Matthias Pintsch

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Keyword in Focus

Keywords in Focus: IMF and World Bank Group

A Chinese one Yuan bill
A Chinese one Yuan bill, courtesy of upton/flickr

This weekend, the annual meetings of the International Monetary Fund (IMF) and the World Bank Group take place with a focus on the world economic outlook, poverty eradication, economic development and aid effectiveness. The meetings are convened in a situation of escalating disputes about the sustainability of the international monetary system and fears of a coming currency devaluation war.

Dominique Strauss-Kahn, the director of the IMF, warns that the willingness to use currencies as a political weapon is growing in a short-sighted attempt to boost a nation’s economy, better known as “beggar thy neighbor” policy. Primarily China with its policy of keeping the Yuan artificially cheap vis-à-vis the dollar and the euro is seen as the main trigger of the current situation. But also the US policy of keeping interest rates at a long-time low adds to long-standing imbalances of the international monetary system.

It will be interesting to see whether the IMF and the World Bank, both cornerstones of the Bretton Woods system and as such deeply interwoven with the shaken monetary system, can facilitate the adaption to the changing realities not only in the realm of monetary economics.

Explore our content holdings on the IMF and the World Bank Group, today’s keywords in focus. Some highlights include:

  • A Chatham House paper on rethinking the international monetary system
  • A CIS paper on the impact of World Bank and IMF programs on democratization in developing countries
  • A PISM paper on the IMF’s review of its anti-crisis package
  • A CEPR paper on the IMF’s support package for Greece
  • A CGD paper on a new World Bank financing model for emerging economies
  • A CGD paper on the World Bank’s black box allocation system
Categories
Business and Finance

From ESPO to Druzhba?

Close-up of a pipeline
Close-up of a pipeline

Some of Russia’s pipelines have names that reflect more than just technical realities – such as the Druzhba (Friendship) pipeline system that brings oil to Central Europe. Yet, others are of a more prosaic kind, including the recently opened Eastern Siberia-Pacific Ocean Pipeline (ESPO). ESPO will bring the black gold from Eastern Russia to China and Russia’s Pacific Coast. Whether this new pipeline is the beginning of a new Russian-Chinese energy-friendship remains to be seen.

China’s growing appetite for gas and oil will be hard to saturate in the next decades. According to projections of the International Energy Agency, China’s demand for primary energy will nearly double from 1,765 million tons of oil equivalent (Mtoe) in 2007 to 2,539 Mtoe in 2020 and 3,451 Mtoe in 2035. The country will account for 30 percent of the increase in global primary energy demand for that period. Oil demand is expected to more than double while the demand for natural gas will more than triple.

Before that backdrop one would expect Russia, home to 5 percent of the world’s proven oil reserves and 24 percent of all proven gas resources, to be eager to enter this growing market; even more so, since the focus of Russia’s oil and gas production is moving eastwards. There are untapped hydrocarbon resources in Eastern Siberia and Russia’s Far East that are expected to cover falling production elsewhere. Furthermore, hooking up with China holds major potential for developing an economically backward region and would add another trump to Russia’s hand when bargaining with its European energy customers.

But that’s not how Russia seems to view the situation.

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Belarus – Stability on a Shaky Foundation

Photo of Belarus' President Lukashenko together with national flag
Belarus' President Lukashenko with national flag, courtesy of Zachary Harden/flickr

Alexander Lukashenko is still there, whether you like it or not. As president of Belarus since 1994 he has overseen the ostensible stabilization of his country, if you are willing to ignore how it has been achieved, that is.

But what are Lukashenko’s prospects after the next presidential election, expected to be held at the beginning of 2011?

After the collapse of the Soviet Union (a collapse it opposed) Belarus took a unique way, different from the 14 other former Soviet states. While the others went through political, economic and social turmoil, Belarus’ path resembled that of a light version of Soviet socialism with stability and modest prosperity.

Over the years, Lukashenko centralized economic and political power in the hands of his regime. Two thirds of Belarus’ economy is still state owned. This in turn assured loyalty from the bureaucracy and the political elites who could not  get access to sources of national wealth, which would have allowed them to develop a political appetite and gain leverage. Unlike in Ukraine or Russia, no ‘oligarch class’ could develop, making the president the ultimate re-distributor of wealth and political power in the country.

After the constitutional reform of 1996 a semi-presidential system was established that led to a complete dismantling of a western-style system of checks and balances. The legislative powers of the parliament are weak, the president controls the executive branch and the judiciary is simply an extension of the presidential administration. Since there is no liberal elite, pressure for liberalization and cooperation with the West is practically non-existent.

Another pillar of regime stability is sustained public support, despite rigged elections and lack of freedoms. Opinion polls from 2006 and 2008 demonstrate public support for the Lukashenko regime and its ability to ensure economic growth, low unemployment and social welfare – underlying the regime’s sustainability in a very real, tangible way.

Yet, what looks like a success story comes at a price that will be increasingly felt in the future – dependence on Russia.

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Afghan Price Tags

100 Afghanis banknote
100 Afghanis banknote, courtesy of Wikipedia

Nearly one year after the devastating Kunduz airstrike the German military has decided to pay $5,000 to each of the families of the 100 civilian victims. This is the latest move in an affair that forced the German public to face the reality of the country’s military involvement in Afghanistan.

Overall the Bundeswehr transferred $430,000, stressing that the payment is only a voluntary, humanitarian measure. This was preceded by demands by the families’ attorneys, who demanded up to 28,000 euro per family. Compared to the amount actually paid, the attorneys did not get very far.

The price tag of $5,000 appears even lower if one considers earlier reports that Germany had paid $20,000 to the family of an Afghan woman who was shot at a checkpoint, and $33,000 for a dead Afghan boy.

The German compensation policy appears ‘generous’ compared to other nations militarily engaged in Afghanistan. One report mentions a sum of $40,000 for 15 people killed, breaking down to roughly $2,700 per person, paid by US commanders. Other sources state that US military commanders are authorized to pay between $1,500 and $2,500 to a family that has lost a child or an adult. The loss of a limb or other injury is ‘worth’ between $600 and $1,500; a damaged or destroyed vehicle, $500 to $2,500; damage to a farmer’s fields is valued between $50 and $250.

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Lost in Relocation

 

T-80U

Russia’s tanks have enjoyed a glorious reputation since the end of World War II, securing buyers and admirers all around the world. How they are safeguarded and where they are found can, however, still be surprising and downright frightening.

Close to the city of Yekaterinburg in the Urals villagers found dozens of abandoned tanks, identified as a mixture of T-80 and T-72 main battle tanks “parked” next to railway tracks. Reports differ on the number of tanks, with estimates ranging between 100 and 200 vehicles. They have been sitting there for almost four months covered in snow, reports add.

The video footage available (1 and 2) shows that at least some of the vehicles were unlocked, open for everyone to take a personal tour. Apparently the only items missing were live rounds and the keys to the tanks’ ignitions. But maybe they were just under another snow heap?

A military spokesperson was quick to point out that special patrols were guarding the tanks, which were being dispatched to a military base.

In the meantime the army has embarked on a hasty operation to relocate the tanks.

This incident comes just days after top military commanders stated that Russia doesn’t need half of its 20,000 tanks.

Could you park one of them close to my train station, please?