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A Saudi Break With Ultra-Conservatism?

Mon, 2018-02-19 18:01

By James M. Dorsey

The surrender of a Brussels mosque offers hope that Saudi Arabia is serious about shaving off the sharp edges of its brand of Sunni Muslim ultra-conservatism. Or does it?

Saudi Arabia, in an indication that it is serious about shaving off the sharp edges of its Sunni Muslim ultra-conservatism, has agreed to surrender control of the Great Mosque in Brussels.

The decision follows mounting Belgian criticism of alleged intolerance and supremacism that was being propagated by the mosque’s Saudi administrators.

Relinquishing control of the mosque reportedly gives real-life evidence of a Saudi plan to curtail support for foreign mosques and religious and cultural institutions that have been blamed for sprouting radicalism.

As with Prince Mohammed’s vow last November to return Saudi Arabia to an undefined “moderate” form of Islam, it is too early to tell what the Brussels decision and the social reforms announced inside Saudi Arabia go beyond trying to improve the kingdom’s tarnished international image.

Just a PR move?

The decision would at first glance seem to be primarily a public relations move and an effort to avoid rattling relations with Belgium and the European Union. After all, so far the case of the Brussels mosque is the exception that confirms the rule. It is one of a relatively small number of Saudi-funded religious, educational and cultural institutions that was managed by the kingdom.

The bulk of institutions as well as political groupings and individuals worldwide that benefitted from Saudi Arabia’s four decades-long, $100 billion public diplomacy campaign, the single largest in history, aimed at countering post-1979 Iranian revolutionary zeal, operate independently.

The “fruits” of that strategy are questionable. Saudi Arabia has let a genie out of the bottle that it not only cannot control, but that also leads an independent life of its own. The Saudi-inspired ultra-conservative environment has also produced groups like Al Qaeda and the Islamic State that have turned on the kingdom.

Relinquishing control of the Brussels mosque allows Saudi Arabia to project a more restrained image. It is a symbolic act to distance itself from the ultra-conservatism that has its roots in an 18th century power-sharing arrangement.

It was concluded between the Al Saud royal family and Mohammed ibn Abdul Wahhab, a preacher whose descendants are at the core of the kingdom’s religious establishment.

A Belgian debate

The decision to relinquish control of the Brussels mosque that, in 1969, had been leased rent-free to the kingdom for a period of 99 years by Belgian King Baudouin followed a Belgian parliamentary inquiry.

That inquiry looked into last year’s attack on Brussels’ international Zaventem airport and a metro station in the city in which 32 people were killed. The inquiry advised the government to cancel the mosque contract on the grounds that Saudi-inspired ultra-conservatism could contribute to extremism.

Michel Privot of the European Network Against Racism, estimated that 95% of Muslim education in Belgium was provided by Saudi-trained imams.

“There is a huge demand within Muslim communities to know about their religion, but most of the offer is filled by a very conservative Salafi type of Islam sponsored by Saudi Arabia. Other Muslim countries have been unable to offer grants to students on such a scale,” Mr. Privot said.

No similar happenings elsewhere

Despite this one decision, Saudi Arabia appears to be making less of clean break on the frontlines of its support for ultra-conservative and/or militant groups elsewhere.

Take the case of North Africa. Algerian media reports last month detailed Saudi propagation of a quietist, apolitical yet supremacist and anti-pluralistic form of Sunni Muslim ultra-conservatism in the country. The media published a letter by a prominent Saudi scholar that appointed three ultra-conservative Algerian clerics as the representatives of Salafism.

“While Saudi Arabia tries to promote the image of a country that is ridding itself of its fanatics, it sends to other countries the most radical of its doctrines,” asserted independent Algerian newspaper El Watan.


Saudi worries about Iran and its influence are too strong to count on more Saudi moderation, except in a few cases such as the Brussels mosque (where the PR value of a mosque closing is significant).

©2017 The Globalist

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Trump’s Budget Priorities: Crimes Against Humanity?

Sun, 2018-02-18 18:01

By Frank Vogl

President Trump’s proposed budget highlights the increasing White House determination to find military solutions to the world’s ills.

U.S. President Trump’s new budget proposes a dramatic cut in spending on diplomacy and economic assistance, while advocating further major boosts to defense outlays.

The numbers: The White House proposes a 30% cut ($8.9 billion) to take total spending for the U.S. State Department, U.S. Aid and Treasury international programs to $29.8 billion. The budget plan sees a gain of 14% ($73.9 billion) in Defense Department outlays to total $597.1 billion.

The plans highlight the increasing White House determination to find military solutions to the world’s ills. President Trump’s willful neglect of the vast humanitarian crises that now abound – the worst since World War Two – is a crime against humanity.

These crises have been building for years. To be fair, this isn’t just about Trump. There has been insufficient leadership by the U.S. Clinton, Bush and Obama administrations as well.

They, too, failed to address the causes, prevent the disasters and build sufficiently powerful international responses to what can only be described as man-made horror stories. To be sure, much good was also achieved by these presidents in the field of development.

Values hurled aside

Now, under the leadership of President Trump, Vice President Pence and Secretary of State Rex Tillerson, the values-driven international leadership of the United States has been hurled aside. And their timing is criminal.

Consider, for example, the plight of the Rohingya in Bangladeshi camps, the Syrians in camps in Jordan, the thousands of people from sub-Saharan Africa who take staggering personal risks to try and find refuge in Western Europe and the gathering nightmares faced by the citizens of oil-rich Venezuela.

The United States under Trump washes its hands from the need to help in any of those urgent crises. Such is the ultimate consequence of Trump’s irrepressible need to see the United States as a victim on the global stage.

More generally, consider, for example:

• According to CARE: “An unprecedented 81 million people are in need of emergency assistance food assistance,” and that the United Nations has declared the world hunger emergency “the gravest since World War Two.”

• According to the World Food Program: “Some 20 million face catastrophe in Sudan, South Sudan, Nigeria and Yemen.”

• According to UNHCR: “We are now witnessing the highest levels of human displacement on record. An unprecedented 65.6 million people around the world have been forced from home. Among them are nearly 22.5 million refugees, over half of whom are under the age of 18. There are also 10 million stateless people who have been denied a nationality and access to basic rights such as education, healthcare, employment and freedom of movement.”

• According to Human Rights First, quoting data from the International Labor Organization and Walk Free Foundation: “An estimated 24.9 million victims are trapped in modern-day slavery. Of these, 16 million (64%) were exploited for labor, 4.8 million (19%) were sexually exploited, and 4.1 million (17%) were exploited in state-imposed forced labor.”

Abandoning the United Nations

The U.S. has long seen the United Nations as playing important roles in explicitly addressing humanitarian crises – no longer.

The budget cuts now proposed by the Trump administration, range for example from 20% for UN Peacekeeping; to 50% for the World Health Organization and the Food and Agriculture Organization; and, to 100% for several leading agencies dealing with economic development assistance, women’s rights issues and the environment.

We have the science to prevent most of the starvation and health epidemics. But at a time when entrepreneur Elon Musk is sending commercial rockets into space and talking about shuttling tourists between earth and Mars, the U.S. administration is sharply reducing basic support that could save lives.

Encouraging authoritarianism

Worse still, the Administration is encouraging some of the kleptocratic authoritarian leaders who are most responsible for the unfolding disasters. Many of the man-made crimes against humanity are the product of extreme violence and grand corruption – corruption, which according to the International Monetary Fund now reduces annual global GDP by between 1.5% and 2.0%.

For years, the United States provided aid, for example, to the corrupt regimes in Egypt and Pakistan that stole the cash – this continues. President Sisi has ruthlessly crushed civil society and imprisoned scores of journalists, but the United States turns a blind eye.

Secretary of State Tillerson is on a Middle East tour where his sole agenda is to support militarism. He started in Egypt, where. The New York Times headlined the event: “Visiting Egypt, Tillerson Is Silent on Its Wave of Repression.”

The United States has spent around $120 billion of reconstruction aid in Afghanistan and its troops have been engaged there for over 16 years. The Pentagon is now preparing to increase the number of U.S. soldiers to be deployed.

The level of corruption, the scale of daily violence and the enormous unemployment in Afghanistan today is powerful evidence of just how misguided U.S. policies, which are hugely based on military approaches, have been and continue to be. The White House is in no mood to learn the lessons of this adventure.

From promoting democracy to America First

From the ashes of World War Two, and the strident spread of Communism, the United States sought to create order in a world of disorder. It pledged to promote freedom and democracy and human rights as the means to provide hope and opportunity to all peoples.

The United States led brilliantly, from the forging of the United Nations, to the implementation of the Marshall Plan, in an endeavor to make this a peaceful and prosperous world.

Now, President Trump is telling the world that those values are irrelevant to the goal of putting the United States first. The result will be that the statistics highlighted above will become even larger in the course of this year and in 2019.

The combination of rising human trafficking, mounting millions of refugees and vast grand corruption, is the single greatest threat to international security. It is a threat that cannot be contained by the American military, irrespective of its size and sophistication.

Late this year, we will mark the 70th anniversary of the signing of the Declaration of Human Rights. It will be an event, probably ignored by the White House, that will not be joyous. Today, as the World Food Program reports: “In South Sudan alone, one million children are estimated to be acutely malnourished.”

Their deaths could be avoided.

©2017 The Globalist

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After Parkland: Murder By Congress

Sat, 2018-02-17 18:01

By Alon Ben-Meir

Reflections on the latest high school shooting in the United States and what it says about the state of American "civilization."

Nothing can assuage the agony and the unbearable pain that parents feel when their child is lost to an outrageous and utterly senseless attack that could have been prevented.

When will lawmakers face the bitter truth that America is at war with itself? A de-facto civil war is consuming us from within. Firearms are mercilessly robbing the lives of 33,880 each year—nearly five times more than American soldiers killed in the Iraq and Afghanistan wars combined (4,530 and 2,408 respectively).

On average, 93 people are killed from gun violence every day, and at least 239 school shootings have occurred across the United States since 2012; a majority of the over 400 casualties are children under the age of 19.

Not the right time?

And yet, after every such unconscionable carnage, you hear our derelict political leaders suggesting that it is not the right time to talk about gun control laws when the families and friends of the victims are agonizing about the loss of their loved ones.

When will the right time come? How much more pain and suffering must our own fellow citizens endure before we act?

Shame on every single House and Senate member who each year takes millions in blood money as a political contribution from the National Rifle Association to ensure their re-election.

Perhaps only when some of these lawmakers lose a child of their own will they begin to grasp the excruciating pain that parents bear when their telephones ring, only to be told that their child was just gunned down at school by a random shooter. Yes, every lawmaker should stop and think how it really feels. But then again, are they even capable of feeling?

The Book of James says it best: “Faith without works is dead.” Without action, “thoughts and prayers” cannot be counted on to stop random mass killings; this has been proven by history time and again. The occasion for condolences and prayers expired a long while ago.

The Second Amendment

How regressive and totally ignorant can our congress members be when they defend the Second Amendment of the Constitution, “A well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed”?

This amendment was written over 200 years ago, when firearms were essential for self-defense against foreign militaries and tyranny.

Wake up, you so-called legislators. Time has changed. There is no Gold Rush and no Wild West. Every congress member, and Trump in particular, who opposes the passage of effective gun control, has the blood of innocent men, women, and children on their hands. Every single one.

Those hypocrites who oppose gun control keep telling us that guns don’t kill people, people kill people. What a revelation! Does it take a genius to realize that if guns were not readily available, a would-be killer could not possibly execute dozens of people with a knife or a club before getting killed or captured?

The numbers

Here is the absurdity of their argument in real numbers, as demonstrated by only a handful of examples of mass shootings that unequivocally make the point:

In the Las Vegas shooting: 851 injured, 58 killed—in Orlando’s Pulse Nightclub: 49 killed—at Virginia Tech: 32 killed—at Sandy Hook Elementary: 27 killed—at Marjory Stoneman Douglas High School: 17 killed.

How many of those victims would have been killed if the perpetrator did not possess a gun?

Take a look at some countries with strict gun laws; their annual death by firearms speaks for itself: In the United Kingdom, with a population of 56 million, on average 50–60 are killed; in Germany with a population of 82.29 million, an average of 165; and in Japan with a population of 129 million, thirteen or (often) less are killed by guns.

In Australia, before enacting strict gun control laws in 1996 following the deadliest mass shooting in Australian history, there were 13 mass shootings in 18 years. In the same time period following the legislation, there were zero.

Confronting the truth

Every one of us must confront the truth. Just imagine, if we were engaged in another foreign war and suffered nearly 3,000 casualties—the average number of Americans killed each month by firearms—how would we react? Why are we not hearing the outcry of every American who is sickened by these horrifying occurrences?

Yes, we can and indeed must blame every member of Congress for their criminal neglect. But we the American people must not remain silent in the face of this non-stop unfolding horror.

Where are the tens of millions of Americans who seek gun control? Why aren’t we demonstrating in the streets day-in and day-out, demanding action? We have the power to end this national travesty by not giving our vote to any elected official who does not commit to enact gun control laws and hold them accountable.

By not acting, every legislator who does not act on gun control is complicit in all murders and atrocities committed by the barrel of a gun. They are responsible for all past and future killings of every man, woman, and child who dies in vain by firearms.

This will be the badge of shame that they will wear for as long as they live.

©2017 The Globalist

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Zuma’s Fall: Why is South Africa So Divided?

Fri, 2018-02-16 18:01

By Sechaba Nkosi

Though the economy suffered during his tenure, Zuma was a shining example of what a better life could mean for rural South Africans.

Even though Jacob Zuma is no longer in office, why is South Africa still so divided about the man?

The answer lies in Zuma’s complex, yet easy-going character. For rural South Africans, Zuma was a shining example of what a better life could mean for them.

A man of the people

After all, he was one of them. Zuma built his extensive patronage around the development of parts of his home village of Nkandla. His rhetoric about white monopoly capital sounded as the quickest way out of their misery.

And Zuma’s talking down of the country’s establishment resonated with them as well. Life in rural South Africa is still characterized by abject poverty, massive unemployment and lack of development.

As I listened to Zuma giving his side of the story on the developments in South Africa, I could not help but admire his courage to steadfastly refuse calls to step down because, in his view, he has done nothing wrong.

Zuma genuinely believes he still had the backing of the vast majority behind him. He believed that lack of direct foreign investment in South Africa was a figment of some people’s imagination.

He just could not understand why most people around the world found investing in South Africa as laughable as buying shares in the Guptas’ Oakbay Investment Limited.

No wonder that Zuma also refused to acknowledge the fact that, under his leadership, the country’s sovereign bonds plummeted from an A grade to junk. As a result, the cost of living for the poorest of the poor has become unbearable.

Failing to ignite the economy

In addition, the state-owned enterprises, which the National Development Plan had identified as key drivers of his economic development plan, failed to ignite the economy. Instead, they scandalously became enrichment schemes for the Guptas and their associates.

As well, under Zuma, the rand plunged to levels yet unseen and the South African stock market wiped off R170 billion that were due to making reckless cabinet appointments.

Furthermore, any sense of self-discipline and important institutional memory that could have taken the country forward was lost in key government departments.

But there is more, much more. Unemployment has reached historic levels. During Zuma’s tenure as the head of state, the economy fell from near 4% growth to stagnation. Everyone now has to tighten their belts to cover the R50 billion budget shortfall. The list is endless.

It ain’t easy

To be fair to Zuma, running a country such as South Africa was always going to prove difficult. Its modern and sophisticated economy needed more support than just giggles in Parliament.

It needed someone who could move from rhetoric to pragmatism. Someone who appreciates what the country’s priorities are and what action plans could be taken to address them.

In short, it needed – and very much needs – a lean, but clear articulation of what government policies are. It means aligning South Africa’s education system to the demands of the new economic realities.

Very few people will remember Zuma as the affable bloke whose charm could disarm even his fiercest critic. Very few will remember his brilliant assembling of the country’s best minds to craft the National Development Plan — the masterstroke that set up a ministry that dealt directly with small businesses. He is also to be lauded for his determination to tackle HIV/Aids head-on.

Instead, he will just be remembered as a bitter old man who refused to see that the world had changed.

In that sense, Zuma went the same way as Rip van Winkle who missed the American Revolution or as Robert Mugabe who famously interpreted the scenes of Zimbabweans taking to the streets as a chaotic discussion on what the nation wanted to buy for him and Grace for Christmas.

©2017 The Globalist

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Curtains for Zuma

Thu, 2018-02-15 18:01

By Sechaba Nkosi

With South Africa’s president out, what lies ahead for South Africa and the rest of the African continent?

The curtain finally fell on one of southern Africa’s post-colonial strongmen, South Africa’s President Jacob Zuma. He left his office begrudgingly late on Wednesday night, hours after the ANC joined his opponents on a multi-party crusade to eject him.

Zuma, the man who became famous for long-drawn legal proceedings against him, tried to hold on until the last minute. His goal was to extract as many concessions as possible before his ousting.

Zuma tried to portray himself as a victim of a small political cabal, while the majority of South Africans supposedly still wanted him. But South Africa had had enough of him, so that even his party could not wait for his resignation finally to happen.

Not unlike what happened in Zimbabwe

It was a palace revolt that was not too far removed from what happened in neighboring Zimbabwe last November. Like Robert Mugabe, Zuma had become too much of a liability. His reckless policy-making decisions grounded a once thriving economy.

Thankfully, with his fall, down the drain also went the fortunes of some of the most recalcitrant ministers in South Africa’s history. Whichever direction the wind blows to from today onwards, it is not unreasonable to predict that Mosebenzi Zwane, Lynne Brown, Faith Muthambi and Des van Rooyen – the ministers for Mineral Resources, Public Enterprises, Public Service and Administration and Cooperative Governance and Traditional Affairs respectively – will bite the dust as well.

It was Zuma’s erratic control of the South African economy that gave rise to a battalion of unemployed youths. They have very little regard for his earlier credentials in the country’s political struggles. For them, the immediate issues are jobs, education, health and other things that their counterparts the world over enjoy.

Seismic change

Zuma’s departure is a seismic change that is gaining traction across the African continent. Many millions are moving away from the nostalgia of the liberation struggles to demand what is rightfully due to them now.

Angola’s new President Joao Lourenco is moving with speed to wrestle the economy away from the hands of a few individuals who have derived large benefits from political connections. He has already dismissed his predecessor Jose Eduardo dos Santos’ son Jose Filomeno as chairman of the country’s $5 billion sovereign wealth fund.

Elsewhere, Emmerson Mnangagwa continues to clog flight hours trying to convince investors that Zimbabwe has entered a new era.

Clean-up at home

Zuma’s successor Cyril Ramaphosa has take on the previously untouchable institutions such as Eskom, the electricity public utility. His task is to send a clear message to investors that the country is on a new path.

Even South Africa’s lackluster elite crime unit, the Hawks, has suddenly woken up to their constitutional obligations of pursuing white collar crime.

This spells real trouble for the Guptas, whose business strategy was modelled on a simple approach: Using the collapsing governance of the country’s parastatals for their private gain, milking them dry. These crooks are now set to answer to suspicions of wrongdoing.

Editor’s note: Adapted from an article that appeared in South Africa’s Business Report.

©2017 The Globalist

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Trump’s Immigration Plan: Sound Start for Compromise

Wed, 2018-02-14 18:01

By Peter Morici

Trump's proposed immigration plan does provide a starting point to accomplish an ultimate compromise that would better serve the national interests.

As promised in the recent budget negotiations, the Senate is engaged in an open debate on the status of the so-called Dreamers and broader immigration reform and enforcement. The Dreamers are the young adults who were illegally brought into the United States as children by their parents.

Out of a U.S. population of 326 million, 45 million are immigrants. One-quarter is in the country illegally. That number has hardly changed in recent years.

Declining birth rates in Mexico and elsewhere, better employment opportunities created by free-trade agreements and stronger law enforcement inside the United States have slowed the inflow even before Trump became president.

U.S. vs. Canada

Canada faces challenges similar to ours — falling birth rates, skill shortages and a society defined by waves of immigrants from Europe and Asia. However, Canada wisely places a much higher priority on employment needs in granting visas.

Canadians broadly embrace immigration as a positive force. The country has also absorbed 35,000 Syrian refugees and experienced an anti-Muslim backlash in some communities, arguably similar to the cultural ambivalence in U.S. communities that supported Trump in 2016.

Overall, the difference between Canada’s and the United States’ levels of acceptance appear to hinge on differences in the proportions of skilled and easily assimilable immigrants.

U.S. rules are complex, but about 65% of U.S. visas are granted based on family ties, whereas only 15% are based on employment. The remainder is mostly through a lottery for under-represented countries and refugees.

Two groups

Immigrants to the United States tend to be concentrated among two groups: On the one hand are the elderly and those with less than a high school education.

The other group consists of those with more than a four-year college education. These new arrivals are often doing jobs that not enough Americans are trained to do in fields such as information technology, science and engineering or requiring other advanced degrees.

Overall, the U.S. immigrant population tends to be considerably older and less educated and employable than the native-born population. That imposes large burdens on the social safety net. About half qualify for means-tested programs such as food stamps.

In an economy hard pressed by import competition and rapidly turning to robotics and artificial intelligence, immigrants exacerbate competition for jobs and downward pressure on wages for native Americans with a high school education or less, even as highly skilled immigrants benefit the economy overall.

Trump’s proposal: Part very sound, part unsound

Trump’s proposal would increase visas for skilled immigrants, end chain immigration by limiting family visas to spouses and minor children, end the lottery and establish a pathway to citizenship for 1.8 million Dreamers. Those are all very sound demands.

Trump is also demanding funds for a wall along the southern border and other measures to bolster enforcement and security. In many places along the border, the idea of a wall is opposed even among many of his conservative supporters.

Farmers and ranchers understand that physical barriers are often not as effective or cost efficient as investments in high-tech surveillance and other deterrents.

The legislative game ahead

Compromises offered by moderates in Congress generally water down Trump’s proposals to end the lottery system and chain immigration.

However, unless a politician or immigration advocate can justify our current national practice of “green-card bingo” or prove conclusively that an immigrant’s first cousin, through a visa granted to his aunt or grandmother, is worthy of special preference over an electrical engineer, one conclusion ought to be abundantly clear: The lottery and present family-reunification rules are difficult to justify on grounds of economic benefits and easing social tensions.


That is why Trump would be well-advised to moderate his demands for physical barriers and compromise with the Democrats on the other issues.

For example, he should accept a focused program to foster skills-based immigration from under-represented countries in exchange for strict limits on family reunification and ending the lottery, as recently suggested by a bipartisan group of 48 lawmakers.

Conservatives, for their part, are balking at establishing a pathway to citizenship for Dreamers. That may prove to be an equally unsustainable position.

On that basis, an immigration deal can be had. It would be a good immigration reform serving the interests of all Americans, not just those of the powerful and privileged.

©2017 The Globalist

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Boris Johnson’s Straw Man

Tue, 2018-02-13 18:01

By Denis MacShane

The UK Foreign Secretary says only hard Brexit can save Britain from “Political Union” in Europe. As if the latter exists!

On Page 26 of his biography of Winston Churchill, Britain’s Foreign Secretary, Boris Johnson, writes of a “Gestapo-controlled Nazi EU.” This kind of hyperbole about Europe has been a Johnson stock-in-trade since his time as a legendary untruth-telling correspondent for the Daily Telegraph in Brussels three decades ago.

James Landale, now the BBC’s diplomatic correspondent, a fellow Old Etonian, and a young reporter in Brussels at the time wrote this ditty:

Boris tells such dreadful lies
It makes you gasp and
Stretch your eyes.

True to form, Johnson accuses the EU founding fathers of having a teleological vision of Europe – an end game in which all Europe’s nation states folded into one political union.

Nonsense on stilts

This is nonsense on stilts. They had political ambition to bring Europe together to prevent another war or, for that matter, the return of the Gestapo.

Their method was to break down economic barriers. The EU’s French spiritus rector, Jean Monnet, after all had been a trader and a salesman, which coincidentally is why de Gaulle disliked him.

For the French president, Monnet’s idea of Europe was one about the (economic) bottom line, not about more gloire to France.

To be sure, European cooperation was a political project and involved (and involves) sharing some sovereignty. Churchill told the House of Commons after 1945 that “national sovereignty maybe resolutely diminished.”

Accordingly, Churchill was instrumental in setting up the (non-EU) European Court of Human Rights. As it happens, that body interferes far more in British ministers’ and judicial decisions than Mrs. May’s bête noire, the European Court of Justice, which is an EU institution.

In 1950, Europe was about ending the economic nationalism around the machinery of war. That was why control over steel and coal was removed from national governments and handed over to a common authority, complete with a court, a parliamentary assembly and a rule that prevented discrimination in hiring on the grounds of nationality – the origins of today’s freedom of movement.

Union of peoples – not states

In the preamble to the Treaty of Rome, which took the breaking down of barriers to trade a stage further, there was reference to an “ever closer union of peoples” – not states.

I was the UK’s Europe minister when we wrote the draft constitution for Europe which was enshrined in a new EU Treaty in 2004. This was repudiated in French and Dutch referendums in 2005. The EU returned to its old treaty language with the phrase “ever closer union of people.”

At the time not a single Tory MP raised with me the matter of its removal. But after 2007 when the 40 year old words were reinserted in the Lisbon Treaty, suddenly they are condemned as meaning the imminent arrival of a political union super state. That is the argument which Boris Johnson says is the reason why Britain should now isolate itself from Europe.

A political union or a federal state requires three things. A budget based on tax raising power. A single executive. And a law-making assembly.

None of these conditions exist in Europe. The EU budget is not only a tiny 1% of the EU’s GDP, but 85% of it is sent straight back to nation states to spend.

More centralization?

Sure, there are those who opine for more centralization/central control. For example, in London this week, the very pro-European Italian politician, Sandro Gozi, Italy’s Europe minister, was arguing for just one president elected by all the voters of Europe.

Fat chance. EU national government leaders and parties like the plethora of presidents – of the Council, Commission, Parliament, Central Bank, Eurogroup and the foreign policy High Commissioner. That arrangement has the distinct advantage to allow traditional national pork barrel politics, as jobs are traded by national political chiefs.

The European Parliament does not make laws. They are voted by 28 nation states on the basis of drafts from the Commission. MEPs can tinker with laws and do other important work holding the Commission to account, but it is the nation states of Europe that are the legislators.

President Macron of France had interesting ideas about creating a transnational list of MEP candidates to try and lift the European Parliament above its present existence as a conglomeration of nationally based politicians.

But Macron’s proposal was shot down by MEPs. Plus, the dominant center-right European People’s Party alliance of conservative parties is openly campaigning against Macron’s more pan-European ideas.

Johnson is utterly wrong if he thinks Poland and Sweden and the Netherlands and Greece are about to fold into a single political union. If anything, the EU has given birth to a springtime of nations with new countries and cultures emerging from fascistic, authoritarian, communist or Milosevic-era domination.

Johnson’s fearmongering about political centralization in Europe is about as truthful as the claims during the Brexit campaign that only a no vote would help Britain to keep hordes of Turks as EU citizens off the British Isles.


Far from there being a political union on the horizon, Europe is less centrally controlled than ever. Just consider the real-life evidence:

• Badly run economies like Italy and Greece were able to avoid meeting common criteria that were meant to be obeyed as part of joining the Euro.

• Ireland has dodged collecting taxes from U.S. global corporate giants.

• Poland is crudely flouting all European norms on an independent judiciary, media freedom and falsification of World War 2 history about the anti-semitic behavior of some Poles towards Jews.

• In Italy and Greece, refugees receive shelter but Hungary and the Czech Republic refuse to take in even a few dozen.

It is a shame that Johnson who is smart enough to know the truth cannot bring himself to say this.

Cynics will say that his speechifying is all about his leadership ambitions. Perhaps — but if we have our most senior UK cabinet members spinning myths and fables, what chance do we have of the British public (or even rank and file MPs) making a rational decision as Britain needs to decide how far it wants to isolate itself from Europe?

©2017 The Globalist

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America First and America Alone—Against All

Mon, 2018-02-12 18:01

By Jean-Francois Boittin

To Trump, everything in politics – even at the global trade stage – is about him personally and how it affects his business interests.

The court that traveled with President Trump to the snowy capital of globalization, Davos, at the end of January was determined to deliver one and only one message: America First does not mean America Alone.

Alas, the cooperative message delivered from script in Davos only held for a day or so. It has proven to be what the U.S. President always blames the media for: Fake News!

The core message delivered by Trump and his team is unmistakable: Trading with the United States has a price, set unilaterally by him and his team. Who cares if that sets America on a collision course against allies and friends alike.

The only potential “grace” in his approach is that the Trumpian message is applied uniformly across the globe, in the Western hemisphere, in Asia or across the Atlantic, not to mention what is otherwise known as Africa.

The U.S. exhorts…

Against that backdrop, it cannot surprise anyone that the current U.S. Secretary of State, supposedly a very skilled business diplomat from his times of leading Exxon Mobil, declared his belief in the Monroe Doctrine, “as relevant today as it was two centuries ago.”

That statement came on the eve of meetings with his colleagues in South and Central America. Mr. Tillerson could just as well have said that he was going to visit his backyard, or Washington’s colonies. The context of his intervention was to make plain his view that China has no right to deal with Latin American countries.

… while China charms

In the real world, that same China held a rather successful summit in Santiago with member countries of the CELAC (Community of Latin American and Caribbean States). Never one for “un-grand” designs, Beijing offered to extend its One Belt One Road initiative to the region.

China is ready to increase imports of commodities, develop exports of manufactured products and investments and cooperate in the fight against climate change. It has also recently modernized its free trade agreement with Chile.

Incredible shortsightedness

Unfazed, a Washington that, under Trump, is even more caught in its own universe than usual has resolved to take its trade battles right to the throat of its two closest neighbors (and biggest trading partners) after China.

The Trump team is determined to change the terms of the NAFTA free trade agreement. To this end, it is suggesting the institution of a USA minimum content requirement, that the terms of the treaty should expire every five years unless the parties agree to a prolongation and pursuing the transparent objective of limiting cross-border investment.

As if that weren’t enough, the administration did more of China’s diplomatic bidding in the region via two so-called safeguard actions against imports of washing machines and solar panels. This penalized Mexico and countries of Latin America and the Caribbean, even though the administrative body in charge of establishing the injury to the American industry had recommended that they be exempt from export restrictions.

In his infinite wisdom, the President decided otherwise. Little wonder that the Chilean minister of foreign affairs at the end of the China-CELA meeting stated: “This meeting represents a categorical repudiation of protectionism and unilateralism.” Score: Beijing 1 – Washington 0.

The Gang That Can’t Shoot Straight

Things get worse when it comes to the relationship with Asia. There, America’s team looks like the Gang That Can’t Shoot Straight. It is shooting himself in the foot at every turn.

Things started ominously with the exit from the Trans Pacific Partnership, three days after Trump’s inauguration. The TPP, a “continuing rape of our country,” so went the Trump mantra, in reality did little to weaken American trade barriers. Instead, it was a quite masterful attempt at promoting an American order in Southeast Asia, to balance China’s influence.

Vietnam is the best example. The country was ready to accept disciplines on its state-owned enterprises and non-state unions. This resolve came about less by sudden conversion to the virtues of a liberal economy than to distance itself from its mighty neighbor to the north.

A fundamental miscalculation

The Trumpians’ assumption had been that, when the United States pulled out, the TPP would be doomed. Wrong. The determined efforts of Japan and Australia have led to the resurrection of the agreement, minus the United States.

The new TPP is slightly modified (i.e., all the tougher disciplines, for example on intellectual property, that had been exacted by Washington have fallen by the wayside).

Which means that Japan, for its exports of manufactured products, and Australia and New Zealand, for their agricultural goods, will have an advantage over the United States.

Not even hitting China, but allies

It does not get better with the use of the safeguard clause on solar cells and panels, or residential washers. The solar safeguard is supposed to be all about China. There is just one little problem. China’s solar panel exports were hit by antidumping duties and its share of the U.S. market went down from 59% to 11% in the past 5 years.

So the countries that are worst hit today by the new restrictions are Malaysia, South Korea, Vietnam and Thailand. (The last two are also the primary target of the safeguard on residential washers, together with Korea whose companies, Samsung and LG are the two culprits). One could well understand that Koreans are asking themselves: “With friends like that, who needs enemies?”

Europe anyone?

Given the U.S. fiasco in Asia, one might think that the European Union would be viewed in Washington as a necessary ally to define better rules of the game that would take into account the rise of China.

That was indeed one of the ambitions of TTIP, the Transatlantic Partnership. However, it too disappeared from the agenda with the new administration.

The U.S. Secretary of Commerce, Wilbur Ross, did mention in Davos the possibility of a restart of the negotiations. However, that is not very likely considering the Buy American priorities of the Trump administration and the understandable insistence of European negotiators on access to the U.S. government procurement market.

Then, there is the mind of Trump himself. For his “thoughts” on the European Union, just look at the interview given to ITV, a British channel, by the Great Leader himself. It offers very revealing evidence of his inability to look at the bigger picture – and that, to Trump, everything in politics – even at the global trade stage — is about him personally and how it affects his business interests:

But I will tell you, representing the United States, it’s a very unfair situation. We cannot get our product in. It’s very, very tough. And yet they send their product to us — no taxes, very little taxes, it’s very unfair. I’ve had a lot of problems with the European Union, and it may morph into something very big from that standpoint, from a trade standpoint. The European Union has treated the United States very unfairly when it came to trade…and I think it’ll turn out to be very much to their detriment.

Beyond the mangled syntax and the poverty of the vocabulary, known hallmarks of the Trump way of speaking, one has to wonder what justifies this “analysis.”

It goes back to Trump’s old rancor against EU environmental rules that slowed down the construction of a Trump golf course in Ireland, as well as the inability of the self-acclaimed “very stable genius” to understand the functioning of the VAT. And that’s how he writes off another longstanding ally.

Not to be left behind, Mr. Ross is joining the choir. While claiming that the United States is not protectionist, seemingly unaware of the contradiction, he gloats that “Americans are coming to the rampart.” Further proof that it is all about “America first and alone — against all!”

©2017 The Globalist

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Germany’s New Government: Abandoning German Interests in Europe

Sun, 2018-02-11 18:01

By Thomas Mayer

Don't blame the French for seeking to pursue French interests and see to it that the French economic model prevails in Europe. But Berlin acts imprudently by accommodating that desire.

Since the end of World War II, politics in Europe has been about finding a balance between French and German interests.

Lessons from history

The French had drawn one key lesson from their experience with the Treaty of Versailles ending World War I in 1918: Europe could not be stabilized politically if other European countries ignored German interests.

The Germans, for their part, had learned from the crash of the Weimar Republic into National Socialism and the Third Reich that it was in their interest to embed Germany firmly in European structures. This created the basis for European cooperation after World War II.

A package deal

From the French perspective, the purpose of European integration was twofold: First, to improve the security of France by gaining political control over the German economic powerhouse and, second, to increase French political influence in both Europe and the world.

From the German perspective, European integration primarily served two purposes: First, to allow reconciliation with neighboring countries after two wars and, second, to promote economic growth by enlarging the markets for German industry.

European cooperation proved very advantageous for both countries, but that success was also always overshadowed by the difficulty to reconcile two opposing views on economic policy.

No twins

In France, the task of the state was seen to lead industry and manage the economy. In the system of “planification,” the state set specific targets that industry was supposed to pursue. In later stages, policymakers tried to keep the economy on course by managing aggregate demand with fiscal and monetary policy.

When the point was reached that fiscal policy ran out of steam (due to the accumulation of high government debt) and monetary policy reached its limits (because of the decay of the currency), the introduction of a European currency was supposed to provide proper remedy for France.

In Germany, by contrast, successful currency reform and economic liberalization introduced by the legendary economics minister Ludwig Erhard after WWII gave German economic policy and the German market a liberal bent.

The “Erhard generation” of senior officials did not think much of industrial policy and was skeptical about Keynesian demand management. They countered French state-oriented policies with distinctly market-oriented ideas.

Two different sets of economic DNA

This difference in views has created conflicts that have affected all European projects. These became ever more difficult to reconcile the closer European integration became.

Most importantly, European Monetary Union was based on many shady compromises. These have made the European single currency very vulnerable to financial tensions. It almost broke apart in 2012 and, for all the soothsaying, is still not yet on safe ground today.

Berlin taking France’s bait

However, it seems that the emerging new German “grand coalition” government is willing to resolve the underlying conflicts. It seems prepared to give up Germany’s interest in the pursuit of a market-liberal approach in the field of economic policy in favor of France’s preference for state dirigisme.

To that end, the new German government supports:

• the regulation of minimum wages and minimum welfare across the European Union;

• a common base and minimum rates for corporate taxes;

• a European Monetary Fund (EMF), set up as an institution of the EU – and hence at considerable distance from the German parliament, to succeed the European Stability Mechanism;

• new financial facilities for demand management policy and investment at the EMF; and

• larger German contributions to the EU budget.

In addition, Peter Altmaier, the acting finance minister and the country’s designated new economics minister, has signaled German agreement to a common deposit insurance scheme for the entire euro area. That project had been firmly resisted by his predecessor Wolfgang Schäuble.

The intended policy course of the emerging new German government boils down to abandoning long defended German interests in market-liberal economic policies, sound finances and a hard currency.

Financial responsibilities are to be mutualized, investment will be politically directed and the economy regulated by the state. German tax payers are to pay more into the EU budget, although Germany is already the biggest net contributor. German bank customers are supposed to co-finance deposit insurance in states with weaker banking systems.

Subordinating German under French interests

Berlin’s new approach to European policymaking is supposed to foster European harmony by subordinating German under French interests. However, it is much more likely to deepen European frictions.

It is hard to imagine that any other EMU member state will follow the German example, abandoning its own national interests, as is the intention of the German government.

Consequently, the new German policy will be welcomed by the states of Southern Europe who benefit from it. And it will be fought by other states whose interests are opposed by those outside Europe’s South.

Governments in countries such as Austria, Netherlands or Slovakia are hardly likely to subjugate their interests to the demands for more redistribution and state dirigisme of the Latin-influenced European group of countries led by France.

Germany: Doubling down on the Brexit fallout

It is especially disturbing that Germany abandons its previous interests at a time when the UK is preparing for exiting the EU. It is worth recalling that it was Germany that in the early 1970s supported EU entry of the UK.

The German government was keen to win a market-liberal partner in the Brussels club.

Unsurprisingly, France had blocked UK entry for many years because it feared the liberal British influence. And it was Germany which insisted on key rules for European Monetary Union. The most important of them was to hold every member responsible for its own finances in order to preserve financial discipline.

In contrast, France saw in a single European currency primarily as an instrument for a laxer economic policy. Against German interests, the euro was transformed during the euro crisis to a politically useable instrument for the funding of cash-strapped EMU member states.

While that was bad enough an outcome for Germany, with Brexit Germany will also lose its most important market-liberal partner on the inside of the EU.

Don’t blame the French!

It is not only legitimate, but also the duty of French President Emmanuel Macron to pursue French interests and see to it that the French economic model prevails in Europe.

What is to be deplored is that the German government is evidently abandoning the formulation and pursuit of German interests. That is not only politically stupid, but will actually also deepen the crisis of the European Union.

Especially in the face of Brexit, the logical goal of German policymaking in Europe should be to counter French central planning with Germany’s well-proven, market-liberal policies in the tradition of Ludwig Erhard.

To keep Europe prosperous and united, competition in the Single Market needs to be strengthened and the operations of the ECB refocused on the provision of sound money.

To those ends, the German government should, among other things, insist on:

• the ending of monetary funding of government debt by the ECB;

• a reform of voting rights in the ECB Council according to the economic weight of a country;

• a change from the present activist to a long-term monetary policy aimed at maintaining the purchasing power of money;

• the limitation and stricter control of financial assistance by the European Stability Mechanism (or a European Monetary Fund as its successor);

• the possibility for debt restructuring and exit of over-indebted and uncompetitive member countries of EMU;

• the effective protection of the borders of the Schengen area;

• the harmonization of asylum law and immigration rules in the Schengen area;

• the prevention of unauthorized immigration into welfare systems;

• a reduction of barriers to trade in the single market;

• an increase in the effectiveness of the countless EU financial assistance facilities; and

• the refocusing of the EU budget on projects for the future instead of subsidies for agriculture.

The German government should reserve the option to withdraw from community projects when vital German interests are violated. For instance, the Bundesbank should withdraw from the interbank payment system Target 2, if future balances are not settled by asset transfers, the ECB continued to monetize government debt, and voting rights in the ECB Council were not changed.


To avoid any misunderstanding: The purpose of a clear articulation and pursuit of German interests is not to provoke other countries.

Existing conflicts of interest can only be settled when they are clearly formulated and put against the interests of others. If this is not done, suppression of one’s own interests will create resentments that could eventually lead to the complete withdrawal from common European causes.

Europe has always benefited from the recognition of opposing interests of France and Germany, of course including the search for reconciliation of those differences, where possible. It will suffer when Germany ceases to purse its own interests for the benefit of France.

©2017 The Globalist

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The Harsh Realism of Adam Smith

Sat, 2018-02-10 18:01

By Branko Milanovic

Adam Smith was no blind worshipper of the market economy. He pointed to many of the deformations of human behavior that we still deplore today.

Under the influence of Amartya Sen, we have been “nudged” towards a reassessment of the relative merits of “The theory of moral sentiments “ (TMS) and “The Wealth of Nations” (WN). Sen has done a lot to bring Smith’s early work out of relative obscurity where it was consigned by two centuries of success of The Wealth of Nations.

What remains true is that many people around the world continue to have a remarkably distorted view of The Wealth of Nations. Not much beyond the (in)famous “invisible hand of the market.”

Bad government

In reality, there are no “good guys” in The Wealth in Nations. Of course, the government comes in for special criticism.

Smith argues against its rapacity in putting up high tariffs, its foolishness in following mercantilist policies, its pettiness in constraining the system of “natural liberty,” its attempts to decide where people should live (the law of settlement, a hukou-like system was then in existence in Britain).

He dissects all of these unenlightened policies with righteous anger.

Bad aristocracy

Next to it in terms of “badness” is the aristocracy: ”Entails are thought necessary for maintaining this exclusive privilege of the nobility to the great offices and honors of their country; and that order having usurped one unjust advantage over the rest of their fellow-citizens, lest their poverty should render it ridiculous, it is thought reasonable that they should have another” (Book 3; Ch. 2, p. 491).

Bad businessmen

But businessmen are no better. As soon as they are given half a chance, perhaps just after having gotten rid of some particularly nefarious government regulation, they are back to plotting how to “restrain” the market, to pay suppliers less, destroy competitors, cheat workers (see today’s IT companies, Walmart, Amazon).

In the famous quote, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices” (Book 1, Ch. 8).

In their mad ambition, they try to rule the world (see Davos): “…the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind” (Book 4, Ch. 3, p. 621).

Bad multinationals

Short of the world they try to rule countries: Companies of merchants (the British and the Dutch East India Companies) grew immensely rich by mismanaging and exploiting India and Indonesia: “The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever” (Book 4, Ch. 7, p. 722).

And their profits are often a price for general impoverishment: “Have the exorbitant profits of the merchants of Cadiz and Lisbon augmented the capital of Spain and Portugal? Have they alleviated the poverty, have they promoted the industry of those two beggarly countries?” (Book 4, Ch. 7, p. 779).

Bad politicians

Businessmen depend on lobbyists and politicians. Those who support them (read K Street and Mass. Avenue in Washington, D.C.) will be praised: “The Member of Parliament who supports every proposal for strengthening this monopoly is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance” (Book 4, Ch.2, p. 595).

Those who try to oppose their drive for monopoly profits will be destroyed:

“If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists” (Book 4, Ch. 2, p. 592).

Are NGOs any better?

Are “do-gooders” and religious orders (read: NGOs) any better? They are all treated with implacable irony by Adam Smith: “The late resolution of the Quakers in Pennsylvania to set at liberty all their negro slaves, may satisfy us that their number cannot be very great” (Book 3, Ch 2, p. 496).

Or: “I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it” (Book 3, Ch. 2, p. 572).

Bad soldiers

Adventurers and soldiers who conquered colonies attracted by the promise of quick gain (see military “contractors” today) “commit[ed] with impunity every sort of injustice in those remote countries” (Book 3, Ch. 7, p. 795).

Led by their selfishness they destroyed a great occasion for the beneficial encounter of two civilizations: “The savage injustice of the Europeans rendered an event, which ought to have been beneficial to all, ruinous and destructive to several of those unfortunate countries” (Book 4, Ch. 1, p. 563).

Human selfishness, rapacity, need for pillage crosses places and times: The crusaders were “the most destructive frenzy that ever befell the European nations” and they were spurred on by the merchant republics of Venice, Genoa and Pisa for whom the crusade “was a source of opulence” (Book 3, Ch. 3, p. 513).

No end of “badness”

There is no end of “badness.” Even Smith’s most famous invention (the invisible hand) takes place despite the natural selfishness of men (“he intends only his own gain”).

Note that through the invisible hand, we fulfill a project which was not part of our original design, i.e., our original intention was selfish, but we could not satisfy it except by catering to the needs of others.

And, of course, we do not count on “the benevolence of the butcher…but [on] his regard for own interest”. We do not count on the butcher’s benevolence because Smith knows that benevolence is not there, while we can be sure that self-interest is.

Toward a tolerably civilized society

Market and the invisible hand indeed turn out to be the almost miraculous contraptions. They transform this landscape of hard men, inured to bleakness, pursuit of self-interest and cheating, into a tolerably civilized society. That way, people treat each other with consideration, at least on the surface.

But, I think, there is no doubt to anyone who has read the Wealth of Nations that this is only a veneer. Once it cracks, we are quickly back in the animal kingdom, as we indeed got there during wars, colonial conquests or crusades.

And this is perhaps an additional, strong reason for the importance of market economy, commerce and general economic accoutrements of civilization. Making use of our worst instincts, they transform them into a tolerable or respectful behavior.

Editor’s note: All page numbers are from “The Wealth of Nations”, Bantam Classic, 2003; edited with notes and marginal summary by Edwin Cannan; preface by Alan B. Krueger.

©2017 The Globalist

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South Korea: Corruption & Self-Censorship

Fri, 2018-02-09 18:01

By The Globalist

Press freedom in South Korea is slipping and public perception of corruption is rising.

1. South Korea celebrated its first female leader when Park Geun-hye became President in February 2013, but she was removed from office in March 2017 for corruption.

2. While South Korea ranks in the upper-third of Transparency International’s 2016 Corruption Perception Index, it does not stack up well with its peer group.

3. Among the 35 OECD developed economies, just six countries rank worse than South Korea: Mexico, Turkey, Greece, Italy, Hungary and Slovakia. Most of them are economically less advanced than South Korea.

4. Moreover, 50% of South Koreans polled said corruption had increased recently – an unsurprising sentiment amid the far-reaching presidential scandal.

5. A key factor in this perception of corruption is the dominant role of the chaebols — the large, often family-owned and family-run industrial conglomerates in South Korea.

6. It is not by accident that the country’s largest industrial group, Samsung, found itself at the center of the corruption charges that led to the ouster of President Park.

7. The chaebols’ dominance over the South Korean economy – and the high level of business concentration that this represents – create a dangerous chokehold over the economy and politics.

8. Moreover, as the unfolding of the recent corruption scandal generated a lot of government backlash to reporting on it, South Korea dropped 10 places between 2015 and 2016 in the global rankings on media freedom. It regained some standing in 2017, as the media covered the scandals to its conclusion despite the pressure.

9. South Korea has long struggled with press freedom, according to Reporters Without Borders, which ranked it 63rd in the 2017 World Press Freedom Index.

10. One reason is that the country has laws on the books that allow imprisonment for defamatory or North Korea-friendly reporting. Both often prompt self-censorship among journalists.

Sources: The Globalist Research Center, Transparency International, Reporters Without Borders and New York Times

©2017 The Globalist

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South Korea: Moving Up the Global League Table

Fri, 2018-02-09 18:01

By The Globalist

South Korea’s $1.4 trillion economy was about 52 times larger than North Korea’s in 2014.

1. One of the poorest nations on Earth in the 1960s, South Korea’s GDP topped the $1 trillion mark for the first time in 2004 — only the 12th country to have done so at that time. (It currently has the world’s 13th-largest economy.)

2. Based on estimates by South Korea’s central bank, North Korea’s GDP in 2014 was approximately $27.5 billion.

3. This means that South Korea’s $1.4 trillion economy was about 52 times larger than North Korea’s.

4. At the time Korea was partitioned in 1945, North Korea’s per capita GDP was significantly higher than South Korea’s.

5. The rigid communist economic system North Korea embraced as well as the isolation from South Korea and other non-communist countries held back its subsequent development.

6. The country’s per capita income (in purchasing-power-adjusted terms) is now just short of $35,000, according to the World Bank (as of 2015).

7. That is about equal to Spain’s average income — and also nearly matches the average for the European Union’s 28 member nations ($38,700).

8. Even more astonishingly, South Koreans are nearing Japan’s level, where the per capita income (at $40,800) is now just about 18% larger.

9. However, the Japanese worked on average 21% less (1,713 hours versus 2,069 hours, in 2016) to generate their annual income.

Sources: The Globalist Research Center, OECD, Bank of Korea

©2017 The Globalist

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Push for Automation: South Korea Vs. China

Fri, 2018-02-09 18:01

By The Globalist

China hopes to shift production from low-wage human labor to robots, as South Korea has done.

1. South Korea, a country with a population of 50 million, has the highest robot density in the world.

2. As of 2016, 631 robots were deployed per 10,000 workers in the country’s industrial manufacturing sector.

3. Among major economies, that density was more than double second-ranked Germany (309 robots per 10,000 workers) and newly third-ranked Japan (303), where the density is falling. It was also more than three times denser than the United States (189).

4. While China currently has only 68 robots per 10,000 manufacturing workers, its leadership has determined that the country’s future economic strategy will rely on industrial robots.

5. To that end, China is making major investments to expand its presence in the market for producing industrial robots.

6. This includes Chinese electrical appliance maker Midea Group’s July 2016 acquisition of German robot maker KUKA, which was ranked as sixth worldwide by installations.

7. Certain industries are much more heavily automated than others. Korea’s automotive industry, for example, has 2,145 robots per 10,000 employees.

8. This compares to 475 robots per 10,000 workers in all other Korean industries.

Sources: The Globalist Research Center, International Federation of Robotics, Bloomberg, Robotics & Automation News

©2017 The Globalist

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Asia’s Dark Underbelly and Long-Term Development

Thu, 2018-02-08 18:01

By James M. Dorsey

Across Asia, governments not only refuse to recognize a quest for cultural, ethnic, national or political rights, but are often willing to suppress them with brutal force.

From the Middle East to Southeast Asia and northwest China, the Asian landmass is gripped by a host of conflicts. They are likely to spark violence, complicate economic development and dash hopes for sustainable stability.

Conflicts galore

The conflicts and tensions range from ethnic strife in Kurdish areas of Syria and Iran, mortally wounded Israeli-Palestinian peace efforts, embattled Baloch nationalism in Pakistan, disposed Rohingya in Southeast Asia and widespread discontent in Iran.

And they also include iron-grip repression in Egypt, Saudi Arabia and Xinjiang. Individually and collectively, these conflicts promise to create festering wounds that threaten economic growth and social development.

Stripped to their bare essence, the conflicts and tensions have one thing in common: A quest for either cultural, ethnic or national, or political rights or a combination of those, that governments not only refuse to recognize but are willing to suppress with brutal force.

Repression for everyone?

Repression and military action are designed to suppress political, ethnic and/or national, and economic and social grievances. They do so in the false belief that a combination of long-term suppression and economic development will weaken ethnic and/or national and political aspirations as well as undermine dissent.

That is true in case of the Rohingya and Uyghurs, as well as for the brutal repression in Egypt, Saudi Arabia, Iran and northwest China, not to forget military actions such as the Turkish intervention in Syria’s Afrin.

Problems in the Middle East and South Asia are aggravated by a debilitating struggle for regional hegemony between Saudi Arabia and Iran that threaten to destabilize Pakistan and have already produced a devastating war and a humanitarian catastrophe in Yemen.

Autocrats vs. economic and social development

If history teaches anything, it is that only a minority of autocrats have achieved economic and social development. General Augusto Pinochet ensured that Chile is the only South American member of the Organization of Economic Cooperation and Development (OECD), albeit at a high human cost. Asia, for its part, gave birth to tigers like South Korea and Taiwan.

There is no denying that, despite Asia’s multiple conflicts and tensions, the continent is at present flourishing economically. But that may be a very static view.

Are nationalist sentiments irrepressible?

After all, history also teaches us that ethnic and/or national aspirations explode with vehemence the moment opportunity arises. Seventy years of communist rule in the Soviet Union failed to smother nationalist sentiment in parts of the empire like Chechnya and the Caucasus. They also did not erase nationalist differences between Armenia and Azerbaijan.

As well, 47 years of communism did not prevent nationalist sentiment from breaking Yugoslavia apart in a series of bloody wars in the 1990s in the wake of the demise of the Iron Curtain.

Carved out of the ruins of the Ottoman Empire, modern Turkey has failed to erase demands for Kurdish cultural, if not ethnic or national aspirations.

Similarly, Palestinian nationalism is alive and kicking 51 years into Israeli occupation of lands conquered during the 1967 Middle East war.

The 2011 Arab popular revolts were followed by a concerted counterrevolution co-engineered by the United Arab Emirates and Saudi Arabia. That aftermath has laid bare the essence of current conflicts and disputes: A determination of regimes to impose policies on minorities or states at whatever cost.

The UAE-Saudi-led diplomatic and economic boycott of Qatar is a case in point as are Asia’s multiple ethnic conflicts. They erupt in a world in which post-colonial borders are being called into question in countries like Syria, Iraq, Libya, Myanmar and Pakistan.

The Rohingya, amid the dizzying array of ethnic and national conflicts stretching from the Middle East or West Asia to China in the East, exemplify the problem in, perhaps, its purest form. Potentially, the Rohingya could become Southeast Asia’s Palestine.

Preventing the Rohingya issue from spiralling out of control and becoming a problem that can no longer be contained to a specific territory, much like the multitude of similar conflicts, disputes and repression-based regime survival strategies across Asia.


Short-term repression and efforts to impose one party’s will at best buys time and sets the scene for avoidable explosions.

All of that is why long-term prospects for stable and secure development in Asia are quite dim.

©2017 The Globalist

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US Campaign Finance: Reining In America’s Oligarchs

Wed, 2018-02-07 18:01

By George R. Tyler

Why can’t the U.S. follow the example of other, truly democratic nations in limiting the influence that very rich people can have on elections?

The U.S. election system is a stark outlier among wealthy democracies. Nearly all other wealthy democracies tightly proscribe campaign contributions and independent political spending to prevent political inequality, the distortion of public opinion and corrupted lawmakers.

Another goal is to prevent American-style polarization caused by negative advertising. Particulars vary, but nearly all mimic Germany and the United Kingdom in preventing what is called pay-to-play in the United States by sharply capping electioneering campaign spending.

Subsidizing candidates

Moreover, peer nations also subsidize candidates and small donors to further free political parties and candidates from reliance on large donors.

These higher quality democracies also restrict political TV and radio advertising opportunities, with those limited opportunities usually provided free or inexpensively.

Election campaigns are limited to a few months in duration as well. In addition, financial contributions by corporations and entities that are independent of candidates and political parties (similar to Warren Buffett or the Koch brothers’ Americans for Prosperity) are prohibited or strictly circumscribed during elections on behalf of politicians or policies.

As a result, American-style negative advertising on TV and elsewhere is absent in virtually all Western democracies. (The glaring exception everywhere are social media).

There are tight limits on electioneering spending by parties or candidates in higher quality democracies. For instance, the nationwide campaign spending by the CDU, German chancellor Angela Merkel’s party in 2013 was $27 million. It was even lower in France in 2012 and 2017.

Influencing election outcomes

Other tight limits apply to citizen donations and independent spending. Voters in other wealthy democracies are comfortable with such tight caps. They would be shocked if opaque, powerful groups could spend unlimited amounts of money for years to mold public opinion and influence election outcomes. Heavy-spending individuals such as the billionaires Sheldon Adelson or Paul Singer are effectively allowed to speak with the voice of tens of millions.

Indeed, peer nations are so determined to avoid vote buying that even the Financial Times — Britain’s equivalent of the Wall Street Journal — rather remarkably demanded in a 2015 editorial that private contributions be entirely abolished. British politics should be funded solely by taxpayers:

“If the political class at Westminster is to have any chance of winning back public trust, it needs to end the suspicion that the culture of political donations is corruptible. The only way to do this is a system of taxpayer funding . . .”

Britain and the Declaration of Independence

This is more than ironic. Britain — the abhorred example of political corruption for colonial Americans — has come to hew far more closely than the United States to the original intent of the founding fathers to excise all political corruption, defined most broadly.

Australia is the only wealthy democracy other than the United States to allow unlimited political donations and independent third-party political spending, including by corporations.

The similarities end there, however. Australian pay-to-play is on a tiny scale. The ten biggest donor corporations, for instance, contributed a total of $3 million during the 2016 general election there — a rounding error in American pay-to-play.

Limiting electioneering spending

More than 70 nations further reduce the need for private campaign donations by providing candidates with public funding to defray electioneering costs. The goal is to avail citizens of a factual, full airing of genuine policy differences between candidates and between political parties.

The outcome is robust and highly competitive elections where the weight of ideas and policy prescriptions are the determining factors rather than weight of wallet.

European nations provide candidates and their political parties an average of about $5 per voter in public funding, with the greatest level at $15 in Norway.

Such subsidies represent about 40% of spending by candidates and political parties over an election cycle. In France, for instance, public subsidies equal 47.5% of permitted electioneering spending.

The balance of campaign funding is derived from small donations, typically incentivized by tax credit as in Canada, France and Germany. Political parties in Germany garnering 0.5% of votes for Bundestag (federal) candidates receive €1 ($1.25) for each of their first four million votes and 83 cents per vote received thereafter. Plus, there is an upper cap on tax credits granted for individual and total donations.

Combining a limited need for campaign donations with public funding has successfully freed lawmakers from reliance on wealthy contributors. The proof is voter sovereignty: Policy outcomes of other wealthy democracies do not reflect an American-style income bias.

Editor’s note: This feature is adapted from Billionaire Democracy: The Hijacking of the American Political System (BanBella Books, 2018).

©2017 The Globalist

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Iran: Threat of Renewed Sanctions Reshapes Economic Thinking

Tue, 2018-02-06 18:01

By James M. Dorsey

Will the EU adopt legislation that would shield European companies from U.S. secondary sanctions targeting non-American entities invested in Iran?

In the wake of recent anti-government protests, Iran’s Supreme Leader Ayatollah Ali Khamenei appears to have put his weight behind President Hasan Rouhani’s repeated calls for reduced military and Revolutionary Guards involvement in the economy.

Mr. Khamenei signaled his support by ordering the military and the Guards to start divesting from commercial holdings and businesses that are not related to their core tasks. The only exception is for construction projects considered essential by the government.

Meaningful step

The order is a significant development. This applies all the more so as it addresses protesters’ grievances that were sparked in part by losses suffered by millions of Iranians as a result of the collapse of fraudulent financial institutions with links to the Guards and other public institutions. These financial entities lured investors with high interest rates that they could not pay.

Europe’s interests

Mr. Khamenei’s order could also sweeten Iranian efforts to persuade Europe to put in place legal measures that would allow its companies to invest in the Islamic republic even if the United States imposes new sanctions and withdraws from the 2015 international agreement that curbed Iran’s nuclear program.

Europe shares the concern about the role of the Guards in Syria, Yemen, Iraq and elsewhere in the Middle East.

Reining in the Guards

A target of U.S. sanctions, the Guards reportedly are not opposed to a reduced stake that, according to analysts, accounts for as much as 30% of the Iranian economy.

The Guards operate, among others, Khatam al Anbia, a huge construction company with tens of thousands of employees that is involved in civil development, the oil industry and defense businesses.

The Guards also build roads, operate ports, manage telecommunication networks and own business in sectors as far flung as finance and medical.

The “top brass have realized that running companies is actually not their competency. The poor management has been a drag on the economy and–as seen in the recent #IranProtests–a risk to internal security and to the prestige of the armed forces,” said Esfandyar Batmanghelidj, an Iran analyst, commentator and business consultant.

In a world in which everything is interlinked, disinvestment by the Guards and military as well as other public institutions like the Social Security Organization, Iran’s largest pension fund, would involve steps toward privatization.

That is difficult in a country that has problems to attract any foreign investment because of the threat of a re-imposition of U.S. sanctions that were conditionally lifted as part of the nuclear agreement.

The Trump factor

Donald Trump, the U.S. President, has threatened not to renew U.S. sanctions relief in May if Europe and the U.S. Congress failed to work towards an agreement with Iran on an addition to the nuclear accord.

Trump wants to restrict Iranian missile testing and development, provide for expanded inspections of Iranian facilities and extend prohibitions on nuclear-weapons work. Iran insists that the accord cannot be renegotiated.

Europe has been pressing the Trump administration not to walk away from the accord. Iranian officials, for their part, have suggested that Tehran would adhere to the nuclear deal in case of a U.S. walkout provided that it served its interests.

The Iran-Europe dance

For Iran to see continued merit in the nuclear deal, it would have to believe that European companies would remain interested in investing in the Islamic republic. That would require the European Union adopting legislation that would shield European companies from U.S. secondary sanctions that would target non-American entities invested in Iran.

Privatization of military and Guards-owned companies, given Iran’s undercapitalized financial markets and its small pool of viable domestic investors, would depend on foreign investors, who in turn are unlikely to risk being penalized by potential renewed secondary U.S. sanctions.

“Europe should put in place a viable contingency plan if the United States continues backtracking on the deal and let Washington know it’s ready to use it… Europe will need to present a package (together with China and Russia) that can entice Iran to continue abiding by the core elements of the current nuclear agreement,” said Iran expert Ellie Geranmayeh.

A reality check

In practice, European companies, if forced to choose between doing business with the United States or Iran, would undoubtedly opt to steer clear of the Islamic republic.

As it stands, the EU is banking on the expectation that the Trump administration would ultimately opt to compromise in a bid to avoid a deterioration of trans-Atlantic relations.

In the meantime, European investors, like their Russian and Chinese counterparts, are likely to take a wait-and-see attitude.

Iran’s very limited economic options

That, in turn, could put efforts to reduce the military and Guards’ economic stake in jeopardy. Iran would find itself caught between a proverbial rock (i.e., lacking Iranian transparency) and a hard place (i.e., weak domestic financial markets and a limited pool of investors).

If that weren’t tough enough, Saudi efforts to counter Iran could further dampen foreign investor appetite.

In a sign of the times, South Korean construction company POSCO Engineering & Construction (in which Saudi Arabia’s Public Investment Fund has a 38 percent stake) cancelled a $1.6 billion contract to build a steel mill in Iran because of objections by the company’s two Saudi board members.

©2017 The Globalist

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Balancing Asia: India Is Late to the Game

Mon, 2018-02-05 18:01

By Philip Bowring

India sees the Belt and Road Initiative as an attempt to clip India’s own wings and build a China-centric world order.

Finally, India has sent a belated signal to assert a commitment to Southeast Asia. Both India and the Southeast Asian nations are looking for a strategic counterweight to Beijing.

The leaders of all 10 countries of the Association of Southeast Asian Nations (ASEAN) paraded through New Delhi this past weekend as guests for India’s 69th Republic Day celebrations.

The procession of dignitaries is an indication that ASEAN nations are keen to avoid putting all their eggs in the China basket.

Republic Day spectacle

The high-wattage presence of the heads of government from Thailand, Vietnam, Indonesia, Philippines, Malaysia, Singapore, Myanmar, Cambodia, Laos and Brunei marks a break from tradition for India.

The country usually invites just one chief guest for the fest. As Prime Minister Modi declared in a radio address: “This time, not one but 10 chief guests will grace the Republic Day. This is unprecedented in India’s history.”

While the celebration is largely symbolic, it does demonstrate that ASEAN is interested in balancing the growing influence of China, which is pursuing its vast “Belt and Road” infrastructure scheme to tie the region together.

As it stands, the Indo-Pacific concept outlined earlier by former U.S. President Barack Obama is gaining traction.

India is late to the game

Even so, India is late to the game. The BRI, as China’s initiative is known, was put into place five years ago. It spans 70 countries and offers the potential for Chinese investment of $4 trillion – albeit at often near-usurious lending rates. It is designed to see that all roads lead to Beijing, just as 2,000 years ago all roads led to Rome.

India’s ambitions are far more modest. Tiny Bhutan remains India’s biggest recipient of foreign aid, followed at a distance by Afghanistan.

The two-day India-ASEAN “Commemorative” Summit in truth celebrated 25 years of a partnership that has mostly been notable for its nonexistence.

To make amends, the summit focused on boosting cooperation in the key areas of counter-terrorism, security and connectivity to counter Beijing’s economic and military assertiveness. The group has agreed to set up a mechanism on maritime cooperation to counter the common “traditional” and “non-traditional” challenges they face.

China’s watchful eye

Expectedly, the event was closely watched by Beijing. Its foreign ministry spokesperson Hua Chunying told reporters wryly that “China is open to all countries developing friendly relations. So, we’re okay with India developing friendly and cooperative relations with ASEAN countries.”

It helps India’s cause that it has gained respect among ASEAN member nations after it stayed away from Beijing’s belt and road initiative despite Chinese attempts at persuasion.

Delhi believes BRI is an attempt to clip India’s own wings and build a China-centric world order. With its growing stature in the region, India is loath to accept Chinese domination in its own neighborhood.

China has been expanding its presence in South Asia, building ports and power plants in countries around India’s periphery including Pakistan and Sri Lanka.

India has countered this by beefing up its infrastructure and standing up to China’s incursions along its north-eastern borders, and quietly in Afghanistan.

New Delhi is also liaising with Washington and Tokyo who view India as a bulwark against China as U.S. influence has waned. The newly formed Quadrilateral comprising India, Japan, Australia and the United States aims to achieve just that.

With many of the ASEAN members locked in maritime disputes with Beijing, critics say, the former are relying on broadening their linkages with countries such as India. The latter alone in Asia has the size, demographics, economic potential, military capability and civilizational depth to act as a countervailing force to China’s hegemony.

ASEAN’s vision of peace and prosperity

As Prime Minister Lee Hsien Loong, whose country Singapore currently chairs ASEAN, said the grouping believes that “India makes a major contribution to regional affairs, helping to keep the regional architecture open, balanced and inclusive.”

There are many areas of convergence between India and ASEAN member states. At the summit, Modi emphasized that India shares ASEAN’s vision for rules-based societies and peace.

“Freedom of navigation will be a key focus of India-ASEAN in the maritime domain,” he said. “India shares ASEAN’s vision of peace and prosperity through a rules-based order for the oceans and seas. Respect for international law, notably UNCLOS is critical for this. We remain committed to work with ASEAN to enhance practical cooperation and collaboration in our shared maritime domain.”

As Kanti Bajpai writes in his column for The Times of India,

India has quietly gone about building diplomatic and even military links with virtually every country in ASEAN. Delhi has strategic dialogues with the major states in Southeast Asia and holds military exercises. It makes port calls. It trains personnel and repairs equipment. It sells arms and provides military credits to some. It likely shares intelligence too with select partners. During the 2004 tsunami, the Indian navy sailed to the rescue, along with American, Australian and Japanese navies.

It is true that India has already been pursuing an “Act East” policy of developing political and economic linkages with Southeast Asia. However, India’s efforts lack the zeal and ambitiousness of China.

Just consider that China’s trade with ASEAN was more than six times India’s in 2016-17. While China-ASEAN trade accounts for 15.2 percent of the block’s total trade, its trade with India only constitutes 2.6 percent.

Thus, while the pomp and show of India’s Republic Day always make for good optics, it is just that – optics. Matching up to Beijing’s clout and winning influence in the region will need some serious efforts on India’s part. It is only starting and there is a long way to go.

©2017 The Globalist

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Seven Challenges for an Asian Century

Sun, 2018-02-04 18:01

By John West

To reach its full potential, Asia will need to overcome seven key challenges in the 21st century.1. Getting better value out of global value chains

Asia appears a global leader in international trade and investment. But the reality is that countries like China, India and Indonesia are mainly undertaking lower value added activities in global value chains like assembling electronics and automobiles, “cut sew and trim” of clothing and operating call centers.

Much greater efforts are required to get better value out of value chains by opening markets, strengthening human capital and technological and innovative capacities.

2. Making the most of urbanization’s potential

Many of Asia’s factories and call centers are staffed by poor migrants who have moved to towns and cities in the hope of a better life. But their dreams are all too often shattered as they wind up living in urban slums.

In the case of China, most internal migrants are denied access to basic social services and their children are “left-behind” in traditional villages. And Asia’s most advanced cities like Singapore, Hong Kong, Tokyo and Seoul lag sadly behind the West in the quest to become hubs of innovation and creativity.

3. Giving all Asians a chance!

Discrimination, prejudice and persecution are rife in Asia, thereby preventing economies and societies to realize their full potential, as our review shows for the cases of: Asia’s LGBT community; Japanese women; South Asian women who suffer gendercide, forced child marriages and honour killing; Asia’s indigenous peoples like West Papuans, Tibetans and China’s Uighurs; Sri Lanka’s Tamil community; and India’s lower castes.

4. Solving Asia’s demographic dilemmas

Most Asian countries face intractable demographic dilemmas. In much of East Asia, fertility has plummeted below replacement rates, populations are ageing, workforces declining and in Japan the population has begun falling.

And yet governments are slow to react. At the same time, in South Asia, Indonesia and the Philippines, a youth bulge is bursting into the workforce, but much of this youth is not well educated and there are not enough jobs on offer.

A potential demographic dividend could easily morph into an explosion of social frustration. Connecting these two demographic realities is the potential for mutually beneficial migration, and yet ethnocentric Asia is barely open to migration.

5. Fixing Asia’s flawed politics

Asia is crying out for democracy and better governance to improve the foundations for stronger economies and decent middle class societies. And yet, according to some measures, there would not be even one mature democracy in Asia.

Contrary to the hopes of political scientists, economic development has fostered too few democracies in Asia.

Asia’s political landscape is deeply flawed with: Oligarchic democracies in Japan and Korea; pro-business soft dictatorships in Hong Kong, Malaysia and Singapore; Chinese client states in Cambodia and Laos; weak and fragile democracies in India, Indonesia, Philippines, Mongolia, Sri Lanka, Bangladesh, and Nepal; military-dominated governments in Thailand, Pakistan, and Myanmar; and staunchly authoritarian states in China, North Korea and Vietnam.

6. Combating Asia’s economic crime

One of the many consequences of these flawed politics is that, as Asia has moved towards the centre of the global economy, it has also moved to centre of the global criminal economy.

Asia is a major player in many aspects of economic crime like counterfeiting and piracy, Illegal drug production and trafficking, environmental crimes, human trafficking and smuggling, corruption and money laundering, and cybercrime.

And while flawed politics is one of the causes, this criminality is eating away at the integrity of the state, as state actors are very often criminals themselves or are colluding with criminals.

7. Can Asian countries live together in peace and harmony?

While many factors have underpinned Asia’s renaissance over the past half century or more, the relative peace that the region has enjoyed has been perhaps the most important.

But today, the relative stability of postwar Asia, led by the United States, is being shaken by the rise of China, as China is now engaged in a bitter power struggle with the United States and its Asian allies for the political leadership of Asia.

There is much debate about whether this will lead to military conflict between China and the United States. In any event, the United States seems to be losing its hold over Asia, something which will likely accelerate under the Trump administration.

This means that it will become ever more necessary for Asian countries to cooperate better together. But this will be a great challenge in light of the tensions involving China, North Korea, Japan, Taiwan, Hong Kong, South Korea and India.

Editor’s note: This feature is adapted from Asian Century… on a Knife-edge: A 360 Degree Analysis of Asia’s Recent Economic Development (Palgrave Macmillan, 2018).

©2017 The Globalist

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Forget Fake News. Worry About Fake History Oscars

Sat, 2018-02-03 18:01

By Denis MacShane

Two movies about Britain in 1940 – Dunkirk and the Darkest Hour – have collected plenty of Oscar nominations. Yet, both movies are full of historical nonsense.

The Oscars are handed out each year in early March. Ahead of this year’s festivities, two movies about Britain in 1940 – Dunkirk and the Darkest Hour – have collected plenty of nominations. They notably include Gary Oldman’s imitation of Winston Churchill and the remarkable cinematography of Dunkirk.

Yet, both movies are full of historical nonsense. For that reason, they should be catalogued with the WWII propaganda movies. I am thinking of “Objective Burma” (in which Errol Flynn single-handedly defeats the Japanese army). A British sample is “In Which We Serve,” made in 1942, where Noel Coward plays the royal family’s naval hero Lord Mountbatten, showing British grit at its best.

Welcome to “Brexit Movies”

Tantalizingly, both the Darkest Hour and Dunkirk are Brexit movies. They were made to allow movie-goers in Brexit Britain to wallow in the warm water of English nostalgia when Britain was utterly cut off from Europe.

It was also a time when everyone on the Isles felt united and closer to the English-speaking Empire and the United States, rather than the beastly Nazis or cowardly capitulationist French.

Unfortunately, the two movies are also shot through with historical howlers. In Darkest Hour, the broken Neville Chamberlain, the prime minister of appeasement, is presented as a bitter enemy of Churchill.

Inaccuracies galore

In fact, Chamberlain told King George VI to make Churchill prime minister, as the only Conservative politician the Labour party and trade unions would serve under in a wartime coalition.

The film presents the Labour leader and post-war prime minister, Clement Attlee, as a ranting demagogue denouncing Chamberlain in a bitter House of Commons speech.

Attlee never made such a speech. He was a determined socialist, but a mild-mannered public school and Oxford educated middle class politician who never raised his voice, waved his arms around or shouted when speaking.

Both films show the evacuation of British troops from Dunkirk as a miracle performed by hundreds of pleasure craft and small boats hastily commandeered on southern English coastal resorts and fishing boat harbors.

Belittling the French

The vast bulk of the 330,000 British and allied soldiers brought back from Dunkirk embarked from a long pier onto 40 British destroyers and cruisers. The film ends with Kenneth Branagh playing a Royal Naval officer bravely staying behind to help French soldiers evacuate to England. In truth, 100,000 French soldiers – about a third of the total were brought back to England at the same time as the British Army.

The French Army lost 40,000 men defending the Dunkirk evacuation perimeter. And yet, the sacrifice of French soldiers is written out of the movie which presents the story as one of English heroism and glory.

Similarly, in Darkest Hour, French politicians are presented as drooling idiots, in contrast to stiff-upper lipped Brits.

Dunkirk has a Spitfire landing gently on the water, floating for a while as a dramatic struggle to save the pilot unfolds. The Spitfire’s Merlin engine weighed 3 tons and any plane landing on water would have tipped over front-first to sink instantly.

Churchill in the Tube?

Darkest Hour has a surreal scene in which Churchill takes the London tube from Downing Street to the House of Commons – a three-minute walk. On the Underground, the new Prime Minister exchanges verses from Macaulay’s Lays of Ancient Rome with a cheerful young black man.

There were a handful of Afro-Caribbeans in London in 1940, but Churchill never took the tube and it is doubtful if any MP today would have by heart Macaulay’s patriotic inspiring lines:

Then out spake brave Horatius, The Captain of the gate:
To every man upon this earth. Death cometh soon or late.
And how can man die better. Than facing fearful odds,
For the ashes of his fathers, And the temples of his Gods.

The black Briton reciting verse is a nod to today’s Hollywood and is ahistorical.

White-washing Churchill

As to the innards of British party politics of the era, Labour and its then-leader Clement Attlee were fully aware of the dangers of European fascism. In contrast, Churchill praised Mussolini as a statesman who has “rendered a service to the whole world …a Roman genius – the greatest lawgiver amongst men.”

It is also worth recalling that pre-WW II Tory appeasement policy allowed Hitler a free hand in the Rhineland, the Spanish Civil War, Czechoslovakia and Austria.

Meanwhile, Labour leaders knew from their social democratic comrades in Germany and Austria, from trade unions and a network of Jewish contacts what Hitlerism amounted to.

Churchill’s motivations in opposing Hitler’s Germany had nothing to do with the latter’s ideology. Churchill was concerned with Germany’s hegemonic ambitions in Europe which he saw as a strategic threat to the British Empire.

This was why the strongly anti-Labour and anti-trade union Churchill combined with Attlee, Labour and the UK’s trade unions in a coalition against Hitler. That broad domestic alliance not just helped defeat Nazism (with more than a little input from the Soviet Union, and in due course from the United States).

In 1946, Churchill, then out of government, but to his credit, called for the creation of a “United States of Europe.” In contrast, Attlee’s Labour government resisted any role in the first steps towards European integration in 1950.

Speaking gently

As a former MP, I can say that the scenes in the Darkest Hour of the House of Commons are just wrong. It is an intimate conversational chamber — not one where MPs orate and thump the dispatch box and wave their arms in the air.

Perhaps none of this matters. A movie is a movie, not a historical monograph. But both films are peak nostalgia about a Britain utterly disconnected from Europe and, presumably, all the better for it. They belong to today’s Brexit-era propaganda about an invented Britain in 1940 that never existed.

©2017 The Globalist

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Gulf Crisis: Is Qatar Really the “Region’s Israel?”

Fri, 2018-02-02 18:01

By James M. Dorsey

Unlike Qatar, Israel is not really in the business of fostering opposition or regime change in the region. Israel largely feels that autocratic rulers are more reliable partners.

Prominent U.S. constitutional lawyer and scholar Alan M. Dershowitz raised eyebrows recently when he described Qatar as “the Israel of the Gulf states.”

Known for his hard-line pro-Israel views, Mr. Dershowitz drew his conclusion following an all-expenses paid trip to the Gulf state. Mr. Dershowitz argued that Qatar, like Israel, was “surrounded by enemies, subject to boycotts and unrealistic demands, and struggling for its survival.”

The sports issue

He also noted that while he was in Qatar, an Israeli tennis player had been granted entry to compete in an international tournament in which the Israeli flag was allowed to fly alongside of those of other participants.

In response, Saudi Arabia took Qatar to task for accommodating the tennis player and almost at the same time refused Israelis visas to take part in an international chess tournament.

“This episode made clear to me that the Saudis were not necessarily the good guys in their dispute with Qatar. The Saudis have led a campaign to blockade, boycott and isolate their tiny neighboring state. They have gotten other states to join them in this illegal activity,” Mr. Dershowitz said.

His remarks were likely to have surprised Arabs and Jews as well as pro-Israeli circles. Israel, like Saudi Arabia and the United Arab Emirates, sees Qatar as a state that supports militant entities.

These include Hamas, the Islamist Palestinian group that controls the Gaza Strip, and Islamists such as the Muslim Brotherhood, which has been designated a terrorist organization by Qatar’s detractors.

Mr. Dershowitz’s similarities notwithstanding, the differences between Qatar and Israel are multiple. Most importantly, Qatar does not occupy foreign territory, nor does it deny the rights of others or employ its military to achieve geopolitical objectives.

It is Qatar’s soft power approach and idiosyncratic policies that provoked the ire of its Gulf brethren and accusations that it supports violent and non-violent militants.

Nonetheless, the trappings of the eight-month-old Gulf crisis, sparked by the imposition last June of a UAE-Saudi-led diplomatic and economic boycott, would seemingly to some degree bear out Mr. Dershowitz’s view.

The map issue

Much like Arab maps of the Middle East that for the longest period of time, and often still do, failed to identify Israel, a map of the southern Gulf in the children’s section of Abu Dhabi’s recently inaugurated flagship Louvre Museum omits Qatar.

The map would seemingly turn the Gulf dispute into an existential one in which the perceived basic principle of recognition, existence and right to chart out one’s own course is at stake.

Yet, protagonists in the Gulf crisis, much like those on the pro-Palestinians side of the Arab-Israeli divide, ensure that some degree of crucial business can be conducted, albeit often surreptitiously. In that process, common or crucial national interests are not jeopardized.

Money exchangers in the UAE still buy and sell Qatari riyals. Natural gas continues to flow. Neither Qatar nor the UAE have tinkered with the sale of Qatari gas that is supplied through a partially Abu Dhabi-owned pipeline that accounts for up to 40% of Dubai’s needs.

The aviation issue

A similar picture emerges with aviation. Like Israel, which does not bar Arab nationals entry, Qatar has not closed its airspace to Bahraini, Emirati and Saudi aircraft even though the three states force it to bypass their airspace by overflying Iran.

This has nevertheless not stopped aviation from becoming the latest flashpoint in the Gulf, signaling that the region’s new normal is fragile at best.

Tension rose this month when Qatar twice charged that military aircraft had violated its airspace. Qatar used the alleged violations to file a complaint with the international aviation authority. The UAE, beyond denying the allegations, asserted that Qatari fighters had twice intercepted an Emirati airliner as it was landing in Bahrain.

The regime change issue

In what may be a significant difference, Israel, unlike Qatar, is not really in the business of fostering opposition, if not regime change, in the region. Israel largely feels that autocratic rulers are more reliable partners and less susceptible to the whims of public opinion.

By contrast, regime change figures prominently in the UAE and Saudi Arabia’s toolkit, at least in the public diplomacy part of it, albeit with mixed results.

Emirati and Saudi efforts to foster opposition from within the ruling family to Qatari emir Sheikh Tamim bin Hamad al-Thani appeared to have backfired.


Mr. Dershowitz no doubt did Qatar a favor by visiting the country and by coming out in its defense. Comparing Qatar to Israel, however, may not go down well with significant segments of Arab and Qatari public opinion as well as pro-Israel groups. In doing so, he may have dampened the impact of his comments.

©2017 The Globalist

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