To book guests, contact Brenda Velez at 212-445-4078—Brenda.Velez@Newsweek.com—or Grace Huh at 212-445-5831—Grace.Huh@Newsweek.com. Articles are posted on www.Newsweek.com. 

INTERNATIONAL EDITIONS: HIGHLIGHTS AND EXCLUSIVES, JUNE 16, 2008

COVER: A New Kind of Recession (All overseas editions). Senior Editor Dan Gross writes that the upbeat forecasts for a quick economic turnaround in the U.S. were proven wrong when the Labor Department reported that 49,000 jobs were cut in May, the fifth straight month of job losses, which inspired a 394-point decline in the Dow Jones Industrial Average. But despite the grim news of a looming recession, there is hope that the second half of 2008 will be better. That is, if we take a different approach than in the past. “While the treatment of the current malaise has been essentially identical to the reaction to the 2001 slump…the symptoms are quite different,” Gross writes. Although some “3 million jobs were shed between 2001 and 2003, consumers soldiered on through the downturn. This time, it’s the opposite. While businesses—especially those that export—are holding up, the economy is being dragged down by the cement shoes of a freaked-out consumer and a punk housing market.”

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We Ask: When Will The Pain Go Away. As a part of the cover package, Newsweek gathered a number of business experts and asked them to assess the country’s current financial situation and offer solutions. Participants included Larry Lindsey, former governor of the Federal Reserve and former economic adviser to President George W. Bush; Robert Reich, secretary of Labor under Bill Clinton; Robert Rubin, Treasury secretary under Clinton, now chairman of the Citi executive committee; Mark Zandi, chief economist of Moody’s Economy.com; and Marissa Mayer, vice president of search products and user experience at Google. Newsweek’s Business

http://www.newsweek.com/id/140552

Why Asia Won’t Save the World. Hong Kong Bureau Chief George Wehrfritz reports that although investors hailed Vietnam as a dynamic, export-driven “China-killer,” in recent months the country’s economy has lurched off course. And a devaluation of Vietnam’s currency could trigger a contagion throughout the region similar to the 1997-98 Asian financial crisis. As Western consumers spend less, and rising oil and food prices lead to double-digit inflation throughout the region, the economic tables have turned. The burgeoning middle class that was supposed to create self-sustaining growth for Asia and help buoy the world in a global downturn looks beleaguered, and the poor are becoming desperate.

http://www.newsweek.com/id/140425

Peace Comes to Paradise. Special Correspondent Jeremy Kahn reports that lately, violence in Kashmir—where separatists have waged a 20-year insurrection against India—has dropped to the lowest levels since the modern conflict began. The relative quiet is owed to several factors, including the fact that Kashmir’s largest militant group, Hizbul-Mujahedin, is in decline. And a newly constructed fence along part of the border has helped keep fighters from slipping in from Pakistan. The waning violence has prompted a highly touted tourism revival, with an expected 850,000 visitors this year—the most since 1998, according to the state tourism secretary.

http://www.newsweek.com/id/140429

‘The Balkanization of Europe.’ Denis MacShane, a Labour M.P., writes that Europe’s recurring nightmare with the Balkans has returned. On June 15, Kosovo will announce full statehood, but NATO is allowing Serbs to turn northern Kosovo into a new law-free zone for criminal activity. “Today, Brussels, NATO and the United Nations are also turning a blind eye, lacking the will or the leadership to face down the Balkans’ problems, which include a resurgent Serb nationalism that prefers its Balkan others have now let Kosovo slip down their priority list. 

http://www.newsweek.com/id/140433

The Odd Couple. European Economics Editor Stefan Thiel reports on the bitter relationship between German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier. They belong to rival political parties, thanks to the awkward grand coalition of Christian and Social Democrats that’s been running the country since 2005, and they’ve been sniping ever since, often to the confusion of Germany’s allies. Now that Steinmeier has emerged as a leading candidate to run against Merkel for the Social Democrats in next year’s Bundestag election, the discord will only grow.

http://www.newsweek.com/id/140426

Dealing With the Devil. Senior Writer Adam B. Kushner reports on how Israel’s method of swapping prisoners with its enemies can end up hurting the rest of us. Last week, Jerusalem released a convicted Hizbullah spy in exchange for the remains of Israeli soldiers killed in Lebanon in the summer of 2006. Such trades may actually hurt Israel more than they help. Analysts say there is the strategic danger that prisoner swaps will encourage terrorists to take more prisoners, and not only in Israel. “[It] says to future terrorists that if you can get somebody valuable enough, Israelis will trade,” says Todd Sandler, a professor of economics at the University of Southern California. “They'll trade if you capture a soldier or children. And the exchange rate is very high.”

http://www.newsweek.com/id/140427

Where ‘The Land Is on Fire.’ South Asia Bureau Chief Ron Moreau reports on why many of the roughly 2,000 villagers of Damadola, in Pakistan’s northwestern tribal agency of Bajaur, near the Afghan border, have been living in fear of American Predator strikes since 2006. Pakistan’s new civilian leadership is complaining that U.S. strikes in the region—and the collateral damage they’ve caused—are making the job of pacifying the area harder. Villagers in Damadola say it’s hard to say no to men with guns, especially when many are your neighbors and relatives. It’s even tougher in Pakistan’s tribal areas, where the Pashtuns’ ancient ethical code requires that every visitor be treated hospitably.

http://www.newsweek.com/id/140462

The Race for Survival. Senior Editor Jerry Adler reports on how environmental groups are using the Endangered Species list as a tool in the war over global warming, despite resistance from the Bush administration. The effort to get the polar bear listed as either “endangered” or “threatened” thrust the Endangered Species Act into the mainstream of 21st-century environmental politics. Activists argue that if polar bears make the Endangered Species list and if global warming is threatening the polar bears’ habitat—the melting Arctic ice—then the government could be forced to crack down on greenhouse-gas emissions.

http://www.newsweek.com/id/139537

WORLD VIEW: How to Get Back to Growth. Newsweek International Editor Fareed Zakaria writes that the period of remarkable economic growth for the U.S. has ended and the policy debate now in Washington is focused on the wrong question: how to spark short-term, cyclical recovery. “The real debate should be about how to move the American economy back onto a high-growth trajectory,” he writes. “It can be done, but it would require large-scale and smart government policies across a whole range of issues.” Those include trimming entitlements substantially, reforming immigration policy, increasing spending on research, technology and infrastructure.

http://www.newsweek.com/id/140465

THE LAST WORD: William Hague, British shadow foreign secretary. Hague spoke about Labour’s decline and the ideological shift in Great Britain. “When any government has been in office for more than a decade, its mistakes start to catch up with it—with a vengeance in more difficult economic times. And the prime minister himself is associated, having been chancellor of the Exchequer. And the [Conservative] party has changed: it’s becoming more broadly based, it’s more open to women, to ethnic minorities… Maybe the emphasis that the party gives to different issues has changed—for instance, on public services, health, education, transport systems.”       

http://www.newsweek.com/id/140432

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