The annual meeting of the World Economic Forum took place in Davos, Switzerland, over the weekend. The forum is intended to provide world economic leaders an opportunity to meet to discuss issues of global importance. The meeting is normally incredibly cordial, as the economic focus of the conference provides an opportunity to move beyond traditional political wrangling that characterizes official meetings of heads of state. This year, however, the Gaza crisis prompted the Turkish prime minister to leave the meting in protest and tension filled the air. In general, this year’s forum has been dominated by discussion of the global economic crisis British Prime Minister Gordon Brown warned against a rising tide of protectionism similar to the trend that occurred leading into the Great Depression, while bankers cautioned the U.S. government against political interference in banking operations.
In news outside Davos this week:
1. Provincial elections in Iraq on Saturday were generally peaceful. Although the final tally will take more than two weeks to complete, preliminary results indicate voter turnout was 51 percent, a slight decline from 2005. Turnout in Sunni provinces, which had previously dismissed the electoral process as biased against their interests, was particularly high. With more than 14,000 candidates competing for just 440 seats, there are bound to be a large number of disappointed political parties and candidates. The question that worries observers now is: how do those who lose the vote respond?
2. A last-ditch effort to craft a government of national unity in Zimbabwe appears to have been successful, as Morgan Tsvangirai’s Movement for Democratic Change agreed on Friday to join Robert Mugabe’s ruling Zimbabwe African National Union, Popular Front to govern the country. Once one of the wealthiest and most productive countries in the region, Zimbabwe has gradually collapsed into economic chaos. With the unemployment rate at an estimated 95 percent, the World Food Programme estimates that up to 70 percent of the country’s population may require food aid in the next six months. In an effort to deal with the crisis and bring the country’s rampant inflation—currently believed to be running as high as a quadrillion percent (that’s 1,000,000,000,000,000%, incase you’re wondering) under control, the government last week also removed restrictions on using foreign currencies for economic transactions within Zimbabwe. It is now possible—indeed likely—that bread, gas, and other basic commodities will be priced in U.S. dollars, pound sterling, South African rand, or other foreign currencies.
3. The crisis over the future of South Ossetia and Abkhazia, which was at the heart of a diplomatic standoff between the United States and Russia lat year, has once again reemerged on the international stage. Russia has announced plans to construct a new naval base in Abkhazia, a move which Georgia claims will undermine its national sovereignty. Meanwhile, in an apparent overture to the west, Russia has suspended plans to deploy a missile station in Kaliningrad. Russia had announced its intention to deploy cruise missile batteries in the enclave last year after the United States moved forward with plans to deploy its missile defense shield in Eastern Europe.
4. The Mexican government announced on Tuesday that the country is likely headed into recession, with the economy estimated to contract by as much as 1.8 percent in 2009. The Mexican economy is heavily dependent on exports to the Untied States, with exports to the U.S. accounting for 80 percent of all Mexican exports and representing about 25 percent of all economic activity in the country. Already, Mexico’s central bank has cut interest rates in an attempt to stimulate the domestic economy. Meanwhile, an ongoing conflict between powerful drug cartels and the central government has led some analysts to forecast that Mexico could achieve “failed state” status if it is unable to assert control over the cartels.
5. Although the fragile ceasefire in Gaza has officially held, a number of fractures are beginning to appear. On Thursday, Hamas launched rockets into Israel in response to an Israeli airstrike against a suspected arms factory in Gaza on Wednesday. President Barack Obama named George Mitchell his Middle East envoy, and Mitchell appears to have his work cut out for him. Arab states are demanding an investigation into alleged war crimes committed by Israel during the conflict in which more than 1,300 Palestinians were killed and more than 5,000 were injured.
And in a bonus story this week:
6. A moderate Islamist leader, Sheikh Sharif Ahmed, was declared the winner of Saturday’s presidential elections in Somalia. Ahmed was the head of the country’s sharia court system that brought stability to southern Somalia in 2006. But the withdrawal of Ethiopian troops earlier this year has led to even more instability in Somalia, and the political process, now to be led by Ahmed, has been dislocated from the country, now based in neighboring Djibouti. Somalia has become a haven for piracy in recent months, and the World Food Program was forced to halt shipments to the country due to insecurity.