May 24, 2013

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Will the Chinese Be Supreme?

nybooks.com | By Ian Johnson

During the turbulent Maoist era from the 1950s to 1970s, China clashed militarily with some of its most important neighbors—India, Vietnam, the Soviet Union—and embarked on disastrous interventions in Indonesia and Africa. But by the 1980s, Deng Xiaoping had put China on a development-first policy, advising the country to “hide its capacities and bide its time.” This wasn’t exactly reassuring—implying that at some point China would reveal its true intentions—but from the 1980s through the mid-2000s China had relatively few confrontations, despite its rising economic, political, and military power.

Suddenly, it seems this modesty has evaporated. China’s territorial claims to islands and waters in East Asia are long-standing but they have turned insistent, bellicose, and even provocative, causing a sharp rift between China and many of its neighbors. Most recently, the Philippines and Japan announced that they would become “strategic partners” in settling their maritime disputes with China—anathema to Beijing, which prefers to see these disputes handled separately. Regardless of the merits of China’s claims and actions, from a realpolitik standpoint these disputes and new alliances bespeak major policy blunders in China’s past.

The most serious conflict involves Japan. While China’s actions in Southeast Asia cause many angry statements, most countries there lack the capacity to prevent Chinese ships from patrolling waters they claim as their own. But in Japan, China faces one of the world’s most capable maritime powers. Unlike the Philippines, which hasn’t been able to stop Chinese ships from encroaching on its territorial waters and even dropping markers onto disputed reefs, Japan has actively defended claims to several disputed islands known as the Senkaku in Japanese, Diaoyu in Chinese, and Tiaoyutai by nearby Taiwan (which also claims them, largely based on the same historical arguments used by China).

While other disputes have ended after a few days or weeks, this one has continued now for months. In February, Japan claimed that a Chinese frigate had locked weapons-targeting radar on a Japanese destroyer and helicopter. Almost every few days, Japanese media report on Chinese ships—especially China Marine Surveillance survey ships—sailing without permission inside Japan’s territorial waters around the islands. (At least twenty-eight such violations have been reported since the issue heated up last autumn.) Last year, these tensions helped prepare the way for the election of a nationalistic Japanese prime minister. Read More...

 

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May 17, 2013

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Toasting the world (or not)

economist.com | From the print edition

A CHANGING China has long been a mirror in which visitors can see their expectations and their own character reflected. Glass-half-full people argue that hundreds of millions have been lifted out of poverty and millions are now being empowered by their use of the internet and their increased spending power. The less positive point out that human rights are routinely abused, freedom of speech is restricted and corruption endemic. Both are right. It just depends where you look and what you want to see.

The same, it turns out, is true of China’s engagement with the world, according to two new books. In “China’s Silent Army” Juan Pablo Cardenal and Heriberto Araújo, both Spanish journalists, claim that China is at the height of its expansion across the world and that its long-term vocation is global. The world, they argue, faces a slow but steady conquest that is already laying the foundations for the new world order of the 21st century: “a world under China’s leadership”.

The two reporters set out to show, in a highly readable fashion, the growing Chinese impact on every corner of the globe. From the gasfields of Turkmenistan to the bazaars of Dubai and the mines of Congo, they find Chinese workers trying to extract what they can from foreign customers and the earth’s crust. The arrival of goods and people from China is changing how business is done. Chinese traders have taken over the main thoroughfare of the Senegalese capital, Dakar, which is now known as Boulevard Mao. They are plundering Burma’s forests and jade mines. “The Chinese overseas community is like a giant Masonic lodge,” complains one Argentinian. “We feel like we’re living in a Chinese colony,” adds a Peruvian miner, whose mine (and town) were bought by a state-owned Chinese company.

Certainly there is plenty to complain about. Many Chinese companies bring their own workers to Africa, or treat local workers badly when they do hire them. Environmental damage is widespread. The unaccountability of Chinese companies at home is extended abroad as they team up with rapacious local elites. Read More...

 

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May 10, 2013

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Why Are We Funding Abuse in Ethiopia?

nybook.com | By Helen Epstein

In 2010, the Ethiopian government began moving thousands of people out of the rural villages where they had lived for centuries to other areas several hours’ walk away. The Ethiopian government calls this program the “Commune Center Development Plan and Livelihood Strategy” and claims it is designed to bring scattered rural populations closer to schools, health clinics, roads, and other public services. But the Commune Center program has been marked by a string of human rights abuses linked to government attempts to clear huge tracts of land for foreign investors. According to testimony collected by Human Rights Watch and other groups over the past two years, the relocations have involved beatings, imprisonment, torture, rape, and even murder. In many of the new “villages” the program has created, the promised services do not exist. Deprived of the farms, rivers, and forests that once provided their livelihoods, many people fear starvation, and thousands have fled to refugee camps in Kenya and South Sudan.

Such mistreatment by the government is nothing new in Ethiopia, an essentially one-party state of roughly 90 million people, in which virtually all human rights activity and independent media is banned. But what makes this case particularly outrageous is that the Ethiopian government may be using World Bank money—some of which comes from US taxpayers—to finance it. If so, this violates the Bank’s own rules concerning the protection of indigenous peoples and involuntary resettlement. In response to complaints from human rights groups, the Bank’s internal watchdog recently conducted its own review of the Commune Center program—commonly known as villagization in Ethiopia—which confirmed the human rights allegations and recommended that the Bank carry out a full investigation of its activities in Ethiopia.

However, it’s unclear whether the Bank’s executives are prepared to accept these findings. After all, this impoverished country—which has received some $15 billion in foreign aid over the past decade is now being held up as an international development success story, and it also happens to be an important US military ally.

The World Bank is the world’s largest development organization, with an annual budget of over $30 billion provided by Western governments and Wall Street investors. Ethiopia, which hosts a US drone base and has US backed fighters in Somalia, has been a particular target of the Bank’s largesse. Since 2006 the Bank has spent more than $1.5 billion alone on a program known as Protection of Basic Services to pay the salaries of schoolteachers, health workers, and other civil servants throughout rural Ethiopia. Bank managers involved with the Protection of Basic Services project deny that it has anything to do with villagization. They also maintain that villagization is voluntary and that there’s no evidence of coercion. Read More...

 

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May 2, 2013

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Social Democracy for Centrists

dissentmagazine.org | By Joseph M. Schwartz

The Economist, long identified with libertarian economic ideals, lauded the “Nordic model” in a cover story last month as a “centrist” economic path for global capitalism. Long hostile to “tax-and-spend” social democracy, the publication’s change in tack arises from its recognition that austerity policies are deepening the economic crisis and that the inequality and declining social mobility of “free-market,” Anglo-American capitalism threatens the very legitimacy of the capitalist system that the Economist holds dear.

The magazine praises Denmark, Sweden, Finland, and Norway for accomplishments often touted by social democrats—low poverty rates, egalitarian distribution, and efficient public services. But the magazine argues that these are now “centrist” societies because they balance their budgets, allow for consumer “choice” within their public services, and nurture risk-taking entrepreneurs. The Economist sheepishly admits that these countries funnel over 50 percent of their GDP through the public sector (versus a meager 30 percent in the United States and 36 percent in Great Britain). But Adrian Woolridge’s “special report” places inordinate emphasis on how the Nordic nations’ have trimmed their (still) generous paid leave, sick day, and disability benefits, while touting Sweden’s switch from a defined-benefit to defined-contribution public pension plan.

The Economist never once mentions that the Nordic economic model of growth-with-equity derives from the continued existence of a powerful labor movement (union density is above 70 percent in each country, versus 11.3 percent in the United States and 17 percent in Great Britain). Nor does it tell us that the historical dominance of social democracy means that Nordic conservative parties resemble Obama-style Democrats. Even as social democratic parties move in and out of government, the “Nordic model” draws heavily upon the egalitarian values of its labor movement and social democratic parties.

The publics in these countries trust government because the social democrats built their welfare state upon a vision of comprehensive and universal social rights. All members of society receive publicly financed health care, child care, and education. The central government ensures that these goods are financed equitably and are of high quality—so the upper-middle class remains loyal to these services and gladly pays the high taxes to support them. The Nordic nations long ago recognized that means-tested programs end up being poorly funded and unsustainable because they are often opposed by those just above the poverty line. (The vicious politics of “welfare reform” in Britain and the United States depended upon only the poor being eligible for child-care support from the state.) Read More...

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March 25, 2013

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‘Zero Dark Thirty’ Is Osama bin Laden’s Last Victory Over America

rollongstone.com | By Matt Taibbi

I went to see Zero Dark Thirty this weekend with great anticipation. I've always loved Kathryn Bigelow's movies – I'm a fan to an almost embarrassing degree. Like most people I liked the Busey-Keanu surf-and-bromance film Point Break, but I also loved the The Weight of Water, as well as Strange Days, The Widowmaker… Bigelow's movies are visually engrossing, innovative and smart, and I couldn't wait to see what she did with a real-life subject matter that had the potential to be both the greatest detective story and the greatest action-movie plot of all time.

So I went to see the movie and like most people I know who watched it, I was blown away. On a pure whodunit level, the bulk of the film was an unbelievably compelling thriller, and purely on the level of action cinematography, the final scene – with all its real-world drama and consequence, plus the unique fact the movie revealed secrets about one of the shadowiest, most highly-classified operations ever – was about as pulse-pounding and exciting as movies get.

The way Bigelow shot that last sequence in Abbotabad, constantly declining to Michael-Bay-ize the action sequences with goofball explosions and kung-fu battles, and not glossing over the brutality or the mission's mistakes (God, what a screw-up to crash that helicopter!), it was ingenious. For however long it lasted, you felt exactly how long 14 or 15 minutes can be, with so much on the line, crowds beginning to form, Pakistani jets on the way.

And when they dragged the big prize with its blood-soaked beard back into the copter and flew off, well – the triumph the characters felt at that moment exploded into the theater, there were gasps and patriotic applause, and even I got caught up in it. The only thing I can compare it to was seeing Rocky or Star Wars in theaters as a kid, the way the crowds went wild over the ass-kicking ending. Read More...

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March 22, 2013

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Laos Could Bear Cost of Chinese Railroad

nytimes.com | By Jane Perlex and Bree Feng

OUDOM XAI, Laos — Wang Quan, the new Chinese owner of a hotel in this farm town tucked into the tropical mountains of northern Laos, is hoping that the first of 20,000 Chinese workers will arrive here soon to start construction on a new railroad.

The Chinese-financed railway is to snake its way through dozens of tunnels and bridges, eventually linking southern China to Bangkok, the capital of Thailand, and then on to the Bay of Bengal in Myanmar, significantly expanding China’s already enormous trade with Southeast Asia.

But Mr. Wang may have to wait a little longer to make his fortune from all the Chinese expected to descend on this obscure corner of Laos about 50 miles from the nearest border with China. Even though the project has run into some serious objections from international development organizations, most experts expect it to go ahead anyway. That is because China considers it vital to its strategy of pulling Southeast Asia closely into its orbit and providing Beijing with another route to transport oil from the Middle East.

The crucial connection would run through Oudom Xai between Kunming, the capital of China’s southern province of Yunnan, and the Laotian capital, Vientiane.

“China wants a fast-speed rail — Kunming to Vientiane,” George Yeo, a former foreign minister of Singapore, said in a recent speech to the Association of Southeast Asian Nations Business Club in Bangkok. Read More...

 

Image Courtsey of Justin Mott for The New York Times

March 20, 2013

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The Low Politics of Low Growth

nytimes.com | By Annie Lowrey

WE typically blame Washington for not doing more to help the economy grow. But what if we have it backward: What if it is the weak economy that is driving the failures in Washington?

That is what Benjamin Friedman, a Harvard economist who has studied the way slow growth frays societies and strains politics, thinks. “We could be stuck in a trap,” he told me last week. “We could be stuck in a perverse equilibrium in which our absence of growth is delivering political paralysis, and the political paralysis preserves the absence of growth.”

Consider how different our politics might be today if the economy had not collapsed in 2008 and not been mired in sluggish growth ever since. A ballpark estimate suggests that if the economy were to grow one percentage point more than expected in each year over the next 10, the deficit would shrink by more than $3 trillion. That would be more than enough to set the ratio of our debt to our annual economic output on a comforting downward trajectory. Moreover, it would happen without making cuts to a single program, like Medicare or food stamps, or without raising a single dollar of additional tax revenue. Even a much smaller boost to growth — say one-tenth of a percentage point per year, or even half that — would make Congress and the White House’s burden hundreds of billions of dollars lighter.

And consider how much better deficit reduction might feel to families in a growing economy, compared with a limping one. The recovery in the past year has delivered only sluggish wage growth, with much erased by inflation as more of a worker’s paycheck goes to paying for more expensive groceries, tuition bills and gas. The end of a payroll tax holiday was only one small portion of the fiscal deal the White House and Republican leaders brokered at the turn of the year. Yet it was enough to wipe out a full year’s worth of wage gains entirely. Read More...

 

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March 18, 2013

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Delta blues

economist.com | By T.P.

FOR YEARS it has been a commonplace among those who watch China—and among those who lead it—that growing inequality is one of the greatest threats to the nation’s continued growth, development and stability. Nearly three years ago the premier, Wen Jiabao, promised both to make the “pie” of social wealth bigger, and to do a better job of distributing it. His government, he said, would “resolutely reverse the widening income gap”.

But for such an important issue, China has done a remarkably poor job of measuring and reporting on it. The Gini coefficient, a 101-year-old statistical tool that can be applied to many different indicators, is among the most widely used measures of income inequality around the world. Yet China went 12 years without formally disclosing its figures.

That changed last Friday, January 18th, when the National Statistical Bureau released a slew of data showing that China’s Gini number stood at 0.474 in 2012 (where a coefficient of zero would correspond to a perfectly equal society and a score of 1 would go to the society in which one person took absolutely everything). Though this is above the threshold of 0.4 that is sometimes reckoned to be a sign of potentially destabilising inequality, it is also down from the peak level of 0.491, recorded in 2008. These numbers put China in roughly the same range as America. There are plenty of countries that are more unequal than China, and still more countries that are less so. Read More...

March 15, 2013

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Azerbaijan Is Rich. Now It Wants to Be Famous.

nytimes.com | By Peter Savodnik

In March 2010, Ibrahim Ibrahimov was on the three-hour Azerbaijan Airlines flight from Dubai to Baku when he had a vision. “I  wanted to build a city, but I didn’t know how,” Ibrahimov recalled. “I closed my eyes, and I began to imagine this project.” Ibrahimov, one of the richest men in Azerbaijan, is 54 and has a round, leathery face with millions of tiny creases kneaded in his brow and the spaces beneath his eyes. He walks the way generals walk when they arrive in countries that they have recently occupied. In the middle of his reverie, Ibrahimov summoned the flight attendant. “I asked for some paper, but there wasn’t any. So I grabbed this shirt in my bag that I hadn’t tried on. I took the tissue paper out, and in 20 minutes I drew the whole thing.”

Once he arrived in Baku, Ibrahimov went straight to his architects and said, “Draw this exactly the way I did.” Avesta Concern, the company that governs his various business interests, subsequently commissioned the blueprints for Ibrahimov’s vision. The result will be a sprawling, lobster-shaped development called Khazar Islands — an archipelago of 55 artificial islands in the Caspian Sea with thousands of apartments, at least eight hotels, a Formula One racetrack, a yacht club, an airport and the tallest building on earth, Azerbaijan Tower, which will rise 3,445 feet.  Read More...

 

Image Courtsey of Amanda Rivkin/VII, for The New York Times

March 13, 2013

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Where Does America Get Oil? You May Be Surprised

npr.com | By Corey Flintoff

Since the Arab oil embargoes of the 1960s and 70s, it's been conventional wisdom to talk about American dependence on oil from the Persian Gulf. But the global oil market has changed dramatically since then.

Today, the U.S. actually gets most of its imported oil from Canada and Latin America.

And many Americans might be surprised to learn that the U.S. now imports roughly the same amount of oil from Africa as it does from the Persian Gulf. African imports were a bit higher in 2010, while Persian Gulf oil accounted for a bit more last year.

America is one of the world's largest oil producers, and close to 40 percent of U.S. oil needs are met at home. Most of the imports currently come from five countries: Canada, Saudi Arabia, Mexico, Venezuela and Nigeria.

Desert Kingdoms Versus The Great White North

Canada is far and away the biggest purveyor of crude to its southern neighbor, hitting a record 2.2 million barrels a day last year as its share of the U.S. market grew by 12 percent.

Energy expert Robert Rapier says the take-away for Americans may be "marry a Canadian," because he or she will be a citizen of an increasingly rich country. "Their budget looks good, and they're sitting on top of tremendous reserves," he says. Read More...

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