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The Globe

SPRING 2012

Undergraduate academic journal

The Gift: Foreign Aid and Mauss’ Construct of Reciprocity Linnea R. Turco

The Shanghai Communique: Downplaying the Taiwan Issue at the 1972 Beijing Summit Keila Franks

The Fundamental Pragmatism of Nixon’s Détente Julian G. Waller

The Failure of the War on Terror in America’s Post-9/11 Information Environment Thomas T. Barry

For Better or for Worse: The Marriage of Private Military Contractors to United Nations Humanitarian Support Missions Christopher V. Longman Tattered: Why the Tibetan Carpet Industry of Nepal is Declining, and How to Mend It Dustin Becker

The Voices Unheard from Syria Asthaa Chaturvedi


Spring Issue Spring Semester 2012 Volume 3, Issue 2

COMMENTS The Voices Unheard from Syria 6 Asthaa Chaturvedi ’14

PAPERS For Better or For Worse 8 The Marriage of Private Military Contractors to United Nations Humanitarian Support Missions

Christopher V. Longman ’13

The Gift 14 Foreign Aid and Mauss’ Construct of Reciprocity

Linnea R. Turco ’14

The Shanghai Communique 19 Downplaying the Taiwan Issue at the 1972 Beijing Summit

Keila Franks ’14

Fundamental Pragmatism 25 A Historical Analysis of Nixon’s Détente

Julian G. Waller ’13

The Failure of the War on Terror

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America’s Post-9/11 Information Environment

Thomas T. Barry ’15

Tattered 34 Why the Tibetan Carpet Industry of Nepal is Declining and How To Mend It

Dustin Becker ’13 The Globe - International Affairs Journal


From the Desk of the Editor-in-Chief:

A Catalyst for Debate Dear Readers, I am honored to present the 2012 Spring edition of The Globe. The issue is an intellectually stimulating amalgamation of academic scholarship that aims to inspire responsible global citizenship. As the only undergraduate journal at the George Washington University devoted entirely to International Affairs, The Globe provides an opportunity to spark discussions on past and current issues; this Spring edition does just that. Asthaa Chaturvedi’s commentary on the Syrian conflict raises thoughtprovoking questions on the issue, while also reaching out to The George Washington University undergraduate community. Christopher Longman’s research examines the security benefits that Private Military Security Contractors provide to state and non-state actors. “The Gift” by Linnea Turco poses interesting analysis regarding the reciprocity of gift-giving and U.S. foreign aid. In her paper on the PCR and the U.S. foreign relations, Keila Franks provides thorough historical background and unique analysis on the issue of Taiwan. In addition, Julian Waller’s paper on Nixon’s détente during the Cold War shows the massive impact his decisions had on U.S. foreign policy. Thomas Barry enhances our understanding of the threat of terrorism, arguing that misrepresentation by the media has dangerously distorted the American political reality. Finally, Dustin Becker offers in-depth research on the Tibetan carpet industry of Nepal as he analyzes why the industry has recently become unprofitable. With such a vast array of topics and issues, The Globe provides an enjoyable reading experience for everyone. I would also like to congratulate the inspiring authors, as well as thank the hard working Globe staff members. Without their ingenuity and determination, this issue would have not been possible. Sincerely, Allyson Brown Editor-In-Chief

Allyson Brown is a Political Science major with a double minor in French and

Statistics. In addition to her position as Globe editor-in-chief, she also is a brother of Alpha Phi Omega and a GW Star Tour Guide.

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THE GLOBE EDITORIAL STAFF: Allyson Brown ’14 Editor-in-Chief Alexandra Stambaugh ’14 Chief Assistant Sara Tehrani ’12 Head Editor Thomas Barry ’15 Content & Formatting Editor Molly Seltzer ’15 Content Editor Linnea Turco ’14 Publicity & Content Editor Sophia Lin ’15 Communications Editor Virginia Wei ’12 Publicity Editor

OFFICIAL WEBSITE www.gwias.com/globe INQUIRIES & SUBMISSIONS should be directed to Allyson Brown at globegwu@gmail.com. MAIL correspondence should be directed to the main office: The Globe c/o The International Affairs Society George Washington University Marvin Center, Room 428 800 21st Street, NW Washington, District of Columbia 20052

Copyright © 2010, [The Globe]. Unless otherwise noted. All rights reserved. Reproduction of any content, in whole or in part, without the express permission of the Chairman of the International Affairs Society is strictly prohibited. Violations are subject to legal action. The Globe is a production of the International Affairs Society and is a registered student organization of The George Washington University in Washington, D.C. The views expressed in this publication are those of the authors, and not necessarily those of The George Washington University, its entities, or the International Affairs Society.

Cover by Sophia Lin


COMMENTS The Voices Unheard from Syria Asthaa Chaturvedi ’14

For over a year now, the Syrian government has fought its own people to maintain ‘stability’ in key cities. BBC News and Al Jazeera have reported over 9,000 conflictrelated deaths in the past year. Every day, there are calls for cooperation and a ceasefire from the United Nations, human rights organizations, and other members of the international community. Americans hear about the latest developments such as the takeover of opposition strongholds by the government or their capture by the Free Syrian Army (FSA); we read about the new coalitions between the National Syrian Council, the exiled opposition group, and the FSA, as well as the peace talks between the Assad regime and Kofi Annan. Yet the attacks have continued. According to the latest The New York Times reports, 30,000 refugees have fled to neighboring countries such as Turkey and Lebanon. Murhaf Jouejati of the Syrian National Council says, “[The Assad family] believes that the country is their backyard and the people are the cattle.” With government barriers preventing transparent media coverage of the situation within Syria, we must ask which voices are not represented in the coverage of the Syrian conflict. What is keeping President Bashar AlAssad in control, and what will it take for Russia

and China to stop arms sales to the government or to agree to Security Council action? There is no guarantee that the Syrian government would weaken soon after UN intervention, but there is a significant possibility that if Russia cut its ties to the government, Syrian forces would not be able to fight the rebels. Dr. Jouejati of The George Washington University says, “Politically, Syria is the last ally and area of influence that Russia has in the Mediterranean.” Russian contracts with Syria are worth over $4 billion dollars according to The Moscow Times. Syria is also the seventh largest importer of Russian arms. The question that remains is: how long will the violence continue and how much destruction will occur before Russia sends the unequivocal message that Syria is alone in its use of brutal force? As the violence escalates, Syrians look to escape a fate similar to the citizens of Homs, a city that has faced the brunt of the fighting. Currently, 1,000 refugees per day try to cross the border into Turkey. Although camps have been set up and it appears that Syria’s neighbors are not turning people away, the conflict’s expansion into regions beyond Damascus and regions controlled by Hamas may present logistical problems for the local populations, who inevitably will overwhelm the refugee

Asthaa Chaturvedi is an International Affairs major, concentrating in International Development. She is interested in journalism and is currently interning at the Washington bureau of the Nightly Business Report, which airs on PBS.

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The Voices Unheard from Syria

Hacipasa Refugee Camp in Antakya, Turkey, near the Syrian border, March 13, 2012 (Image: AFP)

camps. Another factor that contributes to the high emigration rates out of Syria is the ‘brain drain.’ If Assad’s command falls, a nascent government looking to revitalize cannot afford to lose the Syrian intellectuals to surrounding countries. Just as the opposition to the government grows stronger, there are still people who support the government, which the media has failed to show. As a result, few know what government supporters fear when it comes to potential regime change. The latest updates have failed to address who exactly may replace Assad and what the transition will potentially look like. We may not realize it while living in The George Washington University bubble, but the conflict is close to the hearts of students right here on campus. I spoke to GW freshmen students, twin brothers Emad and Moh Kassem from Nigeria who have strong family ties in Syria and often visit the country. Emad said, “There will be a vacuum of power and that’s why the government has support. People fear the alternative.”

Last year, Time magazine named 2011 the “Year of the Protester,” in which uprisings across the Middle East and Northern Africa marked front-pages worldwide. The protests and violence in Syria today show just how long the struggle for a democratic government has taken and what this struggle has cost the state. As policymakers conceptualize strategic actions in the region, we must not forget the long-term effects on citizens and the rebuilding process that follows the violence. Perhaps Moh said it best as he described his feelings about regime change in Syria: “When it comes to freedom, you have to know what you are asking for. I haven’t chosen if I am with or against the government. I care about what is for the greater good, and sometimes you have to make sacrifices.” What are we sacrificing in our understanding of the conflict and which voices are pushed to the fray as we promote missions that end the hostility? As we consider these issues, we find more questions than answers, but sometimes they are worth asking on the road to freedom.

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PAPERS For Better or For Worse The Marriage of Private Military Contractors to United Nations Humanitarian Support Missions

Christopher V. Longman ’13 Since the turn of the century, the prevalence of private military security contractors (PMSCs) has increased. Simultaneously, states and international organizations, including the United Nations (UN), have turned to the private sector to provide valuable logistical, security, intelligence and training capacities.1 Currently, states and non-state actors contract PMSCs to support their security and capacity requirements. By employing these private companies, the costumers can acquire enhanced safety of staff and product, while ensuring the sustainability and ultimate success of their mission objective. The United Nations Peacekeeping Mission’s capacity and kinetic success may increase through the contract employment of PMSCs and the services they provide. The emergence of the private sector in peace operations is a de facto reality in international security. The growth of PMSCs means that impediments to successful peace operations are increasing: the result of artificial and misguided limitations of international actors. This paper will be divided into two major sections of analysis. The first section 1 I will use the acronym ‘PMSCs,’ private military security contractors, throughout this paper. In my own opinion, this acronym is the most encompassing one. It correctly characterizes the actions of the private corporation as providing security protection and logistical support using military tactics and military grade equipment.

will focus on the internal structure and services provided by PMSCs. It will analyze services provided by the companies and their applications to humanitarian and peacekeeping initiatives as well as the viability of their involvement in the mission. The second section will explore the actions of PMSCs in supporting the humanitarian missions and goals of the international community, specifically in regard to UN and NGO community-led operations. PMSCs are used to fill knowledge gaps and increase the capacity of the program while maintaining security and logistical support to the client. The Modern Private Military Security Contractors “We are an international business like any other business, a pin-striped, bespectacled and utterly harmless looking corporate head told us…We go where we are wanted and where people can pay our fees.” --“Solider of Fortune- the mercenary as Corporate Executive,” African Business, December 1, 1997. After 9/11 and the subsequent wars in Afghanistan and Iraq, the global community witnessed the birth of a new breed

Christopher V. Longman is an International Affairs major with a concentration in Conflict and Security and a minor in Criminal Justice. He is also the Chairman Elect of the International Affairs Society.

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For Better or for worse

(Image: www.anticap.wordpress.com)

of commercial military enterprises. PMSCs are ordered along pre-existing corporate lines. They have a clear hierarchy, driven by business profit rather than individual profit, which allows for a permanent structure capable of competing and surviving in the global free market.2 This is in contrast to the ad-hoc structure of historical and present-day individual mercenary soldiers.3 The media coverage and analysis of the U.S. wars in Iraq and Afghanistan have propagated an idea of rogue private mercenary armies causing unregulated havoc in civilian communities. While there exist anecdotal accounts and official investigations into specific occurrences of PMSC violations of the International Code of Conduct (ICoC) and International Humanitarian Law (IHL), PMSCs provide a valuable service to state and non-state actors, including, but not limited to, security services.4 These new military

2 Peter W. Singer, Corporate Warriors: The Rise of the Privatized Military Industry (New York: Cornell University Press, 2003), 45. 3 To date, there has been no universally agreed on consensus on how to define mercenaries. This ongoing debate does not provide a usable definition of the practice of selling military service. Critics claim that PMSCs that engage in hostilities are mercenaries however the international legal community has not (and most likely will not) reach consensus to conclude that this is the case. The legal standing definition of mercenaries can be found in Article 47 of the Additional Protocol to the Geneva Conventions of 1949. 4 The explanation and analysis of the rules and regulations regarding the actions of PMSCs (specifically in regard to engagement and legal repercussions for actions) will be saved for another analytical essay (ISP). International guidelines have been set up to regulate and standardize the actions of PMSCs in conflict zones. For more infor-

firms offer a wide range of appealing services to various state and non-state actors. Former British Army Lt. Col. Tim Spicer is the CEO of Sandline, a PMSC focused on providing “specialist military expertise… to friendly governments.” He stated: “we cover the full spectrum—training, logistics, support, operational support, [and] postconflict resolution.”5 The growing capability of the services offered allow for a broader range of clients as well as a broader range of employees. The demand from clients for various services once left only to the state has greatly encouraged the growth of the industry in the past decade. Tip-of-the-Spear Typology In order to fully conceptualize the ultimate role that the PMSCs have in conflict/ post-conflict (CPC) environment, it is necessary to explicate the industry by its range of services and the level of force required by the firms to provide these services in the field. Traditionally, military installations are classified by their location in relation to the “front lines” of engagement. PMSCs can also be classified using this same structure.6 mation, see the International Code of Conduct for Private Security Service Providers (2010) and the Montreux Document (2008)—both Swiss led initiatives. 5 As quoted in Singer, Corporate Warriors, 46. 6 See Appendix. Figure 1.

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christopher V. Longman

Appendix Figure 1: “Tip of the Spear” Typology. Firms distinguished by range of services, levels of force. (Image: Singer, P. W. Corporate Warriors: The Rise of the Privatized Military Industry)

The PMSC that engages in the forefront of military conflict by fulfilling military specialties for clients with low military capability in a high threat situation is called a military provider firm. In this case, the PMSC is at the tip of the spear because it provides complete alternatives with expertise, instead of supplementing existing forces.7 While these firms are most often associated with the “PMSC community,” companies that provide this form of security service are the minority; more than 90% of the industry is comprised of firms that provide primarily logistical support and/or training rather than armed security.8 Military consulting firms are the next level of the “tactical spear.” These firms “provide advisory and training services that are integral to the [successful]” fulfillment of the client’s mission.9 These firms do not operate directly on the battlefield, leaving the ultimate presence on the front lines to the client. They often require long-term 7 Singer, Corporate Warriors, 93. 8 JJ Messner, “Ethical Security: The Private Sector in Peace and Stability,” In Private Security in Africa, ed. Sabelo Gumedez (South Africa: Institute for Security Studies, 2007), 60. 9 Singer, Corporate Warriors, 95.

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contracts, which result more lucrative profit margins. The use of military consulting firms can extend to the development of programs and capacity necessary for establishing legitimate governing structures. The sector least explored and perhaps most important is that of PMSCs in humanitarian missions. Military support firms provide “supplementary military services, including logistics, intelligence, technical support, supply and transportation.”10 By providing these supporting services, the client can focus primarily on the mission at hand. This section of firms can hold a wide range of subcontractor specialties ranging from intelligence gathering to building shower and toilet systems. Classification of PMSCs as providers of supporting military services gives a simplified method of viewing the actions and technical abilities of PMSCs. It is important to note that many companies engage in various levels of involvement and may at one time hold contracts that incorporate all of these levels of engagement, since they all can easily become intertwined during times 10 Singer, Corporate Warriors, 97.

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of CPC. The contracts secured by PMSCs on behalf of the UN often incorporate all of the three firm types explained above. Although governments, as well as their respective military and associated intelligence communities, remain the obvious primary market for private military security contracts, PMSC clientele has expanded to include multinational corporations, non-governmental organizations, and the UN. Future lucrative long-term contracts, with this side of the industry prove to be the next likely market for PMSCs. PMSCs and Peacekeeping Humanitarian Missions: Increasing Capacity “The times now require you to manage your general commerce with your sword in your hand.” --Gerald Aungier, Governor of Bombay, in a letter to the directors of the British East Indies Company, 1677. In the recent decade, there has been a large gap in the market for humanitarian intervention between the increasing demand for peacekeeping operations and the necessary supply of an appropriate global intervention force.11 United Nations Peacekeeping missions have expanded in both size and scale to address the changing nature of international security threats and interstate warring factions. Since 1990, the UN has undertaken more than 40 new peacekeeping operations generally with a large scope and operational magnitude.12 UN peacekeeping missions are tasked to not only monitor international treaties but “consolidate security and promote conditions for development (South Sudan: UNMISS)…promote government institutions (Haiti: MINUSTAH)…[and] support the implementation of [a] ceasefire [while protecting] United Nations staff supporting humanitarian and human rights activities (Liberia: UNIMIL).”13 The United States Institute for Peace (USIP) Task Force on UN Reform concluded that, 11 Michael O’Hanlon and P.W. Singer, “The Humanitarian Transformation: Expanding Global Intervention Capacity,” Survival, 2004, Vol. 46(1), 79. 12 Doug Brooks and Matan Chorev, “Ruthless Humanitarianism: Why marginalizing private peacekeeping kills people,” In Private Military and Security Companies, ed. Andrew Alexandra, Deane-Peter Baker and Marina Caparini (London: Routledge Press, 2008), 117. 13 United Nations Peacekeeping, “Current Peacekeeping Operations,” Accessed on 10 Feb. 2012, <http://www.un.org/en/peacekeeping/operations/current.shtml>.

“current efforts are bedeviled by both limited capacity and operational challenges.”14 The capacity of the UN has not matched the increasing demands of member nations held in either external or internal conflict. In order for a UN Peacekeeping operation to be a successful one, the mission must consist of a professional The emergence competent of the private force, longterm commitsector in peace ment, and adeoperations is a quate resources de facto reality and finances. These must in international be supported security primarily by Western member states. Unfortunately, many UN peacekeeping missions are often handicapped as a result of lacking one or more of these components.15 One such example of a UN Peacekeeping mission which was severely hampered because of this was the UN Mission to the Democratic Republic of Congo (MONUC). Since 1998, nearly four million people have perished due to ongoing politically fueled civil violence. The UN Mission to the DRC (that officially began in 1999) has lacked the broad international corporation, specifically of Western developed nations, leaving less capable troops to carry out the tasks of the peacekeeping mission. In 2003, four years after the initial occupation, the UN Security Council authorized a French-led European Union troop deployment, which allowed for the securing of the capital and thus provided temporary regional security.16 The MONUC mission is a clear example of a failed liberal international attempt by the UN to address an ongoing violent conflict without substantial resources exhibiting the gap present in peace operations. The decrease of the state, the increase of the PMSC PMSCs have the ability to bridge the gap between mission goals and practi14 United States Institute of Peace, “American Interests and UN Reform: Report of the Task Force on the United Nations,” 2005, 88. 15 Mr. André du Plessis, Project Officer, Privatization of Security Programme, Geneva Centre for the Democratic Control of Armed Forces (DCAF), Personal Interview by Christopher Longman. 15 Feb 2012, DCAF Geneva Office, Geneva. 16 Brooks and Chorev, “Ruthless Humanitarianism,” 117.

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cal application of techniques and methods of implementation to accomplish those goals. Due to the economic environment of the current day, hegemonic global military powers, including the United States, are being forced to drastically cut military budgets and available spending. As a result, they are concentrating their shrinking number of personnel into the combat arms to be able to focus on traditional priority military objectives. Consequently, UN missions and other humanitarian missions have to mitigate international security situations with means other than those provided by member states. In a position paper, titled “United States Department of Defense Directives on the Use of PMC/PSC in Complex Contingencies,” ColoThe sector least nel Christopher explored and T. Mayer of the U.S. Navy experhaps most plained that important is PMSCs provide that of PMSCs essential services that are “eiin humanitar- ther infeasible ian missions or unsuitable for our armed forces, in an environment where local national police and other security structures are unable to provide security for humanitarian relief and reconstruction.”17 PMSCs provide services that qualitatively enhancement and increase the capacity necessary to accomplish objectives. A U.S. Department of Defense analysis by the Government Accountability Office reported two primary reasons for outsourcing operational facets specifically for peacekeeping or humanitarian missions. The first is to acquire technical expertise, such as mine mitigation, logistics, and communication setup/repair. Military support firms, tasked with providing the foundational aspects vital to begin and maintain an operation, deliver this form of support. The second reason is to bypass limits on military personnel that can be deployed to certain regions. This drastically reduces deployment time. The average private sector company can be fully operational in two to six weeks, rather than the two to

17 Col. Christopher Thomas Mayer, “United States Department of Defense Directives on the Use of PMS/PSC in Complex Contingencies,” In Proceedings of the Bruges Colloquium: Private Military/Security Companies Operating In Situations of Armed Conflict, ed. Marc Vuiklsteke (Belgium: ICRC Publishing, 2006), 51.

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four months that it may take a average size military force. Brian Urquhart, founding father of UN Peacekeeping and Former Under Secretary-General for Special Political Affairs said, “some of these private companies could play an extremely useful role…there are all sorts of special tasks which possibly these companies are better trained to perform than a UN force put together at the last minute.”18 By serving as force multipliers, private companies can quickly and efficiently increase the capacity of a force with manpower, expertise and equipment, drastically increasing the feasibility of the mission objectives. PMSCs and UN Contracts In UN humanitarian missions, PMSCs are deployed for the protection of staff, supplies and premises, conflict management advise, risk assessment, and security training.19 The company Defense Systems Limited (DSL), for example, supplied security officers to UNICEF in Sudan and Somalia as well as to the World Food Program (WFP) in Angola.20 Security officers in this context could be actively partaking in convoy protection, border protection (of a compound), or personal security.21 The dynamics of the security are solely reactive, meaning no proactive offensive action can be taken against combatants. An inquiry into PMSC services by UN Humanitarian agencies found that in 2002 the UN Security division (then known as UNSECOORD, but now under the UN Department of Safety and Security) restricted the use of PMSCs by UN humanitarian agencies.22 However, the report concluded that despite the regulation, UNHCR often demanded PMSCs to be used for security protection services of offices and personnel such as the employment of ArmorGroup in Kenya in 2008.23 The use of PMSCs by these

18 Deborah Avant, The Market for Force: The Consequences of Privatizing Security, (Cambridge: Cambridge University Press, 2005), 7. 19 Christopher Spearin, “Private Security Companies and Humanitarians: A Corporate Solution to Securing Humanitarian Spaces?” International Peacekeeping, 2001, Vol. 8(1), 28. 20 Tony Vaux, Chris Seiple, Greg Nakano and Koenraad Van Brabant, Humanitarian Action and Private Security Companies, Opening the Debate (London: International Alert, 2001). 21 du Plessis, Interview by Christopher Longman. 22 The reasoning for the “restricted use” is not made clear in the report. However, it would be a safe assumption to conclude that political considerations of high level policy makers played a role. The UN did not want to be publically criticized for sending PMSC into conflict zones, armed, and capable of violating IHL: an idea ultimately subservient to the field officers’ desires of operational security and continuing the program, rather than shutting it down. 23 Ase Gilje Ostensen, UN Use of Private Military and Security Companies: Practices

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For Better or for worse

agencies ensures the safety and security of the personnel as well as the operations viability as a whole. The introduction of private actors into CPC humanitarian-based situations has sparked debate over operational and theoretical benefits and complications. Critics assert that the very existence of PMSCs in the global market decreases the state’s legitimate monopoly on violence, thus violating the basic Weberian conception of the state. André du Plessis, Project Officer of the Privatization of Security Programme at The Geneva Centre for the Democratic Control of Armed Forces (DCAF), notes that PMSCs aid both states and international organizations in implimenting policy.24 The industry makes governmental policies easier to implement, improving the quality and cost-effectiveness of objectives overwhelmingly seen as being in the interest of the citizens of the state. Mr. du Plessis concludes that PMSCs provide for the state’s security and do not necessarily pose a threat to the monopolization of violence. Instead, the state “controls of all forms of violence.”25 The state’s ability to work with PMSCs enhances the capacity of the state (or international actor) to provide security for its citizens, a prerequisite needed to “support broader social needs such as welfare and sustainable development.”26 The establishment of a reinforced security in a society will promote and encourage the development of permanent bureaucracy and state security institutions, both necessary and vital components of development. The use of PMSCs goes beyond security complexities and also can enhance the capability of logistical and technical security advice. Specialist security guidance is often unavailable in some countries or otherwise inadequate for effective policy implementation. In such cases, the hiring of PMSCs for training and assessments of on-the-ground situations avoids placing urgent humanitarian operations at significant risk while “waiting for additional internal officers to be requited, trained, [briefed], and deployed.”27 According to a consultant at WFP, “the only

fast way to deploy security staff is through professional security companies.”28 The fast deployment of trained personnel prevents complex situations from going unchecked due to logistical limitations that hamper response efficiency. Effective support has always been critical to mission success. Thus, as the size, scope and duration of the mission expand, so must its support. Historically, the bulk of UN Peacekeeping troops are drawn from developing countries. These poorly equipped and trained contingents do not have the skills necessary to handle complicated logistics, communication systems, and maintenance of weaponry.29 Former U.S. Secretary of Defense Donald Rumsfeld stated in 2002, “any function that can be provided by the private sector is not a core government function,” and thus can be outsourced to private companies while the government maintains only war fighting capabilities.30 As a result, the future prospects of developed nations, in providing for UN humanitarian efforts, is further decreased. PMSCs need to become prevalent in UN Missions, even those for which developed countries are the primary personnel contributors. In the case of UN Mission in Timor (UNTAET), the Australian-led coalition was supported with transportation and communications support by DynCorp.31 The systemic, strategic, and political realities leave no practical alternative to the inclusion of PMSCs in peace operation alongside traditional international efforts, humanitarian organizations, and international NGOs. Overall, the global community must find a balance between government military force and private military security contractor involvement that will offer the “greatest humanitarian benefit with the highest standards delivered by the most capable and professional method.”32 PMSCs have the capacity, resources and professional experience to enhance the ability of humanitarian organizations, including the United Nations, to gain secure access to those who they are trying to help.

and Policies, (Geneva: DCAF, 2011), 15. 24 du Plessis, Interview by Christopher Longman. 25 Ibid., Interview. 26 Alexandre Lambert, “From Civil-military Relations towards Security Sector Governance,” European Political Science, 2011, Vol. 10(1), 164. 27 Ostensen, UN Use of Private Military and Security Companies, 25.

28 Ibid. 29 Ibid., 37. 30 Herbert Wulf, Internationalizing and Privatizing War and Peace, (New York: Palgrave Macmillan Publishing, 2005), 180. 31 Singer, Corporate Warriors, 182. 32 Brooks and Chorev, “Ruthless Humanitarianism,” 123.

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The Gift Foreign Aid and Mauss’ Construct of Reciprocity

Linnea R. Turco ’14

“Gifts betray all the threads of which the social fabric is composed—religious, legal, moral, economic, aesthetic.” – Marcel Mauss An Introduction and Overview of Mauss In his seminal book The Gift Marcel Mauss asks the question: Given that there is social solidarity, how is it achieved? His research alights on the phenomenon of gift giving, and is grounded in the empirical behaviors of primitive, or non-western, developing societies. Mauss posits gift exchange as a fundamental to society and to societal solidarity. He notes that gift-giving is obligatory for conformity to society—not only for primitive societies, but for modern social interactions, as well. Mauss’ theories regarding the obligation of reciprocity illustrate the societal constructs which the gift creates, and upon which humans base relationships and the essential formation of their societies. Mauss’ microlevel analysis also can be applied to the broader international human context. When states give monetary aid packages to other countries, it is a clear representation of Mauss’ theory of reciprocity and of the significance which the gift holds in our modern world, especially in the context of foreign aid given by the United States. Mauss writes that gifts are not only utilitarian, but laden with complex, latent meaning. Gifts carry certain obligations.

First, there exists a societal obligation to give gifts in order to project oneself as generous. Second, the recipient has little choice but to accept a gift, so as to respect the giver and convey his promise of reciprocation in the future. Thus, the recipient is never separated from the giver, since the act of giving a gift necessitates a reimbursement, obliging the recipient to return a gift in order to demonstrate his honor. The giver gains power over the receiver through this indebtedness. Mauss’ analysis indicates that goods often given and received are not always of great economic value; that is, economic utility is never the only purpose of a gift. Indeed, there exists a cultural and social component of gifts that has nothing to do with utility, but rather has a deeper social connotation. Additionally, Mauss illustrates that relationships established by gift—giving and reciprocity endure beyond a simple exchange of goods, and instead form a perpetual contract between two parties. There are three key points that Mauss’ The Gift contributes to the anthropological study of reciprocity. First, the circulation of gifts in society can involve not just objects, but persons and symbols as well. Second,

Linnea R. Turco is an International Affairs major with a concentration in Inter-

national Politics. In addition to her role as Publicity and Content Editor for The Globe, she is also a sister of Delti Phi Epsilon, the professional foreign service sorority.

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The Gift

“Selling our land for donor aid” (Image: Pambazuka News)

if one looks at kinship as a system of giftgiving in which individuals are brought into relationships with other families, such as through marriage, it is apparent the intimate extent to which human beings are involved in a gift economy (e.g. bride wealth). Third, peace comes about because of a marriage between families and thus the elaborate kinship structures which are created by gifts of people, especially women. This peace was a focus of Claude Levi-Strauss in his structural anthropological analyses. Mauss posits gifts, which often appear to be simply economic, are in fact symbolic and can have multiple meanings. He focuses on the spirit of the gift, an enduring attachment between something given and the person or institution that gave it. According to Mauss’ theory, the circumscribed activity of gift-giving is a fundamental element in society which structures relations between people and links to many other domains. For Mauss, the gift and reciprocity come to redefine ethnography as a theory of complex social relationships. French anthrologist Claude LeviStrauss was greatly influenced by Mauss’

work on the social relationships and structural implications created by the gift. He adapted Mauss’ ideas about societal cohesion and applied them to complex kinship structures: “Mauss understood the gift as a total social fact. . .Levi-Strauss (1949) extended the significance of giftgiving through some previously unexpected cultural dimensions” (Sherry 1983: 158). Levi-Strauss saw that sister exchange as well as patrilateral cross-cousin marriage among primitive societies were kinds of reciprocity and gift giving. Levi-Strauss also notes British anthropologist Alfred RadcliffeBrown’s fieldwork on the gift, saying that he found “The purpose that it did serve was a moral one. The object of the exchange was to produce a friendly feeling between the two persons concerned” (Levi-Strauss 1969: 55). Levi-Strauss, in his studies on kinship, notes that the woman given in marriage “is nothing other than one of these gifts, the supreme gift” (1969: 65). It is in these analyses that Levi-Strauss concludes, like Radcliffe-Brown and Mauss, that the gift holds a deeper connotation for society: continuous transition exists from war

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to exchange, and from exchange to intermarriage, and the exchange of brides is merely the conclusion to an uninterrupted process of reciprocal gifts, which effects the transition from hostility to alliance, from anxiety to confidence, and from fear to friendship (Levi-Strauss 1969: 67-68)

domination, or a practice that signals and euphemizes social hierarchies” (Hattori 2001: 639). The obligations associated with foreign aid are essentially the same as those articulated by Mauss in regard to the bonds established between a charitable donor and her recipient: it “is too strong for both of them. . .they are too closely linked with one another. The recipient puts himself in a The use of foreign aid is a reflection position of dependence vis-a-vis the donor” of this deeper value which is connoted by (Mauss 2000:59). This linkage manifests in the very essence of the gift. three ways that oblige the involved parties to act. Foreign Aid: An Example of Mauss’ First, there exists the obligation to Theory of Reciprocity give gifts, and in so doing, to display oneself An analysis of foreign aid through as magnanimous and deserving of respect. the lens of Mauss’ theory on the gift Second, there exists obligation to receive provides unique insights into international gifts, and in so doing, to show respect to the cooperation and the values that states giver. Mauss notes that these two simple convey in establishing aid relationships. acts of giving and receiving establish an The provision of foreign aid by the United innate hierarchy: “To give is to show one’s States (and other developed countries) to superiority, to be more, to be higher in struggling, developing nations illustrates rank. . .To accept without giving in return, the broader implications of Mauss’ localized or without giving more back, is to become theory: “With a client and servant, to shift in focus from become small, to fall a micro perspective lower” (Mauss 2000: the concept that a gift is to a holistic one, our 74). Third, there exists never separated from the interpretation of for the recipient the gift-giving behavior obligation to return giver, and that the act of can become more the gift and thus giving a gift necessitates comprehensive” demonstrate that one (Sherry 157). In such reimbursement or expected is equal in dignity an analysis, the to the original giver: reciprocation, is crucial concepts that a gift “The unreciprocated is never separated gift still makes from the giver and that the act of giving a the person who has accepted it inferior, gift necessitates reimbursement or expected particularly when it has been accepted with reciprocation, are crucial to understanding no thought of returning it” (Mauss 2000: 65). the example’s significance. In the case of foreign aid, the reciprocation Mauss notes early in his book that to the aid itself is an ideological and strategic gift-giving “is a competition to see who is alliance with the donor. Kelly Cristiane the richest. Everything is based upon the da Silva, Professor of Anthropology at the principles of antagonism and rivalry. The Universidade de Brasília, offers a pertinent political status of individuals. . .are gained example in the case of aid given to East in a ‘war of property’” (Mauss 2000: 37). The Timor, following their independence, which action of supplying foreign assistance, or tied it “into obligations which are manifest which the United States regularly makes to in such global spaces of political negotiation developing or unstable states, is a salient as the UN General assembly, for example. In application of Mauss’ theory of reciprocity these arenas, it becomes almost impossible and of the deeper significance contained by for East Timor to sustain positions which the gift. are at odds with those of its primary donors Tomohisa Hattori notes that without suffering sanctions” (da Silva 2008: “foreign aid can be understood as… symbolic 25). This illustrates Mauss’ point that gift-

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The Gift

giving is steeped in morality, and by giving, receiving, and returning gifts, a moral bond is created between the persons exchanging gifts. Mauss’ description of the gifts exchanged in primitive gift-giving characterizes those goods and services as having immense power. An analogous power is present in modern gifts, and especially in the donation of foreign aid to other countries, a concept outlined by Levi-Strauss: “The idea that a mysterious advantage is attached to the acquisition of commodities. . .by means of reciprocal gifts. . .is not confined to primitive society” (Levi-Strauss 1969:55). Mauss clarifies that, “Charity is still wounding for him who has accepted it” (Mauss 2000: 65). A gift has the power to defeat or neutralize an opponent because the essence of the norms of reciprocity necessarily make the recipient indebted to the giver. Mauss’ work emphasizes the strategic aspect of gift-giving. In the context of international aid, by giving a large amount of aid to a particular country, the United States is able to attain not only dominance through the inequality created, but also significant leverage, respect, and influence over that country. Hattori notes that inequality is established through, “the wide ranging policy objectives attached to foreign aid [that] are secondary to a more basic role of affirming the social relation in which they are extended” (Hattori 2001:639). Gifts thus become leverage, a method for the donor to establish lasting, and almost indelible influence and hegemony over the recipient. Foreign humanitarian aid does not have the same dominating connotation that is contained in the notion of debt, which assumes equality. Rather, the gift-property of aid gives it a connotation of generosity. Aid as a gift operationalizes the inequality which it causes: “giving is distinguished by. . . the power to transform a relation of domination into one of generosity and gratitude” (Hattori 2001: 640). Not only does aid quietly, as it were, establish a latent and inherent inequality, but Hattori notes also that “a role of foreign aid that is distinctly outside any of these effects: to mark or signal a social hierarchy” (Hattori 2001: 639).

Mauss pays attention to the phenomenon of group gift-giving in his analyses: “The handing over is always solemn and reciprocal. It is still carried out as a group” (Mauss 2000: 49). This notion of gifts that are legitimized through group cooperation is similar to treaties for foreign aid that are negotiated through the United Nations and other such international organizations. These treaties, attested to by a number of Mauss’ work nations in a formal ceremony, convey emphasizes accountability and the strategic leverage, as well as international aspect of giftaudience costs if a giving part of the treaty is not obeyed. Professor of Marketing at the University of Notre Dame, John F. Sherry Jr. notes the importance of enforcement measures: “Since transactions are marked by imbalance at any one point in time, some mechanism must enable a donor to evaluate the intention of a recipient to reciprocate, and permit a recipient to demonstrate trustworthiness in the short run” (Sherry 1983: 159). This mechanism is the international community’s observation of the recipient countries, which are expected to be in alignment with the interests of the giver. The recipient’s obligation to conform to the giver’s ideals “often leads back to the national ideologies of the donors” (da Silva 2008: 23). da Silva illustrates that the United States and other donors use international aid policies as a method of constructing hegemony over the recipients. Aid not only establishes direct economic influence over the recipient, but also ideological expectations and stipulations, which are inherently included. In East Timor, da Silva notes that its greatest “counter-gift to its partners is its configuration as a space in which the values dear to the donor nations – most prominent of which are the western myths of what constitutes a good society, i.e. equality, liberty and democracy – can once more be cultivated during the process of building a new nation state” (da Silva 2008: 25). The gift of economic aid thus becomes a way for the United States and other donor nations to proselytize their ideologies of

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democracy and liberal capitalism, as well as to expand their monetary influence and ensure future dependence of the recipient country. Conclusions Hattori notes that, in “foreign aid arises a basic material inequality between donor and recipient” (Hattori 2001: 639). There exists not only a material inequality, but a socially-constructed inequality, mirroring the imbalance attached to Mauss’ gift. To Mauss, gift-giving is a circumscribed activity, linked to many other domains besides economics. What often appears to be simply economic is in fact symbolic and quite complex. Mauss recognized reciprocity as an obligatory element of social relationships, contending that gifts are “not only made with a view to paying for services or things, but also to maintaining a profitable alliance, one that cannot be rejected” (Mauss 2000: 73). The gift is neither gratuitous, nor purely utilitarian: “It is a sort of hybrid that flourished” (Mauss 2000: 73). The gift consequently creates an irrevocable relationship between giver and recipient, joining both in an essentially perpetual cycle of obligation: “Inferentially or implicitly attached strings are a connotative aspect of the gift” (Sherry 1983: 158). Internalized normative constructs demand that any individual is required to give, receive, and reciprocate gifts. Mauss’ construct of gift-giving and the essential role it plays in social interactions is useful in analyzing the effects of foreign aid. Gifts of foreign aid from the United States, or any state, serve the same purpose as the gifts Mauss describes. By giving aid, the donor country is seen as generous and worthy of respect. The donor country uses this perception of superiority to oblige the recipient to accept the aid, and in so doing, the recipient pledges its own reciprocity. This reciprocity is thus an obligation for the recipient, and may take the form of a ideological or military alliance. Foreign aid is seen initially and superficially as a gift or ethical donation—a humanitarian gesture from the developed to the underdeveloped. In fact, this aid illustrates a deeper, more complex international social relationship of strategy, economics, and the propagation of

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norms that legitimizes the dominance of the donor nations and creates indelible links of reciprocity between states.

Bibliography da Silva, Kelly AID as Gift: An initial approach. Rio de Janeiro: 2008. Hattori, Tomohisa Reconceptualizing Foreign Aid. Review of International Political Economy, Vol. 8, No. 4 (Winter, 2001), pp. 633-660. Levi-Strauss, Claude The Elementary Structures of Kinship. Boston: 1969 Mauss, Marcel The Gift. (Translated by W.D. Halls) New York: 2000 Sherry, John F. Jr. Gift Giving in Anthropological Perspective. Journal of Consumer Research, Vol. 10, No. 2 (Sep., 1983), pp. 157-168.

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The Shanghai Communique Downplaying the Taiwan Issue at the 1972 Beijing Summit

Keila Franks ’14 Before the 1972 Beijing summit, the leaders of the People’s Republic of China (PRC) had often emphasized that the normalization of relations with the United States directly depended on the resolution of the Taiwan issue. The United States had previously recognized the Nationalist government in Taiwan, or the Republic of China (ROC), as the legitimate government of China. The United States was put in a difficult position because it wanted to maintain official ties with Taiwan while at same time improve relations with Communist China. The PRC stated that in order to normalize relations between the two countries, the United States needed to reduce its commitment to Taiwan. A year before President Richard Nixon went to China for the Beijing Summit, Henry Kissinger, the National Security Advisor, met secretly with the Chinese. In his recent book On China, Kissinger said, “From the time of the secret visit in July 1971, the Chinese conditions for normalization had been explicit and unchanging: withdrawal of all American forces from Taiwan; ending the defense treaty with Taiwan; and establishing diplomatic relations with China exclusively with the government in Beijing.”1 However, at the 1972 summit, both sides decided to downplay the Taiwan issue. They recognized that no clear resolution could emerge in the near future, and both desired to improve relations despite this unresolved tension. 1 Henry Kissinger, On China (New York: Penguin, 2011), 355.

Thus, the two countries accepted a vague and imperfect solution to the Taiwan issue, so that they could move on and address other pressing concerns. Nixon and Kissinger believed that improving relations with the PRC would help American strategic interests, particularly visà-vis the Soviet Union. When preparing for the summit, Kissinger said to Nixon, “Our concern with China right now, in my view, Mr. President, is to use it as a counterweight to Russia, not for its local policy.”2 Nixon and Kissinger believed that they could achieve a stable international order in the midst of the Cold War by forming a strategic partnership with the PRC. During his only meeting with Chairman Mao, Nixon said, “What brings us together is a recognition of a new situation in the world and a recognition on our part that what is important is not a nation’s internal political philosophy.”3 America’s determination to normalize relations with the PRC meant that the United States did not press ideological issues at the summit. Later that evening, Nixon told PRC Prime Minister Zhou Enlai, “There are many reasons why the People’s Republic of China and the United States should work together for a peaceful Pacific and a peaceful world. . .We know you believe deeply in your 2 “Conversation between President Nixon and his Assistant for National Security Affairs,” February 14, 1972, Document # 192, in Foreign Relations of the United States Vol. XVII, China 1969-1972, http://www.history.state.gov/historicaldocuments/ frus1969-76v17/ch4. (hereafter FRUS). 3 “Memorandum of Conversation [between Mao Zedong, Zhou Enlai, President Nixon, and Henry Kissinger],” February 21, 1972, Document #194, ibid.

Keila Franks is an International Affairs major with concentrations in Asia and In-

ternational Politics and a minor in Religion. She is a the Fundraising Chair for Delta Phi Epsilon, the professional foreign service sorority, as well as a member of Sigma Iota Rho, The National Honors Society for International Studies The Globe - International Affairs Journal

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Keila Franks

Kissinger, Nixon, John H. Holdridge of the National Security Council and Chinese Prime Minister Zhou Enlai in 1972. (Image: Getty Images)

principles, and we believe deeply in our principles. We do not ask you to compromise your principles, just as you would not ask us to compromise ours.”4 These two statements to Mao and Zhou Enlai demonstrate that, above all, Nixon and Kissinger were determined to form a strategic partnership with the PRC. In order to establish this partnership, Nixon and Kissinger recognized that they must downplay past controversies, such as ideological differences and the Taiwan issue. Nixon, however, realized that the United States could not ignore the PRC’s conditions regarding Taiwan, and that the United States had to seem willing to comply with these conditions. Before the summit, he and Kissinger worried about how to best present the U.S. position so as to appeal to the PRC, while not harm Washington’s official ties with the ROC, especially the U.S.-Taiwan 1954 defense treaty. Shortly before the summit, Kissinger told Nixon that Taiwan would be the most contentious issue that they discussed with the Chinese. Unsure how to frame America’s position on Taiwan, Kissinger told Nixon that the best way to deal with the issue was to discuss it with Mao.5 Nixon and Kissinger seemed to be preparing for an extensive discussion over Taiwan at the summit. However, throughout the course of the summit, it became clear that Taiwan 4 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 21, 1972, Document #195, ibid. 5 “Conversation between President Nixon and his Assistant for National Security Affairs,” February 14, 1972, Document # 192, ibid.

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would not take center stage. Mao hardly mentioned the issue during his meeting with Nixon and Kissinger, except when he noted that Chiang Kai-shek likely did not approve of the meeting. After briefly discussing the name-calling between the PRC and the ROC, Mao stated, “Actually the history of our friendship with him is much longer than the history of your friendship with him.”6 The historian Robert Dallek argued that these brief statements were Mao’s way of muting the Taiwan issue and signaling that it was one that the Chinese would settle themselves.7 Mao did not raise any of the conditions that the PRC had previously stipulated. Henry Kissinger found it significant that the conversation with Mao included “no threats, no demands, no deadlines, no references to past deadlock.”8 After all the previous confrontations, disputes, and stalemates, Kissinger claimed the “issue had lost its urgency.”9 This conversation with Mao allowed for the downplaying of the issue throughout the rest of the summit. Although Taiwan was discussed more extensively in other meetings with Zhou Enlai, the Chinese never emphasized it as a prerequisite for moving on to other issues. Instead of trying to come up with concrete solutions to the Taiwan issue, Nixon and Kissinger played along, presenting vague 6 “Memorandum of Conversation [between Mao Zedong, Zhou Enlai, President Nixon, and Henry Kissinger],” February 21, 1972, Document #194, ibid. 7 Robert Dallek, Nixon and Kissinger: Partners in Power (New York: HarperCollins, 2007), 363. 8 Kissinger, On China, 259. 9 Kissinger, On China, 259.

The Globe - International Affairs Journal


The Shanghai Communique

solutions that made it seem like the United States would comply with the PRC’s previous demands. During an early conversation with Zhou Enlai, Nixon and Kissinger presented five principles summarizing the U.S. policy toward Taiwan in a way that would be acceptable to the PRC. These included: 1) There is one China, and Taiwan is a part of China; 2) The United States has not and will not support any Taiwan independence movement; 3) The United States will discourage Japan from moving into Taiwan and from supporting a Taiwanese independence movement; 4) The United States will support any peaceful resolution of the Taiwan issue and will not support any military attempts by the ROC to return to the Mainland; and 5) The goal of the United States is normalization with the People’s Republic of China.10 These points assuaged two of China’s main concerns, namely the revival of Japanese militarism and Taiwanese independence. In On China Kissinger states that from the beginning of the summit, he and Nixon “put forward views on Taiwan we judged necessary for a constructive evolution… [The five principles] were comprehensive and at the same time also the limit of American concessions.”11 While the five principles made some vague concessions to the PRC, they did not explicitly meet the PRC’s earlier three conditions. These conditions included the withdrawal of all U.S. troops from Taiwan, the abrogation of the defense treaty with Taiwan, and the recognition of the PRC as the sole legitimate government of China. Nixon and Kissinger knew compliance would trigger serious backlash from their domestic political opponents and from the ROC. Although Nixon and Kissinger conceded that there was “one China,” they did not say whether the PRC or the ROC was the legitimate government of China. Nixon and Kissinger intentionally left the language 10 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai].” February 22, 1972, Document #196, ibid. 11 Kissinger, On China, 271.

vague so that they would have loopholes which they could use to defend themselves later if criticized. Indeed, when challenged by James Shen, the ROC Ambassador to the United States, Kissinger reinterpreted the language in the way that was most favorable to the ROC. When Shen argued that the language of “one China” implied that the United States recognized the PRC’s claim over Taiwan, Kissinger responded that this was “foolish.” Instead, he said that the American position at the Beijing Summit mirrored the U.S. defense of the ROC’s representation in the United Nations General Assembly (i.e. that although there was one China, two legal governments existed).12 The PRC ultimately accepted the five principles as a satisfactory compromise. Nonetheless, Zhou Enlai did question Nixon and Kissinger on the second principle during their meetings on February 24. He interpreted the second principle as meaning that the United States “would not support or allow a Taiwan Independence Movement.” Nixon, however, objected, saying that “‘allow’ is beyond our capability.” Zhou Enlai pressed him on this point, saying that the United States should commit to preventing a Taiwanese independence movement while American forces remained in Taiwan. Although Nixon agreed, Kissinger later added, “What we cannot do is to use our forces to suppress the movement on Taiwan if it develops without our support.” Kissinger, thus, qualified Nixon’s earlier statement, ensuring that the United States was not obligated to suppress any Taiwanese independence movement that developed.13 Zhou accepted Kissinger’s statement and noted that Chiang Kai-shek’s forces could suppress the movement. He did not press the point and concluded that “as to what proper formulation to find on the Taiwan case, you two [Chiang Kai-shek and Nixon] will work that out. Only after that is solved, can we very well agree to hold a plenary meeting to discuss the matter.”14 Recognizing that the two sides could not reach a final solution at the summit, Zhou

12 “Memorandum of Conversation [between Henry Kissinger and Ambassador Shen]”, March 1, 1972, Document #205, ibid. 13 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, FRUS Vol. XVII, China 1969-1972. 14 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, Ibid.

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Keila Franks

Enlai accepted an imperfect compromise the withdrawal of our remaining forces, not that delayed further discussions of Taiwan. just two-thirds, but all forces, including the The topic was soon changed to a lengthy remaining one-third. That is a goal which discussion on Indochina, showing that the I can achieve.”17 Finally, Nixon seemed resolution of the Taiwan issue was clearly willing to definitively solve one aspect of the not the priority at the summit. tensions between the PRC and the United For the most part, the PRC did not States. However, Nixon’s paranoia over his take issue with the five principles themselves domestic political opposition undermined as much as they took issue with what they this goal. Kissinger recalled that, although omitted. The five principles never called for Nixon intended to withdraw all troops from the withdrawal of U.S. troops from Taiwan, Taiwan during his second term, “[Nixon] which had been one of the main concerns warned that he was in no position to of the PRC from the beginning. The Chinese make any formal commitments.”18 Nixon raised the issue of troop withdrawals also worried about establishing domestic multiples times during the summit. Rather support for his trip to Beijing. He believed than complying with the PRC’s demand that that if he made any clear concessions to the the United States withdraw all of its troops Chinese, he would encounter significant from Taiwan, Nixon made excuses to delay domestic resistance in the United States, troop withdrawal, stating, “Two-thirds of particularly from his own Republican Party. our present forces on Taiwan are related Nixon acknowledged that despite his stated to the support of our forces in Southeast aim of withdrawing all troops from Taiwan, he would not publicly Asia. These forces… discuss it. Rationalizing will be removed as the the postponement of situation in Southeast Kissinger found it signifi- this announcement, Asia is resolved.”15 While he offered a cant that the conversation Nixon stated,“If I were to announce it definitive solution with Mao included “no now, it would make it about the withdrawal threats, no demands, no very difficult to do it, of two-thirds of the troops, this statement deadlines, no references to because it would raise the issue at the wrong did not promise an past deadlock.” time.”19 However, he immediate compliance was firm that complete with the PRC’s condition of complete troop withdrawal withdrawal was still his ultimate goal and from Taiwan. In terms of the remaining that a step-by-step reduction of troops third of the troops, Nixon offered a vague would allow him to get “the support I will solution. He said that he would reduce need to get the approval from our Congress troop presence when the PRC and the ROC for that action.”20 Nixon believed that if he publicly made progress “on the peaceful resolution of the problem.”16 However, he did not give committed to withdrawing U.S. military a definition for “progress,” and what he forces, he would have sabotaged the plan meant by a “peaceful resolution” is open to because there would not be enough support interpretation. Nixon offered an imperfect in Congress at that time to approve such a solution in order to seem willing to comply measure. This domestic opposition facing with the demands of the PRC so that they Nixon back in United States meant that only could move on to addressing relations with an imperfect solution could be determined the Soviet Union. at the summit. The Chinese accepted Later in the summit, Nixon Nixon’s promise, knowing that it was the demonstrated a stronger willingness to only concession that he could make. When completely withdraw the U.S. troops from 17 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Enlai],” February 24, 1972, Document #199, ibid. Taiwan. He told Zhou Enlai, “My goal is Zhou 18 Kissinger, On China, 271. 15 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai].” February 22, 1972, Document #196, ibid. 16 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai].” February 22, 1972, Document #196, ibid.

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19 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, ibid. 20 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, ibid.

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The Shanghai Communique

President Nixon and Prime Minister Zhou Enlai speaking at a banquet. (Image: National Archives)

Nixon stated that he could make no solid commitment, Zhou Enlai responded that “both sides had ‘difficulties’ and that there was ‘no time limit.’”21 The PRC clearly knew that the American public would balk at any specific timetable stating when they needed to remove specific numbers of troops. Rather than get into a dispute over these details, the Chinese delegation loosened their earlier conditions to accomate Nixon’s political concerns. Zhou stated, “We are not rushing to make use of the opponents of your present visit and attempt to solve all the questions and place you in an embarrassing position.”22 Both sides wisely acknowledged that a gradual solution seemed to be the only way to truly settle the Taiwan issue. The Nixon and Kissinger’s focus on mitigating potential domestic opposition remained a common theme throughout the summit. The summit took place during the Vietnam War, and Nixon and Kissinger were well aware of domestic politics’ impact on foreign policy. They acknowledged that there were already some people in the United States who opposed Nixon’s trip to Beijing, especially pro-Taiwan groups. Nixon and Kissinger believed that the political right hoped that the trip would fail “for deeply principled ideological reasons, believing that no concessions at all should be made regarding Taiwan.”23 Nixon told Zhou Enlai, 21 Kissinger, On China, 271. 22 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 28, 1972, Document #204, ibid. 23 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai].” February 22, 1972, Document #196, ibid.

What we are trying to find is language which will meet the Prime Minister’s need, but language which will not give this strong coalition of opponents to the initiative that we have made, that we have talked about, the opportunity to gang up and say in effect that the American President went to Peking and sold Taiwan down the river. . . I do not want to be forced when I return to the United States, in a press conference or by Congressional leaders, to make a strong basically pro-Taiwan statement because of what has been said here. This is because it will make it very difficult to deliver on the policy which I have already determined I shall follow.24 Determining the details of this language would help develop the language of the communiqué that would sum up the Beijing Summit. Nixon recognized that specific and clear solutions in the communiqué might have a detrimental effect on the future of the U.S. relationship with the PRC. Thus, the only apparent solution was to acknowledge that Taiwan was an ongoing, unresolved issue and to promise to follow up on the issue later. The Shanghai Communiqué summing up Nixon’s trip to China proclaimed that the U.S. withdrawal of troops from Taiwan would occur gradually, and it reflected all 24 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai].” February 22, 1972, Document #196, ibid.

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of the vague language that had surrounded the Taiwan issue during the summit. Robert Dallek argues that the official ties that the United States had with Taiwan “ruled out recognition of Communist China,” but both sides wanted the communiqué to reflect that the summit symbolized a “significant change in Sino-American relations.”25 Although American position towards Taiwan was only one paragraph long, Kissinger and Qiao Guanhau, a Chinese diplomat, spent two allnight sessions writing it.26 The paragraph in the Shanghai Communiqué stated: The U.S. side declared: The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan. In the meantime, it will progressively reduce its forces and military installations on Taiwan as the tension in the area diminishes.27 Reiterating the vague language of “one China” from the five principles and stating the U.S. concern with a “peaceful settlement” of the Taiwan issue allowed the United States to keep its honor, while not explicitly forsaking its commitment to Taiwan. Reflecting on this part of the communiqué, Kissinger stated, “This paragraph folded decades of civil war and animosity into an affirmative general principle to which Beijing, Taipei, and Washington could all subscribe.”28 The Shanghai Communiqué reflected the fact that the PRC and the United States did not expect to solve the Taiwan question at the 1972 summit. Rather, they sought and achieved a vague solution that allowed them to move forward and establish a strategic partnership without compromising their 25 Dallek, Nixon and Kissinger, 366. 26 Kissinger, On China, 271. 27 “Joint Statement Following Discussions with Leaders of the People’s Republic of China,” February 27, 1972, Document #203, ibid. 28 Kissinger, On China, 272.

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ideologies or commitments. Nixon told Zhou Enlai that the communiqué must provide what he called “running room,”29 meaning that a final resolution on the Taiwan issue would be postponed for the next few years. Nixon claimed that this would allow him to “do the things to move us toward achieving our goal.”30 The PRC accepted Nixon and Kissinger’s proposal because of the pressing nature of other events and the perception that the Taiwan issue could wait. Zhou Enlai explicitly told Nixon, “We would rather let the question of Taiwan wait a little while, while we would rather have the war in Vietnam and the whole of Indochina come to a stop because we feel this is a more urgent issue.”31 The Chinese neither expected, nor even desired, the 1972 summit to produce a final solution on the Taiwan question. Although they wanted the Americans to remove their troops, discourage a Taiwanese Independence Movement, and prevent the Japanese from exerting influence on Taiwan, the Shanghai Communiqué reflects the PRC’s definition of the Taiwan issue as an internal Chinese affair. Nixon and Kissinger also wanted to form a strategic partnership that would help to offset the power of Soviet Union and to establish a stable international order. In a conversation with Kissinger and Ambassador Shen after the summit, Nixon justified downplaying the Taiwan by saying, “We may be more effective if we’re talking to the PRC than if we’re not talking to them. That’s the real philosophy.”32 He knew that this strategic partnership could not be formed if the United States took a hardline in the meetings. The Beijing Summit was treated as the beginning of the dialogue between the United States and the PRC. The vague solutions that came out of the summit were enough to justify the establishment of a mutually beneficial relationship that would allow the two powers to strengthen diplomatic relations through future dialogue. 29 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, ibid. 30 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 24, 1972, Document #199, ibid. 31 “Memorandum of Conversation [between President Nixon, Henry Kissinger, and Zhou Enlai],” February 28, 1972, Document #204, ibid. 32 “Conversation Among President Nixon, his Assistant for National Security Affairs (Kissinger), and the Ambassador of the Republic of China (Shen),” March 6, 1972, Document #207, ibid.

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Fundamental Pragmatism A Historical Analysis of Nixon’s Détente

Julian G. Waller ’13 The Nixon Administration embarked on a historic policy change with the development of détente as the modus operandi of the U.S. government from 1969 onwards. Although halting and sometimes fraught with insecurity and confusion, Nixon maintained the policy of détente throughout his terms of office, and the policy itself continued in various forms until the Soviet invasion of Afghanistan in December of 1979. The cold warrior figure of Richard Nixon did not pursue this course of action lightly, but ultimately saw that the pragmatic benefits of détente far outweighed his ideological insecurity. Nixon pursued détente as a means to approach the foreign policy dead-end that the United States had found itself in by the late 1960s. Détente proved to be a means to bring economic benefits, to promote positive changes in global discourse, and to move toward new geopolitical openings for the United States. All of these factors weighed in the president’s thinking; this is seen clearly in the multitude of primary documents collected from the period. There were three principal aspects to the détente policy of the Nixon Administration: a drawdown from Vietnam, treaty negotiations with the Soviet Union, and the opening of the People’s Republic of China. Nixon approached these as both interwoven foreign policy issues and as separate and distinct problems whose solution had individual benefits to the

United States. The Vietnam War was the major trauma of U.S. foreign and domestic policy in the 1960s. Starting out as a small action to prop up an anti-communist, postcolonial government, it became a massive commitment by U.S. forces to defend an overexpansive view of the containment doctrine first elucidated in the late 1940s. When Richard Nixon entered office, he quickly distanced himself from earlier militant anti-communist rhetoric he once espoused1 and sought to mitigate any further losses of prestige and standing from the Southeast Asian geopolitical mire. While continuing in the desire for the South Vietnamese government to survive, Nixon and National Security Advisor Henry Kissinger realized that they would have to pursue conciliatory policies toward the communist countries that funded the North Vietnamese, as well as pull out as much human capital—in terms of conscripted U.S. soldiers—as could be reasonably done.2 In 1969, Nixon gave his defense of a new Vietnamization policy that would slowly end the war while maintaining US prestige: We have adopted a plan which we have worked out in cooperation with the South Vietnamese for the complete withdrawal of all U.S. combat ground forces, 1 Robert S. Litwak. Détente and the Nixon Doctrine. Cambridge University Press: Cambridge, 1984, pp. 52-53. 2 Robert S. Litwak. Détente and the Nixon Doctrine. Cambridge University Press: Cambridge, 1984, pp. 88.

Julian G. Waller is an International Affairs major with a concentration in Europe and Eurasia and a minor in Slavic Languages, Literature, and History. He is also the President of the Eurasian Policy Forum and an officer in Delta Phi Epsilon, the professional foreign service fraternity. The Globe - International Affairs Journal

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and their replacement by South Vietnamese forces on an orderly scheduled timetable. This withdrawal will be made from strength and not from weakness. As South Vietnamese forces become stronger, the rate of American withdrawal can become greater...Let us be united for peace. Let us also be united against defeat. Because let us understand: North Vietnam cannot defeat or humiliate the United States.3 The Vietnamese issue was seen as only solvable if it could be influenced by a changing attitude of the Soviet Union and China. Nixon developed a policy of “linkage” to tie together movements toward better relations only if it were to be reciprocated by limiting interference in Vietnam. The Chinese-USSR conflict itself proved to be a vital aspect of the by late 1969 it policy’s success. As early as March of was clear that 1969, the Chinese the Chinese cut off Soviet rail shipments were coming of supplies to on board to Vietnam because of border clashes the new trend earlier in the year.4 in American This, in turn, allowed the Nixon foreign policy administration to feel comfortable with a major bombing campaign in Cambodia, confident in the knowledge that both communist powers were divided and that China would look on passively; it had no desire for the North Vietnamese to win and then become a security concern on its southern border.5 The early days of détente were dominated by Vietnam, and by late 1969 it was clear that the Chinese were coming on board to the new trend in American foreign policy. It would take an additional two years for the Soviet Union to come around fully to this perspective as well. Amidst defeat of an incursion of American and South Vietnamese forces in Laos, the Soviet Union realized its initial strategy of supporting the 3 Richard Nixon. “President Nixon’s Speech on ‘Vietnamization’, November 3, 1969,” Public Papers of the Presidents of the United States: Richard Nixon, 1969, pp. 901909. 4 Richard C. Thornton. The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Paragon House: St. Paul, 1989, pp. 14. 5 Richard C. Thornton. The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Paragon House: St. Paul, 1989, pp. 24, 37.

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North Vietnamese to bog down the United States was running up against a new ChineseAmerican understanding. China would refrain from helping the North Vietnamese, allowing Nixon’s policy of showing force to bring about a cease-fire to run its course. The United States, in turn, would ensure that Hanoi failed to unite the whole country and become a Soviet client situated on China’s underbelly. With this geopolitical dynamic in mind, the USSR changed toward exactly what China feared – creating a unified Vietnamese state as a balancer to China. However, this required the United States to withdraw.6 In all, this can be seen as a convergence around U.S. disengagement with relative ease. China wanted the United States to exit Vietnam but with the North-South division intact. The USSR wanted the United States to leave so as to finish the unification, and the United STates had clear domestic motives for withdrawal. With the Vietnamese question quietly smoldering in the background, Nixon engaged both the Soviet Unionand the People’s Republic of China in a series of negotiations and discussions. The negotiations resulted in arms treaty agreements with the USSR and a diplomatic opening with the PRC. While the Vietnamese drawdown was largely based on the administration’s desire to ensure the survival of the South Vietnamese state while minimizing the American role – essentially due to public pressure built up over the decade – the broader Soviet and Chinese détente policies were based on an admixture of motivations. Nixon’s decision to reach out to the Soviet Union was grounded in an immediate need to pacify the situation in Vietnam. It was also a means to end the unsustainable economic strains produced by a nuclear and conventional arms race that had exponentially grown since the 1950s. By easing tensions and moving toward what was then termed a “superpower condominium”— where each recognized both spheres of influence and legitimate national interests— military expenditure could be lessened and regional stability was strengthened, which in turn would decrease the need for costly American ground involvement in the Third 6 Richard C. Thornton. The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Paragon House: St. Paul, 1989, pp. 98, 123.

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World.7

Spearheaded by National Security Advisor Kissinger, but actively supported by Nixon, the Soviet détente followed the pattern of talks on normalizing East and West German relations, anti-ballistic missiles, general strategic arms limitations, and other technical issues, each allowing for a greater degree of trust than before. The creation of each treaty was approached from a tactical point of view by the Nixon Administration. The Moscow Treaty—providing mutual recognition for the Federal Republic of Germany and the German Democratic Republic, as well as confirming the borders of Poland—was desired by the Soviet Union. The United States linked concessions in that treaty to the predominance of the American vision in the upcoming Strategic Arms Limitation Talks.8 In turn, Nixon gave ground secretly at the Anti-Ballistic Missile treaty talks in order to have a workable final draft to show in the run-up to the 1972 election. In a dialogue between President Nixon and Soviet Foreign Minister Gromyko in October 1970, this method of negotiation was evident. In the post-meeting memorandum of the conversation President stated, “...the trouble with limited agreements was that they favored one side or the other. If the agreement dealt only with ABM we could not accept it. If it dealt only with offensive missiles, the Soviet Union would not accept it.”9 By linking national interests, Nixon knew he would be able to better shore up a comprehensive set of agreements. Kissinger explained the quid-proquo aspects of détente by stating, “The SALT agreement does not stand alone, isolated and incongruous in the relationship of hostility, vulnerable at any moment to the shock of some sudden crisis. It stands, rather, linked organically to a chain of agreements and to a broad understanding about international conduct appropriate to the dangers of the nuclear age.”10 The purpose of détente with the Soviet Union was to create a network of ties that could not be undone by a single shock. 7 Robert S. Litwak. Détente and the Nixon Doctrine. Cambridge University Press: Cambridge, 1984, pp. 90-91. 8 Wilfried Loth. Overcoming the Cold War: A History of Détente, 1950-1991, Palgrave, 2002, pp 102-111. 9 National Archives, Nixon Presidential Materials, NSC Files, Kissinger Office Files, Box 71, Country Files, Europe, USSR, Gromyko, Top Secret; Sensitive; Eyes Only. Held in the Oval Office. 10 Henry Kissinger, Congressional Record, June 19th 1972, S9599-9600.

It used economic incentives and bargaining based on mutual interests to achieve the desired result of systemic stability. All of these back-and-forth linked agreements were made with public discourse strongly in mind. Both sides congratulated the other and remarked on the progress of the discussions, even if one side in fact had “won” on a particular issue. In a meeting in 1972 between Soviet General Secretary Brezhnev and President Nixon, they discussed forcing the resignation of the South Vietnam president, Thieu. Brezhnev demanded he go in two months. Nixon responded that he would, “use my influence about the two months. But it must be kept absolutely secret.” 11 Attention was also paid to facesaving propaganda statements that were an inevitable part of public communist-capitalist dialogue. Later, in the same conversation with Brezhnev, Nixon stated that, “You have my commitment that privately or publicly shall take no steps directed against the interests of the Soviet Union. But the General Secretary should rely on what I say in the private channel, not on what anyone else tells him.”12 The global discourse of détente was that of avoiding cheap political points designed to push forward a militant agenda.13 Each side bore certain distasteful realities in its desire for this relaxed relationship to continue. One of the most important linkages that bore fruit vis-a-vis the Soviet détente was the use of arms limitation treaties to force Soviet acquiescence over U.S.-Vietnam policy. Just before the ratification of the Moscow Treaty by the Federal Republic of Germany and the conclusion of the SALT I discussions, a North Vietnamese offensive took place. It resulted in an American bombing response that deliberately targeted Hanoi and Haiphong, where Soviet assets had personnel, as well as mining the harbors which also saw significant Soviet ship traffic. Writing to Brezhnev personally, Nixon described the actions in detail and called on the Soviet Union to allow them to 11 National Archives, Nixon Presidential Materials, NSC Files, Box 487, President’s Trip Files, President’s Conversations in Salzburg, Moscow, Tehran, and Warsaw, May 1972, Pt. 2. Top Secret; Sensitive; Exclusively Eyes Only. Transcribed from Kissinger’s handwritten notes. Held in Brezhnev’s office in the Kremlin. 12 Ibid. 13 Wilfried Loth. Overcoming the Cold War: A History of Détente, 1950-1991, Palgrave, 2002, pp 113.

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Secretary of State William P. Rogers (center) signs the Paris Peace Accords, January, 1973. (Image: thenewnixon.org)

happen.14 Brezhnev ignored resistance in the Politburo and stayed silent on the issue in order to preserve the broader talks.15 By 1973, the Soviets had even joined the Chinese in halting supply shipments to the Vietnamese, therefore guaranteeing the success of ceasefire talks and the exit of U.S. forces from the region.16 Nixon’s détente policies with the People’s Republic of China followed a different route. While arms talks were based in economic necessity and tactical linkage with the withdrawal from Vietnam, the opening of China was used as a means to corner the Soviet Union geopolitically. It was also used to ensure regional stability, thereby reducing the long-term American military footprint necessary to keep global balances as the United States required them.17 Kissinger’s initial and Nixon’s subsequent trips to China were symbolic of the weight that the United States placed on opening up China. This was the linchpin in the broader push toward détente with the Soviet Union and disengagement from Vietnam. By entertaining an alignment with China, the USSR was put on the defensive and was more likely to engage in compromise negotiations. By supporting the Chinese vision of a splintered, non-Soviet controlled

Southeast Asia, the United States could gain help in forcing the North Vietnamese into an armistice.18 Most interestingly, the impetus for U.S.-PRC dialogue seemed to be the small border war between the Soviets and the Chinese. As they realized their own weakness in face of the USSR, Nixon’s tentative steps looking for possible rapprochement—first through the withdrawal of a U.S. destroyer from the Taiwan Straits—were treated seriously. In a memorandum prepared by NSC staffer Harold Saunders, the movement of the destroyer was reciprocated by the release of two American yachters held in captivity. Using Pakistan as a mediary, the United States found the Chinese very receptive.19 In a later CIA intelligence memorandum, it was shown that Zhou Enlai had given specific instructions to pursue a “limited flexible approach” with the United States20 These sorts of documents were filtering up to the White House and convincing Nixon of the ultimate practicality of his approach. In September of 1969, Nixon’s notes taken during a National Security Council meeting showed that he had become convinced that China saw the USSR as a greater threat than the United States and that it would be wise for the United States to utilize the opportunity.21

14 National Archives, Nixon Presidential Materials, NSC Files, Box 494, President’s Trip Files, Dobrynin/Kissinger, 1972, Vol. 11. Top Secret. 15 Wilfried Loth. Overcoming the Cold War: A History of Détente, 1950-1991, Palgrave, 2002, pp 114-115. 16 Wilfried Loth. Overcoming the Cold War: A History of Détente, 1950-1991, Palgrave, 2002, pp 119-120. 17 Robert S. Litwak. Détente and the Nixon Doctrine. Cambridge University Press: Cambridge, 1984, pp. 102-103, 133-134.

18 Richard C. Thornton. The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Paragon House: St. Paul, 1989, pp. 340-341. 19 National Archives, Nixon Presidential Materials Project, National Security Council Files, box 624, Pakistan Vol. I, Vol. II 01 Dec 69-Sep 1970. Secret. 20 Central Intelligence Agency, Directorate of Intelligence, Office of Current Intelligence, “Signs of Life in Chinese Foreign Policy,” 11 April 1970, Secret, No Foreign Dissem. CIA FOIA release to National Security Archive. 21 Foreign Relations of the United States, 1969-1976, Vol XVII, China, 1969-1972, Doc.

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West German Ambassador to the United States Berndt von Staden, Chancellor Willy Brandt, President Richard Nixon, Secretary of State Henry Kissinger, and diplomat Günther van Well (Image: National Archives)

The United States went to great lengths to ensure Chinese support for a continued opening, Nixon even went as far as to say that the United States would work to “restrain the Japanese from going from economic expansion to military expansion.”22 This policy vision was only undercut after the successful conclusion of one of the main reasons for the complicated triangle diplomacy that Nixon’s rapprochement with the USSR and China entailed. With the official end to the Vietnam War at the Paris Peace Conference of 1973, the Chinese assumed that the United States would ensure the division of Vietnam for the foreseeable future. But when North Vietnam began to violate the agreement in preparation for the final invasion of the south, the United States did nothing.23 Kissinger said of Nixon’s policy that the Chinese “could not believe that the United States would accept military defeat, much less engineer it.”24 Although it angered Beijing and slowed down the full opening of China, this episode illustrates the fundamental reasons for the détente policy under the Nixon administration. Based on pragmatic national interests, the United States worked hard to accomplish its “Peace with Honor” approach to the war. When that was concluded the 25. “President Nixon’s Notes on a National Security Council Meeting” 22 National Archives, Nixon Presidential Materials Project, White House Special Files, President’s Office Files, box 87, Memoranda for the President Beginning February 20, 1972 23 Richard C. Thornton. The Nixon-Kissinger Years: The Reshaping of American Foreign Policy, Paragon House: St. Paul, 1989, pp. 341. 24 Henry Kissinger. Years of Upheaval, Little Brown & Co, 1982, pp. 343.

United States was much less worried about Chinese concerns. Pragmatism regarding interests was the primary motivation for the whole policy. More specifically, economic interests and arms agreements were inherently selfish. The pullout from Vietnam served as a major positive endpoint of a tragic farce in U.S. history. The geopolitical wrangling with the USSR and China was a fantastic means through which to pursue the age-old adage of divide et impera among the mythologized monolithic communist bloc. Ultimately, the whole purpose of détente was to pursue the national interests of the United States—as seen by President Nixon—unhindered by the blinders of the very ideological anti-communist militancy that he once followed. In the primary documents, Nixon and his close foreign policy adviser, Kissinger, consistently chose policy options that maximized U.S. opportunities to serve its own economic, domestic, political, and geopolitical interests. Military budgets were trimmed, global discourse moved away from continual flashpoint tensions, the American public was placated (at least in regards to Vietnam), and the United States was engineered into an advantageous position between Soviet Union and China. Nixon pursued détente because it best answered these problems, and his pragmatism was well-rewarded.

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The Failure of the War on Terror Policymaking in America’s Post-9/11 information Environment

Thomas T. Barry ’15 In the decade since 9/11, the United States has shaped its foreign policy in an States has strengthened regional terrorism effort to disrupt and defeat global terrorism.1 in the Middle East and Central Asia and That said, most Americans identify terrorism thus inadvertently undermined its own as the top national security priority for the national security. Terrorism, therefore, wrong reasons. Since the end of the Cold should represent the United States’ top War and the United States’ emergence as security concern not because of the mortal the world’s first unipolar power, the United danger it supposedly poses to U.S. citizens, States has exhibited a systemic inability to but because of the legitimate threat America reduce the threat posed by small, fragmented, poses to itself by maintaining the war on terror in its current terrorist organizations. form. The inherent nature Statistical of politics and media America’s sensationalist analysis clearly in the United States illustrates that information environment has contributed to a terrorism, foreign hyperbolic information has consistently prevented homegrown, fails and to environment that the country from addressconstitute a significant systematically undermines the ing terrorism in a prudent threat2 to American lives. According to the public’s ability to manner RAND Corporation, truly understand “The average American the terrorist threat. has about a one in 9,000 chance of dying in By subverting the informative ability of an automobile accident and about a one in the nation’s public discourse, America’s 18,000 chance of being murdered.” However, sensationalist information environment has consistently prevented the country in the five years following 9/11 Americans from addressing terrorism in a prudent had “only a one in 500,000 chance of being manner. The resulting misperception of killed in a terrorist attack.”3 Nonetheless, the this manageable threat has enabled the inordinate fear of terrorism within the public government to continue to implement sphere of the United States has succeeded in ineffective foreign policy. In fact, through changing foreign policy since 9/11. While the its overextended military operations, most horrifying spectacle of 9/11 understandably John Mueller, “A False Sense of Insecurity,” Regulation 27, no. 3 (Fall 2004): recently in Iraq and Afghanistan, the United 2page 46, accessed April 8, 2012, http://www.cato.org. 1 Encyclopædia Britannica Profiles The American Presidency, s.v. “George W.

Bush: declaration of war on terrorism,” accessed April 8, 2012, last modified 2012, http://www.britannica.com/presidents/article-9398253.

3 Gideon Rachman, “Declare Victory and End the ‘Global War on Terror’,”

Financial Times (London), May 2, 2011, accessed April 8, 2012, http://www. ft.com.

Thomas T. Barry is an International Affairs major with a concentration in Global Public Health. In addition to his role as Content and Formatting Editor for The Globe, he is interning this summer with Elizabeth Warren’s campaign for U.S. Senate in Massachusetts.

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CNN’s coverage of the 9/11Attacks (Image: CNN)

stirred severe distress within the country, one would not have expected the nation’s elevated state of alarm to persist for more than a decade. With the decade’s rapid advances in information technology and computing software, the production and consumption of news in the United States fundamentally changed, enabling new media actors (e.g. blogs, podcasts, and social media pages) to interrupt the mass media’s traditional means of conducting a public discourse through “national vertical (top-down) linkages.”4 New media’s rise redefined international politics from a “geospatial physical world of bounded territorial states”5 to a “sociospatial” realm of “boundary-crossing virtual communications”6 that have irrevocably blended domestic political opinion with the bureaucracy of policymaking. The post9/11 emergence of new media not only has expanded the American communications market beyond the mass media, which now faces nearly unlimited competition for customers, but also has provided every 4 Gillian Youngs, “The ‘New Home Front’ and the War on Terror: Ethical and

Political Reframing of National and International Politics,” International Affairs 86, no. 4 (July 2010): page 925, accessed April 8, 2012, doi:10.1111/j.14682346.2010.00920.x. 5 Ibid, p. 927. 6 Ibid, pg. 927.

ordinary American with the unprecedented opportunity to potentially influence the national discourse on terrorism. Politicians soon faced the reality of a “diverse,” “decentralized,” “horizontal (bottom-up)”7 flow of information in the United States, enabling instantaneous correspondence between voters and politicians. This increased politicians’ accountability to their constituents, giving the public “direct impact on [the] political and ethical considerations related to the war on terror.”8 Nonetheless, due to its still considerable reach, the American mass media (i.e. television, print, and radio) has managed to maintain definitive influence over the public discourse on terrorism. Given the highly competitive nature of the expanded, post-9/11 media market, “journalists and editors have incentives to use emotionally powerful visuals and storylines to gain and maintain ever-shrinking news audience,”9 which has distracted journalists from their principle duty of facilitating an appropriate public dialogue through accurate, levelheaded reporting. “Threat and 7 Ibid, pg. 927. 8 Ibid, pg. 927. 9 Shana Kushner Gadarian, “The Politics of Threat: How Terrorism News

Shapes Foreign Policy Attitudes,” Journal of Politics 72, no. 2 (April 2010): page 469, accessed April 8, 2012, http://proxygw.wrlc.org.

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Thomas T. Barry

The accidental guerrilla syndrome (Image: David Kilcullen)

the anxiety that accompanies feelings of risk increase support for strong political leaders as well as support for punitive policies that tend to escalate conflict.”10 Because of this, the media has an obligation to react to terrorism by judiciously reporting the facts within their wider context. 9/11 however marked the beginning of the ‘Breaking News’ era, in which reports of unconfirmed rumors and vague potential threats have come to command the airwaves. This decade of vapid reporting, defined by “evocative, emotionally powerful images of terrorism,”11 rallied the public’s support for the hawkish foreign policies of the Bush era—notably continued by President Obama. Through its hyperbolic coverage of global terrorism as an impending, existential danger to the United States, the mass media has inadvertently reinforced and strengthened Islamic terrorism by prolonging the ineffective, costly, and overly aggressive war on terror. In its current manifestation, U.S. foreign policy assumes that “terrorism can be solved through counterinsurgency techniques,”12 which explains the military’s 10 Ibid, pg. 470. 11 Ibid, pg. 481. 12 Michael J. Boyle, “Do Counterterrorism and Counterinsurgency Go To-

gether? ,” International Affairs 86, no. 2 (March 2010): page 341-342, accessed

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controversial strategy of ‘winning the heats and minds’ in the War in Afghanistan. Since the collapse of the Soviet Union in the early 1990s, the United States has shown itself unable to effectively mitigate the threat of terrorism, as posed in Somalia, East Africa, Yemen, Saudi Arabia, and even the United States with Al-Qaeda’s first attack on the World Trade Center in 1993 and U.S Army veteran Timothy McVeigh’s 1995 bombing of the Murrah Federal Building in Oklahoma City. But while the United States possesses the capabilities to reduce terrorism to an even more statistically inconsequential player in international politics, the system of information flow within the country has continually prevented the national discourse necessary for overhauling America’s counterterrorism policy. Due to its competitive structure and sensationalist direction, America’s information forum “lack[s]. . . the right political conditions to facilitate deep awareness and expression of political agency”13 on terrorism. By attempting to destroy Al-Qaeda through direct military intervention in Afghanistan and Iraq, the United States mismanaged its response to the 9/11 attacks, April 8, 2012, doi:10.1111/j.1468-2346.2010.00885.x. 13 Gillian Youngs, “The ‘New Home Front’ and the War on Terror: Ethical and Political Reframing of National and International Politics,” page 932.

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unintentionally establishing terrorism as its dominant security threat in the 21st century. In particular, the American-led invasion of Afghanistan radically upset the country’s (Afghanistan’s) national political dynamic, triggering the “social version of an immune response in which the body rejects the intrusion of a foreign object.”14 In this way, the United States fell victim to David Kilcullen’s accidental guerrilla syndrome, uniting the Afghan people, the ousted Taliban government, and Al-Qaeda in an insurgency against the foreign, Americanled occupiers. The U.S. invasion introduced chaos and upset into the daily lives of ordinary Afghans, allowing Al-Qaeda and the Taliban “to paint themselves as relative locals and opportunistically draw on local loyalties for support”15 in their fight against coalition forces. After the initial toppling of the Taliban government in Kabul, America’s Afghan mission quickly morphed into a prolonged counterinsurgency campaign. However, the hyperbolic nature of America’s domestic dialogue on terrorism prevented this important realization. The mass media’s sensationalist rhetoric and emotionally evocative images coupled with the new media’s horizontal information flow to create a self-sustaining cycle of hyperbole and misunderstanding within the American political discourse. While “This confusion over the differences between counterterrorism and counterinsurgency is not new,” “it has become more serious over the last eight years,”16 underscoring the significant threat the war on terror presents to the national security and the international political influence of the United States. To achieve this appropriate dialogue that discerns counterterrorism from counterinsurgency, the nation must acknowledge the sensationalist rhetoric that has defined the popular discourse on terrorism since 9/11 and thus legitimized the war on terror. With this awareness, the American citizenry finally may engage in an informative discussion, considering terrorism within its broader “sociospatial”17

and geopolitical context. Ideally, by contrasting terrorism with other, more pressing security concerns, Americans for the first time will understand the minimal threat that terrorism poses to them and the country as a whole. By utilizing both the forums of new media and mass media, the American people may provide their consent for an overhaul plan. This policy prescription will combat terrorism through cost-effective conventional military missions as well as more nuanced diplomatic efforts towards ensuring human security. Ultimately though, by redirecting the public discourse towards an informed awareness of reality, the national overhaul process should sever the ‘Breaking News’ cycle’s focus on emotionally evocative coverage of terrorism and thus free American politics from the hawkish, post-9/11 policies of the war on terror. Political Reframing of National and International Politics,” pg. 927.

14 David Kilcullen, The Accidental Guerrilla: Fighting Small Wars in the Midst

of a Big One (Oxford: Oxford University Press, 2009), page 38, PDF. 15 Ibid, pg. 38. 16 Michael J. Boyle, “Do Counterterrorism and Counterinsurgency Go Together? ,” pg. 335. 17 Gillian Youngs, “The ‘New Home Front’ and the War on Terror: Ethical and

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Tattered Why the Tibetan Carpet Industry of Nepal is Declining and How to Mend It

Dustin Becker ’13 Introduction Nepal today lies between India and China, physically, bordering one to the south and the other to the north, politically, with a fledgling democratic system in which a communist party has plurality, and culturally, containing different ethnic groups with large similarities to those found in both neighbors. Curiously, however, the same cannot be said for economics. While India and China are moving steadily in to the 21st Century at impressive rates of growth, the Nepalese economy has, some would say, devolved in to one based solely on tourism, remittances, and agriculture. As a regional expert told me, “Anyone who has anything to lose in Nepal has already left,” leaving the country with a deficit of entrepreneurship and capital. The economy of Nepal has not always been so homogenized. The welldocumented Tibetan carpet industry once gave employment to a large workforce through the creation of a competitive export product.1 The wealth generated from this industry could have given rise to further industrial ventures, creating more and more jobs inside a country that sends many young men and women abroad to find work. This natural progression of events never occurred. One by one, the factories closed. The industry still lives on today, and the successful owners of these longrunning businesses show what has worked

and what has not. Still, carpet export levels are diminutive compared to the 1980s and 1990s. More critically, the carpet industry is still on the decline. Orders for next year, 2012, are considerably down from 2011.2 The causes behind the current alarming trend, and how owners are coping, are the focus of this study. What I have found is that a variety of factors are making it difficult for carpet manufacturers to compete on the international market - labor regulations, lost days of productivity, an unstable currency, and lack of export incentive government policies. Owners who are still operating today have survived because of longstanding connections, the ability to make luxury goods that do not need to be priced competitively, and, often, adopting a model of small-scale production.

1 Chodrak, Trinley. Of Wool and Loom. Orchid Press, 2000. Also see Kapstein, Matthew. The Tibetans. Blackwell Publishing, 2006.

2 Ghimire, Prabhakar. “Rising cost of production blunts Nepali carpet’s competitive edge.” Republica, October 2, 2011.

Methodology I first pursued interviews with carpetfactory owners through the connections of acquaintances. These owners provided me with insight in to the problems of the carpet industry today. I then acquired academic material to enrich my understanding of these problems. Timely periodicals and newspaper articles were also very instrumental in providing up-to-date information and different perspectives on the various topics discussed. Labor Dysfunction, A Collective Effort

Dustin Becker is an International Affairs major with an International Economics concentration. He also is a brother in the social fraternity Theta Delta Chi.

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When asked about challenges to industry in Nepal, business owners immediately expressed concerns about the volatile labor market. They were quick to mention that pressure from labor unions adversely affects industry profits. “The reputation of carpet industry in Nepal that has been built over the last decade in its ability to deliver special custom orders in high quality and on time has been greatly effected by all the negative influences of the Labor Unions on the work force. The insatiable demands of the Labor Unions for higher wages and facilities with little or no improvement in production output and quality have in turn further greatly disturbed the production of High Value production orders,” explained one owner, who wished to remain anonymous regarding the subject. Other business owners in the carpet-making community reflected these same sentiments. In an interview with the Kathmandu Post, Nepal Carpet Exporters Association President Kavindra Nath Thakur emphasized the fact that high production costs, including labor wages, have made Nepali carpets less competitive in the international market.3 The facts support these claims. Labor costs in Nepal are the highest in all of South Asia, with a total annual cost per worker of USD 1,789 compared to a cost in Sri Lanka of USD 1,619, Pakistan USD 1,052, India USD 943, and Bangladesh USD 789. Between October of 2010 and October 2011, labor costs have increased by 35% for carpet manufacturers in Nepal.4 The rate of labor market efficiency, meanwhile, is among the lowest in Asia, according to the Global Competitiveness Report.5 Carpet owners lament a lack of productivity, noting that wages and productivity do not rise equally. As Chanden Sapkota, a researcher at SAWTEE wrote in the newspaper Republica,

“If the unions want industrialists to double the minimum wage (instead of simply adjusting existing wage with inflation), they should also guarantee that labor productivity would also double. Else, why double the wages when the industrial sector is losing competitiveness 3 Ghimire. “Rising.” 4 Ibid. 5 “Ghimire, “Rising.”

and is in a downturn?”6 One owner, when asked what the government could do to help the carpet industry the most, made productivity the central focus. “Laborers here, they don’t want to work. Tibetans, we work hard. I tell the Maoists, look, why don’t you try setting up an operation, building a client base, turning materials in to a quality product? They don’t get it. Workers, they come in at ten, leave at eleven, and their union is still asking for more money. So if the government could do one thing, it would be to just tell the laborers that they need to work hard if they want more money.” For a foreigner, one simple question comes to mind: Is that really the job of the government? In the American working world, management ensures the productivity of their workforce. By examining labor laws in Nepal, however, one can elucidate the link our distressed owner makes the carpet inb e t w e e n dustry is still government policy and on the decline. worker malaise. Orders for next According to Nepalese labor year, 2012, are laws, after 240 considerably days workers down from 2011 are to be given a “permanent” position, after which time, dismissal for reasons of discipline or reduced demand, or any other sort of disciplinary action, is severely restricted.7 Employers in Nepal, who note a drastic reduction in worker productivity after they are granted “permanent” status, commonly criticize this legislation.8 In one extreme case highlighted in an International Labor Office report, the manager of a large manufacturing plant explained that when he terminated an employee whose productivity was suffering from the regular intake of drugs on the job, the Labour Court ruled that the worker must be reinstated.9 At the same time, the government also imposes restrictions on pay scales. Workers in the same position must be given equal pay.10

6 Poudel, Kashab. “Lockup Mode Pang of Protest.” Republica. 7 Kyloh, Robert. From Conflict to Cooperation. Geneva: International Labour Office, 2008, p.37. 8 Ibid. 9 Ibid., 38. 10 Ibid., 86.

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Thus, the law does not afford employers occurred at a Biratnagar factory for Surya the ability to reward workers who are more Nepal Private Limited, a garment company productive. The same is true of bonuses. Ten that made popular brands such as John percent of a company’s yearly profits must Players and Springwood. The plant opened be spread evenly among the workers.11 Again, in 2004, with an initial investment cost of the law restricts employers from rewarding NRs. 700 million.12 In the summer of 2011, the most productive employees. In this way, tension increased between management and the government prevents employers from labor unions over the payment of workers on motivating workers to improve productivity days they were out making political protests. through either threat of termination or The company said it followed a “no-work, reward of higher pay. Moreover, employers no pay policy.” Unions nonetheless called are also denied the ability to adjust their for a strike and instructed workers to hold operations according to demand. Some of the management hostage and beat them. the business owners claim that, as demand Corporate executives in India were appalled decreased following the Global Financial by these actions and subsequently decided Crisis in 2008, they found themselves unable to close the factory, rather than meet union to downsize their operations because the demands. This resulted in the loss of work law made it very difficult and expensive for for hundreds of employees, who were given severance pay, as mandated by law.13 This them to terminate any employees. These restrictions in labor laws and example demonstrates that the demands of the rapid increase in wages can be mainly unions do not always align with the interests attributed to aggressive and influential of workers. For a worker to have a “permanent” labor unions. Unions in Nepal are formed job, they need to work for a company along political party lines. Thus, instead of that is profitable and confident about the future of its business. workers of a common Demonstrating heavyprofession or employer handed negotiation having one union, they wage disputes become a methods such as the are split between the profit-making venture, use of force erode union affiliated with the Maoist party, with with the amount of money this confidence, and excessive wage and the UML, with the a union negotiator makes benefit demands Congress Party, etc. In a process described to being directly proportional inhibit a company from me by various business to the number of new deals being profitable. However, I owners with whom with businesses he makes must emphasize that I spoke, a negotiator for a union receives and the amount of the wage factory owners, as a collective group, are a commission from increase partially responsible every deal. As a result, for the violence and wage disputes become a profit-making venture, with the amount frequency of strikes. Prior to the rise of All of money a union negotiator makes being Nepal Trade Union Federation (ANTUF), directly proportional to the number of new the union of the Maoist Party, in 2006, many deals with businesses he makes and the businesses actively avoided adherence to amount of the wage increase. With this labor laws.14 They avoided permanent status powerful incentive, negotiators are driven protection for employees either through to create labor disputes. So, they travel failing to grant appointment letters15or by from factory to factory, making speeches to filling their payroll with contract employees, workers, and motivating them to demand who didn’t enjoy the same legal protection. higher wages and better benefits. Sometimes, Many were paid below minimum wage.16 “Imprudent unions & weak industries of Nepal.” Republica, August 27, 2011. when demands are not met, unions have 1213 “Imprudent,” Republica. 14 Kyloh, 57. resorted to violence. An appointment letter is a legal document given to an employee upon hire, provOne high-profile case of this 15ing* his/her start date and thus, the date they are to be granted permanent status. 11 Ibid., 54.

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16 Ibid.

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Figure 1

The labor unions that were active at the time were complacent with these conditions, but more importantly, the legal institutions in place were not capable of enforcing adherence to the laws. The state had only ten inspectors for the whole country, and these workers were trained to ensure the adherence to health and safety laws, not laws regarding legal protection for workers. Not only were they responsible for inspection, but also for the mediation of disputes, thus adding to their already excessive workload. Young appointees improperly prepared for their assigned duties often were the administrators of Labour Courts. There was only one Labour Court judge for the entire country, and so the backlog of cases grew from year to year by the hundreds. Even if companies were found to be in violation of the law, the penalty was only a NRs. 5,000 fine. Inspectors or other officials would often use the violations as leverage for extracting bribes instead of seeking justice.17 Thus, the increased militancy of the unions starting in 2006 was a response to the failure of the state to hold businesses accountable. The 17 Ibid.

power they found in their newly adopted aggressive tactics then allowed to press for greater benefits, which they rapidly accumulated. Effects of Emigration Aggressive unions do not destabilize the labor market in Nepal alone, though. Remittance work is another unique challenge that factory owners must combat. â&#x20AC;&#x153;The Huge Labor market that has opened in the Middle East and South East Asia in the last decade has seen a large number of skilled carpet weavers from the industry migrating to this new labor market to earn their livelihood. This in turn has further left the carpet industry with less productive labor force to meet increasing demands and requirements of the production,â&#x20AC;? said one owner, who wished to keep anonymity. As Gopal Krishna Joshi, vice-president of Carpet Producer Association Nepal, told Republica, â&#x20AC;&#x153;Nepali carpet producers and exporters are also facing a shortage of skilled carpet weavers, making us unable to fulfill the demand from U.S. market which has improved with the housing sector slowly returning to

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normal.”18 The loss of productive workers to foreign labor markets is inevitable in a country where wages are low. In addition, as the flow of labor continues, a rise in wages domestically will be a natural by-product, as demonstrated in Figure 1. Employers in Nepal neither willingly compete with foreign wages levels nor are compelled to do so as a result of the supply of unemployed workers in Nepal. However, the lure of foreign work will be a constant draw for employees, who will find employment abroad easier with their past work experience. It is the experienced workers who tend to leave for better opportunities, and hence we see the phenomenon described by employers, where skilled workers are becoming harder to find. Lower or stagnant wage levels will only encourage migration further. Hence, migration is a significant factor in the inflation of domestic wages. Unfortunate Customs I was surprised to find conflicting holiday calendars to be another challenge that makes labor in Nepal less able to meet production goals. “Generally the months of October and November experiences an increase in orders from our clients to meet the demands for the Christmas holidays in the West,” explained one owner. “But, during this key production period the carpet factories are almost empty due to the October and November Festival holidays. Since the carpet industry comprises mostly of people from the hilly regions of Nepal, during the October and November Festival holidays most of the labor force go back to their villages. After the labor force is back in the factories there is often very less time to fulfill all the orders as per their delivery schedules.” Tihar and Dasain are very significant holidays to Hindu Nepalis, and being able to observe these holidays is imperative for their morale. Yet it is easy to see how, with Dasain lasting ten days and Tihar lasting five, their observance during a crucial period can leave owners at a disadvantage when competing with businesses in other countries to supply holiday orders for the West. Nepali economic observers share this opinion as well.19 Sujeev Shakya in Unleashing Nepal, 18 Ghimire, “Rising.” 19 Poudel, “Lockup.”

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also highlights the need to ration out public holidays for the sake of greater growth and productivity.20 Again, holidays are an important part of every culture, and it would take a perhaps unrealistic amount of will-power for government and the people to embrace a reduction from the 52 public holidays (not including Saturdays). It is critical to understand, however, that the impact of the loss of workdays during peak production time is a severe detriment. Forty percent of U.S. retail sales occur in between Thanksgiving and New Years Day in America.21 Thus, the months of October and November can be said to be the pivotal point of production for an export industry like that of carpets. It is easy to see then, how 15 days of vacation in October and November are less than ideal for carpet makers. Rupee Woes Between July 12, 2011, and November 21, 2011, the Indian rupee decreased by 12.6% against the Euro, as can be seen in Figures 2 and 3.22 Between August 1 and November 21, it decreased by 18.4% against the U.S. dollar.23 There was much volatility in this time period for the value of the Euro. A debt crisis in Greece that contributed to increased borrowing costs for Italy and Spain increased investor anxiety over the possibility of another global financial crisis. While one may think this would cause an appreciation of the rupee, it rather resulted in what is called in the investment world a “risk avoidance” mentality, causing investors to move their money to “safe havens” such as the U.S. dollar or the yen, and away from developing world currencies.24 India is also suffering from a growing trade deficit. Even though exports grew by 10% in the past year, the value of imports grew by over 20%, fueled in large part by growing oil prices.25 The debt problems of Europe, combined with a rapidly slowing Chinese economy, and slow growth in the United States have influenced investors’ belief that export growth will continue to slow in India. 20 Shakya, Sujeev. Unleashing Nepal. India: Penguin, 2009. 21 Douglas, Daniel. “More shoppers, more spending, but no revised holiday spending forecasts,” Washington Post. November 28, 2011. 22* The Nepali rupee is pegged to the Indian rupee. 1 Indian rupee=1.6 Nepali rupee. 23 Kapur, Gaurav. “Strong dollar, weak external macros weigh on rupee.” Daily News and Analysis, November 14, 2011. 24 Kapur, “Strong dollar.” 25 Ibid.

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Rising interest rates and inflation that fails to abate has made investment in India a less attractive option. Moody’s, an international ratings agency, downgraded its assessment of the Indian banking system from “stable” to “negative.”26 All of this has combined to lead to a decrease in demand for Indian currency, and hence a drop in value. In fact, the Indian and Nepali rupee underwent the largest decrease in value of any Asian currency between July and December of 2011.27 All factors indicate that this trend is likely to continue. By conventional economic wisdom, this would be a boon for exporters. Because of the rupee’s weak exchange rate, export products could be marketed at a lower price in America or Europe, and economic models always indicate more sales at lower prices for a product with any amount of elasticity. Additionally, the drop in value for the rupee compared to other Asian currencies means that Indian and Nepali products would benefit from more competitive pricing vis a vis other Asian products in European and American markets. In practice, however, the process determining pricing is more complex. Carpet manufacturers in Nepal have to import nearly all of the necessary input material. Therefore, when the rupee devalues, input costs increase. In India, as will be explained, there is a system of duty drawbacks that is not in place in Nepal.28 This means that for wool, for which the tariff is 5%, Nepali manufacturers are paying 5% more than Indian manufacturers. As the cost of wool increases due to a depreciating currency (which is happening equally in both Nepal and India), 5% represents a larger and larger figure. This means that even as the cost of imported input products increase in both countries, Nepali-made carpets are becoming more expensive compared to their Indian counterparts. Carpet business owners, overall, seem to view the rapid depreciation of the rupee with more anxiety than hope. Nobody said they would lower prices in U.S. dollar or euro terms, as the rise in input costs 26 Ibid. 27 Ibid. 28 Oh, Hong-Choon. “Global multiproduct production–Distribution planning with duty drawbacks.” American Institute of Chemical Engineering. September 28, 2005.

Figure 2 - Between August 1 and November 21 of 2011, the rupee declined by 18.4% against the dollar.

Figure 3 - Between July 12 and November 21 of 2011, the rupee decreased in value by 12.6% against the Euro.

would offset the increased value of foreign exchange. Citing the rise in input costs, one owner said, “The depreciation of NRs against the euro and the U.S. dollar in the current fashion will only make short term profits for orders already received, but in the long run this will hamper the business... It would be beneficial for all if most of the raw materials were produced indigenously so that we can offer better prices to clients and therefore help to increase orders and production.” Certainly, if input products could be produced domestically, the cost of production would be more stable, and Nepali carpets could be offered at more competitive prices on the international market. Other owners, such as Nawang Lama of Nepal Rug Co., said his company was reluctant to change prices in the euro or U.S. dollar markets because they were unsure if these currencies would keep their value, underscoring the instability of the global financial market today. The rapid depreciation of the rupee also has consequences for businesses that take out loans, as almost every industrialist must at one point or another. Typically, a depreciating currency is seen to benefit borrowers. The currency with which they

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repay their loans is worth less than it is when the loan is issued. In the specific context of Nepal, however, it seems to be having a detrimental effect. In 2009, following the collapse of a real estate bubble in Nepal, banks faced a liquidity crisis - they did not have enough deposits to meet the demand of loans. The result of this was a significant rise in interest rates paid out on deposits and an even higher increase in interest rates received on loans. This was detrimental to businesses, as the cost of loan repayments cut in to their profits.29 Banks must first look after banks, however. The lack of discrimination in lending, falling real estate values, and a worsening business climate resulted in many banks being unable to recover many of their loans.30 In a country where defaults are so frequent, banks have proven leery of lowering lending rates. High interest rates act as a safeguard against losses from default, as it allows banks to recover more of the initial principal quicker. In this context, the dropping value of the rupee has given banks another reason to keep interest rates higher than for which they are demanded. Thus, an unfriendly credit market continues to hamper carpet businesses in Nepal. Tariffs

Import tariffs are another limiting factor in profits for Nepali business owners. The Nepali government can collect revenue much more effectively by stopping trucks crossing the border than stopping in on the countless one-room shops throughout the country. In doing so, however, they impose taxes that hurt domestic producers rather than help them. This is especially true of the carpet industry, since nearly every input product must be imported. What is more, imports in Nepal incur taxes beyond those imposed by the state. As Shakya explains in one of his Arthabeed columns titled “Sandalwoodonomics,” the informal extraction of tolls has become a lucrative business for many Nepalis. This increases the cost of imports considerably by the time they reach their final destination.31 In addition, transport syndicates can also increase costs 29 “Act Urgently.” Republica. October 26, 2011. 30 “Bad loans eat in to banks’ profits,” The Himalayan Times, July 20, 2011. 31 Shakya, Sujeev. Beed Bytes. Kathmandu: Fine Print, 2008, 164.

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for businesses in this manner.32 These costs have been a normal part of business in Nepal for years, but they are costs that are not factors in other countries, and thus help account for higher input costs for carpet makers in Nepal. Government, The Inactive Player A reason commonly cited for the downfall of the carpet industry is the lack of government support. Many current and former businessmen mentioned this when asked of the challenges to conducting business in Nepal as opposed to other countries. Not surprisingly, none of them wished to be named. “Tibetan-owned businesses have become soft targets for extortion and abuse from local and politically affiliated organizations,” said one owner. What he is implying is a system of unwilling political patronage that is quite common in Nepal. According to a 2010 report by Transparency International, businesses and entrepreneurs are the largest financiers of campaigns, but these funds are often collected in the form of extortion.33 Thus, many campaign contributions are given without even the pretense of a return benefit in policy. Shakya argues that extortion such as this is deeply embedded in the society of this country. Calling it the “two laddoo syndrome,” he argues, “If we are ready to bribe gods for our own good, why should it be surprising when we bribe mere mortals? Similarly, when we are so used to being extorted in the name of religion or government, why would we react differently when we are being held to ransom by political parties?”34 Apart from stronger law and order, Shakya argues that there needs to be an expansion of legalized political contribution so that parties can raise funds by legitimate means. The current limited legal channels for campaign finance not only promote the raising of funds by dubious measures, but also actually limit the influence of business. The maximum expenditure per candidate is 459,500 NRs. ($5,600) in first-past-thepost elections and 50,000 NRs. ($610) for proportional representation elections.35 32 Shakya, Sujeev. “Ignored Economy.” Nepali Times. July 16, 2010. 33 Bhattarai, Binod Kumar. “Report on Transparency in Political Finance in Nepal.” Transparency International Nepal, February 2010, p. 25. 34 Nepali Times 35 Bhattarai, “Report,” 15.

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Media restrictions are also present, with the detrimental effects of rising production limits in airtime proportional to a party’s costs. Every single owner to whom I talked, number of candidates.36 While these that is still in business today, made the laws are meant to ensure a fair electoral transition from large-scale basic productions process, limited exposure of the public to to producing high-end custom orders . A proposed policies also limits what voters can luxury carpet has a more inelastic demand understand. Campaigns are an opportunity - someone who is willing to pay $5,000 for a for public education of government policies, custom-made carpet is not likely to change current and proposed (albeit a biased his or her mind when the price rises to education). When limits on financing and $5,500. In addition, most of them noted a media exposure constrict campaigns, it shift in sales from a mainly European market encourages parties to adopt policies that to the U.S. market. This may benefit them have simple appeal. “We need laws that in the future, given the current instability make workers work harder,” would not be in Europe with the Euro-zone financial one such example in a country where most crisis. Nawang, who is currently conducting of the population identifies itself with the business both in high-end custom orders, mainly in the United States, and in largeworking class. scale orders, mainly in In India, the Europe, noted that the power of the business doubling of prices for lobby has influenced the informal extraction of his large scale orders the government to create a system of tolls has become a lucrative from a price hike in wool has caused policies that allows business for many Nepalis. clients to look for exporting industries substitutes elsewhere, to flourish. One This increases the cost of as machinesuch policy is a duty imports considerably by the such made rugs or rugs drawback. A duty time they reach their final made from synthetic drawback is the material. Thus, even reimbursement of a destination in companies that company for input have maintained costs that are the result of tariffs on imported goods or excise a variety in production techniques, it is taxes on domestic input goods. For instance, custom orders that have proved more stable. A long history in the business was in Nepal the tariff on wool, which is almost entirely imported, is 5%.37 With a duty also a common theme, with everyone having drawback system, the government would started his or her operation before 1995. pay exporting carpet makers 5% of what Owners who did not have a long history with they spent on imported wool. The existence their employees were more vulnerable when of such programs in India and lack of them unrest from increased union aggression in Nepal is part of the reason production overtook the country. In addition, the lack of costs are 30% higher in the latter than in the much rapport with clients meant customers were more prone to switch suppliers. In former.38 this way many entrepreneurs who entered the carpet business late in its heyday were Success Stories Despite this, the range of carpet quickly culled from the market. This left the business owners to whom I spoke is proof producers who were able to take advantage that companies have been able to adapt to of the relationships they had built over the the hostile business climate. Though they course of years, both inside the factory and are anxious about current conditions in the out. History alone doesn’t make for country and trends in the market, they have developed a model that insulates them from good relations, however. With regards to 36 Ibid., 16. employee relations, owners emphasized 37 “Customs Tariff 2010-2011,” Government of Nepal, Ministry of Finance, 2010. the need for fair treatment. “It really comes 38 Ghimire, Prabhakar. “Rising cost of production blunts Nepali carpet’s competitive edge.” Republica, October 2, 2011. down to the dharma,” Tsering Dolkar The Globe - International Affairs Journal

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said. “If you treat your employees well, they will work well and not let others turn them against you. It’s about compassion. Business is more than making money. If you have compassion for your employees, you will have an environment that is more conducive to work.” She wasn’t alone in this message. “We have over the years also treated all our employees with respect and dignity,” said another owner. “We have encouraged a friendly work place without the rigidity of the hierarchy system in management.  A sympathetic approach to employee problems has also in turn greatly limited outside negative influences into our work place.” Given the rhetoric about worker oppression that is sometimes fed to employees by outside influences, one can see how limiting the viability of this message with fair treatment and compassion is an important part of running a successful carpet business. Another owner mentioned small-scale production as key factor in her company’s success. This may seem counterintuitive, but given Nepal’s labor laws, it is actually quite logical. Since government approval is needed to dismiss unproductive or redundant workers, businesses are not easily afforded the ability to adjust the size of their workforce to changes in demand. Thus, companies who were aggressive in the expansion of their operation were stuck with a workforce much larger than needed as demand receded. It is not hard to imagine how under such circumstances many companies went bankrupt. By using restraint and keeping a limited workforce despite the lure of greater profits from increased production, small companies were well suited to the new market of custom orders and limited production, without large costs of excess overhead. Tsering Dolkar described a successful client base as being a key to success. As is usual among carpet manufacturers here, Tsering’s clients are shop owners and distributors. One such client has in their ranks a well-known designer who creates copyrighted designs. Tsering’s company then produces carpets of these designs in limited quantities, thus allowing them to sell the carpets at higher prices to highend consumers. She too, emphasized the

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stability that comes from selling carpets as luxury goods - small-scale production with high profit margins. The global economic downturn affected everyone, but the wealthy still have expendable income despite a decrease in wealth. They still have a need to display their affluence, and they’ll still buy carpets. Conclusion, Recommendations The economy is a complex and often nebulous system. Thus, it is to be expected that so many factors are partly responsible for the competitive disadvantage carpet makers in Nepal face. It is also why no single action will ensure growth for the industry in the future. It will take cooperation on the part of labor, businesses, and the government, and action in a variety of areas. Firstly, it must be understood that, although limited production of high-quality goods has been a common strategy of successful carpet owners today, it does not necessarily represent a model that can be widely replicated. By their nature, luxury goods are the products of an exclusive group of producers. Greater competition would lower the price, and a lower price would negate its value as a symbol of status. Those who produce these products are able to do so because of years of experience in the field, allowing them to create a product that is judged to be more valuable by the market. Thus, in order for the industry to expand and thrive, it cannot do so by avoiding competitive pricing through the production of luxury goods. Luxury carpet makers will continue to do well in their business as long as they stay on the forefront of quality design and production, but the industry as a whole will never rebound as a large employer and earner of foreign exchange through the replication of this business model. Thus, companies must be able to produce quality products at market prices, and retake business from other Asian competitors. As mentioned, labor costs in Nepal are currently the highest of any South Asian country, and this is a large factor in comparatively high costs of production. Suggesting wages be lowered is unrealistic, but their growth must be slowed, and it must match growth in company profits. Unions that are organized at the enterprise level

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would better serve laborers. In this way, they could decide for themselves what they’re goals are and work with management in a cooperative manner. Solutions would then be found that address workers needs while ensuring the long-term sustainability of their place of employment. Labor laws must be changed to give companies greater ability to dismiss uncompetitive or redundant workers. The raison d’être for permanent worker laws previously was a lack of a social safety net. This changed this passed year with a tripartite agreement between businesses, labor unions, and the government.39 The social safety net, albeit limited, is now in place. Unions promised greater worker productivity, but this is unlikely to happen if no incentive system is in place. Additionally, the owners to whom I spoke unanimously agreed that if companies were allowed to reduce their payroll in an economic downturn, they would be more prone to hire more workers during profitable times. Employers must be able to give higher wages to workers they deem more productive, and terminate employees who repeatedly prove themselves unproductive. With a more efficient workforce, laborers will earn the wages for which they have hard-bargained, and the disparity between unit costs for labor in Nepal and in the rest of South Asia will shrink. Law and order is one of Nepal’s greatest deficiencies, and its implication for business is clear. The case of the Biratnagar garment plant is an example of militant labor unions driving away investment, and this, indeed, needs to cease if this country wants its companies to succeed. Companies need to be held accountable as well, however. State inspections need to be a more regular occurrence, and inspectors need to be better trained regarding labor laws. They also need to be better compensated so that they have less incentive to sacrifice workers rights by extorting guilty company owners instead of criminalizing them. Penalties for breaking labor laws need to be tougher. If the state can hold companies responsible, labor unions will not need to take aggressive measures to ensure workers rights. Sadly, Nepal’s financial system is not stable and accountable enough to manage

its own currency, so the peg with the Indian currency is the only option. The country has no control over the rupee’s rapid inflation. It can minimize its effects on production costs, however, by finding input materials inside Nepal or India. Interest rates are likely to stay high because of the inflation. If banks were better able to identify companies and individuals who are likely to payback loans through a credit-rating system, however, responsible companies would be able to find loans at more affordable rates. India’s system of export incentives is strong and a model that needs to be replicated. Duty drawbacks are one such example. For input goods that must be imported, the government can offer companies a rebate for the cost of the tariff. A more efficient option would be to eliminate the tariff on input products that cannot be found domestically. Businesses in Nepal need to take a more active role in lobbying for change. As mentioned, this would be easier with more relaxed campaign financing laws. Regardless, and whatever ethnicity, business leaders need to realize that an informed public will see that what is best for business, what is best for workers and what is best for the country is often the same thing. In the carpet industry there are many owners who exemplify this, and they need to show their example in the proper light. Opportunities For Further Study Elections in Tibet are an everchanging field of study with complexities that are difficult to imagine for an American observer. Yet an understanding of elections, how parties come to power, and how they form their policies is imperative in order to understand the country’s problems. The relationship between labor unions and their associated parties, and the effect this has on policy is a related topic in which one could delve deeper. The business lobby in this country appears to be very weak and overmatched by the power unions have over every party. Understanding why this is the case, and creating a viable way for this to change would be an important extension of this study.

39 Poudel, “Lockup.”

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The Globe: Spring 2012 Issue