Martti Ahtisaari, Emma Bonino and Albert Rohan write:  Later this year, Turkey will host the 2015 G-20 Leaders’ Summit, the tenth annual meeting of the G-20 heads of government. The country’s prominence on the world stage comes at an odd time, when it finds itself surrounded by a widening arc of instability.

Indeed, two geopolitical orders are unraveling in Turkey’s immediate neighborhood: the post-Cold War entente with Russia, and the national borders in the Middle East defined by the 1916 Sykes-Picot Agreement and 1919 Treaty of Versailles. Never have the European Union and Turkey needed one another more, and yet rarely have they been so distant.

Turkey is no longer the rising regional star that it was during the first half of President Recep Tayyip Erdoğan’s 12 years in office. Long gone are the days when the country was booming economically and advancing toward true democracy, a source of inspiration to many in the region.

Turkey cannot confront its challenges alone. The EU accounts for almost 40% of Turkish trade, 70% of its foreign direct investment, and more than 50% of its tourism industry. Meanwhile, the country’s economic ties with its southern neighbors have spiraled downward since the Arab Spring in 2011.

This reality is reflected in Turkish public opinion, with support for the EU rising from a low of 34% in 2009 to 53% last year. Simply put, Turkey is waking up to the reality that it has no attractive alternative to the EU and close cooperation with the transatlantic community. The country’s “EU Strategy” announced by European Affairs Minister Volkan Bozkir last fall can be read as an implicit recognition of this fact.

Meanwhile, Europe has never had a greater interest in a stable, democratic, and Western-oriented Turkey.

And yet, rather than being drawn closer together, the EU and Turkey are drifting apart. Freedom of expression, the separation of powers, and the rule of law have been progressively eroded under Erdoğan. The country risks being sucked into the region’s sectarian conflicts – and being tempted by the authoritarian sirens of Vladimir Putin’s Russia.

The EU-Turkey relationship hit a new low at the close of last year, when Turkey increased its pressure on media close to the self-exiled Islamic leader Fethullah Gülen. The clampdown triggered strong criticism by the EU, which Erdoğan, in turn, angrily rejected.

Some in Europe argue that the deterioration of rights and freedoms in Turkey is so serious that the already-moribund EU accession process should be suspended. Indeed, it would be difficult to make the case that Turkey fulfills the Copenhagen political criteria. For example, Turkey slid in Reporters Without Borders’ World Press Freedom Index to 154th place (out of 180 countries).

But it is unlikely that a formal suspension of accession negotiations would do anything other than remove the last incentive for Turkey to pursue democratization and EU harmonization. Instead, the EU should redouble its efforts, strengthening both its criticism of Turkey’s democratic backsliding and the credibility of its accession process.

Until now, Cyprus has posed the biggest obstacle to Turkish accession. EU member states should engage more actively with the Cypriot government to bring about the necessary change.

Lifting its blockade on negotiations would benefit Cyprus as much as Europe. No country would gain more than Cyprus from stable democracy in Turkey.

Beyond the EU accession process, other important measures should be taken to rebuild trust and deliver concrete benefits to both sides, thereby revitalizing an ailing and yet increasingly strategic relationship. Such steps should include upgrading and modernizing the customs union agreement (as the World Bank recently advocated) and vigorously pursuing visa liberalization.

Though these measures are not alternatives to a revamped accession process, they would help to revive it. Above all, by embedding Turkey within the European family, such measures would counter the country’s dangerous drift away from our common European values.

Wolfgang Ischinger, Chairman of the Munich Security Conference; Hans van den Broek, a former Dutch foreign minister and EU commissioner for external relations; Marcelino Oreja Aguirre, a former Spanish foreign minister; Michel Rocard, former French Prime Minister; and Nathalie Tocci, Deputy Director of the Istituto Affari Internazionali in Rome.

Dani Rodrik writes: So-called “frontier market economies” are the latest fad in investment circles. Though these low-income countries – including Bangladesh and Vietnam in Asia, Honduras and Bolivia in Latin America, and Kenya and Ghana in Africa – have small, undeveloped financial markets, they are growing rapidly and are expected to become the emerging economies of the future. In the last four years, inflows of private capital into frontier economies have been nearly 50% higher (relative to GDP) than flows into emerging market economies. Whether that should be cheered or lamented is a question that has become a kind of Rorschach test for economic analysts and policymakers.

We now know that the promise of free capital mobility has not been redeemed. By and large, the surge in capital inflows has boosted consumption rather than investment in recipient countries, exacerbating economic volatility and making painful financial crises more frequent. Rather than exerting discipline, global financial markets have increased the availability of debt, thereby weakening profligate governments’ budget constraints and over-extended banks’ balance sheets.

The best argument for free capital mobility remains the one made nearly two decades ago by Stanley Fischer, then the International Monetary Fund’s number two official and now Vice Chair of the US Federal Reserve. He argued that the solution was not to maintain capital controls, but to undertake the reforms required to mitigate the dangers.

Fischer made this argument at a time when the IMF was actively seeking to enshrine capital-account liberalization in its charter. But then the world witnessed financial crises in Asia, Brazil, Argentina, Russia, Turkey, and eventually Europe and America. To its credit, the Fund has since softened its line on capital controls. In 2010, it issued a note that recognized capital controls as part of the arsenal of policy tools used to combat financial instability.

Yet free capital mobility continues to be the ultimate goal, even if some countries may have to take their time getting there.

There are two problems with this view. First, as advocates of capital mobility tirelessly point out, countries must fulfill a long list of prerequisites before they can benefit from financial globalization. These include the protection of property rights, effective contract enforcement, eradication of corruption, enhanced transparency and financial information, sound corporate governance, monetary and fiscal stability, debt sustainability, market-determined exchange rates, high-quality financial regulation, and prudential supervision. The list is not only long; it is also open ended.

The second problem concerns the possibility that capital inflows may be harmful to growth, even if we leave aside concerns about financial fragility.

But many developing countries are constrained by a lack of investment demand, not a shortage of domestic saving. The social return on investment may be high, but private returns are low, owing to externalities, high taxes, poor institutions, or any of a wide array of other factors.

Capital inflows in economies that suffer from low investment demand fuel consumption, not capital accumulation. They also fuel exchange-rate appreciation, which aggravates the investment shortage.

Such concerns have led emerging economies to experiment with a variety of capital controls. In principle, frontier market economies can learn much from this experience.

That is not because they fail to affect the quantity or composition of flows, but because such effects are quite small.

Capital controls by themselves are no panacea, and they often create worse problems, such as corruption or a delay in needed reforms,  Treating capital controls as the last resort, always and everywhere, has little rationale; indeed, it merely fetishizes financial globalization. The world needs case-by-case, hardheaded pragmatism, recognizing that capital controls sometimes deserve a prominent place.

Katie Benner comments on the Kleiner trial and women in high tech.  The common thread that runs through the stories of both Vassallo and Ferraioli is that they were encouraged — implicitly or explicitly — to stay quiet about the way they’d been treated. Complaints were thought to be bad for “the team.”

If being on the team means giving up basic respect and safety, no wonder so few women want to make the bargain.

Silicon Valley isn’t purely bad. Ferraioli, who’s now at Google, says she’s found an engineering job she loves, with people who respect her. Vassallo, who was described by her Kleiner colleagues as a world-class investor, still serves on boards and acts as an independent adviser.

Unfortunately, most tech companies are way more comfortable attacking the pipeline problem, donating money to educational programs that draw women into the kind of math and science classes that feed into technology jobs. Apple just donated $50 million to this effort. Kleiner partner John Doerr often says something must be done to bring more women into his profession.

But if these companies want women in their ranks, they need to do more for the women they’ve already hired. They need to create a workplace where women want to be.  Kleiner Trial and Women in High Tech

Globally, approximately 22 percent of elected parliamentary seats go to women but in Rwanda, that figure is an impressive 64 percent. In the wake of the Rwandan genocide, 70 percent of the country’s surviving population was female, and this along with a quota requiring 30 percent of political candidates to be female, helped bring about massive change.

How does Rwanda compare to other countries across the world? Andorra, perched high in the Pyrenees between France and Spain, comes second with a 50-50 gender split in its parliament. Cuba rounds off the top three with just under 49 percent. What about the United States? It’s all the way down in 72nd position – only 20 percent of government seats in the United States are held by women.

Daniel Gros writes:  In today’s global economy, there is no price as important as that of crude oil. More than 80 million barrels are produced (and consumed) daily, and a large part of that output is traded internationally. Thus, the sharp fall in the crude-oil price – from about $110 last year to around $60 today – is yielding hundreds of billions of dollars in savings for oil importers. For the European Union and the United States, the gain from that decline is worth about 2-3% of GDP.

For Europe, the benefits of cheap oil might grow over time, because long-term gas-supply contracts are to a significant degree indexed to the oil price. This represents another advantage for Europe, where prices for natural gas were, until recently, several times higher than in the US, which had been benefiting from lower-cost shale energy.

But many observers have argued that cheap oil also has a downside, because it exacerbates deflationary tendencies in the advanced countries, which already seem to be mired in a low-growth trap. The sharp fall in oil prices, according to this view, will make it even harder for these countries’ central banks to achieve the 2% annual inflation rate that most have targeted in fulfilling their price-stability mandate.

The eurozone, in particular, seems to be in danger, as prices are now falling for the first time since 2009. This deflation is bad, it is argued, because it makes it harder for debtors, especially in the troubled economies of the eurozone’s periphery (Greece, Ireland, Italy, Portugal, and Spain), to pay what they owe.

However,  what matters for debt-service capacity is the debtors’ income, not the general price level. As oil prices fall, households’ real (inflation-adjusted) income should rise, because they do not have to spend as much on fuel and heating. Lower oil prices make life easier, not harder, for highly indebted households in the US or the eurozone periphery. Falling consumer prices should thus be viewed as a good sign.

Most manufacturing enterprises will also benefit from lower energy costs, improving their ability to service their debts. This, too, is particularly relevant in the eurozone periphery. Lower prices make it more difficult to judge the point at which wage pressure becomes inflationary.  Government revenues depend on the value of domestic output, not only consumption. Though lower oil prices depress consumer prices, they should boost production and overall GDP.

This year, because consumer prices are falling, the GDP deflator (and nominal GDP) is still increasing, government revenues should be solid. ,

The fall in (consumer) prices that the eurozone currently is experiencing should thus be seen as a positive development for all energy importers. The eurozone periphery, in particular, can look forward to an ideal combination of low interest rates, a favorable euro exchange rate, and a boost in real incomes as a result of cheap oil. In a deflationary environment, lower oil prices appear to make it more difficult for the European Central Bank to achieve its target of an inflation rate close to 2%. In reality, lower oil prices represent a boon for Europe – especially for its most beleaguered nations.