According to the G8, it looks like we may be starting to see signs that the global economic crisis is beginning to ease. The final communiqué of the G8 summit on Saturday expressed the sentiment that the worst of the crisis may now be over, and that it may be time to begin addressing the challenges of inflation rather than stagnation. According to the communiqué,
There are signs of stabilisation in our economies, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence, but the situation remains uncertain and significant risks remain to economic and financial stability.
Despite the relatively upbeat assessment, hopes for a quick recovery in the Eurozone (glossary) continue to be thwarted by sharp declines in industrial production and high unemployment.
In other news from the previous week,
1. Incumbent president Majmoud Ahmadi-Nejad decisively won Saturday’s presidential elections in Iran, defeating the moderate reformist candidate Mir-Hossein Moussavi. Although Moussavi alleges Ahmadi-Nejad’s victory was the result of unfair electoral practices and intimidation and has demanded a new poll, the supreme leader, Ayatollah Ali Khamenei, has declared the results final, suggesting any challenge would be unsuccessful. Turnout in the election was high—surpassing 85 percent. Protests broke out across Tehran after the election, and the international community is watching developments in Iran with great concern. The elections carried big implications not just for domestic Iranian society, but also for U.S. foreign policy.
2. The United Nations tightened sanctions on North Korea on Friday. After several weeks of increasing tensions in which the government of North Korea had expanded nuclear warhead and missile tests, the U.N. Security Council passed a resolution expanding sanctions beyond the narrow focus on weapons and weapons technology (which has long been in place) to now include suspending foreign aid, loans, and export credits outside of humanitarian aid. The passage of sanctions by the Security Council signals a shift in Russian and Chinese policy. The two countries had long opposed intensifying sanctions on North Korea, fearing the collapse of the unstable regime.
3. In a dramatic shift in Russian foreign policy last week, Prime Minister Vladimir Putin announced the country would drop its bid to join the World Trade Organization and would instead seek to develop a customs union with Kazakhstan and Belarus. Russia has been negotiating for WTO membership for 16 years, but has been blocked largely as a result of U.S. opposition. Two schools of thought to explain the shift in policy have emerged. According to the first, this represents Russia’s frustration with the process and is merely a ploy to speed up accession talks. According to the second, Russia is more interested in expanding its influence in its former sphere of influence, and the new customs union would help to achieve that goal. Whatever the truth, the move clearly surprised most observers and confounded analysts.
4. The oil giant Royal Dutch Shell reached a settlement with the family Ken Saro-Wiwa and eight other activists executed by the Nigerian government in 1995. According to the suit, Shell had requested the Nigerian government to intervene—going so far as to finance and assist in operations against groups in the Niger River delta region. Without conceding any involvement in their deaths, Shell agreed to pay $15.5 million in damages to settle the claim. The case was one of the first to be brought before U.S. courts under the Alien Tort Statute of 1789, which gives non-U.S. citizens the right to sue in U.S. courts for human rights violations committed abroad. Shell had unsuccessfully sought to have the case dismissed.
5. The crisis in Peru continued last week, as protestors continue to confront police in the capital Lima. A national strike had been called by indigenous groups and labor unions to protest changes in land rights laws. An estimated 10,000 people turned out on Thursday before police dispersed the crowds. The government of Peru is now moving to suspend the law which led to the protests.