ESADEgeo Daily Digest, 09/10/2018

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Financial Times – Chris Giles / Growth policies and populism threaten global economy, IMF warns

  • According to the IMF’s latest World Economic Outlook, risks are building in the global economy, with growth supported by increasingly unsustainable policies and global co-operation undermined by nationalist policies.
  • The fund’s comments came as it revised down its economic forecasts modestly for most countries for this year and next. The IMF now expects the global economy to grow 3.7 per cent in 2018 and 2019.
  • The IMF had unusually stern words for the US, its largest shareholder, criticizing the Trump administration’s imposition of tariffs and tax cuts near the top of the economic cycle.
  • The fund downgraded its US growth forecast for 2019 by 0.2 percentage points to 2.5 per cent, to reflect the likely damaging effects of tariffs. The eurozone is expected to expand 2 per cent in 2018 and 1.9 per cent next year.
  • South China Morning Post – John Carter / Trade war escalation will hit China harder than the US, IMF says

The New York Times – Steven Lee Myers & Chris Buckley / Interpol chief was China’s pride. His fall exposes the country’s dark side.

  • The detention of the now-resigned chief of Interpol, Meng Hongwei of China, dealt a spectacular, self-inflicted blow to China’s efforts to prove itself ready for more prominent roles in global affairs.
  • Meng’s appointment, like his detention, almost certainly had the approval of Chinese President Xi Jinping himself. The biggest question hanging around Meng’s fate is why Xi’s government approved the downfall of a man it had put forward to lead Interpol.
  • Meng was charged by the National Supervisory Commission, an anticorruption body created in March to intensify the country’s campaign against graft. In China’s system, Meng’s detention is almost tantamount to a conviction.
  • The new National Supervisory Commission has already brought cases that appeared to be only tangentially related to political corruption — which experts agree is rife in China — suggesting that its mandate includes securing the Communist Party’s political control.

The Guardian – Lina Khatib / Jamal Khashoggi’s disappearance fits a brutal new pattern

  • The disappearance of the Saudi journalist Jamal Khashoggi has sparked speculation that he has been abducted or killed by Riyadh, as a punishment for criticizing government policy.
  • Since the ascension of Mohammed bin Salman to the position of crown prince and de facto ruler, Saudi Arabia has entered an era in which internal dissent – no matter who is behind it – is met with brutality. International criticism is not tolerated either.
  • Alongside this, the Saudi state has painted itself as the only legitimate orchestrator of change in the country. Modernization initiatives, such as allowing women to drive, are said to come from the top rather than being a response to decades of grassroots activism.
  • Whatever the ultimate fate of Khashoggi, Saudi Arabia’s new zero-tolerance approach to dissent is being broadcast loud and clear.

Project Syndicate – Dani Rodrik / Will new technologies help or harm developing countries?

  • There are many instances of technology improving the lives of poor people. But for technology to make a real and sustained contribution to development, it must not only provide better and cheaper products; it must also lead to more higher-paying jobs.
  • The introduction of new technologies in production in developing countries often takes place through global value chains (GVCs). In principle, GVCs benefit these economies by easing entry into global markets.
  • However, optimism about the scale of GVCs’ contribution must be tempered. First, the expansion of GVCs seems to have ground to a halt. Second, developing-country participation in GVCs has remained quite limited. And third, the domestic employment consequences of recent trade and technological trends have been disappointing.
  • Trade and technology present an opportunity when they are able to leverage existing capabilities, and thereby provide a more direct and reliable path to development. When they demand complementary and costly investments, they are no longer a shortcut around manufacturing-led development.

The selected pieces do not necessarily reflect the views of Javier Solana and ESADEgeo. The summaries above may include word-for-word excerpts from their respective pieces. 

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