More on the global economy. As expected, the International Monetary Fund cut its growth forecast – the first time it has done so since July 2016. It estimates that global growth will hover at around 3.7 percent instead of climbing to 3.9 percent. All things considered, 3.7 percent is nothing to be ashamed of. It would match the highest levels recorded since 2011, and it would do so amid a trade war between the world’s largest economies. (Not to mention the tightening of monetary policy by many central banks.) But strong headline figures have a way of masking what’s beneath the surface, especially when major economies are still accruing debt, still stimulating growth through measures put in place by the last crisis, and still ill-equipped to deal with the next. IMF chief Christine Lagarde went so far as to say the situation could give way to a second Great Depression. Alarmist as that may sound, it’s worth keeping in mind that all the major geopolitical processes we’ve been tracking for the past several years have occurred in a time of relative economic stability. It won’t last forever. When money gets tight, geopolitical fault lines are more likely to rupture.
Beijing is still fighting its veterans. According to an unconfirmed report by Radio Free Asia, new protests began Friday night after a group of elderly veterans were beaten up by police in Pingdu, Shandong province. They had traveled to Beijing to ask for unpaid pensions but were assaulted upon their return. Police broke up the protests on Saturday, but the crackdown attracted “thousands” more veterans from surrounding regions. Additional clashes reportedly ensued, though police were able to lock down the city by Monday. Beijing has periodically had to deal with unhappy veterans since President Xi Jinping started to overhaul the People’s Liberation Army – the guarantor of the Communist Party’s continued rule – in 2015. The government pledged to boost veteran benefits and create a shiny new Ministry of Veterans Affairs to disburse them – theoretically avoiding the local corruption that lay at the heart of the veterans’ complaints. But the resentment isn’t gone.
The situation in Ukraine remains tense. An arms and ammunition depot in northern Ukraine’s Chernihiv region caught fire Tuesday, setting off a series of explosions and forcing a mass evacuation of the surrounding region. A senior Ukrainian military official said sabotage was the most likely cause, and the minister of infrastructure blamed Russia. It’s worth noting that this was just the latest in at least 12 such incidents at depots in Ukraine since 2003, including one in May and three in 2017. And in several of these cases, officials initially blamed sabotage before quietly providing a more benign explanation – most often simple neglect. Whether or not this incident is different, Kiev’s response reflects the reality that Ukraine’s fate remains largely unsettled even if international attention has largely moved on. The low-boil fighting in Donbass has never quite stopped, with Kiev announcing dozens of alleged cease-fire violations by Russia-backed militants over the past few weeks alone and rebels making counter-accusations in kind. Last week, monitors reported that rebels have deployed some 180 tanks and about 100 guns and artillery systems beyond withdrawal lines agreed to in the Minsk agreement. We don’t expect a major shift in the status quo anytime soon; Moscow, Washington and Europe all have bigger issues to deal with. But a frozen conflict can’t be a permanent state of affairs.
- Latvia’s intelligence agency accused Russia of conducting cyberattacks on several state institutions, including the foreign and defense ministries.
- Syrian rebels completed their pledged withdrawal of heavy weapons from the de-escalation zone in Idlib, according to Turkish media.
- Iranian crude oil exports dropped to 1.1 million barrels per day during the first week in October, down from 1.6 million bpd in September.
- In July, Russian shipments of oil products to North Korea dropped by two-thirds compared to June, according to newly released U.N. figures.
- The Macedonian government adopted draft legislation on changing the country’s name in line with its agreement with Greece. The bill now heads to the Macedonian parliament, where its prospects for passage are uncertain.
- A Pakistani Finance Ministry spokesman said Islamabad would open talks with the IMF on another bailout, though an IMF spokesman said it has not yet been approached by the Pakistanis.