Diplomacy & Crisis News

Despite its defiant warnings, Tehran will eventually negotiate with Donald Trump—as long as Vladimir Putin mediates.

The number of informants executed in the debacle is higher than initially thought.

The decision by Israel to reopen the only functional commercial crossing point into Gaza which has been closed to most deliveries for weeks, has been welcomed by the United Nations Secretary-General.

After days of intense fighting for the Afghan city of Ghazni, south-west of Kabul, the United Nations Secretary-General and the Head of the UN  mission in the country (UNAMA) have denounced the toll that the almost 20-year conflict has taken on civilians, and called on warring parties to lay down their arms and seek a political solution to the conflict.

As consumer debt in the UK reaches pre-2008 financial crisis levels within a new low interest rate austerity dynamic, we examine whether there is reasonable cause for concern and how the Government and Bank of England mitigate the risk.

Consumer debt is an individual form of debt which is composed primarily of credit card, household, and car leasing expenditure. Mortgages and student loans are not included as they are generally seen as investments. Consumer debt is not productive, it is simply for consumption. In moderation, consumer debt is encouraged as it increases spending into the economy and incites growth. When debt levels climb at a constant pace, growth can continue to flourish. However, as soon as the market is spooked and business falters or unemployment rises, widespread debt can easily escalate a small treatable market blip.

Before the 2008 financial crisis, the Bank of England’s data on consumer debt in the UK was recorded at £2.08 trillion. As the crisis spread and markets were in turmoil, the first 4 months saw £200 billion of credit vanish. With the continuous real wage rate decline and rise in unemployment, total consumer debt dropped to £1.5 trillion in 2012.

In January 2018, the UK’s consumer debt has reached pre-crisis levels and, as of April 2018, stands at £2.1 trillion. Although the figure matches pre-crisis levels, the reasons for the build-up are largely different.

To remediate the effects of the crisis and recession, the Bank of England, among other stimulus packages, lowered interest rates to encourage spending and investment – which in turn would fuel growth. Individual borrowers saw this as a great opportunity to get their hands on ‘cheap’ money. Independently, the Bank of England’s interest rate policy follows sound economic theory, however, the Government took a contrasting approach which has led to this unique situation.

Austerity vs Stimulus Dynamic

The Bank of England’s technocratic approach was semi-countered by Government’s ideologically-driven austerity plan. On the individual level, a problematic scenario emerges: Cheap debt and tight Government fiscal policy. In the UK, figures from February 2018 show that 44.8% of the population are either financially struggling (low income, benefit dependent, social housed, median savings of £50) or squeezed (low income, private renters, one shock away from problems, median savings of £580). These people, whose financial situations are worsened by tight fiscal policy, are given a lifeline from the artificially low interest rates – leaving some core issues unresolved and a mountain of debt rising. The higher consumer debt piles up the more damaging potential it has. As the boom and bust cycle of economics will indefinitely continue, solving fundamental consumer debt behaviour can lessen the impact

Mitigation Efforts

The Bank of England’s interest rate is managed in a fashion that allows markets to predict rate changes to reduce unnecessary market fluctuations. A rise of bank interest rates will have the effect of slowing a debt build-up, as borrowing money will become more expensive. This idea has already been floated by Monetary Policy Committee member Gertjan Vlieghe specifically in response to ever-rising consumer debt. The UK Government’s austerity plan will eventually end with a fiscal loosening that can be an effective tool countering any economic blips.

On a societal level, the topic of indebtedness has increased its salience. A recent cross-party effort led by MP George Freeman and MP Liam Byrne demonstrates the presence of political will to tackle this epidemic. The wider social cost of consumer debt is estimated to be £8.3 billion. Badly managed debt, as a social problem, must be tackled on a societal level. The MP’s campaign could help encourage a more responsible approach to debt.

Is it really that bad?

Research by staff at the Bank of England and the Financial Conduct Authority recently suggest that the rise in total consumer debt is actually attributed to an increase in safe borrowers taking on more debt. Those with above average incomes are likely to have good credit ratings and opportunities to leverage higher.

The Brexit referendum result and the depreciation of the sterling currency did not lead to disaster for the UK economy. The organised timeline given in the negotiation stages of the Brexit process allows time for the markets to create solutions to whichever direction the negotiations go. It is unlikely there will be an outcome drastic enough to jolt markets and plunge the UK into a recession. In the unlikely event that no deal is made with the EU and UK prospects dwindle, the Government and the Bank of England will certainly use their vast resources and experience to maintain a level of stability.

To effectively control the rise of consumer debt, a lead at the societal level to promote reasonable behaviour and control towards consumer debt should be encouraged. The Government, as always, should have contingency plans for shocks to the market but it will do well in taming the epidemic levels of debt not just for the next shock, but indefinitely,  through the boom and bust cycles we will continue to experience.

 

 

This article was first published on Global Risk Insights, and was written by Fabian Bak. 

The post UK Consumer Debt: A cause for alarm? appeared first on Foreign Policy Blogs.

Kazakh case draws attention to plight of hundreds of thousands detained in Xinjiang

The United States has spent far more time obscuring its role in the Saudi-led war in Yemen than in explaining any rationale for it.

L'augmentation du nombre de chômeurs, la baisse du revenu et l'extension de la pauvreté peuvent-elles inciter les syndicats américains à remettre en cause leur rôle confortable de médiateurs entre le monde ouvrier et le patronat dans lequel ils se sont confinés pendant des décennies ? Ils en sont (...) / États-Unis (affaires intérieures), Syndicalisme, Travail - 1982/10

China's new ideological rigidity is being put to the economic and technological test.

>> Retrouvez l’article dont est extraite cette citation : « Géopolitique de la cyber-conflictualité », écrit par Julien Nocetti, chercheur au Centre Russie/NEI et spécialiste des questions liées au numérique et au cyber, dans le numéro d’été 2018 de Politique étrangère (n° 2/2018). <<

In the last few months, rising public frustrations over domestic policy and a government proposal to weaken the social safety net have led to a sharp decline in Vladimir Putin’s popularity. 

It's Robert Gilpin's world; everyone else is just living in it.

Gamal Abdel Nasser and Sayyid Qutb are usually remembered as bitter enemies and representatives of two sides of Egypt's most intractable political divide. But in his book Making the Arab World: Nasser, Qutb, and the Clash That Shaped the Middle East, Fawaz Gerges shows that the two titans of Egyptian history overlapped ideologically and personally more than is generally realized.

How a dispute over a jailed American pastor roiled Turkey’s economy

LE petit royaume du Swaziland, situé entre l'Afrique du Sud et le Mozambique, est devenu une sorte de test dans le conflit entre Pretoria et ses voisins septentrionaux. Il y a quelques mois, Pretoria lui aurait offert de rattacher au Swaziland le nord du bantoustan du Zoulouland. Des documents (...) / Swaziland, Mouvement de libération, Frontières, Indépendance - 1982/02

Families say the State Department continues to curb benefits mandated by law.

Tech competition is being used to push a dangerous corporate agenda.

Rien ne révèle mieux l'ampleur des fluctuations des prix des produits de base que le sort récent du café et du sucre, qui représentent une part importante du commerce international. Au niveau du marketing et de la distribution, les entreprises transnationales contrôlent directement ou indirectement (...) / Commerce international, Développement, Relations Nord-Sud, Spéculation, Matières premières - 1977/06

 

On June 24th, Saudi Arabia lifted the ban against women driving, which was in place for over 25 years. This reform came just days after the one-year anniversary of 32-year-old Crown Prince Mohammad bin Salman’s (MbS) rise to power. Since his ascension, the young prince has initiated widespread social and economic reformsthroughout the kingdom, many of which have addressed women’s rights. Despite the lift of the driving ban being a step in the right direction for women’s advancement in Saudi Arabia, the main reasoning behind it is purely economic based on MbS’ 2030 vision. Based on this vision, MbS wants to diversify the Saudi economy away from oil, and he promises to achieve this by taking steps to increase women’s participation into the Saudi workforce by 22 to 30%.

However, Saudi women still face a significant number of discriminatory policies that prevent them from achieving their full potential. Additionally, in the lead up to the reforms, the Saudi government arrested many women activistswho disagreed with the direction of such limited gender developments within the country. The United States should “name and shame” Saudi Arabia, one of its allies, into releasing the women activists and rescinding the allegations against them. As Saudi Arabia is unlikely to completely shift overnight in its overall treatment of women, MbS should take short-term actions to create more inclusivity for women, such as fewer regulations on women starting their own businesses. If MbS wants to achieve his 2030 visionfor the country, specifically the goal of transforming the economy with the incorporation of more women, he must begin to champion these courageous women and use them as allies.

A multitude of structural discriminatory policies infringe upon the basic rights of Saudi women, who constitute 42% of the country’s population, preventing them from obtaining full equality alongside their male counterparts. In fact, according to a recent poll, Thomas Reuters ranked Saudi Arabia as the fifth most dangerous country for women in the world, mainly because of its patriarchal societal norms. Some of these restrictive, archaic laws include a male guardianship systemand the inability of women to pass down their nationality to their children. As best described in an Al Jazeera opinion article, “a woman in Saudi Arabia is legally treated as a minor from cradle to grave; she needs consent of a male guardian to be able to study, travel, work, marry or obtain some official documents.” Even the lifting of the driving ban is not a complete equal opportunity for all Saudi women. The law so far has only allowed women with foreign permitsto be able to convert their current licenses from other countries. As of June 24th, an Interior Ministry spokesman estimated that only 120,000women applied for Saudi licenses out of an estimated 9 million eligible drivers. This further proves that the driving reform is not a genuine effort to incorporate more women into the workforce. Overall, women in Saudi Arabia experience life as second-class citizens, and the end of the driving ban is only a small step forward in terms of removing the discriminatory policies women face.

In spite of MbS’ attempt to portray himself as a modern leader committed to the human rights of his people, he has quietly detained activists and restricted the freedoms of citizens in the wake of these seemingly innovative reforms. Just weeks ahead of the lifting of the ban, the Kingdom arrested 11 leading Saudi women activistson counts of “communicating and cooperatingwith individuals and organizations hostile” to Saudi Arabia. Throughout the country and on social media, pictures of the arrested leaders went viral with text pasted across their photos reading “traitors” and “agents of embassies.”Some have suspected that MbS ordered the arrests to appealto the country’s ultraconservative demographic and religious leaders who have opposed these recent reforms. It is a great paradox that when women are finally getting into the driver’s seat, others are sitting in jailafter fighting for this right.

The United States and the United Nations should continue to demandthe release of the activists, as many of these women still remain behind bars. If MbS truly wants to transform the Saudi economy, he must use the untapped resources Saudi women present and expand the driving ban repeal to include all women. This will allow more women to enter the workforce, though many other reforms must occur in order for women to reach real equality. Women are a vital ally for MbS to make strides in achieving his goal of diversifying the Saudi economy.

When asked about Saudi women’s reforms compared to the West, MbS stated, “I just want to remind the world that American women had to wait long to get their right to vote. So we need time.” Even though we must praise driving ban repeal and other gender reforms, we must be concerned about the other restrictions on women’s freedom in Saudi Arabia, as well as the intense crackdown on women activists. This is the moment for MbS to form alliances with women activists in Saudi Arabia and continue to enact reforms for women so that he can be on the pathway of achieving his long-term goal of Vision 2030 for his country. It is 2018, and the time is now for Saudi women to experience full equality.

Renee Coulouris is a Master’s degree candidate at Johns Hopkins University, where she is studying Global Security Studies. She has previously worked at Women in International Security and in the Africa II Division of the Department of Political Affairs at the United Nations. Additionally, she has conducted research in an array of countries relating to international security, foreign policy, and women’s roles in extremist organizations.

The post Don’t Be Fooled by the Recent Reforms for Women in Saudi Arabia appeared first on Foreign Policy Blogs.

On a parlé pendant des années, dans les milieux de journalistes spécialisés, du conflit idéologique entre les partis communistes d'U.R.S.S. et de Chine. Il nous a fallu à plusieurs reprises réagir contre cette conception unilatérale du conflit, et insister sur son caractère global. Certains (...) / Chine, URSS, Armement, Nucléaire militaire, Communisme, Conflit, Idéologie, Parti politique, Tiers-monde, Socialisme, Maoïsme, Révolution russe 1917 - 1969/10