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CRITICAL ANALYSIS OF GLOBAL DEVELOPMENTS, TRENDS & IDEAS

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Wheels Falling off the WTO: Is it high time to write an obituary for multilateralism?

in Economics by

Multilateralism was believed to have returned from the grave, when delegates to the World Trade Organization (WTO) bragged of the Bali deal, the first fruit to be reaped out of the long-deadlocked multilateral trade negotiations in December 2013. The resurrection of the Doha round of international trade talks was indeed quite a surprise to those who already promulgated the end of multilateralism. Doha negotiations, initiated in 2001, were suffocated owing to the conflict of interest among WTO members in intractable issues such as agricultural subsidies, intellectual property rights and trade in services. They also experienced the collapse of talks in 2003 and 2008. In 2012 however, the flame of multilateral negotiations was rekindled as the WTO endeavored to simplify the agenda and channel the focus of talks into “trade facilitation”, i.e. the cutting of red tape in customs procedures, which was predominantly supported by the members. When the Bali package was signed in late 2013, a rosy future of multilateralism was sketched out with optimistic economic estimates—for instance, the Peterson Institute for International Economics forecasted that trade facilitation would generate 21 million jobs, particularly in less developed nations, and could increase developing countries’ annual output by $523 billion, tilting the…

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Testing Theories of American Politics

in Economics/Politics/US by

While not an altogether new phenomenon, the nature of the US’ democratic system in terms of its responsiveness to the needs of its citizens has been given considerable attention in recent years. Coinciding with this is the emergence of new challenges to the existing system. The Occupy Wall Street movement was an example of citizens protesting the actions of the US government in handling the financial crisis. Riots, such as those in the wake of the police shooting in Ferguson, Missouri speak to the racial tension existing there, but also have the political element of expressing anger at the government’s inability to provide necessary access to due process, life, and economic security. Internationally, the US’ democratic system, and the intertwined capitalistic policies has been recently scrutinized with groundbreaking works such as “Capital in the 21st Century” by French economist Thomas Picketty. Testament to the change in dialogue, US domestic discourse now regularly features phrases including “the 1%”, the “one-percenters” or similar terms to emphasize a separation between the average citizen and those who are seen to hold power. In particular, this article will analyze and contextualize a recent peer-reviewed publication that has generated considerable debate in the US. “Testing Theories…

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Dragon Ready to Forge Ahead: Will China overtake US?

in Asia/Economics by

The Chinese juggernaut is expected to overtake the American eagle by 2021 in terms of GDP, according to The Economist’s latest estimates (Aug 2014). In fact, China already outpaced the U.S. as the world’s largest manufacturing power in 2010. Since then, it has been further widening its lead, according to the 2013 UN research. Notwithstanding a small dent in its recent growth trend line, partly owing to a slowdown in export demand from key markets (e.g. U.S. and EU), China has been able to achieve its growth target of 7.5% in the second quarter of 2014. Yet a fleet of naysayers still do not believe these numbers indicate an upcoming shift in the world’s power distribution and, in the face of cognitive dissonance, cling to a weakly-grounded belief that United States of America continues to be the one and only hegemon at least until they rest in peace. Stiff opposition to an impending appearance of Chinese hegemony is predicated on two assumptions. The first one is that China cannot sustain its astonishing growth and is soon doomed to fall from its grace. The other is that even if China is able to surpass the U.S. in the economic area, the…

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All That Glitters Is Not Gold

in Asia/Economics by

China’s fundamentals may not be as strong as you’ve been told. Place your bets, ladies and gentlemen. The fix is in: China will be the next superpower. We’ve been told the economic projections all assure it, but do they? The same projections were made for the Eastern bloc in the 1960s, Japan in the 1980s, and the Asian Tigers in the 1990s. In each of those decades the conventional wisdom, particularly in the United States, whipped policymakers into a frenzy over the implications of dizzying growth numbers. And yet to varying degrees, history has proven the conventional wisdom wrong. Just as history has a tendency to repeat itself, there is strong evidence to suggest it may be wrong on China as well. First, let’s examine economic strength, upon which most “China superpower” predictions are predicated. One of the most oft-cited figures is China’s GDP. In 2013 China met its target to expand by 7.5% – more than double that of the United States, but also only slightly more than half the 14.2% it recorded only 6 years earlier. And how do these numbers stand up qualitatively? Even as GDP has plummeted, it is increasingly being funded by credit accumulation, with…

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