What We're Watching Today is 1,159 words and a 7-minute read.
Global: Global public debt is forecast to exceed $100 trillion by the end of this year
The IMF is warning that high public debt, expected to be about 93% of global GDP by the end of this year, poses global economic risks.
Our Take: The IMF is concerned that the risks of global public debt is being underestimated and true indebtedness (unidentified debt) undercounted. The risks are that governments seeking to manage debt through current fiscal efforts will fall short and fiscal tightening will not deliver promised results, triggering adverse market reactions. Public debt is weighing down major economies, dampening growth, raising real borrowing costs for households and businesses and eroding consumer confidence.
Read More: IMF, Financial Times [paywall], IMF
Europe: Under pressure, the EU to tighten migration stance
Irregular migration has become such a political bomb for EU member states that the European Commission has agreed to consider altering the timetable for implementation of the new Migration Pact.
Our Take: Irregular immigration has become a top political issue among EU member states, fueling support for far-right parties with anti-immigrant stances. Multiple member states, such as Germany, France, Austria, Sweden and Denmark, are breaking with EU policy, imposing border controls to stop migrants from entering their country. Italy has established asylum processing centers in Albania to handle immigrants aboard vessels crossing from North Africa. A new consensus on migration policy and an expedited timetable will need to be reached, or the EU risks each member state going its own direction.
Read More: Reuters, Euronews, Euronews
Middle East: Israel will not target Iranian oil of nuclear infrastructure
Israeli Prime Minister Netanyahu has told the Biden Administration that Israel is willing to strike Iranian military targets rather than oil or nuclear facilities, as had previously been floated.
Our Take: The concession is likely a significant relief for the White House, as well as other international actors, who were worried about the dramatic escalatory effects of a potential attack on Iranian oil or nuclear infrastructure, the former of which could cause a global oil price spike and the latter of which would provoke a significant Iranian retaliation, and potentially the full-scale resumption of Tehran's nuclear program. Either outcome could reshape the upcoming presidential election. The attack on Iranian military targets will likely still be significant, but as Israeli Defense Minister Yoav Gallant said last week, Israel is "not interested in opening additional fronts or new conflicts."
Read More: Washington Post [paywall], Wall Street Journal [paywall], The Economist [paywall]
Americas: Canada expels top Indian diplomats
Canada expelled five top Indian diplomats after naming them as persons of interest in an investigation into the killing of a Sikh activist in Canada last year. India responded by expelling six Canadian diplomats.
Our Take: The expulsions are an escalation of a diplomatic row over the killing of a Sikh activist and Canadian citizen in Canada last June, which Canada has alleged was directed by Indian government agents. Canadian authorities have argued that the man was killed for his support of the Khalistan movement, which seeks to establish a Sikh homeland in India. While both Prime Ministers Modi and Trudeau have said that the row will not impact the countries' trade relationship, it is inarguably a low in diplomatic relations, with the nadir likely to come as Canada continues its investigation.
Read More: New York Times [paywall], Associated Press, BBC
Asia-Pacific: US and Philippines begin war games following Chinese military drills
US and Filipino troops launched large-scale joint exercises in several areas of the Philippines after China conducted military drills around Taiwan earlier this week.
Our Take: These joint exercises between the US and the Philippines, as well as regional US allies such as Japan, South Korea, and Australia, exemplify growing defense cooperation in response to rising Chinese military activities in the region. These war games, which include amphibious landings and live-fire exercises, serve as a signal of deterrence aimed at countering Beijing's moves in disputed territories. While reinforcing regional alliances, these drills also carry the risk of military miscalculation in the event of escalating tensions between China and its neighbors.
Read More: Reuters, The Hill, Council on Foreign Relations
Africa: UN warns that Southern Africa faces worst food crisis in decades
The United Nations' World Food Programme (WFP) stated in a briefing that months of drought brought by the El Niño weather phenomenon is expected to deepen over the next few months, and could become a "full-scale human catastrophe."
Our Take: Five countries – Lesotho, Malawi, Zambia, and Zimbabwe – have declared national disasters as the drought and resulting hunger have left over 27 million people across the region in need. The region's reliance on rain-fed agriculture on rain-fed agriculture has led to widespread crop failure, livestock deaths, and growing malnutrition, particularly among children. As food insecurity worsens and resources dwindle, pressure on governments to secure international aid will increase, with regional instability a potential consequence if the crisis is not mitigated.
Read More: Associated Press, Al Jazeera, World Food Programme
Disruptive Technology: US FCC opens probe into caps on internet data use by broadband providers
Reuters covers how the US Federal Communications Commission announced it is opening a formal inquiry into why broadband service providers cap internet data usage for some consumers, and its potential impacts on consumers and competition.
Our Take: The FCC's probe demonstrates a trend of increasing regulatory scrutiny on broadband service providers limiting internet data usage for consumers based on their payment plans. FCC Chair Jessica Rosenworcel highlighted the agency's concerns that data caps disproportionately affect low-income households and small businesses, limiting their ability to fully participate in the digital economy. This investigation could lead to increased pressure on providers to eliminate caps, given that many networks proved capable of handling higher data usage during the pandemic without restrictions, though it is still in its initial stages.
Read More: Reuters, US Federal Communications Commission, Washington Post [paywall]
Climate Change: New study links climate change and violent conflict
Stanford University and University of California, Berkeley scholars have released a new study that finds a standard deviation increase in local temperature is associated with a 2.5% increase in intergroup conflict and 1.9% increase in interpersonal conflict.
Our Take: The report reviews research literature linking climate and conflict and uses quantitative analysis to conclude that extreme climate is associated with elevated risk of intergroup conflict, intra-personal violence and self-harm. The report put data behind the empirical evidence that, for example, food insecurity caused by crop failure is one of the drivers of instability, conflict and migration in many regions of the world. The World Bank estimates that without serious efforts to limit greenhouse gas emissions, 216 million people could become climate migrants within their own countries by 2050. The International Organization for Migration cites estimates that there may be as many as 1 billion climate migrants in the next 30 years.
Read More: Axios, National Bureau of Economic Research, Migration Policy Institute, International Organization for Migration
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