Solving the Somali Pirate Problem

Danuel Sekulich’s Modern Day Pirates blog had an interesting proposal for dealing with the piracy challenge in Somalia. It’s pretty simple, actually. Sekulich proposes establishing a moratorium on foreign fishing within Somalia’s exclusive economic zone. According to Sekulich, this “would allow Somali fishermen who claim to have turned to piracy because of the foreign fishers to be allowed to work in safety. And it would undermine any of the claims being put forth that Somali pirate gangs are somehow ‘defending’ their own people.”

Sekulich’s proposal is useful because it addresses the underlying reasons for piracy. Many Somalis turn to piracy out of poverty. They are former fisher people who, as a result of the dumpling of waste and overfishing off the Somali coast, have turned to piracy as a way to earn a living. United Nations backed naval patrols may increase the cost of piracy, but it will not end the practice. Only providing an alternative to piracy will. It’s a parallel situation to the challenge of the opium trade in Afghanistan. And it’s a great example of the interaction of environmental degradation and national security.

Taxes, Big Government, and Economic Growth

It’s often taken as a truism that lower taxes lead to higher levels of economic growth. The National Center for Policy Analysis, an anti-tax think tank, goes so far as to assert that if the United States had lowered its marginal tax rate to the “optimal tax rate,” growth in the United States would have increased from 3.4 percent per year to 4.6 percent per year between 1950 and 1995. They argue that lowering taxes will encourage people to work more, thus increasing the total revenue collected by the government through taxes. It’s a restatement of the Laffer Curve. It’s also the argument advanced in every introductory economics textbook. And according to most studies, it’s also wrong.

Baseline Scenario has a great analysis of the relationship between tax rates and growth in gross domestic product in the United States since the end of World War II. Their finding? There is no relationship. An analysis of the data comparing unemployment rates and tax rates in OECD countries suggests that there is no direct relationship there either. Baseline Scenario’s conclusion is a good one:

I don’t think these pictures prove anything. Well, maybe they prove one thing: that the real world is more complicated than the first-year economics textbook…If there’s one thing I’d like people to take away, it’s that any theoretical economic argument that can be stated in a sentence is as likely to be untrue as true in the real world, no matter how clever or intuitive it is.

The Challenges of Monetary Union

Paul Krugman’s recent analysis of the “Spanish Tragedy” deserves more consideration than it’s received. Krugman’s argument is essentially that the current problems faced by several European Union members (chiefly the high rate of sovereign debt) are the result not of irresponsible governments spending recklessly. Rather, the fundamental problem is the European Monetary Union itself.

Monetary Unions are interesting things. When the Euro was established as the single currency for many European Union members, there were two schools of thought. The first (pro-integration) position was that it would lower transaction costs, increase efficiency, and make the European Union an important global player. The second (anti-integration) position argued that the single currency would be difficult to manage because of the competing impulses and demands of the individual member states. A single currency makes using monetary policy [glossary] to manage the economy across a large area increasingly difficult. Encouraging economic expansion in Spain, for example, by expanding the money supply could only work if the other monetary union members went along. If the European Central Bank is concerned about inflation in Germany and stagnation in Spain, what is it to do? The two problems require fundamentally different (indeed, opposite) policy approaches under monetarism. 

As Krugman summarizes the situation:

Spain is an object lesson in the problems of having monetary union without fiscal and labor market integration. First, there was a huge boom in Spain, largely driven by a housing bubble — and financed by capital outflows from Germany. This boom pulled up Spanish wages. Then the bubble burst, leaving Spanish labor overpriced relative to Germany and France, and precipitating a surge in unemployment. It also led to large Spanish budget deficits, mainly because of collapsing revenue but also due to efforts to limit the rise in unemployment.

The Spanish crisis, in other words, resulted from the monetary union. Can the monetary union now be its savior? Doubtful, but we’ll see.

Haiti Aid Update

The international response to the earthquake in Haiti has been remarkable. More than 40 countries around the world have responded with donations. Even relatively poor countries—like the Democratic Republic of the Congo, which has suffered from instability, poverty, and war over the better part of the last decade—donated $2.5 million to the relief effort.

The international response has been impressive, but two caveats are important. First, as most aid observers know, there is a big difference between pledging assistance and delivering the check. As the Guardian’s Datablog site illustrates, many of the largest donations have yet to be delivered. Australia has pledged about $13 million but has delivered only 45% of its pledge. Other countries have similarly fallen short: Germany has delivered 49% of its pledged aid, the Netherlands 50%, Canada 51%, Denmark 53%, France 55%. The United States has performed relatively well so far, delivering 88% of its pledged aid. Only four countries (Ireland, Luxembourg, Portugal, and Switzerland) have delivered 100% of the aid promised.

The second caveat centers on how we measure the generosity of states. Both Guyana and New Zealand have pledged $1 million for the Haitian relief effort. But on both a per capita basis and as a percentage of the economy, Guyana’s donation could be considered more generous (Guyana’s donation is $1.31 per person, 0.088% of its GDP; New Zealand’s is $0.23 per person, or 0.0008 percent of its GDP. 

So which countries have been the most generous? It depends on how you approach the question.

Donations to Haitian Relief by Country (Selected)

Country	Pledged Total	$ per person	Donation as % of GDP
United States	167,769,881	0.53	0.0012
Canada	130,733,775	3.92	0.0087
Spain	45,880,231	1.02	0.0029
France	31,313,132	0.50	0.0011
Sweden	23,219,317	2.51	0.0048
Germany	20,356,105	0.25	0.0006
Brazil	15,535,730	0.08	0.0010
Australia	13,489,211	0.63	0.0013
China	13,005,286	0.01	0.0003
Denmark	11,246,301	2.06	0.0033
Norway	10,398,613	2.16	0.0023
Italy	8,580,536	0.14	0.0004
UAE	3,208,129	0.70	0.0012
Ghana	3,000,000	0.13	0.0186
DR Congo	2,500,000	0.04	0.0001
Indonesia	1,700,000	0.01	0.0003
Belgium	1,151,876	0.11	0.0002
Guyana	1,000,000	1.31	0.0885
New Zealand	1,000,000	0.23	0.0008

Source: InformationIsBeautiful.net

So, to the answer to who is the most generous looks different depending on how you measure it. The top five by category are:

Most Generous (total donations)

1. United States ($168 million)
2. Canada ($131 million)
3. Spain ($45 million)
4. United Kingdom ($32 million)
5. France ($31 million)

Most generous on a per capita basis ($ per person)

1. Canada ($3.89 per person)
2. Sweden ($2.51 per person)
3. Norway ($2.16 per person)
4. Denmark ($2.05 per person)
5. Finland ($1.48 per person)

And finally, most generous as a porportion of the economy (% GDP)

1. Guyana (0.088%)
2. Ghana (0.018%)
3. Canada (0.0087%)
4. Sweden (0.0048%)
5. Estonia (0.0043%)

Is the U.S. Economy Now in Recovery?

On Friday the Bureau of Economic Analysis released its fourth quarter 2009 estimates of economic performance in the United States. The figures were surprisingly positive, with gross domestic product [glossary] growing at an annualized rate of 5.7 percent. According to the BEA, the increase was driven primarily by an expansion in business inventories. Consumer spending increased at a much slower pace (2.0 percent in the fourth quarter, down from 2.8 percent in the third quarter).

Analysts were surprised by the growth in GDP, which had been forecast to increase at a much slower rate. The Obama Administration expressed cautious optimism regarding the figure, with Christine Romer, chair of Obama’s Council of Economic Advisors describing it as the “most positive news to date on the economy” and concluding that, “There will surely be bumps in the road ahead, and we will need to continue to take responsible actions to ensure that the recovery is as smooth and robust as possible. Nonetheless, today’s report is a welcome piece of encouraging news.”

Most observers now agree that we are unlikely to experience a “double-dip” recession. But the nature of the recovery still remains uncertain. Job figures released last week suggest that unemployment remains high and that employers remain hesitant to add jobs—thus Obama’s proposal to offer a $5,000 tax credit to employers who create new jobs. The concern—and one that seems entirely plausible given recent economic reports—is that the recovery of the U.S. economy will resemble the performance of the Japanese economy over the past decade, a “jobless recovery”  in which economic growth continues at a slow pace but unemployment remains high.

Fairness, International Law, and Crimes Against Humanity

Ali Hassan al-Majid, better known as “Chemical Ali” was sentenced to death by an Iraqi court last week. The sentence—death by hanging—was carried out on Monday.

Checmical Ali playing card issued by U.S. military forces in 2003

Ali was convicted of crimes against humanity for his role in a series of chemical weapons attacks against Kurds in northern Iraq under regime of Saddam Hussein in the 198s. The campaign resulted in the destruction of an estimated 4,000 Kurdish villages, the death of more than 180,000 and deportation of an estimated 1.5 million Kurds. His willingness to use a number of chemical weapons, including mustard gas, sarin and VX nerve agents, earned him the nickname “Chemical Ali,” though Kurds often referred to him as the “Butcher of Kurdistan.” Ali’s sentence and execution marked the highest level execution of a former Hussein-regime official since the execution of Saddam Hussein in 2006.

Crimes against humanity were defined during the Nuremburg Trials at the end of World War II as “Murder, extermination, enslavement, deportation, and other inhumane acts committed against any civilian population, before or during the war, or persecutions on political, racial or religious grounds in execution of or in connection with any crime within the jurisdiction of the Tribunal, whether or not in violation of the domestic law of the country where perpetrated.” The definition was later clarified by an Explanatory Memorandum to the Rome Statute of the International Criminal Court (ICC), which explained that crimes against humanity are

particularly odious offences in that they constitute a serious attack on human dignity or grave humiliation or a degradation of one or more human beings. They are not isolated or sporadic events, but are part either of a government policy (although the perpetrators need not identify themselves with this policy) or of a wide practice of atrocities tolerated or condoned by a government or a de facto authority. Murder; extermination; torture; rape and political, racial, or religious persecution and other inhumane acts reach the threshold of crimes against humanity only if they are part of a widespread or systematic practice. Isolated inhumane acts of this nature may constitute grave infringements of human rights, or depending on the circumstances, war crimes, but may fall short of falling into the category of crimes under discussion.

The trial of perpetrators for crimes against humanity has often been difficult and controversial. Accusations that the Sudanese government has engaged in crimes against humanity in operations in Darfur, for example, have generated tension between the ICC and the African Union. Similarly, the trials of individuals involved in the Rwandan genocide has led to diplomatic standoffs between the post-genocide Rwandan government, the United Nations, and the government of France.

The challenge often centers on accusations of politically-motivated trials and the dangers of “victor’s justice,” where the rules of war (and more generally of right and wrong) depend on the nationality of the winner. Critics of the U.S. anti-terrorism policy often claim that the United States is engaged in victor’s justice in its decision to use water boarding against individuals with suspected links to terrorism. This claim is based on the decision of the U.S. government to try (and ultimately execute) Japanese soldiers after World War II on charges of war crimes for water boarding American soldiers.

Clearly, the situation in Iraq is different. But the case does beg the question of fairness in international law. We all know that “to the victor goes the spoils” and that “history is written by the victor.” But does international law allow for equity and fairness that are the foundation for contemporary legal systems?

Belgium the Most Globalized Country

Despite the linguistic divide that appears to be fracturing the country, Belgium was named the “most globlaized country” in the 2010 KOF Index of Globalization. The annual survey attempts to measure political, economic, and social globalization around the world using a host of sub-indices. Rounding out the top 10 are:

1. Belgium
2. Austia
3. The Neterhlands
4. Switzerland
5. Sweden
6. Denamark
7. Canada
8. Portugal
9. Finalnd
10. Hungary

Overall, 20 of the 25 (and 31 of the 50) most globalized countries are in Europe. (Anyone sensing a pro-Europe bias here?) the United States comes in at 27th; China comes in at 63rd.

Still, the report makes for some interesting discussion points.

The European Union’s Foreign Policy Struggles

Baroness Catherine Ashton, Courtesy Wikimedia Commons

The European Union seems to be experiencing another round of growing pains. According to a report in Charlemagne’s Notebook, key European officials are turning on Catherine Ashton, the EU’s top foreign policy official. Ashton was the surprise pick for the position last November, becoming the EU’s first full-time official in that position. At the time, many believed that the pick was a compromise between various camps in the EU, particularly between Britain, which had been pushing for Tony Blair to fill the post, and Germany and France, who wanted someone with more “pro-Union” credentials. 

Ashton’s latest problems arose as a result of her response to the situation in Haiti. After the European Union committed €400 million in aid following the earthquake, Ashton was asked if she would be visiting Haiti personally. After indicated she would not visit the island because the United Nations had requested dignitaries to refrain from making such visits, which tend to disrupt the relief effort. But, a few days later, as Tony Barber reports on the Financial Times Brussels Blog, Michel Barnier, France’s nominee to be the next European Commissioner for internal market, issued a damning statement, noting that after the 2004 Asian tsunami, he visited the region as French foreign minister. As Barber observes,

What this episode reveals is that Ashton really has her work cut out to win the respect of some of her European peers.  They know perfectly well that she was appointed EU foreign policy high representative almost by accident last November and that she lacks experience in the field.  Barnier is not the only one sneering at her or trying to pull attention away from her…To non-European outsiders, this looks chaotic and amateurish.  British anti-Europeans are having a field day.  Someone has to restore order fast…Otherwise the EU’s image on the world stage, which took a hammering at December’s Copenhagen UN climate change conference, will slip even further.

The Lisbon Treaty was intended to streamline decision-making within the European Union by, among other things, institutionalizing key leadership positions. It appears, however, that the Union’s political struggles continue.

Updates on Previous Stories

An update to my post on the fungability of Ameircan power in Haiti: Judah Grunstein has a great analaysis on Haiti and the Constraints of American Hegemony, arguing that the U.S. position in the world left foreign policy decision makers with no choice but to come to Haiti’s aid. Grunstein writes,

What I find more revealing about the Haiti response is the degree to which U.S. policymakers felt they had no choice in the matter. For any number of reasons, they were right — certainly with regards to the humanitarian intervention, and most likely with regards to the subsequent reconstruction efforts. That reflects, in part, the responsibilities inherent in the role of global hegemon, and it underscores a paradox we’d do well to consider. Iraq and Afghanistan have already demonstrated the limits of military force, in particular, and American power more generally. And Haiti itself is a testament to the limits of nation-building. And yet, despite the near-certainty that results will be disappointing, we have no choice but to act.

To paraphrase Madeleine Albright, What good is global hegemony if we have no choice but to use it?

Haitian Aid and the Fungibility of American Power

82nd Airborne's Relief Mission , Photo courtesy US Military (www.army.mil)

Aid is finally beginning to flow to Haiti, despite bottlenecks at key transit points. The U.S. 82nd Airborne division has turned a golf course in Port-au-Prince into a makeshift refugee camp, ferrying relief supplies in by helicopter.
An estimated 50,000 people are now living on the country club’s grounds.

Meanwhile, the Pentagon announced yesterday that the 24th Marine Expeditionary Unit, which had been scheduled to deploy to Afghanistan, would be diverted to assist the relief effort in Haiti.

The use of the U.S. 82nd Airborne, the 24th MEU, and other units to assist in relief operations in Haiti illustrates the changing missions of the U.S. military. Their role in Haiti stands in stark contrast to ongoing combat operations in Afghanistan. But President Obama’s decision to deploy U.S. military personnel to Haiti presents an interesting example of the fungibility [glossary] of hard power as well. Traditionally, international relations scholars have contended that hard power (military force) was really only good for one thing: fighting wars. At the end of the Cold War, many scholars were concerned that U.S. soft power [glossary] was declining at the same time that hard power [glossary] became less relevant.

President Obama’s article in Newsweek illustrates his thinking. He states that the United States acts

for the sake of the thousands of American citizens who are in Haiti, and for their families back home; for the sake of the Haitian people who have been stricken with a tragic history, even as they have shown great resilience; and we act because of the close ties that we have with a neighbor that is only a few hundred miles to the south. But above all, we act for a very simple reason: in times of tragedy, the United States of America steps forward and helps.

But Obama also notes that

When we show not just our power, but also our compassion, the world looks to us with a mixture of awe and admiration. That advances our leadership. That shows the character of our country. And it is why every American can look at this relief effort with the pride of knowing that America is acting on behalf of our common humanity.

This is a classic example of the exercise of soft power in international relations.