Building the Next Financial Bubble:
A Look into the Real Estate Market in China
Exclusive Interview: Venezuelan Opposition Leader Henrique Capriles and His Plan for the Nation Greece’s Financial Crisis and its Implications for the International Community
Winter 2012
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Index 3 Briefing 5 An Unexpected Challenge to the Russian Executive The largest protest has occurred in Russia since the fall of the Soviet Union in reaction to the corruption throughout the December 2011 preliminary elections. The protests are the first step for Russia to finally reach a democratic future. By Abbie Gotter, CAS ’14
Graciela Mariño, COM ’15
Henrique Capriles: A Contender’s Vision
In this exclusive feature, IRR staff writer Graciela Mariño interviewed Henrique Capriles Radonski, who commented on his campaign goals and the future he envisions for Venezuela. Page 12
7 The Power of Investment
Iran has great influence over Lebanon’s government since it intervened during the Lebanese civil war. As Iran tries to expand their regional power even further, they face powerful forces in an attempt to control the Iraqi government. By James Miller, CAS ’12
9 Building the Next Bubble in Asia:
17 The Debate over Intervention in Syria
In the last several months, dictator al-Assad of Syria has killed thousands of his own citizens who have organized an uprising against his government. The current civil war between al-Assad’s troops and a number of Syrian citizens has sparked a controversial debate in the international community on whether or not outside countries should intervene. By Billy Hendershot, CAS ’14
China’s PRC Core Residential Real Estate Market
China’s real estate market has been growing as wealthy families invest in the material wealth of houses rather than the unknown future profits of stocks. People who fall in the poor and middle income brackets have been driven away from their dreams of home ownership. Not only does this China’s economic norms, but it also sparked the threat of class warfare. By Michael Yakuel, CAS ’12
12 Leading the ‘Venezuela of Progress’
On February 12th, Henrique Capriles Radonski was chosen as the opposition’s unity candidate to face Chavez on the October 7th presidential elections. This “Primero Justicia” leader and current mayor of Baruta, a municipality of Caracas, has given the IRR an exclusive interview highlighting his governmental proposals and political views. By Graciela Mariño, CAS ’15
19 An Analysis on Greece’s Ailing Economy: Could returning to the drachma bring financial stability to the nation?
In light of Greece’s financial turmoil, numerous proposals for economic stability have been put forth. This analysis explores the potential implications of Greece abandoning the Euro currency and reverting back to the Greek drachma, including how this move could hypothetically affect the European continent and the global economy. By Nisha Shah, CAS ’14
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Editorial:
On al-Shabaab and al-Qaeda’s merge Somali terrorist group Al-Shabaab and al-Qaeda recently announced their merge. While the mainstream media characterized the union as a sign that al-Qaeda is gaining strength in parts of Africa, news outlets in the region have suggested this is not the case. What appears to be a tactic to spread power may just be the terrorist organization’s attempt to recover after facing major losses in numbers and international support.
Want to write a letter to the editor? The IR Review accepts letters from students, faculty and anyone else from within the Boston University community. Find out how to submit. Page 23
Winter 2012
Join the debate
Briefing Uganda
A bill proposing that ‘serial homosexuals,’ minors, HIV-positive or disabled people engaging in “homoexual behavior” be punishable by death continues to be debated on the legislative floor. Same-sex relationships are currently illegal in Uganda. The bill, which was introduced in 2009, has received widespread criticism from the international community.
www.buiaa.org/ ir-review
Palestine
Palestinian President Mahmoud Abbas signed a deal with Hamas leader Khaled Meshaal to create an interim unity government. Both parties view the deal as an opportunity for the Palestinian people to reunite in the fight against Israeli occupation. Israeli Prime Minister Benjamin Netanyahu condemns the act as an aggressive step from Palestinian authorities that will seriously damage upcoming peace talks.
Guinea
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Col. Moussa Tiegboro Camara, a minister in charge of fighting drug-trafficking and organized crime, has been charged for his role in the massacre of hundreds of people in 2009 at Conakry Stadium. During a protest against the military junta of Moussa Dadis Camara, Col. Tiegboro Camara commanded his troops to open-fire on some 50,000 Guinea citizens resulting in the death of at least 157 people and the rape of over 100 women.
Sudan
The government of Khartoum threatened to retaliate against South Sudanese rebels on Feb. 26 after accusing the country of backing a rebel attack inside its territory. The clash between both parties has sparked major concern in the international community.
The rebels involved in attempting to take down the Khartoum regime claimed the attack in the disputed, oil-rich Jau area as the first step against government forces. Clashes arose weeks after the Sudanese and South Sudanese governments signed a non-aggression pact, in which they agreed to refrain from launching any attacks while more permanent negotiations take place. South Sudan became independent from Sudan in July 2011, but the two governments failed to set firm boundary lines. They continue to debate how to split revenues from oil production. Each side accused the other of stealing resources and backing militia groups.
Nigeria
Islamist militant group Boko Haram carried out an attack on a jail in the central Kogi state. Several armed men broke into the jailhouse with bombs and heavy gunfire, ultimately freeing 119 inmates. Officials say that none of the escaped prisoners were high-profile detainees and most were awaiting trial, but it is reported that Boko Haram was able to free seven of its members in the attack.
Falkland Islands
Argentina is filing complaints with the United Nations, stating that the United Kingdom is breaking a regional antinuclear pact by the presence of a nuclear submarine near the shores of the Falkland Islands. As the 30th anniversary of the Falklands War approaches, Argentina expressed fears that the United Kingdom is still trying to hold the islands as a colony. The United Kingdom, however, said the islanders have the right of selfdetermination. The United Nations has called for Argentina and the United Kingdom to find a compromise in the matter through negotiations.
United States
Anonymous claimed responsibility for putting the Central Intelligence Agency website offline in its latest hacking attack against a U.S. federal agency. Hackers intercepted a conference call between British police and the Federal Bureau of Investigation in January, as they discussed what legal action to take against the group. Anonymous, known to hide behind Guy Fawkes masks, is credited with hacking attacks against many international corporations and federal agencies including Visa, Mastercard, the Department of Justice and the Kremlin.
Greece
The Eurozone agreed to give Greece a £130 billion bailout package in support of their latest budget cuts, but demanded to see a timeline of when such measures will be carried out. Finance ministers from the European Union, International Monetary Fund and European Central Bank called on Greece to make deeper cuts and restructure its economy in return for the bailout, or face bankruptcy.
Italy The bribery case involving Silvio Berlusconi, former prime minister of Italy, was dropped as the statute of limitations ran out. Berlusconi was accused of paying his former tax lawyer David Mills to lie for him in court in the 1990s. Mills originally claimed Berlusconi paid him £382,000, equivalent to $600,000, to lie about the mogul’s business interests. Mills told the court in December that the accusation had been false. The money, he said, had actually come from an associate he didn't want to admit he was working with. Berlusconi called the case part of a smear campaign set up against him. The former prime minister also stands accused of tax fraud and statutory rape, for having sex with an underage prostitute.
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An Unexpected Challenge to the Russian Executive By Abbie Gotter, CAS ’14
Photo Credit: Helena Carpio, CGS ’14 Europe’s highest-reaching railway system in Switzerland travels up to 3,454 meters above sea level, taking passengers to the Jungfrau ski region. People can board the train from Interlaken, Grindelwald and Wengen.
Russian protesters took to the street on Dec. 4, 2011, following national elections, to protest alleged government interference in the national elections. With some regions reporting a more than 100 percent voting rate, the election results raised suspicions about Prime Minister Vladimir Putin’s United Russia party and led people to believe the party presented fraudulent results to secure a victory. While corruption is nothing new in Russian politics, the reaction of the Russian population is more startling. The Dec. 27 rally against the “crooks and thieves” in Moscow attracted 120,000 protesters, making it the largest demonstration since the fall of the Soviet Union.1 The outpouring of public anger at national corruption has called into question many assumptions about Russian politics, particularly the idea that the Russian people prefer strongmen as leaders and are not politically active. Russia’s history has been fraught with non-democratic “strongmen” leaders—from the czars to Communist leaders and more recently with Yeltsin and Putin. Because of this history, international relations theorists associate Russia’s political tendencies with an actual desire for an authoritarian leader, which Henry E. Hale calls “patronal presidentialism.”2 Russia’s executive leadership is characterized by strong formal powers supported by strong informal influence. From this, the conclusion can be drawn that democratic action is unlikely to happen, as the president can use institutional measures to stay in power, but can also craft a group of elites to maintain control beyond strictly legal means. For many, this is an inherent result of Russia’s history. The assumption is made that since Russia has a history of authoritarian regimes, democracy cannot flourish: “[T]he effect of seven hundred years of czarist autocracy and seventy years of Soviet power created one of the
Photo Credit: Sofiya Mahdi, CAS ’14 Partial view of the Kremlin in Moscow. Considered a World Heritage Site by UNESCO since 1990, the Kremlin became a landmark of Russian strength and autocracy after the 1917 Revolution when the government was transferred from St. Petersburg to the Kremlin in Moscow.
most favorable cultural environments for authoritarianism.”3 M. Steven Fish points out a few qualities that may hinder the development of democracy in Russia. These include inequality in the distribution of wealth, little economic development, a large polity, heterogeneity, political culture, religious tradition and a legacy of non-democratic rule.4 Many, if not all, of these qualities apply to Russia, a country distinguished by its powerful oligarchy, huge population, ethnic diversity, and authoritarian history. However, perhaps these factors would not have caused the failure of democracy absent. For many international relations theorists, the continued support of autocratic leaders served as a key factor in the failure of a true democracy. While Russia indicated a move towards democracy during the 1990s, the political system soon “backslid” into autocracy, a reaction that is largely blamed on Yeltsin’s “aggrandizing his own power” and made possible by the easy manipulation of the constitutional system.5 This is again blamed on an inherent quality of Russia, the theory that a superabundance of raw materials, such as Russia’s hydrocarbons
and precious metals, allows for executive corruption that goes unchecked.6 The analyses of all these factors— history, constitutional structure and resources—all contribute to the idea of political determinism within Russia. The existence of these factors precludes even the contemplation of a significant change in Russian politics. After all, history and resource availability cannot be altered, and constitutional change is extremely difficult. Thus, Russian democracy has numerous labels, from liberal autocracy to Putin’s own “sovereign democracy,” a system where democracy is whatever the leader wants it to be.7,8 International relations theory also cannot explain why the general population is taking action to secure the democratic process, considering Russia’s history or weak political participation from the people. In describing Russian politics, the word “elite” is used often, while little attention is given to the Russian population’s role, besides the agreement that they play none. For instance, Hale argues that a democratic change in government is most likely to happen because of a divided elite. In other words, Putin would only lose
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power because of a loss of support from his governors.9 This view rules out the possibility that the Russian population could take steps to reform their democracy. However, many international relations theorists argue that the population is not even capable of organizing interests to oppose the government. Valerie Bunce explains that the Russian people lack a strong national identity; this leads to uncertainty in what role they want the government to play, as they fail to take action.10 This assertion is based on the international relations theory that for democracy to develop there must be politically significant social cleavages that affect how a group or population views its government. These social cleavages are not seen in Russian politics, which is partially indicated by limited or weak party identification.11 The lack of a true democracy in Russia is often blamed on the failure of the Russian population to take political action. Bunce argues that since Russia lacked the mass protests after the fall of the Soviet Union that other countries experienced, they were unable to create a true democratic system. The first elections should be an immediate and sharp break
with the authoritarian past to foster a democratic spirit. This trend has continued to the present day, with the Russian population exhibiting an “absence of significant political polarization among citizens and the relative stability of their political preferences over time.”12 In other words, Russian politics is rife with apathy that prevents civic participation. And yet, the Russian population is demonstrating that it wants real involvement in what their democracy is supposed to be—they are not just protesting against the United Russia party, but against everything the party represents of the corrupt system. They are protesting against the manipulation of the constitution, the abuse of executive power and the establishment of oligarchical relationships. Despite all reason and rationality to the contrary, the Russian people are becoming politically active in opposition to their strongman. James Kimer states “Just one year ago, the idea of someone publicly challenging Putin, mocking him, or otherwise casting aspersions had a different meaning: it was an activity reserved for a certain crazy fringe of harmless oppositionists who were not taken seriously.”13 Putin’s cult of the personality,
Photo Credit: Sofiya Mahdi, CAS ’14 St. Basil Cathedral in Moscow. As a symbol of native history and culture for the Russian public, this cathedral and other monuments in Moscow stand in sharp contrast with the new wave of political uncertainty that surrounds the current administration.
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however, is falling to pieces. The façade of democracy may have been tolerable for many years, but now Putin and his United Russia party have taken the charade too far
“Russia’s history does not have to determine its future. The outbreak of protests in Russia proves that perhaps theory should not be so deterministic.” and made a mockery of the Russian system. This has shown that political cleavages can develop, and political preferences can become unstable. Every factor that should lead to authoritarianism in Russia can also lead to democracy. The power of the elites can lead to popular discontent, indicating polarization between the ruling class and population--the opposite of apathy. An authoritarian legacy can foster even more frustration over Russia’s failure to overcome its past, encouraging the people to bring about political participation the country has never really seen. The existence of extra-constitutional powers can create enough anger that voters will not merely support the opposition, but become it. Russia’s history does not have to determine its future. The outbreak of protests in Russia proves that perhaps theory is not so deterministic, especially in regards to Russia. Based on international relations theory, Russia should not have become a democracy in the 1990s.14 It did, however. Russia has defied analysis and predictions before. It should not be so surprising that it has done so again.
All citations for articles in the winter 2012 issue of the International Relations Review can be found online. Visit the Boston University International Affairs Association website at buiaa.org/ir-review/ to access the bibliographical information.
The Power of Investment
Photo Credit: Alessandra Hartkopf, CAS ’12
By Zoë Reiches, CAS ’12 There is a long standing belief that social and economic development go hand in hand. One crucial example is the education sector, where improvements lead to more opportunities. When people in developing nations gain access to these opportunities, social progress inevitably follows. Unfortunately, in light of the global economic crisis, this has not necessarily been the case. In certain realms, the gaps have widened where they should have closed. However, there is a mutually beneficial solution to these development gaps. A crucial resource has been hiding in plain sight for far too long: the people.
It is about time that the value of contributing in people’s futures be recognized. A new business model should be considered, one in which the private sector acts as the investor and the population as the investment. Based on the principle of diminishing returns, the neoclassical macroeconomic growth model proves that the more developed a nation is, the smaller the return on investment. Conversely, the less developed a nation is, the greater the return on investment. In layman’s terms, that means investing in 1,000 school books for the United States results in a fraction of the return on investment than investing in 1,000 school books in Ghana does. Similarly, an investment in a
tertiary road in the United States would not earn nearly as much revenue as an investment in a tertiary road in Ghana would. This is because the tertiary road in Ghana would connect previously isolated villages with new markets and allow for the previously impossible transportation of goods. Such changes could potentially facilitate the continued improvement of infrastructure. Return on investment can certainly have monetary benefits, but the investment itself has long-term humanitarian benefits as well. This is best explained by the proverb, “If you give a man a fish, you feed him for a night, but if you teach a man to fish, you feed him for a lifetime.”
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Building the Next Bubble in Asia
The United Nations has invested in the infrastructure of education in several developing nations, and the result has been a six-percent increase in enrollment in
“The world will rise out of poverty by investing in people.” primary schools over an eight-year period. These educated populations will have the skills to create the tools necessary to escape poverty, and the return on investment will come in the form of a successful business partner. Bangladesh is an excellent example of how private funding can lead to the eradication of poverty. Once cited by Nobel Peace Prize laureate Henry Kissinger as an “international basket case,” Bangladesh has seen a substantial degree of growth. The country’s per capita income has doubled since its independence in 1971. Investments from companies such as the Gap, Polo and J.C. Penney have helped establish a monumental garment industry that caters specifically to young women. Without those stores, the consumers would otherwise be confined to rural villages that lack access to the global economy. As a result of these employment opportunities, the female population in Bangladesh has significantly decreased its birthrate, which has increased women’s savings and facilitated a move toward upward mobility. Jeffrey Sachs’s End of Poverty describes this investment as the first step on the ladder out of extreme destitution. Another example of successful investment lies in the Women’s Mango Cooperative in Mali. The United Nations Development Programme is working with female farmers to allow for an increase in the export of mangoes. Thus far, its efforts have proven successful. From 2006 to 2008 alone, the amount of exported mangoes has risen by 400 percent, and the amount paid to the producer has also increased
Photo Credit: Molly Masterson, CAS ’13 View of the coastal Chinese megacity of Shanghai, one of the fastest growing metropolises in the last two decades and the most populous city in the world.
China’s PRC Core Residential Real Estate Market By Michael Yakuel, CAS ’12
Photo Credit: Amrita Singh, CAS ’15 Above: children in Ghana play outside of their school. Below: young girl walks down path carrying materials. One of the most important resources a country can use for its development is human capital. By investing in sectors such as education, Ghana is getting ahead in the race toward economic development.
astronomically. The world will rise out of poverty by investing in people. Millennium Development Goals will remain precisely that—goals; they are numbers and statistics that can and will be attained. Through investment and partnership, developing nations will thrive. An
excellent resource for such partnerships is The Global Partnership Forum which offers a platform for all organizations— whether public, private, governmental or nongovernmental—to come together and address problems, brainstorm solutions, and implement programs that work.
As the housing market declines, the economy follows suit, and China is no different. Real estate bubbles are a persistent indicator of economic difficulty in emerging markets due to the crucial link between real estate and global financial systems.1 Shanghai’s real estate market is indicative of an economy with too much capital and too few investment vehicles. China recently experienced a paradigm shift in its worldviews; much of the world’s future growth is relying on the continued stable rise of China. Real estate is a significant vehicle of growth in China with 25 percent of the country’s GDP linked to real estate and its supporting industries.2 The rising price of real estate is a major threat to the Chinese Communist Party’s ability to stay in power, as much of its legitimacy is tied to facilitating a constant GDP growth rate of 8 percent or above. These rising prices pose several potentially disastrous effects for the Chinese Communist Party. First, social order may break down. To counteract this catalyst for social instability, the Chinese government is willing to prop up the housing market. Second, China’s powerful state-owned banks, or the “big four,” face an entrenched
bailout culture, an underlying issue that permeates much of Chinese society. Third, the volatility, lack of transparency and unstable equity markets force many business-savvy Chinese to place their money in real estate, which has a high appreciation value and serves as a hedge against inflation. Finally, unlike many nations, many of the purchases in China are transacted in cash, given China’s high down payment requirements and credit restrictions. This in turn will force the government to enact strict polices to curb rampant buying habits. The high savings rate in China and lack of strong financial markets increases pressure on the economy. As a result, capital is forced into dubious real estate investments. Given the importance of real estate to the socioeconomic situation of China as a whole, the CCP places a higher value on maintaining social order than on economic efficiency. Maintaining social order is an integral part of Beijing’s policy toward the economy. The issue is dual in nature. On one side, high property prices allow economic security for those who own a house. Typically rich families own five to
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ten apartments as a security net. Owning real estate has arguably become a new form of social security and status symbol for China’s upper class.3 However, this type of security net is taken out at the expense of the middle class who are quickly getting priced out of the market. With housing prices surpassing average income, there is a real danger of social unrest. An underlying issue of affordability is seen through the fact that China’s household income cannot keep up with the rising price of property. For example, the average price per square meter in Shanghai is 23,752 renminbi yet the average annual salary for white-collar workers in Shanghai is 38,447 renminbi. This huge discrepancy indicates a top-heavy market with the upper class owning much of the property, pricing out the middle class. The central issue is avoiding a crash, so the upper class does not lose its life savings and the lower- and middle-income families find affordable houses. One solution is to increase supply in the economy segment of real estate while regulating supply and buying habits in the luxury market. For example, in China’s most recent five-year plan there is a push to create 36 million new affordable homes for low-income families. These huge property developments are not without protest; expropriation is rife in China, with poor landowners being forced to leave their land to make room for these new properties. The sheer immorality of this has led not only to rural uprisings, but the “nail house” concept that is seen throughout China. Owners of these nail houses are known as “stubborn nails,” meaning they are unwilling to make way for development. An important, albeit symbolic, property law passed in 2005, which banned seizing land unless it is in the “public interest.”4 This vague wording is indicative of many Chinese laws. The famous “nail house” in Chongqing has become a symbol representing the fight against this type of expropriation. Having a wife in urban centers is directly tied to owning a house, a sign of socioeconomic mobility and tangible commitment. A rise in housing prices, which makes the dream of owning a house in China unattainable for many, threatens this social norm. In highly urbanized and materialistic areas, such as Shanghai, owning a house is as important as ever. Not being able to have a house harms
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the institution of marriage and leads to a discontented local population of both males and females: males, in the sense of the inability to fulfill his “manly duty” of owning a home, and females, who feel insecure without tangible assets or a foundation for the family unit. Much of this rush to own a home is because of a self-fulfilling prophecy, “If I don’t get on the housing ladder now, prices will rise too quickly in the future, [and] I will be priced out of the market and have no family.”5 Because many Chinese have this rationale, prices have continued to rapidly increase. No debate on China’s real estate market would be complete without addressing its banking sector. The big four state-owned banks - the Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China - dominate the mortgage market in China. These banks account for 70 percent of total banking assets in China. Arguably, the initial cause of the housing boom in Shanghai was the government advocating for increased lending in the 1990s. By 1992, Shanghai had added new real estate stock greater than that of New York City.6 By 2005, more than 1,500 skyscrapers were built. The massive capital needed for this construction was funded by China’s unusually high national savings rate of 50 percent, which made many banks very liquid. As the years progressed, poor lending practices developed, leading to many nonperforming loans, also known as NPL, that continue to plague China’s banking sector. It is believed that Chinese banks carry NPL of up to 40 percent. However, China’s Bureau of Statistics publish very different numbers, saying the NPL is under 1 percent, even though outstanding loans increased from 20 trillion renminbi since 2005 to 58 trillion in 2010. This is very counter intuitive, showing that domestic statistics must be taken with a grain of salt, given that there may be other political motives behind them. Given the huge power these stateowned banks have, there is little reason to lend efficiently since they are truly too big to fail. Investment in real estate through China’s banking system is tied to speculation as many buyers are not the end users, but rather people who hope to sell the property for future profit,. As a result, no long-run socioeconomic value is created. Pouring
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Photo Credit: Molly Masterson, CAS ’13
Photo Credit: Molly Masterson, CAS ’13 Street views of Shanghai. In a city of over 23 million inhabitants, where owning property has become a new form to acquire social status and security, a bubble in the real estate market could be disastrous.
equity into these homes without placing them on the open market for families to buy distorts the entire housing and retail market. The construction of new homes does not constitute an increase in family spending -- new television sets, furniture, kitchen appliances -- to fill these homes. It is purely short-run market speculation with no intrinsic economic value for the nation as a whole. After all, homes on a large scale are meant to be lived in -- not traded like stocks. Many ghost houses are seen throughout China, where just shells
of buildings are purchased, but there is no intention of living in them. In the past five years, 587 million square feet were purchased, only to be left empty.7 The buy and hold investment strategy of real estate in China is unlike that of the United States. There is no property tax so the cost of holding a building indefinitely is close to zero. Renting, therefore, is not important. Owning an empty apartment is seen as a stored valued, much like gold bars. There is a massive amount of wasted capital that is invested and does
not translate into practical use, except as an outlet to store wealth.8 This highlights the underdeveloped financial markets of China, given that there are no high-grade investment vehicles to channel funds through. The buying and holding of real estate assets is a highly inefficient and unsustainable method to invest one’s cash. When people lose faith in these real estate assets to perform or better investment options are created, the market will see a major drop in prices. However, by using regulation, the Chinese government is unlikely to allow this property bubble to burst at once. In the past, the government tried to regulate buying habits by increasing down payments. There is now a requirement of 30 percent down on a first home, 60 percent down on a second home and no credit on a third home.9 This minimum down payment policy, which began in 2010, had little effect on the market because most Chinese are cash buyers. As recently as July 2011, new homebuyers were enjoined to show proof of having paid 24 months of tax returns in Shanghai. This was implemented in the hope that only Shanghai locals would buy
homes, rather than outsiders purchasing property for speculative purposes. Moreover, the government also enacted a new policy, which bans the owning of multiple houses by individuals to curb speculative buying. This shift indicates the CCP's emphasis on maintaining order, acting under the assumption that short-term economic hindrance is better than longterm frustration at the rising price of owning a home. However, given China’s questionable legal infrastructure there is a question of whether this extreme regulatory action can be enforced. Given this new regulation, there has been massive capital flight from China. Of the $41 billion in international sales for American homes in 2011, nine percent are Chinese buyers.10 Chinese buyers have also been actively purchasing real estate in the Asian Tigers: Hong Kong, Singapore, South Korea, and Taiwan. On the surface, this seems to be working,: real estate prices fell by .23 percent in October 2011.11 Through this regulation, the government hopes to stabilize the market and slowly lower the price of real estate.12 China’s high savings rate and
lack of high-grade investments places a high amount of pressure on the real estate market. Given the importance of real estate to China’s upper class, as well as the social significance in regards to creating a family institution, the government is slowly letting the air out of the property bubble, rather than allowing it to crash. Gradually reducing property prices through regulation allows the rich to find other investment vehicles while avoiding an economic meltdown. This simultaneously limits the social backlash due to high prices. Beijing seems to be successfully appeasing both ends of the economic spectrum. However, there are still millions who remain outside of the housing ladder, whether in the form of buying or renting. On paper, there seems to be a major push to even the playing field in regards to China’s future real estate. In its latest five-year plan, people have advocated creating 36 million new affordable homes for low-income families. One can only hope China has the means and the political will to achieve this drive to create a new wave of affordable housing, finally creating a “harmonious society.”
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Henrique Capriles: A Contender’s Vision A
By Graciela Mariño, CAS ’15
fter more than 12 years of autocratic rule, economic deterioration, rising crime rates and increasing poverty, Venezuelans may have a fair chance to determine their political future. On Oct. 7, the people will choose between the socialist-oriented government of President Hugo Chávez and the free market, democratic ideals of the opposition candidate. The Mesa de la Unidad Democratica, the platform for democratic unity, is campaigning for Henrique Capriles Radonski, who won MUD’s primary elections on Feb. 12. Radonski competed against several political leaders, including former Caracas Gov. Diego Arria, National Assembly Miranda state Rep. María Corina Machado, former Venezuelan Congress Sen. Pablo Medina and Zulia Gov. Pablo Pérez. Capriles, governor of Miranda and arguably the most popular candidate, was also well known as the former mayor of Baruta and representative of the Venezuelan Congress. Capriles won the majority vote with 62.2 percent. Pérez came in second with 29.6 percent of the vote, half as much as Capriles. Machado followed with 3.5 percent, Arria with 1.2 percent and Medina with 0.48
percent. While his victory came at no surprise, the voter turnout surpassed all expectations. At least 2.9 million voters cast their ballots, giving the MUD a new wave of hope in its efforts to defeat Chavez. In facing Chávez, Capriles will encounter bigger challenges than those faced by the opposition in the 2006 elections. In the last presidential election, 15 million people were registered to vote, accordinag to statistics provided by the Venezuelan electoral council. The results showed that 11.7 million people casted their ballots, about 55 percent of the population. Twenty-five percent of registered voters did not participate. While 96 percent of eligible voters are registered for the 2012 election, it may not translate into a larger turnout for the opposition. Historically, abstention has been high. With more than six months remaining before election day, the road ahead is bound to bring some of the toughest challenges for the opposition. Capriles will have to confront a state devastated by violence, corruption, impunity and political polarization. It will be up to him and his administration to reform and restructure the institution and policies set by Chávez .
Photo Credit: Helena Carpio, CGS ’12 Plaza Altamira, located in the Chacao district of Caracas. In the past, this plaza has served as a hub for political demonstrations for both the Chavistas and opposition. In 2002, three citizens were massacred while protesting against Hugo Chavez, and, in 2004, an opposition protester was shot down by government supporters while protesting the presidential referendum results.
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Leading the ‘Venezuela of Progress’ Capriles on his campaign against the Chavistas IR Review staff writer Graciela Mariño interviewed Henrique Capriles Radonski just days before the primary elections. Capriles provided his views on the challenges he would face if elected president, as well as the political changes he plans to implement. The following interview was conducted in Spanish and translated to English. IRReview: Venezuela is living through a historical period of increasing political and social polarization between those supporting the Chavista government and those representing the opposition. There is also a lack of dialogue between political factions. How do you propose to unify and reconcile the country? Capriles: Venezuela needs a President that stands for peace, dialogue, respect and tolerance. I believe the President should govern by example. The Venezuela we want is an inclusive country, that serves all citizens equally. We propose a project for our country in which everyone is involved, where thoughts are respected, and where there are no imposing ideologies. Our current government in Miranda is an example of the dialogue we have established with different institutions, and of the respect we promote. Reconciliation is possible, because Venezuelans unite when we think of the country we want. We all desire a peaceful country, where our children can go to school and where there are jobs and quality health care. We deserve a way of life where there is money by the end of the month. It is possible; there is a path for “the Venezuela of Progress.” IRReview: There has been a noticeable deterioration in our education system, for primary and secondary institutions alike. Public and private schools are lacking
the trained personnel and technology to improve the academic development of students. What is your plan to improve the education system in Venezuela? Capriles: Our government plan contemplates substantially increasing the access, permanence and persecution of students in all the different educational programs of the Venezuelan system. The quality of current educational plans will be significantly improved. We will also encourage strategies that are in accordance with the social realities faced in Venezuela and that are linked with the nation’s development plans. This will be possible through integral programs, where the students are the focus of the learning process from preschool education to college-level education; and through the implementation of strategies that will directly impact the reduction of violence, drug consumption, the prevention of teenage pregnancy and the incidence of sexually transmitted diseases. Transportation, nutrition and scholarship programs will also be improved in quality and coverage. IRReview: Currently, criminal violence is one of the most alarming obstacles facing Venezuela. Not only do we have to tackle delinquency and crime, but also reinforce the police force and eradicate impunity. How do you propose to solve these issues, in the short and long run?
Capriles: Our proposal’s main objective is to protect and guarantee the right to life, the personal integrity and properties of all Venezuelans. There is an array of measures that can be taken, both in the short and long run, without discriminating the area or social condition of the citizens. We don’t want more deaths because of lost bullets, or any procedural delays that vitiate the legal system. In order to achieve this, we will coordinate and solidify a uniform vision, of course, always taking into consideration the particular realities of every locality - regarding security, and involving every responsible institution in the fight against crime. Governors, majors, members and institutions of the judicial branch and district attorneys, will exercise their tasks in a coordinated manner, through unified actions. After identifying the different organized crime groups responsible for major criminal operations, they will be immediately dismantled. To the right: Petroleums De Venezuela headquarters displays a banner of incumbent Hugo Chavez, which reads in Spanish “Move forward, commander.” The banner is meant to show the company’s support for Chavez as he battles cancer. This exemplifies the state’s use of public resources to promote Chavez’s candidacy, which is the largest challenge Capriles faces in the election. PHOTO CREDIT/HELENA CARPIO, CGS ’12
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Winter 2012
The Debate over Intervention in Syria By William Hendershot, CAS ’14
Photo Credit: Helena Carpio, CGS ’12 The national headquarters of Capriles’s campaign, known as the Comando Tricolor (the tri-color command). This building houses representatives from all of the opposition parties involved in the MUD.
IRReview: Most problems that Venezuela is facing are in some way or another, intertwined with one another: education with violence, the economy with poverty and food scarcity, among others. If you were elected president, which of these problems would you tackle first?
of political will, when dealing with many of the problems Venezuelans face. In the “Venezuela of Progress,” we will create opportunities. We will find solutions, assembling the best team possible. We will work more, and speak less.
Capriles: With time, we have learned two important things; the first one is that all issues fall under education. This is why it is crucial for us to focus on providing committed and professional teachers and the necessary infrastructure to supply a quality education. We believe that the road to achieving progress in our country is having a good education system at every level, because this is the only way to provide equal opportunities for all citizens and to overcome social inequalities.
IRReview: During the last 12 years of Hugo Chavez’s social-democratic government, the relationship between the United States and Venezuela has dramatically deteriorated. In your opinion, what are the main consequences of this phenomenon? What policies would you implement to improve this bilateral relationship?
The second important lesson is that with political will, great things can be achieved. The current administration has seen a lack
Capriles: The relationship between Venezuela and other countries must be based on respect and willingness to establish conditions that will allow our country to become part of the international concert of nations. This will
allow our country to shift from being highly dependent on oil production, to a competitive country within various industries. All initiatives of regional integration will count with our support, only if they mean progress for our people and are not based on substantial discounts from the Venezuelan oil industries.
Editor’s Note: The interview with Henrique Capriles Radonski was originally published as part of a blog post written by Graciela Mariño for the IRR blog. Readers can follow the debate surrounding the Venezuelan presidential election online at www.buiaa.org. The Spanish version of the IR Review’s interview with Henrique Capriles Radonski is available on the Boston University International Affairs Association website.
The question of whether or not to intervene in Syria continues to linger over the international community. The ongoing Syrian uprising is a result of the Arab Spring, which has overthrown various autocratic regimes. Bashar alAssad, Syria’s current president or defacto dictator, has killed thousands of his own citizens protesting for democratic reform. While these citizens are following the examples of Egyptians and Tunisians to ensure that their voices are heard, Assad claims his government is merely crushing armed gangs supported by the West. To support this, he fabricated progovernment rallies by compensating supporters. Adding to the struggle is the ban on foreign journalists reporting in Syria, which has allowed Assad to make outlandish statements such as his insistence on progress in making democratic reforms. However, it is evident from videos taken by opposition Syrians that Assad is indeed suppressing his own people. The international community has so far taken little action in halting the oppression of pro-democratic Syrians. The international institutions put in place to ensure the well-being of the Syrian people have neither worked for their goodwill nor punished the countries siding with Syria. Only coercive force and the responsibilityto-protect principle can bring the brutal dictatorship of Assad to an end. By enacting these principles, it is necessary that China and Russia side with the rest of the world by punishing Syria. Furthermore, Iranian support has reinforced Assad’s power, and stricter sanctions must be enforced to prevent this from continuing. Coercive force, which involves addressing countries that violate international law or its citizens’ basic rights, is crucial in ensuring that the human rights of the Syrian people are protected. By using diplomacy, the United States and the international community should take slow, concerted steps with Syria. The United States needs to pressure Syria to allow foreign journalists into the country, as well as determine if the uprising is as brutal as certain reports have indicated. In addition, organizations such as Amnesty
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Steps toward Intervention in Syria August 2011
International and Human Rights Watch should be permitted into the country to monitor the actions taken towards the pro-democracy protesters by the Syrian government. If the Syrian government refuses to allow journalists into the country, the next step would be to enact firm sanctions on both Iran and Syria. Sanctions on Iran are essential because support from Iran has been a major contributor to the strength of the Assad regime. According to a recent article in Foreign Affairs by Tony Badran, Iran has acted as an ally of Syria against proAmerican groups in the Arab world, “Iran has been the regime's strategic ally since 1979. For more than three decades, the two have worked together...to counterbalance the pro-American Arab states. Syria, meanwhile, has been indispensable to Iran, serving as its bridgehead in the eastern Mediterranean.”1 Since the Iran-Syrian alliance is strong, the United States needs strategic partners in the Middle East to provide stability in the region. One such ally could be Turkey, which neighbors Syria to the north. To structure this friendship with Turkey, the United States must be assured that Turkey is serious in dealing with the current crisis. Turkey has shown some resistance towards Syria but this resistance has not been firm enough.2 A team of American diplomats must interact closely with the Turks. If the United States guarantees that potential actions taken in Syria are multilateral rather than unilateral, its goals of protecting the Syrian protesters will be successful. Furthermore, the Obama administration needs to readjust its policy in Syria and form the necessary alliances that can cripple the regime without damaging the country’s people. The decline of the Assad regime will send a significant message to other autocratic regimes in the world that they will eventually be diminished if they do not embrace some democratic reforms. It is essential for the United States to secure Russia and China’s support for intervention in Syria. Recently, it has been common in the U.N. Security Council for
After months of protests and military backlash, U.S. President Barack Obama and allies call for Syrian President Assad to step down.
October 2011
Russia and China veto the U.N. resolution condemning Syria. Meanwhile, internal and exiled opposition activists form Syrian National Council.
November 2011
Army defectors target a military base near Damascus in what is considered the Free Syrian Army’s most high-profile attack since the start of protests. Government supporters attack foreign embassies.
December 2011
The uprising’s death toll exceeds 5,000. In addition, two suicide bombs outside security buildings in Damascus kill 44 people. The opposition suspects the government. Arab League officials arrive as part of Assad’s agreement to allow the organization monitor Syria. Thousands of protesters gather in Homs to greet them.
January 2012 A suicide bomber kills 26 in Damascus, to which the government responds by claiming an “iron fist” approach. The Arab League suspends its monitoring after violence increases.
February 2012 Russia and China block a U.N. Security Council draft resolution on Syria, as the government increases bombing of Homs and other cities.
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Russia and China to reject any actions taken against Iran or Syria. These rejections have occurred primarily for economic reasons. It is in the United States’ interest to convince both countries that Assad is not to be trusted and that his removal will reap benefits for all. In the case of Russia, recent comments
“The official line is that Syria's economy is fine. In an August interview, Central Bank Governor Adib Mayaleh said that foreign reserves remain strong at about $18 billion -- the same figure he was quoting earlier in the summer.”4 If strict steps are taken, the Syrian government would collapse
Winter 2012 in Syria provides insight on what could happen if the responsibility to protect principle is utilized. Gowan comments that humanitarian intervention could prove to be disastrous. “If Syria sinks into war, peacekeepers may be required to stabilize it later. But ‘humanitarian corridors’ and
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An Analysis on Greece’s Ailing Economy
“If the United States and other members of the United Nations construct a well-planned humanitarian mission to help the oppressed in Syria, the nation’s people will recognize it as a form of assistance rather than a violation of their sovereignty.” from Tony Badran, research fellow at the Foundation for Defense of Democracies in Washington, D.C., illustrate that Russia has concerns about the future of its influence in the region, “For Russia, the Western and Turkish pressure on Syria is an encroachment on its traditional sphere of influence. In fact, Moscow's longestablished military ties to Damascus have allowed it to project power into the Middle East and beyond.”3 To convince Russia of the benefits of intervening in Syria, the United States must reassure Russia that actions taken against Syria are merely for the protection of the Syrian people and that its influence would not be diminished. Continued support for a brutal regime could potentially damage ties between the two countries. Furthermore, the United States needs China and Russia to understand that in this particular situation, economic considerations should be ignored because innocent civilians are being killed for standing up for what they deserve: an adequate democratic government. Economic sanctions are vital to the diplomatic process. Although the Arab League and the United Nations have taken steps to restrict Syria’s access to the world market, there has not been enough done to ensure that the economy will topple Assad from power. To remove Assad, banking must be severely restricted and Syria’s central bank should not be given access to funds from international banks. A recent report from Stephen Starr of Foreign Policy Magazine indicates that some damage has been done to the economy but not to the overall aid count,
under its own weight and succumb to the same fate that other autocracies in the Arab world have. If steps to diplomacy fail, armed conflict is the last resort. Under Chapter VII of the U.N. charter, armed conflict is legally sanctioned if there is an extreme threat present. This portion of the charter proved useful during the recent NATO mission in Libya. Similar to the situation in Syria, the Libyan conflict threatened the safety of its own citizens. United Nations members must recognize that this practice should be applied more forcefully in Syria so that the Syrian people obtain what they deserve. This portion of the charter has led to the Responsibility to Protect principle, an important international norm enacted after the lack of response to genocides in Rwanda and elsewhere during the late 20th century. Since the world failed to react effectively to these situations, the international community agreed to protect citizens’ human rights, even if their sovereign governments failed to do so. In the case of Syria, the international community needs to recognize that any steps taken to stop further atrocities are beneficial and do not have negative consequences. China and Russia must accept that support for Iran and Syria will isolate them further from the rest of the Western world. In saying this, however, the West needs to reassure them that NATO is not willing to launch another war similar to what occurred in Libya. A recent article from Richard Gowan, a policy fellow for EuropeanCouncil on Foreign Relations, in World Politics Review on what not to do
‘safe areas’ are not a strategy to prevent that war escalating now.”5 However, since only unilateral humanitarian actions have failed miserably, multilateral humanitarian action is still a viable option. Successful examples of multilateralism such as the recent toppling of Moammar Qaddafi in Libya and the elimination of Serbian leaders like Slobodan Milosevic demonstrate that intervention is beneficial. If the United States and other members of the United Nations construct a well-planned humanitarian mission to help the oppressed people in Syria, the Syrian people will recognize it as help, not a violation of their sovereignty. The U.N. Human Rights Council (HRC) needs to play an active role in protecting the Syrian people. The HRC must form strict policies not only to protect the Syrian people but also to set an example for the future. These policies should enact strict economic sanctions that immediately cripple the accused regime and ensure that any illegitimate claims to power are diminished. If this arm of the United Nations acts in a concerted fashion and maintains its relevance, the possibility of future human rights violations worldwide will decrease significantly. It is evident that action in Syria will not be simple, but is necessary to secure basic human rights. In order to guarantee this, multilateral actions are essential to end crimes against humanity and establish a true democracy. The Syrian crisis will exemplify that if concerted steps are taken to intervene and the international community provides support, problems can be resolved.
Photo Credit: Matthew Reitman, CAS ’13 The Greek flag has symbolized the birth of Western civilization. It now waves in an air of uncertainty, as the economic future of Greece remains uncertain.
Could returning to the drachma bring financial stability to the nation? By Nisha Shah, CAS ’14 The European Union's economic crisis captured the world's attention this year, especially last fall, when events began unfolding at a rapid pace. The EU's Eurozone has been cautious of the budget deficit incurred by its member states since 2009 when it warned Spain, France, Ireland and Greece to decrease their respective budget deficits.1 Despite warnings and assistance from other EU nations, some members have not properly managed their budgets. A continual problem nation in the union has been Greece, whose financial woes set off the economic crisis in the Eurozone. From early 2000 until about 2007, Greece had a thriving economy, which continued after the country joined the EU and converted to the Euro.2 Greece had high rates of inflation in its national
currency, the drachma. When the Euro was adopted, its loan and bond rates declined and mitigated the drachma's inflation. The inflation rate had been high because the country's spending was disproportional to its revenue, leading to a buildup of debt. The problem worsened when Greece joined the Eurozone as the country continued spending while borrowing heavily, incurring more debt. Despite bailout packages, austerity measures and debt negotiations, Greece struggled to keep its debt under control.3 The debt has accumulated to such an extent that Greece’s options have become severely limited. One option in this stage of uncertainty and flux, as a result of the country's fiscal irresponsibility, is to revert back to the drachma and default on its debt.4 The drachma would be a
devalued currency to stimulate the Greek economy and would set a precedent in the EU that sends a message that the Eurozone is unreliable. As a result, other economies could question their confidence in the Eurozone countries' financial stability, all of which affect the future of the theories of international political economy and the concept of economic regionalism. With the drachma, Greeks would have a highly devalued currency, whose exchange rate is purposely lowered to encourage economic growth to eventually help pay defaulted debts. Greece's economy would break down completely due to the uncertainty of the effect of reintroducing the drachma. Nevertheless, before any growth can occur, the people and government of Greece would have to readjust to not using the Euro and the
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benefits it provides, including the ease of transactions among EU members. With these benefits no longer available, goods and services in Greece would become more expensive. Some people "especially ...skilled labor[ers]," may immigrate to "countries offering higher wages."5 This depletion of human capital, would hinder Greece's ability to progress as new workers would have to be trained to take skill-based jobs, leaving a gap in markets until they are trained. In the long run, a currency with a lower exchange rate makes purchasing exports more expensive, which makes domestic goods the more efficient purchase. This phenomenon would lead to economic growth for that country. The lower value of the currency also gives other countries incentives to invest in the country with the devalued currency, meaning capital would flow into Greece and increase production.6 In spite of this incentive, the other countries may be cautious when considering investing their capital in Greece which has just proven it is not fiscally responsible. Reversion to the drachma would have consequences for the EU. Out of the 27 member states, 17 make up the Eurozone, including Greece.7 On a regional level, the Eurozone and to a lesser degree the EU, would have to face the
Photo Credit: Matthew Reitman, CAS ’13
precedent and image of unreliability and financial instability projected by having a member state leave the monetary union. Using the Euro kept prices competitive in the Eurozone because it removed the necessity for exchange rates among these countries. While Greece leaving the Eurozone might not have a large impact on the region, it could affect other members in debt, as the increase in cost could make
“Greece’s departure would hurt the EU’s influence and reputation as a powerful force in the eyes of the international community.” it more difficult to repay those debts. Also, since the drachma would be devalued against the Euro, Greece would struggle to pay back its debt left after defaulting, leaving the other Eurozone members to wait longer for repayment.8 The Eurozone would face barriers to trade with Greece due to the different regulations and exchange rates of the currencies. Despite these circumstances, it may benefit Greece to leave the Eurozone. This would give other indebted states access to the financial assistance previously offered to Greece.9 Although the Greek economy is ranked 39th in terms of GDP purchasing power parity, it is imperative for the Eurozone to be cautious if Greece reverts back to the drachma, because it would provide a concrete example and precedent in the Eurozone of leaving when large debts have been amassed.10 According to the 2007 Lisbon Treaty, Greece would also have to leave the EU, altogether.11 The loss of a member would blemish the EU’s strong economy, proving the risk involved in the regional collection of states into one group. Greece's departure would hurt the EU's influence and reputation
as a powerful force in the eyes of the international community. It would reveal the EU’s incapability to solve Greece's debt crisis. The reversion to the drachma would cause alarm in the international economic community and spark fear of a domino effect. The international community speculates a domino effect would induce a chain reaction where the other financially struggling states of the Eurozone such as Portugal, the Irish Republic, Spain, and Italy would be at risk of defaulting soon after. This would "make a generalized banking crisis likely" for the Eurozone and the international banks that have investments in its economy, as it would have lost all of its money from the defaults. If the only way for Greece to leave the Euro is for it to leave the EU as well, then the legitimacy and stability of the union would be called into question. With the Eurozone allowing states to leave whenever they please, the purpose of coming together and forming a union is undermined. This along with the knowledge that Greece could default on its debt and the possibility of other states following suit would discourage participation of the international community, especially investment in Greece because it would be deemed risky.12 The consequences of Greece readopting the drachma would be exposed in the International Political Economy's theories of economic liberalism and economic globalization. Greece participates in the IPE, which is governed by the theory of economic liberalism and is operated by the theory of economic globalization. Economic liberalism proposes that all actions in the IPE occur to maximize wealth, so "individuals act in rational ways to maximize their selfinterest," which in turn guides the states’ action and behavior toward the economy. States are inclined to help individuals act rationally, which leads to the development of markets. Greece followed its role as a state, encouraging development of Greek markets and economy. These actions should have led to the maximization of Greece's wealth. However, due to Greece’s mismanagement of state funds, the country's debt increased revealing the a flaw in the theory. The IPE's theory of economic liberalism is designed to predict growth, so
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Photo Credit: Matthew Reitman, CAS ’13
it does not account for states participating in markets on an international level, where there are more factors to consider than just "economic efficiency." Economic globalization incorporates the international aspect of states in the IPE. It uses the idea taken from economic liberalism that all decisions made must be to maximize wealth. However, it redefines wealth as a combination of finance, trade and development for states on an international level, not just in terms of economic wealth. Greece also used this theory to guide its behavior as a state participating in international finance, trade and development through EU membership. Greece’s economic decline, however, proved that a country cannot rely on the theory economic globalization alone to provide solutions for all the problems its economy can face. A return of emphasis on the theory of economic liberalism would be signaled if the drachma is readopted. In this case, the state would be acting in the interest of itself and its individuals since
it would be able to devalue its currency to be able to stimulate its growth, which was not a possibility with a collective currency such as the Euro. If Greece leaves the Euro, economic regionalism would have to be readjusted. Economic regionalism is the "economic integration" of markets of a region to create a single, larger market.13 The Eurozone is one such example of economic regionalism because it has combined the markets of states in the regional union of Europe, the EU, under one currency. This has benefited the members of the Eurozone because it has eliminated traditional trade barriers such as exchange rates and the difficulties of moving through different states. In spite of the positive aspects of the EU and the Eurozone, Greece's debt crisis proves that there are problems to such regional structures. Since a single currency for several states prevents one state from devaluing its currency, there is no way to stimulate economic growth in that particular country. In Greece's case,
this hinders its ability to repay its debts, which are denominated in Euros, so Greece would have to leave the economic regionalism bloc of the Eurozone.14 Such a decision would evidence that economic regionalism could not work as it had been predicted. If Greece adopts the drachma and defaults on its debt, it would affect its regional union and the EU as a whole by setting an example for other members. Such a decision could cause the international economic community to doubt the stability of the EU and the Eurozone. Looking at it on a broader scale, if Greece chooses to readopt the drachma - leaving the Euro and EU - consequences would result internationally. This shows the degree of strength of the IPE's theories and how analysis of different groupings of states reveals the effects of one state's actions. With such a solution for its ailing economy, it could succeed or it could fail. However, it would definitely change how international relations - especially in economic crises - are conducted.
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Staff Editorial: Al-Qaeda’s Alliance with Al-Shabab: Growth in Militancy or Increased Media Exposure? Al-Qaeda, a global terrorist network, announced on Feb. 10 in a video released to the public that it had added more than 14,000 new troops by merging with Harakat al-Shabab al-Mujahideen, more commonly known as al-Shabab. The video featured al-Qaeda leader Ayman al Zawahiri. He stated, “I give you good news today that will make the faithful happy and the Crusaders cringe: al Shabab in Somalia has joined al Qaeda,” ABC news reported. Al-Shabab leader Ahmed Abdi Godane responded to this announcement, by “pledging obedience” to his leadership. Al-Shabab, a Somalia-based terrorist group, controls most southern and central areas of Somalia. The organization faced pressure from African Union troops concerning their supposed claims to territory within Somalia, resulting in the organization joining forces with al-Qaeda. Another probable cause for the merge was Kenya and Ethiopia’s attempts to push back Islamists in the short term by sending aid and forces into Somalia along the Kenyan and Ethiopian borders. AlShabab’s decline in resources gave them another incentive to make this move, as members have not received any financial aid or support from other nations or organizations. A number of Somali citizens marched through Mogadishu on Feb. 15 in
response to the terrorist union. “Al-Qaeda should stop meddling with Somalia's affairs and leave our country," protestor Suleiman Mumin said to African news source Magharebia. Mumin stated Somalia is ready to fight back against “al-Qaeda and al-Shabab’s 'no to life' in Somalia.” Somali Sharif Sheikh Ahmed, president of Somalia, also announced to the protestors that people residing in the country no longer tolerate al-Qaeda’s violence. These citizen-organized protests were a glimpse of hope for the infamous “failed-state” that has struggled to unite. Mainstream media outlets such as BBC, ABC and The Telegraph, have shed light on the importance of alQaeda infiltrating deeper into the African continent. However, multiple African and Middle-Eastern news sources conveyed that al-Qaeda’s presence in the region is nothing new. These sources reported that al-Qaeda and al-Shabab have been historically tied and that the recent merge announcement seemed like a clever ploy to get a weakened al-Qaeda back into the headlines. Despite what major news outlets have expressed, the announcement may be nothing more than a desperate act to make al-Qaeda appear more relevant in the global arena. Al-Qaeda’s leadership has died down since Osama bin Laden’s demise last May. With Syria and the Arab spring dominating
recent news coverage in the Middle East and Africa, there has been little room for alQaeda to stir fear. The publicity stunt may have gotten the press members wanted, but it has not gained the same attention it did in previous years. That, if anything, should prove the weakness of the organization. Al-Qaeda’s support from international allies also declined. BBC reported that Hamas and Hezbollah, have begun sever ties with al-Qaeda. As a result of the decrease in leadership and media exposure, there has also been a corresponding decrease in militancy. By forming an alliance with al-Shabab, alQaeda has not only increased its militant base, but also gained much-needed media attention. The Western world’s concerns involving terrorism may have prevented the media from identifying the merge as a strategic response to low numbers, rather than a sign of growth. Nevertheless, al-Qaeda’s next step remains unclear, as does its future. As the mainstream media continues to highlight the significance of this recent merge, it is now essential to analyze the motives behind this recent alliance. Perhaps they might reflect alQaeda’s search for a boost in its morale or an increase in its exposure. As of today, the effects this alliance will have on Somalis or al-Shabab occupied territories remains uncertain.
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