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.
Decarbonization and global instability
The fight against climate change is currently focused on managing demand and increasing production from non-fossil-fuel sources. But those efforts disregard the strategic interests of major oil- and gas-producing states that depend on exports. Until those countries have an alternative for economic development, keeping the global temperature rise below 2 degrees Celsius will remain a pipe dream.
Boom or bust for Russian arms exports?
The Russian weapons business is facing a critical juncture. Once coequal with the United States as the world’s biggest arms exporter, Russia must now advance technologically or be displaced by rising competitors. The biggest threat is posed by two countries that were traditionally Russia’s best clients – China and India.
Opinion: The OECD’s problematic global tax ‘standard’
The OECD’s global standard for the Automatic Exchange of Information (AEOI) in tax matters is far less global, standardized and automatic than its name suggests. It is structured so that countries tend to apply the rules bilaterally, leading to a complicated web of regulations that the “standard” was designed to avoid. This is leading to higher costs and troublesome legislation.
GIS Dossier: Return of the Daddy State
The aftermath of the 9/11 terrorist attacks and the 2008 financial crisis have led to calls for a dramatic increase in the powers of government. Even the ubiquity of internet-based technologies and the populist backlash against political establishments have had the paradoxical effect of promoting centralization. Yet in both politics and economics, there is plenty of evidence that state paternalism is the wrong answer.
The Swiss franc 2.0
The Swiss economy is doing remarkably well. Though it is growing only slowly, its companies are competitive, unemployment is virtually absent, inflation is close to zero and public debt is under control. One would therefore expect the Swiss National Bank to abstain from taking an active role in monetary policy or manipulating interest rates and exchange rates. Yet, last June the SNB announced that it intends to play an active role, and that it will expand its money supply to enhance growth and avoid deflation. These explanations are not convincing – the key is somewhere else: bruised Swiss manufacturers.
The subtle art of the minimum wage
The movement for significantly raising the minimum wage has gained momentum in many countries. Cities such as Seattle and Berlin have experimented with doing so, with mixed results. Countries can maintain stability by keeping poverty and inequality at bay, but policies that distort the economic environment need to be made at the local level to limit the scale of unintended negative consequences.
Scenarios for the future of the EU-Turkey relationship
The relationship between Turkey and the European Union is on the rocks. Turkey cannot be considered eligible for membership, but the accession process remains officially ongoing. A collapse of the talks seems likely – but that would cause more problems than it would solve. Forging a new kind of partnership would have plenty of benefits, but would require ending accession negotiations. Sticking with the status quo gives both sides what they want, for now.
Opinion: The BRI – China’s road to hegemony
China’s Belt and Road Initiative has generated plenty of excitement for the economic benefits it could bring. But for Beijing, the huge project is a tool to expand its influence throughout Asia and beyond. China is putting on a friendly face, but its main goal is hegemony.
GIS Dossier: Brazil’s crisis
Corruption is nothing new in Latin America, but the sheer scale and brazenness of graft among Brazil’s political and business elites has caused a powerful public backlash. While huge protests against abuse have galvanized the country’s civil society, the crisis has also revealed the strength of its democratic institutions and respect for due process.
Too much oil?
Oil prices were supposed to stabilize in 2017, but instead they dropped by about 20 percent. The reason appears to be more technological progress in the shale industry and the ineffectiveness of OPEC’s production cuts. In response, the oil cartel may decide to reverse its strategy and punish high-cost competitors by increasing supply – sending prices even lower.