Central banks ‘have lost credibility’

Many share markets may be riding higher on hopes of European stimulus this week and overlooking plunging oil prices, and even lower global growth targets, but experts say its time that investors woke up to the fact that central bankers aren’t doing a great job.

The Australian share market rose 0.7 per cent in early trade on Wednesday joining a global rally on expectations that the European Central Bank will announce a 1 trillion bond buying program to help revive economic growth. Continue reading

China’s development bank plans test rising power’s strategic shift

In an influential speech in 2005, then-US deputy secretary of state Robert Zoellick called on China to become a “responsible stakeholder” in the international community. To optimists, China’s recent efforts in creating high-profile international development banks shows that it is gradually embracing that role.

China signed an agreement in July with the four other BRICS countries – Brazil, Russia, India and South Africa – to create the New Development Bank (NDB) to provide loans and liquidity to member nations. Just three months later, Beijing pioneered the effort to create an Asian Infrastructure Investment Bank (AIIB) to finance development projects in the region. Twenty nations as diverse as Qatar, India, Singapore and Thailand signed on as founding members. China plans to provide the majority of the capital required to finance the new bank’s operations, with the headquarters located in Beijing.

The US and its allies view the China-backed AIIB with deep suspicion. It is an open secret that Washington has successfully pressured Australia and South Korea to refrain from joining the new development bank. What explains such hostility toward the Chinese effort to take a larger role in regional and global governance? Continue reading

New Debate on the Responsibility for War

BERLIN (Own report) – In the few months leading up to the one-hundredth anniversary of the beginning of World War I, a new debate, over who was responsible for starting the war, is gaining momentum in Germany. As relevant publications – such as the bestseller, “The Sleepwalkers” by the historian Christopher Clark – show, “a shift in paradigm has taken place” in scholarship, according to a recent press article: “The German Empire was not ‘responsible’ for World War I.” The debate strongly contradicts the recognition that, even though Berlin did not bear it alone, it bore the primary responsibility for the bloody escalation of the 1914 July Crisis. This insight, which was derived particularly from the analyses of the historian Fritz Fischer in the 1960s, is now being massively contested. Historians are strongly criticizing remarks, such as those by Christopher Clark, who, working closely with government-affiliated academic institutions, is denying German responsibility for the war. According to Clark, “the Serbs” are supposedly a priori “the bad guys” of the pre war era, while he openly displays his preference for the Austro-Hungarian Empire. The denial of Germany’s main culpability for the war is “balm on the soul of educated social sectors, grown more self-confident” at a time when Berlin’s political power is again on the rise. Continue reading