The Screaming Pen

Providing Global Insight, Context, and Perspective

Pocahontas, Marlin Brando, and Me

Shakey Chimes In

 

In 1979, Neil Young and Crazyhorse released “Rust Never Sleeps”, an album held in high regards by both critics and fans alike. From the narrative “Powderfinger”, to the transcendant “Pocahontas”, Young, using rust as a metaphor for inevitable deterioration –see 1981's Re-ac-tor– proves that he possesses the tools to ward off rust, namely his creativity and ability to reinvent himself. Young’s newest album, Living With War, is a powerful indictment of the Bush Administration, addressing the current state of American politics, all the while placing his grievances in an emotional and historic context that is a breath of fresh air, especially considering the mostly sad state of dissent among the newest generation of popular musicians. The resulting album, although lacking lyrical depth at times, is a powerful effort that should remain relevant long after the current administration leaves office, in the same way that his 1971 classic "Ohio", written about the massacre at Kent State, remains relevant today.


Hey Hey, My My, Rock and Roll Will Never Die

While some songs on Living With War, namely “Lets Impeach the President” read like a moveon.org pamphlet or a University of Vermont sociology major’s away message, others such as “Families” and “Roger and Out” leave much more to the imagination, effectively conveying the justifiable discontent that many Americans are feeling right now. Powerful protest songs, which usually convey emotion without being terribly forward, seem to be rare these days, especially among the younger generation. Many of the newer anti-Bush efforts coming from Generation Y, examples being Bright Eyes "When the President Talks to God" and NOFX's "Idiots are Taking Over", are lacking in both lyrical content and accuracy. They also seem to lack the "Folky" appeal that historically has transcended age and class. For generally better efforts, see Steve Earle's The Revolution Starts Now, and selected tracks from Bruce Springsteen's excellent Devils and Dust.

Conclusions

Neil Young's newest album, while not flawless, serves as an effective protest album that is also an artistic success. Living With War's lyrical imagery, combined with Young's vocals, provides the listener with an original, experienced voice. It is apparent that it is this experience, gained through both songwriting and a lifetime of careful observation, is what seperates Neil Young from his younger counterparts.

Advertisements

June 24, 2006 Posted by | Author: JPL, Bright Eyes, Dissent, Music, Neil Young, NOFX, Politics, The GOP, The Media, The War on Terror, Uncategorized, United States | 1 Comment

In Shallah

What to Make of Somalia

Until recently, Somalia had been relegated to the depressingly long list of squalid, penurious places so depraved that no one much hoped for any sunny result. The international community largely disregarded Somalia, because hadn’t they tried to help the country before? That forlorn hope ended gruesomely with Black Hawk Down and the messy withdrawal of United Nations peacekeepers in 1993, which additionally helped dissuade foreign intervention elsewhere in Rwanda a year later at the cost of 1 million lives. Spurned and with no supreme interests at stake, the world gave up on Somalia.

In the meantime, Somalia’s capital Mogadishu continued to be one of the most violent and dangerous cities in the world. A prime example of a “failed state,” murderous warlords ruled the country and governmental institutions were non-existent; there was no central bank, foreign aid groups ran makeshift hospitals, and Islamists operated private schools. The international community’s half-hearted efforts to help out centered on propping up an interim government, led by Abdullah Yusuf, that is only nominally in charge of the country. When trying to return to Mogadishu last year he was shot at, and forced to flee in opprobrium. Moreover, as a former warlord many Somalis think Yusuf an Ethiopian stooge, which is hardly a favorable association in a country that’s long been at odds with its northern neighbor.


Looking for a New Career?

Frustrated by rapacious warlords, anomie, and political impotence, Somalis turned to the Islamic Courts Union. The Union began as a collection of local courts settling routine grievances and grew as militias turned out to enforce decisions, eventually coalescing to challenge and defeat the warlords.

So far the judgment is mixed. The ICU’s militias are imposing order and making the streets safe for the first time in memory. Optimistic stories abound of shops reopening and citizens venturing outside without bodyguard or arms. Yet others fear the introduction of Taliban-style theocracy and extreme rectitude. Indeed, there are already rumors of movie theater closings and beatings dealt out to young lovers for frolicking in public. Ultimately, there are more questions than answers at the moment.

Outsiders’ main concern is, unsurprisingly, with terrorism. Yusuf for one is claiming that the ICU is filled with foreign jihadists, although doing so also favors his own agenda; ICU gains are wresting control of territory from his grip. Long before recent interest in the country it was rumored that the CIA was channeling aid to the warlords so long as they kept al-Qaeda out. The ICU does appear to have a varied makeup, ranging from moderate to opportunistic and extreme.

The next concern centers on intervention. Such thoughts are premature, however, because despite recent media interest in the country there remains no legitimate party capable of effective governance that is therefore worthy of support. Unfortunately for Somalis, intervention may come from Ethiopia, which reports indicate has been moving contingents towards the town of Baidoa where Yusuf is holed up.

More promisingly, the ICU and the interim government recognized each other today and signed a cease-fire mediated by the Arab League. Surprisingly perhaps, Somalia’s kismet may not be entirely gloomy: breakaway regions of the country – Puntland and Somaliland – are already safe by comparison. Reassuringly, the concession with Yusuf wouldn’t have occured were al-Qaeda running the ICU. If moderation prevails Somalis may at last be able to affect how their country is governed.

Other peoples are itching for the day when this opportunity is afforded them. In Egypt, Palestine, Saudi Arabia, Pakistan, the oil monarchies and beyond, volatility and years of conflict are likely to pass before extremism’s inability to build a healthy society is exposed. No matter others’ prior experience with this, oppressed peoples throughout the Islamic crescent can’t be told that currently oppressive regimes are better than an alternative they’ve never tried, especially when it claims to have all the answers and promises eternal salvation. Once given the chance extremism will be shown for the failure that it is, people will tire of listlessness, and they’ll search for a sensible alternative. Let’s hope Somalia has already reached that point.

– DML

 2006. All rights reserved.

June 23, 2006 Posted by | Africa, Country Profiles, Intervention, Politics, Somalia, The War on Terror | 2 Comments

The New Amsterdam?

Minorities Crime & Drugs in China

The meanest bowl of la mian – steaming sweet noodles and meat that renew life on a frosty winter evening – you’ll ever find will be in a Uighur restaurant. Fortunately for survival, the dish can be found for 40 cents in noodle stalls located in neighborhoods throughout China. Less auspiciously for Chinese authorities, the widespread presence of ethnic minorities is, combined with the drug trade, making domestic control increasingly harder to maintain.

People from the Xinjiang (the place) Uighur (the people) Autonomous Region, China’s most western province, are noticeably different-looking than the ethnic Han that make up around 95% of the nation’s population. On average, the Uighurs are taller, with sharper features and lighter eyes. They appear more like Central Asians as they are indeed from that corner of the world. Unlike the officially atheistic Chinese, they are Muslim and wear a doppa, or Uighur hat.


Visine: Gets the Red Out

Uighurs are overwhelmingly a friendly, hospitable, and decent people. As is inherent in human nature, however, a small minority exists with less savory motives and the will to resist. They also have legitimate grievances: Xinjiang was only really pulled into Beijing’s orbit in the 1950’s when the People’s Army arrived. In a successful effort to prevent independence – similar to that witnessed in former Soviet states with similar histories in Central Asia – China has been moving its citizens to the province by the millions in an effort to pacify the Uighurs through demography and breeding; the Han now make up 50% of Xinjiang’s population. Furthermore, widespread human rights abuses and the absence of choice in the political arena lead to increasing frustration and unrest among Uighurs. Beijing’s solidarity with America’s war on terror is frequently thought to stem from domestic desires in Xinjiang. Remember the screeching woman on the White House lawn during Chinese President Hu Jintao’s speech in April? She was Uighur, and never would’ve been heard in China.

Yet as long as the central government possesses a monopoly on force restive groups find it virtually impossible to challenge its rule directly. Instead, dissent will undermine the state through other outlets. With little stake in a system that discriminates against them, some minorities seek profit through street crime and drug smuggling. Noodle stalls and niu rou (meat stick) vendors often sell hasheesh alongside their edibles. During 2005 they became even bolder, approaching shaggy-looking foreigners on Shanghai’s main tourish promenade. They also sustain a healthy trade in stolen goods, lifting cell phones and wallets, and push imitation Marlboros.

An Unhappy Bunch

The Uighurs are not the only groups in China with varying loyalties: Tibet has long been a high-profile cause celebre, and the people in Southern China – Guangdong and Hong Kong – don’t consider themselves Chinese because they aren’t Han and don’t speak Mandarin, but Cantonese. Economic dynamism has led to relative calm from Hong Kongers who were more than a little uneasy when the People’s Army arrived as the British pulled out in 1997. And while they have very different aspirations and live under widely divergent conditions than the Uighurs, they are increasingly pushy about their freedoms. Mongolian, Laotian, and Burmese groups also call the PRC home.

Definitely Worth the Trip

Nationalities from far beyond Asia are developing a presence in the country as well. In May, in conjunction with the United States, China seized 300 pounds of cocaine from a Colombian narco-gang with local partners in Hong Kong and mainland China.

Even more disturbingly, less than a mile from Zhongnanhai – the Chinese leadership’s central headquarters in Beijing- lies Sanlitun Rd and its shady cousin, Sanlitun South. The former is a dull stretch of karaoke bars with awful beer that guidebooks tout as having the best nightlife around. Just a few blocks away, hidden on all sides by apartment blocks, emerges an expatriate college student’s dream: a dusty dirt road where animals roam freely, lined by tiny alleys with wild-west bars that stay open all night serving Coronas for 50 cents. Indeed, the latter looks more like Mexico than what you’d expect to find in the heart of the Chinese capital. Less benignly are the Nigerian lookouts that man each end of the street offering everything from marijuana to crack to the passerby.

In a country that places a premium on prying into both its own citizens’ and foreigners’ lives, combined with the blatant visibility of the practice, one wonders how it can exist without the authorities’ complicity. This is doubly so given that the Nigerians are legally in China on student visas. How they got the visas is not so difficult to discern: Nigeria is a significant source of Chinese oil imports, and thus the necessary immigration papers get filed rather quickly. Yet the opacity of the government means that its role in the drug trade – whether through tacit approval and taxation or active facilitation – cannot be ruled out. Do high-ups have knowledge of it? Could it be that the Colombian drug bust accomplished two tasks at the same time: cracking down on a rival gang without connections while showing America’s Drug Enforcement Agency that it’s a good-faith partner in the War on Drugs?

If so, not only is it grossly illegal and disingenuous but illogical. Both petty and violent crime are on the rise in China, and figures will continue to climb in the future. China’s leaders should be careful about the short-term profits they seek from the trade, as the networks it creates will undermine their authority and prove impossible to stamp out. Politically, the communist party exerts a firm hold on power, but increasing revolts – numbering 87,000 last year according to party reports – will lead to a day, unlikely to be soon, when this changes. When it does the Uighurs, Tibetans, Cantonese and others will hardly help slow its fall.

June 17, 2006 Posted by | Asia, Author: DML, China, Corruption, Country Profiles, Crime, Human Rights, Nigeria, War on Drugs | 2 Comments

Jenga!

How Instability in Pakistan could Create a Perilous Proxy War

With the death of Abu Musab al-Zarqawi yesterday in Iraq, we’re reminded that it takes just one accurately targeted missile or bomb to make life fleeting. While Zarqawi’s demise is celebrated in America and elsewhere, there are other areas of the world in which such precise targeting would cause not rejoicing but a major headache. Foremost among such places? Pakistan, and not just because of terrorists; the interests of the South Asia’s three largest powers are increasingly converging in what the Washington Post calls “the world’s most politically fragile nuclear power.”

Musharraf the Quisling

Al Qaeda and friends have tried and barely failed to knock off Pakistani President Pervez Musharraf several times. With Musharraf facilitating and aiding U.S. counter-insurgency efforts in the mountainous region along the Pakistan-Afghan border – and thus severely restricting al-Qaeda’s maneuverability – he’s mujahideen target number one. Leaflets distributed in tribal areas of Waziristan in May called for the “lions of Islam to kill the slave of Bush in Pakistan.”


Dude Needs a Chill Pill, and a sh*@l$!d of weapons

Were this to happen, the nature of a successor government looks far from set. As Musharraf himself came to power by coup d’ etat while circling Karachi in an airplane, and the general has gone on to consolidate personal control at the expense of democratic institutions, weak processes to name a successor could be easily subverted. Indeed, in a country in which only one in ten resident is favorably disposed towards America, popular sentiment might result in a noisy extremist assuming the reins of a nuclear-armed nation (thus the location of WMD must be an A-list priority for the CIA here; there have been reports of this). Nonetheless, a state of flux would emerge with foreign spy agencies forcefully vying for influence.

The Wolves Circle

And who would the meddlers be? Pakistan and Musharraf are centerpieces of America’s anti-terror strategy, and the CIA would obviously be supremely concerned with the outcome. Indeed, America has been ramping up efforts to keep Musharraf alive. India will be on the edge of its seat too. Since Britain abandoned its colonies after WWII, India and Pakistan – and Muslim separatists in Indian-controlled Kashmir – have been fighting over contested territory. India enjoys territorial advantage in the status quo, but spoilers and fanatics have prevented a formal peace and violence has spilled over, with sporadic attacks by armed-gunmen and suicide bombings in Delhi. Relations have thawed to an unprecedented degree since Indian Prime Minister Monmohan Singh took over, yet in the absence of a resolution the potential for disruption is ever-present. Moreover, both non-signatories to the Nuclear Non-Proliferation Treaty aim nuclear weapons at each other.

The third power in the region, China, is hardly a newcomer in Pakistan. Throughout the Cold War, China sought to offset hostility with India – witnessed by their 1962 border war – through friendship with Pakistan. During the 1990’s China exported weapons to the country and was vital to its acquisition of WMD. Of late, however, China has been further consolidating ties. In May, Pakistan placed an order for 150 Xiaolong fighter planes, a move that will replace the F-16 as the air force’s primary jet.


I Hear the Schools in the Neighborhood are Fantastic!

Before that, a February visit by Musharraf to Beijing saw the rapid-fire signing of 13 bilateral agreements on trade, security, and investment, which crucially included the announcement of Chinese aid in building an energy corridor through Pakistan that would supply China with imports of raw materials. China will finance the expansion of a port on the Pakistani coast at Gwadar, adding nine more berths, an approach terminal, and storage facilities. An oil and gas pipeline would then be built to ship materials from the Middle East directly to China’s western provinces, bypassing the (U.S. controlled) Malacca Straits. Never mind what this says about the domestic implications for minority and outlying areas through which the pipeline would cut – Xinjiang in China and Baluchistan in Pakistan – the external implications are clear: China-Pakistan ties are surging.

But They Sometimes Hunt in Packs

That Musharraf will go –in the near future due to assassination, bringing the return of insecurity, or later on because of time and age – is not in question. Neither is the reality that when he does, China, India, and the United States (with Iran potentially in the mix) will see their interests put to the test. Whether this engenders hostility and confrontation or cooperation is unclear; the signals, however, are not entirely inauspicious. China and India signed a border accord in April and have also just announced a $2b joint bid to develop a Kazakh oil field in an effort by the “world’s two fastest-growing major economies to avoid competing with each other,” according to the China Daily.  America and India agreed to a major nuclear deal in July last year. China and America have reached a consensus – although likely short-lived – on Iran, another rocky concern. Additionally, all three countries will be lothe to see WMD fall into terrorist hands or their economic interests threatened.

Against this backdrop, the most likely scenario is the emergence of another clique from the armed forces, commanding no popular support but receiving logistical sustenance from America, China’s tacit approval, and India’s watchful eye. This would be a stop-gap measure that leaves corrections between the people’s volition and political control for another day, yet is far better than allowing extremists assume control. Unfortunately, such has been the argument for supporting dictators everywhere for the past fifty years, always leaving the patriarch on the wrong side of history and fostering yet more grievances to be paid for in future.

– DML

 2006. All rights reserved.

June 10, 2006 Posted by | Asia, Author: DML, China, India, International Relations, Iran, Middle East, Nuclear Weapons, Oil, Pakistan, Politics, United States, WMD | 3 Comments

Chicken the China, the Chinese Chicken

A Changing Tide, the Spigot is Tightened

Since hitting an all time high on May 8, the MSCI Emerging Markets Index has fallen over 20%, as inflation fears and global monetary tightening begin to mop up the loose liquidity that has helped emerging market exchanges, along with other riskier assets, achieve strong annualized gains over the past few years.

With China experiencing staggering economic growth, one would think that the Chinese Stock Markets would have been on the winning end of a several year long emerging markets run. In fact, on June 6, 2005, while many Asian markets were continuously breaking multi-year highs, the Shenzen Compositie hit a six year low, puzzling amateur investors across the globe. Possible answers to China’s equity market conundrum can be found by taking a closer look.

The Times, they are a Shenzen

The Late Bird Gets the Sub Par Market Returns

China, a late bloomer in the Capital Markets game, did not have a stock market until 1990, and not a single Chinese company was listed abroad until 1993. As of 2003 -the latest information thescreamingpen.com could muster- over 66 million Chinese citizens participate in the domestic equity markets, with only 35 companies listed as private. It is estimated that at least two thirds of the shares listed on the Shanghai and the Shenzen, China’s two largest stock markets, are owned by the government. It is apparent that investors, especially those abroad, are hesitant to invest in companies whose balance sheets, among other things, could be compromised because of government involvement.

The Reforms of 2005

Realizing that capital inflows are essential to sustainable growth, the powers that be in China undertook some important reforms in 2005, including:

  • Public listing of the “Big Four” Chinese banks on overseas exchanges
  • Selling large stakes of domestic banks to international investors, which will result in increased capital inflows and much needed international banking expertise.
  • Reform of China’s A share market, which has resulted in 1/3 of China’s A shares being tradable.
  • The removal of capital gains taxes on securities held by foreign investors
  • The issuance of sovereign “Panda Bonds”, issued in Chinese currency.

Outlook and Conclusions

With the initiation of a global tightening cycle, it is possible that China may have missed out on the latest emerging markets rally. The good news is that China’s Eleventh Five Year Plan, which began on January 1, 2006, contains many provisions that aim to reform China’s financial sector even further. Hopefully these provisions are enacted.  This would allow China to efficiently handle foreign inflows of Capital, as well as wealth created at home.  If China continues down the road of financial sector reform, it will be a much needed step on the path to possible market maturity.

*Look for an overview of the Indian Financial sector reform in the coming days.

-JPL

Links of Interest

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR2006060801493.html

thescreamingpen.com is not liable for any loss resulting from any action taken or reliance made by you on any information or material posted by it. You should make your own inquiries and seek independent advice from relevant industry professionals before acting or relying on any information or material which is made available to you pursuant to thescreaminpen.com’s information service, as it may not prove accurate. You rely on this information at your own risk. thscreamingpen.com is not for profit.

June 9, 2006 Posted by | Asia, Author: JPL, China, Chinese Stocks, Corruption, Emerging Markets, Globalisation, Investing, Politics, World Markets | 1 Comment

An Awkward Two-Step

A Beginner’s Guide to the World’s Most Important Relationship

“Which is best chemistry graduate school in England? Who is your favorite NBA player? How many centimeter are you?” Launched rapid fire by the throngs of residents that swallow any native speaker brave enough to wander into one of China’s many “English corners” – plazas and parks where Chinese meet to practice speaking the language on Saturday nights – the questions begin to take on the air of a personal press conference. Any lone Westerner at one of these can expect a similarly exhilarating evening, replete with overly eager late-20’s gentlemen popping into view randomly, making googly-faces from behind the rows of questioners for effect. Indeed, the curiosity and friendliness greeted foreigners here is hard to imagine for outsiders who rarely think of China without the menacing C-word directly preceding.

As the world’s largest and most visible Communist country this is perhaps inevitable. Much U.S. press coverage of China relates to textile quotas, exchange rate policy, and corporate takeovers; complicated issues more easily made exoteric by portraying the country as hostile, red, and monolithic. Avian bird flu, tense relations with Taiwan and Japan, human rights, and an intense military build-up are no less frightening.


Remembering her Conjunctions, and with Plenty of Questions for You

This misunderstanding by no means runs only one way. The xenophobic atmosphere that festered in China during the 1960’s and 70’s persists still, marooned by intellectual debates firmly quashed in public, on-line, and in the classroom. Problems with the U.S. media there may be, but American news organizations provide reporting less fettered by direct state control and censorship. Indeed, Chinese perceptions of America are influenced more heavily by the professional basketball player Dwayne Wade and the television sitcom Friends – wildly popular in Shanghai and Beijing– than through the cycle of accurate reporting, solid analysis, and measured reflection.

A fundamental misconception underlying common foreign discussion of China, but lacking in reality however, is that a massive reservoir of pent-up ill will exists towards America. In fact, many Chinese still proffer the old saying that they “dislike the government, but like the people” of America; a statement now obsolete in many parts of the world that abhor both. Widespread membership in the Communist Party primarily serves cadre’s bureaucratic and individual career objectives rather than zealous anti-capitalist indoctrination. And soldiers’ marching drills in Tiananmen Square are today largely equitable to those at Arlington National Cemetery. Scare-mongering photos of such are better left to tabloid articles covering North Korea.

Policy-makers on both sides have to move past these stereotypes if they are to successfully manage China’s emergence on the regional and national stage. Washington’s principals must also recognize that while Joseph Nye’s “soft power” is ubiquitous throughout the mainland and its peasants and laborers have plenty of bread and butter grievances, they’re hardly clamoring for a democratic revolution. President Hu and company rightly take serious America’s tough talk – a real-politic tendency regulated by its superpower status in a rocky unipolar world – but need to understand that an adversarial relationship is not the intended result, but the concern.

The necessity of maintaining peace is consequently pressed upon by Beijing’s legitimately unnerving actions: an exponential increase in military spending with no obvious military threat; bellicosity towards Taiwan and Japan; and political cover and economic assistance for unsavory regimes from Central Asia to Africa to Latin America. How leaders are able to deal with these issues will likely determine the answer to another question frequently posed at China’s English Corners: “Will there be peace between America and China?”

– DML

 2006. All rights reserved.

June 6, 2006 Posted by | Asia, China, Country Profiles, International Relations, Politics, The Media, United States | Leave a comment

This is Chess not Checkers That’s a Warning Shot

The Deadly Paradox of the Big Six’s Iranian Accord

It’s hard to suppress feelings of glee upon reading the headline “Six World Powers Agree on Iran.” This is the exact foundation that any diplomatic solution to the Iranian quandary must be based upon: a united international alliance providing Iran with a choice between carrots if it agrees to halt uranium enrichment and sticks if it doesn’t. A common diplomatic front brings the world one step closer to the chance for a peaceful solution; however, if the chance proves illusory it will also bring the world one step closer to war.

In the run up to Iraq in 2003, there were many arguments against the U.S. invasion, many of which could be reasonably discounted at the time. War is an extreme last resort, but the argument that it should never be used is flawed: when squared off against a murderous dictator conflict can become justifiable. Nor was U.S. belligerence a stand alone sound argument. Despite bellicose rhetoric from George Bush, Saddam Hussein had violated 18 U.N. resolutions and was sidestepping weapons inspectors. The most valid pre-war argument against going to war: that the Bush administration hadn’t exhausted all diplomatic options.


It’s your Turn, Khameini. Whatcha Gonna Tell ’em ya Big Bearded Fella?

The Diplomacy this Time

The Bush administration seems to have painfully learned how to go about building its case without alienating virtually every non-holder of an American passport. It first relied on negotiations led by the “European 3” – Britain, France, and Germany – during which Iran acquiesced to halting enrichment for a time. But Iran knew that the European trio’s silent partner held the key to the only concession vital to its survival: security. So Iran once again began work on its centrifuges.

Steadily advancing its nuclear know-how, Iran’s fiery president Mahmoud Ahmadinejad recently sent an 18-page letter to George Bush, which was touted as being the first direct communication between the two nations since the 1979 hostage crisis. Accustomed to years of frosty, static relations, Secretary Rice made a knee-jerk announcement that the letter suggested nothing new, and perhaps it didn’t. Then just this week Iran called for direct talks with America, which in the absence of a U.S. response gave Iran the impression of being patient and reasonable. So until the United States replied to these overtures – no matter the political or public relations intentions behind them – Iran would appear to be holding out the olive branch. America had to respond.

With the six-party agreement on Iran it did, and with perfect timing to boot. Iran will be presented with a package of incentives in return for a “verifiable” halt to its enrichment activities. If it continues to pursue nuclear weapons further Security Council action could follow. Clearly, Iran has to make the next move, and crucially, America will appear to have dutifully followed a diplomatic approach supported by the Security Council nations.

This appears to be good news for advocates of multilateralism and supporters of a peaceful, diplomatic solution. It’s good news for those who wanted Europe to face up to legitimate security threats, which due to pride and matters of the heart it could not with Iraq. And it’s good news for those who want to see more than obstructionism and the unbridled pursuit of resources from Russia and China.

The Ball’s in Their Court

Thus, the question now becomes, “What will Iran do?” The preferred choice is for it to accept the incentives offered and abandon its desire for nuclear weapons (merely nuclear energy, it says). This is possible but would likely only come in the form of a comprehensive strategic agreement leaving Iran assured of its own security. Observers should also note that the Iranian issue is not confined to uranium enrichment: Iran plays a powerful role in neighboring Iraq, has long supported insurgents in Lebanon, Palestine, and elsewhere; and exercises more power than many realize. It recently won backing for its nuclear program from Indonesia, and China and Russia usually provide solid political cover. These will have to be addressed.

The true test of the “Big Six’s” solidarity will come if Iran decides to balk: will the world support increasingly tough sanctions, or will views diverge? Governments around the world – now realizing that true threats must be confronted – may be more likely to follow, because they too have played an active diplomatic role this time round. Despite this, these countries’ citizens will have seen Iraq and the gruesomeness of war and are likely to feel much the same as they did before Iraq.

Will Iran stall, varying negotiations with concealment? Probably. This much is true, however: until now, with a dire situation in Iraq and virulent anti-Americanism everywhere, talk of military action against Iran seemed distant. Yet now, if diplomacy is given a fair chance and fails nonetheless, Iranian rejectionism will leave us on the precipice of Iraq redux. And this time – no matter the political logic beforehand– military action would be no more likely to create a stable or friendly or democratic country out of Iran than Iraq.

– DML

 2006. All rights reserved.

Note: The Iranian situation is highly fluid at present, with half a dozen diplomatic developments and announcements (see links below) being made in the past few days alone. Contrast this with the lack of bilateral contact that existed for the past 27 years between the two countries. As stated above, this will either lead to a breakthrough or a serious deepening of the standoff. Keep watching.

U.S. Offers to Join European Three in Talks with Iran
Iran Welcomes Talks, Rejects U.S. Conditions
Iran Considers Offer from Big Six
Washington Post Analysis

June 2, 2006 Posted by | Asia, Author: DML, China, Europe, France, Germany, International Relations, Iran, Iraq, Middle East, Nuclear Weapons, Oil, Palestine, Politics, Russia, United States, WMD | Leave a comment

Dude, Where’s My W-2?

Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

-The Beatles

 

A Possible Impetus For Change

Last fall, the international media focused much of its attention on European elections that promised to shake up the old European order. For those seeking real economic change in the form of market liberalization, those elections were partial letdowns. For instance, many analysts believe that a clear-cut Merkel victory in Germany could have provided the impetus necessary for much needed economic reform and market liberalization in other Western European countries. Following the formation of a grand coalition in Germany, it appears that constant compromise may prevent Angela Merkel, the new Chancellor of Germany, from carrying out her intended reforms. It is also uncertain what direction Poland’s newly elected center right coalition government will take the country. Before coming to the conclusion that all hope is lost regarding Western European change, one must consider an economic force that has been slowly moving westward, originating in the tiny nation of Estonia. The flat tax, which applies a constant rate of taxation, is exerting economic pressure in the form of tax competition on the high tax economies of Western Europe, slowly forcing economic change in those countries.

Reactionary Yet Opportunistic

From a historical perspective, it is interesting that many of the countries who have enacted constant rates are ex-communist nations who have voluntarily moved in the opposite direction of Soviet central planning, the failed communist system that attempted to control every aspect of economic activity. Much like the iron curtain before it, the flat tax movement and free market values are slowly moving westward, with Greece facing a crucial decision this year regarding the adoption of a 25% flat tax. In the recent Polish election, the pro flat tax Civic Platform Party came in a close second, and will now share power with the victorious Law and Justice party. In Germany, the early election campaign of Angela Merkel featured a proposed finance minister who was an outspoken supporter of a flat tax. Unlike the spread of communism, however, the flat tax movement is being voluntarily implemented.

Mail Order Brides are no Longer Estonia’s Chief Export

 

The flat tax system, which uses a single tax rate that is applied to wage earners and corporations that begins taxing after a certain income threshold is reached, has been successful in several nations beginning in 1994, when Estonia introduced a 24% tax rate. By attracting business from abroad, Estonia’s economy grew at double digits in 1997, and has averaged about 6% GDP growth per year since. Russia, a nation whose complicated tax code caused widespread evasion, instituted a flat tax in 2001. It is estimated that in the years leading up to the 2001 flat tax, Russia’s biggest corporations ignored 29% of their tax obligations, while 63% substituted goods or services instead of hard currency. This made Russia susceptible to debt defaults as their coffers reached record lows. In 1998 Russian government revenues were 12.4% of GDP. By implementing a simplified tax code, Russia eliminated loopholes and increased its revenues in real terms by 28% in 2001, 21% in 2002, and 31% in 2004.

Opponents of a flat tax, who believe that a flat tax is meant to line the pockets of the rich and will result in lower government revenues, fail to realize that flat tax systems do not tax earners below a certain threshold, allowing the poorest workers to be exempt from taxes. The revenue question is answered by looking at Russia, a nation who learned that the best way to get higher revenues is to give people more incentive to report their taxes by keeping tax rates low. Ideally, a low tax rate would result in more wealth creation, which could generate even greater revenue. Remember, the examples cited in this article are from countries that had an insanely restrictive, command style tax code. The flat tax is also making Western Europe increasingly uncompetitive, as businesses and investment dollars flow into Eastern Europe.

Implications

In response to widespread eastern European acceptance of a flat tax, Western Europe is beginning to consider tax reform. According to the Economist, Germany has already made plans to cut its corporate tax rate from 25% to 19%, and the in Britain, the Opposition Conservatives announced on September 7, that they would set up a panel to study a flat tax proposal. As investment dollars and businesses continue to flock to Eastern Europe from Western Europe, it will be increasingly apparent to Western Europe that in order to maintain its standard of living, it will need to make radical changes in its tax policy.

Conclusions

It will be interesting to see how the Western European nations deal with tax competition from the east. It is apparent that the increasingly uncompetitive Western European nations will need to modernize their economies in order to compete. It will also be interesting to see how the continued success of an Eastern European flat tax effects the current tax situation in America, where our own tax code has broken the nine million word mark.

-JPL

Links of Interest

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/31/AR2006053102043.html

 

May 31, 2006 Posted by | Author: JPL, Emerging Markets, Europe, Flat Tax, Germany, Globalisation, Politics, Russia, Unemployment, World Markets | 16 Comments

Still the Shining City on a Hill?

Human Rights in the Pursuit of Terrorists

For twenty years after 1979, the U.S. Congress annually passed “Most Favored Nation status” with China. The legislation gave China access to the American market – and vice versa – under the same preferential tariff regime as many other counties. Chinese and U.S. business groups lobbied hard for its approval, and during the summer of 2000 they secured an even greater goal: passage of Permanent Normal Trade Relations (PNTR), which locks in MFN status for good and precludes the need for yearly review of U.S.-trade relations with China.

Because the PNTR debate was fought largely between two groups, its codification crystallized an important development in U.S.-China relations. Groups critical of China, many of which railed about human rights, used the MFN debate each year to shed light on China’s treatment of political prisoners, ethnic minorities, and Falun Gong members. PNTR’s passage, however, was a clear victory for business. Witness Chinese President Hu Jintao’s April visit to America that focused almost entirely on trade and security problems like Iran and North Korea. Business and war may disturb ties, but bickering over rights between the two powers will not: tellingly, mention of human rights is found reluctantly only after phrases like “also on the agenda.”


Doing America Few Favors

Indeed, advocates for human rights must be a grim lot these days. From a United Nations report calling for the closure of Guantanamo Bay, the Abu Ghraib scandal, rumors of secret detention facilities, handing terror suspects to other countries for torture, and extrajudicial renditions, the United States has seen its image as the international standard-bearer of human rights and justice slip away.

The “war on terror,” say America’s leaders, will last for many years, even decades. This is because an individual’s ability to attack the country will remain no matter what political developments occur. As such, it is worth asking whether – with no end in sight – the persistence of the conflict should cause the United States to turn its back on the ideals that won the support of people everywhere for decades, and therefore helped achieve foreign policy objectives that may have otherwise been unattainable.

True, the nature of terrorism poses new challenges that will require novel solutions. The catastrophic potential of terrorist attacks will sometimes require harsh preventative measures and there are certainly terrorists (among an unknown number of innocents, as evidenced by the fact that the Pentagon has released some of the detainees) in Gitmo. The way out of these challenges is not easy or obvious; yet it is vital that America’s leaders make a vigorous effort to stop terrorist attacks in a manner that is more consistent with the country’s professed values. A solid first step would be legal proceedings against those being held at Guantanamo and closure of the prison camp there. Fortunately, President Bush himself announced such sentiments in early May.

The Stakes are High

Like it or not, if America cannot better handle the balance other peoples will continue to find America morally indistinguishable from less savory characters like Chavez, Ahmadinejad and Putin. Therefore, leading by example – while immensely difficult – is thoroughly essential because U.S. behavior has implications not only for potential terrorists but everyone living under brutal regimes that benefit from a lax international human rights environment. Demonstrating proper behavior is in fact the only way to advance the cause, as aggressive promotion of rights in other countries can help justify misguided movements (see “neocon”) and cannot be allowed to engender conflict among major powers (i.e. U.S.-China relations). It’s time for the country to overcome the conservative-liberal divide and recognize that upholding human rights at home is in the U.S. interest; if it doesn’t, anti-Americanism will become endemic, American soft-power weakened, and U.S. influence in the world debilitated.

– DML

 2006. All rights reserved.

May 30, 2006 Posted by | Author: DML, China, Human Rights, International Relations, Politics, The War on Terror, United States | 5 Comments

Sin Padre, Thy Wither

How Venezuela, Iran, China, and Russia are Undermining Human Rights Everywhere

If you’re ever feeling overly happy and want to come down a bit, take a survey of the human condition around the world. Among a sea of rights violators in Africa, you’ll find the worst cases in Darfur, the D.R. Congo, Somalia, Eritrea, and Cote d’Ivoire. Robert Mugabe is systematically destroying Zimbabwe. The Middle East has long seen gross injustice and political repression in Syria, Iran, Palestine, Jordan, Egypt, and Saudi Arabia. Turkey has its Kurdish problem, which flares up from time to time when it feels Europe slipping away. To the north, Russia fights endlessly in the Caucuses and forces compulsory military service on its poor, dehumanizing a generation of young men with beatings and forced labor. Political opponents are jailed and attacked. Andijan and the “Stans” of Central Asia, Azerbaijan, Pakistan, Nepal, Burma, and North Korea. Colombia, Cuba, Venezuela, the favelas of Brazil and the poverty of Bolivia and Peru. The folks at Human Rights Watch are depressingly busy.

Depends on How You Look at It

Yet in spite of this dispiriting image and the gruesome confrontations between riot police and protesters caught on tape for everyone see, the news is not all disheartening. To be sure, most of these places were never free, open, or safe. It is only because of modern communication and the existence of vociferous groups like Human Rights Watch and Doctors Without Borders that one can list the egregious examples above. And there are also examples of places where life has improved: autocratic dictators are out in Indonesia, the Philippines, Chile, South Korea, Spain, parts of eastern Europe, and the states of the former Yugoslavia. Something may finally be done about Darfur. And perhaps most importantly, great power war has been avoided for sixty years.


Sportily Taking in a Soccer Match

So between the good news and the bad, what the world needs is a state or organization exerting pressure on countries to uphold human rights. Near-inherent anti-Americanism means that most of the world no longer views the United States as this model, with consequences for both equality and U.S. objectives of every stripe. The United Nations is a misunderstood body that is limited here because it is merely a collection of self-interested states. Europe espouses many of the right ideals but is mostly focused on itself, often has an uncomplicated view of the world, and has its own internal conflicts to settle.

What the world does not need is a provider of money and material through which outcast regimes can sustain themselves in the face of international pressure. During the Cold War the Soviet Union was this source and when it broke apart Syria, Cuba, and other former dependents found it far harder to resist outside pressure. Desiccation of patronage led to the signing of the Oslo peace accords between Israel and the Palestinians, largely because of a trickle down effect: without Soviet support Syria couldn’t continue to fund Palestinian resistance on par with American aid to Israel. Syria is weak now for this reason; without oil so too would be Iran and other former Soviet clients.

With Friends Like These

But today there is oil, and there are several antagonists capitalizing on anti-Americanism and spreading their largesse with debilitating effects for human rights. Hugo Chavez of Venezuela is using oil profits to destroy institutions within his own country, promote populist movements (see the election of Evo Morales), and reportedly to fund resistance in Colombia. Fidel Castro has found renewed sustenance through friendship with Chavez. Iran – crucially demonstrating that the Iranian issue encompasses more than just the nuclear dispute – is channeling aid to Hamas in Palestine and trying to build ties from Indonesia to Venezuela. In an effort to isolate Taiwan, China is active in Africa (Zimbabwe, Sudan), Asia (North Korea, Burma), and to a lesser degree Latin America. In unison with Russia through the Shanghai Cooperation Organization (SCO), China helps prop up Central Asian dictators.

Patronage from all of these states allows rights violators to defy international norms while finding support elsewhere and thus avoiding isolation. Minatory characters everywhere find it easy to become eloquent, usurp valid arguments, and draw more reasonable people to their side (see Ahmadinejad’s letter to George Bush). Without a paragon of virtue the debate becomes muddled, the message unconvincing, and gross human rights violations overshadowed.

– DML

 2006. All rights reserved.

May 30, 2006 Posted by | Africa, Author: DML, China, Darfur, Foreign Aid, Hamas, Human Rights, Iran, Israel, Korea, Middle East, Oil, Palestine, Politics, Russia, Saudi Arabia, Sudan, United States, Venezuela | 1 Comment