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Intelligence Finance

Addressing the Foreign-Fighter Risk: a Role for Financial Intelligence?

Free Syrian Army fighters in Idlib, courtesy of Freedom House/flickr

The participation of foreign fighters in the Syrian conflict is a growing concern, particularly among Western governments that are not only struggling to track the movement of their citizens, but are also fearful that those travelling to the conflict may become radicalised and return home with their extremist ideology. Recently, a UK Parliament Home Affairs Committee enquiry into counterterrorism heard from a range of experts how returning fighters pose a statistically significant risk to the security of their home countries. Research published by Thomas Hegghammer also suggests that perhaps one-in-nine foreign fighters from the West might perpetrate attacks on their home countries once they return.

In addition, several studies have been undertaken that seek to estimate the number and nationality of these foreign fighters. Consensus suggests that there are over 10,000 such fighters in Syria, with as many as 2000 (and rising) coming from Western Europe. A number of these have already died in battle or, as in the case of Briton Abdul Waheed Majeed, acted as suicide bombers. Yet, while there is certainly no suggestion that all those returning from the conflict will be radicalised, the West’s limited knowledge as to who travels and returns from Syria is alarming.

Categories
Finance Economy Regional Stability

What’s Ailing France?

François Hollande, courtesy of MD Photography

PARIS – France is gravely ill. So ill, in fact, that Standard & Poor’s recently cut its sovereign-credit rating – the country’s second downgrade in less than two years. The decision was accompanied by warnings that the budgetary and structural reforms that President François Hollande’s administration has implemented over the last year have been inadequate to improve France’s medium-term growth prospects. Now, the pressure is on for structural reforms covering everything from labor markets to taxation.

While the S&P downgrade was unexpected, it was not exactly shocking. The recent downturn in France’s industrial output has created large trade deficits, and is undermining the competitiveness of small and medium-size enterprises. Unemployment stands at about 11%, with a record-high 3.3 million workers registered as jobless in October.

Categories
International Relations Foreign policy Finance Development

What Should the World Bank Do?

 Robert B. Zoellick
Who will replace Robert Zoellick as World Bank President? (Photo: World Bank Photo Collection/Flickr)

NEW YORK – I have been honored by World Bank directors representing developing countries and Russia to be selected as one of two developing-country candidates to become the Bank’s next president. So I want to make known to the global community the principles that will guide my actions if I am elected – principles based on lessons learned from development experience.

That experience has taught me that successful development is always the result of a judicious mix of market, state, and society. Trying to suppress markets leads to gross inefficiencies and loss of dynamism. Trying to do without the state leads to unstable and/or inequitable outcomes. And trying to ignore social actors that play an essential role at the national and local levels precludes the popular legitimacy that successful policymaking requires.

Indeed, the specific mix of markets, state, and society should be the subject of national decisions adopted by representative authorities. This means that it is not the role of any international institution to impose a particular model of development on any country – a mistake that the World Bank made in the past, and that it has been working to correct. Because no “one-size-fits-all” strategy exists, the Bank must include among its staff the global diversity of approaches to development issues.

Categories
Government Finance Development Economy

Economic and Political Indicators: Do we Still Need Them?

indicator
Synchronism indicator. Picture: Leo Reynolds/flickr

In a somewhat unexpected turn of events, the presentation of Matthias Busse on Thursday, 1st March entitled ‘Governance in Developing Countries’ at the CIS Colloquium series led to a heated debate on the necessity and validity of indicators, such as those for example developed by the World Bank. Unlike in usual antipositivist development circles, however, the audience engaged in a constructive debate with Busse about his research design concerning the following hypothesis: ‘External drivers of change are less effective than internal ones to improve business regulations’; but how can we discern internal drivers of change from external ones, and how can we measure the well-being of the business regulation framework?

At the beginning, Busse clarified that the project he presented is still in its early stages; yet, he invited disagreement by not being able to explain how internal drivers of change could, even theoretically, be differentiated from external ones. External drivers, such as the IMF or the World Bank, provide conditional loans, which in turn directly affect the so-called internal drivers of change: FDI, press freedom, or trade. Hence, it might be difficult to independently measure and then compare the effect of these two factors on the regulatory framework.

Categories
Finance Economy

Financialization: When Money Took Over

Bankers walking into the City of London, one of the symbols of financialization. Image: Chris Brown/flickr

Money was invented to facilitate economic transactions and thus serve the real economy. Over the past 30 years or so, this relationship has been reversed: the real economy now appears to serve financial markets with financial crises bringing down economies. “Financialization” is the term experts use to describe this phenomenon.

As part of our Editorial Plan’s focus on international economics and finance, yesterday we described the history of the international monetary system.  On Monday the ISN speculated that the growing importance of foreign direct investment and global  financial markets makes the most recent wave of globalization the most impressive. What follows is a critical analysis of the evolution of financialization, which has pernicious side-effects that remain difficult to resolve.