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Nicaragua: A steady, admirable regional economic growth

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Since his early days in office (2007), President Daniel Ortega and his government began elaborating a National Plan of Human Development with a clear goal to reduce inequality by increasing the fight against poverty, cutting irrelevant expenditures and increase investment in social sectors and rural infrastructure.

In the mean time international organizations such as the World Bank and FAO have provided expertise and assistance through their technical cooperation programs including the International Association of Development (AIF) in order to help alleviate the most vulnerable rural – farming families and improve the state of public works and infrastructure throughout Nicaragua.

Despite of an overwhelming global economic turmoil, the government of President Daniel Ortega has been highly praised by competent international actors for maintaining an economic growth that is beyond average in Latin America and the Caribbean. Managua, regardless of its leftist government, has implemented admirable macroeconomic policies, combined with a growing international presence of Nicaragua’s exported products and an ever growing attraction of Foreign Direct Investment. These long term actions have helped the Central American nation to appropriately handle the economic turbulences of 2008-2009 and make the most out of the spiking food and oil prices.

In 2011, national economic growth reached a record high of 6.2 percent; meanwhile in 2015 the country had a 3.9 percent national growth, the lowest growth level in the last five years. In 2016, Nicaragua is expected to reach a 4.5 percent economic growth, making it the country with the highest prosperous level in Central America, and is expected to exceed Panama’s and Costa Rica’s economic growth this year due to: the contracted flow of commodities and movement of cargo in Panamanian ports; Costa Rica’s president has been voted the least popular leader of the Americas and as a result his country is expected to perform poorly this year.

According to a National Central Bank study, during the first semester of 2016, Nicaragua’s economy grew up to 4.6 percent, while experiencing a significant growth level if compared with the same period in 2015. Managua has ripe conditions to maintain a stable level of growth, as this year is coming to a close the level of growth could slightly exceed the level of 4.6 percent.

In the same vein, in May 2016 there was an average of 5.4 percent growth higher than May 2015. This year the economic activities that registered a hoicked level of growth were: financial intermediation and related services (9.6 percent), agriculture (7.9 percent), domestic and international commerce (6.3 percent), public administration and national defence (5.2 percent) and transportation and communications infrastructure (3.2 percent). In 2015, Nicaragua’s Gross Domestic Product grew by 4.9 percent with an inflation of only 3 percent.

The macroeconomic stability of Nicaragua has allowed the government to embrace pioneering strategies that combat poverty in the long run, especially in the rural areas, instead of succumbing into short run decisions that could further protract the glaucous levels of poverty. Visionary leadership and determination of President Daniel Ortega has been quintessential towards reducing the rampant levels of poverty, where in just a five years period (2009-2014) the national poverty level in Nicaragua saw a significant reduction by 13 points (from 42.5 percent down to 29.6 percent); meanwhile extreme poverty was reduced by 6 points (from 14.6 percent down to 8.3 percent).

Another important matter that will have a direct impact in Nicaragua’s economy is the construction of the “Great Bi-oceanic Canal of Nicaragua,” which pretends to unite the Pacific with the Caribbean Sea through: a spacious canal that will allow the circulation of large cargo shipments; connect the two shores with a major highway; the construction of a double track railway; installation of an oil pipeline; two deep water ports; two airports and two free trade zones.

This is an initiative that President Ortega’s government is trying to develop so that it can compete with Panama and offer an alternative service to maritime transport and to the shipment of commodities; such an investment could exceed the amount of USD40 billion.

While the legal aspects of this concession are already finalized, in Managua there are high hopes on this mega project; it is expected to bring optimistic structural changes to the matrix of national economy. Nicaragua would emerge from an economy based on raw materials into a nation that has an economy centred on a highly integrated chain of services, logistics management and the storage of consumption goods.

The study of feasibility and environmental impact for the Great Canal of Nicaragua started this year and the government has already awarded a fifty year long concession (with the possibility for renewal) to HKND Group, a Chinese construction company that will start the project in December 2016 and cut the ribbon of inauguration by mid 2019.

Nicaragua’s Great Canal is perceived as a project that will pave the strategic road of the future economic development of Nicaragua as well as raise the bar of growth in the whole region. Let’s not forget that amid persisting economic stagnation and recession in the global north, Daniel Ortega’s Nicaragua continues to sail on calm water that ensure a constant state of economic growth equilibrium.

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Weakness or calculation? How the pandemic undermined the US world leadership

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Anyone watching the numerous doomsday movies, happily churned out by Hollywood, will see American doctors saving the planet from space-borne viruses and the plague epidemic that turn people into zombies. However, the very first serious test in a decade has shown that the US healthcare system is actually inferior even to the Russian one, created during the Cold War years. And this despite the fact, that for the past 30 years, the Russian medical system has been suffering from “optimizations,” cuts and underfunding. Moreover, while the Kremlin, even for propaganda reasons, has managed to provide real assistance to a number of European countries, and has been the first to launch a vaccine on the market, Washington’s actions can be regarded as a sign of weakness, and a very dangerous one to its allies at that.

More than a year after the start of the global lockdown, we can already sum up the initial results, which look disappointing to Washington. The US healthcare system has collapsed under the pressure, thus laying bare the country’s inability to bring the outbreak of a less-than-deadly disease under control. As for Russia, despite its lack of America’s vast resources, it still managed to win the vaccine race and become the first to come up with a viable antidote.

More importantly, Moscow has also come out on top in the information “war” with the West, with its Sputnik V vaccine proving to have far fewer side effects than its Pfizer and Moderna counterparts. Therefore, the US and British lobbying of their own vaccines, and their attempts to close the European market for the Russian vaccine look unethical, to say the least, all the more so amid numerous European media reports about people having  died from side effects after being inoculated with Western vaccines. At the same time, there are simply no reports about similar complications caused by the Russian vaccine, even though the European Commission and Brussels have been keeping a close eye on the effects of its use in European countries, including Serbia and Hungary, which have already taken the first deliveries of the Sputnik V vaccine.

What is the reason for the US demonstrating its weakness? How come that in the midst of the epidemic Washington was unable to find the resources to demonstrate its readiness to lend a helping hand to its European allies? Unfortunately, one of the reasons was that the Americans simply freaked out. The truth is, the US healthcare system is rather decentralized and unorganized. People with good health insurance have little to worry about. However, in a situation of a pandemic, the US medical facilities are pretty hard to manage, so one has to do it manually. Compounded by the general atmosphere of panic and the fact that the poorest strata of society, who have no health insurance and constitute the main risk zone (obesity due to malnutrition, advanced chronic diseases and other COVID-inducing conditions), the system simply collapsed. Therefore, it is not surprising that the Trump administration tried to keep maximum resources at home. Moreover, the businessman-turned-president, who had openly spoken about “exporting security,” never missed a chance to make it clear to his allies that US assistance is never free. As a result, he was replaced by Biden, a Democrat who advocates maximum support for all democratic forces. However, Democrats usually provide moral or military support, but they have proved equally unprepared to line up any serious assistance to the countries hit the hardest by the pandemic.

Moreover, it was actually at the suggestion of the United States and the UK that the COVAX system, a global initiative aimed at providing equitable (but not free) access to COVID-19 vaccines for countries in need, stalled. It turned out (who might have guessed?) that both the US-developed Moderna and the British AstraZeneca vaccines are primarily needed by their own electorates, and only then by countries that need them, but are unable to produce their own vaccine. Meanwhile, India with a population of over 1 billion, managed to fulfill its obligations, and Russia is ready to launch the production of vaccines in Europe. However, bending under Washington’s pressure, the European Union has banned the import of Russian, Indian and Chinese vaccines, without bothering to explain the reasons for this ban.

A country, claiming world domination cannot lead in everything, of course.  Therefore, it is not surprising that the healthcare systems of many European countries, like Sweden and Switzerland, are way better that what they now have in the United States. That being said, the world leader still bears full responsibility for its allies and cannot leave them to their own devices, not only in the event of a military conflict, but also in the midst of a pandemic. However, this is exactly what it did…

From our partner International Affairs

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The legacy of 2020, and 2021 in the prospects of the United States and China

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image source: cnn.com

2020 was a crucial year because of Covid-19, which disrupted the evolution of the world order in the direction of differentiation and transformation. This is the most severe crisis the human world has faced since the Second World War.

As of 10 May 2021, According to the Hopkins University Global New Crown Epidemic Statistics Report, as of May 10, 2021 there have been 158,993,826 confirmed cases worldwide and 3,305,018 deaths.

The pandemic is like a fatal global social test. On the basis of a world order that has already undergoing a crisis, it has not only caused a pause and thus a deceleration of economic development, but it has also stepped up social division and the transfer of power from the political to the technical sphere.

Although the most experienced analysts and leading research institutions have published various reports, currently none of them can accurately predict in detail the huge impact of the pandemic on the history of the 21st century.

The pandemic, however, will bring about major changes in four areas.

Firstly, it will accelerate the general trend of global economic recession and differentiation. This is due to the currency over-issue policies adopted by several countries and to intensified domestic social polarisation. Since 2018 the global economic and financial crisis has not yet been solved. On the contrary, the crisis has only been concealed by the short-term response of monetary policy.

Secondly, the pandemic will speed up internal changes and the reorganisation of the international political and economic order precisely due to internal social differentiation. Owing to the turbulent influence of domestic and international policies, economic and political risks in fragile regions of the world will intensify or have knock-on effects.

Thirdly, the pandemic will strengthen the digital society and competition between countries in building new technologies will become more intense. The most significant impact of digital society is the silent arrival of a transparent society that exists but has no human contacts.

Fourthly, the pandemic promotes the rise of vaccine nationalism and accelerates the revival of the community value of East Asian countries, which has epochal significance from the perspective of the history of world civilisation.

The most influential political and economic event in 2020 was the US elections and the related change of Administration. The US elections represented the sharpest but also the most frustrating change in US history. Although Donald Trump lost the election, 74,216,154 citizens voted for the outgoing President.

For the United States, the change in direction cannot be seen as the advent of a resolute and determined policy along one single line, as the basic reality of the highly divided American society was not changed, but indeed strengthened due to the general election. The huge impact promoted the spread of political violence and protests in the United States.

Source: The US Crisis Monitor, Bridging Divides Initiative, Princeton School of Public and International Affairs’, Liechtenstein Institute on Self-Determination.

First of all, Donald Trump lost the election, but the spectre of Trumpism has remained in the United States and even in Europe, which is generally not conducive to advancing the strategy of developing relations with China.

Secondly, the “antagonism” of the US strategy towards China has not changed radically. Trump hadopened a political-economic dispute with China. Itisparticularlynoteworthythat the younger generation of the Republican leadership isgraduallybecominghostile and negative towards China, and exertsgreatinfluence in Congress.Thisdoesnotfavours world peace.

Thirdly, if this attitude is not contained, it will lead to negative long-term impacts between high-tech decoupling and ideological competition. Finally, China’s policy towards the United States has been perfected and refined: although the government is still adopting a wait-and-see attitude, the voice of seeking cooperation and being rational and pragmatic is still the mainstream in China.

Besides the issue that China will reduce its dependence on the world and increase world’s dependence on China itself, China will reduce its dependence on traditional growth models and increase its care for social, green and environmental sustainability.

The year 2021 is proving that the focus of the analysis of global political and economic trends will still be competition between China and the United States. President Biden’s Administration still regards China as its main strategic competitor, but the methods of addressing the issue are quite different from those of Trump’s Administration. The main difference lies in the fact that President Biden focuses on solving domestic problems and does not exclude the most important issues with China.

President Biden’s Administration has adapted its strategy for China as the influence of major lobbies and interest groups – such as the US finance and military industry – on policy is constant compared to the previous Administration. Nevertheless, the Chinese factor in the chain of global interests keeps higher levels.

Indeed, voices from both parties in the US Congress calling for curbing China’s rise are also increasing.

In short, in terms of China’s policy direction, President Biden’s Administration is expected to oppose a trade war because it harms the core interests of the US business community. However, there are likely to be problems for Taiwan, Xianggang (Hong Kong), Xinjiang Weiwu’er (Uyghur), South China Sea, Xizang (Tibet), as well as other issues.

The possibility of renewed trade negotiations between China and the United States is expected to increase significantly in the future and the US strategy of constructive competition will be reformed.

Regardless of changes in Sino-US relations, China will certainly promote greater bilateral and multilateral investment cooperation, while seeking new development and shaping new models of cooperation.

The key areas which are currently the most important and noteworthy are, firstly, China’s joining the Regional Comprehensive Economic Partnership (RCEP) and seeking to adhere to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which shows that China’s top leadership has decided to continue the reform strategy of internal and external promotion.

The RCEP is a free trade agreement in the Asia-Pacific region between the ten States of the Association of South-East Asian Nations (Brunei, Cambodia, Philippines, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam) and five of their free trade partners: Australia, China, the Republic of Korea (South Korea), Japan and New Zealand. These Member States account for approximately 30% of world’s population and GDP, thus making it the largest trading bloc.

The CPTPP, instead, is a draft regional investment and regulatory treaty in which negotiations, until 2014, twelve Pacific and Asian countries participated: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam.

Indeed, between the RCEP and the CPTPP, there is not only the interconnection of the industrial chain and commonality -and more reasons for unity than differences – but also the influence of great powers’ strategic factors.

The main difference between the two is that the CPTPP has higher economic quality requirements, while the RECP is more inclusive. Secondly, the China-EU trade and investment agreement is likely to be signed, which has clear short-term interests for Europe and long-term strategic interests for China. China, however, still needs to take a cautious attitude towards European policy and its legal systems based on double standards. Thirdly, China and Russia are strengthening comprehensive strategic cooperation and there will be new opportunities for their cooperation in the energy and military sectors.

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Why Congress should be rough on Chris Miller at his testimony on Wednesday

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FBI director Chris Wray’s weak congressional testimony in March left most of the Capitol attack questions unanswered and most of us scratching our heads: if the chiefs of the intelligence agencies don’t know, then who does?

As I argued back in March, before Senate Wray picked the low hanging fruit questions — such as confirming that the Trump mob that stormed the Capitol was indeed Trump’s mob and not some other people — while conviniently glazing over the real questions.

This is why the congressional testimony by former acting Secretary of Defense, Chris Miller, this Wednesday matters. The national guard mystery is still the elephant in the room that’s still sitting in the corner in loud, deafening silence.

The House Oversight and Reform Committee has been looking for answers from federal intelligence agencies on Trump’s role in the Capitol insurrection since day one. They have knocked on pretty much any door they could think of, requesting information from sixteen offices in total. That brings us to Wednesday when the Committee will hear from Chris Miller, as well as Jeff Rosen, former acting Attorney General, and Robert Contee III, District of Columbia Police Chief, in a hearing titled “The Capitol Insurrection: Unexplained Delays and Unanswered Questions.”

Back in March, when Senate grilled Wray, the FBI director could not answer why the national guard was not sent in to quell the attack. Wray vaguely put the decision on local policy makers, conveniently circumventing federal responsibility.

Then months later, defense officials actually stated that the national guard was delayed for reasons of “optics” and worries over how it would look if Trump’s mob was pushed out forcefully, as they should’ve been. Miller dragged his feet for hours before giving the green light, as he wanted to imagine what exactly the national guard’s intervention will look like. The actual deployment took only 20 minutes, logistically speaking.

Miller has already spoken about Trump’s “cause and effect” words responsible for inciting the Capitol attacks. And some commentators like Sarah Burris at Raw Story already predict that Miller is about to throw Trump under the bus on Wednesday.

But that’s not enough. Where was Miller back then? The delay was his decision and no one else’s. The Congressmen and Congresswomen of the House Oversight and Reform Committee chaired by Congresswoman Carolyn Maloney, should not go easy on Miller only because now, after the fact, he is willing to speak up against Trump. Now it’s easy. Now it doesn’t count.

Trump removed Secretary of Defense Esper over his objection to sending the national guard on the Black Lives Matter movement that sparked up exactly one year ago. That’s why Trump replaced Esper with Miller. Miller could have also said no to Trump but he played along. That’s why Miller doesn’t get to play hero now. There are no heroes in the Trump Administration’s aftermath. Some “cause and effect” talk and hypocritical outrage after the fact don’t count. Now doesn’t count. The House Oversight and Reform Committee shouldn’t buy this. The time for cheap spins and late awakened conscience is up. Now is the time for real answers. Miller and Rosen should get a rough ride on Wednesday. Anything else would not be acceptable.

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