The migrant crisis in Europe, U.S.-China relations, the Fed: disparate developments with a common theme — cooperation, not bluff or bombs, is needed.
By Nelson Graves
Here at News-Decoder we take stock on Fridays and look ahead to the next week’s news themes.
It’s a way of making sense of developments that in the digital age can go by in a flash and confuse more than illuminate.
Here’s a note I circulated last week:
Migrants – Waves of immigrants are putting pressure on Europe. Pessimists (realists?) foresee the collapse of Schengen and the disintegration of the EU.
But what if the crisis forced political leaders to redouble efforts to resolve the underlying causes? What if Russia, the U.S. and the EU worked harder to reach a diplomatic solution in Syria – perhaps with Iran playing a supporting role, now that the nuclear deal is safe from congressional meddling?
Will movement emerge from the U.N. General Assembly meeting in New York?
Can Washington and Beijing afford not to cooperate?
Optimists might assume the kind of leadership that the EU and, many would say, Washington have been lacking. They also presume that Moscow and Tehran would cooperate instead of making life miserable for the West. A lot of assumptions.
Xi Jinping in the U.S. – How Obama and his guest manage this visit could have major repercussions on markets, economic growth, security, cyberspace, trade – you name it.
With so much at stake, can Washington and Beijing in the long term afford not to cooperate? Is China a threat to the U.S. – or would a threat possibly come from an ally (or adversary) that would prefer tension between the giants?
Fed – Have Yellen & company tied their hands by failing to raise rates in part because the rest of the world is full of uncertainty? Or is it an acknowledgement of a globalized economy and globalized markets?
If so, what does that say about financial and market regulation – and the need for closer economic cooperation?
Solutions require cooperation.
So what links the migrant crisis in Europe, China-U.S. relations and the Federal Reserve?
In each instance, solutions will require international cooperation:
- It will be tough to curb the flow of migrants and refugees into Europe without addressing root issues: conflict in the Middle East and Africa; poverty in Africa and Asia.
- The United States and China can be rivals, but if they do not find common ground, neither will emerge unscathed.
- The Fed won’t raise rates unless it’s confident economies and markets elsewhere — mainly in China — will not undercut U.S. growth, employment and consumer demand.
Cooperation does not sit comfortably with those Americans who believe the super power status that victory in World War Two conferred on the United States, augmented with the end of the Cold War, means Washington and its allies can dictate events around the world.
Russia has challenged that assumption in Crimea and Ukraine, and with increased military aid to Syria, could be doing the same there.
Bluster, bluff and bombs won’t work.
China keeps pushing the security envelope in Asia, staking claim to remote islands as it flexes its muscles.
Bluster, bluff and bombs are unlikely to work in the long term in any of these hot spots.
That was the underlying message in the Iran nuclear deal, which bound seven powers that alone would have chosen radically different approaches.
When was the last time Beijing, Moscow, Tehran, Washington and Europe agreed on anything substantial?
Details aside, the Iran agreement represents a common logic — that tough issues require patience and determination to find a consensus among adversaries.
We’d love to hear your thoughts about how disparate world developments have common themes.
(Click here for more News Decoder pieces on migrants.)