World Bank President Jim Kim and the World Bank board will in the next few weeks receive a report about the future of the "Doing Business" report that will be critical in determining the future of the bank's signature project to encourage private sector development. Forces inside the bank -- most notably, China -- have tried to scuttle the Doing Business report, which ranks countries on the ease of starting and running a business, and it is now up to Kim to ensure the report survives intact.
Countries loathe to embrace private enterprise as the main driver of development have attempted to weaken, outsource, or do away with the report, an effort that has crystallized in the forthcoming report about the future of Doing Business. As a trained medical doctor, Kim is well familiar with the Hippocratic Oath and its dictate to "do no harm," and in coming weeks he will have the chance to live up to that pledge and save an important aspect of the bank's development agenda.
The bottom line is that Doing Business is one of the World Bank's most important and useful activities. For the United States, it is one of the top five most important programs at the World Bank. Messing with Doing Business should be a line in the sand for the bank.
I expect one of three outcomes from the panel's report: crippling several of the critical indicators, ending Doing Business altogether, or outsourcing Doing Business to something like the World Economic Forum. These are all bad outcomes for development, the World Bank, and the United States.
Sources inside the World Bank that Kim has said privately that his "hands will be tied" by the panel's report, but there are several other factors that the Bank's leadership should take into consideration in their decision.
First, Kim should review the open letter authored by Paul Collier, Daron Acemoglu, Graeme Wheeler, Michael Klein, and Simon Johnson, five heavyweights in the development community who strongly support Doing Business. Currently, the letter has been signed by 50 former and current policymakers, prominent economists, and others from all over the world.
Additionally, Doing Business is broadly popular on both sides of the aisle in Congress. Last week, Chairman of the House Foreign Affairs Committee Ed Royce and Jeb Hensarling, the chairman of the House Financial Services Committee, sent a letter, which was also signed by the Democratic Reps. Gregory Meeks and Karen Bass, encouraging Kim to keep the Doing Business report intact. That letter is embedded at the bottom of this post.
Jim Kim has the power in World Bank board meetings to offer a summation and to provide his interpretation of the board's consensus. He should exercise that power to defend Doing Business. I have seen him push back on other silly ideas by leveraging his moral authority as someone from the NGO community. Now is the time to say, " I am from the NGO community, I have seen what crony capitalism can do, I have seen what corruption has wrought, I am for a data driven and evidence based approach to development, and I believe the private sector is the driver of development. Therefore, I conclude that the bank will continue to run and grow Doing Business."
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Pakistan has just held a historic election with the highest voter turnout in four decades. For the first time, a civilian administration completed its full term and handed power to new civilian leadership. The military stayed in its barracks and did not openly seek to tilt the electoral playing field, as in the past. Youth turnout was strong. From the ground, where I was part of a delegation from the National Democratic Institute observing the election, Pakistan did not look like a failed state. Rather, it appeared to be a country whose people desperately want good governance and economic opportunity, and believe their democratic choice may help deliver it.
Yet there is another Pakistan, one in which nearly 150 people - including political candidates and their supporters - were killed by the Pakistani Taliban over the past month. Leading politicians from national and regional parties were unable to campaign as militants placed "head money" not only on candidates but on their wives and children. A former prime minister's son, running for a parliamentary seat, was kidnapped in broad daylight at a political rally just days before the vote. And the chairman of the nation's ruling party had to campaign from abroad, so fearful was he of assassination by militants. Dozens were killed in election-day violence in Karachi, the country's commercial capital - despite the nationwide deployment of 300,000 extra security forces to ensure peaceful balloting.
Incoming Prime Minister Nawaz Sharif, whose Pakistan Muslim League (PML-N) faced down a late surge by Imran Khan's Pakistan Tehreek-e-Insaf (PTI), now confronts enormous expectations. During the previous five years of rule by the Pakistan People's Party (PPP), the country's energy infrastructure fell further behind the burgeoning demand, while economic growth lagged badly. Corruption among the country's governing elite reached new heights, despite Pakistan's enormous socioeconomic deficits. The Pakistani Taliban strengthened its position not only in the rugged borderlands along the Afghan frontier but in major urban centers. Sectarian violence between Sunni extremist groups and persecuted Shia and Christian minorities spiked. In short, Pakistan began to look ever more like a failing state, with leaders unable or unwilling to confront vexing national challenges.
Sharif has pledged to focus on expanding reliable energy supply and economic reforms to catalyze growth and job creation. Although Pakistani democracy received a fillip from Saturday's vote, the authoritarian temptation will return if this government cannot put the country on a sustainable economic trajectory. That will require a prime minister who not only can leverage his private-sector background to press for real reforms, but also roll back the corruption and misgovernance that have condemned Pakistan to lackluster economic growth.
Another hoped-for incentive for reform will be the long shadow cast by PTI leader Imran Khan, whose party fell short in the elections but captured the imagination of young, urban Pakistanis with its challenge to politics-as-usual. Khan has been playing a long game, sitting out the last elections in 2008 because he did not believe they would be free and fair, establishing intra-party democracy that highlights the dynastic qualities of the other parties, and speaking bluntly about the failure of the Pakistani state to reflect its people's aspirations. Given demographic and socioeconomic shifts in Pakistani society, his party threatens to displace the PPP and challenge the PML-N as Pakistan's leading political movement. To placate and co-opt Khan's fervent supporters, Sharif will need to deliver on his promises or risk fueling Khan's anti-establishment narrative.
Pakistan's new leaders will also need to manage relations with other internal constituencies, including an activist judiciary and a powerful military lurking just offstage. This year will see the retirement of the assertive chief justice of the Supreme Court, the departure of the president from office, and the retirement of the chief of army staff. The choice of their successors will do much to shape Sharif's ability to deliver on his governing agenda.
Finally, the external environment may become more favorable to Pakistani reform and growth. India hopes to resume the détente that started with the 1999 Lahore Declaration during Sharif's previous tenure as prime minister. The drawdown of Western forces in Afghanistan will create instabilities, but they also create the opportunity for Pakistan and the United States to enjoy a more normal relationship not premised on Pakistani cooperation (or lack thereof) in a third country. Pakistan's successful democratic transition, combined with its increasingly dangerous pathologies, suggest that it is high time the West dehyphenated Af-Pak and focused on how Islamabad can deliver on its people's aspirations to live in a thriving, peaceful nation -- not a Talibanized one.
A version of this article appeared as a German Marshall Fund Transatlantic Take (www.gmfus.org) .
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The World Bank's most successful program -- "Doing Business," which ranks countries on the ease of starting and running a formal business -- has helped spark major free market reforms in over 100 countries during its 10 years of existence. It serves as a major "strategic conversation starter" for American diplomats, makes it easier for entrepreneurs to get access to bank loans, increases the number of business start ups in developing countries, and helps governments bring companies out of the gray economy into the formal economy. But it now is in danger of being weakened, outsourced, or done away with.
So why would anyone dislike Doing Business? Countries that rank poorly compared to their geostrategic rivals (such as China, India, or Argentina) or don't believe in free markets and the private sector as the primary driver of prosperity tend to dislike the index. This has resulted in an unfortunate effort inside the World Bank to do away with the index.
Doing Business reflects a broadly American and widely accepted view about development -- that the private sector is its main driver. A small number of influential, vocal countries on the board of the World Bank such as China, Brazil and India dislike where they end up on the DB rankings. As a result, they have called on bank management to change the methodology of the report to reflect aspects that they can perform more highly on and to stop ranking countries according to the ease of doing business. In addition, several quarters are calling for the World Bank Group to give the Doing Business project to another institution.
Jim Kim became the new president in July 2012, and with his ascent, anti-reform forces within the bank's bureaucracy and on its board sensed their chance to kill, cripple, or "outsource" the index. After a messy board meeting last summer where no consensus was reached, Jim Kim punted and convened a panel to review Doing Business. That panel is expected to release a recommendation about the fate of Doing Business in May or June. This weekend the World Bank hosts its spring meetings, and Doing Business will be one of the hot topics of conversation t. For my day job, I am hosting an event on Friday morning to recognize the 10th anniversary of the report. The World Bank cancelled a large research conference last December following the 10th release of the report because of the review and the "controversy" around the index.
Doing Business ranks countries by how hard or easy it is to start a "formal' (tax-paying, bank loan-taking) business. In many countries, setting up a business "by the book" can cost tens of thousands of dollars and conceivably years of fighting red tape. But operating in an informal economy is bad for prosperity: no access to bank loans, many opportunities for bribes, and less folks paying any taxes at all. Doing Business was incubated with strong support from the Bush administration through contributions to the methodology from USAID, funding from USAID, and political support from State and Treasury. The last three World Bank presidents, especially Bob Zoellick, were strong supporters of Doing Business.
The fact that the World Bank releases an annual ranking gives Doing Business power and influence in unique ways because of the bank's pull in developing countries. Attempts to "outsource" Doing Business to an academic institution will greatly reduce the power of the index.
At a time when the Obama administration and development thought leaders speak about the importance of funding activities that are "evidence based" and "data driven," the data and facts generated by the Doing Business indicators are undeniable and powerful. The data creates the ability to compare countries and local governments across jurisdictions and have made it possible to systematically study the effects of regulations and red tape on private enterprise. Reforms empower entrepreneurs and takes power from crony capitalists.
To the administration's credit, they have supported Doing Business but could use some help from Republicans. Through Congressional action, Republicans need to weigh in with the administration (especially the Treasury Department) and with the World Bank's leadership.
This is a great bipartisan opportunity for the chairman and ranking members of the Senate and House Appropriations, Foreign Relations, and Financial Services Committees to take action to support a pro-business development agenda. Because the World Bank should be a force multiplier of American influence in the world, Republicans supported (and rightly so) the renewal of the general capital increase of the World Bank. In return for supporting the GCI, the U.S. should be expected to retain its "big seat" at the table and exercise that influence with Jim Kim and bring in allied shareholders in favor of strengthening Doing Business. Killing, crippling, or outsourcing the index to another institution is one of the worst things the World Bank could do and would be a direct rebuke to the bipartisan support that the World Bank receives.
The U.S. renewed its commitment to the World Bank through the GCI, and it is time for the World Bank to renew its commitment to a proven program that supports free markets, cuts corruption, and empowers entrepreneurs.
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North Korea is yanking the world's chain yet again, sending all relevant parties hither and yon. As we contemplate what to do and the Kim clan perfects its ability to deliver its growing nuclear arsenal to targets in South Korea, Japan and the United States, we could do worse than turn to a rising star of Korea analysis: Sung-Yoon Lee of Tufts University. Dr. Lee provides a much-needed dose of reality about what exactly we are dealing with. The basics are not a bad place to start in thinking or rethinking how to deal with the criminal-nuclear enterprise that we call North Korea. Here is an edited version of what he said at a conference in Seoul last week (my commentary is in italics and the final thoughts are my own).
1. North Korea is "uniquely unique." It is the world's sole communist hereditary dynasty, the world's only literate-industrialized-urbanized peacetime economy to have suffered a famine, the world's most cultish totalitarian system, and the world's most secretive, isolated country -- albeit one with the world's largest military in terms of manpower and defense spending proportional to its population and national income. The result is an exceptional state, perhaps the world's most influential regional power commensurate with its territorial and population size and economic and political power.
That is, North Korea has managed some seemingly impossible feats. It has remained a cultish communist dictatorship even though all its like-minded brethren have been relegated to the ash heap of history. It has managed to produce a spate of famines despite the fact that its population is urbanized and literate. And through its combination of supremely disproportionate spending on military forces, its nuclear program, and its unique ability to outfox, out-negotiate, and outplay the world's industrialized powers, it has become a regional nuclear power with disproportionate influence in Northeast Asia despite its poverty and privation.
2. The other Korea, the one south of the 38th parallel, is a global leader in trade, shipping, automobiles, and electronics. It is also a free democratic polity. And on December 19, South Korea elected Park Geun-hye as president. Park is the first elected female leader in Korea and also in Confucian civilization, which consists of China, Japan, the two Koreas, Taiwan, Singapore, and Vietnam and makes up nearly a quarter of the world's population. The contrast between the two Koreas could not be starker -- beyond the obvious, you have a cultish male hereditary dictatorship in the North, and a freely elected female leader in the South.
Development experts and theorists of democratization take note. South Korea has the same culture, historical legacies, and so on as its neighbor to the North. And yet it is an advanced industrial economy and a thriving democracy that has just, despite its Confucian culture, elected a woman as president. It has managed to reach this high point of prosperity and human dignity because of -- to reduce a complex set of phenomena to its minimal essence -- different institutions than those in the North: democratic and capitalist ones. (I realize that I may be violating some tenet of doctrinaire realism with this observation. For the less doctrinaire, the contrast between the two Koreas is a useful reminder of why we try and favor and even push for democratic capitalism). Given the stark contrast between the two countries one can safely draw at least one conclusion: There is nothing inherent in culture or history that ipso facto should keep a country poor and enslaved.
3. The Park Geun-hye administration and the Obama administration should ... not deprive themselves of the credible, non-military deterrent that would weaken or debilitate the Kim regime. They should attack the North Korean regime's two most glaring systemic contradictions: 1. Over-reliance on its shadowy palace economy instead of making licit goods that are competitive on the world market or opening up to foreign investment and trade worthy of the name. Pyongyang's palace economy is particularly vulnerable to tools designed to counter international money laundering. 2. [T]he unfeasibility of controlling the population over the long-term through its vast network of prison camps, fear, and thought police; that is, its egregious human rights violations.
The North Korean state is essentially two things: 1) a large money-laundering concern; 2) the world's largest prison and slave labor camp. Now, however, it is a large money-laundering concern and prison camp that has additionally extorted its way to nuclear weapons. Any U.S. policy should begin and end with the knowledge of what North Korea really is. It is not a state engaged in the normal give-and-take of diplomacy, seeking "security assurances" in return for "denuclearization" or some other such deal conjured up by diplomats whose experience is in dealing with real countries who negotiate in good faith. Rather, North Korea has had a pretty good run with its current approach of extortion, criminality and the deprivation of its own people.
4. The Obama administration is in a position to take the lead on squeezing Pyongyang's palace economy. It should designate the entire North Korean government a Primary Money Laundering Concern, which is a legal term for entities that fail to implement adequate safeguards against money laundering. It should also enforce Executive Orders 13382 (signed June 2005) and 13551 (signed August 2010), which call for the freezing of suspect North Korean entities' assets and those of third-country entities suspected of helping North Korea's WMD proliferation (and criminal) activities. Furthermore, the incoming Park Geun-hye administration is in a position to take the lead in implementing a sustained human rights campaign against Pyongyang. It should vastly increase funding for information transmission efforts into North Korea, encourage North Korean defection and reinforce resettlement programs, and raise global awareness on the Kim regime's egregious human rights violations so that people living in democratic societies around the globe come to think less of the Kim regime as an oddity or an abstraction and more as a threat to humanity.
North Korea's nature underscores its vulnerabilities. It cannot survive without laundering money for its dangerous and illicit activities. It should not be treated as a normal country when most of its people are enslaved. The countries threatened by Pyongyang have in their toolkit the ability to treat the entire state apparatus as a criminal enterprise and can block it and anyone (including many Chinese banks and enterprises) doing business with it from engaging in transactions within the international financial and commercial system. Rather than pretending that they are negotiating with just another regime, the United States and South Korea should instead unleash a campaign to highlight just how abnormal and illegitimate the Kim family is. Here is a simple formula that policymakers can use in setting our approach to North Korea: North Korean existence=criminal activity + human enslavement + nuclear exhortation. There may be little to nothing the world can do now about the fact that it has allowed the North to become a nuclear weapons state. But it can and should treat it like one big criminal/slave state.
Some Concluding Thoughts: South Korea and Japan, for reasons that should be obvious (North Korea, China, an unsteady and retrenching American presence), have elected right-of-center hawkish governments. They are uniquely open to dealing with reality, not a common occurrence in international politics. Reality in this case means taking all necessary deterrent measures against a nuclear state (Tokyo and Seoul appear poised to actually call North Korea a nuclear-weapons state, which -- for those unfortunate to have witnessed to the unfolding tragedy of North Korea policy -- is a big deal). Rather than engage in diplomatic conferences that result in more North Korean extortion, more North Korean nuclear weapons, and more illusions that through combined U.S. and Chinese exertions North Korea can actually be persuaded (against all evidence) that the illegal possession of nuclear weapons actually has a price, we would be wise to consider Dr. Lee's basic idea. Let's deal with North Korea as Dr. Lee describes it -- a criminal enterprise whose crimes can and must be stopped.
There is another looming problem. A second term in a presidency seems to provide a unique temptation to American secretaries of state across administrations to go for the brass ring-a Nobel Peace Prize for "solving" the North Korean problem. In this case, at least from Pyongyang's perspective, there is nothing to be solved. North Korea has pretty much what it wants. But now that Seoul and Tokyo (hopefully Washington too?) are ready to call North Korea a nuclear power, there may be one thing to discuss with Mr. Kim: What would happen if he dared use those weapons?
Perhaps to guard against the "North Korea Nobel Peace Prize" temptation, a parallel prize can be created, awarded to those diplomats who avoid attempts to bargain away that which the North has never put on the table, and instead achieve the more modest task of bettering the lot of the North Korean people and putting an end to the many crimes of Kim Jong Un and his cronies.
President Obama's second inaugural address contained an admirable homage to some of the greatest heroes of civil and political rights. We are treated to a vision of the United States that is rooted in the ideals those heroes struggled to achieve. And we celebrate their victory, even if we are not all in agreement about how much progress has been made or how much remains to be done. With the passage of the Voting Rights Act and the Civil Rights Act, America achieved what has made it truly "the last best hope of the Earth" as Lincoln put it and Reagan reiterated. The stains of second-class citizenship and institutionalized prejudice have been removed. There is always more to do to help people take greater advantage of their birthright of freedom, but the birthright is enshrined in law in a country where law rules, not men -- in theory and most of the time in practice.
But such is not the case in many countries of the world, a world where the United States must exist and because of its size and influence, lead. Fecklessness and timidity disguised as false humility won't do; we are expected to lead whether we are asked to or want to. So given this, we as citizens have a right and even a duty, I think, to ask if during the next four years the administration will base U.S. foreign policy on those same ideals. After all, if the character and reputation we have and want to keep is one of a beacon of democracy and a friend to it everywhere, then surely we are obligated to put actions to our words. The president made clear yesterday that as far as his domestic agenda is concerned, he will continue to insist on his understanding of what it means to be a country founded upon the ideals of freedom and equality, and that will mean a larger government and more spending on entitlements with the costs born by overburdened taxpayers and by debt. I don't agree with that approach, but that's not germane to this post. But what of his foreign policy agenda? Shouldn't he also in these matters take care to promote the ideals that he believes make us a great nation? Shouldn't we, can't we, do more than we have done in the last four years to stand by democrats in their struggles, wherever they may be found?
I have been saddened and even alarmed to look over the last four years of the Obama administration's policies and see that support for democracy in word and deed has often been pushed aside to make room for withdrawal and accommodation. For example, one of the greatest threats to liberty and equality the world over are the radical Islamic terrorists and their supporters and funders, but the president and his highest officials, while taking victory laps over bin Laden's takedown by Seal Team 6, campaigned as though this was a diminishing problem and that al Qaeda had been "decimated." The truth is that even as the campaign was winding down Benghazi exposed their assertions as flawed. We know that al Qaeda is not only still powerful but thriving in North Africa and beyond. We stand by as the French take the lead in saving Mali, literally, from an al Qaeda takeover. That's right, the French. But then France has never been slow to assert itself where national interests are at stake. We could take a lesson from them.
And there are other examples where the administration has not taken care to secure our interests, such as its refusal to treat Russia as a bad actor where democracy is concerned and a supporter of those who share its authoritarian bent. Or Venezuela, where a dictator has been allowed to ruin his country, try to ruin others in the region and coddle and comfort our worst enemies with little resistance from us.
Let me tie two concepts together that I have been discussing and make this assertion: support for democracy is in our national interest. I'm glad the president said so yesterday in his second inaugural address. I just wish he'd say it more often and do something more concrete about it in the next four years.
A nation like ours cannot do other than promote democracy and support democrats. It is in our DNA and it is the only way our foreign policy can make sense. Our failure to do so from time to time is the exception that proves the rule. Why else is it noteworthy when we fail to do so? It is one of the reasons we are an exceptional nation.
Support for democracy and democrats means giving voice to our ideals and to take action to support those who share our ideals. We should never fail to talk about liberty and rights with all states who deny them to their citizens. Freedom House's latest report is a useful guide for knowing how to address these issues and with which countries. And we should take action, such as providing resources of various kinds to those men and women who ask for our help. Some of them are so oppressed that they need succor just to go on living; some need support because they are in a position to actually change their country for the better. Think of it as supporting both "hope and change."
Notice I said nothing about imposing democracy or nation-building; these are canards used by those who opposed the Iraq war or who deny our leadership role by hiding behind "state sovereignty" claims. In my years as a government official we never once imposed democracy on any country; it can't be done. What we did, what the United Nations and Europe and the Japanese and the Indians and many others have done, is to provide aid to people in dictatorships or failing states who asked for our help. Sometimes they are the majority of a country; sometimes they are the minority. Pointing out the objections of a dictator who murders and abuses his people and who is very often a disturber of the peace of his region or the world provides no excuse to deny help to his victims when we can. What legitimacy does such a dictator have to object to his would-be slaves asking free peoples to help them be free? By what right does he block the free world from trying to encourage the establishment of more free states, which is in their interest?
A world made up mostly of states where rights are respected and the law rules is surely in our interests as these states are less likely to be in serious conflict with states like them. It might take years or generations, but we should try, nonetheless.
And there are two more reasons to try. First, dictators vexed by dissidents at home are weakened. It is in our interests to make tyrants as miserable as we can; we have plenty of resources and agencies who can do this work. History has many lessons on this. It is a shame so many oppressors and enemies of freedom feel more secure today to work their wicked will at home and abroad than four years ago, especially all those whose behavior we can influence. Second, it makes no sense to hope for the day when a tyrant falls but to have done nothing to help the lovers of freedom be ready to take over. We learned a hard lesson in Egypt: Mubarak spent 30 years squelching the democratic opposition and thereby fulfilling his own prophecy that "it's me or the Brotherhood." We could have done more in Egypt.
I would like to take the president at his word yesterday when he made his single comment about supporting freedom around the world. I did not expect his second inaugural address to be like President George W. Bush's, but I'm glad at least that he mentioned it. And I will hope that he does more. There are many fine people both in the ranks of the political appointees and in the foreign and civil services who want to help democrats around the world, even if there are many who do not. He's the boss, he can have his way if he'll lead. He has an army ready to implement good programs that directly support -- dare I say it -- a freedom agenda.
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Do we really need another lesson on the folly of attempting to appease dictators?
Apparently, Foreign Affairs thinks so -- albeit inadvertently. They recently posted a piece, "Our Man in Havana," about the heroic efforts of some Obama administration officials to give the Castro regime everything it wanted for the release of jailed development worker Alan Gross. Specifically, this meant gutting the official U.S. democracy program for Cuba that Gross was operating under. In the end, however, they just could not overcome the intransigence of -- not the Castro regime -- but the "Cuban-American Lobby" in Congress.
Indeed, not only did they not wind up with the long-suffering Gross's freedom, but, to boot, former Assistant Secretary of State Arturo Valenzuela was forced to sit through a humiliating meeting with Cuban officials ranting about all the dictatorship's grievances against the United States. As the article puts it, "The Cubans were far less flexible than the Americans expected." (One doesn't know whether to laugh or cry.)
The central figure in this drama of high diplomacy is one Fulton Armstrong, a controversial former CIA analyst who began a second career as a staffer for Senate Foreign Relations Committee Chairman John Kerry (D-MA). (Today, he is affiliated with American University.) Armstrong was such an unabashed promoter of U.S.-Cuba normalization in the inter-agency process that he was shipped off to Europe during the Bush 43 administration, although not before playing a role in trying to scuttle John Bolton's nomination to serve as U.S. representative to the United Nations.
Apparently, Armstrong was enlisted by the administration to serve as a go-between with the Castro regime, no doubt due to the fact that he was a "friendly face" in the eyes of the Cubans. His mission: convince the Castro regime that the Obama administration agrees with them that USAID's Cuba democracy programs "are stupid" and that, in the words of Armstrong, "we're cleaning them up. Just give us time, because politically we can't kill them."
The article also includes other Armstrong-sourced inanities meant to further discredit the USAID program: that he was told by a "State Department official" that Gross's mission was "classified" and by another that Gross "likely worked for the Central Intelligence Agency." Apparently, Armstrong needs new sources, because such assertions are nonsense and known to be by anyone remotely associated with the program (as I was during my time with the Bush administration.)
The ever-resourceful, man-on-a-mission Armstrong even enlisted his former boss, Senator Kerry, in the appeasement effort, arranging for him to meet with Cuban officials in New York. The article reports, "there was no quid pro quo, but the meeting seemed to reassure the Cubans that the democracy programs would change, and the Cubans expressed confidence that Gross would receive a humanitarian release shortly after his trial." (That was in March 2011.)
Enter the villain: Senator Bob Menendez (D-NJ), a member of the nefarious "Cuban American Lobby." He supposedly called Denis McDonough, Obama's deputy national security adviser, to say basically hands off the Cuba program. According to a former government official, "McDonough was boxed in." Now, there's a tough call: side either with a lawless dictatorship or with an influential U.S. senator from your own party.
In the end, the effort to appease the Castro regime ended predictably: no freedom for Alan Gross and only utter contempt from Castro regime lackeys. Indeed, is there any mystery why Gross continues to languish in a Cuban jail cell when, according to Armstrong, unnamed administration officials signal to the Cubans that they think the democracy program is "stupid" as well? Moreover, offering to gut a democracy program because a dictatorship opposes it sends a terrible message to authoritarian regimes around the globe.
As I have written several times before, the best approach to securing Alan Gross's freedom is not giving in to the demands of an illegitimate regime, but by denying it things it wants and needs, such as U.S. tourists spending hard currency under currently licensed travel programs. Let's hope this Fulton Armstrong-led fiasco puts an end to any more appeasement attempts and the issue is placed in the hands of those with a more sober understanding of the nature of the Castro regime
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Governor Romney delivered a major speech at the Clinton Global Initiative on Tuesday, focusing on foreign assistance, global development, and how U.S. policy should evolve in these fields. He laid out a vision for placing development assistance squarely in the center of the nexus of trade, investment, and policy reforms. He sees the private sector and capitalism at the center of human progress (read "economic growth" for those in the business), and he also stressed the central place of institutions that support political freedom and rule of law (read "democracy and governance" for those who follow this stuff closely). He strongly endorsed 10 years of progress on public-private partnership in development -- a major factor in development since the Bush administration, adopted energetically by the Obama administration, and a central focus of the Clinton Global Initiative (so, no, he was not in favor of "privatizing foreign aid," just as no one would say that about Hillary Clinton when she talks about public-private partnerships through her Global Partnerships Initiative, as she does here).
Finally, he emphasized what serious development thinkers have been talking about but have only found limited appetite for within development bureaucracies -- a much larger focus on small and medium sized enterprises.
Governor Romney's speech is by far the most detailed speech by either of the major candidates on development in this electoral cycle and likely the most detailed speech of any candidate during the primaries in this cycle.
There has been a series of responses (including a GREAT post from my friend Paul Bonicelli yesterday and a thoughtful op-ed from Amb. Mark Green and Rob Mosbacher) to Governor Romney's speech, not surprisingly, as it outlined a bold plan for American assistance moving forward.
In sum, serious thinkers about development and America's role in it have been positive in their praise as they recognize the depth of the thinking behind this speech and know that the most serious change and advancement in U.S. development policy have happened under Republican presidents.
Governor Romney's strategy would place U.S. assistance on the cutting edge of development theory and practice. By linking greater investments in economic growth and the institutions that promote liberty with a renewed vigorous global trade agenda and pro-growth domestic policies under a Romney administration, along with the sorts of investments in assistance Gov. Romney described in his speech, we are talking about a very powerful combination of forces that are pro-development and help the United States share in that prosperity.
Development theorists and practitioners talk about "private sector led development," but when push comes to shove and the money is allocated, the temptation is always to fund pressing social service delivery projects or photogenic or politically connected causes. At the end of the budget allocation race, policy reform investments that support economic growth, and investments that support democracy and governance --the two sorts of investments that most development practitioners know matter -- often get left behind.
Finally, Governor Romney's speech recognizes the changed world that we live in and the need to change our development policy, processes, systems, and priorities to reflect this changed world. First, foreign aid can help but is dwarfed by trade, investment, remittance, and private philanthropy by foundations, individuals, church groups, and corporations. He cited the central fact that U.S. economic engagement has changed over the last 40 years with massive foreign direct investment flows going to middle, lower, and poor countries in massive amounts, the massive flows of remittances and, the massive amounts of private charity. At the same time his description of "corrupt governments" suggests a skeptical view towards various forms of budget support and an interest in aid transparency initiatives.
Another central change from the past is that the United Nations Development Program estimates domestic resource mobilization in low income countries will reach $394 billion by 2015. Compare that to global ODA of approximately $120 billion, and domestic resources are only going to get bigger over time as societies continue to move up the ladder of development. Foreign aid is a minority shareholder in the business of development already. Development practitioners can provide expertise, technical support, and strengthen the institutions that support private sector led growth and democratic governance, but ultimately over time/in due course (please note emphasis here, so no panicked misinterpretations, please) we want to be moving out of the direct social service delivery business and instead have governments themselves "pick up the tab" using domestic resources similar to the way that PEPFAR is evolving.
The global economic situation means that budget austerity is impacting foreign assistance around the world including the Netherlands, Canada, Spain, Ireland, Italy, and possibly the UK. We should assume that the 150 Account (the account in the U.S. budget where foreign aid is housed) which has until now has defied gravity is going to be examined in the light of trillion dollar deficits and $16 trillion in debt. Regardless of the overall topline number, questions about aid effectiveness and development priorities are going to be at the forefront of any U.S. development conversation under any administration just as that conversation is happening in the rest of the "DAC" (the Major League Baseball Commission equivalent for foreign aid donor) countries. Pressing humanitarian needs (such as ending polio in our time) will always be a part of the U.S. foreign assistance policy as the U.S. still stands ready to respond in situations international disaster relief, but long term foreign aid's role needs to change with the changed global context.
Governor Romney sees foreign assistance as a form of "soft power." It is clear that Governor Romney sees foreign assistance as an instrument of American power and influence and one that we should use to ensure that the 21st century is an American century.
Note: While Dan Runde co-chairs the Romney Campaign's International Assistance Working Group, the blog post above contains Mr. Runde's own opinions.
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Juan Forero's article, "Latin America's New Authoritarians," in the Washington Post on Monday is in many ways an excellent piece. It sheds light on the kinds of authoritarian regimes that have come into being in the region over the last decade or so. But in his reporting and in some of the experts he quotes, there is a use of language that shies away from calling these regimes exactly what they are: undemocratic, dictatorial, and arguably, tyrannical. In several places in the article these new regimes are contrasted with the former Latin American dictatorships (presumably of Pinochet, the Argentine junta, and others), leaving readers to draw the inference that the new forms are worrying but not as bad as the old forms. It is as though there is a form of authoritarianism that is obviously bad and must be dealt with, and then a new form that should cause us concern, but is not yet the threat or the evil that the old form was.
As an academic and former official at USAID in charge of programs that supported democrats around the world, I find this kind of talk and the implications it leaves troubling. We cannot support democracy and the brave people who seek our help if we quibble about who is and who is not "really" a dictator. While both diplomats and political scientists have to be subtle and use nuance sometimes, fundamentally we should be clear in terms of the objectives our interests compel us to work towards. So even to suggest that Hugo Chavez is somehow better than Pinochet is missing the point -- and risks giving aid and comfort to him and causing despair for his democratic opposition.
As a congressional staffer in the late 1990s when Chavez was coming to power, I agreed with a number of congressmen and staff who noted that the general attitude in the U.S. government was unrealistic when it came to who Chavez was and what he intended. We were right.
We are now in the 13th year of "Bolivarian democracy" in the form of Hugo Chavez's Venezuelan regime. Over the years, a few more have joined him (with his aid) in Latin America by creating their own modified "democracies." Correa's Ecuador, Morales's Bolivia, and Ortega's Nicaragua all count as non-democratic states in my view if we are trying to be honest about the essence of democracy. (We dodged a bullet with Lugo's Paraguay and Humala's Peru since they have proved to be too weak -- or smart -- to go full-on Chavez.) It is worth noting that this is not a region-bound phenomenon; witness Putin's "controlled democracy." Nor is it time-bound. Robespierre's French republic was not a democratic state as I understand the term when the guillotine was the state symbol and when more liberty caps than powdered wigs adorned the heads plopping into the basket. Dictators have been putting adjectives in front of their use of the term democracy to dress up their authoritarian regimes for a long time. Thank you Jean-Jacque Rousseau, among others.
But we should be clear: Such regimes as Chavez's are an offense to the idea of democracy (constitutional republicanism, if you will) and mushy linguistic constructs and semantics are an offense to the English language -- or any other language in which it is written that a regime is an "authoritarian democracy," a "people's democracy" or a "revolutionary democracy." If you have to modify it, it isn't really a democracy. In Venezuela, Ecuador, Bolivia, and Nicaragua, the citizens simply do not live under democracy. They are not living in a constitutional republic. Yes, there are constitutions, yes, there are regular elections according to codified rules (most of the time). But much intervenes that is intimidating, repressive, and sometimes violent, so much so that the meaning of democracy is voided.
Here is a listing of the sins against democracy that occur in each of these states (as is the case in Russia, it is worth noting):
Intimidation of voters by using technology to nullify the secret ballot and to tie a person's vote to her employment.
Intimidation of the press by blackmail, repressive regulation, forced bankruptcy, and unfair prosecution.
Intimidation of business people by forcing them to serve the state's interests or lose their enterprises, thus putting the economic well-being of many citizens solely in the hands of the regime.
Manipulation of electoral law and use of the state's purse to provide the regime with a compliant legislature.
And finally, what might well be the worst tactic of all, intimidation of judges and the judicial branch. Democracy is not simply about people being allowed to vote, which is why I earlier referred to constitutional republicanism. It is about individuals being treated as citizens who live under law, not the rule of men. For that to occur, the law must be inviolate and the judges must be free to make impartial rulings without having to prefer the regime's interests. When the judges are intimidated into compliance, or simply removed and replaced with party hacks, the safeguard of democracy is gone, and I would argue, so is democracy in all but name.
Those oppressed by the forgoing means number in the hundreds of thousands, if not millions. So what if in some cases they aren't poor? They are citizens, and they deserve all the rights provided in a democracy.
Just because there are currently few or no desaparecidos or violent suppressions in South America does not mean there is no dictatorship à la Pinochet or the Argentine junta. Just because Chavez or Morales have killed fewer people when suppressing protests than the authoritarians of the 70's and 80's did does not mean they are not running a dictatorship. Just because Ortega has not assassinated opposition figures or declared martial law does not mean he has not just as effectively silenced his opposition. He gets no laurels for having forced them to withdraw from politics -- or to Miami.
As a political scientist, I can appreciate the need to be as descriptive as possible and to define terms with granularity. As one who was formerly responsible for supporting U.S. diplomacy as a development official, I can appreciate that sometimes nuanced language in formal settings is appropriate. But U.S. policymakers (and the Europeans and a growing number of other countries) don't have the luxury of being academic about their work if they expect to clearly articulate that our interests include a world with more real democracies and prospering free peoples. Mr. Feroro is right to point out that the U.S. and the Brazilians, to name two, could do more regarding the new authoritarians. But no one who purports to promote democracy and to support democrats around the world should kid himself: If policy is founded on a muddled view of what democracy is and isn't, then democracy and democrats around the world will suffer. Let us settle at the outset that democracy means real freedom, not pretended freedom, and craft our policy that way.
Ecuadorean President Rafael Correa has made no secret of his support for Iran's controversial nuclear program. In fact, the fiery leftist revels in flaunting that support before the international community. But the relationship goes even deeper than that. Correa's foreign minister just returned from Tehran, where he blasted the United States and sealed a $400 million deal to purchase Iranian fuel products, a deal that might not be illegal under United Nations sanctions, but certainly violates the spirit of international efforts to isolate the Islamist regime over its rogue nuclear program.
At the same time, Iran's Vice President for International Affairs Ali Saeedlou was visiting President Correa in Quito, saying, "The Islamic Republic of Iran places no limits on the expansion of cooperation with Ecuador." (Iranian leader Mahmoud Ahmadinejad paid a visit to Ecuador just this past January.)
What makes this all worth noting is that the Ecuadorean embassy in Washington has just announced a public campaign to convince the U.S. Congress that Ecuador is deserving of continued trade preferences under the Andean Trade Preferences Act (ATPA).
Where to begin?
ATPA was first passed by Congress in 1991 to provide certain Andean countries market access for key exports to boost alternative industries to the drug trade. Of the four original beneficiaries, only Ecuador remains. Colombia and Peru both now have free trade agreements with the U.S., while Bolivia lost privileges for its expulsion of the Drug Enforcement Administration in 2008.
Obviously, a fundamental prerequisite for ATPA eligibility is that a country shares a commonality of purpose with the U.S. in eradicating illicit narcotics, but such a commitment under President Correa has been nonexistent. In fact, he made a central component of his rise to power to expel a U.S. counter-narcotics unit from the coastal city of Manta, which monitored drug shipments heading north to the United States and beyond.
According to the State Department's 2012 international narcotics report, since the U.S. expulsion from Manta in 2009, drug seizures have gone down and trafficking has gone up. Moreover, last year the U.S. and Ecuador did not carry out a single joint counter-narcotics exercise, even as Mexican, Colombian, Russian, and Chinese transnational criminal organizations have increased their presence and activities in Ecuador.
Beyond counter-narcotics cooperation, ATPA also requires that the beneficiary respect the rights of U.S. companies operating within their borders. On that front, Ecuador has been involved in a high-stakes, multi-billion-dollar shakedown of the U.S. oil company Chevron, which it claims is responsible for the despoilment of a patch of the Ecuadorean rain forest years ago. The case has been replete with rigged judicial proceedings and political interference from the get-go.
Finally, Iran. One would think that extending trade benefits to another country would entitle the U.S. to some expressions of broader good will in return. Instead, the Correa government has responded with a reckless embrace of an international rogue that is pushing the world to a crisis point, for no other reason than to burnish its anti-American credentials.
ATPA does not expire until next year, but the U.S. Trade Representative has already asked for public comments on whether it should be renewed for Ecuador. The case for extension is not even close and the Obama administration ought to convey their opposition to any roll-over. Whether it is a joint commitment to fighting drugs, respecting U.S. investors, or hostility to fundamental U.S. foreign policy goals, Ecuador under the Correa government fails on all counts.
If Ecuadorean exporters are going to be hurt by the end of ATPA benefits, they need to make their case to their own government, not the U.S. Congress. And they need to hold President Correa accountable -- and him alone -- if those benefits are lost.
With last week's headlines dominated by Egypt's presidential elections, negotiations on Iran's nuclear program, and fresh atrocities in Syria, it would have been easy to miss a major development out of Iraq that in time could have equally momentous consequences for the future of the Middle East. I'm referring to the announcement that the Kurdistan Regional Government (KRG) and Turkey have agreed -- in principle at least -- to build a series of pipelines that will allow the Kurds to export oil and gas directly to Turkey and, from there, onward to the rest of the world. The U.S. should be paying close attention.
Until now, the KRG's ability to develop its substantial energy riches has been held hostage to its dependence on export pipelines controlled by the central government in Baghdad. To get any oil to international markets -- and, in turn, to get its fair share of revenue from those sales -- the KRG has largely been at Baghdad's mercies.
Iraq's oil ministry has sought to exploit its position of strength to coerce concessions from the KRG on a long-stalled national hydrocarbons law. In particular, Baghdad has demanded veto power over exploration and development contracts that the Kurds are negotiating with international oil companies. At least 40 such contracts have already been signed over the central government's vociferous objections -- including a breakthrough agreement late last year with the global energy giant, Exxon Mobil.
Baghdad has struck back on multiple fronts. Companies signing contracts in Kurdistan have been black-balled from competing for concessions in the mega-fields of southern Iraq. Kurdistan's access to Iraq's pipelines has been restricted. And as often as not, the central government has simply withheld payments that foreign operators are owed under their Kurdish deals. The latest row over compensation led the KRG in April to suspend exports altogether, which were scheduled to be as high as 175,000 barrels per day in 2012.
The oil dispute, of course, is at the center of a much larger argument, still unresolved, about the very nature of the new Iraqi state. The Kurds, scarred by a brutal history of subjugation at the hands of Arab rulers in Baghdad, are determined that their survival -- political, economic, and, yes, physical -- will never again be subject to the central government's diktats. Yearning in their hearts for independence, the Kurds since 2003 have reluctantly bowed to geo-political realities and agreed to work toward a unified Iraq -- but only on the condition that the country evolve toward a truly federal state, with Baghdad's authority strictly limited by constitutional guarantee and the Kurdistan region's autonomy assured. Having primary say over the fate of its energy resources, and a reliable, equitable claim on Iraq's revenue stream, are for the KRG essential elements of any durable national compact.
Baghdad, needless to say, has had a much different view. Under Prime Minister Maliki, the inclination has clearly been to revert to the modern Middle Eastern norm of a strong, centralizing state, where all political, economic, and security issues of consequence are directed by the national government. From this perspective, full-blown federalism is no recipe for stability, but rather a prescription for weakness, chaos, and fragmentation. Lebanon at best; the former Yugoslavia at worst. The KRG's oil contracts are perceived as a dagger aimed at the heart of the Iraqi state: disrupting policy with respect to the nation's most important resource; undermining the authority of the central government; and ultimately intended to underwrite a future Kurdish dash for independence that would rip the country asunder.
It's not hard to see how these conflicting visions, left unmediated, could trigger an unvirtuous action-reaction cycle. And the dynamic has only been exacerbated in the wake of the U.S. withdrawal from Iraq last December, as Maliki's bent for concentrating power is increasingly viewed -- by Kurds, for sure, but by many other Iraqis as well -- as veering dangerously in the direction of a new authoritarianism. Political opponents have been targeted for arrest, including Iraq's Sunni vice president. More than 18 months into his second term, Maliki -- in contravention of a power-sharing agreement -- has yet to yield personal control over the defense, interior, and intelligence ministries. He has further been accused of politicizing Iraq's judiciary and central bank, while subverting the army's chain of command and turning its best equipped, best trained units into his own praetorian guard. And the list goes on.
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The Obama administration's two major weekend summits, the G-8 gathering at Camp David and the ongoing NATO meeting in Chicago, happen to be occurring as the U.S. presidential campaign gets underway. That coincidence of timing presumably helps explain an otherwise baffling statement by National Security Advisor Tom Donilon posted over at the Cable previewing the meetings:
Look for the Obama team to drive home the argument this weekend that the G-8 and the NATO summit are a testament to Obama's ability to repair alliances frayed during the George W. Bush administration.
"It had been an exhausting period leading up to 2009, and the president set about reinvigorating -- indeed, one of the first sets of instructions that we got during the transition, at the beginning of the administration, was to set about really building out and refurbishing, revitalizing our alliances," Donilon said.
"No other nation in the world has the set of global alliances that the United States does... And alliances, I will tell you from experience, are a wholly different qualitative set of relationships than coalitions of the willing."
The best explanation I can muster for this is that Donilon is channeling David Axelrod and indulging in some spin for the campaign "silly season." One hopes that the Obama administration doesn't actually believe that its record on alliances is so exemplary, because to do so means that the notorious White House-bubble must be even thicker than usual. Yet I suppose that as long as the media gives a free pass on these kinds of claims, they will be made. Even the Humble Cable-Guy, normally vigilant to call out any manner of fluff, spin, or distortion, seems to have missed this one.
Campaign spin notwithstanding, the reality is different.
First, taking Donilon's own timeline, the Obama administration inherited a set of alliances in solid shape. When Obama took office the Bush administration had largely repaired bilateral relationships that had been admittedly frayed during its first term. Gone were the "old Europe/new Europe" lines, the feuds with Chirac and Schroeder, etc. By 2008, America had very solid relationships with allies such as Germany, France, the United Kingdom, Japan, South Korea, and Australia, as well as emerging partners such as India. Expanding these partnerships and inviting rising powers to the high table of international politics, Bush had even convened the first-ever G-20 summit in Washington to deal with the eruption of the global financial crisis.
Second, the Obama administration's record on relations with U.S. allies is wanting, to say the least. American allies and friends on almost every continent have been neglected or undercut by the Obama administration. These include specific countries such as the United Kingdom, France, Canada, Germany, India, Japan, South Korea, Australia, Taiwan, Israel, Poland, Czech Republic, Georgia, Ukraine, and Colombia. While the specific issues may have varied -- whether neglected and re-litigated free trade agreements, abandoned missile defense commitments, cancellations of state visits, shirking of defense needs, rebuffs on energy cooperation, dithering on multilateral interventions, hectoring on fiscal policy, or just thoroughgoing neglect -- all of these nations, among them America's most important allies and partners, have suffered poor treatment at the hands of the Obama administration. Anecdotally, one can hardly visit a European capital without hearing private complaints from European diplomats over the neglect they feel from the Obama administration.
Third, Donilon's sanctimonious dig contrasting "alliances" with "coalitions of the willing" was unflattering as well -- to the Obama administration. After all, this White House has, for justifiable reasons, made frequent use of coalitions of the willing on its most significant foreign policy initiatives, such as the Libya War (which included non-NATO members such as Sweden, Qatar, Jordan, and UAE), the P-5 Plus One coalition on Iran, the "Friends of Syria" Group, and the Afghanistan War (forty non-NATO participants).
The Obama administration's efforts to keep blaming Bush have an almost perfunctory quality. If anything, they reveal this White House's own anemic record to base re-election on [insert obligatory "three envelopes" joke here]. I have some sympathy for the administration in that working with allies in practice is much harder than campaign rhetoric would indicate. But here the gap between the rhetoric and the reality is significant.
Obama campaigned claiming he would improve America's global image, but his treatment of allies has undermined our nation's credibility. In a way, Obama's international reputation seems to mirror his domestic reputation. At both home and abroad, personal affection for him far exceeds approval for his policies. He has been successful at cultivating his personal image in the world, but in the process America's standing has been diminished. In terms I hope our Anglosphere allies will appreciate, this White House may talk like Ringo Starr, but too often it has acted like Mike Reno.
I am in Panama for the second time in seven years, and it certainly is a very different place today. Skyscrapers are sprouting up all over the city and there has been explosive growth here. Constant sunshine, no earthquakes, fabulous location, peaceful Costa Rica to the north and a natural buffer of the Darien region to the south make Panama a stable and peaceful democracy. Americans are not perceived as an alien presence but a welcome partner. To be an American in Panama, especially an American who speaks Spanish, is to feel very, very welcome.
The Embassy estimates as many as 45,000 American citizens down here while the Panamanian government estimates as many as 250,000. One of the reasons for the discrepancy in estimates is that many Panamanians, for legacy reasons, possess U.S. passports and dual citizenship. In short, the U.S. legacy in Panama is obvious. At one point the U.S. had 35 military bases here to protect the canal from Japanese attacks in World War II, but today there are no U.S. bases in Panama. Many of the former U.S. bases have become urban renewal projects similar to the Presidio in San Francisco, and the new U.S. Embassy is built in one of these old sites.
Though this past year Panama's growth rate was 8.5 percent, services account for over three-quarters of the economy and English is a big need here. There is a shortage of skilled workers, and English is not as strong as it might be, or as strong as many locals think (although many call centers have been built here). The weakness of English in Panama is the legacy of dictator Omar Torrijos, who deemphasized English, going so far as to ban the teaching of English in public schools and stopping an entire generation from learning the language. Anecdotes tell of English teachers at public schools who have a hard time conducting visa interviews with the U.S. embassy in English.
For years, the Panamanians have been stalling building the last piece of the Pan-American Highway through the Darién region, and the U.S. has supported them for a number of reasons -- preventing the northward spread of foot and mouth disease, environmental worries, and perhaps other security concerns relating to narcotrafficking.
When I was last here, there were discussions about building an extension of the Panama Canal. The expansion is well underway, and ideally the expanded canal will be up and running in 2014 though more likely this will happen in 2015. You may have heard of the "Panamax" class of boats, but the expansion was needed for the "New Panamax" class of ships. At its narrowest portion, the canal can only run one way at a time right now for the largest ships, but after 2015 it will be able to run both ways at all points. The U.S. administered the canal as a public utility until 1999 and therefore hardly made any money. Today, the Panamanians run the canal like a business and it generates around $1 billion annually in profits for the Panamanian Treasury. This figure will increase considerably after the expansion.
In October, Congress finally approved the Panama Trade Promotion Agreement. It took way too many years under the current administration to sign this agreement. Though it is more a signaling effect, the upshot of this is the elimination of tariffs that were making it difficult for American goods to compete in Panama.
As far as security for U.S. interests in the region, there is little concern here over Hugo Chavez's influence except perhaps rumors of mischief with labor unions, and there are likewise no murmured concerns about Chinese influence. Nor do there seem to be any agricultural, mineral, or fuel resources that attract the attentions of China. In fact, Panama has kept official relations with Taiwan over China. I also asked about the ownership of Pacific and Atlantic ports through Hong Kong's Hutchison Port Holdings. It was met with a series of shrugs from U.S. officials and old Panama hands.
The FARC has used Panama's Darién region as a base of "rest and relaxation" but the current center-right government has taken a notably harder line than in the past. The FARC is almost exclusively interested in drug trafficking here, unlike in Colombia, where the group poses a threat to the state. According to U.S. officials, Panama yearly seizes about 40 tons of drugs in partnership with the U.S. There are also gang problems here but nowhere near the level of trouble that other Central American countries have been having over the last decade or so. Perhaps the biggest challenge to Panama's future is the weakness of its institutions and the persistent whispers of endemic corruption in the society. If Panama can confront this challenge, it will be on its ways to being as wealthy as the United States.
Two hours by plane to Mexico City, 40 minutes to San José (Costa Rica), less than an hour to Bogotá, and 4.5 hours to Washington. Panama, with a population of 3.4 million, is truly the hub of the region and a great American ally.
Sadly, the tragic death of another Cuban dissident hunger striker will not change conditions in that island-prison nor provoke governments to reassess their historical indulgence of the Castro regime's crimes. Business as usual will continue.
In fact, this week, Brazilian President Dilma Rousseff is in Cuba promoting business opportunities for Brazilian companies. She plans no meetings with Cuban dissidents.
But the Jan19 death of 31-year-old dissident Wilman Villar Mendoza will not be in vain. Indeed, when decent people arrive in Cuba to pick through the rubble left by the most oppressive regime this hemisphere has ever seen, his sacrifice -- and that of thousands of Cuban martyrs before him -- will be rightly honored on Cuban soil.
But if there is one immediate purpose that the tragic death of Wilman Villar can serve, it is to put the definitive lie to the currently fashionable meme that Cuba, under Raúl Castro, "is changing."
For example, according to the Associated Press, Cuba just wrapped up a "dramatic year of economic change." The BBC informs us, "Cuba expands free-market reforms," while Reuters adds, "Cuba to free 2,900 in sweeping amnesty."
Frankly, the only thing sweeping Cuba these days -- besides the ongoing state repression -- is the hyperbole in foreign correspondents' dispatches.
I have dealt with Cuba's smoke-and-mirrors reforms in this space before, but to briefly summarize, all interested observers need to know about Cuban "reforms" are two things:
They signify no new recognition of the inalienable rights of the Cuban people by the regime. "Allowing" a few new bits of heavily circumscribed individual economic freedoms is hardly indicative of fundamental change. The relationship between state and citizen remains the same -- although instead of controlling 100 percent of the economy, the regime will now control 99.5 percent.
Secondly, recent changes are not meant to reform the system but to save the system. Allowing Cubans to repair children's dolls outside the purview of the state does not mean Cuba is on the road to a free market; it means the regime is looking for new ways to generate revenue through confiscatory taxes of limited private economic activity.
Raul Castro himself serves as the best spokesman that the regime is not contemplating any kind of fundamental reform. Speaking recently at a party conference, he said, "There has been no shortage of criticism and exhortations by those who have confused their intimate desires with reality, deluding themselves that this conference would consecrate the beginning of the dismantling of the political and social system the revolution has fought for more than half a century."
To be sure, the hyperbole surrounding recent changes in Cuba has an ulterior motive. It is meant to apply pressure on U.S. policymakers to make unilateral changes in U.S. policy, because Cuba is ostensibly "reforming." Thankfully, the Obama administration so far hasn't taken the bait. In fact, last September, the President took the matter head-on, saying, "They [the Castro regime] certainly have not been aggressive enough when it comes to liberating political prisoners and giving people the opportunity to speak their minds."
Indeed, at a time when no quarter is being given to undemocratic regimes in the Middle East and North Africa, the suggestion that the U.S. should lessen pressure on an undemocratic regime ninety miles from our shores strikes a wholly discordant note and is unlikely to be entertained by any serious policymaker. The Cuban people deserve no less than what the peoples of those regions deserve: the freedom to live their lives as they see fit. Clearly, that concept was as alien to Muammar al-Qaddafi as it is to the Castro brothers -- which is why they deserve the same fate.
ADALBERTO ROQUE/AFP/Getty Images
The United States is very good at making war. It is awful at state building. No matter how often Washington has tried over the years to pour its human and material resources into what is currently and euphemistically termed "reconstruction and stabilization," it has fallen short at least as often as it succeeds. In places where it has succeeded -- in Germany, Japan, Taiwan, and South Korea -- the recipient country put as much, if not more, effort into rebuilding its polity and economy as did the United States. Where Washington has failed -- the Philippines, Haiti (several times), Somalia, and now Afghanistan -- the country in question simply was on the take.
The United States has defeated al Qaeda in Afghanistan. It is hammering the Taliban. But, as the recently issued Senate Foreign Relations Committee report has made abundantly clear, it has utterly failed to construct a viable political and economic structure that can be expected to outlast the departure of most U.S. forces from that country in 2014. It has not been for want of trying: Washington has poured some $19 billion into Afghanistan in the past decade. Rather, it is due to policy-makers' indifference to the implementation of their plans, lack of timing, and inability to deploy sufficient numbers of civilians to that war-torn country. Equally, it is due to the nature of the country itself: a collection of fiercely independent tribes and ethnic groups that, as they have for centuries, are often at war with one another when not united in warring with outsiders.
As I point out in my recently published A Vulcan's Tale, Washington missed the boat when it came to Afghan reconstruction. From 2002 to 2004, Afghanistan was quiet, and the Taliban (and al Qaeda) had gone into hiding. The country was suffused with optimism; the U.S. was popular. That was the time to move significant resources, and civilian personnel, into the country -- to forestall reliance on the poppy crop, to build up small business, to train the military and police. Instead, Afghanistan became yesterday's news as Iraq moved to the forefront of policymakers' concerns, while the Office of Management and Budget stubbornly ignored pleas from the State Department and the USAID for more resources. At the same time, few civilians volunteered to serve in the country, and contractors took the lead in "reconstruction" -- and in reaping the profits thereof. Add to that the United States' overreaction to that indifference that resulted in a flood of money into Afghanistan beginning in the latter part of the past decade, as well as a cultural tone-deafness that persists to this day, and it should come as no surprise that the majority of Afghans have not benefited from U.S. largesse.
The State Department has, as might be expected, issued a rebuttal to the Senate report. But the statistics it cites regarding economic growth mask the fact that Afghan governance is riddled with corruption, while its economy (excluding revenues from narcotics crops) is not much more than $8 billion, despite all the funds that have poured into it since 2002. Civilians still are chary about serving in Afghanistan -- the civilian surge of about 1100 personnel not only is dwarfed by the U.S. military presence, but is also almost invisible in a country the size of Texas with a population of some 30 million.
There remains a strong case for providing training assistance to Afghanistan's security forces, though it is nothing short of amazing that, until three or four years ago, virtually nothing was done to provide trainees with even a modicum of literacy proficiency. Likewise, there is a case for a significantly reduced but still potent military presence to ensure that the Taliban, and, in particular, al Qaeda, cannot return to the pre-September 11 status quo ante. But it makes no sense for the United States to pour billions into reconstruction assistance when the current effort to reform USAID is in its infant stages, when civilians can still refuse to serve in Afghanistan, and when contractors will continue to dominate U.S. assistance activities.
Meanwhile, the rest of the United States' allies, many of whom have had far more success in implementing state-building projects, sit on their hands and withhold their money. Secretary of Defense Robert Gates was right to castigate the United States' NATO allies for their blithe refusal to pull their weight in Afghanistan and, for that matter, Libya. At a minimum, the Europeans and other putative members of the coalition in Afghanistan should take the lead in providing the human and material resources for the non-military aspects of that country's reconstruction. It is the least that they can do -- and they happen to be better at the job than we are, or are likely to be for some time.
MASSOUD HOSSAINI/AFP/Getty Images
Imagine the chairman of the Joint Chiefs of Staff testifying that if defense funding were reduced, seven hundred thousand people in Libya would die, and tens of millions elsewhere in the world. It would be considered fear-mongering of the most repulsive kind. In fact, it would be considered a threat to the integrity of our civilian-led military to attempt such a blackmail of the Congress.
But that's exactly the approach USAID Director Rajiv Shah took last week testifying before the House Appropriations State and Foreign Operations subcommittee. He said that if proposed reductions to USAID's budget go into effect 70,000 children will die. He added that he considered that a very conservative estimate, and that among other effects, another 800,000 recipients of our international disaster assistance in Darfur would be at risk.
Shah testified that 30,000 deaths would come specifically from scaling back anti-malaria programs, 24,000 from lack of immunization, and 18,000 lack of skilled attendants at births. All this from cutting 16 percent of the Obama administration's international affairs budget request.
Hard to say which is more offensive, Shah threatening Congress will have blood on its hands unless it continues to fund USAID programs, or the bureaucratic and cultural mindset that considers increased spending the only solution to a multivariate problem.
USAID was created as an entity separate from the State Department (and military assistance) in 1961, in order to remove from development assistance the taint of being provided in order to advance America's interests. USAID's official history rather unselfconsciously states that "It was thought that to renew support for foreign assistance at existing or higher levels, to address the widely known shortcomings of the previous assistance structure, and to achieve a new mandate for assistance to developing countries, the entire program had to be 'new.'"
The whiff of sanctimony pervades USAID still, which is part of why it is so unpopular on Capitol Hill, where elected representatives often find unpersuasive that the spending of their constituents money abroad should have no connection to our national interests.
Providing money through the Agency for International Development is by no means the only -- or even the most effective -- way to alleviate disease and poverty in the world. Case in point: funding for AID was dramatically cut in the 1990s, and yet that decade saw nearly a billion people lifted out of poverty by actual economic development. USAID's funding has been increased by 150 percent in the past decade -- most of that coming with the advocacy of a Republican president and his secretaries of state.
There are many ways USAID could compensate for reduced government spending:
In fact, USAID's Quadrennial Diplomacy and Development Review champions all these approaches. USAID just doesn't practice them.
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It is not fair to criticize the Obama administration too harshly for its failure to come up with a single, robust policy regarding the spreading street unrest in the Middle East and North Africa. The administration has been playing catch-up and has often been a step or two behind, but I think that is inevitable when one is confronting revolutionary cascades. Moreover, the region is dotted with very different governments, ranging from friendly autocrats who have been liberalizing (albeit too slowly) to thuggish despots who used almost every tool at their disposal to oppress their people and frustrate U.S. interests in the region. The popular movements rising in the region may share some features in common, but the regimes they are threatening are very different. It would be very hard to come up with a one-size-fits-all policy that would endure given these conditions.
So I have some sympathy for the way the Obama administration has handled, for instance, the situation in Bahrain. The regime there has supported key U.S. policies over the years, and securing long-term access to the home port of the 5th Fleet is an important U.S. national interest. The ethnic mix in Bahrain is volatile, and the Sunni rulers have good reason to fear Iranian adventurism -- long a staple in the region. For precisely those reasons, however, the administration is right to use its influence to pressure the regime into avoiding bloodshed and accommodating legitimate political grievances of the protesters. Calibrating the pressure and the message is hard, but the core U.S. interests involved are fairly straightforward.
I have less sympathy for the same equivocation with regard to Libya. The Qaddafi regime is no friend of the United States. While Qaddafi did make a major concession on WMD in 2003 on the heels of the U.S. invasion of Iraq, it is likely that that deal would be honored (or an even better one secured) by any regime installed after its ouster. Moreover, the level of atrocities the regime has inflicted upon the street protesters goes well beyond what the other regional autocrats have done. Full-throated condemnation would seem an easy call for the administration. As former Deputy Secretary of Defense Paul Wolfowitz notes in a tough column today, the U.S. message has not been all that full-throated, not yet anyway.
The Obama administration needs to do more, but I would not go as far as some who advocate having U.S. forces impose a no-fly zone. I share their outrage at the way Qaddafi had his Air Force strafe defenseless citizens, but involving the U.S. military in this way would constitute a major escalation and it would be hard to walk back if the situation further unraveled. What if Qaddafi shifted to tanks? Would we then be obligated to have our planes destroy the tanks? And without U.N. authorization, the United States would be entirely on its own. Not even our European allies, who otherwise would join in condemning the Qaddafi regime, would approve of U.S. military action without U.N. authorization.
The United States has acted without U.N. authorization before and rightly so, most famously in the Kosovo war of 1999, although there we were joined by all of our NATO allies. (Academics also debate whether the 16 prior UNSC resolutions on Iraq provided adequate legal cover for the 2003 invasion of Iraq or whether the Bush administration needed a 17th.) But in these cases, the action came after considerable diplomatic efforts at the United Nations and elsewhere. Other avenues of pressure were tried and found wanting, and only then was a resort to extraordinary force taken.
As Wolfowitz and others note, there is much the United States can do and pressure other states into doing short of unilateral military actions. The Obama administration should take those steps, and quickly.
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Events in Tunisia, Egypt, Yemen, and to a lesser extent Jordan have led both administration officials and the chattering classes to conclude that democracy is on the march in the Middle East. Having once again been caught by surprise by events overseas -- one wonders where our intelligence agencies have been hiding -- the Obama administration is now trying to push itself into the forefront of those seeking democratic change in the region.
Yet it was not democracy that led a young Tunisian to immolate himself and, apart from English-speaking educated intellectuals, it does not appear that democracy is what most people have been demonstrating about. Instead, what they are seeking, first and foremost, is economic opportunity unfettered by corruption and favoritism. Mohammed Bouazizi set himself on fire because he was prevented from earning a modest living. Three Egyptians have burned themselves because of lack of job opportunities.
Secondly, Tunisians and Egyptian appear to be seeking responsive government, which is quite different from Western notions of democracy. In fact, it is arguable that they and other demonstrators in the Arab world would be quite comfortable living under a Chinese-style system, where there is a high and consistent level of economic growth and standards of living continue to rise. Would Tunisia have overthrown Ben Ali if its economy grew, as it had in the 1990s, and if the President's family curbed their greed? Would Mubarak be in the trouble he is now if he had a far greater percentage of the population benefitting from Egypt's economic growth?
It is noteworthy that for all the talk of upheavals in the Arab world, there has so far been little unrest in the traditional Gulf emirates or in Saudi Arabia. The rulers of the smaller Gulf States have long made it their policy to distribute wealth widely among their citizens. (Non-citizens don't count, of course. And if they made any trouble they would be deported.) Despite predictions of their imminent demise over the past two decades, the Saudis likewise have so far remained quiet. The al-Saud family recognized some ten years ago that it needed to spread more wealth to ensure the support of its increasingly younger population; so far so good.
Even Bahrain, which might have been expected to be the scene of riots, given the secondary status of the majority Sh'ia population, has not witnessed any major demonstrations. Again, most of the Bahraini Sh'ia appear to recognize that a stable Bahrain means more wealth for them too -- even if they do not achieve economic parity with the dominant Sunnis. They also know that Saudi tanks are not far from the causeway that links their state to its much larger and more powerful neighbor, and that those tanks would be quick to cross into the island kingdom if the ruling family came under siege.
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The Washington Post is running a series of articles highlighting failed projects funded by the U.S. military in Iraq and Afghanistan. Nearly $5 billion in funds has been appropriated through the Commander's Emergency Response Program (CERP), which gives military forces in combat money to put toward humanitarian assistance and development projects that advance the war effort, to include reducing unemployment and building support for U.S. objectives. The articles highlight numerous projects that have been abandoned once under the control of the Iraqi and Afghan governments, with the implication that the programs were scandalously wasteful. And that may be right in many cases; but the Post articles also give no context for whether CERP funded projects are more or less successful than other development assistance. Here are three points they ought to have addressed but did not.
No. 1: A project that is abandoned now does not mean it wasn't beneficial.
I realize it's a difficult argument to make that wasted money is a good thing; but CERP funds aim for short term effect in a combat zone. They are not projects for the ages, they are designed to affect the here and now decisions of insurgents and the population that may permit them to operate with impunity. The Post concludes that "have created no more than a temporary illusion of progress," but temporary progress can be vital in creating or sustaining momentum in warfare. If the Iraqi government does not now make a water park (one of the projects) a priority, that does not mean it wasn't a hopeful and useful sign to Iraqis three years ago when we were trying to convey that violence was dramatically down, it was safe for Iraqis to engage in normal pursuits, and our objectives were a peaceful and prosperous Iraq.
No. 2: Development assistance is an inherently speculative undertaking.
What proportion of businesses started here in the United States fail? Add to that the complexities of societies coming out of authoritarian governance or decades of war, developing law and judicial practice while democratizing, and it's not at all surprising that a large number of projects will be abandoned or unsuccessful. If we expect a guaranteed return on investment with our development assistance, we would actually not be assisting development very much. Those projects tend toward large infrastructure guaranteed by local governments, and even those are often rife with corruption and mismanagement. Part of what development assistance does is teach the practices of capitalism, and failure is a part of capitalism, so we should not balk at failed attempts.
No. 3: The U.S. military is not particularly good at development assistance.
It's not their job. They will optimize funding to projects that advance their war fighting objectives, predominantly near-term security. To make the military good at development assistance, as Carl Schramm has advocated in his Expeditionary Economics article in Foreign Affairs, would require a major diversion of effort from fighting and winning the country's wars. We actually have a branch of the U.S. government whose job it is to provide assistance; that would be the Agency for International Development. The real disappointment of so much money being channeled through CERP is that our government proved incapable of working together to prioritize and fund both near-term and long-term assistance in Iraq and Afghanistan when they are essential to our war efforts.
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How can we make sense of a People's Republic of China that is supposed to be, in the words of Deng Xiaoping, "biding its time and hiding its capabilities," but in fact is picking fights with most of its neighbors, including the United States? The Chinese were supposed to be using their deep reservoirs of "soft power" and practicing a highly skilled diplomacy aimed at assuring all that China is rising peacefully. But over the past year, Beijing has been rather more clumsy than the caricature of Chinese cleverness might suggest. China has in effect declared the entire South China Sea -- a body of water that is of critical importance for its abundance of natural resources and for its position as the maritime connection between the Indian and Pacific Oceans -- to be its territorial water.
Needless to say, this has not gone over well with Vietnam and other Southeast Asian nations. And, just when it appeared that China would return to a lighter touch in the face of strong U.S. resistance to its South China Sea claims, Beijing bullied and coerced Japan into circumventing its legal processes after a Chinese fishing trawler rammed Japanese ships in the disputed Senkaku/Diaoyu island chains. In sum, China's exercise of power has been more hard than soft. Beijing seems to be neither "biding its time" nor rising peacefully.
A recent book helps explain how PRC leaders think about the world and what may lead China to engage in the behavior we and our allies find offensive. In The Mind of Empire China's History and Foreign Relations, Christopher Ford makes a persuasive case for hardwired cultural conditioning as an explanation for China's imperious behavior. China possesses, well, the mind of an empire. According to Ford, Chinese history has no precedent for stable coexistence among sovereign equals. Moreover, struggle over primacy within China and later with other states is a fairly continuous characteristic of Chinese history. Here is Ford:
The Chinese tradition has as its primary model of interstate relations a system in which the focus of national policy is in effect a struggle for primacy and legitimate stable order is possible when one power reigns supreme-by direct bureaucratic control of the Sinic geographic core and by at least tributary relationships with all other participants in the world system.
According to Ford, China has an enduring sense of global order. Beijing assumes that the "natural order" of the political world is hierarchical and the idea of truly separate and independent states is illegitimate.
But wait, some might argue, what about China's embrace -- if not sanctification -- of the Western construct of international relations: Non-interference in the affairs of other sovereign states? If China's natural place is atop a Sino-centric hierarchy, and other sovereign states are lesser entities that should pay deference to China, then why use the histrionic defense of Westphalian norms which codifies equal status among states?
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Nouri al-Maliki appears close to a deal that will
put Iraq's Shi'ia parties in power. After seven months of political
wrangling, it would be tempting to believe that any government formed by Iraq's
squabbling political leaders is progress. It is not.
The political slate that garnered the most seats in the parliamentary elections, Ayad Allawi's non-sectarian bloc, ought to have had the first shot at forming a government. Prime Minister Maliki's manipulations of electoral commission findings and superseding of judicial decisions accrued that advantage instead to his second-place finish.
Even with the advantages of incumbency in a system newly empowered and without strong legal constraints, Maliki has been unable to cobble together a coalition. Other parties fear a "soft coup" of Maliki consolidating power and have been unwilling to join a government with him as prime minister.
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In response to my last post about why realists should support nation building, some readers responded with a curious argument: Afghanistan (they believe) is failing, therefore nation building is impossible. Set aside the fact that this is does not respond to my argument -- which was not about Afghanistan and did not argue that nation building is easy, only that it can serve our interests when done right -- it strikes me as a lazy argument to condemn nation building on the basis of a single example. I call this the Somalia Fallacy.
According to the Somalia Fallacy, the failure of the U.N.'s effort to rebuild Somalia in the 1990s proves that all nation building interventions are doomed to fail. It is the favored argument of pundits who want to argue against overseas interventions. Fareed Zakaria gave perfect expression to the Somalia Fallacy in a Washington Post column in July. "The trouble with trying to fix failed states is that it implicates the United States in a vast nation building effort in countries where the odds of success are low and the risk of unintended consequences is very high. Consider Somalia..." Zakaria then retells the recent history of that unfortunate state, and concludes "Somalia highlights the complexity of almost every approach to failed states."
Well, no, it doesn't. Somalia is not a useful historical analogy from which to generalize about failed states (and neither is Afghanistan). To make a useful generalization, you'd want to start with a typical failed state, or, better yet, several of them. Somalia is not a typical failed state: it is an extreme outlier. It has been the most completely failed state on earth for almost two decades. On top of that, the U.N. mission in Somalia in the early 1990s was not a typical U.N. intervention: it was a singularly, uniquely inept one. Deploy an inept U.N. mission to the most failed state and you have the recipe for a famous catastrophe, not have a blueprint for how all interventions are doomed to play out.
Paleoconservative columnist George Will is on a crusade against nation building, and in particular, against nation building in Afghanistan. In June he called it a "fool's errand," that is "staggeringly complex," and claimed it is "rash or delusional" to try it because it is a "cannot-be-done" mission. In May he called it the "civilianization of the military." In September 2009 he called for the United States to withdraw from Afghanistan, saying Afghanistan was so backwards that "nation building would be impossible even if we knew how, and even if Afghanistan were not the second-worst place to try" after Somalia.
Will articulates a view that sounds increasingly plausible to opposite poles of the political spectrum. Left-wing Democrats seeking an end to the war in Afghanistan, as well as some Tea Party neo-isolationists, echo some of Will's arguments (Angelo Codevilla's otherwise fascinating Tea Party manifesto included an odd broadside against trying to win hearts and minds in Iraq and Afghanistan). Will's view is, basically, that it was all a mistake. The United States should not seek to transform regions because it is beyond our capabilities. We should not foster democracy overseas because it rarely grows in inhospitable places. Above all, we should never, ever attempt nation building because it is a misuse of military resources and a hubristic neo-imperial fool's errand.
Will is wrong. I will write later about why the growing skepticism about the war in Afghanistan is unfounded, but today I want to take issue with Will's skepticism about nation building. While I think there are valid arguments in favor of nation building on idealistic grounds, I want to highlight three reasons why I think realists should support nation building.
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The U.N. secretary-general is hosting a high-level meeting this week in New York calling on governments to remain committed to meeting the Millennium Development Goals (MDG) by 2015. It is clear that in the midst of a world economic crisis, the United Nations is hoping to use the MDGs to garner billions of dollars in additional financial commitments.
The United States is not a formal signatory to the MDGs (established in September 2000), but broadly agrees with the eight targets and uses them as "indicators, but not a strategy" (as Laura Hall and Elizabeth Cutler point out over at the Stimson Center blog; see also Laura’s take on the importance of implementation here).
Both the United States and Britain have in large part continued to lead the developed world in fighting poverty and bringing positive change to the developing world. Programs such as the President's Emergency Plan for AIDS Relief (PEPFAR), Malaria Initiative, the Millennium Challenge Corporation, access to education, and Debt Relief for Africa all charted new paths for partnering with the developing world to provide opportunities for millions. The Obama administration has largely remained committed to the paths set forth by President Bush.
Yesterday during his speech to the U.S. General Assembly, President Obama said that foreign assistance should be focused on development, not dependence. Obama went on to say that, "Secretary of State Clinton is leading a review to strengthen and better coordinate our diplomacy and our development efforts." He further said that his administration is rebuilding the United States Agency for International Development (USIAD).
This rebuilding of USAID has been mired with challenges and problems. Phil Levy highlights below that it took more than a year for an USAID administrator to be appointed. Today, USAID still has vacancies in the majority of its top political posts. Even if the White House were to nominate appointees now, these individuals will have little affect on USAID policies and programs in the short term.
To add to the confusion, the administration is still undergoing an internal review of development assistance grappling with who actually controls the budget mechanisms to implement foreign aid. The development community continues to express its frustration that there is no clear strategy.
While governments, foundations, businesses and civil society groups continue to rally around the MDGs' call to action to slash poverty, hunger and disease by 2015, the Obama administration needs to demonstrate it is serious about foreign assistance and its overall development policy.
The infighting between the White House and the State Department should stop, and the administration must provide clear inter-agency guidelines through the White House's Presidential Study Directive on Global Development (PSD-7) or the State Department's Quadrennial Diplomacy and Development Review (QDDR).
We will fail to make the grade on the world stage if we can't get our own house in order.
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The administration has decided that promoting economic development around the world is essential. Foreign assistance is a crucial part of how the United States relates to the developing world and plays a critical role in U.S. national security policy. To date, however, U.S. programs have not been as effective as they ought to have been. Aid flows through too many channels and there is poor overall coordination among the relevant agencies scattered through the government. It is time for this to change.
The preceding paragraph was pretty easy to write, since those were key themes of Secretary of State Condoleezza Rice in 2006. The paragraph works equally well this week, as the Obama administration unveils its own approaches. I'm well-versed in the earlier version, since I had the privilege of working on those issues as a member of her policy planning staff. After an extensive review of foreign assistance programs and countless intra- and interagency discussions about how the sprawling aid apparatus might be improved, Secretary Rice implemented a series of reforms, most prominently featuring tighter integration between the U.S. Agency for International Development (USAID) and the State Department.
Skip forward four years. After not one, but two extensive and concurrent reviews, the Obama administration is poised to tackle the same problems. It is doing so in the context of a United Nations discussion of the (limited) progress that has been made toward the Millennium Development Goals. Herewith, some places to look for potential changes.
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The policy debate over whether to press autocratic yet "friendly" regimes on democracy and human rights is often cast as "values versus interests" or "realism versus idealism," but in the case of Egypt it is better framed as the trade-off between short-term and longer-term interests (or even medium-term, considering President Hosni Mubarak's age of 81 and his regime's brittleness). For a dwindling time longer, Mubarak might continue to offer a degree of stability and be a sometimes reliable partner on regional peace and security issues. But his remaining time in office is finite, and there are positive ferments for reform brewing in Egypt that are in the strategic interest of the United States to support. In a sign of the times, even Mohammed El-Baradei, frequently nettlesome in his former role as head of the IAEA, has emerged in the unlikely reincarnation as one of Mubarak's most energetic electoral challengers.
Jackson Diehl points out as much in his excellent column urging the Obama administration to seize the democracy agenda in Egypt as a strategic opportunity in a troubled region. And he is right. But the Obama administration seems to see this as more of an annoyance than an opportunity, at least judging by its damaging cuts imposed over the past year on U.S. democracy funding in Egypt. Besides whacking the budget from $45 million to $20 million, perhaps even more damaging was the Administration's imposition of new regulations prohibiting any USAID funding going to groups not approved by the Egyptian Government -- which happen to be precisely the same groups that are the most potent reformers and that most need the funding.
While the concern is sometimes raised that visible US funding for reformers risks "tainting" them, the fact remains that the democracy funding was only given to Egyptians who applied for it aware of and willing to assume any risks. And several groups and individuals -- such as Safwat Girgis, Ahmed Samih, Radio Horytna, and the Egyptian Center for Human Rights -- have been willing to appeal publicly for U.S. funding and support in the wake of the budget cuts. Even more important than the funding itself can be the display of American moral support for democracy activists, which can increase their sphere of protection and alert autocratic regimes of the heightened diplomatic cost to any repression.
This is linked to economic reform as well. The Egyptian state monopolizes not only political life but also too much of the economy, and even though its economic growth rates have accelerated in recent years they have not kept pace with a burgeoning population. The Mubarak regime's autocratic constraints on political and economic liberty have atrophied what could otherwise be a vibrant middle class and civil society. Instead, Egypt remains mired in a negative cycle in which lack of economic opportunity leaves large numbers of un- or under-employed citizens (especially young men), who in turn have few outlets for constructive political expression -- hence in part the persistent appeal of the Muslim Brotherhood. Despite a rich intellectual and cultural history, abundant natural resources, and strategic location, Egypt continues to chronically under-perform in most political and economic development metrics. For example, in the Legatum Prosperity Index, Egypt ranks in the global bottom third on economic fundamentals, and among the world's lowest on democratic institutions, governance, personal freedom, and even social capital -- the last factor indicating that Egyptian citizens distrust not only their government but also each other.
What to do? The Obama administration should at a minimum pursue a three-part strategy. First, restore -- better yet, increase -- funding for beleaguered democracy and human rights activists, and do not let the Egyptian government decide who receives the grants. Second, as Jay Hallen argues here, transform economic development programs so that funding helps support urban Egyptian entrepreneurs and access to capital for growing small and medium size enterprises. Third, senior U.S. officials -- especially President Obama and Secretary Clinton -- should consistently and publicly support the principles of religious freedom, freedom of expression, freedom of assembly, and open electoral competition in Egypt.
Implementing these points by no means precludes also working constructively with Mubarak, who still is Egypt's leader and can sometimes be a helpful ally. But the current "Mubarak-only" policy is short-sighted and ineffective. Moreover, it is a policy of Mubarak's own devising -- as he has squelched liberal political dissenters and presented himself as the essential strongman who is the only alternative to Islamic extremists -- and not a policy in the American interest.
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By Philip Zelikow
Will Inboden wonders in his otherwise very good post how folks might have imbibed the long-held view that President Bush regarded development as a priority right alongside defense and diplomacy -- one of "three D's" -- placing development as one of the top three priorities of the United States. Some referred to the 2002 National Security Strategy (NSS). But, Will writes, he checked that document, and "it nowhere privileges development as the third pillar of some type of new national security trinity."
Will believes he solved the puzzle by finding a USAID official who heard something at a White House meeting and embellished it. That's a good story. I have another. This one traces the origins to a White House official ... George W. Bush.
In his remarks at the World Bank on July 17, 2001, President Bush said that, to build a better world, the United States "must be guided by three great goals." The first was to keep the peace with a balance of power that favors freedom. The second was "to ignite a new era of global economic growth through a world trading system that is dramatically more open and more free." Finally, Bush said, "our third goal must be to work in true partnership with developing countries to remove the huge obstacles to development, to help them fight illiteracy, disease, unsustainable debt."
Working on the NSS in late 2001 and early 2002, I was quite struck by the trinity of priorities announced in this July 2001 speech, and the rank it gave to development. Condi Rice confirmed to me that this was deliberate. President Bush soon followed up with his Monterrey speech in March 2002 announcing the plan to increase development assistance by 50 percent and create the Millennium Challenge Account initiative, displaying an international side to his ideal of compassionate conservatism. Although the NSS ended up not adopting such a trinitarian structure, at the time I cited the conceptual structure of President Bush's World Bank speech to many people as illustrative of the emphasis he had placed on development.
So perhaps a more likely explanation for the belief in President Bush's "three D's" is that many people internalized the structure the president had used in his speech, adjusting the middle principle into one of "diplomacy" in order to create a useful and memorable catechism.
But, since Will recently served on the White House staff as one of the custodians of authoritative presidential guidance, the story serves another purpose. It illustrates how fragile institutional memory is in our government, even within the White House of the same president.
By Will Inboden
One line in Secretary Clinton's generally solid Asia policy speech the other week gave me a laugh. It has nothing particular to do with Asia policy but rather was Clinton's earnest invocation of development as a policy priority:
Now, you may have heard me describe the portfolio of the State Department as including two of national security's three Ds: defense, diplomacy, and development. Each is essential to advancing our interests and our security. Yet too often, development is regarded as peripheral to our larger foreign policy objectives. This will not be the case in the Obama Administration.
No, there isn't anything terribly funny about the three D's themselves, but behind that pithy acronym is a classic Washington story.
In 2005, when Peter Feaver and I began working at the National Security Council, Steve Hadley tasked us with staffing the production of a new National Security Strategy (NSS) for the second Bush term. In the early stages of the process we canvassed a broad array of experts, officials, and other interested parties to solicit ideas on how best to shape the new NSS. Every time we met with anyone remotely connected with development policy -- from USAID officials to NGOs to industry groups -- we heard the same appeal for prioritizing development: "Please at least re-state the sentence from the 2002 NSS that said national security includes the three D's of defense, diplomacy, and development." It was further explained to us that this alleged formulation had empowered many groups in their appeals to Congress for increases in development funding. Though we didn't remember that particular line, these requests sounded reasonable enough. Until we went back and did another careful, line-by-line re-read of the 2002 NSS -- and realized the 3 D's are not mentioned at all! To be sure, the document does affirm the importance of development and its connection to other policy priorities. But it nowhere privileges development as the third pillar of some type of new national security trinity.
These appeals notwithstanding, President Bush had made it clear that he did want to elevate development as a policy priority, and to continue to integrate it into a broader national security framework. Pre-9/11 Afghanistan provided the most obvious empirical validation for the linkages between impoverished, fragile states and security threats, but any quick scan at the globe would reveal many other examples. So when we released the final version of the 2006 NSS, it did include this description of development's strategic role:
Development reinforces diplomacy and defense, reducing long-term threats to our national security by helping to build stable, prosperous, and peaceful societies. Improving the way we use foreign assistance will make it more effective in strengthening responsible governments, responding to suffering, and improving people's lives.
Meanwhile, back in our office, the puzzle persisted. How did the now-widespread myth develop that the 2002 NSS established the three D's? It had become an article of faith at USAID, and had taken on a life of its own in the minds of development officials in many other countries.
The next year I found the answer. During the cocktail hour at a development strategy conference, I struck up a casual conversation with a former senior USAID official. I half-jokingly told him that my biggest historical puzzle was discovering the questionable origin of the "three D's" and asked if he knew anything of the matter. Rather sheepishly, he admitted that he may have been the source. He had apparently attended a White House meeting at which then-National Security Advisor Condoleezza Rice had referred to the Pentagon, State, and USAID as each having important functions of (respectively) defense, diplomacy, and development. Excited, he had returned to the USAID office and told the senior staff about Rice's comment. Somehow in the hallways of USAID and then throughout Washington, the account rapidly mutated to become the article of faith that the 2002 NSS magisterially proclaimed the three D's.
I share this story not just as an updated political version of the old children's game of "telephone," but as an interesting angle from which to reflect on the proper role of development policy.
Much as I appreciate the sentiment behind the three D's, there are a couple of problems with it as a formulation. First, reducing national security to these three D's is incomplete. It leaves out other important pillars such as intelligence. And it implicitly reduces international economic policy to just development, while disregarding trade policy, commerce, monetary policy, and other dimensions of economic policy -- which are also important drivers of economic development. At the Pentagon, the favored acronym to summarize the pillars of national security power is "DIME" (Diplomacy, Intelligence, Military, Economics). It is less pithy than the three D's, but more complete and more accurate.
Additionally, listing "development" alongside defense and diplomacy blurs an important distinction. The latter two are primarily if not exclusively the domain of government policy. But development is as much if not more a private sector initiative than government-led one. In fact, some of the most innovative, effective, and enduring development efforts today are being driven by the private sector. And the vast majority of the 20th century's economic development success stories (e.g. South Korea, Taiwan, China, Singapore, India, Chile, Ireland, etc.) grew on the strength of developing businesses, not foreign assistance.
This is by no means to say that government has no role in development. In some development areas, government's role can be helpful; in other areas, it is indispensable.
The Obama administration's policies and priorities on development remain unclear and are no doubt just in the early stages of being debated and formed. Here are five suggested "don'ts" to bear in mind:
1. Don't neglect incentives and governance. Not all development aid is created equal, and aid that creates incentives for recipient countries to improve their governance has a much better chance of being invested well -- and not creating dependency or fueling corruption. Good governance is virtually a sine qua non for effective development, and in turn development programs should either be directly bolstering governance or at least not be undermining it. This is a perennial theme of Paul Collier's work, most recently in his review of Dambisa Moyo's new book Dead Aid: "My preferred alternative is to strengthen [aid's] potential for 'governance conditionality': aid agencies should insist on both transparent budgeting and free and fair elections."
It was in large part the inability or refusal of many traditional development agencies (including USAID) to prioritize governance reforms that led to the Bush administration's creation of the Millennium Challenge Corporation (MCC). A public-private hybrid, MCC incentivizes countries to make governance reforms first before any money will follow. As mentioned previously, early signs are encouraging that the Obama Administration will keep it going.
2. Don't listen only to aid debates among Western experts. Some new voices in the debate are coming from scholars, journalists, and business leaders who themselves hail from developing countries. People like Andrew Mwenda of Uganda, Dambisa Moyo of Zambia, and Iqbal Quadir of Bangladesh speak not just as critics of aid, but also from their own firsthand experience in developing commercial ventures or fighting corruption in their home countries. They are pioneering new models that work, and the insights they bring should be included in Washington policy deliberations.
3. Don't expect aid to produce growth. After five decades and some $2.3 trillion spent by the West on foreign aid, the majority of impoverished recipient countries have experienced little if any economic growth. Continuing debates over aid effectiveness serve as catnip for economists and will no doubt continue. But the prevailing assessments seem to be that aid has at best an inconclusive effect on growth, and at worst can actually impede growth.
4. Don't forget that aid can save lives. Though few would disagree with this statement, it can help focus otherwise sprawling development policy and resources where needs are most acute and on specific initiatives that have been shown to work. While massive aid programs have a dubious record on creating growth, some targeted and carefully crafted efforts can save lives on a significant scale. Most dramatic in this regard is the significant success of the President's Emergency Plan for AIDS Relief (PEPFAR) launched by the Bush administration in 2003. At $15 billion over five years it was not cheap, but it saved many lives and extended many more, and helped arrest the death spiral which threatened entire African nations. The Obama administration's professed support for this signature initiative is laudable.
5. Don't miss this chance to fix the system. A perennial debate in Washington is how to (re)organize the U.S. government foreign assistance system. The various disputes, proposals, and task forces can be mind-boggling, but almost all boil down to the basic question of whether development should be run by a stand-alone agency completely independent of all other masters, or whether development should be more closely integrated into the broader national security community.
About the only thing that nearly all parties agree on is that the current system -- a quasi-autonomous USAID partly governed by the State Department, an incoherent proliferation of Congressional earmarks mandating pet development projects, a growing but murky Pentagon involvement in foreign assistance -- doesn't work. This consensus, along with emerging political will to re-write the obsolete Foreign Assistance Act of 1961, gives the Obama administration a singular opportunity. A particular focus should be bringing more coherence to the dizzying proliferation of assistance programs, and more closely aligning development resources with foreign policy priorities.
Of course there are no easy solutions, but considering these "Five Don'ts" just might help make the "Three D's" work.
Shadow Government is a blog about U.S. foreign policy under the Obama administration, written by experienced policy makers from the loyal opposition and curated by Peter D. Feaver and William Inboden.