Financial Calm in the Face pf the Ukraine Storm

The Financial Times questions why the markets are so calm in the face of the Ukraine war. 

 The west’s financial warfare against Russia has been dramatic. Commodity markets are chaotic, stoking already uncomfortably high inflation, and global economic growth forecasts have been marked down as a result. Many businesses face big hits from their exits from Russia. Yet many investors and analysts have been surprised at the remarkably modest fallout for the global financial system, and the lack of broader, serious reverberations so far. After initially deepening the global stock market sell-off, the MSCI All-Country World Index has now jumped back above its prewar level, and the Vix volatility index — a proxy for how much fear there is in markets — has slipped below its long-term average, indicating a fall in anxiety.

More information can be found here.

https://www.ft.com/content/4c4c4c04-151c-467c-b011-136d56546da9

Brazilian Democracy

 The Association of Diplomatic Studies and Training has posted a history of the development of Brazilian democracy.  

Brazil’s path to democracy was far from perfect and often tortuous. In 1961, a “possibly half insane” Janio Quadros was elected to the presidency. One of his more miscalculated moves was to threaten resignation if Congress did not give him more power. Congress instead accepted his resignation, and his successor, Joao “Jango” Goulart became President. Goulart, however, was much too leftist for most people and on March 31st 1964, he was overthrown by Brazil’s Armed Forces; U.S. involvement was suspected, but denied by Ambassador Lincoln Gordon. What followed was a military dictatorship that ruled for twenty years with an iron fist, often torturing its own citizens under the guise of maintaining order. 

North Korean Proliferation

 

The Arms Control Association has published a chronology of North Korean Nuclear and Missile Diplomacy:

For years, the United States and the international community have tried to negotiate an end to North Korea’s nuclear and missile development and its export of ballistic missile technology. Those efforts have been replete with periods of crisis, stalemate, and tentative progress towards denuclearization, and North Korea has long been a key challenge for the global nuclear nonproliferation regime.

The United States has pursued a variety of policy responses to the proliferation challenges posed by North Korea, including military cooperation with U.S. allies in the region, wide-ranging sanctions, and non-proliferation mechanisms such as export controls. The United States also engaged in two major diplomatic initiatives to have North Korea abandon its nuclear weapons efforts in return for aid.

In 1994, faced with North Korea’s announced intent to withdraw from the nuclear Nonproliferation Treaty (NPT), which requires non-nuclear weapon states to forswear the development and acquisition of nuclear weapons, the United States and North Korea signed the Agreed Framework. Under this agreement, Pyongyang committed to freezing its illicit plutonium weapons program in exchange for aid.

Following the collapse of this agreement in 2002, North Korea claimed that it had withdrawn from the NPT in January 2003 and once again began operating its nuclear facilities.

The second major diplomatic effort were the Six-Party Talks initiated in August of 2003 which involved China, Japan, North Korea, Russia, South Korea, and the United States. In between periods of stalemate and crisis, those talks arrived at critical breakthroughs in 2005, when North Korea pledged to abandon “all nuclear weapons and existing nuclear programs” and return to the NPT, and in 2007, when the parties agreed on a series of steps to implement that 2005 agreement.

Those talks, however, broke down in 2009 following disagreements over verification and an internationally condemned North Korea rocket launch. Pyongyang has since stated that it would never return to the talks and is no longer bound by their agreements. The other five parties state that they remain committed to the talks, and have called for Pyongyang to recommit to its 2005 denuclearization pledge.

In January 2018, another diplomatic effort began when North Korean leader Kim Jong Un declared the country's nuclear arsenal "complete" and offered to discuss with Seoul North Korea's participation in the South Korean Olympics. North Korea's delegation to the Olympics included Kim Jong Un's sister, who met with South Korean President Moon Jae-in. That meeting led to a sustained inter-Korean dialouge, including a meeting between Kim Jong Un and Moon Jae-in April 27 that produced a declaration referencing the shared goal of denuclearization of the Korean peninsula.

During a high-level meeting with South Korean officials in Pyongyang in March, Kim Jong Un conveyed his interest in meeting with U.S. President Donald Trump. Trump accepted the offer and the two leaders will meet June 12 in Singapore.