Why is U.N. recognition such a big deal?

The Obama Administration is working feverishly to prevent the government of Palestine from asking the United Nations for recognition as a state. The United States cannot prevent the asking, but has said it would prevent the success by vetoing the measure when it comes before the Security Council. Palestinian President Mahmoud Abbas has declared he will then appeal to the General Assembly for recognition, which he will certainly get. But the Palestinian Liberation Organization has had observer status at the United Nations since 1974, received formal recognition as a state by numerous countries since 1988. What, then, is the big deal of such recognition? 

President Abbas described the purpose as "negotiating from the position of one United Nations member whose territory is militarily occupied by another, and not as a vanquished people." Palestinian official Nabil Shaath said the appeal to the United Nations was the best of their options, which consisted of surrender, return to violence, or appeal to the international community. That is, they consider negotiations with Israel at a dead end. He dismissed Quartet envoy Tony Blair's efforts with "sounds like an Israeli diplomat," and called for "international responsibility toward the Palestinians."

For the last several years, Prime Minister Fayyad has been taking an alternative approach: creating competent government so that Palestine actually has a functional state. It's a significant difference. Our own country endorsed that approach, bilaterally contributing $600 million a year, including direct budgetary support to the Palestinian Authority and significant effort to training Palestinian security forces.

That aid to the government of Palestine was a very difficult sell to Congress, who feared we were building the military and paramilitary forces that would threaten Israel. The fear has so far not materialized -- well-trained and disciplined security forces in Palestine have been a stabilizing presence in the occupied territories, often working in conjunction with Israeli security forces. Fayyad's fait accompli strategy has worked well enough that Nabil Shaath now confidently asserts "a new culture of nonviolence." If only.

Using international institutions to threaten Israel is unlikely to make Palestine independent. For all the international sanctimony, who is going to force Israel to cede its territory, and commit to ensuring that territory's independence once arrived at?

What Abbas' gambit is likely to produce is an end to American funding and participation in professionalization of Palestinian security forces (already tenuous because of the April 2011 Fatah-Hamas power sharing agreement), and greater hostility to political engagement with the government of Palestine by the two governments it needs to make a Palestinian state a reality: the United States and Israel. It may also undercut the Palestinian case for a right of refugee return to lands in Israel.

The Obama Administration's veto in the Security Council will incur a high political cost to the United States. It is difficult to argue, as we have, for the independence of South Sudan, the dawn of representative governments throughout the Middle East, and the right of ethnic and religious enclaves to their autonomy while opposing the partition of Israel's territory along those lines. Moreover, as the last two administrations have supported a two-state solution, it leaves the United States in the awkward position of vetoing something we have said we want as the outcome. And then there's the man on the street question: if the Palestinians have a President and Prime Minister, don't they already have a state?

Arab countries will cry foul at our hypocrisy, making more difficult our partnerships in that important region. The Abbas government is surely banking on Gulf states filling in the financial assistance that the Congress will cut off; that may happen, although the record is patchy of fellow Arab states supporting Palestinians beyond rhetoric and Palestinians are already among the world's largest recipients of foreign assistance. There will also be the economic effect of tighter restrictions by Israel.

Skillful working of the U.N. rules could delay the vote until well into October, which would deny Abbas the grandstanding opportunities of the General Assembly convocation in September. That is probably the best the Obama Administration can hope for at this point. 

It is difficult to see Abbas' move bringing Israel to the bargaining table. Israeli fears of international persecution will be stoked at the prospect of their security being adjudicated in the International Court of Justice and the International Criminal Court. An overtly confrontational move like going to the United Nations will not soften Israeli hearts or government policies. Peace in Palestine depends fundamentally on Israel feeling secure enough to trade land for peace -- something it tried before and got burned on -- and reining in the settler movement.

At the end of the day, Palestinian aspirations would be advanced more by appealing for international support on the basis of the dignity of Palestinians creating their own state rather than having a U.N. coronation for one that may not be strong enough to support itself.

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Shadow Government

China's investing woes

For those who believe it is just a matter of time before China rides its commercial success to global hegemony, this week offered some compelling imagery: Europe, on its knees, reeling from political discord, rising bond yields, and bank downgrades; China, sitting atop its $3.2 trillion hoard of foreign exchange reserves, condescending to dictate the terms of European surrender.

Of course, Chinese Premier Wen Jiabao was not so tactless as to describe it as surrender. He actually expressed a "readiness to extend a helping hand and a readiness to increase (Chinese) investment in Europe." It wouldn't hurt, he went on, if Europe should decide to grant China market economy status, effectively lowering trade barriers.

Fareed Zakaria translates this into great power politics terms:

In a world awash in debt, power shifts to creditors. After World War I, European nations were battered by debts, and Germany was battered by reparation payments. The only country that could provide credit was the United States. For America, providing desperately needed cash to Europe was its entry into the councils of power, a process that ultimately brought a powerful new player inside the global tent. Today's crisis is China's opportunity to become a 'responsible stakeholder.'"

That's a twist on the original conception of what it meant to be a responsible stakeholder, but no matter. This interpretation falls apart as soon as one scratches at it a little.

The idea that a big infusion of Chinese cash would set Europe aright misinterprets the problems facing the Eurozone. Although the troubled countries there -- Greece, Ireland, Portugal, Spain, and Italy -- each took their own paths into difficulty, they are all in unsustainable fiscal situations. These require difficult choices about future taxes and spending, not just a quick bridge loan. Oddly enough, Zakaria recognizes this early in his piece, when discussing the implausibility of a "eurobond" solution, under which France and Germany would effectively co-sign loans taken out by their neighbors:

The minute such bonds are floated, Italy, Greece and the others would lose all incentive to make painful reforms; they could borrow all the money they need at German-subsidized rates, so why go through the dreary work of restructuring? The Germans know this -- hence their opposition."

Yet Zakaria plows ahead with the idea that a Chinese bailout would be qualitatively different than a German bailout. The Chinese are under no such illusions. Bloomberg quoted the Chinese premier:

Countries must first put their own houses in order," Wen said (Wednesday) at the World Economic Forum in the Chinese city of Dalian. "Developed countries must take responsible fiscal and monetary policies."

While there might be symbolic appeal to the idea of China riding to Europe's rescue, the reality would be less romantic: a relatively poor country would be sending its savings to a collection of wealthy ones. Moreover, to be useful, China would have to be willing to stockpile the Spanish and Italian bonds that are scaring everyone else. Jamil Anderlini of the Financial Times nicely documents Chinese reluctance to take on that role. 

In fact, it sounds as if the Chinese have already demurred. One adviser to China's central bank said explicitly the country should refrain from buying too many European bonds. While there are reports of Italians making sales pitches to lure Chinese investment, they do not seem to have gotten very far. Despite Wen's offer of a helping hand, the Financial Times story reports:

...analysts and European officials say China's actual purchases of Greek, Portuguese, Spanish and Italian bonds have been quite limited and its Euro-denominated foreign reserves are overwhelmingly invested in much safer German debt."

It is tempting to see China's foreign exchange reserves as a massive political war chest, but so far the Chinese have been unwilling to use the stash for anything more than token gestures. China seems to be acting more like a worried investor than an aspiring hegemon.

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