Monthly Archives: August 2008

Five Stories You Might Have Missed

Over the past week we’ve seen a lot of news from the domestic U.S. political front: Obama’s speech at the Democratic National Convention, McCain’s pick of Sarah Palin for his Vice Presidential candidate.  What’s been going on in the rest of the world?  Here are five important stories from the past week.

1. The worldwide economic downturn continued last week.  On Friday, the Japanese government announced a new economic stimulus package.  Analysts are holding out little hope that it will make much of a difference.  In the United Kingdom, Chancellor Alistair Darling conceded that the current crisis will likely be “profound and longlasting.”  He forecasted that it might be the worst economic crisis faced by the United Kingdom in the past 60 years.  Similarly, figures released by the Canadian government last week show that the country is on the brink of recession, with gross domestic product growing by  a mere 0.1% in the second quarter.  All of this suggests that the current economic crisis is global in scope and potentially long in duration.

2. Ongoing political violence in Thailand last week culminated in the closure of three major international airports and blockades of the country’s rail, road, and port infrastructure.   Earlier in the week, protestors had laid siege to state buildings.  The protestors—a loose coalition of business, royalists, and activists under the banner of the People’s Alliance for Democracy—are demanding the resignation of Prime Minister Samak Sundaravej and his government.  So far, the military has refused to become involved in the political crisis.

3. In an interview on Tuesday, Zwelinazima Vavi, leader of the Congress of South African Trade Unions, declared that South Africa would need to radically change its economic policies to avoid the “ticking bomb” of poverty, unemployment and crime.  Vavi is a close ally of Jacob Zuma, the leader of the African National Congress and the person mostly likely to become president of South Africa after Thabo Mbeki’s term expires next year.  Many analysts believe Vavi’s views reflect the policies favored by Zuma.  Many South Africans believe the economic policies pursued by Mbeki have not improved the quality of life for ordinary people.  His complete interview is available through the Financial Times website.

4. The North Korean government announced on Tuesday that it would suspend the processing of disabling its nuclear facilities and was considering reactivating the Yongbyon reactor.  The announcement, which North Korea maintains is a response to the failure of the United States to make good on promises made during the six party talks, raises new concerns about the effectiveness of the talks and the progress made there.  On Thursday, South Korea announced that it would drop the label “main enemy” when referring to North Korea in its biannual defense white paper.  According to Major Seo Young-suk, the decision to drop the term “does not mean that we have changed our stance.  North Korea is still a substantial and present threat.”

5. In a report issued Thursday, the World Health Organization (WHO) condemned health inequalities between rich and poor around the world, describing them as “unfair, unjust, and avoidable.”  According to the WHO “a toxic combination of bad policies, economics, and policies [was] killing people on a grand scale.”  The complete report, entitled Social Determinants of Health, is available through the WHO website.

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Sanctions in a Globalized Economy

Western companies are divesting from Russia following the South Ossetia crisis and are scaling back investment in Iran over fears of the West imposing new sanction on the country. But as large companies are moving out of Iran, small and medium size companies are moving in to fill the void. According to a story reported in the Financial Times on Thursday, trade between the European Union and Iran actually increased as a result. Between January and April 2008, EU exports to Iran increased by 17.8%, while imports from Iran increased by 24%. The increase in European-Iranian trade occurred despite three UN resolutions in intended to isolate Iran, and despite significant pressure on the part of the European Union to discourage trade and investment in the country.

The debate over the effectiveness of sanctions a foreign policy tool goes back some time. The United Kingdom imposed sanctions on South Rhodesia (which would later become Zimbabwe) in 1965. It hoped that the sanctions would force the white minority government in South Rhodesia to move towards multi-racial democracy. Similar sanctions were often debated (though rarely imposed) on South Africa during the apartheid era. The sanctions against Southern Rhodesia (and the limited trade restrictions imposed against South Africa) were largely ineffective. The United Nations imposed sanctions on Iraq after the first Persian Gulf War. In the Iraqi case, U.S. enforcement of the sanctions made them relatively tight, thought the controversy over the misuse of the UN Oil for Food program later suggested that there were holes there as well. The United States has maintained sanctions against Cuba since 1962, through many other countries (including Canada and most European states) have generally refused to recognize the embargo. The Helms-Burton Act (passed in 1996) attempted to strengthen the Cuban embargo by permitting the government to block access to U.S. markets for any company that does business with Cuba.
This has been a very controversial policy in Europe, and may be a violation of World Trade Organization rules.

The effectiveness of sanctions in an era of economic globalization remains even more debated. On the one hand, economic globalization creates interdependence between countries which could make them more vulnerable to the effects of sanctions (though it also raises the cost of the sanctions for the country which is imposing them). On the other hand, globalization also creates many different avenues for trade. As a result, the closure of one market may merely shift buyers and sellers to new markets or trading partners. Nevertheless, it seem that effective sanctions require a strong international consensus or a country willing to bear the cost of enforcement. The sanctions against Iraq, for example, had both. Where this is not the case (contemporary Iran and Russia), sanctions are not likely to be effective in achieving foreign policy goals.

How do we “Recognize” a State?

The South Ossetia crisis continues.  Yesterday, the Russian government announced yesterday that it would recognize the two (former?) Georgian regions, Abkhazia and South Ossetia.  Nato’s Secretary General, Jaap de Hoop Scheffer, condemned Russia’s move, saying it was a “direct violation of numerous UN Security Council resolutions regarding Georgia’s territorial integrity” and cautioning Russia that “Nato firmly supports the sovereignty and territorial integrity of Georgia and calls on Russia to respect these principles.”
 
South Ossetia and Abkhazia have long demanded independence from Georgia.  But Russia’ recognition of the two has some important implications.  The 1933 Montevideo Convention on Rights and Duties of States outlines the four fundamental criteria for statehood. According to the treaty,

The state as a person of international law should possess the following qualifications:
(a) a permanent population;
(b) a defined territory;
(c) government; and
(d) capacity to enter into relations with the other states.

The requirement that a state have the “capacity to enter into relations with other states” has usually been interpreted as meaning a state is recognized by other states.  Unilateral recognition is not usually sufficient.  Thus, Russia’s recognition of the two regions as independent states does not necessarily make them states.  And the hesitation of other countries to follow suit suggests that further movement towards statehood may not be forthcoming.  Recognition by the United Nations has usually been used as shorthand for meeting this criterion. But some states may choose not to participate as members of the United Nations (e.g., Switzerland), while others may be excluded for political reasons (e.g., Taiwan). 

Deciding whether a state is a state or not can be surprisingly difficult.  Some states fail to meet all of the criteria, particularly if we also carry over Weber’s definition that a state “possess a monopoly on the legitimate use of physical force.”  By that definition, countries like Iraq Afghanistan, and Somalia would also not qualify, despite their membership in the United Nations.

Given this difficulty, it is also difficult to get an exact count on the number of states in the world.  There are currently 192 members of the United Nations.  The United States, however, recognizes 194 (including the Vatican and Kosovo, which are not recognized by the United Nations).  Taiwan may also be added to the list.  Palestine aspires to statehood, and the Palestinian government is recognized by many countries, but is not included in the total.

Measuring ‘Success’ at the Olympics

With the Olympic Games officially closed, the final medal counts are in. The United States and China both performed well, garnering 110 and 100 total medals respectively.  But is total medal count the only measure of Olympic success?  Of course not.  The purists among us (and the International Olympic Committee itself) would argue that participating in the Games is its own reward, medal or not.  Setting this position aside, we can still measure success in several different ways, yielding very different results.

The top 10 overall medal winners this year were:

  1. United States (110 total medals)
  2. China (100 medals)
  3. Russia (72)
  4. Great Britain (47)
  5. Australia (46)
  6. Germany (41)
  7. France (40)
  8. South Korea (31)
  9. Italy (28)
  10. Ukraine (27)

Gold Medal Count.  By this count, it’s perfection or nothing at all. In gold medal count, China runs away with the total, winning 51 golds. The United States places second with 36, and Russia remains in third with 23.  By this measure, Japan and the Netherlands overperform, shifting up 3 and 6 places respectively, while France underperforms, losing 3 places.

  1. China (51 golds, +1 place from overall standings)
  2. United States (36 golds, -1 place from overall)
  3. Russia (23 golds, no change from overall standings)
  4. Great Britain (19 golds, no change from overall standings)
  5. Germany (16 golds, +1 place from overall)
  6. Australia (14 golds, -1 place from overall standings)
  7. South Korea (13 golds, +1 place from overall)
  8. Japan (9 golds, +3 places from overall standings)
  9. Italy (8 golds, no change from overall standings)
  10. Three countries (France, Ukraine, and the Netherlands) tied with 7 gold medals each)

Population per Medal. Countries with larger populations can draw upon a wider pool of talent to field Olympic athletes.  Consequently, we might expect them to perform better than countries with smaller populations.  Calculating the number of people for each medal a country won (population per medal) gives us a fundamentally different medal count.  Biggest winners by this count: Iceland, which goes up 63 places in standing, and the Bahamas, which goes up 59.  The biggest declines are seen by China (-66 places) and the United States (-44 places).

  1. Bahamas (165,500 people/medal, +59 places from overall standing)
  2. Jamaica (267,727 people/medal, +18 places from overall)
  3. Iceland (316,252 people/medal, +63 places from overall)
  4. Slovenia (405,800 people/medal, +31 places from overall)
  5. Australia (465,500 people/medal, no change from overall)
  6. Cuba (469,500 people/medal, +6 places from overall)
  7. New Zealand (474,933 people/medal, +17 places from overall)
  8. Armenia (500,333 people/medal, +25 places from overall)
  9. Belarus (510,000 people/medal, +4 places from overall)
  10. Mongolia (657,250 people/medal, +38 places from overall)

And where do our top overall performers come in?

   26. Great Britain (1,234,043 people/medal, -22 places from overall standing)
   32. South Korea (1,555,613 people/medal, -24 places from overall standing)
   33. France (1,611,829 people/medal, -26 places from overall standing)
   34. Ukraine (1,705,900 people/medal, -24 places from overall standing)
   38. Russia (1,970,697 people/medal, -35 places from overall standing)
  39. Germany (2,005,312 people/medal, -22 places from overall standing)
  40. Italy (2,129,260 people/medal, -31 places from overall standing)
  45. United States (2,771,664 people/medal, -44 places from overall standing)
  68. China (13,255,630 people/medal, -66 places from overall standing)

Total Medals by GDP: As countries become more wealthy, they have more resources to spend on sporting facilities, training athletes, and so on.  Consequently, we’d expect relatively wealthier countries to perform better than relatively poor countries.  How do the number stack up?  And what happens to the top 10 countries from our overall medal count?  The biggest increases in standing are seen by countries like Kyrgyzstan (+59), Tajikistan (+50), and Mongolia (+45).  The biggest declines are in the standings of the United States (-74), Australia (-69), and Germany (-58).

  1. North Korea ($370 GDP/medal, +20 places from overall standings)
  2. Jamaica ($810 GDP/medal, +18 places from overall)
  3. Mongola ($964 GDP/medal, +45 places from overall)
  4. Armenia ($1,545 GDP/medal, +29 places from overall)
  5. Georgia ($1,592 GDP/medal, +25 places from overall)
  6. Kyrgyzstan ($1,744 GDP/medal, +59 places from overall)
  7. Tajikistan ($1,850 GDP/medal, +50 places from overall)
  8. Cuba ($1,879 GDP/medal, +4 places from overall)
  9. Belarus ($2,038 GDP/medal, +4 places from overall)
  10. Kenya ($2,107 GDP/medal, +8 places from overall)

And our top overall performers?

   18. Ukraine ($5,204 GDP/medal, -8 places from overall standing)
   35. Russia ($17,861 GDP/medal, -32 places from overall)
   42. South Korea ($31,674 GDP/medal, -34 places from overall)
   44. China ($54,686 GDP/medal, -42 places from overall)
   55. Great Britain ($59,000 GDP/medal, -51 places from overall)
   57. France ($62,875 GDP/medal, -50 places from overall)
   61. Italy ($73,857 GDP/medal, -52 places from overall)
   64. Germany ($79,488 GDP/medal, -58 places from overall)
   74. Australia ($122,233 GDP/medal, -69 places from overall)
   75. United States ($127,900 GDP/medal, -74 places from overall)

And last but not least, total medals by GDP per capita.  By this measure, Egypt fares very well (+81 places), as does North Korea (+31) and Uzbekistan (+29).  The biggest declines are seen in Italy (-32) and Great Britain (-30).   Our top performers by this measure:

  1. North Korea ($16 GDP per capta per medal, +31 from overall standings)
  2. China ($25  GDP per capta per medal, no change from overall)
  3. Egypt ($30 GDP per capta per medal, +81 from overall)
  4. Ethiopia ($56 GDP per capta per medal, +24 from overall)
  5. Kenya ($113 GDP per capta per medal, +13 from overall)
  6. Ukraine ($123 GDP per capta per medal, +4 from overall)
  7. Uzbekistan ($126 GDP per capta per medal, +29 from overall)
  8. Russia ($167 GDP per capta per medal, -5 from overall)
  9. Cuba ($210 GDP per capta per medal, +3 from overall)
  10. Belarus ($214 GDP per capta per medal, +3 from overall)

And our top performers (apart from Russia and China, included above):

21. United States ($411 GDP per capta per medal, -20 from overall)
26. South Korea ($657 GDP per capta per medal, -18 from overall)
29. Australia ($904 GDP per capta per medal, -24 from overall)
31. Germany ($967 GDP per capta per medal, -25 from overall)
32. France ($975 GDP per capta per medal, -25 from overall)
34. Great Britain ($1,017 GDP per capta per medal, -30 from overall)
41. Italy ($1,239 GDP per capta per medal, -32from overall)

So what do these data tell us about international relations and the Olympics?  About economic development and sport?  About any host of other topics?  And which is the best (or most accurate, or most fair) way to calculate Olympic standings?  I’ll leave that for you to ponder.  But for now, consider the following fun facts:

1.  Economist Daniel Johnson at Colorado College created a simple model to forecast Olympic success.  His formula incorporated five variables (GDP per capita, total population, political structure (democratic, authoritarian, military or communist), climate (the number of frost days) and home-nation bias) to project success.  His success rate was good (95-96% correlation)

2. African countries won a total of 40 medals, representing the continent’s best performance at the Olympics ever.  For three countries (Mauritius’ bronze in bantamweight boxing, Sudan’s silver in the men’s 800 meters, and Togo’s bronze in men’s single kayak) won their first ever Oympic medals.  Unforatunately many of the athletes were based overseas.

3. China’s Project 119 demonstrates an increased state commitment to sport—a way of demonstrating to the rest of the world China’s continued rise.  The project represents a continuation of the state commitment to sport common in communist governments, still reflected in the performance of post-communist transition countries (like Russia, Ukraine, Belarus, Tajikistan, and Uzbekistan).

4. Michael Phelps dramatic success placed him in a league of his own.  If he were a country, he would have tied for ninth place in gold medal count, ahead of countries like France, Netherlands, Spain, Canada, Argentina, Switzerland, Brazil and Mexico.

The data used here are taken from Symworld.com, which provides comprhenesive statistics for all Olympic medal winners.

Five Stories You Might Have Missed

The closing of the Beijing Olympics and Barack Obama’s announcement of his Vice-Presidential candidate have been the two most widely covered stories over the past few days.  Here are a few other important stories from the past week:

1.  Growing instability in Afghanistan: A Taliban attack outside of Kabul, Afghanistan, resulted in the deaths of ten French soldiers.  The attack appeared to be part of a coordinated effort by the Taliban against Nato forces in the country, coinciding with another attack against US forces in the southwestern part of the country.  The attacks highlight the shortage of material and soldiers  in the country.  Attending a memorial service for the soldiers, French President Nicolas Sarkozy asserted that he would continue French involvement in Afghanistan, asserting that it was “essential to the freedom of the world.”  Reflecting growing tensions in the country, the government of Afghanistan on Friday accused Nato of killing 76 civilians, mostly children, during operations against Taliban insurgents.

2. The Crisis in South Ossetia: After negotiating a ceasefire, Russia and the west once again appear unable to resolve their differences over Russian withdrawal.  Russia has rejected Nato’s call for a total withdrawal to pre-crisis positions.  Nato has moved to isolate Russia, and in return Russia has cancelled joint military operations with Nato countries.  The crisis gave new impetus to the United States and Poland to sign a missile defense shield.  Demonstrating the link between international security and global political economy, the crisis also helped to push oil prices higher and marked the beginning of a trend of western investors pulling their money from Russia at a rate not seen since the Russian Ruble crisis of 1998.

3. The Rise of Food Neo-Colonialism: In a report issued on Tuesday, Jacques Dious, director general of the United Nation’s Food and Agriculture Organization, warned that the drive for farmland could result in the development of a neo-colonial system for agriculture.  Driven by record high commodity prices, foreign direct investment in farms and agricultural production has grown dramatically over the last couple of years.

4. The Pakistani Presidential Race: After the departure of embattled Pakistani President Pervez Musharraf last week, the struggle to find a new president has begun.  Mohammad Mian Soomro, chair of Pakistan’s Senate, has been named acting President and is heading the search for a new leader.  Asif Ali Zardari, widower of former Prime Minister Benazir Bhutto, has emerged as the leading candidate from the Pakistan People’s Party, the largest party in the parliament.  

5. Unified European Parliament: After part of the ceiling of the European Parliament in Strasbourg collapsed last week, the Parliament was forced to cancel its monthly trek from Brussels to Strasbourg.  The Parliament traditionally moved to the French city of Strasbourg from Brussels for its monthly meetings, despite the fact that the majority of the Union’s administrative and bureaucratic support—not to mention its most important institutions—are based in Brussels, Belgium.  The move, widely denounced by both the EU’s proponents and opponents—costs an estimated €200 million (($350 million) per year.  It is hoped that the forced relocation of the Parliament may encourage a reconsideration of the monthly move, although French opposition may be hard to overcome.

The Global Cotton Market

In the aftermath of the collapse of the Doha Round of WTO talks last month, Brazil has decided to move forward with a formal complaint against the United States.  At issue is the very issue that caused the collapse of the talks in the first place: agricultural subsidies.  A decision by the WTO’s dispute resolution panel in 2005 found that three programs intended to support US cotton farmers with price guarantees, credit access, and export subsidies, constituted violations of WTO rules.  After the decision, the United States both announced its intention to abide by and appeal the ruling.  The WTO appellate body confirmed the decision of the original panel, ordering the United States to cease its programs.  (A full background report on the case was issued by the Congressional Research Service).

The appellate body’s ruling now permits Brazil to impose retaliatory trade sanctions against US exports to Brazil up to the amount Brazil has lost due to US programs—an estimated $1 billion.  The breakdown of the Doha negotiations suggests that Brazil may now move forward with that option.

So why all the fuss about cotton subsidies?  The United States is the world’s largest cotton exporters, accounting for approximately 41 percent of global trade.  And subsidies are a big reason why.  Subsidies push global cotton prices down; removal of subsidies would increase cotton prices.  But just how much is debated.  A range of analyses from the UN Food and Agriculture Organization, to the World Bank, to the International Cotton Advisory Committee suggest that removal of US cotton subsidies would increase the per-pound price of cotton anywhere between 5 and 26 percent (or between 2 and 11 cents per pound).

Approximately 10 million people in West Africa alone depend on cotton fir their livelihood.  And as a recent article in WorldView Magazine suggested,

For the cotton-dependent countries of West and Central Africa, 11 cents a pound adds up quickly. Based on this figure, Oxfam America estimated that sub-Saharan African countries lost $350 million due to U.S. subsidies in 2001. Millions of dollars in lost export earnings means less money for basic services: education, health care and debt refinancing.

With the Doha Round now dead, the United States has suggested that it does not need to move forward with plans to reduce cotton subsidies. 

So why don’t African cotton producers just sue the United States?  Therein lies the problem with the WTO dispute settlement mechanism.  While every country is free to participate, it takes time and costs money.  And if you do win your case, the only enforcement mechanism available is countervailing (retaliatory) tariffs.  If the United States wins a case against the European Union, it can impose tariffs on EU exports to the US, making them more expensive.  If Burkina Faso wins a similar case, it can similarly impose retaliatory tariffs on US exports to Burkina Faso.  For the relatively poor countries in the global south, it’s not much of a win…American goods become more expensive in the export market.

Five Stories You Might Have Missed

Headlines this week have been dominated by two stories: Michael Phelps’ success at the Olympic Games and the Russia-Georgia War.  With all the attention paid to these two stories, here are five other developments you might have missed.

1.  Russia’s Poland Threat:  After Russia’s move into Georgia last week, Poland decided to permit U.S. interceptor missile bases to be housed there.  The bases, part of the Bush Administration’s strategic defense initiative program, had been frozen due to American resistance to Polish demands that a Patriot missiles battery be stationed in the country as part of the deal.  After the Georgian conflict, the United States appeared willing to give in to the Polish demand.  In response, Russia warned Poland that it was now a target for their nuclear arsenal.

2.  Musharraf’s (Possible) Resignation:  Facing possible impeachment, Pakistan’s President Pervez Musharraf indicated on Thursday that he will be stepping down.  Impeachment proceedings had been set to start early next week.  Musharraf’s resignation was likely intended to avoid that spectacle.  As part of the agreement, Musharraf will avoid prosecution and will be permitted to remain in Pakistan.  His departure, however, signals an important shift in Pakistani politics, a key country in the war on terror.

3.  No Diplomatic Solution in Zimbabwe:  Negotiations intended to resolve Zimbabwe’s longstanding crisis have so far failed to reach a peaceful settlement.  At issue is who will lead Zimbabwe.  Robert Mugabe, the current president, has been in office since 1980 and has increasingly relied on force to maintain his rule.  Morgan Tsvangarai, leader of the opposition Movement for Democratic Change party, won the first round of presidential elections last March before being forced to cancel his campaign in the second round of voting due to political violence.  Despite extensive pressure being placed on the country by South Africa, Mugabe appears so far to be unwilling to share power.  Negations continue, but few are hopeful that a settlement will be reached.

4.  Lugo Wins Paraguay Election:  Continuing a leftward shift in many Latin American countries, Fernando Lugo won the election in Paraguay, marking the end of 61 years of one-party rule by the Colorado Party.  One of Lugo’s first acts as President was to decline his monthly salary of approximately $4000, declaring that “the money belongs to the poorest.”  Evo Morales, the leftist President of Bolivia, said that Lugo’s victory would “deepen democracy” in the region.

5.  Syrian-Lebanese Meeting:  In the face of a declining security situation in Lebanon, the country’s President, Michel Suleiman, agreed to re-establish full diplomatic relations with neighboring Syria.  The agreement, part of a package that seeks to normalize relations between the two countries, marks the first time the countries would exchange ambassadors since both achieved independence in the 1940s.