The global financial crisis which had been brewing for some time began to unfold in the middle of 2008. Stock markets around the world have nosedived, large financial institutions have collapsed or been bought out, and governments of even the wealthiest nations have had to come up with rescue packages to rescue their financial systems. The crisis stemmed from the collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialised economies.

Hydrocarbon rich Bay of Bengal seems to be emerging as another centre of oil politics. This was recently manifested by a standoff between Myanmar and Bangladesh, when Dhaka sent three naval vessels to stop Myanmar from conducting exploration activities in their disputed Exclusive Economic Zones (EEZs). The crisis has since been diffused, though it is far from over.

External Affairs Minister Pranab Mukherjee's recent outburst that China poses a security challenge indicates a dangerous ambiguity in India’s China policy. The fact that Mukherjee has aired such a view after his intense and long diplomatic rapport with the leadership of that country needs to be noted seriously. It is not that China has not been a puzzle to Indian strategic thinkers. Even former Defence Minister George Fernandes considered China as India’s number one enemy, but his views were transformed after he paid an official visit to Beijing.

If current developments are any indicator, the long road to economic integration on either side of the Taiwan Straits has commenced. In a first of its kind, a sixty member delegation led by Chen Yunlin, Chairman of the Association for Relations Across the Taiwan Straits (ARATS) visited Taiwan from November 3-7, 2008 to hold talks with his counterpart Chiang Pin-kung, Chairman of the Straits Exchange Foundation (SEF). ARATS and SEF are two non-governmental organisations authorised by China and Taiwan in the early 1990s to examine the entire gamut of cross-Strait relations.

President Bush will host the first ever financial summit of the G-20 on November 15, 2008 in Washington to discuss the current global financial crisis which threatens the economic and political stability through out the world. The crisis comes on the heels of an economic crisis in the global economy in the first half of 2008 which was characterised by a record level of oil prices, global food shortages, high inflation and rising inflation in most countries.