Weekly Graphic

March 3, 2017 On March 2, Pakistan’s Cabinet approved the incorporation of the Federally Administered Tribal Areas into the adjacent province of Khyber Pakhtunkhwa. The move will end the autonomous status of the region that straddles the border with Afghanistan and has been a global hub of transnational jihadi activity. During the early 2000s, an anti-Pakistan jihadi insurgency took shape in the tribal areas in which Pakistan had supported anti-Soviet Islamist insurgents, and later on, the Afghan Taliban. The rise of this Taliban movement was aided by al-Qaida, which relocated to Pakistan after the destruction of its Afghanistan facilities in late 2001. Over time, Pakistan lost control of the tribal badlands along its northwestern border with Afghanistan and many districts of the Khyber Pakhtunkhwa province.

Feb. 24, 2017 Of the 10 largest economies in the world, none is as dependent on another country as Canada is on the United States. A quarter of Canada’s GDP comes from exports to the United States.

However, although the U.S. is less dependent on Canada than Canada is on the U.S., Canada is still an extremely important trading partner for the U.S. Canada is the second largest source of U.S. imports, at about 13 percent of the total; China took over the pole position from Canada in 2007. The fact that the U.S. economy is so massive and is not dependent on exports obscures the importance of the U.S.-Canada trading relationship for the U.S. The U.S. economy is balanced across different regions. This means that certain U.S. regions are much more dependent on the trading relationship with Canada than national economic data indicates.

Feb. 17, 2017 There is an increasing probability that a real estate bubble may burst in China. The financial sector heavily depends on real estate, which in turn exposes the entire Chinese economy to systemic risk. This connection means that a downturn in real estate could quickly spread to other areas of the Chinese economy if banks face liquidity shortfalls. Additionally, decreasing housing prices could result in more non-performing loans (NPLs). While NPLs officially account for only 1.75 percent of all Chinese loans, it’s likely that the government is understating the figure. BMI Research, a financial consulting firm, estimated in a 2016 report that NPLs could be close to 20 percent of loans.

Feb. 10, 2017 Eighty-five percent of goods traded between the U.S. and Mexico are transported by truck or railway, according to the U.S. Bureau of Transportation Statistics. Two-way trade across the border totals $1.4 billion per day and takes place at 25 major ports of land entry between the U.S. and Mexico. Among these are 39 crossing points (high-volume locations such as Laredo, Brownsville and Nogales have multiple crossing points), of which 22 are open all day, every day. Border crossing delays can cost billions of dollars in trade. In 2011, Bloomberg estimated that delays at the U.S.-Mexico border cost the U.S. economy up to $7.8 billion annually.

Feb. 3, 2017 In 2017, economic issues tied to reduced revenue from energy exports and Russia’s weakening economy will further destabilize the entire region. Kazakhstan, Uzbekistan and Turkmenistan are the most vulnerable countries, and the map below makes it easy to see why. The countries are rich in hydrocarbon deposits and built national economies around hydrocarbon exports. As oil prices fell, so did government revenue, which in turn hurt domestic economies.

Jan. 27, 2017 The average annual per capita disposal income by household in China in 2014 was about 20,000 yuan or approximately $3,000, which equates to $8.22 a day. On the surface, that seems to be a somewhat promising figure. It wouldn’t make any of these households rich or even lower-middle class by American standards, but it would be quite a leap forward from where they started. In 1981, the year the World Bank began tracking poverty in China, 88.3 percent of China’s population lived on less than $1.90 a day.

Jan. 20, 2017 China is keenly interested in the Philippines because a Chinese-Philippine alliance would solve China’s main strategic weakness – the various choke points around its coast that it cannot currently control. The United States wants to continue to use the Philippines as a key part of its naval strategy in the Pacific, as it has for decades, because the Philippines is highly valuable strategic territory and Philippine alignment with the U.S. is a key part of U.S. naval dominance in the Pacific. The Philippines wants to gain some degree of independence in its foreign policy, and that means not being too dependent on any outside power.

Jan. 13, 2017 A common language is one of the basic building blocks of a national culture, and India’s various states do not share one. While at the national level Hindi and English are the official languages, the country’s constitution recognizes 22 languages, and there are dozens more that do not have any type of official status. Language is just one example of India’s multinational nature, and as a result, the states have different internal demands. Under this structure, India cannot be thought of as one coherent economic entity, nor can it be expected to behave like a textbook nation-state.

Jan. 6, 2017 Advocates of a two-state solution for the Israeli-Palestinian conflict often argue that demographics loom as an existential threat to Israel’s continued existence as a democracy and Jewish state.

However, the fertility rate is not a significant concern for Jewish Israel. Per the latest available data from Israel’s Central Bureau of Statistics (CBS), the fertility rate for Israeli Jews and Israeli Arabs was an identical 3.13 children per woman in 2015. This means that Israel has no concerns regarding population growth since 2.1 is the necessary fertility rate for such growth. It also means that Israel has no concerns relative to its Arab population because the Israeli Arab fertility rate is not appreciably greater than the Jewish population’s.

Dec. 30, 2016 The biggest myth surrounding the issue of China as a holder of U.S. debt securities is the outsized role China is perceived as playing. U.S. government debt currently totals $19.89 trillion. This is a somewhat misleading figure, however. Intragovernmental holdings make up $5.47 trillion of that figure, which means that almost 30 percent of the debt is money that the U.S. government owes itself. Of the remaining $14.41 trillion, $6.15 trillion is held by foreign sources, and the rest is held by various U.S. pension funds, insurance companies and other investors. Of the amount held by foreign sources, only $1.84 trillion is held by China, 61 percent of which is held in U.S. Treasury securities. (The rest is in equities and corporate or U.S. agency securities, as shown below.)

Dec. 23, 2016 All national economies are regionalized at some level. The U.S. Department of Commerce divides the U.S. into nine regions for bureaucratic purposes. What stands out in this week’s graphic is that, while the U.S. certainly has regions that account for a greater share of GDP, economic activity is more spread out than some might think. The Southeast region actually contributes most to total GDP. The Mideast and the Far West are not far behind. New York City is the U.S.’ largest city, and its greater metropolitan area accounts for about 7 percent of the country’s GDP.

Dec. 16, 2016 China has been working on a plan to modernize the legendary Silk Road. The two-part initiative called One Belt, One Road includes both land and sea routes and the opening of multiple economic corridors, spanning an area that covers almost two-thirds of the world’s population and a third of global GDP. Linking Eurasia together will require the construction of roads, railways, ports and other elements across vast distances in some of the harshest terrain and least populated areas in the world.