POVERTY
A new World Bank report finds that while the number of people living in extreme poverty continued to decline last year, the rate of decline slowed considerably and that’s not the only bad news:
In its annual report, the Washington-based development agency said the proportion of people living in such conditions had fallen to a new low of 10% in 2015 – the latest number available – down from 11% in 2013. It meant that the number of people living on less than $1.90 a day fell by 68 million to 736 million.
But the decline was half the rate of previous years and had slowed further, according to preliminary figures that estimated a 1.4 percentage-point fall between 2015 and 2018.
The agency, which aims to support sustainable development, added to the gloomy picture this year, with figures showing that those lifted out of extreme poverty struggled to make further progress up the income ladder.
EUROPE
EUROPEAN UNION
The European Commission has unveiled something called the “Connectivity Strategy” that appears to be an effort to counter China’s Belt and Road Initiative by offering support for infrastructure projects across Europe and Asia. By way of contrasting itself with Belt and Road, this new program claims to emphasize sustainability (by not drowning participant nations in debt), labor rights, and open competition among private companies (BRI uses exclusively Chinese firms).
UKRAINE
The Lviv regional legislature voted on Wednesday to ban Russian. Or at least to ban Russian-language books, movies, and songs. This is definitely going to turn the tide in the civil war, I can feel it.
KOSOVO
Repartitioning Serbia and Kosovo along ethnic lines is the idea that won’t die, but it’s not really developing into anything more than an idea at the moment either. On the one hand, it could, if it goes well, end a two decade old frozen conflict that has gripped the Balkans, contributed to Kosovo’s failed state status, and prevented both Kosovo and Serbia from pursuing membership in pan-European organizations like NATO and the EU (and, in Kosovo’s case, from joining the United Nations). On the other hand, redrawing boundaries will upend decades of European policy that expressly rejects using ethnicity as the basis for figuring borders, and if it goes really badly it could open up countless ethnic fault lines all over the place, including among the Serbs living in the parts of Kosovo that will remain in Kosovo:
More important, it is the 60 percent of Kosovo’s Serbs south of the Ibar who risk losing the most, as partition would effectively leave them marooned within a rump Kosovo where the pressure to leave would come from both Belgrade and Albanian hardliners in Pristina who would feel far less obligated to respect minority rights. Alongside these communities is the influential Serbian Orthodox Church, whose monasteries and other holy sites have been frequent targets of Albanian extremists since 1999. One of the most outspoken and internationally respected church figures, Father Sava Janjic, the Abbot of the immensely important Visoki Decani monastery, has taken to social media to point out the precarious position of the Serbian Church and its communities in central Kosovo where partition would be absolutely devastating for their future security and safety—especially if a potential land swap replaces 70,000 Serbs of northern Kosovo with nearly 70,000 Albanians from the Presevo Valley.
AMERICAS
BRAZIL
I have some terrible news–Brazil’s presidential election is now dangerously divisive and its polarization threatens to tear the country apart, possibly resulting in some type of “hellmouth”-like portal to another dimension:
Brazil’s presidential campaign, already the most divisive since the end of military rule three decades ago, is growing increasingly polarized each day and raising concerns about the future of the country’s democracy.
Less than three weeks before the vote, surveys from the Ibope and Datafolha polling firms show the middle has collapsed, with the electorate rejecting any centrist and gravitating to opposite ends of the political spectrum.
The frontrunner remains Jair Bolsonaro, the former army captain who talks openly about his admiration for the military government that ran Brazil brutally from the 1960s through the mid 1980s and his regret that it didn’t kill more people. Bolsonaro has been the first round leader in polling for several weeks, despite his contempt for democracy, his (also openly declared) intention to curtail civil liberties and possibly set himself up as dictator if he’s elected, his hatred of LGBT people, his repeated disgusting, demeaning references to women, and on and on. One would think that the fact that this lunatic has been polling consistently around 20-25 percent would alone be cause for serious concern.
But as it turns out, what’s really causing people to freak out is that Bolsonaro might wind up in the runoff against Fernando Haddad, the Workers’ Party candidate. The Workers’ Party being a somewhat leftist party and Haddad being a nominal leftist himself, now it’s time to panic. The middle has collapsed! As if the middle hadn’t already collapsed. As if the middle’s collapse weren’t the very reason why somebody like Bolsonaro could find himself atop a legitimate presidential poll instead of, I don’t know, shouting obscenities at random women on the streets of Rio and trying not to get arrested.
Next month’s election in Brazil is going to be incredibly instructive for anybody who’s paying attention. You’ll get to watch as supposedly centrist business elites, aristocrats, plutocrats, etc. line up behind a man who can barely conceal his fascism, and why? Because that man doesn’t want to raise their taxes, and his opponent does.
This, by the way, is exactly what will happen in the United States if, by some miracle, the Democratic Party nominates anybody to the left of Hillary Clinton or Michael Bloomberg to run against Donald Trump in 2020. All of these people who profess to loathe everything about Trump will one by one come over to his side if the alternative might mean higher taxes. People like Bloomberg, Jamie Dimon, Jeff Bezos, Tom Steyer, et al, aren’t the solution to the Trump problem. They’re the problem that brought us Trump.
UNITED STATES
Finally, John Feffer looks at the state of the US economy and wonders when and how the bubble is eventually going to burst:
Trump, always exuberant when talking about himself and his putative accomplishments, loves to boast about how well the American economy is chugging along. The stock market reached its all-time high at the end of August. In its second quarter this year, U.S. economic growth was 4.1 percent. Unemployment remains below 4 percent, and inflation remains moderate. Even wages are going up.
Irrationality enters the picture because there’s little if any connection between the president’s policies and the outcomes he lauds (since these trends began before he took office). Also, the prosperity that has resulted from this economic expansion has largely been enjoyed by the wealthier sectors of society. Finally, Trump’s economic fever dream is fueled by an enormous and growing amount of debt.
When it comes to irrational exuberance, it’s never if there will be a bust but when. On the tenth anniversary of the financial collapse of 2008, it’s worth looking at the potential pinpricks that will pop Trump’s hot-air balloon and send America crashing back to earth.
The Foreign Exchanges Companion 