This week’s featured graphic maps the geographic distribution of the Asian Infrastructure Investment Bank and New Development Bank lending (approved loans) as of October 2020. For more on China, Multilateral Banking and Geopolitics, read Chris Humphrey and Linda Maduz’s CSS Analysis in Security Policy here.
This graphic illustrates the financial situation of rural and urban Russian households during the 2nd quarter of 2019. According to surveys on living standards and deprivation, the extent of perceived poverty is worse than the official poverty line suggests.
For more on the extent of poverty in Russia and the government’s policies to combat it, see Russian Analytical Digest 249 on ‘Need-Based Social Policies’.
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.
The 2008 global financial crisis and its aftermath have caused a loss of faith not only in markets, but also in the ability of democratic governments to ensure that the benefits of market-led growth are widely shared. On economic, financial, tax, trade, and climate issues, many people around the world are fearful or angry, believing that a worldwide cabal of bankers, corporations, and G-20 elites uses insider deals to monopolize the benefits of globalization.
But few people – whether ordinary citizens or internationally oriented economists – recognize that our seemingly weak and ineffectual multilateral institutions are the world’s best hope for managing and democratizing the global market. Only these institutions are capable of preventing the elite capture and insider rents that are putting global prosperity at long-term risk.
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.