Showing posts with label political instability. Show all posts
Showing posts with label political instability. Show all posts

Saturday, October 12, 2013

Arab Countries in Transition - Economic Outlook and Key Challenges - Deauville Partnership Ministerial Meeting

Arab Countries in Transition - Economic Outlook and Key Challenges - Deauville Partnership Ministerial Meeting
IMF Policy Paper, October 10, 2013
http://www.imf.org/external/pp/longres.aspx?id=4818

Summary: In an environment of heightened socio-economic tensions, regional insecurity, and strained public finances, the Arab Countries in Transition (ACTs) 1 face the difficult task of delivering on the expectations for jobs and growth. Despite patchy improvements in some countries, economic growth remains subdued, private investment is weak, and external and fiscal buffers are running low. Fostering social cohesion and avoiding a downward spiral of economic and political malaise calls for urgent implementation of economic reforms and coordinated support from the international community.


Regional economic outlook and key challenges (edited)
In an environment of heightened socio-economic tensions, regional insecurity, and strained public finances, the Arab Countries in Transition (ACTs, Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen) face the difficult task of delivering on the expectations for jobs and growth. Despite patchy improvements in some countries, economic growth remains subdued, private investment is weak, and external and fiscal buffers are running low. Fostering social cohesion and avoiding a downward spiral of economic and political malaise calls for urgent implementation of economic reforms and coordinated support from the international community.

A. Background and recent developments
Three shocks undermine sentiment. The economic situation in the ACTs has become increasingly difficult amid a still weak external environment, rising regional tensions stemming largely from the civil war in Syria, and heightened domestic political uncertainty in many countries, at times accompanied by violence. As a result, private sector sentiment has worsened, private sector activity remains subdued, and private investment, particularly foreign direct investment, has slowed.

Growth is low and unemployment is rising. Average growth (excluding Libya) is expected to inch up to 3 percent in 2013 from 2½ percent in 2012, with the marginal pick-up reflecting a nascent recovery of tourism and exports, increased post-crisis capacity utilization, and a post-drought rebound of agriculture in Morocco. This moderate growth is not generating the jobs needed to stem the rise in the number of unemployed, which has increased by more than 1 million people since early 2010.

Progress with reforms has been uneven, further straining public finances. Budget deficits remain elevated, averaging 9 percent of GDP in 2012(excluding Libya) owing to weak revenue collection and weaker-than-expected fiscal consolidation efforts. In Egypt and Jordan, high levels of public debt (more than 80 percent of GDP) further limit fiscal space. Meanwhile, inflation pressures have begun to ease in most ACTs helped by lower food and energy prices and weak demand. Foreign exchange reserves have stabilized for now, reflecting a gradual narrowing of current account deficits and, notably in Egypt, external financial support. Nevertheless, reserve buffers remain low relative to the underlying vulnerabilities.


B. Short-term outlook
Private investment and growth are anemic. The current challenges faced by the ACTs are likely to persist over the near term. Revitalizing private sector activity will require political stability and strong policy efforts to improve the business climate. This will take time. Meanwhile, we expect only a gradual recovery in 2013–14, with average GDP growth at about 3 percent. Inflation is expected to stabilize in the upper single digits and the current account and fiscal deficits could begin to narrow gradually, but will remain elevated. Consequently, public debt and unemployment in most countries are likely to continue creeping up.

Significant downside risks. Risks to this already sobering outlook are significant, and mostly to the downside. The Syrian crisis, recent domestic political tensions, and incidences of increasing violence have the potential to intensify further and bring growth to a halt. This would have strongly negative consequences for labor markets in the region. First, an increased flow of refugees could overburden budgets of Syria’s neighboring countries, while damaging trade, confidence, and growth in the region more broadly. Equally damaging could be setbacks to the political transitions as well as an escalation of violence in Libya, Tunisia, Egypt, or Iraq, which would further delay economic reforms and deter investment. In some countries, new disruptions to energy supplies (for example, oil production in Libya or Jordan’s gas imports from Egypt) would take a toll on fiscal and external positions. Finally, and with somewhat lower probability, weaker global—notably European—growth could slow recovery of exports and foreign inflows.

Thursday, July 18, 2013

Conspiracy Theories Permeate Pakistani Society

Pakistan Taliban Lambastes Schoolgirl for U.N. Speech. By Saeed Shah
Anti-Western View Shown in Verbal Attack Permeates Pakistani Society
The Wall Street Journal, July 18, 2013, on page A7
For full article: http://online.wsj.com/article/SB10001424127887323309404578612173917367976.html

ISLAMABAD—Malala Yousafzai, a teenage campaigner for girls' education who was nearly killed by Pakistani militants, was feted at the United Nations last week. Here at home, however, she has been widely portrayed as part of a Western conspiracy against Islam and the developing world.

A 1,800-word open letter in imperfect English by Adnan Rasheed, one of the most feared Taliban leaders in Pakistan, outlined these conspiracy theories Wednesday, describing the type of secular education that Ms. Yousafzai championed as "satanic" and arguing that the U.N. wanted to "enslave the world."

Even as the 16-year-old girl is celebrated abroad as a hero, such radical views are becoming mainstream in Pakistani society, where even commentators hostile to the Taliban widely portray Ms. Yousafzai as a pawn of the West or even a CIA agent.

While Pakistanis usually condemn the violence of the Taliban, the paranoid worldview of the group has soaked deep into society, making the fight against extremism much more difficult. Many in the country, for example, still refuse to believe that Osama bin Laden was found living here in 2011.

"Public opinion is confused about the Malala issue. Many people hate Malala," said Zubair Torwali, a newspaper columnist from her home valley of Swat. "Anything here in Pakistan related to the West or America becomes a thing of conspiracy. The Taliban's ideology is flourishing in Pakistan. It is victorious."

Pakistani society is also influenced by the support that the military has long given to jihadist groups. More recently, the backlash over nearly a decade of U.S. drone strikes, and over the unilateral American raid to kill bin Laden deep inside Pakistan, has created a virulently anti-Western culture that sees spies everywhere.

Ms. Yousafzai narrowly survived an assassination attempt by the Pakistani Taliban in October last year, when she was shot in the head from point-blank range.

When aged just 11, Ms. Yousafzai became a powerful voice against the Taliban through a diary she kept of the extremists' takeover of Swat Valley, in northwest Pakistan. The diary was broadcast by BBC radio in 2009. Following the shooting in Swat, she was airlifted for treatment in England, where she now lives with her family.

Ms. Yousafzai, brought to the U.N. headquarters in New York to mark her 16th birthday, said in a speech Friday that "extremists are afraid of books and pens."

Mr. Rasheed's open letter to Ms. Yousafzai was the first reaction to these remarks by the Taliban leadership.

Mr. Rasheed began the letter by saying that he wishes that the attack on her had "never happened." Then, however, he went on to justify it with detailed arguments, showing, if there were any doubt, the dangers that Ms. Yousafzai would face if she returned home.

"Taliban believe that you were intentionally writing against them and running a smearing campaign to malign their efforts to establish Islamic system in Swat and your writings were provocative," he wrote.

Mr. Rasheed denied that the Taliban were against education—though he went on to spell out the movement's opposition to the "satanic or secular curriculum," which is a "conspiracy of tiny elite who want to enslave the whole humanity for their evil agendas in the name of new world order."

He advised Ms. Yousafzai to return to Pakistan and enroll in a madrassah, or Islamic seminary.

"Your propaganda was the issue and what you are doing now, you are using your tongue on the behest of the others and you must know that if the pen is mightier than the sword then tongue is sharper…In the wars tongue is more destructive than any weapon," the letter said.

When the shooting happened, there was an unprecedented outpouring of public sympathy for Ms. Yousafzai, and anger against the Taliban, inside Pakistan.

However, since then, opinion has hardened against the girl. Last week, on the local Pakistani language versions of the BBC website, in the national language Urdu and the Pashto spoken in her native Swat, the majority of comments were venomously against the schoolgirl. Some even described her as a "prostitute."

Detractors seized on the assistance and attention Ms. Yousafzai received from Western governments and media after the attack. Her appearance at the United Nations seemed to confirm the view that she was somehow working on a Western agenda.

Even Shahbaz Sharif, chief minister of the largest Punjab province and brother of Prime Minister Nawaz Sharif, issued an oblique criticism of Ms. Yousafzai's speech, posting on his Twitter account that it "seemed to be written for global consumption."

Wednesday, July 10, 2013

Riot after Chinese teachers try to stop pupils cheating. By Malcolm Moore

Riot after Chinese teachers try to stop pupils cheating. By Malcolm Moore
What should have been a hushed scene of 800 Chinese students diligently sitting their university entrance exams erupted into siege warfare after invigilators tried to stop them from cheating. The Telegraph, Jun 20, 2013
www.telegraph.co.uk/news/worldnews/asia/china/10132391/Riot-after-Chinese-teachers-try-to-stop-pupils-cheating.html

The relatively small city of Zhongxiang in Hubei province has always performed suspiciously well in China's notoriously tough "gaokao" exams, each year winning a disproportionate number of places at the country's elite universities.

Last year, the city received a slap on the wrist from the province's Education department after it discovered 99 identical papers in one subject. Forty five examiners were "harshly criticised" for allowing cheats to prosper.

So this year, a new pilot scheme was introduced to strictly enforce the rules.

When students at the No. 3 high school in Zhongxiang arrived to sit their exams earlier this month, they were dismayed to find they would be supervised not by their own teachers, but by 54 external invigilators randomly drafted in from different schools across the county.

The invigilators wasted no time in using metal detectors to relieve students of their mobile phones and secret transmitters, some of them designed to look like pencil erasers.

A special team of female invigilators was on hand to intimately search female examinees, according to the Southern Weekend newspaper.

Outside the school, meanwhile, a squad of officials patrolled the area to catch people transmitting answers to the examinees. At least two groups were caught trying to communicate with students from a hotel opposite the school gates.

For the students, and for their assembled parents waiting outside the school gates to pick them up afterwards, the new rules were an infringement too far.

As soon as the exams finished, a mob swarmed into the school in protest.

"I picked up my son at midday [from his exam]. He started crying. I asked him what was up and he said a teacher had frisked his body and taken his mobile phone from his underwear. I was furious and I asked him if he could identify the teacher. I said we should go back and find him," one of the protesting fathers, named as Mr Yin, said to the police later.

By late afternoon, the invigilators were trapped in a set of school offices, as groups of students pelted the windows with rocks. Outside, an angry mob of more than 2,000 people had gathered to vent its rage, smashing cars and chanting: "We want fairness. There is no fairness if you do not let us cheat."

According to the protesters, cheating is endemic in China, so being forced to sit the exams without help put their children at a disadvantage.

Teachers trapped in the school took to the internet to call for help. "We are trapped in the exam hall," wrote Kang Yanhong, one of the invigilators, on a Chinese messaging service. "Students are smashing things and trying to break in," she said.

Another of the external invigilators, named Li Yong, was punched in the nose by an angry father. Mr Li had confiscated a mobile phone from his son and then refused a bribe to return the handset.

"I hoped my son would do well in the exams. This supervisor affected his performance, so I was angry," the man, named Zhao, explained to the police later.

Hundreds of police eventually cordoned off the school and the local government conceded that "exam supervision had been too strict and some students did not take it well".

Additional reporting by Adam Wu

Friday, July 5, 2013

On Mr Lafe Solomon's, National Labor Relations Board's acting general counsel, letter to Cablevision

The Lord of U.S. Labor Policy. By Kimberley Strassel
Lafe Solomon, acting general counsel of the National Labor Relations Board, defies Congress and the courts on behalf of Big Labor.The Wall Street Journal, July 4, 2013, on page A9
http://online.wsj.com/article/SB10001424127887323899704578583671862397166.html

For a true expression of the imperious and extralegal tendencies of the Obama administration, there is little that compares with the Wisdom of Solomon. Lafe Solomon, that is, the acting general counsel of the National Labor Relations Board.

Mr. Solomon's wisdom was on revealing display this week, in the form of a newly disclosed letter that the Obama appointee sent to Cablevision in May. The letter was tucked into Cablevison's petition asking the Supreme Court this week to grant an emergency stay of NLRB proceedings against it. The Supremes unfortunately denied that request, though the exercise may prove valuable for shining new light on the labor board's conceit.

A half-year has passed since the D.C. Circuit Court of Appeals ruled in Noel Canning that President Obama's appointments to the NLRB were unconstitutional, and thus that the board lacks a legal quorum. In May, the Third Circuit affirmed this ruling. Yet the NLRB—determined to keep churning out a union agenda—has openly defied both appeals courts by continuing to issue rulings and complaints.

Regional directors in April filed two such unfair-labor-practice complaints against Cablevision. The company requested that Mr. Solomon halt the proceedings, given the NLRB's invalid status. It is Mr. Solomon's refusal, dated May 28, that provides the fullest expression of the NLRB's insolence.

The acting general counsel begins his letter by explaining that the legitimacy of the board is really neither here nor there. Why? Because Mr. Solomon was himself "appointed by the President and confirmed by the Senate"—and therefore, apparently, is now sole and unchecked arbiter of all national labor policy.

This is astonishing on many levels, the least of which is that it is untrue. Mr. Solomon is the acting general counsel precisely because the Senate has refused to confirm him since he was first nominated in June 2011. Nor will it, ever, given his Boeing BA +1.38% escapades.

Then there is the National Labor Relations Act, which created the NLRB. The law clearly says that the general counsel acts "on behalf of the Board"—a board that is today void, illegitimate, null, illegal. Mr. Solomon admits the "behalf" problem in his letter, though he says he's certain Congress nonetheless meant for him to be "independent" of the board. He says.

The acting general counsel naturally rushes to explain that—his omnipotence aside—the NLRB still has every right to ignore the courts. His argument runs thus: Because a decade ago the 11th Circuit issued an opinion that upholds recess appointments (though it didn't deal with Mr. Obama's breathtaking reading of that power), there exists a "split" in the circuit courts. The NLRB is therefore justified in ignoring any courts with which it disagrees until the Supreme Court has "resolved" the question.

What Mr. Solomon fails to note is the extremes the NLRB has gone to in order to suggest court confusion. The agency has deviated from past procedures, and it refused to ask either the D.C. Circuit or the Third Circuit to "stay" their opinions. Why? Because to do so—and to be rebuffed—would put the NLRB under enormous pressure to acknowledge that those courts have authority over its actions.

The board has likewise ignored the fact that the D.C. Circuit hears more NLRB decisions than any other, and is also the pre-eminent court for reviewing federal agency decisions. This ought to entitle that court, and its Noel Canning ruling, respectful deference from the labor board.

The most revealing part of Mr. Solomon's letter is the section cynically outlining why the NLRB continues to operate at a feverish pace. Mr. Solomon notes that this isn't the first time the board has operated without a quorum.

The NLRB issued 550 decisions with just two board members before the Supreme Court's 2010 ruling in New Process Steel that the NLRB must have a three-person board quorum to operate. Mr. Solomon brags that of these 550, only about 100 were "impacted" by the Supreme Court's ruling—which, he writes, proves that the NLRB is justified in continuing to operate even at times when its "authority" has been challenged.

Mr. Solomon is in fact celebrating that of the 550 outfits harassed by an illegal, two-member board, only about 100 later decided they had the money, time and wherewithal to spend years relitigating in front of the labor goon squad. The NLRB is counting on the same outcome in Cablevision and other recent actions.

The board will push through as many rulings and complaints against companies as it can before the Supreme Court rules on its legitimacy. And it will trust that the firms it has attacked and drained will be too weary to then try for reversals. This is why the Obama administration waited so long to petition the Supreme Court to reverse Noel Canning. The longer this process takes, the more damage the NLRB can inflict on behalf of its union taskmasters.

Right now, the NLRB is the only weapon the administration can wield on behalf of Big Labor. The need to placate that most powerful special interest was behind Mr. Obama's decision to install his illegal recess appointments in the first place, and it explains the NLRB's continuing defiance of courts and Congress. Mr. Solomon's wisdom is the Obama philosophy of raw power, in all its twisted glory.

Thursday, June 6, 2013

Why China Frets Over America's Retreat. By Daniel Blumenthal

Why China Frets Over America's Retreat. By Daniel Blumenthal
The Wall Street Journal, June 6, 2013, on page A17
Usually Chinese leaders decry Washington's foreign-policy aggression. That won't be an issue at this week's summit.
http://online.wsj.com/article/SB10001424127887324412604578515853119610968.html

When Chinese President Xi Jinping meets with President Obama in California at week's end, Mr. Xi will confront a new strategic reality: America in retreat. Chinese leaders normally complain that Washington is too aggressive. But what should really worry Beijing is the opposite—a bipartisan U.S. consensus for a foreign policy of retrenchment. As much as China aspires to global leadership, Beijing has neither the wherewithal nor the desire to take on the responsibilities that come with that role.

Since the Cold War ended in the early 1990s, Sino-American summitry has followed a pattern to which both countries have grown accustomed. Beijing complains of U.S. heavy-handedness. Washington complains that it shoulders all the burdens of global leadership and asks China to play a more responsible and prominent role in world affairs.

Neither country is serious while doing this minuet. At best Washington is conflicted about a greater leadership role for an authoritarian China. For its part, China has become accustomed to the benefits of a post-World War II American-led (and paid-for) global compact that includes freer markets, more peaceful international relations and more liberal governments.

The temptation to repeat this dance will be great this week. Presidents Xi and Obama will be meeting during a period of deep mutual suspicion. The downward spiral of distrust began in 2009 over escalating tensions about territory between China and its Southeast Asian neighbors, and it reached a new low when then-Secretary of State Hillary Clinton announced a "pivot" toward Asia in 2011.

The pivot strategy has two pillars. The first is a positive desire to deeply embed the U.S. in all of Asia's increasingly vibrant political and economic life. The second is a reaction to growing Chinese dominance in the region, and the resulting clamor—from America's regional allies and in the U.S.—for Washington to counterbalance predatory Chinese military power.

China chose to hear only the second part of the pivot strategy, reacting to it as Cold War-style containment with Asian characteristics. Relations between the two powers have been frosty since then.

Yet if Mr. Xi examines U.S. foreign policy more closely, he will see that Beijing is worried about the wrong things. The problem is not too much American power. It is too little.

Consider recent events in Washington: Mr. Obama announced the end of the war on terror without evidence that the conflict had ended and denied leaks suggesting the imposition of a no-fly zone in Syria. He ignored a new International Atomic Energy Agency report suggesting that Iran is making huge progress in developing nuclear weapons, and refused efforts to restore draconian cuts to the U.S. military budget.

In response—a few outliers notwithstanding—Congress, including Republicans, remained silent. This marked a significant shift. Once the tribune of American global leadership, much of the right now marches in foreign-policy lock step with a left that has little interest in the exercise of U.S. power. This left-right neo-isolationist alliance is a recipe for global chaos—an outcome more harmful to China than the big-footed America that China is used to complaining about.

Why? Because despite China's politically correct paeans to international institutions and multilateralism, Chinese leaders well know that international politics needs a prime actor willing to provide global public goods such as secure maritime trade, peace between great powers, nonproliferation, counterterrorism and leadership on international trade and investment.

If the U.S. abdicates its role, China is the only other nation in line for the post of prime power. Is China ready to assume primacy in the international community? The answer is no.

Granted, China is active on the world stage. Recently President Xi announced proposals for Arab-Israeli peace and a Syrian cease-fire. Once again, Beijing prodded North Korea to open up and reform its economy. But peace proposals, state visits and commercial diplomacy cannot maintain world order.

Taking the global leadership reins from the U.S. would require incurring real costs, taking big risks, using political capital and, if necessary, expending blood and treasure. If China wanted to lead the world, it would build a navy capable of protecting—rather than disrupting—sea lanes. It would contribute to the fight against terror and help to keep cyberspace an open commons for commercial transactions and the sharing of ideas. It is doing none of these things.

Think of it this way: Does China wish to anger anyone in the Middle East by taking sides in Syria or pressuring Iran? Manage the collapse of North Korea? Steward a new era of free trade? Push back al Qaeda?

Chinese leaders appear not to give much consideration to taking on these tasks, nor has Washington thought through what a world with no leader would look like. Does a global system of anti-democratic regional hegemons, spheres of influence, and exclusive trading blocs really appeal?

For all of these reasons, this could be a truly pivotal summit. As counterintuitive as it may seem, for the first time since the Soviet collapse China has an interest in America acting more, not less, assertively in foreign affairs.


Mr. Blumenthal is the director of Asian Studies at the American Enterprise Institute.

South Korea: National Security or National Pride Regarding Japan?, by Krista E. Wiegand

South Korea: National Security or National Pride Regarding Japan?, by Krista E. Wiegand
Asia Pacific Bulletin, No. 214
Washington, D.C.: East-West Center
May 22, 2013
http://www.eastwestcenter.org/publications/south-korea-national-security-or-national-pride-regarding-japan

Krista E. Wiegand is Associate Professor of Political Science at Georgia Southern University and a recent POSCO Visiting Fellow at the East-West Center. She explains in this bulletin that "The South Korean government will not be able to deal with the larger issue of security relations with Japan until disputed issues symbolized by Dokdo/Takeshima are sufficiently resolved—and the likelihood of this happening anytime soon is fairly low."

Excerpts:
The first official state function of newly inaugurated President Park Geun-hye was a ceremony on March 1 commemorating Independence Movement Day—celebrating Korean resistance in 1919 to Japanese occupation—where she appealed: “It is incumbent on Japan to have a correct understanding of history and take on an attitude of responsibility in order to partner with us in playing a leading role in East Asia in the 21st century.” Her speech outlined a hard line stance regarding ROK-Japan relations. It also did not help that at the end of March, the Korean Foreign Ministry summoned a high ranking Japanese official in Seoul to strongly protest the inclusion of the islets as being called Takeshima in newly released Japanese school books. Japanese cabinet members then went to Yasakuni Shrine in April which further exasperated matters, resulting in South Korean Foreign Minister Yun Byung-se cancelling a proposed visit to Japan.

If Park wants to maintain high approval ratings and not lose credibility regarding her tough position towards Japan, she will have to take into account domestic public opinion on any future security plans with Japan, even under US pressure. Yet, taking this tough approach causes unconstructive tensions in the ROK-Japan-US security relationship, and at a time of recent unprecedented heightened tensions on the Korean Peninsula. Moreover, Korea’s role as an increasingly important actor in regional security indicates that Japan and South Korea will have to cooperate more in the future.  They are both democracies, have shared values and interests, and each looks to the United States as the preferred security partner. Park will have to balance Korea’s security interests with domestic opposition to closer ties with Japan, an extremely difficult challenge under current circumstances.

Even if Korean officials are not as supportive of the GSOMIA as their counterparts in Japan and the United States, moving forward on security relations with Japan is critical. Yet, domestic opposition to issues related to Japan has effectively prevented such cooperation. The South Korean government will not be able to deal with the larger issue of security relations with Japan until disputed issues symbolized by Dokdo/ Takeshima are sufficiently resolved—and the likelihood of this happening anytime soon is fairly low. The United States has encouraged better bilateral relations between its two closest allies in East Asia, yet at the same time, the US government has been hesitant to take sides in a dispute that the United States itself inadvertently created as a result of its ambiguity in its role as mediator of the 1951 San Francisco Treaty. President Park and future Korean presidents will have a tough time successfully pursuing any plans of security engagement with Japan as long as the Dokdo/Takeshima dispute and related issues flare up. The United States is in a unique position to influence both Korea and Japan and it should continue to pressure both states to work toward reconciliation.

Saturday, May 25, 2013

Reading Hayek in Beijing. Bret Stephens on Yang Jisheng

Reading Hayek in Beijing. By Bret Stephens
A chronicler of Mao's depredations finds much to worry about in modern China.The Wall Street Journal, May 25, 2013, on page A11
http://online.wsj.com/article/SB10001424127887324659404578501492191072734.html

On Yang Jisheng

In the spring of 1959, Yang Jisheng, then an 18-year-old scholarship student at a boarding school in China's Hubei Province, got an unexpected visit from a childhood friend. "Your father is starving to death!" the friend told him. "Hurry back, and take some rice if you can."

Granted leave from his school, Mr. Yang rushed to his family farm. "The elm tree in front of our house had been reduced to a barkless trunk," he recalled, "and even its roots had been dug up." Entering his home, he found his father "half-reclined on his bed, his eyes sunken and lifeless, his face gaunt, the skin creased and flaccid . . . I was shocked with the realization that the term skin and bones referred to something so horrible and cruel."

Mr. Yang's father would die within three days. Yet it would take years before Mr. Yang learned that what happened to his father was not an isolated incident. He was one of the 36 million Chinese who succumbed to famine between 1958 and 1962.

It would take years more for him to realize that the source of all the suffering was not nature: There were no major droughts or floods in China in the famine years. Rather, the cause was man, and one man in particular: Mao Zedong, the Great Helmsman, whose visage still stares down on Beijing's Tiananmen Square from atop the gates of the Forbidden City.

Mr. Yang went on to make his career, first as a journalist and senior editor with the Xinhua News Agency, then as a historian whose unflinching scholarship has brought him into increasing conflict with the Communist Party—of which he nonetheless remains a member. Now 72 and a resident of Beijing, he's in New York this month to receive the Manhattan Institute's Hayek Prize for "Tombstone," his painstakingly researched, definitive history of the famine. On a visit to the Journal's headquarters, his affinity for the prize's namesake becomes clear.

"This book had a huge impact on me," he says, holding up his dog-eared Chinese translation of Friedrich Hayek's "The Road to Serfdom." Hayek's book, he explains, was originally translated into Chinese in 1962 as "an 'internal reference' for top leaders," meaning it was forbidden fruit to everyone else. Only in 1997 was a redacted translation made publicly available, complete with an editor's preface denouncing Hayek as "not in line with the facts," and "conceptually mixed up."

Mr. Yang quickly saw that in Hayek's warnings about the dangers of economic centralization lay both the ultimate explanation for the tragedies of his youth—and the predicaments of China's present. "In a country where the sole employer is the state," Hayek had observed, "opposition means death by slow starvation."

So it was in 1958 as Mao initiated his Great Leap Forward, demanding huge increases in grain and steel production. Peasants were forced to work intolerable hours to meet impossible grain quotas, often employing disastrous agricultural methods inspired by the quack Soviet agronomist Trofim Lysenko. The grain that was produced was shipped to the cities, and even exported abroad, with no allowances made to feed the peasants adequately. Starving peasants were prevented from fleeing their districts to find food. Cannibalism, including parents eating their own children, became commonplace.

"Mao's powers expanded from the people's minds to their stomachs," Mr. Yang says. "Whatever the Chinese people's brains were thinking and what their stomachs were receiving were all under the control of Mao. . . . His powers extended to every inch of the field, and every factory, every workroom of a factory, every family in China."

All the while, sympathetic Western journalists—America's Edgar Snow and Britain's Felix Greene in particular—were invited on carefully orchestrated tours so they could "refute" rumors of mass starvation. To this day, few people realize that Mao's forced famine was the single greatest atrocity of the 20th century, exceeding by orders of magnitude the Rwandan genocide, the Cambodian Killing Fields and the Holocaust.

The power of Mr. Yang's book lies in its hauntingly precise descriptions of the cruelty of party officials, the suffering of the peasants, the pervasive dread of being called "a right deviationist" for telling the truth that quotas weren't being met and that millions were being starved to death, and the toadyism of Mao lieutenants.

Yet the book is more than a history of a uniquely cruel regime at a receding moment in time. It is also a warning of what lies at the end of the road for nations that substitute individualism with any form of collectivism, no matter what the motives. Which brings Mr. Yang to the present day.

"China's economy is not what [Party leaders] claim as the 'socialist-market economy,' " he says. "It's a 'power-market' economy."

What does that mean?

"It means the market is controlled by the power. . . . For example, the land: Any permit to enter any sector, to do any business has to be approved by the government. Even local government, down to the county level. So every county operates like an enterprise, a company. The party secretary of the county is the CEO, the president."

Put another way, the conventional notion that the modern Chinese system combines political authoritarianism with economic liberalism is mistaken: A more accurate description of the recipe is dictatorship and cronyism, with the results showing up in rampant corruption, environmental degradation and wide inequalities between the politically well-connected and everyone else. "There are two major forms of hatred" in China today, Mr. Yang explains. "Hatred toward the rich; hatred toward the powerful, the officials." As often as not they are one and the same.

Yet isn't China a vastly freer place than it was in the days of Mr. Yang's youth? He allows that the party's top priority in the post-Mao era has been to improve the lot of the peasantry, "to deal with how to fill the stomach."

He also acknowledges that there's more intellectual freedom. "I would have been executed if I had this book published 40 years ago," he notes. "I would have been imprisoned if this book was out 30 years ago. Now the result is that I'm not allowed to get any articles published in the mainstream media." The Chinese-language version of "Tombstone" was published in Hong Kong but is banned on the mainland.

There is, of course, a rational reason why the regime tolerates Mr. Yang. To survive, the regime needs to censor vast amounts of information—what Mr. Yang calls "the ruling technique" of Chinese leaders across the centuries. Yet censorship isn't enough: It also needs a certain number of people who understand the full truth about the Maoist system so that the party will never repeat its mistakes, even as it keeps the cult of Mao alive in order to preserve its political legitimacy. That's especially true today as China is being swept by a wave of Maoist nostalgia among people who, Mr. Yang says, "abstract Mao as this symbol of social justice," and then use that abstraction to criticize the current regime.

"Ten million workers get laid off in the state-owned enterprise reforms," he explains. "So many people are dissatisfied with the reforms. Then they become nostalgic and think the Mao era was much better. Because they never experienced the Mao era!" One of the leaders of that revival, incidentally, was Bo Xilai, the powerful former Chongqing party chief, brought down in a murder scandal last year.

But there's a more sinister reason why Mr. Yang is tolerated. Put simply, the regime needs some people to have a degree of intellectual freedom, in order to more perfectly maintain its dictatorship over everyone else.

"Once I gave a lecture to leaders at a government bureau," Mr. Yang recalls. "I told them it's a dangerous job, you guys, being officials, because you have too much power. I said you guys have to be careful because those who want approval from you to get certain land and projects, who bribe you, these are like bullets, ammunition, coated in sugar, to fire at you. So today you may be a top official, tomorrow you may be a prisoner."

How did the officials react to that one?

"They said, 'Professor Yang, what you said, we should pay attention.' "

So they should. As Hayek wrote in his famous essay on "The Use of Knowledge in a Society," the fundamental problem of any planned system is that "knowledge of circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess."

The Great Leap Forward was an extreme example of what happens when a coercive state, operating on the conceit of perfect knowledge, attempts to achieve some end. Even today the regime seems to think it's possible to know everything—one reason they devote so many resources to monitoring domestic websites and hacking into the servers of Western companies. But the problem of incomplete knowledge can't be solved in an authoritarian system that refuses to cede power to the separate people who possess that knowledge.

"For the last 20 years, the Chinese government has been saying they have to change the growth mode of the economy," Mr. Yang notes. "So they've been saying, rather than just merely expanding the economy they should do internal changes, meaning more value-added services and high tech. They've been shouting such slogans for 20 years, and not many results. Why haven't we seen many changes? Because it's the problem that lies in the very system, because it's a power-market economy. . . . If the politics isn't changed, the growth mode cannot be changed."

That suggests China will never become a mature power until it becomes a democratic one. As to whether that will happen anytime soon, Mr. Yang seems doubtful: The one opinion widely shared by rulers and ruled alike in China is that without the Communist Party's leadership, "China will be thrown into chaos."

Still, Mr. Yang hardly seems to have given up hope that he can play a role in raising his country's prospects. In particular, he's keen to reclaim two ideas at risk of being lost in today's China.

The first is the meaning of rights. A saying attributed to the philosopher Lao Tzu, he says, has it that a ruler should fill the people's stomachs and empty their heads. The gambit of China's current rulers is that they can stay in power forever by applying that maxim. Mr. Yang hopes they're wrong.

"People have more needs than just eating!" he insists. "In China, human rights means the right to survive, and I argue with these people. This is not human rights, it's animal rights. People have all sorts of needs. Spiritual needs, the need to be free, the freedoms."

The second is the obligation of memory. China today is a country galloping into a century many people believe it will define, one way or the other. Yet the past, Mr. Yang insists, also has its claims.

"If a people cannot face their history, these people won't have a future. That was one of the purposes for me to write this book. I wrote a lot of hard facts, tragedies. I wanted people to learn a lesson, so we can be far away from the darkness, far away from tragedies, and won't repeat them."

Hayek would have understood both points well.

Mr. Stephens writes "Global View," the Journal's foreign-affairs column.

Thursday, May 16, 2013

Unconventional Monetary Policies - Recent Experiences and Prospects (+ Background Paper)

Unconventional Monetary Policies - Recent Experiences and Prospects
IMF Policy Paper
http://www.imf.org/external/pp/longres.aspx?id=4764

Summary:This paper addresses three questions about unconventional monetary policies. First, what policies were tried, and with what objectives? Second, were policies effective? And third, what role might these policies continue to play in the future?




Unconventional Monetary Policies - Recent Experiences and Prospects - Background Paper
IMF Policy Paper
http://www.imf.org/external/pp/longres.aspx?id=4765

Summary:This paper provides background information to the main Board paper, “The Role and Limits of Unconventional Monetary Policy.” This paper is divided in five distinct sections, each focused on a different topic covered in the main paper, though most relate to bond purchase programs. As a result, this paper centers on the experience of the United States Federal Reserve (Fed), the Bank of England (BOE) and the Bank of Japan (BOJ), mostly leaving the European Central Bank (ECB) aside given its focus on restoring the functioning of financial markets and intermediation. Section A explores whether bond purchase programs were effective at decreasing bond yields and, if so, through which channels. Section B goes one step further in evaluating whether bond purchase programs had—or can be expected to have—significant effects on real growth and inflation. Section C studies the spillover effects of bond purchases on both advanced and emerging market economies, using very similar methods as introduced in the first section. Section D breaks from the immediate focus on bond purchases to discuss how inflation might decrease the debt burden in advanced economies, in light of possible pressures that could fall (or be perceived to fall) on central banks. Finally, Section E discusses the possible risks of exiting given the very large central bank balance sheets.

Saturday, April 27, 2013

Two Muslim Brothers Who Took the Assimilation Path. By Kenan Trebincevic

Two Muslim Brothers Who Took the Assimilation Path. By Kenan Trebincevic
The Wall Street Journal, April 27, 2013, on page A11
http://online.wsj.com/article/SB10001424127887323789704578443473812237556.html

'I hope they're not Muslim," I told my brother, Eldin, when we first saw the pictures of the Boston bombers. We soon found out that Dzhokhar and Tamerlan Tsarnaev shared our religion, as we'd dreaded, when my Jewish college roommate jokingly texted: "Hey, would you please tell your people to stop blowing things up?"

I laughed, in sadness, but soon felt completely unnerved by how much the Tsarnaevs' story mirrored our own. My brother and I were born six years apart, and we're two foreign-born-and-named, athletic, Islamic brothers from difficult backgrounds in Eastern Europe, where we had experienced persecution and then been generously taken in by Americans. The 26-year-old Tamerlan Tsarnaev, killed in the police shootout, was the eldest, strong-minded child, like Eldin. Dzhokhar Tsarnaev, now in a federal medical detention center in Massachusetts, looked up to his sibling, as I always looked up to my strong-minded brother.

Boxing is big in Chechnya and nearby regions where the Tsarnaev family has its roots, and the brothers excelled in the sport, like their father. Martial arts are big in the Balkans, where we're from. Our dad owned a gym in our hometown of Brčko, Bosnia, where he trained athletes and where Eldin and I won brown belts and awards for karate.

The Tsarneavs were caught in the confusing war between Chechnya and Russia that erupted in 1999, and they wound up emigrating in 2003 to Cambridge, Mass. Caught in the bloody war between Bosnia and Serbia, factions of the former Yugoslavia, my family moved to Westport, Conn., in 1993.

Like the Tsarnaevs' father, our father suffered setbacks to his career in America, and to his health. While Anzor Tsarnaev reportedly toiled as a mechanic for $10 an hour, our dad, Senahid, slung poultry at a fast-food chicken place and took other low-paying jobs. While the Tsarnaevs' mother, Zubeidat, did facials at a Boston spa and later at their home to make ends meet, my mother, Adisa, baby-sat and found work at a data-processing firm. We too had little money, and it was hard to get jobs without connections or language skills.

Yet the Tsarnaev boys became angry, alienated young men who never quite assimilated into their new country (Tamerlan said on Twitter: "I don't have a single American friend, I don't understand them"), while my brother and I made many friends in the U.S. and wound up on the more successful side of the American dream.

There is a well-documented connection between unhappy, disenfranchised immigrants who can't connect and crime and terrorism. When I first moved here at age 13 I felt as lost, estranged and resentful as Tamerlan Tsarnaev appeared to be. In the days since the Boston bombing, I kept comparing Eldin's and my circumstances with the Tsarnaevs' to see where our paths diverged and what saved us from becoming embittered.

I was struck by news accounts that the Tsarnaev parents moved back to Russia, where they separated two years ago. One of their daughters lived in New Jersey, and she admitted that she hadn't spoken to her brothers in years. I was fortunate that my immediate family of four stayed together, first in Connecticut until my mother died of cancer in 2007, then in Queens, N.Y., where my father, brother and I now live blocks away from each other.

Even when I moved into my college dorm room at the University of Hartford and Eldin moved to the Stony Brook campus in Long Island, we spoke to our mother, father and each other daily—either by cellphone or email. I'm convinced that remaining a close-knit family kept my brother and me saner and safer. The Tsarnaev family, by contrast, seemed constantly roiled—by war, immigration, work and financial difficulties, serious illness and a marriage breakup. Throw in radical religion and, in retrospect, it seems a recipe for disaster.

Perhaps because my family survived the ethnic cleansing in the Balkans to wipe out Muslims, my family members—unlike Tamerlan Tsarnaev and his mother—did not seek solace with any specific religious figure or house of worship. While we remained proud of our heritage, we were sponsored by the Interfaith Council in Connecticut, a group of liberal churches and synagogues.

When we arrived in 1993 at JFK airport, we were met by the Rev. Don Hodges, a Methodist minister. He drove us to his Westport home, where we stayed for four months. It's not surprising or wrong for immigrants to deepen their focus on religion in a strange land. But I would speculate that in our case we felt such gratitude to the people of differing faiths who helped us that our chances of assimilating, and succeeding, in America were enhanced.

When my mother found a lump in her breast, the late surgeon Dr. Malcolm Beinfeld at Norwalk Hospital operated on her. Dr. Beinfeld, who was Jewish, told us that the Bosnian genocide against Muslims reminded him of the Holocaust. We never received a bill for the surgery or for my mother's subsequent radiation and chemotherapy.

A Protestant dentist, Richard Sands, asked my mother: "What does your son need?" At 13, I was taken to an orthodontist who gave me braces and took care of me for two years. I was embarrassed but deeply grateful that he never asked for a dime.

On my first day of school in Westport, Dr. Glenn Hightower, the principal, and a member of Mr. Hodges's church, introduced me to the seventh-grade English class with his arm draped around my shoulders. He explained that my family had been exiled in the Bosnian war, and he asked the other students to help me out. I had a foreign name, strange accent and could barely speak the language. I felt scared and pathetic, like a mutt waiting to be adopted. I was immediately befriended by Miguel Peman, a Catholic Spanish-American student, who offered me a seat.

When the school-bus driver who drove me home noticed that I had a long walk to Mr. Hodges's house, he introduced himself as Offir, from Israel, and dropped me off right at the driveway, making me promise not to tell anyone. Later, my Greek Orthodox soccer coach, Ted Popadoupolis, gave me rides to practices and games when my parents couldn't.

My brother and I didn't pursue sports with the dreams of Olympic glory that Tamerlan Tsarnaev apparently did. At schools in Westport, Norwalk and Hartford, a series of teachers and mentors helped us formulate a realistic career plan. They geared us toward a more feasible field than sports stardom: physical therapy.

We didn't experience the sort of disappointment and resentment that Tamerlan seems to have endured when his boxing dream went sour. Instead, sports teams gave us a sense of belonging.

Since my athletic father was a health nut, under his strong influence, my brother and I steered clear of the alcohol and drugs that seem to have plagued the Tsarnaevs—and might have fueled depression and hopelessness that, I would guess, twisted their judgment.

It is impossible to know what went on in someone else's childhood or what is happening in another's mind or heart. The Tsarnaevs took one path. My brother and I, despite our family's war displacement, persecution and years of poverty, thrived—but only with stable parents by our side, good jobs and help from many and diverse guardian angels. During a dark week, it was easy to forget that countless immigrants to America have similar stories to tell.

Mr. Trebincevic, a physical therapist who lives in Queens, is the coauthor, with Susan Shapiro, of "The Bosnia List," to be published by Viking next year.

South Korea: Give Nukes a Chance. By Denny Roy

South Korea: Give Nukes a Chance. By Denny Roy
Asia Pacific Bulletin, no. 204
Washington, D.C.: East-West Center
March 27, 2013
http://www.eastwestcenter.org/publications/south-korea-give-nukes-chance

Excerpts:

It is only a matter of time before North Korea fields an actual nuclear-tipped missile that works. With the persistent security threat from North Korea seemingly worsening, recent public opinion surveys show that a majority of South Koreans favor getting their own nuclear weapons. There is no doubt that South Korea is capable of making its own nuclear weapons, probably within a year. Indeed, the Republic of Korea (ROK) has explored this possibility occasionally since the 1970s, each time backing off under outside pressure.

There are some good reasons why, in principle, the world is better off with a smaller, rather than larger, number of nuclear weapon states. Nevertheless, there are two additional principles that apply here. First, nuclear weapons are a powerful deterrent; they are the main reason why the Cold War remained cold. Second, there may be a specific circumstance in which the introduction of a new nuclear weapons capability has a constructive influence on international security—call it the exception to the general nonproliferation rule.

Given the ROK’s present circumstances, Washington and Seoul should seriously consider the following policy change. Seoul gives the required 90 days notice required for it to withdraw from the Nuclear Nonproliferation Treaty, which allows for deratification in the case of “extraordinary events” that threaten national security. The ROK announces its intention to begin working toward a nuclear weapons capability, with the following conditions: (1) the South Korean program will match North Korea’s progress step-by-step towards deploying a reliable nuclear-armed missile; and (2) Seoul will commit to halting and shelving its program if North Korea does the same. For its part, Washington announces that US nonproliferation policy is compelled to tolerate an exception when a law-abiding state is threatened by a rogue state—in this case North Korea—that has both acquired nuclear weapons and threatened to use them aggressively. Pyongyang has repeatedly spoken of using its nuclear weapons to devastate both the ROK and the United States.

This policy change is necessary because US, ROK and (half-hearted) Chinese efforts to get North Korea to denuclearize are not working. [...]

An ROK nuclear weapons capability would impose a meaningful penalty on the DPRK for its nuclear weapons program. Aside from the sanctions ordered by the United Nations Security Council, which have proved no more than a nuisance and are amply compensated for by the growing economic relationship with China, Pyongyang has suffered no significant negative consequences for acquiring nuclear weapons. A South Korean nuclear capability would change that. The North Koreans would understand that their act brought about an outcome they very much do not want [...].

ROK nukes, furthermore, will help deter North Korean provocations. A capacity to attack a neighbor with nuclear weapons provides North Korea with cover for limited conventional attacks. Pyongyang has established a pattern of using quick, sharp jabs against South Korea. The goal is to rattle Seoul into accommodating North Korean economic and political demands. Seoul insists that future North Korean attacks will result in military retaliation by South Korean forces. Since South Korea has not hit back after previous incidents, it is uncertain whether this pledge will deter Pyongyang from trying this tactic again. A DPRK nuclear weapons capability worsens this already dangerous situation. North Korean planners might conclude that Seoul would not dare retaliate against a DPRK strike out of fear that the next step would be a nuclear attack on the ROK. A South Korean nuclear capability, however, would redress this imbalance. If ROK conventional military capabilities are superior to the DPRK and equal or superior at the nuclear level, deterrence against a North Korean attack is stronger.

South Korean nukes would close the credibility gap in the US-ROK alliance. The “umbrella” of America’s nuclear arsenal covers South Korea and theoretically negates the DPRK nuclear threat. However, South Koreans have always questioned the reliability of this commitment which potentially puts a US city at risk in order to protect a South Korean city. The doubts are growing more acute now that a North Korean capability is apparently close to realization. An ROK nuclear arsenal would remove this strain on the alliance and give the South Koreans a sense of greater control over their own destiny.

Pyongyang would not be the only target audience for Seoul’s announcement of intent to deploy nuclear weapons. Like the North Koreans, the People’s Republic of China (PRC) is deeply opposed to an ROK nuclear capability. The announcement would also signal to Beijing that the cost of failing to discipline their client state is rising dramatically. The Chinese are already debating whether the status quo of a rogue DPRK has become so adverse to Chinese interests that China must pressure Pyongyang more heavily even at the risk of causing regime collapse. South Korea’s imminent—and reversible—acquisition of nuclear weapons would strengthen the argument that the PRC must get tougher with the DPRK.

To be sure, this policy change would create its own problems. An ROK nuclear capability would pressure Japan to follow suit. A US-friendly, stable, law-abiding, liberal democratic country getting nukes is not necessarily a bad thing. But if so, the solution is for Washington and Seoul to emphasize that South Korea’s nuclear capability would be temporary and contingent, so Tokyo can remain non-nuclear.  Thankfully, there are precedents for middle-sized states giving up their nuclear weapons.

South Korea’s security situation is deteriorating and for the ROK’s leadership, national security is job number one. It is now time to get past the visceral opposition to proliferation and recognize that in this case, a conditional change of South Korea’s status to nuclear-weapon state can help manage the dangers created by a heightened North Korean threat.

Monday, March 18, 2013

In service of the country: Ted van Dyk

My Unrecognizable Democratic Party. By Ted van Dyk
The stakes are too high, please get serious about governing before it's too late.
http://online.wsj.com/article/SB10001424127887324128504578344611522010132.html 
The Wall Street Journal, March 18, 2013, on page A13

As a lifelong Democrat, I have a mental picture these days of my president, smiling broadly, at the wheel of a speeding convertible. His passengers are Democratic elected officials and candidates. Ahead of them, concealed by a bend in the road, is a concrete barrier.

They didn't have to take that route. Other Democratic presidents have won bipartisan support for proposals as liberal in their time as some of Mr. Obama's are now. Why does this administration seem so determined to head toward a potential crash and burn?

Even after the embarrassing playout of the Obama-invented Great Sequester Game, after the fiasco of the president's Fiscal Cliff Game, conventional wisdom among Democrats holds that disunited Republicans will be routed in the 2014 midterm elections, leaving an open field for the president's agenda in the final two years of his term. Yet modern political history indicates that big midterm Democratic gains are unlikely, and presidential second terms are notably unproductive, most of all in their waning months. Since 2012 there has been nothing about the Obama presidency to justify the confidence that Democrats now exhibit.

Mr. Obama was elected in 2008 on the basis of his persona and his pledge to end political and ideological polarization. His apparent everyone-in-it-together idealism was exactly what the country wanted and needed. On taking office, however, the president adopted a my-way-or-the-highway style of governance. He pursued his stimulus and health-care proposals on a congressional-Democrats-only basis. He rejected proposals of his own bipartisan Simpson-Bowles commission, which would have provided long-term deficit reduction and stabilized rapidly growing entitlement programs. He opted instead to demonize Republicans for their supposed hostility to Social Security, Medicare and Medicaid.

No serious attempt—for instance, by offering tort reform or allowing the sale of health-insurance products across state lines—was made to enlist GOP congressional support for the health bill. It passed, but the constituents of moderate Democrats punished them: 63 lost their seats in 2010 and Republicans took control of the House.

Faced with a similar situation in 1995, following another GOP House takeover, President Bill Clinton shifted to bipartisan governance. Mr. Obama did not, then blamed Republicans for their "obstructionism" in not yielding to him.

Defying the odds, Mr. Obama did become the first president since Franklin Roosevelt to be re-elected with an election-year unemployment rate above 7.8%. Yet his victory wasn't based on public affirmation of his agenda. Instead, it was based on a four-year mobilization—executed with unprecedented skill—of core Democratic constituencies, and on fear campaigns in which Mitt Romney and the Republicans were painted as waging a "war on women," being servants of the wealthy, and of being hostile toward Latinos, African Americans, gays and the middle class. I couldn't have imagined any one of the Democratic presidents or presidential candidates I served from 1960-92 using such down-on-all-fours tactics.

The unifier of 2008 became the calculated divider of 2012. Yes, it worked, but only narrowly, as the president's vote total fell off sharply from 2008.

Other modern Democratic presidents have had much more success with very different governing strategies. In 1961-62, John Kennedy won Republican congressional and public support with the proposals of his Keynesian Council of Economic Advisers chairman, Walter Heller, to cut personal and business taxes "to get America moving again," and for the global free movement of goods, services, capital and people.

In 1965, Lyndon Johnson had Democratic congressional majorities sufficient to pass any legislation he wanted. But he sought and received GOP congressional support for Medicare, Medicaid, civil rights, education and other Great Society legislation. He knew that in order to last, these initiatives needed consensus support. He did not want them re-debated later, as ObamaCare is being re-debated now.

Johnson got bipartisan backing for deficit reduction in 1967, when he learned that the deficit had reached an unthinkable $28 billion. Faced with today's annual deficits of $1 trillion and federal debt between $16.7 and $31 trillion, depending on whether you count off-budget obligations, LBJ no doubt would appoint a bipartisan Simpson-Bowles commission and use it to get a tax, spending and entitlements fix so that he could move on to the rest of his agenda. Bill Clinton took the same practical approach and got to a balanced federal budget as soon as he could, at the beginning of his second term.

These former Democratic presidents would also know today that no Democratic or liberal agenda can go forward if debt service is eating available resources. Nor can successful governance take place if presidential and Democratic Party rhetoric consistently portrays loyal-opposition leaders as having devious or extremist motives. We really are, as Mr. Obama pointed out in 2008, in it together.

It's not too late for the president to take a cue from his predecessors and enter good-faith budget negotiations with congressional Republicans. A few posturing meetings with GOP congressional leaders will not suffice. President Obama's hype about the horrors of fiscal-cliff and sequestration cuts, and his placing of blame on Republicans, have been correctly viewed as low politics. His approval ratings have plunged since the end of the sequestration exercise.

But time is running out for Democrats to get serious about governance. That concrete barrier—in the form of the 2014 midterm—lies just ahead on the highway, and they're joy riding straight toward it.

Mr. Van Dyk served in Democratic national administrations and campaigns over several decades. His memoir of public life, "Heroes, Hacks and Fools," was first published by University of Washington Press in 2007.

Tuesday, March 5, 2013

Reef and Relations: Is the Philippines-US Alliance Finally Maturing? By Julio S. Amador III

Reef and Relations: Is the Philippines-US Alliance Finally Maturing? By Julio S. Amador III
Washington, D.C.: East-West Center. February 26, 2013
Asia Pacific Bulletin, No. 202
http://www.eastwestcenter.org/publications/reef-and-relations-the-philippines-us-alliance-finally-maturing

Julio S. Amador III, Foreign Affairs Research Specialist at the Foreign Service Institute of the Philippines, explains that the recent grounding in Filipino waters of the USS Guardian, "[s]hows just how delicate managing alliances can be, and the response by the Filipino and US governments also demonstrates a level of maturity in managing the issue."

Excerpts:

The two countries have had a long history of working together and the military aspect of the alliance is an important facet of the overall relationship, but further cooperation in other areas should be emphasized and supported. The incident in Tubbataha opens up a new opportunity to cooperate on environmental protection, which is an issue that strikes a chord among citizens of both countries. Already, there are reports that the US government is willing to provide additional assistance including radar and communications equipment to help the Philippines’ reef rangers and coast guard improve their capacity to protect Tubbataha. This would be of great value in ensuring the reef’s survival. Further collaboration should be encouraged such as scientific partnerships between marine science institutions in the United States and the Philippines, environmental tourism, and investment in coral reef conservation.

Protocols that cover US naval movements near protected areas could also be adopted so that future accidents can be avoided. As a result of this incident, such a move could allay any fears that the United States is running roughshod over the Philippines. Acknowledging local expertise and information should also be something that US naval officers take into consideration when navigating through Philippine waters. On the Philippine side, coordination among the various government agencies involved should be emphasized so that there are no conflicting messages. A
lead agency should be designated that addresses this issue on behalf of the government. A comprehensive rehabilitation plan for Tubbataha also needs to be developed to showcase how serious both two sides are in managing the aftermath of the incident.

Going forward, managing the alliance should not be too difficult for the Philippines and the United States, as both states have a long history of working and cooperating together. That does not detract from the fact that US officials should be more respectful of Philippine navigational laws and restrictions regarding its sovereign territory. Nor should it make the Philippine side complacent with regard to implementing its environmental laws. However, what this incident illustrates is the capacity of the allies to be more mature in managing a potentially serious diplomatic incident.

That the United States has already acknowledged some responsibility is an indication of its respect towards its ally. The Philippine side, meanwhile, has demonstrated a pragmatic and principled stance to an otherwise incendiary issue; thus, the government’s ability to be firm with regard to the implementation of its environmental laws and its capacity to separate this issue from the military relationship is commendable.

How the two allies will work together after this incident will be a good indication of the maturity and future direction of the alliance. Looking at the current situation, the outlook is positive.

Thursday, February 21, 2013

Stapleton Roy: U.S. and China Must Halt Drift Toward Strategic Rivalry

Stapleton Roy: U.S. and China Must Halt Drift Toward Strategic Rivalry

HONOLULU (Feb. 20, 2013) -- With China’s leadership in transition and incoming Secretary of State John Kerry heading a new foreign policy team in the second Obama administration, leaders in both countries must face a “frightening array of domestic and foreign policy problems” in managing their vital relationship, longtime senior U.S. diplomat J. Stapleton Roy said in a Feb. 13 address at the East-West Center in Hawai‘i.

(View a video of Roy’s speech.)

“No task is going to be more important than trying to arrest the current drift in U.S.-China relations toward strategic rivalry,” he said. “If leaders in both countries fail to deal with this issue, there is a strong possibility that tensions will rise and undermine the benign climate that has been so important in producing the Asian economic miracle ­– and to a significant degree, political miracle ­– over the past 30 years.”

Roy, who served as U.S. ambassador to China from 1991 to 1995, said the two nations are “locked in the traditional problem of an established power facing a rising power, and we know from historical precedent that competitive factors that emerge in such situations often result in bloody wars.” The good news, he said, is that “leaders in both countries are aware of the historical precedents and are determined to not let history repeat itself.”

While top leaders on both sides have recognized the need to work together toward a stable balance between cooperation and competition, Roy said, neither country has been able to implement this, and “it remains to be seen if it is even possible to establish this new type of relationship.”

Roy said opinion polls over the last couple of years have shown a dramatic increase in the percentage of Chinese citizens and officials who view relations with the U.S. as characterized by hostility rather than cooperation. During the same period, he said, U.S. polls indicate that “we don’t think of China in same way.”

“This is something we need to be concerned about,” he said, “because the tensions and passions on the other side are stronger than they are on our side, and this requires careful management.”

While incoming Chinese President Xi Jinping and Premier Li Keqian have already declared their interest in implementing further market reforms and reining in pervasive corruption, Roy said, “the Communist Party may lack the legitimacy and will to force through the far-reaching reforms that are needed against the influence of special interests, especially large state-owned businesses. One can reasonably doubt if a party corrupted by wealth at the highest level can carry out the kind of fundamental systemic reforms that are necessary.”

In addition, he said, China’s new leaders will be faced with a litany of internal difficulties that “illustrate why it would still be foolish to postulate that the 21st century will belong to China.” These include what even outgoing premier Wen Jiabao has characterized as an “unstable, unbalanced, uncoordinated and unsustainable” economy, Roy said, along with a rapidly aging population, slowing economic growth, and what is known as the “middle income trap,” when a rising economy loses the competitive advantage of low-cost labor as it climbs the income scale.

“Wages in China have been rising rapidly, especially for skilled labor,” Roy said. “So they have to substitute something else, such as innovation or efficiency.” Historically, he said, “over 100 countries have reached the middle income trap, and 86 percent failed to get out of it. They grow, then reach a certain level and stall out. China has to find way to avoid this, and that’s a big challenge.”

Another huge issue, Roy said, is that “rising nationalism is pushing China toward a more assertive international style and enmeshing it in difficulties with a lot of its neighbors. This has the potential to undermine the benign international environment that has underpinned the dramatic accomplishments China has made.”

China’s more assertive recent behavior is “both typical and predictable for a rising power,” he said. “But China is finding that when it expresses this nationalism through more assertive behavior, its neighbors all show solidarity with the U.S., which is not what China is trying to accomplish. And this is causing resentment in China, because they find that they can’t use their growing power effectively as a result of the negative consequences.”

This could actually prove to be a positive phenomenon for the U.S., he said, “because if we’re skillful enough to understand this dynamic, we are in a position to constrain China when it’s behaving irresponsibly and cooperate with it when it behaves responsibly.”

“China is not the Soviet Union,” he said. “China’s rise has benefitted all of the countries around it, and as a result they don’t want a containment policy; they want responsible behavior by China so they can expand economic and trade relations, which already dwarf their relations with other countries. But when China behaves badly, then they want the United States to be present because they can’t deal with China on their own. It’s a dynamic that skillful diplomacy should be able to take advantage from.”

With China now “locked in a web of disputes” with its neighbors over small but potentially resource-rich islands in the region, Roy said, “the United States finds itself in the awkward situation of trying to reassure our allies at the same time we try to restrain their behavior, because we don’t want tiny little islands in the western Pacific to end up bringing us into a great-power confrontation with China.”

The threat of such hostility is real, he said, and “these disputes are having direct impact on U.S.-China relations – but it’s an asymmetrical impact, because Americans basically don’t care about these islands. But in China it is an issue of great nationalist importance, as it is for Japan, the Philippines and other claimants.”

Such issues, he said, illustrate the complexity of trying to manage this vitally important relationship: “A stronger China will undoubtedly see itself as again becoming a central regional player, but the United States intends to remain actively engaged in East Asia, where we have formal alliances and strategic ties throughout the region.”

The question for leaders of both countries, Roy said, is whether they can find a solution to this conundrum. As of now, he said, “there is a disconnect between the high-level desire on both sides not to have our relationship drift toward rivalry and confrontation, and the way we’re actually behaving, which is driving us in that direction.”

Open military conflict is unlikely and preventable, he said, but just the threat of it could cause a costly “military capabilities competition” for decades to come, at a time when the U.S. is already facing budget cuts.

“Chinese and U.S. declared strategic goals and their actions are not yet in conformity with each other,” Roy said. “In my mind, this is the central strategic challenge in the U.S.-China relationship, and if we don’t address it forthrightly, it will be more difficult to manage in the future.”


 
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Wednesday, February 13, 2013

A Banking Union for the Euro Area. IMF Staff Discussion Note

A Banking Union for the Euro Area. By Rishi Goyal, Petya Koeva Brooks, Mahmood Pradhan, Thierry Tressel, Giovanni Dell'Ariccia, Ross Leckow, Ceyla Pazarbasioglu, and an IMF Staff Team
IMF Staff Discussion Note 13/01
February 13, 2013
http://www.imf.org/external/pubs/cat/longres.aspx?sk=40317.0

Summary: The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.

ISBN/ISSN: 9781475521160 / 2221-030X
Stock No: SDNEA2013001


Executive summary:
  • A banking union—a single supervisory-regulatory framework, resolution mechanism, and safety net—for the euro area is the logical conclusion of the idea that integrated banking systems require integrated prudential oversight.
  • The case for a banking union for the euro area is both immediate and longer term. Moving responsibility for potential financial support and bank supervision to a shared level can reduce fragmentation of financial markets, stem deposit flight, and weaken the vicious loop of rising sovereign and bank borrowing costs. In steady state, a single framework should bring a uniformly high standard of confidence and oversight, reduce national distortions, and mitigate the buildup of concentrated risk that compromises systemic stability. Time is of the essence.
  • Progress is required on all elements. A single supervisory mechanism (SSM) must ultimately supervise all banks, with clarity on duties, powers and accountability, and adequate resources. But without common resolution and safety nets and credible backstops, an SSM alone will do little to weaken vicious sovereign-bank links; they are necessary also to limit conflicts of interest between national authorities and the SSM. A single resolution authority, with clear ex ante burden-sharing mechanisms, must have strong powers to close or restructure banks and be required to intervene well ahead of insolvency. A common resolution/insurance fund, sized to resolve some small to medium bank failures, with access to common backstops for systemic situations, would add credibility and facilitate limited industry funding.
  • The challenge for policymakers is to stem the crisis while ensuring that actions dovetail seamlessly into the future steady state. Hence, agreeing at the outset on the elements, modalities, and resources for a banking union can help avoid the pitfalls of a piecemeal approach and an outcome that is worse than at the start. The December 2012 European Council agreement on an SSM centered at the European Central Bank (ECB) is an important step, but raises challenges that should not be underestimated. Meanwhile, to delink weak sovereigns from future residual banking sector risks, it will be important to undertake as soon as possible direct recapitalization of frail domestically systemic banks by the European Stability Mechanism (ESM). Failing, non-systemic banks should be wound down at least cost, and frail, domestically systemic banks should be resuscitated by shareholders, creditors, the sovereign, and the ESM.
  • A banking union is necessary for the euro area, but accommodating the concerns of non-euro area European Union (EU) countries will augur well for consistency with the EU single market.

Views from Japan: Comments on the incidents with China's naval forces

Q&A session with "aki", a Japanese citizen, on contemporary politics

Q: Maybe you'd like to publish some short comments on the incidents with China's naval forces

A: yes, i've been interested in it indeed.

Chinese government seems pushing themselves to the edge of cliff. they are scared of that their citizens make disorder against the them, so they need to make "scapegoats" outside of the country to distract the people's view to protect themselves.

recently Chinese citizens' been tending to show their frustration to the government, because of the corruptions of politics and unfair distribution of wealth.

they are trying to make Japan the "scapegoat" now. but the government of Japan never reacted their provocations, just do what we should do in internationally "right" way. that makes China nervous - if they stimulate japan more, they will be censured in the world, but never can show their citizens compromising attitude... these days, their behavior looks like north Korea's. never look they are the economically 2nd biggest country.

need to watch it carefully. (personally, a sort of fun to see how they do)

aki

Wednesday, January 23, 2013

Q&A session with a Japanese citizen on contemporary politics

The comments of a Japanese citizens on politics and our questions:
[...]

- what do supporters of Tokyo's governor say about him? I always read comments against him, but he wins the elections, so there are lots of (silent) supporters.

our present PM Shinzo Abe is supported by citizens pretty well so far. he showed a policy for economics called "Abenomics" lately. then even though nothing's done yet just show it to us, stock prises' been rising and rising, curency rate's been much better (Yen got too much strong and international exporting companies as even Sony, Panasonic or Toyota were getting big loss for these 3 years).

also, his strategy of international is evaluated. former government always compromised to Chinese or Korean's unreasonable accusations just for economical reasons. but he is trying to build a strong relationships between South-east Asian countries, Australia, India and Russia. especially SE Asian countries welcome this because they've been threatened by Chinese forces, they've actually wanted Japan to have leadership against China.
he seems doing very fine now.

i have to say many of japanese medias have big problems... many people in medias are kind of "traitor". they pick up "noisy minority" and show it just like the majority to give Japan bad names to the world... it's fine if their opinions are to make things better, but just critisise. it will be too long if i explain this.

Question: what do supporters of nuclear arms say? I always read assurances about the Japanese not wanting the A-bomb, but from time to time some politician says that Japan is considering protecting herself (against North Korea and China)

i think there are not many supporters of nuclear arms. some polititians and scholars are saying to discuss it. because almost all of Japanese has a sort of allergy for nuclear weapons (it comes from trauma of WW2) and even discussions are taboo. indeed, even though we have been aimed by Chinese and maybe Korean A-missiles. so they are claiming to get out of trauma now. also they say even only discussion will be a detterent to the countries. (personally i agree with them, we don't need to have it, but it's nonsense not to even talk). recently it seems peoples who agree with it has been increasing.

PM Abe is trying to have a good relationship between US, but on the other hand, trying to protect ourself with proper forces. and it's generally supported by majority (at least it seems so to me). almost all of people likes US better than China in politics, but lately people started to think stand by ourselvs.
actually now is the turning point of Japan after WW2 i think...

if you want to understand how Japanese are, it might be important to understand "Shinto". it's a domestic thoughts/philosophy of Japan, quite religious but not religion. it says we have 8 million gods in our land - god of fire, god of wood, god of sea, god of marrige, god of traffic, god of study... so we should thank to everything, be good and respect others. it is the base of moral of Japanese, we are brought up with it by our parents. it's easy to accept other religion for Shinto, because any god or buddha of other religions can be one of the god. (Japanese buddism are a lot influenced and mixed with Shinto). our Tenno (emperor) is regarded as offspring of the god. http://en.wikipedia.org/wiki/Shinto

last year, South Korean president insulted Tenno, then all of Japanese citizens got angry, (i have never seen such angry Japanese ever!), i understood Tenno is the symbol of this country and Shinto at the moment.

sorry it's getting out of focus.

[...]

take care,

[...]

---
Remember Ozawa: "If Japan desires, it can possess thousands of nuclear warheads." 2009. https://www.bipartisanalliance.com/2009/06/remember-ozawa-if-japan-desires-it-can.html

Sunday, January 20, 2013

Are there clear affinities of Communism with Fascism?

Political philosopher John N. Gray on liberals' totalitarian temptation
Times Literary Supplement, Jan 02, 2013:

One of the features that distinguished Bolshevism from Tsarism was the insistence of Lenin and his followers on the need for a complete overhaul of society. Old-fashioned despots may modernize in piecemeal fashion if doing so seems necessary to maintain their power, but they do not aim at remaking society on a new model, still less at fashioning a new type of humanity. Communist regimes engaged in mass killing in order to achieve these transformations, and paradoxically it is this essentially totalitarian ambition that has appealed to liberals. Here as elsewhere, the commonplace distinction between utopianism and meliorism is less than fundamental. In its predominant forms, liberalism has been in recent times a version of the religion of humanity, and with rare exceptions— [Bertrand] Russell is one of the few that come to mind—liberals have seen the Communist experiment as a hyperbolic expression of their own project of improvement; if the experiment failed, its casualties were incurred for the sake of a progressive cause. To think otherwise—to admit the possibility that the millions who were judged to be less than fully human suffered and died for nothing—would be to question the idea that history is a story of continuing human advance, which for liberals today is an article of faith. That is why, despite all evidence to the contrary, so many of them continue to deny Communism's clear affinities with Fascism. Blindness to the true nature of Communism is an inability to accept that radical evil can come from the pursuit of progress.

John Gray is professor emeritus at the London School of Economics

Saturday, January 5, 2013

We, Too, Are Violent Animals. By Jane Goodall, Richard Wrangham, and Dale Peterson

We, Too, Are Violent Animals. By Jane Goodall, Richard Wrangham, and Dale Peterson
Those who doubt that human aggression is an evolved trait should spend more time with chimpanzees and wolvesThe Wall Street Journal,January 5, 2013, on page C3
http://online.wsj.com/article/SB10001424127887323874204578220002834225378.html

Where does human savagery come from? The animal behaviorist Marc Bekoff, writing in Psychology Today after last month's awful events in Newtown, Conn., echoed a common view: It can't possibly come from nature or evolution. Harsh aggression, he wrote, is "extremely rare" in nonhuman animals, while violence is merely an odd feature of our own species, produced by a few wicked people. If only we could "rewild our hearts," he concluded, we might harness our "inborn goodness and optimism" and thereby return to our "nice, kind, compassionate, empathic" original selves.

If only if it were that simple. Calm and cooperative behavior indeed predominates in most species, but the idea that human aggression is qualitatively different from that of every other species is wrong.

The latest report from the research site that one of us (Jane Goodall) directs in Tanzania gives a quick sense of what a scientist who studies chimpanzees actually sees: "Ferdinand [the alpha male] is rather a brutal ruler, in that he tends to use his teeth rather a lot…a number of the males now have scars on their backs from being nicked or gashed by his canines…The politics in Mitumba [a second chimpanzee community] have also been bad. If we recall that: they all killed alpha-male Vincent when he reappeared injured; then Rudi as his successor probably killed up-and-coming young Ebony to stop him helping his older brother Edgar in challenging him…but to no avail, as Edgar eventually toppled him anyway."

A 2006 paper reviewed evidence from five separate chimpanzee populations in Africa, groups that have all been scientifically monitored for many years. The average "conservatively estimated risk of violent death" was 271 per 100,000 individuals per year. If that seems like a low rate, consider that a chimpanzee's social circle is limited to about 50 friends and close acquaintances. This means that chimpanzees can expect a member of their circle to be murdered once every seven years. Such a rate of violence would be intolerable in human society.

The violence among chimpanzees is impressively humanlike in several ways. Consider primitive human warfare, which has been well documented around the world. Groups of hunter-gatherers who come into contact with militarily superior groups of farmers rapidly abandon war, but where power is more equal, the hostility between societies that speak different languages is almost endless. Under those conditions, hunter-gatherers are remarkably similar to chimpanzees: Killings are mostly carried out by males, the killers tend to act in small gangs attacking vulnerable individuals, and every adult male in the society readily participates. Moreover, with hunter-gatherers as with chimpanzees, the ordinary response to encountering strangers who are vulnerable is to attack them.

Most animals do not exhibit this striking constellation of behaviors, but chimpanzees and humans are not the only species that form coalitions for killing. Other animals that use this strategy to kill their own species include group-living carnivores such as lions, spotted hyenas and wolves. The resulting mortality rate can be high: Among wolves, up to 40% of adults die from attacks by other packs.

Killing among these carnivores shows that ape-sized brains and grasping hands do not account for this unusual violent behavior. Two other features appear to be critical: variable group size and group-held territory. Variable group size means that lone individuals sometimes encounter small, vulnerable parties of neighbors. Having group territory means that by killing neighbors, the group can expand its territory to find extra resources that promote better breeding. In these circumstances, killing makes evolutionary sense—in humans as in chimpanzees and some carnivores.

What makes humans special is not our occasional propensity to kill strangers when we think we can do so safely. Our unique capacity is our skill at engineering peace. Within societies of hunter-gatherers (though only rarely between them), neighboring groups use peacemaking ceremonies to ensure that most of their interactions are friendly. In state-level societies, the state works to maintain a monopoly on violence. Though easily misused in the service of those who govern, the effect is benign when used to quell violence among the governed.

Under everyday conditions, humans are a delightfully peaceful and friendly species. But when tensions mount between groups of ordinary people or in the mind of an unstable individual, emotion can lead to deadly events. There but for the grace of fortune, circumstance and effective social institutions go you and I. Instead of constructing a feel-good fantasy about the innate goodness of most people and all animals, we should strive to better understand ourselves, the good parts along with the bad.

—Ms. Goodall has directed the scientific study of chimpanzee behavior at Gombe Stream National Park in Tanzania since 1960. Mr. Wrangham is the Ruth Moore Professor of Biological Anthropology at Harvard University. Mr. Peterson is the author of "Jane Goodall: The Woman Who Redefined Man."

Monday, December 24, 2012

A case study in the dangers of the Law of the Sea Treaty

Lawless at Sea. WSJ Editorial
A case study in the dangers of the Law of the Sea Treaty.
The Wall Street Journal, December 24, 2012, on page A12
http://online.wsj.com/article/SB10001424127887324407504578187523862827016.html

The curious case of the U.S. hedge fund, the Argentine ship and Ghana is getting curiouser, and now it has taken a turn against national sovereignty. That's the only reasonable conclusion after a bizarre ruling this month from the International Tribunal for the Law of the Sea in Hamburg.

The tribunal—who knew it existed?—ordered the Republic of Ghana to overrule a decision of its own judiciary that had enforced a U.S. court judgment. The Hamburg court is the misbegotten child of the 1982 United Nations Convention on the Law of the Sea. Sold as a treaty to ensure the free movement of people and goods on the high seas, it was rejected by Ronald Reagan as an effort to control and redistribute the resources of the world's oceans.

The U.S. never has ratified the treaty, despite a push by President Obama, and now the solons of Hamburg have demonstrated the wisdom of that decision. While debates on the treaty have centered around the powers a country might enjoy hundreds of miles off its coast, many analysts have simply assumed that nations would still exercise control over the waters just offshore.

Now the Hamburg court has trampled local law in a case involving a ship sitting in port, and every country is now on notice that a Hamburg court is claiming authority over its internal waters.

Specifically, Hamburg ordered Ghana to release a sailing ship owned by the Argentine navy. On October 2, a subsidiary of U.S. investment fund Elliott Management persuaded a Ghanaian judge to order the seizure of the vessel. The old-fashioned schooner, used to train cadets, was on a tour of West Africa.

U.S. hedge funds don't normally seize naval ships, but in this case Elliott and the Ghanaian court are on solid ground. Elliott owns Argentine bonds on which Buenos Aires has been refusing to pay since its 2001 default. Elliott argues that a contract is a contract, and a federal court in New York agrees. Argentina had freely decided to issue its debt in U.S. capital markets and had agreed in its bond contracts to waive the sovereign immunity that would normally prevent lenders from seizing things like three-masted frigates.

To his credit, Judge Richard Adjei-Frimpong of Ghana's commercial court noted that Argentina had specifically waived its immunity when borrowing the money and that under Ghanaian law the ship could therefore be attached by creditors with a valid U.S. judgment registered in Ghana. He ordered the ship held at port until Buenos Aires starts following the orders of the U.S. court.

But in its recent ruling, which ordered Ghana to release the ship by December 22, the Hamburg court claimed that international law requires immunity for the Argentine "warship," as if Argentina never waived immunity and as if this is an actual warship. On Wednesday, Ghana released the vessel, and the ship set sail from the port of Tema for its trans-Atlantic voyage.

So here we have a case in which a small African nation admirably tried to adhere to the rule of law. Yet it was bullied by a global tribunal serving the ends of Argentina, which has brazenly violated the law in refusing to pay its debts and defying Ghana's court order. The next time the Senate moves to ratify the Law of the Sea Treaty, Ghana should be exhibit A for opponents.