Review THE HORACE MANN
Volume XXIV Issue 7 April 2015
BALANCE OF POWER
Letter From the Editor
Review THE HORACE MANN
Ikaasa Suri
Editor-in-Chief
Lauren Futter Executive Editor
Jenna Barancik Laszlo Herwitz
Managing Design and Web Directors
F
or over a month now, editors and writers pursuing leadership roles for next year’s volume of The Review have been hard at work on our Junior Issue. This issue in particular is one of my favorite issues of the year because it provided both the sophomore and junior staff with the opportunity to showcase how their skills have developed over the course of these past eight months. Where editors exhibited a greater level of independence in their content and design choices by creating longer and more creative layouts, sophomores produced their best articles yet through thorough analysis and in-depth research of our features topic. Together and through this issue, our underclassmen staff realized The Review’s mission. More than just a current affairs publication, this magazine is an open platform for the Horace Mann student body to share its opinions through collaboration and teamwork. This year has been especially eventful in light of the struggle between police brutality and racial justice, the development of smaller nations and foreign influence, and the freedom of expression and media censorship. With so much going on in today’s world, it was difficult to pinpoint exactly one issue that overshadowed all other for this issue’s features topic. Instead, we chose the overarching theme of “balance of power” to culminate The Review staff ’s work thus far. Through such a topic, writers honed in on specific aspects of this concept on a regional basis. While some writers chose to delve into the battle between state and federal governments in North America, others chose to write about the gender and religious inequalities many nations in South Asia face today. I am confident that every member of the Horace Mann community will find something that catches his or her eye. Hopefully these articles will encourage you to pursue your political and current affairs interests even more. This being the second-to-last issue of Volume XXIV, I cannot emphasize enough how enormously proud I am of the entire staff for putting this issue together. By far our longest and most comprehensive issue this year, the Junior Issue has exceeded my expectations by degrees I could not have even imaged several months ago. Simply put, the hard work and dedication the members of this Review community put in is incredibly inspiring, and I could not be more grateful to each and every one of you. In addition, I would like to thank Mr. Donadio, Dr. Kelly, and Dr. Delanty for all their support this year in allowing us to achieve our goals. Happy reading! I truly hope you enjoy this issue as much as I do!
Matthew Harpe Adam Resheff Brett Silverstein
Managing Content Editors
Emily Kramer
Senior Editor - Domestic
Neil Ahlawat Senior Editor - International
Elizabeth Xiong
Senior Editor - Features
James Megibow Mitchell Troyanovsky Senior Editor - Economics
Alexander Newman Abigail Zuckerman Senior Editor - Science and Technology
Edmund Bannister Charles Cotton James McCarthy Harry Seavey Samantha Stern Senior Contibutors
Ben Alexander Daria Balaeskoul Maria Balaeskoul Gabriel Broshy Daniel Jin Cassandra K-J
Anna Kuritzkes Natasha Moolji Anne Rosenblatt Daniel Rosenblatt Peter Shamamian Eric Stein
Junior Editors
Miranda Bannister Evan Greene Ray Fishman Alex O’Neill
Matthew Parker Aditya Ram Spencer Slagowitz Evy Verbinnen
Associate Editors
Ikaasa Suri Editor-in-Chief Volume XXIV
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Gregory Donadio Faculty Advisor The Horace Mann Review is a member of the Columbia Scholastic Press Association, the American Scholastic Press Association, and the National Scholastic Press Association. Opinions expressed in articles or illustrations are not necessarily those of the Editorial Board or of the Horace Mann School. For more information, please visit www.hmreview.org.
Table of Contents Income and Wealth Inequality page 8
The State and the Federal Government Menr Suri
page 11
Racism in North America John Eng
page 14
Debilitating Partisanship in the US Dahlia Krutkovich
Lexi Kanter
page 20
page 22
Pro: Equality for All? Germany’s Corporate Gender Laws
EUROPE
Alexis Megibow
page 24
Con: Equality for All? Germany’s Corporate Gender Laws Zack Gaynor
Daniel Lee
Anarchy and a Failing Government in Greece Sydney Katz
page 34
Drug Trade Stephen Phillips
page 36
The State of South American Democracies Daniel Frackman
page 39
page 45
Inside Petrobas Karen Jiang
page 48
Nicaragua Polarized Cassandra Kopans-Johnson
page 50
page 52
Decline of the Chinese Economy Henry Shapiro
Teddy Kaplan
page 56
page 60
Defying the Odds: Papua New Guinea Alex Karpf
page 62
Lee Kwan Yew: The Passing of an Icon Daniel Rosenblatt
page 66
China’s Uncertain Fate Sophie Maltby
page 68
Drug Trafficking in Singapore Ray Fishman
page 28
page 31
Timothy Hoang
The Lost Voices of India
page 26
Putin Dreams of Empire
36
56
Rebuilding Europe the German Way Vaed Prasad
United States- Venezuelan Relations
J.P. Cerini
The Dominant Powers of the European Union Olivia Silberstein
page 42
Argentina’s Fight for Justice
page 17
The Relationship Between Big Business and Big Government
22
Ankit Gupta
ASIA PACIFIC
NORTH AMERICA
Chris Shaari
Brazil’s Growing Middle
page 4
SOUTH AMERICA
Eva Steinmann
74 AFRICA/ MIDDLE EAST
4
The Lengthy Fight for Women’s Equality
page 72
Africa: An Inescapable History of Colonialism Ananya Kumar-Banerjee
page 74
Boko Haram: The Threat to Nigeria’s Future Jacob Chae
page 77
Endemic Inequality in the Middle East Will Scherr
page 80
The United Nations: An Offensive Power Krystian Loetscher
page 84
African Empowerment Jack Vahradian
page 86
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EVA STEINMAN
THE LENGTHY FIGHT FOR WOMEN’S E UALITY
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UR PROGRESS: 1848 First women’s rights convention takes place in Seneca Falls
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1920 Women’s suffrage granted
1921 Equal Rights Amendment (ERA) written
1960
1963
1966
Birth control pill introduced
Equal Pay Act passed by Congress
Civil Rights Act outlaws discrimination on the basis of gender
magine a country in which women do not have the right to vote, have no legal identity separate from their husbands, have no right to control their biological reproduction, and cannot own property, pursue a career, serve on juries, or hold public office. Envision an entire gender whose members were not even considered “persons” under their legal system. While it might seem difficult to believe, this state describes the United States in the early 20th century, less than 100 years ago. In fact, when one traces the relative balance of power between men and women in American society over the course of our nation’s history, one might be surprised to learn that the vast majority of advances have only been made in the last 25 or so years, with multiple initiatives for greater gender equality making little progress over long periods of time. Our Declaration of Independence states unequivocally that “all men are created equal,” and our nation rose up in revolution against the British monarchy in support of this basic concept. Yet, as revolutionary as our nation’s foundation was, the gradual evolution of women’s rights, and women’s roles in American politics stands in stark contrast. The war itself was fought almost exclusively by
men, save for extreme cases like Deborah Samson and others disguised as men, desperate to break free of stereotypes and fight for the cause of independence, which one must presume they thought applied to them as well. When it ended, the same pre-war stereotypes applied. Women were once again the caregivers, charged with child rearing, cooking, washing, and other household chores. These same preconceptions about gender would persist for another 150 years. In 1848, it must have seemed that Europe and parts of Latin America were on fire. Known as the “Spring of Nations,” political upheaval shook over 50 nations. The causes varied by country, but all were influenced by changes in industrialization, political awareness, and the growth of liberalism. In the United States, already freed from the shackles of monarchy, it was the budding women’s rights movement, likely inspired by liberal movements elsewhere, which began to take shape. Signed in Seneca Falls, New York, the Declaration of Rights and Sentiments was principally written by Elizabeth Cady Stanton and modeled on the Declaration of Independence. It listed grievances ranging from the right to vote to prop-
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erty rights to the ability to obtain formal education, concluding that there existed an “entire disfranchisement of one-half the people of this country” that are “aggrieved, oppressed, and fraudulently deprived of their most sacred rights.” The reaction to the Declaration was swift and harsh, especially as it related to female suffrage, and foretold a long struggle ahead in the mission for equality. The Philadelphia Public Ledger and Daily Transcript wrote that no lady would want the right to vote, stating that “a woman is nobody. A wife is everything. ” Such sentiment was echoed across the media, yet the conference nonetheless sparked the beginning of annual conventions among like-minded women, to be joined by Quaker reformer Susan B. Anthony in 1852. In the aftermath of the Civil War, the women’s rights movement would briefly split, with some women focused solely on suffrage and others pursuing a much broader agenda, including an end to all laws and practices resulting in gender discrimination and unequal pay, divorce law reform, access to higher education, and a redefinition of the female role in society. The movement would reunite, in 1890, under the leadership of Stanton and later
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1964
1982
National Organization for Women (NOW) created
ERA Ratification falls short by 3 states
1984 Geraldine Ferarro selected to be first female Vice Presidential candidate
Anthony. Meanwhile, in 1878, Aaron Sargent, a Massachusetts Senator whose wife was a friend of Anthony, proposed 29 words calling for the women’s right to vote. His amendment would be rejected for an incredible 40 consecutive years. At the state level, there was some progress in women’s rights. In numerous states, for example, married women were granted property rights, equal guardianship over children, and the ability the engage in contracts and pursue legal remedies. In 19 states, women were permitted to vote in school board elections. However, the right to vote remained elusive. At the turn of the century, with the deaths of Stanton (1902) and Anthony (1906), the torch was passed to a new generation of suffrage leaders. Some, in the more militant branch, saw suffrage as only the first step towards true equal rights between women and men, whereas others embraced “social feminism,” based on the precept that women, because of their differences from men, needed their particular voice heard for the benefit of the nation. Yet little in the balance of power changed. As in so many other countries, World War I had a transformational impact on society. The role of the suffragettes in the war effort received broad acknowledgment, and in 1919 Congress approved the Susan B. Anthony Amendment. After ratification by the states, it one year later became known as the Nineteenth Amendment to the Constitution, providing women the right to vote. It had taken an astounding 72 years from the Seneca Convention for this one right to be realized – a clear indication of how rigid the balance of power among the genders had been.
The 1920s witnessed a dramatic increase in the number of women holding jobs. Their integration into the workforce emphasized their continued unequal status in society, forming the groundwork for what would later be known as the feminist movement. The focus of activists turned from the right to vote to ideas that were equally if not more controversial, such as reproductive rights, pay equality, and sexual harassment. Indeed, as difficult as the right to vote had been to secure, it became clear to these feminists that it would prove to be only the first stop on a long road towards equal rights and greater power for women. In 1923, the Equal Rights Amendment (ERA), which stated that the quality of rights under the law should not be denied or abridged on account of sex, was advocated by Alice Paul, a suffragette leader in the spirit of Stanton and Anthony. The ERA would be introduced in every Congressional session between 1923 and 1970, yet it was rarely voted upon – once again emphasizing the challenges women faced in their attempt to achieve gender balance. Indeed, some opponents of the legislation, including Eleanor Roosevelt (who later changed her view), were concerned that the amendment, which was supported largely by middle class white women, might undercut laws enacted to protect lower class female workers. This view was shared by the League of Women Voters, highlighting the lack of consensus around the legislation. The Second World War, in retrospect, would not appear to have had nearly the impact on women’s rights as did the First. In fact, in the prosperity that followed in the 1950s, there was an emphasis on the woman’s traditional role as mother and homemaker, whereas the man was
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the primary breadwinner. This was reinforced through television, which was becoming popularized, in shows like Father Knows Best and I Love Lucy. It was not until the tumultuous 1960s, with the growth of the anti-Vietnam War and Civil Rights movements, that what has become known as the “Second Wave” of feminism, in contrast to the “First Wave” suffragette movement, began to take root. The debate was dominated by the issues of sexuality, reproductive rights, sex discrimination in the workplace, and women’s economic and social status. In contrast to the First Wave, Second Wave feminism was more global in its reach, which was likely a function of the spread of democracy and the growing influence of the media and telecommunications. In the United States, activist Betty Friedan formed a new political group, the National Organization for Women (NOW). Prodded by an aging Alice Paul, NOW backed the passage of the ERA, which had been on the table for decades. In 1971, it was adopted by the House and in 1972 by the Senate. President Nixon endorsed the bill and set it to the states for ratification, only to see the legislation become tied up in the legal system and never ratified. In the meantime, selected women outside of the United States were making considerable strides in the political arena. Indira Ghandi became India’s first female prime minister (1966), followed by, among others, Golda Meir in Israel (1969), Maria Peron in Argentina (1975), and Margaret Thatcher in Great Britain (1979). While some of these women certainly benefited from their association with political families, it proved that women could be national leaders. By contrast, in the 96th US Congress beginning in 1979, only 20
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1896 Madeleine K. Albright is the first woman appointed to serve as Secretary of State members of the House (3.7%) and 1 member of the entire Senate were female. Changes in the 1980s were gradual but nevertheless important in laying the groundwork for advances to come. In 1981, President Reagan nominated Sandra Day O’Connor as the first woman to the Supreme Court. In 1984, Geraldine Ferraro became the first woman Vice Presidential candidate. In the same year, Sally Ride became the first American woman to fly into outer space. However, it was only during the latest wave of feminism, referred to as the “Third Wave”, that women entered the political arena in force. Beginning in the early 1990s, this new wave differed from its predecessor in that it was less tied into larger issues like the Vietnam War or Civil Rights, with greater focus on violence against women and sexual liberation. The question remains as to whether these later waves of feminism were really responsible for the rising power of women in our nation’s politics. It is certainly sub-
2005 Dr. Condoleeza Rice becomes first African American Secretary of State ject to debate, and one could argue that the ongoing transformation of our society due to globalization and the broad adoption of technology and communications could provide a better explanation. In other words, just as in the wake of World War I, there may be larger societal changes that are responsible for a change in the balance of power. What is clear is that female participation in government appears to have reached a tipping point of sorts. Today’s 113th Congress boasts 82 Congresswomen (18.9% of total) and 20 Senators, representing a dramatic increase in women representatives over the 24-year period since the 96th Congress, or essentially over the span of a generation. This is not to mention key executive posts held by women, including Condoleezza Rice, Hilary Clinton, and Nancy Pelosi, among others. Indeed, unlike the 72 years between the Seneca Convention and the passage of the Nineteenth Amendment, and unlike the 48 years that the ill-fated ERA would
2007 Nancy Pelosi becomes first female speaker of House of Representatives
languish in Congress, it the rate of change over these last 24 years that is particularly impressive. And while there is still a long way to achieve equal levels of representation, there is also little to suggest that these gains will not continue. It has been 167 years since Elizabeth Cady Stanton authored the Declaration of Rights and Sentiments, in a document modeled intentionally after our Declaration of Independence. Over the course of many generations, the balance of political power between men and women in our society has changed very slowly. Yet even though the pace of progress has accelerated dramatically over the last generation, one is left to wonder whether Stanton and those female activists who followed her would be content with the relative political power of women in modern-day America. More likely, they would view our political landscape with a mixture of guarded optimism and a sense that the mission remains unfinished. HMR
January 2015 April 2015
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Income and Wealth Inequality in North America
Chris Shaari
I
I
ncome inequality has always been a facet of the North American economy. However, the gap between the wealth and income of the wealthy, middle class, and poor is now disturbingly large. Data recorded between 1979 and 2015 by the Congressional Budget Offices of the United States, Canada, and Mexico shows that the gap in income between the top one percent and everyone else more than tripled. This rise can be attributed to corporations prioritizing profits before their workers and competition with Indian and Chinese corporations that pay workers little to nothing. More troubling is the fact that in that time, the income of that top percent increased by 275%. For the rest of the population, meanwhile, it increased by only 29%. Wealth inequality is directly related to income inequality,
primarily because the middle and lower class’ primary source of wealth is their wages. From 2009 to 2015, the net worth of the top seven percent of people rose by 28% percent, while net worth for the bottom 93% dropped by 4%. Income inequality is now so ingrained in North America that it threatens both the economy and the idea of equal opportunity. Luckily, we can effectively combat it through a variety short-term and low-risk of routes, including increasing the federal minimum wage, investing in education as well as infrastructure, and redistributing stocks between the rich and poor. As previously mentioned, income and wealthy inequality threaten two foundations of society in North America: the economy and the idea of equal opportunity. The two peak years of income and
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wealth inequality in the last century in North America are 1928 and 2007, which represent the foundations of the Great Depression and near-meltdown of 2008, respectively. The depression and recession were caused in part by an increase in cash borrowing by the middle and lower class. Cash borrowing is the result of inadequate purchasing power. When the middle and lower class have inadequate purchasing power, consumer demand goes down, which causes businesses to lose money and have less incentive to expand or hire additional workers. Thus, income and wealth inequality hurt the economy significantly. The idea of equal opportunity and social mobility is also directly correlated to income and wealth inequality. In many cases, the poor do not have the financial
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systemcapital.com
resources to have the same opportunities as the rich. These opportunities range from affording a quality education to having the assets to start a business, preventing them from improving their socio-enomic status. Since July 24, 2009, the federal minimum wage has been $7.25 per hour in the United States. Certain states have higher minimum wages, such as New York, who$8.75. The problem with its current value is that most Americans who work full time at or near minimum wage live on the poverty line. The federal poverty line is an income of $23,550 for a family four. A stunning 15% of Americans, or nearly 50 million people, live below it. A third of Americans living in poverty make $7.25 per hour or less. If Americans want to see progress
on this issue, the federal minimum wage should be increased to at least $15 per hour. By increasing the minimum wage to $15 per hour, nearly 25 million Americans would break the poverty line, a huge step towards income and wealth inequality. In Mexico, the federal minimum wage is around 10 pesos, which equals $0.65. As of 2014, nearly 52.3% of Mexico’s population lives in poverty. As a result, many Mexicans suffer from underdeveloped institutions and extremely financially limited lifestyles. Economic growth is what Mexico needs if it would like to see improvements to its wealth equality. In Canada, the federal minimum wage is ten Canadian dollars, or around $8. As a result, only around 10% of Canadians live in poverty. Opponents to raising the minimum
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wage argue that if it were increased, prices must also increase to compensate for the loss. While this may be true, doing so would stimulate the economy and create job opportunities elsewhere, making the benefits outweigh the costs. Research shows that men and women who have access to quality education throughout their childhood are more likely to find gainful employment and have stable families. One of the major contributors to wealth and income inequality is unemployment. Also, many jobs that require “unskilled” labor pay their employees at or near minimum wage, which further hurts the cause. Investing in education, specifically public primary and secondary schools, would reap incredible social and economic gains for North America. According to Pennsylvania’s Best Investment: The Social and Economic Benefits of Public Education, if the US, Canada, and Mexico decreased the number of high school dropouts by half and sent those people into the workforce, nearly $45 billion would be produced nationally. Investing in higher education has major benefits as well. Statistics indicate that employment rates and income among educated people are significantly lower than those with only a high school diploma or less. As a result of wealth and income and inequality, poor neighborhoods typically lack the funding to uphold infrastructure suitable for some of the richest nations in the world. Obsolete infrastructure generates complications such as long commutes to work, inadequate Internet access, insufficient power and water sources, and unnecessary environmental degradation. The United States and Canada are the only first-world countries in North America, and communities in these countries typically maintain well-developed infrastructure. However, countries like Mexico suffer from much higher levels of wealth and income inequality, which results in extremely poor neighborhoods and communities with a severe lack of infrastructure. Investing in infrastructure would hence significantly improve the living conditions of its poor communities and neighborhoods, helping to mitigate this problem. In order to fix income and wealth inequality, it is important not only to focus on those who are currently suffering but also those who potentially would in the future. An estimated 88% of the next gen
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“From 2009 to 2015, the net worth of the top seven percent of people rose by 28% percent, while net worth for the bottom 93% dropped by 4%. Income inequality is now so ingrained in North America that it threatens both the economy and the idea of equal opportunity.” eration of families who have parents living below the poverty line today will as well. Reducing future income and wealth inequality starts today. North Americans can achieve this by giving all children a share in future economic gains. In America, the richest 10% own nearly 80% of the nation’s capital stock, and the richest 1% own nearly 35%. In order to reduce inequality, North Americans should give every newborn an “opportunity share.” This would mean everyone would be allocated a certain amount of money invested in a diversified index of stocks and bonds at birth. Over time, this measure would reduce the gap in wealth inequality by reducing the inequality of capital.
One big question opponents have for the solutions proposed in this article is where the money to fund them would come from. The simple solution is to print money, however, that would raise prices. A great way for the proposed solutions to gain funding is through earmark funding. Earmark funding is money allocated by the federal government towards a specific area for a specific project. In many cases, earmark funding never gets put to use or is used for projects many would deem unnecessary, however, it serve a valuable cause in this scenario. Income and wealth inequality will always be facets of the North American economy. While wealth inequality is most
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prominent in Mexico, it remains an important issue in the entire region. Luckily, reducing the gap between the wealth and income of the rich and poor is a realistic endeavor for North America. To help solve this problem, nations can increase the minimum wage to assist those at the lowest rungs in the socioeconomic ladder. North Americans should also invest in education and infrastructure in order to reduce wealth and income inequality. Finally, the fact that wealth and income inequality typically hurts the same families generation after generation can be cured by giving all individuals a share in future economic gains. HMR
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The State and the Federal Government
r h e M
J
ames Madison once said, “The operations of the federal government will be most extensive and important in times of war and danger; those of the state governments, in times of peace and security.” However, after examining the current US political climate, it is unequivocally clear that the federal government has usurped powers well beyond what our founding fathers, including James Madison, envisioned back in 1788. Following the establishment of the Articles of Confederation in 1781, it was unambiguous as to the fear of American citizens: an overarching, despotic national government. But, as the years have progressed, that fear has become a more vivid reality. In fact, today, states are vastly limited in their power of nullification, allowing the federal government full reign to enforce any legislation deemed necessary, as permitted by the elastic clause of our nation’s constitution. Even further is the borderline extortionist measures applied by our national government in order to implement ordinances, threatening the reduction of federal aid to states that do not comply with its agenda. Therefore, this is the juncture where we must re-establish state’s rights and return to that which we were meant to be: United States. Back in 1984, the US Congressio-
Suri
nal body passed the National Minimum Drinking Age Act, changing the legal age from 18 to 21. Although the ruling, deciding the legal age for alcohol consumption, was up to the states, the federal government chose to implement conniving measures to coerce its constituent states to oblige to its demands of accepting this ruling. This document included a clause that asserted that any state that did not comply with this act would receive a 10% cut in its highway funding. At the time, it was a commonly accepted notion that this clause could be interpreted as a leeway of sorts, respecting a state’s right to choose, without inflicting any truly major repercussions. However, modern statistics render that this statement is fictitious, as almost one in every three dollars in state revenue is derived from federal funding. In fact, in some of the most populous states, close to a majority of their revenue, as of 2015, is acquired from the federal government. 32.8% of New York’s income, 34.5% of Texas’ income, and 45.3% of Mississippi’s income is federal aid. Thus, with such staggeringly high numbers, it is most definitely irrational to assume that any state would be willingly to accept this large pay cut and allow Congress to use this threat as means of impressing its agenda upon states. Therefore, this leverage enables
April 2015
the federal government to seize the power of numerous state governments that cannot afford to lose this funding. This seize hinders the ideological concept of democracy. Thus, at this juncture, we are left with one remaining question: can we truly accept that our federal government has ignored democratic principles and allow them to continue to yield this same power? Many might attempt to defend our current political climate by suggesting that there is no need to adjust the fundamental practices of our legislative branch and that we should rely on our previously implemented system of “checks & balances” to settle this power imbalance regarding state and federal power. However, currently, the state governments have no ability to balance out the prolonged reign of the federal government. As a result, the U.S. cannot effectively employ its earlier “checks & balances” system. In fact, states are so limited in their ability to protest unjustifiable legislation on the federal level, that even upon their deeming it unconstitutional, it is very likely the federal government will still enforce the law. This debate as to states’ nullification powers dates back to 1798 following the introduction of James Madison and Thomas Jefferson’s Kentucky and Virginia Resolutions. These documents suggest that
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states have the right to nullify a federal law upon its declaring it unconstitutional. In 1828, John C. Calhoun, Vice-president to President Andrew Jackson, furthered these resolutions in his Nullification Doctrine, declaring that, in this particular case, South Carolina had the right to protest and disobey Jackson’s 1828 tariff. Even though some of the most prestigious men in our nation’s history vouched for it, as current US law dictates, there is a gaping loophole for the federal government to negate any and all state nullification powers. Current US law asserts that states are allowed to negate certain federal laws upon their deeming it unconstitutional. However, they cannot prevent the intervention of federal troops to enforce said legislation. That second clause fails to establish a truly democratic practice because it permits the federal government to enforce any ruling it chooses. Not being able to protect oneself from military intervention from the largest and most powerful army in the entire world is quite the incentive to simply accept any legislation passed by either the legislative or judicial branch, no matter how detrimental to the domestic climate. In fact, an instance in which a state was limited in this respect was perfectly epitomized in the
Little Rock Nine incident. Following the Brown vs. Board of Education ruling in the US Supreme Court, an Arkansas Mayor, along with his constituents in the state’s legislature, declared this ruling unconstitutional and deemed their public schools remain segregated. President Eisenhower, in response, sent almost 1200 soldiers and 10,000 air officers to the implementation of this Supreme Court ruling. This example is not used to suggest that Eisenhower’s intentions were not virtuous, but rather to illustrate the precarious precedent set for how states handle a federal ruling they deem unconstitutional. If states are not permitted to resist military force of the federal government, the national government is epitomizing the image of a despotic government, which the United States government has feared throughout its existence. However, even though in the past this issue has clearly favored national power, in recent months, advocating for states’ rights has become a more prevalent notion, especially with the reemergence of the National Popular Vote Interstate Compact. This agreement establishes that states shall allocate their electoral votes to the candidate who has won the popular vote in the election. Even though numerous states, in-
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cluding the District of Columbia, have embraced this ideology, federal theorists continue to parry with the slightest inclination at a return to balance on the state and national level. It is argued that there remains a lack of communication on the state’s part to the congressional body. This poor communication suggests this compact can only be made legal with s the House and Senate’s approval to formulate a constitutional amendment. However, those in support continue to claim that this compact negates all illicit accusations as in Article II of our nation’s constitution and establishes a state’s right to appoint its electors in any manner it sees fit. Thus, states could choose how they wanted to vote as long as they remained in the loose guidelines of the Electoral College. This is just another example in which the federal government has denied states their rights, specifically the right to delegate their electors, and thus votes, in a manner they choose. Even though I have been advocating to increase power allocated to state governments, it would be irresponsible to suggest that we return to a system identical to the failed Articles of Confederation, as this is the typical topic alluded to in a conversation of state’s rights. Although my
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intentions were to ameliorate the myriad issues associated with the U.S.’s system of governance, the argument that suggests that the failure of the Articles of Confederation signifies the impracticality of stronger state governments is entirely outdated. For one, our political climate is encompassed by a rather serene ambiance, as opposed to the revolutionary climate of that era as evidenced by the 113th Congressional body’s passing 31 bills between January of 2013 and January of 2015. These bills initiated the intricacies of our economy, public school system, and even public works that burdened legislators of that period. But, with these initiatives already in place, states would simply be able to further append these measures. Further, when delving into this topic outside of committee chambers, numerous representatives in our Congressional body have claimed that granting states the majority of the nation’s political power could lead to detrimental costs in two-fold. The first qualm suggests that when moving one’s residence from state to state, different regulations in those borders pose a massive indignation to the moving individual and that these differences would grow as states received more power. However, this statement clearly contradicts the
notion of a state government altogether; its purpose is to establish ordinances that are not fit to be federal law, but are rather apt for considering a state’s geographical and financial standing. The other quam is that state officials tend to run unopposed, as was evident in the 2014 mid-term elections. Thus, radicalist thinkers are more common in state legislatures. However, what politicians fail to acknowledge is that state legislatures include more representatives than our national Congress. Therefore, those radical beliefs are diluted. However, the sole, rational, and echoed rhetoric by all criticizers of the system remains that the Articles of Confederation, when posed from an economic standpoint, is an immense conformity cost. This suggests that a symbiotic relationship between the states was almost unattainable. This, in fact, was true. The system failed due to states’ working as separate entities and inability to collaborate with neighboring states. An even bigger problem arose from that lack of communication, which originally emerged from the national government’s lack of power. States were guaranteed sovereignty, but by doing so, the national government developed into an ineffective directorate altogether. Thus, if, as a nation, we were to reallocate states’
April 2015
rights, we would have to forge congruous relationships between states. Numerous historians have suggested that reestablishing states’ rights is a hopeless cause that should be left to take its own course. However, as Congress continues to ascertain any and all powers, I feel that reformation is necessary. Thus, I put forth a solution to once again regain our balance between state and federal governments. One of the biggest problems concerning the Articles of Confederation was its lack of a strong centralized government, a polar opposite to contemporary society. However, by initiating states’ rights and granting them more power without stripping Congress of its powers, we can foster a more autonomous sentiment throughout the country. The biggest power states can be delegated is their right to nullification in an ameliorated fashion, such that federal, military intervention would not be permitted while the trial of unconstitutionality persisted. By allocating this particular power to our states, we will return to a balanced system. A symbiotic relationship between state and federal governments is not only attainable, but also well within reach.HMR
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Racism in North America John Eng
“I
have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character,” Martin Luther King Jr famously proclaimed in 1963. Dr. King’s famous “dream” that segregation between African Americans and Caucasians would be abolished was realized in the form of biracial schools and non-segregated public areas such as water fountains and buses. In all aspects, African Americans gained legal equality in American society. Yet even to this day, cases of segregation, racism, and hate crimes are becoming more and more apparent. One of the most controversial recent instances of this phenomenon was the Michael Brown case last year in which Brown, an unarmed African American teenager, was shot by a police officer six times. In fact, racism and discrimination remain prevalent and significant throughout North America, affecting different so-
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cial minority groups in a variety of ways. One example of the prevalence of racism in the United States is racial discrimination and prejudices towards African Americans. Nikole Hannah-Jones, a writer for Huffpost Blackvoices, recounts an experience of hers in which a biracial intern named Hunter was subjected to unwarranted accusations from police due to her race. After she had notified the police of a shooting that had occurred at a beach last Fourth of July, they questioned her involvement in the crime on account of her skin color. Nikole and her friends, meanwhile, had been afraid of calling the police due to their share of experiences in which they say African Americans have notified the police, only to be questioned or even arrested. Jones proceeds to state that African Americans live in a completely different world than the rest of society since they are always aware of the fact that they cannot trust those who are supposed to keep them safe. The reality is that police subconsciously target
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African Americans or other minorities since they have a preconceived notion that due to their skin color, they must be guilty or somehow involved in the crime. Another example was in the case of Martese Johnson, a black student at University of Virginia, who fell victim of both police brutality and racism. After being turned away at a local pub, Johnson was flung to the ground by Department of Alcoholic Beverage Control agents, causing him to receive multiple sustaining head injuries that required stitches. These aren’t just one isolated incidents. According to the Huffington Post, the Chicago Police department has engaged in “ongoing, pervasive” violence targeting youths of color. Furthermore, these minorities face a disproportionate amount of arrests relative to the amount of crimes they commit. Despite using the drug at similar rates, African Americans are 3.73 times more likely to be arrested for marijuana-related crimes according to the American Civil Liber-
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ties Union. In 2010, the U.S. Sentencing Commission found that they receive 10% longer sentences for the same crimes. After the high-profile Michael Brown case, an investigation by the Department of Justice found cases of systematic racism within the Ferguson Police Department. They discovered that police had wrongfully targeted African Americans without probable cause and gave them tickets in order to raise revenue for the city, a behavior that is likely common in other police departments across the country. Furthermore, immigrants face a significant amount of prejudice as newcomers into America. Although some of they face problems that lie in learning a new language or getting acquainted with new surroundings, their main problems lie in facing the preconceived ideas about their race. This issues don’t just face Hispanics. Asian and European immigrants also face unique prejudices. According to
psychologist Dennis Hunt, some immigrants are afraid of implementing their native traditions upon their children, facing social pressures to become “Americanized” in order to not face prejudice. Mexico, a nation with a long-standing and deeply ingrained history of racism and social inequality, still faces these
33%
How much more likely Blacks are to be detained after facing a felony trial in New York
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same issues today. Ever since the Spaniards settled in Mexico, they formed a society based on racial superiority and exploitation. Surprisingly, many of these views haven’t died out, as this the issue remains today. According to Ruben Navarette, a contributor to CNN, obtaining high-paying jobs and educa
32%
Chance an African-American male born in 2001 has of going to jail in his lifetime 15
North America
51%
Percentage of Americans that “expressed anti-Black sentiments” in a 2012 poll
10%
How much longer sentences for the same crimes done by Blacks are
37%
Percentage of people arrested for drug-related crimes that are African- Americans
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“The reality is that police subconsciously target African Americans or other minorities since they have a preconceived notion that due to their skin color, they must be guilty or somehow involved in the crime.” tional opportunities as well as general day-to-day life in Mexico is significantly more challenging for those who are darker-skinned, or in other words, those with more native blood than European blood. Canada, however, has a race problem far worse than that of Mexico or even the U.S. Canada is inhabited by two different racial groups, Canada’s First Nation and those of European origin. The First Nation is comprised of Aboriginal Canadians, who are essentially cut out from society. In a report by Macleans, 49% of the Aboriginals live on remote reservations while the rest live in small cities in the prairie regions, with less than 1% living in the Greater Toronto Area, which makes up almost 20% of the country’s overall population. Besides geographic isolation, further research by Macleans, showed that the Canadian Natives are far worse off than the African Americans in the U.S. in almost every single aspect. With ten times the national incarceration rate, significantly lower median income, and 2.1 times the national unemployment rate, every sign points to the fact that the Aboriginals are suffering on a larger scale than any other ethnic group in North America. In spite of these issues, Canada has taken strides to combat their social inequality. In 2005, the Canadian government launched a program called Canada’s Action Plan Against Racism (CAPAR). The three main points of the program were reducing discrimination in the workplace, police services, and justice system, increasing initiatives run by government, unions, schools and other social areas to work on solutions to racism, and providing more opportunities for ethno-cultur-
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al, ethno-racial, and Aboriginal communities to actively participate in Canadian social and economic life. CAPAR is not one singular initiative, but rather an umbrella under which other programs live and are funded by. It has funded many initiatives, all pertaining to their three goals. Programs that were funded under CAPAR include the: Welcoming Communities Initiative (WCI), Racism-Free Workplace Strategy (RFWS), and Interventions for Victims of Victims and Perpetrators of Hate Crimes (IVPHC). These programs bring along a significant change because they target the areas in which the issue of race is most prevalent. Although social inequality in Canada is still present, these initiatives have effectively prevented the further growth of the gap between the social groups. Here in America, our government hasn’t taken any particularly big strides to heal the rift between African Americans, Whites, and Latinos. For example, the unnecessary use of overly violent force by the police towards minorities is still an unresolved conflict. Excessive force is most likely the largest and most controversial issue. Police officers are hardly ever convicted of their crime, and if convicted they generally receive a very light sentence. Given all the recent occurrences in which minorities have been subjected to unwarranted violence by those who are supposed to protect them, the topic of police brutality should be dealt with first. Related to this is the stop and frisk law, which officers usually take advantage of to harass minorities. Only through these legislative changes can we truly start to fight against this long-standing issue that still remains today. HMR
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DEBILITATING PARTISANSHIP IN THE US Dahlia Krutkovich
http://jacobrosenfeldphotography.com/
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aralyzed by the most flagrant partisanship since the Truman administration, congressional presence during the Obama administration has been a dismal attempt at governance. Largely incapable of reaching across the proverbial aisle, both Democrats and Republicans have exhausted themselves in lengthy filibusters, petty political point-scoring, singularly voting along party lines, and publicly lambasting their
opponents in attempts to salvage public opinion. Proving themselves as wholly inept, legislators have created such profound gridlock as to lead to a government shutdown, sequestration, and a singular federal budget in the last six years alone. With the ideological middle’s gradual yet virtual disappearance over the last 40 years, not only has the body become an unwieldy, ineffectual shadow of its former self, but new congressional leaders
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show no signs of legislative respite or assuming any blame. Defined as representatives with voting records that fall between those of the most liberal Republican and the most conservative Democrat, the ideological middle has rapidly deteriorated from 402 members of Congress in 1982 to a grand total of 4 in 2013, including the hardy caucus of 0 in the senate.
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North America While gerrymandering or even regional self-separation of the electorate have increased the House’s sectionalism, senatorial rifts purely mean state voters as a whole have encouraged candidates to become more polarized. The extreme nature of the electorate’s split has encouraged candidates to adjust their platforms in order to pick up more radical voters and appeal to a broader range of special interest groups, thus both hastening the disappearance of the political independent by forcing him or her to elect extreme politicians and skewing the national political landscape to create a murky patchwork of extremes. In fact, in avowing militant support of more exaggerated stances on contentious subject matters
While the House of Representatives has become a legislative deadzone, the Republican-controlled Senate has taken several bold moves in addition to their own brand of dysfunction. After successfully passing their Keystone XL bill earlier this year, Republicans failed to whip the necessary Democratic votes needed to override President Obama’s promised veto, one of a mere three he has used in his tenure as president. Instead of being viewed as an equitable solution to unemployment and energy dependency, in the months before its passing, the Keystone proposition took on more of a political distinction, becoming a symbol of supposed Republican progress in the face of liberal ineptitude. While Democrats
passing, the ACA, or informally known as ‘Obamacare’, has become, like the Keystone pipeline, a political symbol of the successes of one party and failings of another. Instead of closely examining the actual implementation or effectiveness of the program, any ACA criticism meets a defensive round of unproductive pseudo-debate, followed by immediate Democratic dismissal of the incendiaries and their dissent. The over-scrutinized and attacking nature of the vast majority of ACA discussion has created a tone of conversation adverse to any type of worthwhile troubleshooting. As such, the inability to separate constructive opposition from mindless political drabble (not
“Rampant political dysfunction also projects an image of a weak and fractured front, further undermining the United States’ standing abroad.” and pledging support to already influential PACs before even taking office, politicians on both sides of the spectrum freeze the workings of representative government to create the very stagnation that plagues them. In addition to personal allegiances to ensure their election, factional commitments made in-office further complicate matters upon which partisanship already impinges. By joining rigidly defined sub caucuses and political groups, politicians accentuate the gridlock within their own party, not to mention inflaming the chamber-wide friction. Groups such as Heritage Action, the House Freedom Caucus, and Republican Study Group, while all under the umbrella of the GOP, have their own strict party line, ideology, and pet projects. In an age devoid of accommodation, individually and firmly rooted coalitions do not serve their original purpose - to diversify the two mainstream parties by giving underrepresented viewpoints more voting power and influence on a crowded stage - but instead they further divide and demarcate already polarized representatives and push them further to the edges of their respective parties, making intra-party harmony difficult, let alone inter-party compromise.
vocally vowed to block the bill, Republicans championed it as a “true American fix.” Being no secret that as soon as the bill passed it would face a veto, as per the president’s own public statements, instead of using the time to construct a passable bill with his Democratic counterparts in the Senate and Executive branch, Majority Leader Mitch McConnell swore that if the bill was sent back to his chamber he could override it unamended. Unsurprisingly, the necessary two thirds Senatorial majority did not rise to the occasion and instead of solving to two of the most prominent issues in the American political climate today, energy dependency and unemployment, finding its way into law, the Senate is back to square one with both parties more bitter and belligerent than before. However, not only must both chambers look inwardly to pass legislation, they must find a way to work with the Obama administration in order to create meaningful reform. In tirelessly fighting the Affordable Care Act, the hallmark achievements of the administration that has been proven once and again to be lawful by the Supreme Court, congressional Republicans have not only exhausted their resources, but their time too. With a grand total of 50 repeal attempts since its
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to mention the mindless political drabble itself) dilutes the legislative drafting process and weakens the few bills that finally become laws, thus shortchanging the American electorate of well thought out and carefully examined legislation. How can voters rely on their politicians to ensure that well-groomed and thorough legislation becomes a reality when politicians are so blinded by partisanship and sensitive to debate as to forget their original intent? Even in dealing with issues with seemingly bipartisan support, such as pay equality, politically driven spite stymies the legislation necessary for reform. Specifically, this phenomenon manifested in last year’s Paycheck Fairness Act, which Senatorial Republicans unanimously opposed. Since 2010, each of the four times the bill has been reintroduced, politically driven voting has mitigated the well-intentioned reform, leading to its eventual retirement from the senatorial docket. Affecting not only domestic policy, or lack thereof, rampant political dysfunction also projects an image of a weak and fractured front, further undermining the United States’ standing abroad. As exemplified in Senator Tom Cotton’s letter to Iran, signed by 47 other Senate
North America Republicans, domestic strife directly impairs the Obama administration’s ability to navigate sensitive international affairs, further sabotaging the image of power and unity so integral to the United States’ identity in the foreign landscape. While negotiations were an arguably misguided, ineffectual, and largely delusional foreign policy, the Senate has no place in directly sending what essentially was a letter of intent to another governmental body, a hostile governmental body, before crucial negotiations are to take place. While a completely legal activity, the Republican senate demonstrated a gross lack of consideration and reckless abandonment in the face of greater diplomatic implications. In sending that letter, the signatories used Iran as a chip, nothing more than a device in their strategy to publically deepen the rift between the administration and Congress, in order to gain national notoriety in the wash of the aforementioned crowed stage. They sent the letter, not with the motivation of implementing any sort of actual beneficial political after-effects, but rather to loudly decry their dissatisfaction and create a
stronger image of “the Republican renegade;” a vocal minority standing up for the rights of the American people, the same tactic they employed while promoting the Keystone Bill. Specifically, Tom Cotton, a junior senator serving the first few months of his second term, could not have possibly thought that this letter would serve as a useful intimidation factor in dealing with any rogue foreign nation, let alone Iran, but he did understand it would calcify and subsequently make a spectacle of the negotiations. While maligning the President’s domestic agenda can be justified, creating disarray in the face of a belligerent third party, especially in negotiations as crucial to the geo-political landscape as these, not only highlights the climate of insubordination latent in American politics, but also creates an aura of weakness around the administration, especially in enforcing its own policy. Iran’s antagonistic attitudes in relation to any sort of negotiation presents an already contentious, hostile environment without the letter. Yet, with the letter, Republican Senators have demonstrated that repudiating the President
and his actions is easy, and their reaction encourages Iran to do as they have done before, thus hurting the United States on a macro scale. Blinded by their bitterness, the Senatorial GOP has both complicated matters and created a backdrop of disobedience and duplicity. Instead of working with the President on the policy he has decided works the best for the US, they have directly undermined their own country. In both the Republican and Democratic Party, immense congressional partisanship has led to dysfunction, disarray, and disheartenment. Political factions, special interest groups, and electorate polarization have all contributed to the pervasive gridlock, but most of all, the subversion, duplicity, and lengths to which each party will go to antagonize the other to appeal to their base of support. With 965 bills passed in the 111th, 112th, and 113th congresses, nearly half of the 1748 passed 20 years ago, the political stagnation has wrought a sense of tired struggle and futility in Washington as senators and representatives attempt to fight their self-inflicted war of attrition. HMR
Senate Election Results 2014 January 2015
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THE BIG BUSINESS RELATIONSHIP AND BIG GOVERNMENT BETWEEN LEXI KANTER
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here is a long history of conflict and debate in the United States that stems from the issue of big business versus big government. A prominent example of this conflict is the “Robber Barons” and trusts of the Industrial Revolution and the famous “Trust Busting” presidents, including Teddy Roosevelt, who pursued them. The “Battle of the Bigs and Bads,” as the New York Times has called it, is an age-old rivalry that has continued to be a leading issue through the 21st century. As increasingly radical political figures and their polarized political agendas force their way into Washington, this conflict has again risen to the forefront of American politics. The rise of big business began primarily in the 19th century during the years following the Civil War. Entrepreneurs in search of profits consolidated their businesses into massive corporations. Industry exploded in this era that many consider the height of true capitalism and a free market financial system, where government took a backseat. These large corporations, otherwise known as trusts, were used to gain control of markets and force out competition. They integrated control of many companies, both horizontally by combining similar companies, and vertically by combining companies involved in all stages of production. For example, Andrew Carnegie of the Carnegie Steel cooperation bought and combined railroad companies, while also buying the iron mines that would produce the raw materials for the railroads. By owning both the railroads and the mines, Carnegie eliminated
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middlemen reducing his costs. These trusts came to dominate their respective industries, and they, and the businessmen who ran them, became exceedingly wealthy and powerful. Some of the most powerful corporations include John D. Rockefeller’s Standard Oil Company, Andrew Carnegie’s Carnegie Steel, Cornelius Vanderbilt’s New York Central Railroad System, and J.P. Morgan’s banking house. In the early years of the Industrial Revolution, the government maintained a hands-off attitude toward business. The government, and much of the nation, believed in the principles of laissez-faire economics, which dictated that the economic market should run freely without government interference. By the late 1880’s, however, the attitude began to shift and federal regulation of big business became a key component of government policy. Naturally, this issue has become tied to our bipartisan political system with conservatives favoring big business and limited government, whereas liberals favor bigger government and more regulation of businesses. Conservatives typically argue that free market competition drives innovation and productivity, both of which are beneficial to society. They also argue that big government squashes initiative, distorts markets, and erodes individual freedom. Liberals will typically argue that business needs to be highly regulated because left unchecked, they will damage the economy, exploit individual workers, destroy the environment. In addition, big business could potentially “mortgage our grandchildren’s future,” according to Alejandro Crawford of
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U.S. News, essentially pushing off important environmental and fiscal issues until they pose such a great danger to society that future generations may not be able to resolve them. Although both parties are correct in the risks that they highlight, neither extreme viewpoint is healthy for our economy, or conducive to the compromise that makes government run effectively. The conservative viewpoint is that government regulations and taxes add costs to businesses, raising prices, which make goods more expensive for the consumer. When regulations are eliminated prices will fall, increasing the purchasing power for consumers. Competition will also increase, especially against other international companies without the same burdens levied by the government. They believe that it is more difficult for the United States to compete with China, for example, because we have regulations hindering our growth and progress that they do not have. Additionally, businesses will have more money to spend on investments, innovation, research, and jobs. Although, on the surface, this seems reasonable, this is oversimplified logic that emphasizes the drawbacks of regulations but fails to recognize the reasons why they are necessary. Regulations, such as those created by the FDA are critical in ensuring the quality and safety of products on the market. Without regulations consumers will receive products that may be contaminated, unsafe, and likely ineffective in curing ailments. In addition, without regulations there is no method of managing the usage of natural resources or
North America controlling and monitoring pollution such as toxic waste disposal. For example, until regulations were put in place on electricity plants and factories off of the Charles River, it was highly polluted with sewage and industrial wastewater. Regulatory bodies such as the Occupational Safety & Health Administration (OSHA) ensure safe and sanitary working conditions for laborers. Regulations are not only for safety and quality control, but also needed in the banking industry. Without regulations, there would be no way to prevent or minimize the damage caused by crises such as the collapse seen in 2008. Banks can grow too large and collapse due to over speculation. In the case of 2008, the trigger was the large-scale investment in too many high-risk mortgages. When these risky investments did not materialize because the new homeowners were unable to pay back the mortgages, the banks had no money to pay back the people who they owed it to, and the economy spun into a recession. This is one reason why the government established regulations in the first place. Following this collapse, the government put in regulations limiting the risk that banks can take by requiring that they have capital reserves. In other words, banks must hold back a certain amount of capital to prevent them from putting too much money at risk. In addition, stress tests are required every quarter or so insuring they are in compliance with government regulations. A stress test is an analysis, which is designed to determine whether or not a bank has enough capital to withstand the impact of various economic downturns. They can be carried out internally or by supervisory officials and are meant to detect weak spots in the system so that preventative measures can be taken before it is too late. Although the conservative view on big business versus big government and their support of free market economics is clearly not an ideal policy liberals are not completely correct in their policy of tight regulations either. Excessive oversight can generate administrative burdens. Moreover, it can suffocate and sap the motivation from those whose resourcefulness is essential to generating economic
value. Businesses require freedom to experiment, take healthy risks and need breathing room to grow free from too many restraints, overhead-intensive processes and complicated regulations. Without this freedom, it can be difficult for entrepreneurs and innovators to develop original and competitive businesses. In addition, the government hasn’t always shown that it is capable of appropriately and effectively handling the responsibilities of oversight and regulations. Another major topic in the debate of big business versus big government is the government’s unnatural distorting of the financial markets. There are various mechanisms that the government uses to manipulate and influence the markets including taxes. Many conservatives focus specifically on the capital gains tax versus the ordinary income tax. The capital gains tax is on profits made off of investments unlike the income tax, which is on wages. As conservatives view the issue, a capital gains tax that is put in place by the government, let alone raised by the government, dissuades people from taking risks, making investments, and starting new businesses. A capital gains tax equal to the income tax is also unacceptable because the belief is that people need to be incentivized to take risks, which they believe fuel innovation. On the other hand, liberals do not believe it is fair that earned wages should be taxed at a higher rate, essentially punishing those who are salaried workers. Although it is unreasonable that there should be no capital gains tax, individuals do need incentive for taking risk. Risks help drive the economy forward and allow the United States to stay competitive internationally. An unequal tax is not used to punish salaried workers, but it compensates individuals for the chance they take by choosing a less stable and reliable financial path. For better or worse, taxes in general inherently influence the financial markets because individuals do not have absolute control of how their money is spent. Many argue that the government is a bad and often irresponsible custodian for the money that is earned by the people. While this is true in many respects, there are government run initiatives that are in the civic interest that
need to be funded, including infrastructure improvements and national security. To the dismay of conservatives and liberals, big business and big government are surprisingly similar. In both cases a significant amount of effort is required to keep leaders honest and to reign in their worst tendencies. Big institutions can do extraordinary damage. Throughout human history, when their power has been left unchecked, such institutions have grown unresponsive to the needs of the people they are supposed to serve. Checks and balances in both sectors of society are required to ensure fairness and limit corruption and exploitation. As time goes on, a pendulum trend comes into effect and, as a business columnist from the Washington Post explains, “The center of political gravity swings toward one party or the other in response to economic crises brought on by overdoing things in one direction.” Extremes are never ideal, in fact, the most plausible solutions to many of this nation’s issues lie somewhere in the middle. Extremes are clear and easy. Too often, they are used as political fodder by simple-minded politicians and their constituents pandering to ill-informed isolated groups of people in order to win elections. They neglect to take the time to thoroughly think through the issues to find exactly where in the middle of the spectrum the pendulum should rest, instead doing whatever is politically expedient. We need to move beyond the constant fear mongering and stop rehashing tired debates that pit government against business. Recently, Gallup conducted a poll asking Americans which is the bigger threat- big business or big government? In an effort to reveal the predilection of the American people, Gallup and other media sources help to fuel the dissent that divides the American people. The questions should not be which is the bigger threat. Instead, we should be asking what the best balance of government and business is and how to achieve it. The recognition that we need both kinds of institutions to be in healthy tension with each other is key in successfully facing the economic and social challenges that we are and will continue to face. HMR
Checks and balances in both sectors of society are required to ensure fairness and limit corruption and exploitation. April 2015
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Europe
The Dominant Powers of the European Union
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OLIVIA SILBERSTEIN
he creation of the European Union under the Maastricht Treaty in 1992 fundamentally changed the balance of power both within the European continent and across the globe. Throughout Europe’s complex history, war among the many nation states has been a consistent occurrence as countries battled for land, trade, and power. Conflict among European nations even extended beyond Europe’s borders as the leading powers colonized the globe and fought for trade as well as military dominance worldwide. Most recently during the 20th century, Nationalism in Europe led directly to the beginning of World War I, one of the bloodiest and most gruesome wars in world history. In addition, the overbearing reparations imposed on Germany by its neighboring victors after World War I in part led directly to Hitler’s rise and the onset of World War II. By creating the European Union, and subsequently launching the Euro currency in 1999, the balance of power within Europe became more intertwined leading to greater stability within the continent. Furthermore, the strength of the Eurozone, in which the majority of member
states of the European Union adopted the Euro as a single currency, altered the balance of power between Europe and other large economies around the world. For most of Europe’s history, war has frequently occurred across the continent. Many countries experienced periods when they controlled the dominant power of Europe as other countries were forced to succumb due to their inferior attributes at the time. Examples of this include Greece or Rome in ancient times, or Portugal and Spain during the colonial period. Nations had the potential to rise to dominance due to their unique access to trade routes, alliances they would form based on trade, religion, culture, and the desire for political stability and greater military power. As a continent consisting of trade barriers, tariffs, and various currencies, doing business across European borders was often limited and difficult. The balance of power resided in the dominant nations of the day, shifting throughout history, as societies would rise and fall. In the 20th century, the rise of Germany as a militaristic manufacturing power had devastating results that not only affected the rest of Europe, but also
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the entire world. If the Eurozone were to dissolve, the current state of Europe might revert to its historic ways: there would be an uneven distribution of power throughout the continent, threatening to bring violence to the continent all over again. The history of the Eurozone dates back to the aftermath of World War II. The situation in Europe was so dire at the time that the fastest way to rebuild was to remove previous barriers, allowing for trade within the continent. Steel and coal tariffs, for example, were reduced so that countries were able to trade more easily and allow their economies to grow more quickly. Out of such successful efforts, several countries began to band together toward a larger goal of breaking down more barriers, lowering the cost of managing business, and ideally unifying the currency by creating the Euro. The Euro contained the potential to unify the continent and put an end to all future wars. One of the last barriers to pave the way for the establishment of such a European Union was the fall of the Berlin wall in 1989. With a united Germany, the stage in Europe was finally set for the signing of the Maastricht
Europe Treaty in 1992 when 27 countries signed on to create the European Union. Since 1999, nineteen of the member states of the European Union have also adopted the Euro currency and become part of the Eurozone. Several more of the European Union states including Bulgaria, the Czech Republic, Hungary, Poland, and Romania, are required by treaty to eventually join, while Denmark and the United Kingdom have been granted exemptions. Under the Maastricht convergence criteria, member states must have their economic houses in order to be allowed to join the Eurozone. Specifically, according to the Council on Foreign Relations, such states must ensure inflation below 1.5%, budget deficits below 3% of
benefits they had created under the Euro. Furthermore, the fact that such countries could not acquire the new money that was essential to fund their budgets or pay their debts was no longer a problem for just these countries in isolation, but it was a problem for the entire Eurozone due to its unified currency. On the one hand, a problem in one country has the potential to trigger a chain reaction of defaults that could reverberate across the Eurozone and the entire globe. On the other hand, as long as the member states remain willing to support each other, their interconnected interests are an example of how the Eurozone levels the balance of power and how its dissolution could lead to greater instability.
money a government collects in taxes and how much it spends. The government can only spend as much as it collects in taxes; anything above that, and it is forced to borrow. This is called deficit spending. Ultimately, this concept would call for the Eurozone to require a fiscal union along with its monetary union. There would need to be a political organization put in place with the authority to set fiscal policies over the Eurozone. This authority would have the power to cut spending, raise taxes, and perhaps to even set laws. With a fiscal union like this, excessive borrowing and spending could perhaps be more easily prevented, but the balance of power among the member states would sway more in the favor of the stron-
If the Eurozone were to dissolve, the current state of Europe might revert to its historic ways: there would be an uneven distribution of power throughout the continent, threatening to bring violence to the continent all over again. GDP, and a debt-to-GDP ratio of less than 60%. To meet these criteria, many countries had to adopt strict budgetary reforms. As a result, the Eurozone today consolidates one of the largest trade blocks in the world and the Euro is one of the globe’s strongest and most stable currencies. Prior to the Euro’s initiation, countries with weaker economies, like Greece, had to pay higher interest rates in order to borrow money; they could only borrow limited amounts. Investors would attribute greater risk to lending money to countries with relatively weaker economies than they would to countries with stronger economies, like Germany. Therefore, investors would require greater returns on more limited amounts of money if a country such as Greece desired to borrow money. With the creation of the Eurozone, however, the newly united monetary policy under the European Central Bank created a more stable economy under which the credit of the stronger countries would support the weaker countries; this granted the relatively smaller peripheral economies access to more and cheaper credit than they ever had before. The emergence of the Euro progressed fairly well as long as credit was readily available, and credit was available up until 2008. At that time, the global credit crisis brought borrowing to a halt, and suddenly certain peripheral economies such as Portugal, Spain, Italy, and now Greece, could no longer function because they were unable to borrow more money for all the new jobs and
Germany, as the most powerful economy in the Eurozone, is the leading member of the Eurozone with the greatest ability to subsidize other member countries that may get in trouble with debts. Germany has generally agreed to do so under the condition that existing austerity measures be enforced and adhered to or new measures may be put in place. Such austerity measures can be very hard for countries to accept. They require cutting back on government spending, public sector jobs and wages, and perhaps even money for schools and hospitals. Countries that have become accustomed to many seemingly easily funded benefits understandably may have a hard time accepting greater austerity. In practice, austerity measures have been shown to have positive results, such as in Spain, where the economy is now moving more towards recovery rather than failure. The problem is that even if the debtor nations adopt austerity measures, and even if the bailout from Germany and the stronger countries helps pay down their problematic debts, there is no system in place to prevent this from happening again. One suggested solution to strengthen the Eurozone would be to more closely incorporate unified fiscal policies in addition to unified monetary policies currently accommodated by the European Central Bank. Monetary policy is the control money supply, namely how much money there is in the economy and what the interest rates are for borrowing. Fiscal policy dictates how much
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gest economies, in particular, Germany’s. This idea is a natural extension of the theory of the Euro but would clearly be very complicated to implement and highly unpopular among many nations, specifically the ones with weaker economies afraid to be dominated by Germany. Over the past few years, Greece, Portugal, Ireland, Italy, and Spain have all teetered on the brink of financial collapse, threatening to disrupt the Euro as such nations have not willingly accepted austerity measures in order to salvage the Eurozone. In practice, the strict criterion required of Eurozone participants has not been consistently applied. Perhaps the eagerness of European Union officials to develop a large and competitive Eurozone led them to overlook warning signs, as a number of peripheral economies have threatened, and continue to threaten the Eurozone’s long term viability. Maintaining the current stability of the balance of power in Europe by showing flexibility in the austerity measures may indeed be for the greater good. The recent Greek crisis highlights the economic interdependence of the European Union, while also underscoring the lack of political integration necessary to provide a coordinated fiscal and monetary response. If the Eurozone were to dissolve, clearly the balance of power throughout the European continent and the rest of the world would be greatly impacted. HMR
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Europe
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Germany’s new corporate gender law: A Model For True Equality
It is no secret that women are widely underrepresented in the workplace, especially on the boards of large corporations. Some corporations have little to no female board members despite the fact that women often make up a significant portion of the rest of the company. While general pressure and social movements have failed, it has become clear that the only plausible solution to this age-old problem is the implementation of temporary legislation requiring a certain percentage of boardroom seats to be occupied by women. Gender quotas are the fastest and most effective way to combat the underrepresentation of women’s perspectives and opinions on these boards, whose sole purpose is to accurately represent the company’s constituents. While it is clear that gender quotas are not a plausible long-term solution due to the fact that they can be seen as resistant to equal opportunity for men, they are necessary short-term measures that must be taken in order to rebalance a skewed proportion of men to women in terms of representation. After they are enacted, over time the action of allowing women increased say in corporations will become more natural, and the laws should be removed. They are a temporary measure that, when implemented for a certain amount of time, will balance the representation and power between men and women in the workplace more equally. On March sixth, Germany’s lower house of parliament joined the recent trend among European nations to work towards that which has not happened naturally: greater roles for women in corporate boardrooms. A new law was passed that requires 100 major corporations to allot at least 30% of supervisory board seats to women. The new quotas will be implemented in 2016 and will affect some of the world’s largest and most successful companies, including BMW and Volkswagen. Around 3,500 mid-sized companies will determine their own quotas. Corporations that fail to meet the requirements will have to leave such positions empty or fill them with women. The overall opinions on the law in Germany have been overwhelmingly positive. Justice Minister Heiko Maas of
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SOME ARGUE THAT REQUIRING INCREASED REPRESENTATION OF WOMEN BY LAW IS TOO EXTREME, AND THAT A BETTER METHOD WOULD BE TO SIMPLY ENCOURAGE COMPANIES TO HIRE MORE WOMEN INTO THEIR EXECUTIVE POSITIONS. THIS METHOD; HOWEVER, HAS BEEN PROVED INEFFECTIVE.
Alexis Megibow the Social Democratic Party of Germany weighed in on the issue, saying that “the quotas for women are the biggest contribution to equal rights since the vote for women was introduced.” Now in her tenth year of power in Germany, Chancellor Angela Merkel watched as deputies from center left and center right voted in favor of the revolutionary law. The new legislation passed by an indisputable majority. Gender equality movements have recently been sweeping nations throughout the world more than ever before, and these quotas are only furthering the cause. Countless surveys and an enormous amount of research have shown that gender inequality is felt most for women in business-life. This inequality is even more prevalent in Germany than in the rest of the European Union, and it is long overdue that the country should take action against the issue. A survey published in the Handelsblatt newspaper earlier this month said that a whopping 59% of middle sized German companies did not have a single woman holding a leadership position, compared to the 36% average of the EU. While these new gender quotas are obviously working towards achieving gender equality, they are not uncontroversial. Whether or not one believes that such measures towards increasing women’s representation on corporate boards are necessary depends on whether or not one believes that diversity is necessary in the making of corporate decisions. If the goal is greater diversity, especially in terms of gender, then quotas are the only effective solution. Some argue that requiring increased representation of women by law is too extreme, and that a better method would be to simply encourage companies to hire more women into their executive positions. This method; however, has been proved ineffective. When the European Commission drafted the “women on the board pledge for Europe,” whose aim is to encourage corporations to increase representation of women in boardrooms to 40% by 2020, only 24 companies involved in the EU signed it. If encouragement is the only technique, the movement for gender
Europe
women make up the majority of college graduates in most of the developing world, yet they constitute a smaller percentage of the workforce the further they go up the corporate ladder. equality in business will continue to move at a glacial pace. More radical solutions are necessary to produce substantial results. Those against corporation board quotas claim that they are actually discriminatory against men because they put aside seats for women. These quotas are not discriminatory; they simply counteract preexisting discrimination. In a perfect world, they would not be necessary; however, given preexisting prejudice and discrimination against women, they are the only system to compensate for it. Quotas are an extreme measure that need to be taken. It can be argued that they work against equal opportunity, but without them, gender equality on corporation boards would be virtually unachievable. Eventually, after these laws are implemented, more women will be naturally appointed in boardrooms. This will most likely be due to women appointing other women, a general decrease in prejudice and bias against them, or even just due to content with the increased representation and diversity. At this point, the legislation will have achieved its main goal, and it should be withdrawn. After the implementation and withdrawal of the quota, equal opportunity will be restored and there will be an increase in gender equality in terms of women’s representation. The potential temporary loss of equal opportunity for a short period of time is well worth gender equality that could last for centuries. Some worry that women who are appointed to positions or board seats are less competent or less qualified than men, but there is no research evidence that says that these suspicions are true. As a result, it can be concluded that the fact that women currently hold fewer board seats and leadership positions than men is most likely not due to the fact that they are generally less qualified. Rather, other factors such as discrimination and bias against women in business leadership positions are to blame. In fact, women make up the majority of college graduates in most of the developing world, yet they constitute a smaller percentage of the workforce the further they go up the corporate ladder. Executing gender laws such as Germa-
ny’s quotas will not only benefit specific corporation boards; it will also help to promote qualified women in higher positions throughout the business world. The increase in women’s representation will help to change attitudes and reduce overall prejudice against women’s holding of leadership positions. In 1993, a law was passed in India that set aside positions for women on several randomly selected councils in villages. Ten years later, it was found that in those specific villages that had reserved spots for women, women were more likely to run for and win elected positions. In some ways, it is a matter of proving that women are equally capable of being leaders in both the business world and in general. In addition to Germany, many countries are also creating legislations to make an effort towards gender equality. Norway first introduced a 40% quota for female directors, which was to be put into action for certain companies. Since then, countries such as Belgium, Spain, Italy, Iceland, and the Netherlands have put various gender quotas into effect. Even the European Union is considering enacting a quota. The governments of Britain, Australia, and Sweden have threatened to follow suit if state-controlled firms fail to voluntarily appoint more female directors. The increase in countries taking action against gender inequality in terms of businesses and representation is indicative of the fact that a growing number of people are realizing the importance of the issue and that just encouraging or recommending equality will simply not make enough of a difference to right this wrong. Countless studies show that companies with higher percentages of women on boards are more economically successful. According to Forbes and a recent study from Catalyst, corporations with the highest percentage of women holding board seats have at least 66% more return on invested capital than do companies with the smallest percentage of women’s representation. These companies also have a 53% higher return on equity and 42% higher sales return. There is clearly a very strong correlation between economically success-
April 2015
ful companies and those which maintain gender diverse boards. This is perhaps due to the fact that in many cases, increasing the diversity of the corporate boards mirrors the diversity of the companies’ consumers. Opinions that are more representative of those belonging to a wide variety of consumers would be represented, which would benefit the company as well as the client. Greater economic success for German companies will lead to greater success of the country as a whole. Additionally, this economic prosperity will potentially spread outside of Germany to other nations involved in the companies. With evidence of greater female representation on boards increasing companies’ success, it is clear that gender quotas will significantly increase economic prosperity through the promotion of diversity. Such prosperity would benefit all nations and corporations that support or ratify gender quotas. Germany’s implementation of its gender quota is certainly a step in the right direction. Its short-term enactment will surely produce positive results and demonstrate the benefits of such temporary legislation to other nations. In facing the significant global issue of gender inequality, especially regarding the imbalance of representation on corporate boards, gender quotas are the quickest and most efficient method of correcting the currently distorted proportion of women to men. When used correctly as a temporary measure, quotas will help to ensure accurate and more equal representation of women without infringing upon equal opportunity. Utilizing this short-term quota is the best system in order to see long-term success. New legislations on gender representation promote equal future success for women and reverse the damage of preexisting discrimination while also potentially increasing the economic success of both individual companies and of nations all over the world. While quotas may be an extreme measure, they have been proven to be necessary in order to make any remarkable effort towards gender equality in the business world. HMR
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Germany’s new corporate gender law: Unecessary advantages
n March 6th, 2015 Germany passed a law that would change the future leadership of their commerce. This law said that large German companies must give 30% of board seats to women. These new measures will apply to about one hundred major German corporations such as BMW, Deutsche Bank, and Daimler to incite extreme changes in their leadership. Germany will join a collection of European countries such as England, Norway, France, and Spain that have passed similar laws. A visible ode to their staunch support of gender blindness is that their chancellor is, Angela Merkel, a woman. She is a woman that is highly educated and has undoubtedly earned her position. The German Parliament has the right idea of further integrating women in the work force at the highest levels given that women currently hold less than 20% of executive positions on the boards of German companies; however, this new set of laws will not only make many people loose their jobs to compensate for the influx of women on these boards, but it will also devalue women’s participation on these boards because these companies are being forced to take on these women rather then taking them on for their merit. Many people argue that in Germany this law was actually quite unnecessary because Germany is one of the leading nations on Gender equality. What is the definition of discrimination? According to the Oxford English
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Dictionary it is, “the unjust or prejudicial treatment of different categories of people or things, esp. on the grounds of race, age, or sex.” When compared to this definition, these gender laws give corporations the ultimatum that forces companies to hire women just purely because of their sex rather then their merit. This is a blatant discriminatory practice to reverse what is another discriminatory practice of favoring men for leadership roles in corporations. Many people would find this to be an acceptable method of fighting sexism, but it is not. It is a sloppy fix to the larger problem of sexism, and makes this problem affect a wider range of people. Another problem that this German program and American programs like Affirmative Action have is that their goal is to make up for years of discrimination by giving preferential treatment to candidates that belong to a race or gender that is perceived to be disadvantaged. Sadly, most people have been discriminated against spanning across race and gender. While we as moral people feel bad for all people who are persecuted, we can’t fix that by deciding that we will discriminate against the people that haven’t been mistreated recently. That logic is astronomically flawed. The German government along with the other governments that are participating in programs like this is widening the effects of sexism. Due to these programs, the German people, specifically German men of ev-
zack gaynor
ery race, will experience reverse sexism. This blindness presented by the program is that, while it corrects the pure number of women serving on company boards, this influx does not necessarily mean that these women would have as much merit as the men they would be replacing. That is not to say that there are not women capable of doing as good of a job if not a better one then the men currently holding those positions, but it allows for less qualified women to have better chances of gaining jobs that they may not be qualified for. The German government should stay out of these companies’ boardrooms because it is both not its business and its reponsibility to help these women to have a crutch when they absolutely do not need one. When dealing with that same issue an additional argument for these Gender Laws is that they are needed to break stereotypes against women and help them to be further integrated into the workplace. The belief is that when women are integrated into places where they normally haven’t had access, the walls that society has historically built to separate gender break down. This thought, however, is inaccurate because these German Gender Laws have the direct opposite effect. These Gender Laws have the potential to create both unnecessary and extreme animosity between sexes and create a situation that drives people further apart. The reality of the situation is that the people who will be hired through these Gender
When boards choose to hire women, they experience faster revenue growth, greater returns on equity, and higher multiple of price-to-book value. This only occurs though when businesses by their own choice, but when companies are forced to take on women or any other race, statistics show that companies tend find ways around these laws. 26
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Laws sometimes are not as qualified as the people who are not hired through the program, so this power imbalance creates further problems between the people hired. This animosity that will be created due to arbitrary loss of jobs will deepen the roots of gender bias and completely destroy the whole goal of what these laws are trying to achieve. Another aspect of this issue that must be understood is that statistically, women on company boards are good for business when done by choice. When boards choose to hire women, their respective companies experience faster revenue growth, greater returns on equity, and a higher multiple of price-to-book value. This only occurs when businesses do this by their own choice, but when companies are forced to take on women or any other race, statistics show that companies find ways around these laws. One of the most widely used tactics by big companies subjected to these laws is that for every woman they take on they bring in two men to minimize the authority of the woman. Additionally, it has been seen in other countries that have put these laws into place that while it forces companies to put women in the top rungs, it does not help the employees at the lower rungs at all. In considering these German Gender Laws from someone’s perspective who is actually assisted by these laws, It seems that these women would or should be highly offended that the German government believes that women are inadequate and can’t achieve the same levels of success without governmental help. If the government felt women could adequately find work, there would have been no need to put these laws into place. Many people look at these laws as help for not being hired due to preconceived notions of their gender, rather than believing that they don’t have the merit to achieve the same things as men. In truth it is possible that both of these arguments are true, but is it the government’s duty or right to
decide that there is a need for quotas to give women an unfair government sponsored advantage over men? It is absolutely not the governments right or duty put laws in place to favor anyone whether it is on the basis of race, gender, or socioeconomic class. The first few steps of creating a dictatorship is getting in power and start to use that power to make decisions that give you more power, for example making decisions or laws that favor different people. Germany should work off of a merit based system in which it forces all people to compete and fill the jobs that they are most qualified for with a blindness to gender or race. The way we must change this complex of bias and inherent inequality is that we must educate the youth about gender equality, so that they may understand that discrimination is wrong and hard work will get them ahead. Hate is learned and we must teach a lesson of equality and not send mixed messages with ridiculous programs like the German Gender Laws or Affirmative Action. The German government should not get involved in setting quotas for companies to meet because there are very few reasons to keep these laws in place, and it also very possibly will have the inverse effect and hurt gender relations in the future. Additionally, the implications of passing this law in the future lower the amount of merit it would take for women to get such opportunities. This could essentially create a vacuum in which women do not need to strive to become more educated and compete with their male counterparts, and therefore create a generation of women who are not motivated to achieve. This thought is not isolated to just women as this is a fear when any affirmative action program is put into place, so the real question that needs to be asked is whether or not the German Government in reality is helping or hurting the progress of women with this program. HMR
April 2015
It seems that these women would or should be highly ofended that the German government believes that as a group they are inadequate and cannot achieve the same levels of success without governmental help. 27
Europe
Rebuilding Europe The German Way Vaed Prasad
“U
nited in Diversity,” the official motto of the European Union, has been challenged by the Great Recession that started in 2007. The Recession transformed the European Union from a coalition of nations to a hierarchy of economic powers. It left several member countries in grave debt, leading larger economic titans to bail them out and wield significant influence in the management of those countries, thereby shifting the balance of power across the EU.
The Great Recession that affected Europe bore its roots in the United States subprime mortgage crisis. Complex policies in the US encouraged home ownership and granted easy access of loans to risky borrowers. When the housing bubble burst, borrowers of subprime mortgages were unable to afford their mortgage payments, resulting in extremely high delinquencies and foreclosures. The value of securities tied to United States real estate plunged and in a blink of an eye depleted the financial assets of
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many individuals, companies, and banks all over the world. While impacted by the mortgage crisis, high government deficits and accelerating debt levels precipitated the Recession’s move to Europe. Countries that were most affected by this debt crisis experienced a rise in interest rates for government bonds, reflecting investors’ concerns about their debt sustainability. All members of the European Union are obligated to follow the Maastricht Treaty of 1992 and are required to keep
Europe “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.” However, a number of member countries have struggled to stay within these guidelines. In 2009 Greece under-reported its numbers, claiming to have a budget deficit of “6-8% of GDP.” However, immediately after the Pasok party won the national Greek elections, the officials revised the deficit to 12.7% of GDP. Shockingly, Greece’s actual debt exceeded $400 billion and was over 120% of the country’s GDP. The Greek government’s approach to public sector jobs, pensions and social benefits, as well as its high military expenditures, created a structural deficit challenge that was difficult to break out of without antagonizing its citizens. Additionally, Greece’s two main industries, shipping and tourism, suffered significantly due to the global economic slowdown, worsening the situation. Credit
Portugal, which was among the first to enter the crisis, fell victim to speculation and anxiety among bond investors. Its financial markets froze making it impossible for Portugal to raise money. Spain, on the other, suffered from the housing bubble as the real estate prices had risen 200% from 1996 to 2007. As the bubble burst, property values dropped and the government had to borrow heavily to deal with the consequences. Portugal and Spain sought bailout loans for €78 billion and €100 billion respectively, which came with severe austerity clauses that further exasperated the situation. The citizens of Greece, Spain and Portugal, already under pressure from the recession and high unemployment rates, responded to the austerity measures with strikes, riots, and violence. They viewed these austerity measures as a challenge to their already difficult way of life. With millions of layoffs and increasing un-
High government deficits and accelerating debt levels precipitated the Recession’s move to Europe. rating agencies responded by downgrading Greek government debt to junk bond status. While Greece was hit the hardest, other member countries such as Portugal and Spain faced similar challenges. In order to rescue the impacted member countries, bailout programs were created and delivered jointly by the International Monetary Fund, the European Commission, and the European Central Bank, collectively nicknamed “Troika.” Special purpose programs such as European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM) with combined lending capacity close to €1 trillion were created to provide financial support to Eurozone countries in financial trouble. Greece, for example, received a €240 billion bailout loan conditional on implementation of austerity measures, structural reforms and privatization of government assets. Portugal and Spain also suffered from poor management of public works, inflated wages and lax supervision of financial sectors. The bank bailouts and the economic downturn increased their deficit and debt levels and led to a substantial downgrading of their credit rating.
employment rates, Spain for example, in 2011 saw more people leave the country than come to the country for work. Youth unemployment rates climbed from 30% in 2010 to 60% by 2013, with many calling them the “lost generation.” In contrast, Germany was already in process of making structural reforms to overcome lost competitive edge following the reunification boom in the early 1990s. As such it was able to dodge the full brunt of the Eurozone crisis. Germany had proactively taken steps related to labor markets, moderate wage agreements, more flexible collective bargaining legislation and cleanup of firms’ balance sheets to manage its budget. The austerity measures that inflamed others were already part of German policy and ideology. As the Swabian saying goes, “Schaffe, schaffe, Häusle baue!” which means “Work, work, build your little house!” That sort of striving and discipline was embedded deep in German identity. Consequently, Germany emerged as the economic powerhouse of Europe. Germany led the European Union’s bailout efforts. Chancellor Angela Merkel stated, “Quite simply, Europe’s future is
April 2015
$3.82 trillion
Germany’s GDP in 2014, The Highest Of All EU Nations
31.6%
The Percentage By Which Germany’s GDP Exceeds that of France, the Second-Highest EU GDP
14.9%
German GDP Growth Since 2008
57.2%
German Debt as % of GDP
-12.5%
Spanish GDP Growth Since 2008
71.9%
Spanish Debt as % of GDP
-28.2%
Greek GDP Growth Since 2008
155.4%
Greek Debt as % of GDP www.global-gateways.com
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source:senzanubi.it
at stake.” The bulk of the containment measures relied heavily on Germany’s financial support and economic strength. Its top credit ratings served as an anchor and provided high degree of confidence to investors. While Germany’s role in stabilizing the crisis and helping a number of member countries emerge out of the Recession cannot be ignored, German sociologist Ulrich Beck argues that the crisis transformed Germany to a “Political Monster.” In a Harris poll conducted in June of 2013, 88 percent of respondents in Spain, 82 percent in Italy, and 56 percent in France claimed that Germany’s influence in the European Union was too strong. This strength was not militaristic, but rather economic. While the GDP per capita for Germany increased 2% during the recession (2008 – 2013), it decreased 13%, 19% and 34% for Portugal, Spain and Greece respectively. According to Beck, “The new German power in Europe is not based as in former times on force. It has no need of weapons to impose its will on other states… It has no need to invade, and yet is ubiquitous.” The austerity measures
source: rusi.org
the crisis, many people think they are losers because the austerity policy pursued jointly by Berlin and Brussels deprives them of their means of livelihood – and also of their human dignity.” With increasing unemployment rates, the popular belief is that Merkel, the unofficial queen of Europe, is imposing German values on feebler nations. As the head of Europe’s strongest economic power, Merkel is in a position to dictate the terms under which struggling Eurozone countries can apply for further credit thereby eroding their democratic autonomy and sovereignty. By prescribing austerity as the singular approach for the European Union, she refuses to acknowledge that there may be more than one approach to recovering from the debt crisis. The European Union, led by Germany, has taken an unyielding commitment to fiscal and monetary virtue, making persistent efforts to balance budgets while remaining vigilant against inflation. In contrast, the United States took a divergent approach of stimulus and spending. The U.S. economy has exhibited strong
“The popular belief is that Merkel, the unofficial queen of Europe, is imposing German values on feebler nations.” that Merkel has prescribed for sick indebted European economies has earned her a spread of names from “Merkiavelli” to “Frau Hitler.” According to Beck, “In the countries most harshly affected by
recovery from the crisis, but the same can’t be said about Europe. Unemployment rate in Eurozone is almost twice the U.S. level due to budget cuts in public sectors and new laws that make it easier
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for companies and governments to fire people. U.S. policies focused on spending in the mean time have returned the unemployment rate to the pre-crisis level of 5.7%. While the European Union’s policies have kept inflation below the official target, deflation has become an impending risk for Europe. The current situation in the EU resembles Japan in the 1990s that led to the “lost decade.” As it did in Japan, the inflation rate in the EU has declined to the five year low of 0.5% well below ECB’s target of 2%. According to a recent International Monetary Fund report, spending on public works during a downturn can pay for itself by boosting economic growth. However, the German controlled European Union refuses to increase debt and argues that E.U.’s budget must always be balanced. This insistence of not increasing debt and stubborn focus on austerity as the only solution carries the risk of the European Union getting “stuck in persistent stagnation.” The Recession has challenged the core objectives of unification and equality in the European Union, altering its balance of economic power. Germany has emerged as the economic powerhouse exercising significant influence on other Eurozone countries. While German imposed austerity policy through structural reforms and budgetary discipline ensures that irresponsible behaviors of member countries such as Greece, Spain and Portugal are not rewarded, it rejects other approaches to recover from the crisis, including those that have proven successful in the United States. Germany’s lack of recognition for flexible and diverse approaches to assisting member countries has put the entire European Union at the risk of continued recession. HMR
Europe Europe
Putin Dreams of Empire Daniel Lee
www.global-gateways.com
January April 2015 2015
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ussia’s recent establishment of the Eurasian Economic Union (EEU) has garnered widespread notice due to its potential implications for the balance of power among European nations. Despite many initial impressions of the alliance as an emerging menace to world order, internal divisions and tensions over Russia’s coercive approach continue to be revealed and will hurt the Union’s chances of success. As of now, the Union aims to bring economic benefits to each of its member states by facilitating the movement of capital and services and implementing agriculture and energy policies, though the Union may seek further economic integration and perhaps even make provisions for a single currency in the future. Russia, Kazakhstan, Belarus, and Armenia are the current members of the Eurasian Union, and Kyrgyzstan will accede this May. The introduction of the EEU has been characterized as a political ploy by Russina President Vladimir Putin to restore the image and political reach of Russia. Particularly in light of Russia’s recent display of aggression in Ukraine, it is clear that the expansion of the EEU is Moscow’s attempt to”effectively lock countries into Moscow’s political and economic orbit,” as explained by Professor Alexander Cooley of Barnard College. As stated by Lilia Shevtsova, an expert on Russia, President Putin intends for the Union to “be a political alliance, not only the customs union, with supranational institutions that will be hosted by Moscow and apparently dominated by Russia.” As a result, Russia’s increasing aggression in expanding the Union has been perceived by its critics as a threat to the world’s current economic and political order. Though the Union’s recent trade policies confirm that its purpose is to fulfill Russia’s neo-imperialistic interests, Putin’s power plays, the EEU’s stagnating market, and current sanctions against Moscow eliminate its chances of becoming a powerful multilateral institution.
Russia’s expansionist agenda has raised significant concern among both Western nations and former Soviet republics alike. The Kremlin’s unilateral action during the Ukraine crisis to both annex Crimea and introduce counter-sanctions on Western food imports went without any consultation with its union partners. Tensions between Russia and other G8 countries have only hardened skeptics’ positions that it is increasingly dangerous to ally with a Russia that is essentially an international outcast. Moreover, the EEU’s authorizations, working conspicuously in favor of Russia, have clearly not helped the mutual skepticisms between Moscow and the other member states of the Union. Therefore, member states of the EEU such as Kazakhstan have decided to keep the Union purely economic with respect to each nation’s political system, as initially proposed. In addition to the waning likelihood of further political integration, the Kremlin’s reckless actions have severely hampered its economic ties with its allies as well; in opposition to Moscow’s import sanctions against Western goods, Kazakhstan and Belarus have aggravated division within the Customs Union by restoring protectionist policies against Russia. As the Kremlin violated basic principles of the Union by limiting the transit of goods across its territory last November, including those destined for Kazakhstan, Belarus retaliated by restoring its own customs controls. These internal conflicts at the core of the EEU’s illusion of economic and political unity since the sanctions war, along with Moscow’s war against re-exports, show no sign of ending. Russia remained undeterred, banning twenty-three different groups of Belarusian producers from its domestic market to punish their smuggling of sanctioned EU goods and selling them under Belarusian labels. The intensifying discord persisted as Belarusian President Aleksander Lukashenko not only attacked Russia’s policy as “stupid and brainless” but also expressed ambitions to “normalize relations with
As Russia, the EU’s largest player, continues to spiral into fiscal crisis, the consequences it will have on its bordering allies are both critical and inevitable. 32
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the West” by liberalizing the visa regime. Faced with choosing between either an increasingly despotic Kremlin or the coalition of Western nations as political and trade partners, Russia’s current allies in the EEU seek to avert political integration with Moscow, particularly when their influence may be diluted by such a pariah. At the point at which negotiations and diplomacy within the Union are failing to even maintain its economic policies, and Russia’s expansionism coming at the cost of coherence, Putin’s long-term hopes to reconstruct “a Greater Russia” remain impotent. As Russia, the EEU’s largest player, continues to spiral into fiscal crisis, the consequences it will have on its bordering allies are both critical and inevitable. With Russia losing two billion U.S dollars in revenue for every dollar fall in the oil price, the World Bank has estimated that Russia’s economy would shrink by at least 0.7% in 2015 and continue to sink into a complete recession. Meanwhile, Russia’s more reliable partners, namely Belarus and Kazakhstan, are preoccupied with issues of devaluation of their own currency, and are resorting to restrictions on foreign currency exchange. Depreciation of the Russian ruble by over 40% in the past year has had enormous financial ramifications for its fellow members of the EEU. Belarus, which relies on Russian firms for over 40 percent of its exports, has absorbed much of the repercussions of Russia’s economic troubles. As a result, the Belarussian Central bank saw a devaluation of national currency by 23 percent against the U.S. dollar in January, in spite of attempts to keep Russia’s crisis from leaking across the border. According to Bloomberg Businessweek, the fall of the ruble has also adversely impacted the Kazakhstan monetary system, forcing them to commit $3 billion since the summer of 2014 to help support its own currency. In addition to Kazakhstan’s own economic concerns with falling oil prices, its trade ties to Russia have further deteriorated the national economy. With the growth of cheap imports from Russia and the decline of consumer demand, the Kazakh economy has lost several crucial opportunities to recover, its growth slowing down this year to three percent. In addition, Furthermore, newly integrated nations Armenia and Kyrgyzstan, have reportedly seen decreases in the value of their remittances,
Europe
With its only viable allies, Belarus and Kazakhstan, unsupportive of its expansionist and neo-imperialistic trade policies, Russia is left isolated with no backers to cushion its anticipated financial crisis this year. a major source for government revenues, by 30 to 50 percent. At the present rate, the peripheral economies of Post-Soviet states are left bound only to a sinking Russia. As the various consequences of Moscow’s financial crisis carry over to its EEU trading partners, Kazakhstan and Belarus are actually seeking to loosen economic ties with the Kremlin and shift their dependence away from Russia. The Union’s long-term goal for 2025 to integrate member countries’ economies into a single market with free movement of goods and labor, is proceeding to fall apart. The sole solution for these Eastern European nations to insulate themselves from degradation of their economy and national sovereignty by Russia, is gaining entry into the European Union. Losing Russia as a trading partner in exchange for increased access to abundant structural funds and a more established financial market, will prove a substantial positive pay-off for current EEU member-nations. Regardless of its current economic challenges, the Kremlin has maintained its unethical approaches to pressure its neighbors into joining the EEU. Through leveraging the security it offers Armenia, Russia succeeded in coercing the nation to discontinue its free trade pact with the European Union and instead join the EEU in September 2013. Similarly, Putin engaged in significant arm-twisting to integrate the reluctant Kyrgyz government into the EEU. With Russian energy corporations completely dominating the Kyrgyzstan’s gas industry, Kyrgyz president Almazbek Alambayev was left publicly repeating the fact that it had no alternative but to yield to Russia. Notwithstanding Moscow’s previous successes in integrating new member-states to the EEU, its coercive tactics undermine the fundamental unity and fidelity required for any organization. Incorpohttp://a.scpr.org/i/f74c73a76f939a02dration of these smaller countries simply
through bullying and intimidation tactics will create a weak foundation for the EEU, certain to exacerbate any pre-existing frustrations with Russia. Nevertheless, in spite of the Kremlin’s domineering attempts to bring more surrounding post-Soviet nations into its organization, potential candidates including Tajikistan and Moldova are economically weak and yet unable to sustain their own national markets. The increasing strife as a result of Putin’s precipitous annexation of Crimea, the import sanctions war plaguing the Kremlin, and the bitter economic realities of all of the EEU’s members, neutralize the possibility of an effective multilateral financial framework. Pressures from surrounding European countries fearing restoration of the Russian empire have only further escalated political tensions, bound to curtail any future growth of the Eurasian Economic Union. With its only
viable allies, Belarus and Kazakhstan, unsupportive of its expansionist and neo-imperialistic trade policies, Russia is left isolated with no backers to cushion its anticipated financial crisis this year. Divided over its contradicting preoccupation with influence and its desperation to gain financially stable trading partners, Moscow continues to obstruct any latent progress the Union may have been able to make to begin with. The Eurasian Economic Union’s development of a successful trade liberalization model pales In comparison to that of the European Union, with little chance of expanding beyond Central Asia. Contrary to those who fear the collapse of the Western powers and a Eurasianist market concentrated in Russia, the Union’s current economic climate and lack of obligation to its rules encourage us to dispel these fears as, at best, irrational. HMR
source: xe.com
April 2015
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Anarchy and a Failing Government in Greece Sydney Katz
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stilpon.blogspot.com
reece’s new left wing government is facing battles on two very important fronts. First, the entire world is putting pressure on the country so it will repay global debt while remaining a member of the European Union. Internally, its citizens are waiting for changes promised by the new government that have not yet been implemented. The new ruling party, Syriza, remains popular as anti-government protests have almost dissipated since the election two months ago, but this will not go on for long as high unemployment, very poor living conditions and malnutrition are all still on the rise. The fear is that anarchists could try to overthrow the new government if conditions do not improve. The next few months will be very important in determining the future of Greece. The only way the government will stay in power is if it remains committed to keeping its election promises while remaining to stand on firm ground against the European Union and their demands for repayment of the debt. For over 40 years, Greece has been run by leaders from 2 right wing political parties
which had similar views. PASOK and New Democracy became very powerful by giving out political favors in exchange for votes. They increased pension benefits for state employees, awarded infrastructure projects to companies owned by government officials, and implemented widespread social benefit programs targeted at party supporters. All of this ended up creating a costly system that put the Greek government into huge debt and led to high inflation and currency devaluations. Newspapers around the world started running headlines about Greece being on the brink of bankruptcy. Public unrest also started after it was discovered these parties became very lax on tax collections from the rich who were big supporters of the parties. Greece’s debt became a huge problem for the European Union as it was having an effect on the Euro. Greece continued to borrow without having the funds to repay the billions owed to banks and the EU. In order to receive further loans and aid, the former ruling parties adopted austerity programs, which led to widespread protests
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and ultimately to a change in the leadership in Greece. Under the austerity programs adstilpon.blogspot.com opted for the benefit of the EU, Greece agreed to wage cuts for civil servants, thousands of layoffs, and a reduction in subsidies for essentials like electricity. This greatly angered the country as people were now receiving smaller pensions, electricity and other state provided services were no longer subsidized, and thousands of government jobs were eliminated. Social and political unrest were on the rise. In January, Greek radical leftists were the winners of the Greek elections. Therefore, the former right wing government who favored the demands of the European countries over the interests of the Greek population were voted out of office. After being in power for over 40 years, the right wing government was defeated 3 months ago in Greece’s elections. The new Prime Minister Alexis Tsipras won over 40 % of the popular vote and his party, Syriza, continues to secure more seats in the Greek parliament. The question in everyone’s mind is whether the newly elected government can overcome
Europe over $240 billion of debt while maintaining its promises made during the elections to the voters in Greece. Prime Minister Tsipras has said “the Syriza government’s priority will be for Greece and its people to regain their lost dignity.” In order to do this, he has declared that the old era will be over, and there will be a lot of changes. First, Tsipras wants to focus on improving the Greek economy rather than paying down debt to the European Union. He wants to stop spending money on primary budget surpluses, stay within the Euro, increase government revenue, lower the tax rate, raise minimum wage, and stop the sale of state assets. In addition to helping the economy, Tsipras wants to improve living conditions for the poor. This includes protecting more homeowners who cannot pay their mortgage, and create jobs. Most importantly, he plans to introduce an aid program for the poor, and low income pensioners, including free electricity, food vouchers, medical care, travel privileges, and a tax break on heating oil. Overall, the Greeks are hopeful of change, but are skeptical of the ability of the government to keep their promises. Not far from Parliament, Evangelia Alexai has been watching her new government with high expectations. She is a leader of a group of cleaning ladies who became national symbols of the harsh effects of austerity adopted by Greece’s old right wing government when they were fired from their jobs as cleaning ladies in the Finance Ministry. They have been sleeping in tents outside the ministry for months, demanding to be hired again, and Syriza has already pledged to pass legislation soon to put them back on the government payroll with other fired workers. Greek Prime Minister Alexis Tsipras has
kept one of his promises by eliminating a 5-euro fee to access state hospitals. He has also promised to hire 4,500 healthcare workers to ease what he refers to as a humanitarian crisis in Greece. According to the new left wing government, years of deep cuts in health spending have crippled the healthcare system in Greece. Critics of the government and foreign leaders are wondering how Tspiras expects to pay for these cuts and new hires. In fact, these very actions bring into question whether Greece will survive its current financial crisis as the government cannot afford these new programs. Yet, according to a high ranking Greek official, “We are a left-wing-government. If we have to choose between a default to the IMF or a default to our own people , it’s a no-brainer.” Besides the possibility of widespread social unrest and suffering, Greece’s newest government is facing a near economic crisis over unpaid debt and the decision over whether to stay in the Eurozone. German Chancellor Angela Merkel has said “there is an increasing risk that the stand-off between Greece and the rest of the Eurozone would end with a very bad outcome for everyone.” The Eurozone is hesitant to loan Greece any additional funds unless the new government comes up with a new list of reforms to show how Greece will avert bankruptcy. The Eurozone does not want Greece to leave the EU as it will result in other European countries with similar economic problems defaulting on their debt devaluing the Euro. However, the EU and other world banks are refusing to loan or provide funding for Greece. They want assurances Greece can withstand the crisis and that the government has a plan that will ensure the government can start repaying the national debt. Greece is facing an April deadline to pay 460
April 2015
million euro to the International Monetary Fund and owes another 760 million euro payment in May. The fear is Greece will not make either payment and will be forced to leave the European Union. To date, all requests for an extension or reduction in loan payments have been conditioned on Greece putting forward a plan of financial reforms for the country. If Greece is forced out of the EU this will force the government to nationalize its banking system and return to the drachma as its currency. Greeks do not want to return to its old currency and have no faith in its banking system. In fact, deposits in Greek banks have continued to decline having reached a 10 year low as people through out the country are withdrawing money from their bank accounts. Therefore, if Greece is forced to leave the EU and return to its own currency it is expected the banks will become insolvent. Insolvency in the banking system will lead to political unrest in Greece and even anarchy. Greeks fear a return to its own currency as leading economists have already been quoted as saying the drachma will be worthless. There will be widespread calls for a new government in Greece if the country is forced to abandon the Euro as its currency. Unfortunately, last week, the rating agencies again downgraded Greece’s sovereign rating from B to CCC amid growing uncertainty over the new government’s pledge to implement necessary reforms to restart bail loan payments and avoid default. It is thought the country may run out of cash sometime in April, which could have a rippling effect throughout Europe. The current plan for Greece’s economy does not seem to be working. According to recent statistics, unemployment is at 25% and youth unemployment has risen to 50% as no one can find work. The country continues to face a health emergency as doctors continue to treat people suffering from malnutrition. The new government wants to use loans and other funding to help jump start the economy. They do not want to use it to pay off old debt. Neither the IMF or the European Union seem willing to sit back and watch the new leftist Greek government increase spending while not honoring Greek’s sovereign debt. Moreover, unless the Greeks are convinced the new government can balance the interests of the country against the demands of the EU and the IMF, they will demand a change in leadership. The new leadership has made a lot of promises but promises alone will not create jobs and provide stability to an economy tinkering on bankruptcy and possibly anarchy. HMR www.global-gateways.com
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South America
drug trade
T
he drug trade is the staple of illegal activity in many Central and South America countries. Drug cartels reap vast profits from producing and surreptitiously moving drugs to the United States, Europe, or other developed regions to sell them. The governments of afflicted countries have made major efforts to dismantle the trade in banned substances, but the trade remains entrenched, especially in Colombia and Peru. For these countries and any other nations facing an organized drugs industry, the solution is aggressive military force used against the leaders of big cartels and a policy of promoting legal economic growth and stifling corruption. President Richard Nixon started the American War on Drugs in 1971, establishing both treatment programs for addicts in the US and government agencies designed to attack drug production and distribution. Currently, the United States Drug Enforcement Administration (DEA) undertakes missions alongside military, paramilitary, and police forces to try to stamp out drug trafficking. The US has
one of the largest vested interests in stopping the drug trade; billions of dollars of illicit drugs cross the US-Mexico border or otherwise enter the US each year. Colombia faced a rich and violent enemy in the form of the cocaine cartels of the 1970s and ‘80s. Corruption was rampant, hamstringing efforts by the government to control drugs trafficking. However, Colombia went on the offensive and killed or captured the drug kingpins, leading their cartels to fall apart. It has since continued the use of force against trafficking rings and has also undermined the economic advantage of growing coca by offering money to farmers who cultivate legal crops. In the 21st century, Peru is the new narcotics hotspot of South America, and it needs to follow a formula like Columbia’s to combat the threat of the drug trade. Relatively small smuggling operations started in Colombia in the 1970s. Traffickers who had previously carried marijuana into the US in suitcases started transporting cocaine. The new product was highly profitable when sold on American
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soil, bringing in over $20,000 per pound. Pablo Escabar created the Medellin cartel, which started ferrying drugs into the United States using small aircrafts. His cartel flourished, but it faced competition from the Cali cartel, which focused more on profiting from its illicit businesses by investing in above-board enterprises. Large syndicates like the Cali cartel relied on webs of corrupt police officers, judges, and politicians to facilitate their operations. A former bodyguard in the Cali cartel revealed his personal experience with bribery: he delivered around $1 million in bribes, the largest being $500,000 to a member of the Salvadorian air force in exchange for 4 bombs (intended to be used against Pablo Escobar). The cartel paid hundreds of thousands of dollars every year to keep police and counter-narcotics forces from significantly disrupting its operations. Many law-enforcement secrets like raid plans and phone taps were exposed to the cartel, damaging Colombia’s ability to fight it. The Medellin cartel was crushed in the 1990s by the opposition of the Cali ring and
South America
stephen phillips counter-narcotics operations by the Colombian government. Security forces killed Escobar in 1993, and his lieutenants turned themselves in to avoid harsh sentences. The Cali cartel soon suffered the same fate, with its leaders arrested and imprisoned. After the demise of Colombia’s two largest trafficking groups, remaining members of the cocaine industry decided to form smaller groups that carried out specific steps in the production and transport process. This decentralization allows them to fly below the radar and more easily avoid Colombian and American drug-enforcement efforts. In 2000, the US Congress passed Plan Colombia, a funding package designed to strengthen Colombia’s drug enforcement efforts and to stabilize the country’s precarious political and military situation. At that time, 90% of the cocaine consumed in the United States originated in Colombia, and a 2001 Gallup poll found that 58% of Americans were greatly concerned about drug use in the US. Plan Colombia allocated $1.3 billion in aid to the South American nation, including an initial $6
32 million for the armed forces and police and $227 million for strengthening the economy, dealing with social problems like displacement, and fighting corruption. After 9/11, the US increasingly allowed Colombia to use Plan Colombia funds to fight insurgent groups designated terrorists, such as the Revolutionary Armed Forces of Colombia (FARC−Fuerzas Armadas Revolucionarias de Colombia), an eminent leftist rebel organization. This freedom allowed Colombia to address some of its underlying security problems, which in turn strengthened national security and decreased the ease of drugs trafficking. Under the guidance of the DEA, Colombia established a Sensitive Investigative Unit (SIU) designed to gather intelligence on drug operations and direct strikes by the police and military. To form the elite SIU, which was established in 1997, American DEA agents recruited members of the Columbian police and counter-narcotics forces and administered polygraph (“lie detector”) and drug tests to ensure that cartel operators would not infiltrate the group.
April 2015
Today, the US continues to oversee the training and equipment of the SIU, trusting it with many high-profile drug busts. Using information gleaned mostly from wiretaps, SIU agents in 2012 learned of a boat shipment from the Colombian town of Cartagena to the Dominican Republic that was to carry at least a ton of cocaine. The powerful, fast boat left Cartagena in the middle of the night, its crew unaware that their mission had already been compromised by SIU intelligence. By the time the craft arrived in the Dominican Republic, local police were waiting for it. A firefight resulted, killing the captain of the smuggling boat and leading the to the seizure of the onboard drugs. However, around half of the narcotics that had set out from Colombia had not made it to the Dominican Republic, either dumped into the Caribbean or transferred to another boat. SIU infiltration of the highest levels of drug production and smuggling rings allows it to direct targeted, highly successful counter-narcotics operations. The government has fragmented the
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South America drug industry in Colombia, but its total extermination remains a high priority. The country’s drugs industry is estimated to be worth $10 billion, with 43% of the world’s coca supply originating from Colombia. For decades, Columbia has correctly been focusing heavily on engaging and destroying cartels and their leadership with military force, and now it must remove the underlying economic incentives that lead farmers to grow coca in the first place. President Juan Santos has decided to take a less confrontational route to try to end the cultivation of coca by negotiating with FARC. The group controls some rural areas of Colombia, profiting from a tax it levies on coca farmers. FARC may have the influence to implement programs like crop substitution, where coca farmers are subsidized and otherwise given assistance by the government to grow legal crops. The Colombian government hopes to end the need for raids and crop fumigation (the spraying of herbicides on coca fields from aircraft) by successfully negotiating with FARC. Destabilizing the economic underpinnings of
drug production is the surest way to permanently end the narcotics trade, but only the downfall of the largest cartels has provided the necessary security to pursue this goal. Peru is now the largest cocaine producer in the world, but its narcotics organizations use a strategy different than that of the Colombians. Instead of focusing on selling to the United States, which would incur the wrath of the well-organized and powerful DEA, they profit from lower-risk regions like Brazil and Europe. Peruvian coca farmers sell their crop to local organized-crime groups, who then often delegate delivery responsibilities to larger cartels from Mexico or Colombia. An estimated 325 tons of cocaine is produced in Peru each year, reaping $1 billion in revenue. The Peruvian government has taken a much less aggressive stance towards the drugs trade than has Colombia. Peru delegated $300 million for drug enforcement in 2014, a small increase from the $278 million spent in the previous year but significantly less than the amount spent by Colombia. Peruvian counter-narcotics
Because of the drug trade,Latin America has the world’s highest crime rates
Cocaine trafficked in Colombia, Bolivia, and Peru is traficked to 174 countries 38
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forces destroy improvised dirt airstrips, which traffickers use to move cocaine to other South American countries on small aircraft. However, most are quickly rebuilt when drug gangs offer local villagers money to repair them. Peru ended a policy of firing on aircraft used to carry narcotics after it mistakenly attacked a civilian plane, killing a US missionary and her daughter. There is little political will in Peru to fight drugs trafficking because, as far as outside observers can tell, very little violence is being committed by organized criminal groups. Data from Peruvian authorities is inconsistent, but large-scale cartel violence like that seen in Colombia certainly does not exist. Cocaine production thus brings riches to the country without the death that usually promotes counter-narcotics efforts. The DEA will generally leave Peru alone as long as it does not export drugs to the United States, and thus enforcement is likely to remain lax. However, the histories of drug-producing countries like Colombia teach us that violence cannot be avoided in the trade: eventually factions will encroach upon one another or the market will sour, inevitably leading to intergroup fighting. The only way for Peru to break up its drugs industry is for a leader to step up and initiate the military crackdown and economic stimulus necessary to undermine the narcotics trade. As long as producing coca is more lucrative than growing legal crops, farmers will choose coca. Destroying the leadership and infrastructure of organized crime in Peru will undermine farmers’ ability to sell coca, and subsidies for growing legal crops will incentivize them to switch. US or European funding or expertise could help the Peruvians find the right path forward. Since the 1970s, power has shifted away from the notorious drug cartels of Colombia. The deaths or surrenders of cartel kingpins caused the collapse of the highest level of Colombian organized crime, shrinking the relative size of the drug trade there and empowering the Colombian government. Rebel groups and other paramilitary organizations with links to narcotics continue to wield a great deal of power, but negotiations and economic deterrents are undermining them. Peru is in an earlier stage of drug trafficking than Colombia, with its smaller, decentralized groups harder to confront. It is targeting new markets and using new tactics, but the same strategies used to fight the drugs trade in Colombia could be effective at stifling it in Peru. HMR
South America
THE STATE OF SOUTH AMERICAN DEMOCRACIES BY DANIEL FRACKMAN
April 2015
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t is clear that South American democracies are in bad shape. Corruption, poverty, and vast income inequality have hindered these governments’ ability to succeed. Another reason, and possibly the most important, for why South American democracies are having trouble functioning is their deficient structure. Think about it this way: these democracies are a combination of the United States’ political structure and that of some European nation’s. As a recent article in The Economist describes it, “Latin America combines directly elected presidents, as in the United States, with multiparty legislatures chosen by proportional representation, in the manner of many European Parliamentary systems.” Therefore, many of these governments have been stagnant due to conflict between the administrations and Parliaments. In certain South American nations, weak executives do not hold the majority in their Parliament, leading to the formation of coalitions among legislative parties within parliaments. In addition, some South American governments have been cutting ties with developed nations, mainly the United States, as well as the International Monetary Fund and the World Bank. Dysfunctional governments are not a total surprise in South America. Democracy flourished only in the 20th century, and there has been no history of democracy on the continent since South American nations have primarily had military rule. Therefore, some would go as far as to say that it is predictable that these democracies have run into trouble.
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The stand-out examples of currently struggling South American democracies are Brazil and Argentina. On March 15th of this year, a huge protest occurred in São Paulo in which the Brazilian public rallied against President Dilma Rousseff. This protest exemplifies the diminishing approval citizens have for their executives. In addition, the Argentinian President, Cristina Fernández de Kirchner, is a model of the corruption that exists within South American governments. Alberto Nisman was a prosecutor who was shot dead shortly before he was going to testify against Mrs. Kirchner. There are a plethora of theories regarding his death, but the prevailing belief is that the president orchestrated his murder to protect herself from indictment. Alberto Nisman’s death epitomizes corruption and demonstrates how problematic it is in South America. The main reason behind the growing dislike repugnance of South American executives is due to recent economic decline in the region. Recently, the economic growth that these countries were experiencing has declined, and, therefore, the decrease of poverty has slowed down as well. These economic trends have not helped public opinion of the leaders in these nations. In order to overcome this trend, it is imperative that political parties solidify their structure. This includes centralizing the parliament by consolidating the plethora of parties into larger coalitions and resulting in fewer parties, as well as implementing methods to reduce corruption, like fixing the way funding is organized.
Brazil yet again provides an apt example for where reform is vital. To quote The Economist article again, “The need is especially acute in Brazil, which suffers the world’s most fragmented party system, with the 513-seat lower house of Congress [divided] among 13 ‘effective’ parties (ie, those with more than a handful of seats). The response has ben an increasingly dysfunctional ‘coalitional presidentialism.’” The reason that this situation is such an issue is because there are numerous parties in the Parliament and many of them hold only a few seats. This leads to the “coalitional presidentialism” mentioned in the article. Therefore, presidential candidates do not represent just one party, but they lead a coalition of multiple parties. Continuing with the case of Brazil, President Rousseff represents a nine-party coalition, and, as a result, her cabinet consists of 39 ministries so that all parties are represented. To put this in perspective, there are fifteen members in the president’s cabinet in the United States. This decentralized structure is obviously inefficient, and, as a result, it creates unnecessary government expenses. Cláudio Couto, a political scientist in Brazil, believes the best way to fix the structure is to limit the number of parties in Parliament. He believes that one of the first steps to be taken must be to prohibit electoral alliances, which would result in the merging of parties. While limiting the number of parties in Parliament might fix the problem of party fragmentation, the issue at large requires a dual-faceted approach. The second measure to be taken is to reform political financing. This is a necessary
The stand-out examples of currently struggling South American democracies are Brazil and Argentina. On March 15th of this year, a huge protest occurred in São Paulo in which the Brazilian public rallied against President Dilma Rousseff... In addition, the Argentinian President, Cristina Fernández de Kirchner, is a model of the corruption that exists within South American governments.
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South America
step to reduce corruption, which is one of the more pressing issues in South American democracies. The article in The Economist describes a possible remedy. “The second task, in Brazil and elsewhere, should be to enforce stricter rules on party financing… Public opinion is hostile to state funding of parties. For that reason, Peru’s presidents have since 2007 stopped implementing a law on public funding. Daniel Zovatto of the International Institute for Democracy and Electoral Assistance, an inter-governmental body, favours bans on corporate and anonymous donation, and partial public funding in return for much tougher scrutiny of party finances and greater internal democracy.” It is clear that some restrictions must be made on funding, and there has to be transparency when dealing with political donations to limit corruption. Only after these nations complete this reforms can the governments function properly. South American governments, in addition, have been cutting ties with international bodies such as the IMF (International Monetary Fund) and developed nations, primarily the United States. There is justification for this; South America is trying to protect itself from the “shock doctrine.” This idea comes from the book, The Shock Doctrine: The Rise of Disaster Capitalism, written by Naomi Klein. She argues that some developed nations exploit crises and disasters to promote their own agenda and to implant policies that would normally receive some resistance. This is not an unfounded theory. The same pattern has occurred before throughout Latin America and the
Caribbean. Haiti provides an instance of a possible shock doctrine occurence, and how nations are trying to avoid such a situation. During the crisis that ensued after the 2010 earthquake in Haiti, the IMF gave a loan of 165 million US dollars. After that, the IMF agreed upon another loan of $100 million to Haiti; however, there was a call for the money to be given as a grant, not a loan. This response was due the possibility that the earthquake would be used to implement the shock doctrine on Haiti. Later, much to the relief of shock doctrine believers, the IMF clarified that the loan would be “interest-free,” and the fund stated that they would try to get rid of Haiti’s debt. Ecuador implemented measures to protect itself from the shock doctrine a couple years earlier when the president, Rafael Correa, refused to renew the lease on the American military base in Manta. While this might not seem to help reduce the possibility of the shock doctrine, it does reduce connections with the United States. Why is this helpful? Well, South American countries believe America is a key perpetrator of the shock doctrine especially in Latin America and the Caribbean. The reason being that the United States is one of the primary sources of aid for countries in the region of Latin America. How can these nations afford to lose such a valuable ally? In truth, the answer is quite simple: The Bank of the South or BancoSur, which, simply put, is a monetary fund that is operated by South American countries. One can think of it like the IMF, but only for the South America. The importance of this
April 2015
bank is that nations in the region no longer have to go to the US Treasury or the IMF for loans and aid. The result, initially, was quite tragic for the IMF. Naomi Klein wrote an article on the news website Common Dreams. She wrote, “In 2005 Latin America made up 80 percent of the IMF’s total lending portfolio; the continent now represents just 1 percent.” The article was written in 2007, and the South American nations that were not willing to make an agreement with the IMF have since joined back again. South American countries have another place to turn to besides the United States and the IMF, so they no longer need to focus on their shock doctrine vulnerability. The next step is to utilize the Bank of the South to its full extent. If these states were worried about shock doctrine vulnerability with America and the IMF, then they should look to the Bank of the South for loans to build up infrastructure and create programs to negate poverty in the region. However, it is important for these nations to reform the political landscape as mentioned earlier so that corruption is eliminated. Only then will these countries be able to utilize the loans to reduce poverty, which, as stated previously, is one of the roadblocks for these democracies. While this conflict is easy to explain, it is rather difficult to solve. The issue can be laid out, and the plan can be outlined, but, ultimately, the responsibility falls to the governments of these states to reform themselves from the inside out. Only then will these democracies be able to prosper. HMR
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South America
BRAZIL’S GROWING MIDDLE CLASS ANKIT GUPTA T
he BRIC countries’ emergence into the global economic sphere in the last ten to twenty years has been staggering, and based off of opinions from Goldman Sachs, it is very plausible that the BRIC economies could compete with G7 economies starting in the next two to three decades. If the BRIC economies continue to expand, all four of these nations would have an increased influence on the rest of the world. But for this prediction to come true, all four of these nations would have to continue to develop domestically and solve their common problem of social inequality. Brazil is currently addressing this issue and as a result has experienced a rising middle class. Brazil’s growing middle class has catalyzed domestic economic growth and will soon allow Brazil to be a large international power. Starting in the early 2000’s, Brazil has made strides in addressing domestic issues such as the extraordinary wealth gap and lack of social mobility. Due to these successes, Brazil could be a prime example for the other BRIC countries to follow as they try to improve their economic standing. Most of this reform began in
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2003 through Bolsa Família, a program started by Luiz Inácio Lula de Silva while he was Brazil’s president. Bolsa Família, which translates to “Family Allowance” in English, is an entitlement program for the lower class. This program helps to fight short-term and long-term poverty by offering incentives for families under specific circumstances. For example, Brazilian parents are required to vaccinate their children and send them to school, and the Brazilian government will provide families with compensation based on the number of children the family has and the children’s ages. It is clear how this initiative can fight short-term poverty: the Brazilian lower class can use money from the incentive program to obtain better living conditions, food or any other necessities. Furthermore, this program disrupts this transgenerational poverty. Because families are required to send their children to school in order to obtain benefits, the next generation will be able to escape poverty. They have an opportunity to obtain a higher education, which can lead them to a professional occupation, and then rise to the middle class. The incentives break the cycle of poverty through which children from the lower class grow up to work in menial jobs that pay minimum wage. But a lot has changed in the twelve years since Bolsa Família’s introduction. Most recently, sitting President Dilma Rousseff ’s opponent in the 2014 Presidential Election, Aécio Neves, challenged it by claiming that it was not radical enough, so it is clear that not all parties are in favor of this program despite its tremendous success. During his campaign, Neves promised to preserve and expand Bolsa Família. This is surprising to some given his anti-government intervention platform and considering Neves was targeting upper class citizens. Some of the critiques of the program are that it diminishes the incentive for people to work, and it is a maneuver to buy political power via the support of the lower class. However, advocates for the program claim that it actually increases one’s incentive to work because people are more likely to take economy-stimulating risks when they know they have a safety net to fall back on if they fail. Once one notices the positive effects that come from Bolsa Família, it is obvious the program is a positive thing for all of Brazil, not just the lower class. Renata de Camargo
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Nascimento, a controlling shareholder in Carmargo Correa, said in an interview regarding Bolsa Família, “It makes all the difference in the world and adds a lot for the needy population. What is more important is that it promotes a virtuous cycle. If there is more money in circulation, the local market heats up, the purchasing power is increased and the effects spread throughout the whole economy.” Her statement underscores Bolsa Família’s ability to help all of Brazil and not just the lower class. In Brazil’s current stagnant economy, a force to drive spending would be nothing but beneficial. Before discussing how a growing middle class impacts Brazil’s global influence, it is important to understand the magnitude of change in Brazil’s social spectrum in the past two decades. The Brazilian middWle class is composed of households with a per capita income between US$145 and US$500 and are not at risk of becoming poor in the near future. In 2012, Brazil saw more than 50% of its population in the middle class; this statistic was unprecedented in Brazil. From 2002 to 2012, 35 million people joined the middle class, most of who were from the lower class. At
South America
35 MILLION BRAZILIANS JOINED THE MIDDLE CLASS FROM 2002 TO 2012 this rate, by 2022 about 57% of the population will be in the middle class. Since 2003, the year Bolsa Família was introduced, 28 million people have been lifted out of extreme poverty and since 1995, the rate of extreme poverty has dropped consistently and rapidly and is currently at an all time low. In 1995 it was 16.4%, but today it is a meager 4%, and the incomes of those stuck in poverty have increased because the monthly minimum wage has been raised from $224.18 to $244.00. In a world where the richest 1% own almost 50% of the wealth, Brazil has done a phenomenal job in the past two decades
of controlling its wealth gap while still experiencing economic growth. This success will help Brazil immensely within the domestic sphere. Brazil could follow the path of South Korea, which in the 1980’s had growing middle class. South Korea seized the opportunity to grow from the inside and become less dependent on export driven growth and more dependent on domestic consumption. Brazil’s current situation is very similar to this because of its growing middle class and the new wealth that it can use to drive domestic manufacturing. The relationship between Brazil and China is one
April 2015
that epitomizes why Brazil needs to step away from export driven growth. China is Brazil’s largest trading partner. China has recently become less focused on being an exporter of finished goods. Brazil was supplying China with large amounts of raw materials so as soon as China decreases its production, its need for these Brazilian raw materials diminishes as well. Being dependent on other countries for economic success is never beneficial. Once Brazil is able to create and sell goods domestically, its dependence on other countries This is exactly what Renata de Camargo Nascimento meant
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South America when he used the term “virtuous cycle” to refer to Brazilian economic growth. As consumption of domestic goods goes up, there is more demand for these goods, so manufacturing increases as well. As manufacturing increases, so does demand for jobs. This demand for jobs will help combat unemployment and if there is enough demand, employers will need to provide a larger incentive to work for employees, which will cause wages to increase. Ultimately, this pattern leads to increased spending. It is a cycle that feeds on itself, and everyone benefits from the economic stimulation, growth and wealth of the middle class, and lower poverty rates. This cycle and increased spending from the middle class shows how important they are to an entire society. The role of the middle class also goes beyond providing economic growth. Middle classes have also been proven to help regulate nations in their political spheres. For decades Brazil has been home to political instability and corruption. Brazilian corruption ranges from companies’ supporting a campaign in return for influence on legislation, politicians’ being put in a seat of power through connections or embezzling money. The middle class is a very active group in its country’s political election system and therefore could help address the nation’s problem with corruption through exercising their democratic rights. People in the middle class tend to take more of an interest in politics by paying closer attention to who is being elected on the local and federal level. This trend occurred in both the US and South Korea. Middle class voters help reduce corruption in government because they are educated and look out for their own interests, which are not aided by corruption schemes that benefit corporations The middle class are still in a vulnerable position in society when compared to the elite, so middle class voters generally look for a candidate who is progressive but not radical. Strong middle classes express support for political programs that promote inclusive growth, meaning that the middle class will vote for people who are looking to better the conditions of the poor and provide equal opportunity for economic success to all classes in society. Brazil also benefits on the global sphere from a growing middle class because its economic growth will allow Brazil to become much more influential and powerful. Considering the relationship
that Brazil had with China, the following is clear: once Brazil became dependent on China, China controlled their partnership. As Brazil becomes more industrialized, it can open up to international trade once again, but this time as the partner that is manufacturing goods and redistributing them as opposed to the one providing raw materials. This will be entirely possible because Brazil started to produce goods domestically, so it can now get other raw materials imported, manufacture them, and then redistribute them. The domestic success of Brazil will also contribute to its international success because as spending and consumption rises, so does the amount of tax dollars that the government is collecting. With this new capital, the government can fund initiatives like a larger military, which will give the nation a larger presence on the international scale. Brazil embodies the fact that a country does not have to expand its wealth gap to see its economy grow. Brazil’s rising middle class will be the force to put Brazil back on the map as a global power and will shape the domestic issues of the country as well. If anything is taken away from Brazil’s decreasing poverty levels, it is that Brazil is making finally making progress towards more social equality. HMR
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BRAZIL EMBODIES THE FACT THAT A COUNTRY DOES NOT HAVE TO EXPAND ITS WEALTH GAP TO SEE ITS ECONOMY GROW
South America
UNITED STATES-VENEZUELA RELATIONS TIMOTHY HOANG
April 2015
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S
everal months ago, President Nicolas Maduro of Venezuela announced that new measures were to be taken against the United States in response to recent criticisms directed at the Venezuelan government. Relations between the two countries have become tense as Maduro remains true to his belief that the United States is working with his opponents to possibly plot a coup and take control of “his” country. This is the first real response that the Venezuelan president has publicly stated after the United States imposed sanctions on Venezuelan officials who were connected to the violent suppression of anti-government protests in Venezuela. These sanctions included the denial of visas as well as the freezing of United States assets owned by these Venezuelan officials. The United States was not going to take the mistreatment of peace protestors lightly and made its displeasure towards Venezuela obvious. A comment by Josh Earnest, the White House press secretary, summarizes the problem, “We have not and will not remain silent in the face of Venezuelan government actions that violate human rights and fundamental freedoms and deviate from well-established democratic norms.” Maduro did not take well to the restrictions imposed on his own officials and publicly called the move “crazy”, using it to reinforce his belief that the United States was attempting to undermine him. However, even with all the tension surrounding the situation, a question still remains: What will happen next in United States-Venezuelan relations? The deadlock with Venezuela and President Nicolas Maduro comes at a time when relations with Cuba, a close ally of Venezuela, are improving. Only recently has President Obama moved to possibly lift sanctions on Cuba while approving a separate set to be imposed on Venezuela.
This is interesting and somewhat contradictory given that Cuba and Venezuela are close allies and that Cuba is often credited with sparking the unrest that has swept over Venezuela. Cuba is not only accredited with the protests going on in Venezuela but is also known to have a one of the worst track records when it comes to human rights. So why are we punishing Venezuela while repairing our relationship with Cuba if both committed the same crimes? There is more than one answer to this question and all of them justify and provide reason about the sudden approval for the embargo on Cuba to be lifted. First off there is a market in Cuba for American goods and different products in general. The United States is one of the few not taking advantage of the economic upside of trading with Cuba and it is estimated that between $1.2 and $4.84 billion is lost annually. In addition, a calculated 6000 American jobs would be created in order to keep up with the demand of products that would ensue if the embargo were to be lifted. Although Cuba is still a communist country. The economic upside of lifting the embargo is undeniable and support for such an action has been increasing over the years. It is even possible that the overall relationship between the United States and Cuba could potentially improve over time. To address the issue of why Venezuela now has to bear the brunt of U.S. criticism, we have to look at the situation and state of the country as well as its people. Under the authoritarian government of Hugo Chavez and now, Nicolas Maduro, the economy has faltered and attempts at protest have been ruthlessly crushed. President Obama stated that the situation in Venezuela “constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States, and I hereby declare a national emergency
to deal with that threat.” The state of the country itself cannot be overlooked and the fact that its economy and its respect for human rights deteriorates every year provides good reason for the United States to intervene. However, we shouldn’t be so hasty as to immediately approve of US intervention due to the history of similar events. US intervention has not always been successful and, in some cases, has caused even more unrest. It is certainly plausible that the main goal of the United States is to gain more resources as Venezuela is rich in petroleum and natural gases. There should most definitely be an air of wariness surrounding this issue due to the multitude of factors that US intervention could be attributed to. Now that Venezuela has responded to the U.S. sanctions with demands of its own, the relationship between the United States and Venezuela is not so clear. The United States was the first to publicly announce its displeasure of how seriously President Nicolas Maduro and his government took the issue of human rights. Shortly after, measures were taken against Venezuelan officials as a “punishment” for refusing to uphold certain values. However before the US took action against Venezuela for their inhumane crackdown on anti-government protests, there was a history of mistrust and suspicion between the two countries. Their history of mutual antagonism includes limited trade restrictions and accusations of spying or instigating unrest which were quickly followed by deportation. Since 2010, full diplomatic relations with Venezuela have not resumed which in part has fed the stirring tensions. These tensions have peaked as of late and Nicolas Maduro’s statement, detailing Venezuela’s attempt at retaliation, may have started something much bigger. Recently, the United States was abruptly informed that their embassy was
“ALTHOUGH THE UNITED STATES IS MOST CERTAINLY NOT THE PERFECT EXAMPLE OF A COUNTRY THAT HAS EQUAL HUMAN RIGHTS... WE CANNOT JUST STAND IDLY BY WHILE MADURO CONTINUES MISTREATING THE VERY PEOPLE HE IS SUPPOSED TO PROTECT.” 46
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to be cut down in size from one hundred personnel to only seventeen and that new visa requirements for American tourists were to be installed sometime in the near future. Additionally, American officials who want to have meetings in Venezuela are now required to get permission from his government due to Maduro’s suspicion that the United States is attempting to destabilize his administration. His suspicion isn’t necessarily unfounded as the US has a history of destabilizing administrations whose agendas do not align with ours. These new restrictions were attributed to the idea of reciprocity; Venezuelan citizens pay for visas to travel to the United States so we will do the same and there are seventeen Venezuelan diplomats in the United States so we will cut down the number of US diplomats. In 2014 the United States issued 103 statements and 65 already this year, all with hopes of intervening in the worsening situation that we call Venezuela. Our continual interference in Venezuelan affairs has caused Maduro to treat us with caution and suspicion which in itself has sparked the tensions that now exist between the United States and Venezuela. For the time being, I believe the United States really has no choice but to abide by Maduro’s demands but in the future actions should be taken, with support from other nations, to discipline those who disrespect the essence and meaning of human rights. The issue of human rights has become increasingly prevalent in the United States, especially in the years 2014 and 2015. We should seek to solve our own issues
with human rights as well as help others learn to respect and uphold these values. To be specific, Maduro’s violations when concerning the human rights of his people is testament to the accusations that the United States have issued against Venezuela and its government. According to a Human Rights Watch report, the Venezuelan government has arrested over three thousand protesters with around forty-two deaths, possibly more. This behavior by a country’s government would be unacceptable no matter the country but the fact that Venezuela is mistreating innocent, peaceful protestors goes to show that intervention in some shape or form is required. It is definitely plausible that the United States could be using the situation in Venezuela as a ploy to gain access to more natural resources but the more pressing situation here is the issue of human rights and the distinction between right and wrong. The problems that Venezuelan citizens are facing under the watch of the Maduro regime, including soaring inflation and crime rate, food shortages and suppression of free speech, are immoral no matter how you look at it. Although the United States is most certainly not the perfect example of equal human rights, as shown in certain incidents of police brutality, we cannot just stand idly by while Maduro continues mistreating the very people he is supposed to protect. To respond to the demands that Venezuela has placed on the table, I believe that the United States should increase the number of sanctions on the Venezuelan government, especially those who have
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a direct connection to the unjust treatment of anti-government protesters. If we don’t intervene and let the situation continue to spiral out of control who knows what problems Venezuela and its people will run into in the future. This is an issue of human rights that must be dealt with immediately and with resolve. The United States cannot back down, given that numerous public statements have been issued condemning the use of violence against protesters. Just the week before a 14-year old boy was killed at an anti-government protest in San Cristobal as he was running. The response and outrage at this inhumane act of violence has grown and this only goes to show that this is an issue that cannot be set aside. If no measures are taken and the US doesn’t take the initiative and try to prevent such acts from happening in the future, things like this will only continue to happen. The death of that young boy was a rallying cry and has inspired people to protest for change and to stand up for their rights. “I’m here because of the death of that boy. I’m here because we can’t find simple, basic products in supermarkets. I’m here because I have had enough.” These three sentences embody the whole cause and what the anti-government protests in Venezuela stand for. It just isn’t fair for Venezuela to continue on this path if it is evident that it only leads to more economic hardship and social struggle. It is up to the United States to set it right and try to correct Venezuela’s mistakes, but if Venezuela completely rejects our efforts it is still our duty to keep trying. HMR
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4 corruption investigations. 80% fall in stock since 2008. $130 billion worth of debt. This is the 6th largest energy company in the world. Once upon a time, the Brazilian oil giant Petrobras was the nation’s symbol of power and advancement. Today, it is mentioned in the same sentence as “corruption,” “shame,” and “failure.” A company once prided by the Brazilian people has lost its focus in the sea of corporate greed. Over the years, the company’s interests have shifted away from those of the nation and towards those of money-hungry businessmen and politicians. A recently uncovered scandal has marred the face of the company, put the Brazilian economy in jeopardy, and shaken the political sphere. The corruption scandal is a manifestation of the company’s deeply rooted political and economic issues. The enormity of Petrobras and its strong political ties essentially set the company up for corruption and bribery. Brazilians can only hope that corporations will learn from Petrobras’ mistakes; corruption allegations of this magnitude may be the final stroke to prompt corporate reform in companies throughout Brazil. Only once corporate interest is aligned with national interest will the country begin to recover. Petrobras is one of the most significant players in the Brazilian market – some predict that it alone is responsible for a tenth of the nation’s economic output. The company virtually controls every step of the oil process, from
the deep-sea rigs to the gas stations. It produces more than 90% of the country’s petroleum, owns all of Brazil’s refineries, operates more than 21,000 miles of pipelines, leads wholesale gas distribution, and owns the largest service station chain. Those numbers are more than enough to convey that Petrobras has a clear monopoly over the industry. Such a high dependence on a single company is particularly problematic in any country because a hit to Petrobras would undoubtedly reverberate throughout the entire economy. Unfortunately for Brazil, this punch has already been thrown. Brazil’s prosecutors have uncovered a scandal that occurred while Brazil’s current president, Dilma Rousseff, was the head of Petrobras’ board of directors. The company is accused of awarding contracts to construction companies who subsequently diverted 3% of their funds to the Workers’ Party (PT), which is also Rousseff’s political party. These contracts were frivolous and more costly than necessary, suggesting that their only purpose was to feed hungry politicians and high-ranking executives. Ultimately, the consequences amount to a multi-billion dollar bribery scheme. From an economic perspective, Petrobras is going to ruins. The company is in $130 billion of debt due to the expenses of offshore drilling. If the allegations are true, banks will be reluctant to lend the company any more money, and the company’s credit rating will plunge. Simultaneously, Petrobras shares have fallen
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45% since August of 2014 and 80% since 2008. Not only are investors losing money, but thousands of workers are also being laid off. A company that once created millions of jobs for Brazil is now a major source of job loss. With the Brazilian economy so dependent on Petrobras, the scandal could cause a .75% decrease in economic growth. The economy is already facing high inflation and stagnant growth, and Rousseff is having great difficulty fixing it. Essentially, the Petrobras scheme has the power to turn a sluggish economy into a mild recession. Politically, Petrobras is unleashing chaos. Rodrigo Janot, Brazil’s chief prosecutor has filed a list of 54 federal officials, congressmen, and executives to be investigated. The list has been submitted to the Supreme Court who will approve the investigation. Brazilians are all speculating at its contents– how many politicians are involved? How many of their most well respected businessmen are charged? At this rate, a subsequent question can also be asked: how can Brazilians be expected maintain their faith in their leaders? While allegations have not been made against Rousseff, the sheer fact that the scandal occurred under her supervision has tarnished her reputation. Two names have been leaked – Eduardo Cunha and Renan Calheiros, speakers of the Brazilian House and Senate respectively. Both are members of the Party of the Brazilian Democratic Movement (PMDB), which is the main partner of President Rousseff’s Workers’
South America Party. If Cunha and Calheiros are investigated, Rousseff’s image will be further damaged. Likewise, Rousseff cannot risk political friction while she is trying to combat Brazil’s sluggish economy. She needs political backing from the PMDB when passing controversial legislation such as spending cuts and tax increases to stabilize the economy and prevent Brazil’s credit rating from plummeting. The scandal is in essence a double-edged sword for Rousseff. If she was involved, then her nation will accuse her of corruption and shady dealings. These accusations will lead to political prosecution, which may jeopardize her presidency. If she wasn’t involved, she will be accused of incompetence for allowing blatant corruption to slide while she was the head of the board of directors. However the story unfolds, Rousseff will emerge torn apart. Already, the ramifications of the scandal are taking shape. In the 3 months since the beginning her second term on January 1st, Rousseff’s popularity has almost halved from 42% to 23%. More recently, Brazilians have already taken to the streets to display their frustration with her actions. Some are even going so far as
middle classes especially hard. Essentially, the Brazilian people are feeling the harshest consequences of the upper class’ greed. Now, the question is not how to change the nature of big business, but how to combat it. In Petrobras’ case, reform can occur in several ways. First, the company needs to be detached from the protective wing of the government. Petrobras is currently state owned, meaning that it should be tightly regulated by corporate governance, in principle. However, it is evident that Rousseff and her party will act in favor of Petrobras rather than thwart its corrupt growth. The Working Party (PT) as a whole benefited massively from the shady contracts, and many individual PT members were involved with the scandal. Thus, the PT had little incentive to regulate Petrobras while the scandal was occurring. As the ruling party, it also had the power to turn a blind eye. If Petrobras had not been so entwined with a political party, it is possible that the scandal could have been prevented. Secondly, Petrobras needs to either downsize or split. It currently has a near monopoly over the Brazilian oil industry. It has clear con-
ruption scandal allegedly occurred. Although Rousseff is not currently being investigated, it’s not hard to connect the dots. As the situation currently stands, new policies like those from the 1990s need to be created to regulate the company. When reviewing the Petrobras scandal, an obvious connection can be made to Standard Oil in the late 19th century. Petrobras’ oil monopoly is like a combination of Carnegie’s technique of vertical consolidation combined with Rockefeller’s massive horizontal consolidation. During the mid to late 1800s, Standard Oil held a colossal monopoly on the oil industry. Simultaneously, robber barons generated immense wealth, while the urban poor suffered the consequences of Big Business’ emergence. The rich got richer…and the poor got poorer. Standard Oil engaged in unblocked sketchy business practices, until muckraker Ida Tarbell exposed Standard Oil’s corruption. Afterwards, the idea of “public opinion” became increasingly more important for corporations. At Petrobras, the story is uncannily similar. Petrobras’ scandal has now been exposed, but
Petrobras is no longer a corporation for the brazilian people, but one focused on its wealthiest leaders to call for impeachment. Clearly, Brazilians are becoming less and less tolerant of corruption, and they have a reason to be. Corruption has plagued the nation’s history - money has been consistently taken from the people and funneled to the rich. In a global competitiveness report by the World Economic Forum, Brazil is ranked 135th out of 144 countries in the diversion of public funds. In a poll conducted by the Pew Research Center, 71% of Brazilians said that they were unsatisfied with their political system. The problem fundamentally lies in the fact that Petrobras is no longer aligned with national interest. Like the majority of large corporations, the interests of Petrobras are centered on those of its leaders. However, this is a company originally intended to provide jobs for the lower class and stimulate the economy for all classes. Through the scandal, it is apparent that Petrobras is no longer a corporation for the Brazilian people, but one that is clearly focused on its wealthiest leaders and political supporters. As the scandal plays out, the failing economy will hit the Brazilian lower and
trol over every single step of the oil process. Thus, the company has virtually no market competition. Without competition, it doesn’t have high incentive to consider its consumers or protect its image. At the same time, having such a large monopoly implies that Petrobras can engage in corruption unblocked. Only through exposing the company to competition will it begin to focus on its consumers rather than its executives. Consequently, Petrobras will be forced to recover its tarnished public image by combating corruption. Ironically, Petrobras was successfully reformed in the 1990s. It was stripped of its oil monopoly, put under market discipline, and regulated by “arm’s-length” regulations. This system was relatively effective until 2007 when major deep-sea oil fields were discovered in Brazil. Rousseff, then chief of staff, wrote new oil laws that gave Petrobras sole operating rights in the new fields. Subsequently, the company’s monopoly on oil was restored and it charged on. It is interesting to note that when Rousseff rewrote the oil laws, she was also sitting on the Petrobras board of directors. A few years later, the recent cor-
April 2015
it is up to the Brazilian government to carry out reform. Corporations like Standard Oil were reformed only once the Progressives took charge. The Progressives famously “busted” trusts and adamantly fought corruption. By this example, political change was needed to spur economic reform. In Brazil, the same process must occur. Any onlooker cannot deny the fact that 71% of Brazilians are unhappy with their government. They are rioting in the streets for political reform. It is clear, then, that the Brazilian government must see changes before economic corruption can decrease. Once Petrobras loses its governmental counterpart as the ruling party, it will be left to fend for itself. Brazil is facing shaky times. The people are disappointed with their government and appalled by one of the nation’s largest corporations. The Petrobras scandal is a spark with the ability to ignite an entire wave of reform. After all, the Petrobras slogan is “o petróleo é nosso” or “the oil is ours.” It is time that the benefits of the oil industry are pulled from the hands of an exclusive “ours” and restored to the hands of the nation. HMR
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Nicaragua
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he Republic of Nicaragua, nestled in Central America between Honduras and Costa Rica, currently faces economic, political, and ethnic polarization. From 1936 to 1979, the Somoza family ruled Nicaragua under a dictatorship that indulged Nicaraguan elites and ignored the well being of the general population. As inequality increased, people became frustrated with the government. This frustration culminated in two back-to-back conflicts. The Sandinista Revolution (1974-1979) grew out of the original vexation with the dictatorship and aimed at overthrowing the Somoza family. The Contra War (1979-1990) was the reaction to the Sandinista government taking power. Throughout this tumultuous period, economic inequality, political fractionalization, and ethnic prejudice developed. Today’s Nicaragua still faces the impacts of history’s polarization.
Economics As of 2009, one in three rural Nicaraguans still lived in extreme poverty. This poverty is rooted in the Somoza’s family political philosophy. Under the dictatorship, the government provided for elites, but denied its general population of basic human rights. During a visit to Costa Rica in the 1950’s, General Somoza commented that the Nicaraguan people resembled oxen; they needed hard labor, not education. The government, not recognizing the needs of its people, began selling the land of the poor to agricultural elites who began operating coffee plantations and producing other large crops for exportation such as bananas, sugar, and cotton. The increasing delegation of land for the purpose of growing agricultural exports robbed the nonelite population of its livelihood and caused a drop in domestic food production. From 1952 to 1967, land given to Nicaragua’s Pacific coast for cotton production increased by 400 percent, while peasant land allocated to bean, corn, and sorghum production dropped by over 50 percent. Drops of this caliber made it more challenging for non-
elites to purchase affordable food but contributed to elites’ monetary growth. Eventually Nicaragua’s increasing economic inequality triggered a revolution against the Somoza dictatorship. In 1974, in an effort to depose the Somoza family, the Sandinista National Liberation Front kidnapped officials and eventually took control of the capital in 1979. They attempted to mitigate the poor’s plight by creating new economic policies. Their reforms to redistribute income consisted of access to credit for medium and small-size producers, redistribution of agricultural land, increased employment, and greater access to education and health care. However, the United States of America, falling back on fears from the Cold War, disliked the left-leaning Sandinista’s rise to power. The U.S. began supporting Contras, a coalition of groups resolved on defeating the Sandinistas. The U.S. trained Honduran forces to fight the Sandinistas. The U.S. also locked loans from the Inter-American Development Bank and the World Bank to Nicaragua. This amplified economic stress
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in Nicaragua because Somoza had left the new Sandinista government with $1.6 billion of debt. The Contras induced more economic woes. The Contra forces assailed agricultural cooperatives, health care centers, schools, power lines, bridges, and other infrastructure crucial to the Sandinista government. The circumstance of external boycott and civil war influenced the economic, social benefits of a stronger domestic market, greater access to health care and education, and more grants for basic consumption. Lack of external financing and the Contras’ internal economic disruption culminated in the failure of efforts at stabilization. As domestic demand remained unsatisfied and basic services deteriorated, Nicaragua entered a deep recession. This recession increased the cost of economic adjustment. Since 1990, Nicaragua has attempted to successfully make economic adjustments, but its progress is slow. Nicaragua still suffers from the economic disparity that emerged during Somoza’s reign.
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Politics Somoza’s dictatorship marks the beginning of an era of political fractionalization that has disrupted Nicaragua’s balance of political power. Under his authoritarian control, Somoza concentrated Nicaragua’s wealth into the hands of a few. His political philosophy, consisting of unequal treatment of the wealthy and poor, widened wealth disparity. By only accommodating for the wealthy, he disrupted economic balance, which triggered the Sandinistas to take action. The Sandinistas desired to reallocate wealth to the non-elites. In trying to return to a more balanced wealth distribution, their reforms were left leaning. The Sandinista Revolution created political fractionalization between the elites and nonelites. The Contra War also triggered the manifestation of political fractionalization that had existed during the Cold War. The U.S. feared the Sandinistas’ left-leaning stance. In addition to cutting off economic supplies to Nicaragua as described above, the U.S. sent the CIA to work with Contras to train two forces from the indigenous Miskito family. One of the forces, called KISAN, was trained in Honduras, and they fought alongside the FDN, the biggest
contra force. The second force, MISURASATA, fought with the ARDE, a contra force based in Costa Rica. In 1985, the U.S. House of Representatives denied President Reagan’s request for giving more military aid to the Contras. The Reagan administration then secretly conducted an arms deal with Iran, later known as the Iran-Contra scandal, and sent the profits to the Contras. Although the U.S. sought to alienate Nicaragua, other countries offered assistance. These other countries consisted of the U.S.’s opponents from the cold war. When the U.S. cancelled a $9.6 million food shipment, the Soviet Union presented Nicaragua with 20,000 tons of wheat. Cuba also offered $64 million in technical aid. After the U.S. imposed the trade embargo on Nicaragua, the Soviet Union and Eastern Europe lent $202 million. Thus, Nicaragua suffered from leftover tension from the Cold War and was the object of political fractionalization between the Soviets and their allies and the U.S. In 1990, after the Contra War, Violeta Barrios de Chamorro won the presidential election. She offered Nicaragua unity despite political differences. The wars had divided her family. Two of her sons were Sandinistas and
her two other sons were Contras. Her husband, the editor of a daily newspaper La Prensa, was assassinated in 1978 during the Somoza dictatorship. As detailed above, Nicaragua had just undergone years of disunity and violence. She campaigned on the notion that she could unify the country as she had done with her family and assuage the nation’s scars. Daniel Ortega, the leader of the Sandinistas, won the presidency in November 5, 2006. The United States tried to intervene against Ortega. In April 2006, U.S. Ambassador Trivelli mustered a meeting to form an alliance to oppose Ortega. However, after his political triumph, the U.S. agreed to accept his administration. Since his election, Ortega has softened his leftist views and appears to be acting more like a dictator. Although, Nicaragua experienced a period of political unity under Chamorro’s presidency, such unity is fragile. Nicaragua continues to experience the political impacts of the Somoza regime, Sandinista Revolution, and Contras War as evidenced by their current president’s political history. The political fractionalization is still in living memory and its players are active in Nicaraguan politics.
and became acquainted with the indigenous people. Africans from the Caribbean, who escaped bondage moved to the Mosquito Coast. Some joined the indigenous culture. This collection of Mayagnas, Africans, and Europeans evolved into an autonomous Miskitu culture that incorporated elements, such as social structures and language, from all three groups. The Miskitu developed strong relations with the British and by the late 17th century, British traders began bringing Africans to the Mosquito Coast. Economic migrants from Belize and Jamaica moved to the Atlantic coast after emancipation in the late 19th century. As European settlers, Africans, and indigenous people began inter-marrying, they created a distinct English-speaking minority, Creoles. The Atlantic Coast’s inhabitants became known as the Atlantic Coast minorities. During the Somoza dictatorship, the Atlantic Coast was neglected and marginalized. However, from 1936 and onward, Somoza García, a Nicaraguan individual who had
amassed a large fortune, won allies in the United States. He gave U.S. companies access to Nicaragua’s gold, silver, seafood, and timber. Most of these commodities came from the Atlantic Coast. The Atlantic Coast inhabitants began forming relationships with U.S. powers. During the Sandinista revolution, when the Sandinistas were attempting to impose a socialist economic model which did not eliminate the long held ethnic, social divide between the Pacific Coast and Atlantic Coast, the Miskitu joined the Contras, who were backed by the familiar U.S. powers. Their joining the Contras and allying with external forces perpetuated their reputation as a hostile, separatist territory. This emphasized the pre-existing isolation. Today, there exist no major highways connecting the east and west. Although Nicaragua’s ethnic tensions are not as obvious today when observed from the outside, aspects of Nicaraguan culture and life were created with the intent to separate people of different ethnic backgrounds. HMR
Ethnics Nicaragua’s colonial history is unique in Latin America because it was colonized on the eastern Atlantic coast by Britain and on the western Pacific side by Spain. Spanish rule resulted in the near annihilation of the indigenous Pacific coast and Central populations. Within 50 years of the Spanish Conquest, the indigenous population declined from about one million to a few ten thousand. Many were enslaved and sent to work in Spanish metal mines. Without adequate support for the continuity of indigenous culture, Nicaragua developed a mestizo culture. This evolved into today’s Catholic, dominant Spanish-speaking culture. The Atlantic coast, also known as the Mosquito Coast, avoided Spanish colonialism because Spain did not desire to colonize an area with small mining potential and resistant local populations. Chibcha speakers, who the Europeans referred to as Mayagnas, largely comprised this indigenous population. In the 17th century, British pirates hid in coastal estuaries, extracted the local area’s resources,
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ARGENTINA’S FIGHT FOR JUSTICE J.P. Cerini
Weakness, incompetence, and corruption in the justice system undermine its ability to act impartially and effectively carry out its function. What is the solution? 52
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T
he death of Alberto Nisman, an Argentine prosecutor who was found dead on the eve of congressional hearings in which he was to charge President Cristina Kirchner with covering up Iran’s alleged masterminding of the 1994 bombing of the Argentine Israeli Mutual Association (AMIA) in Buenos Aires, has shaken Argentina to the core. Twenty years after the worst terrorist attack in the history of Argentina, which left 85 people dead and over 300 injured, the bleak prospects for learning the truth and obtaining justice in this tragedy is a painful reminder of the impotence of the justice system and congress against a backdrop of rampant corruption and a system of government in which the executive branch is alarmingly powerful. Without clear separation of powers and a robust system of checks and balances on the Argentina executive branch, democracy will continue to elude Argentina. The allegations against Iran are sobering. Iran entered into nuclear technology contracts with Argentina in the 1980s
in order to improve its nuclear capabilities in order to meet its domestic energy needs. When the pro-US Menem government came to power in the early 1990s, Menem bowed to US pressure to suspend these contracts. Iran, upset over the suspension, and Lebanon’s Hezbollah, upset over the killing and kidnapping program then underway as part of Israel’s occupation of south Lebanon, retaliated by bombing AMIA. Argentina is home to a Jewish community of about 200,000, the largest in Latin America and the sixth largest in the world outside of Israel. On paper, it seems as if Argentina’s justice system would be well equipped to handle the matter. Argentina, like the U.S., has a tripartite system of government composed of a legislative, executive and judicial branch. The Argentine Constitution grants Congress the power to pass federal legislation and the judiciary the power to enforce it. It would seem as if, like the U.S., the three branches of government in Argentina would function as strong, independent branches
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with specific, limited roles. Think again. The Argentine Constitution gives the president the power to issue executive orders whenever the president believes that there is a necessity or urgency. The scope of this authority is so broad that it can be used to override Congressional action. Separation of powers is crucial to prevent the concentration of power in a single branch of government and, thus, avoid undemocratic rule. And yet, the Constitution merely codifies a long standing practice by Argentine rulers of circumventing the Congressional and judiciary branches under the guise of its “emergency powers” in order to further their agenda. These emergency powers have been invoked liberally during economic crises to justify a broad range of activities that effectively give the executive branch complete control over, areas which would otherwise have been left to Congress. Because Congress is the body that represents the myriad interests of the Argentine population, such usurpation undermines the will of the people. Under the US system of government, the
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South America President must act within the boundaries of the law which reflects the will of the people. By continually disregarding properly enacted legislation, the executive branch can not effectively be held accountable to the people. Because the judiciary’s role is primarily to enforce laws, its role is meaningless if the executive branch has the power to unilaterally change these laws whenever it considers it convenient to do so. To make matters worse, the judicial system is, as is the Argentine government at all levels, plagued with incompetence and corruption. The justice system’s failure to object to this abuse of power by the executive or the broad Constitutional grant of power has undermined the re-
spect for the judicial system because they have merely been a tool of the executive branch. Let’s consider the AMIA investigation for a moment. The intervention by the justice system that followed the AMIA bombing is a reflection of its weakness and inefficacy. From the start, the investigation was marked by incompetence. Autopsies and DNA tests following proper procedures were not conducted. Juan Jose Galeano, a federal judge that was put in charge of the case and who arrested 20 police officers and Carlos Telleldín, alleged to have provided the van used in the bombing, was discredited when a video broadcast on Argentine TV showed Galeano offering Telleldín $400,000, in return for evidence. Galea-
no was removed from his post in 2003 on a charge of “serious” irregularities due to mishandling of the investigation and ultimately impeached in August 2005. Judge Galeano had also issued warrants for the arrests of 12 Iranians, including a former ambassador of Iran to Argentina. The ambassador, who was arrested in the UK on August 21, 2003, at the request of the Argentine authorities, was later released because, according to the Home Office, there was not even enough evidence presented to make a prima facie case for the extradition to proceed. Such weakness, incompetence and corruption in the justice system undermine its ability to act impartially and effectively carry out its function.
The justice system’s failure to object to this abuse of power by the executive or the broad Constitutional grant of power has undermined the respect for the judicial system because they have merely been a tool of the executive branch. Alberto Nisman, who was appointed as special prosecutor in the AMIA investigation in 2006 by Menem’s successor, President Nestor, dedicated the rest of his life to pursuing the charges against Iran and Lebanon’s Hezbollah. On October 25, 2006, Argentine prosecutors Alberto Nisman and Marcelo Martínez Burgos formally accused the government of Iran of directing the bombing and the Hezbollah militia of carrying it out. He directly accused the top leadership of Iran of approving the bombing and had Interpol issue red alerts, the equivalent of arrest warrants, to a number of high-ranking Iranians, including the defense minister. To this day, these leaders can not travel outside of Iran, because if they leave Iran, then Interpol can ar-
rest them. Alberto Nisman would spend the rest of his life trying in vain to get the Iranian leadership into an Argentine court. Over the past 20 years, however, the political circumstances in Argentina have changed drastically as has its geopolitical position. In the aftermath of a severe economic crisis in the year 2000, the more left leaning governments of Nestor and Cristina Kirchner have moved away from the United States. In the wake of a severe energy crisis in President Cristina Kirchner turned to Iran for help. The government was anxious to trade Argentine grain for Iranian oil. But Iran imposed a condition. It wanted its leaders to be absolved of responsibility for the bombing so that they could travel. On
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January 27, 2013, the Government of Argentina announced it had signed a memorandum of understanding with Iran to establish a “truth commission” to investigate the AMIA Bombing. According to President Kirchner, the commission was established to “analyze all the documentation presented to date by the judicial authorities of Argentina and Iran…and to give its vision and issue a report with recommendations about how the case should proceed within the legal and regulatory framework of both parties.” Let’s think about this for a minute. Officials at the highest levels of government in Iran have been accused of genocide in Argentina and, instead of using the Argentine justice system to gather evidence and arrive at justice, the Argentine and Ira-
South America nian executive branches are going to get together and figure it out for themselves. Iran is going to interrogate its own leaders. It basically meant that Argentina had to give to Iran all the results of its investigation against Iran for the Iranians and Argentina to check together. This was negotiating with the terrorists responsible for the attack. The Kirchner government had essentially usurped the powers and duties of the justice system and transferred them to a foreign country. The fate of these Iranian officials had become a mere bargaining chip in the negotiation of Argentina’s commercial interests. Although the Memorandum of Understanding was eventually challenged and struck down by the Argentine Supreme Court, the insignificance that the Kirchner government relegated to its own justice system during the course of its negotiation speaks to its arrogance and lack of respect for the judiciary. So does the impunity of the alleged cover up alleged by Nisman which involves the fabrication of evidence in order to end the Interpol red alerts. What the Kirchner government unsuccessfully sought to achieve legally,
they now sought to achieve through illegal means. The Argentine branch was used to getting its way. Although we do not know the cause of Nisman’s mysterious death on the eve of the Congressional hearings, the result is undisputable. The best chance, perhaps the only chance, that the Argentine people had to shed light on the truth in the most horrific terrorist action in Argentine history and possible Presidential misconduct has been lost. Nisman’s accusation of the President represented a rare instance of strength and integrity on the part of the Argentine judicial system. In the wake of Nisman’s death, thousands have taken to the streets, accusing President Kirchner herself of ordering the murder. The boldness of the murder of such a high profile figure on the eve of the culmination of his life’s work has emboldened Argentines to speak out. Surely, the Argentine people deserve better. Argentina needs fundamental changes in order to become a society that is governed by the rule of law that reflects the will of the people and restore the people’s confidence in their government. What
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is the solution? The executive branch’s powers need to be curtailed, so that it’s role is confined by laws adopted by Congress. That requires amendment of the Constitution to take away the President’s broad powers to issue executive orders. After all, there is no justification for circumventing the powers of another distinct branch of government. Without clear separation of powers, the executive branch can not effectively be held accountable to the people. Secondly, add checks and balances to the current governmental system. In the U.S., the judiciary branch has review power over executive action. Without this crucial function, how else can we verify that the executive branch is acting within its constitutional mandate and legal bounds. Finally, pass and vigorously enforce anti-corruption legislation. Corruption exists at all levels of government in Argentina and has weakened these institutions to the point where they do not serve their purpose. Argentinians desperately need to restore faith their its governmental institutions. HMR
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Asia Pacific
The Decline of Chinese Economy Henry Shapiro
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ommunism, socialism, free market reforms, and crony capitalism have all blended together to create the mangled scale that is the balance of power between the Chinese government and the market place. The economy of China and its deeply intertwined political system has continued to grow and change in ways that have baffled westerners. The tides of economic revolutions and political turmoil have transformed this formerly communist nation into an almost indescribable economic structure. State run enterprises run in stark contrast with the free market policies of the Special Economic Zones. With no coherent balance of power between the government and marketplace, fiscal policy differs in each individual provinces and district of China. The Heritage foundation ranked Hong Kong the freest economy in the world compared to the motherland of China who ranked 139th. The roaring double digit GDP growth of China’s export driven economy before the recession has given way to fears of instability as the global economy continues to slowdown. As China has become the largest economy measured by purchasing power, the nation
appears to be at crossroads. There is little doubt that China’s economy will continue to change but its complexity has caused a lack of consensus surrounding the question of what change might look like. The new wave of economic reforms announced last year has stirred up widespread debate over how the balance of power between the government and the marketplace will shift over the coming years. Political columnists have made predictions ranging from continued reforms, backpedalling, economic disaster, and even all out-revolution. Ultimately, the key to determining how the balance of power will shift is not by examining the government’s affect the economy, but instead focusing on how the economy will affect the government’s decisions. The method behind the madness of China’s disorderly and ever-changing economy lies within the ways economic hardship has influenced China to tip the balance of power in the marketplace’s favor. Although there are vast differences between American and Chinese cultural and political norms, the way in which we respond to issues is driven by a similar mindset. When it boils down to it, there
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is one thing all individuals react to, and that is economic decline. Mao may have thought that money is the root of all-evil, but poverty and economic struggles are often the roots of revolutions. Almost all great revolts, rebellions, and revolutions have been inspired by the deterioration of one’s economy. Why would someone want change when they have stable employment, a house, and a good quality of life? On the contrary, when the factories shut their doors, the mills stop churning out wheat, and the money ceases to flow leaving you starving, poor, and restless, you might be more inclined to seek change. Using this assumption, change in China will depend on when and how significantly the economy declines and how it affects the Chinese political landscape. The government’s uneven concentration of wealth and excessive investment in certain regions has created an unsustainable economy that will soon deteriorate. The new reforms announced last year do not sufficiently address China’s immediate problems. In the end, economic strife will push through even larger scale reform, balancing the power in the marketplace’s favor.
Asia Pacific China has always had a strong and powerful central government on which its people are heavily dependent. Instead of having a free market, Mao Xedong established China’s communist identity by instituting communal agricultural projects and investing in state run enterprises which provide for its citizens. Furthermore, the Chinese government carefully regulates freedom of speech by censoring the media. The single party system in China has allowed the Communist Party to maintain complete control over the central and state governments since its establishment as China’s ruling regime in 1949. The fundamental differences between the Chinese and western economies and governments began to emerge in 1912 as the Chinese moved away from imperial rule. As western nations secured their independence from imperial rule, their ethos was liberty and a focus on the people’s freedom. China, on the other hand, responded through a focus on dependence by creating a strong communist state that opposed many western nations’ free market principles. By 1949, Mao Zedong’s communist government created State Owned Enterprises (SOEs), seized land for itself, and established communal farming. These reforms created the socialist backbone of the Chinese economy and greatly tipped the balance of power in the government’s favor. By the end of Mao’s rule, the economy was in shambles. Two hundred million people lived below the poverty line, there was widespread starvation, and the poverty rate stood at 30%. Due to the great economic strife, change was on the horizon. At the helm of the nation’s next economic transformation was Deng Xiaoping. Deng shifted China’s development towards a prosperous market-oriented nation that made individuals and the economy more independent from the government. He removed many of the farming communes responsible for the famine. Deng disman-
tled tens of thousands of State Owned Enterprises and created special economic zones that allowed private corporations to grow without excessive regulation from the government. Additionally, his decision to privatize urban housing fostered a new era of development in Chinese cities. Deng removed British colonial power from China by reclaiming Hong Kong and establishing the city as one of the least regulated cities in China. More recently, China has experienced an economic downturn that has resulted in new reforms. The 2008 financial crisis caused a sharp drop in demand for Chinese goods and as a result contributed to a sharp decline in the country’s economy. Exports fell about 44% from its pre-crisis peak to its lowest point during the crisis. As a result, exports as a percentage of GDP has decline from 39% to about 26% since 2006. From 2003-2008, China’s economy expanded immensely as it cemented its role as a critical part of the world economy. In 2008, the GDP growth fell below this long-standing double-digit benchmark. Not only has China’s GDP growth not recovered, but also it has continued to decline, hitting 7.5% last year. This was the nation’s lowest growth rate in the past two decades and some experts predict an even sharper drop in 2015. This decline is the result of the dependence China’s economy has on foreign markets. The irony of the economic independence the Chinese experienced under Deng was that while China’s economy gained stability, it became far more dependent on mass producing and exporting goods to other countries. The low costs of Chinese manufacturing have allowed China to obtain large amounts of wealth through exportation. Because China only liberalized small regions of the economy, the foreign investment and wealth China received only went to small, concentrated parts of the nation. In return, the un-liberalized areas
that still rely on the government did not receive as much wealth. As a result, there is little domestic consumption. China became the world’s largest exporter in 2013, with a total of $2.21 trillion in exports. Its exports composed a total of 26% of the nation’s GDP. On the other hand, China’s domestic consumption comprises 35% of its GDP, compared to the US economy that’s consumer consumption comprises around 70% of its GDP. The current model of growth in economy only allows for foreign export driven growth instead of domestic driven growth. This Achilles heel of China’s economy is what has and will continue to bog down their economy in the upcoming years. The Chinese government has responded to the recent decline in growth with economic reform that has made the economy less dependent on both the government and foreign markets. These reforms passed last year show a small-scale shift towards further independence of the marketplace from the government. The three main components of this economic reform were an anti-corruption campaign, a lower growth target, and other comprehensive and influential changes to the marketplace. The most significant portion of this reform was its focus on making domestic growth the rock of the economy instead of exportation. The ultimate goal of these reforms would be for China to ditch its export driven economy which occasionally reaches extreme levels of growth and steady the GDP growth rate so its sizable economy can land softly. China’s complex financial systems will have to revert to a “new normal.” Theoretically, the recent reforms should allow for the creation of a new model of growth and strip the preexisting barriers the old model created. Are these economic changes the peak of the country’s redundant cycle of smallscale reforms or are they precursors to a greater period of change? One of the issues
The 2008 financial crisis caused a sharp drop in demand for Chinese goods and as a result contributed to a sharp decline in the country’s economy. April 2015
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Asia Pacific with the reforms is that their structure will not allow for a fast enough adaptation of the economy to result in its smooth landing. The structure of the reforms focuses on long-term solutions and assumes that the majority of the more widespread and impactful reforms will be implemented in the future. The current worsening outlook of the global marketplace along with rising prices in China will cause a continuous decline in exports. Because China’s GDP is so tremendously dependent on its exports, a decline in the nation’s wealth will likely inhibit any small steps towards increasing domestic driven growth and consumption. Finally, a looming collapse of the urban real estate market could be the final blow to the economy. This economic decay will greatly contribute to inciting political reform and will shift the power balance in the markets favor. The largest problems with the new set of reforms is how long it will take before these programs are fully implemented and that a bulk of the reforms will not be announced until next year. China has always struggled to implement new free market reforms. In the past, China has used the Free Trades Zones (FTZ’s) established under Deng Xiaoping to test some of these programs. The problem is that these programs will mainly affect the small zones in which they are implemented and will likely end up just concentrating wealth in a single part of the nation. The new reforms utilize this strategy as well. Shanghai is currently experimenting with a streamlined administrative process, privatized financial sector, and investment campaign. These reforms
will be very beneficial to Shanghai, but will do little else in the short term for the rest of the nation. The government continues to pilot these new programs in the FTZ’s and rarely end up implementing them on a large-scale. Another main part of these reforms is the new growth target, which was set at 7.5%. Slower growth in China could benefit the nation. Ten percent growth is unsustainable for such an elaborate economy. Without stability, the economy will likely crash whenever exports start to decline. Although the new target is much smaller than the nation’s previous double-digit growth, it does not make a meaningful change. China should give up growth targets all together to signify a real commitment towards sustainability instead of rapid growth. Many analysts predicted an ambitious 7% growth target at the time of the announcement. Although this figure is more realistic and sustainable than past targets, the new growth targets still do not fully address the underlying problems China’s economy faces and shows a lack of commitment to address them. Since Deng’s era, China has struggled to reform state-owned enterprises. As the new set of reforms were about to be announced last year, many hoped China would make meaningful reform to help further refine and dismantle the SOE’s. Instead, China attempted to avoid the issue and simply made small salary cuts to the top executives at SOE’s. Although more small-scale reforms are expected soon, this only shows how the government keeps pushing back the timeframe for meaning-
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ful change. The small economic decline in China has not been enough to push the government to make significant alterations to the economic system, but larger financial problems loom in the distance. So far, exports have been the heart of the Chinese economy. Low prices are the reason why it makes sense for a corporation to spend money to import foreign goods rather than produce them domestically. China has been able to keep prices incredibly low for so long because of both the free market reforms under Deng and the low to nonexistent minimum wages. The Chinese government has never established a national minimum wage. Rather, each providence or municipality sets its own minimum wage. The minimum wage can be as low as $1.45 per hour compared to $7.25 in America. The average yearly wage in China is $8,450.63 compared to $48,377 in the US. Part of the uniqueness of China’s economy can be attributed to this fact. China has the third highest GDP in the world (behind the United States and the European Union) but ranks outside of the top fifty in average yearly wage. Because of the low minimum wages, the unemployment rate has been constant at a low 4.1% since 2009 compared to the US unemployment rate which was at 10% in 2008 and recovered to 5.5% last February. The strong export economy and employment has translated to significant wage growth. Since 2006, wages in China have increased by 2.8 times. By comparison, the US has only experienced a dismal 5% increase in wages during the same period. The problem is that the increased price of labor has
Asia Pacific
“The method behind the madness of China’s disorderly and ever-changing economy lies within the ways economic hardship has influenced China to tip the balance of power in the marketplace’s favor.” made products in China more expensive. New research done by Bloomberg estimates that the price to make a product in China is now about equal to that of the US when you take into account factors like cost of shipping and currency exchange rates. A stagnant global marketplace will result in a decline of demand for China’s goods. Since the financial crisis, the Eurozone has yet to make a strong recovery, drawing fears of the stability of the region. All nations that are members of the European Union use the same currency, the Euro. At the same time, there all have different fiscal and structural policies. The structure of the EU has bogged down stronger nations like Germany because their economies are now reliant on weaker nations like Spain and Greece. As a result, the entire region has been unable to recover. The unemployment across the EU is at 9.8% and the euro has declined 35% in the past year. The currency also makes Europe a much more attractive place to import goods from because of China’s augmenting labor prices. Many large developing nations like Japan and Brazil have also experienced economic downturns. Japan, which recently exited a decade long recession, has now begun to reenter recession after undergoing broad economic reforms under their new Prime Minister Shinzo Abe. After an almost decade of economic strength even throughout the global financial crisis, Brazil has also fallen into economic difficulty. The United States economy remains strong, but there is fear that the global economy’s deterioration will wear down the United States’ economy. The state of the global economy will discourage nations from buying Chinese goods. The result of higher prices and a weak global economy has been a massive drop in Chinese exports unexpected by many economists. This year, a panel of 45 of leading economists had a median prediction of
7.3% export growth, but instead, exports declined by 18.1%, the greatest drop since the financial crisis. This has set fears across the Communist Party that their new reforms will not create fast enough change before a weak export market crushes China’s economy. This rapid decline in exports is unsustainable and could pop the Chinese export bubble. Looking away from China’s foreign trade, the unsteady real estate situation in Chinese cities could be disastrous to the Chinese economy. When Deng Xiaoping privatized urban housing, he allowed the rural population to move into expanding urban communities with better facilities, opportunities, and public services. In 2012, China’s urban population exceeded its rural population for the first time in the nation’s history. As the economy increased 90-fold, the nation’s rural population has fallen from 81 to 50%. At the same time, the profitability of the growing urban housing market has encouraged excessive investment in the urban real estate market. Investment in real estate has increased from ¥624 billion to ¥71.8 trillion in the past decade. Real estate investment is an essential part of the nation’s domestic investments, occupying 25.3% of aggregate fixed asset investment. The problem now is that this investment is very speculative and the real estate bubble has taken in more capital than it needs. The result has been large urban cities with shopping malls, apartment buildings, and community centers all completely unoccupied. These cities have been dubbed “Ghost Towns.” Home prices have already started to fall in urban areas, declining by 9.7% in 2014, but the poor state of the real estate market suggests that there is more danger on the horizon. The government has been incredibly inactive in preventing a popping of this bubble. They passed small amounts of reforms, such as restricting second-home purchases, only to scrap them last year. Although
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this reform may have been harmful because it prevented domestic investment, its repeal shows an unwillingness of the government to address this pressing issue. If the Real Estate market crashes, not only will it be decimated for years to come, but also the steps the nation has taken towards domestic proficiency will become useless. The recent reforms to make the nation more focused on domestic growth will be destroyed by an implosion of their real estate market. Not only will the nation’s economy be in shambles, but also its ability to grow will be inhibited. Investments will stop coming in as investors lose confidence in the market. This will destroy any progress the government makes towards making the Yuan a more reliable currency and will convince more Chinese businesses and wealthy individuals to move their money offshore. This threatening crisis may be the final dagger that kills China’s hopes for small scale-reform, and instead may insight public anger and a large-scale economic transformation. As the balance of power between government and the marketplace in China has shifted over the century, economic hardship has been at the core of this transformation. The path from Maoist China to a modernized economy has been forged by economic strife. The balance of power between the government and the marketplace has shifted dramatically in the marketplace’s favor over the past century. Although China’s economy has significantly improved, fundamental problems within the nation’s financial system continue to cause economic strife. As the remaining antiquated policies bog down the nation, the people will continue to push the balance of power in the market place’s favor. With the looming threats of a global economic crisis and the precarious state of China’s real estate market, widespread change appears to be on the horizon. HMR
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Asia Pacific
THE LOST VOICES OF INDIA By Teddy Kaplan
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n December 16, 2012, in South Delhi, India, Jyoti Singh Pandey and a male friend boarded a bus at around 9:30 PM. Singh, her friend, and six men, including the driver were onboard the bus at the time. As the bus went off of its normal route, the male friend noticed that something was wrong. However, right upon his realization, he was beaten with an iron rod. With the friend unconscious, the men onboard the bus brutally raped Singh, beating her with the iron rod. Singh tried to fight against the rape but could not do so and suffered multiple life-threatening injuries. After going into cardiac arrest while being transferred to a Singapore hospital, she
died on December 29, 2012 at 2:15 AM. Soon after the gang rape, all six suspects were found and arrested. After being found guilty, five of the six men were sentenced to death, while the other, a 17-year old boy, served the maximum of three years in a reform facility. This tragic event occurred over two years ago, but more recently, in early March of 2015, BBC made a documentary about the rape. However, the Indian government prohibited its release. This prohibition has resulted in much controversy in various forms; articles, demonstrations, and protests across the country demand that the movie be released. The Indian government must not only allow
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the documentary to air but also work to draw more attention to victims of rapes in India. The release of the film must coincide with an augmented focus on women rights and the balance of power between genders in Indian society. Leslee Udwin, a British filmmaker, created the documentary India’s Daughter, in order to shed light on the details of the rape. By interviewing Singh’s family, the families of the rapists, members of the police, and others, the film is able to publicize the story of both the rape and its aftermath. Yet, despite a fair approach to gaining information about the events, many, including prominent members of society, have criticized the film. The In-
Asia Pacific dian government called the production an “international conspiracy to defame India.” Indian liberals dislike the film, as they do not want the rapists’ viewpoints to be heard. Furthermore, Indian liberals do not like how the film hurts men’s role in society. Specifically, one scene in the movie, in which Udwin interviews the bus driver, Mukesh Singh, who was also involved in the rape, has drawn great controversy. The driver’s viewpoints underscore the problem within India and throughout the world: in balancing power within the Indian society, the rights of women, those subject to this kind of gang rape, must increase. Singh blamed the victim for the rape, saying, “It takes two hands to clap. A decent girl won’t roam around at 9 o’clock at night. A girl is far more responsible for rape than a boy.” Singh comes from a Delhi slum, in which he received no education, however this viewpoint is shared with many other men in the male-dominated Indian society. Singh’s viewpoints are, of course, repulsive, as he and his friends on the bus initiated the rape and the women did not ask to be raped, attempting the entire time to flee. However, the viewpoints held by Singh are unfortnately representative of a significant portion the Indian – and global – society; this understanding of women and rape exists despite a 21st century world in which women and men share equal legal rights in so many nations. One example of the prevalence of such viewpoints in Indian society lies in the commonly practice tradition of dowry. In this custom, after a marriage, the bride’s family gives presents and money to the male’s family. While this was outlawed in 1961, it still is present in Indian society. This takes advantage of women, by essentially paying the male’s family for allowing a woman to marry into that family, inherentially demoting the status of women in the union of marraige. India’s Daughter reveals viewpoints even worse than Singh’s through comments made by his lawyers. One said, “We have the best culture in our culture, there is no space for a woman.” This quotation, along with many others, illustrates how this opinion premates multiple demographics within society. By not allowing women a “space” in society, this lawyer doesn’t allow for women to be on the same level as men, resulting in an unfair balance of power between men and wom-
“The ban of this film is more than just prohibiting Indians to see a film; it is an effort by the Indian government to ignore the issue of rape.” en in society. The ban of this film is more than just prohibiting Indians to see a film, but it is an effort by the Indian government to blindside the issues of rape. The government of the United States of America took a similar approach in the 19th century Antebellum period, when Congress refused to talk about the issue of slavery. While the Indian government has put in place laws against rape and has convicted all of the suspects accused of this gang rape, there is still clear connection between the US Congress’s use of the gag rule on slavery and the modern Indian aversion to dsicussing rape, another major problem in society. Eventually, like in the United States, the Indian government will need to address the divise issue. While many in India have supported Jyoti Singh Pandey, the victim, many others have supported Mukesh Singh, the rapist. And while the Indian government did arrest and sentence the rapists to death, thereby siding legally with the victim, not enough efforts have been made to deal with the more general problem of rape and women’s rights in India. This indecision much be halted immediately. One singifcant factor that must be address is simply that India has done a poor job understanding the core of problem. According to India’s National Crime Records Bureau, rapes increased 35.2% from 2012 to 2013. After this gang rape, India had a group try to have rapist’s legal process take quicker, the Justice Verma Committee. The JVC found that new laws would not be enough for women to be fully safe. Instead they “came to realize that there had never been a serious study in India directed at understanding the psychological factors that drive rape,” Abhishek Tewari, the counsel for the committee, said. As a result, the JVC made a very long report that found
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that rape in India results from inequality between genders and social classes. While the report provided legal recommendations, a bill was passed by India’s lower house of Parliament to nullify these proposals. Most notably, the bill allowed for martial rape, rape by a women’s husband, to occur. It is clear, then, that while the Indian government did make some progress in the legal standpoint with sentencing some rapists to death, a bigger change in society is still needed. Nikhil Mehra, a member of the JVC said, “For the government, legislation was the easiest change they could enact. Generating serious societal change, on the other hand, is much more difficult.” This explains just how hard it is for the Indian government to balance power within society, for while they can make laws addressing certain rights toward women, without appropriate enforcement by the Indian government, women’s rights will continue to be diminished in India. Women in Indian society are not just highly subject to rape, but also receive a worse education. While boys and girls both get free education until they are 14-years old, many families remove their girls from school after, resulting in staggering low literacy rates. According to world.bymap.org, just 50.8% of women are literate, which ranks as the 183rd country out of 208. This supports the need to better balance the power between men and women in society. HMR
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41% of those in PNG live in poverty
DEFYING THE ODDS
By Alex Karpf
How Papua New Guinea Can Use Resource Extraction to its Advantage In January, Exxon Mobil managed to strike another lucrative deal with the Papua New Guinea government that expands the company’s newly formed natural gas platform in the country. The $19 billion project, which both extracts natural gas and cools it to be transported as liquid, will soon provide not only a quarter of the power for the nation’s capital, Port Moresby, but also electricity for 8% of Japan. Unless the country’s government changes, however, natural gas and the nation’s other resources will do little to actually lift Papua New Guineans out of widespread poverty. The industry itself provides little hope of major employment increases to locals, as just a few workers are necessary to mine for precious minerals. More importantly, PNG’s array of indigenous cultures, tribal society, and resulting underdevelopment will hamper any economic progress from this sector. Instead, the nation must eliminate corruption and empower its citizens with education in order to seek greater
economic prosperity. While a single natural gas project might not seem too exciting, its economic impact on the underdeveloped nation initially sounds gigantic. A report by the Australian and New Zealand Banking Group claims that the new resource investment, spearheaded by mining for natural gas, could quintuple the nation’s exports in the next fifteen years, injecting $130 billion into its economy and adding 100,000 jobs. Some of this employment increase would occur in the actual mining sector, but a sizeable amount would originate from resulting government investment in infrastructure in rural communities, allowing impoverished citizens to access employment opportunities. For a country whose gross domestic product straddles $15 billion, all this economic growth sounds unimaginably large. In fact, many analysts consider the project as the force that will effectively galvanize the nation’s economy and lift it out of econom-
April 2015
ic despair. Papua New Guinea (PNG), a poor island nation bordering Indonesia, has an economy already deeply reliant on resource extraction. Mining for precious metals, primarily gold, silver, and copper, exploded in just the past decade to become a behemoth of an industry. The three minerals make up 70% of the nation’s exports, and taxes on them constitute 20% of the government’s entire revenue. This sudden surge in mining activity has caused PNG’s economic growth since the 2008 recession to balloon to almost 6%, and new gas production will boost growth even higher. By contrast, America’s growth rate is just a third of that number. However, large-scale resource ventures alone are inherently unable to drive a nation’s development, because resource extraction provides meager employment opportunities. In other words, digging for resources like gold and oil basically creates wealth without actually employing
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many people. In 2013, mining accounted for almost three-quarters of the nation’s exports but employed just 8,000 people, a tiny sliver of the nation’s potential workforce. Some rural individuals also work informally as small-scale miners and use basic tools like shovels and panning dishes to collect barely enough gold each year to support themselves. However, a lack of money from these jobs prevents these workers from upgrading their technology and collecting a substantial amount of gold, indefinitely trapping them in the cycle of poverty. The reason for PNG’s inability to harness resource extraction as a tool for economic growth goes much deeper than the industry itself. The island country is actually one of the most culturally diverse in the entire world. Its population of 7 million speaks over 800 native and unique languages, and the nation’s social structure is still dominated by a large number of relatively small tribes, each with its own hierarchy and social organization. This tribal culture directly conflicts with attempts by Western energy and mining giants to make use of PNG’s resource reserves. Indigenous tribes technically
own 97% of PNG’s land in order to maintain their autonomy, so sustenance farmers previously inhabited and farmed on the site of the new gas project. In order to gain access to tribal lands, Exxon and the PNG government essentially tricked local landowners, who spoke no English and were illiterate, to agree unknowingly to give up to their land. While the agreement which locals blindly signed claimed
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“Further tensions have mounted between the local population and employees from Exxon” to share the benefits of the mines with the natives, none of the revenue as of now has been allocated to development projects such as expanded public education. Landowner groups representing the displaced
individuals have already begun to lead protests in the nation’s capital and even took three government officials hostage in 2011. On top of this, further tensions have mounted between the local population and employees from Exxon due to Exxon’s lack of sensitivity toward the native population. For example, when a landslide from one of Exxon’s quarries killed 27 locals in 2011, the company chose not to search for dead bodies, but rather to pave a new road over the incident immediately afterward. The oil giant further exacerbated strife when it hired a foreign security service to protect the project and its employees from any attack, aggravating and distancing itself from PNG citizens. As a result, conflict between indigenous peoples and powerful Western drilling corporations could spark social unrest, possibly a civil war. The former commander of the PNG army has already warned that Exxon’s takeover of local lands and use of a foreign military company could lead to an aggressive revolt against the government. A similar conflict took place before. In the 1990s, copper mining on the PNG island province of Bougainville
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“Even with hundreds of millions of dollars of annual aid from Australia and the World Bank, the country has not succeeded in reaching these communities.” created tensions between native civilians and migrating workers from other parts of the country. Fighting soon escalated to civil war, killing 20,000 citizens until a ceasefire more than seven years later. The former commander of the PNG army has claimed that a parallel conflict on the PNG mainland would turn out even more destructive than the one twenty years ago. Most importantly, PNG’s traditional tribal lifestyle, along with its already weak mining economy, has caused the nation to remain woefully underdeveloped. 86% of its population still lives in rural areas as sustenance farmers. Despite half a billion dollars of annual aid from its neighbor Australia, 35% of PNG citizens make less than $1 a day, and 40% are illiterate. The lack of education among PNG’s people and their resulting ability to be bribed for votes, along with a weak judicial system in PNG, allows the nation’s politicians to effectively hoard the revenues of mines and energy plants for themselves. In other words, officials have crafted laws, without any widespread backlash from disengaged rural citizens, that grant the government the vast majority of resource profits and local landowners almost none. The nation’s administration gains eight times more money from taxes on resources than landowners gain in profits, and ten times more than miners make in wages. But these outrageously large government revenues from natural resources are exactly why numerous analysts have predicted that the rush to gold and natural gas will solve PNG’s endemic poverty. Any estimate for a positive impact of resource extraction must falsely assume that government revenue from resource extraction will actually end up in the hands of the poor. This expectation might be reasonable, considering the meticulous plan the government recently published that promises to allocate new revenue to infrastructure projects and other forms of internal development. But the nation’s
disenfranchised citizens are unable to hold politicians accountable for corruption, so government revenues have turned into politicians’ private bank accounts. Half of PNG’s development budget in the past five years, money meant for programs to benefit local farmers, simply disappeared from government coffers. The government may become even less accountable to its people when a smaller share of its revenue originates from taxes on its own citizens, and a greater share instead comes from resources. In other words, less funding from individual taxpayers could prompt politicians not to feel obligated to serve their citizens, and so resource extraction could fuel corruption. At the end of the day, a greater dependence on resource extraction, without any changes to how revenues from resource extraction are shared, will lead to no additional benefit to the people of PNG, but instead might add to the current disconnect between the nation’s government and citizens. Although poverty and corruption right now prevent PNG from capitalizing on its resources, they are not permanent obstacles to the nation’s growth. PNG’s natural minerals hold the potential to improve the lives of the rural poor, but only if the government chooses to share part of the $25 billion in resource extraction revenue it will soon be generating directly with rural landowners and invest the rest in development projects that benefit all PNG citizens. Of course, the country has taken steps in this direction in the past, most prominently in its attempt to publicly stamp out endemic government corruption. In 2012, President Peter O’Neill established an anti-corruption task force, an investigative agency with a purpose of sniffing out political misconduct and pursuing the adequate legal punishments for such activity. Investigators had indeed succeeded in persecuting more than 350 of the country’s
April 2015
most powerful offenders, before discovering that the president himself had embezzled public funds and then boldly deciding to issue an arrest warrant. President O’Neill hastily disbanded the group, and although protests by university students pressured the president to reauthorize the force, its budget has not-so-mysteriously shrunk to the point at which it is no longer functional. Funding for the task force that originated outside of the PNG, possibly from Australia, would allow law enforcement to continue squashing corruption and hopefully ensure that resource revenues ultimately end up in infrastructure projects. Paving the way for a stable democratic government in PNG also involves reforming the nation’s electoral culture. Political campaigns in the nation are dominated by a culture of gift-giving, in that politicians both supply monetary incentives and handouts, such as food and livestock, in exchange for votes. Such a system both allows the wealthiest individuals, often those who have previously embezzled revenue, to become reelected and dissuades citizens from assessing the political beliefs of candidates. As a result, creating an accountable government requires banning this widespread practice, in order to encourage voters to become informed on their government. At the end of the day, educating citizens nearest to natural resources about both living peacefully alongside drillers and demanding compensation for their land is the most effective method to mitigate the harms of resource extraction. Exxon itself has already funded and begun education programs for individuals near the natural gas project, which provide some possibility that more knowledgeable citizens will begin to reap profits from their own land and also avoid conflict with mining companies. Expanding programs like these to other mining areas would only act to benefit resource extraction corporations and the local population. They could even cause PNG’s electorate to become more informed and insist on a more benevolent government. If these programs can take hold and begin to empower citizens to demand an accountable government that shares and invests the wealth reaped from resource extraction, there is hope that the country can begin to take steps to alleviate its endemic poverty. HMR
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Lee Kuan Yew:
The Passing of an Icon Daniel Rosenblatt http://www.shemazing.net/
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n 1965, a small city-state in Southeast Asia split from Indonesia and hoped for international recognition of sovereignty. Unsanitary and dangerous squatter settlements plagued the city, and unemployment within the population of two million seemed uncontrollable. But in just a few decades, this poverty-ridden land would undergo an astounding transformation. Today, with a population almost three times greater, the third highest GDP per capita in the world according to International Monetary Fund assessments, and an economic growth rate that reached 36.4% in 2010, the country we now know as Singapore is unrecognizable from the small port city that existed just decades ago. Much of this dramatic renewal can be attributed to one man: Lee Kuan Yew. Mr. Lee served as the first Prime Minister of Singapore and held the position for a stunning 31 years. He envisioned much of the change that would come during his term and beyond and is seen as a symbol, whether positive or negative, of the modern na-
tion itself. Mr. Lee recently passed away on March 16th, 2015, at the age of 91. Mr. Lee’s death, though not unexpected, hit the city hard. Mourners lined up for hours hoping to catch a glimpse of the late leader’s coffin; in fact, residents were even cautioned against visiting the site, as the wait had surpassed 10 hours. The intense public process of mourning reflects, in Mr. Lee’s son’s opinion, what many saw in him. “To many Singaporeans,” Lee Hsein Loong said, “Lee Kuan Yew was Singapore.” Yet despite these public displays of grief, perception of the former Prime Minister is not all positive. Because of Lee’s influence, Singapore has, since independence, followed a controversial ideology of Machiavellian pragmatism; it has ramped up its aggressive legal and judiciary system, pushed down opposition to government, and limited individual freedoms, all in order to create a business-friendly, stable society. For years, much of the nation welcomed the economic growth and accepted the regulations as a
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necessity; of course, those who didn’t were not usually allowed to express their discontent. But today, a younger generation of Singaporeans, growing up in a globalized world where freedom of expression and of the Internet are often stressed, doesn’t seem to have this same vision of compliance for the sake of the economy. The nation is at a crossroads - the conservative business leaders vs. the young visionaries. In the end, either the current political powers will need to adapt and loosen up restrictions or new political forces will emerge and threaten the sanctity of Singapore’s style of governance. For the sake of the nation’s security, the transition to heightened liberty should be calm and gradual. No matter the method, though, this shift is inevitable – as it should be. To understand why Lee’s effective yet controversial policies will be pushed aside for a more liberal societal structure, we must assess the history and necessity of the strategy. The creation of the Singapore we know today is marked by two notably
Asia Pacific contrasting policies: free, liberal markets and restricted individual freedoms. The combination of these approaches to government led to a booming economy and an extremely pragmatic yet austere society that supports financial success. Prime Minister Lee and his supporters in the People Action Party were strong advocates of these ideologies. To begin we must recognize the frankly dismal hand that Singapore was dealt. It is one of the smallest countries in the world, with an area of under 3,000 square miles. It has essentially no marketable natural resources on which it could establish an economy. And at the time of independence, it had poor relations with its neighbors Malaysia and Indonesia and had inadequate foundational infrastructure. How, then, did Singapore develop to its current state? After independence, the government needed to create a flexible legal framework to accommodate a thriving economy that would attract international business; it did exactly this and more, beginning with tax policy. Taxes were and still are maintained at an extremely low rate, allowing businesses to keep much of their profits and return the capital to the economy. Next, since the early days of the Lee administration, the power of unions has been suppressed. Many existing labor unions were closed and others were joined together by law to form the National Trade Union Congress (NTUC). This labor organization is administered by the government in order to limit the threat it could pose to corporate profits. Meanwhile, government policies relating to daily life, though seemingly not linked to international investment, quickly became harsh and almost draconian in nature in order to increase stability in society and promote business. For example, companies, of course, desire limited corruption in dealing with government. To achieve this, Mr. Lee created the Corrupt Practice Investigation Bureau, and corruption laws became quite strict, to the point that even a low-level official could be executed for purposefully breaking one. The laws are uniquely severe, but they work — Singapore has consistently held a spot in the top five least corrupt nations, according to Non-Governmental Organization Transparency International. Austere measures extend past the government, though, and into the lives of citizens. Drug dealers can be sentenced to death. Littering can result in $1,000 fines
and public embarrassment. The sale of chewing gum is illegal. Punishment for vandalism and graffiti includes mandatory caning. What can seem like absurd restrictions and punishments are enforced and assessed directly by judges rather than juries, a system that highlights the intense nature of these laws. But despite this restrictive legal system, people still gladly choose to live in Singapore. It is considered one of the most livable cities in the world, as it is extremely clean and has very minimal crime. So, while Singapore’s harsh legal system often limits individual freedoms, it also makes for a great place to live – that is, for anyone willing to abide by the rules. Along with these societal restrictions is a more controversial lack of freedom of speech. Though Article 14 of the Constitution of Singapore upholds freedom of expression, it also provides the Parliament with the power to deny this right if it is deemed necessary in order to maintain morality, public order, or favorable relations with other nations. This power delegated to the government is great and wide-ranging and often has been used, including by Lee, to silence political opposition. Just recently, following Lee’s death, a 16-year-old YouTube blogger was arrested for criticizing Lee in a video. The video, entitled “Lee Kuan Yew Is Finally Dead!” questioned whether Lee’s harsh leadership was justified. This outspoken individual is not alone. Others have been detained, arrested, and convicted for speaking out against the government, and there are many more young citizens who share the blogger’s views. Will they too be arrested and suppressed? Many, especially in a young generation growing up in a diverse, international city, are not content with continuing to fol-
low Lee’s policies of strict rule. They are not willing to sacrifice certain freedoms and feel that a strong economy does not rely on oppression. Meanwhile, many corporate enterprises and businessmen, including a large population of wealthy immigrants, will easily accept the limited freedom for the associated financial gain. It is because of this quintessential struggle for power between the conservatives and the younger generations that Mr. Lee’s unfortunate passing comes at an almost symbolic time. As the country moves further away from the times of financial hardships and societal disarray, it is easier and easier for Singaporeans to want not just economic power but also social freedoms. The country is now developed and no longer needs to implement harsh laws. Surely, a culture of strict social rules can be maintained if it is desirable for the people and maintains a well-regarded culture. However, continued failure to uphold human rights codes is not tolerable. The nation has a government that is cohesive and completely able to maintain this level of respect for human dignity and thought; therefore, it must do so for the sake of the people. Every day, this becomes more evident to young citizens of the country, as they look towards other booming economies that do not rely on oppressive governments. As their voices become heard, they will start to form a new face of Singapore; one that is still economically successful but also democratic. It seems that with the rise of this new faction, the People’s Action Party will have to shift in policy or organized political opposition will arise as a serious option for control of government for the first time in the history of the nation. HMR
coconutsmedia.com
mothership.sg
April 2015
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CHINA’S UNCERTAIN FATE Sophie Maltby
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ver the past 20 years, the Chinese economy has seen exponential growth, and with it the nation’s influence on the entire Asian continent has rapidly expanded. Even during the global financial crisis, the country continued to prosper. However, there now
seems to be a slight shift in China’s dominance following its overly aggressive imperialist strategy that has persisted for the last decade. While relations with Tibet have always been tense and strained, the Tibetan government-in-exile has launched a fresh drive to persuade peo-
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ple across the world to support its campaign for more autonomy for people living inside the region, following increasing restriction and repression from its neighboring China. Further, the recent re-emergence of Myanmar onto the political platform challenges what we always took for granted as China’s absolute power in the region. Neither of the countries have strong diplomatic ties with China, and both would benefit greatly from a shift of power in the region. Tibet and China have seen tension relations for more than a millennium. While contention began from conflicting
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“NOW MORE THAN EVER, THE PEOPLE OF TIBET ARE LOOKING FOR A WAY TO OVERCOME CHINA’S OVERBEARING POWER.” religious ideas, a fiercer conflict over Tibet’s sovereignty and independence became the one of primary focus. The Mao government and People’s Republic of China as a whole completely disregarded Tibet’s desire for independence within sovereign borders, immediately instigating land redistribution of private property. Landholdings of religious houses such as monasteries, and the homes of the nobility were seized for redistribution to the lower classes and peasants. In doing this, the communist regime of China hoped to destroy the power base of the wealthy and Buddhist leaders in the country. A reaction led by the monks broke out in June of 1956 and continued through 1959. The Tibetans, though powerful in thought and communication, were poorly armed compared to the powerful China and turned to use guerilla war tactics to drive out the Chinese. While the Chinese suffered minor fatalities, the end of the fighting three years later left 86,000 Tibetans dead, and even more strangled relations between the two countries. On March 10, 2008 thousands of Tibetans took to the streets, peacefully protesting for the release of imprisoned monks and nuns. Chinese police tried
to break up the protest with tear gas and gunfire. The Tibetans continued for several more days, but the peaceful protest eventually graduated into a riot – their anger further spurred by reports that the imprisoned monks and nuns were being mistreated or killed in prison as a reaction to the protests. Tibetans burned and ransacked the homes and shops of ethnic Chinese immigrants in Lhasa and other cities; the Chinese associated press reported that 18 people were killed by the rioters. Word spread of these demonstrations, as did the unrest to the neighboring provinces of Qinghai, Gansu, and Sichuan. The Chinese government, in an attempt to strangle and dry out the protests, mobilized 5,000 troops. Reports indicate that the military killed as many as 140 people, and arrested more than 2,300 Tibetans. Now more than ever, the people of Tibet are looking for a way to overcome China’s overbearing power over another nation. Equally as important to the balance of power in the region, the emergence of the previously militarized Myanmar has already begun shifting more of the power away from China. A major step in the process of re-emergence has been Myanmar’s assumption of the chair of the Association of Southeast Asian Nations for 2014, after being passed over for the chairmanship in 2005. This signaled to the world that the country was prepared to interact with the region in a more robust and serious manner. The National Bureau of Asian Research has gathered together a team of experts to analyze various aspects of Myanmar’s emergence, specifically the geographical and political advantages it has that can make it a serious contender for a power position in the region. Now, China’s economic growth has slowed to 7.4% in 2014, regressing to a level not seen in a quarter century. The Communist Regime in China sees social and economic stability as an essential component in maintaining its grip on power; but as the economy is slowing down and more country’s are growing in strength, China’s strength is being questioned, and challenged. Though small in size, Myanmar too has demonstrated increased influence and has altered the balance of power on the continent. After decades of authoritarianism and self imposed isolation, it is emerging as a force to be reckoned with. As the National Bureau for Asian
April 2015
Research first reported, domestic political and economic reforms have already begun to enable Myanmar’s people and institutions to interact with foreign cultures through diplomatic missions in ways that would have previously been impossible. As Myanmar re-emerges onto the world stage, its potential to play larger role in global economic and political affairs is significant. The country’s new role as chair of the Association of Southeast Asian Nations (ASEAN) places it as the leader of 10 countries within the region — Cambodia, Brunei Darussalam, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam – all of whom share an interest in challenging the power of China. ASEAN and China have defined their relationship as a “strategic partnership,” meaning that while ASEAN wants to ensure that China does not monopolize trade within the continent, it is also aware that in its current state, China is stronger and must be willing to cooperate with ASEAN, or the balance in power will tip the scales. Furthermore, Myanmar and China relations are far from amicable. Myanmar’s air force bombed Chinese soil in an accidental strike in early March of this year. The strike, while resulting in no deaths or injuries, damaged a Chinese civilian building. The incident will test China’s resolve on its policy of non-interference with internal affairs of other states as per its Five Principles of Peaceful Coexistence, a decades old and antiquated set of guidelines spearheaded by the PRC’s first premier, Zhou Enlai, to guide the country’s foreign policy. Additionally, confirmation of these bombings comes no more than a week after it was revealed that a primary general in the People’s Liberation Army had leaked states secrets to the Kokang rebels, a militant group fighting Myanmar’s military and formerly members of the Communist Party of Burma. The scandal fueled conspiracy theories in Myanmar that the Chinese military was assisting the Kokang rebels in their violence and insurgency. China and Myanmar benefitted from diplomatic relations until the 1960’s. After
Asia Pacific this point, militarization overwhelmed Myanmar and suppressed any growth of diplomatic relations. Further, China did nothing to protect the people of what was then Burma when General Ne Win orchestrated a coup d’etat to take over the Burmese government in 1962, reaffirming China’s stance to its Five Principles resolve. As the Communist government of Burma grew, its isolationist attitude and chauvinism escalated and the two governments headed down completely different paths. The Chinese focused on economic growth and expansion of power, while the Burmese’s sole goal was to strengthen the internal power of the Communist Power, through militarization and oppression of its own people. In 1963 the Burmese dictatorship declined to join China’s bloc in the Sino-Soviet feud and rejected any form of reconciliation with its neighboring country. As China delved further into the Cultural Revolution in 1966, its export of Maoist thought and revolution became
7.4% CHINA’S 2014 GROWTH RATE more militant. The brewing tension between the two countries finally boiled over in June 1967; thousands of Burmese in Rangoon, Burma participated in an anti-Chinese riot – yearning for help from the Chinese government to fight back against the furious dictatorship in their home country. Then, as the Communist government grew in China, its support grew for the Communist Party of Burma (CPB). The states traded diplomatic measures – including mutual denunciations of the press and public
demonstrations. When the Burmese Dictatorship was overthrown in 1989 and the country became Myanmar, the people of the nation remained bitter towards the great power of China and its lack of support to the suppressed Burmese. However, the most important impact of that time on present relations has to do with China’s continuing support of the military regime. Now that the country has become de-militarized and exited from the darkness, it is the people who were long against any form of regime or militarization that maintains control — and those people are aware of the pro-military support provided by China. Second to China, India is inarguably the most powerful country in the region, and has the second largest and fastest growing economy. While Myanmar and Tibet have tense relations with China, the free and democratic country of India represents an ideal, one that they believe can be achieved for them if distanced from China. Though India’s economy slumped in 2012 and 2013, it is projected
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Asia Pacific to grow 6.3 percent next year — largely due to investor confidence promoted by newly elected Prime Minister Narendra Modi. By 2016 the country’s growth rate of 7.2 percent will surpass China’s 7.1 percent, says CLSA senior economist Rajeev Malik. Further, India came second in the global rank of labor size, positioning it to spring forward if given support by other country’s in the region. On a more global scale, the instability of China’s rise as a great power is a stark reminder that Beijing does not enjoy the same sense of geographic insularity afforded to the United States. The United States, with a larger military than the next ten countries combined, can assert itself in almost any region in the world. China not only has to reckon with states friendly to the United States along the first island chain off its coast — it also has to ensure that land-based threats from its neighbors do not end up compromising its internal security. Beijing has long been aware of the risk, for example, of Uyghur militants using Pakistan and Afghanistan as safe-havens for planning terrorist attacks, and has had included the issue in its diplomatic approach toward these states. However, American involvement in the region has eased, and the result may actually be the opposite of what was expected. The reason the United States was involved with China, apart from its being a place holding one trillion dollars of our nation’s debt, is to ensure the Chinese government was treating its citizens well. While the Chinese government had previously been very oppressive toward its people a 2008 attempt to save the economy, a $600 billion stimulus package, changed that. In a plan that many economists compared to the New Deal, the government said it would ease credit restrictions, expand social welfare programs, and launch an infrastructure spending program that would increase construction of railways, roads, and airports. The plan also allowed the country to separate itself from the turmoil of the global economy at the time. At the time, the U.S. had a $20 billion monthly trade deficit with China, funded by China’s willingness to hold U.S. treasuries in its Central Bank. Previous to the stimulus package, China was essentially investing in the U.S. economy, in exchange for low inflation rates – an effect of the Yuan
being tied to the dollar. Now, it is transitioning from its reliance to a self-sustaining economy. With less U.S. involvement in the region and a weaker Chinese economy, it is easier now more than ever for mobility within the continent and region. Asia is undergoing tremendous change right now — some of which may not present itself for years. However, the economic effect of international anger toward China will soon be visible . On March 11th, China announced its growth rate target for 2015 as 7%, though in reality it will be a stretch to hit even that, and its deceleration has been both abrupt and unexpected. In 2012, the International Monetary Fund (IMF) forecasted that an annual growth rate above 8% would continue to 2017. While most did predict that the China’s economy would wane, few thought it would happen this quickly. The financial law of large numbers tells us that the larger an economy gets, the more difficult it is to maintain the size of that economy and to continue growth at a consistently high rate. It states that the larger a company grows, the harder it I for that company to sustain the same amount of growth. Similarly, the more the Chinese economy grows, the more difficult it is to sustain its own growth. All of this leads to the conclusion that while the country remains the most economically prosperous country in the region, its recent economic slowdown shows a bleak report for the future of economic growth. In 2014, China’s economy grew half of the 14% by which it increased in 2007. The immense growth it has seen for so long can only exist under near perfect conditions. Growth is a function of changes in labor, capital, and production; when all three increase, an economy can see unprecedented growth – and that is precisely what happened in China for many years. But now the country is lacking in those three key elements, and it is precisely that which will slow it down. China’s working age population peaked in 2012, and its technological gap with richer countries indicates that productivity will be lower as well. Still, the largest reason for the economic slowdown is the credit bubble that has been growing for the past decade. The total debt of the country is 250% of the GDP, which is up 100% since 2008. While it is this debt that allowed the economy to
April 2015
flourish during the 2008 financial crisis, it is worrying that most of the credit flowed to property developers, and China’s inventory of unsold homes sits at a record high. The increasingly stagnant economy of China, compared with the further emerging and flourishing economies of Myanmar and India present a somewhat dismal future for further expansion of power of China. While it would be unreasonable to say that China will become completely irrelevant in the region, it will be far more difficult for it to expand its influence without a growing economy. Further, the neighboring Tibet has a resistance movement that is gaining more traction everyday. This social and economic threat to the country will certainly change the balance of power in the region, and that power will be spread more equally amongst other nations and organizations. HMR
“THE PEOPLE OF THE MYANMAR REMAINED BITTER TOWARDS THE GREAT POWER OF CHINA.”
Asia Pacific
Drug Trafficking in Singapore: A Social Dilemma with Economic Solutions
O
Ray Fishman
n May 13th, 2005, Shanmugam Murugesu was hanged at Changi Prison in Singapore at dawn. A taxidriver and freelance window cleaner who had previously represented his country at the 1995 World Championship Jet Ski Finals in Arizona, Murugesu was executed for having smuggled a little over a kilogram of cannabis into Singapore. Despite pleas from family members for a reduced sentence, Murugesu was subject to Singapore’s notoriously harsh “Misuse of Drugs Act,” which mandates capital punishment for possession and assumed trafficking of more than 0.5 kilograms of cannabis. And while Murugesu’s death only represents the sad story of one life cut far too short, the unfortunate statistics will show that there exist many cases similar to his. In fact, the Republic of Singapore, an island country in Southeast Asia, is the world’s leader in executions per capita, which are all carried out via hanging. Even more alarming, however, is the estimate that roughly 70% of these
hangings are for drug-related offenses, which, generally speaking, are non-violent crimes. With these disturbing facts known, two mainl questions arise: Firstly, why does Singapore feel that is is necessary to use capital punishment against drug traffickers and secondly, why are so many people resorting to the illegal drug trade? To answer the first, obviously very nuanced question, it is necessary to evaluate the Republic of Singapore as a whole. At first glimpse, Singapore is a thriving country. Obtaining independence from the United Kingdom in 1963, Singapore has in general experienced a period of economic boon, ranking highly in certain quantitative measures of success. For example, Singapore has the 3rd highest Gross Domestic Product per capita out of any country in the world and is also ranked 9th in the Human Development index. In addition, Singapore’s education and healthcare systems have been praised. But despite these impressive statistics for a nation of just 5.5 mil-
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lion residents, Singapore is ranked last in economic equality of developed nations, having a Gini coefficient of 47.8, a statistic demonstrating how the wealth of a nation is split between the richest and poorest citizens. Additionally, Singapore was given the lowest Democracy Index of any developed country in the world, indicating that freedom of the press as well as civil liberties were severely oppressed. It is in these, far more disturbing statistics, that the answer to our original questions can be found. In a country where the government seeks to control the very speech of its own citizens, it perhaps come as no surprise that the government also seeks to preserve a certain image of a country--one in which citizens follow strict government regulation and dissent is not tolerated. In establishing a death penalty for drug trafficking, the government effectively does just this. In addition, through mandates of harsh punishment, the government of Singapore seeks to instill fear within its citizens and hopefully deter them from considering
Asia Pacific
crime. The same can be said with regards to the number of executions that occur in Singapore every year. What the government of Singapore, however, does not consider, is how the very country’s economic situation is perhaps the reason as to why so many of its citizens are resorting to this type of crime, even with the knowledge that being caught is lethal. In countries plagued by economic inequality, such as Singapore, socially mobility is often almost unachievable and quixotic. Menial jobs are common, and wages are almost always kept low. When faced with such conditions, people, and workers more specifically, tend to flock towards any economic opportunities that may arise, even if such methods are illegal. This is the exact promise of the drug trafficking. While the risk is extremely high if caught, the reward of a successful operation is also tremendous. This is why so many, particularly in Singapore, choose to leave their quotidian jobs in search for a more lucrative opportunity. And while drug trafficking is by no means moral, an inequitable economic situation certainly makes it understandable, and at the very least least, more likely to occur. If Singapore truly wishes to stop or at least mitigate the the current amount of drug related executions that occur each
year, it can, but the country as a whole first needs to understand the reasons drug trafficking occurs in the first place. Creating even harsher penalties and attempting to remove drugs from the country with large scale operations are in general both costly and ineffective, and there are many different routes that Singapore can take to combat drug trafficking. One of these would be to establish a national minimum wage, something that Singapore, unlike the vast majority of developed countries, does not have. A creation of welfare programs that go beyond simply paying for basic medical treatment could also potentially be effective. If Singapore can perhaps take one lesson away from their high rates of drug trafficking, it is that these crimes are deeply intertwined with continued farright economic policy. It also would seem as if stopping the amount of executions in Singapore would be in in the interest of the Singaporean government, since it is a basic and mostly true assumption that a country wants less crime to be committed. Since a fairly large amount of drug trafficking crimes are actually being committed by non-native Singaporean people (although a large amount of permanent residents are also foreigners), a mollification of drug trafficking crimes and executions would
April 2015
almost certainly result in improved foreign relations with countries whose citizens are involved in these drug trafficking crimes. There have also been several high-profile cases where Singapore has refused to participate in discussions with other countries whose citizens have been accused of drug trafficking in Singapore. In turn, this recalcitrance from Singapore has severely damaged relations between it and other countries. With fewer executions being committed, Singapore’s place as the country with the greatest number of executions per capita will be assumed by another country. Even with public expressions of being “hard on crime,” certainly no country wishes to top that list. The bottom line is that the blame of the sheer volume of executions in Singapore lies solely upon the government, which must take responsibility via immediate economic action to both save lives and also improve Singapore’s place in the international world. As Singapore moves forward into the 21th century with the rest of the developed world, we can only hope that the country will bring an end to its corrupt executions. For now, however, there is still blood on the hands of the Singaporean government. HMR
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Africa and the Middle East
AFRICA:
AN INESCAPABLE HISTORY OF COLONIALISM Ananya Kumar-Banerjee
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s a continent, Africa has had a long history of colonization by both moorish and european explorers. Although portions had been under foreign rule, Africa was largely composed of independent nations until 1914. It is estimated that there existed over 10,000 different states and autonomous groups within Africa prior to its colonization. Before the 20th century, extensive colonization had been impossible because of the lack of development of technology. However, after the creation of repeating rifles, modernized artillery and the discovery of quinine, a chemical aiding in the prevention of malaria that affected the majority of tropical Africa, colonisation became more possible in African territories. By 1914, the scramble for Africa was making good headway, with roughly 90% of the continent under European rule. Previously, partitioning of African territory had been done to counter the possibility of European wars within
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Africa and the Middle East Africa. After the Berlin Conference of 1884 and 1885, many Western powers stretched into the African continent with the hopes of promoting direct rule, maintaining their role as a major power in the international community, and utilizing the nation’s natural resources. In order to properly use these resources and ensure efficient European rule, nations had to establish infrastructure in their specified region in order to provide for the maximization of monetary gain in these regions. Many of the regions occupied by Europeans had previously been divided into mobile districts based on the migration patterns of nomadic tribes that were native to the area. But this concept was new to Europeans and something that they could not comprehend. So, Europeans divided up the land into the hard-lined, easily mapped colonies that we know today. These divisions forced many opposing tribes together by forcing them to live within synthetic borders which were not naturally or easily accepted. Backlash against these borders included massacres and open war, including the famously attempted genocide between the Hutu and the Tutsis in Kenya. Many of the first disruptions of the European “peace” in the selected regions were caused by revolutionaries. In the French colonies of Algeria and Morocco, people were dissatisfied with the Empire’s lack of recognition of the forces these colonies contributed during the first World War. These early movements showed dissatisfaction among the people and strengthened nationalism, but did not contribute greatly to the cause of independence. Instead, these movements promoted the acceptance of European dominance and instead sought to develop their rights within the existing framework of European colonialism present in their land. However, these early movements are significant because they first introduced the idea of openly expressing dissatisfaction with ruling European nations. The sentiments introduced during this period would be reintroduced after the Second World War, a period which saw an increase in literacy and local industries. Despite the fact that Winston Churchill and Franklin D. Roosevelt established the Atlantic Charter in 1941, which declared the autonomy of all imperial colonies, many African countries remained under
European rule. Shortly after, however, many highly educated nationalist individuals reignited anti-European sentiments and led the fight for colonial independence. After many of these countries declared independence, anarchy ensued because of the lack of dictator-like power that had controlled the area for so long. In searching to establish a modern, self-sufficient society, these countries were faced with two options regarding their imperialist infrastructure: utilise the existing framework with minor changes, or rebuild the entire infrastructure to fit to serve altered purposes. Both of these options offered positive and negative aspects. For those choosing to use the existing framework, the society would divide into factions that were originally comprised of Europeans and
nations, such as Ethiopia. So how can the issue of these militant factions be dealt with? Is there something the national governments can do? Is it up to the international community to intervene? Or is it truly in the hands of the people themselves? One of the problems with the idea that the national government could intervene is that in this situation we assume that the national government is an independent authority. However, in many cases, regions that are being dominated by militant factions often do not have a strong, independent government. Rather, these militant factions act as the primary authority figure in the region, utilizing concepts such as fear tactics in order to maintain their heinous rule. So often, there is nothing the national government can do to intervene.
“It must be in the hands of those dominated by these militant factions to defeat the very people who threaten their livelihood.” non-Europeans. This divide would lead to a disjunction in the distribution of power and the inevitable corruption of society to serve one minority elite group whose thoughts and actions were nearly identical to that of the imperial colonizers. Those choosing to rebuild their entire infrastructure to be a democracy soon realized the ordeal they had chosen to embrace. Building a democracy out of a “country” that was already divided by antiquated tribes that often had pre-existing tensions between them was nearly impossible and led to anger and anarchy. Further, not everyone agreed with either of these proceedings and fought the power of those who were desperately trying to lead and organize their country. Both of these models led way to major revolutions, thereby creating anarchy. Out of this anarchy came the militant factions that we know today, such as Boko Haram. Almost all of the nations that we know in Africa have experienced or are experiencing this aforementioned anarchy, with the exception of a few smaller
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What about the international community? Many foreign nations have the means and infrastructure to help bring order to these nations. Why aren’t they helping these nations? When it comes to the “international community”, most power is coming from developed nations. In other words, the help is coming from nations that are considered to be primarily caucasian in their populace, something which angers many people from African nations. After decades of being bullied and oppressed by European and American caucasian colonizers, one might understand why there is so much anti-caucasian sentiment in Africa. That being said, there has been limited intervention on the part of the United Nations. The United Nations has several “peacekeeping missions” on the African continent that mean to work against the tyrannical powers of the militant groups while counteracting and diminishing the effect of local crime, such as rapes and murders. However, it is not really in the United Nations jurisdiction to totally reorganize any nation because that would
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FRANCE
GERMANY
PORTUGAL
SPAIN 76
that can take everything from them? There is one major motivation, a motivation which led these nations to their current state. The possibility of change is what pushed these people, many years ago, to work against their all powerful European colonizers. Every revolution and major change is a gamble, a possibility that might lead to chaos and a fractured society. However, this discouraging fact is well-known. These people knew that by fighting their rulers, there was no guarantee of getting their dream of a democratic society. Yet, they did it anyway. They fought their rulers for the small possibility that things would work out and that they would get the society of their ideals. That is what these people must do again. Every stable nation is born out of tumultuous times and chaos, and the people of these nations must battle through the chaos with the possibility of a beautiful democracy in their minds. HMR
GREAT BRITAIN
be violating the national sovereignty of the nation. Further, although the United Nations may seem like a true collective of the nations of the international community, the bureaucracy is dominated by the United States. So just as in the previous situation, many people from African nations may not be too keen on the intervention of the United Nations because they see it as a modern extension of European domination. So, if it is not in the hands of a national government and it is not in the hands of the international community, it must be up to the people to cause change. It must be in the hands of those dominated by these militant factions to defeat the very people who threaten their livelihood. But how can they achieve this tremendous goal? Often the people who are dominated by militant factions have little shelter, food, and water and don’t have access to the tools that would help them defeat their aggressors. Further, because of the limited nutrition and stability they have in their life, it might be simply impractical for them to go against those that provide what little resources they have. So why do it in the first place? What is the motivation for these people to fight those
Africa and the Middle East
*1 in 100 Nigerians is affected by Boko Haram
Boko Haram: The Threat to Nigeria’s Future Jacob Chae
B
oko Haram emerged as a new terrorist organization in Africa in 2002. The group surfaced at a crucial era for the worldwide community after the terrorist attacks of 9/11 During the past 13 years, Boko Haram has committed countless acts of terrorism. Its most recent violent acts, which garnered widespread international attention, were the kidnapping of almost 300 schoolgirls from Chibok in April 2014 and the massacre of over 2,000 people in Baga, Nigeria in January 2015. With its military force reaching near 10,000 militants, Boko Haram is advancing rapidly and is faced with little opposition from the countries in which it operates. As Boko Haram’s presence and authority in Africa continues to increase, more and more Af-
rican governments lose power. This will ultimately endanger not only these targeted nations but also other prominent countries nearby and overseas. Boko Haram is a persistent threat to Africa’s people and natural resources. This threat will only be magnified in the future, as Boko Haram plans to work alongside the Islamic State of Iraq and Syria (ISIS). To ensure the balance of power in Africa, other prominent countries, such as the U.S., should either aid countries such as Nigeria in the fight against Boko Haram or urge the United Nations to put an end to the violent conflict. Boko Haram is led by Abubakar Shekau and is a radical militant Islamist group, which seeks to wage a “global jihad.” The group’s name, when loosely translated from
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a local language called Hausa, means “western education is forbidden.” Members of the group believe that secular education is a sin and those who have secular beliefs must be reprimanded. According to Toni Johnson from the Council of Foreign Relations, Boko Haram was founded as a Sunni Islamic fundamentalist sect and bases its ideology on a strict form of Sharia law. Boko Haram later developed into a Salafist-jihadi group in 2009 and was influenced by the Wahhabi Movement. According to PBS, Wahhabism is a religious reform branch of Sunni Islam and has often been described as an “ultraconservative” Islamic movement. Wahhabism has been repeatedly accused of being a source of global terrorism and for causing disunity in the Muslim
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Africa and the Middle East community. Boko Haram strongly reflects and advocates the beliefs of Wahhabism through it’s violent movements and executions. Boko Haram focuses it’s major acts of terrorism in areas of Africa where it seek to destabilize the governments. Boko Haram first infamously became widely known through the 2011 bombing of a U.N. facility in Abuja, Nigeria. Since then, Boko Haram’s presence in Africa has been steadily growing, as it constantly gains more members. Conclusively, as Boko Haram’s power continues to increase and if nothing is done to prevent them, a new unstable sense of order will be inevitable in Africa. There exists many reasons on why Boko Haram’s power is steadily rising. One of the main reasons is due to the lack of retaliation from African countries. Countries such as Nigeria have had initiated military activity to try to fight and repel Boko Haram but these methods have had little or no success. Another cause of Boko Haram’s rise is the severe dearth of media coverage. The change in the balance of power in Africa can be attributed to the lack of media activity. An insufficient amount of media coverage can ultimately lead to the deficiency of political activism. The influence of the media is clearly an underestimated factor in today’s world, as the media informs people about current events locally and worldwide. When the word about a particular event starts to spread out, more awareness is formed. In many other instances, media coverage of an incident has clearly influenced the public’s responses. For example, when the Charlie Hebdo attacks happened, news outlets were all over the topic. CNN and NBC covered it for a long period of time. There was a great deal of public response. In Paris, France, more than one million people took to the streets in a rally to protest the violence of the attakcs, including many notable people such as Benjamin Netanyahu and the President of Palestinian Authority, Mahmoud Abbas. At the same time, a hundred miles away,
one of the deadliest massacres occurred in Baga, Nigeria. This massacre went down as one of the most gruesome massacres in Nigeria’s history, as over 2,000 innocent civilians were murdered. Boko Haram claimed responsibility for these attacks, which they carried out in protest of people in Nigeria becoming accustomed to western civilization. Boko Haram was motivated to engage in these attacks because it disapproved of Muslims in Baga taking part in Western societal activities, such as promoting democracy. However, major news outlets shined either little or no light upon this topic. They neglected to discuss the tragedy that took the lives innocent people and instead focused all their attention on the Charlie Hebdo shooting. Due to the lack of media coverage these Boko Haram attacks receive, very few people are aware of them. Not only were the reactions of the media were unacceptable but also, the reactions of the Nigerian government officials were outrageous. The Nigerian government security officials initially denied the attacks and stated that the whole situation was all under control. In the situation of the Charlie Hebdo shooting, since the news spotlight was put on the attack, many people became aware and advocated for justice to be implemented. Countless people have cried out against the attacks in Paris through social media. Many famous politicians, such as Barack Obama who signed a book of condolence at the Embassy of France, condemned the attack. Conversely, in the case of the Baga massacre, only a few people were aware of the events. As a result, no significant political action was taken and there was no collective response. It is evident that the secrecy and the distortion of information from the Nigerian government depicts its decreasing authority in its region. This can be attributed to Boko Haram’s surging dominance in Nigeria and other neighboring countries. As it’s supremacy becomes more and more prevalent in areas where it
operates, Boko Haram will continue to tip the balance of power towards its side. If Boko Haram’s control in African regions were to continue to rise at a quicker rate, this would negatively impact the trade relationships regarding Africa’s natural resources. African nations are very involved in trade. According to The Independent, Africa contains many natural resources: gold and uranium to petroleum and cocoa beans. Some of the major countries that Africa trades with are the United States, Canada, France, the United Kingdom, and China. Many countries rely on imports from Sudan and Nigeria, which are the two largest oil producers in Africa. However, many of the countries that trade with African nations exploit the plentiful natural resources. They receive the majority of value and money from natural resources, worsening the poverty in Africa. China is clearly a dominant force resource exploitation, as it owns 40% of Sudan’s oil production. China definitely has ahuge role in Sudan oil as according to the U.S. Department of State: Diplomacy in Action, Sudan's oil exports in 2010 were estimated to be at $9 billion (in United States dollars). Therefore, China’s ownership of Sudan oil is worth approximately 3.6 billion US dollars. However, if Boko Haram’s power in Africa continues to rise, not only countries in Africa but also the major countries overseas, that take advantage of Africa’s resources, would suffer devastating blows. Under potential control of Boko Haram, the African governments would falter, civilians would have to endure harsher lifestyles, and the African poverty line would plummet even further. Powerful and influential countries such as the United States and China would suffer economic detriments as they would no longer have control over their African exploitations and therefore would lack some of the promising natural resources such as petroleum. Furthermore, Boko Haram would have possession over these natural resources and might even go as far as placing a monopoly
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on their goods and selling them for outrageous prices. This would have a long lasting negative impact on many of the economic markets worldwide as Boko Haram would have sole possession and authority over Africa’s resources. Boko Haram achieving more power in African countries would allow it to be a more dominant force in the world and possibly continue the cycle by taking over another vulnerable country in another continent. To some people, this idea might sound far-fetched, but in truth, it happens to be a very realistic situation. According to BBC News in March 2015, Boko Haram has pledged allegiance to the Islamic State. The allegiance of Boko Haram to the Islamic State serves as a huge turning point due to the vast amount of territories both regions already have and plan to occupy in the near future. As previously noted, Boko Haram has a strong presence in African regions such as Nigeria, Cameroon, Niger and Chad while the Islamic State of Iraq and Syria (ISIS) has control over “large swathes of territory in eastern Syria and across northern and western Iraq.” BBC News further reported that ISIS works to establish a “caliphate”, a state ruled by a single political and religious leader according to Islamic law and its leader, Abu Bakr al-Baghdadi, is known to his followers as Caliph Ibrahim. To further emphasize Boko Haram’s dedication, the leader of Boko Haram, Abubakak Shekau, stated in an audio message that, "We announce our allegiance to the caliph [Abu Bakr al-Baghdadi] and will hear and obey in times of difficulty and prosperity. We call on Muslims everywhere to pledge allegiance to the caliph." The relationship between Boko Haram and ISIS is an unfortunate one from our perspective.. When two rising terrorist organizations
join forces, not only do they become harder to attack due to their increase in strength but also they become more likely to spread out and have a stronger presence. When Boko Haram and ISIS team up together, they will become an even stronger terrorist threat than before and place an even bigger obstacle for the United States and the U.N. in their attempts to counter terrorism. Not only countries such as Nigeria but also countries like the United States should look further into destabilizing Boko Haram. Currently, Boko Haram is persistently trying to take control over more areas of land and recruit more peole. However, in order to prevent Boko Haram from attaining more authority, these countries must step up to the task.. One major path that Nigeria is already using to retaliate against Boko Haram is sending their national army into towns to try to eradicate Boko Haram’s presence. It is crucial to attack this problem from the core. However, this method has not been very successful. Nigeria has had varying information regarding this conflict and even went as far as trying not to acknowledge the fact that they needed help. Due to the Nigerian government trying to cover-up their woes, one possible way they might have attempted was to distort information given to the media. For example, of the many media reports regarding Boko Haram, several of them contain conflicting ideas. As reports constantly state that the Nigerian army is teaming up with other African armies against Boko Haram, they however contradict themselves by also saying Boko Haram is constantly killing handfuls of lives. For example, the Financial Times reports that Africa’s soldiers of fortune join fight against Boko Haram. However, a report that came out around the same time from CBS News stated that
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1,000 killed by Boko Haram in 3 months. What we should be expecting is for these African armies to join the fight and stop Boko Haram. Conversely, the opposite result appears and it seems like Boko Haram keeps on surging. If this troubled situation continues to linger on, it will reach a potential point where Boko Haram is in full command and the governments of these occupied areas are completely faltered. Another reasonable claim would be for powerful and influential countries such as America or China to provide help to these Boko Haram conflicted areas by sending in troops. If all these attempts do not succeed, countries would have to convince the United Nations to get involved. Just as the U.N. previously did with its Fact Finding Mission on the Gaza Conflict and its current investigations of North Korea and Syria, if the United Nations needs to get involved, it will surely take the most appropriate and suitable approach to the fight against Boko Haram. Whenever there is an issue or dilemma faced, it is important to understand all the aspects of the problem, note the root cause of the problem, and to devise a way to solve this problem. The problem Africa currently has is the intervention and negative influence of Boko Haram. While in countries where Boko Haram operates in such as Nigeria there is a sense of small retaliation, it is clearly not enough. Boko Haram has proven itself that it should not be taken lightly under any circumstances. The war on terrorism has been furiously growing over the past several years and as it does not appear to subsidize anytime soon, new methods and tactics must be taken to preserve not only Africa and its respective governments but also the peace residing within it. HMR
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Africa and the Middle East
A Striking Contrast: William Scherr
E
conomic inequality in the Middle East is the most rampant, influential, and consequential to the World. Viewed by many as the reason for the wave of revolts in the Arab world, economic inequality proved to be the most divisive in the world. Five years removed from mass uprisings that ousted hardened and previously considered untouchable regimes in Tunisia and Egypt, it appears as though the initial hopes and aspirations that triggered these movements and represented by these movements have not materialized. The revolts in Libya, Syria, Yemen, and Iraq that
followed those in Egypt and Tunisia remain stuck in a bloody armed gridlock that have combined led to close to a million deaths and has displaced even more within and across borders, creating more economic problems in the neighboring countries. In Egypt, the birthplace for the mass uprisings, military rule has returned through the violent crushing of protests. In addition, the Egyptian government has arrested over 40,000 people. Other nations of non-democratically elected governments such as Saudi Arabia continue their strong iron fist like rule on their nations. As a result, in
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nations like Saudi Arabia, Kuwait, and United Arab Emirates there has not been widespread revolt. Economic reforms put in place by the IMF and the World Bank, the oil industry and education are largely responsible for economic inequality in the Middle East. The same factors that cause economic inequality are the same principles that the people of the Arab World are revolting against. Economic inequality is proof that the Arab spring was not solely a revolt against an authoritative government. Even before the global economic recession of 2008 and 2009, the Arab world ranked
Africa and the Middle East
Endemic Inequality in the Middle East near or at the bottom in many quality of life categories. Average unemployment rates for Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia were higher than those in any other region in the world, while labor participation rates were the lowest: less than half of the population was employed. For the Arab world as a whole, youth and female participation rates also ranked at the bottom among the many different nations of the globe. As a result over half the population receives minimal earnings and is subject deteriorating living conditions. This poor quality of life naturally gives way
to discontent among a population. It is only human instinct to want and to strive for a better life than one currently has. In Western nations protests against economic inequality are quite common. For example, in the United States, Australia, France, Canada, and Germany, there have been many Occupy protests against social and economic inequality. However, these protests can only have an impact in nations where people hold the government accountable for its actions. In many Western nations, if citizens are not happy with their quality of life, they let the government know during the local and
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national elections. That being said, in a region where majority of the leaders have been in power for decades and have muted their opposition this type of accountability and change in government is not possible. As a result of unwavering and unaccountable governments combined with poor quality of life, the world has been made witness for the past five years, to complete chaos, anarchy, and violence. While reforms to liberalize nations’ economies from the World Bank and the International Monetary Fund proved helpful in some aspects, they have not been successful at improving the life of
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Africa and the Middle East many of the average Middle East civilians. There was deregulation of the labor markets, privatization of land and other economic assets, financial and trade liberalization. All in all, countries put a large amount of importance on private sector growth, similar to the monetary policies of many Western countries. Yet there is a key difference between the private sector growth in the West and the private sector growth in the Middle East; all of this private sector growth among the Middle East countries was at the expense social spending and attention. As a result there were some in society that benefited from these reforms but others who could not keep up with this new economy and the inequality began to become more noticeable. If the governments of these nations had been held accountable such imbalance in attention and spending might not have occurred. But these governments were never held accountable until the citizens of these nations started the fight five years ago by demanding accountability. Oil is largely responsible for the widening gaps of power and wealth that are not only apparent within the borders of individual Arab states but also throughout the region This inequality most notable at a regional level between the Gulf Cooperation Council (GCC) states comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates on one side of the spectrum and other Arab countries on the other. In the nations of the Gulf Coop-
eration Council, oil makes up 75% of those nations’ total exports. This leaves only 25% of the rest of the market open to exportation. As a result, there are very few means by which an individual not engaged in the oil markets to be active in the international economic field. These regional governments and kingdoms have grown larger in the wake of recent multiple political, social and economic crises. By the end of 2014 net foreign assets grew to 2.27 trillion U.S Dollars. This growth is up from 878 billion dollars back in 2006. During this time many of those same nations that had a positive gain in net foreign assets, all had negative GDP’s. This deficit is paralleled by a 17.5 percent growth in the private sector each year for the past four years. While private sector growth is vital to success of a nation and a promotion of capitalism and is a beneficial factor, limiting the necessary tools for an individual to economically and socially rise is detrimental and should not have to come second to economic growth. Furthermore, among the 44.2 million citizens of the GCC nations only 5,100 Gulf families are estimated to hold more than $500 million per household in liquid assets; their combined total assets exceed $700 billion. While economic inequality within nations is important, economic disparity among nations within the region is equally if not more important. Nations that have large oil fields such as Saudi Arabia and the United Arab Emirates have a larger economic relevance on
the international stage and as a result are wealthier. However other Middle Eastern nations such as Yemen and Jordan, who just on where they are geographically situated do not have large oil fields, remain some of the poorest nations in the world. As a result what appears to be a regional problem, now is a much larger more problematic issue for the wealthier nations. Recent trends have shown that Saudi Arabia’s population has increased 3.5 percent per year and the United Arab Emirates population has increased by an even larger margin of 4 percent per year. If the current trends continue, within the next couple decades the population of those nations should double. This creates a problem for the nations as their population increases at a dramatic rate, their cities become overpopulated, there is a heavy usage of natural resources such as water, and most importantly for the sake of this article economic inequality will expand. As a result of social and economic life becoming more deeply embedded in market relations and in their nation’s economy, those who hold the most power in those markets tend to benefit. This social and economic entanglement combined with an increase in population will only prolong the economic inequality in the region. As the population increases, especially among the Gulf coast nations, it will become harder for the immigrants to rise socially and economically creating an even smaller percentage of families that have a share in the wealth. The lack of quality education in
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75%
$700
45%
of GCC Exports are comprised of oil
Billion held by 5100 Gulf Families
youth unemployment in Iraq and Algeria
leaves the people in a similar state of reliance to when the colonial powers left the Middle East, leaving the people economically dependent on other western nations. Furthermore, the new regimes tried to emulate Western Education systems, and in turn created a culture clash because those who had received a Quranic education and those who started in secular schools. Naturally those members of society who were already affluent and close to leadership were able to make an easier and quicker transition towards this modern European Therefore, those people who received modern education would eventually be able to engage in trade and business with the international businesses. Those same people were also able to control the massive oil fields found throughout the Middle East. While access to education has increased, the quality has not. A telling sign of this would be the fact that majority of the royalty in these Arab nations are educated abroad in Western schools located in England, America, Switzerland, Germany and Australia. Even though the accessibility of a higher education among the Arab nations has increased, youth unemployment is at a level unparalleled anywhere else in the world. In some nations such as Iraq and Algeria youthful unemployment is at 45.6 and 45.4 percent respectively. This high number of youth unemployment is in large part due to the fact that the education that is given to the people does not teach the correct
skills to match up with higher paying, higher quality jobs. Instead the royalty who have always been able to receive the higher education and therefore were already intertwined in business can afford to send their children to western schools. In addition these royals do not have to deal with the issue that most citizens face when upon completing a higher education an average citizen will spend up to two years in search for a high paying and high quality job. However, recently the two year wait increased to three, then to four until finally many young educated people either accepted unemployment or settled for a low paying low quality job, despite their higher education. This disappointment and struggle is what lead to the Arab Spring five years ago; the people demanded more for their education than just a low paying job, and they demanded that the government stop masking over their nation’s problems with ineffective solutions just so that they can save their image. Economic inequality will only be solved when the proper tools to fix it are available. It will not be fixed through higher taxes, discrimination, or a rejection of any ideology. Rampact economic inequality for all nations in the world will only be solved through a proper education system, and a functional government that is held accountable. Solving this endemic economic inequality is the only way for the Middle East to progress and for the region to achieve its true potential HMR
the Middle East is yet another reason why economic inequality is rampant. Throughout the 19th century and middle 20th century much of the Middle East was under the control of European empires. The Europeans brought with them a modern education with modern schools but access to education was limited to other Europeans living in the area and indigenous people did not have the same access. The Europeans limited this education as a result of their fear that educating the local people would engender challenges to the oppressive colonial authority. The alternative to a Western and European education at this time was Quran schools. Sharia law, which is a society that functions in accordance with the rules and laws in the Quran, is also in large part responsible economic inequality. Sharia Law states that a man’s work and salary must be the primary source of income to the family. However if the man develops a disability, dies, or even divorces, the widow or divorcee and her family are now left with no source of income. While the Quran provides for moral and societal values it does not have lessons or instructions on individual skill sets such as math, science and liberal art classes; courses that are requirements in many Western nations. As a result, there are currently two generations in this region that lack a formal education. Thus, the majority of them are unable to compete in business on either an international or regional level, which
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The United Nations: An Offensive Power Krystian Loetscher
A
n unfortunate reality that we live in today is that force, or at the very least some form of offensive capability, is necessary to wield power. Authority is gained out of respect for a greater power, whether that respect is some form of paternalism or out of fear of punishment. United Nations Peacekeepers are a prime example of an institution where a lack of power results in a lack of authority. Despite the good intentions of “peacekeepers,” their 73 missions to date have shown that they are not keeping peace. Their lack of authority derives from limited military power, which provides no incentive for any party to abide by their resolutions. However, their most recent mission in the Democratic Republic of Congo (MONUSCO) has sparked a worldwide debate on the topic of peacekeeper capabilities because they used “offensive” force for the first time. MONUSCO has shed light on the possibility of offensive capability as a potential weapon in the arsenal of peacekeeper tactics and its potential benefits in a world of seemingly endless conflict. This new authority that would be given
to U.N. Peacekeepers, relative to its past institution, would greatly enhance their ability to achieve their goal: keeping peace. The Peacekeepers were established under three main principles: impartiality, consent of both parties, and the non-use of force except in self-defense and defense of the mandate. They have worked under these three basic principles for about 67 years, but unfortunately not so well. One of the most egregious failures of peacekeeping occurred in the Rwandan genocide of 1994 when an overwhelming Hutu clan virtually eliminated the Tutsi’s, killing over 800,000 people. While this example is the largest in terms of impact, it is by no means the only example of UN peacekeeping failing to meet its mandate. The African region of Darfur is another prominent example of idling Peacekeepers watching as civilians were shot in front of them. The list goes on, including the UN peacekeeping operation in Sudan that was reported to have witnessed the massacre of over 600 civilians. The bottom line is that there needs to be some reform if the UN Peacekeepers are to be
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effective. The most evident and clear way to positively reform the Peacekeepers is to allow them the use of force in the form of offensive military capabilities. Why are offensive capabilities the best run at reform? Why should we be giving Peacekeepers more power? These are some of the questions that are raised when dealing with this issue of giving UN peacekeepers more authority. However, one critical observation that is important to establish is that UN Peacekeepers were created to help reduce conflict through intervention. The fundamental purpose of creating Peacekeepers was to provide a force that can help to protect innocent civilians. The Peacekeepers are there to defend people who have no part in the conflicts that are eating away at their populations and, more importantly, who cannot defend themselves. Peacekeepers are a good idea, and the solution is not that we shouldn’t have this organization, it is that we should reform how they can tackle these problems. One must consider, who would help in these instances if not the Peacekeepers? Neighboring local powers? The unfortunate truth is that
Africa and the Middle East they are usually not present, and if they are, they lack the resources or self-interest to be effective. we can move onto how these reforms will positively effect future operations and build onto a flawed, yet potentially beneficial peacekeeping force. It is quite clear from the previous examples that Peacekeepers currently do not have enough power to make any noticeable difference. Historically there have been many more failures that have plagued the institution than successes. The small success stories, such as in Sierra Leone, do not provide enough justification to continue the current practice of Peacekeepers. However, it seems that the benefits of proactive action, of offensive force are beginning to be realized. Perhaps the most significant, and in fact only, example of offensive operations utilized by UN Peacekeepers is in the Democratic Republic of Congo (DRC) where their success has provided the warrant for issuing this immense power. UN Peacekeepers had been involved ineffectively since the start, but in late March of 2013 they changed the mission to be the “United Nations Force Intervention Brigade.” This has been the turning point of the conflict, the point at which Peacekeepers are now able to proactively and aggressively pursue groups that have been killing innocent civilians. The March 23rd Movement, abbreviated M23, was the largest of the anti-government Tutsi factions that posed a threat to the government in place. Perhaps more significantly, they were responsible for the killing and raping of innocent Hutu civilians in the large city of Goma. Given their new capabilities, UN Peacekeepers were able to mobilize their 3,000 men that made up the brigade to subdue the group. While some may fairly question the legitimacy of the government established there, our concern is with the effectiveness of the UN Peacekeepers in halting the fighting and allowing a polit-
ical solution to emerge. The fact remains that Peacekeepers have now demonstrated an ability to eliminate a sizable threat to the security of the populace. In the long term, we can see how this new tool that the Peacekeepers have, can be put to good use. In eliminating the murderous faction they undeniably terminated a threat to civilians. Not only that, with ensuing peace and less conflict, the existing government will have a better shot at reforming; with a huge domestic threat like M23, no government would be able to progress. Opposition to this brigade and the use of offensive force on the whole do have a variety of legitimate concerns, but it seems clear that on the whole, the benefits of long term peace outweigh these concerns. One of these counterarguments is that the intervention brigade goes against what it means to be a “peacekeeper.” But, one must question, if what it means to be a peacekeeper is inherently flawed, why shouldn’t we change it? The non-use of force principle must be directly contested. The argument that peacekeepers should have offensive power is one that is meant to fundamentally change what it peacekeepers are. Impartiality is another principle that is said to be in violation with this new practice. Unfortunately, it appears that retaining complete impartiality is also a detrimental aspect of peacekeeping. This is because remaining impartial and insisting on negotiations creates opportunities for insurgency groups such as M23 to arise. In other words, by remaining impartial you inadvertently recognize insurgency groups as a legitimate power, and in doing so, promote the growth of others as well. Conversely, if you were to deploy force to protect citizens, these insurgency groups will recognize Peacekeepers for what they are: enforcers of order. The last major counter argument to offensive forces is that the use of force
would turn the UN into a perceived foreign occupation which could invite a blowback of violence towards them. The link into this claim is that it increases terrorism due to the fact that peoples would see the UN as a foreign threat and form radical factions to rid themselves of it. The response to this argument is that it is simply untrue. Essentially, even if offensive operations are perceived as an occupation, this fact by itself is unlikely to further terrorism because it is not the root cause. Additionally we see that with Peacekeepers require the consent of all parties involved in a conflict, therefore their existence is on good standing with those involved. On the whole while these concerns seem reasonable, they are far outweighed by the real world application of offensive operations and how it has been faring. At the point where we see concrete evidence of a successful implementation of offensive force, and viable reasons as to why they establish longterm peace, there is insufficient reason to not do so. We have enough empirics on how the Peacekeepers have fared in their past missions. We also have new capabilities that give us a better route to pursue reform at an institution with a highly respectable purpose. It is an undeniable fact that offensive operations are successful as seen in the effects of their implementation. The truth is that the success witnessed in the DRC is not a result of passive Peacekeepers, it is the result of an intervention brigade that took action to eliminate an opposing force to peace. At the end of the day, offensive force is needed to make change, to be recognized as an authoritative figure, and to truly establish peace. General Carlos Alberto dos Santos Cruz, the top commander in the DRC, agrees: “To be a peacekeeper, you need to take action. The way to protect the civilians is to take action. If you see the history of atrocities here, it justifies action.” HMR
The fundamental purpose of creating Peacekeepers was to provide a force that can help to protect innocent civilians. April 2015
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Africa and the Middle East
Seeking African Empowerment in the Age of Global i zat ion Jack Vahradian
A
frica has been crippled by the AIDS epidemic, warlords, and widespread poverty. Various NGO’s and supranational unions such as the Red Cross or the World Bank have provided aid to these countries; this increasing amount of foreign aid is caused by the spread of globalization.. Since the beginning of the information era in the 1980’s, Globalization is becoming more and more prevalent largely due to significant advances in transportation and communication, along with the worldwide diffusion of various ideologies. This trend is best illustrated by the rising number of supranational unions—multinational political unions where negotiated power is delegated to an authority by governments of member states, the increasing amount of policies these unions implement, and the significance of the policies enacted. The transfer of these African nations’ sovereignty to supranational unions. has caused various changes in these nations, such as an increased wage gap, a slight increase in unemployment, and a shift towards a more democratic government. The increased wealth inequality generated by globalization is caused by various policies implemented that focus on stabilizing and privatizing, rather than the eradicating poverty and creating growth. An example of this is the UN Economic Commission for Africa, which states that its policies’ main areas of emphasis are “the design and implementation of macroeconomic policy” and the privatization of various mining contracts. Another focus that this agency has is the promotion of industrialization, which is one of the main reasons that most African nations have seen increased unemployment over the past few years. This increased technology made previously necessary jobs obsolete, much like how the Industrial Revolution in the West caused many
unskilled workers to lose their job. These effects arose solely from changes in African nations’ economic policies, which are mostly controlled by supranational unions. In an attempt to reform African economies, various economically focused unions such as the IMF or the UN, have implemented a variety economic policies in African nations, and a loan would be given to the countries if certain policies are enacted or one that stipulates certain conditions, such as growth rate or economic output. While it may not seem like this forces African nations to implement certain policies or programs, many African politicians feel pressured to implement them for the appropriations that are given, as the money that is received can be used to reduce poverty in their respective nations. If this type of action was only occasionally used, it would be an excellent method of allowing other parties to help reform the economies of many African nations, while allowing them to retain their sovereignty. However, this strategy is used so frequently by supranational unions that most African nations have little, if any, sovereignty regarding economic issues. While it is clear that most African countries need economic reform due to their increasingly small share of world trade, the leaders of these countries, who are struggling to implement democracy, and are battling large amounts of internal corruption, should retain sovereignty over their nation rather than the markedly less democratic supranational unions, which is less democratic due to the fact that a small group of countries possess almost all of the power in these unions. Western countries primarily control the most powerful unions operating in Africa, such as the IMF, World Bank, and the International Trade Organization, so African leaders or diplomats will have little to no say in whether certain policies or initiatives are
implemented, as they have already allowed for the union to carry out certain actions within their country by accepting appropriations. While the removal of sovereignty is one of the primary problems with increasing involvement of supranational unions, there are various additional problems with relying solely on these unions. Although organizations such as the IMF or World Bank implement economic policies into African nations, they usually don’t usually facilitate or implement policies that will create economic circumstances that will allow the policies to be effective. For example, one of the policies enacted by the IMF might call for increasing industrialization in the nation that the policy was implemented into. If the nation already has their laws designed around a certain economic activity (which is often the case in previously colonized African nations), large amounts of change will be necessary to successfully implement the new policies. In documents regarding the goal of their activity in African countries, the UN and IMF state that their agenda consists of implementing a democratic government, in addition to economic reform. These unions believe that this change in governance will allow for liberal capitalism to emerge as their economic system, which is the economic system that developed countries use. A democracy negatively impacts the ability for such a government to form and succeed, as the UN and IMF’s control over the region, which in turn reduces the capacity of the local governments to determine and control events in their countries, and therefore their accountability for citizens and inability to respond to the needs of their people. Furthermore, the democratic governments implemented in these regions are greatly undermined by the unions that have power in their respective regions. The democracies are undermined because the unions
“One solution that would allow for a successful balance of power would be to name the African Union as the only supranational union that can operate in Africa.” 86
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Africa and the Middle East who implement policies in these regions use a decision-making process that is far from democratic(the largest shareholder in the union, which is generally the United States, controls the union for the most part).These powerful nations also have the most opportunities for entrepreneurs, which has caused “brain drain,” or the emigration of most skilled workers somewhere else for better pay or conditions. This makes liberal capitalism, the economic policy the World Bank and IMF want to implement, nearly impossible to successfully achieve because without any skilled workers, it will be very difficult to facilitate the creation of private companies, and export an increased amount of goods. While globalization and large amounts of aid from outside organizations has opened up various foreign markets, its downsides outweigh its few benefits. Leaving these countries without any aid or intervention would be politically unwise, as well as morally unacceptable. Throughout modern history, African regions have been impoverished due to the colonial governments they were left with once given freedom, disease, and lack of resources to export. These factors, along with outdated technology, are contributing to Africa’s decreasing share of global trade, which is causing them to become less and less economically relevant. This poverty has caused many countries to become reluctant to become trade partners, favoring more reliable regions to export to, promoted “brain drain” as described above, and made the governments unable to fund most reforms, lowering the quality of life in the nations, which makes skilled individuals leave to go to
locations with better conditions as pay, which increases the scale of the brain drain. Finally, since most governments have poorly-funded armies, warlords or other local hostile groups have seized control of various regions using their military power. Therefore, outside intervention is needed in African nations, both to economically revitalize them, and keep peace in the region. There is one supranational union, the African Union, which is only represented by African nations, since the only members of this union are African nations. This group provides many of the benefits that other unions, such as the World Bank, provide, yet allows for African nations to retain their sovereignty to a degree. However, there are certain problems with allowing this union to control economic reform of the region. The main problem with this group is its lack of funding. It has to address various issues in Africa, but doesn’t have the funding to effectively deal with these issues. The African Union has to keep peace in a region with widespread wars, violence, and insurgencies, as well as the AIDS epidemic that has plagued the continent for nearly 35 years. The African Union’s primary objectives are, among other things, to “promote peace, security, and stability on the continent, to promote democratic principles and institutions, popular participation and good governance, and to accelerate the political and socio-economic integration of the continent.” Since these goals align very well with the goals of groups such as the IMF and World Bank, these groups should work together to achieve a balance between foreign intervention and
retaining sovereignty. One solution that would allow for a successful balance of power would be to name the African Union as the only supranational union that can operate in Africa. To combat the issue of the AU’s lack of funding, groups such as the IMF and World Bank could give appropriations to the Union, instead of directly to the African nations, in exchange for membership in the union, and the ability to gain a small amount of power in one of the bodies of the AU. This would not only allow for African regions to keep an increased amount of sovereignty, but it would allow for them to work together in their own economic interests. If the continent was able to work together, member nations wouldn’t have to resolve issues and reform their own countries with very limited resources, economic reform and increasing each nation’s share of global trade would become even more efficient. It would also allow for the creation of a unified African culture, which would be much more similar to each individual African culture than the Western culture which other unions would form in the continent. In conclusion, globalization has caused the increased activity of supranational unions such as the UN or IMF in African nations. These groups have caused various problems, but most importantly, have stripped African nations of a portion of their sovereignty. Allocating these groups power to the African Union, which each African nation is a member of, will allow for a more equal power balance between the individual nation and the union that the nation is a member of. HMR
http://www.dimitri.co.uk
April 2015
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