China loses its allure

January 27, 2014

This week’s print edition of The Economist brings a worth reading story on China: life is getting harder for foreign companies there.

“According to the late Roberto Goizueta, a former boss of The Coca-Cola Company, April 15th 1981 was “one of the most important days…in the history of the world.” That date marked the opening of the first Coke bottling plant to be built in China since the Communist revolution.

The claim was over the top, but not absurd. Mao Zedong’s disastrous policies had left the economy in tatters. The height of popular aspiration was the “four things that go round”: bicycles, sewing machines, fans and watches. The welcome that Deng Xiaoping, China’s then leader, gave to foreign firms was part of a series of changes that turned China into one of the biggest and fastest-growing markets in the world.

For the past three decades, multinationals have poured in. After the financial crisis, many companies looked to China for salvation. Now it looks as though the gold rush may be over.”

Read full story.


Happy Chinese New Year!

January 23, 2012

“Forget injuries, never forget kindnesses.” Confucius


Barack Obama’s State of the Union Address 2011

January 26, 2011

In his State of the Union address on January 25, 2011, U.S. President Barack Obama mentioned a plan for investment in crucial areas like education, high-speed rail, and green technology, as well as reforming the tax code to help the United States meet the challenge of globalization amid relentless competition from rising economies such as China and India.

A Member of Congress reads along as President Barack Obama delivers the State of the Union address in the House Chamber at the U.S. Capitol in Washington, D.C., Jan. 25, 2011. (Photo by Pete Souza)
A Member of Congress reads along as President Barack Obama delivers the State of the Union address in the House Chamber, January 25, 2011. (Photo by Pete Souza)

“We need to out-innovate, out-educate, and out-build the rest of the world,” he said in his speech (see full transcript below). At the same time, Obama, who is facing massive deficits, did not call for new programs. Instead, he promised a five-year budget freeze on non-defense discretionary spending, which he said had the prospective to reduce the deficit by $400 billion over ten years.

When Obama did address U.S. foreign policy, he mainly focused on his latest successes – such as ratifying the new START arms control treaty with Russia and the trade agreement with South Korea, and concealed critical issues like drug violence in Mexico, instability in Pakistan, and climate change.

In an op-ed in The New York Times Chief Washington Correspondent David E. Sanger argues that one of President Barack Obama’s “subtexts on Tuesday night was that doing big things these days may require a bit more humility, a lot more work, and some international partners that Americans rarely thought about twenty years ago but whose competition they have now grown to fear.”

Read full story.

Nota bene: for full coverage of the Union Address 2011 and more insight, check out also The Wall Street Journal.

***

Remarks by the President in State of Union Address
United States Capitol, Washington, D.C.

January 25, 2011 – 9:12 P.M. EST

THE PRESIDENT: Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Tonight I want to begin by congratulating the men and women of the 112th Congress, as well as your new Speaker, John Boehner. (Applause.) And as we mark this occasion, we’re also mindful of the empty chair in this chamber, and we pray for the health of our colleague — and our friend -– Gabby Giffords. (Applause.)

It’s no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs.  And that’s a good thing. That’s what a robust democracy demands. That’s what helps set us apart as a nation.

But there’s a reason the tragedy in Tucson gave us pause. Amid all the noise and passion and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater -– something more consequential than party or political preference.

We are part of the American family.  We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled.

That, too, is what sets us apart as a nation.  (Applause.)

Now, by itself, this simple recognition won’t usher in a new era of cooperation.  What comes of this moment is up to us.  What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.  (Applause.)

I believe we can.  And I believe we must.  That’s what the people who sent us here expect of us. With their votes, they’ve determined that governing will now be a shared responsibility between parties.  New laws will only pass with support from Democrats and Republicans.  We will move forward together, or not at all -– for the challenges we face are bigger than party, and bigger than politics.

At stake right now is not who wins the next election -– after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else.  It’s whether the hard work and industry of our people is rewarded.  It’s whether we sustain the leadership that has made America not just a place on a map, but the light to the world.

We are poised for progress.  Two years after the worst recession most of us have ever known, the stock market has come roaring back.  Corporate profits are up.  The economy is growing again.

But we have never measured progress by these yardsticks alone.  We measure progress by the success of our people.  By the jobs they can find and the quality of life those jobs offer.  By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.

That’s the project the American people want us to work on.Together. (Applause.)

We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today.  Every business can write off the full cost of new investments that they make this year. And these steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.

But we have to do more. These steps we’ve taken over the last two years may have broken the back of this recession, but to win the future, we’ll need to take on challenges that have been decades in the making.

 Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors.  If you worked hard, chances are you’d have a job for life, with a decent paycheck and good benefits and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.

That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts on once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear -– proud men and women who feel like the rules have been changed in the middle of the game.

They’re right. The rules have changed.  In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an Internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became the home to the world’s largest private solar research facility, and the world’s fastest computer.

So, yes, the world has changed. The competition for jobs is real.  But this shouldn’t discourage us.  It should challenge us. Remember -– for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.  (Applause.) No workers — no workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We’re the home to the world’s best colleges and universities, where more students come to study than any place on Earth.

What’s more, we are the first nation to be founded for the sake of an idea -– the idea that each of us deserves the chance to shape our own destiny. That’s why centuries of pioneers and immigrants have risked everything to come here. It’s why our students don’t just memorize equations, but answer questions like “What do you think of that idea?  What would you change about the world? What do you want to be when you grow up?”

The future is ours to win. But to get there, we can’t just stand still.  As Robert Kennedy told us, “The future is not a gift. It is an achievement.”  Sustaining the American Dream has never been about standing pat. It has required each generation to sacrifice, and struggle, and meet the demands of a new age.

And now it’s our turn.  We know what it takes to compete for the jobs and industries of our time.  We need to out-innovate, out-educate, and out-build the rest of the world.  (Applause.)  We have to make America the best place on Earth to do business.  We need to take responsibility for our deficit and reform our government.  That’s how our people will prosper.  That’s how we’ll win the future.  (Applause.)  And tonight, I’d like to talk about how we get there.

The first step in winning the future is encouraging American innovation.  None of us can predict with certainty what the next big industry will be or where the new jobs will come from.  Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution.  What we can do — what America does better than anyone else — is spark the creativity and imagination of our people.  We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook.  In America, innovation doesn’t just change our lives.  It is how we make our living.  (Applause.)

Our free enterprise system is what drives innovation.  But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need.  That’s what planted the seeds for the Internet.  That’s what helped make possible things like computer chips and GPS.  Just think of all the good jobs — from manufacturing to retail — that have come from these breakthroughs.

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the moon.  The science wasn’t even there yet.  NASA didn’t exist.  But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.

This is our generation’s Sputnik moment.  Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race.  And in a few weeks, I will be sending a budget to Congress that helps us meet that goal.  We’ll invest in biomedical research, information technology, and especially clean energy technology -– (applause) — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

Already, we’re seeing the promise of renewable energy.  Robert and Gary Allen are brothers who run a small Michigan roofing company.  After September 11th, they volunteered their best roofers to help repair the Pentagon.  But half of their factory went unused, and the recession hit them hard.  Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country.  In Robert’s words, “We reinvented ourselves.”

That’s what Americans have done for over 200 years: reinvented ourselves.  And to spur on more success stories like the Allen Brothers, we’ve begun to reinvent our energy policy. We’re not just handing out money.  We’re issuing a challenge.  We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo projects of our time.

At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars.  At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities.  With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015.  (Applause.)

We need to get behind this innovation.  And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies.  (Applause.)  I don’t know if — I don’t know if you’ve noticed, but they’re doing just fine on their own.  (Laughter.)  So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling.  So tonight, I challenge you to join me in setting a new goal:  By 2035, 80 percent of America’s electricity will come from clean energy sources.  (Applause.)

Some folks want wind and solar.  Others want nuclear, clean coal and natural gas.  To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen.  (Applause.)

 Maintaining our leadership in research and technology is crucial to America’s success.  But if we want to win the future -– if we want innovation to produce jobs in America and not overseas -– then we also have to win the race to educate our kids.

Think about it.  Over the next 10 years, nearly half of all new jobs will require education that goes beyond a high school education.  And yet, as many as a quarter of our students aren’t even finishing high school.  The quality of our math and science education lags behind many other nations.  America has fallen to ninth in the proportion of young people with a college degree.  And so the question is whether all of us –- as citizens, and as parents –- are willing to do what’s necessary to give every child a chance to succeed.

That responsibility begins not in our classrooms, but in our homes and communities.  It’s family that first instills the love of learning in a child.  Only parents can make sure the TV is turned off and homework gets done.  We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair.  (Applause.)  We need to teach them that success is not a function of fame or PR, but of hard work and discipline.

Our schools share this responsibility.  When a child walks into a classroom, it should be a place of high expectations and high performance.  But too many schools don’t meet this test. That’s why instead of just pouring money into a system that’s not working, we launched a competition called Race to the Top.  To all 50 states, we said, “If you show us the most innovative plans to improve teacher quality and student achievement, we’ll show you the money.”

Race to the Top is the most meaningful reform of our public schools in a generation.  For less than 1 percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning.  And these standards were developed, by the way, not by Washington, but by Republican and Democratic governors throughout the country.  And Race to the Top should be the approach we follow this year as we replace No Child Left Behind with a law that’s more flexible and focused on what’s best for our kids.  (Applause.)

You see, we know what’s possible from our children when reform isn’t just a top-down mandate, but the work of local teachers and principals, school boards and communities.  Take a school like Bruce Randolph in Denver.  Three years ago, it was rated one of the worst schools in Colorado — located on turf between two rival gangs.  But last May, 97 percent of the seniors received their diploma.  Most will be the first in their families to go to college.  And after the first year of the school’s transformation, the principal who made it possible wiped away tears when a student said, “Thank you, Ms. Waters, for showing that we are smart and we can make it.”  (Applause.)  That’s what good schools can do, and we want good schools all across the country.

Let’s also remember that after parents, the biggest impact on a child’s success comes from the man or woman at the front of the classroom.  In South Korea, teachers are known as “nation builders.”  Here in America, it’s time we treated the people who educate our children with the same level of respect.  (Applause.)  We want to reward good teachers and stop making excuses for bad ones.  (Applause.)  And over the next 10 years, with so many baby boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science and technology and engineering and math.  (Applause.)

In fact, to every young person listening tonight who’s contemplating their career choice:  If you want to make a difference in the life of our nation; if you want to make a difference in the life of a child — become a teacher.  Your country needs you.  (Applause.)

Of course, the education race doesn’t end with a high school diploma.  To compete, higher education must be within the reach of every American.  (Applause.)  That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students.  (Applause.)  And this year, I ask Congress to go further, and make permanent our tuition tax credit –- worth $10,000 for four years of college.  It’s the right thing to do.  (Applause.)

Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we’re also revitalizing America’s community colleges.  Last month, I saw the promise of these schools at Forsyth Tech in North Carolina.  Many of the students there used to work in the surrounding factories that have since left town.  One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old.  And she told me she’s earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams, too.  As Kathy said, “I hope it tells them to never give up.”

If we take these steps -– if we raise expectations for every child, and give them the best possible chance at an education, from the day they are born until the last job they take –- we will reach the goal that I set two years ago:  By the end of the decade, America will once again have the highest proportion of college graduates in the world.  (Applause.)

One last point about education.  Today, there are hundreds of thousands of students excelling in our schools who are not American citizens.  Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet they live every day with the threat of deportation.  Others come here from abroad to study in our colleges and universities.  But as soon as they obtain advanced degrees, we send them back home to compete against us.  It makes no sense.

Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration.  And I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows.  (Applause.)  I know that debate will be difficult.  I know it will take time.  But tonight, let’s agree to make that effort.  And let’s stop expelling talented, responsible young people who could be staffing our research labs or starting a new business, who could be further enriching this nation.  (Applause.)

The third step in winning the future is rebuilding America.  To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information — from high-speed rail to high-speed Internet.  (Applause.)

Our infrastructure used to be the best, but our lead has slipped.  South Korean homes now have greater Internet access than we do.  Countries in Europe and Russia invest more in their roads and railways than we do.  China is building faster trains and newer airports.  Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”

We have to do better.  America is the nation that built the transcontinental railroad, brought electricity to rural communities, constructed the Interstate Highway System.  The jobs created by these projects didn’t just come from laying down track or pavement.  They came from businesses that opened near a town’s new train station or the new off-ramp.

So over the last two years, we’ve begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry.  And tonight, I’m proposing that we redouble those efforts.  (Applause.)

We’ll put more Americans to work repairing crumbling roads and bridges.  We’ll make sure this is fully paid for, attract private investment, and pick projects based [on] what’s best for the economy, not politicians.

Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail.  (Applause.)  This could allow you to go places in half the time it takes to travel by car.  For some trips, it will be faster than flying –- without the pat-down.  (Laughter and applause.)  As we speak, routes in California and the Midwest are already underway.

Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans.  This isn’t just about — (applause) — this isn’t about faster Internet or fewer dropped calls.  It’s about connecting every part of America to the digital age.  It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world.  It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.

All these investments -– in innovation, education, and infrastructure –- will make America a better place to do business and create jobs.  But to help our companies compete, we also have to knock down barriers that stand in the way of their success.

For example, over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries.  Those with accountants or lawyers to work the system can end up paying no taxes at all.  But all the rest are hit with one of the highest corporate tax rates in the world.  It makes no sense, and it has to change.  (Applause.)

So tonight, I’m asking Democrats and Republicans to simplify the system.  Get rid of the loopholes.  Level the playing field.  And use the savings to lower the corporate tax rate for the first time in 25 years –- without adding to our deficit.  It can be done.  (Applause.)

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 -– because the more we export, the more jobs we create here at home.  Already, our exports are up.  Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States.  And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs.  This agreement has unprecedented support from business and labor, Democrats and Republicans — and I ask this Congress to pass it as soon as possible.  (Applause.)

Now, before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers and promote American jobs.  That’s what we did with Korea, and that’s what I intend to do as we pursue agreements with Panama and Colombia and continue our Asia Pacific and global trade talks.  (Applause.)

To reduce barriers to growth and investment, I’ve ordered a review of government regulations.  When we find rules that put an unnecessary burden on businesses, we will fix them.  (Applause.)  But I will not hesitate to create or enforce common-sense safeguards to protect the American people.  (Applause.)  That’s what we’ve done in this country for more than a century.  It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe.  It’s why we have speed limits and child labor laws.  It’s why last year, we put in place consumer protections against hidden fees and penalties by credit card companies and new rules to prevent another financial crisis.  (Applause.)  And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients.  (Applause.)

Now, I have heard rumors that a few of you still have concerns about our new health care law.  (Laughter.)  So let me be the first to say that anything can be improved.  If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you.  We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.  (Applause.)

What I’m not willing to do — what I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a preexisting condition.  (Applause.)

I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered.  I’m not willing to tell Jim Houser, a small business man from Oregon, that he has to go back to paying $5,000 more to cover his employees.  As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their patients’ — parents’ coverage.  (Applause.)

So I say to this chamber tonight, instead of re-fighting the battles of the last two years, let’s fix what needs fixing and let’s move forward.  (Applause.)

Now, the final critical step in winning the future is to make sure we aren’t buried under a mountain of debt.

We are living with a legacy of deficit spending that began almost a decade ago.  And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.

But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in.  That is not sustainable.  Every day, families sacrifice to live within their means.  They deserve a government that does the same.

So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years.  (Applause.)  Now, this would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was President.

This freeze will require painful cuts.  Already, we’ve frozen the salaries of hardworking federal employees for the next two years.  I’ve proposed cuts to things I care deeply about, like community action programs.  The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.  (Applause.)

I recognize that some in this chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without.  But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens.  (Applause.)  And let’s make sure that what we’re cutting is really excess weight.  Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine.  It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact.  (Laughter.)

Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12 percent of our budget.  To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough.  It won’t.  (Applause.)

The bipartisan fiscal commission I created last year made this crystal clear.  I don’t agree with all their proposals, but they made important progress.  And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it –- in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.  (Applause.)

This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit.  The health insurance law we passed last year will slow these rising costs, which is part of the reason that nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit.  Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year — medical malpractice reform to rein in frivolous lawsuits.  (Applause.)

To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations.  (Applause.)  We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.  (Applause.)

And if we truly care about our deficit, we simply can’t afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans.  (Applause.)  Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break.  It’s not a matter of punishing their success.  It’s about promoting America’s success.  (Applause.)

In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code.  (Applause.)  This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them.  (Applause.)

So now is the time to act.  Now is the time for both sides and both houses of Congress –- Democrats and Republicans -– to forge a principled compromise that gets the job done.  If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future.

Let me take this one step further.  We shouldn’t just give our people a government that’s more affordable.  We should give them a government that’s more competent and more efficient.  We can’t win the future with a government of the past.  (Applause.)

We live and do business in the Information Age, but the last major reorganization of the government happened in the age of black-and-white TV.  There are 12 different agencies that deal with exports.  There are at least five different agencies that deal with housing policy.  Then there’s my favorite example:  The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in saltwater.  (Laughter.)  I hear it gets even more complicated once they’re smoked.  (Laughter and applause.)

Now, we’ve made great strides over the last two years in using technology and getting rid of waste.  Veterans can now download their electronic medical records with a click of the mouse.  We’re selling acres of federal office space that hasn’t been used in years, and we’ll cut through red tape to get rid of more.  But we need to think bigger.  In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America.  I will submit that proposal to Congress for a vote –- and we will push to get it passed.  (Applause.)

In the coming year, we’ll also work to rebuild people’s faith in the institution of government.  Because you deserve to know exactly how and where your tax dollars are being spent, you’ll be able to go to a website and get that information for the very first time in history.  Because you deserve to know when your elected officials are meeting with lobbyists, I ask Congress to do what the White House has already done — put that information online.  And because the American people deserve to know that special interests aren’t larding up legislation with pet projects, both parties in Congress should know this:  If a bill comes to my desk with earmarks inside, I will veto it.  I will veto it.  (Applause.)

The 21st century government that’s open and competent.  A government that lives within its means.  An economy that’s driven by new skills and new ideas.  Our success in this new and changing world will require reform, responsibility, and innovation.  It will also require us to approach that world with a new level of engagement in our foreign affairs.

Just as jobs and businesses can now race across borders, so can new threats and new challenges.  No single wall separates East and West.  No one rival superpower is aligned against us.

And so we must defeat determined enemies, wherever they are, and build coalitions that cut across lines of region and race and religion.  And America’s moral example must always shine for all who yearn for freedom and justice and dignity.  And because we’ve begun this work, tonight we can say that American leadership has been renewed and America’s standing has been restored.

Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high.  (Applause.)  American combat patrols have ended, violence is down, and a new government has been formed.  This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq.  America’s commitment has been kept.  The Iraq war is coming to an end.  (Applause.)

Of course, as we speak, al Qaeda and their affiliates continue to plan attacks against us.  Thanks to our intelligence and law enforcement professionals, we’re disrupting plots and securing our cities and skies.  And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.  (Applause.) 

We’ve also taken the fight to al Qaeda and their allies abroad.  In Afghanistan, our troops have taken Taliban strongholds and trained Afghan security forces.  Our purpose is clear:  By preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny al Qaeda the safe haven that served as a launching pad for 9/11.

Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency.  There will be tough fighting ahead, and the Afghan government will need to deliver better governance.  But we are strengthening the capacity of the Afghan people and building an enduring partnership with them.  This year, we will work with nearly 50 countries to begin a transition to an Afghan lead.  And this July, we will begin to bring our troops home.  (Applause.)

In Pakistan, al Qaeda’s leadership is under more pressure than at any point since 2001.  Their leaders and operatives are being removed from the battlefield.  Their safe havens are shrinking.  And we’ve sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe:  We will not relent, we will not waver, and we will defeat you.  (Applause.)

American leadership can also be seen in the effort to secure the worst weapons of war.  Because Republicans and Democrats approved the New START treaty, far fewer nuclear weapons and launchers will be deployed.  Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.  (Applause.)

Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher sanctions, tighter sanctions than ever before.  And on the Korean Peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons.  (Applause.)

This is just a part of how we’re shaping a world that favors peace and prosperity.  With our European allies, we revitalized NATO and increased our cooperation on everything from counterterrorism to missile defense.  We’ve reset our relationship with Russia, strengthened Asian alliances, built new partnerships with nations like India.

This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances across the Americas.  Around the globe, we’re standing with those who take responsibility -– helping farmers grow more food, supporting doctors who care for the sick, and combating the corruption that can rot a society and rob people of opportunity.

Recent events have shown us that what sets us apart must not just be our power -– it must also be the purpose behind it.  In south Sudan -– with our assistance -– the people were finally able to vote for independence after years of war.  (Applause.)  Thousands lined up before dawn.  People danced in the streets.  One man who lost four of his brothers at war summed up the scene around him:  “This was a battlefield for most of my life,” he said.  “Now we want to be free.”  (Applause.)

And we saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator.  And tonight, let us be clear:  The United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.  (Applause.)

We must never forget that the things we’ve struggled for, and fought for, live in the hearts of people everywhere.  And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.  (Applause.)

Tonight, let us speak with one voice in reaffirming that our nation is united in support of our troops and their families.  Let us serve them as well as they’ve served us — by giving them the equipment they need, by providing them with the care and benefits that they have earned, and by enlisting our veterans in the great task of building our own nation.

Our troops come from every corner of this country -– they’re black, white, Latino, Asian, Native American.  They are Christian and Hindu, Jewish and Muslim.  And, yes, we know that some of them are gay.  Starting this year, no American will be forbidden from serving the country they love because of who they love.  (Applause.)  And with that change, I call on all our college campuses to open their doors to our military recruiters and ROTC.  It is time to leave behind the divisive battles of the past.  It is time to move forward as one nation.  (Applause.)

We should have no illusions about the work ahead of us. Reforming our schools, changing the way we use energy, reducing our deficit –- none of this will be easy.  All of it will take time.  And it will be harder because we will argue about everything.  The costs.  The details.  The letter of every law.

Of course, some countries don’t have this problem.  If the central government wants a railroad, they build a railroad, no matter how many homes get bulldozed.  If they don’t want a bad story in the newspaper, it doesn’t get written.

And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn’t a person here who would trade places with any other nation on Earth.  (Applause.)

We may have differences in policy, but we all believe in the rights enshrined in our Constitution.  We may have different opinions, but we believe in the same promise that says this is a place where you can make it if you try.  We may have different backgrounds, but we believe in the same dream that says this is a country where anything is possible.  No matter who you are.  No matter where you come from.

That dream is why I can stand here before you tonight.  That dream is why a working-class kid from Scranton can sit behind me.  (Laughter and applause.)  That dream is why someone who began by sweeping the floors of his father’s Cincinnati bar can preside as Speaker of the House in the greatest nation on Earth.  (Applause.)

That dream -– that American Dream -– is what drove the Allen Brothers to reinvent their roofing company for a new era.  It’s what drove those students at Forsyth Tech to learn a new skill and work towards the future.  And that dream is the story of a small business owner named Brandon Fisher.

Brandon started a company in Berlin, Pennsylvania, that specializes in a new kind of drilling technology.  And one day last summer, he saw the news that halfway across the world, 33 men were trapped in a Chilean mine, and no one knew how to save them.

But Brandon thought his company could help.  And so he designed a rescue that would come to be known as Plan B.  His employees worked around the clock to manufacture the necessary drilling equipment.  And Brandon left for Chile.

Along with others, he began drilling a 2,000-foot hole into the ground, working three- or four-hour — three or four days at a time without any sleep.  Thirty-seven days later, Plan B succeeded, and the miners were rescued.  (Applause.)  But because he didn’t want all of the attention, Brandon wasn’t there when the miners emerged.  He’d already gone back home, back to work on his next project.

And later, one of his employees said of the rescue, “We proved that Center Rock is a little company, but we do big things.”  (Applause.)

We do big things.

From the earliest days of our founding, America has been the story of ordinary people who dare to dream.  That’s how we win the future.

We’re a nation that says, “I might not have a lot of money, but I have this great idea for a new company.”  “I might not come from a family of college graduates, but I will be the first to get my degree.”  “I might not know those people in trouble, but I think I can help them, and I need to try.”  “I’m not sure how we’ll reach that better place beyond the horizon, but I know we’ll get there.  I know we will.”

We do big things.  (Applause.)

The idea of America endures.  Our destiny remains our choice.  And tonight, more than two centuries later, it’s because of our people that our future is hopeful, our journey goes forward, and the state of our union is strong.

Thank you.  God bless you, and may God bless the United States of America.  (Applause.)

END           10:13 P.M. EST


U.S. Senate gives approval to new START Treaty with Russia

December 22, 2010

The U.S. Senate has voted to end debate (as we previously reported) on a new arms control treaty with Russia. Several Republican senators supported the new START (Strategic Arms Reduction Treaty) treaty in what would be a bipartisan success for U.S. President Barack Obama.

President Barack Obama attends a New START Treaty meeting hosted by Vice President Joe Biden in the Roosevelt Room of the White House, Nov. 18, 2010. Seated with them, clockwise from left, are: former Secretaries of State James A. Baker III and Dr. Henry A. Kissinger; Vice Chairman Joint Chiefs of Staff Gen. James E. Cartwright; former Secretary of State Dr. Madeleine Albright; former National Security Advisor Gen. Brent Scowcroft; former Secretary of Defense Dr. William Perry; Deputy Secretary of Energy Daniel B. Poneman; Senator John F. Kerry, D-Mass; Secretary of State Hillary Rodham Clinton; Senator Richard G. Lugar, R-Ind.; Deputy Assistant to the Vice President for National Security Affairs Brian P. McKeon. (Official White House Photo by Pete Souza)

President Barack Obama attends a New START Treaty meeting hosted by Vice President Joe Biden in the Roosevelt Room of the White House, Nov. 18, 2010. Seated with them, clockwise from left, are: former Secretaries of State James A. Baker III and Dr. Henry A. Kissinger; Vice Chairman Joint Chiefs of Staff Gen. James E. Cartwright; former Secretary of State Dr. Madeleine Albright; former National Security Advisor Gen. Brent Scowcroft; former Secretary of Defense Dr. William Perry; Deputy Secretary of Energy Daniel B. Poneman; Senator John F. Kerry, D-Mass; Secretary of State Hillary Rodham Clinton; Senator Richard G. Lugar, R-Ind.; Deputy Assistant to the Vice President for National Security Affairs Brian P. McKeon. (Official White House Photo by Pete Souza)

U.S. Senate approval could smooth the way for further arms reductions beyond the limits set by START, which requires both sides to decrease stockpiles to 1,550 strategic warheads.

The text of the New Strategic Arms Reduction Treaty (START) signed in April 2010 can be read here.

In a Brookings paper released early this month, Steven Pifer, foreign policy analyst and former ambassador to Ukraine, argues that future arms reductions talks with Russia won’t be easy to negotiate, since Russia relies on tactical nuclear weapons to balance conventional imbalances with China and NATO.

Read full story.


China-Bashing contaminates 2010 United States midterm elections

October 8, 2010

China is emerging as a common adversary in midterm U.S. election campaigns, as candidates from both parties seize on anxieties about China’s growing economic power to attack each other on trade policies, outsourcing, and the deficit.

 

French political cartoon from the late 1890s. A pie represents "Chine" (French for China) and is being divided between caricatures of Queen Victoria of the United Kingdom, William II of Germany (who is squabbling with Queen Victoria over a borderland piece, whilst thrusting a knife into the pie to signify aggressive German intentions), Nicholas II of Russia, who is eyeing a particular piece, the French Marianne (who is diplomatically shown as not participating in the carving, and is depicted as close to Nicholas II, as a reminder of the Franco-Russian Alliance), and the Meiji Emperor of Japan, carefully contemplating which pieces to take. A stereotypical Qing official throws up his hands to try and stop them, but is powerless. It is meant to be a figurative representation of the Imperialist tendencies of these nations towards China during the decade.

French political cartoon from the late 1890s. A pie represents "Chine" (French for China) and is being divided between caricatures of Queen Victoria of the United Kingdom, William II of Germany (who is squabbling with Queen Victoria over a borderland piece, whilst thrusting a knife into the pie to signify aggressive German intentions), Nicholas II of Russia, who is eyeing a particular piece, the French Marianne (who is diplomatically shown as not participating in the carving, and is depicted as close to Nicholas II, as a reminder of the Franco-Russian Alliance), and the Meiji Emperor of Japan, carefully contemplating which pieces to take. A stereotypical Qing official throws up his hands to try and stop them, but is powerless. It is meant to be a figurative representation of the Imperialist tendencies of these nations towards China during the decade.

 

With U.S. economic revival still slow, trade policy looms as a an issue in midterm races, The Wall Street Journal reports.

***

China-Bashing Gains Bipartisan Support

By Naftali Bendavid, The Wall Street Journal, October 8, 2010

China is emerging as a bogeyman this campaign season, with candidates across the American political spectrum seizing on anxieties about the country’s growing economic might to pummel each other on trade, outsourcing and the deficit.

In television ads, China is framed as an ominous foreign influence in a time of economic anxiety, often accompanied by red flags and communist-style stars and sometimes by Asian-sounding music. Democrats say Republicans support tax breaks that reward companies for moving jobs to China; Republicans blame Democrats for a federal budget deficit they say forces the U.S. to borrow money from China.

“Candidates are looking to speak in a visceral way to the fears and concerns of voters about jobs,” said Lawrence Jacobs, a political scientist at the University of Minnesota. “Bashing China is safe.”

The heated rhetoric puts the White House in a bind. Administration officials often don’t mind Congress putting pressure on China, and Treasury Secretary Timothy Geithner himself in a speech Wednesday offered a blunt critique of Beijing’s currency policy. But officials also worry that a confrontational approach could backfire.

Both nations may feel compelled by public opinion to engage in “an escalation of rhetoric that is going to be difficult to manage” after the election, said Charles Freeman, chairman of China studies at the Center for Strategic and International Studies in Washington.

Wang Baodong, a spokesman for Beijing’s embassy in Washington, criticized candidates’ use of his country in campaign messages. “China is committed to promoting strong bilateral trade and economic cooperation, which brings about enormous benefit to the welfare of our two peoples,” Mr. Wang said. “So making China an issue in the elections or in any other forms is irrelevant and wrong-targeted.”

Mark Schauer, a Michigan Democrat facing a tough re-election fight, has aired an ad against his Republican rival saying, “Tim Walberg made it way too easy for companies to outsource our jobs to China.” Mr. Walberg said the ad was misleading and that he considered American products superior to Chinese ones.

In Ohio, Democratic Senate candidate Lee Fisher has focused on GOP opponent Rob Portman’s stint as a House member and as U.S. trade representative under President George W. Bush. “Congressman Rob Portman knows how to grow the economy—in China,” said a recent Fisher ad.

The Portman campaign rejected these assertions, saying Mr. Portman fought to increase exports and was the first U.S. trade representative to take China to court and win.

Republicans, for their part, cited China in their recently released “Pledge to America.” “We now borrow 41 cents of every dollar we spend, much of it from foreign countries, including China, and leave the bill to our kids and grandkids,” it said, as it attacked Democrats for “unparalleled recklessness with taxpayer dollars.”

Warnings of foreign influence have often been a feature of U.S. elections, especially in times of economic insecurity. And there is little reason to believe the latest ads will have a long-term effect on U.S.-China relations. or on the fate of anti-China legislation, which has struggled in Congress.But with China on the rise, warnings about it seem to have a special resonance this campaign season. The House, with GOP support, passed a bill in September to penalize Beijing’s foreign-exchange practices. A few days earlier, Democrats unsuccessfully pushed a measure to end corporate tax deductions for expenses related to shifting jobs overseas.

Meanwhile, in West Virginia, an ad by Republican Spike Maynard against Rep. Nick Rahall featured Asian music and Chinese flags. It cited a Texas wind farm that reportedly planned to apply for federal stimulus funds while obtaining its windmills from China. “It’s on our jeans, even our children’s toys: ‘Made in China,’ ” the narrator said.

Democrats said the windmill project would have materials manufactured in the U.S. and that the operator hadn’t applied for stimulus funds.

A similar back-and-forth is unfolding in Virginia, where an ad by Republican State Sen. Robert Hurt accuses Rep. Tom Perriello (D., Va.) of voting to give tax breaks to foreign companies “creating jobs in China.”

That’s a reference to a portion of the stimulus package that gives tax breaks for green jobs. The Perriello campaign said Mr. Hurt’s pledge not to raise taxes means he’d oppose closing tax loopholes for companies that move jobs overseas.

About the author: Naftali Bendavid covers Congress and politics for The Wall Street Journal. Before coming to the Journal, he covered the White House and the Justice Department for the Chicago Tribune. Bendavid also spent five years as deputy Washington bureau chief for the Tribune, overseeing its coverage of government and politics. Bendavid has covered such stories as the impeachment of Bill Clinton, the Al Gore presidential campaign, the September 11, 2001 terrorist attacks and the Supreme Court confirmation of Sonia Sotomayor.

Reprinted with kindly permission of The Wall Street Journal.


Pentagon Officials Renew Military Relations With China

October 6, 2010

The Pentagon, signaling a softening in its relationship with the Chinese military, announced that U.S. Defense Secretary Robert M. Gates will meet with a Chinese counterpart next week in Vietnam and will likely visit Beijing early next year.

Secretary of Defense Robert M. Gates escorts Chinese army Gen. Xu Caihou, vice chairman of the Central Military Commission of the Chinese People's Liberation Army, Oct. 27, 2009, to a conference room at the Pentagon in Arlington, Va., where they will hold discussions on a broad range of security topics.  (DoD photo by R. D. Ward/Released)

Secretary of Defense Robert M. Gates escorts Chinese army Gen. Xu Caihou, vice chairman of the Central Military Commission of the Chinese People's Liberation Army, Oct. 27, 2009, to a conference room at the Pentagon in Arlington, Va., where they will hold discussions on a broad range of security topics. (DoD photo by R. D. Ward/Released)

Ties between the two militaries were suspended in January 2010, when China protested a $6.4 billion U.S.-Taiwan arms deal.

Read full story.


Geneva Summit for Human Rights, March 8-9, 2010

February 3, 2010

Human rights NGOs from around the globe have joined hands to organize the 2nd Geneva Summit for Human Rights, Tolerance and Democracy.

To take place on March 8-9, 2010 – in parallel and to enhance the main annual session of the UN Human Rights Council – this unique assembly of renowned human rights defenders, dissidents and experts will feature victim testimonies, shine a spotlight on urgent human rights issues and situations, and call on governments to guarantee freedom of the internet for democracy and human rights activists.

INTERNET FREEDOM The Google-China Case, Censorship and Hacking: Entrepreneurs & Dissidents Debate

DEFENDING ETHNIC MINORITIES Rebiya Kadeer, Nobel Peace Prize nominee, Uighur human rights hero

ATROCITIES IN SUDAN Jan Pronk, former UN Secretary-General Special Representative in Sudan

EQUALITY FOR WOMEN Massouda Jalal, former Afghan Minister of Women Affairs, first female presidential candidate

THE FUTURE OF DISSENT Yang Jianli, 1989 Tiananmen Square Hero, founder of Foundation for China in the 21st Century

•THE BURMESE JUNTA vs. AUNG SAN SUU KYI  Bo Kyi, Burmese dissident and 2008 winner of Human Rights Watch Award

COMBATING CONTEMPORARY SLAVERY Simon Deng, former Sudanese Slave

OPPRESSION IN TIBET  Phuntsok Nyidron, Buddhist nun, longest-serving Tibetan political prisoner, jailed for recording songs of freedom, winner of 1995 Reebok Human Rights Award

NON-VIOLENT PROTEST Matteo Mecacci, Italian MP, OSCE Rapporteur on human rights and democracy, activist

REPRESSION IN LATIN AMERICA  Tamara Suju, Venezuelan human rights lawyer

PRISONER FROM BIRTH Donghyuk Shin, survivor of North Korean prison camp

•“DEFAMATION OF RELIGION” vs. FREE SPEECH Owais Aslam Ali, Secretary General of Pakistan Press Foundation


Human Rights and the Rule of Law in China

October 10, 2009

Elizabeth Economy, expert on China-U.S. relations and Chinese domestic and foreign policy, testified before the Congressional-Executive Commission on China. She discussed China’s current environmental challenges and implications for U.S.-China relations.

Elizabeth Economy – Director, Asia Studies, Council on Foreign Relations

Statement Prepared for the Congressional-Executive Commission on China

October 7, 2009, Room 628 Dirksen Senate Office Building, 2:00 pm

Mr. Chairman and distinguished Members of the Commission, it is my pleasure to have the opportunity to discuss China’s efforts in the realm of human rights, the rule of law and the environment and the prospects for U.S.-China cooperation on this critical issue.

Introduction

Over the past five to seven years, China’s leaders have become increasingly concerned about the impact of the environment on the country’s future. Twenty of the world’s thirty most polluted cities are in China; over half of the country’s population drinks contaminated water on a daily basis; and more than twenty-five percent of the land is severely degraded or desertified. As China’s Minister of Environmental Protection Zhou Shengxian acknowledged in 2007, “Pollution problems have threatened public health and social stability and have become a bottleneck for sound socio-economic development.”

Much of China’s environmental challenge stems from the very rapid and unfettered growth of the past thirty years. The “growth at all costs” model of development has exerted a profoundly negative impact on the country’s air, water and land quality and further transformed China into a major global polluter. The country now ranks as the world’s chief contributor to global climate change, ozone depletion, the illegal timber trade, and pollution in the Pacific.

Yet the inability of China’s leaders to turn this devastating environmental situation around—and the environment is frequently mentioned as a “top” priority by President Hu Jintao and Premier Wen Jiabao—has as much to do with failings in governance as with economic interests. China has passed well over 100 environmental laws and hundreds of regulations. The challenge rests in effectively implementing these laws and regulations, a process that is seriously impeded by a lack of transparency, rule of law and official accountability.

Whether China’s leaders are able to incorporate better governance practices into their system matters enormously not only for the health and welfare of the Chinese people but also for the rest of the world. If China cannot enforce its current environmental laws and regulations, there is little reason to believe that it will be able to respond effectively to a challenge such as global climate change.

The Nature of the Challenge

China’s leaders are concerned about the country’s environment above all because it is limiting opportunities for future economic growth, harming the health of the Chinese people, and has become one of the leading sources of social unrest throughout the country.

The economic challenges are most direct. Over the past several years, the Chinese media have reported on a number of environment-induced annual economic losses: desertification costs the Chinese economy about $8 billion, in addition to water pollution costs of $35.8 billion, air pollution costs of $27 billion and weather disaster and acid rain costs of $26.5 and $13.3 billion respectively.

All told, the Ministry of Environmental Protection estimates that environmental pollution and degradation cost the Chinese economy the equivalent of ten percent of GDP annually. Regionally, the impact is even more devastating. The prawn catch in the Bohai Sea, for example, has dropped by ninety percent over the past decade and a half as a result of pollution and overfishing. In Qinghai, over two thousand lakes and rivers have simply dried up over the past two decades, contributing to significant lost opportunities for industrial growth.

These economic costs are compounded by a set of mounting public health problems. In a survey of thirty cities and seventy-eight counties released in spring 2007, the Ministry of Health blamed worsening air and water pollution for dramatic increases in the incidence of cancer throughut the country: a nineteen percent rise in urban areas and a twenty-three percent rise in rural areas since 2005.

About 700 million people in China drink water that is contaminated with human or animal waste, and according to the Ministry of Water Resources, 190 million drink water that is so contaminated that it is dangerous to their health.

Taken together, these economic and health problems are at the root of the rapidly rising public discontent and unrest over the state of the environment. According to Minister Zhou, in 2005, the number of environmental protests topped 50,000.

While some pollution-related protests are relatively small and peaceful, others become violent, even deadly, when demands for change are repeatedly ignored.

In August 2009, for example, several thousand villagers in Shaanxi Province stormed a lead and zinc smelting plant after hundreds of children living near the plant tested positive for excessive levels of lead in their blood.Of these, 154 were so sick that they had to be admitted to the hospital. The villagers had been complaining for three years about the plant, and although the local government has promised to relocate the affected families, villagers in the relocation sites have noted that their children are similarly afflicted with lead poisoning.

Environmental protest has also been spurred by the Internet. In May 2009, in Shandong Province, a group of residents posted an online petition calling for an investigation of four cyclohexanone chemical plants. The petioners believed that the factories, which had been in operation since a year earlier, were polluting the air and water and contributing to an unusually high number of thyroid cancer cases. The county government initially ignored the petition, arguing that the factories were not allowed to drain wastewater until they met provincial standards and had passed official water quality tests. Over the next month, the petition circulated on web portals such as Baidu and Tianya, collecting an estimated 1,400 signatures.

In an open letter published on Internet forums, one resident even called for a broader “uprising” that might not be successful but would “mark the start of a revolution against a crude regime” and even called for the killing of the Communist Party chief and county director. The author later claimed that more than 5,000 people had signed up for the protest. On June 29, 2009, Premier Wen Jiabao ordered the Shandong officials to investigate the claims and respond to the public.

In addition, the Internet and other forms of telecommunication such as texting have facilitated mobilized protest in urban areas, a phenomenon of only the past two years. There have been significant protests—with up to 10,000 people—in major cities such as Xiamen, Zhangzhou and Chengdu over the planned siting of various large-scale chemical and petrochemical plants. Here, too, violence has occurred in some cases. Notably, in a few of these instances of urban protest, public opposition has been strong enough to lead to a reversal in a government decision. The significance of the urban, middle class protest is that it erupts not “after the fact” in response to a devastating environment-induced economic or public health crisis, but rather in advance of something likely to cause significant public health damage. In a small, but potentially significant, way, therefore, urban protestors have influenced Chinese government policy.

Reform in Environmental Governance

There are a number of reasons for China’s worsening environmental situation and the related proliferating social and economic challenges: a continued priority on economic growth, the pricing of resources that doesn’t support conservation or efficiency, a dearth of political and economic incentives to do the right thing and, most critically, a lack of transparency, official accountability and the rule of law. There is no reliable mechanism for uncovering and dealing with environmental wrongdoing.

To begin with, accurate environmental data are often difficult to obtain. Sometimes it is a matter of capacity. Local environmental officials may simply not have the manpower, transportation or funds to monitor pollution levels at all the sites for which they are responsible. In addition, local officials are often reluctant to provide information that reflects poorly on their leadership, and there is no institutionalized check on the statistics that are provided. One significant central government campaign to evaluate local officials on their environmental performance—the Green GDP campaign—failed in large measure because the Ministry of Environmental Protection could not access the necessary environmental data from a number of recalcitrant provincial leaders. In a few places, such as Jiangsu Province, there are experiments underway with interntational partners to scorecard factories and make the information available publicly. However, ensuring the transparency element of the process has apparently been quite difficult.

Corruption is also a serious problem. Many local officials often ignore serious pollution problems out of self-interest. Sometimes they have a direct financial stake in factories or personal relationships with factory managers. In recent years, the media have uncovered cases in which local officials have put pressure on the courts, the press, or even hospitals to prevent pollution problems and disasters from coming to light. Moreover, local officials often divert environmental protection funds to other endeavors. A recent Ministry of Environmental Protection-supported study, for example, found that fully half of the environmental funds distributed from Beijing to local officials for environmental protection made its way to projects unrelated to the environment.

Recognizing the potential of local officials to subvert or ignore environmental laws and regulations, Beijing has opened the door to the media and non-governmental organizations (NGOs) to act as unofficial environmental watchdogs. China’s first environmental NGO, Friends of Nature, was established in 1994, and it was devoted to environmental education and biodiversity protection. Fifteen years later, China has over 3,000 environmental NGOs that play a role in virtually every aspect of environmental protection. Above all, they help bring transparency to the environmental situation on the ground.

These groups help expose polluting factories to the central government, launch internet campaigns to protest the proliferation of large-scale hydropower projects, sue for the rights of villagers poisoned by contaminated water or air, provide seed money to smaller, newer NGOS throughout the country, and go undercover to expose multinationals that ignore international environmental standards. The media are an important ally in this fight: educating the public, shaming polluters, uncovering environmental abuse and highlighting environmental protection successes.

Environmental NGOs are also at the forefront of advancing the still nascent rule of law in China’s political system. In 1998, Wang Canfa, a professor of law at the China University of Politics and Law, established the Center for Legal Assistance to Pollution Victims (CLAPV). The center trains lawyers to engage in enforcing environmental laws, educates judges on environmental issues, provides free legal advice to pollution victims through a telephone hotline, and litigates cases involving environmental law. Between 2001 and 2007, the center trained 262 lawyers, 189 judges and 21 environmental enforcement officials in environmental law.

In addition, Wang has been advising the Chinese government on the establishment of a system of specialized environmental courts. Beginning in late 2007, the Supreme People’s Court established a network of courts that are responsible only for cases regarding environmental protection and the enforcement of environmental regulations. These environmental protection courts seek to address the weak capacity of judges to solve environmental disputes due to lack of expertise and experience, eliminate the challenge faced by plaintiffs in bringing environmental lawsuits, and strengthen the enforcement of judgements against defendants who are influential in local economic matters. Thus far, these courts have been established in three provinces: Guizhou, Jiangsu and Yunnan. The courts have already heard a number of cases: the Kunming Court in Yunnan Province heard twelve environmental law violation cases during the first half of 2009, while the Guiyang court in Guizhou accepted forty-five environmental cases (and ruled on thirty-seven of them) in its first six months.These environmental courts also have the authority to enforce the judgments they issue. More environmental courts are expected to open throughout China as the success of established courts becomes determined. The biggest problem currently confronting the courts is that they do not have enough cases to consider.

Despite the important role that environmental NGOs and the media have come to play in China’s environmental protection effort, many Chinese leaders remain wary of the intentions of these non-governmental actors. Above all, China’s leaders fear the potential that the environment might become a lightning rod for a broader push for political reform. They thus have put in place a byzantine set of financial and political requirements to confine NGO activities within certain boundaries and to enable their close monitoring by authorities.

Misjudging these boundaries can bring severe penalties. Wu Lihong worked for sixteen years to address the pollution in Tai Lake, gathering evidence that forced almost two hundred factories to close. In 2005, Beijing honored Wu as one of the country’s top environmentalists, but in 2006, one of the local governments Wu had criticized, arrested and jailed him on dubious charges of blackmail and fraud. Yu Xiaogang, the 2006 winner of the Goldman Environmental Prize and 2009 winner of the Ramon Magsaysay Award, both for grassroots environmental activism, has been forbidden to travel abroad in retaliation for educating villagers about the potential downsides of a proposed dam relocation in Yunnan Province. A third environmental activist, Tan Kai, has been in jail since 2006. In 2005, Tan established the NGO Green Watch in his home province, Zhejiang, to monitor local officials’ compliance with orders to shut down several polluting factories that had been the sites of serious protests.

Implications for the United States

For the United States, the capacity of China to meet its environmental challenges is only becoming more pressing. If China does not have transparency, accountability or the rule of law within its domestic environmental system, it cannot be relied upon to be a responsible partner to meet the challenge of a global issue such as climate change. It will not possess the capacity to enforce the regulations that will arise from domestic climate legislation nor the transparency to ensure accurate measurement of emissions and emissions reductions. Nor will China be able to devise and implement a system that will ensure that officials who attempt to subvert the legislation will be held accountable. This does not mean that the United States should not move forward to assist China in setting and meeting targets to reduce their greenhouse gas emissions. It does suggest, however, that building capacity within China’s system of environmental governance should be a top priority for bilateral cooperation.

There are small-scale efforts already underway within the United States to help China develop such capacity. Over the past two years, the U.S. government has provided $5-$10 million in Development Assistance for programs and activities in the PRC related to democracy, rule of law and the environment. With support from the U.S. government, for example, the American Bar Association has supported both Wang Canfa’s Center for Legal Assistance to Pollution Victims as well as various universities to train public interest lawyers to specialize on the environment and provide expertise to the new environmental courts. Vermont Law School similarly engages partners such as SunYat-sen University to help improve China’s environmental policies, systems and laws. Climate change is also garnering growing interest as an area of cooperation.

The state of California is already pushing forward on several fronts, including enhancing transparency in energy use in Jiangsu Province and fostering interagency cooperation at the local level to address climate change. Still, the majority of interest and attention in the United States and China is focused on the opportunity for technology cooperation and transfer. This technology will only be effective, however, if China has the appropriate political environment to support its use. To tackle an issue of the magnitude of climate change, will require far more of a concerted and coordinated international effort by the United States and its partners to bolster the rule of law, transparency and accountability within China.


Protected: China’s public relations strategy

July 8, 2009

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U.S. treasury secretary Geithner urges combined U.S.-China efforts to boost global economy

June 1, 2009
 

United States Secretary of the Treasury Timothy Geithner

United States Secretary of the Treasury Timothy Geithner

Timothy Geithner, in his first visit to China as U.S. Treasury Secretary, presented a plan for the United States and China to work together to rebuild the global economy and restore growth.

In a speech today at Peking University, Geithner stressed that there is much that both the United States and China need to do to rebalance the world economy. He called for China to make its currency more flexible in exchange for fiscal reforms in the United States. He also said China would need to diversify its economy beyond relying so heavily on exports for growth, and that the United States, in return, would focus on mitigating its ballooning deficit to protect massive Chinese investments in U.S. government debt.

Chinese media focused on Geithner’s implication that China should play a more significant role in global economic policymaking. China Daily says the primary goal of Geithner’s trip, which has included meetings with several leading Chinese economic policymakers, has been to reaffirm China’s faith in U.S. dollar-backed assets and still fears that U.S. budget deficit and loose monetary policy will prompt inflation, undermining Chinese holdings of both the U.S. dollar and U.S. Treasury bonds.

Below is the text of Timothy Geithner’s speech.

***

The United States and China, Cooperating for Recovery and Growth

 Treasury Secretary Timothy F. Geithner

Speech at Peking University – Beijing, China
June 1st, 2009

 It is a pleasure to be back in China and to join you here today at this great university. 

I first came to China, and to Peking University, in the summer of 1981 as a college student studying Mandarin. I was here with a small group of graduate and undergraduate students from across the United States. I returned the next summer to Beijing Normal University. 

We studied reasonably hard, and had the privilege of working with many talented professors, some of whom are here today. As we explored this city and traveled through Eastern China, we had the chance not just to understand more about your history and your aspirations, but also to begin to see the United States through your eyes. 

Over the decades since, we have seen the beginnings of one of the most extraordinary economic transformations in history. China is thriving.  Economic reform has brought exceptionally rapid and sustained growth in incomes. China’s emergence as a major economic force more fully integrated into the world economy has brought substantial benefits to the United States and to economies around the world.  

In recognition of our mutual interest in a positive, cooperative, and comprehensive relationship, President Hu Jintao and President Obama agreed in April to establish the Strategic and Economic Dialogue. Secretary Clinton and I will host Vice Premier Wang and State Councilor Dai in Washington this summer for our first meeting.  I have the privilege of beginning the economic discussions with a series of meetings in Beijing today and tomorrow. 

These meetings will give us a chance to discuss the risks and challenges on the economic front, to examine some of the longer term challenges we both face in laying the foundation for a more balanced and sustainable recovery, and to explore our common interest in international financial reform.

Current Challenges and Risks

 The world economy is going through the most challenging economic and financial stress in generations. 

 The International Monetary Fund predicts that the world economy will shrink this year for the first time in more than six decades. The collapse of world trade is likely to be the worst since the end of World War II. The lost output, compared to the world economy’s potential growth in a normal year, could be between three and four trillion dollars.

In the face of this challenge, China and the United States are working together to help shape a strong global strategy to contain the crisis and to lay the foundation for recovery. And these efforts, the combined effect of forceful policy actions here in China, in the United States, and in other major economies, have helped slow the pace of deterioration in growth, repair the financial system, and improve confidence. 

In fact, what distinguishes the current crisis is not just its global scale and its acute severity, but the size and speed of the global response.

At the G-20 Leaders meeting in London in April, we agreed on an unprecedented program of coordinated policy actions to support growth, to stabilize and repair the financial system, to restore the flow of credit essential for trade and investment, to mobilize financial resources for emerging market economies through the international financial institutions, and to keep markets open for trade and investment. 

That historic accord on a strategy for recovery was made possible in part by the policy actions already begun in China and the United States. 

China moved quickly as the crisis intensified with a very forceful program of investments and financial measures to strengthen domestic demand.

In the United States, in the first weeks of the new Administration, we put in place a comprehensive program of tax incentives and investments ¨C the largest peace time recovery effort since World War II – to help arrest the sharp fall in private demand. Alongside these fiscal measures, we acted to ease the housing crisis. And we have put in place a series of initiatives to bring more capital into the banking system and to restart the credit markets.  

These actions have been reinforced by similar actions in countries around the world. 

In contrast to the global crisis of the 1930s and to the major economic crises of the postwar period, the leaders of the world acted together. They acted quickly. They  took steps to provide assistance to the most vulnerable economies, even as they faced exceptional financial needs at home. They worked to keep their markets open, rather than retreating into self-defeating measures of discrimination and protection. 

And they have committed to make sure this program of initiatives is sustained until the foundation for recovery is firmly established, a commitment the IMF will monitor closely, and that we will be able to evaluate together when the G-20 Leaders meet again in the United States this fall. 

We are starting to see some initial signs of improvement. The global recession seems to be losing force. In the United States, the pace of decline in economic activity has slowed. Households are saving more, but consumer confidence has improved, and spending is starting to recover. House prices are falling at a slower pace and the inventory of unsold homes has come down significantly. Orders for goods and services are somewhat stronger. The pace of deterioration in the labor market has slowed, and new claims for unemployment insurance have started to come down a bit. 

The financial system is starting to heal. The clarity and disclosure provided by our capital assessment of major U.S. banks has helped improve market confidence in them, making it possible for banks that needed capital to raise it from private investors and to borrow without guarantees. The securities markets, including the asset backed securities markets that essentially stopped functioning late last year, have started to come back. The cost of credit has fallen substantially for businesses and for families as spreads and risk premia have narrowed.    

These are important signs of stability, and assurance that we will succeed in averting financial collapse and global deflation, but they represent only the first steps in laying the foundation for recovery. The process of repair and adjustment is going to take time. 

China, despite your own manifest challenges as a developing country, you are in an enviably strong position. But in most economies, the recession is still powerful and dangerous. Business and households in the United States, as in many countries, are still experiencing the most challenging economic and financial pressures in decades. 

The plant closures, and company restructurings that the recession is causing are painful, and this process is not yet over. The fallout from these events has been brutally indiscriminant, affecting those with little or no responsibility for the events that now buffet them, as well as on some who played key roles in bringing about our troubles.

The extent of the damage to financial systems entails significant risk that the supply of credit will be constrained for some time. The constraints on banks in many major economies will make it hard for them to compensate fully for the damage done to the basic machinery of the securitization markets, including the loss of confidence in credit ratings. After a long period where financial institutions took on too much risk, we still face the possibility that  banks and investors may take too little risk, even as the underlying economic conditions start to improve. 

And, after a long period of falling saving and substantial growth in household borrowing relative to GDP, consumer spending in the United States will be restrained for some time relative to what is typically the case in recoveries. 

 These are necessary adjustments. They will entail a longer, slower process of recovery, with a very different pattern of future growth across countries than we have seen in the past several recoveries. 

Laying the Foundation for Future Growth

 As we address this immediate financial and economic crisis, it is important that we also lay the foundations for more balanced, sustained growth of the global economy once this recovery is firmly established. 

A successful transition to a more balanced and stable global economy will require very substantial changes to economic policy and financial regulation around the world. But some of the most important of those changes will have to come in the United States and China. How successful we are in Washington and Beijing will be critically important to the economic fortunes of the rest of the world. The effectiveness of U.S. policies will depend in part on China’s, and the effectiveness of yours on ours. 

Although the United States and China start from very different positions, many of our domestic challenges are similar. In the United States, we are working to reform our health care system, to improve the quality of education, to rebuild our infrastructure, and to improve energy efficiency. These reforms are essential to boosting the productive capacity of our economy. These challenges are at the center of your reform priorities, too. 

We are both working to reform our financial systems. In the United States, our challenge is to create a more stable and more resilient financial system, with stronger protections for consumer and investors.  As we work to strengthen and redesign regulation to achieve these objectives, our challenge is to preserve the core strengths of our financial system, which are its exceptional capacity to adapt and innovate and to channel capital for investment in new technologies and innovative companies. You have the benefit of being able to learn from our shortcomings, which have proved so damaging in the present crisis, as well as from our strengths.  

Our common challenge is to recognize that a more balanced and sustainable global recovery will require changes in the composition of growth in our two economies. Because of this, our policies have to be directed at very different outcomes. 

In the United States, saving rates will have to increase, and the purchases of U.S. consumers cannot be as dominant a driver of growth as they have been in the past. 

In China, as your leadership has recognized, growth that is sustainable growth will require a very substantial shift from external to domestic demand, from an investment and export intensive driven growth, to growth led by consumption. Strengthening domestic demand will also strengthen China’s ability to weather fluctuations in global supply and demand.

If we are successful on these respective paths, public and private saving in the United States will increase as recovery strengthens, and as this happens, our current account deficit will come down. And in China, domestic demand will rise at a faster rate than overall GDP, led by a gradual shift to higher rates of consumption.  

Globally, recovery will have come more from a shift by high saving economies to stronger domestic demand and less from the American consumer. 

The policy framework for a successful transition to this outcome is starting to take shape.

In the United States, we are putting in place the foundations for restoring fiscal sustainability. 

The President in his initial budget to Congress made it clear that, as soon as recovery is firmly established, we are going to have to bring our fiscal deficit down to a level that is sustainable over the medium term. This will mean bringing the imbalance between our fiscal resources and expenditures down to the point – roughly three percent of GDP – where the overall level of public debt to GDP is definitively on a downward path.  The temporary investments and tax incentives we put in place in the Recovery Act to strengthen private demand will have to expire, discretionary spending will have to fall back to a more modest level relative to GDP, and we will have to be very disciplined in limiting future commitments through the reintroduction of budget disciplines, such as pay-as-you go rules.

The President also looks forward to working with Congress to further reduce our long-run fiscal deficit.

And, critical to our long-term fiscal health, we have to put in place comprehensive health care reform that will bring down the growth in health care costs, costs that are the principal driver of our long run fiscal deficit. 

The President has also proposed steps to encourage private saving, including through automatic enrollment in retirement savings accounts. 

Alongside these fiscal actions, we have designed our policies to address the financial crisis to carefully minimize risk to the taxpayer and to allow for an orderly exit or unwinding as soon as conditions permit. Across the various financial facilities put in place by the Treasury, the Federal Reserve, and the FDIC, we have been careful to set the economic terms at a level so that demand for these facilities will fade as conditions normalize and risk premia recede.  Banks have a strong incentive to replace public capital with private capital as soon as conditions permit. 

Let me be clear – the United States is committed to a strong and stable international financial system. The Obama Administration fully recognizes that the United States has a special responsibility to play in this regard, and we fully appreciate that exercising this special responsibility begins at home. As we recover from this unprecedented crisis, we will cut our fiscal deficit, we will eliminate the extraordinary governmental support that we have put in place to overcome the crisis, we will continue to preserve the openness of our economy, and we will resolutely maintain the policy framework necessary for durable and lasting sustained non-inflationary growth.

In China, the challenge is fundamentally different, and at least as complex. 

Critical to the success of your efforts to shift future growth to domestic demand are measures to raise household incomes and to reduce the need that households feel to save large amounts for precautionary reasons or to pay for major expenditures like education.  This involves strengthening the social safety net with health care reform and more complete public retirement systems, enacting financial reforms to help expand access to credit for households, and providing products that allow households to insure against risk.  These efforts can be funded through the increased collection of dividends from state-owned enterprises.

The structure of the Chinese economy will shift as domestic demand grows in importance, with a larger service sector, more emphasis on light industry, and less emphasis on heavy, capital intensive export and import-competing industries.  The resulting growth will generate greater employment, and be less energy-intensive than the current structure of Chinese industry. Allowing the market, interest rates, and other prices to function to encourage the shift in production will be particularly important.

An important part of this strategy is the government’s commitment to continue progress toward a more flexible exchange rate regime.  Greater exchange rate flexibility will help reinforce the shift in the composition of growth, encourage resource shifts to support domestic demand, and provide greater ability for monetary policy to achieve sustained growth with low inflation in the future. 

International Financial Reform

 These are some of the most important domestic economic challenge we face, and these issues will be at the core of our agenda for economic cooperation. 

But I think it is important to underscore that we also have a very strong interest in working together to strengthen the framework for international economic and financial cooperation.  

Let me highlight three important areas.

At the G-20 Leaders meeting, we committed to a series of actions to help reform and strengthen the international financial architecture.

As part of this, we agreed to put in place a stronger framework of standards for supervision and regulation of the financial system.  We expanded and strengthened the Financial Stability Forum, now renamed the Financial Stability Board.  China and other major emerging economies are now full participants, alongside the major financial centers, in this critical institution for cooperation.  We will have the chance together to help redesign global standards for capital requirements, stronger oversight of global markets like derivatives, better tools for resolving future financial crises, and measures to reduce the opportunities for regulatory arbitrage. 

We also committed to an ambitious program of reform of the IMF and other international financial institutions.  Our common objective is to reform the governance of these institutions to make them more representative of the shifting balance of economic and financial activity in the world, to strengthen their capacity to prevent future crisis, with stronger surveillance of macroeconomic, exchange rate, and financial policies, and to equip them with a stronger financial capacity to respond to future crises. We also committed to mobilize $500 billion in additional finance through the enlargement and membership expansion of the IMF’s New Arrangements to Borrow in order to provide an insurance policy for the global financial system.

As part of this process of reform, the United States will fully support having China play a role in the principal cooperative arrangements that help shape the international system, a role that is commensurate with China’s importance in the global economy.

I believe that a greater role for China is necessary for China, for the effectiveness of the international financial institutions themselves, and for the world economy. 

China is already too important to the global economy not to have a full seat at the international table, helping to define the policies that are critical to the effective functioning of the international financial system.

Second, we must cooperate to assure that the global trade and investment environment remains open, and that opportunities continue to expand.  As economies have become more open and more closely integrated, global economic growth has been stronger and more broad-based, bringing increasing numbers out of poverty, and turning developing nations into major emerging markets.    The global commitment to trade liberalization and increasingly open investment played a critical role in this process ¨C in the industrialized world, in East Asia, and, since 1978, in China.  As we go through the severe stresses of this crisis, we must not turn our backs on open trade and investment – for ourselves and for those who have yet to experience the fruits of growth and development. The United States, China, and the other members of the G20 have committed to not resort to protectionist measures by raising trade and investment barriers and to work toward a successful conclusion to the Doha Development Round. 

And third, one of the most critical long-term challenges that we both face is climate change.  Individually and collectively, there is an urgent need to ensure that each and every country takes meaningful action to deal with this threat.  Reducing land and forest degradation, conserving energy, and using clean technology are important objectives that complement both our efforts to achieve a new, sustainable pattern of growth and our goal of reducing greenhouse gas emissions. China and the United States already are working closely through the Strategic and Economic Dialogue in areas such as clean transportation, clean and efficient production of electricity, and the reduction of air and water pollution.  We must continue these efforts for the sake of our natio ns and the planet.

Conclusion

In the last few years the frequency, intensity, and importance of U.S.-China economic engagements have multiplied.  The U.S.-China Strategic and Economic Dialogue that President Obama and President Hu initiated in April is the next stage in that process.  I look forward to welcoming Vice Premier Wang, State Councilor Dai and their colleagues to Washington to participate in the first meeting of the U.S.-China Strategic and Economic Dialogue.

 Our engagement should be conducted with mutual respect for the traditions, values, and interests of China and the United States. We will make a joint effort in a concerted way “同心协力”.  We should understand that we each have a very strong stake in the health and the success of each other’s economy. 

China and the United States individually, and together, are so important in the global economy and financial system that what we do has a direct impact on the stability and strength of the international economic system.  Other nations have a legitimate interest in our policies and the ways in which we work together, and we each have an obligation to ensure that our policies and actions promote the health and stability of the global economy and financial system.

We come together because we have shared interests and responsibilities.  We also have our own national interests.   I will be a strong advocate for U.S. interests, just as I expect my counterparts to represent China.  China has benefited hugely from open trade and investment, and the ability to greatly increase its exports to the rest of the world.  In turn, we expect increased opportunities to export to and invest in the Chinese economy.   

We want China to succeed and prosper.  Chinese growth and expanding Chinese demand is a tremendous opportunity for U.S. firms and workers, just as it is in China and the rest of the world. 

Global problems will not be solved without U.S.-China cooperation.  That goes for the entire range of issues that face our world from economic recovery and financial repair to climate change and energy policy.

I look forward to working with you cooperatively, and in a spirit of mutual respect.


China reacts sharply to new U.S. military report

March 26, 2009

The BBC reports Beijing reacted sharply toward a U.S. Defense Department report that says China’s rapid development of its armed forces is dramatically shifting the power balance in Asia.

A foreign ministry spokesperson for China said the report represented a “gross distortion of the facts” and “Cold War thinking.”

Here is the text of the report itself. The Pentagon’s annual report to Congress on China’s military power draws Beijing’s ire every year.


Security Challenges Arising from the Global Financial Crisis

March 11, 2009
Statement of Richard Nathan Haass, former Director of Policy Planning in the U.S. State Department, current President of the Council on Foreign Relations, before the Committee on Armed Services of the U.S. House of Representatives
Washington DC, March 11, 2009

Mr. Chairman,

Thank you for this opportunity to testify before the House Committee on Armed Services on security challenges arising from the global financial crisis. Let me first commend you and your colleagues for holding this hearing. Most of the analysis and commentary on the global economic crisis has focused on the economic consequences.

This is understandable, but it is not sufficient. The world does not consist of stovepipes, and what happens in the economic realm affects political and strategic policies and realities alike. It is also important to say at the outset that this crisis, which began in the housing sector in the United States, is now more than a financial crisis. It is a full-fledged economic crisis. It is also more than an American crisis. It is truly global.

I would add, too, that the crisis is unlike any challenge we have seen in the past. It is qualitatively different than the sort of cyclical downturn that capitalism produces periodically. This crisis promises to be one of great depth, duration, and consequence. This crisis was not inevitable. It was the result of flawed policies, poor decisions, and questionable behavior.

It is important that this point be fully understood lest the conclusion be widely drawn that market economies are to be avoided. The problem lies with the practice of capitalism, not the model. Nevertheless, the perception is otherwise, and one consequence of the economic crisis is that market economies have lost much of their luster and the United States has lost much of its credibility in this realm.

It is inconceivable in these circumstances to imagine an American official preaching the virtues of the Washington Consensus. This is unfortunate, as open economies continue to have more to offer the developing world than the alternatives. It also adds to the importance that the U.S. economy get back on track lest a lasting casualty of the crisis be modern capitalism itself.

The impact of the economic crisis will be varied and go far beyond the image of capitalism and the reputation of the United States. Director of National Intelligence Dennis Blair was all too correct when he testified recently that the primary near-term security concern of the United States is the global economic crisis and its geopolitical implications. The crisis will have impact on conditions within states, on the policies of states, on relations between states, and on the thinking of those who run states. I have already alluded to this last consideration.

Here I would only add that initial reactions around the world to the crisis appear to have evolved, from some initial gloating at America’s expense to resentment of the United States for having spawned this crisis to, increasingly, hopes that the American recovery arrives sooner and proves to be more robust than is predicted. This change of heart is not due to any change of thinking about the United States but rather to increased understanding that the recovery of others will to a significant extent depend on recovery in the United States. In a global world, what happens here affects developments elsewhere and vice versa. Decoupling in either direction is rarely a serious possibility. The crisis is clearly affecting the developed world, mostly as a result of the centrality of banking-related problems and the high degree of integration that exists among the economies of the developed world. Iceland’s government has fallen; others may over time. Many governments (including several in Central and Eastern Europe but outside the Eurozone) will require substantial loans.

The economies of Japan, much of Europe, and the United States are all contracting. World economic growth, which averaged 4 to 5 percent over the past decade, will be anemic this year even if it manages to be positive, which is increasingly unlikely. It is worth noting that the most recent World Bank projection predicts negative growth for 2009. Change of this sort will have consequences. There will likely be fewer resources available for defense and foreign assistance. Reduced availability of resources for defense makes it even more critical that U.S. planners determine priorities. Preparing to fight a large-scale conventional war is arguably not the highest priority given the enormous gap between the relevant military capabilities of the United States and others and the greater likelihood that security-related challenges will come from terrorism and asymmetric warfare. State-capacity building, the sort of activity the United States is doing in Iraq, Afghanistan, and Pakistan, will continue to place a heavy burden on U.S. military and civilian assets.

Also remaining highly relevant (and deserving to be a funding priority) will be standoff capabilities designed to destroy targets associated with terrorism and weapons of mass destruction. Developing states may appear to be better off than wealthier countries at first glance. Their growth on average is down by half from previous years, but still positive. Appearances, however, can be deceptive. This growth is measured from a low base in absolute and relative terms. The reduction in growth in some instances has been dramatic. Developing country exports are down as demand is down in the developed world.

Also reduced are aid flows and most importantly investment flows to the developing world. Commodity prices are much lower, a boon to those who rely on imports but a major problem for the many who are dependent on the income from one or two exports. A few countries merit specific mention. One is China. China’s economic success over the past few decades constitutes one of history’s great examples of poverty eradication. This process, one that has involved the migration of millions of people every year from poor rural areas to cities, will slow considerably. The already large number of domestic political protests in China over such issues as land confiscation, corruption, environmental degradation, and public health, is likely to grow. Absent renewed robust economic growth, the chances are high that the government will react by clamping down even more on the population lest economic frustration lead to meaningful political unrest.

Russia is in a different position, one characteristic of countries dependent on raw material exports for much of their wealth. The Russian economy is contracting after a period of boom. As is the case with China, this suggests the likely assertion of greater political control. But Russia is not as fully integrated as China is with the world economy. There is thus a greater (although impossible to quantify) chance that Russia’s leaders will turn to the time-honored resort of manufacturing an overseas crisis to divert attention than will China’s.

The same holds true for Iran and Venezuela, two countries that are heavily reliant on energy exports and whose foreign policies have been counterproductive (to say the least) from the U.S. perspective. But at the same time, it is possible that one or both will pull in their horns. Venezuela is already showing some signs of this, with its more welcoming stance toward international oil companies. This may well be simply a tactical adjustment to immediate needs.

And at least in principle, Iran’s government might find it more difficult to make the case to its own people for its continued pursuit of a nuclear weapons option if the Iranian people understood that it was costing them dearly with respect to their standard of living. Iraq is another oil producing country whose wealth is closely associated with the price of oil. Here the effects are sure to be unwanted. There is the danger that disorder will increase as unemployment rises, prospects for sharing revenue shrink, and the ability of the central government to dispense cash to build broad national support diminishes. In light of the multiple challenges already facing the United States, the last thing the Obama administration needs is the specter of an unravelling Iraq.

Two other countries are worth highlighting. One is Pakistan. Pakistan’s economic performance is down sharply for many reasons, including a decrease in both foreign investment in the country and exports from Pakistan to other countries. Pakistan has little margin for error; the possibility that it could fail is all too real. The worsened economic situation makes governing all that much more difficult. The consequences of a failed Pakistan for the global struggle against terrorism, for attempts to prevent further nuclear proliferation, for the effort to promote stability in Afghanistan, and for India’s future are difficult to exaggerate. North Korea is a second nuclear-armed state whose stability is worsened by the economic crisis.

At issue is the extent to which South Korea (along with China and Japan) can provide resources to the North to help stave off collapse. Another serious consequence of the global economic crisis, one that affects both developed and developing countries, is the reality that protectionism is on the rise. One realm is trade; some seventeen of the twenty governments set to meet in London early next month have increased barriers to trade since they met late last year. Negotiated free trade agreements with Colombia, Panama, and South Korea continue to languish in the U.S. Congress. The president lacks the Trade Promotion Authority essential for the negotiation of complex, multilateral trade accords. Prospects for a Doha round global trade pact appear remote. The volume of world trade is down for the first time in decades. The economic but also strategic costs of this trend are high. Trade is a major source of political as well as economic integration; one reason China acts as responsibly as it does in the political sphere is because of its need to export its products lest potentially destabilizing unemployment jump sharply. Trade has other virtues as well. More than anything else, trade is a principal engine of global economic growth. The completion of the Doha round might be worth as much as $500 billion to the world in expanded economic activity. One-fourth of this expanded output would occur in the United States. This is the purest form of stimulus.

For the United States, exports are a source of millions of relatively high-paying jobs; imports are anti-inflationary and spur innovation. Alas, the economic crisis will make it difficult if not impossible to conclude new trade pacts and to gain the requisite domestic support for them. Economic nationalism is on the rise, and when this happens, the will and the ability of political leaders to support policies that are perceived to hurt large numbers of their citizens (but which in reality help many more) invariably goes down. What is more, the economic crisis may also make it more difficult to reach agreement on a global climate change pact when representatives of most of the world’s countries gather in Copenhagen late this year. Developed and developing countries alike will resist commitments that appear to or in fact do sacrifice near-term economic growth for long-term environmental benefit. What, then, should be done to limit the adverse strategic effects of an economic crisis that is certain to get worse and persist for some time?

The United States – the Obama administration and the Congress – should resist protectionism. “Buy America” provisions in the stimulus legislation will increase costs to American consumers and all but make certain that other countries will follow suit, thereby reducing the prospects for American firms to sell abroad. More American jobs are likely to be sacrificed than preserved. Increased protectionism will also dilute the strategic benefits that stem from trade and its ability to contribute to international stability by giving governments a stake in stability. Similar arguments hold as to why “lend national” provisions are counterproductive. Bringing countries into the world trading system (best done through WTO accession) makes strategic sense, too, as it gives them a stake in maintaining order at the same time it opens government decision-making to greater degrees of transparency. Recession cannot become this country’s energy policy or a reason not to decrease U.S. consumption of oil, imported or otherwise. Lower prices will dilute any economic incentive to consume less oil. Regulatory policy will be the principal means of discouraging demand and encouraging the development of alternative energy sources and technologies. Reduced demand is essential for strategic reasons (so as not to leave the United States highly dependent on imports and so that countries such as Russia, Venezuela, and Iran do not benefit from dollar inflows), for environmental reasons, and for economic reasons, i.e., not to increase the U.S. balance of payments deficit. The goal should be to use this moment of temporarily-reduced prices to decrease the chances we as a country again find ourselves in a world of high energy prices once the recession recedes.

The United States should work with other developed and reserve-rich countries to increase the capacity of the IMF to assist governments in need of temporary loans. Current capacity falls short of what is and will be needed. It would be helpful if aid budgets were not victims of the economic crisis. Aid is needed on a large scale not just for humanitarian reasons (to fight disease, etc.) but also to build the human capital that is the foundation of economic development. Aid will also be a necessary substitute in the short and medium run for investment. Absent such flows we are likely to see greater misery and an increased number of failing or failed states. The upcoming G-20 summit in London provides an opportunity to adopt or encourage some useful measures in many of these realms. It is essential that others, including Europe and Japan, take steps to stimulate their economies. It is equally important, though, that guidelines be promulgated so that stimulus programs do not become a convenient mechanism for unwarranted subsidies and “buy national” provisions that are simply protectionist measures by another name.

The London meeting is also an opportunity to increase IMF capacity, to generate commitments to provide aid to developing countries, and to agree on at least some regulatory principles for national banking and financial systems. There is not time, however, to try to rebuild the architecture of the international economic system, solve the problems caused by countries that run chronic surpluses, or revamp the system of exchange rates. Let me close with two final thoughts. Much of this hearing and statement is focused on the question of the consequences of the economic crisis for global security. But it is important to keep in mind that the relationship is not only one way. Developments in the political world can and will have an effect on the global economy.

Imagine for a second the economic consequences of, say, a Taiwan crisis or fighting between India and Pakistan or an armed confrontation with Iran over its nuclear ambitions. This last possibility is the most worrying in the near term and underscores the importance of trying to negotiate limits on Iran’s enrichment program lest the United States be confronted with the unsavory option of either living with an Iranian near or actual nuclear weapons capability or mounting a preventive military strike that, whatever it accomplished, would be sure to trigger a wider crisis that could well lead to energy prices several times their current level.

Finally, getting through this economic crisis should not be confused with restoring prolonged calm in the markets or sustainable growth. Enormous stimulus measures here at home coupled with equally unprecedented increases in the current account deficit and national debt make it all but certain that down the road the United States will confront not just renewed inflation but quite possibly a dollar crisis as well. At some point central banks and other holders of dollars will have secnd thoughts about continuing to add to their dollar holdings, currently larger than ever given the desire for a safe harbor. Ongoing U.S. requirements for debt financing, however, will likely mean that interest rates would need to be raised, something that could choke off a recovery. This underscores the importance of limiting stimulus packages to what is truly essential to reviving economic activity and to taking other measures (such as entitlement reform and the already discussed steps to reduce oil use) lest the current crisis give way to another one.


Former US ambassador with financial links to Iran and Saudi Arabia declines intelligence post

March 11, 2009

Former US ambassador to Saudi Arabia Charles W. (“Chas”) Freeman, Jr. has withdrawn his candidature for a top intelligence post in the Obama administration, US intelligence director Dennis Blair has announced, accepting Freeman’s decision “with regret.”

Freeman’s decision came after US lawmakers raised concerns about his alleged financial links to China and Saudi Arabia, and critics attacked comments he had made in the past which they saw as overly critical of Israel. A Republican politician highlighted Freeman’s ties to a think tank heavily funded by Saudi Arabia as well as his time on the board of a state-run Chinese oil giant, during which the firm made major investments in Iran.

Dennis Blair had chosen Freeman, a former ambassador to Riyadh and senior diplomat in Beijing, to be chairman of the National Intelligence Council. The post would have made him, in effect, the chief author of the National Intelligence Estimates – assessments for US presidents and other decision-makers on highly sensitive matters. The documents are designed to reflect the consensus view of all 16 US spy agencies on potential threats like Iran.

Freeman himself explained his withdrawal in an email saying that pro-Israeli lobbyists in Washington led a campaign to block him from taking office. Foreign Policy has printed the text of the email here.


China-U.S. Naval Dispute

March 10, 2009

A naval dispute between China and the United States escalated today as Beijing rebuffed Washington’s claims that Chinese ships “harassed” an unarmed U.S. ocean surveillance ship in the South China Sea on Sunday.

China’s foreign ministry spokesperson Ma Zhaoxu said today that “the U.S. claim is totally inaccurate and wrong” and that the American ship was breaking international law.

Read full story.


Folgt auf die Finanzkrise ein Bürgerkrieg?

February 26, 2009

Das Volk rebelliert nämlich nie allein deshalb, weil es einen schweren Sack schleppen muss, es lehnt sich nie gegen die Ausbeutung auf, denn es kennt kein Leben ohne Ausbeutung. Das Volk empört sich erst dann, wenn ihm jemand plötzlich und unvermutet einen zweiten Sack aufzubürden versucht. Er rebelliert, weil er spürt, dass du ihm mit diesem zweiten Sack betrügen wolltest, du hast ihn wie ein stumpfes Tier behandelt, den Rest seiner geschändeten Würde in den Schmutz getreten, ihn zum Idioten gemacht. Der Mensch langt nicht nach dem Beil, um seinen Geldbeutel zu verteidigen, sondern seine Würde. (Aus dem Roman König der Könige von Ryszard Kapuściński)

Steht der Zusammenbruch der öffentlichen Ordnung kurz bevor, nachdem die globale Finanzkrise die Ohnmacht der Politik (die mit einer unanständigen Umverteilung von Steuergeldern für die oberen Zehntausend reagiert, anstatt das System grundlegend zu verändern) entlarvt hat? Den genauen Zeitpunkt und die Form des kommenden Bürgerkriegs kann man noch nicht voraussehen. Dass er kommen wird, steht jedenfalls fest. Wann und wie er kommen wird, liegt noch verborgen im Schoße der Zukunft.

Es ist zumindest die ziemlich apokalyptische Prophezeiung der europäischen Denkfabrik European Laboratory of Political Anticipation LEAP/Europe 2020, die in einer Pressemitteilung vom 18. Februar 2009 verkündet wurde.

Ein ähnliches düsteres Szenario prognostiziert ebenfalls Igor Panarin, Dekan der Fakultät Internationale Beziehungen der Diplomatischen Akademie des russischen Außenministeriums: ” Der US-Dollar ist durch nichts mehr gedeckt. Die Außenverschuldung ist lawinenartig gewachsen: 1980 hatte es noch keine gegeben, 1998, als ich meine Prognose aufstellte, lag sie bei zwei Billionen Dollar, heute beträgt sie mehr als elf Billionen Dollar. Das ist eine Pyramide, die unbedingt einstürzen wird. Millionen von Bürgern haben ihre Ersparnisse eingebüßt. Die Preise und die Arbeitslosigkeit werden steigen. General Motors und Ford stehen am Rande des Zusammenbruchs. Das bedeutet, dass ganze Städte arbeitslos werden.”

***

Pressemitteilung European Laboratory of Political Anticipation LEAP/Europe 2020

Seit Februar 2006 vertrat LEAP/E2020 die Auffassung, dass die umfassende weltweite Krise in vier Grundphasen ablaufen würde, nämlich die Anfangsphase, die Beschleunigungsphase, die Aufprallphase und die Dekantierungsphase. Die Ereignisse der letzten zwei Jahre fügten sich hervorragend in dieses Schema. Jedoch müssen wir uns endlich in die Einsicht finden, dass die Regierenden unfähig sind, die wahre Natur der Krise zu verstehen. Denn seit nunmehr mehr als einem Jahr bekämpft die Politik mit ihren Maßnahmen nur die Symptome der Krise, nicht aber die Ursachen.

Deshalb gehen wir heute davon aus, dass mit dem vierten Quartal 2009 eine fünfte Phase der Krise einsetzen wird, in der die öffentliche Ordnung zerfallen wird.

Nach der Auffassung von LEAP/E2020 werden zwei bedeutende Phänomene diese neue Phase der Krise prägen; die kommenden Ereignisse werden damit in zwei parallelen Entwicklungen ablaufen:

A. Die zwei bedeutenden Phänomene:

1. Das Wegbrechen der globalen Finanzbasis (Dollar + Schulden)
2. Die sich beschleunigende Divergenz der Interessen der großen Staaten und der internationalen Organisationen

B. Die zwei parallelen Entwicklungen:

1. Die rasche Auflösung des gesamten gegenwärtigen internationalen Systems
2. Die Auflösung der Handlungsfähigkeit der mächtigen Staaten und großen internationalen Organisationen

Wir hatten gehofft, dass die Dekantierungsphase den Regierenden dieser Welt ermöglichen würde, die Schlussfolgerungen aus dem Zusammenbruch der Nachkriegsweltordnung zu ziehen. Man kann heute mit größtem Bedauern nur feststellen, dass solcher Optimismus nicht mehr zu rechtfertigen ist.

In den USA wie auch in Europa, in China oder in Japan handeln die Regierenden, als ob die Weltordnung nur von einer vorüber gehenden Krise erfasst wäre und es genügen würde, noch etwas Treibstoff (Liquidität, also weitere Schulden) und weitere Tinkturen (Leitzinssenkungen, staatlicher Aufkauf von wertlosen Forderungen, Konjunkturförderprogramme zu Gunsten insolventer Industriezweige) in das System zu gießen, um den Motor wieder zum Anspringen zu bringen. Sie wollen einfach nicht verstehen, dass, wie der Begriff der umfassenden weltweiten Krise, den LEAP/E2020 im Februar 2006 prägte, zu vermittelt versucht, die Weltordnung nicht mehr funktionsfähig ist. Statt verzweifelt zu versuchen, diese am Boden liegende, unrettbare Weltordnung zu retten, muss endlich die Schaffung einer neuen Weltordnung angegangen werden.

Geschichte wartet nicht, bis die Menschen für sie bereit sind. Da die Schaffung der neuen Weltordnung nicht vorausschauend und planend möglich war, wird der Zerfall der öffentlichen Ordnung während dieser fünften Phase der Krise die Welt in ein solches Chaos stürzen, dass die neue Weltordnung als Zufallsprodukt und Improvisation entstehen wird. Die beiden parallelen Entwicklungen, die wir in dieser 32. Ausgabe des GEAB beschreiben, werden für einige der großen Staaten und internationalen Organisationen tragisch sein.

Nach unserer Auffassung verbleibt nur ein sehr kleines Zeitfenster, während dem das Schlimmste noch vermieden werden kann, nämlich bis zum Sommer 2009. Dann wird die Zahlungsunfähigkeit erst Großbritanniens und dann der Vereinigten Staaten die Grundlagen des bestehenden Systems zusammen stürzen lassen und Chaos ausbrechen.

Wir gehen sehr konkret davon aus, dass der geplante G20-Gipfel April 2009 die letzte Chance für die bestehende Weltordnung ist, die aktuell wirkenden Kräfte so auszurichten, dass der Übergang in die neue Weltordnung sich mit dem geringst möglichen Schaden vollzieht.

Wenn ihnen das nicht gelingt, wird den Mächtigen der aktuellen Weltordnung die Kontrolle über die Ereignisse vollständig entgleiten, und zwar nicht nur auf globaler Ebene, sondern für einige von ihnen auch in ihren eigenen Ländern; die Welt wird in die Phase, in der die öffentliche Ordnung zusammen bricht, gleiten wie ein Schiff, dessen Ruder gebrochen ist. Am Ausgang dieser Phase des Zusammenbruchs der öffentlichen Ordnung wird die Welt mehr dem Europa von 1913 ähneln als der Welt, an deren reale Existenz die meisten noch bis 2007 glaubten.

Die meisten der von der Krise betroffenen Staaten, unter ihnen die mächtigsten dieser Erde, versuchten verzweifelt, das immer weiter anwachsende Gewicht der Krise zu schultern; sie verstanden nicht, dass sie damit die Gefahr herauf beschworen, unter dieser Last zusammen zu brechen. Sie vergaßen, dass Staaten, von Menschen geschaffen, nur solange Bestand haben, wie sich eine Mehrheit dieser Menschen mit ihnen identifiziert. In dieser 32. Ausgabe des GEAB wird LEAP/E2020 seine Analysen über die Auswirkungen dieser Phase des Zusammenbruchs der öffentlichen Ordnung auf die USA und die EU vorlegen.

Es wird für alle, Privatpersonen wie Wirtschaftsführer, dringlich, sich auf eine sehr schwierige Zeit vorzubereiten, in der ganze Bereiche unserer Gesellschaft wegbrechen werden und zumindest zeitweise oder sogar dauerhaft aufhören werden, Bestandteile der Gesellschaft zu bilden.

So wird z.B. der Zerfall des Weltwährungssystems im Sommer 2009 nicht nur den Dollar (und aller Geldanlagen in Dollar) zusammen brechen lassen, sondern das Vertrauen in alle Papierwährungen (also ohne Gold- oder Silberdeckung) massiv unterminieren. Alle Empfehlungen in dieser Ausgabe des GEAB sollen auf diese Situation vorbereiten.

Weiterhin gehen wir davon aus, dass die Staaten, die besonders monolithisch, besonders mächtig, besonders zentralistisch sind, diejenigen sein werden, die von der fünften Phase der umfassenden weltweiten Krise besonders massiv betroffen sein werden. Weitere Staaten, die unter dem Schutz dieser Staaten stehen, werden ihre Schutzmächte verlieren und damit dem Chaos in ihren Regionen ausgeliefert sein.


In Memoriam: Samuel P. Huntington (1927-2008)

January 24, 2009

huntington

To commemorate the passing of Samuel P. Huntington, the preeminent political scientist of the second half of the twentieth century, who died on December 24th, 2008, we reproduce his great controversial essay The Clash of Civilizations, published 1993 in the leading magazine for international affairs Foreign Affairs.

clash

The Clash of Civilizations?

by Samuel P. Huntington

Summary: World politics is entering a new phase, in which the great divisions among humankind and the dominating source of international conflict will be cultural. Civilizations – the highest cultural groupings of people – are differentiated from each other by religion, history, language and tradition. These divisions are deep and increasing in importance. From Yugoslavia to the Middle East to Central Asia, the fault lines of civilizations are the battle lines of the future. In this emerging era of cultural conflict the United States must forge alliances with similar cultures and spread its values wherever possible. With alien civilizations the West must be accommodating if possible, but confrontational if necessary. In the final analysis, however, all civilizations will have to learn to tolerate each other.

THE NEXT PATTERN OF CONFLICT

World politics is entering a new phase, and intellectuals have not hesitated to proliferate visions of what it will be-the end of history, the return of traditional rivalries between nation states, and the decline of the nation state from the conflicting pulls of tribalism and globalism, among others. Each of these visions catches aspects of the emerging reality. Yet they all miss a crucial, indeed a central, aspect of what global politics is likely to be in the coming years.

It is my hypothesis that the fundamental source of conflict in this new world will not be primarily ideological or primarily economic. The great divisions among humankind and the dominating source of conflict will be cultural. Nation states will remain the most powerful actors in world affairs, but the principal conflicts of global politics will occur between nations and groups of different civilizations. The clash of civilizations will dominate global politics. The fault lines between civilizations will be the battle lines of the future.

Conflict between civilizations will be the latest phase in the evolution of conflict in the modern world. For a century and a half after the emergence of the modern international system with the Peace of Westphalia, the conflicts of the Western world were largely among princes-emperors, absolute monarchs and constitutional monarchs attempting to expand their bureaucracies, their armies, their mercantilist economic strength and, most important, the territory they ruled. In the process they created nation states, and beginning with the French Revolution the principal lines of conflict were between nations rather than princes.

In 1793, as R. R. Palmer put it, “The wars of kings were over; the wars of peoples had begun.” This nineteenth-century pattern lasted until the end of World War I. Then, as a result of the Russian Revolution and the reaction against it, the conflict of nations yielded to the conflict of ideologies, first among communism, fascism-Nazism and liberal democracy, and then between communism and liberal democracy. During the Cold War, this latter conflict became embodied in the struggle between the two superpowers, neither of which was a nation state in the classical European sense and each of which defined its identity in terms of its ideology.

These conflicts between princes, nation states and ideologies were primarily conflicts within Western civilization, “Western civil wars,” as William Lind has labeled them. This was as true of the Cold War as it was of the world wars and the earlier wars of the seventeenth, eighteenth and nineteenth centuries. With the end of the Cold War, international politics moves out of its Western phase, and its centerpiece becomes the interaction between the West and non-Western civilizations and among non-Western civilizations. In the politics of civilizations, the peoples and governments of non-Western civilizations no longer remain the objects of history as targets of Western colonialism but join the West as movers and shapers of history.

THE NATURE OF CIVILIZATIONS

During the cold war the world was divided into the First, Second and Third Worlds. Those divisions are no longer relevant. It is far more meaningful now to group countries not in terms of their political or economic systems or in terms of their level of economic development but rather in terms of their culture and civilization.

What do we mean when we talk of a civilization? A civilization is a cultural entity. Villages, regions, ethnic groups, nationalities, religious groups, all have distinct cultures at different levels of cultural heterogeneity. The culture of a village in southern Italy may be different from that of a village in northern Italy, but both will share in a common Italian culture that distinguishes them from German villages. European communities, in turn, will share cultural features that distinguish them from Arab or Chinese communities. Arabs, Chinese and Westerners, however, are not part of any broader cultural entity. They constitute civilizations. A civilization is thus the highest cultural grouping of people and the broadest level of cultural identity people have short of that which distinguishes humans from other species. It is defined both by common objective elements, such as language, history, religion, customs, institutions, and by the subjective self-identification of people. People have levels of identity: a resident of Rome may define himself with varying degrees of intensity as a Roman, an Italian, a Catholic, a Christian, a European, a Westerner. The civilization to which he belongs is the broadest level of identification with which he intensely identifies. People can and do redefine their identities and, as a result, the composition and boundaries of civilizations change.

Civilizations may involve a large number of people, as with China (“a civilization pretending to be a state,” as Lucian Pye put it), or a very small number of people, such as the Anglophone Caribbean. A civilization may include several nation states, as is the case with Western, Latin American and Arab civilizations, or only one, as is the case with Japanese civilization. Civilizations obviously blend and overlap, and may include subcivilizations. Western civilization has two major variants, European and North American, and Islam has its Arab, Turkic and Malay subdivisions. Civilizations are nonetheless meaningful entities, and while the lines between them are seldom sharp, they are real. Civilizations are dynamic; they rise and fall; they divide and merge. And, as any student of history knows, civilizations disappear and are buried in the sands of time.

Westerners tend to think of nation states as the principal actors in global affairs. They have been that, however, for only a few centuries. The broader reaches of human history have been the history of civilizations. In A Study of History, Arnold Toynbee identified 21 major civilizations; only six of them exist in the contemporary world.

WHY CIVILIZATIONS WILL CLASH

Civilization identity will be increasingly important in the future, and the world will be shaped in large measure by the interactions among seven or eight major civilizations. These include Western, Confucian, Japanese, Islamic, Hindu, Slavic-Orthodox, Latin American and possibly African civilization. The most important conflicts of the future will occur along the cultural fault lines separating these civilizations from one another.

Why will this be the case?

First, differences among civilizations are not only real; they are basic. Civilizations are differentiated from each other by history, language, culture, tradition and, most important, religion. The people of different civilizations have different views on the relations between God and man, the individual and the group, the citizen and the state, parents and children, husband and wife, as well as differing views of the relative importance of rights and responsibilities, liberty and authority, equality and hierarchy. These differences are the product of centuries. They will not soon disappear. They are far more fundamental than differences among political ideologies and political regimes. Differences do not necessarily mean conflict, and conflict does not necessarily mean violence. Over the centuries, however, differences among civilizations have generated the most prolonged and the most violent conflicts.

Second, the world is becoming a smaller place. The interactions between peoples of different civilizations are increasing; these increasing interactions intensify civilization consciousness and awareness of differences between civilizations and commonalities within civilizations. North African immigration to France generates hostility among Frenchmen and at the same time increased receptivity to immigration by “good” European Catholic Poles. Americans react far more negatively to Japanese investment than to larger investments from Canada and European countries.

Similarly, as Donald Horowitz has pointed out, “An Ibo may be … an Owerri Ibo or an Onitsha Ibo in what was the Eastern region of Nigeria. In Lagos, he is simply an Ibo. In London, he is a Nigerian. In New York, he is an African.”

The interactions among peoples of different civilizations enhance the civilization-consciousness of people that, in turn, invigorates differences and animosities stretching or thought to stretch back deep into history.

Third, the processes of economic modernization and social change throughout the world are separating people from longstanding local identities. They also weaken the nation state as a source of identity. In much of the world religion has moved in to fill this gap, often in the form of movements that are labeled “fundamentalist.” Such movements are found in Western Christianity, Judaism, Buddhism and Hinduism, as well as in Islam. In most countries and most religions the people active in fundamentalist movements are young, college-educated, middle-class technicians, professionals and business persons. The “unsecularization of the world,” George Weigel has remarked, “is one of the dominant social facts of life in the late twentieth century.” The revival of religion, “la revanche de Dieu,” as Gilles Kepel labeled it, provides a basis for identity and commitment that transcends national boundaries and unites civilizations.

Fourth, the growth of civilization-consciousness is enhanced by the dual role of the West. On the one hand, the West is at a peak of power. At the same time, however, and perhaps as a result, a return to the roots phenomenon is occurring among non-Western civilizations. Increasingly one hears references to trends toward a turning inward and “Asianization” in Japan, the end of the Nehru legacy and the “Hinduization” of India, the failure of Western ideas of socialism and nationalism and hence “re-Islamization” of the Middle East, and now a debate over Westernization versus Russianization in Boris Yeltsin’s country. A West at the peak of its power confronts non-Wests that increasingly have the desire, the will and the resources to shape the world in non-Western ways.

In the past, the elites of non-Western societies were usually the people who were most involved with the West, had been educated at Oxford, the Sorbonne or Sandhurst, and had absorbed Western attitudes and values. At the same time, the populace in non-Western countries often remained deeply imbued with the indigenous culture. Now, however, these relationships are being reversed. A de-Westernization and indigenization of elites is occurring in many non-Western countries at the same time that Western, usually American, cultures, styles and habits become more popular among the mass of the people.

Fifth, cultural characteristics and differences are less mutable and hence less easily compromised and resolved than political and economic ones. In the former Soviet Union, communists can become democrats, the rich can become poor and the poor rich, but Russians cannot become Estonians and Azeris cannot become Armenians. In class and ideological conflicts, the key question was “Which side are you on?” and people could and did choose sides and change sides. In conflicts between civilizations, the question is “What are you?” That is a given that cannot be changed. And as we know, from Bosnia to the Caucasus to the Sudan, the wrong answer to that question can mean a bullet in the head. Even more than ethnicity, religion discriminates sharply and exclusively among people. A person can be half-French and half-Arab and simultaneously even a citizen of two countries. It is more difficult to be half-Catholic and half-Muslim.

Finally, economic regionalism is increasing. The proportions of total trade that were intraregional rose between 1980 and 1989 from 51 percent to 59 percent in Europe, 33 percent to 37 percent in East Asia, and 32 percent to 36 percent in North America. The importance of regional economic blocs is likely to continue to increase in the future. On the one hand, successful economic regionalism will reinforce civilization-consciousness. On the other hand, economic regionalism may succeed only when it is rooted in a common civilization. The European Community rests on the shared foundation of European culture and Western Christianity. The success of the North American Free Trade Area depends on the convergence now underway of Mexican, Canadian and American cultures. Japan, in contrast, faces difficulties in creating a comparable economic entity in East Asia because Japan is a society and civilization unique to itself. However strong the trade and investment links Japan may develop with other East Asian countries, its cultural differences with those countries inhibit and perhaps preclude its promoting regional economic integration like that in Europe and North America.

Common culture, in contrast, is clearly facilitating the rapid expansion of the economic relations between the People’s Republic of China and Hong Kong, Taiwan, Singapore and the overseas Chinese communities in other Asian countries. With the Cold War over, cultural commonalities increasingly overcome ideological differences, and mainland China and Taiwan move closer together. If cultural commonality is a prerequisite for economic integration, the principal East Asian economic bloc of the future is likely to be centered on China. This bloc is, in fact, already coming into existence. As Murray Weidenbaum has observed,

Despite the current Japanese dominance of the region, the Chinese-based economy of Asia is rapidly emerging as a new epicenter for industry, commerce and finance. This strategic area contains substantial amounts of technology and manufacturing capability (Taiwan), outstanding entrepreneurial, marketing and services acumen (Hong Kong), a fine communications network (Singapore), a tremendous pool of financial capital (all three), and very large endowments of land, resources and labor (mainland China)…. From Guangzhou to Singapore, from Kuala Lumpur to Manila, this influential network-often based on extensions of the traditional clans-has been described as the backbone of the East Asian economy.

Culture and religion also form the basis of the Economic Cooperation Organization, which brings together ten non-Arab Muslim countries: Iran, Pakistan, Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan, Tadjikistan, Uzbekistan and Afghanistan. One impetus to the revival and expansion of this organization, founded originally in the 1960s by Turkey, Pakistan and Iran, is the realization by the leaders of several of these countries that they had no chance of admission to the European Community. Similarly, Caricom, the Central American Common Market and Mercosur rest on common cultural foundations. Efforts to build a broader Caribbean-Central American economic entity bridging the Anglo-Latin divide, however, have to date failed.

As people define their identity in ethnic and religious terms, they are likely to see an “us” versus “them” relation existing between themselves and people of different ethnicity or religion. The end of ideologically defined states in Eastern Europe and the former Soviet Union permits traditional ethnic identities and animosities to come to the fore. Differences in culture and religion create differences over policy issues, ranging from human rights to immigration to trade and commerce to the environment. Geographical propinquity gives rise to conflicting territorial claims from Bosnia to Mindanao. Most important, the efforts of the West to promote its values of democracy and liberalism as universal values, to maintain its military predominance and to advance its economic interests engender countering responses from other civilizations. Decreasingly able to mobilize support and form coalitions on the basis of ideology, governments and groups will increasingly attempt to mobilize support by appealing to common religion and civilization identity.

The clash of civilizations thus occurs at two levels. At the micro- level, adjacent groups along the fault lines between civilizations struggle, often violently, over the control of territory and each other. At the macro-level, states from different civilizations compete for relative military and economic power, struggle over the control of international institutions and third parties, and competitively promote their particular political and religious values.

THE FAULT LINES BETWEEN CIVILIZATIONS

The fault lines between civilizations are replacing the political and ideological boundaries of the Cold War as the flash points for crisis and bloodshed. The Cold War began when the Iron Curtain divided Europe politically and ideologically. The Cold War ended with the end of the Iron Curtain. As the ideological division of Europe has disappeared, the cultural division of Europe between Western Christianity, on the one hand, and Orthodox Christianity and Islam, on the other, has reemerged. The most significant dividing line in Europe, as William Wallace has suggested, may well be the eastern boundary of Western Christianity in the year 1500. This line runs along what are now the boundaries between Finland and Russia and between the Baltic states and Russia, cuts through Belarus and Ukraine separating the more Catholic western Ukraine from Orthodox eastern Ukraine, swings westward separating Transylvania from the rest of Romania, and then goes through Yugoslavia almost exactly along the line now separating Croatia and Slovenia from the rest of Yugoslavia. In the Balkans this line, of course, coincides with the historic boundary between the Hapsburg and Ottoman empires. The peoples to the north and west of this line are Protestant or Catholic; they shared the common experiences of European history-feudalism, the Renaissance, the Reformation, the Enlightenment, the French Revolution, the Industrial Revolution; they are generally economically better off than the peoples to the east; and they may now look forward to increasing involvement in a common European economy and to the consolidation of democratic political systems. The peoples to the east and south of this line are Orthodox or Muslim; they historically belonged to the Ottoman or Tsarist empires and were only lightly touched by the shaping events in the rest of Europe; they are generally less advanced economically; they seem much less likely to develop stable democratic political systems. The Velvet Curtain of culture has replaced the Iron Curtain of ideology as the most significant dividing line in Europe. As the events in Yugoslavia show, it is not only a line of difference; it is also at times a line of bloody conflict.

Conflict along the fault line between Western and Islamic civilizations has been going on for 1,300 years. After the founding of Islam, the Arab and Moorish surge west and north only ended at Tours in 732. From the eleventh to the thirteenth century the Crusaders attempted with temporary success to bring Christianity and Christian rule to the Holy Land. From the fourteenth to the seventeenth century, the Ottoman Turks reversed the balance, extended their sway over the Middle East and the Balkans, captured Constantinople, and twice laid siege to Vienna. In the nineteenth and early twentieth centuries as Ottoman power declined Britain, France, and Italy established Western control over most of North Africa and the Middle East.

After World War II, the West, in turn, began to retreat; the colonial empires disappeared; first Arab nationalism and then Islamic fundamentalism manifested themselves; the West became heavily dependent on the Persian Gulf countries for its energy; the oil-rich Muslim countries became money-rich and, when they wished to, weapons-rich. Several wars occurred between Arabs and Israel (created by the West). France fought a bloody and ruthless war in Algeria for most of the 1950s; British and French forces invaded Egypt in 1956; American forces went into Lebanon in 1958; subsequently American forces returned to Lebanon, attacked Libya, and engaged in various military encounters with Iran; Arab and Islamic terrorists, supported by at least three Middle Eastern governments, employed the weapon of the weak and bombed Western planes and installations and seized Western hostages. This warfare between Arabs and the West culminated in 1990, when the United States sent a massive army to the Persian Gulf to defend some Arab countries against aggression by another. In its aftermath NATO planning is increasingly directed to potential threats and instability along its “southern tier.”

This centuries-old military interaction between the West and Islam is unlikely to decline. It could become more virulent. The Gulf War left some Arabs feeling proud that Saddam Hussein had attacked Israel and stood up to the West. It also left many feeling humiliated and resentful of the West’s military presence in the Persian Gulf, the West’s overwhelming military dominance, and their apparent inability to shape their own destiny. Many Arab countries, in addition to the oil exporters, are reaching levels of economic and social development where autocratic forms of government become inappropriate and efforts to introduce democracy become stronger. Some openings in Arab political systems have already occurred. The principal beneficiaries of these openings have been Islamist movements. In the Arab world, in short, Western democracy strengthens anti-Western political forces. This may be a passing phenomenon, but it surely complicates relations between Islamic countries and the West.

Those relations are also complicated by demography. The spectacular population growth in Arab countries, particularly in North Africa, has led to increased migration to Western Europe. The movement within Western Europe toward minimizing internal boundaries has sharpened political sensitivities with respect to this development. In Italy, France and Germany, racism is increasingly open, and political reactions and violence against Arab and Turkish migrants have become more intense and more widespread since 1990.

On both sides the interaction between Islam and the West is seen as a clash of civilizations. The West’s “next confrontation,” observes M. J. Akbar, an Indian Muslim author, “is definitely going to come from the Muslim world. It is in the sweep of the Islamic nations from the Maghreb to Pakistan that the struggle for a new world order will begin.” Bernard Lewis comes to a similar conclusion:

We are facing a mood and a movement far transcending the level of issues and policies and the governments that pursue them. This is no less than a clash of civilizations-the perhaps irrational but surely historic reaction of an ancient rival against our Judeo-Christian heritage, our secular present, and the worldwide expansion of both.

Historically, the other great antagonistic interaction of Arab Islamic civilization has been with the pagan, animist, and now increasingly Christian black peoples to the south. In the past, this antagonism was epitomized in the image of Arab slave dealers and black slaves. It has been reflected in the on-going civil war in the Sudan between Arabs and blacks, the fighting in Chad between Libyan-supported insurgents and the government, the tensions between Orthodox Christians and Muslims in the Horn of Africa, and the political conflicts, recurring riots and communal violence between Muslims and Christians in Nigeria. The modernization of Africa and the spread of Christianity are likely to enhance the probability of violence along this fault line. Symptomatic of the intensification of this conflict was the Pope John Paul II’s speech in Khartoum in February 1993 attacking the actions of the Sudan’s Islamist government against the Christian minority there.

On the northern border of Islam, conflict has increasingly erupted between Orthodox and Muslim peoples, including the carnage of Bosnia and Sarajevo, the simmering violence between Serb and Albanian, the tenuous relations between Bulgarians and their Turkish minority, the violence between Ossetians and Ingush, the unremitting slaughter of each other by Armenians and Azeris, the tense relations between Russians and Muslims in Central Asia, and the deployment of Russian troops to protect Russian interests in the Caucasus and Central Asia. Religion reinforces the revival of ethnic identities and restimulates Russian fears about the security of their southern borders. This concern is well captured by Archie Roosevelt:

Much of Russian history concerns the struggle between the Slavs and the Turkic peoples on their borders, which dates back to the foundation of the Russian state more than a thousand years ago. In the Slavs’ millennium-long confrontation with their eastern neighbors lies the key to an understanding not only of Russian history, but Russian character. To understand Russian realities today one has to have a concept of the great Turkic ethnic group that has preoccupied Russians through the centuries.‹

The conflict of civilizations is deeply rooted elsewhere in Asia. The historic clash between Muslim and Hindu in the subcontinent manifests itself now not only in the rivalry between Pakistan and India but also in intensifying religious strife within India between increasingly militant Hindu groups and India’s substantial Muslim minority. The destruction of the Ayodhya mosque in December 1992 brought to the fore the issue of whether India will remain a secular democratic state or become a Hindu one. In East Asia, China has outstanding territorial disputes with most of its neighbors. It has pursued a ruthless policy toward the Buddhist people of Tibet, and it is pursuing an increasingly ruthless policy toward its Turkic-Muslim minority. With the Cold War over, the underlying differences between China and the United States have reasserted themselves in areas such as human rights, trade and weapons proliferation. These differences are unlikely to moderate. A “new cold war,” Deng Xaioping reportedly asserted in 1991, is under way between China and America.

The same phrase has been applied to the increasingly difficult relations between Japan and the United States. Here cultural difference exacerbates economic conflict. People on each side allege racism on the other, but at least on the American side the antipathies are not racial but cultural. The basic values, attitudes, behavioral patterns of the two societies could hardly be more different. The economic issues between the United States and Europe are no less serious than those between the United States and Japan, but they do not have the same political salience and emotional intensity because the differences between American culture and European culture are so much less than those between American civilization and Japanese civilization.

The interactions between civilizations vary greatly in the extent to which they are likely to be characterized by violence. Economic competition clearly predominates between the American and European subcivilizations of the West and between both of them and Japan. On the Eurasian continent, however, the proliferation of ethnic conflict, epitomized at the extreme in “ethnic cleansing,” has not been totally random. It has been most frequent and most violent between groups belonging to different civilizations. In Eurasia the great historic fault lines between civilizations are once more aflame. This is particularly true along the boundaries of the crescent-shaped Islamic bloc of nations from the bulge of Africa to central Asia. Violence also occurs between Muslims, on the one hand, and Orthodox Serbs in the Balkans, Jews in Israel, Hindus in India, Buddhists in Burma and Catholics in the Philippines. Islam has bloody borders.

CIVILIZATION RALLYING: THE KIN-COUNTRY SYNDROME

Groups or states belonging to one civilization that become involved in war with people from a different civilization naturally try to rally support from other members of their own civilization. As the post-Cold War world evolves, civilization commonality, what H. D. S. Greenway has termed the “kin-country” syndrome, is replacing political ideology and traditional balance of power considerations as the principal basis for cooperation and coalitions. It can be seen gradually emerging in the post-Cold War conflicts in the Persian Gulf, the Caucasus and Bosnia. None of these was a full-scale war between civilizations, but each involved some elements of civilizational rallying, which seemed to become more important as the conflict continued and which may provide a foretaste of the future.

First, in the Gulf War one Arab state invaded another and then fought a coalition of Arab, Western and other states. While only a few Muslim governments overtly supported Saddam Hussein, many Arab elites privately cheered him on, and he was highly popular among large sections of the Arab publics. Islamic fundamentalist movements universally supported Iraq rather than the Western-backed governments of Kuwait and Saudi Arabia. Forswearing Arab nationalism, Saddam Hussein explicitly invoked an Islamic appeal. He and his supporters attempted to define the war as a war between civilizations. “It is not the world against Iraq,” as Safar Al-Hawali, dean of Islamic Studies at the Umm Al-Qura University in Mecca, put it in a widely circulated tape. “It is the West against Islam.” Ignoring the rivalry between Iran and Iraq, the chief Iranian religious leader, Ayatollah Ali Khamenei, called for a holy war against the West: “The struggle against American aggression, greed, plans and policies will be counted as a jihad, and anybody who is killed on that path is a martyr.” “This is a war,” King Hussein of Jordan argued, “against all Arabs and all Muslims and not against Iraq alone.”

The rallying of substantial sections of Arab elites and publics behind Saddam Hussein caused those Arab governments in the anti-Iraq coalition to moderate their activities and temper their public statements. Arab governments opposed or distanced themselves from subsequent Western efforts to apply pressure on Iraq, including enforcement of a no-fly zone in the summer of 1992 and the bombing of Iraq in January 1993. The Western-Soviet-Turkish-Arab anti-Iraq coalition of 1990 had by 1993 become a coalition of almost only the West and Kuwait against Iraq.

Muslims contrasted Western actions against Iraq with the West’s failure to protect Bosnians against Serbs and to impose sanctions on Israel for violating U.N. resolutions. The West, they alleged, was using a double standard. A world of clashing civilizations, however, is inevitably a world of double standards: people apply one standard to their kin-countries and a different standard to others.

Second, the kin-country syndrome also appeared in conflicts in the former Soviet Union. Armenian military successes in 1992 and 1993 stimulated Turkey to become increasingly supportive of its religious, ethnic and linguistic brethren in Azerbaijan. “We have a Turkish nation feeling the same sentiments as the Azerbaijanis,” said one Turkish official in 1992. “We are under pressure. Our newspapers are full of the photos of atrocities and are asking us if we are still serious about pursuing our neutral policy. Maybe we should show Armenia that there’s a big Turkey in the region.” President Turgut Özal agreed, remarking that Turkey should at least “scare the Armenians a little bit.” Turkey, Özal threatened again in 1993, would “show its fangs.” Turkish Air Force jets flew reconnaissance flights along the Armenian border; Turkey suspended food shipments and air flights to Armenia; and Turkey and Iran announced they would not accept dismemberment of Azerbaijan. In the last years of its existence, the Soviet government supported Azerbaijan because its government was dominated by former communists. With the end of the Soviet Union, however, political considerations gave way to religious ones. Russian troops fought on the side of the Armenians, and Azerbaijan accused the “Russian government of turning 180 degrees” toward support for Christian Armenia.

Third, with respect to the fighting in the former Yugoslavia, Western publics manifested sympathy and support for the Bosnian Muslims and the horrors they suffered at the hands of the Serbs. Relatively little concern was expressed, however, over Croatian attacks on Muslims and participation in the dismemberment of Bosnia-Herzegovina. In the early stages of the Yugoslav breakup, Germany, in an unusual display of diplomatic initiative and muscle, induced the other 11 members of the European Community to follow its lead in recognizing Slovenia and Croatia. As a result of the pope’s determination to provide strong backing to the two Catholic countries, the Vatican extended recognition even before the Community did. The United States followed the European lead. Thus the leading actors in Western civilization rallied behind their coreligionists. Subsequently Croatia was reported to be receiving substantial quantities of arms from Central European and other Western countries. Boris Yeltsin’s government, on the other hand, attempted to pursue a middle course that would be sympathetic to the Orthodox Serbs but not alienate Russia from the West. Russian conservative and nationalist groups, however, including many legislators, attacked the government for not being more forthcoming in its support for the Serbs. By early 1993 several hundred Russians apparently were serving with the Serbian forces, and reports circulated of Russian arms being supplied to Serbia.

Islamic governments and groups, on the other hand, castigated the West for not coming to the defense of the Bosnians. Iranian leaders urged Muslims from all countries to provide help to Bosnia; in violation of the U.N. arms embargo, Iran supplied weapons and men for the Bosnians; Iranian-supported Lebanese groups sent guerrillas to train and organize the Bosnian forces. In 1993 up to 4,000 Muslims from over two dozen Islamic countries were reported to be fighting in Bosnia. The governments of Saudi Arabia and other countries felt under increasing pressure from fundamentalist groups in their own societies to provide more vigorous support for the Bosnians. By the end of 1992, Saudi Arabia had reportedly supplied substantial funding for weapons and supplies for the Bosnians, which significantly increased their military capabilities vis-à-vis the Serbs.

In the 1930s the Spanish Civil War provoked intervention from countries that politically were fascist, communist and democratic. In the 1990s the Yugoslav conflict is provoking intervention from countries that are Muslim, Orthodox and Western Christian. The parallel has not gone unnoticed. “The war in Bosnia-Herzegovina has become the emotional equivalent of the fight against fascism in the Spanish Civil War,” one Saudi editor observed. “Those who died there are regarded as martyrs who tried to save their fellow Muslims.”

Conflicts and violence will also occur between states and groups within the same civilization. Such conflicts, however, are likely to be less intense and less likely to expand than conflicts between civilizations. Common membership in a civilization reduces the probability of violence in situations where it might otherwise occur. In 1991 and 1992 many people were alarmed by the possibility of violent conflict between Russia and Ukraine over territory, particularly Crimea, the Black Sea fleet, nuclear weapons and economic issues. If civilization is what counts, however, the likelihood of violence between Ukrainians and Russians should be low. They are two Slavic, primarily Orthodox peoples who have had close relationships with each other for centuries. As of early 1993, despite all the reasons for conflict, the leaders of the two countries were effectively negotiating and defusing the issues between the two countries. While there has been serious fighting between Muslims and Christians elsewhere in the former Soviet Union and much tension and some fighting between Western and Orthodox Christians in the Baltic states, there has been virtually no violence between Russians and Ukrainians.

Civilization rallying to date has been limited, but it has been growing, and it clearly has the potential to spread much further. As the conflicts in the Persian Gulf, the Caucasus and Bosnia continued, the positions of nations and the cleavages between them increasingly were along civilizational lines. Populist politicians, religious leaders and the media have found it a potent means of arousing mass support and of pressuring hesitant governments. In the coming years, the local conflicts most likely to escalate into major wars will be those, as in Bosnia and the Caucasus, along the fault lines between civilizations. The next world war, if there is one, will be a war between civilizations.

THE WEST VERSUS THE REST

The west is now at an extraordinary peak of power in relation to other civilizations. Its superpower opponent has disappeared from the map. Military conflict among Western states is unthinkable, and Western military power is unrivaled. Apart from Japan, the West faces no economic challenge. It dominates international political and security institutions and with Japan international economic institutions. Global political and security issues are effectively settled by a directorate of the United States, Britain and France, world economic issues by a directorate of the United States, Germany and Japan, all of which maintain extraordinarily close relations with each other to the exclusion of lesser and largely non-Western countries. Decisions made at the U.N. Security Council or in the International Monetary Fund that reflect the interests of the West are presented to the world as reflecting the desires of the world community. The very phrase “the world community” has become the euphemistic collective noun (replacing “the Free World”) to give global legitimacy to actions reflecting the interests of the United States and other Western powers.› Through the IMF and other international economic institutions, the West promotes its economic interests and imposes on other nations the economic policies it thinks appropriate. In any poll of non-Western peoples, the IMF undoubtedly would win the support of finance ministers and a few others, but get an overwhelmingly unfavorable rating from just about everyone else, who would agree with Georgy Arbatov’s characterization of IMF officials as “neo-Bolsheviks who love expropriating other people’s money, imposing undemocratic and alien rules of economic and political conduct and stifling economic freedom.”

Western domination of the U.N. Security Council and its decisions, tempered only by occasional abstention by China, produced U.N. legitimation of the West’s use of force to drive Iraq out of Kuwait and its elimination of Iraq’s sophisticated weapons and capacity to produce such weapons. It also produced the quite unprecedented action by the United States, Britain and France in getting the Security Council to demand that Libya hand over the Pan Am 103 bombing suspects and then to impose sanctions when Libya refused. After defeating the largest Arab army, the West did not hesitate to throw its weight around in the Arab world. The West in effect is using international institutions, military power and economic resources to run the world in ways that will maintain Western predominance, protect Western interests and promote Western political and economic values.

That at least is the way in which non-Westerners see the new world, and there is a significant element of truth in their view. Differences in power and struggles for military, economic and institutional power are thus one source of conflict between the West and other civilizations. Differences in culture, that is basic values and beliefs, are a second source of conflict. V. S. Naipaul has argued that Western civilization is the “universal civilization” that “fits all men.” At a superficial level much of Western culture has indeed permeated the rest of the world. At a more basic level, however, Western concepts differ fundamentally from those prevalent in other civilizations. Western ideas of individualism, liberalism, constitutionalism, human rights, equality, liberty, the rule of law, democracy, free markets, the separation of church and state, often have little resonance in Islamic, Confucian, Japanese, Hindu, Buddhist or Orthodox cultures. Western efforts to propagate such ideas produce instead a reaction against “human rights imperialism” and a reaffirmation of indigenous values, as can be seen in the support for religious fundamentalism by the younger generation in non-Western cultures. The very notion that there could be a “universal civilization” is a Western idea, directly at odds with the particularism of most Asian societies and their emphasis on what distinguishes one people from another. Indeed, the author of a review of 100 comparative studies of values in different societies concluded that “the values that are most important in the West are least important worldwide.” In the political realm, of course, these differences are most manifest in the efforts of the United States and other Western powers to induce other peoples to adopt Western ideas concerning democracy and human rights. Modern democratic government originated in the West. When it has developed in non-Western societies it has usually been the product of Western colonialism or imposition.

The central axis of world politics in the future is likely to be, in Kishore Mahbubani’s phrase, the conflict between “the West and the Rest” and the responses of non-Western civilizations to Western power and values. Those responses generally take one or a combination of three forms. At one extreme, non-Western states can, like Burma and North Korea, attempt to pursue a course of isolation, to insulate their societies from penetration or “corruption” by the West, and, in effect, to opt out of participation in the Western-dominated global community. The costs of this course, however, are high, and few states have pursued it exclusively. A second alternative, the equivalent of “band-wagoning” in international relations theory, is to attempt to join the West and accept its values and institutions. The third alternative is to attempt to “balance” the West by developing economic and military power and cooperating with other non-Western societies against the West, while preserving indigenous values and institutions; in short, to modernize but not to Westernize.

THE TORN COUNTRIES

In the future, as people differentiate themselves by civilization, countries with large numbers of peoples of different civilizations, such as the Soviet Union and Yugoslavia, are candidates for dismemberment. Some other countries have a fair degree of cultural homogeneity but are divided over whether their society belongs to one civilization or another. These are torn countries. Their leaders typically wish to pursue a bandwagoning strategy and to make their countries members of the West, but the history, culture and traditions of their countries are non-Western. The most obvious and prototypical torn country is Turkey. The late twentieth-century leaders of Turkey have followed in the Attatürk tradition and defined Turkey as a modern, secular, Western nation state. They allied Turkey with the West in NATO and in the Gulf War; they applied for membership in the European Community. At the same time, however, elements in Turkish society have supported an Islamic revival and have argued that Turkey is basically a Middle Eastern Muslim society. In addition, while the elite of Turkey has defined Turkey as a Western society, the elite of the West refuses to accept Turkey as such. Turkey will not become a member of the European Community, and the real reason, as President Özal said, “is that we are Muslim and they are Christian and they don’t say that.” Having rejected Mecca, and then being rejected by Brussels, where does Turkey look? Tashkent may be the answer. The end of the Soviet Union gives Turkey the opportunity to become the leader of a revived Turkic civilization involving seven countries from the borders of Greece to those of China. Encouraged by the West, Turkey is making strenuous efforts to carve out this new identity for itself.

During the past decade Mexico has assumed a position somewhat similar to that of Turkey. Just as Turkey abandoned its historic opposition to Europe and attempted to join Europe, Mexico has stopped defining itself by its opposition to the United States and is instead attempting to imitate the United States and to join it in the North American Free Trade Area. Mexican leaders are engaged in the great task of redefining Mexican identity and have introduced fundamental economic reforms that eventually will lead to fundamental political change. In 1991 a top adviser to President Carlos Salinas de Gortari described at length to me all the changes the Salinas government was making. When he finished, I remarked: “That’s most impressive. It seems to me that basically you want to change Mexico from a Latin American country into a North American country.” He looked at me with surprise and exclaimed: “Exactly! That’s precisely what we are trying to do, but of course we could never say so publicly.” As his remark indicates, in Mexico as in Turkey, significant elements in society resist the redefinition of their country’s identity. In Turkey, European-oriented leaders have to make gestures to Islam (Özal’s pilgrimage to Mecca); so also Mexico’s North American-oriented leaders have to make gestures to those who hold Mexico to be a Latin American country (Salinas’ Ibero-American Guadalajara summit).

Historically Turkey has been the most profoundly torn country. For the United States, Mexico is the most immediate torn country. Globally the most important torn country is Russia. The question of whether Russia is part of the West or the leader of a distinct Slavic-Orthodox civilization has been a recurring one in Russian history. That issue was obscured by the communist victory in Russia, which imported a Western ideology, adapted it to Russian conditions and then challenged the West in the name of that ideology. The dominance of communism shut off the historic debate over Westernization versus Russification. With communism discredited Russians once again face that question.

President Yeltsin is adopting Western principles and goals and seeking to make Russia a “normal” country and a part of the West. Yet both the Russian elite and the Russian public are divided on this issue. Among the more moderate dissenters, Sergei Stankevich argues that Russia should reject the “Atlanticist” course, which would lead it “to become European, to become a part of the world economy in rapid and organized fashion, to become the eighth member of the Seven, and to put particular emphasis on Germany and the United States as the two dominant members of the Atlantic alliance.” While also rejecting an exclusively Eurasian policy, Stankevich nonetheless argues that Russia should give priority to the protection of Russians in other countries, emphasize its Turkic and Muslim connections, and promote “an appreciable redistribution of our resources, our options, our ties, and our interests in favor of Asia, of the eastern direction.” People of this persuasion criticize Yeltsin for subordinating Russia’s interests to those of the West, for reducing Russian military strength, for failing to support traditional friends such as Serbia, and for pushing economic and political reform in ways injurious to the Russian people. Indicative of this trend is the new popularity of the ideas of Petr Savitsky, who in the 1920s argued that Russia was a unique Eurasian civilization.‡ More extreme dissidents voice much more blatantly nationalist, anti-Western and anti-Semitic views, and urge Russia to redevelop its military strength and to establish closer ties with China and Muslim countries. The people of Russia are as divided as the elite. An opinion survey in European Russia in the spring of 1992 revealed that 40 percent of the public had positive attitudes toward the West and 36 percent had negative attitudes. As it has been for much of its history, Russia in the early 1990s is truly a torn country.

To redefine its civilization identity, a torn country must meet three requirements. First, its political and economic elite has to be generally supportive of and enthusiastic about this move. Second, its public has to be willing to acquiesce in the redefinition. Third, the dominant groups in the recipient civilization have to be willing to embrace the convert. All three requirements in large part exist with respect to Mexico. The first two in large part exist with respect to Turkey. It is not clear that any of them exist with respect to Russia’s joining the West. The conflict between liberal democracy and Marxism-Leninism was between ideologies which, despite their major differences, ostensibly shared ultimate goals of freedom, equality and prosperity. A traditional, authoritarian, nationalist Russia could have quite different goals. A Western democrat could carry on an intellectual debate with a Soviet Marxist. It would be virtually impossible for him to do that with a Russian traditionalist. If, as the Russians stop behaving like Marxists, they reject liberal democracy and begin behaving like Russians but not like Westerners, the relations between Russia and the West could again become distant and conflictual.

THE CONFUCIAN-ISLAMIC CONNECTION

The obstacles to non-Western countries joining the West vary considerably. They are least for Latin American and East European countries. They are greater for the Orthodox countries of the former Soviet Union. They are still greater for Muslim, Confucian, Hindu and Buddhist societies. Japan has established a unique position for itself as an associate member of the West: it is in the West in some respects but clearly not of the West in important dimensions. Those countries that for reason of culture and power do not wish to, or cannot, join the West compete with the West by developing their own economic, military and political power. They do this by promoting their internal development and by cooperating with other non-Western countries. The most prominent form of this cooperation is the Confucian-Islamic connection that has emerged to challenge Western interests, values and power.

Almost without exception, Western countries are reducing their military power; under Yeltsin’s leadership so also is Russia. China, North Korea and several Middle Eastern states, however, are significantly expanding their military capabilities. They are doing this by the import of arms from Western and non-Western sources and by the development of indigenous arms industries. One result is the emergence of what Charles Krauthammer has called “Weapon States,” and the Weapon States are not Western states. Another result is the redefinition of arms control, which is a Western concept and a Western goal. During the Cold War the primary purpose of arms control was to establish a stable military balance between the United States and its allies and the Soviet Union and its allies. In the post-Cold War world the primary objective of arms control is to prevent the development by non-Western societies of military capabilities that could threaten Western interests. The West attempts to do this through international agreements, economic pressure and controls on the transfer of arms and weapons technologies.

The conflict between the West and the Confucian-Islamic states focuses largely, although not exclusively, on nuclear, chemical and biological weapons, ballistic missiles and other sophisticated means for delivering them, and the guidance, intelligence and other electronic capabilities for achieving that goal. The West promotes nonproliferation as a universal norm and nonproliferation treaties and inspections as means of realizing that norm. It also threatens a variety of sanctions against those who promote the spread of sophisticated weapons and proposes some benefits for those who do not. The attention of the West focuses, naturally, on nations that are actually or potentially hostile to the West.

The non-Western nations, on the other hand, assert their right to acquire and to deploy whatever weapons they think necessary for their security. They also have absorbed, to the full, the truth of the response of the Indian defense minister when asked what lesson he learned from the Gulf War: “Don’t fight the United States unless you have nuclear weapons.” Nuclear weapons, chemical weapons and missiles are viewed, probably erroneously, as the potential equalizer of superior Western conventional power. China, of course, already has nuclear weapons; Pakistan and India have the capability to deploy them. North Korea, Iran, Iraq, Libya and Algeria appear to be attempting to acquire them. A top Iranian official has declared that all Muslim states should acquire nuclear weapons, and in 1988 the president of Iran reportedly issued a directive calling for development of “offensive and defensive chemical, biological and radiological weapons.”

Centrally important to the development of counter-West military capabilities is the sustained expansion of China’s military power and its means to create military power. Buoyed by spectacular economic development, China is rapidly increasing its military spending and vigorously moving forward with the modernization of its armed forces. It is purchasing weapons from the former Soviet states; it is developing long-range missiles; in 1992 it tested a one-megaton nuclear device. It is developing power-projection capabilities, acquiring aerial refueling technology, and trying to purchase an aircraft carrier. Its military buildup and assertion of sovereignty over the South China Sea are provoking a multilateral regional arms race in East Asia. China is also a major exporter of arms and weapons technology. It has exported materials to Libya and Iraq that could be used to manufacture nuclear weapons and nerve gas. It has helped Algeria build a reactor suitable for nuclear weapons research and production. China has sold to Iran nuclear technology that American officials believe could only be used to create weapons and apparently has shipped components of 300-mile-range missiles to Pakistan. North Korea has had a nuclear weapons program under way for some while and has sold advanced missiles and missile technology to Syria and Iran. The flow of weapons and weapons technology is generally from East Asia to the Middle East. There is, however, some movement in the reverse direction; China has received Stinger missiles from Pakistan.

A Confucian-Islamic military connection has thus come into being, designed to promote acquisition by its members of the weapons and weapons technologies needed to counter the military power of the West. It may or may not last. At present, however, it is, as Dave McCurdy has said, “a renegades’ mutual support pact, run by the proliferators and their backers.” A new form of arms competition is thus occurring between Islamic-Confucian states and the West. In an old-fashioned arms race, each side developed its own arms to balance or to achieve superiority against the other side. In this new form of arms competition, one side is developing its arms and the other side is attempting not to balance but to limit and prevent that arms build-up while at the same time reducing its own military capabilities.

IMPLICATIONS FOR THE WEST

This article does not argue that civilization identities will replace all other identities, that nation states will disappear, that each civilization will become a single coherent political entity, that groups within a civilization will not conflict with and even fight each other. This paper does set forth the hypotheses that differences between civilizations are real and important; civilization-consciousness is increasing; conflict between civilizations will supplant ideological and other forms of conflict as the dominant global form of conflict; international relations, historically a game played out within Western civilization, will increasingly be de-Westernized and become a game in which non-Western civilizations are actors and not simply objects; successful political, security and economic international institutions are more likely to develop within civilizations than across civilizations; conflicts between groups in different civilizations will be more frequent, more sustained and more violent than conflicts between groups in the same civilization; violent conflicts between groups in different civilizations are the most likely and most dangerous source of escalation that could lead to global wars; the paramount axis of world politics will be the relations between “the West and the Rest”; the elites in some torn non-Western countries will try to make their countries part of the West, but in most cases face major obstacles to accomplishing this; a central focus of conflict for the immediate future will be between the West and several Islamic-Confucian states.

This is not to advocate the desirability of conflicts between civilizations. It is to set forth descriptive hypotheses as to what the future may be like. If these are plausible hypotheses, however, it is necessary to consider their implications for Western policy. These implications should be divided between short-term advantage and long-term accommodation. In the short term it is clearly in the interest of the West to promote greater cooperation and unity within its own civilization, particularly between its European and North American components; to incorporate into the West societies in Eastern Europe and Latin America whose cultures are close to those of the West; to promote and maintain cooperative relations with Russia and Japan; to prevent escalation of local inter-civilization conflicts into major inter-civilization wars; to limit the expansion of the military strength of Confucian and Islamic states; to moderate the reduction of Western military capabilities and maintain military superiority in East and Southwest Asia; to exploit differences and conflicts among Confucian and Islamic states; to support in other civilizations groups sympathetic to Western values and interests; to strengthen international institutions that reflect and legitimate Western interests and values and to promote the involvement of non-Western states in those institutions.

In the longer term other measures would be called for. Western civilization is both Western and modern. Non-Western civilizations have attempted to become modern without becoming Western. To date only Japan has fully succeeded in this quest. Non-Western civilizations will continue to attempt to acquire the wealth, technology, skills, machines and weapons that are part of being modern. They will also attempt to reconcile this modernity with their traditional culture and values. Their economic and military strength relative to the West will increase. Hence the West will increasingly have to accommodate these non-Western modern civilizations whose power approaches that of the West but whose values and interests differ significantly from those of the West. This will require the West to maintain the economic and military power necessary to protect its interests in relation to these civilizations. It will also, however, require the West to develop a more profound understanding of the basic religious and philosophical assumptions underlying other civilizations and the ways in which people in those civilizations see their interests. It will require an effort to identify elements of commonality between Western and other civilizations. For the relevant future, there will be no universal civilization, but instead a world of different civilizations, each of which will have to learn to coexist with the others.

Samuel P. Huntington was Professor at Harvard University, where he was also director of the John M. Olin Institute for Strategic Studies and chairman of the Harvard Academy for International and Area Studies. He was one of the co-founders of the influential magazine Foreign Affairs.


China’s Recession

January 23, 2009

Chinese President Hu Jintao said in a speech that economic recovery would be China’s top priority for 2009 and called on leaders of social and political organizations to work together to address the crisis. Hu’s comments come a day after China released data showing 2008 gross domestic product growth of 6.8 percent, a seven year low.

RGE Monitor’s Nouriel Roubini points out that due to China’s year-on-year reporting mechanism, the country’s quarterly growth for the fourth quarter of 2008 might well have been zero or lower.

Read full story.


An American Strategy for Asia

January 12, 2009

by Dan Blumenthal and Aaron Friedberg

ASIA STRATEGY WORKING GROUP – American Enterprise Institute (AEI)

On the global shift in wealth and power toward Asia

The new U.S. administration confronts an unusually long and daunting list of pressing foreign policy problems: ongoing conflicts in Afghanistan and Iraq, the continuing threat of global terrorism, a brewing crisis in Pakistan, unresolved nuclear standoffs with Iran and North Korea, Russia’s new aggressiveness toward its neighbors, and the lingering aftereffects of a global financial meltdown. All will demand urgent attention and timely action. The president-elect will be lucky if he has a moment to savor his victory, let alone to pause and reflect on the longer-term trends that are reshaping the world.

Yet such reflection is badly needed. As important as they undoubtedly are, all of the issues listed above are being played out against the backdrop of something even bigger: a massive, rapid shift in the distribution of global wealth and power toward Asia. This process has been gathering momentum for more than thirty years; if current projections are borne out, in the next thirty Asia’s rise will fundamentally alter the structure of the international system and the character of great power politics.

It is difficult to exaggerate the magnitude of what is taking place. The changes now underway are comparable in scale, and potentially in historical significance, to the “rise of the West” – the emergence of Europe as the world’s leader in wealth and military power – or the rise of the United States to global preponderance that began in the nineteenth century.

Such a profound shift will eventually require the reexamination, and ultimately the reorientation, of many aspects of America’s foreign, economic, and defense policies. These changes may be forced by events. Or they could be shaped by a clear and coherent national strategy, a plan of action that looks beyond today’s turmoil, sets broad goals, and identifies the tools and policies that will be necessary to achieve them.

The purpose of this report is to put forward an American strategy for Asia. While it is motivated by an awareness of long-term trends, the emphasis of this report will be on the concrete and practical. We intend not only to identify goals, but also to specify the steps that a new president should take over the next four to eight years to bring them closer to realization.

Our report differs from others on related subjects in two important ways.

First, it is focused rather than comprehensive. Instead of touching lightly on every conceivable subject relevant to Asia, we have chosen to concentrate on those that we believe to be of greatest strategic importance.

Second, our report is more candid than is typically the case about the challenges that are likely to emanate from Asia and, in particular, about those that may result from the rise of China. Our intention is not to be provocative, but rather to be clear. Ritualized “happy talk” about where China is headed will do little, if anything, to alter Beijing’s course. But unwarranted optimism on the part of our leaders may make it harder to maintain public support for the policies necessary to keep the peace and secure American interests, and it could set the stage for future disappointment and overreaction if exaggerated expectations of Sino-American friendship are not met.

We have been reminded in recent years how important it is not to overstate the magnitude and imminence of threats to our nation’s security, but it is at least as important to be clear and honest in acknowledging their existence.

Read full report.


President Barack Obama’s foreign policy priorities

November 6, 2008

The Washington Post reports President Barack Obama will get his first national intelligence briefing today, as he prepares for several security challenges.

Obama will receive the same briefing as outgoing U.S. President George W. Bush from Director of National Intelligence Michael McConnell. The article says Pakistan, Afghanistan, Russia, and the Guantanamo Bay detention facility could figure prominently in the briefing.

Op-ed columnist David Ignatius considers Barack Obama’s foreign policy priorities, and says he’ll focus first on personnel before he turns to substance. He notes the speculation that Obama will appoint a Republican to a senior foreign policy post, perhaps Condoleeza Rice or Colin Powell.

Meanwhile, Obama has chosen Illinois Representative Rahm Emanuel to be his White House chief of staff, one of the most influential positions in the new administration. Rahm Emanuel, a former Bill Clinton adviser, is the son of a Jerusalem-born pediatrician who was a member of the Irgun, a militant Zionist group that operated in Palestine between 1931 and 1948. Emanuel served briefly as a civilian volunteer on an Israeli military base during the Persian Gulf war of 1991.

Also in The Guardian, an editorial lists what it calls the elephant traps facing the new U.S. president: how to disengage from Iraq without destabilising it; how to end the Pashtun insurgency in Afghanistan without sparking a bigger one in Pakistan; how to achieve a breakthrough over the intractable problems of Israel-Palestine.

Last but not least: In today’s New York Times, columnist Nicholas D. Kristof writes that Barack means blessing in Swahili, and this election feels like America’s great chance to rejoin the world after eight years of self-exile. He argues: “America is more than a place. At its best, it also is an idea.”


Globalised Economy

October 8, 2008

In the International Herald Tribune, Paul Kennedy, director of International Security Studies at Yale University, and author of the bestseller The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, comments on how the consequences of the financial crisis are affecting all parts of an increasingly globalised economy.

“Even the rising Chinese superpower is being blasted by these distant capitalistic convulsions. How could its Finance Ministry, seduced by the advice of Wall Street bankers and consultants to place billions of dollars into American so-called ‘safe havens,’ not be badly shaken by the financial tumults of the past few weeks?

Should China trust the Yankee capitalist system? What will happen to its vital exports to that enormous, volatile consumer market? Already The People’s Daily in Beijing has published a noteworthy piece by the economist Shi Jianxun calling upon the world to create ‘a diversified currency and financial system and (a) fair and just financial order that is not dependent on the United States.’ Where goes the dollar then, and its reputation as a safe haven?”

Read full story.


China’s Financial System

October 6, 2008

China’s Prime Minister Wen Jiabao said China’s financial system as a whole has proven well buffered to the financial concerns elsewhere in the world.

He says Chinese financial firms have generally increased their strength during the course of the crisis.

The Wall Street Journal looks at how East Asian central bankers, including China’s, have responded to the U.S. bailout plan.

Read full story.


U.N. General Assembly’s annual meeting

September 24, 2008

In his final address at the United Nations’ annual General Assembly debate, U.S. President George W. Bush sought to reassure world leaders about the financial crisis in the United States and called on the United Nations to be a “powerful force for good”.

Ban Ki-moon, the UN General-Secretary, urged leaders to work together to resolve multiple crises – from finance to food to energy.

Iran’s President Mahmoud Ahmadinejad also gave an address. He defended his country’s nuclear plans, denounced “bullying powers”, and said the “American empire in the world is reaching the end of its road.”

Speaking at the United Nations, Georgia’s President Mikhail Saakashvili vowed a “second Rose Revolution” of democratic expansion in Georgia aimed at counteracting the “specter of aggression and authoritarianism“. Saakashvili challenged UN member states to use “actions, not words” to protect Georgian sovereignty against Russia.

China’s prime minister Wen Jiabao praised the progress of Sino-American bilateral relations and called for continued work on the partnership.


China and Pakistan: A New Strategic Alliance

September 20, 2008

Senior U.S. and Pakistani officials say they are hoping a new strategic partnership plan will be announced ahead of meetings between Presidents George W. Bush and Asif Ali Zardari in New York next week.

With Pakistan-U.S. ties strained, Islamabad looks also to its regional ally, China, to guarantee longterm stability. Policy experts say Pakistan also hopes for a nuclear deal with China to balance the U.S.-India nuclear pact now before the U.S. Congress.

Read full story.


United States presidential election, 2008: The Next President

September 4, 2008

In the last cover story of the world affairs magazine Foreign Affairs, Richard Holbrooke says the opening-day challenges awaiting George W. Bush’s successor will make for a daunting agenda – one that will require both strength and a renewed sense of national purpose. Of issues ranging from Iraq and global warming to rising oil prices and world economy, Holbrooke says the next administration must correct the mistakes of the current one. And Holbrooke, a former U.S. Ambassador to the United Nations, believes that with the right strategy it will be possible for the United States of America to inspire and lead the world once again.

The Next President – Mastering a Daunting Agenda
by Richard Holbrooke

From Foreign Affairs, September/October 2008

The next president will inherit leadership of a nation that is still the most powerful in the world – a nation rich with the continued promise of its dynamic and increasingly diverse population, a nation that could, and must, again inspire, mobilize, and lead the world. At the same time, the next president will inherit a more difficult opening-day set of international problems than any of his predecessors have since at least the end of World War II. In such circumstances, his core challenge will be nothing less than to re-create a sense of national purpose and strength, after a period of drift, decline, and disastrous mistakes.

He will have to reshape policies on the widest imaginable range of challenges, domestic and international. He will need to rebuild productive working relationships with friends and allies. He must revitalize a flagging economy; tame a budget awash in red ink; reduce energy dependence and turn the corner on the truly existential issue of climate change; tackle the growing danger of nuclear proliferation; improve the defense of the homeland against global terrorists while putting more pressure on al Qaeda, especially in Pakistan; and, of course, manage two wars simultaneously.

To make progress on this daunting agenda, the president must master and control a sprawling, unwieldy federal bureaucracy that is always resistant to change and sometimes dysfunctional. He will also need to change the relationship between the executive and the legislative branches after years of partisan political battle; in almost all areas, congressional support is essential for success. So is public support, which will require that the next president, more effectively than his predecessor, enlist help from the private sector, academia, nongovernmental organizations, and the citizenry as a whole.

The presidency of the United States is the most extraordinary job ever devised, and it has become an object of the hopes and dreams – and, at times, the fears, frustration, and anger – of people around the world. Expectations that the president can solve every problem are obviously unrealistic – and yet such expectations are a reality that he will have to confront. A successful president must identify meaningful yet achievable goals, lay them out clearly before the nation and the world, and then achieve them through leadership skills that will be tested by pressures unimaginable to anyone who has not held the job. A reactive and passive presidency will not succeed, nor will one in which a president promises solutions but does not deliver – or acts with consistent disregard for what the Declaration of Independence called “a decent respect to the opinions of mankind.”

Although not every issue the new president inherits requires change, every major one requires careful reexamination. In many cases, new policies and new people – loyal to the president and capable of mobilizing the support of the permanent bureaucracy – will be necessary. But a comprehensive national security policy is more than a collection of individual positions. A coherent vision for the United States’ role in the world must be based on its enduring national interests, its values, and a realistic assessment of its capabilities and priorities; not even the most powerful nation can shape every event and issue according to its own preferences. The days when a single word, such as “containment,” could define U.S. foreign policy will not return in this world of many players and many, many issues. Still, there is a need to define a broad overarching concept of the United States’ national interests. (The Bush era’s focus on the “global war on terror” was simultaneously too limited and too broad.)

To restore the United States to its proper world leadership role, two areas of weakness must be repaired: the domestic economy and the United States’ reputation in the world. Although the economy is usually treated as a domestic issue, reviving it is as important to the nation’s long-term security as is keeping U.S. military strength unchallengeable. This will require more than a cyclical upturn; to repair the economy in the long term, a new national policy on energy and climate change will be essential. And restoring respect for American values and leadership is essential — not because it is nice to be popular but because respect is a precondition for legitimate leadership and enduring influence.

The president should address both issues as early as possible in order to strengthen his hand as he tackles pressing strategic issues, including the five neighboring countries at the center of the arc of crisis that directly threatens the United States’ national security – Turkey, Iraq, Iran, Afghanistan, and Pakistan. A few early actions that lie wholly within his authority can make an immediate impact. The most compelling such actions would be issuing a clear official ban on torture and closing the detention facility at Guantánamo Bay, Cuba, which now holds only 260 prisoners. Because the Bush administration limited itself to punishing only those at the very bottom of the chain of command at Abu Ghraib, the damage to the United States’ image has been immense and continuing – the gift that keeps on giving to the United States’ enemies. Presidential directives making clear that the U.S. government does not tolerate or condone torture are necessary in order to separate the new administration from that costly legacy. As for Guantánamo, closing it is complicated, as Bush administration apologists (and many lawyers) say. Well, a lot of things in life are complicated. Guantánamo must not become the next president’s albatross, too; closing it, no matter how difficult, is not just desirable but imperative.

A NEW FACTOR

History is not immutable. But there is one pattern that comes very close to being a law of history: in the long run, the rise and fall of great nations is driven primarily by their economic strength. Rome, imperial China, Venice, France, the Netherlands, Portugal, the United Kingdom – all had their day, and their international decline followed inexorably from their economic decline.

Starting in the late nineteenth century, nothing was as important to the emergence of the United States as its spectacular economic growth. That growth was fueled, literally, by cheap domestic oil. The United States always overcame its periodic economic downturns, even the Great Depression. It is therefore reasonable for Americans, who are optimistic by nature, to assume that the nation’s current economic difficulties are just another temporary cyclical setback. But a new factor has emerged, unlike any the United States has previously faced. With the price of oil quadruple what it was four years ago, Americans are witnessing – or, more to the point, contributing to – the greatest transfer of wealth from one set of nations to another in history. Politicians and the press understandably focus attention on the domestic pressures caused by the high price of oil – the “pain at the pump.” But the huge long-term geostrategic implications of this wealth transfer, so far virtually neglected, also require the next president’s attention.

Consider the following, from the noted oil expert Daniel Yergin: the United States consumes more than 20 million barrels of oil a day, about 12 million of which are imported. Based on prices from the first half of 2008, that means the United States is transferring about $1.3 billion to the oil-producing countries every day – $475 billion a year. (At the more recent price, $140 for a barrel of crude, the amount is far greater.) The other major consumers, including China, the European Union, India, and Japan, are sending even greater portions of their wealth to the producing countries, for a total annual transfer of well over $2.2 trillion. These figures are climbing.

Suppose high oil prices continue for, say, another decade – a gloomy but not unreasonable scenario given the long lead-time required to wean the consuming nations off their expensive habit. The wealth now accumulating in the producing nations will lead over time not only to even greater economic muscle but also to greater political power. Some of these producing nations have very different political agendas from those of the United States, Europe, and Japan. Groupings of oil-rich nations with goals opposed to those of the United States and its European allies will become more common and act more boldly. More money will be available to fund dangerous nonstate actors who seek to destroy Israel or destabilize parts of Africa or Latin America – or attack the United States. There is a well-known example of this, although the West seems not to have learned any lessons from it: Saudi Arabia, which, although it has long worked with Washington to bolster world oil output and keep prices within an acceptable range, has simultaneously allowed billions of (ostensibly nongovernmental) dollars to go toward building extremist madrasahs and funding terrorist organizations, including al Qaeda. There will be more such complicated double-dealing in the future: Does anyone doubt that the current assertiveness on the international stage of, for example, Iran, Russia, and Venezuela comes from the economic muscle that accompanies their growing petrodollar reserves? (Venezuela now spends five times as much as the United States on foreign aid to the rest of Latin America.)

At the same time, the problem of climate change has reached a level that, in the view of many scientists, threatens the planet; many believe that there is only a decade to act to avoid a catastrophic tipping point, which would otherwise come somewhere around the middle of the century. Even as former Vice President Al Gore crossed the globe raising the alarm, the Bush administration wasted seven and a half irreplaceable years, refusing to address the issue. There was little sense of urgency in this administration or among its congressional allies; they opposed almost anything other than voluntary conservation measures – until the prices at the pump hit $4 a gallon. It was only at the end of 2007, under immense political pressure, that the Bush administration finally agreed to the first increase in fuel-efficiency standards in 32 years. (By that time, fittingly, Gore had won the Nobel Prize.) Then, at the 2008 G-8 summit in Japan, George W. Bush agreed to a vaguely worded and essentially meaningless “aspirational” goal on the reduction of carbon emissions.

Over time, stronger conservation measures, together with investments in new technologies, will undoubtedly be put into effect. But if oil and gas prices fall from their current bubble-like levels, consumption will rise again. On the other hand, if prices stay high, consumption may fall, but the United States and its closest allies will continue to hemorrhage petrodollars. Either way, absent an effective energy and climate-change policy, the planet will suffer from continued warming. Drought and famine will increase in some of the poorest places on earth, food prices will continue to rise, and people will abandon areas that are no longer arable. Glaciers and icecaps will melt faster, ocean levels will rise, and more species of plants and animals will become extinct. The Bush administration’s neglect of these issues is beyond astonishing – it is as shocking, in its own way, as the administration’s performance in Afghanistan and Iraq.

The two major presidential candidates, Senator Barack Obama (D-Ill.) and Senator John McCain (R-Ariz.), both say that they take climate change seriously. But an examination of their positions on the issue shows important differences. Obama has a far more comprehensive plan, with an ambitious goal for emissions reduction, a market-based mechanism that has broad support among economists on the left and the right, and substantially greater investments than McCain’s plan in technologies that will help achieve these goals. McCain stresses removing environmental restraints on domestic and offshore drilling. This is hardly a serious long-term solution to anything; even if major new fields were found, they would have no effect on supply for at least a decade, and they would do nothing for climate change or conservation.

The search for effective energy and climate-change policies will require a national consensus on the seriousness of the situation and an action plan entailing compromises and sacrifices on everyone’s part, sacrifices normally associated with war – all without undermining economic growth. As a cautionary tale, it is worth recalling President Jimmy Carter’s fervent but unsuccessful attempt to rally the nation in a prime-time televised speech in April 1977. Wearing a much-mocked cardigan sweater, he said that his energy-independence project would be the “moral equivalent of war.” When someone pointed out that the initials of that phrase spelled “meow,” the press had a field day, ignoring the substance of Carter’s proposals. A true national debate was deferred for 30 years. One of Ronald Reagan’s first acts as president was to remove from the White House roof the solar panels Carter had had installed.

The twin challenges of energy dependence and climate change offer an opportunity for a breakthrough between the two most important nations in the world today, which also happen to be the world’s top two polluters. Together, China and the United States produce almost 50 percent of the world’s carbon emissions. In the last year, China has passed the United States as the world’s largest polluter. In 2007, two-thirds of the worldwide growth in global greenhouse gas emissions came from China, according to the Netherlands Environmental Association, which estimates that China now emits 14 percent more climate-warming gases than the United States does. On a per capita basis, however, it is still not even close — as every Chinese points out. The United States produces 19.4 tons of carbon dioxide per person per year; China (5.1 tons) trails not only the United States but also Russia (11.8 tons) and the countries of western Europe (8.6 tons). India checks in at only 1.8 tons per capita.

The effort to produce a new international climate-change treaty to supplant the Kyoto Protocol, which expires in 2012, is getting nowhere fast. A new agreement is supposed to be finished and ready to be signed in Copenhagen at the end of 2009. Do not count on it. With neither China nor the United States playing a leading role in the negotiations, many members of Congress are warning that there is no greater possibility of Senate ratification for the Copenhagen agreement next year than there was for the Kyoto Protocol in the 1990s (in other words, none) – unless at least Brazil, China, India, and Indonesia agree to limits on their carbon emissions. And without China and the United States, the value of the treaty, although still real, would be limited.

Here is a seemingly insoluble Catch-22: the major emerging economies will not agree to any treaty containing meaningful limits on their emissions, and the U.S. Senate will not ratify an agreement that does not include them. There is, however, another approach that should be considered, without abandoning the Copenhagen process: multiple agreements in which various combinations of nations address specific parts of the larger problem. In such a collection of agreements, there would be a greater opportunity for genuine U.S.-Chinese cooperation. In particular, the two nations could reach bilateral agreements for joint projects on energy-saving, climate-change-friendly technology. The mutually beneficial goal would be an increase in energy efficiency and a reduction in carbon emissions in both countries. (Japan, the world’s most efficient energy consumer – and an indispensable ally of the United States – could participate in such arrangements; it has much to teach both nations, and it already has bilateral technology-exchange agreements with China.) From carbon capture to clean coal to solar and wind energy, there is vast untapped potential in joint projects and technology sharing – but no institutionalized U.S.-Chinese framework to encourage them.

On a recent trip to China, I raised the possibility of such bilateral agreements with senior Chinese officials, who showed interest and a willingness to explore the idea unofficially through nongovernmental channels. Their concern, freely expressed, was that any energy plan the West proposed would be just another device to slow down China’s economic growth. Whether true or not, this deeply felt view, shared by India and other major emerging markets in regard to their economic growth, must be understood and taken into account in order to make progress. Perhaps the window is already opening slightly: Wang Qishan, the powerful vice premier in charge of trade and finance, recently called publicly for joint research laboratories for renewable energy and pollution-reducing technologies. “Stronger co-operation between the two countries in energy and the environment,” he wrote in the Financial Times on June 16, “will enable China to respond better to energy and environmental issues and also bring about tremendous business opportunities and handsome returns for American investors.” In the careful language of one of China’s top officials, this is an unexpected and welcome signal. The next administration should not ignore it. Vigorous follow-up would not only address one of the world’s most pressing problems; it would also open up a new door for cooperation in the world’s most important bilateral relationship.

AGREEMENTS AND DISAGREEMENTS

Given the dissatisfaction of Americans with the nation’s present condition, it is hardly surprising that both Obama and McCain have sought to emphasize the changes they would bring. Both have said that they would put more emphasis on Afghanistan – an early Bush administration success that has deteriorated dramatically as a result of neglect, miscalculation, and mismanagement. Both candidates have promised to strengthen U.S. relations with NATO allies. Both have expressed concern – although in very different language – over the recent behavior of Russia, especially in Georgia. (McCain has gone overboard, however, speaking in a highly confrontational manner and calling for the expulsion of Russia from the G-8, the group of highly industrialized states – something that he surely knows would never be agreed to by the other six G-8 members and a bad idea in its own right.) Both have promised to rebuild the armed forces and take better care of the wounded from Afghanistan and Iraq. Both are committed to the support and defense of Israel. (Although both have said they would close down the detention facility at Guantánamo and ban torture, a significant difference emerged in a recent Senate vote: Obama supported, and McCain opposed, an important statutory requirement to hold the CIA to the same standards for interrogation as the military, as mandated in the U.S. Army Field Manual.)

It is the differences between Obama and McCain that are truly revealing, and they offer important insights into the values and styles of the two men, their profoundly divergent attitudes toward the role of diplomacy, and their contrasting visions for the United States. Obama’s policy proposals – whether on climate change, energy, Africa, Cuba, or Iran – are forward-leaning; he proposes adjusting old and static policies to new and evolving realities. He emphasizes the need for diplomacy as the best way of enhancing U.S. power and influence. On trade, although McCain accuses Obama of neoprotectionism, in fact Obama argues for improving trade agreements to take into account elements such as labor and environmental standards – improvements that would give them more domestic support.

In contrast, McCain’s boldest proposals are neither new nor original: his vague “League of Democracies,” for example, sounds like an expansion of an organization, the Community of Democracies, created by former Secretary of State Madeleine Albright that still exists but is virtually ignored by the current administration. Although McCain says his league “would not supplant the United Nations,” he explicitly proposes that it take collective action when the UN does not. “The new League of Democracies,” he said last year, “. . . could act where the UN fails to act, to relieve human suffering in places like Darfur [and] bring concerted pressure to bear on tyrants in Burma or Zimbabwe, with or without Moscow’s and Beijing’s approval.” McCain calls this “the truest kind of realism.” Whatever McCain says, his “League,” unlike the forum created by Albright, would be viewed by everyone as an attempt to create a rival to the UN. Recent conversations I have had with senior officials in many of the world’s leading democracies confirm that not even the United States’ closest allies — let alone the world’s largest democracy, India – would support a new organization with such a mandate.

The UN has been undermined and underfunded for the last eight years, often making it weaker and more vulnerable to anti-American positions. The UN is, to be sure, a flawed institution. But it plays an important role in U.S. foreign policy, and if correctly used, it can advance U.S. national interests and play a more effective role in peacekeeping in such difficult areas as Sudan. Yet the UN can only be as strong as its largest contributor (which is also a founding member), the United States, wants it to be. Obama would improve and reform the organization in ways that would serve the United States’ interests, starting by asking Congress to pay the arrears that have grown once again, under Bush, to over $1 billion (an American debt of similar size was paid down after an arrangement made in the last year of the Clinton administration). Creating a new organization, instead of making a renewed effort at serious UN reform, would work against the very objectives McCain says he supports.

In his speech on nuclear proliferation delivered at the University of Denver on May 27, McCain said he would reconsider his long-standing opposition to the Comprehensive Nuclear Test Ban Treaty if a renegotiation could “overcome the shortcomings that prevented it from coming into force” – a vague and elusive conditionality. Obama, in contrast, flatly favors this important treaty. Similarly, Obama has endorsed the goal of eliminating all nuclear weapons, as outlined in the now-famous article by former Secretary of State George Shultz, former Secretary of Defense William Perry, former Secretary of State Henry Kissinger, and former Senator Sam Nunn. McCain has pointedly refused to do so.

Looking at these and other differences, it is clear that the U.S. electorate is being offered two different visions of the United States’ role in the world and two different attitudes toward diplomacy. On most issues, with the important exception of climate change, McCain supports or takes harder-line positions than the Bush administration. (For example, he expressed deep skepticism about the partial agreement President Bush announced in late June on the halting of North Korea’s nuclear weapons development.) Although McCain prefers to describe himself as a “realist” or, more recently, a “realistic idealist,” looking broadly at his positions, it is impossible to ignore the many striking parallels between him and the so-called neoconservatives (many of whom are vocal and visible supporters of his candidacy).

IRAQ AND IRAN

Of course, no disagreement between Obama and McCain reaches the level of importance of their disagreements over Iraq and Iran. Policy toward these two countries will shape perceptions of the new president more than policy on any other issue; in some ways, the election is a referendum on Iraq. When McCain says that the United States is in Iraq to win, he means it – no matter what the costs or the duration of the war might be. No other issue engages him as deeply or as emotionally, and his feelings derive not from political calculation but from profound personal conviction. He believes that recent reductions in American and Iraqi casualty rates are proof that the United States is winning the war. As of this writing, however, he has not said that this highly welcome improvement in the situation would lead to significant troop withdrawals in 2009 beyond the removal of the “surge” troops whose departure has already been announced. He has repeatedly made clear that he is ready to leave troops in Iraq indefinitely rather than take the risks that he believes would accompany major reductions. He never acknowledges the risks and costs associated with continued deployments.

Obama, on the other hand, believes that military victory, as defined by Bush and McCain, is not possible – a judgment shared by the U.S. commanders in Iraq. He finds unacceptable the costs to the United States of an open-ended commitment to continue a war that should never have been started. Obama concludes that in the overall interest of the United States, it is necessary to start withdrawing U.S. ground combat troops at a steady but, he emphasizes, “careful” pace. This will, he predicts, put far more pressure on Iraqi politicians to reach the compromises necessary to stabilize the country than leaving the troops there. Emphasizing diplomacy as an indispensable component of U.S. power, Obama has also called for an all-out effort to involve all of Iraq’s neighbors in a regional diplomatic and political effort to stabilize the country.

McCain charges that his opponent’s position (which he and his supporters often misrepresent as “precipitous withdrawal”) would snatch defeat from the jaws of victory, encourage the United States’ enemies, and weaken the nation. But he offers no exit strategy, no clear definition of achievable victory, and no plan for promoting political reconciliation within Iraq. His policy amounts to little more than a call for continuing the war because of the risks associated with trying to end it. Such a negative goal is not a sufficient rationale for putting still more American lives at risk.

Some of McCain’s opponents have misstated, at times, his position on a key point: he never said that the United States might have to fight in Iraq for a hundred years. But what he did say was equally unrealistic and highly revealing of his mindset. Using as his model South Korea, where 28,500 American forces remain 55 years after the armistice agreement, McCain said that he was ready to station U.S. troops in Iraq for at least that long, if not longer, even a hundred years. Such a multidecade commitment, even under peaceful conditions, is inconceivable in the xenophobic and violent atmosphere of the Middle East. In the end, McCain defines every other issue in terms of Iraq. “Its outcome,” he wrote in these pages late last year, “will touch every one of our citizens for years to come.” That may be true, but perhaps not in the way that he intends.

Obama stands McCain’s core argument on its head. “The morass in Iraq,” he wrote, also in these pages, “has made it immeasurably harder to confront and work through the many other problems in the region — and it has made many of those problems considerably more dangerous.” Like McCain, who favored the war even before it began, Obama has been consistent: he opposed the war from its outset. He is well known, of course, for his intention to start withdrawing combat troops as soon as possible. But because he recognizes the complexities of withdrawal, he has also emphasized (to little press attention) the need to be extremely careful at every step of that process. Obama has said that he would maintain flexibility in regard to whether to leave a residual force and follow an exact timetable. “This redeployment,” he wrote in these pages, “could be temporarily suspended if the Iraqi government meets the security, political, and economic benchmarks to which it has committed. But we must recognize that, in the end, only Iraqi leaders can bring real peace and stability to their country.” He added, “The best chance we have to leave Iraq a better place is to pressure these warring parties [the Sunnis and the Shiites] to find a lasting political solution. And the only effective way to apply this pressure is to begin a phased withdrawal of U.S. forces.”

The dispute between the Iraqi government and the Bush administration over a “status-of-forces agreement” highlights this issue. When the Iraqi prime minister insisted on a timetable for U.S. withdrawal (suggesting a three- to five-year adjustable schedule), why did both the current administration and McCain demure? Bush had often said that the United States would leave when it was not wanted; now he objects to a reasonable request from a sovereign state, seeming to prove the charge that the United States seeks a permanent presence in Iraq. Obama, on the other hand, calls it “an enormous opportunity . . . to begin the phased redeployment of combat troops.” In July, reports surfaced that the administration might withdraw one to three combat brigades still in Iraq after the departure of the surge troops. If true, both candidates could claim they were right; Obama could plausibly say that this was what he had called for all along, and McCain could say that it justified his support for the surge.

At the heart of the United States’ geostrategic challenge lie five countries with linked borders: the United States’ NATO ally Turkey, Iraq, Iran, Afghanistan, and Pakistan. In this arc of crisis, incoherence has marked U.S. policy since 2003. This five-nation area falls into three different regional bureaus in the State Department. Washington preaches different policies on democracy in neighboring countries, confusing everyone – pressuring Israel and the Palestinians, for example, into letting Hamas, the terrorist organization, run in the 2006 Palestinian elections, with disastrous results, while backing away from democracy promotion in Egypt. There is little coordination or integration of policies toward Afghanistan and Pakistan, although the two countries now constitute a single theater of war. No single concept beyond the vague “global war on terror” – defined in any way that suits the short-term needs of the administration – has guided U.S. strategy. Relations with all five countries have deteriorated.

Any serious policy will require dealing with all the countries in this region, as well as Israel and the Palestinian Authority, Lebanon, Syria, and Saudi Arabia. This unfortunately includes the very unpleasant reality at the center of this region, Iran. Both Obama and McCain agree that preventing Iran from becoming a nuclear weapons state must be a major priority. Both would tighten sanctions. Neither would remove the threat of the use of force from the table. But from that point on, their emphasis and language differ significantly. Obama has said repeatedly that he is ready to have direct contacts with Iran at whatever level he thinks would be productive, not only on nuclear issues but also on Afghanistan, Iraq, and Iran’s support for terrorist organizations, including Hamas and Hezbollah (which Iran has equipped with tens of thousands of rockets aimed directly at Israel’s heartland). McCain not only opposes such direct talks but also has famously said that the only thing worse than a war with Iran would be a nuclear Iran. Obama’s forthright approach has been met with cries of alarm from McCain and his supporters, as though the very thought of talking to one’s adversaries were in and of itself a sign of weakness, foreshadowing another Munich. This position is contradicted by decades of U.S. diplomacy with adversaries, through which U.S. leaders, backed by strength and power, reached agreements without weakening U.S. national security. Diplomacy is not appeasement. Winston Churchill knew this, Dwight Eisenhower knew it, and so did John F. Kennedy, Ronald Reagan, and George H. W. Bush.

This singular difference between Obama, on the one hand, and George W. Bush and McCain, on the other, offers an important insight into the underlying philosophies and values of the two candidates. Although McCain and his advisers have sometimes looked for ways to distance him from Bush, his position on Iran (as with Iraq) is tougher than that of the Bush administration. This is, one can safely assume, McCain’s real view, which he sometimes expresses in pungent and humorous language (“Bomb, bomb, bomb, bomb, bomb Iran,” he once sang at a public rally). Coupled with his criticism of the Bush administration’s deal with North Korea and his call to throw Russia out of the G-8, his position suggests a deep, visceral aversion to talking to one’s adversaries, perhaps stemming from a concern that such dialogue might be viewed as weakness. It also shows an innate skepticism of diplomacy as a frontline weapon in the United States’ national security arsenal. Although both Bush and McCain attack Obama as weak, Obama’s position is in fact closer to the traditional default position of almost everyone who has ever practiced or studied diplomacy or foreign policy. Even loyal pro-McCain Republicans, such as James Baker, Robert Gates (before he became secretary of defense), Henry Kissinger, and Brent Scowcroft have disagreed with the McCain position on Iran and Russia.

Of course, there is no certainty that serious talks are possible with the real power center of Iran: Supreme Leader Ayatollah Ali Khamenei and his inner circle. It is therefore important, before starting down the diplomatic track, to have a clear idea as to what should be done if talks either are refused or make no progress. Contacts should begin through private and highly confidential channels to determine if there is a basis on which to proceed. The ongoing low-level communication through the U.S. and Iranian embassies in Baghdad, although limited in scope and unproductive so far, could allow for initial probing with little risk of compromise, and there are several ongoing private “track-two” efforts that could also be useful. The model that comes to mind, not surprisingly, is the one that President Richard Nixon and his national security adviser, Kissinger, used to open a dialogue with China in 1971, after 22 years of noncontact. Nixon’s decision to talk to one of the most repressive regimes in the world, at the height of the insanity of the Cultural Revolution, came at a time when Beijing’s treatment of its own population was certainly worse than that of Tehran today. China was also supporting guerrillas fighting U.S. troops in Southeast Asia. Yet Nixon and Kissinger talked to Mao Zedong — and changed the world. (The way not to proceed is to emulate Reagan’s move in 1987, at the height of the Iran-contra drama, when he secretly dispatched his national security adviser, Robert McFarlane, to Tehran carrying a chocolate cake decorated with icing in the shape of a key.)

Would an effort at dialogue with Iran produce results? Could it reduce the overt anti-Israel activities of the Iranian government, which poses an existential threat to the Jewish state? Could it stop the Iranian nuclear program? Is there enough common ground to enlist Iran in a regional project to stabilize Iraq and Afghanistan? None of these questions can be answered in advance, but most scholars and experts believe that there are sufficient parallel interests to make the option worth exploring, just as Obama (and all the other candidates for the Democratic nomination) has suggested. Combined with the threat of tougher sanctions – and with the use of force remaining on the table – this carrot-and-stick approach would not threaten the security of either Israel or the United States, and it would strengthen the United States’ position elsewhere in the world, especially with other Muslim states, regardless of its outcome.

If Tehran rebuffs an opportunity to have meaningful talks with Washington, it will increase its own isolation and put itself under greater international pressure, while the United States will improve its own standing. Of course, this journey, once begun, will require adjustments along the way. Diplomacy is like jazz – an improvisation on a theme. Let it begin next year, as part of a new foreign policy in which diplomacy, conducted with firmness and enhanced by U.S. power, and consistent with American values, returns to its traditional place in the United States’ national security policy.

Such an approach toward Iran, coupled with the drawdown of U.S. combat units in Iraq, would have an important additional benefit: it would enhance the value of a return by the United States to its role as a serious, active peacemaker between the Israelis and the Palestinians. As with so many other issues, the Bush administration wasted most of its eight years not attending to this one, only finally engaging with it in 2007, with the “Annapolis process” launched by Secretary of State Condoleezza Rice. That effort will not lead to anything more than, at best, a loose framework agreement before the administration’s time runs out. The next president must engage personally with this issue, as every president from Nixon to Bill Clinton has in the past.

THE OTHER WAR

Although both Obama and McCain agree on the importance of the “other war” – that in Afghanistan – this alone is not sufficient. Current U.S. policy in Afghanistan is a failure. American voters should hear in more detail what each candidate would do about it. For McCain, the question arises as to where the additional resources needed would come from if he continues the war in Iraq. Obama has already pledged at least 10,000 more troops.

Since the U.S.-led coalition’s initial success in driving the Taliban from the cities, the basic U.S. plan and timetable in Afghanistan have been upended time and again by events that were not foreseen and policies that were inept. This past year, disaster was staved off only with the dispatch of additional British, Canadian, French, and U.S. troops. The right course now does not lie in a huge increase in NATO forces, although additional forces will be required for the southern and eastern parts of the country. The Taliban cannot win in Afghanistan; their terror tactics and memories of the “black years” repel most Afghans. But by not losing, by staying alive and causing continual trouble, the Taliban are achieving a major objective – preventing success by the central government, tying down large numbers of NATO troops, rallying “jihadists” from around the world to a remote but oddly romantic front. Faced with this challenge, the central government has shown that it is simply not up to the job. Meanwhile, the international community, a vast and uncoordinated collection of nongovernmental organizations, international agencies, and bilateral organizations, does enormous good but, paradoxically, sometimes undercuts its own goals by creating an ever-deeper dependency on foreigners for services that Kabul cannot deliver.

The situation in Afghanistan is far from hopeless. But as the war enters its eighth year, Americans should be told the truth: it will last a long time – longer than the United States’ longest war to date, the 14-year conflict (1961-75) in Vietnam. Success will require new policies with regard to four major problem areas: the tribal areas in Pakistan, the drug lords who dominate the Afghan system, the national police, and the incompetence and corruption of the Afghan government. All present immensely difficult challenges, but the toughest is the insurgent sanctuaries in the tribal areas of western Pakistan. Afghanistan’s future cannot be secured by a counterinsurgency effort alone; it will also require regional agreements that give Afghanistan’s neighbors a stake in the settlement. That includes Iran — as well as China, India, and Russia. But the most important neighbor is, of course, Pakistan, which can destabilize Afghanistan at will – and has. Getting policy toward Islamabad right will be absolutely critical for the next administration – and very difficult. The continued deterioration of the tribal areas poses a threat not only to Afghanistan but also to Pakistan’s new secular democracy, and it presents the next president with an extraordinary challenge. As a recent New York Times article stated, “It is increasingly clear that the Bush administration will leave office with Al Qaeda having successfully relocated its base from Afghanistan to Pakistan’s tribal areas, where it has rebuilt much of its ability to attack from the region and broadcast its messages to militants across the world.” Nothing – not even Iraq – represents a greater policy failure for the outgoing administration.

AN OVERFLOWING AGENDA

The focus here on a few major issues does not mean that others can be ignored. If history is any guide, issues that are neglected too long often emerge at the top of the policy agenda – Somalia, Bosnia, Cambodia, Darfur, Myanmar (also known as Burma), Tibet, and Zimbabwe are only a few recent examples. So even as a new administration starts to deal with the arc of crisis, it must also pay close attention to issues that could easily overwhelm it, in much the way Rwanda did Clinton’s administration in 1994, when the president’s focus was on Bosnia. A good example is Sudan, where, in addition to there being a deepening crisis in Darfur, the North-South agreement, once hailed as a genuine Bush-era success, is now in danger of collapse. It is likely that its key provision (national elections followed by a referendum on independence in the South) will be ignored or repudiated. By 2010, the odds are that Sudan will once again explode into a major North-South conflict, with the perennial risk of involvement by its neighbors. Preventing such a scenario will take intense efforts, led by the United States and the Africa Union and requiring the active involvement and support of China.

U.S. relations with the Muslim world will require special attention; efforts so far to encourage moderate Muslims to deal with extremists have not worked. A new, creative approach to public diplomacy must be developed. Then there is the odd problem posed by the “democracy agenda” of the last six years. The Bush administration’s inept advocacy of a fundamental human right has contaminated one of the nation’s most sacred concepts. Bush did the dream of democracy a huge disservice by linking it to the assertion of U.S. military power. Pressuring other countries to adopt the superficial aspects of a complex and subtle system of governance is simply not the route to follow in promoting American values or security interests. Yet the goal is correct and should not be abandoned – only presented in a style and a tone far more sensitive to how it is perceived in other lands. The next administration should focus more on human rights (a phrase curiously absent from the Bush lexicon) and basic human needs while still encouraging the development of democratic forms of government, accompanied by the evolution of a pluralist political culture, the rule of law, and improvements in material conditions, especially through job creation. If there is progress in these areas, democracy will follow, in ways that countries will determine for themselves – with U.S. encouragement. That is the lesson of Chile, Indonesia, the Philippines, South Korea, Taiwan, and several promising young democracies in Africa.

It was in Africa that President Bush produced his greatest success – his anti-AIDS program, one of the few bipartisan policies of the last eight years. The United States has spent over $13 billion on the program since 2003. It has saved well over one million lives so far and incentivized other nations to do more. But the Bush administration’s Africa policy has been notably deficient in addressing the strategic, economic, and environmental dimensions of Africa’s plight. It has failed to deploy the instruments of statecraft in addressing Africa’s debilitating cycle of violence – in the Democratic Republic of the Congo, Sudan, Zimbabwe, and the obscure but explosive Horn of Africa. The world needs a strategy to address Africa’s endless conflicts, and that strategy must include a political approach to conflict resolution. The next administration must attend to the crises and mobilize support from its allies and from the African Union. The Bush administration played a useful role during the postelection crisis in Kenya (as did Obama, who gave interviews to Kenyan media and the Voice of America), but nowhere else on the continent has the United States been particularly effective. The UN is a key player, but the United States must lead the effort to get more resources for UN peacekeeping in Africa, or else such efforts will have no chance of success. In Obama’s extraordinary trip to Africa in 2006, he gave early hints of the promise of his candidacy. When I visited Kenya a few months later, I felt the excitement that his visit, including his undergoing a public HIV test in Nairobi, had generated. The conventional wisdom on Africa is that it is a hopeless case. This view – which amounts to triage by continent – is neither true nor acceptable morally, politically, or strategically.

In Latin America, the United States must begin to redress the widespread skepticism toward U.S. leadership – but not by making implausible promises to eradicate poverty and inequality or to stop drug trafficking and rampant crime. The greatest boost the next president can give to the realization of the long-elusive consolidation of a social contract in Latin America starts with recovering the social contract at home. Immigration reform and policies to alleviate economic anxiety, from introducing universal health care to making major investments in education and infrastructure, will create the surest path to rebuilding U.S. public support for what is now de facto integration with Latin America, whether through capital or language, commerce or culture.

To advance U.S. interests, Washington needs a different relationship with Mexico and strategic ties with Brazil. In Mexico’s case, thriving trade along a 2,000-mile border, vast population networks, and shared vulnerability to increasingly pervasive organized-crime syndicates require sustained presidential attention, as Bush promised but was unable to deliver. In Brazil — the world’s ninth-largest economy, a leading global producer of food and ethanol, an emerging petroleum giant, a potential nuclear power, and a major emitter of greenhouse gases – the next president can find a partner to advance key global initiatives, help define the shape of multilateral institutions, and act as a diplomatic ally in confronting the toughest regional challenges.

LEADING IN A MULTIPOLAR WORLD

The United States is not a helpless giant tossed on the seas of history. It is still the most powerful nation on earth, and within certain limits, it can still shape its own destiny and play the leading role in a multipolar world. It can still take the helm in addressing the world’s most pressing problems (as President Bush did effectively on only one issue, AIDS). There are many issues waiting for inspired and, yes, noble U.S. leadership, backed up by enlightened U.S. generosity that is also in the United States’ own interest. The United States is still great. It deserves leadership worthy of its people, leadership that will restore the nation’s pride and sense of purpose. That task must begin at home, but the world will be watching and waiting.

ONCE IN OFFICE . . .

It is a well-established historical fact that what candidates say about foreign policy is not always an exact guide to what they will do if elected. Historians point to a myriad of examples: Franklin Roosevelt’s 1940 promise to not send “your boys . . . into any foreign wars,” Lyndon Johnson’s statements in 1964 that he would not send ground troops to Vietnam, Richard Nixon’s 1968 references to a nonexistent “secret plan” to get out of Vietnam, Ronald Reagan’s 1980 pledge to upgrade U.S. relations with Taiwan to “official” status, Bill Clinton’s 1992 promises to take a strong stand on Bosnia and stand up to the “butchers of Beijing,” George W. Bush’s 2000 call for a “more humble” foreign policy that would never again have the United States involved in “nation building.” If a candidate takes a position that, on reaching the White House, he concludes is wrong, it obviously would be irresponsible to stick with that position; national interest must take precedence over statements made in the heat of a campaign. However, reversals of campaign positions, no matter how necessary, are painful for any politician and certain to be used against him by his opponents regardless of the circumstances. (A memorable experience for me involved Jimmy Carter’s 1976 campaign pledge to withdraw all U.S. ground troops from South Korea, a pledge he reaffirmed publicly shortly after the election. I had argued against it, but as Carter’s assistant secretary of state for East Asian and Pacific affairs, I then had to defend it publicly while, under the direction of Secretary of State Cyrus Vance and Secretary of Defense Harold Brown, working to reverse it as quietly as possible — which was finally done, after two difficult years, in the summer of 1979.)

Whatever their ultimate fate, however, campaign positions are key indicators of the priorities and thinking of each candidate as he approaches the most powerful and difficult job in the world. It is therefore valuable to examine them carefully.

Reprinted with kindly permission of The Council on Foreign Relations.


Beijing Games honors Israeli athletes slain in Munich 1972

August 22, 2008

                                        

by Uzi Dann, Israeli Newspaper HAARETZ

A memorial ceremony was held on Monday in Beijing to honor the 11 Israeli athletes who were murdered in a Palestinian terror attack at the 1972 Munich Olympics.

The ceremony was organized by the Israeli embassy in the city and the Israel Olympic Committee at the Hilton hotel.

Hundreds attended the event, including representatives of Israel’s athletic delegations, and Science, Culture and Sport Minister Raleb Majadele. 

A significant number of foreign delegates, military attaches and Olympic officials were in attendance as well. Among the guests of honor was Juan Antonio Samaranch, International Olympic Committee president from 1980 to 2001, and Alex Giladi, Israel’s delegate to the IOC.

On September 4, 1972, 10 Israeli athletes and a coach were taken hostage by Black September, a Palestinian terrorist group with ties to Yasser Arafat’s Fatah organization.

Just after midnight on September 6, after West German police botched the rescue attempt, the group killed all of the hostages and a German police officer.

Memorial ceremonies for the Munich massacre have been held at every Olympics since the 2000 Games in Sydney. They have always been organized by Israeli authorities.

For the past 36 years, the IOC has denied any culpability in the athletes’ deaths. ON Monday Samaranch gave a heartfelt speech about keeping the slain sportsmen’s memories alive, describing the massacre as the “blackest moment in the history of the Olympic movement.”

While in office, neither Samaranch nor his successor, Jacques Rogge, made even the slightest effort to commemorate the victims. Those most hurt by the committee’s inaction were the families of the slain athletes.

Since Munich, widows Anki Spitzer and Ilana Romano have tried to persuade IOC officials to erect a monument to the slain athletes in the city’s Olympic Village.

On Monday, Romano pleaded with Giladi, who was present at the 1972 Games as a broadcaster, that the “next ceremony be held under the Olympics’ five-ring banner.”

Spitzer spoke in English about the families’ desire not for vengeance, but for peace of mind, and of the difficulties the widows have faced in raising 14 children between them as orphans.

She also leveled damning accusations at Rogge and his predecessors.

“The sons, husbands and fathers who were murdered weren’t tourists or bystanders, but part of the Olympic family. But the Olympic family doesn’t recognize them,” she said, receiving a standing ovation from the audience.

Despite the emotional pleas, the ceremony will likely remain an Israeli-organized event at the London Games in 2012, and indeed for the foreseeable future.

The Olympics prides itself on being an apolitical event.

Holding a ceremony in honor of the athletes of a small, conflict-prone Middle Eastern state – no matter how justified – is likely low among its priorities.


The Beijing games end the U.S. hegemony

August 21, 2008

The Beijing Olympics might be remembered as a “Sputnick moment” that showed the United States of America it had lost its hegemony, writes Jamie F. Metzl, executive vice president of the Asia Society and a former member of the National Security Council under President Bill Clinton, in the newspaper The Daily Star. Whether this actually leads to a post-American era depends how the United States reacts at this juncture, he argues.

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China is changing – in many ways for the better

July 25, 2008

In the Chinese newspaper China Daily, former director of Policy Planning in the US State Department Richard Nathan Haass writes that those boycotting the Olympics are ignoring China’s accomplishments.

“Of course, China merits criticism in many areas of its domestic and foreign policy. But snubbing China is misguided. It ignores what the country has accomplished, and it risks consequences that are inconsistent with what the critics themselves want to see.

Some perspective is called for. Modern China is only some six decades old. Its economic growth has been and is truly astounding. Hundreds of millions of Chinese have been lifted out of poverty. Indeed, Chinese economic growth must be acknowledged as one of history’s great achievements in poverty reduction.”

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