Growth, recessions, fiscal policy, monetary policy, currencies and global business deals. GIS experts provide forecasts and potential scenarios for all of the economic trends that shape geopolitics.
Cronyism puts democracies and markets at risk
Behind the malaise afflicting Europe’s democracies and economies is an overlooked cause: cronyism. Big government can encourage businesses to seek favors from politicians and regulators. When that happens, the accountability needed for markets and democracies to function properly disappears. It is time to view crony capitalism as a systemic threat.
Brazil’s economy starts to rebound as political crisis festers
As President Dilma Rousseff’s impeachment nears its final stage, Brazil remains stuck in a deep political crisis. Citizens do not trust their current leaders, including the acting president, but legal hurdles make an early election unlikely. The first signs of an economic rebound, however, brings hope for change in the political sphere as well.
The future of Chinese influence in Latin America
Between 2000 and 2012, Chinese demand for commodities fueled economic expansion in Latin America and underwrote expensive populist measures that kept left-leaning governments in power. Then, in 2012, the Chinese economy began to slow and the commodities boom collapsed, destabilizing many of those same governments. How these new dynamics affect China’s role in the region as a trading partner, investor and geopolitical actor will have a huge impact on Latin America in the coming years.
The fraying of sanctions
Two years on, there is no obvious endgame for Western sanctions against Ukraine. Some European Union leaders are already calling for normalized relations with Russia, even as fighting erupted in Donbas. But a “dirty deal” would carry a hefty long-term cost.
Bad loans are not the worst threat to Italian banks
Italian banks suffer from poor management and a high ratio of nonperforming loans, but except for a handful of the most troubled institutions, their shareholders and bondholders have no reason to worry. Unless further losses emerge as a consequence of a public debt crisis, a catastrophe is not in sight.
India, a nation where few pay income tax
A low tax base, poor tax compliance and ineffective, often abusive tax administration not only have constrained Indian governments’ revenue, but also hampered growth and Indian society’s capacity to hold the government accountable. The government of Prime Minister Narendra Modi has chosen to focus on the Goods and Services Tax with the aim of simplifying indirect taxes rather than to tackle the direct tax structure.
Africa’s poaching wars
Poaching in Africa has intensified in recent years, leaving less than half a million elephants on the continent. The flip side of this ecological tragedy is a multibillion-dollar business for criminal and terrorist groups. That makes poaching a geopolitical problem requiring an international response.
Forget about the nukes, where is our aid?
The leaders of China have not found a way yet to tame their rogue ally, Kim Jung-un. Thus far, the North Korean dictator has been able to continue both developing his weapons of mass destruction, which China fears and has gently tried to block, and extracting economic aid from Beijing that his mismanaged economy necessitates.
Central Europe gropes for ways to deal with bad demographics
Central Europe’s population is shrinking faster than any other region in the world. To avert an economic disaster, Poland is trying a bazooka-like blast of cash grants to needy families. Experience suggests it won’t work.
India’s new nuclear push
India is making a big push to finally join the Nuclear Suppliers Group, which sets global rules on the spread of nuclear technology. Becoming a member is crucial for India, since it would solidify its ability to import and export nuclear technology freely. Without this, its nuclear energy sector could wither, with dire impacts for the country’s climate goals and its economy.