The U.S. dollar is facing competition from other currencies, but there is still one place, ironically, where the greenback is king: the streets of socialist, anti-imperialist Caracas. Everyone here wants dollars -- from the importer looking to stay in business, to the mid-level professional wanting to save his Christmas bonus.
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In a widely expected move, the Venezuelan government announced last Friday that it would devalue its currency by 32 percent. The Venezuela Bolívar (BsF) will now trade at 6.3 BsF per U.S. dollar, up from 4.3 BsF per dollar. This costly move was probably influenced by events that took place halfway around the world, in Beijing.
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Rick Rowden argues that recent accounts of "Africa's rise" are fundamentally flawed.
In his column, Christian Caryl explains why 2012 was a good year for elections, but a bad one for democracy.
Juan Nagel outlines possible scenarios for Venezuela if Hugo Chávez leaves the scene.
Peter Passell sums up some of the recent research in transitional economics.
Reflecting on the holiday season just past, Endy Bayuni shows how Indonesians are winning the war on Christmas.
And Jackee Batanda rounds out the year 2012 out with stories about extraordinary Ugandans
And here are this week's recommended reads:
Syria Deeply publishes the powerful tale of a young Alawite woman whose pro-revolutionary mother was killed by her pro-regime father -- a vivid example of how the civil war is tearing families apart. Al-Monitor shares the experience of Alawites living under siege.
Democracy Digest provides a useful collection of views from the experts on the directions that might be taken by a post-Chávez Venezuela.
Writing for The Irrawaddy, Gustaaf Houtman offers a vivid take on the recent changes in Burma as the society continues to open up.
Over at The New York Times, Simon Romero presents an unforgettable portrait of Uruguay's ultra-modest president.
A new working paper from the International Monetary Fund analyzes economic transitions in post-conflict nations.
Rami G. Khouri casts a critical gaze on some of the most frequent analytical assumptions about the Arab Spring.
Sebastian Mallaby, writing for the Council on Foreign Relations, joins the argument over Africa's economic development, insisting that the continent is growing in more ways than one.
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In a remarkable interview with Nobel Laureate Shirin Ebadi, Nazila Fathi asks Iran's leading human rights activist why she believes that an attack on Iran would strengthen the mullahs and undermine democratic aspirations.
Mark James Russell explores how South Korean popular culture has been giving the country's exports a brand name bump in the developing world.
Looking ahead to next week's parliamentary election in Georgia, political scientist Scott Radnitz argues that having two political machines contending for power is better than one. This week's case study from Princeton's Innovations for Successful Societies offers an in-depth look at one of President Saakashvili's signature reforms.
Christian Caryl makes the case that Aung San Suu Kyi should not be immune to criticism.
Roger Bate urges the FDA to take regulating internationally sourced pharmaceuticals more seriously.
Mohamed El Dahshan takes aim at the seemingly archaic Egyptian economic policy.
Endy Bayuni contrasts the various Indonesian views on blasphemy laws.
And here are this week's recommended reads:
The International Republican Institute offers a handy overview of the political scene and the major players in Georgia's October 1 election. At The Atlantic, Charles H. Fairbanks Jr. looks at the recent prison scandal there and what they say about the legacy of the 2003 Rose Revolution.
The Caracas newspaper, El Universal, analyzes the impending Venezuelan presidential election through the prism of both candidates' tweets. Reuters investigates the scandal over a fortune in government funds spent on a factory that never quite got built.
In its latest report, Freedom House takes a critical look at the state of censorship on the web.
October's issue of Journal of Democracy includes several noteworthy papers on the state of Burma's transition, including pieces by Hkun Htun Oo on minority rights, Min Ko Naing on civil society, and Brian Joseph and our very own Min Zin on the challenges of building democracy.
Anthony Kuhn of National Public Radio tells the story of Singapore's forgotten dissidents.
Democracy Digest offers a helpful introduction to a new report, Political Parties in Democratic Transitions, that analyzes the dynamics of democratic transitions.
As the wave of protests around the Muslim world ebbs, two authors offer their perspectives on the motives of religious anger: Kenan Malik compares the latest protests with the fatwa against Salman Rushdie, and Steve Cole, writing in The New Yorker, shows why the TV imagery of fanatical rioters usually falls short of a complex reality.
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Aung San Suu Kyi, the Burmese democracy leader and Nobel laureate, is coming to Washington, D.C. On September 19 she is set to receive the Congressional Gold Medal. This is the highest civilian honor bestowed by the U.S. Congress, and it will be presented to Suu Kyi "for her leadership and steadfast commitment to human rights and for promoting freedom, peace and democracy in her home country of Burma," said House of Representatives Speaker John Boehner.
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While much of the developed world is mired in sluggish growth or downright recession, a few days ago Venezuela came out with healthy GDP figures. According the country's central bank, GDP grew at 5.6 percent in the first quarter of the year, outperforming Brazil, Mexico, and Colombia, and equaling Chile. Unnamed government officials cited in the Wall Street Journal expect the GDP as a whole to grow by 5 percent in 2012.
This is welcome news, especially after the country was hit hard by the financial crisis of 2008-2009. Unfortunately, this growth spurt will not last.
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In March, Kenyan President Mwai Kibaki, South Sudan's President Salva Kiir, and Ethiopia's Prime Minister Meles Zenawi troweled dollops of concrete onto a barren patch of land on the picturesque island of Lamu, Kenya, where a future seaport will lie. The Lamu Port-Southern Sudan-Ethiopia Transport Corridor (LAPSSET), a $23-billion undertaking that will connect Kenya's coastal Lamu region to South Sudan and Ethiopia with oil pipelines, railways, and super highways, is one of the biggest infrastructure projects in Africa to date. According to President Kibaki, LAPSSET "will stimulate the growth of regional economies through promotion of trade and other productive activities." He predicted that the project will boost employment and contribute to better prospects for some 167 million people in the surrounding region.
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Can Burma make headway towards democracy when it's still saddled with an authoritarian constitution? Michael Albertus and Victor Menaldo argue that countries in comparable situations have managed to overcome similar obstacles in the past.
Skeptics say that Brazil's economy is losing its mojo. But Albert Fishlow begs to differ, explaining why investors shouldn't give up so soon.
Christian Caryl tells the peculiar story of a West Texas town that has become a player in the global human rights industry.
The White House announced yesterday that it is lifting two of its major sanctions against Burma. At the same time, the Obama Administration nominated the first U.S. ambassador to Burma in 22 years. (Technically speaking, President Obama first extended one more year of the "national emergency" that serves as the legal basis for the investment ban, then used his presidential waiver to suspend the sanction. Yeah, it's confusing.) He also decided to waive a measure banning the export of financial services, which was a provision of the JADE Act passed by the Congress in 2008.
Secretary of State Hillary Clinton outlined five possible responses to the political opening in Burma in remarks she made on April 4. The United States, in Ms. Clinton's words, resolved to "meet action with action." Yesterday's announcement means that the U.S. has now implemented all five of the measures she alluded to.
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Thirty-five years after the end of the "Dirty War," Alex Gibson shows how a trial in Argentina is struggling to come to terms with a legacy of state-sponsored violence.
Peter Reuter explains why the West won't be able to contain money laundering from developing countries unless it cleans up its own act first.
Min Zin asks whether Burmese opposition leader Aung San Suu Kyi is making a mistake in her latest confrontation with the powers-that-be, and also offers an entertaining primer on the politics behind the latest Burmese New Year celebrations.
Mohamed El Dahshan explores the decision that has thrown Egypt's presidential election into disarray.
Juan Nagel shows why the Venezuelan government's recent decision to subsidize beauty products will score it political points.
Endy Bayuni explains how Aceh's separatist leaders have morphed from guerillas into governors.
And in his column, Christian Caryl argues that economic inequality is now becoming a hot political issue in both rich countries and poor ones.
This week's recommended reads:
In Foreign Affairs, Leon Goldsmith writes on the Alawite community of Syria and the motives for their persistent support of the Assad regime.
In an essay in the current issue of Journal of Democracy, political philosopher Abdou Filali-Ansary casts light on why many voters in the Arab world prefer Islamist parties -- and arrives at some surprising conclusions.
A new report by the International Crisis Group documents the growing fight over resources between the Iraqi central government in Baghdad and the Kurdistan regional government.
Writing for Project Syndicate, Alfred Stepan and Etienne Smith discuss the surprising resilience of democracy in Senegal.
Democracy Digest reports on the difficulties faced by Russian dissidents following Vladimir Putin's victory in the March 4 presidential elections. And the German Marshal Fund examines the recent release of imprisoned opposition leaders in Belarus. (The photo above shows activist Dmitry Bondarenko meeting his wife after leaving prison.)
And don't miss Jeffrey Bartholet's great travelogue from post-Mubarak Egypt in National Geographic.
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The World Bank and IMF have warned Africa that a fresh economic crisis could hit the continent hard in 2012. This downward trend has to do with ripple effects from the Eurozone financial crisis and weakening growth in emerging markets. The Daily Monitor reports:
The bank also cut its global growth forecast for 2012 to 5.4 percent from 6.2 percent for developing countries and 1.4 per cent from 2.7 per cent developed countries. The global growth is projected at 2.5 and 3.11 per cent for 2012 and 2013, respectively.
That means that living costs on the continent will continue to rise. In Uganda, where the general populace is growing dissatisfied with rising prices, this is already fueling a fresh round of non-violent protests. Early in the year, traders in Kampala, under their umbrella organization, Kampala City Traders Association (KACITA), announced a strike. The traders, small shopowners who are a mainstay of the Ugandan economy, closed their shops for three days earlier this month to protest the new interests on existing bank loans. In November of last year, Bank of Uganda increased its base lending rate from 13 percent to 23 percent. Commercial banks then increased interest on their loans to 28-29 percent. Bank of Uganda's reluctance to intervene, and the commercial banks' refusal to lower their interest rates, triggered the strike. KACITA declared that it would mobilize its members to withdraw their money from banks en masse if the decision was not reversed.
The strike forced President Museveni to leave a political retreat at Kyankwanzi to address the traders. He met with over 1,000 traders at the Serena Hotel in Kampala to work out a solution. He called on the traders to diversify their imports and exports, and promised to get Bank of Uganda to look into scaling back its interest rates. He warned the traders not to sabotage their own businesses. He stressed that banks and the businesses belonged to Ugandans. Analysts had warned the traders not to mix their strike with politics.
I believe the president needs to let the relevant authorities deal with the conditions that provoked the strikes instead of trying to have the final say in all disputes. This meeting shows that a culture has been cultivated where Ugandans do not believe in their institutions; as a result, only the president can solve every crisis. This culture of misplaced patronage needs to be addressed, since it is a symbol of a weakness in the democratic process.
The public called the banks "thieves" who were out to exploit poor borrowers. At least one banker tried to explain that borrowing costs are dictated primarily by two factors: inflation, which is likely to be high in the year to come, and the cost of funds, which is set by market conditions as well as the central bank rate. But people aren't necessarily in a mood to listen.
The strike cost the government millions of dollars in lost tax revenues. With the traders back to work, it is not clear whether it has been a win-or-lose situation. No sooner had the traders' strike subsided than other Ugandans resumed their walk-to-work protests, which were greeted by the government, as usual, with mass arrests and indiscriminate use of tear gas. On several occasions this week the police deployed at dawn at the homes of different opposition politicians in order to prevent them from taking part in the demonstrations. On Thursday (Jan. 19), main opposition leader Kiiza Besigye was held for several hours -- along with a few sympathetic members of parliament and supporters -- at Kiira Road Police station in Kampala after he attempted to launch a new phase of protest. (The photo above shows him shortly before his arrest.)
The gloomy state of the economy means that other professions are gearing up to protest. Teachers have promised to strike after Jan. 22 if their salaries are not increased. It will be interesting to see how the government reacts.
Transitions is the group blog of the Democracy Lab channel, a collaboration between Foreign Policy and the Legatum Institute.