The Eurozone's Roubini

Nouriel Roubini, the economic doomsayer who predicted the 2008 financial crisis became one of the most sought-after economic consultants after being able to say "I told you so." Bernard Connolly, Europe's most outspoken pessimist, is confident that he too will end up on the right side of history.

“The current policy of lending plus austerity will lead to social unrest,” Connolly said in the New York Times.

As an Oxford educated economist in the early years of the European Union, he helped oversee the very first designs for European financial integration. When he expressed negative views about a common currency, he was dismissed. In 1998, just before the Euro was introduced, he predicted that Europe's smaller, less financially stable countries would cause problems for the entire region. As Connolly told the Times, Europe will face a "“downward spiral from which there is no escape unaided. When that happens, the country concerned will be faced with a risk of sovereign default.”

Connolly, like Roubini before him, is now profiting from spot-on economic forecasting. The European debt crisis that threatens not only Greece and Portugal, but larger countries like Spain and France has launched Connolly's consulting career. Unlike Roubini, who is now the head of Roubini Global Economics, a consulting firm in New York City, Connolly is an independent analyst. But this doesn't mean he profits less. Connolly reportedly churns out over 20,000 words of analysis per week, and while the price of his opinions is not publicly available, competitors are known to charge as much as $100,000 for complete services that include written reports as well as individualized meetings and phone calls.

When Connolly worked at AIG in 2005, he convinced a small group of investors to buy credit default swaps of the most vulnerable European countries. When Greece, Portugal, and Ireland came to the brink of default around 2008, the value of the swaps increased enormously, which turned the investors a hefty profit and earned him a devoted group of followers.

Today, the Connolly disciples are looking to spread his words of doom for the greater good. As a former colleague at AIG, James Aitken, insisted, “He sees where this is going and is warning against the human tragedy.”

Yra Harris, a trader on Chicago's Mercantile Exchange offered to pay $75,000 out-of-pocket to republish The Rotten Heart of Europe, Connolly's 1997 denunciation of the Euro's predecessor, the European exchange rate mechanism.

Still in the thick of the European crisis, it remains unclear whether Connolly's Eurozone death knell will ultimately ring true. One thing, however is quite certain- as the crisis continues, Connolly's stock continues to rise.

-Rachel

Is Music a Universal Language???

Throughout the years, America’s image has been getting more and more ugly in the public eyes of Pakistanis. According to a recent study by the Pew Research Center “Roughly six-in-ten (59%) Pakistanis describe the U.S. as an enemy, while just 11% say it is a partner.” This is because of many reasons including the fact that the war the United States has declared in Afghanistan has spread into their territory which has caused many innocent Pakistanis their lives. The image gets even more unattractive since the United States has been strengthening their ties with Pakistan’s archenemy India. Citing the Assistant Secretary for the Bureau of South and Central Asian Affairs of the State Department, Robert Blake, “We recently have begun an effort to try to enhance state-to-state ties between our two countries... because we believe there are quite significant opportunities for individual American states to do more with their Indian counterparts.” Some may even go further and say that America dislikes the Muslim world because of our constant intervention in trying to promote democracy abroad. Even though I do not believe this to be true, America has a reason to try to save face in the region. Because of this, the U.S. embassy has been trying to find informal modes of diplomacy to be used in an attempt to save its unfavorable image. One of the avenues that was used was targeting the younger generations through music.

The U.S. embassy’s cultural diplomacy program in Islamabad, Pakistan has been bringing over multiple musical groups in conjunction to its American Festival of the Arts. This festival, according to the State Department, is meant to promote cultural exchanges between the two countries. Acts that have participated in this Festival have included the Ari Roland Jazz Group and Mary McBride, a country music artist. This week, the State Department has brought over a hip hop troupe from Chicago for a 10 day trip through the region to perform for an educated young audience of Pakistanis. The Chicago troupe, the F.E.W Collective dances, sings, raps and recites poetry. The purpose of this tour through the region is to get the face to face contact of non-governmental Americans, and to try to find a commonality among the two countries through music.

Hip Hop universally looks different but is found everywhere. This form of expressive arts can be used to bring youth from all over together. The target audience for the festival is the youth, the future leaders of Pakistan. This is extremely strategic in my eyes because, as we have seen through the Arab Spring and many other uprisings, that the youth are key in trying to achieve change. Getting through to this group and building the American relationship earlier in their lives, is important an ingredient in the recipe to try and fix Pakistani-American relations. This idea is pretty remarkable to me. Even though I might be a bit biased because I love hip hop, I do believe that even if countries are culturally separated, something that could bring differing communities together is music. This new, cutting edge idea of using music to build relations between the two countries has not been used before on a big scale and I am really interested to see the end result. Whether U.S. officials agree or not if this program is going to work is not important because it is something that could actually blend the two cultures together. It’s this out of the box thinking that could continue to create new waves of building relations. With face-to-face contact with a few could possibly change the perception of Americans and break down stereotypes that the Pakistani youth have of the United States. This would not only strengthen the relations between the U.S. and Pakistan but paint a more positive image of the United States in the region.

Alexis Roe

Al-Shabab recruits Kenyan youths to fight in Somalia

Al Jazeera interviewed parents of Kenyan youths who were recruited by a terrorist group, Al-Shabab, to overthrow the government in Somalia.

Al-Shabab is an Islamist militant group, an offshoot of the Islamic Courts Union, which was removed from power by Ethiopian troops back in 2006. Al-Shabab, or The Movement of Striving Youth, aims to overthrow the Somali government and it has control over some territories in south Somalia. In these places the group has already imposed its own form of Sharia law, which is even stricter than usual.

Many of the recruited Kenyans come from slums in Nairobi, the capital of Kenya, and some estimate their numbers to be in the hundreds. Most of them are not native Somali; they come from other ethnic tribes; therefore, they are more difficult to spot by the authorities. Since the Somali army has been fighting Al-Shabab, the parents fear retaliation.

Several of the recruited youths do not come from Islamic families; they convert to it. However, experts believe the recruitments have nothing to do with religion. It is purely human trafficking for the purpose of jihad.

-Adrienn Szlapak

End of Occupy Wall Street?

Mayor Michael R. Bloomberg ordered to clear Zuccotti Park today, consequently leading to the arrest of around 200 protestors who have been camping in the park for nearly two months on the grounds that “health and safety conditions became intolerable.”

Bloomberg has been torn between whether to take any direct measures against the protests ever since the beginning of Occupy Wall Street. In the time that has passed, he has supported people’s right to protest but in recent weeks, in the wake of growing complaints from neighbours about how the protest has disrupted the neighbourhood and hurt local businesses, the mayor decided to act. Mayor’s sudden decision comes as a big surprise to the American public. The clearance of Zuccotti Park demonstrates fading of the American promise and commitment to democracy. It is never a good sign when non-violence is met with violence. If the citizens of the United States are prohibited in voicing their opinion, and thus are being taken away their freedom of speech by their own governors, how does America plan to maintain its exemplary role as global promoter of peace and democracy? After today’s event, can America still be referred to as democratic? Or is the country simply hiding its less open domestic politics behind a created illusion of worldwide promotion of democracy?

Despite the criticism that Bloomberg is currently receiving from the protestors and the supporters of Occupy Wall Street, the mayor is clever in his approach: He announced that “New York City is the city where you can come and express yourself. What was happening in Zuccotti Park was not that.” The mayor said the protesters had taken over the park, “making it unavailable to anyone else.” Furthermore, by laying the blame on poor health and safety conditions the decision to clear Zuccotti Park becomes an undisputed case as it would indeed be improper of the protestors to argue against public health after the numerous health care debates in the U.S. in recent years. Bloomberg is right in that the Park, initially created for everyone, has for the past two moths been an occupied space, with several access limitations for citizens who do not wish to participate in the protests. Especially, taking into account rumours about lack of health measures, it is not surprising that these conditions prevent ‘visitors,’ apart from the protestors themselves, on the territory of Zuccotti Park. Consequently, it can also be argued that the occupied space is a limitation to freedom for everyone.

Whether this marks the end of Wall Street Protests remains unknown. The possibility for continued protests is high, especially in the immediate aftermath of police’s forceful clearance of the Park. The public in support of the protests is in rage over mayor’s decision. However, Wall Street never sleeps, hence even if protestors relocate, Wall Street will continue to keep its eyes on those who oppose it.

- Inga

Assad is Still in Power (O yea....and he has killed 4,000 of his own people)

Jordan's King Abdullah told the BBC yesterday that if he were Syrian President Bashar al-Assad, he would step down as president. 'I would step down and make sure whoever comes behind me has the ability to change the status-quo that we’re seeing.' On Saturday, the Arab League suspended Syria and called on its government to stop the violence against protesters. The League said that it will impose economic and political sanctions on the Syrian government and will also meet with opposition leaders in the country. They are also expected to make a similar condemnation this week, along with most Western leaders.

The White House added yesterday that President Assad was increasingly isolated, and said that he had lost his legitimacy to lead. 'It is clear that the Assad regime is continuing to be isolated, that the political pressure on them is building,' said White House spokesperson Josh Earnest.

40 Syrians were reported to have been killed in fighting yesterday between forces loyal to President Assad and anti-government forces.

This all appears to be productive, but is in fact futile. Assad knows that Russia and China will never back similar measures that they did against Libya and he knows that international sanctions can only go so far. The conflict in Libya helped secure, not deter Assad’s reign and condemned four thousand activists to death. With the Euro crisis, 2012 US elections, the wider Arab Spring, Russia and China’s veto and Iran’s nuclear program, world leaders have their plates full and don’t want and in some cases can’t handle and even afford another issue to deal with. As long Assad keeps this now, civil war in his country as a domestic conflict and affair and not let the troubles in his country escalate beyond his boarders, it is pretty clear he will be the Syrian President this time next year – especially if the West has nothing to with it. They can just congratulate each other about a successful Libyan mission.

-Roy.

Korean Bridge in G20

As the G20 Cannes Summit focuses on bailing out the Eurozone, super powers such as United States, Russia and China gathered all the attention. Among the rest of the G-20 members exist, overlooked yet relatively important, nations such as Korea, Mexico and Indonesia. Though relatively peaceful, these countries can play bigger roles in pushing the global system than their shares in media these days. South Korea, for example, is bridging the developed with the emerging and developing world.

As a heavily export-dependent economy, S. Korea is a beneficial of open market and free trade. It has one of Asia's largest economies, one that survived and thrived from 1997 Asia financial crisis and once again, weathered and resumed strong growth after a brief downturn as a result of the global economic downturn of 2008. In either of the situation, S. Korea was able to avoid deeper recession and move to growth is a result of actively involving in the global market. This experience of South Korea, along with similar ones by other medium-sized G20 countries, makes it an exemplary open markets and a firm supporter of free trade. On G-20 Cannes Summit, as a result, President Lee Myung-Bak promotes the idea of market liberalization in combating economic crisis from spread and stands against protectionism

When it comes to euro zone rescue plan, President Lee states that S. Korea has noticed readiness to help from neighbor countries Japan and China, in an interview with French media, he says "We ourselves are planning to see at the G20 summit how other countries will organize and what resources they will deploy. Discussions are planned. If it's necessary, obviously, (South) Korea is willing to cooperate."

South Korea's willingness to act as a bridge between the advanced, emerging, and developing worlds and its adoption of the "Seoul Development Consensus for Shared Growth." has indicated Koreans efforts in drawing a consensus on an array of agenda issues including development aid and free trade. The exemplary efforts have drawn proclamation by Microsoft co-founder Bill Gates in his developmental finance report to all G20 leaders.

Posted by Yinan Hu.

G-20: Let's Talk Turkey

Oh how the times change. This past week's G-20 summit in France proved that there's a new "Sick Man of Europe," and it's certainly not Turkey.

As ArabNews.com reports, The "Sick Man" is actually the "Sick Men-" the consortium of troubled Eurozone economies that includes Greece, Portugal, Ireland, Italy, and perhaps even Spain. The Cannes gathering mainly focused on the European debt saga that just seems to grow worse, and amid the European panic, Turkey played it cool. France's Nicolas Sarkozy met with Turkish President Abdullah Gul to agree on a broad platform of domestic as well as international financial reforms, and it was also announced that Turkey will play host to the G-20 meeting in 2014. The real story however, came after Cannes. Planning for the future, traditionally Westward-looking Turkey has taken note of the tumult in Europe and is now opting to diversify its trading partner portfolio.

The stable Erdogan government boasts the 17th largest economy in the world and at the beginning of 2011, Turkey recorded a 10.3 percent double-digit growth rate while many Western powers stood at the brink of a double-dip recession. And this is likely to continue. Turkey has a robust population of 70 million with the youngest average age in Europe at 29, and its diverse economy remains attractive to foreign investment.

Situated at the crossroads of east and west, Turkey has a geographic advantage when it comes to trade. As an Islamic state with a staunchly secular government, Ankara has no problem wooing both the Europeans and its partners in the Middle East. Nearly any any energy deal or pipeline from the Caspian to Europe goes through Turkey, and as an associate member of the European Union with a Customs Union agreement, it runs little risk of falling to Russian political manipulation like the Gazprom shenanigans up north in Ukraine. But with so much drama unfolding to the west with Europe and the east with the revolutions of the Arab Spring, Turkey has turned its eye outside its immediate region and has found a kindred secular spirit in Southeast Asia.

Turkey and Malaysia, while both secular regimes, have strong financial sectors that conform to Sharia law. This particular brand of 'Islamic Banking,' prohibits usury and investment in goods or services that are considered contrary to Islamic principles. Recently, Turkey and Malaysia have signed agreements to increase trade and work together on originating Sukuk, the bonds unique to Sharia-style finance. Malaysia has a dual banking center that trades both Islamic and customary financial assets. Turkey, looking to open up its own financial sector, can look to Malaysia for guidance and support.

At a G-20 rife with gloomy financial woes, Turkey has emerged as one of the few points of optimism, and Ankara's shrewdness predicts its continued success.

-Rachel

France at the G20

France is the second largest economy in the European Union, which, taken as a whole, is the largest economy in the world. The G-20 this year was an important time for all members of the EU, but was particularly important for the larger economies in the EU such as France and Germany, who were faced with trying to solve the European debt crisis and the possibility of having to bail out countries such as Greece and Italy.

For the President of France, Nicholas Sarkozy, the G-20 summit overcast with politics, as the 2012 elections loom nearer. Sarkozy is faced with the challenges of reducing France's deficit, preserving the country's credit rating while resisting the pull downward from other debt swamped nations in the EU. The debt in the European Union has all but taken over Sarkozy's life when he had to rush from the hospital where his daughter was being born last month to meet with German Chancellor Angela Merkel about the economic crisis.

So what exactly happened for France at the G-20? As a whole, the G-20 members accepted the plan that the EU came up with last month to solve the European debt crisis, and the plea from Sarkozy to implement a tax on financial transactions was turned down. So, nothing too exciting, unless you count that Barack Obama and Nicholas Sarkozy, unaware that microphones were turned on, were caught dissing the Israeli Prime Minister.

- Ysabel Yates

G20: Russia: Medvedev Couldn't Have Done Any Less (Seriously)

President Dmitry Medvedev started his final round of top level meetings before he to step down as President with the trip to Cannes. The scale of the unfolding disaster is far greater than the pile of debt accumulated by Greece, and the EU leaders are rightly embarrassed by their “model” union as it has become the epicenter of economic disaster – and by their inability to handle the problem. Medvedev however, did not have much to offer, as many hoped. He announced the sum of Russia’s possible contribution to $10 billion, however this was said to be “ridiculously inadequate, barely supporting the point that it is a part of the solution rather than the problem” . He did give unsolicited advice about reducing budget deficits whcih was hardly welcomed, but Medvedev’s argument that Russia was a part of Europe resonated particularly false because European politicians simply had neither the time for nor interest in his opinions and lack of help and leadership by his country.

A development that could have lifted Russia’s seat at the G20 table is the final resolution of the constant problem of its admission to the World Trade Organization (WTO). However, Medvedev was rather cautious and quiet on this issue. The difficult issues with Georgia were resolved by the at the of October, yet Prime Minister Vladimir Putin remained reluctant to give the final word on the deal as he does not like giving up his power to erect protective tariffs and considered that his favorite project to upgrade the Customs Union with Belarus and Kazakhstan would suffer a setback. Another meaningful contribution to calming down the European crisis could have been an agreement with Ukraine on gas trade and transit, but Moscow and kept to exploit the deepening political mess in Kyiv. Amid the turmoil that is the Euro right now, Medvedev arrived to the conference with quite a strong economy behind him.

Lacking serious things to say, Medvedev presented a rather dubious proposal for protecting intellectual property in the Internet but what was even odder was his attempt to position Russia together with “super-emerging” powers like China and apart from the depressed Western economies while claiming Russia was “with” Europe as they are a “part” of it. However, whatever he would have said would have little significance as this was his last global summit and while offering nothing observers believe there is even less he could have done.

- Roy.

G20: CHINA: Europe, We Won't Pay for Your Lunch

The recent G20 summit was a fiasco from start to finish. The purpose of the meetings was to help the global economy back on its feet after a long period of deterioration, however, the participating nations were unable to reach an agreement.

For once, Washington and Beijing were on the same side, against the common enemy- Europe. Beijing had been approached by the IMF and Europe prior to the summit to contribute money to the bailout fund, but after a number of rumours and speculations about what China would ask for in return and after empty comments from the Chinese vice finance minister Zhu Guan, who said that the rescue fund was an "important tool" with which to address the sovereign debt crisis, Beijing simply refused to help Europe save the Euro.

According to Steven Dunaway, CFR adjunct senior fellow for international economics, the Eurozone crisis “is a European problem…For the United States and for the rest of the G20, there’s only a very limited role they can play.” Both China and the United States are not in a position to strike credible compromises also when it comes to major challenges beyond Europe, like pushing for exchange rate flexibility and macroeconomic balancing, policies that have been at the centre of debate since the U.S. began to argue that an intentionally undervalued Renminbi unfairly supports Chinese exports.

Dunaway adds that taking into account China’s pending leadership transition, no Chinese official wants to “stand out and make a strong policy stance, particularly in terms of needed measures to help rebalance China’s economy.”

The French President Nikolai Sarkozy, called the Chinese President urging him to agree to contribute to his proposed €1tn (£864bn) European Financial Stability Facility (EFSF) firewall. However, even prior to G20 summit, doubts were rising as to how willing China would be to produce funds to buy European bonds or capitalise the European firewall fund due to the instability caused by the Greek crisis.

Consequently, with China unwilling to help the Eurozone by lending money to the IMF or by allowing more flexibility in its currency to help ease global trade and investment, Europe and the rest of the global economy continues to struggle.

The G20 summit only brought forth heated debate but the future of the Euro appears to be less certain at this stage than it has ever been.

Furthermore, the summit became a global manifestation of the power presently held by Beijing, and the impact that China has internationally. The fact that Europe needs China to save the Euro illustrates the dependence of the world on the Chinese economy. China’s action -or rather, lack thereof, further indicates that China is not afraid to act independently of international pressures and criticism.

-Inga

Update from the G20 Summit: South Africa

South African president, Jacob Zuma returned home after attending the G20 Summit in Cannes, France. The G20 Summit was established in 1999 and brought together 20 world leaders, finance ministers and central bank governors in developing economies to discuss key issues critical to ensuring global stability. President Zuma and Finance Minister Pravin Gordhan represented South Africa . Their goals were to promote not only South Africa but all of Africa’s potential for being a vital contributor to global demands - manufacturing and innovation, food security and increased prices for food, and opportunities for investing in infrastructure. This year’s discussion, among other things on the agenda, included fixing the Eurozone financial crisis. This exciting conference was a huge stepping stone for the group because it enabled them to tackle important issues such as employment, growth, International Monetary Fund reform, the situation in Greece and implementing a Financial Transaction Tax (FTT, also known as the Robin Hood Tax). South Africa wanted to make it clear that this summit should not be overwhelmed with the European crisis but "it should attempt to come up with a plan that incorporates bringing about growth in developing countries," says Mac Maharaj, spokesman for the South African President.

At the end of 2010, South Africa’s unemployment rate was 24.9%. Since the country’s unemployment rate is so high, South Africa was happy that the summit would discuss this issue. The finance minister, Pravin Gordhan, urged the summit to tackle this important issue.. "There's a recognition that lack of jobs for young people brings social challenges and a decline in social cohesion. The public around the world has been making clear that these are challenges that require urgent attention," he said. South Africa has implemented programs on its own to try to combat unemployment but needed more help, so the conference gave South Africa more ideas to implement for providing more jobs. South African President Zuma affirmed that “South Africa was pleased with the summit's commitment to renew efforts to combat unemployment and promote decent jobs” and that “The focus on job creation is in line with South Africa's own domestic focus on economic transformation to promote inclusive growth and decent jobs.”

South Africa, the only African country represented at the summit, was a strong supporter of the FTT. The FTT would put a tax on the financial institutions. One very important issue targeting the South African population is HIV. The country has the highest number of people suffering from HIV in the world and today over 5 million people South Africans are diagnosed with the disease. This has led to a decrease in South Africa’s workforce and life expectancy, and higher death rates in the nation. The projected US$81 billion per year that the tax would bring in if all of countries in attendance signed on to such a tax could really help the world community tackle many things including the Eurozone crisis andglobal health issues. More importantly, the money would help South Africa tackle many health problems including HIV treatments to raise the average life span, preventing measles outbreaks, helping treat those who are already diagnosed with diseases, preventing malnutrition in children, etc. Unfortunately, the world leaders failed to reach an international agreement about the Robin Hood Tax even though South Africa, Brazil and Argentina backed it.

The conference also hoped to attract non-Euro zone countries like the BRICS countries (Brazil, Russia, China, China and South Africa) that could provide some funding for the bailout for the Euro zone. South Africa said that they were not in any position to make a big commitment with Europe until it "[gets] its act together so [they] have a clear picture of what Europe is proposing," Maharaj told The Associated Press. The BRICS weren’t convinced that the three pronged strategy (a) reduce Greece’s debt, b) scale up their European Financial Stability Facility rescue fund and c) create ways to invest that will attract foreign support of bond markets in Europe) that the European countries came up with to combat the financial crisis was going to successful. However, South Africa is keeping an open mind. It was not prepared to dish out the money but as one of the BRICS countries that the summit acknowledged as powerful, South Africa is gaining the recognition that it deserves in a western dominated global affairs arena. Even though the BRICS countries are skeptical that the debt in the Euro zone will have an nefative impact on their economy, they are waiting to hear what the European countries come up with before they offer any funding. However, they did, say they would support the IMF in taking steps to fix and prevent a crisis from happening again.

On the thursday of the summit, South Africa along with 12 other countries signed the Convention on Mutual Administrative Assistance. This Convention would combat cross-border tax evasion by allowing nations to share tax information among themselves. "The benefit is that our country ... will automatically have the benefit of exchange of information, simultaneous tax examinations (audits) between revenue administrations of different countries," said a South African spokesperson.

And last but not least on the long list of agenda items is climate change. African countries and other underdeveloped countries have been the hardest hit by climate change, which made it fitting for President Zuma to be the President of the Durban Conference on Climate Change at the G20 summit. In the conference, President Zuma encouraged the developed nations to finance the Green Climate Fund. This fund will promote and implement green projects throughout the world.

Africa is the hardest-hit by climate change. Its vulnerability stems not only from climate change impacts such as the rise in the sea level, severe droughts and floods, but also from the current levels of poverty, which limit their [sic] ability to cope with these impacts... There is no doubt that a global response is the only effective and sustainable answer to this global challenge.”

President Zuma succeeded in this role and got the support of the member nations at the summit to agree to the fund the Green Climate Fund hoping to raise US$100 billion a year. He reminded them that world leaders were “accountable to the global citizens who suffer daily from the impacts of climate change” and that they expect “effective solutions to the threat that climate change presents to their livelihood, quality of life, dignity and in many cases their very survival.” By succeeding, he assured participants in the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) that South Africa was prepared to the conference next month while they are moving towards a more ‘greener’ economy.

Alexis Roe

G20: Japan, The Savior

With the Global economy greatly weakened due to many financial crises, the G20 summit met at a critical time. The main goal was to strengthen the economy and get it back on track. The role Japan will play in these efforts are crucial. Many of the G20 leaders looked to the Asian countries, mainly Japan and China as the two biggest countries to take action and help tackle the economic problems; the G20 leaders expect much from Japan. Mainly, Japan will continue to buy EFSF bonds (aiming at preserving financial stability in Europe these bonds provide financial assistance to eurozone states in economic difficulty) to alleviate the European economic problems.

Japan, although having a strong economy that has bounced back and overcome their own economic woes, doesn't want the rest of the G20 leaders to forget they still have problems of their own. Ballooning debt from a recent $250 billion rebuilding effort due to the recent earthquake and Tsunami has taken taken a toll on Japan. The natural disaster created a nuclear crisi for Japan as well. While Japan is in a better position to help the wounded European Economy, it should be put in perspective with their own problems.

Additionally with an incredibally strong Yen, Japan has already intervened numerous times to weaken the Yen. While many G20 countries side with the decision to devalue the Yen, Japan wants to be careful it doesn't hurt the Japanese people.

-Gabby

G20: Brazil and an attempt at tough love.

“The Brazilian message will be: ‘You have to get your game together and make some decisions’,” claimed David Fleischer, a political scientist from the University of Brasilia.

Brazil is prepared to aid the EU through monetary contributions to the IMF, but needs to see a more detailed report on the intended implementation of resources before committing specific figures. Brazilian authorities and other BRIC country officials held a meeting prior to the beginning of the G20 summit to discuss a coordinated aid effort to the IMF, which would be of substantial help to the IMF. Although Brazil has $350 billion in foreign reserves, China has an estimated $3.2 trillion. China has thus far committed $100 billion, the equivalent of which for Brazil would be $11 billion.

Between the financial crises erupting in Europe and the United States, and the economic slowing of China, Brazil’s greatest trading partner, the concern of impending shockwaves is legitimate. With all this success, it is growing fears of recession “contagion” that has emphasized the need for Dilma’s attempt at tough love.

The Brazilian economy faired the 2008 financial crisis fairly well, dropping from a relatively low level of economic damage and a quick recovery (real GDP growth dropped in 2008 from a fairly steady 5.1-5.7 down to -0.7 in 2009, but then rapidly climbed up to 3.5 in 2010 and continues to grow).

Economically, Brazil’s near future is even brighter: the poverty rate in Brazil has halved over the last two decades, and economic disparity among Brazilians, measured by the Gini coefficient, is continuing to drop. This is largely due to economic and social reforms set forth during former President Lula da Silva’s term, where he expanded the size of the middle class by 29 million people.

GDP per person has been growing steadily, and according to the Economist Intelligence Unit, Brazil’s economy is expected to exceed Britain’s economy this year to become the sixth largest economy in the world this year.

For Brazil, avoiding falling south the way of Europe, encouraging growth of global markets, and improving economic and social conditions at home are of the utmost importance. Although negotiations at the G20 could be said to have produced less-than concrete results thus far, Brazil is willing to give aid where it can, and is in a considerably better position than many of its fellow G20 participants.

- Liana Mitlyng Day