Commentary Magazine


Topic: World Bank

Obama World Bank Pick: Growth Kills

It’s come to light that Barack Obama’s nominee for president of the World Bank, Jim Yong Kim, has some zany ideas about free markets, growth, and “social equity.” If recently found quotes from Kim’s published works are representative, Obama should have redirected his resume to the Human Resource Department of the Central Bank of Cuba.

In 2000, Kim co-edited the subtly titled Dying for Growth: Global Inequality and the Health of the Poor. The Noam Chomsky inspired work seems to make the case that the World Bank is an evil capitalist tool and that economic growth in developing countries . . . kills:

“This book seeks to fill an important gap in knowledge by examining the documentable health effects of economic development policies and strategies promoted by the governments of wealthy countries and by international agencies such as the World Bank, the International Monetary Fund (IMF), and the World Trade Organization.”

“The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”

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It’s come to light that Barack Obama’s nominee for president of the World Bank, Jim Yong Kim, has some zany ideas about free markets, growth, and “social equity.” If recently found quotes from Kim’s published works are representative, Obama should have redirected his resume to the Human Resource Department of the Central Bank of Cuba.

In 2000, Kim co-edited the subtly titled Dying for Growth: Global Inequality and the Health of the Poor. The Noam Chomsky inspired work seems to make the case that the World Bank is an evil capitalist tool and that economic growth in developing countries . . . kills:

“This book seeks to fill an important gap in knowledge by examining the documentable health effects of economic development policies and strategies promoted by the governments of wealthy countries and by international agencies such as the World Bank, the International Monetary Fund (IMF), and the World Trade Organization.”

“The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.”

You know what doesn’t worsen lives, according to Kim and Co? Castronomics:

“Using Cuba as an example, Chapter Thirteen makes the case that when leaders prioritize social equity and the fundamental right of all citizens to health care, even economically strapped governments can achieve improved and more equitable health outcomes.”

The editors quote Chomsky approvingly on the tyrannical brutality of economic growth:

“Today, Chomsky notes, we see widespread ‘efforts to make people feel helpless, as if there is some kind of mysterious economic law that forces things to happen in a particular way, like the law of gravitation.’ Yet belief in such an immutable law is simply ‘nonsense.’  ‘These are all human institutions, they are subject to human will, and they can be eliminated like other tyrannical institutions have been.’”

Perhaps when Obama gets back from fine tuning the details of his second term with his Moscow cabinet, he’ll have a perfectly good explanation for why the only person he could find to head the World Bank was a man who seems interested in realigning it with Havana economic policy.  Then again, perhaps Obama is entering into one of those PR nightmare phases of his. A hot-mic moment, a radical World Bank president. Who knows what’s next.

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Things We Shouldn’t Be Doing with China

Four U.S. senators have registered concern about the proposal of a start-up company, Amerilink Telecom Corp., to upgrade Sprint Nextel’s national network to 4G data-rate capacity using Chinese-provided equipment from Huawei Shenzen Ltd., a company with longstanding ties to the Chinese military. The point made by the senators – Joe Lieberman, Susan Collins, Jon Kyl, and Sue Myrick – is that China could install a surveillance or sabotage capability in a very large segment of the U.S. wireless infrastructure. The scope of the Sprint Nextel 4G upgrade reportedly encompasses about 35,000 transmission towers throughout the 50 states.

Huawei has been trying to crack the U.S. market for years but has always been blocked by the security concerns of American officials, backed by comprehensive cyber-security reports from intelligence agencies and the Pentagon. Huawei hoped to contract directly with Sprint this past summer, but when a group of senators shot that attempt down, a senior Sprint executive left the company to join Amerilink and began planning a new strategy to bring Huawei into the U.S. telecommunications infrastructure. The strategy has included developing “insider” connections by recruiting Dick Gephardt and former World Bank president James Wolfensohn to Amerilink’s board, along with former Navy secretary and Defense Department official Gordon England.

Although vigilant senators deflected the Huawei-Sprint bid as recently as August, there’s a reason for disquiet in October. In a move that received little attention outside the tech-industry press, Huawei finally managed this month to contract with a U.S. wireless provider, T-Mobile, to supply handsets to customers. On Monday, Forbes tech writer Jeffrey Carr wondered why this contract was allowed to go through, considering that T-Mobile is a government contractor and supplies handsets and wireless service to federal agencies.

That’s a good question. India, Britain, and Australia have all zeroed in on Huawei (along with Chinese tech firm ZTE) as a source of potential security risks. India’s resistance to penetration has equaled that of the U.S. – and may soon exceed it. America seems to be quietly lowering its guard with Huawei: the announcement of the T-Mobile contract last week came on the heels of an October 11 press release from Huawei Symantec on its plan to sell data-storage platforms and gateway packages to U.S. customers. For a company that has consistently been excluded from the U.S. due to security concerns, that’s a lot of market-entry announcements in one week.

The Stuxnet worm has reminded us of the stealthy and devious methods by which security vulnerabilities can be introduced into the IT systems that control major infrastructure operations. We won’t see the next “Stuxnet” coming, or the one after that; the events of 2010 clarify for us that we can’t rely solely on technical vigilance to protect our critical infrastructure. We also need a basis for trusting suppliers the old-fashioned way. China and its tech companies haven’t met that test.

Four U.S. senators have registered concern about the proposal of a start-up company, Amerilink Telecom Corp., to upgrade Sprint Nextel’s national network to 4G data-rate capacity using Chinese-provided equipment from Huawei Shenzen Ltd., a company with longstanding ties to the Chinese military. The point made by the senators – Joe Lieberman, Susan Collins, Jon Kyl, and Sue Myrick – is that China could install a surveillance or sabotage capability in a very large segment of the U.S. wireless infrastructure. The scope of the Sprint Nextel 4G upgrade reportedly encompasses about 35,000 transmission towers throughout the 50 states.

Huawei has been trying to crack the U.S. market for years but has always been blocked by the security concerns of American officials, backed by comprehensive cyber-security reports from intelligence agencies and the Pentagon. Huawei hoped to contract directly with Sprint this past summer, but when a group of senators shot that attempt down, a senior Sprint executive left the company to join Amerilink and began planning a new strategy to bring Huawei into the U.S. telecommunications infrastructure. The strategy has included developing “insider” connections by recruiting Dick Gephardt and former World Bank president James Wolfensohn to Amerilink’s board, along with former Navy secretary and Defense Department official Gordon England.

Although vigilant senators deflected the Huawei-Sprint bid as recently as August, there’s a reason for disquiet in October. In a move that received little attention outside the tech-industry press, Huawei finally managed this month to contract with a U.S. wireless provider, T-Mobile, to supply handsets to customers. On Monday, Forbes tech writer Jeffrey Carr wondered why this contract was allowed to go through, considering that T-Mobile is a government contractor and supplies handsets and wireless service to federal agencies.

That’s a good question. India, Britain, and Australia have all zeroed in on Huawei (along with Chinese tech firm ZTE) as a source of potential security risks. India’s resistance to penetration has equaled that of the U.S. – and may soon exceed it. America seems to be quietly lowering its guard with Huawei: the announcement of the T-Mobile contract last week came on the heels of an October 11 press release from Huawei Symantec on its plan to sell data-storage platforms and gateway packages to U.S. customers. For a company that has consistently been excluded from the U.S. due to security concerns, that’s a lot of market-entry announcements in one week.

The Stuxnet worm has reminded us of the stealthy and devious methods by which security vulnerabilities can be introduced into the IT systems that control major infrastructure operations. We won’t see the next “Stuxnet” coming, or the one after that; the events of 2010 clarify for us that we can’t rely solely on technical vigilance to protect our critical infrastructure. We also need a basis for trusting suppliers the old-fashioned way. China and its tech companies haven’t met that test.

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Washington’s West Bank Pyromania

Secretary of State Hillary Clinton made a stunning admission last week that has garnered far too little attention. After a de rigueur assertion that the Israeli-Palestinian “status quo is unsustainable,” she added, “That doesn’t mean it can’t be sustained for a year, or a decade, or two or three.”

But if so, why the rush to solve the conflict now, when all signs indicate that a deal is unachievable and another round of failed talks could greatly worsen the situation?

One could simply say she’s wrong; the status quo is intolerable for suffering Palestinians. But the facts are on her side.

First, the territories are experiencing unprecedented economic growth. The World Bank reported last week that the West Bank economy grew 9 percent in the first half of this year, while Gaza (you remember — that giant Israeli prison locked in hopeless poverty and misery?) grew an incredible 16 percent. For the West Bank, this represents a second year of strong growth; last year’s was 8.5 percent.

The World Bank hastened to declare that we should never mind the facts; growth under occupation is unsustainable. And growth in Gaza (which isn’t occupied) might well be: it was artificially boosted by reconstruction after last year’s war and the abrupt easing of Israel’s blockade in May. But the West Bank’s two-year surge shows that economic reforms like those instituted by Palestinian Prime Minister Salam Fayyad, coupled with a sharp drop in terror that has let Israel greatly ease its restrictions on Palestinian movement, make long-term growth quite feasible.

Second, West Bankers have evidently learned a lesson from the second intifada: support for terror there is very low, making a resurgence that would upset the current calm unlikely. Indeed, during a visit this month to the Balata refugee camp, once “a hotbed of extremism,” a Haaretz reporter “was hard-pressed to find any passersby who were willing to express support for it.” As resident Imad Hassan explained, “What good did this [terror] do us?”

By contrast, the current calm is doing West Bankers a lot of good, and they’re clearly savoring it. As Haaretz reported following a Ramadan visit to Ramallah last month:

The one phrase not on the lips of local shoppers in their conversations with this Israeli reporter on Wednesday was “the occupation” — unlike during prior visits, when the occupation and the conflict with the Jews were regularly raised. These days, the hot topic is business. Peace negotiations, and even the Gaza Strip, are irrelevant.

In short, West Bankers, too, consider the status quo tolerable; they’re more concerned with business than “the occupation.”

One thing, however, could yet disrupt this status quo: as several CONTENTIONS contributors have noted, negotiations that collapse amid mutual recriminations have triggered violent explosions in the past, and could well do so again.

So to try to achieve an agreement that overwhelming majorities of both Israelis and Palestinians believe is currently unachievable, the Obama administration is risking the violent implosion of a status quo that it admits is sustainable for decades. That isn’t “smart diplomacy”; it’s the irresponsibility of a pyromaniac near a barrel of gunpowder.

Secretary of State Hillary Clinton made a stunning admission last week that has garnered far too little attention. After a de rigueur assertion that the Israeli-Palestinian “status quo is unsustainable,” she added, “That doesn’t mean it can’t be sustained for a year, or a decade, or two or three.”

But if so, why the rush to solve the conflict now, when all signs indicate that a deal is unachievable and another round of failed talks could greatly worsen the situation?

One could simply say she’s wrong; the status quo is intolerable for suffering Palestinians. But the facts are on her side.

First, the territories are experiencing unprecedented economic growth. The World Bank reported last week that the West Bank economy grew 9 percent in the first half of this year, while Gaza (you remember — that giant Israeli prison locked in hopeless poverty and misery?) grew an incredible 16 percent. For the West Bank, this represents a second year of strong growth; last year’s was 8.5 percent.

The World Bank hastened to declare that we should never mind the facts; growth under occupation is unsustainable. And growth in Gaza (which isn’t occupied) might well be: it was artificially boosted by reconstruction after last year’s war and the abrupt easing of Israel’s blockade in May. But the West Bank’s two-year surge shows that economic reforms like those instituted by Palestinian Prime Minister Salam Fayyad, coupled with a sharp drop in terror that has let Israel greatly ease its restrictions on Palestinian movement, make long-term growth quite feasible.

Second, West Bankers have evidently learned a lesson from the second intifada: support for terror there is very low, making a resurgence that would upset the current calm unlikely. Indeed, during a visit this month to the Balata refugee camp, once “a hotbed of extremism,” a Haaretz reporter “was hard-pressed to find any passersby who were willing to express support for it.” As resident Imad Hassan explained, “What good did this [terror] do us?”

By contrast, the current calm is doing West Bankers a lot of good, and they’re clearly savoring it. As Haaretz reported following a Ramadan visit to Ramallah last month:

The one phrase not on the lips of local shoppers in their conversations with this Israeli reporter on Wednesday was “the occupation” — unlike during prior visits, when the occupation and the conflict with the Jews were regularly raised. These days, the hot topic is business. Peace negotiations, and even the Gaza Strip, are irrelevant.

In short, West Bankers, too, consider the status quo tolerable; they’re more concerned with business than “the occupation.”

One thing, however, could yet disrupt this status quo: as several CONTENTIONS contributors have noted, negotiations that collapse amid mutual recriminations have triggered violent explosions in the past, and could well do so again.

So to try to achieve an agreement that overwhelming majorities of both Israelis and Palestinians believe is currently unachievable, the Obama administration is risking the violent implosion of a status quo that it admits is sustainable for decades. That isn’t “smart diplomacy”; it’s the irresponsibility of a pyromaniac near a barrel of gunpowder.

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Rand Paul’s Foreign Policy

Rand Paul has tried to dial back the extreme isolationist rhetoric expressed by his father, Ron Paul, who once suggested that 9/11 was our fault for provoking al-Qaeda. For instance, the junior Paul, who is now the GOP Senate candidate in Kentucky, says that he’s against a “wholesale withdrawal” from Afghanistan or Iraq (as opposed to a partial pullout?) and that he’s in favor of winning wars once we get into them. Moreover, he favors keeping Guantanamo open and trying terrorists in military tribunals.

But his victory is still bad news for Republicans who believe in a strong and active foreign policy. All you have to do is look at his website to see that he holds a quirky — and untenable — view of a “Fortress America.” He writes, “I believe our greatest national security threat is our lack of security at the border,” a threat that he proposes to address by imposing “a moratorium on Visas from about ten rogue nations or anybody that has traveled to those nations.” This may sound like a seductive solution, but it will not keep us safe, because numerous terrorists (like the would-be Times Square bomber) already have U.S. citizenship or citizenship from non-rogue states such as the United Kingdom. By closing our doors to “rogue nation” citizens (which nations qualify? he doesn’t say), he spurns our best counter-radicalization tool — the ability to educate foreign students in the United States.

The rest of his bare-bones foreign-policy statements consists of red herrings, such as his demand “that we fight only under U.S. Commander and not the UN” — as if UN command of U.S. forces were a big issue. Only in the Paul household, I suspect. And maybe the Pat Buchanan household too. Rand Paul really goes deep into isolationist territory with his views on “sovereignty”:

The Founding Fathers warned us that foreign alliances sacrifice our independence as a nation. In Thomas Jefferson’s First Inaugural Address, he asserted that America should have “peace, commerce and honest friendship with all nations — entangling alliances with none.” Yet today, America is often subservient to foreign bodies such as the International Monetary Fund (IMF), World Bank, World Trade Organization (WTO), and the United Nations (UN). …

Rand Paul proposes that America can engage the world in free trade, develop lucrative commercial relationships with other nations, and defend its national interests without funding or joining international organizations. The U.S. Government must answer only to the Constitution and the citizens protected by it.

I suppose some on the right would join him in denouncing the UN, but what about the IMF, World Bank, and WTO? Generally I think most conservatives are Hamiltonian (one of the Founding Fathers whom Paul doesn’t mention) and believe that we gain from such trade and economic arrangements, which, yes, restrict sovereignty to some small degree but in the process immeasurably benefit the United States by curtailing tariffs and other obstacles to economic growth. There is ample room to criticize and improve the UN, IMF, World Bank, WTO, and other organizations, but Paul’s suggestion that we not fund or join any international organizations suggests that he is advocating a fringe foreign-policy outlook — one I hope is not representative of the Tea Party movement as a whole.

Rand Paul has tried to dial back the extreme isolationist rhetoric expressed by his father, Ron Paul, who once suggested that 9/11 was our fault for provoking al-Qaeda. For instance, the junior Paul, who is now the GOP Senate candidate in Kentucky, says that he’s against a “wholesale withdrawal” from Afghanistan or Iraq (as opposed to a partial pullout?) and that he’s in favor of winning wars once we get into them. Moreover, he favors keeping Guantanamo open and trying terrorists in military tribunals.

But his victory is still bad news for Republicans who believe in a strong and active foreign policy. All you have to do is look at his website to see that he holds a quirky — and untenable — view of a “Fortress America.” He writes, “I believe our greatest national security threat is our lack of security at the border,” a threat that he proposes to address by imposing “a moratorium on Visas from about ten rogue nations or anybody that has traveled to those nations.” This may sound like a seductive solution, but it will not keep us safe, because numerous terrorists (like the would-be Times Square bomber) already have U.S. citizenship or citizenship from non-rogue states such as the United Kingdom. By closing our doors to “rogue nation” citizens (which nations qualify? he doesn’t say), he spurns our best counter-radicalization tool — the ability to educate foreign students in the United States.

The rest of his bare-bones foreign-policy statements consists of red herrings, such as his demand “that we fight only under U.S. Commander and not the UN” — as if UN command of U.S. forces were a big issue. Only in the Paul household, I suspect. And maybe the Pat Buchanan household too. Rand Paul really goes deep into isolationist territory with his views on “sovereignty”:

The Founding Fathers warned us that foreign alliances sacrifice our independence as a nation. In Thomas Jefferson’s First Inaugural Address, he asserted that America should have “peace, commerce and honest friendship with all nations — entangling alliances with none.” Yet today, America is often subservient to foreign bodies such as the International Monetary Fund (IMF), World Bank, World Trade Organization (WTO), and the United Nations (UN). …

Rand Paul proposes that America can engage the world in free trade, develop lucrative commercial relationships with other nations, and defend its national interests without funding or joining international organizations. The U.S. Government must answer only to the Constitution and the citizens protected by it.

I suppose some on the right would join him in denouncing the UN, but what about the IMF, World Bank, and WTO? Generally I think most conservatives are Hamiltonian (one of the Founding Fathers whom Paul doesn’t mention) and believe that we gain from such trade and economic arrangements, which, yes, restrict sovereignty to some small degree but in the process immeasurably benefit the United States by curtailing tariffs and other obstacles to economic growth. There is ample room to criticize and improve the UN, IMF, World Bank, WTO, and other organizations, but Paul’s suggestion that we not fund or join any international organizations suggests that he is advocating a fringe foreign-policy outlook — one I hope is not representative of the Tea Party movement as a whole.

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LIVE BLOG: America in the World

Obama takes some dramatic license in recounting his record:

I have spent this year renewing our alliances and forging new partnerships. And we have forged a new beginning between America and the Muslim World – one that recognizes our mutual interest in breaking a cycle of conflict, and that promises a future in which those who kill innocents are isolated by those who stand up for peace and prosperity and human dignity.

Finally, we must draw on the strength of our values – for the challenges that we face may have changed, but the things that we believe in must not.  That is why we must promote our values by living them at home – which is why I have prohibited torture and will close the prison at Guantanamo Bay. And we must make it clear to every man, woman and child around the world who lives under the dark cloud of tyranny that America will speak out on behalf of their human rights, and tend to the light of freedom, and justice, and opportunity, and respect for the dignity of all peoples. That is who we are. That is the moral source of America’s authority.

It would have been grand had he done all that! But to his credit, he also gives one of his more robust defenses of America’s role in the world:

Since the days of Franklin Roosevelt, and the service and sacrifice of our grandparents, our country has borne a special burden in global affairs. We have spilled American blood in many countries on multiple continents. We have spent our revenue to help others rebuild from rubble and develop their own economies. We have joined with others to develop an architecture of institutions – from the United Nations to NATO to the World Bank – that provide for the common security and prosperity of human beings.

We have not always been thanked for these efforts, and we have at times made mistakes. But more than any other nation, the United States of America has underwritten global security for over six decades – a time that, for all its problems, has seen walls come down, markets open, billions lifted from poverty, unparalleled scientific progress, and advancing frontiers of human liberty.

For unlike the great powers of old, we have not sought world domination. Our union was founded in resistance to oppression. We do not seek to occupy other nations. We will not claim another nation’s resources or target other peoples because their faith or ethnicity is different from ours. What we have fought for – and what we continue to fight for – is a better future for our children and grandchildren, and we believe that their lives will be better if other peoples’ children and grandchildren can live in freedom and access opportunity.

More of that would be nice to hear — and when he is talking to other nations, and not just to the cadets at West Point.

Obama takes some dramatic license in recounting his record:

I have spent this year renewing our alliances and forging new partnerships. And we have forged a new beginning between America and the Muslim World – one that recognizes our mutual interest in breaking a cycle of conflict, and that promises a future in which those who kill innocents are isolated by those who stand up for peace and prosperity and human dignity.

Finally, we must draw on the strength of our values – for the challenges that we face may have changed, but the things that we believe in must not.  That is why we must promote our values by living them at home – which is why I have prohibited torture and will close the prison at Guantanamo Bay. And we must make it clear to every man, woman and child around the world who lives under the dark cloud of tyranny that America will speak out on behalf of their human rights, and tend to the light of freedom, and justice, and opportunity, and respect for the dignity of all peoples. That is who we are. That is the moral source of America’s authority.

It would have been grand had he done all that! But to his credit, he also gives one of his more robust defenses of America’s role in the world:

Since the days of Franklin Roosevelt, and the service and sacrifice of our grandparents, our country has borne a special burden in global affairs. We have spilled American blood in many countries on multiple continents. We have spent our revenue to help others rebuild from rubble and develop their own economies. We have joined with others to develop an architecture of institutions – from the United Nations to NATO to the World Bank – that provide for the common security and prosperity of human beings.

We have not always been thanked for these efforts, and we have at times made mistakes. But more than any other nation, the United States of America has underwritten global security for over six decades – a time that, for all its problems, has seen walls come down, markets open, billions lifted from poverty, unparalleled scientific progress, and advancing frontiers of human liberty.

For unlike the great powers of old, we have not sought world domination. Our union was founded in resistance to oppression. We do not seek to occupy other nations. We will not claim another nation’s resources or target other peoples because their faith or ethnicity is different from ours. What we have fought for – and what we continue to fight for – is a better future for our children and grandchildren, and we believe that their lives will be better if other peoples’ children and grandchildren can live in freedom and access opportunity.

More of that would be nice to hear — and when he is talking to other nations, and not just to the cadets at West Point.

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Another “Global Crisis”

Today, United Nations Secretary-General Ban Ki-moon said that the recent increase in food prices has become a “real global crisis.” His comments come after weeks of food riots in Haiti, Egypt, Indonesia, the Philippines, and Ethiopia. The Thai and Pakistani governments have had to call out troops to protect crops. Cambodia and Kazakhstan are banning grain exports. Stores in the United States are limiting purchases of rice. North Korea faces famine. Is this a job for the UN?

Perhaps not. On Sunday, Jean Ziegler, the UN’s special rapporteur on the right to food, accused the West of causing starvation in poor countries through, among other things, the promotion of biofuels and the maintenance of farm subsidies. “This is silent mass murder,” he said. Multinationals, for their part, are responsible for “structural violence.”

Ziegler also attacked commodity markets. “And we have a herd of market traders, speculators and financial bandits who have turned wild and constructed a world of inequality and horror,” he noted. “We have to put a stop to this.”

What we have to put a stop to is the UN promotion of world government and socialism. The solution to rising global food prices–they have increased 83 percent in the last three years according to the World Bank–is not more UN food aid, which has undermined agriculture in fragile states. The answer is allowing markets to work. Increasing food costs, after all, will encourage further farm production.

And let me add this: there is no right to food. There is, however, a right to live in a free society where people have the ability to provide for themselves. Unfortunately, the UN has yet to appoint a special rapporteur for common sense.

Today, United Nations Secretary-General Ban Ki-moon said that the recent increase in food prices has become a “real global crisis.” His comments come after weeks of food riots in Haiti, Egypt, Indonesia, the Philippines, and Ethiopia. The Thai and Pakistani governments have had to call out troops to protect crops. Cambodia and Kazakhstan are banning grain exports. Stores in the United States are limiting purchases of rice. North Korea faces famine. Is this a job for the UN?

Perhaps not. On Sunday, Jean Ziegler, the UN’s special rapporteur on the right to food, accused the West of causing starvation in poor countries through, among other things, the promotion of biofuels and the maintenance of farm subsidies. “This is silent mass murder,” he said. Multinationals, for their part, are responsible for “structural violence.”

Ziegler also attacked commodity markets. “And we have a herd of market traders, speculators and financial bandits who have turned wild and constructed a world of inequality and horror,” he noted. “We have to put a stop to this.”

What we have to put a stop to is the UN promotion of world government and socialism. The solution to rising global food prices–they have increased 83 percent in the last three years according to the World Bank–is not more UN food aid, which has undermined agriculture in fragile states. The answer is allowing markets to work. Increasing food costs, after all, will encourage further farm production.

And let me add this: there is no right to food. There is, however, a right to live in a free society where people have the ability to provide for themselves. Unfortunately, the UN has yet to appoint a special rapporteur for common sense.

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Putin’s Real Record

Surprise, surprise. In an “election” with all the suspense of the Harlem Globetrotters beating the Washington Generals, Russian voters dutifully handed their presidency to Vladimir Putin’s hand-picked successor, Dmitri Medvedev, who promised to keep Czar Vladimir around as his prime minister.

There is little doubt that Putin and Medvedev are genuinely popular, if only because their critics have been denied access to the news media, parliament, and any other possible source of opposition. But does Putin have a real record of achievement to run on? He tells Russian voters all the time that he restored the country’s greatness and prosperity after the terrible times of the 1990s. But an article in the last issue of Foreign Affairs, “The Myth of the Authoritarian Model” by Michael McFaul and Kathryn Stoner-Weiss of Stanford University, shreds those claims.

The authors concede that Russia’s economy has done well in recent years:

As Putin has consolidated his authority, growth has averaged 6.7 percent — especially impressive against the backdrop of the depression in the early 1990s…. Since 2000, real disposable income has increased by more than 10 percent a year, consumer spending has skyrocketed, unemployment has fallen from 12 percent in 1999 to 6 percent in 2006, and poverty, according to one measure, has declined from 41 percent in 1999 to 14 percent in 2006. Russians are richer today than ever before.

But, they argue, most of this growth is not due to Putin’s policies. Instead it can be traced to the natural recovery from the traumas of communism combined with high oil prices. In fact, notwithstanding Russia’s mineral riches, it has not fared any better than most of its neighbors: “Between 1999 and 2006, Russia ranked ninth out of the 15 post-Soviet countries in terms of average growth. Similarly, investment in Russia, at 18 percent of GDP, although stronger today than ever before, is well below the average for democracies in the region.”

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Surprise, surprise. In an “election” with all the suspense of the Harlem Globetrotters beating the Washington Generals, Russian voters dutifully handed their presidency to Vladimir Putin’s hand-picked successor, Dmitri Medvedev, who promised to keep Czar Vladimir around as his prime minister.

There is little doubt that Putin and Medvedev are genuinely popular, if only because their critics have been denied access to the news media, parliament, and any other possible source of opposition. But does Putin have a real record of achievement to run on? He tells Russian voters all the time that he restored the country’s greatness and prosperity after the terrible times of the 1990s. But an article in the last issue of Foreign Affairs, “The Myth of the Authoritarian Model” by Michael McFaul and Kathryn Stoner-Weiss of Stanford University, shreds those claims.

The authors concede that Russia’s economy has done well in recent years:

As Putin has consolidated his authority, growth has averaged 6.7 percent — especially impressive against the backdrop of the depression in the early 1990s…. Since 2000, real disposable income has increased by more than 10 percent a year, consumer spending has skyrocketed, unemployment has fallen from 12 percent in 1999 to 6 percent in 2006, and poverty, according to one measure, has declined from 41 percent in 1999 to 14 percent in 2006. Russians are richer today than ever before.

But, they argue, most of this growth is not due to Putin’s policies. Instead it can be traced to the natural recovery from the traumas of communism combined with high oil prices. In fact, notwithstanding Russia’s mineral riches, it has not fared any better than most of its neighbors: “Between 1999 and 2006, Russia ranked ninth out of the 15 post-Soviet countries in terms of average growth. Similarly, investment in Russia, at 18 percent of GDP, although stronger today than ever before, is well below the average for democracies in the region.”

Meanwhile, on a host of other measures relating to “public safety, health” and a “secure legal and property-owning environment,” Putin’s autocracy is doing no better, and in many cases worse, than the more democratic Yeltsin regime which preceded it.

McFaul and Stoner-Weiss cite a host of eye-opening statistics to make their point:

• “In the “anarchic” years of 1995-99, the average annual number of murders was 30,200; in the “orderly” years of 2000-2004, the number was 32,200.”

• “The frequency of terrorist attacks in Russia has increased under Putin. The two biggest terrorist attacks in Russia’s history — the Nord-Ost incident at a theater in Moscow in 2002, in which an estimated 300 Russians died, and the Beslan school hostage crisis, in which as many as 500 died — occurred under Putin’s autocracy, not Yeltsin’s democracy.”

• “The death rate from fires is around 40 a day in Russia, roughly ten times the average rate in western Europe.”

• “At the end of the 1990s, annual alcohol consumption per adult was 10.7 liters (compared with 8.6 liters in the United States and 9.7 in the United Kingdom); in 2004, this figure had increased to 14.5 liters. An estimated 0.9 percent of the Russian population is now infected with HIV, and rates of infection in Russia are now the highest of any country outside Africa.”

• “Life expectancy in Russia rose between 1995 and 1998. Since 1999, however, it has declined to 59 years for Russian men and 72 for Russian women.”

• “In 2006, Transparency International ranked Russia at an all-time worst of 121st out of 163 countries on corruption, putting it between the Philippines and Rwanda.

• “Russia ranked 62nd out of 125 on the World Economic Forum’s Global Competitiveness Index in 2006, representing a fall of nine places in a year.”

• “On the World Bank’s 2006 “ease of doing business” index, Russia ranked 96th out of 175, also an all-time worst.”

If he had not eliminated the independence of the press and made it virtually impossible for the opposition to field candidates, Putin might have been made to pay a price for some of these problems at the ballot box.

It will be interesting to see what fate will befall the Kremlin clique if oil prices fall in a big way. By then, of course, their power might be so secure that it won’t make any difference, but a collapse in oil prices would make clear for all to see what McFaul and Stoner-Weiss argue so persuasively: that autocracy in Russia isn’t really a success story.

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Unlearning History

In today’s New York Times, Ian Kershaw seems to suggest all this “never again” talk is bit alarmist. After comparing Adolf Hitler’s rise to power with some of today’s totalitarian threats, he concludes: “Mercifully, what happened in Germany in 1933, and it’s aftermath, will remain a uniquely terrible episode in history.”

After describing the Milosevic, Mugabe, Putin, Chavez, Musharraf, and Ahmadinejad regimes, Kershaw offers his reasons for optimism:

. . .neither in their acquisition of power nor in their use of it do modern authoritarian rulers much resemble Hitler. International organizations and institutions that did not exist in interwar Europe — the United Nations, the European Union, the World Bank, the International Monetary Fund — also provide some barriers to the sort of calamity that engulfed Germany.

Milosevic didn’t resemble Hitler in his use of power? And nothing comes back to Kershaw when he hears Ahmadinejad’s daily promise to erase Israel from history? Moreover, Saddam Hussein is conspicuously absent from Kershaw’s reckoning. Could it be that he would have had an impossible time downplaying the comparisons between Saddam’s penchant for mass-gassings and country annexations with those of Hitler? As for the organizations he mentions, they are all, to greater or lesser extents, enablers of today’s totalitarians. If there’s any reason to think that modern fascists will continue to be marginalized and defeated it’s because the U.S. has made a habit providing that very service for the civilized world.

Ultimately, though, Kershaw is playing a game with the reader: it’s no longer merely states that pose a deadly fascist threat, but trans-national organizations (such Al Qaeda and Hizzbollah) working in concert with sympathetic countries.

Kershaw’s piece is intended as a big slap in the face to unilateralism and the doctrine of democracy promotion. Because Hitler’s rise occurred during German democracy in place between world wars, it demonstrates “the illusory assumption that democracy will always be a favored choice of a population torn apart by war. . .”

But, Sir Ian, wasn’t your point that today’s fascist threats are so unlike the one posed by Nazi Germany?

In today’s New York Times, Ian Kershaw seems to suggest all this “never again” talk is bit alarmist. After comparing Adolf Hitler’s rise to power with some of today’s totalitarian threats, he concludes: “Mercifully, what happened in Germany in 1933, and it’s aftermath, will remain a uniquely terrible episode in history.”

After describing the Milosevic, Mugabe, Putin, Chavez, Musharraf, and Ahmadinejad regimes, Kershaw offers his reasons for optimism:

. . .neither in their acquisition of power nor in their use of it do modern authoritarian rulers much resemble Hitler. International organizations and institutions that did not exist in interwar Europe — the United Nations, the European Union, the World Bank, the International Monetary Fund — also provide some barriers to the sort of calamity that engulfed Germany.

Milosevic didn’t resemble Hitler in his use of power? And nothing comes back to Kershaw when he hears Ahmadinejad’s daily promise to erase Israel from history? Moreover, Saddam Hussein is conspicuously absent from Kershaw’s reckoning. Could it be that he would have had an impossible time downplaying the comparisons between Saddam’s penchant for mass-gassings and country annexations with those of Hitler? As for the organizations he mentions, they are all, to greater or lesser extents, enablers of today’s totalitarians. If there’s any reason to think that modern fascists will continue to be marginalized and defeated it’s because the U.S. has made a habit providing that very service for the civilized world.

Ultimately, though, Kershaw is playing a game with the reader: it’s no longer merely states that pose a deadly fascist threat, but trans-national organizations (such Al Qaeda and Hizzbollah) working in concert with sympathetic countries.

Kershaw’s piece is intended as a big slap in the face to unilateralism and the doctrine of democracy promotion. Because Hitler’s rise occurred during German democracy in place between world wars, it demonstrates “the illusory assumption that democracy will always be a favored choice of a population torn apart by war. . .”

But, Sir Ian, wasn’t your point that today’s fascist threats are so unlike the one posed by Nazi Germany?

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Another World Bank Triumph

Today’s Wall Street Journal reports:

The World Bank on Wednesday announced the resignation of Suzanne Rich Folsom as director of its anticorruption unit, or INT. “She was not forced out, she was not asked to leave,” said external relations chief Marwan Muasher.”

After detailing “$569 million worth of corrupted bank projects in India” Ms. Folsom was indeed forced out, and she should wear her ejection as a badge of honor. She’s the latest in a string of World Bank employees made to pay for the mortal sin of being honorable and the venial sin of being American. As head of the INT, Ms. Folsom had her hands full. (Imagine someone trying to expose the oil-for-food scandal from inside the UN in real-time, and you’ll get some idea.) The Journal piece details the sundry attempts to block her efforts and malign her character, and notes:

All of this might seem farcical were the stakes not so high. If the India report and others we’ve disclosed are anything to go by, at least some of these loans will go to projects in which nine of 10 dollars are either squandered or stolen by corrupt officials and middlemen, and where filthy, half-built hospitals are certified as completed to project specifications. That ought to matter to a “bank” that purports to have the interests of the world’s poor at heart and whose annual lending portfolio tops $30 billion.

Through the railroading of former Bank President Paul Wolfowitz, senior officer Shaha Riza, and now Susan Folsom, the World Bank has achieved something akin to, say, the NYPD purging its own internal affairs unit. Time and again the international community that decries American unilateralism squashes American cooperation in attempts to help strengthen and improve the institutions of multilateral policy. It seems the World Bank’s doors are now open and ready for business.

Today’s Wall Street Journal reports:

The World Bank on Wednesday announced the resignation of Suzanne Rich Folsom as director of its anticorruption unit, or INT. “She was not forced out, she was not asked to leave,” said external relations chief Marwan Muasher.”

After detailing “$569 million worth of corrupted bank projects in India” Ms. Folsom was indeed forced out, and she should wear her ejection as a badge of honor. She’s the latest in a string of World Bank employees made to pay for the mortal sin of being honorable and the venial sin of being American. As head of the INT, Ms. Folsom had her hands full. (Imagine someone trying to expose the oil-for-food scandal from inside the UN in real-time, and you’ll get some idea.) The Journal piece details the sundry attempts to block her efforts and malign her character, and notes:

All of this might seem farcical were the stakes not so high. If the India report and others we’ve disclosed are anything to go by, at least some of these loans will go to projects in which nine of 10 dollars are either squandered or stolen by corrupt officials and middlemen, and where filthy, half-built hospitals are certified as completed to project specifications. That ought to matter to a “bank” that purports to have the interests of the world’s poor at heart and whose annual lending portfolio tops $30 billion.

Through the railroading of former Bank President Paul Wolfowitz, senior officer Shaha Riza, and now Susan Folsom, the World Bank has achieved something akin to, say, the NYPD purging its own internal affairs unit. Time and again the international community that decries American unilateralism squashes American cooperation in attempts to help strengthen and improve the institutions of multilateral policy. It seems the World Bank’s doors are now open and ready for business.

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Terrorism and the Palestinian Economy

Those who have taken it upon themselves to be the permanent caretakers of the Palestinian cause have found, in the abysmal condition of the economies of the West Bank and Gaza, their latest mission. The U.N., the World Bank, and a new British government report are all in agreement that a major obstacle to peace is the Palestinian economy, and the major obstacle to its improvement is, of course, Israeli security measures.

The saviors of Palestine never wish to deal with the behavior of the Palestinians themselves; thus, they have come forward with a set of economic development proposals that predictably avoid addressing the central problem with the Palestinian economy: Palestinian terrorism. Last week, the British government released a much-anticipated report that had been commissioned by Gordon Brown in 2005. It proposes five “building blocks,” the third of which states that “the right balance must be struck between short-term security and allowing movement and access,” and goes on to argue that Palestinian economic development will increase Israel’s security. Yet who, exactly, is going to decide for Israel the “right balance” between its own security and Palestinian freedom of movement? If the authors of the British study had their way, this “right balance” would involve many more buses and restaurants blowing up in Tel Aviv. Thankfully, however, the British do not set Israeli security policy, so their nattering on about it is almost totally irrelevant. The rest of the British study, a full version of which is available here, is a similarly unimpressive recitation of platitudes.

Read More

Those who have taken it upon themselves to be the permanent caretakers of the Palestinian cause have found, in the abysmal condition of the economies of the West Bank and Gaza, their latest mission. The U.N., the World Bank, and a new British government report are all in agreement that a major obstacle to peace is the Palestinian economy, and the major obstacle to its improvement is, of course, Israeli security measures.

The saviors of Palestine never wish to deal with the behavior of the Palestinians themselves; thus, they have come forward with a set of economic development proposals that predictably avoid addressing the central problem with the Palestinian economy: Palestinian terrorism. Last week, the British government released a much-anticipated report that had been commissioned by Gordon Brown in 2005. It proposes five “building blocks,” the third of which states that “the right balance must be struck between short-term security and allowing movement and access,” and goes on to argue that Palestinian economic development will increase Israel’s security. Yet who, exactly, is going to decide for Israel the “right balance” between its own security and Palestinian freedom of movement? If the authors of the British study had their way, this “right balance” would involve many more buses and restaurants blowing up in Tel Aviv. Thankfully, however, the British do not set Israeli security policy, so their nattering on about it is almost totally irrelevant. The rest of the British study, a full version of which is available here, is a similarly unimpressive recitation of platitudes.

The just-released World Bank report stipulates three “preconditions for growth” for the Palestinian economy: “(1) a drastic improvement in the security environment; (2) dismantling restrictions on the movement of Palestinian people and goods; and (3) clear progress on Palestinian reform and institution-building.” The authors seem unaware that preconditions (1) and (2) are at war with each other: any serious fulfillment of point two will have the immediate consequence of undermining any progress on point one.

The World Bank report details how terribly the Palestinians have damaged themselves. Since the start of the terror war in 1999, per capita GDP has shrunk by one-third; “GDP is being increasingly driven by government and private consumption from remittances and donor aid, while investment has fallen to exceedingly low levels”; public sector employment has increased by 60 percent, as “workers have been hired as part of a trend to bolster political support”; already-low private investment decreased by over 15 percent between 2005 and 2006; and on, through a litany of indicators of economic decrepitude.

Amazingly, the World Bank also says: “The main challenge for Palestinian economic recovery remains the comprehensive restrictions on movement and access imposed by GoI [the Government of Israel]…that combine to stunt Palestinian economic growth.” A more accurate way to formulate that statement would be: “The main challenge for Palestinian economic recovery remains the ongoing support for terrorism against Israel, which cause comprehensive restrictions on movement and access to be imposed by GoI.” But never mind.

This is how these kinds of things always seem to go. The same people who lobby on behalf of the Palestinians are unfortunately those who tend not to take the Israeli commitment to its own security very seriously. These are people who, in theory, would be well-suited to deliver the message to the Palestinians that any hopes they have for economic or political development are forever doomed so long as their terror war against Israel continues.

My own humble recommendation to the many advocates for Palestine is to insist that a Palestinian rejection of terrorism be a precondition for aid. I realize this is an unrealistic proposal, but so be it—nothing the British government or World Bank is proposing is any more realistic. It’s worth mentioning that, after the Six Day War, when the dark night of Israeli occupation descended on the Palestinians, but before the start of the first Intifada, the GNP of the West Bank grew, from 1968 to 1980, at an average rate of 12 percent per year, and the per capita GNP increased by 10 percent. I wonder if the people who write about the Palestinian economy today know that?

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A Different Kind of Danger

Yesterday, the Dow Jones Industrial Average ended down 30.49 points. Yet both the S&P 500 and the Nasdaq Composite posted gains, and market signals indicate the Dow will turn back up today to continue the advance started on Friday. But even with the recent uptrend, no one thinks the global sub-prime lending crisis is over.

The recent turmoil in the world’s equity markets is a symptom of greater dislocations. There are many causes for the recent problems—such as the mispricing of risk caused by too much liquidity—and none of them have been solved by the recent gyrations in global markets. At some point, the great economic bull run following the fall of the Soviet Union must end. There is a rhythm to economies that governments can moderate, but not eliminate.

Since the end of World War II, the United States has taken the lead in developing mutually supporting systems—embodied by multilateral institutions such as the International Monetary Fund and the World Bank—to ensure prosperity. Yet, if the shocks to this global system are too great, the network’s interconnectedness, normally a strength, becomes its weakness, as one part brings down another. As in an overstressed electrical grid, problems can first ripple and then cascade. So, for the first time in history, virtually all societies can move in sync due to the very nature of the international system we have created.

Read More

Yesterday, the Dow Jones Industrial Average ended down 30.49 points. Yet both the S&P 500 and the Nasdaq Composite posted gains, and market signals indicate the Dow will turn back up today to continue the advance started on Friday. But even with the recent uptrend, no one thinks the global sub-prime lending crisis is over.

The recent turmoil in the world’s equity markets is a symptom of greater dislocations. There are many causes for the recent problems—such as the mispricing of risk caused by too much liquidity—and none of them have been solved by the recent gyrations in global markets. At some point, the great economic bull run following the fall of the Soviet Union must end. There is a rhythm to economies that governments can moderate, but not eliminate.

Since the end of World War II, the United States has taken the lead in developing mutually supporting systems—embodied by multilateral institutions such as the International Monetary Fund and the World Bank—to ensure prosperity. Yet, if the shocks to this global system are too great, the network’s interconnectedness, normally a strength, becomes its weakness, as one part brings down another. As in an overstressed electrical grid, problems can first ripple and then cascade. So, for the first time in history, virtually all societies can move in sync due to the very nature of the international system we have created.

If a serious global recession hits the world now, how will it affect geopolitics? For one thing, governments will have fewer resources to pursue their ambitions. A general downturn, for instance, might accomplish what Democrats in Congress and insurgents in Baghdad have failed to achieve so far: an end to the American involvement in Iraq. The war, costing about $2 billion a week, has been affordable in a booming economy. In a recessionary one, it could become a burden the public might not be willing to bear, at least at present levels. Other members of the international coalition, whose commitments already are not firm, undoubtedly would pull out. Funding for the conflict in Afghanistan could be scaled back to unacceptably low levels.

Not all the foreseeable consequences of a severe recession would be bad, however. A fall in oil and gas prices most likely would dent the plans of Russia’s Putin, Venezuela’s Chavez, and Iran’s Ahmadinejad. A decline in global consumption could mean that China’s export markets might dry up, the Chinese economy might spiral downward, and the Communist Party might lose power. The Doha Trade Round would probably fail, and globalization would stop for a long pause—as it has done so many times in the past. Countries would insource and international commerce would decline.

The biggest imponderable is how people around the world will react in a deteriorating economic environment. In today’s hyper-connected society, private citizens have more say in what goes on, even under rigidly authoritarian governments. At this point, no one knows what the mood of global citizenry would be. All we know is that if a severe recession comes, the world will still be dangerous, but the dangers will differ from the ones we face today.

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What China Doesn’t Want Us to Know

Today the Financial Times reports that, at Beijing’s insistence, the World Bank deleted almost a third of its new study, “Cost of Pollution in China.” Senior cadres were concerned that the World Bank’s most startling conclusion—that bad air and bad water cause about 750,000 premature deaths in China each year—“could cause misunderstanding.” “We did not want to make this report too thick,” said the considerate Guo Xiaomin, who, as a former official from the horribly misnamed State Environmental Protection Agency, coordinated Chinese research for the project.

A pared-down version of the study, which is still in draft, is available without the sensitive death estimate. The World Bank told Agence France Presse that the final report is “still under review.”

It is hardly a surprise when Chinese autocrats insist upon the removal of information that “could cause social unrest,” to borrow the words of an adviser who worked on the study. But the World Bank has no business acceding to such demands. China’s environmental degradation not only kills Chinese; it is beginning to affect our own health as well. The country is air-mailing pollutants half-way around the world, and is now the world’s largest emitter of CO2, the main greenhouse gas.

With the help of the World Bank, China’s Communists have now managed to export not only pollution but their governing principles of censorship, secrecy, and unaccountability.

Today the Financial Times reports that, at Beijing’s insistence, the World Bank deleted almost a third of its new study, “Cost of Pollution in China.” Senior cadres were concerned that the World Bank’s most startling conclusion—that bad air and bad water cause about 750,000 premature deaths in China each year—“could cause misunderstanding.” “We did not want to make this report too thick,” said the considerate Guo Xiaomin, who, as a former official from the horribly misnamed State Environmental Protection Agency, coordinated Chinese research for the project.

A pared-down version of the study, which is still in draft, is available without the sensitive death estimate. The World Bank told Agence France Presse that the final report is “still under review.”

It is hardly a surprise when Chinese autocrats insist upon the removal of information that “could cause social unrest,” to borrow the words of an adviser who worked on the study. But the World Bank has no business acceding to such demands. China’s environmental degradation not only kills Chinese; it is beginning to affect our own health as well. The country is air-mailing pollutants half-way around the world, and is now the world’s largest emitter of CO2, the main greenhouse gas.

With the help of the World Bank, China’s Communists have now managed to export not only pollution but their governing principles of censorship, secrecy, and unaccountability.

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