China’s anniversary. Beijing celebrated the 70th anniversary of the founding of the People’s Republic of China on Tuesday in style, with a massive military parade accompanied by a fireworks bonanza. Like nearly everything eye-catching that happens in China these days, the event demonstrated China’s enormous growth in prosperity and power under Communist Party leadership – and was intended to mask the profound challenges it’ll face going forward. To be sure, gross statistics make it abundantly clear that Beijing has plenty to celebrate. Since 1949, life expectancy for the average Chinese citizen has soared from just over 40 to 75. Just 21,000 Chinese citizens went to college in that year; in 2018, that number was more than 7.5 million. Since 1990 alone, gross domestic product per capita has climbed steadily from less than $500 to more than $9,000, lifting hundreds of millions of people out of poverty. It’s built 4,850,000 kilometers (3 million miles) of highways, more than 100,000 kilometers of railways, and more than 300 advanced warships. At the same time, though, it also amassed a staggering $34 trillion in public and private debt, provoked a trade war with a $20 trillion economy, and is facing a labor force shortfall numbering in the hundreds of millions (and a pension shortfall soon to surpass 1 trillion yuan, or $140 billion) resulting from the party’s ill-conceived family planning policies. And tens of thousands of Hongkongers protested again on Tuesday, underscoring just how carefully Beijing must move to avoid alienating the Western investors on which it still depends. China’s fate isn’t sealed; it has repeatedly demonstrated an incomparable capacity to defy expectations and has incredible tools with which to defy conventional economic wisdom. Nonetheless, we shouldn’t take for granted that the 75th-anniversary party will be similarly jubilant; China’s leaders certainly aren’t.
Turkey’s economic optimism. Turkish Treasury and Finance Minister Berat Albayrak has revealed Ankara’s ambitious economic program and goals for 2020-22, under the theme “Transformation Begins.” The plan reveals the government’s approach to reversing the negative trajectory of major economic indicators in Turkey. Unemployment is projected to drop from 12.9 percent this year to 9.8 percent by 2022 under the new plan; the budget deficit-to-GDP rate is expected to decline from 2.9 percent to 2.6 percent; and GDP growth is expected to climb from 0.5 percent to 5 percent. Perhaps the most optimistic projection, however, is that inflation will fall from 12 percent to 5 percent over the next three years. Separately, Turkey’s Treasury also announced plans to pay off $10.23 billion in debt by the end of 2019. Turkey’s gross external debt stock totaled $446.9 billion at the end of June, the equivalent of 61.9 percent of GDP. It’s clear the government needs to do something to address Turkey’s current economic conditions, but the feasibility of these goals is questionable, and it still faces the challenge of turning the plan into reality.
Protests in Iraq. Iraqis took to Baghdad’s Tahrir Square and the streets of Basra today to protest a lack of basic services, unemployment, rampant corruption and unequal treatment within the Iraqi army. Riot police were deployed in Baghdad and there were reports of security forces using excessive force and arresting protesters in Basra. Protesters also expressed their continued disapproval of the Iraqi government’s recent decision to remove Lt. Gen. Abdel-Wahab al-Saadi, seen as the national hero who helped defeat the Islamic State, from his post as commander of the Iraqi Counterterrorism Service. Additionally, factions of the Popular Mobilization Forces denounced their marginalization and demanded salaries and support equivalent to what the Iraqi army receives from the government. A pro-government member of Iraq’s parliament already cautioned protesters not to politicize their demands or to be opportunistic. Just last summer, the Iraqi government faced a wave of unrest that began with similar social grievances in Basra and spread nationwide. This renewed wave comes at a time when the government is also facing increased foreign security threats.
- The Japanese government raised the consumption tax rate to 10 percent from 8 percent. This will collect an additional 4.6 trillion yen ($43 billion) in government revenue, much of which will support welfare for the elderly, but the move risks derailing Tokyo’s elusive quest for robust growth.
- A firefight broke out this morning between Pakistani and Indian soldiers stationed near the Poonch district of Jammu and Kashmir.
- The People’s Liberation Army of China opened a radar station at the Khor Ambado coast guard training base in Djibouti.
- The Islamic State claimed an improvised explosive device attack against Bangladesh’s ruling party, the Awami League, at the party’s office in Khulna. This marks the first time IS claimed an attack in Bangladesh outside the capital.
- Peruvian President Martin Vizcarra dissolved Congress and called for early elections in a move aimed at ending the country’s political crisis.
- African migrants stranded in Chiapas, Mexico, renewed their calls for the Mexican government to issue transit visas to them, so they can make their way to the northern border with the United States.
- The unregistered European Party of Armenia, which backs Armenia’s accession to NATO, rallied against the upcoming Eurasian Economic Union summit in Yerevan and Russian President Vladimir Putin’s attendance of the summit.