Tag Archives: economic recovery

Five Stories You Might Have Missed

Economic data out this week suggests that the end of the global recession may be nearing. The most recent jobless numbers out of the United States gave economists reason to celebrate, as the unemployment rate declined by 1/10 of a point, leading to a price rally on Wall Street. Germany, which has seen a sharp decline in gross domestic product (glossary) during the global recession, benefitted from an unexpected expansion of exports—7 percent in June. While other countries continue to struggle, including Russia and Iceland, many economists now believe we are seeing the proverbial light at the end of the tunnel.

In other news from the previous week:

1. The trial of dozens of people, including a French national and two Iranians employed in the British and French embassies began in Iran on Saturday. The defendants are charged with espionage and “acting against national security” by taking part in and reporting on post-election protests to Western embassies. Under Iranian law, a conviction on either charge could be punished by death. Several of the defendants have confessed, but Western governments have dismissed the charges as “baseless” and contend the confessions were made under duress. The government of Iran accuses the United States and Britain of interfering in its internal affairs by “proving financial help to Iran’s opposition.” Meanwhile, the trial of 100 opposition leaders continued last week. The opposition leaders have condemned the trials as a spectacle, but the defendants face charges punishable by death. Opposition leaders continue to assert that the election of President Mahmoud Ahmadi-Nejad in June’s disputed presidential election was the result of electoral fraud. Nevertheless, Ahmadi-Nejad was sworn in on Monday.

2. A power struggle inside Taliban in Pakistan emerged over the weekend after the organization’s top leader, Baitullah Mehsud, was killed in a U.S. drone strike on Friday. Mehsud was a powerful figure in the Waziristan district of Pakistan, and Pakistani officials believe he was responsible for nearly all of the major terrorist attacks in Pakistan over the past two years, including the assassination of former prime minister Benazir Bhutto and the bombing of Marriot Hotel in Islamabad in 2008. Many analysts believe that Mehsud’s death will undermine the ability of the Taliban to operate in Pakistan. Already, political infighting in the Taliban in Pakistan’s leadership has led to the murder of one top leader by another, as Waliur Rehman, a leading contender to lead the organization, killed Hakimullah Mehsud, a rival for the same position. Pakistani intelligence now believes the organization is likely to splinter into several factions, each operating independently, but collectively much weaker than the original organization.

3. Former President Bill Clinton met with North Korean President Kim Jong-il this week, securing the release of two American journalists who had been sentenced to twelve years of hard labor for illegally entering the country. The meeting, which the White House maintains was not part of its official diplomatic efforts to address the challenges posed by the North Korean regime, was the highest level contact between the two countries in more than ten years. The Obama administration also reminded North Korea that, despite Clinton’s trip, that the United States will continue its efforts to increase diplomatic and financial pressure on the North Korean state unless it abandons efforts to secure nuclear weapons.

4. Secretary of State Hillary Clinton began her Africa tour this week, meeting with Kenyan officials on Wednesday. Clinton is hoping to apply pressure on the coalition government to move forward with political reforms intended to bring grater stability to the country and to prevent another flare up of the violence which rocked the country after February’s disputed presidential election.

On Thursday, Clinton met with Sheikh Sharif Ahmed, the embattled president of Somalia. Clinton used the opportunity to reiterate U.S. support for the Ahmed government, pledging to provide more military and economic assistance as the government continues its battle against Islamist insurgents. Meanwhile, in neighboring Eritrea, President Isaias Afewerki, who is believed to be a supporter of rebel groups in Somalia, dismissed U.S. efforts, saying that it is unrealistic to try and “imposing [a government] that doesn’t exist in reality.” Somalia has long topped Foreign Policy’s list of failed states. The lack of an effective central state has also made the country a haven for pirates in the Gulf of Aden.

5. A series of cyber-attacks aimed at social networking sites last week were believed to be directed at one individual—a blogger posting under the name of Cyxymu Livejournal. The denial-of-service attacks targeted several popular sites, including Facebook, Twitter, Google, and the blogging site Livejournal. Cyxymu Livejournal is a critic of Russian policy in the Caucuses, particularly Georgia. According to some sources, the Russian government has used denial-of-service attacks in the past, targeting sites critical of the Russian government in Georgia, Estonia, and Eastern Europe. But if responsible for the most recent round of attacks, this could represent an expansion of the strategy. Leading credence to the theory is the fact that this week marked the one year anniversary of the Russian-Georgian War over the breakaway regions of Abkhazia and South Ossetia.

Five Stories You Might Have Missed

The U.S. political scene this week was dominated by coverage of Sonia Sotomayor’s confirmation hearings in the Senate. After the hearings, Sotomayor appears to be headed for an easy confirmation to the U.S. Supreme Court, a fact conceded by Republican Senator Lindsay Graham on the first day of the hearings.

Also on the domestic political scene, the battle over President Barack Obama’s proposed health care reform heated up this week, with both sides spending increasingly large sums of money on television advertising. So far, Obama has been content to allow Congressional Democrats to lead the reform effort, but that strategy appears to be in danger after several moderate Democrats expressed hesitation over the bill introduced in the House last week.

In news from outside the United States last week:

1. A suicide bomb attack in Jakarta, Indonesia, killed 9 people and injured more than 50 on Friday. Although no group has yet claimed responsibility for the bombing, the police investigation is focusing on Jemaah Islamiyah, a terrorist group with ties to al Qaeda. The group was responsible for a series of attacks between 2002 and 2005, including the 2002 Bali bombings, which killed more than 200 people.

2. The standoff between President Manuel Zelaya and the leaders of the military coup in Honduras remains unresolved. On Friday, Zelaya attempted to return to Honduras, only to be denied entry. He is currently in Nicaragua. Meanwhile, Venezuelan President Hugo Chávez, a close ally of Zelaya, has become increasingly vocal in his condemnation of the coup, accusing it of being backed by the United States. On Thursday, Chávez said, ““The Honduran army wouldn’t have gone forward without the approval of the state department. I don’t think they told [US president Barack] Obama, but there’s an empire behind Obama.” The de facto government of Honduras has filed a complaint against Venezuela with the United Nations Security Council, claiming that the Chávez government is interfering in its domestic affairs. But the Security Council has so far refused to deal with the complaint.

3. It’s been a month of relatively good economic news out of Zimbabwe. Although efforts at developing a new constitution to deal with the ongoing political standoff between the country’s two leading political parties appear to have stalled, the economy is slowly recovering. Finance Minister Tendai Biti announced on Thursday that the government would have a balanced budget this year, with total spending increasing 39 percent to U.S. $1.39 billion. After peaking at more than 231 million percent last year, inflation has been brought under control and the economy has effectively been dollarized, with foreign currencies used for most transactions. Nevertheless, the government is forecasting a sharp increase in agricultural production and a smaller increase in tourist revenues, which should offset a decline in mining revenue caused by the global economic crisis. Meanwhile, the International Monetary Fund issued a statement describing Zimbabwe as experiencing a “nascent economic recovery” facilitated by “a more liberal economic environment, price stability, increased financial intermediation and grater access to foreign credit lines.”

4. The Russian economy is currently experiencing its worst economic decline since the transition from communism in the early 1990s. According to a Financial Times report issued on Wednesday, the Russian economy contracted by 10.1 percent in the first half of 2009, a much sharper decline than the 7.9 percent forecast by the World Bank just one month ago. Russia’s current economic woes have been caused largely by the sharp decline in global oil prices, which have recovered to $60 per barrel after falling as low as $35 per barrel earlier this year. Russia is also experiencing its own financial crisis, as commercial banks there are bogged down with bad loans. The Russian government may be forced to turn to international markets, barrowing to offset the sharp decline in tax revenues caused by the economic downturn. Based on the new figures, its projected deficit for 2010 could reach as much as 7.5 percent of GDP, a figure far above the 5 percent originally projected. Unemployment has increased from 6 to 10 percent and continues to grow. Meanwhile, many Russians are responding to the economic crisis by returning to the soil, growing their own food on small plots just outside the city.

5. Natalia Estemirova, a human rights activist in Chechnya, was murdered on Wednesday. Estemirova was kidnapped as she left her house in Chechneya on Wednesday morning, and was found shot to death in Ingushetia, a neighboring Russian republic. Protestors fathered in Moscow on news of her murder, and the international community has condemned her death. Russian President Dmitry Medvedev has promised those responsible for Estemirova’s death would be punished, but the Russian human rights community remain skeptical of his reassurances. Estemirova was the third human rights activist killed this year. She was also a close friend of Anna Politkovskaya, the Russian journalist murdered in Moscow in 2006. No one has yet been punished for any of the deaths. Estemirova’s murder, however, raises concerns that the Caucasus region may be headed toward greater instability.