Posted Wednesday, Oct. 10, 2012, at 6:29 AM
Never stop reading, people.
Photograph by Natalie Behring-Chisholm/Getty Images
Every once in while, I like to jot down some thoughts on the books I’m reading, since reading and flying across oceans and large land masses is a major part of my job. In part, I do this because I fear I’ll begin to forget the details of these works as my brain slowly deteriorates into a whiskey-soaked old age. But there’s also the fact that some of these books are worth recommending, and since my kids are highly unlikely to take my recommendations as anything but an unwelcomed bit of parental pressure, I’ll foist them upon you.
Boom, Bust, Boom: A Story About Copper, the Metal that Runs the World
By Bill Carter
Bill Carter’s the kind of guy I might have known, and also would probably get along with. He was in Bosnia at the same time I was – he wrote the fantastic Fool’s Rush In about that war’s absurdities, and he’s got a gonzo streak I recognize from my own days as a foreign correspondent. But I don’t know him – or at least I didn’t until I started assessing his new book on the copper mining industry as a possible selection for think tank I run at Renaissance Capital. Among the things I do as Editor-in-Chief of Renaissance Insights is find good excerpts to send out to our clients, many of whom are deeply involved in minerals and mining as investors or operators.
Bill’s book wasn’t quite what I was looking for – short on market savvy or the kind of actionable nonsense an investment audience wants. But it is a fantastic, fascinating look at the often brutal and seedy side of mining, copper or otherwise. For someone not steeped in the topic, it’s a great introduction and an enraging narrative of greed, apathetic corporate incentives and government malfeasance. Particularly good, considering the recent Barclay’s – LIBOR scandal – is Bill’s account of how global prices for copper and other metals are set at the London Metal’s Exchange by people with a barely concealed interest in skewing reality. Anyway, great stuff from an excellent reporter and slightly mad gentlemen. It was nice to meet him, even if it was just over the phone.
By John Updike
When I moved to London last year from Hoboken, I knew being lonely was part of the deal. My wife and I – now ex-, had to buy our way out of a bad mortgage, which meant taking on debt just to sell the house. Infuriating, but that’s life. As a result, my employed had the upper hand on where I’d be based, to say the least, and London it was. My three kids, unfortunately for me, are now living an ocean away.
So I decided that, rather than enter into a quest for the finest single malt on this island (I may yet do that, but not so far), I’d instead read a few seminal works that somehow I had missed all these years. I’ve started with Updike’s great Rabbit series, and I have not been disappointed.
Indeed, as Rabbit tools around the mid-Atlantic states in “Rabbit Run” contemplating a dash away from his wife and child, I had a chilling sense that maybe this story was too close to home. Not that I did any such thing – but loneliness has a way of messing with you. (I get that same feeling when I hear the opening lines of “Hungry Heart” by Bruce Springsteen, too). But Rabbit turns around and saves the day in his inimitable selfish, sex-obsessed, mid-century American way. Within 100 pages I realized why this book is part of the cannon, and jumping forward to 1969 in the second volume, Rabbit Redux, just makes me want more and more. Shame there are only four of them.
By Mary Harper
This is a great breath of fresh air for someone interested on Africa and tired of, for lack of a better term, war pornography. Nowhere would you less expect to find good news than the “failed state” of Somalia.
I’ve been off the Somali coast on a US Navy ship, but never in the country. However, my dealings with Somalis – from cab drivers in Newark, N.J. to a few London bankers -- always led me to wonder: How could such an entrepreneurial people descend into such a mess?
Islam – I hear you screaming at your screen. Well, partly it’s militant Islam, but that hardly the whole story. Happily, radical Islam seems to be on the run there, and Mary Harper, a BBC correspondent I knew many centuries ago during my time there, does a marvellous job telling a very unknown story of success.
The fact is, life has gone on. In spite of what western photojournalist capture and send home, children are born, people get married, businesses are started, people eat, live, die (some of them of even of natural causes).
Somalia is showing signs of mending. Outsiders have played a role in this, notably African Union peacekeepers and the Kenyan military. But it’s Somalis themselves who are taking the real action, and here’s where Harper’s book shines. “The best people to sort out the problem of Somalia are the Somalis themselves, and this has already been proved to some degree in the self-declared republic of Somaliland. It is ironic that the region that was largely left alone by foreign powers, and received very little outside help, is one of the most stable, and certainly the most democratic, of all territories in the Horn of Africa.”
By Ruchir Sharma
“It’s not just a cultural oddity that new wealth in Warsaw is boring and understated while the style of the Moscow elite is garish and overstated,” Ruchir Sharma, an EM portfolio manager and asset allocation specialist at Morgan Stanley Investment Management writes in Breakout Nations. “It’s a sign that Poland has a more serious future than Russia does, because Poland is spending money more wisely.”
That’s the kind of on the ground truth that separates this book from dustier volumes tackling the same topic: which “emerging nations” will keep emerging as the century progresses. Sharma, who I hosted in a series of meetings for Renaissance clients, has his favorites, and they happen to coincide with some of my own: he’s high on South Korea (who isn’t?), but also shaky Thailand in Asia. He sees Poland and Turkey, as I do, as countries doing all the right things, and in Africa, we share optimism (and a bullish view) of Nigeria, in spite of its internal problems.
Indeed, it’s his lack of enthusiasm for the powers of the BRICS that stand out (and again I agree). Russia is a commodity play, Brazil overrated, as he wrote recently in Foreign Affairs.
On China, the “big kahuna,” he pleads special case: the biggest question for investors and the world economy. As it breaks through the $5,000-per-capita GDP level it may stall. Of the many economic and political stresses in the country, the statistic of most concern is aggregate debt/GDP, currently around 200%. This ratio has grown by 65% over the past five years.
On the subject of India, where Sharma was born, his contrarian views have played out dramatically. When he was writing the book in early 2011, most analysts were still debating whether India would overtake China’s growth rates over the next decade. “Today, no expectations have lowered as quickly as India’s.”
When his book first appeared earlier this year, Indians demanded to know how he could possibly be so negative as to suggest that India has only a 50/50 chance of being a breakout nation. “Now everything written is about how I was too optimistic.”
All in all, fantastic book.
Posted Monday, Oct. 8, 2012, at 8:37 AM
One of these BRICS is better than the others ... Brazilian President Dilma Roussef (L to R), Russian President Vladimir Putin, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma at the opening of the G20 Summit hosted by Mexico last June.
Photograph by Roberto Stuckert Filho/AFP/GettyImages
When it comes to the great giant of the north, Brazil prefers to stay off the radar.
“Being the source of American attention raises expectations in Washington that Brazil will work as a ‘responsible stakeholder’ according to some arbitrary criteria of what ‘responsible’ means, or it turns Brazil into a target of U.S. pressure when interests don’t coincide,” Matias Spektor, at Rio de Janiero’s Center for International Relations, recently wrote about his country. “As a result, there is a consensus among Brazilians that a policy of ‘ducking’ – hiding your head underwater when the hegemonic eagle is around – has served them well.”
If so, the ducking came to an abrupt end in May 2010, when Brazil and Turkey announced they had concluded a deal on Iran’s nuclear weapons program that they believed would prevent Iran from building a nuclear weapon while forestalling threatened U.S. or Israeli preemptive military action.
After a press conference with a smiling Iranian President Mahmoud Ahmedinjad, Brazil’s president at the time, Luis Inacio “Lula” da Silva, learned that the U.S. was furious with the deal. A week prior, he had received a letter from President Obama explaining the U.S. position, and why Washington was unwilling to take Iran’s word on the complex question of uranium enrichment. “Throughout this process, instead of building confidence Iran has undermined confidence in the way it has approached this opportunity. That is why I question whether Iran is prepared to engage Brazil in good faith, and why I cautioned you during our meeting. To begin a constructive diplomatic process, Iran has to convey to the IAEA a constructive commitment to engagement through official channels — something it has failed to do.”
For Obama, this was tough talk, and U.S. officials rejected the Brazilian-Turkish initiative. Lulu, exasperated, said on Brazilian television afterward: “Why doesn’t Obama call Ahmadinejad?” Mr. da Silva asked, “Or Sarkozy, or Angela Merkel or Gordon Brown?” naming the French, German and British leaders also involved in the Iran nuclear talks. “People aren’t talking.”
Brazil’s decision to step onto the international stage, following the Turkish lead, caught Washington by surprise. In fact, Brazil has for years been quietly evolving into something quite apart from the vast, bikini-clad, rainforest clearing, developing nation of yesteryear. Apparently this caught the State Department by surprise. And so, in true Washington style, we’ve held a grudge ever since.
Old-style geographical or raw material tallies of Brazil’s importance are outstripped by economic figures now, but they still remain impressive. Brazil is the fifth largest country by landmass, controlling 18 percent of the world’s fresh water in the Amazon basin, and its rainforest produces 20 percent of the world’s oxygen. It will be a top 10 producer of oil by 2020, will move up in GDP from eighth to fifth largest and jump even further up the income chart in terms of per capita wealth. But geopolitically, it had always been a quiet giant, which is why Lula’s Iran initiative struck an American nerve.
“[T]he unease is palpable,” writes Celso Amorim, Lula’s foreign minister at the time – both have since retired. The Iran deal, he said, “caused some discomfort in Washington, DC. The agreement obliged the U.S. government to explain, not always convincingly, its reasons for refusing an agreement that met all the points in President Obama’s letter to President Lula less than three weeks before.”
Brazil, in fact, began wresting control of the region’s economic and diplomatic agenda well before the Obama administration took office. Emboldened by its achievement of financial stability after decades of boom-to-bust cycles, and finding itself suddenly on the world stage in climate change talks due to the Amazon’s huge importance to the planet’s environmental health, a country which had been a reliably pro-American voice in world affairs began – politely – to let Washington know its priorities were not always in lockstep with Latin American views.
Iran aside, however, Brazil’s ability to remain on good terms with often diametrically opposed players echoes Turkey’s “no problems” approach to its own neighborhood. Problems, of course, abound – but like Turkey, Brazil appears intent on playing the regional voice of reason, whether the issue involved is global, like Iran’s proliferation, or regional, like Syria’s civil war or the ideological tension between Venezuelan President Hugo Chavez and Colombia’s former President Alvaro Uribe.
Brazil intervened diplomatically in 2008 to head off a possible was between Colombia and Venezuela over alleged support by Chavez for left-wing guerrilla movements inside Colombia. Lula, always sensitive to the appeal of Chavez’s left-wing populism for Brazil’s poor, tolerated the Venezuelan’s bluster and angered Colombia by publicly criticizing a deal that would have allowed U.S. troops to be based in the country. In the end, Brazil got what it wanted – cooler heads in its neighborhood, a new, less bellicose leader in Colombia who dropped the plan for a U.S. military base, and the gradual but steady discrediting of Chavez, as his policies faltered, leaving Venezuela as the latest failed state where oil riches retard and corrupt the political system. (Congratulations to Venezuela, by the way, for re-electing him: not since the U.S. reelected George W. Bush in 2004 has democracy so failed to separate wheat and chaff. Does incompetence mean nothing? )
But back to our story: The U.S. has made a miserable hash of what should be the easiest adjustment of our post-hegemonistic era: working closely with Brazil.
Those who gush about the “superpower of South America” are certainly prone to overstatement: Brazil continues to have problems with cronyism, poverty and (like China, India and other highly touted EM powers). But unlike any of those countries, its rise has threatened no one, not even Chavez (it merely showed him up), and not Argentina, which has been the regional rival for a century until the two nations buried their differences in the 1980s.
Why, then, would Barack Obama have visited both India and Brazil in 2011 and publicly endorse India’s bid for permanent U.N. Security Council status, but snub Brazil? This is the lowest of low hanging fruit – the diplomatic equivalent of kissing a baby.
The State Department’s excuse is mealy mouthed and can be summed up as something like this: South America isn’t strategic enough for a UN Security Council permanent seat (unless, of course, you’re South American). Good old Yanqui ingenuity shining through.
The real reason, I suspect, was to avoid offending Mexico, which squirms whenever the Portuguese speaking Brazilians don the mantel of regional leadership.
Too bad. I like Mexico, and see it as a potential growth superstar if internal chaos can be brought under control. To be sure, the U.S. should be on good terms with both of them, but Mexico isn’t building nuclear submarines, ordering an aircraft carrier or threatening, anytime soon, to overtake France as the world’s fifth largest economy (my bet on that: 2014). Mexico is a respectable and rising 14.
Or, consider this: In the 21st century, we need Mexico to succeed. But we need Brazil for us to succeed.
Next up: Nigeria
Posted Sunday, Oct. 7, 2012, at 4:15 AM
A young Somali farm worker tending a crop of maize in Dollow, northern Somalia.
Photo by Tony Karumba/AFP/GettyImages
Editor's Note: This is from my weekly Globalpost.com column.
An African Agricultural Powerhouse?
The situation was grim. It was November 2005, and for more than a year, less than an inch of rain had fallen on much of the country. Irrigated tobacco farms, mostly foreign owned, had managed to survive, but in a land where 70 percent of GDP is based on farming — mostly an acre or less per plot — the prospect of extended drought raised the spectre of famine.
A desperately poor place, Malawi for years had been almost completely dependent on a mixture of tobacco export revenue, international aid donations and IMF and World Bank loans. Scientists have long understood that the vulnerability of the soil in Malawi and other places to drought was not merely a question of water, but also of nitrogen, the key ingredient in fertilizer that farmers elsewhere can afford but which was well beyond the reach of the average Malawian cropper.
So Malawi’s President Bingu wa Mutharika stepped in, funding the distribution of small amounts of fertilizer to farmers all across the country.
The World Bank, led at the time by Paul Wolfowitz, the former Bush administration deputy defense secretary, objected to this move, as did the IMF. But Mutharika persisted, and within one harvest season, his farmers not only produced enough food to feed itself, but also enough to donate to neighbors in need.
Posted Sunday, Oct. 7, 2012, at 4:04 AM
A nice bit of news: the Crisis Guide multimedia documentary series I produced over the past decade for the Council on Foreign Relations has won a third Emmy award, this time for Crisis Guide: Iran. It's the last in the series, sadly, but I wanted to congratulate all the team at CFR and MediaStorm, the production company run by my friend Brian Storm, for the hard work and vision. It's an important topic - perhaps never more so than right now - and it deserves an in depth, objective approach with historical and political developments put into context.
NEW APPROACHES TO NEWS & DOCUMENTARY PROGRAMMING: CURRENT
Council on Foreign Relations & MediaStorm cfr.org/MediaStorm.com
Crisis Guide: Iran
Executive Producer, Coucil on Foreign Relations
Executive Producer, MediaStorm
Supervising Producer, Council on Foreign Relations
Managing Producer, Council on Foreign Relations
Producers, Council on Foreign Relations
Hagit Bachrach, Jayshree Bajoria, Roya Wolverson
Design and Development, MediaStorm
Posted Saturday, Oct. 6, 2012, at 4:48 AM
Syrian rebels help a wounded comrade who survived a Syrian army strike outside a hospital in the northern city of Aleppo on September 18. NATO was nowhere to be seen.
Photo by Marco Longari/AFP/GettyImages
Eleven months of civil war.
That’s a debatable judgment, depending on where, exactly, one draws the line between the regime’s brutal repression of Syrian pro-democracy protesters and the bloodthirsty onslaught against civilians that followed.
But it struck me recently that it was at about this point in 1992 that NATO finally established a no-fly zone over Bosnia-Hercegovina, about 11 months after the event now recognized as the start of that war, a mortar attack on Sarajevo that killed 16 shoppers in a Muslim neighborhood.
Remember, after 11 months of ethnic cleansing – not a bad term for what the Assad regime is currently attempting on the unmeltable ethnic pot that is Syria – Bosnia’s darkest days were most definitely ahead.
Concentration camps, like the one exposed by The Guardian’s Ed Vulliamy at Omarska, were already known to exist.
But the massacres at Srebrenica, the destruction of the ancient bridge of Mostar, the killing thousands in the siege of Sarajevo by snipers and artillery barrage, and the score settling murders and rapes and other atrocities committed by all three sides all over the land continued for three more years before the dictators bluff was finally called.
Why should we care about Syria? Well, that’s a post for a less intelligent audience, I hope. And while I frequently make the case that the U.S. should be scaling back its military commitments around the globe, there is penny wise and there’s pound-foolish. The time to impose a no-fly zone is now.
Remember, the question is Syria is not a purely military one, it's about momentum. If the outside world remains outside, Assad's well-armed regime, fearing reprisals, has a good chance of wearing down resistance and restoring its reign of terror. But dictators, at least in recent history, don't survive no-fly zones -- whether or not they ever truly tip the battlefield balance.
The alternative is grim. Allowing Syria’s chaos to continue will damage too many strategic American interests and, perhaps more importantly, squander an opportunity to affect precisely the kind of change that will make the world a safer place as America’s ability to “police it” inevitably fades.
Ironically, my post of two days ago – in effect, an argument to deputize Turkey as the leader of a more forceful intervention in Syria (and the Mideast generally) – was outdated within a day. Turkey doesn’t need Washington’s blessing: it got Assad’s instead, via an artillery attack that killed several Turkish civilians.
But the basic US policy reactions I sketched out remain relevant:
· Coordinate with Turkey to recognize a Syrian government in exile;
· Create a NATO peacekeeping force in waiting with a Turkish general in command;
· help arm the Syrian opposition against a brutal government that is filling refugee camps in Turkey, Jordan, Iraq and Lebanon with traumatized people.
And, now, impose a no fly zone run from the NATO base at Incirlik, Turkey, not far from the site of the Syrian artillery attack.
The counter arguments at this point are
a) Oh, no, that will look like “Wag the Dog!”
As an argument, that’s as specious as the GOP’s invocation of it in 1999 over Kosovo. And even Kosovo, a pretty clean win for the good guys, couldn’t save the Gore campaign from Ralph Nader and Florida’s electoral incompetence. A real president doesn’t worry about this stuff. And anyway, if he really wanted to play that game, he’d attack Iran, not Syria. To date, neither Romney nor Obama endorses a no-fly zone. Obama should do what a president is supposed to do: lead public opinion rather than react to it.
b) We can’t afford an expensive air deployment right now.
Actually, we’ve got three carrier strike forces in the Persian Gulf for the first time in decades because of the risk of an Israeli-Iranian clash. So they’re in place, and in spite of the conventional wisdom about Syria’s air force, it’s little more formidable that Saddam’s. In effect, a two day problem and (for the real penny pinchers) “monetizing” the current deployment of our naval assets. Meanwhile, Turkey’s interests here align perfectly with our own if ground forces become an issue.
c) We can’t be sure what will follow a collapse of the Assad regime.
No, but we can be sure what follows his survival. A bolstering of Iran, its Hezbollah allies in Lebanon, a message to Iraq’s Shia leaders that the US has lost its resolve, and unwelcomed new fuel for Israeli paranoia. Additionally, if we wait any longer, our desperately desired help will be displaced by the very real money and arms being channeled into the country by Saudi and Gulf sources. Anyone remember how that turned out in Pakistan or Afghanistan?
Besides, we’ve been here before in Bosnia. For those who were not in Bosnia, as I was on and off in those days, or were too young to remember the unbelievable indecisiveness of the West as the dictatorial Slobodan Milosevic bluffed and murdered and kept it at bay, let’s review:
Perhaps the most disgraceful moment in the history of the ever overrated European Union was its “hand-tied-behind-the-back” UN peacekeeping mission in Bosnia it ran between 1992 and 1995, a mission that literally provided cover for ethnic murder, rape and ethnic cleansing, and an excuse for the US to look away.
Not that the US gets a pass.
The first George Bush wanted nothing to do with Bosnia – “no dog in that fight” a senior Bushie, ever mindful of the need to bolster the boss’ shaky Texas credentials, quoted the president as saying.
Clinton, arriving in early 1993 to a mission in Somalia launched during Bush’s lame duck period, was a deer in the headlights. Somalia went south, the Rwanda genocide in 1994 shook the world to its core. Clinton today says he regrets not getting involved to stop Rwanda’s genocide more than any other failure of his tenure. Yet on his hands he sat for three more years before ordering air strikes on Serb artillery and snipers who rained death down daily upon Sarajevo’s Muslims.
So, we’ve reached 11 months in Syria. Back in early 1993, we imposed a no-fly zone over Bosnia and then sat on our hands. This time, we should impose a no-fly zone and follow up with aid to rebels and beseiged civilians, threats of escalation if the regime does not back down, the establishment of an international war crimes tribunal for Syria, and a green light to the Turks to take a chunk out of northern Syria so that refugees can be held safely on their own native soil. The Russians are bluffing, the UN playing the EU's role in Bosnia - time to let the world know that we see that.
Let’s hope Bosnia is not the template here. Whatever one thinks of Bush pere's judgement of Bosnia all those years ago, we have many dogs in Syria's fight.
Posted Monday, Oct. 1, 2012, at 11:02 AM
Jakarta's skyline: No more dangerous than Detroit, and a lot more vigor, frankly.
Photograph by Bay Ismoyo/AFP/Getty Images
Outside of a tsunami, the 1982 flick The Year of Living Dangerously, and maybe a sense that Bali would be a nice place for a vacation, there’s not a whole lot of appreciation in my great country for Indonesia. But Indonesia, arguably, has more going for it than many of the more familiar places bandied about as leaders of the 21st century.
Now, over the past several months, Indonesia has started to think beyond the complexities of its own huge population and borders, and its voice should not only be welcomed in Washington, but heeded, too.
As mentioned in Saturday’s post (U.S. Foreign Policy: Time for a Reshuffle), I believe the United States remains tied to too many commitments, assumptions, and alliances that date to the Cold War or even World War II. Many of these alliances are built on sound fundamentals—genuine mutual interests in things like democracy and free markets, genuine disdain for authoritarian repression, and some cultural affinity, too.
But a period of historic power transition is no time to get cliquey. In my view, the United States is the only nation in the developed world (i.e., the OECD) that has the political will, demographic profile, and economic dynamism to hold its place in the world even as other nations emerge. Japan’s in a seemingly permanent recession. Europe’s nations, already opting out of global security commitments, have entered a period of declining economic capabilities, too, exacerbated by the hydra-headed crisis of the Eurozone.
Germany, the one possible star of that story, is turning ever more inward, wrestling with the inadequate centralization of the EU on the one hand and the historical ghosts that prevent it from seeking too forceful a role even regionally. This morass will last decades, and as we’ve seen already, it is not only affecting global growth by removing European demand, it’s also eroding consensus in NATO (see: Libya).
As any schoolyard basketball captain can tell you, when the team starts to atrophy, it’s time for a youth movement. While this might mean very tough choices in the zero sum world of choosing up sides on the playground, thankfully geostrategy is not a zero-sum game. You can be friends with aging Europe and flailing Japan even as you bring new blood into your ranks. And while conventional wisdom would argue that the new blood on the block belongs to China (or, at least, the BRICS), I see this a bit differently.
Again, repeating Saturday’s premise, Turkey, Indonesia, Brazil, Poland, and Nigeria are the rising stars of each of their respective regions. These rising and democratic powers have the energy, the incentive and the ambition to occupy the beachheads being exposed by the ebbing of America’s influence and power. We can argue later about those left out, as many of my readers have already done: What about Mexico? Poland instead of Germany? (See above) Indonesia not India?
But Indonesia’s case today: First, the fundamentals—Indonesia, the largest Muslim-majority country on Earth, has since the overthrow of the dictatorial Suharto regime in 1998 repeatedly defied naysayers who predicted it would become either a kleptocracy or a base for Islamic terrorism. Neither has materialized.
Of course, there has been Islamic terrorism hatched from its soil, but we could say the same about Germany, Britain, Spain, and the good old USA. In fact, Indonesia’s liberal brand of Islam, like liberal brands of any religion, allows for the kind of rational compromises necessary for a complex multi-ethnic state of 240 million people to thrive.
This is an important difference from India—which, I realize some of you are itching to point out, actually contains more Muslims (though they are a minority). India’s inter-ethnic relations, and even its regional political tensions, are far more dangerous than Indonesia’s. India is far less efficient and far more saddled with destitution. Even in the dubious realm of corruption, Indonesia has a leg up.
As Ruchir Sharma, the Indian-born Morgan Stanley EM specialist and author of Breakout Nations: In Pursuit of the Next Economic Miracles, put it to me recently: “Indonesia does corruption right. In India, you have to pay off everyone, but there’s still not guarantee anything gets done. In Indonesia, you get your money’s worth.”
But let’s not make the negative case: Indonesia’s positives are many and worth noting. A stable democracy, a responsible participant in Asia’s regional institutions in recent years, Indonesia has grown briskly (above 6 percent a year since 2010, and even the down year of 2009 it grew 4.3 percent). Net foreign direct investment, helped by important domestic reforms, has soared above $10 billion a year.
Mortality rates have plummeted, according to World Bank figures. At the same time, the percentage of GDP spent on health care, sanitation, the number of physicians per 1,000 people, and life expectancy have skyrocketed—all healthy signs of a society that is investing in its people and lifting millions out of despair.
More importantly in terms of poverty alleviation, per capita GDP—roughly put, the money people take home each year—has increased by over 5 percent in almost every year since 1989, the only exceptions being 2009 and the revolutionary year of 1998. Its middle class—defined as households making more than $10,000 a year—has doubled since 2004. By 2020, Euromonitor International, a consultancy, projects there will be 31.1 million Indonesian households in that category.
Already the Southeast Asia’s dominant power, Indonesia has patched up long-strained ties with Australia, which now sees it, rightly, as a natural ally in the region. It has settled ugly separatist insurgencies by letting go of East Timor and making concessions in Aceh, and corrected abuses by its military that led to horrific massacres on East Timor in 1999, though ties with the U.S. military remain under a form of sanctions pending further reforms.
But what truly makes Indonesia special is the example it represents to other nations. At a time when relations between Islam and the West are at another nadir, Indonesia not only stands out for its tolerance but also for its willingness to chide the intolerant while offering creative solutions. Last week, Indonesia’s president, Bambang Yudhoyono, was largely dismissed when he suggested at the opening of the U.N. General Assembly that the world body take the lead in pressing for a ban on blasphemous speech. This may have been rank politics—an appeal to those in his country offended by the infamous anti-Mohammad video. But rather than dismiss it, the U.S. should revise it and make the idea more practical.
Our own laws, after all, in many states ban hate speech. Germany, Canada, the U.K., and others do much the same. While this is primarily a racial or gender preference approach in the West, there is no good reason not to expand that definition to include certain aspects of religion. (Laws banning anti-Semitic speech, for instance, already walk this fine line.)
In a separate venue, Indonesia circulated late last week a proposed “Code of Conduct” for the maritime powers of the South China Sea—a good-faith effort to halt the idiotic sabre-rattling between Japan, China, South Korea, the Philippines, Vietnam, and Taiwan over various waters along the rim of Asia.
The State Department, sadly, has done little if anything with either initiative, probably reflexively worried about the consequences of not dominating the dialogue on either issue. Or maybe Barack Obama is worried about the political hay that Birthers would make of anything Indonesian.
This is sad, self-defeating, bad for America, and bad for the world. And also typical of America today. We ram an American candidate down the World Bank’s throat out of a sense of national entitlement; we fail the humility smell test time and time again.
Time, however, is not on our side. Indonesia is a friend for the future. We should jump on the chance to demonstrate that we, too, can see the future, and it’s not something we’re afraid of.
Tomorrow (I hope): Wild Turkey
Posted Saturday, Sept. 29, 2012, at 11:54 AM
A melting ice sculpture with the NATO logo is seen in the reception area for ceremonies at the NATO Supreme Allied Commander Transformation Change of Command Ceremony this week in Norfolk, Virginia.
Photo by PAUL J. RICHARDS/AFP/GettyImages
The times, they are a changing, but even under a man who put “change” at the top of his agenda in 2008, not much is changing about they way America deals with the world. Obama’s State Department has ridden the waves, but done precious little to prepare our shoreline for storms to come.
This is not about Armageddon or “the next 9/11.” This is about the lack of deep, long-term thinking in the foreign and national security posture of the United States. The Iraq pullout and Afghan draw downs aside, the United States continues to act as if its hegemony will persist for decades, as if opportunities to reshuffle various global decks will remain available for decades to come.
Whether the “deck” in question is about conflict prevention (East Asia), armed intervention (Libya), trade (Emerging Markets), energy policy or nuclear non-proliferation (Iran/North Korea), the U.S. simply has not began to rethink the basic architecture of global power. NATO? The G7? APEC? P5+1? These and many other acronyms of the Cold War remain too prevalent in the lexicon of 21st Century American diplomacy. Some, like NATO, contorted into half-effective tools of power politics by US bullying, and its increasingly divided members are showing the wear. Others, APEC, for instance, or the Organization of American States, are simply a massive waste of time, money and political capital – really just opportunities for gaffs or displays of impotence rather than useful forums. The need for a bold redrawing of these institutional levers is pressing – and completely absent from the U.S. agenda. (To be fair, the Romney campaign's positions on foreign policy are even further removed from reality, but that's another post).
Wait long enough for the reshuffle and we’ll suddenly find it’s no longer “our deal;” the house will shift and playing with house money will involve a more complex trade off than a smoke signal from the White House to the Federal Reserve – “print --- more – money.” Some efforts to starting thinking through government do exist, including CFR’s Global Governance Monitor launched by my friend Stuart Patrick at the Council on Foreign Relations.* But rethinking the sinews and tendons of global power so far remains beyond the abilities of the Obama administration.
Already, the incapacity of the United States to lead on vital questions like Syria’s civil war or the myriad maritime disputes of the Pacific Rim invites trouble. Our policies here and on other potentially explosive issues – no least the looming clash between Israel and Iran – have been reduced by risk aversion and a lack of creative thinking to a series of “lines in the sand,” the crossing of which brings no action other than a few steps backward and the drawing of a new line.
In this regard, Benjamin Netanyahu made a good point in his otherwise bizarre performance at the UN General Assembly on Thursday: the world needs to clarify what is and what is not acceptable behavior by the planet’s tyrants and trouble-makers. Netanyahu, of course, was strictly focused on Iran and its progress toward an irreversible nuclear weapons “breakout” capacity.
But whether you look at Syria, Iraq, Pakistan, China’s actions in the Pacific, Saudi actions in Bahrain, Egypt’s new government or the ranting of Argentina over the Falkland Islands, the U.S. has allowed dangerous vacuums to develop, confusing State Department or White House or Pentagon pronouncements on these issues for leadership, and failing utterly to harness the rising, regional players whose interest in preventing any of these flash points from exploding into open conflict.
Who are these regional powers? In the Middle East, Turkey holds the key to multiple crises having positioned itself as a kingmaker not only in Iraq and Syria, but also as the most powerful state whose interests are coming into severe conflict with Iran’s reckless regime. Turkey, not unreasonably, wants to get rich and the incompetent regimes that border it to the south have repeatedly disrupted that goal.
Turkey, Indonesia, Brazil and Nigeria: Much more than the British and French, the Israelis and Australians, it is these four rising regional democratic powers who have the energy, the incentives and the ambition to occupy the beachheads being exposed by the ebbing of America’s influence and power. Add to the list Poland in Europe, the single most impressive economic and political story to emerge from the ruins of the Warsaw Pact, and you have the potential levers that the United States needs to manage the transition from the world it shaped and has dominated since 1945, and the emerging, multipolar one it can’t seem to face. More on each of them in posts to come.
Full Disclosure: I helped design the app when I was still at CFR in 2008-2009.
Posted Tuesday, Sept. 25, 2012, at 5:53 AM
Islamic zealots in Pakistan joining the video da fe.
Photo by John Moore/Getty Images
The soul searching over the consequences of America’s qualified support for the revolutions of the Arab Spring in 2011 has gotten a bit out of hand. Is there anyone who has ever been outside the United States who is surprised that anti-Americanism exists? Is there anyone who has ever been to the Middle East shocked that Islamic radicals can mobilize mobs and whip them into a frothy murderous frenzy?
As he addresses the U.N. General Assembly on Tuesday, President Obama no doubt will feel compelled to condemn the kind of opportunistic violence that led to the death this month of four Americans, including our ambassador to Libya.*
But the president should not dwell on this topic. For just as extremists are using the appearance of an anti-Islamic video on YouTube as an excuse to fan violence and anti-American hatred across the Arab world, Obama’s opponents are using it at home to attempt to draw a direct line between the president’s decision to tip the balance against the dictatorial Egyptian President Hosni Mubarak in early 2011 and the death of Americans in Libya.*
Granted, a presidential election campaign is in full swing, and Israel’s less-subtle supporters always viewed Obama’s refusal to help prop up Mubarak as reckless and more evidence of his lack of concern for Israel’s security.
But claiming, as the American right currently does, that Obama has appeased American enemies and caused chaos with a needless intervention in Libya is not only incorrect factually, it’s also contradictory. How is it the same voices so eager to plunge into the carnage in Syria—a far more complex and difficult intervention case—seem to believe that the existence of anti-American factions in post-Qaddafi Libya proves we should never have supported rebels there?
What nonsense. Anti-Americanism has deep roots in the Arab world that will not be addressed with a few nice words and subtle shifts of policy. Surely, the first step down that road is ending the practice of lavish support for Arab rulers who torture and repress their people?
Furthermore, the existence of violent groups does not mean the entire society supports them; as here, the loudest, crudest, and most violent often get the attention.
The perspective of hard-line Israeli supports is equally flawed. If Israel’s security was based on the lifespan of a dictatorial octogenarian in Egypt, then Obama did Israelis a favor by forcing them to face the reality that ultimately their security must include not only deals with the devil but also genuine accommodation with the people these devils rule.
In the U.S., meanwhile, a campaign to “blame” Obama for the death of Chris Stevens and others killed this month at the U.S. consulate in Benghazi, Libya, is particularly perverse.* Anyone working in an American diplomatic post in the Arab world is fully aware of the dangers posed by the militant Islamic fringes of these societies, and none seemed more devoted to the policy of making the most of the opportunities afforded by the Arab Spring than the late Ambassador Stevens.
For all these reasons, Obama should refrain from using the U.N. speech as a chance to address the false accusations either of maniacal Muslims or fanatical right-wingers. History will be the judge of his handling of the Arab Spring, not the blogosphere.
Instead, address the wider world, Mr. President, and call some bluffs, in the Middle East, where Iran's bluster should be seen for what it is, in Europe, where the Russians shamefully prevent coherent action to end Syria’s bloodshed, and in East Asia, where China should be shamed into sitting down with its neighbors to have a mature conversation about maritime disputes. The bluffs back home can wait for November.
The best way to honor the Americans who lost their lives in Benghazi is to refuse to bend to extremism whether it appears in the Middle East, the Pacific Rim, or the homeland.
*Corrections, Sept. 25, 2012: This blog post originally stated that the U.S. ambassador to Tunisia and other Americans were killed in Tunisia last week. The deaths occurred in Libya on Sept. 11. The post also misspelled the last name of late Ambassador Chris Stevens.
Posted Thursday, Sept. 20, 2012, at 11:13 AM
US President Barack Obama holds a copy of his proposed American Jobs Act back in 2011. How about one for the future of the country, too?
Photograph by Mandel Ngan/AFP/Getty Images
The real question voters should be asking themselves right now as they wade through the muck of the 2012 presidential election has less to do with 2008 or even 2012 than it does with 2016.
At a time when the U.S. position in the world is in flux—largely due to the fact that we cannot afford to keep the many foreign and domestic promises we’ve made over the past century—which one of these men appears to have a plan that puts us on a sustainable path in the decades to come?
Many of you will now expect a straw man to be erected and torn down, revealing the Amazing Obama as the clear choice in this regard. Would that it were so; in fact, both are failing us.
Start on the right: The Romney brain trust argues that because Mitt Believes in America, he believes that doubling down on defense and intelligence activity and an aggressive U.S. posture in the world is in the best interest of the country.
He also believes that the only things preventing America from enjoying the fruits of a second industrial revolution are government regulation and an unwillingness to implement eviscerating cuts to government.
If only he could spend copiously on weapons, attack Iran’s nuclear program, encircle China with aircraft carriers, eliminate regulation of the private sector, and effect massive cuts to government spending, the USA would grow at 5 percent or more a year.
Mitt believes in America so much, in fact, that he thinks the American economy in its current enfeebled condition could survive his spending cuts—which amount to at least 4 percent of GDP (some put the figure much higher)—without a wrenching recession, too.
Now, look at Obama’s camp, where the argument appears more chastened than it did in 2008, and that is a good thing, but just as devoid of detail.
Abroad, Obama argues that the U.S. should temper its involvement in the world, deputizing NATO or other allies to act when possible, and using “stand-off” tactics like drones and special forces to keep the worst at bay. That, the left notes, leaves room to pare back defense spending and avoid provoking China even as the shift form the Middle East and Europe toward the Pacific Rim continues. So far, I’m down with that.
Domestically, he keeps arguing that entitlement and tax reform is a priority. But here’s where it falls apart. For whatever reason—lack of political courage, or perhaps just a healthy sense of political timing—there appears to be no particular blueprint for closing the gap between government entitlement spending and reality. This isn’t a value judgment on those entitlements; government should provide a safety net and retirement benefits to those who paid in all their lives, as well as those whose lives took turns that left them unable to cope. But gravity exists, and it is exerting its pull on the U.S. economy. The uncertainty that floats above everything economic these days is retarding growth, and much of that is the result of politicians—Obama included—who just will not commit to making hard choices.
As a result, well-meaning people who would like to support Obama instead waver, worrying (for good reason) about the clearly unsustainable path the country is on. They wonder, these swing voters, is he a politically savvy ice man, or the ultimate empty cynic? Does he have a plan, and if so, where is it?
Richard Nixon, remember, campaigned in 1968 saying he had a “secret plan” to end the Vietnam War. After being elected, the plan turned out to be heavy on B-52s and light on endings.
Does Obama have a secret long-term plan to tackle America’s crushing national debt, one that preserves his party’s traditions but also faces up to the new realities that face his country globally? Or is his plan, like Nixon’s, not a plan at all, just a prescription for making things worse?
It’s all very disappointing. Of the two rival approaches that emerge from the sudsy spin cycle of both campaigns, one is mad on its face and the other is maddeningly devoid of detail. Romney would, best I can guess, govern like a small government Cold War conservative—think George H.W. Bush with a better tan and nastier advisers.
But the United States during the Cold War—even the late, George H.W. Bush Cold War—was the planet’s only top-tier economic power and about to inherit the Earth in the form of the collapse of its only rival, the Soviet Union. This is not the world we face today. We’ve got competition now that requires more than bravado and speeches at the Berlin Wall.
Today, failing to invest in research, education, and infrastructure is akin to surrendering the rest of the century to that competition. And acting arrogantly on the world stage will only help the worst elements in rival nations to make the case that America is an enemy that, ultimately, needs to be equaled militarily as well as economically. Right now, most nations are happy to let us have our military advantages. Thinking from Beijing’s perspective, for instance, it costs far too much to challenge U.S. military power directly, and for all our annoying miscalculations in Iraq and elsewhere, China knows the U.S. military serves a useful purpose in keeping trade routes open and Japan’s military instincts under wraps. For a guy proud of his management chops, Romney’s posture here amounts to a very bad business plan.
All this might be highlighted by the publication of a detailed, spin-free, long-term plan by Obama right now that charts a middle way through the budget-scything instincts of the GOP and the actual needs of history’s largest-ever economic power. The lack of seriousness in the Romney camp's approach should be easy to underscore.
Perhaps Obama is waiting until his lead approaches double digits to show his hand? Perhaps he wants to wait for another lame duck period and re-engage in the “grand bargain” talks that failed so spectacularly in 2010, in spite of his willingness to go far beyond halfway.
But I worry he has no plan, secret or otherwise. And as much as I’d like to say, “That’s still better than Romney’s plan,” it’s not much better—certainly not worthy of a guy asking the country to trust him with its future.
Romney may be hiding awful things in his past tax returns, but he’s not the president. Obama is the president, and politically risky or not, I think it’s his duty to chart a clear path forward to 2016 and beyond. Will he revive the Simpson Bowles deficit plan? Is he willing to cap Social Security benefits for those over a certain income level? Will he trade horses on Medicare and Medicaid spending to ensure their most important functions—coverage of catastrophic illnesses—are salvaged? Will he put the kind of energy into remaking the tax system that he devoted to health reforms?
So far, it’s all spin and slogans, and no serious solutions. Until those questions and others have solid answers, he’s only the least bad option.
Posted Monday, Sept. 10, 2012, at 12:05 PM
Business as usual on the Rhine - for now.
This week brings another inconvenient intervention by “national institutions” in the workings of the multinational Eurozone, that portion of the even larger European Union that uses the euro as its currency. On Thursday, Germany’s constitutional court will rule on whether the creation of a EUR 700 billion “rescue fund” to bail out tottering member states like Ireland and Greece is a violation of Germany’s own national constitution, known as the Basic Law.
More than 12,000 Germans signed a petition asking to high court to rule the bailout fund – the European Stability Mechanism (ECM) – which they argue violates a constitutional clause requiring Germany’s parliament – and not an outside body -- to decide whether to expose the country to long term debts.
This has the potential to cause an enormous legal train wreck – in essence, a restart moment for the European debt crisis that would be a major shock to already jittery global markets. Many legal experts expect a fudge, assuming the justices know an outright ruling against the ECM would cause havoc. Markets would tumble, the euro with it, and it could just be the straw that breaks the Eurozone’s back.
But these experts have no way of knowing how much tolerance is left in German minds for the endless bailouts already undertaken, nor how that may be weighing on judges.
Such surprises have become commonplace in recent years. The French rejected in a referendum a proposed EU constitution in 2005 that would have created a much more powerful European government. Then Irish voters rejected its successor, the so-called Lisbon Treaty) in 2008. Since unanimity was required, those votes scrapped the initiatives.
What is striking, looking back at these two referendum campaigns, is that none of the reforms proposed in either of those documents would have addressed what has turned out to be the EU’s true shortcoming: the lack of a common fiscal policy.
The EU Constitution, which was never ratified, contained clauses providing greater powers for European versus national law, provisions for a common foreign policy and lofty words about shared European values.
Like the later Lisbon Treaty, the constitution said nothing about sharing the pain of a national bankruptcy, or issuing common “Eurobonds” to fund deficits, or enforcement or ejection provisions to be used if a country flouted the limits on government spending meant to keep the bloc solvent.
So what is a German constitutional justice to do? Unlike US Supreme Court justices, Germany’s highest court has regularly backed the notion that international laws and treaties can override constitutional concerns in some cases. The principles laid down at Nuremberg after World War II – the idea that just because it’s the law doesn’t mean it is right - still weigh heavily on the country’s legal code, and German law bends to international will at times.
But Germany is reaching a tipping point. Whatever is wrong or right about its decision to force radical austerity on its weaker EZ partners – and much is wrong, to my mind – Germans themselves are asking when they get a vote in how their tax money is spent.
Early in the Eurozone crisis, the German electorate was in a more generous mood: the German economy was defying gravity and exports booming. But German GDP has barely budged since the start of 2011 – not a recession, but certainly a fall back to Earth. While the jobless rate is 5.5 percent – not bad, compared to 25 percent Spain, but exports and order books look slack.
Politically, there is no doubt that the bailouts of Greece and other countries are viewed by most Germans as an unfair handout to less hard working cultures. This is not entirely fair, as I’ve frequently written. The fact is, like the US and its Chinese creditor, there is a co-dependency here. German banks would not have overextended themselves in the “periphery” if German industry wasn’t making a killing there. The enlarged euro currency zone turned parochial German manufacturing companies into regional and then global powerhouses, pushing national favourites into bankruptcy. So there’s plenty of blame to go around.
Still, the ugly mood and German exasperation makes Thursday’s ruling a crucial, potentially critical moment. While the ESM rescue pool is jointly funded, Germany’s share is much larger than others at 27 percent. Since the bailouts of weaker EU states began in 2010, according to the German think tank Ifo, Germany has exposed itself to some $831 billion worth of liabilities to prevent Eurozone members Greece, Ireland and Portugal from bankruptcy – and this doesn’t include the many billions in dicey loans to these countries made by Germany’s leading banks, which would have to be bailed out, too, if a default were to occur.
No end is in sight, either. Last week, the cost of financing Spain’s much larger debts rose once again toward 7 percent – levels that are unsustainable. The Eurozone’s central bank, the ECB, intervened with soothing words about supporting Spain and other troubled EZ countries by buying their sovereign bonds – in effect, lending them money.
But the long-term solution has to involve reforms that give the central bank more authority to discipline member states that overspend (or lie about it, as Greece regularly did). Otherwise, Spain will eventually need a bailout, and the Germans know they will again be asked to pay.
Back at the constitutional court, located near the Rhine in Karlsruhe -- far from Berlin as a symbol of post-war Germans’ determination to prevent over-centralization of their government ever again -- over-centralization is again at issue. Political issues are supposed to be irrelevant, of course. Jurists will argue that Germany’s constitutional judges will decide the ESM case on legal merits. And so they might. Indeed, you can argue yourself in circles trying to figure out how applying a more nationalist filter might affect a judge’s thinking: Is it more dangerous to blow up the ESM and risk the quick, sharp pain of default that would follow, or is death by a thousand cuts, with Germany doling out rescue funds for decade or more – the darker scenario?
The absurdity of this dilemma illustrates another point: the EU, or at least the EZ (Eurozone), suffers not only from a “democratic deficit,” but an acute lack of leadership, too. The debate right now should not just be about cutting more spending in Greece, Portugal, Spain and Ireland, which have already cut severely. Yes, flabby labor laws and tax codes need reforming, but these economies cannot cut their way to health while remaining tied to a currency as powerful as the euro. Who’s going to buy a Greek anchovy when the Tunisian ones are just as salty and cost half the price?
Greece, and possibly others, need selective reintroductions of their old national currencies, giving them the ability to devalue, cheapen their exports, lower labor costs and regain competitiveness -- all with a path back to rejoin the larger bloc if they meet certain goals. At very least, this gives them ownership of their own problems, a first step to incentivizing real solutions.
This penalty box approach (which I wrote about back in June) has complications, of course, that make it only a bit less painful than doing nothing. But so far, doing nothing – the Eurozone’s current policy – is only putting off the day of reckoning.