Defending the Fed. Betting on investment. China in Peru & Pakistan's counterinsurgency campaign.
Great links, images and reading from Chartbook Newsletter by Adam Tooze
Thank you for opening the Chartbook email.
Vento Divino 1969, Tullio Crali
Quite the headline.
Federal Reserve Chair Jerome Powell made clear he’s ready to defend the US central bank from political pressure following the re-election of Donald Trump, saying he wouldn’t resign if asked and insisting the incoming president doesn’t have the power to fire him or other senior Fed leaders. “No,” Powell said firmly on Thursday, when asked whether he would step aside if Trump asked for his resignation. During a press conference following the Fed’s two-day policy meeting, Powell said repeatedly that Trump — who explored firing the Fed chief during his first term in the White House — lacks the legal authority to demote or remove the chair or other senior Fed officials in Washington. “What Powell is saying, in making the forceful statement that no one can be demoted, is that the Fed’s leadership is all in this together,” said Peter Conti-Brown, a professor and Fed historian at the Wharton School of the University of Pennsylvania. “I see this as Powell’s declaration that the president-elect is going to have his say on shaping the Federal Reserve, but not until there are vacancies to be filled.”
Source: Bloomberg
Betting on R&D, defense & investment
“Getting ahead in technology and being self-reliant in defence are essentially very expensive lottery tickets. There’s no guarantee that if you spend money you’re going to be better off,” says Adam Posen, president of the Peterson Institute for International Economics. “But the odds are much better than the average lottery, and the payouts are enormous. You want to be buying those tickets,” he adds, warning that “the contractionary bias in fiscal policy and foregoing European fiscal borrowing capacity” risks the continent passing up such opportunities.
Source: Financial Times
HEY READERS,
THANK YOU for opening the Chartbook email. I hope it brightens your weekend.
I enjoy putting out the newsletter, but tbh what keeps this flow going is the generosity of those readers who clicked the subscription button.
If you are a regular reader of long-form Chartbook and Chartbook Top Links, or just enthusiastic about the project, why not think about joining that group? Chip in the equivalent of one cup of coffee per month and help to keep this flow of excellent content coming.
If you are persuaded to click, please consider the annual subscription of $50. It is both better value for you and a much better deal for me, as it involves only one credit card charge. Why feed the payments companies if we don’t have to!
And when you sign up, there are no more irritating “paywalls”
The other leader at VW
For contributing subscribers only.
La sfinge1931, Tullio Crali
Just an American General wondering why China might build a container mega port around “sea lines of communication for global commerce”.
A Chinese-built megaport in Peru could be used by Beijing’s navy, a top US general has said, highlighting the security risks to the US from “Belt and Road” projects in Latin America. Chinese President Xi Jinping is expected to inaugurate the $1.3bn Chancay port on the Pacific coast when he visits Peru for a summit in mid-November, amid growing concerns among US security officials that the facility’s size, depth and strategic location make it suitable to host Chinese warships. China’s Cosco Shipping, which has been building the port with a local junior partner, will be the sole operator when it opens after Peru dropped a lawsuit challenging its exclusive status. “It could be used as a dual-use facility, it’s a deepwater port,” said General Laura Richardson, outgoing chief of US Southern Command, which covers Latin America and the Caribbean. “[The navy] could use it, absolutely . . . this is a playbook that we’ve seen play out in other places, not just in Latin America.” Twenty-two Latin American and Caribbean countries have signed up to Beijing’s Belt and Road Initiative, Xi’s hallmark project to build infrastructure abroad, as China expands its footprint in a region once labelled as the “backyard” of the US. China is now the biggest trading partner for South America and a major investor in critical minerals, transport and energy projects. “If you look at all the countries which have these projects, they just happen to be around all these strategic . . . locations or sea lines of communication for global commerce,” Richardson told the Financial Times. “You have to ask yourself: ‘why all this investment in these kinds of things?”
Source: Financial Times
Built over a natural deepwater harbor, Chancay’s port is the first in the region to support “post-Panamax” ships — modern vessels so colossal that they’ve outgrown the Panama Canal. With 15 berths, the size and capacity of Chancay’s port could draw activity away from competitor ports from Colombia to Chile.
Chinese exports to the Andean community have surged
Source: The Wire China
Joe Biden did not visit Latin America as President
For contributing subscribers only.
Pakistan’s Azm-e-Istehkam Operation: Old Wine in a New Bottle? By Abdul Basit
The counterterrorism campaign is loud on rhetoric, low on substance and offers nothing substantive to stem the rising tide of militancy in Pakistan. On June 23, Pakistan announced a new military operation Azm-e-Istehkam, or Resolve for Stability, to reinvigorate its counterterrorism campaign amid a surge in militant violence from neighboring Afghanistan. The Shehbaz Sharif government announced that the new operation would not be a full-scale kinetic campaign displacing a large number of people like Operation Zarb-e-Azb. Rather, it will be the continuation of the ongoing intelligence-based operations, which will be expedited further under improved inter-agency coordination and cooperation. Azm-e-Istehkam has two key components, kinetic and diplomatic. Under the kinetic component, operational efforts will aim to dismantle terrorist networks. The diplomatic component will focus on building pressure on the Taliban regime to stop harboring Tehreek-e-Taliban Pakistan (TTP) as well as evolve a regional approach. … Like its predecessor Radd-ul-Fasaad, Azm-e-Istehkam raises more questions than it answers. It is like old wine in a new bottle where a new nomenclature has been added to a long list of military operations that also aimed to eliminate terrorism. Yet Azm-e-Istehkam is different from previous military operations in several respects. First, it has been announced in an environment wherein the U.S. has left Afghanistan and there is no international funding available for counterterrorism campaigns. For cash-strapped Pakistan, which is surviving on the International Monetary Fund (IMF)’s bailout packages, funding a new kinetic campaign is going to be a tall order. Second, while in the previous operations, terrorist networks operated from within Pakistan, now they are based in Afghanistan and Iran. Hence, irrespective of the efficacy of local operations, as long as terrorist sanctuaries in Iran and Afghanistan are not eliminated, terrorism will persist in one form or the other. Third, the operation has been announced at a time when the Pakistani polity is polarized and the state-society gap is alarmingly high. This situation will hinder the government’s effort to forge a national consensus against violent extremism. Already, Pakistan Tehreek-e-Insaaf (PTI) and Jamiat Ulema-e-Islam Fazal (JUIF), the two major political parties from Khyber Pakhtunkhwa, the province most affected by militancy, have opposed the military operation, fearing large-scale displacement. They have urged the government to focus on political rather than military solutions to end militancy in Pakistan. Fourth, the current phase of militancy in Pakistan is markedly different from its previous iterations ideologically, operationally and strategically. The Taliban’s takeover had a rejuvenating impact on groups like TTP, which has restructured its organizational framework and tactics along the Taliban’s insurgency model. These changes have transformed the face of militancy in Pakistan which necessitates a generational approach for restoring peace and stability. Finally, Pakistan has initiated several counterterrorism and counter-extremism initiatives in the past as well, which looked very comprehensive on paper, but their poor implementation undermined their efficacy. Currently, Pakistan is going through a turbulent political period and its economy is in the doldrums. Against this backdrop, a judicious implementation of Azm-e-Istehkam seems difficult. Pakistan lacks the political will and institutional wherewithal required to meaningfully push back against militancy.
Source: The Diplomat
I sommersi II1933, Tullio Crali
If you have scrolled this far, you know you want to click: