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foreign policy and global economy

Archive for the tag “sovereign debt”

Is Sri Lanka Really A Victim Of China’s ‘Debt Trap’?

The economic reality is that Sri Lanka leased out Hambantota port to China largely due to a persistent balance of payment (BOP) crisis resulting from the reduction of trade over the years even while external debt servicing costs have been soaring. Sri Lank faced a severe shortage of foreign reserves in light of the upcoming debt servicing payments, due to the maturity of international sovereign bonds. Therefore, the country had to look for various avenues to obtain foreign currency inflows. Leasing out Hambantota port was one of the ways to increase the country’s foreign reserves.

Read Here – The Diplomat

Exposing China’s Overseas Lending

Over the past 15 years, China has fueled one of the most dramatic and geographically far-reaching surges in official peacetime lending in history. More than one hundred predominantly low-income countries have taken out Chinese loans to finance infrastructure projects, expand their productive capacity in mining or other primary commodities, or support government spending in general.

Read Here – Project Syndicate

Saudi Arabia’s $750 Billion Threat To Wreck The U.S. Economy

Dumping U.S. bonds is not really an option for any country holding major positions. To the extent that the number of bonds the United States sells is a problem—and it is a problem—it is not because it gives others leverage over America. It is because it is reflective of decades of out-of-control spending, which must be addressed for the sake of the country’s long-term economic health.

Read Here – The National Interest

China Has Lots of Treasuries, Not Much Leverage

During the last U.S. presidential election, an editorial in a Chinese state-run newspaper declared that if Washington insisted on flouting Chinese interests (by selling arms to Taiwan, for example), Beijing should “use its financial weapon to teach the U.S. a lesson.” Three years later, America owes even more to China than the $1.16 trillion it owed then. But the increase in debt holdings hasn’t translated to an increase in leverage; quite the opposite, writes William Pesak.

Read Here – BloombergView

The $100 Trillion Whammy

The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates.

Read Here – Bloomberg

Germany’s Dilemma

There is a new German question. It is this: Can Europe’s most powerful country lead the way in building both a sustainable, internationally competitive Eurozone and a strong, internationally credible European Union?

Read Here – The New York Review of Books

Only Talking Will Do…

Once an idea enters the world, it comes to life and affects the way we treat those around us. Reality takes on the shape of fiction. Narratives are one type of fiction. Economic models are another. Narratives are the stories we tell about ourselves and others to justify the way we behave. Economic models are the things we build in ivory towers, and sometimes they work, but more often than not, they don’t.

Read Here – The European

‘Europe’ Now Has a Soothing Ring to It?

Since Greece’s insolvent-grade financials first came to light, Europe has consistently and reliably emanated ripples of distress across the Atlantic. Recall the mini-panic of 2011, with its big selloffs in global markets. And periodic fears about the endearingly named PIIGS—Portugal, Italy, Ireland, Greece and Spain—sneezing their malaise onto France and beyond. Then there’s the latest bank-run-that-wasn’t out of Cyprus.

Read Here – Businessweek

The Nightmare Of The Far Right in Greece

The Municipal Theater in Piraeus, Greece, was bathed in an eerie light, with yellow floodlights and red torches combining to illuminate the theater’s neoclassical façade, which now served as the backdrop for a macabre spectacle: At least 1,000 neo-Nazis and their supporters had turned out for a march, and red flags bearing a large, black swastika-like symbol flew from the building’s front steps.

Read Here – Der Spiegel

The BRICS Expose the West’s Hypocrisy

Who do they think they are, these upstart economies, Brazil, Russia, India, China and South Africa?

That might sum up the feeling in the U.S., Europe and Japan as the BRICS nations consider a new development bank that might challenge the World Bank and International Monetary Fund. The move brings to mind Alice Amsden, the Massachusetts Institute of Technology economist who died last year, and her 2001 book, “The Rise of ‘the Rest.’”

Read Here – Bloomberg

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