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This is why Alberta never invaded Saskatchewan when it had the chance

The costs of taking over Crimea are more than Russia can afford

Rising prices and stagnating wages may make hundreds more Russians think twice about the government’s price tag of between 800 billion and 1 trillion rubles ($23-30 billion) for Crimea, and may come to pose the first real threat to Putin.

The Russian leader for now looks unassailable, with popularity ratings running at over 80 percent and his critics reluctant to speak out against him for fear of being labelled a traitor against the popular cause of building a Greater Russia.

Russian markets have bounced back, recovering all their losses since the start of the year to trade slightly higher, and some bankers are encouraging their clients to dive back into a market they say is undervalued.

But Russia’s economy, riddled with corruption and nepotism, is still weak and, increasingly isolated by Western sanctions, is for now teetering on the edge of recession.
Fighting in eastern Ukraine, an influx of Ukrainian refugees and the threat of further sanctions all hang over an economy, which the International Monetary Fund sees growing by just 0.2 percent this year. Russia’s central bank hopes for 0.4 percent and the Economy Ministry 0.5 percent growth.

After weeks of saying visa bans and asset freezes imposed by the European Union and United States against a number of firms and officials close to Putin could not harm the economy, Russian leaders are increasingly testy over the damage wrought if not by the current sanctions, then by the threat of more.

“In fact, we are dealing with a new offensive type of weapon,” Russian Deputy Foreign Minister Sergei Ryabkov said of the U.S. sanctions in an interview with the Kommersant daily.
Investment has all but dried up, forcing the government to dip into reserves meant for pensions to finance projects, and the government says it will sell a stake in Russia’s state-controlled oil company, Rosneft, to cover some of the costs of developing Crimea.

Finance Minister Anton Siluanov had to backtrack after coming under fire for saying that all the funds accumulated in Russia’s personal pension plans in 2014 had been spent on “anti-crisis measures” and on Crimea.

The next day, he said Russians “would lose nothing”, but stopped short of saying whether the sum of $8 billion would be returned to the personal pension plans.
While such measures may take a while to hurt the population, Karen Vartapetov, an analyst at Standard & Poor’s rating agency, said a more immediate danger was the stagnation of real disposable incomes, which show only 0.2 percent real growth (adjusted for inflation) this year.

“Zero growth of real disposable incomes against continuing growth of public sector pay indicates that salaries in the private sector and non-salary incomes are shrinking,” he said.
“The economy outside the public sector has been stagnating.”

On top of this, the Finance Ministry’s efforts to try to meet Putin’s demands to increase public sector pay, including proposing a new regional sales tax, mean that prices could rise further, putting pressure on stretched salaries.

In the major cities such as the capital Moscow and Russia’s second city of St Petersburg – where Putin faced street protests in the winter of 2011-12 that at times drew tens of thousands – core inflation running at an annual rate of more than seven percent has had little impact on a population largely wealthy enough to cover higher prices.

U.S. Initiative to Reduce Hunger and Poverty Effective, Report Shows

This is huge and really encouraging.

An Obama administration program set up to reduce chronic hunger and poverty has contributed to rising incomes for farmers around the world and helped save millions of people from starvation, according to a report released Monday by the United States Agency for International Development.

The program, Feed the Future, was started by the agency four years ago after a rapid rise in global food prices. It has helped more than seven million small farmers increase crop production and has provided nutritional foods to 12.5 million children in countries hit hard by drought, war or poor development, the report said.
In addition, the United States government received more than $160 million in private sector investment in 2013 to help farmers and small businesses increase their food production, the agency said, a 40 percent increase from 2012.

Dr. Rajiv Shah, administrator of the United States Agency for International Development, said the report provided the first comprehensive look at the program’s effectiveness.
“We have real numbers for the first time,” Dr. Shah said, adding that the new data showed that the administration’s efforts to end extreme poverty were having some success.
The administration has made food security one of its top foreign policy priorities and has pledged billions of dollars in aid for agricultural development to help countries sustainably grow enough food to feed their people.

Feed the Future works with American universities including Texas A&M and Kansas State, which have provided agriculture research and technical help. Private companies such as Cargill, DuPont and Walmart have provided new types of seeds, fertilizer and equipment to farmers.

Gregory R. Page, executive chairman of the board of the Minnesota-based Cargill, said it was essential that private companies be involved in the Feed the Future program.
“Governments and development groups have been at this for years and it hasn’t worked,” he said. “The only way that this is going to succeed is if we treat agriculture production as a business, not as aid. Feed the Future is the perfect example of this.”

The program operates in 19 countries, mostly in Africa, Asia, Latin America and the Caribbean, and has seen the greatest success in Senegal, Bangladesh and Honduras, the report found.

In Senegal, efforts financed by the United States helped the country reduce its dependence on food imports, particularly rice. The country’s rice imports fell more than 20 percent between 2008 and 2011.

Saving South Sudan

Vice Magazine dedicates and entire issue to the conflict in Sudan

Sudan was once home to a great civilization that was the most advanced in all of Africa—but centuries of colonialism and conflict, and a post-independence period ravaged by coups, dictatorships, and incompetent rule, mired Sudan in a series of never-ending wars. This timeline details how by 2013, the oil-rich, fertile nation was falling apart.

Canadian rhetoric makes no difference

The tough talk that has been coming out of Ottawa towards Moscow; it makes no difference at all.

The Conservative government’s tough rhetoric over Russia’s actions in Ukraine may play well to some voters domestically, but analysts doubt it will have any impact on curtailing Moscow’s policies in the region.

“I think the only people Putin’s going to pay any attention to, if he pays any attention at all, are going to be the United States and the European Union, above all Germany,” said Randall Hansen, director of the University of Toronto’s Centre for European, Russian and Eurasian Studies.

“The United States, because it’s the global super power, and Germany because it’s a major importer of Russian gas, which on the one hand gives Putin leverage, and on the other hand, he’s also dependent on Germany.

“Canada doesn’t matter in this in the slightest. We can rant and yell and threaten. It will make no difference.”

He’s not alone

Piotr Dutkiewicz, a political science professor at Carleton and the former director of the Institute of European, Russian and Eurasian Studies, said it’s relatively easy for the government to criticize because Canada doesn’t have extensive economic relations with Russia and there are no large Russian investments in Canada.

However, he notes that Canadian companies do have $3-billion worth of investment in Russia and the government should take that into consideration when speaking out.

“I think we should take a more balanced, I’m not saying uncritical, I’m saying more balanced position, taking into the equation Canadian interests in Russia,” Dutkiewicz said.

“If the Canadian government decides to be critical it should be critical, but at the same time we should watch what others are doing and how, by our criticisms, we’re really helping Ukraine.”

Dutkiewicz said that Canada is losing its reputation as a negotiator and instead is engaging in rhetoric stronger than that of the U.S., Germany or France.

“With their very heated rhetoric and no action we’re becoming a paper tiger in this process,” he said. “I really don’t like Canada to be seen as a paper tiger who is roaring without having any tools to implement its outrage.”

But the experts agreed that the government’s words have little to do with foreign policy.

“Harper and Baird, I think, are both principled democrats and have a principled commitment to liberal democracies such as Israel and a principled opposition to autocratic governments,” Hansen said. “But this is really about domestic politics. So they’re making a play to the Ukrainian community in Canada.

Was Putin right?

Has the west accepted both the fall of Crimea and also the loss of Ukraine?

Although we have recently heard many fearsome statements from President Obama and the E.U. leaders, the actual sanctions (issued two and half weeks after the beginning of Crimea adventure) leave much to be desired. The “unprecedented measures” against Russia turned out to be relatively feeble prohibitions against several random and not very influential Russian officials—definitely not the primary decision-makers in the Crimea’s story. The real heroes of the occasion stayed (even symbolically) unpunished. Moreover, not only has Russia’s maintained its G8 membership, but, recently, G8 representatives have been distancing themselves from earlier statements regarding suspension of Russia’s membership. Loud talk and a small stick, indeed.

Moreover, the “acceptance” of Putin’s actions among the Western community appears to be on the rise. A Bloomberg View editorial, for example, announced that “the U.S. and EU aren’t going to fight to defend what remains of Ukraine. They aren’t bound by treaty to do so, and their interests (not to mention their electorates) argue against it.” (In fact, the U.S. has at least moral obligations to defend Ukraine under 1994 Budapest Memorandum.) Analyst John Walcott went as far as to suggest that “there is no question anymore, Ukraine (not Crimea, but Ukraine overall) is gone” on Bloomberg News this past weekend. Even the Baltics states that are often viewed as the fiercest opponents of Russia’s policies in Ukraine have shown some restraint. Yesterday, the Latvian minister of finance asked the E.U. to provide compensation to the European Union countries that will suffer economically from sanctioning Russia.

Altogether, this means that Putin is reading the situation correctly: The monopoly on violence rules the international order. There is simply no one to stop Putin from taking what he wants.

Is Losing Crimea a Loss?

Could losing Crimea be a win for the Ukraine?

Ukraine’s initial losses are obvious: defeat in a land war, surrender of territories and populations, and the sacrifice to violence of thousands — perhaps tens of thousands — of Ukrainians. Once the war is over, however, Ukraine would emerge more compact, more homogeneous, and more unified in purpose: Along with its eastern territories would go much of the electorate that routinely votes for the Communist Party and for former President Viktor Yanukovych’s Party of Regions. As a result, anti­-Ukrainian and anti-Western sentiments would decline. The new Ukraine’s government could confidently proceed with a radical political and economic reform program (a more solidary population would be more likely to accept the belt-tightening that reform entails) and pursue rapid integration into European and international structures. Unburdened of some of its most unprofitable rust-belt industrial sectors, Ukraine’s economy would be more open to foreign direct investment and could be poised for takeoff. Without Crimea and its southeastern provinces, Ukraine would be smaller, but it would survive and, in all likelihood, be much stronger.

 

Why Hawks Win

Why are hawks so influential? The answer may lie deep in the human mind. People have dozens of decision-making biases, and almost all favor conflict rather than concession. A look at why the tough guys win more than they should.

Social and cognitive psychologists have identified a number of predictable errors (psychologists call them biases) in the ways that humans judge situations and evaluate risks. Biases have been documented both in the laboratory and in the real world, mostly in situations that have no connection to international politics. For example, people are prone to exaggerating their strengths: About 80 percent of us believe that our driving skills are better than average. In situations of potential conflict, the same optimistic bias makes politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes of war. Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster. And this is not an isolated example.

In fact, when we constructed a list of the biases uncovered in 40 years of psychological research, we were startled by what we found: All the biases in our list favor hawks. These psychological impulses — only a few of which we discuss here — incline national leaders to exaggerate the evil intentions of adversaries, to misjudge how adversaries perceive them, to be overly sanguine when hostilities start, and overly reluctant to make necessary concessions in negotiations. In short, these biases have the effect of making wars more likely to begin and more difficult to end.

None of this means that hawks are always wrong. One need only recall the debates between British hawks and doves before World War II to remember that doves can easily find themselves on the wrong side of history. More generally, there are some strong arguments for deliberately instituting a hawkish bias. It is perfectly reasonable, for example, to demand far more than a 50-50 chance of being right before we accept the promises of a dangerous adversary. The biases that we have examined, however, operate over and beyond such rules of prudence and are not the product of thoughtful consideration. Our conclusion is not that hawkish advisors are necessarily wrong, only that they are likely to be more persuasive than they deserve to be.

Egypt hires American PR firm to improve its image, then arrests its film crew within hours of setting foot in Cairo

From the Washington Post

How do you maintain the image of a friendly, fatherly military stewarding the country toward democracy, one in which the generalissimo looks increasingly likely to run for president himself, while simultaneously continuing to tighten power on the streets and crack down on political opposition? How do you thread that needle?

It turns out to be really difficult, maybe too difficult. That contradiction, and ongoing inability of the military-dominated government to fully overcome it, was captured perfectly in an anecdote reported by Egypt-based journalist Max Rodenbeck. A long-time correspondent for the Economist who also wrote a wonderful book on the history of Cairo, Rodenbeck wrote recently on the government’s simultaneous efforts to cultivate popular support (backed by funding from Gulf states such as Saudi Arabia) and to crack down on dissent. Those two missions collided, and spectacularly:

Significant sums of that generous Gulf aid have gone towards addressing this perceived image problem. Among several Washington public relations firms recently hired, one sent a film crew to Egypt to shoot some pretty footage of order and progress. Within hours of setting foot on the streets of Cairo, they were arrested.

There’s a certain dark comedy to the government cracking down on the very people it had hired to promote its image. But there’s a tragic element as well. In a way, isn’t every arrest of a journalist or intimidation of an opposition activist similarly self-defeating, if not as glaringly so? That was supposed to be one of the principal lessons of the February 2011 revolution that started all this. It was supposed to be a lesson of Morsi’s power-grabs and the fall from power it helped to enable. But it’s a cycle Egypt seems to keep returning to.

Of all the powers that have attempted to rule Egypt since Hosni Mubarak’s fall, and including Mubarak himself, none has succeeded in fully convincing the country of its benevolence, but neither has it been able to impose its will. But they’ve all tried to do both, and poorly.

A Game of Shark and Minnow

Amazing piece of photojournalism from the New York Times about the standoff between the Philippines and China over the Spratly Islands.  It’s worth reading as it is very probable that this could be the trigger of the world’s next major armed conflict.

Documentary: A History of Syria

Syria’s 99 Percent: The Problem With Focusing on Chemical Weapons

So is it okay to slaughter people with conventional weapons?

John Kerry’s off-the-cuff remarks about Assad handing over his chemical weapons have triggered a potential resolution to the Syrian crisis. Kerry’s gaffe-from-the-gods led to furious diplomatic maneuvering that averted an immediate U.S. air strike against Syria.

There’s no question that Obama escaped a seemingly impossible situation. If Congress had rejected the use of force, what was Obama going to do? Press ahead with air strikes amidst congressional howls? Or back down meekly and suffer a diminished presidency?

The deal offers a face-saving way to claim some success. Assad hands over his chemical weapons stockpiles. The taboo against using chemical weapons is upheld.

Americans also avoided a dangerous military adventure. U.S. missile strikes would be big enough to embroil the United States in the Syrian civil war but too small to really make a difference on the battlefield–unless, of course, the U.S. campaign escalated into something much grander.

But Syrians, on the other hand, remain very much in the line of fire.

Removing chemical weapons from the Syrian battlefield will probably make little difference. The real weapons of mass destruction in Syria are conventional arms like artillery, guns, and mortars. Conventional weapons have killed 100,000 Syrians. Chemical weapons have killed 1,000.

Guns and bombs are no less barbaric than gas. High explosives even contain plenty of chemicals–it’s just these chemicals cause explosions that kill through laceration and trauma rather than through asphyxiation.

Even if Assad dutifully hands over his chemical weapons, it still leaves shelling, gunfire, and torture on the menu. Indeed, Assad’s willingness to give up his chemical stockpiles suggests they’re hardly essential to the regime’s strategic plans.

It’s like telling Al Capone he can’t murder people with a baseball bat–disappointing perhaps, but he does have other options.

Enforcing the chemical weapons taboo could have the perverse effect of encouraging brutality against Syrian civilians–so long as it happens in a conventional way. The more we fixate on chemical weapons as “bad” warfare, the more we make conventional weapons seem like “good” warfare.

After all, we enforce rules by punishing violators and by not punishing those who stay on the right side of the law. If Assad goes back to killing his people in the socially approved manner, it becomes tougher for the United States to act. How can you rally domestic and international support for intervention if Assad plays by our rules?

We’re too preoccupied by the means of killing rather than by the total number of civilian deaths and the overall strategic situation. Any decision to use sanctions or force should focus on Syria’s 99 percent: the vast majority of victims who were killed by conventional means.

How the U.S. lost Yemen

The United States used the Pakistan playbook on Yemen’s terrorists. It didn’t work.

Why? Why, if the U.S. counterterrorism approach is working in Yemen, as Barack Obama’s administration claims, is AQAP still growing? Why, after nearly four years of bombing raids, is the group capable of putting together the type of plot that leads to the United States shuttering embassies and missions from North Africa to the Persian Gulf?

The answer is simple, if rather disheartening: Faulty assumptions and a mistaken focus paired with a resilient, adaptive enemy have created a serious problem for the United States.

Part of the U.S. approach to fighting AQAP is based on what worked for the United States in Afghanistan and Pakistan, where drone strikes have decimated what is often called al Qaeda’s core (though as al Qaeda’s strength moves back toward the Arab world, analysts will need to start rethinking old categories). Unfortunately, not all lessons are transportable. This means that the United States is fighting the al Qaeda that was, instead of the al Qaeda that is.

In Afghanistan and Pakistan, al Qaeda was largely a group of Arabs in non-Arab countries. In Yemen, al Qaeda is made up mostly of Yemenis living in Yemen.

This has two key implications for the United States. First, new recruits no longer need to travel abroad to receive specialized training. For years, men like Nasir al-Wuhayshi, the head of AQAP and the man believed by U.S. officials to be recently promoted to al Qaeda’s global deputy, had to spend time in training camps in Afghanistan to acquire the requisite experience. But since AQAP has developed its own network in Yemen, that is no longer the case. Now young Yemenis who want to join al Qaeda can study with Ibrahim al-Asiri, the group’s top bomb-maker, without ever leaving home.

The United States has had some recent experience fighting a similar foe: al Qaeda in Iraq. But that was with the full weight of the U.S. armed forces. One of the many reasons that the Obama administration has settled on a drone-heavy approach to Yemen is the realization that sending large numbers of U.S. troops into Yemen would be a mistake of catastrophic proportions. For the past few years, AQAP has been making an argument that just like Iraq and Afghanistan, Yemen is also under Western attack, which requires a defensive jihad from every Yemeni. AQAP has not been particularly successful making that argument, but if the United States were to send ground troops to Yemen, that would change. And AQAP would move from a few thousand fighters to many times that number.

The second drawback to assuming that what worked in one place would automatically work in another is what Yemenis call thar, or revenge — a concept the United States appears to have overlooked in Yemen. The men that the United States is killing in Yemen are tied to the local society in a way that many of the fighters in Afghanistan never were. They may be al Qaeda members, but they are also fathers and sons, brothers and cousins, tribesmen and clansmen with friends and relatives.

The United States can target and kill someone as a terrorist, only to have Yemenis take up arms to defend him as a tribesman. In time, many of these men are drawn to al Qaeda not out of any shared sense of ideology, but rather out of a desire to get revenge on the country that killed their fellow tribesman.

How soon the U.S. forgets the lesson of General Petraeus.

The Obama administration’s counterterrorism approach in Yemen is primarily concerned with preventing an immediate attack directed at America or its interests in the Middle East. This is a short-term goal that eclipses everything else, from long-term strategy to the stability of Yemen itself. The United States has yet to realize that this is not a war it can win on its own. Only the tribesmen and clerics in Yemen are in a position to decisively disrupt, dismantle, and defeat al Qaeda.

The United States can do a lot of good in Yemen, but it can also do a lot of harm. And right now it is playing a dangerous game, firing missiles at targets in the hopes that it can kill enough men to keep AQAP from plotting, planning, and launching an attack from Yemen. After this terrorism alert that has sent America’s entire diplomatic and intelligence operatives in nearly two dozen countries scrambling, it may be time to rethink that approach in favor of a strategy that’s more sustainable — and more sensible too.

The Inside Story of Russia’s Fight to Keep the U.N. Corrupt

How Russia consistently undermines the U.N. in order to keep a multi-billion dollar monopoly on the sales of helicopters and airplanes.

Russia’s zeal for turning back reform has been felt most powerfully in the U.N.’s leasing of aircraft — a $1 billion a year market — that provide transport for the world’s second-largest expeditionary force. An examination of U.N. procurement practices in the air-transport sector — drawing on dozens of interviews with U.N.-based officials and diplomats, as well as a review of internal U.N. communications and audits — suggests that Russia has enjoyed unfair advantages, including contracts that all but demand that the United Nations lease Russia’s Soviet-era aircraft.

The dispute provides a textbook example of the difficulties of implementing basic financial reforms at the United Nations when major powers have conflicting commercial interests in the outcome. As such, the secretary general and key countries have been unwilling to openly confront Russia because its cooperation is required on a wide range of critical issues at the United Nations.

Some interesting soccer related geo-politics today

Some big news out of UEFA today with Gibraltar being accepted as a member.  Deadspin has it’s take.

Soccer under the shadow of the Rock goes back a long way—the Gibraltar Football Association was established in 1895, with a national team forming in 1901 and league play beginning in 1907. This photo shows hundreds of British sailors attending a match in April 1934.

But, still bitter about that whole War of the Spanish Succession thing, Spain has always claimed sovereignty over Gibraltar, and in recent years has stepped up its push for the return of the territory. As part of the politicking, one of the most powerful soccer nations has threatened to boycott international tournaments if little Gibraltar were recognized. The last time UEFA voted on this, in 2007, Spain threatened to pull out of the European Championships, and bar its clubs from the Champions League. Only England, Wales, and Scotland voted for Gibraltar that election.

Who knows what backstage bargaining was done to ensure Gibraltar’s approval this time around, but a 2011 ruling in the Court of Arbitration for Sport had a lot to do with it. UEFA head Michel Platini announced that future Euro draws will be set up so Spain and Gibraltar are placed in opposite brackets. This will only be a problem if both make the finals. This will not be a problem.

Michael Chandler has his take on the political risk to Spain from this move.

With an area of only 2.6 square miles and a population of 30,000, Gibraltar will hardly be a threat to continental powers like Germany and Spain, though the latter’s objections to the move are not so much in fear of Gibraltar, but of other parts of Spain fighting for their own sovereignty. The Spanish FA has publicly shown dissent towards this decision, worrying that this opens the door for Basque and Catalan regions to claim their own independence in footballing terms, something they have both made efforts to do on a political level.

FC Barcelona, who in recent years has cemented their place as a perennial footballing power, is located in the heart of Catalonia, a region where many claim their right to independence from Spain. If Catalonia were to one day be granted the same rights as Gibraltar, players the likes of Cesc Fabregas, Xavi Hernandez and Jordi Alba, mainstays of the European and World Cup champion side, would be eligible to play for a Catalan National side. What’s more, they already have a Catalan National Football team that have played in exhibitions à la Washington Generals. They even once had Dutch legend Johan Cruyff as their skipper. It’s easy to claim that players of this stature would never play for a weakened side such as Catalonia, but to understand their beliefs in the rights of an independent state, would be to understand generations of families and their desire to have their own country. The same could occur with players from a Basque autonomous side, despite the fact that the Basque people are spread out over various regions and without the same concentration as the Catalan in Catalonia.

UEFA boss Michel Platini has claimed that Gibraltar and Spain will not be pooled into the same qualifying groups for future tournaments, as with Armenia and Azerbaijan in the past. Surely, this gesture does little to quell the fears of the Spanish FA.

While the dozens of football supporters in Gibraltar should be pleased with UEFA’s decision, there’s reason to side with Spain and understand their position on the matter. Unlike the former Yugoslavia, civil wars have not forced the division of the country, fracturing a footballing power into smaller, still competitive nations the likes of Croatia, Serbia and Bosnia and Herzegovina. Despite being merely a drop in the ocean that is European football, UEFA’s move today could signal a change big enough to inspire other communities to seek the same rights.

Can Spain be saved?

Spain is done.  This is bad.

Spain is in a great depression, and it is one of the most terrifying things I have ever seen.

Five years after its housing boom turned to bust, Spanish unemployment hit a record high of 27.2 percent in the first quarter of 2013. It’s almost too horrible to comprehend, but 19.5 percent of the total workforce has not had a job in the past six months; 15.3 percent have not in the past year; and 9.2 percent have not in the past two years.

Here is why it is so bad

Spain is in a great depression, and it is one of the most terrifying things I have ever seen.

Five years after its housing boom turned to bust, Spanish unemployment hit a record high of 27.2 percent in the first quarter of 2013. It’s almost too horrible to comprehend, but 19.5 percent of the total workforce has not had a job in the past six months; 15.3 percent have not in the past year; and 9.2 percent have not in the past two years.

In other words, unemployment is a trap people fall into, but can’t fall out of. Indeed, the rate of new unemployment has stabilized at a terrible, but not quite-as-terrible, level, as you can see with the flat blue, red, and green lines. But the steadily rising purple line shows us that the rate of job-finding for the jobless has collapsed.

That is what a permanent underclass looks like.

What happened?

Why has Spain’s jobs depression been so great? After all, its GDP is “only” 4.1 percent below its 2007 level, compared to 5.8 percent below for Portugal, 7 percent below for Italy, and 20 percent below for Greece. But despite this better (negative) growth, unemployment is higher in Spain than the others. In other words, Spanish unemployment isn’t just about inadequate demand. Part of it is structural.

Spain’s labor market problems fall into two big buckets: too much regulation, and not enough education. It’s almost impossible for companies to get rid of older workers, which creates a horribly bifurcated labor market. There are permanent workers who can’t be fired, and temporary ones who can — and are. Indeed, as Clive Crook points out, about a third of Spain’s workforce are temporary workers who enjoy few protections and fewer opportunities. Companies go through these younger workers without bothering to invest much in their human capital, because why would they? These temporary workers will be let go at the first sign of economic trouble. Young people get stuck in a never-ending cycle of under-and-unemployment since firms are always hesitant to hire permanent workers who will always be on their books.

But it gets worse. The housing bust hasn’t just cast a shadow over household and bank balance sheets; it’s cast one over young people’s educations too. At its peak, building made up a whopping 19 percent of Spain’s economy, which, as Tobias Buck of the Financial Times points out, lured many young men into dropping out of school for well-paying construction gigs. But now that building has gone into hibernation, all of those young men are left with no work and no education to fall back on. And, again, even if they can find temporary jobs, it’s not as if the companies will spend money to develop their skills.