Tag Archives: sectarian violence

Five Stories You Might Have Missed

Debates over Wall Street compensation reemerged on the national stage last week, as the government urged companies that received federal assistance under the Troubled Asset Recovery Program (TARP) limit executive compensation. On Thursday, the Federal Reserve issued draft rules governing compensation for companies that have not repaid TARP assistance. Under the new rules, the companies would be required to demonstrate that their compensation packages do not encourage excessive risk-taking. In an interview with the Financial Times, George Soros weighed in on the debate, calling Wall Street’s profits this quarter “hidden gifts” from the U.S. government. He commented that, “Those earning are not from the achievement of risk-takers. These are gifts, hidden gifts, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.”

Meanwhile, concerns over the spread of the H1N1 (swine flu) virus continue to grow. On Saturday, President Barack Obama declared a declaration of “national emergency” to combat the flu. Under the declaration, hospitals eases some restrictions on hospital operations, giving them additional powers to treat the flu. 

In news from outside the United States last week:

1. German Chancellor Angela Merkel formally announced her new coalition agreement on Saturday. There were few surprises, as Merkel’s center right Christian Democrats allied with the liberal Free Democratic Party. The coalition contract included a promise to pass a €24 billion tax cut for poor and middle-income Germans and will reform inheritance laws. Under the new coalition agreement, Guido Westerwelle, the leader of the Free Democrats, will assume the post of foreign minister. The Christian Democrat’s Wolfgang Schäuble, a strong fiscal conservative, will become finance minister.

2. In two separate attacks, two car bombs exploded outside government buildings in Baghdad, Iraq, on Sunday, killed more than 130 people and injuring more than 500. The attacks were the deadliest in more than two months. Iraq had been enjoying a period of relative stability, as Western-backed tribal leaders had pushed al Qaeda militants into the margins. But U.S. officials contend that Iraq may be entering a period of increased violence, as militants attempt to reignite sectarian violence ahead of parliamentary elections scheduled for next year.

3. Negotiations intended to resolve the standoff over the Iranian nuclear program appear to have stalled. The talks, which were reopened early last week, were intended to develop an agreement which reduced Iran’s stockpile of low enriched uranium (LEU), building upon an agreement reached earlier this month under which Iran agreed, in principle, to send some of its estimated 1,200 kg of LEU to Russia and France, which would convert the fuel into medical isotopes before sending it back to Iran. But after Iran failed to meet a Friday deadline, the United States warned that it would be willing to wait for a few more days, but cautioned that its patience was limited. Iran’s current stockpile, if enriched, could provide enough uranium for a single nuclear weapon.

4. Figthing between Somali insurgents and African Union (AU) peacekeepers broke out in Mogadishu on Thursday, killing at least 30 people. According to witnesses, militants attacked using mortars as Somali President Sheikh Sharif Ahmed was leaving the country for a meeting in Uganda. AU forces responded with artillery fire. More than 19,000 civilians have been killed, and an estimated 1.5 million people have been displaced from their homes since 2007 as a result of ongoing fighting in Somalia, which has made the country a center for international piracy and terrorism.

5. The government of Brazil on Tuesday imposed a two percent tax on some capital inflows into the country. The decision, which as intended to slow the increase in the value of the real, Brazil’s currency, which had already increased more than 36 percent against the U.S. dollar this year. The new tax targets portfolio investment and financial speculation, not productive investment in the country. Nevertheless, the announcement was not well received by the market, and stocks fell sharply after the government made its announcement. But analysts offered a more positive pronouncement. In an editorial comment, the Financial Times described the new tax as “wise,” “sensible,” and “honest.”

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Five Stories You Might Have Missed

A new report issued by the International Monetary Fund on Saturday suggests that the globally economy will contract by 1.3 percent in 2009 with a slow recovery beginning in 2010. While the United States has been pushing countries to expand stimulus spending, the IMF said that existing stimulus spending already committed for 2009 should be sufficient to address the crisis. A Friday meeting of the finance ministers of the G7 countries was more cautious, concluding that, “the pace of decline in our economies has slowed and some signs of stabilization are emerging,” but simultaneously warned that “downside risks persist.”

In news outside the global economic crisis from the last week:

1. The outbreak of a new flue strain has raised concern in Mexico, as 68 people have died and more than 1,000 have been infected. The World Health Organization is monitoring the situation to determine if it is likely to reach pandemic status. While the Mexican government is urging people to remain calm, authorities have already canceled more than 500 public events and many residents in Mexico City have opted to stay home rather than travel for shopping and work. Tests have also confirmed the virus has made people in California, Texas, Kansas, and New York ill.

2. Elections in Iceland have produced the country’s first center-left government. The previous government of Iceland had been forced to resign as a result of the devastating impact of the global financial crisis on the country. Preliminary election results give Johanna Sigurdardottir’s Social Democrats 30 percent of the vote. With their coalition partner, the Left Greens’ 22 percent of the vote, the coalition appears well-positioned to drive the political agenda in Iceland. Sigurdardottir becomes the first openly gay person elected head of state in the modern world. The first item on her agenda: Icelandic membership in the European Union.

3. While the Obama administration is hoping to resume the six-party talks with North Korea, the government of North Korea appears to be taking a more hardline stance. Earlier this month it test fired a long-range missile, sparking a confrontation with the UN Security Council. Last week, the government of North Korea last week announced it would put two U.S. reporters on trial, charging them with illegal entry and “hostile acts.” Additionally, after expelling international atomic inspectors two weeks ago, North Korea has announced its intention to resume plutonium extraction. It is widely believed that North Korea already possesses enough plutonium for six to eight nuclear bombs. According to some observers, the deteriorating relations between North Korea and the West may be part of the country’s efforts to force the United States into direct, bilateral negotiations.

4. The sharp upsurge of violence in Iraq, including two suicide attacks that killed 75 people outside a Shia shrine in Baghdad on Friday, have raised concerns that Iraq is sliding back into civil war. Recent attacks raise the concern of sectarian violence, suppressed by a strong U.S. presence over the past year, but never entirely defeated.

5. Reversing a longstanding policy of the Bush administration, Secretary of State Hillary Clinton announced on Thursday that the United States would be willing to work with a Palestinian government backed by Hamas so long as the organization met international demands to renounce violence and recognize Israel’s right to exist.  The Bush administration had refused to work with Hamas, which has effectively controlled the Palestinian government since it defeated its rival, Fatah, in elections in 2007. Meanwhile, Israeli Prime Minister Benjamin Netanyahu is under pressure to engage meaningfully in international diplomacy and to be seen acting.

And because it was such a busy week internationally, here are two bonus stories from this week:

6. The rebel Tamil Tigers in Sri Lanka on Sunday declared a unilateral ceasefire, a move almost immediately rejected by the government. An operation launched by the government last month has effectively confined the Tamil Tigers to a small enclave in the northern part of the country, and the government is expected to announce the defeat of the Tigers any day. But the United Nations has described the situation as a humanitarian disaster, with more than 6,500 civilians already killed and as many as 100,000 refugees created as a result of the fighting.

7. It was announced on Friday that China has become the world’s fifth largest holder of gold reserves, with 1,054 tones of gold. Seen as part of a broader strategy to diversify its nearly $2 trillion in foreign exchange reserves, the government of China has slowly been building its gold reserves over the several years. However, even with the recent purchases, China has a level of gold reserves (as a percent of its total reserves) far below that of the United States and other developed countries.

Five Stories You Might Have Missed

Poor economic news continues to flow out of most of the world. In the United States, new jobless figures released last week show unemployment up to 8.1 percent, the highest rate in 25 years. Malaysian exports have collapsed, placing pressure on the government to find a solution to the ongoing crisis. And the banking sector in South Africa, Canada, and Mexico (among others) continues to face problems, and the International Monetary Fund is urging greater coordination to address the crisis. 

But the Chinese government is asserting that things are improving there already, forecasting 8 percent growth this year and denying the economy is in a downturn. If they’re correct, perhaps we’re starting to see the beginning of the end of the global economic crisis. I, however, remain cautious.

Here’s important five stories from the previous week:

1. Hillary Clinton continued her charm offensive in Europe last week. After shifting to a more diplomatic strategy with Syria, the new Obama administration has announced its intention to conclude a new arms control agreement with Russia by the end of the year. The effort to improve diplomatic relations with both Syria and Russia are seen as part of a wider effort by the Obama administration to distance itself from the hardline policies of the previous president.

2. A suicide bomb attack against Baghdad’s main police academy killed 28 people on Sunday. Although the number of attacks has declined since the height of the sectarian violence in 2003, the attack nevertheless illustrates the challenges that Iraq continues to face.  On Thursday, a car bomb attack in Babil province—a region that has enjoyed relative peace for months—killed 12 people and injured 40. 

3.  Palestinian Prime Minister Salam Fayyad on Saturday announced his intention to resign. Fayyad was appointed by Palestinian President Mahmoud Abbas after Hamas took control of Gaza in 2007. But Fayyad was a controversial figure, and Hamas regularly criticized Fayyad for being too closely aligned with the United States and Israel. Fayyad’s resignation is seen as an important step towards the development of a unity government for Palestine, which itself is viewed as an important first step in the Middle East peace process.

4. The Good Friday peace accord in Northern Ireland faces its most serious challenge since it was signed in 1998, after two British soldiers were killed Saturday night in an attack by Irish nationalist groups opposed to the agreement. Though no group has yet claimed responsibility, several groups, including the Real IRA, the Continuity IRA, and the Irish National Liberation Army, oppose Sinn Fein’s effort to develop a powersharing agreement and peace deal for Northern Ireland.

5. Last week, President Hugo Chávez stepped up his effort to nationalize foreign agricultural producers in Venezuela. After last month’s referendum, which granted Chávez the right to remain in office indefinitely, Chávez announced his intention to move forward with the nationalization of key industries, including oil, steel, and cement. Chávez accuses foreign agricultural producers of exacerbating the country’s economic problems.

And in a bonus story for this week:

6. Zimbabwe’s Prime Minister Morgan Tsvangirai was injured in a car accident on Saturday, and Susan Tsvangirai, his wife of 31 years, was killed. According to witnesses, a truck swerved from the oncoming lane and struck his car, the middle in a convoy of three cars, head on. Some within Tsvangirai’s Movement for Democratic Change have accused Zimbabwe’s President, Robert Mugabe, of masterminding the attack in an effort to eliminate his political rival. Although Tsvangirai has since said he did not believe the accident was part of a broader plot by Mugabe to eliminate him, Tsvangirai did accept an offer from Botswana’s President to recouperate across the border, fueling speculation about the nature of the accident. Zimbabwe’s national unity government remains an unstable coalition of rival groups, and the government has been unable to effectively address the ongoing economic crisis there.