Did this week's events signal increasing Russian aggression, Georgian paranoia, or both?

By Lincoln A. Mitchell

According to Georgian Defense Minister David Sikharulidze, the news this week that the Georgian government had thwarted a presumably Russian-backed mutiny on May 5 was evidence that Russia had engaged in an attempt at "disrupting NATO exercises and overturning the [Georgian] authorities militarily." For opposition leaders such as Zviad Dzidziguri, the whole affair was "yet another stage show" concocted by President Mikheil Saakashvili's government to discredit the country's domestic opposition. Information is still becoming available, but determining the truth is likely to be difficult because both sides have enough evidence to present a fairly convincing case. This is, after all, the Caucasus, where political intrigue is the regional sport.

It's true that Russia is clearly uncomfortable with this week's NATO exercises in Georgia and, for that matter, anything that might suggest that Georgia will soon become part of the transatlantic alliance. Although Georgia's chances of getting into NATO in the near future are significantly less than what some in Tbilisi, and Washington, would like, it's certainly not out of the question that Russia would jump at the chance to play a disruptive and destructive role in Georgia.

Nonetheless, Russia's very real aggressive tendencies coexist with the Georgian government's habit of suggesting that any opposition to the government is either Russian-funded or Russian-backed. In fairness to Saakashvili, this is something of a reflex for Georgian leaders: It was not too long ago that Saakashvili himself was being accused of being a Russian operative by the government of then President Eduard Shevardnadze.

The attempted mutiny comes at a sensitive time in Georgian politics. Demonstrators have been on the streets of Tbilisi calling for Saakashvili's resignation for almost a month. Although it is unlikely the president will resign, there is significant frustration throughout the country over the decreasing democratic space in Saakashvili's Georgia, as the electronic media is dominated by the government and critics of the government are inevitably accused of being disloyal. Then there is the president's conduct during Georgia's brief and disastrous war with Russia last August. The defeat was viewed by many both inside and outside Georgia as caused by the president's poor judgment and impulsive decision making.

While it is possible that Russian leaders saw this week as a moment to decisively oust Saakashvili, whom they despise, it is also plausible that the Georgian government will seek to leverage this thwarted mutiny into another attempt to discredit the political opposition and link it to Russia.

Whatever actually happened, Washington would be wise to keep a close eye on developments in Georgia. Last year when Russia and Georgia went to war, the United States almost became involved in the conflict and was seen by many in the former Soviet Union as having encouraged Georgia to provoke a fight. Further conflict between these two countries will be felt throughout the former Soviet Union, where many countries still fear renewed Russian power. Moreover, Georgia's domestic political situation is far from resolved. Saakashvili's regime is very polarizing, and the recent mutiny attempt -- whether it was a Russian-inspired coup attempt, an indigenous Georgian military revolt, or a story embellished for short-term political gain by the Georgian government -- does not augur well for Georgia's stability.

Lincoln A. Mitchell is the Arnold A. Saltzman assistant professor in the practice of international politics at Columbia University's School of International and Public Affairs and author of Uncertain Democracy: U.S. Foreign Policy and Georgia's Rose Revolution.

Why Hezbollah is not the new Hamas.

By Elias Muhanna

The Lebanese parliamentary elections are just over a month away, and the race between the two dominant coalitions is too close to call. But it's clear that the "March 14" coalition, a Western-backed alliance that swept into power following former Prime Minister Rafik Hariri's assassination in 2005, has suffered a string of political setbacks during the past year. Last week's release of four Lebanese generals held in connection with Hariri's murder by the U.N.-backed Special Tribunal for Lebanon has dampened March 14's hopes of implicating the Syrian regime. More significantly, a new electoral law has redrawn various districts in ways that may threaten the coalition's current margin of just 16 (out of a total 128) seats.

What this means is that the Lebanese opposition, which includes Hezbollah, has a decent shot at becoming the new majority on June 7. Both Britain and France have said that they will work with either side. Still, many fear a tougher response from the United States and the Sunni Arab regimes if the opposition wins -- something akin to the reaction to Hamas's victory in the 2006 Palestinian elections. All this has raised the stakes for the June elections, with many in Lebanon and abroad asking: What will happen if Hezbollah wins?

Interestingly, winning might not be Hezbollah's primary goal. The party's secretary-general, Hassan Nasrallah, announced last month that his bloc would not seek to increase the size of its own parliamentary share, which currently stands at 14 deputies. This is just one of the steps Hezbollah has taken to insulate itself and its allies from the likely portrayal of an opposition victory as a Hamas-style "takeover" of Lebanon.

The current opposition consists of three blocs: the predominantly Christian (but officially secular) Free Patriotic Movement (FPM) and the country's two main Shiite parties, Hezbollah and Amal. Like Hezbollah, Amal is not likely to seek an expanded parliamentary share, placing the onus on the Christian bloc to put the opposition over the top. Even with an opposition win, Hezbollah would continue to represent only 11 percent of parliamentary seats. Its allies would need at least another 40 percent to become the majority.

Hezbollah has also repeatedly called for the creation of a national unity government after the elections, promising to grant March 14 a blocking veto in any opposition-led cabinet. Some have even speculated that Hezbollah and its allies would appoint Saad Hariri -- the son of the slain prime minister and one of March 14's principal figures -- to the prime minister's office as a way of ensuring the participation of his bloc within the new government. What these measures suggest is a deliberate attempt by Hezbollah to prevent its opponents in Lebanon and abroad from casting its victory as an Islamist coup against the forces of moderation.

Of course, if the opposition wins, many will do exactly that. But would the United States just cluck its disapproval, or would it follow words with punitive actions? Boycotting a Lebanese government in which Hezbollah has a relatively small share, and in which the Western-backed opposition wields a veto, would seem inconsistent for an administration that has already established talks with Hezbollah's principal sponsors, Iran and Syria. Engaging such a government via Hezbollah's parliamentary allies, such as the FPM, and the United States' own European partners, such as France, seems more in line with the rolled-up-sleeves approach of this State Department.

Many think that an opposition victory would embolden Hezbollah against attempts to dismantle its military wing. Others argue that political success might serve as a great moderating influence on the party by raising the stakes of a confrontation with Israel and saddling it with the mundane duties of making Lebanon's trains run on time. If Hezbollah and its allies prevail on June 7, both these theories will finally be put to the test.

Elias Muhanna writes the Lebanese affairs blog qifanabki.com. He is a Ph.D. candidate in Arabic and Islamic studies at Harvard University.

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The political fallout of Argentina's dengue fever epidemic.

By Michael Shifter

Mexico's swine flu outbreak has captured the world's attention over the past two weeks. But Latin America's other, less-noticed epidemic is not only more severe, but may have more serious consequences for the government struggling to control it.

The worst outbreak of dengue fever in Argentine history has affected more than 20,000 people since the beginning of this year, including two children born with the disease and at least half a dozen people who died. A tropical disease transmitted by the Aedes aegypti mosquito, dengue is accompanied by severe flulike symptoms, but the vast majority of cases are not lethal. In Argentina, roughly 80 percent of the dengue cases have been in the predominantly poor, rural northern provinces of Chaco and Catamarca, but several cases have been confirmed in the capital, Buenos Aires.

Dengue fever is a wake-up call for one of Latin America's most prosperous and highly educated countries. Argentina enjoyed a period of robust growth between its devastating, unprecedented economic crisis in 2001 and the onset of the current global slowdown. The outbreak is disheartening for many Argentines who had begun to think their country had reversed its recent decline. Dengue is common in neighboring Bolivia, Paraguay, and Brazil, but until a decade ago Argentina had managed to escape the ravages of the fever.

Argentine President Cristina Fernández de Kirchner had already moved the midterm legislative elections up four months to June 28 to avert even greater political damage to herself and her Peronist party in a worsening economy. Now, her government's handling of the fever crisis has emerged as a potentially damaging campaign issue.

In the midst of their heated clash, both the government and the opposition have been criticized for exploiting the dengue epidemic for political gain. Fernández has been accused of downplaying the severity of the outbreak, resisting opposition pressure to declare a national health emergency. Meanwhile, some say the opposition is more focused on pointing fingers than finding a solution, failing to recognize government efforts after a slow start. As the author Mempo Giardinelli wrote in Argentina's left-leaning daily Página/12 on April 30, both sides are guilty of "prioritizing the elections over the health of the population."

Although they responded aggressively to prepare for the possibility of swine flu infection, Argentine officials did not immediately take sufficient measures to deal with the homegrown plague. The problem exposes serious deficiencies in the country's healthcare system -- another example of often precarious public services throughout Latin America.

Preventive measures aside, it is essential at least to have accurate and credible data on the status of the epidemic. Because the Fernández administration's statistics on inflation and other economic indicators are widely seen as underreported relative to rising prices, people are similarly suspicious of government figures related to the spread of dengue cases.

The handling of the dengue outbreak is emblematic of deeper governance and institutional weaknesses, particularly poor coordination and relations between provincial and federal governments. In just two years, the once unassailable public support for Fernández and her husband, former President Néstor Kirchner, has plummeted from about 70 percent to 35 percent. Polls indicate that growing insecurity in urban areas is the top public concern, while the perception of manipulated inflation figures and official corruption also stand out in this distressed economic environment.

Fernández is looking forward to the start of the Argentine winter on June 21, as the cold weather should help contain the fever. But she is most likely apprehensive about the critical elections a week later, when her government could possibly lose its current majority in the legislature. Whatever the outcome, the dengue epidemic has already helped put the country's deepening governance difficulties in even sharper relief.

Michael Shifter is vice president for policy at Inter-American Dialogue and adjunct professor of Latin American studies at Georgetown University's School of Foreign Service.

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Ending U.S. torture gains the moral high ground, but will not in itself make America safer.

By Thomas Hegghammer

The CIA torture memos have generated a media storm in the United States. Many have expressed surprise and indignation at the nature and extent of state-sanctioned torture in the war on terror. On the center-left of the political spectrum there is also a sense of relief and hope that the dark Bush era is over and that a torture-free America will regain the moral high ground and be safer as a result.

Switch to the jihadi Internet forums, where thousands of radical Islamists log on every day to debate religion, politics, and the latest news from the war on terror. Last week there were debates on all kinds of topics, from swine flu to the financial crisis to the alleged capture of the leader of al Qaeda in Iraq. But there was virtually nothing about the torture memos.

This wasn't because the jihadists don't care about how the United States treats detainees. Pictures from Guantánamo and Abu Ghraib have been among al Qaeda's most widely used and most potent recruitment tools in the post-9/11 era. Since early 2002, not a day has passed without Guantánamo being mentioned somewhere on the jihadi Internet. Outrage over Abu Ghraib was the single most important motivation for foreign jihadists going to Iraq in 2004 and 2005. Al Qaeda hostage takings began after the establishment of Guantánamo and skyrocketed after Abu Ghraib. More than one Western hostage met his fate in Iraq wearing an orange jumpsuit.

Nor is al Qaeda's silence on the memos a tacit admission that the end of torture is bad for its recruitment. Jihadi strategists have never shied away from publicly discussing the objective challenges they are facing. There are many reasons for al Qaeda to fear an Obama administration, but the cleanup of the CIA black sites is not one of them.

The reason for the silence on the forums is that al Qaeda couldn't care less about the current U.S. debate about torture. The questions of who signed which memos when, whether Khalid Sheikh Mohammed was waterboarded 80 or 180 times, and whether a millipede was inserted into Abu Zubaydah's confinement box are only interesting for those who did not expect the United States to behave this way. And the jihadists are not among them.

For a start, al Qaeda never cared about the black sites in the first place. It never expected its leaders to be treated gently, and it knew the dungeons of Cairo were infinitely worse anyway. Moreover, even if the CIA really did stop torture, the United States has so little credibility left in the Muslim world that virtually nobody would believe it. And those who would believe it would rightly point out that the practice of rendition will continue. Most importantly, Guantánamo and Abu Ghraib have already provided enough propaganda material to last a generation. For the jihadists -- indeed for most Muslims -- the CIA memos are a small drop in an ocean of examples of Western injustice toward Muslims.

The bottom line is that the damage caused by Guantánamo and Abu Ghraib is irreparable and the end of U.S. torture will not in itself make the United States safer from this generation of jihadists. Ending torture in the United States is obviously important, but it will only bring security benefits if it is part of a broader policy package that includes pressure on allied regimes to do the same.

Cleaning up America's own backyard might make liberals feel good about themselves, but they should not be fooled into thinking that this alone will make them safer.

Thomas Hegghammer is a fellow at Harvard Kennedy School and a senior research fellow at the Norwegian Defence Research Establishment. He is the coauthor of Al Qaeda in Its Own Words and author of the forthcoming Jihad in Saudi Arabia. He blogs about jihadi Web sites at www.jihadica.com.

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The U.N. Security Council's shameful failures in Sri Lanka.

By Gareth Evans

As the whole world watches the continuing calamity in Sri Lanka, with thousands of civilians dead and tens of thousands more at risk as government forces try to quash the last of the insurgent Tamil Tigers, the United Nations Security Council remains mired in debates over whether or not to even discuss the issue, with a minority of member-states obstructing any collective action in response to the crisis, or even an official review.

As the Sri Lankan army continues its assault on what is left of the separatist Liberation Tigers of Tamil Eelam (LTTE), tens of thousands of civilians remain trapped inside a shrinking conflict zone, at risk not only from the fighting but from starvation and lack of water and medical attention. Despite the government's April 27 announcement that the military had been ordered to cease using air attacks, artillery, and other heavy weapons against remaining LTTE-held areas, such attacks have carried on with increased intensity.

The trapped civilians are not the only ones at risk. More than 170,000 who have managed to escape the worst of the fighting remain imprisoned in desperately overcrowded camps and medical centers. Scores are reported to have died after fleeing the conflict zone, and the military has been overwhelmed by the number of civilians flooding into reception areas.

Moreover, the government's screening process for those fleeing the conflict zone is both highly chaotic and without any international monitoring presence. Given a not-insignificant history of government-linked disappearances, the safety of those suspected to have LTTE ties is also of grave concern.

The reality is that both the LTTE leadership -- a murderous bunch of extremists for whom no tears should be shed by Tamils in Sri Lanka or by anyone anywhere -- and the Colombo government have abdicated their responsibility to protect Sri Lankan civilians from mass-atrocity crimes.

And the tragedy is that they have now been joined in this abdication by the Security Council itself, notwithstanding the unanimous resolution of the General Assembly, meeting at the heads of government level in 2005, that it should take "timely and decisive" action when "national authorities are failing to protect their populations from genocide, war crimes, ethnic cleansing and crimes against humanity."

To their credit, France, the United States, Britain, and a number of other proactive Security Council members have ratcheted up pressure in recent weeks. They have pushed -- albeit cautiously -- for the council to review Sri Lanka as an official agenda item, and carefully negotiated a series of informal remarks on behalf of the council.

But because of consistent obstruction by a handful of member states, the issue continues to be relegated to informal statements and unofficial meetings -- not in the Security Council chamber -- but in the basement of the U.N. building. Those signaling varying degrees of opposition to council engagement have been China, Russia, Libya, Vietnam and --most surprisingly and disappointingly, given its role in advocating human security generally and civilian protection specifically -- Japan. While the tacit approval of a military endgame against a terrorist group is understandable enough, looking the other way as tens of thousands of innocent civilians are imperiled in the process is indefensible.

Since February, four U.N. envoys have been dispatched on missions to Sri Lanka to assess the deteriorating humanitarian situation, the status of displaced persons, and to discuss political solutions to the current crisis with President Rajapaksa and senior government officials. Despite obtaining a series promises from Colombo, no U.N. needs-assessment team has been received, humanitarian access remains limited, and the shelling continues.

Well aware of the absence of determined and united international action -- by the council in particular -- the government has defaulted on its promises and paid mere lip service to calls for restraint, all the while pursuing its military onslaught. But Colombo's intense efforts to prevent a review by the Security Council, with much lobbying in member state capitals, show how much weight effective council action would have.

Immediate -- and official -- action by the Council should include securing a U.N. needs assessment, the lifting of all restrictions on the delivery of humanitarian aid, and open access for the ICRC and U.N. agencies to all reception and screening points. The council could also facilitate steps toward an internationally-supervised surrender of the LTTE and a lasting political settlement.

It must be made crystal clear to both the Tigers and the Sri Lankan government that they will be held accountable for their actions. The council could consider a U.N. commission of inquiry to examine the likelihood of war crimes committed by both sides.

The longer the Security Council delays taking action of this kind, the longer atrocities will continue. Its relative silence is a matter for growing shame with each passing day.

Gareth Evans is president of the International Crisis Group and author of The Responsibility to Protect: Ending Mass Atrocity Crimes Once and for All.

The EU wants to cut deficits. What is it thinking?

By Desmond Lachman

One has to be struck by the oddity and poor timing of the European Union's call on Greece, Ireland, and Spain to begin reducing their budget deficits. At the very time that the International Monetary Fund is counseling countries to engage in aggressive fiscal stimulus to fight the worst postwar global recession, the European Union is pushing for belt-tightening. And it is doing so for those euro-zone countries that are hardest hit by the global economic crisis.

Greece, Ireland, and Spain are all neck-deep in recessions of epic proportions that will soon raise unemployment to the highest levels in the past 70 years. In Ireland and Spain, the bubbles bursting in the housing market make the United States' own predicament look benign. All three countries also must cope with a global collapse in trade and tourism.

Under usual circumstances, a country experiencing a recession of this proportion would sharply reduce its interest rates and allow for a sharp depreciation of its currency. However, stuck within the euro zone, Greece, Ireland, and Spain have to live with interest rates set by an overly cautious European Central Bank (ECB) and a euro whose relatively high price on world currency markets renders their economies grossly uncompetitive. At the very least, these countries should be allowed a reprieve from having to fight widening budget deficits even as their economies weaken.

History is littered with examples of fixed-exchange-rate countries that have tried and failed to balance their budgets in deep recessions by raising taxes and cutting expenditures. In counseling budget tightening for Greece, Ireland, and Spain this week, the European Union seems blithely oblivious to this experience. Policymakers in these countries need only look as far as the Baltic countries to see that economic collapse is being exacerbated by hair-shirt budget tightening.

Rather than counseling budget austerity for Greece, Ireland, and Spain, the European Union would be better advised to push for aggressive fiscal stimulus in Germany, Europe's major economy. Or how about a decidedly more expansionary monetary policy from the ECB? The German government itself now concedes that, with present policies, the German economy will contract a staggering 6 percent in 2009 before recovering only marginally in 2010. Absent more vigorous growth in that country, it is difficult to see how Greece, Ireland, and Spain can extricate themselves from deep recessions -- even if they ignore the European Union's advice. This time, the real deficit to watch out for is that of common sense.

Desmond Lachman is resident fellow at the American Enterprise Institute.

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As its economy cools, Taiwan warms ever so slightly to Beijing.

By Steve Tsang

Taiwanese President Ma Ying-jeou of the Kuomintang took office last May, elected on a platform that promised the easing of tension with China, in part to help bolster Taiwan's flagging economy. Since then, the economic outlook has grown dimmer: Taiwan's GDP is expected to shrink 3 to 7 percent this year. Already, Ma's administration has held three rounds of high-level talks with Beijing, and the two sides reached an agreement on April 26 to forge closer economic ties and air links. The rapprochement is not, from Beijing's angle, entirely based on altruism. China is cleverly taking advantage of Taiwan's weakness to interlace the two economies and make it more difficult and costly for a future Taiwanese government to push for de jure independence.

Since the United States switched recognition from Taiwan (as Republic of China) to mainland China in 1979, Taiwan, China, and the United States have maintained an awkward but stable triangular relationship. Beijing wants Taiwan to "rejoin" mother China at the lowest possible cost but will eventually use force to achieve this if necessary. Taiwan will not give up its independence without a fight, though it prefers to avoid one. The United States, meanwhile, does not wish to see its most successful postwar protégé being swallowed up by an authoritarian state run by the Chinese Communist Party, and it prefers to achieve this by preempting any cross-strait confrontation that may require it to interfere.

The new warmth between Taipei and Beijing doesn't change any of the fundamentals of the triangle, but it does alter the atmospherics. China thinks it can put the Taiwan issue on the back burner, given that it has won a significant battle already, and allow Taiwan to join the World Health Assembly, the World Health Organization's governing body, as an observer. That's something Beijing had resisted in the past because it did not trust previous Taiwanese administrations not to use the assembly as a means to enlarge Taiwan's representation in the international community. The United States sees its role as moderator much diminished because it no longer has to rein back Taiwanese leaders from making statements that China sees as belligerent, and possibly unwittingly provoking an unequal war.

As for Taipei, while the Ma administration tries to make as much economic and political capital out of the agreement, it faces a delicate task: maintaining a degree of momentum in improving cross-strait ties without putting Taiwan's own security at risk in the long term. Ironically, the easing of tension presents Taiwan with a security dilemma: As the threat from China appears to recede, it will be more difficult to procure desperately needed weapons systems without a clear enemy to justify them. Taiwan requires another batch of 66 U.S.-made F-16 fighters to replace its aging F-5s. It needs small diesel submarines to make the Taiwan Strait and the East China coast unsafe for the Chinese Navy, so that the United States will be more likely to dispatch carrier battle groups to waters east of Taiwan in the event of a confrontation with China.

In reaching their recent agreement, China and Taiwan have stuck mostly to low-hanging fruits. Further progress will require tackling more sensitive and controversial political and diplomatic issues, including allowing Taiwan greater scope for official representation in the international community. And the success or failure of these talks could mean a great deal for Taiwan's future security and independence. For Taiwan, China is a very greedy neighbor.

Steve Tsang is the Louis Cha fellow in modern Chinese studies and university reader in politics at St. Antony's College, Oxford University. He is the author or editor of 14 books, the latest of which is Taiwan and the International Community.

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When the world sneezes, it's the global economy that catches the nastiest cold.

By Warwick  J. McKibbin and Alexandra A. Sidorenko

Comparing the recent outbreak of swine flu to the influenza epidemic of 1918-19 may seem premature. A century ago, 50 million died -- a mortality rate far, far higher than this current strain has seen so far. Yet while today's modern world is much better prepared to deal with a public health emergency, in one respect, it is in fact more vulnerable to contagion. The integrated nature of the global economy means that international finance offers little resistance to the economic shocks that accompany pandemics.

Even with a relatively small number of cases and deaths, the global cost of a modern epidemic is large and not limited to the countries directly affected. Outbreaks inspire massive drops in the consumption of various goods and services (think tourism and group recreation); they increase businesses' operating costs, and they speed the flight of foreign capital. The SARS epidemic in 2003 offers a telling example. As flights were cancelled, schools shut down, and panic gripped Asian markets, the relatively short-lived outbreak cost the world $40 billion.

In 2006, we estimated the likely global economic consequences of an influenza pandemic using several epidemic scenarios. The study began with a multi-country, multi-sector, dynamic model capable of describing the trade and financial linkages between and within economies. We then fed the model with a series of shocks meant to simulate the effect of pandemic: a decreased labor force, increased business costs, a shift in consumer preferences due to social distancing, and changes to risk premiums. We took into account the geography of each region and the strength of its health system. Labor supply shocks varied depending on the infection rate and mortality in a given country.

Even a mild pandemic, we discovered, would likely make a noticeable dent in global economic output. The mild scenario, estimated to cost the world 1.4 million lives, reduces total output by nearly 1 percent or approximately $330 billion (in constant 2006 prices) during the first year. In our model, as the scale of the pandemic increases, so do the economic costs. A massive global economic slowdown occurs in the next-worst scenario, with more than 142 million people killed and some output in economies in the developing world shrinking by half. The loss in output in this scenario could reach $4.4 trillion, 12.6 percent of global GDP in the first year. Of course, the composition of the slowdown would differ sharply across countries, with a major shift of global capital from the affected economies to the less-affected safe havens of North America and Europe.

In the most severe scenario, cost shocks play a much larger role in the GDP losses. Markets close down entirely. Wealth and income effects are larger in developing countries, and the contraction of demand is therefore much larger than in Europe and North America (Japan is caught in the middle). The destructive cycle feeds itself; Worse epidemiological outcomes in poorer countries perversely send much-needed capital flowing out and into industrialized economies. This exacerbates the current-account positions of the receiving countries and puts downward pressure on developing-country exchange rates. In essence, entire developing markets could become junk assets. World trade would likely contract significantly.

So far, our real-world swine flu pandemic appears to be less severe than the dire scenarios used in our modeling. But even now, the global economy is seeing some troubling signs of capital retreat. The Mexican peso, for example, has taken a hit. And just five days after news of the outbreak, it looked likely that Mexico's government would have to tap its $47 billion credit line with the International Monetary Fund.

Although stocking Tamiflu and developing vaccines might be the most pressing priorities of the day, it will take a much longer, sustained effort to prevent a future financial catastrophe. Investing in poverty reduction and healthcare in developing countries are the keys to managing pandemics in the long term. For now, we will have to live with a world where a relatively minor flu outbreak in Mexico City can send markets reeling in Tokyo.

Warwick J. McKibbin is Director of the Australian National University Centre for Applied macroeconomic Analysis, senior fellow at the Brookings Institution and professorial fellow at the Lowy Institute for International Policy. Alexandra A. Sidorenko is adjunct research fellow at Australian National University.

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