VOLUME I ISSUE II FALL 2010
Fordham Political Review Fordham University’s Undergraduate Foreign Affairs Journal
INSIDE THIS ISSUE: China’s Devaluation of the Yuan The World Bank & IMF A Saudi-U.S. Arms Deal A Transition of Power in Cuba
Letter from the editor
The Fordham Political Review is Fordham University’s first undergraduate foreign affairs and economics journal. FPR is populated by a series of research-oriented reports and opinion essays highlighting critical global issues that are of significant import to university undergraduates. We seek to provide a balanced and nuanced forum that explores the complex intersection of macroeconomics and geopolitics, from the perspective of undergraduate students. FPR is composed of a highly motivated student body, from a diversity of academic interests, who are devoted to the exploration of and engagement with critical global challenges. And now for our second act… After a brief hiatus, FPR is back with a new look and design, and remains committed as ever to our initial mission: to offer insightful commentary on pertinent international issues from the perspective of undergraduates. Since FPR released its first issue in August of 2010, we have received incredible support from students and professors and have begun to attract the interest of a number of graduate students within the IPED program at Fordham, who are interested in sharing their work with the undergraduate community. The journal thus hopes to evolve into a platform to foster a dialogue between
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students, professors and administrators, who all share a stake in the global debate. For our December 2010 issue, many of our writers gravitated toward issues relating to the nascent financial recovery and the various policy actions of the Federal Reserve. More importantly, the comments of our writers suggest that the growing imbalances between the worlds largest economies will remain a critically important topic that will continue to be explored in subsequent issues. I am also pleased to announce the creation of a new Science & Technology section within the journal. The section will feature a number of articles that explore the economic and political challenges facing scientific discovery and technological advancement. Moreover, in the Spring of 2011, FPR will be hosting a number of interviews with prominent guest speakers and alumni called the One-2-One Leadership Series. The series will cover issues like global aid and development, microfinance and the global economic recovery. Look for announcements on our website— fordhampoliticalreview.org—for upcoming events in the new semester. Thank you all for your continued support and interest. We invite all of you to contribute and welcome dialogue and engagement with these issues!
Enjoy Reading! Peter Lachman, Managing Editor
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! INTERESTED IN WRITING FOR FPR?
Questions, Comments, Cries of Intolerance? Injustice? EMAIL: politicalreview @fordham.edu or email@example.com
Business & Economics A New Defense of Fiscal Policy
China’s Devaluation of the Yuan: A Global Economic Imbalance
Conflict & Security A Dark Side to UN Peacekeeping Missions
LEARN MORE ABOUT US AT: fordhampoliticalreview.org
Aid & Development The World Bank and IMF: A Limited Mandate
Hopes Based on a Peanut Paste
Politics & Diplomacy The Dubious Politics of a Saudi Arabian Arms Deal
Raúl Castro: Revolutionizing ‘La Revolución’?
FPR STAFF EDITORIAL BOARD Managing Editor: Peter Lachman Assistant Editor: Fred Maurin Policy Editor: Abraham Mercado Policy Editor: Sevan Birmanian Design/Layout: Kathryn Freund STAFF WRITERS Gabe Agostini Dariusz Bialuski Erin Dahl Michael Drucker Ermal Dudushi Daniela Kiszti Aly Kravitz Chris Lyons Yashwanth Manjunath Ojala Naeem Michal Schwalbenberg Jordan Teicher FACULTY ADVISOR Professor Jonathan Crystal Department of Political Science
FPR is a student-run foreign policy publication. Please note that the opinions expressed within the Journal are those solely of the author. Copyright© FPR 2010
Science & Technology Barriers to Renewable Energy Investment
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Business & Economics
A New Defense of Fiscal Policy By Tim Lynch Fordham University ‘13
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Two important causes of the recent financial crisis were the increasing amount of debt assumed by consumers and the excessive leverage of banks and other financial institutions. During the decade before the crisis, rates were low, credit was easy, and expectations about the future state of the economy were positive, in large part due to rising real estate values. Gradually, consumers took on more and more debt. Between 2000 and 2008, household debt rose from 96% of disposable income to 128%. At some point, and for reasons unknown, there was a sudden downward revision of acceptable debt levels. Economists Paul Krugman and Gauti Eggertsson, in a paper published in November 2010 titled “Debt, Deleveraging, and the Liquidity Trap,” describe this phenomenon as a “deleveraging shock” or a “Minsky moment.” The two economists believe that much of the deepening of the financial crisis was caused by a massive and relatively rapid period of deleveraging. Krugman and Eggertsson posit that this process put the American economy in a liquidity trap, not easily remedied by the traditional tools of monetary policy. In essence, a rapidly deleveraging consumer, coupled with banks’ continued reluctance to lend, has undermined the effectiveness of monetary policy in the near term. This is principally reflected in the inability of QEII to spur consumer expenditures. Therefore, Krugman and Eggertsson focus on fiscal policy as a principal tool of economic recovery. A fiscal response to the crisis poses a particularly difficult political and economic conundrum for policy makers. Deficit spending, (i.e. using debt to attack a problem originally caused by debt), has become a rallying cry for fiscal hawks on the right, making the prospect of a second round of stimulus spending politically untenable. One of the purposes of their paper was to determine the immediate and long term effects of deficit speding on the economy, and how fiscal policy can be used as an effective tool to complement the actions of the Federal Reserve. In the process, the two
Figure 1: Topsy turvy economics
economists discovered some “topsy-turvy” aspects of deleveraging shocks. In their model, instead of assuming each actor in an economy is a “representative agent” with equal propensities to assume debt, Krugman and Eggertsson present a more nuanced argument, presenting two general actors in an economy—patient people and impatient people. The impatient people borrow from the patient people up to a certain limit. This analysis leads naturally to the conclusions Irving Fisher drew in “Debt-deflation Theory of Great Depressions.” As Krugman notes, “If debts are specified in nominal terms, and a deleveraging shock leads to falling prices, the real burden of debt rises—and so does the forced decline in debtors’ spending, reinforcing the original shock.” One startling conclusion of this analysis is that a Minsky moment causes the aggregate demand curve to slope upwards (see Figure 1 above). As price levels fall, the debtors will demand fewer goods and services because the real burden of their debt has increased. Three “topsy-turvy” consequences of a
theoretical upward sloping aggregate demand curve are the paradoxes of thrift, toil, and flexibility. In the paradox of thrift, when interest rates are near the zero lower bound, attempts to save more by individuals actually result in a decrease in aggregate savings because of a reduction in consumption and investment. This macroeconomic effect is not limited to upward sloping aggregate demand curves, but the new model gives a reason why interest rates would fall to the zero lower bound where this effect is more prevalent. The other two paradoxes are lesser known, and are a unique byproduct of an upward sloping aggregate demand curve. The paradox of toil (see Figure 2, on right) is that when aggregate supply shifts outward (perhaps due to an increase in productivity or technological innovation), output actually declines. The paradox of flexibility says that if workers are more willing to take wage cuts, a decrease in the price level causes a greater increase in unemployment than if workers were less flexible. In terms of fiscal policy, the model adds some insight into what steps should be taken after a deleveraging shock in order to avoid or limit output declines. The model says that people take on different levels of debt, and thus face different constraints after a deleveraging shock. Furthermore, the model says that those who did not take on that much debt—the patient people—should take on more debt after the shock to allow others to recover. Within the context of the crisis, the private sector borrowed excessively and became increasingly constrained by the real value of their debt as price levels fell. Therefore, they argue that government can help remedy this situation and allow the economy to steady unemployment and deflation by assuming more debt and allowing the private sector to repair its balance sheet. Once the crisis event has passed, then the government can then begin to reduce the deficit. The economic stimulus plan of 2008 presents us with an apt example of the sort of fiscal policy that Krugman and Eggertsson present. Although we avoided a full-fledged depression, we experienced the worst unemployment levels since the Great Depression. Krugman and Eggertsson’s model neglects to examine the
Figure 2: The paradox of toil
muted effect that deficit spending tends to have on high levels of unemployment. Rather, the models posit that the unemployment level will remain steady, while the private sector repairs its balance sheets. At any rate, it is probably too early to determine the extent to which the economic stimulus succeeded or failed. Of course, the model is susceptible to other criticisms. Government spending projects can be slow and inefficient, and excessive debt accumulation by the government often leads to inflation as monetary policy is forced to respond to an expanded money supply. Also, it is necessary for the government to make an effort to repay its debts during less volatile times, a decision which is not always a politically feasible. In addition, there are inherent vulnerabilities to discretionary policies, both monetary and fiscal. To the greatest extent possible, governments should attempt to plan for crises such as deleveraging shocks and should articulate possible responses beforehand rather than dealing with them on an ad hoc basis. In conjunction with fiscal policy, there should be a greate focus on instituting consistent monetary policy, such as one that is guided by the Taylor Rule. Both of these suggestions will help expectations shift more quickly during periods of financial crisis and prevent extended periods of output loss.
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Business & Economics — Continued
China’s Devaluation of the Yuan: A Global Economic Imbalance
By Dariusz Bialuski Fordham University ‘12
Unless you have been living under a rock for the past few years, you probably already know that The People’s Republic of China is growing in both power and influence. In the second quarter of 2010, China overtook Japan as the second largest economy. This lead is likely permanent as China is growing at a much faster rate than Japan, about 10% annually. The importance of the U.S.-China economic relationship has never been so clear. With a population of over 1.3 billion, China is the fastest-growing major overseas market for the United States. However, major challenges to optimal economic cooperation still remain, and to an extent have been escalated by recent quarrels over China’s currency manipulation. The undervalued renminbi helps China’s export sector by making foreign imports more expensive, and Chinese exports cheaper in foreign markets. It also encourages outsourcing production and jobs from the United States, contributing to unemployment here at home.
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However, the Chinese government’s recent criticisms of the Federal Reserve’s recent second round of Quantitative Easing reflects the growing imbalances between the world’s emerging and mature economies. China alleges that the Fed, by acting to inject liquidity into U.S. markets through large scale bond purchases, has threatened to destabilize the world’s monetary system. China’s criticism is a deflection of its continued devaluation of the renminbi (yuan), spending nearly $1 billion U.S. dollars each day to keep its currency pegged to the dollar. While many have argued that this persistent currency manipulation has hindered a U.S. export-driven recovery, the real issue at hand may be the growing divide between fiscal and monetary policy in the world’s largest economies. QEII has prompted a massive influx of investors into emerging market bonds, searching for lower yields. Put off by the paltry yields on Treasuries, investors have flocked
to emerging market debt—the Brazilian Real is currently priced to yield 10%. Brazil and Indonesia have joined China in criticizing the Fed for promoting the creation of asset bubbles in emerging economies, positing that they are vulnerable to potentially volatile capital inflows. As the world’s mature economies, the U.S. in particular, drift into a dangerous “liquidity trap,” in which the effectiveness of monetary easing is hindered by a lack of consumer demand and tightening credit availability, QEII has driven short-term, hot money inflows into high yielding emerging economies. Yet, it is important to note that while world’s emerging economies have only begun to use traditional instruments of monetary policy, mature economies have all but exhausted conventional maneuvers. This growing divide has pitted the growth and recovery of mature and emerging economies against one another. The former are coping with deflation, the latter with inflation. The Fed’s latest round of QE has only aggravated this chasm. The U.S. House of Representatives recently passed the Currency Reform for Fair Trade Act, which aims to influence China’s undervalued currency by targeting Chinese imports to the United States. The world’s second biggest exporter, Germany, recently urged China to loosen controls on the yuan’s exchange rate, warning that a trade war could result between competing export nations by keeping their currencies weak. Nevertheless, China has shown that it is not immune from international pressure. Since June 2010, the government has allowed some appreciation, allowing the yuan to gain 2.5 percent against the dollar. In an attempt to ward off international criticism of China’s undervalued currency and bolster it’s image, the country is slowly moving towards efforts to boost domestic demand among its growing middle class. This move in the long run will likely increase domestic consumption, and decrease China’s dependency on exports, causing the yuan to rise in relation to other major currencies. Fed Chairman Ben Bernanke has expressed his faith in a particular economic phenonmenon known as the wealth effect, which posits that
by buying bonds, the Fed will push investors into equity markets, thereby boosting consumer wealth and increasing market confidence—a scheme that the Fed believes will translate into larger economic recovery. However, the more important question may be whether the Fed’s desire to spur inflation will offset any increases in consumer spending. Inflation may occur in oil, cotton or food prices, which would undermine the very aims of the Fed’s actions in the bond market. On September 16th, 2010, Treasury Secretary Timothy F. Geithner testified before the Senate Banking, Housing, and Urban Affairs and House Ways and Means Committees. Mr. Geithner outlined the U.S. government’s three core objectives in China; those include encouraging China to change its growth model to rely more heavily on domestic demand, moving towards a market determined exchange rate, and leveling the playing field for U.S. firms and service providers to better able to compete in China. This will mean bigger opportunities for U.S. companies exporting goods and services to China. This is particularly important as exports are one of the few bright spots and are becoming an increasingly important part of the equation that is driving growth here at home. United States exports increased 17.9 percent during the first seven months of 2010. The bulk of the growth is attributed to U.S. exports to China, which exceeded $63 billion so far this year. This growth is in line with President Obama’s National Exports Initiative, an ambitious effort to double U.S. exports and create 2 million jobs by 2015. An undervalued yuan remains an obstacle to this plan, and will likely continue to be a point of contention between the two largest economies. Mr. Geithner is optimistic about China’s currency policy and contends that the nation will continue to move towards a stronger yuan. A Chinese currency that accurately reflects economic fundamentals is not only in the interest of the United States and the world, but also China. It would go a long way towards fighting inflationary pressures that the nation is facing, as well as increase the purchasing power of Chinese people.
“It seems that the world’s emerging economies have only begun to use traditional instruments of monetary policy.”
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Conflict & Security
A Dark Side to UN Peacekeeping Missions By Ermal Dudushi Fordham University ‘12
A decrepit UN post along the Bosnian-Croatian border. (Photobucket)
Peacekeeping troops are generally regarded as positive forces in virulent and destabilizing intrastate conflicts. However a growing number of recent allegations against the United Nations forces tell a different story. It seems that in a number on conflict zones, the presence of UN forces have indirectly helped small local criminal factions grow into well-organized networks able to usurp state sovereignty. This holds important implications for state response to ethnic conflict. In the absence of stable mechanisms of governance and rule of law, extremist ideology, graft and fractious social change can lead to further episodes of ethnic violence. A 2004 Amnesty International and BBC report revealed that immediately following the deployment of UN troops in Bosnia and Kosovo after the Bosnian and Kosovo Wars, there were sharp increases in the proliferation of prostitution and sex trafficking. Furthermore, an internal UN inquiry discovered that peacekeeping forces were involved with a child molestation and pedophilia in the Democratic Republic of Congo in 2006. (Allegations of child molestation in Mozambique date back to 1996). The short term consequences of these unsettling 8
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findings directly undermine the legitimacy and credibility of the United Nations peacekeeping mandate. Moreover, the nature of such conflicts are inflamed by a complex international component. A lack of credible information concerning the nature of the violence and the critical needs of targeted populations on the ground, can stymie an effective international response. Yet the implications for long term security and economic prosperity in war ravaged nations like Bosnia and Kosovo are a more concerning byproduct of a sullied peacekeeping mandate. The Amnesty International report underscores the dubious business of international peacekeeping and security. Where the presence of UN troops may cause a major rise in the criminal activity, such actions hold widereaching implications for the ability of the international community to effectively mitigate genocide, once small groups of unorganized gangs blossom into coordinated criminal networks with international clout. The demand for prostitutes has increased the trafficking of women throughout Eastern Europe and Africa. Furthermore, large sums of money have been funneled into the coffers of criminal
organizations in regions debilitated by genocide and ethnic strife. According to The New York Times, in 1999 there were only 18 places where one could purchase sex, in Prishtina, Kosovo’s capital. By 2003, this number had swelled to 200. Moreover, the compensation of UN troops that hail from the West are paid much better than the average person in the countries in which they are deployed. The BBC reported that trafficked girls are “sold from one trafficker to another for prices ranging from 50 to 3,500 euros ($60-4,200).” Now imagine these large sums of money flowing to human traffickers, pimps, and bordello owners. The redirection of payments designed to support peacekeeping efforts enable criminal networks to purchase their own security and pay off government officials. Amnesty International has also reported that “international personnel make up about 20% of the people using trafficked women and girls even though its members comprise only 2% of Kosovo’s population.” In the long term, these high powered criminals threaten the peace and stability of states already burdened by domestic conflict. Humanitarian intervention missions’ ability to deliver conflict resolution are complicated by a variety of forces. Belligerents may often blend into civilian populations and masses of refugees fleeing conflict zones, complicating efforts to protect targeted populations. In addition, humanitarian forces must also cultivate the trust of local populations and be able to work with stable state mechanisms to effectively deliver aid, which can often be intercepted by perpetrating groups. Peace is often maintained during periods in which forces remain in the country. It increasingly appears as if UN forces are only able to provide temporary peace, and ensure long term instability.
In East Timor, the issue of state sovereignty severely undermined UN force’s ability to end the conflict. If force is delivered without any semblance of aid, the country in question may perceive intervention as a threat to its territorial integrity and sovereignty. Furthermore, unilateral intervention has been viewed with great skepticism by the international community. When operating during the de-escalation phase of conflict, it is prudent for these missions to quell a culture of armed conflict and to promote cease-fire agreements between conflicting parties. Thus, if these missions happen to overstep the bounds of their operating charter, by demonstrating a degree of impartiality or failing to obey cease-fire lines, violence can quickly erupt. The allegations of criminal activity presented in the Amnesty International report only augment this conflicting mandate. Following the withdrawal of UN troops, nations often experience periods of relative political and social stability, which masks a long-term security dilemma. During these critical periods of transition, the nation will be at its weakest security and economic position. The growth of criminality will tax the nations few resources, and weaken their position even further. UN troops can also hinder the creation of legitimate and productive forms of commerce in the regions in which they are deployed. The impermanent and often rapid nature of their deployments desensitizes them to the long-term social and economic effects of their presence. The troops often have a lot of funds, and nowhere productive to spend it. As a result, prostitution, gambling, alcohol and drugs providers benefit. This problem is only pushed further by an unwillingness of the UN governing body to investigate many of these allegations.
“If force is delivered without any semblance of aid, the country in question may perceive intervention as a threat to its territorial integrity and sovereignty.”
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Aid & Development
The World Bank & IMF: A Limited Mandate
IMF Director Dominique Strauss-Kahn speaks about historical reforms within the organization. (IMF)
By Peter Lachman Fordham University ‘12
In the fight against global poverty, the World Bank aims to help direct developing economies onto a stable path of sustained economic growth through the support of domestic financial institutions and large-scale infrastructure projects. Yet, there are ethical and moral implications to an organization that seeks to alleviate poverty in the developing world, while failing to reach the poorest of the poor, who lack access to the financial services and development projects that the World Bank provides. The Bank addresses the development of financial institutions and seeks to bolster domestic economic capacity, infrastructure, systems of governance and financing for the poor. The Bank devotes much of its resources towards large-scale development projects that build capacity for future economic growth. Yet proposals for reform of the Bank’s allocation of funds, should pressure those countries that receive the most aid, to achieve sustained economic growth and thereby contribute more to the Bank’s pool of funds. By creating an incentive for greater involvement in the Bank’s operations, countries may find it politically salient to make good use of the funds provided to them. The IMF’s role as a crisis lender and monitor of exchange rates and international trade has increasingly placed it at the forefront
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of the contentious debate over economic globalization. Many have assailed its increased role as a lender of last resort for defaulting economies. Although the IMF’s ability to meet the debt payments of countries on the brink of insolvency can have a calming effect on global markets, its so-called “organizational infallibility” and movement away from development initiatives, have sullied its mandate. Economist Joseph Stiglitz has examined the disconnect that exists between the Fund’s short-term capacity to avert crisis, and the adverse long-term effects its loans have had on weakened economies. There is little evidence to suggest that the IMF’s loans bolster basic health or education services, which are critical components of poverty alleviation. Furthermore, the IMF is generally unaccountable to the countries in which it intervenes. It principally serves world financial markets and the large economies from which its receives the lion share of its funds. Thus, the IMF is limited in its ability to implement concrete goals for development. Although it plays a vital role in stabilizing international trade and world financial markets, it provides little aid to struggling microentrepeneurs, rural farmers or urban day laborers, who constitute the bulk of poor populations in developing economies. Loans to ailing economies are short-term in nature and
provide little of the long-term assistance that is found in the work of World Bank and various civil society networks. The World Bank has increasingly focused its mandate towards ‘middle economies,’ often bypassing those states in the most dire need of economic assistance. The rationale behind this development initiative is that weak or failing states lack the systems of governance, rule of law and political mechanisms to implement aid and support infrastructure projects in a tenable manner. It is within these very economies that a vibrant civil society and network of non-governmental organizations can flourish and effectively deliver aid to the lion share of the world’s poor that are overlooked by largescale public-works projects. Microfinance NGO’s and other civil society networks can bridge the divide between rural and urban marketplace and provide a mechanism by which the poor can benefit from the work of the World Bank. Thus, the World Bank can play an important role in supplementing and financing the network of NGO’s that help to finance the poorest of the poor. These privatelyfunded networks can serve as the foundation upon which the Bank can effectively serve developing economies. Many have also questioned the environmental impact that the Bank’s large-scale infrastructure projects have had on fragile ecosystems and in economies that are wholly dependent on subsistence activities. Large dams or power stations can undermine the goals of the UNDP to prevent environmental degradation and promote sustainable means of development. There are also profound legal and moral implications for both state sovereignty and international environmental law when the construction
of such projects serve as a detriment to the health of a country’s biodiversity and farmland. Private-sector economic development projects are better able to consider the level of inequality not only between individuals and the wider marketplace, but also between intrastate populations and regions. The World Bank addresses these differences on a larger scale, principally considering the disparities in standards of living and economic output between
states. Thus, reform to global development initiatives must consider the need for funds from both public and private sources—from both a vibrant civil society and large scale development institutions— to address the complexities of the global poverty landscape. Furthermore, a central issue for the World Bank and IMF is whether countries with poor governance, who have pursued policies of fiscal imprudence, should be eligible for development assistance. Yet within the interconnected global marketplace, the threat of contagion has warranted action by the IMF and World
Bank, regardless of the fiscal track-record of the country in question. The World Bank and IMF’s voting structure and source of funding has also served as fodder for critics of globalization. A country’s voting share is proportional to the amount of funds it contributes. Therefore, as largely western-oriented organizations, the World Bank and IMF are chiefly represented by those countries with the most capital to contribute to international development. The countries of Sub-Saharan Africa, which receive a substantial percentage of Bank’s capital, have a small voting share in comparison to the countries who provide those funds. The actions of the World Bank and IMF must also be examined within the context of non-traditional security issues, for it is salient to note the extent to which poverty and economic marginalization can undermine global, state and individual security. Economic development, traditional and non-traditional security dilemmas and the civil society sector all converge within the geopolitical debate. Economic crises often leads to state failure and ethnic conflict. To that end, economic development can have both a positive and negative effect on transnational terrorist networks, who both thrive in weak and failing state environments, yet benefit from stable methods of financing and access to readily available capital. In the absence of rule of law, the threat of terrorism and horizontal nuclear proliferation become critically important issues. Thus, the World Bank’s efforts at bolstering economic and political institutions and creating mechanisms for prosperity and the IMF’s efforts at stabilizing floundering economies, all serve a greater purpose for international security.
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Aid & Development — Continued Far Left: Young girl eating Plumpy’nut. (Ellie Lancaster) Left: An example of Plumpy’nut packaging. (The Daily Omnivore)
Hopes Based on a Peanut Paste By Aly Kravitz Fordham University ‘12
A mother and her child eating Plumpy’nut in Karamoja, Uganda. (NY Foodchain, Tine Frank)
As the world becomes increasingly globalized and technology transforms reality, the novelty of new innovations sometimes eclipses the very real suffering of a sizable portion of the Earth’s population. Although technology allows people on opposite sides of the globe to speak face to face, it has yet to fix the problem of famine and malnutrition in underdeveloped and developing countries. On September 24th, at an emergency meeting in Rome regarding food price inflation, the UN warned of an impending major food crisis. It continued along this line when, on October 6th, its Food and Agriculture Organization (FAO) published a report declaring that no less than 22 countries are facing enormous food-related challenges, including repeated food crises and an extremely high prevalence of hunger. These crises stem from a combination of natural disasters, conflict and weak institutions, and are affecting approximately 925 million people who live, according to the FAO, in “chronic hunger.” Confronted with such grim statistics and a discouraging lack of public interest, the situation seems hopeless to many. However, among the dark realities
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there shines a small ray of hope called Plumpy’nut. Plumpy’nut may not be the most appealing moniker, but it is an apt description of the product: a peanutbased paste specifically formulated to rapidly increase weight gain in malnourished children. It’s officially classified by the World Heath Organization as a Ready-to-Use-Therapeutic-Food (RUTF), and, true to that classification, it requires no water, preparation or refrigeration and has a shelf life of 2 years. It’s a blend of peanut paste, vegetable oil, powdered milk, powdered sugar, vitamins and minerals, all enclosed in foil pouches containing 500 calories each. Inspired by the chocolate hazelnut spread Nutella, and manufactured by the French company Nutriset, Plumpy’nut has the enormous and fantastic potential to alleviate a considerable amount of the rampant hunger and malnutrition around the world. Can the paste be used in the same manner as the large-scale introduction of antiretroviral drugs to Africa in the last twenty years? Moreover, is there evidence that the paste helps prevent malnutrition, rather than alleviating short-term hunger? The issue has pitted those who want to see solid, scientific evidence
before embarking on a major aid program, against those—impatient with talk of cost-effectiveness and sustainability—who want to act now. The effectiveness of Plumpy’nut ultimately hinges on a distinction between treatment and prevention. Giving the paste to children who are moderately malnourished or just at risk of severe malnutrition, may help curb this usurious cycle that begins with poor-quality food and weak immunity. Yet identifying and supporting those children on such a scale poses a mammoth logistical challenge to aid organizations. It was first used in Darfur in western Sudan, where it was credited with cutting malnutrition rates in half. Its success continued in Niger, where it was administered in 2005. The region into which it was introduced had been the region with the highest malnutrition rate in the country; however, largely thanks to Plumpy’nut, it currently has the lowest rate. Results have been similar in other countries, including the Democratic Republic of Congo, Malawi and Ethiopia. In addition to being effective, the product is relatively inexpensive to produce and distribute. A standard treatment (one pouch two to three times a day for a child between six and 24 months) costs approximately 12 Euros in sub-Saharan Africa. Each pouch costs a mere $0.06. However, there are dark undertones to this bright ray of hope. Nutriset, the original producer of the product, claims that it needs to be patentprotected in order to safeguard its production and protect against cheap surpluses. This claim has drawn
“Plumpy’nut has the enormous and fantastic potential to alleviate a considerable amount of the rampant hunger and malnutrition around the world.” cries of outrage from non-profit organizations, many of them based in the United States, who argue that a patent is something for a commodity product, not a life-saving resource. The patent debate is still raging, primarily between Nutriset and two U.S. non-profits, the Mama Cares Foundation and Breedlove Foods. Nutrition science is a difficult process in the developing world. The biological and genetic variations between villages and populations makes it difficult to randomize children to two regimes within a village, in an effort to test the effects the paste within a population. Moreover, studies done in Malawi by the WHO in 2008, between neighboring villages, appeared to have little effect on the larger prevention of malnutrition, and is often consumed within the initial days of delivery, making it difficult for researchers to determine the effect the paste may have if meted out in small doses throughout the day. Nevertheless, Plumpy’nut has the potential to alleviate much of global hunger and allow mass treatment, all at a decreased cost. However, its commodity treatment has complicated this aspiration. It remains to be seen whether companies will cede their potential profits to the benefit of the global community or will they merely cash in on the power of the Plumpy’nut.
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Politics & Diplomacy An F-15 fighter jet, similar to those the Saudis will receive. (Photobucket)
The Dubious Politics of a Saudi Arabian Arms Deal By Yashwanth Manjunath Rutgers University ‘12
President Obama meets with Saudi Arabian King Bin Abdulaziz. (Fox News)
The Obama administration is seeking to sell Saudi Arabia advanced aircraft worth up to $60 billion in what Pentagon officials say would be the largest-ever single foreign arms deal. According to the terms of the deal, the Saudis will receive as many as 84 new F-15 fighter jets and three types of helicopters: 70 upgraded F-15s, 70 Apaches, 72 Black Hawks and 36 Little Birds. Let’s review what is offensive to the victims of the 9-11 attacks and what isn’t. When totally innocent moderate Muslim-Americans like Imam Rauf and his wife Daisy Khan try to build an interfaith community center to promote religious tolerance and unity two blocks from Ground Zero on the site of an old Burlington
Coat Factory, that is supposedly a slap in the face to the victims of 9-11. But selling 60 billion dollars worth of weapons to the country where 15 of the 19 actual 9-11 hijackers were from, whose government helped finance the actual attacks against us, and whose royal family has close ties to the mastermind the attacks, barely makes the news. If you’re repulsed by this, do not worry. Obama cannot do this without the support of Congress, and I am sure the watchful protectors in the Republican party who care so deeply about the 9-11 families will step in and prevent the sale of the weapons. Bret Funk, a spokesman for Sen. Christopher S. Bond (R) of Missouri, where parts for the F-15 are made, said that
“Have the two countries recovered from their post-9/11 meltdown in bilateral relations?”
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the deal is important to the country’s “strategic, national interests in the Middle East” and that Bond hopes it will preserve jobs for the fighter-jet production lines in St. Louis (So much for the Republicans). Of course, to be fair to the Saudis, their government is not a single, united, monolithic entity. There are multiple Saudi princes and only some of them are tied to al Qaeda. So only some of the Saudi people have the blood of 3000 dead Americans on their hands. It isn’t like they have been involved in anything else since 9-11, right? Except for the fact that the Saudi people are also funding the Sunni insurgents in Iraq who have killed 4,400 American soldiers. So let’s review American foreign policy over the past few years: We needed to invade and occupy Iraq, which had nothing to do with the 9-11 attacks. We were told they might have had weapons of mass destruction with which to attack us. We needed to invade and occupy Afghanistan because the Taliban government harbored al Qaeda in exchange for the millions of dollars in Saudi oil money with which they were bribed. But we never even discuss invading Saudi Arabia, whose government helped fund
“The Saudi people are also funding the Sunni insurgents in Iraq who have
killed 4,440 American soldiers.” the al Qaeda terrorists and whose money was used to bribe the Taliban and also finance the 9-11 attacks. In fact, we make the largest arms deal in history with them so defense contractors in this country become rich. If those weapons (or the money we give them when we buy their oil) are used to kill thousands of Americans both at home and overseas, who cares? So here is a question for the people in Washington and their puppet masters in the defense industry: how much Saudi money is an American life worth?
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Politics & Diplomacy — Continued
Raúl Castro: Revolutionizing ‘La Revolución’? By Daniela Kiszti University of Windsor, Ontario ‘06
Raúl Castro, current President of Cuba, waves a Cuban flag during a military parade in commemoration of the 50th anniversary of the Cuban revolution in Havana, December 2, 2006. (REUTERS/Carlos Barria)
Despite surviving numerous assassination attempts during his long period of rule, it was always an undeniable fact that Cuba’s Maximum leader, Fidel Castro, could not remain in power forever. For years the Cuban people, the United States, and the rest of the world waited in anxious anticipation for the day the aging dictator would fade into senility or disappear into death, and the question remained whether his revolution would follow suit. Then, on July 31, 2006, following reports of stress induced intestinal surgery and ailing health, it was revealed that the then 79-year-old President had transferred day-to-day governing power to his brother Raúl Castro for the first time since seizing control of the island in 1959. Although originally meant to be a temporary move, as Fidel claimed he would resume his role as Head of State once fully recovered, the Cuban dictator ultimately chose otherwise and Raúl officially took over the presidency in 2008. Almost five years his junior and in better health, Fidel’s younger brother had always
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seemed the most viable option to take on the challenge of running the island, and keeping the legacy of Fidel and ‘la revolución’ alive. As such, in similar fashion to the series finale of many enduringly popular television shows, it would seem that Fidel decided to step out of the limelight while still ‘on top,’ leaving Raúl to deal with the political, economic, and ideological mess that has, albeit inadvertently, been created. The island that Raúl inherited is often considered a historical backwater in a world that has otherwise moved on. The country’s Communist policy of ‘equality for everyone’ is better expressed in theory than in practice, and has been deteriorating for years. Any hopes Fidel once had that his people would remain truly unspoiled by the introduction of foreign influence, owing to the establishment of tourism on the island, have long been extinguished. Although the Cuban people have maintained a certain admiration and respect for the part Fidel played in their history, over
time they developed a general sense of dissatisfaction with their current state of affairs. This attitude grew as the result of increased contact with foreigners, resulting in an improved understanding of the possibilities available outside the constraints set by Communist orthodoxy. The fact remains that, even prior to the transition of power, Fidel’s revolution had already begun to slip from his historically iron-clad grasp, and the revolutionary fervour that once ignited passion and patriotism amongst Cubans had already lost its lustre. The question, therefore, remains: how capable will Raúl be in leading an increasingly disillusioned country that has existed in the shadow of a charismatic dictator for more than four decades? Some believe that true change cannot, and will not, occur until Fidel is completely gone from the scene, namely since he is still capable of influencing his brother and the decisions of the Cuban government despite being publicly recluse. After all, it is to be expected that, with his infamous reputation as a staunch Communist dictator, his presence alone still incites fear, commands compliance and invites cries of solidarity. Yet, it is undeniable that Cuba is waning under the stress of its own ideals, and even Fidel has recently resurfaced to state that, “the Cuban model doesn’t even work for us anymore.” The statement is debatable as Fidel argues that the media has misinterpreted his words by suggesting that his statement proves he no longer agrees with the Communist dogma steering the country, which he claims is the complete opposite of the truth. Nevertheless, as the global economic crisis continues to stir hardship and chaos, the Cuban government seems to have reached an impasse and come to the realization that the country can no longer function, and survive, as it once had under the existing system. It is common knowledge among analysts that Raúl is not as relentlessly
dogmatic as Fidel, notwithstanding his own long-held Communist ideologies. As such, the current President Castro is seeking to improve Cuba’s government by relaxing the ideological stronghold that had always aided in the provocation of increased American hostilities, economic strain, as well as opposition on the island. Raúl’s post-Fidel government, therefore, has gradually begun to transition into more liberal policies, maintaining its leftist track politically, while economically and socially opening itself up to the contemporary world. One of the most significant decisions made by the Cuban government towards a liberalization of the economy took place just last month with the announcement that up to one million public sector jobs will be cut in the hopes that the unemployed will aid in the development of private enterprise. In order to facilitate this process, the government will lift many of the bans that once prevented private businesses from expanding in a country where the state employs 85 percent of the citizenry. Yet, as Raúl’s government begins to step gingerly into the realm of liberal reforms, it will be faced with the question of how rapidly to implement certain reforms. A balance must be struck between meeting the needs of the people and maintaining the stability and legitimacy of the leadership. Cubans have been waiting, by and large with remarkable patience, for the opportunity to have their say in the political system and the future of their island. As such, if the new government hastily introduces the process of liberalization, it will unwittingly present an occasion for the people to overwhelmingly voice their demands and expect them to be met immediately. However, many of these same challenges will also undoubtedly arise should the government be too slow in implementing reforms on the island. Either way, the risk is that the people could become increasingly restless and intolerant, possibly forcing the government to resort to
aggressive action as a means of repressing any unruliness or perhaps even an insurgency. Finding the right balance between continuity and change will be an arduous task. Consequently, will the dismissal of a million state employees negatively tip the scales? Or will it be gradual enough, with an initial 500,000 employees being let go by March 2011, to retain the delicate balancing act necessary for modest Cuban liberalization to be realized? Nevertheless, although Cubans have been denied political freedoms for years under Fidel’s vision of egalitarianism, is it possible that with the introduction of economic reforms a greater degree of social differentiation can be expected to emerge over time? Some may hope that through liberalization policies, positive ‘spill over’ will eventually seep into the political realm, leading to fewer restrictions on the people. However, the probability of such an occurrence would be minimal under an authoritarian government that continues to adhere to Communist principles. After all, any complete acceptance of political freedoms in Cuba would mean a transition towards democracy, and that is unlikely to occur. Regardless of the governmental structure that ultimately emerges under new leadership, the most important factor of a post-Fidel administration will be to reform a number of Fidel’s longstanding ideologically motivated policies. Economic liberalization will aid in the improvement of Cuba’s currently stagnant economy, and certain political or individual liberties may be hoped for as a welcomed consequence. Though the full impact of such reforms remains to be seen, it can be assumed that the overall security and well-being of the population will improve as Cubans are offered the opportunity to indulge in self-determinant progress. Politically, however, the country will presumably remain stringent in its authoritarian rule, disallowing free and fair competitive elections, at least in the short run.
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Science & Technology
Barriers to Renewable Energy Investment By Fred Maurin Fordham University ‘12
Ocean windmills provide alternative energy for changing green energy markets. (Fox News)
What exactly does green energy mean? To me it’s a possible career path. To Europe its a way of life and to the United States it is a touchy subject that has been a point of contention for decades. The most pertinent question however, is what does green energy mean to Corporate America? Harnessing important natural resources like wind requires a substantial amount of capital. Renewable energy companies hoping to invest in wind and solar power technology seek private capital needed to embrace these innovative sources of energy. The alternative energy industry requires effective, market based solutions to address climate change and ecosystem degradation in order to create new
business opportunities for capital investment and industry growth. Consider the following statistics compiled by the U.S. Energy Department in 2009; worldwide demand for electricity is expected to increse from 14.8 trillion kilowatts to 27.1 trillion kilowatt hours by 2025. Investment in electric generation, distribution and transmission will be required to meet this demand. Yet, there must be a convergence of public and private sector interests to bolster these nascent technologies. Here, it is important to examine how China’s vast energy needs and capability limitations provide ample opportunity for U.S. clean-tech firms to create an integrated, globalized market for alternative energy innovation.
“Beijing is determin[ed] to be at the forefront of manufacturing key technologies such as wind turbines and solar photovoltaics.”
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Radical innovation in the U.S., supported by public and private capital, can complement the producing power of China, capable of producing billions of widgets at a penny each. The problem in the U.S. is twofold: 1) Renewable energy projects generally require higher amounts of financing for the same capacity of conventional energy sources. Capital markets may demand a premium in lending rates for financing projects of such kind. More capital is risked up front than in conventional energy projects. 2) The failure of WaxmanMarkey alternative energy bill to pass in the Senate in 2009, which would have provided important incentives for capital investment in wind, solar and bio-fuel technologies, reflected the persistent legislative constraints surrounding the investment and application of these alternative energy technologies. Mr. Paul Loeffelman of American Electric power spoke at the United Nations in 2009 about changing the legislative landscape to spark corporate interest in alternative energy investments. His outline consists of three requirements—the laws must be predictable, stable and enabling. With these requirements met it will be easier for the rest of the industry to begin to grow. His requirements for the industry to follow suit are also three fold. 1) The creation of strong public-private partnerships to provide market-based solutions to make alternative investment attractive here at home and not in China, where outsized production capacity and state support of renewable initiatives has drawn the production of alternative technologies away from the U.S. 2) Technology and training must be available to support the growth of a domestic renewable industry. 3) Funds for development, construction, and maintenance are critical components of a capital intensive, public-private partnership in pursuit of a vibrant and sustainable U.S. clean-energy industry. The United Nations has begun to draw more attention to the issue
“Radical innovation in the U.S., supported by public and private capital, can complement the producing power of China.” by sprinkling an energy agenda into the Millennium Development Goals. While energy is not one of the goals, the United Nations has tried to incorporate it into each of the existing ones. This is an important step and according to Dr. Shihab Kuran, founder of Petra Solar, “unless action is taken now, the consequences of inaction will be devastating”. Peter Fusaro, founder and chariman of Global Change Associates commented on the issue saying, “we can’t just have the rhetoric of green. What we need is the deployment of capital and finance in green”. His goal has been to make alternative energies competitive and profitable. His company invests in new projects and is a leader in renewable energy investment. With leaders like these paving the way, even in an uncertain legislative landscape, it is easy to see that this industry is bursting at the seams. Within the next five to ten years, the renewables market is expected to become one of the fastest growing in the world. Dr. Kandeh K. Yumkella of Sierra Leon, Director General of UNIDO (United Nations Industrial Development Organization), closed his keynote address at the United Nations high-level energy conference by saying, “you can’t eliminate climate change without an energy revolution”. Whether you are interested in green energy for the prospect of fortune, or simply for the promotion of a more sustainable planet, Dr. Yumkella is correct: what the world needs is an energy revolution.
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