April 9, 2012
By Tanvir Ahmad Khan

Writing for this newspaper, Jyoti Malhotra assessed the recently-concluded fourth summit of the BRICS nations—Brazil, Russia, India, China and South Africa — in New Delhi in remarkably careful terms, close to the ‘middle-of-the-road opinion’. Notably, she also attributed concerns about BRICS — a grouping from different continents with different histories — to the western disquiet with an India-China association. Malhotra is right inasmuch as none of the BRICS leaders will let it break out into an open revolt against the order defended by the US. On further thinking, there is, however, some substance also in the more radical claims made for BRICS; the western anxiety may also not be primarily related to Indo-Chinese economic relations.

India is, in fact, securely anchored in the American plan to limit China’s influence and power projection in the Pacific and South Asian region. Washington is, however, uncertain about India’s role on the global economic scene, where India and China may continue to work together even as they are considered rivals in the Asian context. The West always has more reasons to worry about the broader international canvas when such unlikely groupings of economically vibrant nations as BRICS threaten its monopolistic right to define the world order exclusively.

If the post-1989 world order was a different kind of global Empire, the triumph of which was briefly celebrated by Francis Fukuyama as the end of history, the subsequent history that obviously had not ended is a record of blatant use of force, frequent threat of use of force, overt and covert actions to bring about regime changes and new doctrines of power projection, such as the promised pre-eminence of the US Pacific Command. This is only the militaristic aspect; the Empire has also been active diplomatically to promote Nato’s global influence and allied structures of international relations; the most recent examples of the latter being the initiative to link Asian states on China’s vast rim, into economic collaboration relatively free of dependence on Beijing, and the proposal of the New Silk Route in Central and South Asia. Just as the ‘Empire’ has developed strategies to prevent dispersal of political and economic power, many other nations, notably Russia and China, have launched moves to accelerate the shift to a multipolar world.

The raison d’être of BRICS has been strengthened by the 2007-08 financial crisis and the subsequent US effort to lead an essentially western effort to overcome it. BRICS nations would probably be more concerned by the West’s unilateralist actions than many other states because they have greater leverage. An illustration is the threat posed by masses of money released by western bail-out and rehabilitation plans to the trading advantage of the emerging economies. There is now a low-simmering discussion about reducing dependence on the dollar. BRICS is talking about local currency payments and even a new development bank. Consider the facts: BRICS nations occupy 26 per cent of the world’s land mass; over 40 per cent of its population; 40 per cent of global GDP, and an intra-BRICS trade of $250 billion. Optimists in the West say that all this need not translate into strategic power but deep down they fear that it may.

Consider the following from the declaration of the fourth BRICS summit and ponder if the dynamic to seek strategic clout has not already been established: “We believe that it is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs. We draw attention to the risks of large and volatile cross-border capital flows being faced by the emerging economies”. The declaration also confirmed that the summit “considered the possibility of setting up a new development bank for mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development.”

Since Pervez Musharraf’s rise to power, Pakistan’s diplomacy has shrunk in outlook and performance; the political government that followed him has been prevented by its very genesis, from thinking boldly, especially where Washington is involved. India, on the other hand, established special strategic relations with the US and, kept its participation in other important groupings at a robust level. BRICS may well attain a strategic salience and the pillar erected by it may not be hollow.

The Express Tribune,

April 18, 2012
Charles Grant

Many problems cannot be solved without international cooperation, yet “multilateralism” – the system of international institutions and rules intended to promote the common good – appears to be weakening. The G-20 has become a talk shop; the Doha round of trade liberalisation is moribund; the UN climate change talks have achieved very little. We seem to be moving toward a world of balance-of-power politics, competing alliances and unilateral actions.

One reason for these trends is that Europe, always the biggest supporter of international institutions, is economically, diplomatically and militarily weak; another is that the United States has over the past 20 years become relatively weaker and more prone to unilateralism.

A third reason is that the emerging and re-emerging powers – Russia and China in particular – tend to be cynical about international institutions: They see them as Western creations that promote Western interests, though they use them when it suits their purposes.

Both implacably opposed to American hegemony, Russia and China are willing to deploy their vetoes on the Security Council to thwart US objectives. Their strong attachment to state sovereignty makes them allergic to humanitarian intervention, as they made clear when vetoing Security Council resolutions that would have criticized the Syrian regime for killing protesters.

Russia and China both think that power matters more than rules in international relations. They like “concert diplomacy” – informal gatherings that give great powers status, such as the six-party talks dealing with both the Iranian and North Korean nuclear problems. They are more wary of rules-based institutions, which may allow small countries to block the wishes of big ones.

But the two countries do not always think alike on global governance.

Russia takes security institutions and proliferation regimes seriously. Unlike China, it has ratified the Comprehensive Test Ban Treaty and joined both the Missile Technology Control Regime and the Proliferation Security Initiative (a club that tries to stop illicit transfers of weapons of mass destruction).

China has never signed any arms control treaty that limits conventional or nuclear weapons. China is also slacker than Russia at enforcing proliferation regimes: Its companies sell dual-use equipment to Iran, North Korea and Pakistan, as well as nuclear reactors to Pakistan.

But the picture is very different on economic governance. Here, Russia has been slow to sign up to rules: It is now joining the World Trade Organisation after 18 years of negotiations. It stands on the sidelines of UN climate change talks despite being the world’s fourth-biggest emitter of carbon. It is passive in forums on financial regulation.

China, by contrast, is actively engaged in the International Monetary Fund and the World Bank. It accepts rulings against it by WTO dispute-settlement panels. And though China has been reluctant to accept binding limits on carbon emissions, its views are evolving: Last December, in Durban, it agreed that by 2020 there should be a carbon emissions regime “with legal force.”

Economics and history explain these differences. As the world’s biggest exporter of manufactured goods, China needs global rules on trade. Knowing that its renminbi will eventually become a world currency, China takes a keen interest in international financial rules. Russia exports mainly oil and gas, for which there is no global regime.

In the field of security, China is a rising power, increasingly confident of its newfound strength, so it is unwilling to be shackled by international rules on armaments. Russia, though in some respects a declining power, retains a huge nuclear arsenal. It sees arms control treaties as a means of protecting its status. In the long term, will Russia and China do more to strengthen or to undermine the multilateral system? That will depend, in part, on how successfully the two countries rebalance their economies.

Russia must build up manufacturing and service industries, depend less on oil and gas exports, and create a business environment that encourages foreign investment. China needs to boost consumption and curb investment. It should create a credit system that benefits individuals, small enterprises and the private sector, rather than just state-owned enterprises. Powerful vested interests in both oppose reform: in Russia, some of the leadership clans and natural resource companies; in China, some sections of the Communist Party and the state-owned enterprises. Rebalancing would curb the power and incomes of elites in both countries.

If the rulers in Moscow and Beijing succeed in transforming their economies, laying the basis for sustained growth, they will become more confident in engaging with international institutions and other powers. But if these countries fail to make a smooth adjustment and suffer from slower growth and the consequent social unrest, their regimes will be prone to insecurity, nationalist sentiment and paranoia toward the West.

Global governance would certainly suffer. So Russia’s and China’s attempts to reform matter hugely for the international system.

Charles Grant is director of the Center for European Reform and the author of the CER report ‘Russia, China and global governance’

©International Herald Tribune

April 20, 2012
By Dr Pervez Tahir

Which country comes to mind with key words like reconciliation, a president accused of corruption, bad governance, high crime rate, rising poverty, massive unemployment, widening rich-poor gap and falling GDP growth? Wait, before you jump to conclude that it cannot be but the land of the pure, I have been in South Africa for over a week; from the beautiful Cape Town to the sprawling Johannesburg and now, in humid Durban, and these conditions are what I see, read about and listen to.

Together, these three cities contain about half of the country’s 50 million inhabitants. The population is small relative to the size and rich resource endowment, which includes vast tracts of fertile land and precious and strategic minerals. Beautiful beaches and thousands of hectares of game areas make South Africa one of the top tourist destinations. In 2010, its entry added the ‘S’ in the BRICS arrangement comprising large, fast-growing economies. It has the third largest GDP per capita (though it is only above India in terms of the Human Development Index).

After the end of apartheid, the South African economy experienced a good spell of growth but nowhere near the figures achieved by the other BRICS countries. The highest ever that the growth reached was 7.6 per cent in just one quarter of 1994. The recovery was largely due to the termination of global sanctions against the apartheid regime which had led to negative growth for three years in a row in 1990, 1991 and 1992.

The services sector dominates and deindustrialisation is much evident. A thriving textile industry, for example, has been competed away by the Chinese. Apartheid has ended but the dualism of a very modern formal sector and a very backward informal sector persists.

Race no longer divides the country. But with rapid upward mobility depicted by the black political leaders, extracting rents in a situation where the state, government and party have become indistinguishable, the society is defined more and more by class. Black townships such as Soweto are changing, but at a snail’s pace. The government’s housing programme aims to move people out of the pre-apartheid ‘shoe’ houses to what common wisdom dubs ‘elephant’ houses, but the requirement is much higher than the resources that the government can spare.

Poor housing, combined with an unemployment rate variously described as 20-25 per cent, fuels crime. The state cares for children and the old, but the working-age population has no social protection. Black job applicants complain of informal discrimination by the white employers, who still control the commanding heights of the economy. The coloured complain of discrimination at the hands of blacks and are, therefore, forced to play second fiddle to white politics. The whites seem to be the happiest lot. Their part of the economy has thrived in the post-apartheid world; reconciliation was a small price to keep their wealth intact.

What of the future? Despite their frustrations, one did not come across a single black citizen who had lost hope. Nor did any interaction with the coloured end in despair. Slowly but steadily, democracy in South Africa will lead to the fullest realisation of the potential of its people and resources. It will continue to be the Cape of Good Hope and not the Cape of Storms as proclaimed by the first European explorer who reached it.

-The Express Tribune

April 20, 2012
By Marwan Kabalan

Turkish-Iran relations have turned sour in recent months. The clearest sign came during a visit by Turkish Prime Minister Recep Tayyip Erdogan to Tehran early this month. Erdogan had reportedly received ill-treatment from his Iranian hosts. President Mahmoud Ahmadinejad postponed a scheduled meeting with Erdogan allegedly for health problems. Ahmadinejad, however, received on the same day Syrian Deputy Foreign Minister Faisal Mikdad who carried a message from the Syrian leadership. Erdogan had also to fly to Qom to meet with Iran’s Supreme leader Ayatollah Ali Khamenei. The meeting went bad when the two leaders exchanged accusations over which side is right concerning the Syrian uprising. Upon his return to Ankara, Erdogan announced that his country has decided to join the West in imposing sanctions on Iran and has subsequently cut 20 per cent of its purchases of Iranian oil.

The signs of strained Turkish-Iranian relations were already manifest in September 2011 when Ankara agreed to install new Nato radar systems to detect missiles launched from Iran. Iran strongly criticised the move and considered it to be a hostile act. In response, it tried to sideline Turkey in its talks with the six great powers concerning its nuclear programme. Tehran proposed Baghdad instead of Istanbul to host the last week (P5+1) meeting. Although the meeting had eventually taken place in Istanbul, it did not change much in the hostile language between the two countries.

Just over a year ago, the US was expressing anger and frustration at the Turkish-Iranian rapprochement and Turkey’s reluctance to join the West in isolating Iran. Iranian officials had repeatedly praised Turkey’s foreign policy stances, describing it on several occasions as a sister country. Turkey had even tried to hamper US attempts in the UN Security Council to impose tougher sanctions against Iran. To this end, it led a joint effort with Brazil in the summer of 2010 to defuse a crisis between Tehran and Washington over the former’s intentions to increase the percentage of uranium enrichment from 5 to 20 per cent.

Turkish-Brazilian efforts resulted in the Tehran declaration in which Iran agreed to freeze local enrichment in exchange for equally enriched uranium to be supplied by France and Russia. The US had initially encouraged Turkey to go ahead with its efforts, hoping that Iran would not agree. When Iran responded positively to Turkish mediation, Washington backed off. It resorted instead to the UN Security Council to impose further sanctions on Iran. Angered by what it considered as a slap on the face by the US, Ankara, which at the time held a non-permanent seat in the UN Security Council, surprised many, including Tehran, when it voted against the US-sponsored resolution. The Turkish-Iranian honeymoon seems to have come to an end. The two countries have just rediscovered the harsh realities of Middle Eastern politics. They seem to disagree on almost every single issue in the region.

Sphere of influence

In fact, two key developments have played vital role in ending the honeymoon between the two big regional powers: the US withdrawal from Iraq and the Syrian uprising. When the US completed the withdrawal of its forces from Iraq by the end of 2011, it was already apparent that Iran has emerged as the dominant power in the country. This situation allowed Tehran to secure a sphere of influence stretching from western Afghanistan to the Mediterranean. Turkey saw a Shiite crescent in the making, consisting of Iraq, Syria and Hezbollah and led by Iran. For Ankara, this worrying development if allowed to materialise unhampered could fundamentally change the political landscape of the entire region.

The breakout of the Syrian uprising presented Turkey, therefore, with a golden opportunity to address this geo-strategic dilemma. Syria emerged as an ideal arena to check Iran’s power and contain its ambitions. At present, the polarisation is clearly taking a sectarian flavour and Turkey sees an opportunity to bring about a regime change in Damascus.

Ankara has, therefore, openly sided with the Syrian National Council (SNC), an umbrella of Syrian opposition groups, and is also hosting the Free Syrian Army, a group of Sunni defectors, seeking to bring down the Syrian regime. If its calculus works, Ankara may be one step closer to its neo-Ottoman aspirations, helping to spearhead Sunni, political Islamic movements in the Middle East and North Africa. Against this backdrop, it may well be that Ankara’s decade-long, improving relations with Tehran have come to an end. Turkey’s support of the Syrian opposition explicitly threatens Iran’s expanding power in the region and its ideological sphere of influence. Turkey may thus increase its cooperation with the West against Iran while Tehran might start using the PKK (Kurdistan Workers’ Party) as leverage against Ankara.

Dr Marwan Kabalan is the Dean of the Faculty of International Relations and Diplomacy at the University of Kalamoon Damascus, Syria.
Source: Gulf News

April 23, 2012
By Christopher R. Hill

For most countries, the spectacular failure of a rocket launch would mean a return to the drawing board, or at least some introspection aimed at figuring out what went wrong.

But that does not appear to be the case in North Korea, where the flubbed launch of its long-range Unha-3 rocket has merely set the stage for a new level of defiance: the detonation of yet another nuclear device, perhaps bigger than in the past.

The world, it seems, must be shown that North Korean scientists, despite their dearth of success in producing food, have mastered how to produce a weapon of mass destruction. And such a demonstration might well be needed to confer legitimacy on the newly installed third-generation leader, Kim Jong-un, a boy-dictator whose only accomplishment to date has been to prove on television that he can ride a horse, and that he appears to know how to read.

There used to be a measure of sympathy in Asia for the plucky North Koreans and their systematic defiance of the US and the rest of the international community. But those days are over. As the unanimous adoption of a United Nations Security Council statement on April 16 suggests, no one, including the Chinese, is trying to make the case any more for nuance in dealing with the North.

The Chinese, in particular, appear to have lost patience. Reportedly, in the run-up to the rocket launch, the North Koreans refused to respond to China’s pleas that they stand down.

The Chinese have had centuries of experience dealing with problems on the Korean Peninsula, the most difficult of imperial China’s tributary small neighbours, but not even receiving a reply to their communications was a new insult.

Intransigent behaviour

If the North Korean problem is ever to be solved, it will be when China says that it has had enough. That day may be approaching, but in the meantime there are worrisome signs that China’s trade and investments in North Korea, the latest of which is a Chinese supermarket in which local currency can be traded at free-market (that is, black-market) rates, could oddly make China dependent on the North.

Chinese traders and investors have in recent years moved in as Japan and South Korea, two of North Korea’s longstanding trade partners, have withdrawn, owing to official sanctions and increasing public irritation with the North’s intransigent behaviour.

China’s trade with North Korea has increased from around $1 billion (Dh3.67 billion) in 2005 to more than $5.1 billion in 2011. The overall pattern is familiar: China imports North Korean raw materials, such as coal, and exports machinery, consumer goods, and refined petroleum products.

China’s government has justified this burgeoning trade by claiming that North Korea will come to appreciate the wonders of a market economy. But that is simply an attempt to make a virtue out of necessity: for a country with one of the world’s largest and most storied bureaucracies, China has a surprisingly difficult time telling its business community not to do business with someone, especially a historic friend and ally.

Impressive trajectory

Chinese leaders’ longstanding reluctance to participate in international sanctions is often attributed to their belief in judging actions by whether or not they work.

Perhaps the real pragmatism on display in the case of North Korea is a reluctance to rein in the business community at a time of slower growth and internal fixation.

China’s rise is one of the most studied developments of our time. It is, after all, a country that can be described as a civilisation, and its trajectory has been far more impressive than that of any North Korean rocket.

It has emerged from what it calls a “century of shame” to become one of the world’s engines of economic development and cultural and intellectual achievement. To visit China is to be stunned by its accomplishments across the range of human endeavour.

But, as many Chinese acknowledge, their country still has much to do, both internally and in its dealings with the rest of the world. Some of that unfinished business consists in reconciling past commitments with current interests.

All countries carry some burden from the past, and China is no exception. But the burden of protecting North Korea from the world’s justified outrage is one that China cannot afford to carry for long.

Now would be a very good time for China, as the expression goes, to put its money where its mouth is. China should follow up on its Security Council vote to condemn North Korea’s behaviour by shutting down bilateral trade.

— Project Syndicate, 2012

Christopher R. Hill, former US assistant secretary of state for East Asia, was US ambassador to Iraq, South Korea, Macedonia, and Poland and chief US negotiator with North Korea from 2005-2009.
Source: Gulf News

April 26, 2012
Jamil Nasir

Finally Jim Yong Kim, the nominee of President Obama, has been chosen as the president of the World Bank. There should be no doubt about the credentials of Mr Kim, a Korean-American public-health expert and professor who is currently president of the Ivy League University Dartmouth College. He worked in the World Health Organisation (WHO) as head of its HIV/Aids programme. But the question here does not pertain to the excellent credentials or academic excellence of the person in question.

This time round, it was the first-ever challenge to the long-established tradition that the World Bank’s president will be a US citizen nominated by the US president. The debate in the global press since President Obama nominated Mr Kim as the candidate of World Bank’s top slot simply was: whether the president of the World Bank should be selected through an open, transparent and merit-based process irrespective of his nationality, or he should essentially be a US citizen nominated by the US president.

This question was hotly debated due to three main reasons. First, the role of the emerging economies has tremendously increased in the world economy in terms of output and contribution. Even the World Bank and the IMF are looking towards emerging market economies for funds. Further, these economies have shown a high level of resilience amid the financial turmoil that has gripped the globe since 2008. The Western world is still in the bind of this financial turmoil. The Euro zone crisis is a case in point. On the other hand, the emerging economies have fast recovered. So the argument goes that the future of the world lies in the emerging economies and the developing world.

Second, the activities of the World Bank are mainly geared towards the developing world where majority of the poor reside. Poverty alleviation initiatives, HIV/Aids programmes, and other endeavours of the World Bank in fields like governance, anti-corruption and recovery of stolen assets are directly related with the poor and developing countries. So the appointment of a candidate from the developing countries will give a sense of ownership and leverage with the World Bank’s initiatives.

Third, the other two candidates whose names were put forward by the 11 directors from emerging and developing countries were equally excellent in terms of their credentials. For example, Jose Antonio Ocampo, currently professor at Columbia University, has vast experience in the domains of economics and finance. He worked as minister of economy, finance and agriculture in Colombia, his native country. He served as the United Nations under-secretary general for economic and social affairs. He had thus got a good blend of practical and academic experience.

In his article titled “What the World Bank should do,” Mr Ocampo gave a very balanced view of the development. “That experience has taught me that successful development is always the result of a judicious mix of market, state and society – no one-size-fits-all strategy exists. Development is a comprehensive process that involves economic, social, and environmental dimensions,” he wrote.

I have the honour of having been his student at Columbia University where he taught me “macroeconomics for development.” His lectures in the class were really a vindication of his clear understanding of the development issues and priorities of the developing world. He is a strong believer of counter-cyclical policies to address the boom-bust cycles and avert financial crises. He believes that development is a persistent structural change.

I fully understand that I may be a bit biased about Mr Ocampo as he was my mentor at Columbia, but what about the other candidate Ngozi Okonjo-Iweala, the finance minister of Nigeria? She was also an excellent candidate. She is an insider of the World Bank as she worked as one of its managing directors for several years.

So the point is that both the candidates were excellent, but the selection process, which is monopolised by the US, wasted an opportunity for the World Bank to emerge as an institution which is respected in the developing world. One of the main reasons for the unpopularity of multilateral institutions like the IMF and the World Bank in the poor and developing countries is perception, and rightly so. There is a widespread feeling that these institutions are controlled by the developed world, especially the US, and used as instruments for furthering their agendas.

Joseph Stiglitz, Nobel laureate in economics and professor at Columbia, raised this point in one of his recent articles, entitled “Whose World Bank?” He said: “For years, the Bank’s effectiveness was compromised because it was seen, in part a tool of the Western governments and their countries’ financial and corporate sectors.” But the US has compromised its long-term interests by keeping its grip on the World Bank. The selection of the Korean-American as president of the World Bank may serve the United States’ immediate security agenda at Seoul and America’s medium-term economic agenda in South-East Asia.

Loosening of the US grip on the World Bank, and by extension on the world financial system, might have had political cost for Obama in an election year, so the decision may have been helpful for him. But it will not help the World Bank in improving its image in the developing countries. The credibility of its policies will continue to be questioned with an ever-widening chasm between the developed and the developing world. A golden opportunity to right the wrong and correct the balance has surely been missed.

-The News

The writer is a graduate from Columbia University with a degree in economic policy management. Email: jamilnasir1969@gmail.com

April 27, 2012
Frank-Jurgen Richter

Mass demonstrations against globalisation used to occur while the IMF, WTO, Gxx meetings were being held; for instance, the WTO meeting at Seattle (1999) was recognised as perhaps the initiation of this mainstream protest.

Their intensity fell away as the ‘business cycle’ progressed only to arise again in a new form – the Occupy demonstrations, commencing in September 2010 in New York. Although it is a convenience for politicians to talk of the ‘business cycle’ many economists consider these variations to be only fluctuations superimposed on the aggregate economic activity – for them it represents a form of normality; but for the people out of work it may be described as a catastrophe.

I am of the opinion we ought to reconsider business practices, maybe reflecting on what happened even before Adam Smith (1723 – 1790). Yet, taking one of his axioms, we understand that if there is someone who can make ‘things’ more effectively than oneself it is best to let them do that and enter into some bargaining — to exchange what one can make effectively in exchange for those things others can make better. Perhaps this sequence of bargaining and using cash sometimes will be a long sequence, but it will be best for all. Partly as a consequence of these thoughts massive globalisation took place as the world became more industrialised; more fuel was consumed, logistics became more reliable and the global population grew. Many grew rich on trade and trade took on many forms — including complex global trades of financial instruments, hence the Occupy demonstrations.

Once containers were invented after the Second World War vendors saw that their goods (finished and part-finished) were now securely transported and so Adam Smith’s ‘effectiveness’ criteria was further extended: work was outsourced and increasingly off-shored to the vast factories of Asia especially in China once its ‘special enterprise zones’ opened up; now it is their centre and western regions opening up. Western managers looked to personal and stockholder value maximisation. What their societies ought to have done was to invest in the re-education of redundant staff to ensure they would be able to leap past their own historical skills to embrace an unknown future. Indeed, this is what will soon be needed in China since it finds now fewer people working in cities than remaining in their rural homelands. Several dynamics come into play – an ageing workforce nationally with rising wages in the coastal regions, as well as their annual GDP rate faltering as the nation becomes ever more prosperous.

Yet, make no mistake, globalisation is here to stay. Adam Smith was quite correct — we must, for the good of the planet, use all our resources effectively. This means we must use logistics to move goods and services round the globe to better our overall state. At the same time we must support an honest social agenda and stop the rape of innocents. We should realise that ‘sweat shops’ (while they offer cash to poor people whose only alternative is no work and probable starvation) must provide a full social service of wages, health and education support both at the factory and back in the rural villages.

There has to be a new balance of re-shoring, off-shoring and outsourcing. It is stupid for governments to succumb to local pressures to offer incentives and tax-breaks to entice reluctant managers to re-shore bringing back work to the local community which could be better done overseas: this is a waste of our taxes. Yet it is prudent for all enterprises to look to their sustainability, their green credentials and to their susceptibilities to supply-chain shocks to ensure they have second-sourcing in place: the recent floods of Thailand and the chaos of Fukushima demonstrate the massive interdependence of present-day globalisation.

The demonstrations for and against globalisation must stop and be re-addressed to clamour for a Fair Global Social Agenda. This should take the form of a complex change since ‘back home’ governments have allowed too many of their population to fall into a malaise exacerbated by poor education fitted only for the past: their people need re-education to support a new future. And these people, while still out of work, must agree to let people overseas work effectively within the new Social Agenda so in the round, globally, we will all benefit. Our new quest must be a re-education to jointly understand how the world is running: the future is now, and we must learn to thrive on our global strengths whilst preserving local harmony.
Frank-Jurgen Richter is chairman and founder of Horasis, a global business community.
Source: Khaleej Times

April 28, 2012
By Dr Pervez Tahir

The World Bank (WB) has a new president. But what is so new? The US government has always nominated an American to head the WB, just as the Europeans appoint other Europeans to head the International Monetary Fund. This duopoly has existed since the birth of the two organisations at Bretton Woods in 1944 in the name of development and stability. All appointments hitherto have been made at the discretion of the president of the United States. No transparent or due process existed. This time around, however, there have been a few departures from the routine in selecting Jim Yong Kim as WB president.

First, unlike in the past, the position has gone to the not-for-profit sector rather than to a public servant or the for-profit sector. The new man was the president of an Ivy League college and co-founder of an NGO, Partners in Health.

Secondly, the background of the new president is not in finance or economics but in development. His specialisation, public health, has become a major development issue in protecting and promoting human productivity. Jeffrey Sachs, the economist behind the formulation of the millennium development goals, who is now agonising over their slow progress, called for the WB to be led by a developmental leader rather than a banker, hence welcoming Kim.

Third, in choosing Kim, a Korean-born American, an attempt has been made to signal that the presidency is not necessarily an Anglo-Saxon preserve.

But Latin America and Africa thought differently and for the first time the duopoly was challenged. A former finance minister of Colombia withdrew his candidature saying that politics, rather than merit, would determine the outcome. Nigerian finance minister, Ngozi Okonjo-Iweala, a woman of substance, went all the way but the ‘champions’ of democracy, merit and gender development got together to defeat her. It was not just Europe and the United States scratching each other’s backs, but also China and India as only Brazil and South Africa supported her. The defeat, however, failed to dampen Okonjo-Iweala’s spirits, who declared: “Our credible and merit-based challenge to a long-standing and unfair tradition will ensure that the process of choosing the World Bank president will never be the same again”.

The Bank, as its staff likes to call it, started with the straightforward approach of lending for development projects, like the Tarbela dam in our case. In time, it became a crusader for the neo-liberal ideology. First, it attempted to get the prices right in developing countries. Not making much headway there, the mantra was changed to correcting institutions. Now, there are attempts to get the governments and in some cases, the states, corrected. What would President Kim correct? A book, Dying for Growth: Global Inequality and the Health of the Poor published in the year 2000, with Kim as chief editor, got “neo-liberal policy measures” correct by holding “the quest for growth in GDP and corporate profits” responsible for worsening the lives of millions. Neo-liberalism failed the poor even in its success with growth. Soon after his nomination was announced by President Barack Obama, Kim was already unlearning. The Bank, he said, had since shifted to pro-poor growth. After winning the one-sided contest, he told the BBC that “market-based growth is a priority for every single country”. At this rate, the good old healer will die trying to achieve growth by July 1, 2012, the day of his formal inauguration.

-The Express Tribune

May 1, 2012
By Kurt Volker

President Barack Obama was on the right track when he announced a new effort to monitor global hot spots and prevent mass atrocities before they happen.

But what about daily atrocities unfolding now in Syria — where a UN-brokered ceasefire is growing weaker by the day and the world refrains from intervening to stop the violence?

In this case, a history lesson from the Bosnian War is worth remembering. On May 1-2, 1993, negotiators at a resort outside of Athens reached agreement on the “Vance-Owen peace plan” aimed at ending Bosnia’s civil war. The plan required Bosnian Serbs to stop shelling Sarajevo, where Bosnian Muslims were under a year-long siege. The catch: Western military force might be required to implement the ceasefire.

In 1993, US Secretary of State Warren Christopher began consultations with European allies to gauge their level of support for military force. But instead of assuring that the US was prepared to lead the charge, he asked allies whether they were prepared to implement the plan, without committing the US either way.
Then, in July 1995 in Srebrenica, Bosnian Serbs murdered more 7,000 Bosnian Muslims in one, systematic slaughter. It was at that point that the West finally acted. To his lasting credit, Clinton then determined that the US would lead.

What was the difference between May 1993 and July 1995? In terms of Western implementation — nothing. We did in 1995 roughly what we would have done in 1993, had we acted. But in terms of human cost — tens of thousands of lives were lost. And that is the key lesson. Eventually, the West was willing to act. But it took a ‘catalyst’ of thousands of lives lost in a single massacre to convince us to do what we could have done years before. Would it not have been better to have acted sooner and saved thousands of lives?

Nearly all the arguments against intervention in Syria have merit. It is difficult. The Syrian military is strong. Outside powers such as Iran and Russia are engaged. The local politics is complicated.

Imagine that after the shelling of Homs, after the shelling of Damascus suburbs, after everything we have seen over the past year, some new slaughter takes place. Imagine 5,000 people killed in one fell swoop. Or 7,000. Or 9,000. It’s happened before.

Opposing tyranny

What is the magic number that will finally prompt the international community to act in Syria?

The moral principles arguing for intervention are already known: The Syrian government is engaged in a systematic campaign of mass murder, seeking to kill anyone who dares oppose it, in order to re-establish firm control. The state of Syria has a monopoly of force — in the military, police, intelligence services, and secret police. The people are standing up with great valour — but little capacity — to oppose such tyranny. Over 10,000 people have been killed — though over a year’s time, not at once. How to intervene? There’s no easy answer, but having no answer is even worse. On the political side, we have to assume that Russia will block any intervention resolution in the UN Security Council. And so the world would need to be prepared to act without one — just as in Kosovo in 1999.

Participation by regional states is important — particularly Turkey, Saudi Arabia, Qatar, and the UAE. Given France’s post-imperial history in Syria and Lebanon, it is better to have France (and, for that matter, Britain) on board a liberating intervention. On the mechanics, it would require suppressing Syria’s offensive capabilities and air defences and jamming communications. A ‘safe zone’ would need to be established inside the country, which would allow for unfettered distribution of humanitarian relief and create a space where the opposition could organise and receive further training and support (think Benghazi in Libya).

What is missing, therefore, is not an understanding of the case for intervention, or even a means to intervene, but a ‘catalyst’ that justifies and forces action. If that catalyst occurs, the US and others might act. And then America and its friends should ask themselves why they did not act sooner, and prevent the very catastrophe that spurred them into action.

Kurt Volker, a former US ambassador to Nato, is a professor of practice at Arizona State University.
Courtesy: Christian Science Monitor

May 4, 2012
Jonathan Power

Napoleon warned us that China was a sleeping giant best left undisturbed. No longer. The giant is well awake and not only has the West disturbed it, many of the West’s elite appears to fear it. Nowhere is this more true than when it comes to the debate about China’s growing naval power and in particular its attitude towards China’s claim for sovereignty over the South China Sea, to which other bordering nations — the Philippines, Vietnam, Taiwan, Brunei, Indonesia and Malaysia — also claim rights.

Long before Napoleon China had Admiral Zheng He who in the 15th century led large fleets as far away as Africa. But unlike his European contemporaries Zheng He and his emperor had mainly curiosity. They possessed no idea of subjugation, slavery or colonisation. They were not on any mission to “civilise”. Only in the most recent of years has China given its navy prominence and even today its expenditure on naval power compared with the US or Europe is small.

Last week, the US and the Philippines staged a mock battle to show they could recapture a Philippino island from foreign forces. Earlier in April a Philippino warship found Chinese fishing boats close into the Scarbough reef, a submerged shoal of rocks that the Philippines claim. The fishermen called in two Chinese civilian patrol boats. Beijing persuaded the Philippines to withdraw their warship and replace it with a civilian coastguard ship. But China did not withdraw neither its fishing boats nor its patrol boats. “Chicken can be a dangerous game”, observed The Economist last week.

Neighbouring countries have rushed to occupy as many of the sea’s land spots as possible. Today China controls the entire Paracels islands and 15 reefs and shoals within the Spratleys. Both islands probably have in their waters large deposits of oil, gas and minerals. Since 2007 China has repeatedly warned foreign oil companies that cooperating with Vietnam would affect their business in China.

Beijing insists that its historic map, claiming the whole South China Sea, is a valid territorial claim. It argues that this has been so since the 15th century. But its contours are vague and it’s not recognised under international law.

Contradicting this claim China has ratified the UN’s Law of The Sea Treaty. The treaty compels states to surrender the majority of their historical claims in favour of the maritime zones awarded under the convention, in particular a 200 kilometre offshore economic zone. (But the US has not, shooting itself in the foot.)

The other countries involved have not stood still. The Philippines has proposed that ASEAN (the regional cooperation body) set aside disputes among themselves and form a united front to force Beijing to clarify its aims. The US has reiterated UN policy that there must be freedom of navigation in the sea and, according to a new report by the International Crisis Group, Beijing is worried that US involvement will internationalise the disputes, isolating China.

China loses much credibility with its refusal to take the dispute to the International Court of Justice. A few years ago Nigeria took the issue of its dispute with neighbouring Cameroon over the oil-rich Bokassa peninsular to the Court. It lost and President Olusegun Obasanjo gracefully turned over the territory to Cameroon. China also refuses to use the arbitration mechanisms of the Law of the Sea.

However, the debate is not frozen in its parameters. Some of the agencies and the National People’s Congress have been calling for the establishment of a coordinating body. At the top there is the feeling that China suffers from a lack of good policy options. There is now appears to be a policy of leaving this intractable problem to the next generation as was first proposed by Den Xiaoping in 1978. Last year China reaffirmed these guidelines when it signed the White paper on Peaceful Development with ASEAN.

China should loose no time in sorting out its bureaucratic mess and taking the issue to the International Court of Justice as Nigeria did.
Jonathan Power is a veteran foreign affairs commentator
Source: Khaleej Times