Shaun Rein: Give the People What They Want

Economy

With the world’s elite in Davos as the backdrop, Chinese Premier Wen Jiabao has reiterated the government’s stance that it can hit 8 percent gross domestic product (GDP) growth in 2009—despite exports dropping 2.8 percent in December and fourth quarter GDP growth falling to 6.8 percent. An 8 percent GDP growth rate is the magic number many analysts believe China must reach in order to absorb the 6 million university graduates joining the workforce every year and maintain social stability.

Premier Wen says 2009 will be a hard year but that government spending in health care, environmental protection, and other large-scale projects will make up for foreign investment shortfalls. With China’s debt levels at only 17 percent of GDP (versus well over 50 percent in countries like the United Kingdom) and deflation emerging as a bigger concern than inflation, China also has the option to push banks to loan more money.

However, China’s planned $586 billion stimulus package is far too focused on large infrastructure and state-owned enterprise projects, leaving the country’s ability to hit that growth rate in jeopardy.

Jocelyn McCalla: Obama & Haiti’s Window of Opportunity

EconomyEnergy & Environment

Barack Obama delivered a sober yet forceful speech at his inaugural as the forty-fourth president of the United States of America. The speech covered a lot of ground in a relatively short period of time. He balanced a reality check on the state of the union with an appeal to the American people that, with their help and support, the country would be better off in the years ahead, and that the obstacles that stand in their path to a better future today would be but history when their grandchildren looked back on the historical record.

Obama spoke mainly to the American people, but he had a few choice words for allies and foes abroad. What should Haitian leaders take away from his words? Two things: a warning and a promise.

The warning: “To those leaders around the globe who seek to sow conflict, or blame their society’s ills on the West—know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.”

Since these words were preceded by others meant to convey to the Muslim world that the United States was not its enemy, some may very well say that such warnings were directed at terrorists and their international supporters rather than poor Haiti. Au contraire.

Jodi Liss: Farewell to the Year of Oil Power

Citizenship & IdentityEconomyEnergy & Environment

As we stagger into 2009, the financial and economic world of the past 30 years is crumbling and in chaos. Where is the bottom of this mess? How much more pain? No one knows and all dread the answer.

It is not just the United States; it is a global shift. Whatever the world comes to think about the United States and its debunked Washington Consensus, last year was, if anything, the Year of Oil Power. The radical plunge in prices we’re witnessing now may change the global balance of power even more in the other direction this year.

Whether due to speculation or wishful thinking, in 2008, geopolitics seemed to hinge on commodities in a positively unnatural way, especially among those who knew better. Anyone familiar with the boom-and-bust cycle of oil (and gas) so memorably captured in Daniel Yergin’s The Prize knows that for every delirious rise, the oil busts, such as those of the 1930s and the 1980-90s, have been long, painful, and hard for the producers to end.

Ian Williams: Pinochet’s Echoes Today

EconomyElections & InstitutionsRisk & Security

Ian WilliamsSeptember 11 is a day that will live in infamy: a terrorist attack on a landmark building whose aftermath left more than 3,000 dead. Yes, Chileans will always remember the coup of September 11, 1973, when their military commanders—with tacit, and indeed active, support from Washington—bombed their own presidential palace, setting up a repressive regime that imprisoned, tortured, and executed supporters of the deposed government while driving untold more into exile.

But while Osama bin Laden is being hounded around the North West Frontier, one of the architects of the Chilean coup, Henry Kissinger, is a revered advisor to governments; the other, Augusto Pinochet, died without facing trial for his involvement.

“He had taken full advantage of the rights guaranteed to him by due process—rights that his victims were denied—and postponed his day of reckoning indefinitely.” On the day he died, “My feelings of hate toward Pinochet and what he represented had waned through the years; instead I felt a serene contempt for the man,” concludes Heraldo Muñoz in The Dictator’s Shadow, a highly readable, fascinating, and revelatory account of the General’s career.

Muñoz, now Chile’s ambassador to the United Nations and one of those who had to flee his country in 1973, has written a remarkably restrained memoir assessing just how big a shadow Pinochet cast, both globally and historically.

Jonathan Power: Palestine and the War of Civilizations

EconomyPolarizing Political EconomyRisk & Security

Just what Barack Obama needs as he prepares to be the forty-fourth president of the United States: another Israeli/Palestinian war re-inflaming passions all over the Arab and Muslim world. Will that middle name of his count for something in this intense firefight?

Well, possibly—but only if he moves fast to change the long-time American emphasis on supporting, by both word and deed, the Israeli side at the Palestinian’s expense. It is as simple—and as complicated—as that. After the Bush years, during which the “clash of civilizations” became the de facto interpretation of American, and to some extent European, policy in the region, the West quickly needs to de-escalate its fixation with what it often interprets as the rabid policies of the Islamic world. The focus instead should be on restoring a sense of humility in dealing with the world-wide Muslim civilization, albeit one with its share of bad apples.

Comparison, even in the time of Al Qaeda, does not work in Christendom’s favor. The West should not overlook its near-takeover by the Nazis, whose attempt to eliminate the Jews was launched from a country that was in many ways the fulcrum of modern Christianity. It would be a mistake to forget the inroads that atheistic Marxism made in Europe; or the everyday crime rates in Western nations that far, far exceed those in Muslim countries, especially in the Middle East.

David A. Andelman: A New Year, A Fresh Start?

Big QuestionCultureEconomyElections & InstitutionsUncategorized

Davis Andelman, EditorThe first Monday of the new year began in Baghdad with a unique debut: the ribbon-cutting for the world’s largest and most opulent American Embassy, and at the very moment the administration that made it most necessary (and least affordable) is headed for the exits.

We are indeed, as the Chinese proverb so aptly notes, living in interesting times. Some of Wall Street’s wisest prognosticators (if that is not an oxymoron in itself) are predicting a market surge this year that could rival that of 2000 when the Internet bubble was in full flight and companies with nothing but bottled air for products commanded stratospheric prices on the wings of inflated expectations.

Over the past year, our expectations have fallen to a new low, or at least our confidence. So does this signal a rock bottom of despair? Perhaps. How indeed could things get much worse than today?

There is always something worse. War in Gaza could expand to include southern Lebanon and Hezbollah, drawing Iran into the equation. Markets could resume their slide even in the face of mega-wealth pouring in from every leading central bank around the globe. The diplomatic packet on Monday from India to Pakistan detailing Islamabad’s role in last year’s Mumbai terror attacks could simply be a prelude to armed conflict along that always tense frontier. China could decide to stop funding the excesses of the American consumer, sending the dollar into a fatal tailspin. Oh, and then there’s oil: as desperate a case at $40 a barrel as $140.

Jodi Liss: Down and Out in Zimbabwe

EconomyRisk & Security

These past weeks it has been hard to decide which politician is more completely out of touch with reality: Governor Rod Blagojevich of Illinois, who apparently sought to sell Barack Obama’s Senate seat to the highest bidder, or Robert Mugabe of Zimbabwe, who seems uninterested that thousands of his people are suffering and dying from cholera.

Of course, whatever Blagojevich has done is peanuts compared to Mugabe, who has driven his once-successful country into the ground with a 231 million percent inflation rate (which sounds almost comically impossible—unless you’re there), a ruined physical infrastructure, the destruction of property rights, commonplace violence, an economy that has contracted more than 40 percent in the past decade, and now epidemic diseases. And, of course, there is the fact that he lost the national election last spring. He stays in power because the Zimbabwean military and the ZANU-PF party thugs have an interest in keeping him in power.

Anyway, Mugabe’s days are numbered. His country is in a slow death spiral; he’s also 84. The question is what happens to Zimbabwe after his end. Sure, there’s Morgan Tsvangirai, the guy who more or less did win the elections—but members of the military are already engaged in an internecine struggle for supremacy. This week, one of the Zimbabwean military’s own, Air Marshall Perence Shiri survived an assassination attempt considered by many to have been an inside job. Whatever happens to Mugabe, these commanders will not quietly accede to change that will cost them prerogatives and power.

What is in the offing, according to U.S. Ambassador James McGee, is a collapsed or failed state.

In his recent book on development, The Bottom Billion, noted economist Paul Collier tells of being told why, after decolonization, the developing world’s governments turned out so inept: the homegrown technocrats (of which Africa had precious few) were shoved aside from power by those with a less educated, more military background. Those who could run a government competently were replaced with cronies.