Brazil, a pioneer for the Global South and Latin America’s self-proclaimed regional leader, has long been recognized as a potential power in the international system. Initiating its regional-leader trajectory in the 1930s after its adoption of the “national-developmentalist” paradigm, one based on the foundations of industry, Brazil endorsed the promotion of domestic markets through the employment of import substitution tactics, and centre-periphery. Yet the nation’s failed attempts to live up to its full potential in influencing global events have proven insufficient, time and time again. Regional treaties with futuristic, promising proposals such as the Treaty of Asuncion (1991) operated well in their primary years, yet performance from all member countries stagnated as commitment from partner states became less important in their individual agendas — the Treaty of Asuncion dispersing in the late 1990s due to Brazil’s economic crisis whose effect rippled all throughout the region, including in the Argentinian economy’s collapse in 2001. 

In attempts to attain such a goal of regional influence, two diverging approaches were employed: under liberal leadership, Brazil’s attempt at recognition came from avant-garde peacekeeping and notable humanitarian proposals from 1995-2016, whereas under conservative administration, the attempt was directed towards Brazil’s potential economic power in commodity trading. Regardless of whichever approach was taken, success rates have proven inconsistent, with policies not being carried out, agreements being dismantled and audacious claims being contested. Under Jair Bolsonaro’s presidency from 2018 through 2022, the country’s agenda stayed away from regional power and dove deeper into domestic stability given the COVID-19 pandemic and its substantial effects on economies worldwide. With the drastic leadership change from the radical conservative president Jair Bolsonaro, back to extreme liberal leadership under current president Luis Ignacio “Lula” da Silva in Jan 2023, nonetheless, Brazil’s policy agenda returned to the importance of growing regional and international power. 

Amongst many, one of President Lula’s first proposals was the establishment of a joint currency with Brazil’s neighbor and trading partner, Argentina. The currency that would be titled “The Sur” would not be used as a widespread currency. Instead, it would “be a common denominator of trade exchanges,” as understood by Fabio Terra, professor of Economics at the Federal University of ABC. 

Analyzing the currency implementation through different lenses highlights the conflicting outcomes for Argentina and Brazil, with a clear winner and loser in sight. 

 For Argentina, who has been suffering from seemingly-limitless levels of annual inflation approaching 100%, while also owing a $40 billion debt to the IMF for a bailout in 2018, the joint currency approach seems like an efficient bandage on the gaping wound of international debt. For Brazil, nonetheless, binding its monetary flows to such an unstable neighbor would be tying an anchor to a rapidly sinking boat. 

On the other hand, the countries’ bilateral trade is expanding, even “reaching $26.4bn in the first 11 months of last year, up nearly 21 percent on the same period in 2021,” according to the Financial Times. This may motivate the joint currency as a supporting booster between both economies. Yet, it only accounts for 6.5% of their combined gross domestic product. With trade being a crucial primary source of income for Brazil, the establishment of the Sur motivated by facilitated trade with Argentina is no trade-off given its detriments.  In addition, the sectors that pioneer trade in the two countries diverge immensely, from industrial commodities to agricultural goods for Brazil and Argentina, respectively. Such a difference in traded goods results in different responses to trade alterations in global headwinds that might spur from the new currency proposal. 

Furthermore, Brazil’s inflation levels have been thriving on a stable currency regulated by a “vigilant independent central bank,” remaining under double digits throughout the last decade, a staggering 61 percentage points below Argentina’s inflation levels. As highlighted in a recent article by the Atlantic, “Brazil’s monetary policy has credibility in international money markets; Argentina has had to impose capital controls to keep people from buying dollars.” The divergences in the nation’s economic performance economically through the past years can be attributed to significant divergences in policy approaches, which could be yet another issue factor when considering the establishment of the Sur. 

With the launch of the idea to the public eye, significant figures in the realm of international economics have spoken out about their opinions on the proposal. Olivier Blanchard, former chief economist of the IMF, mercilessly characterized the operation as “insane” and “a terrible idea.” For Brazil, doubtlessly, the insanity is clear. Why, then, is the country so headstrong about the merger? Surprisingly, a similar proposal was made in the late 1980s, following the neoliberal influence of chile, to replace the Brazilian Cruzeiro and Argentine Austral as a trade currency, but the idea fell short due to economic turmoil in 1988 sprouted from rampant inflation encountered by Brazil and an arduous debt crisis occurring in Argentina. 

The reintroduction of a joint currency for Brazil can be attributed to the country’s continued attempts to dominate the Latin American region through forms of soft and hard power. Economically, Brazil’s avant-garde approach to lifting Argentina from the ashes of financial turmoil, on paper, would allow it to reinforce its regional dominance as a liberal state providing support to one of its neighbors. Simultaneously, the Brazilian government sees the Sur as an opportunity to challenge the current economic system’s reliance on the US Dollar in trade. From the Brazilian perspective, the support of this idea provides the country with a “reputational boost from being seen to revive regional cooperation,” while also “[clawing]back trade with Argentina it has lost to China in recent years.”

 While on paper, the idea seems plausible and the potential accomplishments of the plan seem beneficial to Brazil as a growing regional and global power, the detriments coming from the implementation of the Sur would provide a drastic counter effect to such benefits, leaving the country in a worse state than in the outset of the plan. “Hitching Latin America’s biggest economy to that of its perennially volatile neighbor” would not work as smoothly as the neighboring states in question envision it. Not only would the Sur tether instability to Brazil’s economy, diverting investments and furthering trade relations, but it would also prove inefficient for the complications of the free flow of capital and labor across borders — a crucial aspect of currency shock balancing. The Sur simply lacks the mechanism that working currency unions bear: where European farmers transit seamlessly between jobs and member states, “South America’s poor infrastructure makes travel a hassle, and Argentina’s capital controls make getting paid across borders nearly impossible.”

Brazil should not be fooled by the enchanting tale of valiantly rescuing itself, Latin America and eventually the Global South, from dollar dominance marching across the international arena in a white stallion; certainly less so when said stallion, Argentina, has no legs. As a result, the growth potential that has been historically attributed to Brazil’s powerful economy remains — under the plan of the Sur — presently unattainable. 

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In 2020, Eastern Europe’s response to the pandemic was a loosening of monetary policies to support citizens and protect against short-term economic loss, which ultimately led to higher inflation and an increased cost of living. Out of the whole continent, Eastern Europe has been impacted the most; while it used to be known for countries with lower living costs compared to the rest of Europe, the cost of living in Eastern Europe is now almost comparable to Western European countries. 

After the Russian invasion of Ukraine, Eastern Europe saw a sharp decrease in retail sales, skyrocketing food and energy prices and higher rent, all of which have cut significantly into families’ incomes. Hungary, a small, landlocked country bordering Ukraine and the EU country with the highest rate of inflation, saw the most severe inflation rates it has seen in decades following the invasion, rising more than 20% year after year from January 2021 to December 2022. 

How is this crisis impacting the average Eastern European citizen?

Low-income families are paying around double for groceries, electricity and gas compared to upper-middle and wealthy families in Eastern Europe. This results in worse economic gaps between low and high-earning families. Food prices have also risen faster in Hungary than any other country in the EU, rising over 45% from 2022 to 2023, with Slovakia in second place at 29%. 

Meat products, once considered a staple in the Eastern European diet, are now a luxury for many. Bottled water, milk, eggs and bread now cost 72-80% more than they did in 2021– a staggering difference when compared to the average monthly income of Hungarians, which is 554,540 forints (about $1,631 USD). A dozen eggs can now cost as much as 858 forints (about $2.34 USD); this is not currently a sustainable price point for the average Hungarian. In Hungary, many families like to vacation in Lake Balaton, a world-famous vacation destination that European citizens flock to every summer for its warm temperatures and beautiful landscapes. 

When I visited Hungary this July, I was shocked by the cost of food. Cheese was somehow more expensive in Hungary than in the United States and what I would have considered affordable in Hungary the last time I was there was no longer affordable. According to my Hungarian family members, as well as other Hungarians I met during my time there, fewer and fewer people are able to travel for vacation to other countries or even within Hungary.

The risks of inflation rates remaining this high are many, including consumers buying fewer things, having to find a second or third job, finding alternatives to using gas and having less disposable income, which in turn negatively impacts Eastern Europe’s economies. According to the European Commission, Hungary’s GDP growth fell from 4.6% in 2022 to a mere 0.5% in 2023, and unemployment rose from 3.6% in 2022 to 4.2% in 2023. Experts predict that Hungary will be able to recover in 2024 with forecasted disinflation and a tightening of monetary policy. Hungarians should expect a decrease in inflation to 7-8% by December of this year, according to Hungary’s Finance Minister Vargás. The IMF predicts a low 0.3% GDP growth in Poland for 2023, 2.4% in Romania and -0.3% in Lithuania. 

The Israel-Palestine war will affect not only the Middle East’s economy but Eastern Europe’s as well; the cost of oil has already risen but will expect to recover unless Iran is sanctioned by the West for its support of Hamas. With no end in sight for the Russia-Ukraine war, rippling global conflict, lower consumption and economic activity and climate disasters such as wildfires and heat waves, the next couple of years will be difficult for Eastern Europeans. 

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As the United States recalibrates its international alliances and economic dependencies, India emerges as a pivotal player that could help shape the future of this crucial geopolitical theater.

The world has witnessed a significant shift in the dynamics of international relations. The declining relationship between the United States and China, coupled with concerns over human rights abuses and regional tensions, is prompting a reassessment of the economic and strategic ties between the two nations. 

This is not to say that India is without its own democratic flaws. 

However, the over-dependence of a consumer America on Chinese imports, with a staggering trade deficit of $382.92 billion as of 2022, underscores the urgency of diversifying trade partners.

There is no exact substitute for China. But there is a way for the U.S. to diversify its dependence — India. 

The world’s largest democracy, and now most populated, shares fundamental values with the United States, such as democracy (while questionable), commitment to counterterrorism and engagement with international institutions. These shared principles provide a solid foundation for a deeper strategic partnership. 

Here are some compelling reasons why the United States should consider India as a significant ally:

Democratic Values: For namesake — The alignment of the world’s largest democracy (India) with the world’s oldest democracy (the United States) offers opportunities for collaboration on defense, security, economics and global cooperation. 

Strategic Location: India’s location in the Indo-Pacific region is pivotal for global trade and security. Its rapidly developing infrastructure, including ports, highways and railways, positions India as an essential hub for international trade, countering China’s influence.

Indo-Chinese Strains: The strained relationship between India and China, exacerbated by disputes over initiatives like the Belt and Road Initiative (BRI) and border clashes, creates an opening for the United States to foster stronger economic ties with India.

While the benefits of a closer U.S.-India partnership are evident, certain challenges must be acknowledged and addressed:

India’s Relationship with Russia: India’s reliance on Russia for defense procurement and oil purchases may not align perfectly with American interests. Nevertheless, aligning with India in the context of its non-support for the war in Ukraine is crucial for U.S. security.

The Pakistan Question: Closer economic ties between the United States and India could be perceived as a threat by Pakistan, potentially leading to stronger ties with China or other U.S. rivals. Careful diplomatic efforts must be made to navigate this complex situation.

Domestic Policies: India’s protectionist policies aimed at safeguarding domestic industries could pose challenges for U.S. businesses. Incentives such as tax breaks or subsidies can help mitigate these obstacles.

The Way Forward — A marriage of future economic convenience? 

The United States could prioritize discussions with India to establish an exclusive trade agreement through a Trade Policy Forum (TPF) and renew the Generalized System of Preference (GSP) Program. These actions can lead to increased Foreign Direct Investment (FDI), diversified investment portfolios and more favorable tariff treatments for Indian products.

Additionally, engaging in mega-regional trade agreements that involve India but exclude China, such as the Indo-Pacific Economic Framework (IPEF) and the India-Korea Comprehensive Economic Partnership Agreement (CEPA), could be explored. These agreements align with the US policy of “friendshoring” and promote multilateralism, helping maintain U.S. influence in the Indo-Pacific region.

To protect America’s national security and economic interests, a trilateral trade agreement involving India, the United States and South Korea might be a strategic move to counter a growing Chinese influence. 

India’s strategic significance in the Indo-Pacific region cannot be underestimated. The potential benefits far outweigh the challenges, making India a key partner in navigating the complex geopolitical landscape of the 21st century.

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It is an irrefutable fact that the measuring and cultivating of socioeconomic development and subsequent poverty reduction for emerging countries is a continuous challenge composed of numerous complex facets. When a choice is made by a state to focus on one aspect of development, another pressing issue is, in turn, frequently neglected. Nonetheless, several economically and developmentally upcoming countries have implemented policies that brought about successes and improvements to the country in question. 

In today’s polarized world, the interdependence between states and their governments about successful and failed cases is crucial to the perpetual development of other countries looking for similar improvements. 

Within the category of necessary improvements, gender inequality has gained an increasingly large role in the discussion of social and economic development. The disparity poses a continuous challenge for women pursuing professional careers — be it a different pay rate, the prevalent lack of opportunity in employment or an underlying social structure that prohibits their integration in the workforce. In an economy where not all resources are allocated properly, a welfare loss to society occurs since resources are being employed inefficiently. This model illustrates the global society’s shortsighted view on women.

While several countries with high rates of gender inequality around the world have displayed significant progress in their inclusion of women in society, most still have a substantial way to go in order to, not only empower their women, but also improve their general economic and social development. According to a United Nations analysis of their annual Gender Snapshot Report of 2022, “If change continues at its current rate, our analysis shows that gender equality will remain unrealized for centuries to come.”

This is due to the fact that while the economic impact of day-to-day tasks is indeed difficult to measure, providing an answer as to why they are usually unaccounted for, an estimate of 10-60% of GDP is composed of unpaid female labor such as “cooking, cleaning, fetching food or water, and caring for children and the elderly,” according to the IMF. 

When this analysis is taken to a local level, an extremely positive correlation between the proper, paid employment of women in the labor force and a country’s economic development is brought to light. 

A country that serves as an example globally for female empowerment is Brazil. In 2021, Brazil was deemed Latin America’s fourth most unequal country. Yet, amid presidential administrations, several leaders have shown continued efforts to improve the country’s conditions through the empowerment of women, among other initiatives. 

The implementation of such projects began in the early 2000s.

Specifically, in 2003 President Lula da Silva introduced the Bolsa Familia Project (BFP),”a nationwide Conditional Cash Transfer (CCT) programme managed by the relevant local administration within a federal infrastructure.” Financed by the World Bank and the Brazilian government, Bolsa Familia began as a form of monthly transfer payments sent out to families contingent on their household composition and income. A culmination of several types of previously existent but not enforced forms of governmental assistance, such as the Bolsa Escola (School Aid) Bolsa Alimentação (Food Aid), Cartão Alimentação (Food Voucher), and Auxílio-Gás (Gas Auxiliary), the program intended to “improve the efficiency and coherence of the social safety net and to scale up assistance to provide universal coverage of Brazil’s poor.” In the program’s outset, to be eligible for the payment, the family’s total monthly income per capita was required to be lower than R$218, the equivalent of approximately US$40 at the time. 

In specific efforts to empower females in the extreme poverty situations supported by the BFP, the CCT’s were given to the female head of the household at the beginning of every month. Furthermore, they were expected to be monitored for the proper spending of the transfers such as on children’s education, women’s prenatal health, and other household expenses. Not only did this condition allow for more conscious decisions to be made with the money provided, but it also encouraged the female management of assets, increasing the total female economic power in Brazilian society. 

At the time of the project’s conception, several feminists speculated that the direct transfer of the money to female figures would induce more of a burden on women. The sustained argument was that male companions would feel threatened by the growing female empowerment, placing women in a vulnerable position rather than a superior one. 

Yet, the strategy was meticulously calculated — “Our research shows that the money empowers women. In many cases, it’s their only source of income, so it means they are less dependent on their husbands, more likely to share in decision-making, and have higher self-esteem,” recounts Tereza Campello, Brazil’s former social development manager. Accordingly, as of 2010, 54% of the Bolsa Familia recipients were women, and in 2013, 93% of family households across the country were considered to be headed by women. 

Years later, the Bolsa Familia remains internationally renowned for its success in lowering poverty, increasing education and decreasing the gender inequality gap in the country. In 2013, the project was already accountable for “up to 25% of Brazil’s reduction in inequality and 16% of the drop in extreme poverty,” according to a case study conducted by the Women Deliver Organization. Furthermore, statistics drawn directly from the World Bank point out that Brazil’s population under extreme poverty percentage declined from 9.7% to 4.3% over the 10-year period. The change in the extreme poverty percentage by nearly two-fold may be traced back to the wide range of benefits brought by the Bolsa Familia such as healthcare, education and general improved support of critical living standard conditions such as electricity and sanitation. Yet, a significant element in that improvement is the passage it opened for women to push themselves, and their children, out of that reality — a positive externality to Brazilian society as a whole. 

As a leader of the Global South, Brazil set high fiscal policy standards for fellow developing countries that need an immediate remedy in order to improve poverty, social inequality and gender inequality, all of which’s improvements perpetuate fundamental economic growth. 

Bolsa Familia has served as a model for the implementation of similar CCT programs in over 40 countries, bringing recognizable advancements to countries such as Chile, Turkey, Indonesia, Morocco, South Africa, Mexico and others. Moreover, in virtue of its admirable progress officially recognized since 2010, Brazil became a host to frequent visits from over 120 delegations across the globe who traveled to learn about the project. 

 Nevertheless, the substantial improvements accomplished through the BF remain minor when it comes to gender equality and overall poverty reduction in the country. As Maria Da Paz says, “the changes in the moral and cultural order are slow,” despite life still being “better than it was five years ago.”

As brought to light in a recent study conducted by UNICEF, approximately 32 million Brazilian children live in poverty, a number representing 63% of the country’s youth. If that is not enough, the Brazilian government has announced that in the first semester of 2022 alone it has received and attended to more than 31 thousand reports involving domestic violence against women.

While the success story of Bolsa Familia allows for optimistic approaches to socioeconomic development for countries attempting to improve their current situation, Brazil itself serves as an example that despite this huge success there is still a long path ahead in order to reach even greater improvements in the same goals targeted by the program. Hence, the BFP must serve as a reminder to other developing countries searching for improvement as a potentially implementable model, yet must be frequently amended in order to achieve full efficiency in its objectives realistically and in a timely, stable manner. 

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China believes its trillion-dollar project will create a more comprehensive, modern-day Silk Road across Asia, Europe and Africa, and, in recent years, this project has spread more rapidly than originally envisioned. However, the project is riddled with maintenance issues, allows for the vast displacement of local workers, actively damages the environment and conducts predatory lending practices. These effects leave projects rendered useless and the host nation worse off than before Chinese investment. These worries should be of vital concern to the United States as BRI has the possibility to significantly alter the economic, political, and military security and balance of our world, especially as the project becomes increasingly popularized. 

In China’s own backyard, the country has rallied various nations throughout Asia to participate in BRI. Although China already serves as a massive power in the region, the introduction of BRI has further allowed China to establish itself as the leader of Asia, especially economically. 37 Asian countries are currently participating in BRI. Despite this high number, numerous countries have pulled out of BRI plans stating that they were nervous about the implications and debt responsibility. Between 2013 to 2021, Malaysia abandoned deals worth $11.58 billion, and Kazakhstan exited projects worth $1.5 billion. Many other Asian countries may pull out of deals or reject future BRI proposals as the outcomes of BRI in Asia, as seen in Sri Lanka, have caused tremendous environmental and economic turmoil for the nation. 

Sri Lanka, an island country in South Asia, which has a prime geopolitical and trade presence due to its Indian Ocean access, was detrimentally affected by the environmental effects and predatory lending practices of BRI. During the construction of the Port of Colombo, environmental concerns took a back seat as mining was conducted to construct the landfill of the city. These actions caused the obstruction of marine life, which resulted in an extreme risk to biodiversity in both the immediate and surrounding areas.

BRI’s predatory lending practices have also caused Sri Lanka to find itself in a debt trap with China, forcing a significant surrender of its sovereignty and security. China had used the failure of being unable to repay the debt to take over strategic economic and military assets, as seen in 2017 in Sri Lanka when $1 billion out of $8 billion in debt was forgiven in exchange for a 99-year lease of the Port of Hambantota, the country’s second-largest port, and 15,000 acres surrounding the port. While the port is primarily being operated for commercial use, Sri Lankan officials have stated that when conducting the deal with China, the ability of China to utilize the port for intelligence and strategic operations was also a possibility that was discussed.

China has even extended its reach as far as Latin America. Latin America was not initially part of BRI in its earliest phases. However, in the past few years, China has increased its focus on the region. In 2017, in a meeting with Argentinian President Mauricio Macri, Chinese President Xi Jinping said that the continent is a “natural extension of the 21st century Maritime Silk Road.” While the continent is more weary of its support of BRI, it is clear that China is increasingly becoming a critical partner for the region. Brazil sends approximately 28% of its exports to China, and, as part of the BRI vision for Latin America, one project consists of building an underwater fiber optic cable between Chile and China. Despite this fervor, the same worries of environmental damage and economic extortion should concern international observers, as exhibited by the unraveling situation in Peru.

Peru, a country residing on the Pacific Ocean and spanning a portion of the Amazon rainforest, is undergoing significant BRI investment. In June 2018, a Chinese company, COSCO, bought a 60% stake in the Chancay port in North Lima and pledged to improve the port as part of BRI. The construction is set to cost $600 million, and the first pier aims to be ready in late 2023. While China and Peru hope that this port will be financially successful, there already have been environmental consequences as part of this project. The killing of wildlife and plant life, the release of dangerous toxins, and the displacement of local communities are rampant because of this project. As a result of these outcomes, local communities have been protesting this development since 2019. 

Another project China has invested in is the expansion of Toromocho Copper Mine. This project poses an inherent environmental and health risk to Peru. The further development of copper mining in Peru will cause widespread deforestation, land degradation, water pollution, and a human health risk for workers and surrounding communities. Despite Peru deeming China as a “good trade partner,” it is evident that if China truly cared for the long-term success of Peru and the safety of its citizens, they would not encourage sustainable and destructive development.

Rather than just publicly criticizing BRI, the United States must focus its efforts on Chinese predatory lending practices that leave nations susceptible to Chinese extortion. The United States should then advise these countries on how to better negotiate deals with China to ensure a nation’s right to sovereignty. The United States should rally the EU and partner up to make a comprehensive infrastructure plan that is more ambitious than the $600 billion Partnership for Global Infrastructure and Investment coming from the G7 committee that only secures funds by 2027. The need for action is now. Instead of asking nations to pick a side, providing this alternative with fair loan practices that underscore sovereignty for the host nation can be an attractive option for countries looking for foreign direct investment. This strategy will both boost American morale across the world and pressure China to amend their BRI policies to more fairly compete with Western infrastructure initiatives.

BRI has provided some success; however, that does not outweigh the blatant issues associated with the initiative. While each country has specific conditions that leave them vulnerable to coercion and extortion by the Chinese, the risk is always the same. China is an unreliable and exploitative partner that will negatively impact our world order as BRI infringes on the principles of sovereignty and the right to self-governance. The United States must fast-track its Partnership for Global Infrastructure and Investment initiative with G7 as the fight for sovereignty cannot wait — the risk is simply too great. 

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As of December, Bitcoin prices had fallen approximately 63% throughout 2022 and 16% in November alone. While many companies and investors remain confident the currencies will quickly bounce back and remain trustable assets, the fall of the company re-sparked debate over the area of policy and finance. 

The world of cryptocurrencies is uncharted territory. As such, looking at the impact of the trading giant and the journey of cryptocurrency throughout 2022 is best understood by outlining its rise, controversies and debates in modern financial history. 

First, a bit about the evolution of money

The role of money has generally been subdivided into three categories: to act as an accepted medium of exchange, have a store of value and serve as a unit of account to price and compare goods and services. Moving from a bartering-centered system, forms of money have constantly morphed from country to country. Paper money was initially printed during the Yuan dynasty, and credit cards entered the scene in the 1950s. Since, modern finances have operated primarily on the use of debit/credit cards and cash.

The financial system underwent its subsequent change with the evolution of the internet and commercial websites, with digital payments becoming more common in the 1970s and 80s. Money now started moving through online intermediaries.

For instance, companies such as Paypal helped move the needle toward online transfers through the creation of third-party payments. Additionally, firms such as Safaricom, which began utilizing cellular sim cards to promote digital transactions, according to MIT Professor Gary Gensler, presented innovations for moving money. 

The introduction of Bitcoin and the rise of cryptocurrency

The first concrete and surviving digital crypto-currency, Bitcoin, comes after a series of primarily failed attempts in the 1980s, 90s and 2000s to apply the idea of cryptographic technology to cash and credit. Cryptography refers to a system of encoding and decoding data back and forth. 

On Halloween 2008, still anonymous, Satoshi Nakatomo sent out an email announcing work on a new electronic cash system. The proposal was technically advanced but conceptually simple: the creation of a new peer-to-peer direct system that would require no third-party intermediary. The email introduced Bitcoin to the world, and while the system has undergone various changes since, most cryptocurrencies today still operate primarily on the same skeletal structure.  

Bitcoin is an electronic currency that runs transactions using a system of public and private keys unique among users, who maintain a certain level of anonymity because transactions need confirmation through these electronic keys. Bitcoins are defined, according to Nakatomo, as a chain of computer-generated digital signatures, free-floating. 

These digital signatures allow a way to record and verify online transactions on a distributed and shared ledger. Digital signatures operate as a sort of “virtual fingertip,” ensuring correct transactions are taking place. 

Later, transactions are given a unique serial number and form a block that comes into contact with blockchain technology to timestamp and adds to the ledger through a process known as mining. Mining operates to ensure scarcity, so only a limited amount of bitcoin, 21 million Bitcoin, are mined each year. 

Additionally, to create a consensus protocol, the communication network only adds and accepts new blocks after proof-of-work, a specific computation that verifies transactions, is established through the computer system. 

Cryptocurrency stands apart from traditional currency due to its distributed ledgers and model. Since Bitcoin, countless other digital currencies have hit the market, including Ethereum, released in 2014, and Tether.

Although initially primarily used in the underground economy and illegal activity, cryptocurrency started boosting value and becoming mainstream. Yet, due to their politically decentralized nature, cryptocurrencies are generally highly volatile and face low scalability. Thus, outside of El Salvador and the Central African Republic, which became the first countries to legalize Bitcoin as legal tender to settle debts, cryptocurrencies are today traded and used as speculative financial assets for consumers and investors. At its peak in 2021, the total crypto market was valued at $2.9 trillion. 

Current Situation and FTX

So how did FTX enter the scene? The introduction of cryptocurrency helped start its capital market and various trading companies were established for selling, buying and managing the currencies beginning with the industry giant Binance in 2017. Binance was followed in 2019 by the creation of FTX, which quickly established itself as a player in cryptocurrency exchange. FTX created and introduced its denomination of cryptocurrency, or token, known as FTT. The company became the third largest exchange company in the international market, helping bail out several other firms after the crypto-winter price fall in the spring of 2022. 

Co-founded by American Sam Bankman Fried, the FTX entrepreneur became a public figure, frequently appearing in US congressional panels to talk about cryptocurrency.  

FTX worked in coordination with its hedge fund, Alameda Research, but the company’s story began unraveling in November when another cryptocurrency exchange company, Coinbase, released information FTX was performing a series of high-risk trades and loans through their FTTs. Coinbases’ information release led to a decrease in consumer confidence that, fueled by the public statements of other exchange companies, sparked a consumer-run that uncovered several weaknesses and pains in the corporate model. The company did not hold enough reserve resources and after a failed acquisition plan, it filed for bankruptcy. After further investigation, its American CEO was extradited from the Bahamas, then FTX’s less regulatory operations center, on claims of company-wide defrauding; the scandal even rendered many investors unable to withdraw their initial investments. 

Broader developments and debates

FTX’s collapse marked one of the most notable developments in the timeline of cryptocurrency. Following the fall of FTX, many in the financial sector began criticizing the exchange market as an overly centralized environment, with few companies dominating and monopolizing much trade. 

The long-term ramifications on the value of crypto-assets remain fluctuating, but FTX’s first hearings in the US Congressional House Committee have led to talks regarding regulatory policies.  

In the wake of FTX, on Jan. 2, the Federal Reserve and Federal Deposit Insurance issued a joint statement regarding crypto-asset risks on banking organizations. Additionally, Coinbase reached a 100 million dollar settlement with New York regulators after failing to comply with New York’s reporting requirements. FTX’s fall has led to wavering consumer trust and placed a heavier spotlight on the possible weaknesses and effects of the exchange market. 

Furthermore, on Nov. 18-19, the Group of 20 countries, or G20, issued in their leaders’ declaration support for the Financial Stability Board’s proposal for creating an international regulatory framework of crypto activity to promote consistency.  

This has led to increasing talks on regulation programs, including the European Union’s approval of the Markets in Crypto-Assets Regulation Bill (MiCA) in October 2022. MiCA was one of the first international efforts to regulate digital market assets. The bill, which will be brought before the EU Parliament for Voting in early 2023, would require crypto companies to register with national authorities and meet a series of guarantees for investors. 

The fall of FTX came at a time when cryptocurrency had grown extremely prevalent, a recent poll showing as many as 1 in 5 Americans had contact with or held cryptocurrency. Looking forward, investors and regulators must track the international community’s continued response,  determine how to place cryptocurrency in the market and what types of regulations will or should be implemented. 

Despite recent price falls, cryptocurrencies and assets do not seem to be going anywhere anytime soon. In the economic game of risk and expected values, FTX has jump-started discussion on how countries should navigate domestic and international supervision and standards of the digital market.  

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As cost of living climbs, lower classes are facing new class conflict in Spain, a country already struggling to find its footing after the 2008 financial crisis and the global pandemic. The war in Ukraine has impacted the entire world’s food supply and cost of living, but Spain faces among the highest hikes in prices of anywhere in the EU. 

According to the OECD’s economic snapshot of Spain, the onset of conflict in Ukraine has affected the Iberian Peninsula, much like the rest of Europe, “via increased energy prices, disruption in production chains and higher uncertainty.” Reuters reports that annual inflation in Spain surpassed 10% for the first time in almost four decades. 

Transport costs have risen by almost 20%, electricity has increased 33% and tourist accommodations like hotels have risen by 45%. Eating and drinking in Spain is 13% more expensive this year than it was this time last year, a more significant difference compared to Germany (+11.8%), Italy (+9.2%), France (+6.3%) and most of the EU. Indeed, olive oil and fruit are currently more expensive in Spain than anywhere in Europe, a considerable kick in the gut to one of the largest producers of olives and agricultural products in the region. 

Spain, alongside other EU member states, is working to keep the threatened tide of recession at bay. Fuel prices in Spain have only recently begun to slightly decrease from unprecedented highs following an agreement between Spain, Portugal and the European Commission to limit the cost of wholesale electricity. The EU’s strict fiscal deficit limits will remain suspended through the next war to help absorb the economic shock of the conflict in Ukraine, and Spain’s projected public deficit is 5% of GDP in 2023. These disciplinary rules, known as the Stability and Growth Pact (SGP), typically require countries to keep public deficit below 3% and debt belo 60% of GDP, but many countries, including Spain, currently exceed these requirements since they were suspended for the pandemic in March 2020.

Despite continued emergency fiscal policy, workers across Spain are expressing their frustration with rising costs of living, which they claim exacerbates the low wages and poor working conditions that characterize typical union demands.

Last March, truckers across Spain went on strike for 20 days, wreaking havoc throughout the nation’s economy and only concluding after months of fraught negotiations with the Ministry of Transport. Almost 20,000 metalworkers in A Coruña and Cantabria began striking in early summer, calling for “recovery of purchasing power, salary review clauses to protect purchasing power, the extension of these rights to workers from subcontracted companies, the limitation of temp work and the regulation of toxic, painful and dangerous work.” Taxi drivers marched in Barcelona, and teachers strike across Catalan.

This July, two Spanish unions associated with Ryanair have voted to strike for decent working conditions and pay in the wake of spiking travel demand in recent months. In an economy that relies on tourism for around 12% of its GDP and 13% of its employment (at pre-pandemic levels), major walk-outs and delays in the top budget airline poses a significant economic threat

As economic pressures mount, strikes are catching hold across the country and across the industrial spectrum. However, the rising tide of economic protests is familiar to Spaniards.

On May 15, 2011, Madrileños rallied in the central Puerta del Sol plaza to protest dire inequality and corruption. The movement,known as 15-M after May 15, the day the protest ignited,emerged from years of tension after the 2008 recession and aimed to take down the Spanish political and judicial establishment, or “the caste.” This anti-austerity movement in Spain included weeks of camping in the city center, demonstrations in more than 60 Spanish cities, more than a million participants in protests in Spain and corresponding protests around the world, often in conjunction with other occupy movements. 

15-M shook the country to its core. It destabilized the political establishment and catapulted Podemos, a left-leaning and pro-worker political party, onto center stage. Moreover, the massive protests empowered the Spanish workforce, which was only beginning to restabilize after the fall of Franco in the 80s and now was facing a bleak financial future, to demand more from their government. 

My host mother remembers the global financial crisis and subsequent anti-austerity protests as a pivotal moment in her life, although she doesn’t consider herself very political. The Spanish economy had been growing rapidly before the crisis, and her small womens’ fashion boutique had been thriving. Plummeting consumer demand had slashed her income. 

“People don’t shop anymore. Not at the local businesses, not like they used to,” she says. At the time I thought she was referring to life after the 2008 recession, but I realize the lament also applies to pandemic-related financial shifts. 

Before my host mother could get back on her feet after the financial crisis, the pandemic trapped all of her potential customers in their homes, leaving her with no business and little means of making rent. 

So she understands why Spaniards strike. Siempre hay una huelga. “There’s always a strike,” she says. “The transportation strikes, the farmers strike, always there’s a strike. But I understand it.”

As a small business owner, my host mother can’t strike for higher pay. Instead, she opened her home to a stranger (me) to try and make ends meet. About a month after I moved in, she confessed to me that her daughter, a 22-year-old law student, had been too afraid to tell her friends that an American study abroad student (me) was living in her home. My host mother explained that her daughters’ friends had money, like she used to have money, and if they knew the family needed to take in a student, then they would treat her differently.

“She’s seen how [her friends]treat people without money, and she doesn’t want them to treat her that way,” she says.

In my host family, a sharp divide still exists between the working-class empowerment against “the caste” in political spheres and the reality of class relations in practice. Protests in 2011 and ongoing strikes in the wake of the pandemic means these conversations play out on national news but rarely in the real world. 

In hushed tones around the kitchen table, my host mom opens up about her experience as a small business owner and a single mother. She explains her support for strikes and her daughter’s shame for being working-class. She hints at her own frustration with her financial backsliding, careful to avoid any implication that her frustrations are directed toward me. 

But our conversation thrums with the tense reality that I am paying to live in her home and that she needs the money. After her confession about her financial situation and her family’s shame at my presence, her final plea knocks the wind out of me.

“Please don’t leave,” she says. If I leave, how will she make rent?

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Ecuador is one of the many Latin American countries still suffering from the economic repercussions of the pandemic. Protesters claim Ecuador’s center-right government has done little to remediate the country’s economic situation as poverty and unemployment rates continue to skyrocket.

Ecuador’s indigenous communities — which CONAIE estimates make up 25 to 30% of the population — have been left particularly vulnerable as the cost of living grows nationwide. The country’s farmers, many of whom are indigenous, are forced to pay more for everyday items while receiving less for their agricultural products, allege protestors. Across the country, working-class Ecuadorians are seeing no increase in wages despite transportation, food and fuel rising in cost.

In a list of demands including price cuts on diesel and gasoline, controls on the price of food, and a commitment to invest in public healthcare and education, CONAIE called on the Ecuadorian government to make significant changes in support of its working-class citizens. In response, the government — led by conservative president Guillermo Lasso — declared a state of emergency in six provinces, including in the capital Quito.

Displeased with the government’s refusal to negotiate on CONAIE’s terms, protestors continued to block key roads and highways, causing shortages of food and fuel throughout Ecuador. Violent clashes with the police resulted in the deaths of several protestors and members of law enforcement, compelling CONAIE to demand the “demilitarization” of Ecuador as a precedent for negotiation talks.

Lasso and his administration remained wary of CONAIE, accusing the group of using the country’s economic situation as an excuse to overthrow the government. CONAIE, an organization powerful enough to have ousted three Ecuadorian presidents in the past, has certainly demonstrated the extent of their national influence. Protestors in the Amazon have succeeded in stopping more than half of the country’s standard oil production while the government claims that the tens of thousands marching on the streets of Quito have cost the economy more than fifty million dollars every day.

As CONAIE maintained its blockade, many in the Ecuadorian government sought bureaucratic measures to end this conflict. On June 20th, Ecuador’s parliament voted 81 to 56 in favor of the government pursuing dialogue with the protestors. Lasso refused to remove the upscaled military and police presence in Quito — stalling any chance at peace talks. On June 24, after the protests had persisted for two straight weeks, a group of opposition lawmakers began to push for the removal of President Lasso, taking advantage of the assembly’s constitutional right to unseat a president during a time of national unrest.

Lasso’s relationship with the national assembly was already strained after criticism of his weak response to the growing rate of violent crime in Ecuador. Though Lasso initially polled well after his election in 2021, his approval rating dropped from 75% to 38.5% from September 2021 to May 2022. Having lost the full confidence of his government and people, all eyes were on the Ecuadorian present as he sat down on June 27 for the preliminary talks with CONAIE president Leonidas Iza.

The concessions that Lasso had made so far — a 10-cent per gallon price cut on gas and diesel prices, subsidies on fertilizer, debt forgiveness, and the partial demilitarization of areas of Ecuador — cost the government another $600 million in addition to the $500 million Lasso claims the economy has already suffered across various sectors. Still, Iza says it’s not enough. The Indigenous activist and leader reaffirmed that CONAIE would not stop the demonstrations until all its demands were met, including assurance that prices of food, gas, and transportation become affordable for all Ecuadorians.

Lasso responded by calling Iza an “opportunist” and publicly refused to continue any negotiations with Iza, though Lasso later stated that the government was still willing to resolve the situation through peaceful dialogue.

Meanwhile, Ecuadorian lawmakers put forth a vote of no confidence into motion. Though the vote failed, it revealed the shaky grounds on which Lasso’s authority stands: his presidency survived by only 12 votes.

Lasso, unable to come to satisfactory terms with Iza and desperate to prove his authority amidst movement towards impeachment, decided to take a more aggressive approach against the protests. The president declared a month-long state of exception in four provinces — Quito excluded — to protect the country’s oil and fuel supply as well as food and medicine.
Finally, on June 30th, the protests came to an end as Iza and government minister Francisco Jimenez, with the help of a mediator, reached a deal. The two agreed that the price of gas and diesel would be lowered by 15¢ and assurances were made that oil exploration and mining activity be limited to protect Ecuador’s protected areas. Under these conditions, which the government is required to meet within 90 days, CONAIE concluded the national strike which shut Ecuador down for 18 days, proving to the world the political power of Ecuador’s Indigenous peoples.

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Understanding resource-rich economic structures are essential to understanding economic diversification. Economist Max Corden explains how these economies are made up of three sectors: booming, lagging, and non-tradable. These sectors fluctuate with the subsequent resource-based markets. For example, a boom in the oil sector will result in growth in the booming sector, which increases “aggregate income” across all sectors. This boom can be represented in many different ways; for instance, an “exogenous technical improvement,” — which refers to any advancements and improvements in technology and production methods related to the production and usage of resources, such as oil, that define these resource-rich economies. These changes can improve the efficiency of the oil sector and can cause outward shifts in the production function, thereby resulting in a shift in the booming sector. All three sectors coexist and are used to define shifts and changes in the resource market.

However, a boom in the oil sector does not necessarily equate to economic prosperity. The misallocation of profits from the resource sector is a key point when discussing resource-rich economies in the MENA region. Misallocation can take many forms, such as corruption and inadvisable spending, which can hurt these economies in the long run. These forms of misallocation can show the complex, multifaceted underbelly of these resource-rich economies.

First, let’s talk about corruption. Corruption has a big effect on the sustainability and efficacy of an economy, as it can facilitate “time-consuming and inefficient administrative processes,” which can extend further into even attracting “larger amounts of bribes.” Corruption can be measured by looking at the work of Global Financial Integrity, a think-tank that focuses on global illicit economic and financial activity. They use the term “illicit financial flows,” which refers to analyzing the gaps between the source and use of institutional funding. If the use of funding is greater than the source, that proves missing funds and therefore can show corruption. This gap is apparent in MENA countries such as Iraq, where according to former RAND economist Paul Heaton, Saddam Hussein used “illicit contracts” for cheaper oil to reward political supporters. Additionally, the research conducted by Nadeem Ul Haque and Ratna Sahay during their time at the International Monetary Fund (IMF) shows how corruption via misallocation can also appear in countries that have “incentive myopia.” Decreasing budget deficits and increasing expenditures, policymakers will cut wages in the public sector, which will reduce public sector productivity and increase corruption through collusion between firms and tax collectors. 

Similarly, inadvisable spending highlights a significant trend for MENA region economics. Inadvisable spending mainly falls under the concept of rent-seeking, which refers to gaining wealth without added productivity. In essence, rent-seeking refers to trying to actively “seek” profits and monetary gains through the manipulation and exploitation of welfare and the social sector through means such as misallocation of wealth and resources. This can lead to many economic troubles, such as “budget deficit, trade deficit, unemployment, [and]public debt.” Iran, for example, has experienced a “permanent decrease in [their]economic growth” due to increasing rent-seeking practices over the last 50 years. In African countries, we see how resource-based rent-seeking can hinder economic growth because of “increased exposure to price shocks and volatility,” which are both harmful in the short-run and long-run by inhibiting processes of “creating jobs” and “financing social infrastructure.” 

Rent-seeking can be caused by a plethora of actions, such as the strength of institutions. Rangar Trovik puts it best as he cites how resource-rich entities can have different fiscal effects based on the institutions in place. For example, resource abundance can actually diminish growth in countries that engage in rent-seeking practices and have weak institutions.  Torvik defines this as the “resource curse,” showing how institutions can determine the effects that being resource-rich truly have. Additional research has supported this claim that “poor institutions can eliminate the positive effect of natural resources,” which shows the importance that the strength of institutions has on economic growth.

So, what is next? How can these resource-rich countries achieve economic growth and prosperity?

Economic diversification.

Siham Matallah of the University of Oran 2 in Algeria defines economic diversity as reducing resource dependency by diversifying the economy and its investments. In resource-abundant economies, relying solely on resources to define the economy can be very risky. These resource markets, such as oil, tend to be very volatile, making rent-seeking processes exponentially riskier. A way to combat these volatile markets and still experience economic growth is by diversifying the economy. Matallah cites economic diversification as a key pillar toward sustainable economic growth and can help reduce unemployment while facilitating the growth of  local institutions. 

Siham Matallah’s model finds that as corruption is controlled, economic diversity increases, leading to long-term economic prosperity across socioeconomic institutions and industries. The model is designed to reflect oil-rich countries; because of the volatility of the oil market, it is important to diversify and reinvest economic gains from the oil market into reproducing capital. 

Economic diversification has many implementations. However, one apparent in the MENA region is the use of Sovereign Wealth Funds (SWFs). SWFs are investment funds used to invest in domestic and global welfare institutions, protect long-term economic growth, and diversify economies defined by volatile markets. These funds can facilitate development via economic diversification while also focusing on the social sector. SWFs have become increasingly apparent in the MENA region; for example, Qatar has the Qatar Investment Authority, Saudi Arabia has the Saudi Arabian Monetary Agency, Kuwait has the Kuwait Investment Authority, and the UAE has the Investment Corporation of Dubai. We can take the United Arab Emirates and Saudi Arabia for example — the UAE’s collection of Sovereign Wealth Funds has combined to a value of over “$800 billion”, while Saudi Arabia’s collection equates to almost “$300 billion”.

Additionally, within the Arab region specifically, SWF’s investments lie in firms and countries with “less corruption, better developed stock markets, [and]higher economic growth,” which embody a “safety and strategic value” that typical MENA investments seem to lack, thereby releasing some of that extensive reliance on the volatile resource market. As SWFs continue to grow and expand, we will continue to see the importance of economic diversification, especially in resource-rich countries in the MENA region.

Diversification can also come to fruition by developing external sectors of the economy outside of the resource sector, as we see in Oman. Oman’s diversification strategy consisted of “increasing the role of the private sector in the economy” while also “developing human resource capabilities.” Essentially, by developing the private sector and human capital, Oman can begin to diversify its economy into these different sectors to avoid the volatile shocks that define the oil and gas industries. This initiative is reflected in Oman Vision 2040: an initiative to strengthen economic development and health and well-being. Projects like this are also essential to help increase economic diversification in these resource-rich economies to provide and expand sustainable socioeconomic development practices. 

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They include minerals such as dysprosium and neodymium. However, the confusing names still don’t explain what they are, nor why global superpowers like Russia, China and the United States are willing to wage a new space war over them. So, how do these elements typically only mentioned on the Periodic Table correlate to a country becoming the world’s ultimate superpower? 

These rare earth minerals are the key elements that make up many modern technological devices like phones, laptops, satellites, electric cars, and even fighter jets. Meaning that whichever country has the largest abundance of these rare earth minerals has the advantage of research and advancement in the technological field. 

Currently, China is the leading country in rare earth mineral production. It’s important to note that it is in production that they surpass every other nation. When it comes to rare earth minerals, the biggest issue isn’t finding them but processing them. China’s abundance of these minerals, perhaps, is one of the reasons that their technological advancements are up to par or surpassed in quantity. So, when China had a dispute with Japan in 2010 and briefly paused rare-earth mineral exports, it alarmed the United States.

To put into perspective, currently, the United States only has one operating rare-earth mine at Mountain Pass, California; however, there are several developing ones in Alaska, Wyoming and Texas. On the other hand, in 2019, China accounted for 80% of rare earth imports. Though rare earth independence has continuously been spotlighted as the focus of debates in U.S. defense circles, the issue often seems to be circumvented. The first reason is that there is too much focus on extracting minerals from the ground. Secondly, the United States realizes that China can’t sustain its environment and still be able to dominate the rare-earth market. Thus, the actual issue of over-dependency is not addressed by the United States.

The United States aims to have full self-sufficiency of rare earths; however, as the demand and growth of electric vehicles and other electronic devices grow, rare-earth supply isn’t simultaneously increasing. Another concern is that becoming completely self-reliant would come at the expense of the environment. Thus, unless the United States acts with European Union allies to reduce reliance on China, extraterrestrial mining is the only way to gain an edge. 

Hence, researchers in the United States have been searching for opportunities to mine rare earths outside Earth’s limits. This would aid in the scarcity issue, environmental concerns, advancing technology and the rare earth minerals market. Thus, scientists in Sydney formed the world’s first “Off-Earth Mining Forum.” 

For the past ten years, China, Russia and the United States have been pouring money into space exploration and technology. Though many don’t see why the United States would allocate so much money to space exploration when places in the United States don’t even have access to clean water, the scientific answer is simple: long-term investment. 

The country that explores and ‘colonizes’ space first will be the country that has an advantage in the economy. This would then increase the influence of that country on the world stage. So, China’s current dominance in this market leads to increased hegemony, which is alarming for many modern democracies. Consequently, this could result in another Space Race, because not only would the United States and China be continuing their fight over political ideologies but also over market and technological dominance. 

Countries are rushing to mark their territory and superiority in space to get a headstart in this off-earth mining field. NASA Administrator Jim Bridenstine explains that getting rare earths from the surface of other bodies in space, like the moon, is one way that companies can profit from space exploration. 

The country with its hold on these rare earth mines wouldn’t need to depend on other countries or even their own mines so heavily, helping the environment and increasing their power. Furthermore, this could quickly become political, influencing how countries deal with political power and space exploration. 

These 17 naturally occurring elements power the device you’re using to read this article and influence political choices, funding, economies, and trade relations. Rare earth minerals are such a precious commodity that nations are willing to race to space in order to get ahead in the market. 

Now, the question is, could this ultimately become the new Space Race?

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