, Iran, and Russia was supposed to have a representative but she was sick that day. It ended with me (Turkey) yelling at Iran’s sassy representative until the United States mopped things up and signed a treaty. In reality Turkey and Iran have had several shouting matches throughout history, dating back to the Ottoman and Safavid empires.

We were allowed to bicker in part because the professor was distracted by 30 other students at the time but also because certain facts about the group presented themselves. Iran and Turkey are similarly sized countries with populations of about 75 million each, with economies sized by the IMF at $930.236bn and $1,054.560 respectively. Before the US got involved, neither me (playing Turkey) nor Iran’s representative had enough of a relative advantage to sway Georgia; it took a superpower to alter the dynamics of the group. International politics aren’t usually that simple, but the exercise has always intrigued me. I’ve wondered since then what patterns you could find by taking a simple measurement of a country’s relative power (like wealth) and looked a differences within real international working groups.

In this blog I want to look at relative power and measure it within various international organizations. But before I go any further I want to make one point clear: I am not attempting to predict actual influence in international organizations, I am merely measuring theoretical influence in these organizations and leaving it up to the viewer to draw whatever conclusions from this. Having said that, I’ve found several articles about recent events that relate to the power-dynamics in these organizations. For most of these graphs I will be using Gross Domestic Product based on Purchasing Power Parity as a basis for potential influence in groups. I collected the statistics from the IMF (here) and all but a few exceptions are from 2011.

For my first group I would like to present the Arab League, with the Gulf Cooperation Council as a subgroup:

(note: the Palestinian Authority and Somalia were omitted as they lacked recent statistics, Yemen and Libya’s numbers are from 2010)

I think this graph is especially important as recent uprisings in the Middle East have captured the attention of the world. Like so many things in the region, the uprisings must be viewed in a context includes more than just relative GDP, but this graph offers some perspective on recent events. Just as Tunisia had seen its president abdicate power and Cairo’s Tahrir Square was swelling with protestors, the Gulf Cooperation Council (led by Saudi Arabia) invited the Morocco and Jordan to join the oil producing group. The move was widely interpreted as an effort to stymie the revolution retain Saudi Arabia’s influence in the Arab League. Even without adding Jordan and Morocco the combined wealth of the Gulf Cooperation Council makes up 46% of the Arab League, it would have a majority of the League’s wealth were it to include the two monarchies.

Palestine is a perennial feature of Arab League summits, so it should come as no surprise Arab states frequently vie for influence over the politics of the territory. Egypt has repeatedly tried to broker unity within the Palestinian government; Saudi Arabia has tried to take the initiative on Arab leadership in the Israel-Palestine conflict. Personally, I think it’s no coincidence that the two largest economies in the Arab League have both taken such a critical role in the Israel-Palestine conflict. While Arab League efforts to resolve the Israel-Palestine have stagnated recently, the situation in Syria has been very much on the agenda.

While conflict and upheaval has often characterized the Middle East, Latin America has seen a recent flourishing of democracy and regional integration. For this region I would like to present two graphs representing different regional organizations:

UNASUR (The Union of South American Nations) is the main body for regional integration in South America, but its significance to greater Latin America was enough to move Mexico and Panama to observe the treaty signing that created the institution. It’s not hard to see how relative power in this institution could easily mirror the simulation I participated in in class. In 2010 a dispute between Colombia and Venezuela gave the new organization a role in resolving a long-brewing confrontation. Like Turkey and Iran, Colombia and Venezuela are neighbors with somewhat similar means ($467bn GDP for Colombia versus $370bn Venezuela) but very different ideology/foreign relations. Colombian president Álvaro Uribe, having just signed an agreement with the US to build a new base there, accused Venezuelan president Hugo Chávez of giving FARC material support. Pressure from UNASUR helped to prevent war and in August the two countries resumed diplomatic relations.

While UNASUR represents a successful South American effort towards integration, the wider Latin America has seen varied progress towards the goal of integration.

As the Arab League seeks to integrate the Arab World, CELAC (The Community of Latin American and Caribbean States) seeks to integrate Latin America. Both groups therefore exclude obvious regional powers: the Arab League is often maligned for excluding Israel and Iran, while CELAC was created (intentionally) to promote Latin American integration without US, Canadian, or European involvement. A potential obstacle to CELAC’s success is that unlike UNASUR, Brazil faces a rival in Mexico. While Brazil is a decorated member of the BRIC (a bloc of emerging economies) and has a much larger population (190 million vs. 112 million) Mexico grew at a quicker pace in the last two quarters. Perhaps in relation to this recent shift, Brazil and Mexico are now in trade dispute with one another. Guido Mantega, Brazil’s finance minister, has recently suggested that the trade group Mercosur (part of UNASUR) increase its tariffs with outside countries, including Mexico. This doesn’t have to spell doom for the dream of Latin American integration, but it does reveal a potential rivalry that could threaten wider regional integration.

CELAC has been championed by leftist leaders in the region like Bolivia’s Evo Morales and Hugo Chávez as an alternative to the Organization of American States, since it lacks the US and Canada. At a summit last year two declarations were adopted by the organization that reflected this reality; Argentina’s claim to the British-controlled Falkland Islands (called the Malvinas in Argentina) was supported and the US embargo on Cuba was criticized. While these declarations were adopted by all CELAC members, the body went short of calling for any direct action on the issues. Journalist Andrew Cawthorne posits that pro-US members like Mexico, Chile and Colombia have prevented CELAC from adopting more radical action against Western interests in the region. This scenario is an example of how organizations can easily lose the capacity to act unilaterally when political and economic divisions are present. The combined GDP share of Mexico, Chile and Colombia represents 35% of CELAC.

Sometimes regional groups can be so effective that they’re summits become used to coordinate bigger goals than their membership suggests. This was the case with ASEAN (Association of Southeast Asian Nations), a group founded in 1967 to represent Asian countries sandwiched between giants like China and India to the north and Australia to the south.

Security and economic integration are both included in ASEAN’s charter, but the group’s effectiveness has been varied between the two mandates. Cambodia and Thailand have had an ongoing border dispute that has persisted despite an ASEAN brokered agreement that includes Indonesian monitors in the area. But while ASEAN’s effectiveness at settling regional conflicts has been varied, it’s economic importance cannot be understated. The group plans to implement a Free Trade Agreement in 2015, which has smaller countries like Timor-Leste eager to join quickly.

ASEAN attracting small regional nations may not seem like a big deal, but certainly role in the response to the 1997 Asian financial crisis was. The financial crisis devastated much of Asia and the IMF’s response was highly criticized by many inside Asia and beyond. In 2000, finance minsters from ASEAN member-states plus China, Japan, and South Korea met at and produced what is now called the Chiang Mai Initiative. What started out as a currency-swap agreement has evolved (at least conceptually) into a regional bailout fund, with a role akin to the IMF itself. The initiative is managed at a summit connected to the annual ASEAN meetup, with the expanded group called ASEAN+3. Now, with a bailout fund of $240 billion, ASEAN+3 is a critical piece of Asian integration. What does a graph of this expanded group look like?

As evidenced by this graph, ASEAN has an outsized influence on the region it now helps to integrate.

When it comes to challenges facing a regional organization, the AU (African Union) has to be far in the lead. of the 20 countries with the lowest Human Development Index ranking 19 are members of the AU (source). With recent coups in Madagascar and Mali and Zimbabwe in perpetual crisis, the AU exists in a region that needs security and economic cooperation desperately.

(note: South Sudan, Western Sahara, and Somalia lacked current info, also not included due to GDP being under 15bn: Benin, Malawi, Rwanda, Niger, Guinea, Mauritania, Togo, Swaziland, Zimbabwe, Sierra Leone, Eritrea, Gambia, Lesotho, Central African Republic, Burundi, Djibouti, Seychelles, Cape Verde, Guinea-Bissau, Liberia, Comoros, São Tomé and Príncipe)

The AU faces several internal conflicts: the Arab north is sometimes ambivalent about the role in the AU, something brought under the spotlight when Jacob Zuma and other leaders tried to broker an AU peace plan in Libya. The AU opposed any foreign military intervention, even as Qaddafi’s troops threatened to massacre Benghazi. With a somewhat disengaged Arab north, the largest countries that back the AU enthusiastically are Nigeria and South Africa, whose support is often critical for AU resolutions.

Despite being a diverse organization with large regional/ethnic divides the AU has acted decisively on occasion. Led by Nigeria’s ambassador B. Paul Lolo the AU suspended Mali swiftly after an illegal coup took place. But sometimes the perverse influence of geopolitics has been maligned in the AU. Notably, Mugabe’s Zanu-PF government in Zimbabwe was accused of being “sheltered” by a sympathetic administration in South Africa during the worst political violence in 2008. Whether or not the AU suffers from the problems associated with power dynamics, its success is critical for the region, and perhaps the world.

With the recent election drama in France and Greece it would feel remiss to leave out the European Union in this blog.

(note: underlined countries do not use the Euro currency)

I’ll leave coverage of the eurozone sovereign debt crisis out of this as I have covered it in several other posts (and I plan on writing more shortly), but I’ll highlight a few broad observations about the EU’s politics. The UK is the largest non-Euro member-state and is often seen as the most eurosceptic member. This has distanced its role in enhancing the powers of the EU and has sometimes seen it act as a check on Franco-German aims to do so. One of the biggest recent events to upset this equilibrium has been the election of French Socialist François Hollande. German chancellor Angela Merkel actively supported his rival, incumbent Nicolas Sarkozy during the election, and many now ponder what impact the election will have on Franco-German relations. I’ll write more on this later in a dedicated EU/EuroApocalypse post.

I want to reiterate a point: as compelling as I find all of this, I have to be intellectually modest here and admit that most of it is conjecture. I’ve found most of the articles supporting this theoretical perspective on group power because I probably have a bias when I read articles about international news. Despite this, I’ve found myself drawn to this interpretation of events; I simply can’t look at news relating to China’s vetos in the UN Security Council, or India’s nuclear trade agreement with the US without seeing this interpretation of events shaping my opinion. In the very least, I hope you’ve found this to be interesting to read about.

If you’re reading this because you found one of my graphs while desperately trawling the web for statistics for an essay, feel free to use them! unless otherwise noted all of my graphs use data from the IMF found here and I’ve taken it on myself to post all of the excel docs below:

arab league GDP pie 2011

ASEAN GDP PPP 2011 pie

ASEAN+3 GDP PPP 2011 pie

AU 2011 BIG LIST

AU 2011 gdp pie

CELAC GDP PPP 2011 pie

EU27 GDP PIE 2011

NATO 2010 military spending

NATO 2011 GDP PIE

UNASUR GDP PPP 2011 pie

Tags asia, balance of power, BRIC, EU, international relations, power

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An International Bellwether: China, Taiwan, America and the Cross-Strait flashpoint.

09/26/2011 //

From the BBC: China has reacted angrily to a US deal to upgrade Taiwan’s ageing fleet of US-built F-16 fighter planes.

This recent development where the US has agreed to a $5.85 billion renovation plan has renewed a long standing dispute between both (The People’s Republic of) China and Taiwan (Republic of China) and China and the United States. Comprehensively explaining the conflict would be both time consuming and needless, there are a variety of great sources on the matter.

Here is a quick summary, between 1945 and 1950 China had a civil war between the Communist Party led by Mao Zedong and the sitting government ruled by the KMT. Eventually the Communist Party captured the entire mainland of China and the KMT was forced to retreat to the Island of Taiwan, no armistice was signed. The US is involved in the hostilities because it supported the KMT both the during the conflict and afterwards by refusing to recognize the Communist controlled mainland as the legitimate government of China for some time. For several decades the ROC (Taiwan) refused to lift its claim over all of mainland China, with many additional countries contained in their claim (see below):

Incidentally, the People’s Republic of China also claims the entire territory of Taiwan, calling it the “Taiwan Province, People’s Republic of China.” As time has progressed, relations between the two entities has been fraught with conflict and frequent military and diplomatic posturing. Currently only a handful of countries fully recognize Taiwan as an independent state, most of them are small states. Despite America’s lack of official recognition of Taiwan it continues to support Taiwan both militarily and politically under the Taiwan Relations Act. Thus the F-16 package recently signed between Taiwan and the US isn’t anything new.

What is new, however, is the regional balance of power and its impact of relations across the Taiwan Strait. While relations have been better in recent history, there have been notable flareups in the past 20 years. These flareups (along with cross-strait relations at large) have been keenly observed by diplomats and academics alike. They watch with particular attention because cross-strait relations are often viewed as a bellwether of China’s military and economic rise and its relationship with the US, who China is now beginning to rival in economic output (using PPP, more on this later). Relative changes in the balance of power between both China and Taiwan and China and the US should be seen as a background for conflicts across the strait of Taiwan.

If one were to use only the Realist or Neo-Realist schools of thought on these relations, one might puzzled by the continued support the US gives to Taiwan. After all, Taiwan is a small country of just 23 million people, which trades less with the US compared to China. But this would be viewing things from an ahistorical perspective. Taiwan’s democracy and historic political ties with the US were once backed by a level of military spending that was closer to China’s than it is now. Without disregarding the current tension over this recent US F-16 deal, I would like to present graphs of relative power that play as a backdrop for the cross-strait relations over the past 20 years, focusing on events in 1995-6 and 2008.

Below is a graph I made using data from SIPRI on military spending from the US, Taiwan and China. (The excel spreadsheet is free if you fill out a small form here):

As one can see, in 1990 despite China seeing substantial growth in the 80s and having a population over a billion, it spent only 46% more on its military than Taiwan. China also had (and continues to have) a large border with numerous flashpoints (Arunachal Pradesh with India, among others) that could have complicated any military deployments near the Taiwan Strait. In 1995 this figure changed only slightly, with Taiwan still spending nearly 50% of what Mainland China spent on its military. This complicates a Realist/Neo-Realist interpretation of the 1995-6 Taiwan Strait Crisis.

During this crisis the then president of Taiwan Lee Teng-hui began moving away from a One China policy towards an Independent Taiwan stance. This angered PRC officials and made his 1995 visit to his alma mater, Cornell, a diplomatic crisis both between China and Taiwan and between China and the United States. In 1995 and 1996 China conducted a series of missile tests and eventually an amphibious assault exercise in the Strait, acts frequently viewed as a tool to intimidate voters in Taiwan from voting for Lee Teng-hui. The US responded with what was dubbed “the biggest display of US military power in Asia since the Vietnam War” sending two battle carrier groups into the region. Lee Teng-hui won the election that year, and tensions remained high for some time afterwards. But if China was willing to threaten Taiwan, perhaps it no longer feared Taiwan’s military. Perhaps instead, China wanted to test the alliance between Taiwan and the US.

Comparing US military Spending to China’s paints an asymmetrical picture:

In 1995 the US military spent almost 20x as much as China on its military! But the reason people are eying the Taiwan Strait as a bellwether has as much to do with the economic rise of China as its military rise. After all, a country can only spend as much on its military as its citizens are willing to sacrifice in money for whatever potential benefits that military might bring. While China’s military spending is still a fraction of US spending, its exponential increase underscores the fast-changing pace Asian political geography.

The graphs below show the GDP (national income) of the three nations using exchange rates only, and does not factor in prices in domestic markets. If you wanted to compare how much bread people could buy this would not be a good source because bread might be cheaper in other countries. But if you’re looking at international trade (or purchasing arms) this is actually a better source than Purchasing Power Parity since exchange rates would come into play.

As you can see, China’s rise has transformed its comparative wealth with both the United States and with Taiwan. It also helps explain how China’s economic growth was partially matched by Taiwan in the early 90s. In 1995 Taiwan’s GDP represented ~38% of mainland China. Now it represents just 7.3% using exchange rates.

Now lets look at a final set of graphs showing GDP using Purchasing Power Parity. This should shore up the differences in cost between both Taiwan and China versus the USA.

The first difference you notice is that both China and Taiwan’s GDP double here. This is because China and Taiwan both partake in a form of currency manipulation. Essentially, by undervaluing their currencies, these countries give their citizens less buying power on the international market, promoting domestic consumption instead. Having an undervalued currency enables these countries to export at a lower cost as well.

This data comes from the IMF, which also forecasts future GDP. They predict that by 2016 China’s GDP will surpass the United States; by then Taiwan’s GDP would represent only 6.3% of mainland China’s GDP. This is all important because it might help to explain the recent detente between Taiwan and China, beginning in 2008. This has included high level talks between the leadership of both countries as well as economic integration, and most notably frequent cross-strait commercial flights.

I have a feeling that this recent policy change comes from a re-evaluation of Taiwan’s security dilemma from within. The term “security dilemma” is used by Realist and Neo-Realist theorists in International Relations to describe a state’s conflicting needs. A state must enough power to repel aggressor states but if that state becomes too powerful it will provoke other states to counter that strength either through alliances or by increasing their own security. A common measure of power/security in Realist theory is money (GDP) or other resources. Using this level of analysis, one would surmise that China’s rise in GDP was always a threat to Taiwan and other nearby states, but that Taiwan’s countering check on Chinese growth depended on US security assurances, as the US was stronger than China. Taiwan might now be betting on the US continuing to being a powerful ally, but wants to prolong the status quo until it can find new ways to counter China’s rise. There are, of course, other interpretations of recent developments. Expect to see more headlines regarding Cross-Strait relations, as the IR community watches with great anticipation.

Tags asia, balance of power, BRIC, china, Cross-Strait Relations, international relations, power, Taiwan, USA

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University rankings inadequacy: two rankings give Europeans heartburn and Americans brief respite?

06/23/2011 //

News about university rankings has taken an International Relations twist as the EU has angrily criticized two recent rankings and has allocated funding to create a new system. This was in response to a very low ranking of European universities by the UK publication Times Higher Education, and the Shanghai ranking. Having an emerging superpower like China view Europe’s universities so poorly has led to some European education ministers and university presidents to travel to China and express their concerns and promote their universities. Unlike domestic rankings of US universities (we call them colleges : ) have, these international rankings bring the prestige of a nation’s entire higher education system into scrutiny. It makes sense for countries like Germany and France to fret over these results, as both rankings make their higher education systems appear to be inferior not just to the US model, but to one of the most eurosceptic members of the EU: Britain. The coalition government in Great Britain has been increasingly critical of European (read EU) integration, and the debt crisis has emboldened them continue to use a separate currency and avoid contributing to Eurozone bailouts (the UK is, by far, the largest EU member-state not to use the Euro). Lets see what these two rankings show:

Of the top 100 from the Times Higher Education, here are some results and analysis: (note: I am lazy so the colors don’t match, sorry)

Immediately it is clear that the EUs higher population and GDP (EU-wide, not Eurozone) does not produce as many top 100 universities compared to the US. But this shows only part of the problem.

Half of Europe’s top 100 universities are in the UK, an impressive feat for a country with a smaller economy and population than Germany. The United Kingdom’s GDP and population figures are very closely matched with France who does terribly on this graph. see my link above for complete results.

Finally, when we include Irish, Canadian, and Australian universities lets see how they perform, as the Anglosphere:

Once you include important universities in Canada, Australia and Ireland it appears that the world’s most desired universities are overwhelmingly English-speaking establishments. Perhaps this ranking system favors that unfairly, it is an independent publication, but it is also a British, independent publication. Russia once had a ranking system that appeared reasonable at first glance, until one found Russia’s own Moscow State University ranked higher than Harvard or Cambridge. Lets see how China’s ARWU or Shanghai Ranking rates the same regions.

The Chinese ranking or ARWU has been out since 2003, but it wasn’t until its recent battering of European universities was combined with the THE ranking for 2010 that Europe responded. Here are the same regions being measured by the 2010 ARWU/Shanghai Ranking: (note: I excluded Moscow State University from Europe because Russia’s relationship with the EU is different than Switzerland or Norway’s)

While Europe clearly does better in the ARWU ranking, the US still dominates the top 100.

Separating Britain from the EU has a similarly bad outcome for Europe, though its not as bad for Europe as the THE rankings showed. To break it down more thoroughly: France has 3 universities compared with Britain’s 11, while Germany has 5, and Switzerland somehow ties with France with 3.

Both the ARWU and THE rankings clearly favor English-speaking universities, with both giving them at least 70% of the top 100 in both cases. The ARWU ranking doesn’t rank Irish universities in its top 100, but does rank Canada and Australia’s universities with 4 and 3 respectively. While one might expect China’s East Asian rivalry with Japan to color the ranking’s view of Japanese universities, this isn’t the case: Japan features 5 universities in the top 100, with no Chinese institutions included. Rounding off the list is Russia’s Moscow State University and Israel’s Hebrew University.

The ARWU has also been criticized for favoring sciences much more than humanities, which might explain why many liberal arts colleges perform badly on this list.

Personally, I think ranking an entire university is an incomplete science at best. It’s easy to rank a university’s prestige, but sometimes that prestige doesn’t reflect a particular program’s strength at a university. For instance, Georgetown and Johns Hopkins both have highly esteemed schools of International Relations and Diplomacy but lack the similar prestige of MIT’s hard science programs, so they lose out in a ranking that favors hard sciences. I’d rather not split hairs ad infinitum over ranking systems and instead focus on the IR implications ofthe recent ranking system debacle.

European integration has been viewed by some of its proponents as a means for Europe to remain relevant in an increasingly multi-lateral world. Don’t just take my word for it, academics have written much about it. French and German politicians and academics have been especially eager to use the EU to promote this goal, and as a consequence, have been equally insecure over its prospects. While the Eurozone’s economy is smaller than the US, the entire EU membership has at least matched it recently. This has led outsiders and Europeans alike to eagerly await an example of European leadership. One of these much anticipated examples ended in spectacular failure at the 2009 Copenhagen Summit on Climate Change.

Europeans anticipated this would be a moment where their divergence with the US on climate change could help to underscore Europe’s relevance as an ec0-friendly alternative to US or Chinese dominance; this made the summit’s outcome exceptionally embarrassing. Prior to the opening of the summit itself was a smaller summit within the summit, where Obama negotiated with China as well as Brazil, India, and South Africa. After the summit appeared to be faltering, it was only efforts by China and the US to reconcile their differences with one another that was able to produce a final draft agreement. This was witnessed at the horror of EU enthusiasts, as it confirmed their worst fears of a world dominated by the G-2 (China and America). The fact that Europe’s failure at the summit may have been planned in advance can only add to the frustrations of European leaders. China’s importance at the summit put European aspirations of global leadership in doubt. The Eurozone debt crisis hasn’t helped matters, with Standard & Poor’s recently downgrading Greece’s sovereign debt to one of its lowest ratings.

It might seem like a poor ranking from two subjective lists shouldn’t bother European politicians and university heads as much as it has, but within the context of an increasingly desperate Eurozone debt crisis and a larger global shift towards the BRIC (the IMF predicts China’s GDP in PPP will overtake the US by 2016) it seems reasonable for such insecurities to exist.

Tags balance of power, BRIC, china, EU, Eurozone, Higher Education, international relations, University Ranking, USA

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measuring regional power part 3: south asia

05/25/2011 //

What happens when we apply the same measurements to South Asia, where India and Pakistan have been long time rivals?

We see that unlike China in East Asia, the economic growth in South Asia has been fueled by India with only Sri Lanka keeping up pace. Like China (and perhaps other BRICs) India has seen its military spending come closer in line with its economic dominance of the region. It’s worth pointing out that Sri Lanka and Pakistan have been spending more on their military than their economies have grown. It really is worth noting that while East Asia has been dominated by China, South Asia is dominated more so by India. While China might carry nearly twice the share in miliary and economic dominance in East Asia, Japan lingers, maintaining at least half of what China has. Pakistan, on the other hand, hardly competes with India economically or militarily. India spent ~6.6x as much on its military in 2008 compared to Pakistan.

Shockingly, South Korea’s military and economic rivalry with China is more closely matched than Pakistan’s rivalry with India. But Pakistan continues to spend a higher percentage on its military despite its economic decline. Perhaps the conflict with change in the next decade, depending on how badly Pakistan feels threatened by India’s rise.

Tags asia, balance of power, BRIC, international relations, power

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measuring regional power part 2: east asia

05/21/2011 //

Sadly, the results for East Asia aren’t quite as exciting, or especially validating of my hypothesis. I should note that poorer countries like Mongolia and N. Korea didn’t have complete data so I had to limit my list of countries.

It is interesting to note that SIPRI’s list shows a dramatic climb in China’s military spending over the past 10 years, in 1999 they spent less than a 3rd what they do now. Using http://www.umsl.edu/services/govdocs/wofact99/5.htm I will show the change 11 years has brought East Asia:

Surprisingly, China’s relative economic growth has been minimal, changing just 5% relative to the rest of East Asia. The notable exception of Japan might cause you to wonder do these numbers really add up? They mostly do. The reason China hasn’t improve more is because its own growth has been matched economically by Taiwan and South Korea. But militarily, China now matches its economic might with the majority of all military spending in East Asia. My hypothesis could work, perhaps there was a threshold in individual income in China that passed in the last decade, while the government in Japan saw the national debt and increasing cost of an aging population as a bigger threat than military ones.

I think I’m probably wrong though; there are likely better explanations for relative military spending than GDP per capita alone. for instance, in 1996 the third taiwan strait crisis took place, possibly driving the government in Taipei to continue spending a large amount on its military. In 1998 South Korea began the so-called Sunshine Policy with North Korea, easing tensions in the region as a result. Finally, China itself has seen its direction of trade expand in the past decade; numerous shipping routes have become essential to its globalized economy. Perhaps the relative leap in China’s military spending is mostly an outcome of its increasing trade. In the US the war of 1812 is often hailed by historians as an early example of US economic policy shaping its military and foreign policy perhaps the three fold increase in military spending by China is similar.

Tags asia, balance of power, BRIC, china

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