Recommended Weekend Reads
April 19 - 21, 2024
Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend. And let us know if you or someone you know wants to be added to our distribution list.
India
A Short History of India in Eight Maps The Economist
In his decade in power Narendra Modi, India’s prime minister, has centralized the state to an unprecedented extent. Yet his ruling Bharatiya Janata Party(BJP) has failed to attract many voters in the more prosperous south. The regional divergence is not unique to the BJP. Throughout India’s long history, rulers have tried and failed to unite the subcontinent under central authority. The chief reason is India’s diversity, summed up in clichés about dozens of cuisines, hundreds of languages and thousands of gods. The clichés may be trite, but they are also useful. A whirlwind tour through 2,500 years of Indian history helps explain why.
“Meet India’s Generation Z” Foreign Policy
India changes more in five years than many countries would in a quarter century. This is partly because it is still relatively young: The country gained independence just 76 years ago, and nearly half of its population is under the age of 25. As one would expect, then, much has happened in the five years since 2019, when Indian voters issued an overwhelming mandate to keep the Bharatiya Janata Party (BJP) and Prime Minister Narendra Modi in power. But what do those aged 18 to 25 think about India’s future?
“The Hindu Nationalist Foreign Policy – Under Modi, India is Becoming More Assertive” Foreign Affairs
As India enters into historic elections, and unlike in previous elections, foreign policy is a major issue. Today, more Indians care about their country’s place in the world than did so a decade ago, and the aspirations of average citizens are mirrored in their nation’s fortunes like never before. The BJP has used this new attention to craft a self-reinforcing message: if the party can catapult an “ordinary citizen” such as Modi to global prominence, it can do the same for a country that has languished in poverty and weakness. Similarly, if Modi can make India secure, prosperous, and widely respected, he can do the same for the Indian voter.
Geoeconomics
Quantitative Tightening Around the Globe: What Have We Learned? National Bureau of Economic Research
This paper uses the recent cross-country experience with quantitative tightening (QT) to assess the impact of shrinking central bank balance sheets. We analyze the experience in seven advanced economies (Australia, Canada, the Euro area, New Zealand, Sweden, the UK, and the US)—documenting different strategies and the substantive reduction in central bank balance sheets that have already occurred. Then we assess the macroeconomic and financial impact of QT announcements on yields and a range of other market prices. QT announcements increase government bond yields, steepening the yield curve and potentially signaling a greater commitment to raising policy interest rates, but have more limited effects on most other financial market indicators. Active QT has a larger impact than passive QT, particularly on longer maturities. The implementation of QT has been associated with a modest rise in overnight funding spreads and a decline in the “convenience yield” of government bonds, but QT transactions did not significantly affect the pricing and market liquidity of government debt securities. Finally, we evaluate who buys assets when central banks unwind balance sheets, an issue that will become increasingly important if central banks continue to reduce their security holdings while government debt issuance remains elevated. We find that increased demand by domestic nonbanks has largely compensated for reduced bond holdings by central banks. This series of cross-country results suggest that QT has had more of an impact than “paint drying” but far less than simply reversing the effects of the quantitative easing programs launched during periods of market stress. Looking ahead, although QT has been smooth to date, frictions could increase in the future so that QT quickly evolves into more like watching “water boil.”
Europe
EP Spring 2024 Survey: Use Your Vote - Countdown to the European Elections EU
The Parliament’s Spring 2024 Eurobarometer reveals strong interest among citizens in the upcoming European elections (6-9 June) and awareness of their significance in the current geopolitical context. The survey sheds light on Europeans’ voting behavior, their attitudes toward campaign topics, and their preferences for the priority values for the next term of the European Parliament. It focuses also on citizens’ perception of the EP and EU, their perspective on life in the EU, as well as on their opinions about the EU within the current global context.
Russia
The Impact of Semiconductor Sanctions on Russia American Enterprise Institute
After Russia again invaded Ukraine in February 2022, the US and its allies restricted Russia’s access to semiconductors, aiming to disrupt the Kremlin’s defense industrial supply chains. Have these semiconductor controls worked? The secrecy of the Russian defense industrial base makes it difficult to answer this question fully, but this report examines the evidence to provide some tentative conclusions on the impact of tech export controls.
The Five Futures of Russia: And How America Can Prepare for Whatever Comes Next Foreign Affairs
Vladimir Putin happened to turn 71 last October 7, the day Hamas assaulted Israel. The Russian president took the rampage as a birthday present; it shifted the context around his aggression in Ukraine. Perhaps to show his appreciation, he had his Foreign Ministry invite high-ranking Hamas representatives to Moscow in late October, highlighting an alignment of interests. Several weeks later, Putin announced his intention to stand for a fifth term in a choiceless election in March 2024 and later held his annual press conference, offering a phalanx of pliant journalists the privilege of hearing him smugly crow about Western fatigue over the war in Ukraine. “Almost along the entire frontline, our armed forces, let’s put it modestly, are improving their position,” Putin boasted in the live broadcast.
China
A Chinese Perspective on the Russia-Ukraine War: A Conversation with Dr. Zhao Hai CSIS ChinaPower Podcast
In this episode of the ChinaPower Podcast, Dr. Zhao Hai joins us to discuss China’s views on the Russia-Ukraine war and its broader implications for China. Dr. Zhao provides an assessment of how he thinks China perceives the evolving situation on the ground, emphasizing China’s concerns about the risk of further escalation between Russia and the West, potentially involving the use of nuclear weapons. He argues that the Ukraine crisis has heightened U.S.-Russia competition and speaks to how China views the conflict as a sign of the world order shifting towards one of multi-polarity. He also shared his assessment of the United States engaging in enhanced proxy warfare in Ukraine that could be used in the Indo-Pacific in the future.
The CCP’s Role in The Fentanyl Crisis The Select Committee on The Strategic Competition Between the United States and The Chinese Communist Party
The House Committee this week released an in-depth report on the Chinese Government’s role in the Fentanyl trade and its impact on the U.S. The fentanyl crisis is one of the most horrific disasters that America has ever faced. On average, fentanyl kills over 200 Americans daily, the equivalent of a packed Boeing 737 crashing every single day. Fentanyl is the leading cause of death for Americans aged 18-45 and a leading cause in the historic drop in American life expectancy. It has led to millions more suffering from addiction and the destruction of countless families and communities. The report charges that beyond the United States, fentanyl and other mass-produced synthetic narcotics from the People’s Republic of China (PRC) are devastating nations around the world. It is truly a global crisis. The PRC, under the leadership of the Chinese Communist Party (CCP), is the ultimate geographic source of the fentanyl crisis. Companies in China produce nearly all of the illicit fentanyl precursors, the key ingredients that drive the global illicit fentanyl trade.
Why China Remains Unlikely to Invade Taiwan The Interpreter
The United States, and Washington DC in particular, is awash with expectations of war against China in the near future, most likely caused by a Chinese decision to forcibly annex Taiwan. Plenty of Americans — including senior military officers, academics, and politicians — think Chinese leader Xi Jinping sees war as the best option. Those making this argument typically say Xi is tired of waiting for unification to happen peacefully, sees a military window of opportunity, or has set a deadline for finishing the job. Some think China’s recent economic problems create an incentive for Beijing to launch a diversionary Taiwan war.
China, Russia, and Iran Are Reviving the Age of Empires Hal Brands/Bloomberg Opinion
The ghosts of empire are haunting Eurasia. President Xi Jinping’s China is seeking to reclaim the power and privileges of the great dynasties that once bestrode Asia. President Vladimir Putin is channeling the memory and the methods of famous conquerors from Russia’s imperial past. Iran is using proxies, missiles, and other means to build a sphere of influence encompassing parts of the old Persian Empire. Not so long ago, much of the world was ruled by empires. If today’s revisionist states have their way, the future could resemble the past.
The Economics of a Good Sleep
Sleeping Our Way to Being Productive VoxEU
Sleep is key to our physical and mental health. It also affects people’s employment and productivity. This column explores how the amount of weekly sleep influences employment, productivity, and the income of individuals in Germany. Each additional hour of sleep per week increases the probability of employment by 1.6 percentage points and weekly earnings by 3.4%. Sleep is partly the product of both public and private decisions and can be incentivized so that the negative economic effects of not sleeping enough are more salient to individuals.
Americans Sleeping Less, More Stressed Gallup
For the first time in Gallup polling since 2001, a majority of U.S. adults, 57%, say they would feel better if they got more sleep, while 42% say they get as much sleep as they need. This is nearly a reversal of the figures last measured in 2013, when 56% of Americans got the sleep they needed, and 43% did not. Americans’ perception that they aren’t getting enough sleep is borne out by the diminished number of hours of sleep they report getting per night.
