Saudi Arabia’s King Salman bin Abdul-Aziz Al Saud gave Indian Prime Minister Narendra Modi a very warm welcome last weekend in a public tilt of Saudi policy toward New Delhi and away from its traditional ally Pakistan. Economic interests are part of the tilt, but so too is Saudi pique at Pakistan’s refusal to back its military adventure in Yemen.

Modi and the Saudis signed five new bilateral agreements to improve relations, covering intelligence sharing on terrorism financing, increasing private investment and enhancing defense cooperation. Salman bestowed the King Abdul Aziz Order of Merit medal on the prime minister; it is the kingdom’s highest honor and has never been given to a purely civilian Pakistani leader (although it was given in 2007 to President Pervez Musharraf, a general who ousted Prime Minister Nawaz Sharif in a 1999 coup). Modi in turn gave the king a gold replica of the Cheraman Juma Masjid mosque in Kerala, the first mosque in India, dating from the seventh century, and a symbol of trade between Arabia and the Indian subcontinent.

Just days before the visit, the United States and Saudi Arabia jointly announced sanctions against four individuals and two organizations in Pakistan involved in financing terrorist organizations, including al-Qaeda, the Taliban and Lashkar-e-Taiba. The joint announcement was unprecedented. Four years ago, the kingdom deported a seniorLashkar-e-Taiba official to India who had been involved in the 2008 Lashkar-e-Taiba attack on Mumbai, which was backed by Pakistani intelligence. Modi met with Crown Prince Mohammed bin Nayef, who is also minister of interior and the kingdom’s top counterterrorism official.

Economics play a big role in the Saudi-India relationship. About 3 million Indians work in Saudi Arabia, almost half the 7.3 million Indian worker population in the Gulf states. Bilateral trade in 2015 was almost $40 billion and India imports a fifth of its oil from the kingdom. The Pakistani emigre population is about 1.5 million and trade was about $6 billion last year. Modi met with senior Aramco officials to discuss more energy and investment opportunities.

This was only the fourth visit ever by an Indian prime minister to the kingdom. By contrast, Pakistani prime ministers often visit that many times in a single year. Sharif, who is again prime minister, was in Saudi Arabia in early March to watch the Northern Thunder military parade in which troops from 21 Muslim countries participated, although the place of honor next to the king was given to Egyptian President Abdel Fattah al-Sisi.

A year ago, Sharif wisely rebuffed Salman’s request to provide Pakistani troops to join the Saudi-led coalition in Yemen fighting the Houthi rebellion. The Pakistanis thought the Saudi war plan was impetuous and not thought out. They were not eager to get in the middle of another Saudi-Iran conflict. They expected a costly stalemate would ensue.

The Pakistani move removed a key component of the Saudi plan for a quick, decisive victory in Yemen. Sharif’s decision was very popular at home, however, and was endorsed by a unanimous vote in the parliament. Lashkar-e-Taiba was among the few voices critical of Sharif’s decision. His top aides privately anticipated some blowback from the Saudis would result.

Pakistan is very wary of the Saudi campaign against Iran. Last month, Islamabad hosted Iranian President Hassan Rouhani in his first foreign trip since the beginning of the Iranian new year. Sharif and Rouhani signed several agreements and discussed the long-standing plan to build a gas pipeline linking the two neighbors. Pakistan conditioned its participation in the Northern Thunder military exercise on the premise that the exercise and the new Saudi-sponsored Islamic military alliance is not directed against any country, meaning Iran. Of course, the main point of the exercise and the alliance, from Riyadh’s perspective, is precisely to challenge Iran. Sharif has allegedly rebuffed Saudi suggestions that Pakistan’s chief of army staff be made the titular commander of the alliance.

The Saudis now seem eager for the Yemen war to end. They have proclaimed a victory in preventing the emergence of an Iranian foothold in the Arabian Peninsula. Whether that was ever a serious danger is uncertain, but it gives Riyadh some face-saving cover for ending the war with the Houthis still in Sanaa. A cease-fire is scheduled for April 10, and talks are planned for April 18 in Kuwait to end the conflict.

The war has created a humanitarian disaster for Arabia’s poorest country and generated widespread criticism of the kingdom around the world. The European Parliament voted to cut off all arms sales to Saudi Arabia, for example. While not a binding vote, it is a symbolic defeat for Saudi diplomacy.

Pakistan will remain a key ally for Saudi Arabia. The kingdom has invested billions in supporting Pakistan for decades. The military relationship between the two remains robust despite the differences over Yemen. The bonds of religion and history unite the two Islamic countries. Sharif knows Riyadh will want to avoid any damage to its ties to Islamabad. But Salman is also warning Pakistan that the kingdom has other suitors.

On March 13, nearly 1,000 people of the Oromo ethnic community took part in a big ceremony celebrating the second anniversary of the Oromia Media Network (OMN), which opposes the ruling regime in Ethiopia.

The ceremony was the first event held by the Ethiopian opposition in Cairo since the outbreak of violence in Ethiopia between the government and the ethnic community in December. The violence arose over Ethiopia’s “master plan” to expand the capital, Addis Ababa, into large parts of Oromo farmlands without any actual compensation.

At that time, Egypt’s Foreign Affairs Ministry contented itself with issuing a press statement on Dec. 21, saying that the incidents “are an internal Ethiopian issue.”

“We are looking forward to stability and the completion of the comprehensive economic and social development programs in Ethiopia,” the ministry said.

Yet local Ethiopian media outlets continued to circulate statements by Ethiopian officials accusing Cairo of supporting the opposition and of being behind these events in order to weaken Ethiopia. These statements were based on the remarks in November 2010 by late Ethiopian Prime Minister Meles Zenawi that there was irrefutable evidence of Egypt’s support for insurgents in Ethiopia, under the rule of former President Hosni Mubarak.

At the second anniversary ceremony, OMN head Jawar Mohammed spoke of the need for the Oromo uprising to continue against the policies of the Ethiopian government and the ruling Tigrayan People’s Liberation Front (TPLF) party. He accused the government of adopting systematic policies against the Oromo community and of seizing its land.

A government official who coordinates African affairs and spoke to Al-Monitor on condition of anonymity said, “The Egyptian authorities have nothing to do with the ceremony.”

He explained, “A group of Ethiopian activists applied for a security approval for the ceremony, which they obtained, similarly to any other foreign communities wishing to hold activities in Cairo.”

The United Nations High Commissioner for Refugees (UNHCR) fact sheet issued in February said that 6,916 Ethiopian asylum seekers are registered with the UNHCR in Cairo.

“Most of the Ethiopians who are registered with the UNHCR are of the Oromo people, whose registration rate has been constant since 2015,” Marwa Hashem, assistant public information officer for the UNHCR in Cairo, told Al-Monitor.

“The UNHCR have provided all political asylum seekers and refugees from Africa with services such as material aid to the most needy, educational grants, health care and psychosocial support.”

Ahmad Badawi, head of the Egyptian Foundation for Refugee Support, told Al-Monitor, “Egypt is committed to its international obligations not to reject asylum seekers when they do not oppose national security, even those who enter illegally.”

The Egyptian government does not provide any special advantages to Ethiopian refugees without providing the same to other foreign nationals, he said. UNHCR is in charge of providing services to all refugees.

The Oromo ethnic community makes up 40% of Ethiopia’s population, followed by the Amhara and Tigrayan communities, which make up 32% — though Tigrayans control the government through the ruling TPLF party. The Oromia Regional State stretches over large areas in central Ethiopia, where the capital is located, and includes most of Ethiopia’s wealth, as it controls the country’s coffee exports, gold mines and the rivers’ headwaters.

Due to the escalating protests, the Ethiopian government canceled the plan to expand the capital. Yet the Oromo revolution has not ended, as the people continue to demand freedom and fair representation in the government and to protest the ruling party’s practices.

“The Oromo community will continue to protest not only against the Ethiopian government’s master plan, which raised problems in the past, but also to preserve the Oromo ethnic community’s land, culture and language, against the ethnic policies of the Tigrayan who control the rule,” Girma Gutema, an Oromo community activist, told Al-Monitor.

“Eritrea and Sudan supported the Oromo struggle. Yet following the Sudanese-Ethiopian rapprochement, many rebels fled to Eritrea,” Gutema said. However, the Egyptians, as well as the international community, don’t know enough about the Oromo community’s problems to be able to offer support.

Such rumors, he said, are propaganda spread by the Ethiopian government due to its historic bickering with Egypt.

Galma Guluma, an Ethiopian political activist and organizer of the ceremony in Cairo, told Al-Monitor that Cairo is the safest place for Oromo people fleeing Ethiopia, particularly since Sudan changed its policy and is now turning over Ethiopian oppositionists to their government.

“Fleeing to Cairo was not an easy thing to do. Many refugees went through difficult situations and conditions until they reached the Egyptian border,” Guluma said. “Most of the Oromo refugees in Cairo do not have permanent jobs, and some girls are working as domestic servants. Moreover, they receive very little aid from the civil society organizations.”

Guluma added, “We do not have weapons to face the regime in Ethiopia. Our goal is to focus on [getting] the media to speak of the suffering of the Oromo people,” who are oppressed despite the great wealth in their state.

He noted, “Cairo has been a historical place for the Oromo struggle and the idea of the media network and Oromo radio started in Cairo more than 50 years ago with Sheikh Mohammed Rashad, who studied at the Al-Azhar University in the 1960s and was honored by [former Egyptian President] Gamal Abdel Nasser.”

The Egyptian political administration has said that, while it seeks to build trust and goodwill, its open-door policy for Oromo refugees is part of an international commitment to the refugees’ case and should not be perceived as an attempt to exploit any internal conflicts to weaken the Ethiopian state.

Nevertheless, this issue remains a focus of constant tension in Egyptian-Ethiopian ties, in addition to the historic conflict over Nile water management.

 

 

Bernie Sanders, a current Democratic candidate has been holding his own during the recent race. However, with Hillary Clinton’s recent success in New York, and having over 700 more delegates than Sanders own 1,191 (as of April 25th, 2016) it seems that Sanders will need something miraculous to happen. Bernie Sanders has won tremendous support from the more liberal and less influential states, however California is approaching and the all-important question of will Bernie Sanders be able to overtake Hillary Clinton is looming. Can Sanders defeat the rising tide of the Clinton’s juggernaut campaign, or is #feelthebern sizzling out?

Bernie Sanders, like many politicians is not just counting on long time Democrats to vote for him. He is trying to extend his reach to the important independent voters that have yet to make up their minds. While his popularity is rising and in many polls he does better than Clinton he is still trailing in the race for the Democratic nomination. A Huffington Post poll shows that Senator Bernie Sanders is the most popular candidate. It is easy to see this with the lack of negative campaigning against Sanders, and his biggest criticism has been that he is ‘too liberal’.

Perhaps the biggest advantage Sanders has in the current election is that the lion’s share of superdelegates (delegates that may choose to vote for whom they wish aside from the State’s caucus) are currently held by Clinton (513 to his 38). If Senator Sanders can sway those delegates that are leaning towards Hillary Clinton over to him while keeping his own that will help to bridge the gap and keep the race neck in neck.

April 26th will be a battle day for both Democratic candidates. There are five states with a total of 463 delegates to be won. If Hillary Clinton wins them all (unlikely) than she will have over the 2,383 that she needs to secure her nomination. If Sanders manages to secure the majority from each of these states (Connecticut, Delaware, Maryland, Pennsylvania and Rhode Island) then it could force the race onto California, historically a more liberal state which will work to Sanders’ advantage.

Pennsylvania and Maryland are the issue. Both of them together add up to 328 delegates and in both states the superdelegates lean towards Hillary Clinton. A recent poll shows that Hillary Clinton has the advantage at least in Maryland (57%). Monmouth University polling suggest a reason to why the majority side with Clinton, ‘The demographics of Maryland’s Democratic electorate are similar to past primary states where Clinton has done very well.’ They do go on to say that ‘However, it looks like that isn’t as important a factor since she holds large leads among practically every voting bloc.’

Pennsylvania seems also to be tilting towards Clinton. Pennsylvania Governor Tom Wolf declared to CNN that Clinton’s decisive win in New York bodes well for her in Pennsylvania. ‘I think Hillary was always going to do well in Pennsylvania, and she’ll do very well. New York, after all, is her home state, but she has strong family roots here in Pennsylvania. I think people are coming around to the idea that she is going to be the nominee.’

These tidings in the two bigger states do not bode well for Bernie Sanders continued campaign. Granted, polls can be slanted, questions manipulated or misconstrued that lead answers towards one candidate over the other. Bernie Sanders still holds out hope. Tad Devine, an advisor to Bernie Sanders explains the deficit in delegates by saying that it was a deliberate strategy. They wanted to forgo states that they were certain to lose. Devine explained in an interview with Business Insider, ‘She has gained advantage in a bunch of places where we didn’t effectively compete because we chose a different tactical approach to the nomination. But as we go through the rest of these states, from California to the District of Columbia, we will compete and compete fully.’ This is a very bold strategy. Devine explains that ‘essentially 97% of her delegate lead today comes from those eight states where we did not compete.’

Joel Benenson, Hillary Clinton’s senior strategist responded best with, ‘If you don’t want to compete in battleground states like [Florida and North Carolina] that are essential to an electoral college win, to me, that’s not how you set yourself up to win a general election.’

Tactically speaking, by not competing in battleground states and essentially giving up in states where another candidate is ‘sure to win’ is political suicide and may have cost Sanders this election. There are a few things that he can do in order to keep the coffin lid open to his campaign. First and foremost he needs to convince the superdelegates. Sanders has the media attention, financial backing, and momentum, now he needs to go to the plethora of superdelegates and convince them to choose him before they vote in July at the Democratic National Convention.

If Bernie Sanders is able to sway those superdelegates to his side, win by more than a slim margin in the upcoming primaries, raise larger funding and bolster his message he may be able to close the gap and defeat Hillary. However, his biggest challenge after the 26th of April, will be California.

Bernie Sanders is facing an uphill battle and every vote will count for him. His political aide Tad Devine is quoted as saying, ‘We’re obviously going to have to win most of the states coming up. We’re going to have to win by large margins. I don’t know if we’re going to hit 82% again, like we did in Alaska.’ In order to win, Sanders will need as close to that 82% as possible.

A recent poll suggests that Sanders has gained ground and Clinton’s lead in California has dropped to two points. If Sanders can continue to gain there, amongst other upcoming states, and lead, not trail he can at least keep the race going until the end.

Is #feelthebern sizzling out, or by the end of the election will it be a rampant fire? This will depend on what happens over the next few days, and how well Sanders can persuade those all-important superdelegates to rally around him.

Barack Obama’s recent trip to Cuba and Argentina are the crowning achievement on his administration’s efforts to consolidate peaceful ties with and among Latin American countries.

Obama’s recent visits to Havana and Buenos Aires were clearly more than just protocol visits. Here are some of the reasons why the U.S. President is leaving a legacy of geopolitical significance in Latin America, and beyond:

1. Obama’s declarations and interventions suggest he has been acting as a statesman and has sought to help build an environment of democratic cooperation in present-day Latin America. These actions represent a carefully developed vision, and are reflected in his latest State of the Union.

2. Obama has continued a line of profoundly democratic sensibilities represented earlier by such presidents as Abraham Lincoln, Franklin D. Roosevelt, John F. Kennedy and Bill Clinton.

3. We know about Obama’s charisma, and he is recognized worldwide for his presence, wisdom and exceptional personal traits. In his way and in our time, Obama has pursued the construction of representative and participatory democracy, faith in the equality of all citizens before the law and in the fight against oppression.

4. Given the power structure of the world today and the role played by China and Russia, Obama is sending clear messages to Latin America about the need to live together in peace, to consolidate liberal democracy and to make the required changes to those ends.

5. Obama’s visit to Cuba symbolized the end of the Cold War in Latin America and the need to start a new era focused on values such as freedom, democracy, alternation of power, peace, interaction through dialogue, guarantees for opponents, plurality in exercising rights and the presence of free media.

At our end, we should bear in mind our continental history and heterogeneous political traditions, and make defending our own democratic values the basis and path for negotiating any future, long-term treaties with the United States.

And we shouldn’t forget the immediate political factor in Obama’s actions. His visit to Cuba is also an act of support for Hillary Clinton’s campaign in terms of its importance for the Latino vote in the United States. It inevitably highlights the profound difference between Obama’s world view and that of Donald Trump, whose inexperience and ignorance pose a threat to the free world and to Latin America in particular.

Perhaps we should be planning ahead, bearing that in mind.

Summary

The interests of South Korea have once again fallen victim to the interests of larger powers: the United States and China. Washington is currently circulating a draft of a U.N. Security Council resolution against North Korea for its recent nuclear and missile tests — a resolution that stands a much better chance of being passed if it is supported by China. In return for China’s cooperation, the United States will halt the potential deployment of a controversial air defense system to South Korea, according to several news agencies. Some of those news agencies suggest that Washington has even backtracked on its claim that Seoul urgently needed the defense system. These media outlets are portraying this as a U.S. attempt to curry favor with Beijing so that stricter sanctions can be levied against North Korea.

If true, Washington’s ploy may well appease Beijing in the short term, but it raises some long-term concerns for Seoul, particularly ahead of parliamentary elections. If South Korean lawmakers decide they no longer want to be at the mercy of the United States, they could also decide to move forward more quickly and more enthusiastically with their country’s push to build up its own defense industry. But the factors driving this push are not always so blatant. South Korea often finds itself caught between the interests and actions of the much larger China and United States, and this only adds impetus to South Korea’s defense effort.

Analysis

The prospect of sending the air defense system — the Terminal High Altitude Area Defense anti-ballistic missile system, more commonly called THAAD — to South Korea has been around for a few years. The issue flared at the end of 2015; China railed against the possibility of THAAD systems in South Korea even as Seoul denied that formal discussions with Washington had even taken place. That it would downplay the discussions makes sense: Seoul has to maintain economic and security relations with both the United States and China, and it has to contend with domestic political factions that oppose new military initiatives with the United States. Partly because of the outrage of the South Korean public over a potential intelligence sharing deal with Japan and the United States, officials in Seoul realized that such issues ought to be discussed quietly.

Just a Delay

China, of course, never wanted the THAAD so close to its border. But its advocacy against it left the impression that Seoul’s foreign policy was being shaped not by the United States but by China. This impression was deepened when South Korean President Park Geun Hye decided to attend a major Chinese military parade and to delay a visit to the United States because of an outbreak of Middle East respiratory syndrome. The decisions raised questions in Washington of just what South Korea brought to the U.S. regional alliance structure.

When North Korea tested its missiles and its nuclear capabilities, the South Korean government sought to put a strong face on at home and to shore up the seemingly strained relations with the United States. To that end, Seoul took the extreme step of pulling South Korean businesses out of the Kaesong Industrial Zone in North Korea and called for formal discussions on the deployment of THAAD — the deployment that Washington had wanted.

The move did not go unnoticed by Beijing, which opposes THAAD less for what the system actually does and more for the precedent it would set — namely, expanding U.S. missile defense systems to mainland Asia. Seoul calculated that the benefit of mending relations with the United States (while sending a strong message to North Korea) outweighed the cost of provoking China. Washington quickly stepped in and announced the imminent establishment of a joint working group to discuss the deployment, but the discussions were delayed partly because of deliberations over North Korean sanctions.

Whether the United States and China actually came to an explicit agreement is unclear, though, notably, the media coverage surrounding the affair certainly makes it appear as though they did. But Beijing and Washington recognize the limits of sanctions and the broader issues of missile defense. A short term delay may have been politically expedient, but barring some very different behavior from China that truly limited North Korean nuclear and missile programs, it is just a delay, not the end of THAAD entirely.

Interests Cast Aside

Washington’s ostensible reversal could not have come at a worse time for the South Korean government. For the South Korean public, THAAD is as controversial as it is in China, albeit for different reasons. Indeed, concerns over THAAD abound, particularly in the five cities that have been floated as potential deployment sites: Pyeongtaek, Daegu, Waegwan, Wonju and Gunsan. Those concerns include falling real estate values, potential health risks over the electromagnetic field THAAD-associated radar systems produce and a general unease with increased U.S. military presence. South Korea will hold parliamentary elections in April, and while members of the ruling conservative Saenuri Party have largely supported the deployment, many of their constituents do not, so they have had to adjust heir stances accordingly.

Domestic considerations aside, the THAAD issue also goes to the heart of South Korea’s foreign policy dilemma. All too often Seoul gets caught in the middle of China and the United States, which sometimes ignores South Korea’s interests even as it guarantees its security. In 2010, for example, the United States delayed the deployment of a U.S. aircraft carrier to waters near North Korea following the sinking of a South Korean ship, the Cheonan. Such is the lot of South Korea, whose location and insufficient domestic military capabilities leave it vulnerable to larger economic and security partners. That its partners have such a contentious relationship certainly does not help.

South Korea could improve its position by strengthening its indigenous defense capabilities — something the THAAD controversy may encourage it to do — and by further expanding economic ties to other countries. Under former Presidents Kim Dae Jung and Roh Moo Hyun, Seoul accelerated its program to make its military more autonomous, but its efforts have slowed for economic and political reasons in recent years.

That trend may soon reverse. South Korean politicians have once again raised the idea that Seoul should pursue its own nuclear capability (something not likely politically feasible any time soon), and Seoul is pressing forward with its own missile defense systems and space program. The rising role of Japan in the region further reinforces to South Korea the need to strengthen itself, and more important, to expect that its security concerns will not always align with Washington’s. THAAD may be one of many chips in the U.S.-China balance, but for Seoul it is one more demonstration of the need to accelerate its own indigenous capabilities, considering it is such a small country caught between two great powers.

  • Given their fragmented, decentralized structure, Venezuela’s colectivos would have a difficult time openly confronting security forces in the coming year.
  • These groups will try to maintain their independence in the neighborhoods they control in spite of government efforts to disarm them.
  • The government probably will not be able to disarm the colectivos that run the impoverished slums of western Caracas in 2016, despite security operations in the area. 
  • The colectivos will try to take advantage of Venezuela’s dire economic situation by stealing food and basic goods and reselling them at higher prices.

Analysis

Venezuela has been in a tailspin since former President Hugo Chavez died in March 2013. But in addition to the country’s visible economic and political deterioration, another crisis is emerging, one that is perhaps less conspicuous but no less damaging.

Tension is rising between Venezuelan security forces and the pro-government patronage groups known as colectivos. Despite being highly disorganized, the colectivos have managed to take advantage of the ruling party’s fragmentation and its weakened grip on power, bringing anarchy to the streets of Caracas. If the Venezuelan government does not move quickly to disarm the groups, it will risk losing more control of the neighborhoods in which they operate. Given enough time, the colectivos could even evolve into organized crime groups — a threat that would prove even more difficult to eradicate.

The Rise of the Colectivos

Venezuela’s colectivos, colloquially known as “the guardians of Chavez’s revolution,” are armed groups linked to the ruling United Socialist Party of Venezuela (PSUV) through patronage. They classify themselves as anti-imperialists and anti-capitalists. Though they profess their loyalty to Chavez, the colectivos did not begin during Chavez’s presidency. In fact, they started well before his time, emerging between the 1960s and 1980s as small, underground left-wing groups that were marginalized by Venezuela’s two-party political system.

However, the colectivos did not truly gain prominence until 1989, when protests broke out against fuel and transportation price hikes passed by former President Carlos Andres Perez. At that point, the groups began to coalesce in support of Chavez’s eventual coup attempt in 1992. All the while, they built their own politically autonomous zones in the low-income neighborhoods of western Caracas, including Barrio 23 de Enero, where most colectivos are based today.

In the early 2000s, the PSUV began to seek greater political support from these neighborhoods, and the formation and influence of colectivos began to increase as a result. The groups’ clout reached its peak during the 2004-2008 tenure of former Caracas Mayor Juan Barreto, who served as a conduit between the colectivos and the Chavez government. The mayor appointed group leaders to positions of power in exchange for their political backing. Over time, patronage links thickened and multiplied between the colectivos and the ruling Chavista elite..

 

After Barreto left office, the various colectivos, which were oriented toward an array of cultural, political and paramilitary goals, united under a single umbrella: the National Commoner Network. Though technically a state-affiliated institution, the National Commoner Network has been able to operate independently of the government since its formation.

The colectivos’ detachment from the state is what has led to their structural disorganization, and what will likely lead to their continued fragmentation as time goes on. Today, there are more than 35,000 colectivo members scattered across Venezuela, belonging to many different groups that compete with one another for funds and territory.

Still, some 80 percent of Venezuela’s colectivos are concentrated in western Caracas, primarily in the neighborhoods of Sucre, Petare, Cotiza, Chacao and Catia. The bulk of these groups’ operations are conducted in Barrio 23 de Enero, located near the Miraflores Palace. Instead of being pushed to the capital’s outskirts, the colectivos operate in the heart of the city, not far from most of Venezuela’s government buildings.

For the most part, Venezuelan security forces are not allowed into neighborhoods controlled by colectivos without first receiving permission, even if they have search and arrest warrants. The government has lost its sovereignty in such areas, making it difficult to enforce the rule of law there. This has given the colectivos room to pursue illegal activities largely unhindered, including drug trafficking, extortion, racketeering, contract killings and car theft.

Caracas Tries to Regain Control

In some ways, the colectivos’ interests still align with those of the PSUV, their longtime backers, particularly when it comes to tamping down on Venezuela’s political opposition. For example, the colectivos used aggressive tactics, including attacks against political rallies for Venezuelan opposition leaders, in the lead-up to the country’s December 2015 legislative elections. They subsequently harassed opposition lawmakers being sworn into the National Assembly in January.

Nevertheless, a rift is forming between the colectivos and the government of President Nicolas Maduro. Many colectivos are critical of corruption among the Chavista elite and have accused officials of lacking true revolutionary spirit. At the same time, several paramilitary colectivos have announced that they will fight for the ideals of Chavismo — even if it means going against Maduro.

 

In response to the growing tension and to rising security concerns stemming from the colectivos, Maduro launched Operation Liberation and Protection of the People in mid-2015. The effort, which primarily aimed to disarm the paramilitary colectivos and combat organized crime more generally, sparked an unofficial war between the colectivos and the government. The feud resulted in the deaths of 350 public officials in 2015; in January, government forces reciprocated by killing more than 200 alleged members of organized crime. In the meantime, the colectivos have antagonized Maduro even more by killing off-duty security personnel and kidnapping a high-ranking military officer.

As economic and political instability rises, the streets of Caracas will likely see more violence. So far, the government has not proved capable of pacifying and retaking the colectivo-controlled neighborhoods, which are essentially separate political entities. Over time, paramilitary colectivos could begin to move away from political activities if they lose the patronage of the ruling party, morphing into well-armed criminal organizations instead.

The colectivos will face their own constraints in the battle against Venezuela’s security forces. They lack hierarchical organization, which will limit the amount of coordination they can achieve. These groups also continue to rely on financial support from figures in the government, which is contingent upon their ideological backing. All told, the colectivos will likely remain divided, especially as Caracas applies constant pressure on them to disarm. Though the colectivos probably will not voluntarily comply with the government’s demands, their resistance will leave the ruling party with little choice but to continue its operations, even if it is unlikely to regain control of the capital’s neighborhoods by the end of 2016.

Still, the colectivos will have a chance to make gains in other ways. As the Venezuelan economy continues to fall apart, the colectivos will likely seize the opportunity to launch contraband operations, stealing trucks carrying food and basic products with the intent of reselling the stolen goods at much higher prices. And the Maduro government, already embroiled in a lengthy political spat with the opposition, will likely be too preoccupied to stop them.

After nine years in office, popular Chechen President Ramzan Kadyrov has announced that he is done with public service. In a Feb. 27 interview, he declared that he will leave his post in April at the end of his current term, saying that he has reached his limits and that his time is past. Kadyrov also made it clear that, despite rumors, he will not take a position in the federal government but will retire from public life to focus on his family and his religious studies.

Kadyrov’s departure would leave a power vacuum at the top of one of Russia’s most tumultuous republics. His replacement would be chosen in September regional elections. Chechnya has been consumed twice by brutal conflict since the fall of the Soviet Union, the First Chechen War from 1994 to 1996 and the Second Chechen War, which began in 1999. Kadyrov’s leadership was key to ending this second war in 2009. He has since presided over a period of relative regional stability.

A Chechen Dynasty

The outgoing Chechen president’s rule has its roots in President Vladimir Putin’s power consolidation in the early 2000s. Putin and his then-Deputy Chief of Staff Vladislav Surkov formulated a plan to weaken the various Chechen factions by pitting them against one another. Moscow succeeded in securing the loyalty of Chechen nationalist militants — often through force — and used them against their Chechen Islamist counterparts, who favored terrorist tactics that threatened security nationwide. The Kremlin organized the nationalists into paramilitary brigades under the umbrella of the Russian Interior Ministry to combat radical Islamist groups led by Chechen leaders such as Shamil Basayev, Aslan Maskhadov, Zelimkhan Yandarbiev and Dzhokhar Dudayev. These brigades fought Islamist militants using the guerrilla tactics they once employed against Russian troops, allowing Moscow’s forces to remain behind the lines in a support role. This served the dual purpose of shielding military personnel from the brunt of fighting and placating the local population, which does not support a heavy Russian troop presence.

In the midst of this, two families, the Yamadayevs and the Kadyrovs, rose to prominence. The Yamadayevs, were led by five brothers: Ruslan, Sulim, Isa, Dzhabrail and Badrudi. The Kadyrovs were led by Akhmad, his son Ramzan and other family members. The Kremlin divided power between the two families to balance power in the republic. Akhmad Kadyrov became Chechen president in 2003 but was assassinated in 2004, leaving his son to take the position two years later when he reached legal age to do so. Moscow gave the Yamadayev family various security portfolios, including leadership of the largest Chechen nationalist brigade, the Vostok Special Battalion. Ruslan Yamadayev also entered state Duma where he lobbied against Kadyrov’s dominance of Chechnya.

However, the precarious balance between the two pro-Kremlin families did not bring peace. Both sides systematically worked to undermine the other,carrying out ruthless assassinations. The Yamadayevs fared the worst, with three of the five brothers killed between 2003 and 2009. Another was arrested. The remaining Yamadayev brother announced a truce with the Kadyrov family in 2010. Over the past decade, Kadyrov power has grown. Ramzan Kadyrov now enjoys a cult-like status in Chechnya, and his loyalists are in place throughout the republic and trusted family members hold critical positions.

Ramzan Kadyrov’s ruthless centralized rule has emerged as the ultimate stabilizer in the normally restive republic, and many believe it is his power that has prevented the re-emergence of war. For someone at the peak of his power, his resignation is puzzling. Kadyrov’s announced retirement could, in fact, be a ploy, one aimed at locking in support from the Kremlin for his continued rule. In the past, Kadyrov has said publicly that only Putin keeps him in the presidency. The Chechen leader may be hoping that his announcement will prompt Putin to demand that he remain in his position, giving him a mandate for the future. This would be particularly useful at the moment: Kadyrov is under siege at the national level by numerous powerful Kremlin factions, including the Federal Security Service (FSB), that want to sideline or oust him.

Weighing Successors

But there is still a distinct possibility that the Kremlin will decide it is, in fact, time for a managed transition in Chechnya. This would give the Russian and Chechen sides until September, when all of Russia will hold parliamentary and regional elections, to prepare a successor. There are a number of prospective successors in official positions, many from the Kadyrov family itself.

The most obvious candidate would be Adam Delimkhanov, Kadyrov’s cousin and currently a Duma lawmaker from the United Russia party. Delimkhanov is not only Kadyrov’s close friend, but Kadyrov has also mentioned him in the past as a possible successor. Delimkhanov is popular, especially given his close association with the current Chechen president. But Delimkhanov, like Kadyrov, has made a number of highly public gaffs, albeit less frequently and on a smaller stage. Most notably, Delimkhanov engaged in a highly publicized brawl in the Russian Duma in which he dropped a golden handgun he was carrying. He has also been accused of ordering, orchestrating or participating in a string of kidnappings and assassinations. If the Kremlin is looking to change the behavior of whoever leads Chechnya, Delimkhanov might not be the top choice.

Others within Kadyrov’s clan could also fill the role in a relatively smooth transition. These include the Head of the Presidential Administration (and Kadyrov’s cousin) Islam Kadyrov, Federal Council member (and cousin of Adam Delimkhanov) Suleiman Geremeev, Chief of the Sever Battalion (and brother of Delimkhanov) Alibek Delimkhanov and Security Council Secretary (former commander of Akhmad Kadyrov’s forces during the war) Vahit Usman.

One option, outside of Kadyrov’s cronies and family members, is Grozny Mayor Muslim Khuchiev. The mayor holds a position that grants him a degree of power and public support but has not organized a cadre of loyalists powerful enough to intimidate Kadyrov or his loyalists. Moreover, Khuchiev has been seen to work well with Kadyrov in the past. Khuchiev may be a compromise solution between the clans and the Kremlin. In recent months, Khuchiev has been more frequently seen at Kadyrov’s rallies, making speeches. He has shown a level of command over Grozny, but it is not clear that he, like Kadyrov, can maintain a firm grip on Chechnya.

Prospective Replacements

Editor’s Note: Chechen power politics is opaque and some details below are unconfirmed.

Adam Delimkhanov

Current Position: Federal Duma lawmaker (United Russia)

Credentials: Ramzan Kadyrov’s cousin, described by the Chechen president as his closest friend and mentioned as a successor.

Biographical Details: Some reports claim he was close to infamous separatist militant commander Salman Raduyev, perhaps serving as his driver during the First Chechen War. In 2000, Delimkhanov began working for the Russian Interior Ministry to protect government facilities and energy infrastructure. He became Chechnya’s deputy prime minister in July 2006. Commands approximately 2,000 troops tasked with protecting the republic’s energy assets. He is accused of running the regional oil and gasoline black market. His brother, Alibek, commands the Sever Battalion.

Liabilities: The Kremlin might believe his ostentatious public behavior is too similar to Kadyrov’s. In 2013, Delimkhanov fought with fellow Duma lawmaker, Alexei Zhuravlyov, and dropped a golden gun. Delimkhanov may have organized the assassinations of Ruslan and Sulim Yamadayev — the Kadyrovs’ greatest political rivals. He has also been accused of kidnapping opposition civilians, leaders of rival governments and suspected militants.

Muslim Khuchiyev

Credentials: Grozny mayor (2007-2012, 2015-present)

Biographical Details: Initially worked as a criminal reporter and in advertising. In 2004, then-Chechen President Alu Alkhanov invited him to become his press secretary, though he left when Ramzan Kadyrov came into power. Former vice president of the Akhmad Kadyrov Fund, which invests in large projects in Chechnya. Khuchiyev left his mayoral post in 2012 after Kadyrov accused him of misallocating land. The Kremlin reportedly forced Kadyrov to bring Khuchiyev back to the mayoral seat in 2015 in an attempt to balance out regional power.

Khuchiyev is a fairly independent player, certainly not a Kadyrov ultraloyalist, but has not drifted far from the Chechen president’s policies. Recently, Khuchiyev has been part of public rallies and speeches alongside Kadyrov.

Liabilities: Khuchiyev is seen as outside the Kadyrov circle, so there may be infighting should he replace Kadyrov.

Islam Kadyrov

Credentials: Ramzan Kadyrov’s cousin and head of the Chechen Presidential Administration

Biographical Details: Awarded medals of “Party Fighting in the Caucasus” and “Order of Akhmad Kadyrov.” Previous positions include assistant to Chechen president, mayor of Grozny, and minister of regional property and land relations. Helped overhaul Chechnya’s housing and telephone networks. He has spoken on numerous occasions alongside Ramzan Kadyrov.

Liabilities: Islam Kadyrov is only 29 years old.

Suleiman Geremeev

Credentials: Ramzan Kadyrov’s second cousin and member of the Federation Council of Chechnya

Biographical Details: Served in both Chechen wars, joining pro-Kremlin militias in the second. Was a close associate of former Chechen President Akhmad Kadyrov. Geremeev has made numerous radio appearances endorsing Kadyrov branding the Russian liberal opposition as traitors. Because he is related to Ruslan Geremeev, a suspect in the assassination of opposition leader Boris Nemtsov, some believe Geremeev is tied to the killing.

Liabilities: Geremeev has been implicated in both the Nemtsov and Anna Politkovskaya murders, making him a target for opposition and human rights groups.

Alibek Delimkhanov

Credentials: He is Ramzan Kadyrov’s cousin. Head of the Sever battalion and deputy commander of the Interior Ministry’s 46th Brigade.

Biographical Details: Awarded the title “Hero of Russia.” Questioned in the death of Nemtsov because the primary suspect, Zaur Dadaev, was enlisted in the Sever battalion.

Liabilities: He has no political experience.

 

Vahit Usman

Credentials: Chechen Security Council Secretary

Biographical Details: Former special operations forces police commander under Akhmad Kadyrov, though formally part of the Interior Ministry. Led around 380 operations against militants between 2004-2009. Kadyrov reportedly gave him oversight of Chechnya’s economic security and social stability.

Liability: Like Delimkhanov, he has limited political experience.

More than two months after general elections, the Spanish parliament will begin what will likely be the first of several attempts to form a government March 2. No party has enough seats to govern alone and coalitions are proving difficult to create. If the parties cannot form a government in the next two months, Spain will have to hold new elections in late June. This would only exacerbate political and economic uncertainty in a country that is still dealing with the consequences of a long economic crisis.

Spain’s political fragmentation is the direct consequence of its economic problems, which have weakened popular support for mainstream parties and led to the emergence of new political forces. Acting Prime Minister Mariano Rajoy’s Popular Party is the largest force in parliament, but it has failed to win the support of other parties needed to form a government. The Socialist Party, led by Pedro Sanchez, is the second largest force in parliament. It will try to form a government March 2, but is also likely to fail. So far, Sanchez has only received support from the centrist Ciudadanos party, but this is not enough. Sanchez tried to make a deal with the left-wing Podemos party, but the two diverge on issues, including the authorization of a legal independence referendum in Catalonia (which the Socialists oppose) andplans for reforms in the economy.

To become prime minister, Sanchez will need the support of more than half of the 350 members of the lower chamber in the March 2 vote. In the likely case he fails, they will hold a second vote the night of March 4 at the latest. During the second vote, Sanchez would only need a simple majority. But even this will be difficult to achieve, as Podemos and the Popular Party have announced that they would vote against the Socialist candidate. Should Sanchez fail to form a government, King Felipe VI could ask another candidate to try his luck. If no prime minister is appointed by May 2, new elections will have to be called.

Some parties are already betting on new elections, hoping to gain extra seats to strengthen their negotiating positions. Podemos, for example, hopes to siphon votes away from the Socialists to become the second largest force in parliament. However, opinion polls suggest that new elections would lead to another fragmented parliament, making alliances a requirement. Even in the probable case Spain goes back to the polls in late June, no party will be strong enough to govern alone.

At this point, Spain’s political uncertainty has not had a significant effect on the national economy. Unemployment is slowly going down, even if most of the new work contracts are temporary and a large segment of the population is employed part time. The Spanish economy grew by 3.2 percent in 2015, and is forecast to grow by around 2.8 percent this year. But uncertainty about the future is starting to take its toll. On Feb. 29, the Bank of Spain warned that capital outflows accelerated in 2015, especially during the final quarter of the year. Investors are worried that the next Spanish government will be under popular pressure to reverse some of the policies introduced by the previous administration. In early February, Madrid admitted it had not met the deficit target agreed to with the European Union for 2015 and asked Brussels for more time to reach the goal of 3 percent of GDP.

Spain’s case illustrates a broader trend in Europe: Voters in former bailout countries are punishing conservative governments even as their economies show early signs of recovery. In Portugal, former Prime Minister Pedro Passos Coelho won the general elections in October but lost power to a fragile coalition of center-left and left-wing parties. In Ireland, Prime Minister Enda Kenny won the general election in February, but the Irish voted in a fragmented parliament where multi-party alliances will be needed. In both cases, voters want a reversal of some of the policies that were introduced during the bailout years. The uncertainty created by this gap between growing economies and disenchanted voters is one of the most important threats to a full recovery in the eurozone periphery.

‘The Donald’ has upped the ante of business in the political realm and most recently the current election. Donald J. Trump, the Republican hopeful has amassed his fortune in business and is currently (as of April 11, 2016) leading the GOP in delegates. Though he has less time in the political realm than others running for presidency he has his views on the business of geopolitics and is making them known to all. Trump is an advocate for ‘America First’ and his current rally cry of ‘Make America Great Again’. Listening to him speak or reading a transcript from his interviews and debates brings forth a serious question for voters and citizens of the world. It is apt to ponder what Trump’s thoughts are on the geopolitical scale (beyond building a wall)? Or in short, what to Trump is the business of geopolitics?

It can be construed that Trump’s ‘America First’ stratagem will be employed as a business tactic to increase America’s international authority. When considering some of the statements that he has made and his plans for ousting China as a powerhouse on the global scale of economics it becomes apparent this is what the former reality star is planning. In an interview with the New York Times, Trump stated that America ‘will not be ripped off anymore. We’re going to be friendly with everybody, but we’re not going to be taken advantage of by anybody.’ In business it is generally considered a smart move to be courteous while watching out for your own/company’s interest. 

One of the areas in the world that America has held a military presence is South Korea. Trump was asked in an interview with the New York Times on whether or not he would withdraw troops from the region if South Korea and Japan did not increase payments to cover the cost of holding forces there. Trump said that he would remove the troops because America ‘cannot afford to be losing vast amounts of billions of dollars on all of this… And I have a feel that they’d up the ante very much.’ This contributes much to his ‘America First’ and ‘making America great again’ by utilizing a business tactic.

This is not the only time Trump has stated that he would want more compensation for troop use overseas. On his campaign website his intentions are clear that he wants to strengthen the military and deploy appropriately in the East and South China Sea. His reasoning is that it would ‘discourage Chinese adventurism that imperils American interest in Asia and shows our strength as we begin renegotiating our trading relationship with China.’ He wants to show the world that America is back in the ‘global leadership business.’

Through the years Donald Trump has not shied away from stating his viewpoints. An article from Newsweek remembers that a handful of decades ago Trump called on America to ‘stop paying to defend countries that can afford to defend themselves’ indicating both Japan and Saudi Arabia. While only a few years ago he asked ‘how long we (United States) will go on defending South Korea from North Korea without payment?’

Trump went on to explain more recently that in order to preserve money and save the deficit from dropping even lower, ‘pulling back from Europe would save this country (America) millions of dollars annually. The cost of stationing NATO troops in Europe is enormous.’

Beyond military might, another factor in geopolitics that Trump could potentially excel in is trade. Trump’s years of experience in business may allow him a stronger position than other candidates. He has laid out an extensive plan on how to deal with China. Trump wants to bring America back to being strong economically. He plans on being strong handed with China in order to bring fair trade and jobs to Americans.

International trade is key to the continuation of global politics. Stephen A. Schwarzman, the CEO of Blackstone Group (global private equity and financial advisory firm) is quoted as saying, ‘For future geopolitical stability and global prosperity, we need to build a culture of greater trust and understanding between China, America and the rest of the world.’ Granted, Trump’s proposal of calling China a currency manipulator does not help towards a greater trust, it does expose Trump’s problem to the world. Once the issue is known to all it can be helped. Trump wants to negotiate with China and feels that the way to do so is to call them on currency manipulation, end their intellectual theft, and illegal export subsidies. By negotiating with China it can create a culture of greater trust and understanding.

Trump is a firm believer in negotiating from strength. He plans on becoming stronger domestically first in order to be stronger globally. He feels that lowering corporate tax, attacking debt and deficit and again strengthening the U.S. military and strategically deploying them will allow this.

His second point (attacking debt and deficit) is key towards China. He wants to close the deficit and reduce debt so that ‘China cannot blackmail us with our own Treasury bonds’.  While strengthening the military will ‘discourage Chinese adventurism that imperils American interests in Asia and shows our strength as we begin negotiating our trading relationship with China.’  

His views on the business of geopolitics are criticized. Some believe that he does not have a real strategy because of the way he has been responding to questions, leaving much to the imagination. They criticize his lack of understanding that placing United States Armed Forces in South Korea and Japan are pieces to a bigger puzzle that deal with a global hegemony and a regional balance of power.

However, looking at his views and plans from solely a business perspective the simplicity of them could potentially work. There is a famous quote that emphasizes this point that is attributed to Leonardo da Vinci, ‘Simplicity is the ultimate sophistication.’ Trump has ever been a tenacious businessman that craved growth and profit. His intention to ‘make America great again’ by theoretically turning the United States into a business and treating it as such will allow him to view everything from his own comfort zone. By utilizing his skills and sticking to simplicity he could force America to turn a profit. Either way, this will undoubtedly be an interesting election.

  • The European Union will likely soon decommission the 500-euro note in an effort to deter criminal activity. Cash.

  • The elimination of the euro’s highest denomination is the latest step in a longer-term move toward a cashless society, prompted by factors such as the growing use of negative interest rates and capital controls worldwide.

  • Setbacks in the transition to exclusively electronic transactions — for instance, a general loss of faith in financial institutions — may slow the trend but will not reverse it.

Analysis

The eurozone has found a new scapegoat for international crime: the 500-euro note. The Continent’s leaders are seriously discussing decommissioning the euro’s highest denomination, which is favored by crime groups for transferring massive sums across international borders. Eliminating the bank note could help temper criminal activity, but in reality the implications are much broader. The idea is just the most recent step in an ongoing process moving Europe, and indeed the world, closer to an entirely cashless economy.

European authorities have long known that high-denomination bills are a boon for the criminal underworld, but the publication in February of a paper by Peter Sands, a Harvard academic and former CEO of Standard Chartered, accelerated the campaign to phase out the 500-euro note. The widely read paper, Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes, is an exhortation to world leaders to eliminate their high-denomination notes because they make it easier for criminals to move money internationally. Sands specifically names the 500-euro note as the first that should go because of its high usage in criminal networks, but he foresees the same fate for the 1,000-Swiss franc, 10,000-yen notes and the $100 bill.

Sands is hardly the first to make the connection between high-value banknotes and criminal activity. Britain’s Serious Organised Crime Agency banned the 500-euro note in 2010 because of its regular use by criminals. The note had originally been introduced with the euro at the behest of Germany and Austria, which were accustomed to having higher-denomination notes in their own currencies. Its association with criminal activity also brought it to the attention of European authorities following the terrorist attacks in Paris in November 2015 and the ensuing renewed attempts to disrupt the Islamic State’s activities. The European Commission promised that it would work with the European Central Bank to examine the note’s role in terrorism financing, and the European bank has itself now launched an investigation with the ultimate goal, it appears, of phasing the note out.

Most ordinary Europeans would hardly notice if the 500-euro note went out of circulation; 60 percent say they have never even seen one. The note does have its defenders, however, namely the central banks of Germany, Austria and Luxembourg, albeit for different reasons. Luxembourg is one of the top printers of the note, despite contributing to just 0.2 percent of Europe’s population and itself being one of the most cashless societies in Europe. In 2013, Luxembourg printed more than twice its gross domestic product in 500-euro bills. But the Austrian and German cases are slightly different. The Bundesbank seems to be speaking for the German public in a way that the German government, which supports the change, is not. The people of Austria and Germany, after all, live in two of the more cash-heavy societies in Europe, thanks in part to the pain of past monetary crises. The prospect of losing the 500-euro note has accordingly prompted an uproar in German media.

A Penchant for Paper

There are various reasons societies tend to be more cashless or cash-heavy. One recurring theme in cash-heavy societies is the memory of traumatic monetary experiences. Both Germany and Austria experienced periods of extreme hyperinflation after the world wars. This, along with life under dictatorships and in high-surveillance societies, has given both populations a fierce desire to protect their privacy — something that is afforded by the anonymity of using cash — and to keep wealth in physical form to avoid relying on systemic institutions. In 2008, large numbers of the German public responded to the financial crisis by withdrawing high quantities of 500-euro notes from their banks, presumably to stuff in their mattresses. The German preference for cash may also have something to do with the notorious Teutonic thriftiness — poll respondents often claim that using cash makes personal budgeting easier and that cards are liable to lead to overspending.

Monetary trauma and dictatorial histories also left their mark at the other end of Eurasia in Japan, another cash-heavy outlier, which experienced its own brush with hyperinflation after World War II. And there are other similarities between the former Axis powers. Japan and Germany are both leading the developed world’s aging epidemic. This makes some intuitive sense, since it is more common to find early adopters among the youth rather than the elderly, and many of the latest cashless developments are being driven by innovations in the technology sector. The Japanese have also gone through two decades of deflation, which incentivizes saving. In an inflationary environment, citizens are motivated to spend their cash because they know that it can buy less every day. During prolonged deflation, a 10,000-yen note stashed in a mattress for a year would buy more than it could when it was first earned.

At the other end of the spectrum, Sweden and Denmark are leading the move away from paper currency. In fact, Denmark has made the transition to a fully cashless society an explicit goal for 2030. And the prevailing winds appear to be blowing in the Scandinavian direction. Obviously, technological advancements are making cash-free transactions easier than ever before, but there are also distinct structural advantages to a cashless economy that make it more appealing in today’s regulatory environment.

The Evolving Global Economy

The primary example is the growing prevalence of negative interest rates, which have now been introduced by the Bank of Japan following the examples of the European, Danish, Swedish and Swiss central banks. Monetary theory holds that, when it comes to interest rates, there is a theoretical “zero lower bound” that banks cannot cross. If a central bank effectively charges commercial banks a fee to hold their money overnight and those commercial banks then pass those charges on to their customers, customers will simply remove all their money from the bank and keep it in cash. Now, steep rate cuts are testing this theory.

With Switzerland leading the way with rates of -0.75 percent, all are watching closely to see how low a rate can go before triggering mass withdrawals. Electronic money eliminates this threat, of course, since money that cannot be held physically cannot be withdrawn. In theory, then, a cashless society frees up central banks to explore an entirely new set of financial tools, which could be useful in fighting the low inflation that has so far defied already unprecedentedly low interest rates.

Another trend is the return of capital controls to the global stage. Since the mid-1970s, economic theory has broadly held that all states should free up their markets and allow capital to flow across borders unrestricted. But during the Asian financial crisis of the late 1990s, the countries that weathered the recession best were those that tightly controlled their capital flows. The financial crisis of 2008 cast further doubt on the idea that financial liberalization is always and everywhere ideal. As a result, capital controls have been gradually coming back into fashion. Iceland has been repairing its economy behind capital controls since 2008, and Greece introduced them in mid-2015 as part of its financial crisis. Even the International Monetary Fund, usually a vocal proponent of free movement of capital, has admitted that some situations warrant tighter controls. There is also some speculation that China will cope with its current financial woes by reversing some of its previous liberalizing reforms and reinstituting monetary barriers.

The link between capital controls and a cashless society is simple. A geographically remote country such as Iceland, an island in the middle of the Atlantic, can easily impose restrictions on the movement of capital. It is harder, however, to stop a determined Greek national from crossing the Bulgarian border with a backpack full of 500-euro notes. As more countries consider capital controls a possibility — and much of Europe must at least consider the possibility of finding itself in Greece’s position — the attraction of a cashless society becomes stronger.

This would especially be the case for a country leaving the eurozone, as Greece nearly did last year, since it is much easier to freeze assets and redenominate them into a new currency electronically than to try to confine all the euro bank notes in Greece. Along the same lines, the ease with which governments can track and control electronic money makes it harder for citizens to hide capital or to misrepresent their income. Now that there is a global push to end tax evasion, a cashless system becomes all the more appealing.

All of these trends, allied with the unstoppable progress of technology, will likely make cashless transactions ever more prevalent in the global economy, especially as the emerging economies of Africa and India embrace concepts such as mobile banking. Of course, widespread monetary trauma or a loss of faith in central institutions could drive citizens back to cash or even into gold. But such retreats will only slow the trend; they are unlikely to reverse it. The next step in the process will be the continued phasing out of higher-denomination notes, as international governments collude to make life harder for criminal networks. The first of these is likely to be the 500-euro note, despite the objections of Austria, Luxembourg and Germany.