Brave New World?

[pkpatriotic]

Brave New World
By Klaus Schwab

It is much more than a sign of the times when the president of the World Bank and former deputy secretary of state, Robert Zoellick, is publicly advocating disbanding the Group of Seven in favor of a "multilateral network" twice its size to address major economic challenges.

It is true that the flurry of national responses to the banking crisis by the major industrialized economies has been uncoordinated, and ineffective, with respect to the current global credit crisis. But the starker reality is that a new international order has arrived that has yet to be understood fully or accepted widely. The deleveraging and shifting of capital flows occurring globally at this moment are not reversible trends. The economic changes happening now are structural, not cyclical, and therefore truly transformative.

I believe this transformation will, over time, reveal the following.

First, crises in a global world economy require numerous institutions and governments to respond, because any major crisis will have multiple dimensions to it that are beyond the comprehension or mandate of any single institution or government. Complexity and interdependency are characteristics inherent to globalization. In fact, there is growing grassroots awareness that global challenges are interlinked, but current governance institutions appear unable to pursue the measures needed to address them holistically.

For example, the connection between climate change, food scarcity and energy security is evident, yet an integrated solution to the three is not. There is a mismatch between the global challenges of the 21st century and the global governance institutions of the 20th century. Putting aside the current financial crisis, the failure to achieve the Millennium Development Goals, the failure to conclude the Doha Round of trade negotiations and the struggle to negotiate a successor to the Kyoto Protocol all point toward this conclusion.

Second, calls for greater global or regional collaboration will not be easily answered. Shortcomings in strategic foresight, global cooperation and managing complexity are together what landed us in the current predicament. Leaders in policy and in industry must first develop a more systematic and strategic view of global issues if any future collaboration is to be effective and sustainable.

Again, decision-making in a complex global environment requires identifying the multiple dimensions of a challenge and establishing the relationship between those dimensions. Plotting issues, interests and institutions, and understanding how they are connected, are necessary first steps in solving complex international problems. Yet this function is largely absent from our existing compartmentalized global governance architecture and in many corporate boardrooms.

A more immediate lesson that the public will need to understand is that "regulatory" failures are not the same as "market" failures. For the reasons cited above, effective regulatory coordination in a globalized world is certainly not easy, but it is achievable. However, the perception that what we are experiencing now is mostly due to "market" failure is a pernicious one, as there are signals of a growing backlash to capitalism and support for protectionist policies.

A full accounting of regulatory and corporate governance failures must take place, particularly in the United States. But in that process, we must remember that we cannot turn back the clock on globalization. Yes, it has enabled economic downturns, financial crises and commodity shocks to spread across regions, markets and industries faster than ever before. But the resulting economic interdependence and openness have made it possible for emerging and developing economies to generate two-thirds of the world's current growth and to lift millions out of poverty.

The best prescription to ward off a global recession is entrepreneurial growth. We should remind ourselves that the vast majority of companies worldwide, along with their employees, are working hard at providing this growth. We also must remind ourselves that there are other major global challenges, such as food security and climate change, that require our attention. Financial volatility will continue to grab our attention in the days and weeks ahead, but it's worth remembering that 4 billion people, nearly two-thirds of humanity, still do not have access to basic financial services.

By the time the World Economic Forum holds its 39th annual meeting in Davos, Switzerland, next January, my hope is that the leaders from government, industry and civil society who will join us will have understood that solving complex global challenges requires understanding how issues, interests and institutions are connected to one another. Appropriately, the challenge next year in Davos will be connecting these dots to come up with solutions. Our objective is to find answers that are not only holistic and systematic, but also take into account all of the stakeholders in our global society.

 

[muse]

A Middle Eastern Union?
Shlomo Ben Ami And John Bell


This autumn, the Toledo International Centre for Peace convened a meeting devoted to water cooperation in the Middle East. One conclusion that emerged was that any effective response to the unequal distribution of natural resources in the region must be regional. With this idea in mind, Munther Haddadin, a former Jordanian minister of water resources, proposed for the Middle East a “Water and Energy Union,” a long-term mechanism to integrate a fragmented region.

The idea is compelling. Attending to such basic needs in a way that manages scarcities and surpluses regionally has a powerful logic.

Indeed, the parallels with the role of coal and steel in forging the European Union are clear enough that, over the past month, Joschka Fischer, Germany’s former foreign minister, has called for such a union. So, too, have former Czech president Václav Havel and a group of global luminaries who support the idea of regional integration through water. Having convened the meeting in Spain, we are very much in favour of the pursuit of such a worthy goal.

But the European “coal and steel union” became possible only after Europe’s major political conflicts were resolved. A successful process of regional integration in the Middle East will also require a political framework that ensures the stability needed to make regional cooperation work. All sides need to know where their borders begin and end. And past injustices will need to be put aside, so that the cycle of revenge and the automatic reflex in favour of immediate gain do not scuttle regional solutions to problems.

Here, the experience of a previous regional exercise is worth acknowledging. During the 1990’s, the multilateral track of the Middle East Peace Process pursued regional coordination concerning economic development, the environment, refugees, arms control, and water. It failed, because when the bilateral talks collapsed, readiness to engage in regional cooperation withered under the despair of failed politics and the bloody reality of the Second Intifada.

The necessary political framework also needs to be regional and, fortunately, it exists. The Arab Peace Initiative, first tabled at an Arab League Summit in Beirut in 2002 and reconfirmed in Riyadh in 2007, provides all the parties with a framework to resolve their differences, as well as a political basis for moving forward. Adopting it is essential to moving forward, especially if additional chapters addressing regional security and economic relations are included.

Despite today’s chronic pessimism, the pursuit of a Middle East Water and Energy Union, coupled with adoption of the Arab Peace Initiative, would change mindsets. Together, they would form a mutually reinforcing process: a political agreement would provide the framework in which the region’s water and energy needs can be met; and meeting these basic needs in an effective and innovative way would make the Arab Peace Initiative more than a paper deal.

Moreover, the arid triangle formed by Israel, Palestine, and Jordan cannot meet its water needs unless yet another dimension is incorporated into the solution. A World Bank report has already stated that, with 19 million people living between the Jordan River and the Mediterranean by 2020, water needs would not be met without making existing technologies of desalinisation more economically viable.

Coincidentally, over the past month, there have been early signals of greater interest in a regional political approach. The Bahraini foreign minister recently called for a regional forum that includes Israel to resolve the problems ahead; a former senior Saudi official met with Israelis in the United Kingdom to reiterate the need for a comprehensive peace agreement; and Israeli Labour Party leader Ehud Barak has said that it may be time to pursue an overall peace deal for the region, accompanied by an economic package, since separate negotiations with Syria and the Palestinians may prove fruitless.

Despite decades of effort, the process of trial and error through bilateral and conflict-management approaches has always ended in frustration. Whatever economic projects have been launched has crumbled in the face of the persistence of the occupation. The problems are too complex, and the dangers of radicalism too advanced, to permit success through haphazard means.

The Middle East can end its state of permanent crisis only if it builds a comprehensive foundation for peace. The Arab Peace Initiative, combined with the long-term development of a Water and Energy Union, offers the necessary basis to meet the needs of the region’s peoples and mitigate future conflict.

The Middle East must no longer be a hallmark of intractable violence. It can be a herald of innovation on issues of common human concern — water, energy, and politics.

Shlomo Ben Ami, a former Israeli foreign minister who now serves as vice-president of the Toledo International Centre for Peace, is the author of Scars of War, Wounds of Peace: The Israeli-Arab Tragedy. John Bell is Director of the Middle East and Mediterranean Programme at the Toledo Centre

 

[muse]

What should Bretton Woods II look like?

NEW YORK: For those of us who have long claimed that the world's international financial architecture needed deep reform, the call for a "Bretton Woods II" is welcome. Of course, similar calls were made after the Asian and Russian crises of 1997-1998, but were not taken seriously by the rich industrial countries. Now that these countries are at the center of the storm, perhaps they will now be serious.

Two fundamental problems exist with the call for reform. First, it lacks content: it is unclear what any eventual Bretton Woods II discussions will be about. Second, the process started the wrong way, by excluding most countries from the talks. It is obviously good for the G-7 or a subset of G-7 members to show leadership, but no fundamental reform can occur without an inclusive process that gives both industrial and developing countries, and both large and small countries an adequate voice. Global institutions, not ad hoc groups of countries, must be at the center of the reform effort.

The clearest issue right now is correcting the deficit of regulations that characterizes global financial markets. Discussion must start by agreeing on regulatory principles. An obvious one is that regulations must be comprehensive, to avoid the massive loopholes that led to the current turmoil.

Regulations should also have a strong counter-cyclical focus, preventing excessive accumulation of leverage and increasing capital and provisions (reserves) during booms, as well as preventing asset price bubbles from feeding into credit expansion. Reliance on financial institutions' internal models, the major focus of the Basle II agreement on banking regulation, should be discarded. That strategy has now been exposed as perilous, and the use by financial institutions of similar risk models can lead to greater instability.

Any new regulatory system should be based on a well functioning network of national and regional authorities (still missing in the European Union) and include truly international supervision of financial institutions with a global reach. Most agree that the International Monetary Fund should not be at the center of the regulatory system. The Bank for International Settlements and the Basle Committee are better placed, but a fundamental reform is needed to broaden their membership and to avoid a major problem of the Basle Committee: its lack of representation of developing countries.

Three central issues of IMF reform should also be taken on board. The first is the need for a truly global reserve currency, perhaps based on the IMF Special Drawing Rights (SDRs). This would overcome both the inequities and the instability that is inherent in a global reserve system based on a national currency. Today's system is plagued by cycles of confidence in the dollar and by periodic shocks due to American policies that are adopted independently of their global impact and thus imposed on the rest of the world.

The second issue is the need to place the IMF, not the G-7, or any other "G", at the center of global macroeconomic policy coordination. This is the only way to give developing countries a voice. The multilateral surveillance on global imbalances that the Fund launched in 2006 was an interesting step in this direction, but it has lacked commitment by the parties, as well as teeth. The third issue is developing countries' major demand. The IMF should lend during balance-of-payments crises rapidly and without overburdening conditions, particularly when the source of the crisis is a rapid reversal of capital flows or a sharp deterioration in the terms of trade. This would make the IMF more like a central bank, providing liquidity in an agile way, just as advanced countries' central banks have been providing funds on a massive scale recently. In the case of the IMF, the financing for such liquidity could be counter-cyclical issues of SDRs.

In all these areas, the IMF should make more active use of regional institutions. For a decade, I have proposed that the IMF of the future should be seen as the apex of a network of regional reserve funds, that is, a system closer in design to the European Central Bank or the United States Federal Reserve system.

A similar institutional design could be adopted for prudential policies. A denser network of institutions seems better adapted to a heterogeneous international community, and it is likely to provide better services and give a stronger voice to smaller countries.

Finally, one major deficiency of the current international financial architecture is the lack of an institutional framework, i.e., a court similar to those created to manage bankruptcies in national economies, to manage debt overhangs at the international level. The current system relies on ad hoc mechanisms, which generally operate too late, after high indebtedness has already imposed devastating effects. The only regular institutional mechanism is the Paris Club, which deals exclusively with official financing. Bretton Woods II should resolve this problem by creating an international debt court.

The current financial crisis has made the need for reform of the international financial architecture patently clear. But any summons to a "Bretton Woods II" conference must be concrete in its content. A global system for prudential regulation and supervision; a revamped IMF managing a global reserve currency, coordinating global macroeconomic policy, and providing agile credit lines; and an international debt court, all of these must be on the agenda.

José Antonio Ocampo, a former UN Under-Secretary General for Economic and Social Affairs and Colombia's former finance minister, is currently Professor and co-chairman of the Initiative for Policy Dialogue at Columbia University

 

[muse]

How to win Islam over
By Olivier Roy and Justin Vaisse

Monday, December 22, 2008

During the presidential campaign, Barack Obama said he would convene a conference of Muslim leaders from around the world within his first year in office.

Recently aides have said he may give a speech from a Muslim capital in his first 100 days. His hope, he has said, is to "make clear that we are not at war with Islam," to describe to Muslims "what our values and our interests are" and to "insist that they need to help us to defeat the terrorist threats that are there." This idea of trying to reconcile Islam and the West is well-intentioned, of course. But the premise is wrong.

Such an initiative would reinforce the all-too-accepted but false notion that "Islam" and "the West" are distinct entities with utterly different values. Those who want to promote dialogue and peace between "civilizations" or "cultures" concede at least one crucial point to those who, like Osama bin Laden, promote a clash of civilizations: that separate civilizations do exist. They seek to reverse the polarity, replacing hostility with sympathy, but they are still following Osama bin Laden's narrative.

Instead, Obama, the first "post-racial" president, can do better. He can use his power to transform perceptions to the long-term advantage of the U.S. The page he should try to turn is not that of a supposed war between America and Islam, but the misconception of a monolithic Islam being the source of the main problems on the planet: terrorism, wars, nuclear proliferation, insurgencies and the like.

This will be an uphill battle, since this view of a monolithic, dangerous Islam has gained wide acceptance. Whether we're talking about civil war in Iraq, insurgency in Afghanistan, unrest in Kashmir, conflict in Israel-Palestine, nuclear ambitions in Iran, rebellion in the Philippines or urban violence in France, people routinely - but wrongly - single out Islam as the explanation, rather than nationalism or separatism, political ambitions or social ills. This in turn reinforces the idea of a global struggle.

Even the recent attacks in Mumbai, India, cannot be seen primarily through the prism of religion. What the terrorists and supporters of Lashkar-e-Taiba, the Pakistani militant group believed to have carried out the attacks, have achieved is to make normal relations between India and Pakistan impossible for the foreseeable future. Such groups have always used regional conflicts like that in Kashmir to hold on to power.

Islam explains very little. There are as many bloody conflicts outside of regions where Islam has a role as inside them. There are more Muslims living under democracies than autocracies. There is no less or no more economic development in Muslim countries than in their equivalent non-Muslim neighbors. And, more important, there exist as many varieties of Muslims as there are adherents of other religions. This is why Obama should not give credence to the existence of an Islam that could supposedly be represented by its "leaders."

Who are these leaders anyway? If Obama picks heads of state, he will effectively concede bin Laden's point that Islam is a political reality. If he picks clerics, he will put himself in the awkward position of implicitly representing Christianity - or maybe secularism. In any case, he would meet only self-appointed representatives, most of them probably coming from the Arab world, where a minority of Muslims live.

And such a conference would have negative effects for Western Muslims. By lending weight to the idea of a natural link between Islam and terrorism, it would reinforce the perception that they constitute a sort of foreign body in Western societies.

Most Western Muslims want first and foremost to be considered as full citizens of their respective Western country, not part of any diaspora. And most of them share the so-called Western values.

If the idea of a Muslim summit meeting should be dropped, then what should Obama do?

No more - but also no less - than carrying out the ambitious program he put forward during the campaign: closing the prison at Guantánamo Bay, withdrawing from Iraq, banning torture, pushing for peace in the Middle East and so forth.

These are not in any sense concessions to "Islam," but on the contrary a reassertion that American values are universal and do not suffer any kind of double standard, and that they could be shared by atheists, Christians, Muslims and others.

Obama should also put more faith in the capacity of the rest of the world to recognize that America has turned the page on eight catastrophic years. After all, Americans have just elected a president whose middle name is Hussein. That name goes a long way with many Muslims.

Olivier Roy is a visiting professor at the University of California at Berkeley. Justin Vaisse is a senior fellow at the Brookings Institution.

 

[muse]

NATURAL ALLIES?
How Moscow courts the Muslim world
By Jacques Lévesque
December 29, 2008



Vladimir Putin was the first head of a non-Muslim majority state to speak at the Organization of the Islamic Conference, a gathering of 57 Muslim states, in October 2003. That was a political and diplomatic feat, especially since Russia was waging a long-running war in Chechnya at the time. Putin stressed that 15 percent of the population of the Russian Federation is Muslim and that all the inhabitants of eight of its 21 autonomous republics are Muslim, and he won observer member status with the organization, thanks to support from Saudi Arabia and Iran.

Since then, Putin and other Russian leaders, including the foreign minister, Sergei Lavrov, claim that Russia "is, to some extent, a part of the Muslim world." In an interview with Al Jazeera on Oct. 16, 2003, Putin stressed that, unlike Muslims living in Western Europe, those in Russia were indigenous, and that Islam had been present on Russian territory long before Christianity. So Russia now claims to have a privileged political relationship with the Arab and Muslim world and believes that, as a mostly European state, it has a historic vocation as a mediator between the Western and Muslim worlds.

There are reasons for these claims. The first is to counter the pernicious effect of the war in Chechnya, in Russia as much as in the rest of the world. The aim is to avoid, or at least limit, polarization between Russia's ethnic majority and its Muslims by reinforcing Muslims' feelings of belonging to the state. "We must prevent Islamophobia," said Putin in the Al Jazeera interview. That will be difficult, given the way anyone suspected of being a Muslim fundamentalist is pursued, and not just in Chechnya. "Terrorism should not be identified with any one religion, culture or tradition," Putin insisted. Before 9/11 he called Chechen rebels "Muslim fundamentalist terrorists." Now he speaks of "terrorists connected to international criminal networks and drug and arms traffickers," avoiding any reference to Islam.

The other purpose in seeking special ties with the Arab and Muslim world is related to Russia's foreign policy aim to "reinforce multipolarity in the world" - to sustain and develop poles of resistance to U.S. hegemony and unilateralism. This means taking advantage of the hostility to U.S. foreign policy in the Arab and Muslim world. The Soviet Union used to present itself as the natural ally of anti-imperialist Arab states "with a socialist orientation." Now Russia is seeking strong political relations not only with Iran and Syria, but also with Saudi Arabia, Egypt and Turkey, which have long been close American allies.

Economic considerations are important, especially in the energy sector - the power behind Russia's return to the international stage. The Kremlin believes there is a major future in nuclear energy and the export of nuclear power stations, which may give Russia a competitive edge in technology and make it more than just an exporter of raw energy. The same is true of high-tech weapons, which were the most successful economic sector of the former Soviet Union before serious difficulties in the 1990s.

The Kremlin is no longer seeking formal alliances. It wants strong but non-restrictive political ties in frameworks such as the Shanghai Cooperation Organization (Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan), which do not put it in direct opposition to the United States. Significantly, Iran only has observer status in this organization, although it would like to be a full member.

One more explanation for this new policy toward the Muslim world is the quest for a post-Soviet Russian identity at home and abroad. This is not just political opportunism. In 2005, the academic Sergei Rogov wrote in the official Foreign Ministry review: "The Islamic factor in Russian policy is first and foremost a question of identity. ... That is one of the reasons why Russia cannot yet be a nation state in the European sense of the term. ... Our relations with the Islamic world directly affect our security."

It is important to grasp what that means. In September 2003, Igor Ivanov, then foreign minister, said the war in Iraq had increased the number of terrorist attacks on Russian territory as elsewhere in the world. That was before Beslan, but Russia was already fearful of terrorism as a consequence of the Iraq war. Russia had hoped that a new multipolar configuration would emerge from the concerted opposition at the UN Security Council by France, Germany and Russia, which had deprived the U.S. of international legitimacy for the war.

Russian leaders were seriously concerned that a "clash of civilizations" would become a self-fulfilling prophecy. Given the wars in Afghanistan and Iraq, and unconditional U.S. support for Israel's most intransigent policies, Russian leaders thought potential U.S. attacks on Iran would be a catastrophe, with destabilizing consequences in Iran, so close to Russia, as well as in several former Soviet republics and in Russia.

 

[muse]

Central Asia’s waking giant
Marcel De Haas


The Shanghai Cooperation Organisation (SCO) brings together almost half the world’s population, several members own nuclear weapons, many are big energy suppliers, and it includes some of the world’s fastest growing economies. Yet few outside Central Asia have heard much about it.

The SCO emerged from the wreckage of the Soviet Union in 1996. Today, its members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, while Mongolia, Iran, Pakistan and India are observers. Russia and China remain the lead actors. Since its launch, the SCO’s military exercises have become increasingly ambitious, growing from largely bi-lateral to inclusion of all members. The SCO is also beginning to work together in the fight against drug trafficking and organised crime.

Until recently, the SCO’s members addressed energy issues only bilaterally. But, in order to coordinate energy strategies and strengthen energy security, last year the organisation launched a club that unites energy-producing and energy-consuming states, transit countries, and private companies. The SCO promotes free trade, too, and aims to build essential infrastructure such as roads and railways to link its members and boost commerce between them while also harmonising customs systems and tariffs.

Yet cooperation within the SCO remains focused on national rather than collective objectives, because its members’ interests vary so much. China, for example, seeks markets for its products and further energy resources, while Russia aims to use the SCO to promote its anti-Western agenda. The group’s other members — led by China and Kazakhstan — want to strengthen their already robust levels of economic cooperation with the West. Thus, for example, at the SCO summit in August, Russia did not get the support of other members regarding the Georgia conflict.

These diverging objectives make it hard to believe that the SCO will ever evolve into an eastern version of NATO. True, its members have held joint military exercises and have expressed a desire to build the SCO into a more mature security organisation. But the SCO still lacks many essential elements of a full-grown NATO-style security organisation.

The SCO has no integrated military-political structure, and no permanent operational headquarters. It has no rapid-reaction force and does not engage in regular political deliberations. NATO’s focus is on external security risks, while the SCO’s members target security issues within their own territories.

It makes sense for the West, particularly the European Union, to seek cooperation with the SCO, as this would also help counter Russia’s attempts to use it as a tool for its anti-Western policies. It would also prevent the SCO from turning into a militarised entity.

These may look like negative reasons for the EU to engage with the SCO, but there are also ample positive reasons for encouraging cooperation. Europe needs energy supplies from Central Asia, and Central Asia needs European investment.

Another sphere of mutual interest is Afghanistan. At present, the EU offers financial support to the Afghan government and helps to train its police and judiciary. The SCO has established a contact group with Afghanistan. Both sides want to do more, and they might be able to make a greater impact by working together rather than separately. The EU has money and the SCO, most of whose members border Afghanistan, has trained personnel and direct experience in the region.

Cooperation with NATO also looks strategically wise. Given China’s importance in both military and economic matters, growing energy and trade relations between Central Asia and the West, and the reasonable assumption that Central Asia’s security will continue to have great significance for Western security, cooperation between the SCO, the EU, and NATO looks inevitable. This is all the more true in view of the common security threats faced by NATO and the SCO in Central Asia, such as Al Qaeda and Taliban-sponsored terrorism and drug trafficking.

But both NATO and the SCO have so far hesitated to engage in closer contact. It is hard to discern whether NATO has any opinion at all about the SCO. At best, NATO seems to regard it as being neither a problem nor an opportunity.

Reaching out to the SCO would certainly seem to support NATO’s stated objectives. After 9/11, the alliance came to the conclusion that threats may need to be dealt with on a worldwide basis, which explains NATO’s presence in Afghanistan. As a part of this global strategy, NATO strengthened its relations with partners elsewhere, including in Southeast Asia which is the SCO’s chief area of responsibility.

Perhaps inevitably, the SCO — and Russia and China as its leading members — regards NATO’s increased presence in the region with some mistrust. As long as NATO remains reluctant to enter into a dialogue with the SCO, such a cautious attitude looks set to linger, and may even intensify. Consideration also needs to be given, therefore, to the establishment of a NATO-China Council, along the lines of the NATO-Russia Council, and to the creation of arrangements that would facilitate greater cooperation with the SCO as a whole.

Such cooperation would not bridge the main differences between SCO members and the West over issues like democratisation and human rights. Cooperation would also need to comprise much more than mere joint policy development, and should involve the practical pursuit of mutually beneficial, smaller-scale ad hoc projects. NATO and the SCO could work together on neutralising anti-personnel mines in Afghanistan, as well as other possible types of confidence-building measures, such as joint police training and counter-narcotics operations.

If security cooperation is to be a success, politically sensitive issues should be avoided, with the emphasis squarely on practical measures. This approach would serve the interests of the EU, NATO, the SCO’s members, and, not least, Afghanistan.

Marcel de Haas is a Senior Researcher at the Netherlands Institute of International Relations Clingendael

 

[muse]

Islamists you can talk to
By Olivier Roy

Wednesday, January 21, 2009
PARIS:

From Gaza to Kandahar, the new Obama administration is confronted with two kinds of Islamist movements: the ones with a global agenda (Al Qaeda and its local subsidiaries) and the others with a territorial and national agenda (Taliban, Hamas, most of its Iraqi opponents).

There is nothing to negotiate with the global jihadists, but the Islamo-nationalist movements simply cannot be ignored or suppressed.

Hamas is nothing else than the traditional Palestinian nationalism with an Islamic garb. The Taliban express more a Pashtu identity than a global movement. The Iraqi factions are competing not over Iran or Saudi Arabia, but over sharing (or monopolizing) the power in Iraq.

The "war on terror" during the Bush years has blurred this essential distinction by merging all the armed opponents to U.S.-supported governments under the label of terrorism. The concept of a "war on terror" has thwarted any political approach to the conflicts in favor of an elusive military victory.

Where a political approach has been tried, it has worked. The relative success of the surge in Iraq is based on the implicit rejection of the official doctrine of the "war on terror": Local armed insurgents were recognized as political actors with more or less a legitimate agenda, thus separating them from the foreign-based global militants who did not give a damn about Iraqi national interests.

Could the same approach be applied to the Taliban and Hamas? The appointment of General David Petraeus as chief of the U.S. Central Command suggests that this is the idea for Afghanistan.

As far as Hamas is concerned, the issue rests with the leaders of Israel, not those in Washington. (Forget about U.S. pressure on Israel. Such pressure could force a temporary agreement but not a long-term solution.)

Nevertheless, for both Afghanistan and Palestine, the issue is the same: If the nationalist dimension supersedes the global jihad - which I think it does - how can a solution be found based on recognizing the legitimacy of nationalist aspirations?For Palestine, the Oslo agreement defined the framework that still guides the common policy of the West: the two-state solution.

A positive side effect of such a solution, which makes it even more desirable for Washington, is that it could open the space for a new strategic alignment against Iran. For all the Arab states, except Syria, the greatest threat today comes from Iran, not Israel.

The problem is the political reality on the ground. No Arab state can impose such an open strategic shift on its public as long as there is no agreement between Israel and the Palestinians. In short, the two-state solution is dead on the ground even if it remains on the diplomatic agenda.

Beyond this reality, the expanded settlements and the security requirements of Israel imply that a Palestinian state will never be viable.

By making security a prerequisite for any political move, Israel plays against its potential allies, Mahmoud Abbas and his Fatah (who are deprived of the wherewithal to deliver), and in favor of the radicals, who consider negotiations useless.

Adding even further to the conundrum, Israel and the West have tried to impose on the Palestinians both elections and the outcome of the elections.

In the view of the West, the Palestinian people should not have chosen Hamas by democratic means, but rather the Palestinian Authority - even though the PA has been systematically deprived of concrete means of governing. The option of negotiating with Hamas has never been really taken into consideration.

It is time to consider that option.

Whatever the justification of the Gaza military operations (to punish the inhabitants for supporting Hamas or to free them from the control of Hamas), it will not work. Dismantling Hamas' military capacity can only buy time, not solve the issue.

Under the logic of the current military scenario, either the PA must be reinstated in Gaza - only to face political and military guerrilla warfare with Hamas - or the Israeli Defense Forces must maintain control, perhaps with the involvement of foreign troops. In either case, the military "solution" will prevent the emergence of a Palestinian state.

Palestine is thus doomed, in the best case, to be either under a permanent Israeli occupation or under some sort of an international mandate.

The suggestion that Gaza could be handed over to Egypt and what remains of the West Bank to Jordan will just contribute to extending the conflict. Such an eventuality would nullify the only positive result of the Oslo negotiations, which was to transform an Israeli-Arab conflict into an Israeli-Palestinian conflict.

The issue is also complex for the Taliban. The Taliban do not embody "Afghan" nationalism but Pashtu identity. There are almost no Taliban in the center and the north of Afghanistan.

During the last 40 years, Pashtu identity has been expressed through non-nationalist ideological movements (the Khalq faction of the Afghan communist party, the numerous mujahideen movements and now the Taliban).

Thus, if the Obama administration truly seeks to change the equation in the Middle East and Afghanistan, it must recognize the real motives and aspirations, not imagined ones, that actually drive groups like Hamas and the Taliban.

Such a recognition would lead the United States to talk to the Taliban in Afghanistan and look for a political instead of military solution that responds to legitimate Pashtu aspirations.

It would lead the United States to refrain from endorsing the Israeli delusion that it can eliminate Hamas by force while frustrating Palestinian statehood.

Closing Guantánamo, as Obama has promised to do as soon as he takes office, is a powerful symbolic act that signals the United States has changed course.

But a new departure that leaves behind the wrongheaded mind-set that casts Hamas and the Taliban with the wholly different phenomenon of Al Qaeda in the "war on terror" would do far more to enhance security for the United States and peace and stability in the region stretching from Gaza to Kandahar.

Olivier Roy is a research director at the French National Center for Scientific Research and a lecturer for the School for Advanced Studies in the Social Sciences.

 

[muse]

The multi-polar myth
Ian Bremmer



Early this month, Kyrgyzstan’s president Kurmanbek Bakiyev went cap in hand to Moscow to ask for financial aid. To make his request more palatable, Bakiyev announced that he was demanding that the United States close its airbase in Kyrgyzstan, which resupplies NATO troops in neighbouring Afghanistan. Similarly, late last year, Iceland’s government asked Russia to help bail out its banking system, while Pakistani President Asif Ali Zardari visited China in hopes of securing an emergency infusion of cash.

Some observers cite these episodes as evidence of decline in America’s international clout. But there’s a larger point: so far, except for relatively small sums offered to the Kyrgyz, Russia and China haven’t offered much help.

Amid much talk of a “post-American world,” many observers see a shift from a US-dominated international order toward a multi-polar system, in which countries like China, Russia, and several others compete for global leadership on a range of common challenges and risks.

More than five years ago, China’s President Hu Jintao proclaimed that, “the trend toward a multi-polar world is irreversible and dominant.” When Vladimir Putin complained during a conference in Munich last year that US unilateralism stoked conflict around the world, an offended Senator John McCain responded that confrontation was unnecessary in “today’s multi-polar world.”

When Putin welcomed Venezuelan President Hugo Chávez to Russia last September, he observed that, “Latin America is becoming a noticeable link in the chain of the multi-polar world that is forming.” Chávez agreed: “A multi-polar world is becoming reality.”

All of them have it wrong. US dominance is clearly on the wane, but a multi-polar order implies that several emerging powers hold competing views about how the world should be run, and that they are prepared to act to advance their global agendas. That is not the case.

Instead, we are witnessing the birth of a non-polar order, in which America’s chief competitors remain too busy with problems at home and in their immediate neighbourhoods to shoulder the heaviest international burdens. None of the emerging powers has even begun to use its growing political and economic clout to advance truly global ambitions — or to take on responsibilities that Washington can no longer afford.

Start with Russia. Despite its growing ties with Venezuela and efforts to coordinate energy policy with natural gas-rich countries in North Africa, the Kremlin has no aspirations to rebuild Soviet-scale influence in Latin America, Africa, or Southeast Asia. Nor does it have Soviet-style ideological appeal. Instead, Russia’s leaders are busy protecting Russian markets, banks, and companies from the worst effects of the global financial crisis, consolidating state control over domestic economic sectors, and extending their foreign-policy leverage across former Soviet territory.

China’s need to satisfy its hunger for imported oil and other commodities has given it an international presence. But its influence is more commercial than political. China’s leaders must devote their attention to a staggering array of pressing problems at home: averting an economic slowdown that could push millions out of work and into the streets, the fallout from rural land reform, and efforts to manage enormous environmental and public health problems.

India must hold its own in China’s lengthening shadow. Facing elections next year, the ruling Congress Party is spending the government’s time and money on subsidies for consumers, wage hikes for state employees, and debt relief for farmers.

Brazil is similarly preoccupied, appearing to have no grander near-term aspirations than to promote stability in Latin America, manage the effects of the global financial crisis, and inspire others in the developing world.

In short, there is a vacuum of global leadership just at the moment when it is badly needed. President Barack Obama’s attention is now concentrated on stimulating the anaemic US economy, crafting tax cuts, reforming energy and health-care policies, and restoring confidence in US financial institutions. The European Union continues its internal debate over how best to bail out its failing banks and industries, handle the fallout from EU and euro-zone expansion, and manage increasingly rocky relations with Russia.

Who, then, can take the lead on efforts to create a new global financial architecture that reflects the complexities of twenty-first-century commerce? Who can drive consensus on a multilateral response to climate change? Who will replace an obsolete non-proliferation regime, provide collective security in emerging international hotspots, and build momentum behind Middle East Peace talks?

The international summit meeting in Washington in November 2008 underlined the problem. The world’s richest countries (the G7) turned to the emerging powers within the G20 to help coordinate a response to the global financial slowdown. Difficult as it is for seven countries to agree on anything, imagine the challenge of building consensus among 20.

Consider the competing views within this group on democracy, transparency, the proper economic role of government, new rules of the road for financial markets and trade, and how best to ensure that the United Nations, International Monetary Fund, and the World Bank fairly reflect today’s global balance of power.

For the next several years, when those in crisis turn to the US for help, they are increasingly likely to hear the word no. And it is not at all clear that anyone else is willing and able to say yes.

Ian Bremmer is President of Eurasia Group and a Senior Fellow at the World Policy Institute

 

[hembo]

Self Delete!

 

[fromwilliams]

This crisis will only be getting worse before it gets better, so batten down the hatches.

 

[muse]

Road map out of crisis
By Angela Merkel and Jan Peter Balkenende

Friday, March 20, 2009
Crisis perhaps no word is used more often to describe the current downturn of the global economy.

The ancient Greeks used the word "krisis" to express the idea of a key moment, a turning point enabling people to take clear and unambiguous decisions. This implies that every crisis embodies a chance to change things for the better.

That idea should guide us at the summit meeting of the Group of 20 in London on April 2. The immediate challenges of the current financial and economic crisis are apparent. People all over the world are deeply concerned about their jobs, mortgage repayments and future pensions. However, there are two reasons why this crisis could also prove to be a turning point that enables us to make the global economic system more balanced and fit for the future.

First, governments all over the world have clearly shown that they can and will act decisively to stimulate global demand and to preserve the stability of the financial sector. An immediate meltdown of the financial system has been prevented and there is no doubt that ensuring the stability of the financial infrastructure and unlocking the credit flow remains a top priority.

Second, the climate for international cooperation is more favorable than ever before. A spirit of shared responsibility already prevailed during the Washington summit last November. Never before did all the main players in the world economy agree so rapidly on an elaborate agenda for action.

This crisis shows that some fears about untamed globalization are not unjustified. But it also proves that in today's world there is no alternative to globalization as a motor for growth and employment, thus fostering prosperity worldwide. So our goal must be a market driven and social world economy that is balanced, equitable and sustainable.

Apart from the discussion on how to bring our economies back onto a robust growth path, the key challenge we face in London is to build a new financial architecture that meets 21st century requirements.

It is clear that over the past few decades, the financial system has globalized at unprecedented speed, but the various systems of rules and supervision have not kept pace.

This global governance gap must now be filled. The credibility of the Group of 20 process hinges upon whether we deliver on our Washington commitments, e.g. that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile. This is especially true for those private pools of capital, including hedge funds, that may present a systemic risk. Furthermore we should tackle tax havens and put an end to a bonus culture that leads to unacceptable risks.

The current crisis has revealed that the globalization process is not sustainable if key market actors the most recent example being major parts of the financial industry neglect fundamental principles of sound economic behavior. In our view it is therefore indispensable that market forces are not only checked through regulations and oversight, but also by a robust global framework of common values that sets clear limits to excessive and irresponsible action.

This lies behind the idea of a Global Charter for Sustainable Economic Activity, aimed at developing a single framework relying on the unfolding of market forces but striving to ensure a stable, socially balanced and sustainable development of the global economy.

The charter is meant to be a collection of overarching principles which should be drawn up collaboratively, taking benefit of existing concrete rules representing international consensus, but also drawing lessons from the current crisis. They would serve to guide policy makers in designing and implementing the necessary new architecture in the areas of economic, financial and social policy. We would propose that leaders endorse the charter approach at the London summit. Of course, the project is in principle open to a broader group of countries as well as international organizations.

The starting point of the charter is the common interest that industrialized, emerging and developing economies have in sustainable globalization. It is a forceful attempt to set the weights of market forces and accompanying values, principles and rules into a new global relationship that fits best the needs of people in the era of globalization. Its ultimate goal is to restore confidence in the global economy and make the world less vulnerable to crises.

We strongly believe that the London summit can be a milestone enabling us to tackle the dangers and seize the opportunities this crisis brings, alongside the other major issues on the global agenda, such as concluding the Doha round of negotiations on trade liberalization; creating opportunities for developing countries; fighting poverty; strengthening of internationally agreed social standards; tackling climate change and developing renewable sources of energy.

Fighting this crisis demands resolve and commitment. There is no easy way out and it is clear that difficult times lie ahead of us. At the same time it gives us the chance to get it right. Let's seize this chance and make the London summit a success.

Angela Merkel is the chancellor of Germany. Jan Peter Balkenende is the prime minister of the Netherlands.

 

[muse]

India begins uphill journey with the SCO
By M K Bhadrakumar



A shift in India's approach to the Shanghai Cooperation Organization (SCO) has become unavoidable as Indian regional policy in Central Asia painstakingly works its way out of a cul-de-sac. Tentative signs first appeared during the visit by Russian President Dmitry Medvedev to Delhi last December and formed part of a rethink against the backdrop of the transition of power in Washington.

In a manner of speaking, Delhi began a slow, painful process of edging away from the George W Bush era. A top Indian official said over the weekend that it has become an "uphill task" for Indian diplomacy to cope with US President Barack Obama's Central Asia policy with regard to Afghanistan.

The shift in Indian thinking comes not too soon as the government's lackadaisical approach to the SCO through the past five-year period is increasingly becoming unsustainable. The heart of the matter is that the SCO is much more than a mere clearing house for the Caspian hydrocarbon reserves but is a security organization first and foremost. (The SCO comprises China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.)

Not that the Indian government did not realize this. But it pretended otherwise since Delhi was striving to harmonize India's regional policies with the George W Bush administration, and the SCO was anathema to Washington, being a challenge to the US strategy to propel the North Atlantic Treaty Organization (NATO) as the prime security framework in the Central Asian region.

The Bush administration's "Great Central Asia" strategy attributed a pivotal role to India insofar as it envisaged India as a balancer to the traditional Russian (and increasingly Chinese) influence in that strategically vital region. Senior officials of the Bush administration and noted American regional experts and think-tankers dropped by in Delhi on a regular basis and nudged the Indian establishment toward the "Great Central Asia" strategy.

The main thrust of the US diplomacy was to use Afghanistan as a strategic bridge between Central Asia and South Asia and to encourage the Central Asian states to forge economic and political bonds with India. On a parallel track, the Bush administration's strategy strove to involve India gradually in the NATO processes so that the alliance's agenda of isolating Russia and containing China received a fillip.

In the kind of worldview - or "global vision" - that the present Indian government (which is completing its five-year term in May) claimed to possess, the US's regional strategy aimed at building up India as a major regional player and as a counterweight to China.

The Bush administration carefully nurtured these Indian aspirations - though Washington also quietly kept encouraging Beijing to make inroads into the Russian preserves in Central Asia and began developing common ground between the US and China on the contentious agenda of energy security.

At any rate, the Indian government followed a policy of masterful inactivity towards the SCO. The most glaring sign of this was that India was the only country among the SCO's member and observer countries that was not represented at head of state/government level at the organization's gala fifth anniversary summit meeting in June 2006 in Shanghai. In an appalling insensitivity toward the SCO's political agenda, Delhi kept insisting that petroleum minister Murali Deora, in the Indian cabinet, was the most appropriate official to advance the country's interests within the SCO.

For these reasons, the SCO's conference in Moscow on March 27 holds special significance for Delhi. The conference underscores that regional security and stability have been and always will remain as the raison d'etre of the organization. The agenda of the Moscow conference focuses on the situation in Afghanistan and how a regional initiative can be structured for stabilizing that country. The Indian decision to participate in the conference at the level of the prime minister's special envoy duly takes note that the SCO is placing itself in a key role in any Afghan settlement.

The main challenge for Indian diplomacy is that among the regional capitals, Delhi faces potential isolation apropos the Afghan problem. This is partly because of the centrality of Pakistan in any Afghan settlement, and most big powers are chary of Islamabad's aversion to including Delhi at the high table of conflict resolution in the Hindu Kush. Furthermore, India's adversarial relationship with Pakistan somehow has come to figure as a major template of the Afghan problem.

Such a linkage, historically, has no basis and must be counted as a failure of India's Afghan policy in the past seven years. Delhi now has to grapple with growing international opinion - especially among Western experts - that a regional solution to the Afghan problem must include a settlement ("grand bargain") of India-Pakistan differences, including Kashmir.

In retrospect, the propensity of Indian policymakers to view Afghanistan as a "second front" against Pakistan and build up an axis with the Kabul government has come to haunt them. India should have known that the government of President Hamid Karzai was too fragile as an ally. The irony is that the Obama administration itself has lately put a distance between itself and Karzai.

The SCO conference in Moscow, therefore, provides a window of opportunity for India to harmonize its Afghan policy with Russia, China, Iran and the Central Asian states. But this also poses challenges to Delhi insofar as India's US-centric foreign policy during the recent years has not gone down well in the region. Indian diplomacy must strain every nerve to recapture the verve of strategic understanding that India used to enjoy with Russia and Iran.

Nonetheless, the Moscow conference provides India with an opportunity to become part of a major regional initiative on Afghanistan's stabilization. It is highly unlikely that the SCO will be inclined to take a stance that is confrontational vis-a-vis the US's strategy. This provides comfortable space for India to negotiate. (Incidentally, India is also participating in the US-sponsored conference on Afghanistan scheduled to be held at The Hague on March 31.)

The bottom line of current Indian diplomacy is that Delhi should find a berth in the mainstream international and regional efforts in search of an Afghan settlement. Clearly, India shares the SCO's concerns over the ascendancy of the forces of religious extremism and militancy in Afghanistan. Having said that, the Indian stance towards the Taliban remains rooted in the past, whereas international opinion has evolved and nuances have appeared in Russian, Iranian and Chinese thinking. Whereas India remains stuck in the argumentative contention that there is nothing like "good" or "bad" Taliban, the Russian and Chinese stances seem to take note of the fact that the Taliban do not constitute a monolithic movement.

Moscow and Beijing seem to appreciate that there could be "moderate" elements within the Taliban, and the issue is really how practical will be any attempt to distinguish the moderate elements in the present climate of violence where the hardliners call the shots. In comparison, as a top Indian official maintained, Delhi insists that the task ahead is to "isolate the Taliban and deal with Afghanistan". He added wryly, "We do not accept this 'good-Taliban-bad-Taliban' theory because how do you decide who is a 'good Taliban'?"

All the same, India would share with Russia and China a deep sense of disquiet over any US attempts to bring about a regime change in Kabul. All three countries have made sustained efforts to cultivate Karzai and will be loathe to forfeit their political capital if the Obama administration chooses to replace him. All three, equally, would like to see that any change of leadership in Kabul should be a matter left to the Afghans themselves to decide rather than for the international community to prescribe.

The SCO, in fact, has taken a consistent position on the subject of regime change. On the Andijan uprising in Uzbekistan in July 2005, and the failed "Tulip" revolution in Kyrgyzstan earlier in the same year, in March, the SCO took a clearcut position opposing the US's intrusive regional policies. This was one of the main issues for the SCO's extraordinary call at its summit meeting in Astana in July 2005 for the termination of the American military base in Manas, Kyrgyzstan.

But Delhi assesses that a sense of realism is finally prevailing in the Obama administration about the importance of Karzai and there is no longer any compelling urge felt within the Obama administration to rush through a regime change in Kabul.

Another area of similarity in the Indian, Russian and Chinese approaches will be the three countries' emphasis on the "Afghanization" of the war. That is to say, all three countries are of the opinion that enduring peace cannot come to Afghanistan unless the capacity of the Kabul government is strengthened and the importance of economic reconstruction duly recognized. Similarly, all three countries share an aversion towards deploying troops in Afghanistan, but are prepared to make substantial contributions as "stakeholders" within that threshold.

Finally, India is developing proximity with the SCO at a time when NATO and Pakistan are getting close to establishing a formal relationship. NATO is keen on stepping up its cooperation with Pakistan, and Islamabad also wants to engage more with the alliance. NATO is working on improving its lines of communication through Pakistan, despite the availability of a northern corridor through Russian territory.

This is understandable, as NATO would like to keep in check the dependence on Russia, which has implications for European security and US-Russia relations on the whole. But 80% of NATO supplies for Afghanistan pass through Pakistani territory. Thus, NATO is under compulsion to seek a qualitatively new level of relationship with Pakistan, making it a partner in the alliance's operations in the region. NATO's decision to establish a "liaison office" in Islamabad will be seen from this perspective.

Without doubt, the developing NATO-Pakistan tango will be closely watched in Delhi. Also of concern to Delhi is NATO's plan to develop a new matrix of intelligence-sharing with Pakistan, even as the alliance is in the process of setting up six border cooperation centers along the Afghan-Pakistan border. The idea is to conduct joint NATO-Pakistan military operations along the border and make it a regular process with set agendas. Incidentally, Pakistan is already operating an intelligence cell in Kabul which coordinates with NATO.

Obviously, there is a divergence of opinion between NATO and Delhi regarding Pakistan's role in the stabilization of Afghanistan, where India views Pakistan as part of the problem. But NATO sees things differently. A senior Indian official said over the weekend, "Our view is that Pakistan should not use extremism as a strategic instrument and that it should make that choice clear."

But the NATO perspective on Pakistan lacks any such cutting edge. On the contrary, it is manifestly sanguine. The aide to NATO's secretary general and the director of policy planning, Jamie Shea, said recently, "We've [NATO] got to bring Pakistan as closely as we can into a regional approach in order to be successful in Afghanistan ... We want the closest possible relationship with [Pakistan] on the basis that the threat we face is also the threat they face - and that they can't face it without us and we can't face it without them. So there is the logic of working more closely together."

Fair enough. But what is bound to raise eyebrows in Delhi are the nascent moves by NATO - under active US and British encouragement - to have a long-term bilateral security cooperation program with Pakistan within an institutionalized framework. Shea broadly admitted, "There have been some ideas that have been around about assistance the [NATO] allies could provide to the Pakistani armed forces ... So I don't rule it [formal structures such as the Partnership for Peace program] out. But we're going step by step."

In short, NATO disagrees with Delhi's bleak view regarding Pakistani intentions. Shea said, "I think it would be very unfair to claim that they [Pakistani military] are not putting their shoulder to the wheel, as we say, in terms of making an effort. They could perhaps benefit from assistance and training, or whatever, that could be given by allies. That's something we may discuss with them in the future. But, of course, we cannot impose that upon Pakistan."

The Pakistani military being raised to NATO standards? Arguably, it is a logical move if viewed in the context of the struggle against terrorism. But then, India holds an altogether different sort of prism for viewing the Pakistani military.

At the Moscow conference, the Indian special envoy is almost certain to realize that there are virtually no takers in the region to any campaign to isolate or "pressure" Pakistan. The SCO - like NATO - will in all probability also visualize Pakistan as part of the solution rather than berate it as the problem. None of the SCO member countries will be interested in isolating Pakistan. Curiously, Pakistan may find itself being courted by NATO and the SCO alike. The region's geopolitics are dramatically changing.


Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

 

[muse]

Listen to Asia Carefully
Tom Plate

20 April 2009
President Barack Hussein Obama’s self-proclaimed proclivity for listening does not necessarily prove that he is a good listener. The art of listening is more than a passive act. Meanings must be carefully monitored and processed as words are received and acknowledged. The proof of the listening comes in the payoff on policy. 
Do we Americans learn from others as well as just listen?

Obama’s recent streak across Europe provided the new US President with plenty to listen to. In France there’s an old saying about their much loved language to the effect that the ‘French have a word for it’. During Obama’s time in Europe, though, it seemed as if that grandstanding blowhard, French President Nicolas Sarkozy, had more than a few words to say regarding just about everything. The French connection to Europe is in fact deeply revealing. If Obama did listen carefully there, he would have heard a whole lot of talking from all the European super-egos-but very little action.

He wanted a lot more help on Afghanistan, for example, and got back precious little in return. “This effort cannot be America’s alone,” he said. But judging from the crumbs produced by the Europeans, who allegedly are as vulnerable to from extremists operating out of Afghanistan, as we are such effort, more or less, will have to be 
from us alone.

There was a perverse beauty to the Europe’s response. Its educational value to the new President had to be enormous and striking. The mark it should have left on the Presidential mind should be indelible. It is this: As the US economy is restructured (in the wake of the collapse), and as American foreign policy is reconfigured (into what perhaps may become known as the post-Iraq era), Europe must continue to be listened to and consulted, of course, but with the understanding that it has less and less to contribute to America’s 21st century future.

Obama needs to fully absorb this reality, face it, and then turn in the direction of its true future: towards Asia. America needs to listen more to our Asian friends and competitors while not turning a rude deaf ear to anyone. The reason is sheer numbers - and thus geopolitical weight. Put the economies and populations of just India, China and Japan together, and next to that, colossus Europe is a peanut farm.

It’s a pity that after Obama’s return from the trip, the US media was filled with enormously boring analyses and commentaries about the future of the North Atlantic Treaty Organisation. The fact of the matter is that as long as NATO doesn’t somehow help Russian justify some kind of aggression, it’s basically yesterday’s institution. It’s almost of no importance.

Far more consequential to America is an Asia-based organisation that few Americans have ever heard of and which few members of the American media can decode out of its acronym. It’s ASEAN (Association of Southeast Asian Nations), and it needs to replace, in the American geo-political mind, 
the hallowed spot heretofore reserved for NATO. Rightly rues Singapore’s Kishore Mahbubani, the widely respected former UN ambassador and current Lee Kuan Yew School of Public Policy Dean, who may be the most sagacious geo-political mind writing in English of our time: “President George W. Bush abruptly cancelled his participation in the 2007 US-ASEAN Summit, which celebrated 30 years of US-ASEAN partnership, in favour of a 24-hour photo 
op in Baghdad.

American Secretaries of State have frequently skipped the annual ASEAN ministerial meetings. These decisions reflect a complete misunderstanding of the standing and value of ASEAN to the international community.”

For years, Mahbubani has been decrying the bizarre preoccupation with NATO and Europe, as if American thinking were still frozen in some intellectual glacier even as geo-political warming is pushing China to the fore and sliding Europe to the side.

But those clever Southeast Asians haven’t been derailed by the big American sleep. The big bopper in that group is China, of course, without in the slightest denigrating the importance of Japan. But Tokyo is mired with leadership instability at the top, while Beijing continues to play a strong, steady and sometimes healthily provocative hand at the top.Take, for example, the recent call by the Chinese for a new international currency to obviate the need for the US dollar to be so central. Washington’s reaction was instantly negative. China’s new proposal also deserves serious consideration. The Obama administration could demonstrate to the world that it is not just listening but taking it all in by calling a high-level multi-national meeting to carefully consider the idea. That would be the least America could do.

Tom Plate is an American journalist and founder of the Asia Pacific Media Network

 

[muse]

From one post above this one, which I again invite readers to read critically, "India Begins Long Journet with SCO" :

India is developing proximity with the SCO at a time when NATO and Pakistan are getting close to establishing a formal relationship. NATO is keen on stepping up its cooperation with Pakistan, and Islamabad also wants to engage more with the alliance. NATO is working on improving its lines of communication through Pakistan, despite the availability of a northern corridor through Russian territory.

This is understandable, as NATO would like to keep in check the dependence on Russia, which has implications for European security and US-Russia relations on the whole. But 80% of NATO supplies for Afghanistan pass through Pakistani territory. Thus, NATO is under compulsion to seek a qualitatively new level of relationship with Pakistan, making it a partner in the alliance's operations in the region. NATO's decision to establish a "liaison office" in Islamabad will be seen from this perspective.

Without doubt, the developing NATO-Pakistan tango will be closely watched in Delhi. Also of concern to Delhi is NATO's plan to develop a new matrix of intelligence-sharing with Pakistan, even as the alliance is in the process of setting up six border cooperation centers along the Afghan-Pakistan border. The idea is to conduct joint NATO-Pakistan military operations along the border and make it a regular process with set agendas. Incidentally, Pakistan is already operating an intelligence cell in Kabul which coordinates with NATO.

Obviously, there is a divergence of opinion between NATO and Delhi regarding Pakistan's role in the stabilization of Afghanistan, where India views Pakistan as part of the problem. But NATO sees things differently

Kayani leaving for France today

LAHORE: Chief of Army Staff General Ashfaq Kayani is leaving for France today (Sunday) on a two-day official visit to Europe, a private TV channel reported.

The channel said Kayani would meet French military officials and deliver a lecture at the French National Defence College during his visit. Kayani would then leave for Belgium where he would visit the NATO headquarters and meet senior NATO officials. He will return home on May 19.

 

[muse]

July 8, 2009
U.S. Considers Curbs on Speculative Trading of Oil
By EDMUND L. ANDREWS
WASHINGTON — Reacting to the violent swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering new restrictions on “speculative” traders in markets for oil, natural gas and other energy products.

The move is a big departure from the hands-off approach to market regulation of the last two decades. It also highlights a broader shift toward tougher government oversight under President Obama.

Since Mr. Obama took office, the Justice Department has stepped up antitrust enforcement activities, abandoning many legal doctrines adopted by the Bush administration.

The Obama administration is also proposing an overhaul of financial regulation that would include tougher capital requirements for big banks, tighter regulation of hedge funds and a new consumer protection agency with broad power to regulate credit cards, mortgages and other consumer lending.

In the case of oil and gas trading, regulators made it clear that they were willing to move, without waiting for Congress to act on Mr. Obama’s overhaul, invoking their existing powers.

The Commodity Futures Trading Commission said it would consider imposing volume limits on trading of energy futures by purely financial investors and that it already has adopted tougher information requirements aimed at identifying the role of hedge funds and traders who swap contracts outside of regulated exchanges like the New York Mercantile Exchange.

“My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” said Gary Gensler, chairman of the commission, in a statement. He said regulators would also examine whether to impose federal “speculative limits” on futures contracts for energy products.

Much of Mr. Gensler’s announcement was focused on precise issues well within his agency’s authority, suggesting that he was serious about seeking changes. But his proposals could encounter fierce opposition from big banks and Wall Street firms, which are each big traders in the commodity markets and manage big investment funds focused on commodities. Oil prices hit a record high of $145 a barrel last summer, then plunged to $33 a barrel last December and have since bounced back to more than $60.

Much of the wild swings over the last year were caused by chaos in the global financial system, as banks and much of Wall Street came perilously close to collapse last September and the global economy fell into the most severe recession in decades.

But a growing number of critics have blamed those who are betting on the direction of energy prices for some of the extreme volatility.

“It is the regulatory authority’s business to make sure the markets work,” said Edward L. Morse, head of research at LCM Commodities, a brokerage in New York. “If there’s a lesson of that last few years, it’s that the markets haven’t been functioning as well as they should have been.”

Analysts said regulators face huge challenges in distinguishing normal volatility, which is always high during a chaotic economic period, from speculative swings propelled by investors seeking purely financial gains who end up distorting energy prices.

Mr. Gensler appears focused on two basic goals. The first is to limit the volume of trading by purely financial investors, the “speculators,” as opposed to businesses like airlines or oil companies that consume or produce oil and want to minimize their exposure to big changes in price. But according to data compiled by the Commodity Futures Trading Commission, other noncommercial traders accounted for almost one-fifth of the activity in several major oil and gas products for June.

The government already imposes speculative limits on agricultural commodities like corn and wheat. But for energy products, the limits are left to exchanges like the New York Mercantile Exchange. Mr. Gensler said the limits that have been set in the past have never been aimed at reducing speculative excesses, and financial traders often receive exemptions.

The government’s second goal is to shed more light on who the players really are.

The commission also announced that it will pull back part of the veil on the oil and gas markets, publishing much more detailed information about the aggregate activity of hedge funds and tapping into new information about traders who swap energy contracts outside of traditional exchanges.

Mr. Gensler’s proposals are likely to be opposed by the banks and Wall Street firms that arrange swap contracts in the commodity markets and operate funds that invest in commodities.

Mr. Gensler is in some ways a surprising person to lead the charge for tougher regulation. A former investment banker and a high-ranking Treasury official during the Clinton administration, he was among those who defeated efforts in the late 1990s to regulate financial derivatives, an effort led by one of Mr. Gensler’s predecessors at the futures trading commission, Brooksley E. Born.

Several important Senate Democrats opposed Mr. Gensler because they suspected he was too friendly to industry. Senator Byron L. Dorgan, Democrat of North Dakota, voted against Mr. Gensler’s nomination and said on Tuesday that he wanted to see the chairman follow through with actual rules.

“I welcome the announcement,” Mr. Dorgan said in a written statement. “but it is only concrete action that will prove the C.F.T.C. is finally an effective cop on the beat.”

The commission is an independent agency that regulates the trading of futures contracts for commodities including wheat, corn, oil, precious metals and currencies. For years it has followed a deregulatory path that rarely interfered the growing markets under its jurisdiction.

A future is a contract to buy or to sell a particular volume of a commodity by a particular date. Futures contracts were created to help farmers shield themselves from price volatility for their crops, and speculators absorb that risk by buying contracts that allow them to bet on price swings. Futures are now used to trade a wide variety commodities, including oil, gas, precious metals, Treasury bonds and foreign currencies.