Monthly Archives: October 2009

Five Stories You Might Have Missed

The Nobel Prize Committee sparked considerable debate on Friday when they named President Barack Obama the recipient of the 2009 Nobel Peace Prize. According to the committee, Obama received the award for “his extraordinary efforts to strengthen international diplomacy and co-operation between peoples,” citing in particular his effort to reach out to the Muslim world and his push for nuclear disarmament. FT blogger Gideon Rachman commented, “while it is OK to give school children prizes for “effort” – my kids get them all the time – I think international statesmen should probably be held to a higher standard.” Qari Mohammad Yousof Ahmadi, a senior spokesman for Afghanistan’s Taliban movement said of the award, “Obama should be awarded the war prize, rather than the peace prize.” Daniel Drezner said the decision “cheapens an already devalued prize.” At Foreign Policy, David Rothkopf decried the decision as “the most ludicrous choice in the history of an award that has a pretty dubious history… It’s as if a freshman tailback were handed the Heisman Trophy as he ran onto the playing field along with a hearty pat on the back and the explanation that he’d been selected to encourage him to have a great year to come.”

But most of the criticism of the award seems to be reserved for the Nobel Peace Prize Committee rather than for President Obama. Indeed, while calling the decision a “ludicrous choice,” Rothkoph also praised Obama’s speech regarding the award. He wrote,

Short of deferring his acceptance of the Nobel Prize, President Obama could not have struck a better tone in his remarks this morning accepting the award. From saying he did not deserve it to framing the award as a “call to action” to citing others who merited such an award, he was pitch-perfect. And in reciting some of his key goals — from the elimination of nuclear weapons to combating climate change to bringing a lasting peace between Israel and Palestine — he raised hope that the award might be even further motivation to advance to what are, as noted above, worthy objectives.

In news from outside the Nobel Prize awards:

1. The security situation in Pakistan appears to be in serious decline. Over the weekend, a group of militants stormed the headquarters of the Pakistani military in Rawalpindi, taking hostages and creating a standoff situation. The Pakistani military was able to retake the compound early Sunday, rescuing 42 hostages and killing most of the militants. On Friday, a car bomb exploded near a shopping mall in Peshawar, a city in the northern part of the country. The attack, described by Pakistani security officials as “one of the most daring attacks ever carried out by the Taliban,” killed 49 people and injuring nearly 100. The attack came just one day after a similar bombing outside the Indian embassy in Afghanistan, and may constitute part of a renewed offensive by Taliban elements operating along the Afghan-Pakistan border. Last week, the Pakistani government launched a renewed offensive against the Taliban in the Waziristan region of the country. But so far, the campaign has had few successes, and the increase in recent attacks, particularly the brazen attack against Pakistani military headquarters, cast doubt on the ability of the Pakistani military to effectively address the Taliban threat.

2. Despite reservations that the treaty would erode national sovereignty and transfer too much power to Germany, Lech Kaczynski, the President of Poland, signed the Lisbon Treaty on Saturday. Poland’s accession make the Czech Republic the lone European Union member that has not approved the Lisbon Treaty. Despite Czech resistance, the treaty appears to be headed for adoption and thus a radical restructuring of the European Union. The treaty would make EU decision making more efficient, streamlining the current voting system in the European Council and strengthening the role of the European Parliament.

3. A number of trade disputes intensified last week. On Thursday, the United States announced an investigation into Chinese steel pipes, the culmination of which could result in a 98.7 percent duty on steel pine imports from China. The announcement follows the imposition of a 35 percent duty on Chinese tire imports last month and a longstanding dispute over Chinese currency values.  Meanwhile, the United States filed a complaint against the European Union with the World Trade Organization on Thursday. The complaint alleges that EU restrictions on the importation of chicken meat washed with chlorine and other chemicals constitutes an unfair trade barrier. Canada last week filed a complaint with the WTO alleging US country-of-origin labeling requirements in cattle and hog exports also constitute an unfair trade barrier.

4. Intervention by Secretary of State Hillary Clinton was able to help overcome last minute setbacks to the Armenian-Turkish peace treaty on Saturday. The agreement, which must still be approved by both country’s parliaments, sets out a timeline to restore diplomatic relations and open the border between Amenia and Turkey. While the agreement was difficult to reach, both sides stand to gain. For Turkey, resolving the longstanding dispute could smooth its path to membership in the European Union and increase its influence in the Caucasus. Armenia could see its economy improve access to European Union market. Despite the potential benefits, the agreement could still be derailed due to longstanding tensions between the two countries, which date back to 1915 murder of up to 1.5 million Armenians by the Ottoman Empire, often referred to as the world’s first genocide.

5. On Tuesday, Idelphonse Nizeyimana, a key player in Rwanda’s 1994 genocide, was arrested in Uganda. Nizeyimana was responsible for the organization of the genocide in Butare, a southern province in Rwanda. The arrest was the second high profile detention in a month, following the arrest of Gregoire Ndahimana in the Democratic Republic of the Congo. But the arrests highlight tensions between Rwanda and the United Nations over the handling of charges related to the genocide, in which more than 800,000 ethnic Tutsis and politically moderate Hutus will killed. Both Nizeyimana and Ndahimana have been transferred to Tanzania to stand trial at the International Criminal Tribunal for Rwanda, despite efforts by the Rwandan government to have them tried by the Rwandan government in Kigali.

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The Declining Dollar and the Rise of American Jobs

Blogging over at The Daily Beast, Simon Johnson offers an interesting take on the recent but steady decline in the value of the U.S. dollar. Gold prices reached record levels yesterday, as the U.S. dollar continued its six month decline against most major international currencies. The dollar is currently trading at near-record lows against the euro and the yen. And according to a story by Robert Fisk in Tuesday’s Independent,

Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

This comes on the heels of discussions within the Chinese government to diversify its currency reserves, potentially replacing the dollar as the global reserve currency with a basket of currencies.

If true, such moves could have dramatic implications for the U.S. economy. The dollar has been the de facto reserve currency for the world since the end of World War II. And oil is the most widely traded commodity in the world, and the global oil trade provides a significant level of demand for U.S. dollars.

Most economists suggest that a shift will occur, but that it will be a gradual change rather than a sudden shift. Indeed, as former U.S. Trade Representative and current President of the World Bank, Robert Zoellick conceded ahead of World Bank meetings in Istanbul last week, “One of the legacies of this crisis may be a recognition of changed economic power relations.”

Still, Simon Johnson suggests that the current decline in the value of the dollar may not be anything to worry about. Indeed, he suggests that it may be part of a deliberate strategy by the Obama administration to improve the economic outlook in the United States ahead of 2010 Congressional elections. A weak dollar has historically been viewed as good for manufacturing but bad for the financial sector. Given that inflation is a major concern currently, the reason for a strong dollar appear less compelling. Johnson writes,

think what a weaker dollar does for the industrial heartland, where so many congressional seats will be in play and where today it’s easier to export or compete against imports because the same dollar costs convert into fewer euros, yen, or renminbi (this is what a “weaker” dollar means—foreigners can more easily afford our goods and their stuff is more expensive to us). If the dollar stays weak or declines further, our car companies, machinery makers, and turbine blade manufacturers will soon be rehiring and we’ll finally get some job growth as part of our sputtering economic recovery.

Certainly a new spin on an old debate.

IgNobel Prize Winners

With the Nobel Prize season underway, the folks over at the Annals of Improbable Research have once again announced the winners of the IgNobel Prize. According to organizers, the award is given to researchers whose work “first makes people laugh; then makes people think.” While speculation about who may win the prizes in economics and the Peace Prize continues, the IgNobel Prizes have already been awarded. Among the highlights are…

Prize in Veternary Medicine to Catherine Douglas and Peter Rowlinson of Newcastle University, Newcastle-Upon-Tyne, UK, for showing that cows who have names give more milk than cows that are nameless.

The IgNobel Peace Prize to Stephan Bolliger, Steffen Ross, Lars Oesterhelweg, Michael Thali and Beat Kneubuehl of the University of Bern, Switzerland, for determining — by experiment — whether it is better to be smashed over the head with a full bottle of beer or with an empty bottle.

The Prize in Literature to Ireland’s police service, for writing and presenting more than fifty traffic tickets to the most frequent driving offender in the country — Prawo Jazdy — whose name in Polish means “Driving License.”

And the Mathematics Prize to Gideon Gono, governor of Zimbabwe’s Reserve Bank, for giving people a simple, everyday way to cope with a wide range of numbers — from very small to very big — by having his bank print bank notes with denominations ranging from one cent ($.01) to one hundred trillion dollars ($100,000,000,000,000).

Five Stories You Might Have Missed

There have been several interesting developments in European politics over the past few days. Final results were released Saturday from the Irish referendum on the Lisbon Treaty. The Irish approved the treaty by a wide margin (with 67.1% of voters in favor) after defeating the treaty in June 2008 by a 53.4 percent majority. Ireland’s approval of the treaty represents an important step forward in approving a restructuring of the European Union; a restructuring that would expand the influence of the European Parliament, establish a full-time presidency for the EU (a position for which former British Prime Minister Tony Blair may be tapped), and limit the ability of national governments to veto EU legislation in certain areas. But despite the approval by Irish voters, Czech President Vaclav Klaus tempered expectations, stating that he may delay signing the treaty until a Czech appeals court can review the treaty and assess its implications for Czech sovereignty.

Two important elections also took place recently. In Germany, Angela Merkel won reelection as Germany’s Chancellor. The victory of her center-right coalition promises to continue her emphasis on greater openness for the German economy. Preliminary results from Greek elections on Sunday suggest that the Socialists will soundly defeat the ruling New Democracy party, possibly securing a legislative majority in the national parliament. The contradictory results suggest an interesting restructuring of European politics.

In news from outside of the European Union last week:

1. Government ministers at the annual meeting of the International Monetary Fund in Turkey this week rejected warnings by the banking sector that new financial regulations could undermine economic growth. Representatives from the United States, Italy, and the United Kingdom all rejected claims by the global bankers association that regulatory overkill could undermine global economic growth and result in the creation of fewer jobs. But despite apparent agreement on the need for new financial regulations, considerable debate over the exact nature and structure of those regulations remains, and an agreement on the details appears to be a ways off.

2. The International Olympic Committee granted Rio de Janeiro the right to host the 2016 Olympic Games on Friday, making Rio the first South American city to host the Olympics. A last minute visit by President Barack Obama to Copenhagen was unable to convince the IOC to grant the games to Chicago, which was also bidding to host. Several observers have raised concerns that Obama’s unsuccessful campaign to win the games may undermine his ability to deliver on health care reform and foreign policy objectives.

3. A massive earthquake in Indonesia resulted in the deaths of an estimated 1,100 people last week. The tragedy follows a tsunami in the South Pacific that killed more than 100 people. Concerns that another, larger quake could strike soon were also raised on Saturday. International aid campaigns have begun delivering supplies to the region, but the widespread devastation of government facilities in the region could hamper aid efforts.

4. The President of Burkina Faso has been dispatched to meet with the military rulers of Guinea to address the emerging crisis in the country. More than 100 people have been killed in Guinea in the past week, as the county’s military government has moved to quash opposition protests. On Thursday, Cellou Dalein Diallo, former prime minister and current opposition leader, was forced to flee the country, as Captain Moussa Dadis Camara, who came to power as the country’s leader in a December coup, has attempted to solidify his hold on power.

5. On Sunday, the government of Iran agreed to permit International Atomic Energy Agency inspectors to visit a secret uranium enrichment facility made public by the United States last week. The discovery of the site led the Russian government to concede the possibility of United Nations sanctions on the Iranian government—a proposal which both Russia and China have long opposed. The Iranian decision comes ahead of scheduled six-party talks, involving the United States, Russia, France, China, Britain, Germany, and Iran, at the end of the month.

Realism and Liberalism in U.S. Foreign Policy

Stephen Walt poses an interesting thought experiment on his blog. He asks, “What if Obama delivered Bush’s second inaugural address?”  In the speech, Bush advances all the claims of a liberal foreign policy, emphasizing the role of the United States in promoting democratization and liberty around the world. Based on this exercise, Walt arrives at three conclusions:

First, when you like a political leader, you’ll tend to like what he or she says no matter what the actual words are. Conversely, if you’ve already decided you don’t like someone, there’s little they could do to convince you. Second, liberal values are deeply infused into American political culture, which is why either Bush or Obama could use a lot of the same phrases and invoke the same sweeping language and get a lot of heads to nod in assent. Third, as long as the United States is very, very powerful, there will be a strong outward thrust to its foreign policy, even when vital interests aren’t at stake and even when meddling abroad could make things worse rather than better.

I think Walt’s conclusions are correct as far as they go. But he stops short of the most important (fourth) conclusion. U.S. foreign policy has often engaged in naked power politics, pursuing realist objectives couched in the rhetoric of liberalism. Throughout the Cold War period, the United States frequently justified foreign policy decisions in the name of “protecting democracy” and “promoting liberty” blended with concerns of fighting communism. This blending is certainly not unique to U.S. foreign policy, but Americans are perhaps distinctive in the degree to which we emphasize the role of the United States as the “city on the hill,” occupying not just a powerful position, but also representing a powerful moral force for good in global geopolitics.