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Global Issues

ISIS is the least of Afghanistan's problems

The growing geographic spread of ISIS has lately been part of the news chatter in tabloids and respected papers alike. We know ISIS has tried to spread its propaganda to Pakistan and Afghanistan since late 2014 and proclaimed its leadership of that region in early January, with members of the

Julie Bishop goes to Tehran

To everyone's surprise, it was announced on Monday that Australian Foreign Minister Julie Bishop intends to travel to Tehran in April 2015. The visit isn't about the nuclear negotiations with Iran. After all, while Australia would rather not see Iran go nuclear, it isn't exactly a foreign policy

The 'beggar-thy-neighbour' currency wars

Leon Berkelmans is in good company in defending the policy actions which have come to be described as 'currency wars'.  Ben Bernanke gave the same defence of the US Fed's actions while he was Chairman: while low interest rates and 'quantitative easing' (QE) may give the domestic economy an extra

Balancing act: Jordan's fight against ISIS

When the video of the murder of Jordanian pilot Muath al-Kasasbeh was released, the King of Jordan was in Washington. This brutal act led directly to discussions about the need to resolve delays to existing US arms deliveries to Jordan. King Abdullah of Jordan attends the funeral of Jordanian

A currency war would be no bad thing

The European Central Bank has finally begun to engage in quantitative easing. The euro depreciated on the news, which is good for the Europeans but bad for the rest of the world, right? It's another currency war – a zero sum game leading to, at best, nothing but debased currencies . At least that'

How Greece and Europe can both win

The press is making much of the academic qualifications of Greece's new finance minister, Yanis Varoufakis. His specialisation is economic game theory, which in this case might be described as 'the art of bargaining'. Good bargaining skills are, indeed, important. But there are also some basic

Should the West arm Ukraine?

Should the West arm Ukraine against Russian-backed rebels? That's a question guaranteed to generate earnest debate among armchair foreign policy pundits. But it also found its way into the just-concluded 51st Munich Security Conference. Chancellor Angela Merkel, Munich Security Conference, 8

China's leaders read an old French book

It is witty these days to observe that the Chinese Politburo's required reading list, apparently recommended by the daunting anti-graft chief Wang Qishan, includes The Old Regime and the Revolution by Alexis de Tocqueville. This French noble is well known for his admiring perspective on Democracy

How much is too much? The debt mystery

The 2008 financial crisis left no doubt that ill-considered debt can cause major damage not just to an individual country, but to the global economy. You might think that by now, six years later, balance sheet repair would have taken debt below pre-crisis levels. However, debt burdens are

A looming succession crisis in Oman and Saudi Arabia

When King Salman bin Abdulaziz succeeded King Abdullah last month, the Kingdom of Saudi Arabia edged one step closer towards a succession crisis. US Secretary of State John Kerry with Omanu Sultan Qaboos bin Said, May 2013. (Flickr/US State Dept.) There remain two more sons in the house of

Australia is not meeting its IEA oil reserve targets

The plunge in the global oil price is a hot topic. Between June 2014 and January 2015, the price of crude has dropped by 57%. Most of the attention has been on the boon for consumers, with a litre of petrol in some parts of Australia now counted in cents, not dollars. But while Australia is

Memo to IMF reformers: Don't let Congress get you down

By Lowy Institute Non-Resident Fellow Mike Callaghan and G20 Research Fellow Tristram Sainsbury When it comes to IMF quota reform, the words of Yogi Berra come to mind: 'It's like deja vu all over again'.  IMF First Deputy Managing Director David Lipton and Managing Director Christine Lagarde,

India nuclear deal needs serious parliamentary scrutiny

The Australian parliament's Joint Standing Committee on Treaties (JSCOT) will soon review the proposed treaty between Australia and India on Cooperation in the Peaceful Uses of Nuclear Energy, signed by Prime Ministers Abbott and Modi in New Delhi on 5 September 2014. A 1984 cartoon on Australia's

The real Tunisian spring

On 21 December 2014, Tunisians elected a president by universal suffrage for the first time in their history. The election marked the success of a democratic transition initiated when a popular uprising sparked by the death of a young street vendor, Mohamed Bouazizi, in Sidi Bouzid (central

Is globalisation slowing?

In the decades leading up to the 2008 financial crisis, international trade typically grew much faster than GDP. This reflected increasing global economic integration: tariff barriers were coming down, trade groups (eg. the eurozone, NAFTA, ASEAN) facilitated trade through regulatory simplification

China's investment rebalance

I am embarrassed to say that I made a mistake in the analysis below (I should have realised the results were too clear to be true!). In fact, the relative price of investment goods follows the pattern in the graph below. This mistake was discovered by Guonan Ma and staff at the RBA, who tried to

The IMF's pessimism is misplaced

When the IMF produced its last World Economic Outlook in October, one of the risks it forecast was a possible oil price increase. A US$25 per barrel increase, the IMF said, would take at least 0.5% off global economic growth. Now, even with the change in oil price twice as large and in the opposite

Is China slowing down? Not much

The Wall Street Journal: China's economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags. The slipping momentum in China, which

Australia and UN peacekeeping: Time for a reset

The UN is the go-to organisation for virtually every forgotten international crisis. While the West has struggled on in Afghanistan and Iraq, the UN and its peacekeeping missions have been deployed to just about everywhere else: Congo, Central African Republic, South Sudan, Darfur, Mali, Liberia

No, the IMF did not cause the Ebola crisis

Headlines blaming the IMF for the Ebola crisis are something you may expect in the tabloid press. However, a robust debate on the role of the IMF in the spread of Ebola was started by an article in The Lancet, a leading health journal. Four British professors claimed that the fiscal austerity

Is China fragile?

The Black Swan, by Nassim Nicholas Taleb, is a parable for unanticipated risk: the possibility of 'unknown unknown' events that no-one sees coming. In a new essay, The Calm Before the Storm, Taleb further posits that perceptions of risk are distorted by 'fragile stability.' Some countries (eg.

Cambodia's controversial dam seems set to go ahead

What is happening with Cambodia's Lower Se San 2 dam? Elliot Brennan's citation of a Bangkok Post report of Cambodian Prime Minister Hun Sen's speech at the opening of the Stung Russey Chrum Krom hydroelectric dam in Koh Kong province in Tuesday's Southeast Asia links is interesting for a number

The need for civil resistance to terrorism

More than three million people took to the streets of French cities last weekend in a unprecedented public response to an act of politically motivated violence. It made me think back to the massive worldwide public outrage to the abduction of over 200 school-age girls in Chibok, a town in

What I got wrong in 2014, and what I got right

January should be called pundit accountability month. On websites such as this, we make all sorts of predictions and forecasts, or we identify structural trends or leadership changes as critical, and so on. The temptation to choose our ideologically-preferred independent variables, or to otherwise

City limits: How big will China's megacities get?

Chinese urbanisation will be a globally consequential trend in the 21st century. The path policymakers follow is of profound importance. A noisy debate about city planning has been ongoing for years, essentially between laissez-faire advocates of 'mega-cities' and those arguing for more

Oil drops 50%, world shrugs

What does the fall in the price of oil do for global economic growth? If the price of oil had swiftly risen by 50%, economic commentators would be calling this an economic disaster. In fact the price has fallen by 50% since June last year, yet this ray of good news hasn't pierced through the

Lima climate conference: Slow movement on Planet UNFCCC

As haggard negotiators left the UN climate change conference in Lima in the early hours of Sunday morning, many observers noted the contrast between the political acrimony that characterised the final days of these tortured discussions and the sense of optimism that many felt going into the talks

G20 Brisbane Summit: Australia's adolescence on show

Australia had a prime chance to demonstrate its adult status in chairing the G20 Summit this year. What did it do with the opportunity? It showcased some of the characteristic behaviours of an adolescent country, my term for Australia in a new Lowy Institute Paper. Tantalisingly, it also showed

Sanctions and the coming Russian recession

The IMF, OECD and the Russians themselves have substantially downgraded their Russian economic growth forecasts for 2015. The fall in the oil price is partly responsible. However, heightened 'geopolitical risk' was also mentioned as a drag on activity, along with the effect of sanctions. But just

Myanmar police force needs more foreign help to reform

Two years ago, I wrote that the Myanmar Police Force (MPF) was gradually being recognised as a large, increasingly powerful and influential organisation that, in a more civilianised form, was likely to become a key instrument of state control under the hybrid civilian-military Government inaugurated

China's G20 year will raise human rights concerns

The G20 party may have ended in Brisbane, but the show rolls on. The leaders' forum will head to Turkey in 2015 and, in his final act as G20 chair for 2014, Australian Prime Minister Tony Abbott confirmed 2016 will see leaders heading to China. I've just co-written a paper on what the first ever

Financial stability: Did the G20 go far enough?

Financial stability was not the most headline-grabbing topic discussed at the Brisbane G20 meeting, but judging from the official communique word-count (a full 175-word paragraph in the three-page document, plus four substantial items in the annexes), a fair bit must have happened. Governor of

East Timor, Australia and the 'Timor Gap'

Tom Allard recently reported in the Sydney Morning Herald that Australia and East Timor are ready to restart talks on the maritime boundary between the two countries, with all its complications of petroleum revenues and history. The tradition is to keep these talks under wraps, but Allard's article

Iran nuclear negotiations: A negative non-failure

This morning it was announced that the nuclear negotiations between Iran and the P5-1 have been extended for another seven months; or to be specific, another four months to reach a political agreement and another three months beyond that to finalise technical details. That the talks did not end

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