By Dalibor Rohac, Special to CNN
Editor’s note: Dalibor Rohac is a policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute. You can follow him @daliborrohac. The views expressed are his own.
It’s now a decade since Ukraine’s “Orange Revolution” brought hope that the country could be liberated from its post-Soviet legacy and join the ranks of the successful transitional countries of Central and Eastern Europe. The question now, of course, is whether Ukrainians do better this time around. But to really understand where Ukraine is headed, it’s important to understand the roots of the unrest that led to the ousting of President Viktor Yanukovych.
First, the country’s oligarchic elite, which ruled the country for the past two decades, cared little about the prosperity of ordinary Ukrainians. The evidence is not just in the tacky mansions of President Yanukovych and his men, but also in the fact that the average income in Ukraine is roughly one third of that in Poland even though both countries started from around the same point in 1990.
Second, the change of government in Ukraine follows a miscalculation on the part of the Kremlin, which long considered Ukraine as its client state, dependent on imports of natural gas from Russia. Ukrainians simply lost patience after their government effectively followed instructions from Moscow and canceled the broadly popular association agreement with the EU. Now that the plan to bully Ukrainians into submission has backfired, Russian President Vladimir Putin is likely to leverage the situation to push claims to parts of Russian-speaking Eastern Ukraine – most prominently Crimea and the port of Sevastopol.
For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN
By Global Public Square staff
Last week, Jimmy Fallon took over as host of “The Tonight Show.” More than 11 million Americans tuned in at midnight to watch his debut – that's about 3.5 percent of the population.
Americans love their late night TV. But there's one country that loves it even more: Spain. An estimated 25 percent of Spaniards are up watching TV at midnight, according to Jim Yardley in a great piece in the New York Times.
And it’s not just TV – staying up late is part of the culture. Restaurants rarely serve dinner until after 10 p.m. According to one survey, Spaniards sleep on average 53 minutes less than other Europeans. During the day, Spaniards are known for taking long lunches and breaks – and of course, siestas.
Well, a number of Spanish economists are saying this needs to stop. By some accounts, Spain loses 8 percent of its GDP to reduced productivity. So, what can be done? One suggestion is that Spain should turn its clocks back.
Fareed speaks with former U.S. Treasury Secretary Larry Summers about U.S. economic policy and developing economies. Watch the full interview on GPS this Sunday at 10 a.m. and 1 p.m. ET on CNN.
If you look at what happened a couple of weeks ago, when there were some indications that the Fed might start reversing its course – you know, either raise interest rates or end what is called the quantitative easing policy. What happened was the stock markets here swooned. Markets around the world crashed and countries like Turkey found themselves in very big trouble, very fast growing countries. Does that suggest that the world is not ready for a return to what would frankly be very normal interest rates?
They are now so abnormally low, that many people believe they have to come up to some kind of historical norm and when that happens, we will see another financial crisis, because assets and markets around the world have got inflated and they're going to get punctured again.
I think there’s no question that in a number of countries, a period when it's been very easy to attract capital because capital could only earn a zero return on U.S. Treasury bills, has bred a kind of complacency and a kind of over borrowing. And the sense that it was going to get a little more challenging in the competition for capital has raised a set of fears and brought a set of problems to light. That’s really the story of the so-called fragile five countries – Turkey and India, South Africa and Indonesia, and Russia, each of which, in their own way, probably has become more complacent than would have been ideal during this period of quite extraordinary financial conditions.
But I think the Federal Reserve is going to have to do all the things that it judges to be appropriate in the context of U.S. economic expansion. And developing countries will need to find ways of standing on their own two feet without the spur of the extra investment that comes from extraordinarily low interest rates.
Watch "Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN
On GPS this Sunday: Asia's war of words – Why China has been engaging some heated rhetoric with so many of its neighbors, and whether things could get more serious. Fareed speaks with China experts Elizabeth Economy and The New Yorker's Evan Osnos.
Then, a 1-on-1 interview with former U.S. Treasury Secretary Larry Summers to discuss new Federal Reserve Board Chair Janet Yellen and the state of the U.S. economy.
“I have college-aged children. And occasionally, we have a difference of opinion about how much money they've spent,” Summer says. “And in our family, we discuss whether they're going to pay or whether I'm going to pay. But we don't discuss whether or not Visa should get stiffed, because we know that would be terrible for our family's credit rating and that's just not what we would do.”
And later, is the U.S. safe from cyber crime? Peter Singer of the Brookings Institution explains how the online world is very much like the real one.
By Cornelius Adebahr, Special to CNN
Editor's note: Cornelius Adebahr is an associate at the Carnegie Endowment for International Peace, and author of Tehran Calling: Understanding a New Iranian Leadership. He taught political science at the University of Tehran in Iran from 2012 to 2013. The views expressed are his own.
Iran may be continuing its global charm offensive, but the U.S. government is still having trouble selling changes in Iran policy to an American audience.
The latest example came late last month, following Iranian President Hassan Rouhani's trip to Davos, Switzerland. During his appearances at the World Economic Forum, Rouhani invited gathered world and corporate leaders to take advantage of the opportunities that the opening up of Iran offers. But such encouragement is only likely to provoke ire in Washington, a point underscored just days later when U.S. Undersecretary of State Wendy Sherman was grilled by the Foreign Relations Committee over fears that the foreign firms lining up to do business with Iran could diminish Washington's leverage in negotiations over Iran's nuclear program.
It's a compelling argument on the surface. But it is also one that belies a misunderstanding of the reality on the ground – and how the situation is viewed from within Iran.
"Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN
GPS Digital Producer Jason Miks speaks with Zanny Minton Beddoes, economics editor for 'The Economist,' and Canadian member of parliament Chrystia Freeland about rising inequality – and how the West should respond.
You were elected as a member of parliament in Canada last year. How do you think the big debate going on over inequality in the United States compares with how it is unfolding in Canada?
Freeland: Basically, these are global phenomenon that are driving the surge in inequality. It’s globalization. It’s technological change. And there’s a political aspect, a set of political changes – deregulation, weakening of unions, privatization, changes in taxes. So this is really something that is happening in all of the Western industrialized countries, and also in a lot of the emerging markets – you see income inequality surging in China, Russia, India. So it’s a big issue in Canada.
Interestingly, I think it’s becoming a truth universally acknowledged, which it wasn’t before the crisis. Things have changed. Income inequality is higher than it has been. So if you think back pre-2008, people were still debating that. Now, we all get that this is the new reality, and I think what you are starting to see is people focusing on what part of all this is bad, and what can we do about it. And I think the focus rightly is narrowing in on really the big problem of the hollowed out middle class, the stagnant middle class jobs and there not being enough middle class jobs.
I think what you’re going to see increasingly is people saying that this is the thing we need to focus on, and also how do we improve social mobility?
Watch "Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN
On GPS this Sunday: In the wake of President Obama's State of the Union address, Fareed convenes a panel looking at the issue of inequality in the United States. Zanny Minton Beddoes, economics editor of The Economist, Steve Rattner, the Obama administration’s “car czar,” Canadian member of parliament Chrystia Freeland and former IMF Chief Economist Ken Rogoff offer their takes on this and more.
Then, our “What in the World?” segment looks at the economic costs of smoking – and whether obesity could be next in line for intervention by policymakers.
Later, a look at the ongoing political crisis in Ukraine – and why Kiev can't shake off Moscow’s influence. Former Secretary of State Henry Kissinger explains the nature of Russia’s role.
Also, an insider's perspective on Russian President Vladimir Putin, from a close friend: the famous conductor Valery Gergiev.
By Fareed Zakaria
USA Today has a new poll out that shows that the American public is increasingly concerned about inequality and wants the government to do something about it. So what to do?
There’s little doubt that inequality has risen dramatically. The most eye catching number might be this one – the world’s 85 richest people own as much as do the poorest 3.5 billion put together. If you put this in American terms alone, the six heirs to the Wal-Mart fortune have a net worth that is larger than the poorest 48.8 million American families put together. These are staggering numbers and it does make for some envy. But envy is not a good basis for public policy.
As I have argued before, inequality is made up of three different factors: the rise of the super rich, the rise of a larger group of poor people, and the stagnation of the great middle class.
Japanese Prime Minister Shinzo Abe explains what is behind “Abenomics” and what the so-called third arrow of these reforms mean. Watch the full interview on "Fareed Zakaria GPS" this Sunday at 10 a.m. and 1 p.m. ET on CNN.
What is important about the third arrow, structural reform, is to convince those who resist the steps I am taking and to make them realize that what I have been doing is correct, and by so doing, to engage in structural reform.
Last autumn, the Diet (Parliament) decided many things. In terms of agriculture, I made the decision to end the "rice production adjustment," which had continued for 40 years.
I also passed a law to make it easy to dramatically consolidate farmland, to make it easy to do that. And on the medical front, I decided that selling medicines over the Internet would be made possible. And I amended the pharmaceutical laws, to make it possible for companies to continue to develop regenerative medicine, creating opportunities in that area.
By Andrey Kostin, Special to CNN
Editor’s note: Andrey Kostin is CEO of Russia’s VTB Bank. The views expressed are his own. This is the latest in a series of articles ahead of a special GPS show from Davos this Sunday.
Interconnectedness is part of everyday modern life. We think nothing of, for example, an American company designing its products in California, assembling them in China, and launching sales simultaneously in 100 countries or more. Russia has benefited from the increased integration of national economies and markets that has made all of this global cooperation possible – and essential. And like other major global economies, Russia – the world’s eighth largest – will continue to deepen its integration into these global processes.
Yet while the idea of globalization as a force for good is apparently widely accepted in the economics and business spheres – not least in my own area of expertise, banking and finance – it sometimes seems that politicians of countries that ought to have much in common are at risk of drifting further and further apart.
It has long been a Russian complaint that relations with the West – particularly the United States and the European Union – more often resemble a teacher lecturing a disobedient pupil than a serious dialogue, especially when the talk turns to topics of mutual sensitivity. This lies at the heart of what President Vladimir Putin, in his New York Times editorial last year, termed the “insufficient communication” between our societies.
By Dennis Nally, Special to CNN
Editor’s note: Dennis Nally is chairman of PricewaterhouseCoopers International and is participating at the World Economic Forum’s annual meeting this week. You can follow him @Dennis_Nally. The views expressed are his own. This is the first in a series of articles ahead of a special GPS show from Davos this Sunday.
We live in an era when lapses in corporate behavior have damaged public trust in business. But to do business in the right way, you first need to decide what the right way is. And that can actually be the hardest part.
In many cases, I find that CEOs and boards are approaching the question of the “right” business behavior through the lens of trust and value, essentially asking themselves: “How can our business regain trust through long-term value creation?” Yet by assuming that the route to renewed trust lies via creating long-term value rather than behaving in a particular way, I think this question highlights a deeper challenge.
There are two parts to the challenge. The first is that, while creating value can contribute to trust, a business without trust will never generate value in the first place – or at least not sustainable value. Looked at one way, increasing trust and rising value form a virtuous circle. Looked at another, they present a Catch-22: unless a business is already trusted, it won’t have the wherewithal to deliver the value that helps to generate more trust.
By Bruce Stokes, Special to CNN
Editor’s note: Bruce Stokes is director of global economic attitudes at the Pew Research Center. The views expressed are his own.
Isolationism is not protectionism. And confusing the two can create a false impression of the trajectory of U.S. global engagement in the year ahead.
New polling data showing that the American public is turning inward, preoccupied with domestic affairs and less interested in international engagement, is not evidence of a rise in U.S. economic protectionism, with its grave consequences for global business. Indeed, even as their doubts grow over the future U.S. geopolitical role, Americans say that the benefits from U.S. participation in the global economy outweigh the risks. And even as they harbor doubts about the impact of trade agreements on wages and jobs, public support for closer trade and business ties with other nations stands at its highest point in more than a decade.
The Obama administration’s disengagement from Iraq and Afghanistan, its “leading from behind” in Libya and its reluctance to become involved in the Syrian civil war all reflect a broad public reassessment of America’s future security role in the world. But the White House’s pursuit of the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, two unprecedented trade deals, equally reflect Americans’ newfound acceptance of the importance – or at least inevitability – of U.S. economic integration with the rest of the world.