Foreign Press Review: January, 25 – 2012

Posted on 25/01/2012 by

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Reuters: The elephants in the Davos ski lodge.  The epic global shifts of 2011 transformed the political, economic, and social landscape from Shanghai to Sao Paolo, Washington to Cairo. No leader (not even Vladimir Putin) is safe from the vagaries of social unrest; no economy (not even China’s) is unaffected by contagion from an over-leveraged, under-managed euro zone. No country (not even the United States) is immune from the threat of asymmetric attacks—anything from a terrorist bomb to cyber-warfare. Volatility will be the rule, not the exception in 2012. What I call the emerging Archipelago World of fragmenting power, capital, and ideas is inherently unstable— as vulnerable to old conflicts and new threats as it is open to the dynamic entrepreneurship of rising powers and corporations remaking the map of the world. A 20-year period of one-world, one-way globalization is being replaced by an era of competitive sovereignty. The walls are going back up. Developed and developing states alike are vertically integrating political and economic interests across public and private sectors in a global race for growth, employment and security.

Having previously embraced interdependence as the motivation for horizontal integration across markets and regions, states as diverse as Canada, Finland, Saudi Arabia, Japan, Brazil, Turkey and the United Kingdom are now pursuing more national strategies for economic and political security. For investors, corporations, and governments doing diligence on their global exposures, acknowledging this new reality is an essential starting point. Forget stability and predictability. Abandon the notion of global solutions to global problems. Instead, develop deep, granular understanding of the distinct political and economic context of new markets. Seek cooperation and alliances of interest, beginning with the discreet interests of these states and their economies. Embrace complexity, and understand that the successful management of political and economic discontinuities will be the essence of stability in the 21st century.

Four themes are likely to dominate the environment in which global investors, companies and institutions will seek to limit the downside to risk and capture the upside to volatility in 2012. Read more –  Reuters

BBC: Libyan defence minister in restive Bani Walid for talks. Libya’s defence minister has arrived in Bani Walid, a former stronghold of the Gaddafi regime, after four people were killed in fighting there on Monday. Osama al-Juwali wants to negotiate with militiamen who drove those loyal to the National Transitional Council into the surrounding desert, officials say. Locals have told the BBC 90% of the town is under the militiamen’s control. In case Mr Juwali is unsuccessful, NTC forces armed with artillery and rockets have gathered outside, ready to attack. However, one commander was overheard telling his men that they were there “for the purposes of reconciliation, not fighting”.On Tuesday, the head of Bani Walid’s council, Mubarak al-Fatamni, said that forces loyal to the new government were attacked on 23 January in a “barbaric manner” by members of the “remnants of the Gaddafi regime”.On Tuesday, the head of Bani Walid’s council, Mubarak al-Fatamni, said that forces loyal to the new government were attacked on 23 January in a “barbaric manner” by members of the “remnants of the Gaddafi regime”.Read more – BBC

The Economist: The zero-sum president. STATE of the Union addresses tend to be long, winding affairs, filled with a grab bag of policy ideas that will altenatively appeal to and irk people across the political spectrum. Barack Obama’s latest address had plenty of sensible ideas in it: tax reform, including reductions in corporate rates; more spending and accountability on education and infrastructure investment; streamlining of the regulatory environment; and so on. He led off, however, with a call for a reshoring of manufacturing jobs seemingly calculated to cost him The Economist’s endorsement. Granted, annoying The Economist is, almost definitionally, good politics. For a president whose hallmark has been soaring orations promising hope, however, Mr Obama’s take on the global economy is strikingly bleak and depressing. The president was not so unreasonable as to suggest that the American economy could recapture all of its lost manufacturing jobs. Nor was he wrong to point out that countries like China have used direct subsidies, financial shenanigans and currency manipulation to give their exporters a leg up. Yet at no point did he attempt to justify the unstated assumption that what America ought really to do is develop an economy like China’s—a place, recall, scarcely one-sixth as rich as America, riddled with potentially debilitating economic imbalances, and governed by an unaccountable monopoly of a communist party. Perhaps more distressing, he implied in several places that the reason to become more like China was that only by doing so could America defeat China, and others, at economics. Read more – The Economist.

The Guardian: Angela Merkel casts doubt on saving Greece from financial meltdown. Angela Merkel has cast doubt for the first time on Europe’s chances of saving Greece from financial meltdown and sovereign default, conceding that Europe’s first ever multibillion bailout coupled with savage austerity was not working after two years of crisis that has brought the single currency to the brink of unravelling. n an interview with the Guardian and five other leading European newspapers, the German chancellor also insisted – against widespread resistance elsewhere in the eurozone and in the UK – that the European court of justice (ECJ) be empowered to police the public spending and budget policies of the 17 countries in the euro. She also called for the eventual creation of a European political union, with many more national powers ceded to a central government, a strengthened bicameral European parliament, and the ECJ assuming the role of Europe’s supreme court.Days before the latest crucial EU summit, which – at Merkel’s insistence and evoking scant enthusiasm elsewhere – is to finalise an international treaty between eurozone governments entrenching German-style fiscal and budgetary rigour in all single currency countries, the chancellor admitted to having doubts about the strategy she has pursued throughout the crisis. “We haven’t overcome the crisis yet,” Merkel said. “Of course, there’s Greece, a special case where, despite all the efforts that have been made, neither the Greeks themselves nor the international community have yet managed to stabilise the situation.” Read more – The Guardian

The Independent: Britain facing boom in dishonesty. The British people are becoming less honest and their trust in government and business leaders has fallen to a new low amid fears that the nation is heading for an “integrity crisis”. ying, having an affair, driving while drunk, having underage sex and buying stolen goods are all more acceptable than they were a decade ago. But people are less tolerant of benefits fraud. The portrait of a nation increasingly relaxed about “low-level dishonesty” emerges in a major study seen by The Independent. Carried out by the University of Essex, which will today launch Britain’s first Centre for the Study of Integrity, it suggests that the “integrity problem” is likely to get worse because young people are more tolerant of dishonest behaviour than the older generation. The new centre will look at issues arising from recent scandals such as phone hacking, MPs’ expenses and the banking crisis. A separate “trust barometer”, published by the PR company Edelman, shows that two out of three people do not trust politicians to tell the truth. Trust levels in MPs from all parties slumped by 36 points to 4 per cent after last summer’s riots. People also lost confidence in the young and the police. Read more – The Independent.

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