About six months ago, when the world's major central banks all started pursuing aggressive strategies of quantitative easing, I blogged that, "the international bitching and moaning about QE3 seems much less than the 'currency war' rhetoric that QE2 triggered."
With Japan's decision to unleash the monetary taps, the "currency war" meme has cropped up again, but in an odd way. To be honest, I'm reading a lot more essays that smack down the "currency war" claim than are making it. For recent and salient smackdowns, see Felix Salmon, Mario Draghi, Gavyn Davies, Philipp Hildebrand, Matthew Yglesias, and Paola Subacchi.
So this raises an awkward question -- who is claiming that there's a currency war and why? Is there a lobby that's agitating for an end to certain policies and using the guise of a "currency war" to try to make it happen? Who are these shadowy groups?
As near as I can determine, there are three interest groups with the motivated interest in doing this:
1) The Bundesbank. One can think of the eurozone crisis as one long, inexorable weakening of the Bundesbank's grip on European monetary policy. Bundesbank president Jens Weidemann set off the latest round of currency war puffery in a speech in which he bemoaned the "increased politicisation of exchange rates" and warned that central bank indepenence was eroding. Now I'm not a German-speaker, but it's possible that when Weidemann says central bank independence is "eroding" he means, "I don't have a veto over eurozone monetary policy like I used to and Draghi won't return my calls."
2) The bond funds. Bondholders aren't big fans of inflating currencies, which is the designed effect of this collective round of quantitative easing. Or, to put it more pithily, it's not a currency war unless someone at PIMCO is hyping it!! In this case, Mohammed El-Erian:
[T]here is a lot of scholarship demonstrating why such beggar-thy-neighbor approaches result in bad collective outcomes. Indeed, multilateral agreements are in place to minimize this risk, including at the International Monetary Fund and the World Trade Organization.
Yet, when push comes to shove, country after country is being dragged into abetting a potentially harmful outcome for the global economy as a whole. Worse, this process has not yet registered seriously on the multilateral policy agenda.
El-Erian needs to read the Financial Times a bit more often. The problem isn't that this isn't on the "multilateral policy agenda" -- it's that these global governance structures are less stressed about it than El-Erian:
The world’s largest developed nations reaffirmed their commitment not to target exchange rates in a statement on Tuesday aimed at addressing concerns over a fresh round of global currency wars.
In a move widely seen as an attempt to defuse tensions over recent rapid moves in the currency market, the Group of Seven countries -- comprising the US, the UK, France, Germany, Italy, Canada, and Japan -- said they would “consult closely” on any action in foreign exchange markets.
"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates,” the ministers and governors said.
This doesn't sound like the G-7 is all that troubled -- or, to put it more bluntly, not as troubled as El-Erian wants them to be.
3) The developing world. While the G-7 seems pretty copacetic with the combined quantitative easing, the G-20 is another matter.
The words “currency wars” are too blunt for a G20 communique, but that is what the world’s finance ministers will talk about when they meet in Moscow this week.
A new round of monetary easing in advanced economies is pushing down their currencies and prompting howls of protest from the developing world.
Indeed, the most cogent critiques of the developed world's combined QE strategy comes from officials and op-ed writers focused on the less developed world. And to be sure, the combined effect of developed country actions on the monetary front can create some policy problems in the developing world.
Again, though, what's striking isn't the vocal complaints about currency wars in 2013 but the relative absence of them compared to, say, the fall of 2010 after QE2. Which suggests that while there might be some mild grumbling among the advanced developing countries, they prefer the status quo to policies that cause the OECD economies to contract in size.
So, to sum up: when you read about someone voicing "grave concern" about currency wars, see if they are based in A) an export-dependent developing economy; B) a bond fund; or C) the German central bank. If they are, you can safely tune them out. It's when people outside those places start carping that I'll start getting concerned about a currency war.
Am I missing anything?
One of the tests of any theoretical paradigm is whether it works on a new explanatory domain. The introduction of "cyber" as a new possible zone of conflict would seem to be an ideal testing ground for international relations theory, for example. Will cybersecurity emerge within a strong body of law-governed international regimes, a norm-infused sphere of do's and don'ts, a game-theoretic equilibrium in which no actor has an incentive to deviate frrom status-quo policies, an arena where nuclear analogies are applied to a new and not-so-similar security theater, or a realpolitik zone of anarchy in which there are no rules or norms, just exercises of power and capabilities?
Based on recent reporting, the answer appears to be a realpolitik one. After bolstering the Department of Defense's Cyber Command even during a time of austerity, the New York Times' David Sanger and Thom Shanker report on a new legal review of presidential authority in this area:
A secret legal review on the use of America’s growing arsenal of cyberweapons has concluded that President Obama has the broad power to order a pre-emptive strike if the United States detects credible evidence of a major digital attack looming from abroad, according to officials involved in the review.
That decision is among several reached in recent months as the administration moves, in the next few weeks, to approve the nation’s first rules for how the military can defend, or retaliate, against a major cyberattack. New policies will also govern how the intelligence agencies can carry out searches of faraway computer networks for signs of potential attacks on the United States and, if the president approves, attack adversaries by injecting them with destructive code — even if there is no declared war.
The rules will be highly classified, just as those governing drone strikes have been closely held....
Cyberweaponry is the newest and perhaps most complex arms race under way. The Pentagon has created a new Cyber Command, and computer network warfare is one of the few parts of the military budget that is expected to grow. Officials said that the new cyberpolicies had been guided by a decade of evolution in counterterrorism policy, particularly on the division of authority between the military and the intelligence agencies in deploying cyberweapons. Officials spoke on condition of anonymity because they were not authorized to talk on the record....
As the process of defining the rules of engagement began more than a year ago, one senior administration official emphasized that the United States had restrained its use of cyberweapons. “There are levels of cyberwarfare that are far more aggressive than anything that has been used or recommended to be done,” the official said....
While many potential targets are military, a country’s power grids, financial systems and communications networks can also be crippled. Even more complex, nonstate actors, like terrorists or criminal groups, can mount attacks, and it is often difficult to tell who is responsible. Some critics have said the cyberthreat is being exaggerated by contractors and consultants who see billions in potential earnings.
One senior American official said that officials quickly determined that the cyberweapons were so powerful that — like nuclear weapons — they should be unleashed only on the direct orders of the commander in chief.
A possible exception would be in cases of narrowly targeted tactical strikes by the military, like turning off an air defense system during a conventional strike against an adversary.
“There are very, very few instances in cyberoperations in which the decision will be made at a level below the president,” the official said. That means the administration has ruled out the use of “automatic” retaliation if a cyberattack on America’s infrastructure is detected, even if the virus is traveling at network speeds....
Under the new guidelines, the Pentagon would not be involved in defending against ordinary cyberattacks on American companies or individuals, even though it has the largest array of cybertools. Domestically, that responsibility falls to the Department of Homeland Security, and investigations of cyberattacks or theft are carried out by the F.B.I.
There's a lot going on in this story, but distilled to its elements, it does seem as though the U.S. is ramping up its offensive capabilities a hell of a lot more than preparing for defensive resiliency. So, offensive realism for the win, right?
Well, maybe, or maybe this is just some odd organizational politics going on. I confess to finding this utterly puzzling, because the latter is clearly kinda important. In an arena populated by non-state actors and quasi-non-state actors, defense would seem to me to be a far more important concern.
The language and analogies being used by officials in the story are also a confusing mix. On the one hand, a lot of the quotes in the story suggest that they think of cyber as like nuclear deterrence, in that escalation could be a very, very, very bad thing. On the other hand, keeping the decision rules classified seems to cut against any kind of deterrence logic.
The New Republic's Thomas Rid is equally bumfuzzled:
Barack Obama is probably America’s most web-savvy president ever. But when it comes to actually crafting policy for the nation's cyber security, his administration has been consistent in only one aspect: bluster. Obama's major legacy on cyber security, it increasingly seems, will be an infrastructure for waging a non-existent “cyber war” that's incapable of defending the country from the types of cyber attacks that are actually coming....
[T]he rhetoric of war doesn't accurately describe much of what happened [in recent cyberattacks]. There was no attack that damaged anything beyond data, and even that was the exception; the Obama administration's rhetoric notwithstanding, there was nothing that bore any resemblance to World War II in the Pacific. Indeed, the Obama administration has been so intent on responding to the cyber threat with martial aggression that it hasn't paused to consider the true nature of the threat. And that has lead to two crucial mistakes: first, failing to realize (or choosing to ignore) that offensive capabilities in cyber security don’t translate easily into defensive capabilities. And second, failing to realize (or choosing to ignore) that it is far more urgent for the United States to concentrate on developing the latter, rather than the former.
In many ways, what's happening with cyber appears to mirror a more general conceptual uncertainty about whether resources and doctrine that apply to other states in the international system can be applied to non-state actors as well. In cyber, it seems that the latter is the more immediate and constant threat, while the former is the more serious but latent threat. On the other hand, when pondering an actor like China, perhaps that dichotomy breaks down.
I'm far from a cyber expert, but I do know a litle bit about international relations theory. What's disturbing about these stories about cyber is not that they reflect aspects of offensive realism -- it's that they reflect a more inchoate cluster of contradictory impulses.
What do you think?
For the past few years, a low level theme that occasionally pops into my news feed is the idea of greater Sino-Pakistani cooperation. Now this has a certain amount of realpolitik sense to it. The United States and Pakistan are not exactly on the best of terms, China is a rising power, they share a comon interest in containing India, yadda, yadda yadda. As a result, there has been the occasional press story about closer ties, which begets the inevitable U.S.-based blog posts about China expanding its "string of pearls" strategy of more deepwater ports in the Asia/Pacific region.
There's just one thing. The more closely one reads these stories, the less clear it is that China wants a string of pearls. Most of these stories talk about great Pakistani enthusiasm for more Chinese involvement. That enthusiasm is not really reciprocated by China, however. Consider Jane Perlez's New York Times story from October 2011:
A rising China with global ambitions is unlikely to supplant the United States in Pakistan, according to Chinese experts on Pakistan, as well as Pakistani and American officials. And while Pakistan’s latest flirtations with Beijing have been received cordially, Pakistani officials have walked away from their junkets with far less in hand than they might have hoped....
China’s core interests lie elsewhere — in its competition with the United States and in East Asia, experts say. China has shown little interest in propping up the troubled Pakistani economy, consistently passing up opportunities to do so.
Despite China playing it cool, Pakistan has continued to fall all over itself to attract greater Chinese engagement in their country. Which leads us to today's headline in the New York Times: "Chinese Firm will Run Strategic Pakistani Port." Sounds ominous for U.S. interests... until one reads Declan Walsh's actual story:
Pakistan is handing management control of a strategic but commercially troubled deep-sea port to a Chinese company, the information minister confirmed Thursday....
The fate of Gwadar, once billed as Pakistan’s answer to the bustling port city of Dubai, United Arab Emirates, has been a focus of speculation about China’s military and economic ambitions in South Asia for the past decade. Some American strategists have described it as the westernmost link in the “string of pearls,” a line of China-friendly ports stretching from mainland China to the Persian Gulf, that could ultimately ease expansion by the Chinese Navy in the region. Gwadar is close to the Strait of Hormuz, an important oil-shipping lane.
But other analysts note that Gwadar is many years from reaching its potential, and they suggest that fears of creeping Chinese influence might be overblown. “There may be a strategic dimension to this, where the Chinese want to mark their presence in an important part of the world,” said Hasan Karrar, an assistant professor of Asian history at the Lahore University of Management Sciences, referring to the management transfer at Gwadar. “But I wouldn’t go so far as saying this implies a military projection in the region.”....
Pakistan has failed to build the port or transportation infrastructure needed to develop the port, the property bubble has burst and, according to the port management Web site, the last ship to dock there arrived in November. “The government never built the infrastructure that the port needed — roads, rail or storage depots,” said Khurram Husain, a freelance business journalist. “Why would any shipping company come to the port if it has no service to offer?”
According to reports in the Pakistani news media, the Port of Singapore Authority sought to withdraw from the management contract after the Pakistani government failed to hand over land needed to develop the facility. (emphasis added)
This greater Chinese involvement, it should be noted, also comes after Beijing rebuffed Pakistani requests to turn Gwadar into a naval base.
So, to sum up: despite Pakistan prostrating itself before China, Beijing has been extremely leery of getting too enmeshed in that country. It has rejected repeated requests for military basing, and only now has a commercial Chinese company agreed to manage a port that appears to be the Pakistani exemplar of "white elephant."
So please, no "strong of pearls" posts from the national security blogosphere today. These pearls are about as fake as you can get.
Am I missing anything?
Roger Cohen has a column modestly titled "Diplomacy Is Dead." Let's see what he's talking about:
Diplomacy is dead.
Effective diplomacy — the kind that produced Nixon’s breakthrough with China, an end to the Cold War on American terms, or the Dayton peace accord in Bosnia — requires patience, persistence, empathy, discretion, boldness and a willingness to talk to the enemy.
This is an age of impatience, changeableness, palaver, small-mindedness and an unwillingness to talk to bad guys. Human rights are in fashion, a good thing of course, but the space for realist statesmanship of the kind that produced the Bosnian peace in 1995 has diminished. The late Richard Holbrooke’s realpolitik was not for the squeamish.
There are other reasons for diplomacy’s demise. The United States has lost its dominant position without any other nation rising to take its place. The result is nobody’s world. It is a place where America acts as a cautious boss, alternately encouraging others to take the lead and worrying about loss of authority. Syria has been an unedifying lesson in the course of crisis when diplomacy is dead. Algeria shows how the dead pile up when talking is dismissed as a waste of time....
Indeed the very word “diplomacy” has become unfashionable on Capitol Hill, where its wimpy associations — trade-offs, compromise, pliancy, concessions and the like — are shunned by representatives who these days prefer beating the post-9/11 drums of confrontation, toughness and inflexibility: All of which may sound good but often get you nowhere (or into long, intractable wars) at great cost.
Stephen Heintz, president of the Rockefeller Brothers Fund, wrote in an e-mail that, “When domestic politics devolve into polarization and paralysis the impact on diplomatic possibility becomes inordinately constraining.” He cited Cuba and Iran as examples of this; I would add Israel-Palestine. These critical foreign policy issues are viewed less as diplomatic challenges than potential sources of domestic political capital....
Obama has not had a big breakthrough. America’s diplomatic doldrums are approaching their 20th year.
Narrow-minded domestic politics.... check... Web 2.0 short-termism... check... yes, this is indeed the exemplar of the Grumpy Old Diplomatic Hand column. So as a Grumpy Middle-Aged Academic, I'd like to grouse a bit on these alleged truisms.
Now on the one hand, Cohen has a point that the optics of patient diplomacy can be more politically challenging than military statecraft. The use of force tends to arouse domestic suipport; diplomacy can be painted as an act of weakness or appeasement. And one can certainly think of Cuba, Iran or even Israel/Palestine as places where diplomacy has not achieved liftoff capacity. And, yes, Web 2.0 technologies do make things like "backchannel diplomacy" that much more difficult to keep under wraps.
All that said.... give me a f**king break.
First of all, there's a logical tension hidden within Cohen's narrative. He laments the disappearance of patient diplomacy in one breath and then observes the relative decline in U.S. power in the next. Maybe it's not that U.S. patience has withered, but that a hegemon with less weight to throw around requires even greater levels of patience to achieve the same tasks. In the case of Syria, for example, it's kinda hard to see how more realpolitik would have gotten states with fundamentally divergent national interests to agree on a manageable solution. Indeed, one could argue that the tropuble with America's Syria diplomacy has been too much realpolitik, not too little.
Second of all, Cohen is glossing over some examples of patient diplomatic successes. Even in Syria, there have been examples of successful "concert" diplomacy. The U.S. opening to Myanmar would be another example [UPDATE: Cohen tweets in response that he did in fact mention Myanmar. He's right, and I apologize for not noting that fact.]. This is a case where the Burmese themselves have done a lot of the heavy lifting, but it's to the Obama administration's credit that it nimbly seized on the opportunity. Indeed, this has been part of an overall Asia/Pacific strategy that would appear to epitomize the kind of hard-headed diplomacy that Cohen does. Even the Sino-American handling of the Chen Guangcheng case represents an example of deft diplomacy in response to Web 2.0 technology.
Third -- and most important -- diplomacy is a two-player game. There have been cases where the Obama administration has reached out to leaders with a different worldview in an effort to normalize relations -- think about the "reset" with Russia. It would be safe to describe that effort as "fraught with complications." Most of the friction in the Russia reset has nothing to do with the domestic American causess Cohen highlights, however, and everything to do with Russian policymakers
feeling their relative power wane being extremely wary of the outreach effort. Similarly, Iran's domestic politics during the Obama years have been... complicated. It's not clear whether the most generous U.S. offer would actually be accepted by Iran's current political establishment.
One could argue that Cohen's logic, extended globally, does have some heft. It's not just the rise of domestic impediments in the United States -- it's the increased importance of domestic politics in diplomacy in other countries that makes realpolitik statecraft so hard to execute in the 21st century. But let's be clear -- this phenomenon has little to do with the Internet age, the decline in American power, or even the rise of single-issue interest groups. Ironically, it has more to do with the effect a successful American grand strategy -- the promotion of open polyarchic politics in the rest of the world. Even authoritarian countries like China, or quasi-authoritarian countries like Russia have domestic interests and bases to sate. The domestic politics in these countries is far more open than it was during the heyday of realpolitik diplomacy.
As International Relations 101 will say, adding domestic constraints narrows the possibility of any international agreement. I agree with Cohen that this is happening. I disagree with Cohen as to the reasons why. It has very little to do with the United States, and an awful lot to do with the rest of the world.
So, to sum up: diplomacy's death has been greatly exaggerated, and a lot of what ails it has very little to do with the United States.
Am I missing anything?
One of this blog's
annoying tics persistent themes has been its insistence that the 2008 financial crisis did not, in fact, doom the United States to a future of inevitable decline. Indeed, there are many reasons to be optimistic about America's future, and there are many reasons to be skeptical about claims that China will be able to exercise leverage over the United States.
Now, one of the counterarguments to this thesis over the past five years has been the explosion of U.S. debt and Washington's need for Beijing to continue to buy that debt to finance America's current expenditures. This was a running theme of financial writers in 2009. Four years ago, there was a particular concern that "China is also trading long-term Treasuries for short-term notes." If the United States could only borrow overseas by issuing more short-term debt, that ostensibly gave China some kind ov leverage as Washington needed to continually roll over those debt obligations.
I bring this up because Daniel Altman highlights a fascinating data point in his Foreign Policy essay about the shifting composition of the federal government's debt:
In the past several years, the national debt of the United States has undergone a tremendous change. Long-term securities -- those with maturities of seven years or more -- have gone from about 30 percent of the debt in 2009 to about 40 percent today. By 2018, according to the Treasury's own estimates, they'll make up 50 percent of the debt, a proportion the Treasury expects to maintain from then onward. The United States is doing what any smart borrower would do: locking in low rates for the long term. As a result, its probability of default for any given level of debt has dropped.
Huh. So it turns out that desite a surge in borrowing by the U.S. government and China's desire to keep the arrangement on a short-term basis, Washington has managed to borrow in a relatively efficient manner at historically low interest rates.
Oh, and by the way, how has China altered its purchases of U.S. debt? Well, besides a general slackening of such purchases (which partially explains the appreciation of the yuan) and a general lack of complaint in response to QE3, it has also changed the composition of those U.S. debt purchases:
China has actually decreased its short term U.S. bond holdings by 5.1%. China holds $US 3.7 billion short term U.S. paper. On June 2011 China held $US 4.9 billion of short term U.S. paper. So basically all the debt that China holds are long term treasuries now. Interesting to know, China had $US 200 billion in short term U.S. debt in May 2009. So they divested all short term paper to long term paper.
In other words, contrary to the fears of debt hawks in 2009 -- including, it should be noted, Hillary Clinton -- China has not exercised an iota of influence over the United States via its debt holdings. Indeed, the shifting pattern of their debt purchases strongly suggests that the Chinese have recognized the futility of such an approach.
While Beijing has recognized this truth, certain Very Serious People who write Very Serious Columns persist in being afraid of China's mythical debt leverage. So, on occasion, as a public service, this blog will continue to remind its readers that U.S. remains clothed in immense financial power.
To follow up with another data point suggesting that we're living in a world of "good enough" global governance, let's take a look at piracy on the high seas , shall we?
You might recall that in 2009 piracy off the Horn of Africa and elsewhere was skyrocketing. This triggered multiple policy responses by shipping companies as well as governments. Ships started carrying armed guards on tankers as a form of deterrene. An ad hoc and diverse group of countries formed Combined Task Force 151 to help patrol the Horn of Africa to prevent pirate attacks. Hell, even Iran sent ships to participate in anti-piracy operations.
So it turns out that all of these measures seem to be working. By 2012, both press reports and official statistics suggested that the tide had turned. As the New York Times' Thom Shanker wrote up one U.S. Navy finding last September:
Data released by the Navy last week showed 46 pirate attacks in the area this year, compared with 222 in all of last year and 239 in 2010. Nine of the piracy attempts this year have been successful, according to the data, compared with 34 successful attacks in all of 2011 and 68 in 2010.
How bad have things gotten for Somali pirates? The top pirate just announced that he has retired from piracy.
So can we chalk this up as an example of successful global governance? I would say yes, but it's worth noting two additional points. First, it's far from clear that activity on the water is the sole factor responsible for the decline in piracy attacks. Events on land -- including Kenya's invasion of Somalia and Puntland's increasing "stateness" -- might have something to do with it as well. Second, it's not only multinational sea patrols that have played a role. If it was, then shipping companies wouldn't be mobilizing their own private navy.
Still, these actions compliment rather than substitute for each other. The protection of shipping is one of the global economy's oldest public goods -- and it appears that after a post-financial crisis spike, there has been a useful policy corrective. That's good enough.
The mobilization towards an agreement reflects the changing landscape of global trade. If a deal emerges, it will allow the U.S. and EU more leeway to set the rules of the road for the industries that matter most to them....
This potential trade deal is also a further sign of the collapse of the movement toward global free trade. The new round of WTO negotiations is effectively dead, and a major deal between two of the world’s largest economies would be a further signal that bilateral negotiations are once again becoming the norm.
Finally, this deal shows us that the BRICs are not quite as influential as many think. A U.S.-EU trade deal is essentially a way to ignore countries like Brazil and India while crafting rules that will govern some of the high-tech industries and information-based services that play a growing role in US-EU trade.
Mead is correct to point out the advantages of the US and EU trying to craft an FTA template, particularly for the sectors they care about a lot. Still, a few quibbles and disagreements.
First, a transatlantic deal doesn't signal a "collapse of the movement toward global free trade" -- it signals a different pathway towards that goal. The collapse of Doha suggests that the traditional multilateral round negotiaions are dead, but it's worth remembering that the global economy got very close to zero barriers in the late 19th century and there was nary a multilateral institution to be found. True, the trade agreements of the 19th century had most-favored nations clauses and their 21st century counterparts do not. Nevertheless, the political economy of trade diversion still generates competitive incentives for a growth in FTAs, thereby leading to a similar end outcome -- a world blanketed in free-trade agreements.
Second, contra Mead, I'd suggest that a transatlantic trade deal is not a sign of US-EU strength, but rather its weakness. There have been rumblings and trial balloons to do something like this for the past fifteen yewars, but it never really got off the ground. The reason it never got off the ground was simple -- both Americans and Europeans were worried that any trade deal this massive would scupper the WTO system. It would seem like a developed country effort to completely rewrite the rules of the global trading game. Since everyone had a lot of skin in the WTO game, it didn't seem like it would be worth it.
Two things have changed. First, the traditional method of multilateral trade liberalization has died. Second, while both the US and EU are major trading states, they're not quite as pivotal as they used to be. Ironically, it's their declining (though still appreciable) importance in global trade that makes a US-EU agreement feasible now. The BRIC economies are now sufficiently large that a transatlantic trade deal doesn't seem like an existential threat.
One of the points I was trying to make in my CFR working paper on global economic governance is that the system, while far from perfect, did in fact prevent the worst from happening. That might sound like lowered expectations, but anyone who knows anything about the history of global governance would appreciate that this would represent a significant upgrading from past centuries.
I bring this up because of this maddeningly-short-on-detail New York Times front-pager by Eric Shmitt and David Sanger on what went down when the Syrian government inched closer to using its chemical weapons stockpile:
In the last days of November, Israel’s top military commanders called the Pentagon to discuss troubling intelligence that was showing up on satellite imagery: Syrian troops appeared to be mixing chemicals at two storage sites, probably the deadly nerve gas sarin, and filling dozens of 500-pounds bombs that could be loaded on airplanes.
Within hours President Obama was notified, and the alarm grew over the weekend, as the munitions were loaded onto vehicles near Syrian air bases. In briefings, administration officials were told that if Syria's increasingly desperate president, Bashar Al-Assad, ordered the weapons to be used, they could be airborne in less than two hours — too fast for the United States to act, in all likelihood.
What followed next, officials said, was a remarkable show of international cooperation over a civil war in which the United States, Arab states, Russia and China have almost never agreed on a common course of action.
The combination of a public warning by Mr. Obama and more sharply worded private messages sent to the Syrian leader and his military commanders through Russia and others, including Iraq, Turkey and possibly Jordan, stopped the chemical mixing and the bomb preparation. A week later Defense Secretary Leon E. Panetta said the worst fears were over — for the time being.
Now if you read the whole thing, it's entirely unclear exactly who communicated to whom and whether these messages were planned and coordinated in advance -- though it reads like it was.
But this episode, again, seems like an example of the great powers making sure that the worst-case scenario -- for them, at least -- did not transpire. Now this might seem like small beer compared to the appalling loss of life in Syria and the discomfiting tolerance the Obama admiinistration has with the status quo. Still, compared to, say, the interwar period of 1919-1939, or the Cold War deadlock from 1945-1990, it's not nothing either. Clearly, the great powers do seem pretty invested in the idea of keeping the Syrian civil war limited to Syria and not allowing it to consume the entire region.
In no way should this be taken as a shining moment for global governance, but it does suggest that there is some governing and policing going on, no matter how suboptimal the level. In much of the social sciences, there's a focus on constrained optimization and maximization. What's going on in global governance right now highlights the "constrained" part of that equation more than anything else. Still, compared to some who argue that we operate in a world where no one is powerful enough, perhaps it would be more accurate to phrase it differently. Formal and informal global governance structures still perform some important tasks at preventing worst-case scenarios from metastasizing, be it in security or economics. Call it "'good enough' global governance" -- it's not a new world order or anything, but it's also not as chaotic or dysfunctional as many pundits proclaim.
What do you think?
Ellen Barry reports in the New York Times that the Russians see the handwriting on the wall in Syria:
Deputy Foreign Minister Mikhail Bogdanov, Russia's top envoy for Syria, said on Thursday that President Bashar al-Assad’s government was losing control of the country and might be defeated by rebel forces.
“Unfortunately, it is impossible to exclude a victory of the Syrian opposition,” he said — the clearest indication to date that Russia believed Mr. Assad, a longtime strategic ally, could lose in a civil war that has claimed tens of thousands of lives.
“We must look squarely at the facts and the trend now suggests that the regime and the government in Syria are losing more and more control and more and more territory,” said Mr. Bogdanov, in remarks to Russia’s Public Chamber carried by Russian news agencies.
This comes a day after Syria launched Scud missiles at opposition forces -- which everyone and their mother seems to think is a desperate move by the Assad regime -- and the United States announced it would recognize the new Syrian opposition council.
Now, as someone who has been expecting Assad to go for quite some time now, these appear to be pretty powerful signs that the regime is, if not facing the end, the beginning of the end. On the other hand, as Bruce Bueno de Mesquita and Alistair Smith note in Foreign Policy, Assad still seems able to command the necessary resources to fund his coercive apparatus.
So, how can we really tell that Assad -- or any other leader facing an insurrection -- is actually on his way out? In the spirit of David Letterman, might I suggest the following:
TOP TEN SIGNS THAT YOUR REGIME IS IN TROUBLE:
10) Your Minister of Transportation decides to cash in all his frequent flyer miles.
9) Barbara Walters bumps you from her Most Fascinating People of the Year special in favor of a boy band;
8) Your press agent tells you, "I don't know what happened, but we can't find that Vogue profile of you anywhere on the Internet!"
7) The RSVPs for your year-end holiday party don't seem to include anyone from the Defense Ministry.
6) Fox News interrupts its War on Christmas coverage to actually report on your country
5) Your last name, as a hashtag, is trending higher than a Kardashian.
4) For no apparent reason, your radio station is playing this song nonstop.
3) The traffic jam to your international airport is far worse than usual.
2) All those posters of you in the downtown are now covered by posters of the latest Liam Neeson film.
and the #1 sign that your regime is in trouble...
1) The U.N. Security Council says so!!
Every five years or so the National Intelligence Council releases a Global Trends report about what the world will look like a generation from today. The Global Trends 2030 report is now out, and if my Twitter feed and Thom Shanker's New York Times story are any indication, well, there's gonna be some freaking out inside the Beltway:
A new intelligence assessment of global trends projects that China will outstrip the United States as the leading economic power before 2030, but that America will remain an indispensable world leader, bolstered in part by an era of energy independence....
“There will not be any hegemonic power,” the 166-page report states. “Power will shift to networks and coalitions in a multipolar world.”
It warns that at least 15 countries are “at high risk of state failure” by 2030, among them Afghanistan and Pakistan, but also Somalia, Burundi, Rwanda, Yemen and Uganda.
The study acknowledges that the future “is malleable,” and lists important “game-changers” that will most influence the global scene to 2030: a crisis-prone world economy, shortcomings in governance, conflicts within states and between them, the impact of new technologies and whether the United States can “work with new partners to reinvent the international system.”
The best-case situation for global security to 2030, according to the study, would be a growing political partnership between the United States and China. But it could take a crisis to bring Washington and Beijing together — something like a nuclear standoff between India and Pakistan resolved only by bold cooperation between the United States and China.
The worst-case situation envisions a stalling of economic globalization that would preclude any advancement of financial well-being around the world. That would be a likely outcome following an outbreak of a health pandemic that, even if short-lived, would result in closed borders and economic isolationism.
The chief author and manager of the project, Mathew Burrows, who is counselor for the National Intelligence Council, said the findings had been presented in advance in more than 20 nations to groups of academic experts, business leaders and government officials, including local intelligence officers.
As one of those academic experts, let me say three things. First, the NIC puts a lot of effort into these reports, and they're important because they're consumed globally and not just nationally. Not a lot of other countries have either official or unofficial institutions trying to do this kind of long-range analysis, so they devour the NIC reports just as much as Americans.
Second, as Michael Horowitz and Philip Tetlock pointed out in Foreign Policy just a few short months ago, these NIC reports are hardly a perfect crystal ball:
The reports almost inevitably fall into the trap of treating the conventional wisdom of the present as the blueprint for the future 15 to 20 years down the road. Many things the early reports get right, such as the continued integration of Western Europe, were already unfolding in 1997. Similarly, predicting that "some states will fail to meet the basic requirements that bind citizens to their government" or that information technology will have a large impact on politics was hardly going out on a limb.
Looking carefully at the first two Global Trends reports reveals how the reports have struggled to make accurate non-obvious predictions of big-picture trends....
The reports also engage in extensive hedging. For every prediction, there is a caveat. The reports lean heavily on words such as "could," "possibly," and "maybe." The lead-in to Global Trends 2025 uses "could" nine times in two pages, and the report as a whole uses the word a whopping 220 times. The report also uses "maybe" 36 times. Global Trends 2020 uses "could" 110 times. Add all of the caveats and conditionals, and a harsh critic might conclude that these reports are saying no more than that there is a possibility that something could happen at some point -- and it might have a big effect.
Third, that prediction of the end to U.S. hegmony will be an interesting litmus test of the maturity of America's foreign policy community. Sure, other institutions have made this kind of prediction about rising Chinese power, but it's different when a U.S. government body does it. Despite the wide variance contained within these kind of predictions, it's gonna be easy for threat-mongers to screech at the headline statements.
Furthermore, whenever the topic of waning American hegemony comes up in public discourse... well, the conversation doesn't go well. Admitting a relative decline in American power is not something American's political and policy elites like to do -- see 2012 campaign, Mitt Romney.
So pay close attention to who freaks out and who doesn't from the NIC report, and feel free to discount the future statements of those who choose to freak out today.
It would be safe to describe the Chinese government as having been "peeved" at Norway for the Nobel Peace Prize that Liu Xiaobo was awarded back in 2010. More than two years later, Beijing is still pissed off at Oslo, according to the Financial Times' Jamil Anderlini and Clare MacCarthy:
China is offering visa-free visits to Beijing for visitors from every European country except Norway, in what appears to be the latest in a string of punishments for the Nordic country since it gave a jailed Chinese dissident the Nobel peace prize in 2010.
The Nobel Peace Prize is awarded by a committee of five appointed by the Norwegian parliament, and committee members have always been Norwegian nationals.
On Wednesday, the Beijing city government unveiled a list of 45 countries whose citizens will be allowed to enter the city while in transit for 72 hours without a visa, starting from January 1.
Visitors from all 27 EU member states, as well as Iceland and Switzerland, will enjoy the new visa-free treatment, as will those from the US, Russia, Japan, Australia and most major Latin American countries.
When asked why Norway was left off the list, Wang Qin, a senior official at the Beijing government travel administration, did not respond directly but said that some countries were not eligible because their citizens or government were “of low-quality” and “badly behaved”. (emphasis added)
Yeah!! I've taught a few Norwegians in my day, and the whole lot of them are low quality and badly behaved, with their inscrutable fjords and smug blondness and their vague association with herring and their very specific association with lutefisk!!
In fact, I'm glad Wang Qin brought this up, because in the past couple of months a whole bunch of country rankings have come out, and they're an excellent way to bolster Wang's assertion of low Norwegian quality and bad behavior, especialy as compared with a peacefully rising China.
Why, just yesterday, Transparency International released their 2012 Corruptions Perception Index, and Norway ranks 7th and China ranks 80th!! Who's dirty now??!! [Ahem!--ed.] Oh.... Norway's the 7th least corrupt economy and China is... way more corrupt.
Well, there's more than one ranking system! A few weeks ago the World Justice Project released their 2012 Rule of Law Index. I bet that shows how dirty Norway really is!! [Ahem!--ed.] Oh... Norway is actually pretty good on rule of law issues, including ranking first among all 97 countries in civil justice. Whereas China is.... um... not as good, ranking 94th out of 97 countries on fundamental rights.
Well, even if Norway's government is pretty good, I bet their low quality, badly behaved people make the country an unlivable hellhole compared to Beijing. [Ahem!!--ed.] Oh... so based on Legatum's 2012 Prosperity Index, Norway is actually the most prosperous country in the world, whereas China ranks.... 55th.
[But that's just because Norway's rich!! What have they done for the rest of the exploited developing world??!!--ed.cn] Excellent point, oh great and glorious Beijing-based editor!! Why, when we go to the Center for Global Development's 2012 Commitment to Development Index, we find that... that... Norway is the second-most supportive country for assisting the developing world. Son of a....
Look, it kills me to write this. I use to have great fun teasing my Norwegian students about the whaling and the high agricultural import barriers, just so they wouldn't think they were all that and a bag of chips. But if China thinks Norway is a country of low quality and bad behavior, then China would be what happened if Lindsay Lohan hooked up with Kid Rock at 4 AM after a two-day coke bender and three bottles of Patron.
In other words, Wang Qin wins this week's Vizzini Award.
Your humble blogger has been an "advisor" to the Legatum Prosperity Index for a few years now. They released their 2012 rankings today, and according to Bloomberg, the results ain't good for the United States:
The U.S. slid from the top ten most prosperous nations for the first time in a league table which ranked three Scandinavian nations the best for wealth and wellbeing.
The U.S. fell to 12th position from 10th in the Legatum Institute’s annual prosperity index amid increased doubts about the health of its economy and ability of politicians. Norway, Denmark and Sweden declared the most prosperous in the index, published in London today.
With the presidential election just a week away, the research group said the standing of the U.S. economy has deteriorated to beneath that of 19 rivals. The report also showed that respect for the government has fallen, fewer Americans perceive working hard gets you ahead, while companies face higher startup costs and the export of high-technology products is dropping.
“As the U.S. struggles to reclaim the building blocks of the American Dream, now is a good time to consider who is best placed to lead the country back to prosperity and compete with the more agile countries,” Jeffrey Gedmin, the Legatum Institute’s president and chief executive officer, said in a statement (emphasis added).
In the Wall Street Journal, Gedmin and Prosperity Index program director Nathan Gamester push on this message a bit harder in an op-ed:
Earlier this month the Obama administration received good news: U.S. unemployment seems finally to be coming down. This week, however, the news is not so good. In fresh data on economic prosperity from countries around the world, the U.S. has fallen out of the Top 10 for the first time ever. If elections were decided by data, today's findings would spell trouble for President Obama.
The 2012 Legatum Prosperity Index captures not simply the quarterly or annual ups and downs of the national economy, but rather long-term underlying components of national prosperity. Our findings suggest that the American Dream is in jeopardy.
The first problem is well-known. America has saddled itself with crippling debt and soaring entitlement spending. Couple these with projections of low growth—and possibly even another recession—and a bleak picture emerges.
It seems that even parts of Old Europe, the euro crisis notwithstanding, can teach America a thing or two. Norway, Denmark and Sweden top our rankings this year. Once upon a time the Scandinavians were world champions in big government and social spending. But bloated welfare states have been brought to heel in recent years. There has been deregulation and privatization: The Swedes even privatized air traffic control. Today Denmark has one of the most flexible labor markets in the world. (emphasis added)
So, the subtext seems pretty clear: U.S. prosperity is declining because of staggering debt and a bloated public sector, in contrast to those newly laissez-faire Scandinavians. You can guess which presidential camdidate is better-placed to reward entrepreneurship.
This has prompted some gnashing of
tweets teeth about the future of the United States. Now, having looked at the numbers, I share some of this anxiety. There is a powerful grain of truth to Gedmin and Gamester's assertions. But there are a few other grains of truth that should be sprinkled about before reaching any conclusions:
GRAIN OF TRUTH #1: The U.S. didn't really fall too far in the rankings -- it went from 10th place last year to 12th this year. That's partly because Luxembourg got added to the index in the interim and it did better than the United States in the rankings. It's not great, but it's not an exaggerated decline either.
GRAIN OF TRUTH #2: High levels of debt ain't what's holding the United States back in these rankings. Japan has a much higher debt-to-GDP ratio, but its economic performance ranked eight places higher than the U.S. There are other factors at work here.
GRAIN OF TRUTH #3: If you burrow into the report itself (.pdf), you find that the primary reason for the drop in the U.S. ranking was a fall in the "Entrepreneurship and Opportunity" score. The primary driver for this? "This fall is driven by a decline in the number of US citizens who believe that hard work will get them ahead and a decrease in ICT exports (p. 10)."
Now this leads to an interesting question: what drives the decline in the belief that hard work will get one ahead in life? Legatum explains that on p. 38:
Low business start-up costs and a positive perception of a country’s entrepreneurial environment contribute to improving citizens’ economic prospects and overall wellbeing. The sub-index also evaluates a country’s ability to commercialise innovation and measures the technological and communication infrastructure that is often essential to successful commercial endeavours. It further provides a snapshot of access to opportunity by tracking inequality and by asking citizens whether they believe their society to be meritocratic. (emphasis added)
And now we get to the nub of it. The decline in America's prosperity score is partly a function of the weak economy -- but it's primarily a function of citizen perceptions of their ability to get ahead. Government barriers to entrepreneurial activity would certainly depress those perceptions, but so would very high levels of inequality (moderate levels of inequality are a different animal altogether). The more unequal a society is, the less that ordinary citizens feel that their own efforts will yield commensurate rewards. And in the past few years, the data shows that the United States has become increasingly unequal.
So, if Gedmin and Gamester are correct that Americans should use this report to think about which presidential candidate would be poised to improve American prosperity, you have to ask yourself which candidate is more likely to improve Americans' belief that their society rewards hard work and effort. And I don't think the answer is as clear cut as they think it is.
What do you think?
The latest issue of The Washington Quarterly is just lousy with China essays -- it's like there's a theme or something. Andrew Scobell and Andrew Nathan tackle China's (apparently overstretched) military, and Guoyou Song and Wen Jin Yuan review China's response to the burgeoning Trans-Pacific Partnership.
James Reilly has an essay on China's use of unilateral economic sanctions that really caught my eye, however. The overwhelming bulk of economic sanctions that have been threatened and used during the past century have been from the United States. From a scholarly perspective this is somewhat disturbing, as general theories about economic statecraft become tough to distinguish from theories of U.S. foreign policy. If another great power starts being profligate with its economic statecraft, there's the promise of a lot of new data.
China has deplored the use of economic sanctions in the past, but as Reilly notes, "Over the past few years, Chinese experts have begun to clear some of the legal, moral, ideological, and practical hurdles to Beijing’s use of unilateral sanctions."
So... how effective are they? Well, at best, it's a mixed bag. Here's Reilly's key paragraph:
Ultimately, China uses sanctions for the same reasons other countries do: they are a relatively low-cost, low-risk way to signal dissatisfaction, increase the costs to those who take undesired actions, and satisfy domestic demands to respond to those actions. Sanctions can assuage domestic criticism while not undermining broader economic and diplomatic interests. For all these reasons, China has increasingly resorted to unilateral sanctions in recent years on issues like Taiwan, Tibet, human rights, and maritime disputes.
If you read the article, it's pretty clear that any concessions made by other countries have been pretty modest --more modest than Reilly seems willing to admit (compare Reilly's take on the 2010 Nobel Prize sanctions with, for example, Erik Voeten's).
But there are three caveats to this observation. First, if China views the sanctions as mostly symbolic and for domestic consumption, then it wouldn't be surprising that they're ineffective. Symbolic sanctions aren't supposed to work, they're supposed to be for show. Second, Reilly notes that China likes threatening sanctions more than using them, and sanctions threats are more likely to work as a form of pre-emptive coercion and deterrence than actually compelling the actor in this particular case.
Third, as with its economic statecraft more generally, China is just beginning to understand this foreign policy tool. Indeed, as Reilly observes, the problem with issuing empty threats is that "the credibility of Beijing’s bluffs risk eroding over time." It will be veeeery interesting to see how China's approach to economic statecraft evolves over time.
I should be really pleased with Thomas Friedman's column today. Entitled "In MItt's World," Friedman pens a substantive column criticizing Romney's foreign policy rhetoric to date and wishing that Romney displayed the same analytic acumen about foreign policy that he displayed as CEO of Bain Capital.
So I should be happy, except that I passed out from banging my head against my desk after reading the first two paragraphs:
Mitt Romney has been criticized for not discussing foreign policy. Give him a break. He probably figures he’s already said all that he needs to say during the primaries: He has a big stick, and he is going to use it on Day 1. Or as he put it: “If I’m president of the United States ... on Day 1, I will declare China a currency manipulator, allowing me to put tariffs on products where they are stealing American jobs unfairly.”
That is really cool. Smack China on Day 1. I just wonder what happens on Day 2 when China, the biggest foreign buyer of U.S. debt securities, announces that it will not participate in the next Treasury auction, sending our interest rates soaring. That will make Day 3 really, really cool.
No. No, no, no, no, no, and no.
To elaborate a bit further:
First, it wouldn't be enough for China to stop buying Treasuries -- as Joe Weisenthal showed with some fun charts a few weeks ago, China has pared back its Treasury purchases intermittently over the past few years -- with zero appreciable effect on U.S. interest rates. (see non-panda-hugger Paul Krugman on this point as well). No, for China to have the effect that Friedman envisions, they would also have to actively dump most of their holdings of U.S. debt as well.
So what if they do? Well, second, while Romney's stated China policies border on the destructive, the "labeling" move is bone-headed rather than truly calamitous. China wouldn't dump its debt unless things got really bad between the two countries. Not even Stephen Roach thinks this would be the initial Chinese response -- and I think Roach is being way too gloomy about Sino-American relations under Romney.
The reason China won't respond with the nuclear option of dumping all its U.S. debt holdings is that -- to repeat a theme -- this move would hurt China way more than it would hurt the United States. The far more likely response by China would be to retaliate with trade measures. This would not be good, as China is now the third largest export market for the United States. Beijing can hurt a Romney administration by reducing its American imports far more adroitly than trying to trigger another financial crisis.
Now, for the record, I don't think Romney should label China as a currency manipulator on day one, and I think Friedman makes some trenchant observations on Romney's consequences-free foreign policy statements later in his column. But this Niall Ferguson-lite version of Sino-American relations is bad international relations theory and really bad economics -- and yet Very Serious People keep trotting it out.
I really, really wish this would disappear from public discourse. But it won't. So, most likely, my desk is gonna get dented a few more times before Election Day.
For the past decade, Stephen Roach has been the Eeyore of global economic analysis -- gloomy about the U.S. economy, gloomy about Chinese economic policy, and in yesterday's Financial Times, very, very gloomy about what would happen to the Sino-American relationship if Mitt Romney became president. Here's how he closes:
By the autumn of 2013 there was little doubt of the severity of renewed recession in the US. Trade sanctions on China had backfired. Beleaguered American workers paid the highest price of all, as the unemployment rate shot back up above 10 per cent. A horrific policy blunder had confirmed that there was no bilateral fix for the multilateral trade imbalance of a savings-starved U.S. economy.
In China, growth had slipped below the dreaded 6 percent threshold and the new leadership was rolling out yet another investment stimulus for a still unbalanced and unstable Chinese economy. As the global economy slipped back into recession, the Great Crisis of 2008-09 suddenly looked like child’s play. Globalisation itself hung in the balance.
History warns us never to say never. We need only look at the legacy of U.S. Senator Reed Smoot and Representative Willis Hawley, who sponsored the infamous Tariff Act of 1930 – America’s worst economic policy blunder. Bad dreams can – and have – become reality.
Like Roach, I think Romney's stated policies towards China have been a wee bit over the top. And it's certainly true that China hasn't reacted terribly well to Romney. The key word here is "stated," however. In Roach's analysis, this is how things escalate:
Feeling the heat from [plummeting] financial markets, Washington turned up the heat on China. Mr Romney called Congress back from its Independence Day holiday into a special session. By unanimous consent, Congress passed an amendment to [a 20 percent tariff on Chinese products] – upping the tariffs on China by another 10 percentage points.
Call me crazy, but if a brewing trade war triggers economic contraction, which then triggers rising financial discontent, I don't see any president responding by accelerating the trade war. I certainly don't see bipartisan support for such a trade war.
If the 2008 financial crisis failed to spark a renaissance in protectionism, then Mitt Romney ain't gonna be able to do it all on his own. Stephen Roach's yarn is entertaining but not persuasive.
Am I missing anything?
Jason Kempin/Getty Images
As China gears up for its 18th Party Congress and the trial of Bo Xilai's wife Gu Kailai on charges of murdering a British business partner, there have been accompanying press stories (even from the Chinese press) about the opaque nature of the Chinese regime. For example, consider this Edward Wong and Jonathan Ansfield New York Times front-pager about the relationship between China's civilian leadership and the People's Liberation Army:
During a holiday banquet for China's military leadership early this year, a powerful general lashed out in a drunken rage against what he believed was a backhanded move to keep him from being promoted to the military’s top ruling body.
The general, Zhang Qinsheng, vented his fury in front of President Hu Jintao, according to four people with knowledge of the event. At the banquet, he even shoved a commanding general making toasts; Mr. Hu walked out in disgust.
The general’s tirade was one of a series of events this year that have fueled concerns among Communist Party leaders over the level of control they exercise over military officials, who are growing more outspoken and desire greater influence over policy and politics.
With China’s once-a-decade leadership transition only months away, the party is pushing back with a highly visible campaign against disloyalty and corruption, even requiring all officers to report financial assets.
“Party authorities have come to realize that the military is encroaching on political affairs,” said one political scientist with high-level party ties. “Although the party controls the gun, the expression of viewpoints from within the military on political issues has aroused a high level of alarm.” He, like others who agreed to discuss internal party affairs, spoke on the condition of anonymity because of fear of reprisals.
Now if you read the whole article, it's really not clear at all just how much of a problem this is. We learn that Hu Jintao's relationship with the PLA is weak, even though he has engineered promotions of his favored generals (including, apparently, Zhang). We learn Ju's likely successor Xi Jinping allegedly has better ties to the military, but that Hu might keep control of the Central Military Commission for the next few years anyway. Oddly, we also learn that some PLA hardliners want to see China adopt a more liberal political model -- like Singapore.
In other words, we know a bit more about the machinations than we do in, say, North Korea. But we don't know much.
Western readers are now likely clucking to themselves and thinking, "Man, am I glad that we don't have to live in a regime with that much political uncertainty and caprice." To those readers: Let's take a tour of Europe and the United States now, shall we?
In Europe, there was a long WSJ front-pager about Italian prime minister Mario Monti and his efforts to push back against Angela Merkel's austerity policies. The impresssion that was given in the beginning of the article is that Mnti was successful... and then we get to this:
Mr. Monti didn't want Rome and Madrid to suffer the stigma of applying formally for aid or signing a list of policy demands written in Brussels, fearing this would undermine his public standing at home, as well that of his ally, Spain's premier Mariano Rajoy....
The evening before the [June EU Summit meeting], Mr. Monti hatched a plan to hijack the summit. Unless Ms. Merkel accepted his proposal on bond-market intervention by Europe's bailout fund, Mr. Monti would veto the growth pact -- stymieing Ms. Merkel in her parliament.
Italy had previously lobbied for the growth pact, so Mr. Monti's threatened veto -- announced just before Europe's leaders were due to sit down for dinner -- was a bombshell....
Mr. Monti's blockade lasted until 4 a.m., when leaders finally agreed to a text hashed out by their aides. It promised that Europe's bailout funds would be used "in a flexible and efficient matter" to stabilize the bond markets of vulnerable euro members.
It didn't go as far as Mr. Monti had originally wanted: Italy and Spain would still have to apply for any aid and sign a policy memorandum. But by planting the need to stabilize bond markets in the declaration, Italy had convinced Germany to recognize Italian reform efforts and pushed its approach for tackling the crisis into the spotlight.
An ebullient Mr. Monti spoke to reporters, claiming satisfaction for Italy and for Europe. A tired Ms. Merkel slunk off to her hotel.
German media and lawmakers were convinced their chancellor had buckled under Mr. Monti's pressure, granting Italy and Spain unconditional access to Germany's treasury. Her protestations later that morning that the fine print preserved the existing procedure for aid went largely unheard.
So did Monti get what he wanted? Beyond political optics, I don't think so, but the article makes it unclear. Actually, to be fair, the summit declaration itself makes it unclear as well, as the Financial Times' Peter Spiegel explains:
Last week’s signal from Spain’s prime minister that he may be prepared to request assistance from the eurozone’s €440bn rescue fund to drive down his country’s borrowing costs has shifted the debate back to where it was more than a month ago: What strings will be attached to such aid?
Eurozone leaders had hoped to put the question to bed during an all-night summit in late June, where Mario Monti, Italy’s prime minister, thought he had won agreement that new aid from the bailout fund to buy a struggling country’s bonds would come with few additional conditions.
Indeed, Herman Van Rompuy, who chaired the summit as president of the European Council, publicly declared there would “not be any more countries” subject to full monitoring if they sought bond-buying assistance from the fund, the European Financial Stability Facility.
The only conditions, Mr Van Rompuy said, would be living up to existing commitments under EU budget rules.
Even before the summit wrapped up, however, that conclusion came into dispute. Indeed, the summit’s final communiqué appears to contradict itself.
At one point, it asserts bond buying programmes would be executed “in a flexible and efficient manner” -- code words for light conditions sought by Mr Monti and his Spanish counterpart, Mariano Rajoy. But in another section it says such aid would only be granted under “existing guidelines” -- code words for the more onerous conditions that existed before the summit (emphasis added).
So I'm gonna say that the EU is not winning a lot of points in the transparency department right now.
Well, there's always the United States, right? Right? Oh, wait, what's this New York Times front-pager from Monday saying?
A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will force hundreds of billions in tax increases and budget cuts in January, undermining economic growth in the coming months.
Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill....
All told, the political gridlock in the United States, along with the continuing debt crisis in Europe, will shave about half a percentage point off growth in the second half of the year, estimates Vincent Reinhart, chief United States economist at Morgan Stanley.
More than 40 percent of companies surveyed by Morgan Stanley in July cited the fiscal cliff as a major reason for their spending restraint, Mr. Reinhart said. He expects that portion to rise when the poll is repeated this month.
“Economists generally overstate the effects of uncertainty on spending, but in this case it does seem to be significant,” he added. “It’s at the macro- and microeconomic levels.”....
In Washington, powerful business lobbies like the National Association of Manufacturers, the Business Roundtable, and more specialized groups like the National Electrical Manufacturers Association have grown more vocal about their frustration with the inaction of Congress, and the possible dangers ahead.
“It’s totally irresponsible and absolutely insane,” said Evan R. Gaddis, the president of the electrical manufacturers’ group. “The two parties are really dug in. Companies see the writing on the wall and business decisions are now being made on this.”
Sure, China is an opaque mess when it comes to governance. Sure, praising China's governance in an uncritical fashion should trigger critical blowback. Let's face it, however -- 2012 is not a year for democracies to be crowing about how their governing model is more transparent.
The New York Times' Ashley Parker reports that Mitt Romney got into a spot of trouble on the first leg of his
fundraising foreign affairs tour:
Mitt Romney's carefully choreographed trip to London caused a diplomatic stir when he called the British Olympic preparations “disconcerting” and questioned whether Londoners would turn out to support the Games.
“The stories about the private security firm not having enough people, the supposed strike of the immigration and customs officials, that obviously is not something which is encouraging,” Mr. Romney said in an interview with NBC on Tuesday.
That prompted a tart rejoinder from the British prime minister, David Cameron. “We are holding an Olympic Games in one of the busiest, most active, bustling cities anywhere in the world. Of course it’s easier if you hold an Olympic Games in the middle of nowhere,” an allusion to Salt Lake City, which hosted Games that Mr. Romney oversaw (emphasis added).
American commentators want to focus on what Romney said, but it strikes me as pretty anodyne. As Feargus O'Sullivan notes in The Atlantic, "it's not like Romney’s worries haven’t been expressed many times already in the British media." Or, for that matter, The Daily Show:
Furthermore, it's not like these are the only screw-ups that have occurred before the openng ceremonies.
Cameron's comments, on the other hand, strike me as pretty offensive. Salt Lake City is a lovely mid-sized city that pulled off a lovely Olympics. Why act petty about that? Why describe it as in the "middle of nowhere" when, last I checked, a fair number of airlines fly to Utah's capital?
Fnally, this comment from Cameron is also kinda disappointing:
Mr Cameron also refused to back calls for a minute's silence to remember eleven Israeli athletes murdered by terrorists at the Munich Olympic Games forty years ago.
The Prime Minister said it was important to remember what happened in 1972, but that planned memorial events were the proper way to do that.
His comments came after the widows of two Israeli athletes who were killed in the attack pleaded with the International Olympic Committee (IOC) to allow a minute's silence during Friday's opening ceremony.
Ankie Spitzer and Ilana Romano, whose husbands Andrei Spitzer and Yosef Romano were among 11 athletes killed in the attack at the Olympic Village in Germany, handed a petition to IOC chiefs yesterday containing more than 105,000 signatures from people around the world backing the call for a silence.
The standard response to this kind of plea is that the Olympics is a celebration of sport and politics should be kept offstage. This is akin to saying that the Miss Universe competition has nothing to do with beauty -- it's not true and insults the intelligence of anyone within earshot.
Romney has walked back his comments already. I hope Cameron does the same on both counts.
The Romney campaign has come in for a fair amount of criticism in the past week or so. Most of this is fairly typical summer doldrums stuff, but some of it has to do with Romney's foreign-policy musings -- or lack thereof. On this issue in particular, William Kristol, Gerry Seib, Fred Kaplan, and, er, your humble blogger have been pillorying the campaign for a near-complete lack of substance.
According to Politico's Maggie Haberman and Jonathan Martin, the Romney campaign seems to have been listening:
Mitt Romney’s campaign is considering a major foreign policy offensive at the end of the month that would take him to five countries over three continents and mark his first move away from a campaign message devoted almost singularly to criticizing President Barack Obama’s handling of the economy, sources tell POLITICO.
The tentative plan being discussed internally would have Romney begin his roll-out with a news-making address at the VFW convention later this month in Reno, Nev. The presumptive GOP nominee then is slated to travel to London for the start of the Olympics and to give a speech in Great Britain on U.S. foreign policy.
Romney next would fly to Israel for a series of meetings and appearances with key Israeli and Palestinian officials. Then, under the plan being considered, he would return to Europe for a stop in Germany and a public address in Poland, a steadfast American ally during the Bush years and a country that shares Romney’s wariness toward Russia. Romney officials had considered a stop in Afghanistan on the journey, but that’s now unlikely.
Sources stressed that the trip was still being planned but will be finalized internally this week, and some of the details are subject to change. While Romney is likely to lash Obama in his VFW speech, he’s expected to restrain his remarks about the president when speaking abroad.
Huh. Now, obviously, I can't comment on the content of any of these speeches. Still, the country selections are themselves revealing, as Burns & Haberman elaborate on in their Politico story. How do those choices stack up? Laura Rozen was a bit skeptical, tweeting that "his reported itinerary only seems 25 yrs out of date." Kristol responded in the Politico story by urging Romney to go to Afghanistan.
My initial response falls more into the Larry David camp on this one. The goal of a trip like this is twofold: to try to demonstrate some kind of foreign-policy gravitas, and to draw a distinction between one's foreign-policy views and that of the opponents. The second part is really tricky to do overseas, because one of the few norms of comity left in Washington is that public officials aren't supposed to criticize a sitting president's foreign policy in foreign lands. Romney can finesse this by going to countries where he thinks he can foster a stronger bilateral relationship, in contrast to Obama (it would be more awkward for him to go to countries where he thinks the U.S. should be less friendly, so I think we can rule out stops in Moscow and Beijing).
By that standard, this is a decent list. The stops in Israel and Poland highlight the frictions the Obama administration's rebalancing and reset strategies have created in the Middle East and Eastern Europe. Going to Germany allows Romney to ding Obama on economic policy, as Romney is clearly more sympatico with Angela Merkel's austerity strategy.
If I were planning the itinerary, however, I'd suggest two additional stops. First, India. That's another country where bilateral relations have cooled off a bit during the Obama years. It's also one of the BRIC economies, which would allow Romney to disprove Laura Rozen's charge of being out-of-touch with current geopolitical realities. Second, Seoul. This would allow Romney to blast North Korea with invective while talking about his vision for the Pacific Rim.
What do you think? Where would you have Romney go visit?
I've received some pushback in the blogosphere in response to my last post, an effort to goad Mitt Romney into making saome substantive foreign policy critiques. Let's talk them out.
First, I wrote that, "relations with Pakistan, Russia, India and Canada have cooled off considerably since the Bush years." There's been some justifiable pushback on that sentence -- but within that pushback there's some interesting things to note about the politics of perception.
I linked to a Foreignaffairs.com essay on the Canadian-American relationship, but Roland Paris does a pretty effective job of shredding their argument, in no small part by reminding readers of the true low point in bilateral relations this century:
Between 2003 and 2005, I had the privilege of serving as an advisor on Canada-U.S. relations in the Department of Foreign Affairs and in the Privy Council Office. Relations today are no worse, and probably better, than they were then. Jean Chrétien had just declined to send Canadian troops to Iraq – the right decision, but one that nevertheless angered officials in the George W. Bush Administration, who were hoping at least for an expression of political support. (It didn’t help that Chrétien announced his decision in the House of Commons to a throng of cheering Liberal MPs.) Bush then cancelled a planned state visit to Canada....
Here is a different picture that fits better with the facts: The state of the Canada-U.S. relationship today is sound. Yes, there are irritants, but they are no more challenging than the irritants of the past. Nor does only one country – or one leader – bear the fault for these irritants.
This is a pretty powerful critique. As someone who has too much experience in making this kind of argument, however, I fear it won't carry much weight in the American body politic. The reason is that Paris' basic point is that, "look, things were a lot worse a little while ago." But that's not a point that plays politically. When talking about bilateral relations in a political context, analysts and pundits care about the trendline more than the base level. The trendline suggests a mild cooling of a very warm and multidimensional relationship. So people will focus on the cooling.
Still, in linking to the article in the first place, I did perpetuate the meme. So, apologies.
There was also some pushback on Russia as well. Daniel Larison notes:
One needn’t be a supporter of current Russia policy to recognize that it isn’t the complete disaster of the late Bush years. I know I’ve beaten this topic to death lately, but this claim about relations with Russia being worse than they were during “the Bush years” is simply wrong.
This may be easy to overlook at a time when U.S.-Russian relations are cooler than they were a year or two ago, but apparently it can’t be repeated too often that the Bush administration drove the U.S.-Russian relationship into the ground starting in 2002-03 and then kept going down. U.S.-Russian relations were widely recognized to be at a post-Cold War low in August 2008 and during the months that followed, and administration policies and decisions contributed significantly to that outcome. The current administration had repaired a fair amount of the damage, but quarrels in the last year have undone some of that improvement. Outgoing President Medvedev said that the last three years “have perhaps been the best three years in relations between our two countries over the last decade.” Maybe that’s damning with faint praise. Relations between the two countries from 2002 to 2012 were mostly mediocre or poor. That doesn’t make the claim any less true.
Indeed, in a related post, Dan Nexon notes the benefits of the "reset" relationship with Russia:
The basic theory behind the Obama Administration's "Reset" policy was that US-Russian relations could be disaggregated: that it is possible for two countries to disagree on a range of issues and still cooperate on matters of common interest. That bet looks to be correct; despite a significant deterioration in relations between Washington and Moscow, the pursuit of common interests persists.
The Russian government has given approval for the United States and its NATO allies to use a Russian air base in the Volga city of Ulyanovsk as a hub for transits to and from Afghanistan....
Unfortunately, too many pundits and policymakers continue to reduce US bilateral relations with other countries to single "barometers."
Again, this is factually correct, but to go all emo on Larison and Nexon, it "feels" wrong somehow. Why? I think it's based on some combination of the following:
1) The arms control dimension of the "reset" took much longer to play out than anyone expected -- including Obama administration officials. Everything eventually got signed and ratified, but Russia's prickliness during the whole episode seemed to baffle American officials.
2) Russian rhetoric towards the United States continues to be quite hostile -- and has become even more hostile since large-scale protests began in December of last year. Vladimir Putin isn't fond of Michael McFaul, Hillary Clinton or Barack Obama -- so even cooperative moves are obfuscated by bellicose rhetoric.
Nexon is correct to observe that there are key dimensions on which cooperation has been significant. I do wonder, however, if too many Americans have imbibed the simple Schmittian dichotomy of friend and enemy to view other countries. We're unpracticed as a country in dealing with the category of "rival" -- or, in the case of Russia, "demographically crippled rival."
Finally, the very smart Will Winecoff responds with a curiously lazy post. The key points:
At some point Romney will be asked direct questions about foreign policy. When he asked those questions he will say things like "I will get tough with China to make sure they play by the rules and stop stealing American jobs" and "I will not let terrorists kill American citizens, and I will do whatever is necessary to keep Americans safe" and "I will keep America strong by not cutting our military budget" and "Screw Russia". He will not say whether he favors neoconservatism or realpolitik because he does not know what those things are. Neither does any of the people who will be asking him questions (unless Fareed Zakaria gets a crack, which he won't), nor will 99.9% of the people who will hear his answers.
His actual foreign policy will be run by the bureaucracy, which will be highly constrained by structural factors, and will be reactive to events yet to occur.
A few responses:
1) Mitt Romney is many things, but he's not an idiot. He knows perfectly well what realpolitik and neoconservatism are.
2) I don't want Romney to talk about foreign policy because it will provide a sneak peek into what he'll actually do. I want him to talk about it as a way of A) demonstrating leadership over how own friggin' campaign machine; and B) demonstrating the necessary background knowledge to reassure people like me that he can handle a foreign policy crisis. By not talking about it, all he's doing is encouraging his own loyalists to leak like crazy. And by repeatedly ghosting God-awful op-eds, he's sowing doubts that he has any kind of game plan about how to be proactive about foreign policy. Oh, and that reminds me...
3) Winecoff's structuralist view of foreign policy might be true in the long run. Presidents who deviate away from the foreign policy "mainstream" for too long usually have to reverse course. The notion that any president's foreign policy is "will be run by the bureaucracy," however, vastly underestimates the president's short-term flexibility. So it does kinda matter who's working in the Oval Office come January 21st, 2013.
In my experience, American realists just love the heck out of Russia. Go scan The National Interest and inevitably you'll see the most charitable of interpretations about Russian behavior. As near as I can determine, they reflexively sympathize with Moscow for a few reasons:
1) The Russians tend to be wonderfully blunt in explaining their motivations
2) Russia rarely, if ever, dresses up their foreign policy actions in anything other than national interest motivations
3) In the eyes of most realists, Russia is the status quo power justly defending its sphere of influence in the wake of revisionist American demands that have everything to do with ideology and nothing to do with American national interests.
I raise all of this because a few days ago Charles Clover in the Financial Times wrote an interesting story about Russia's foreign policy in Syria:
A respected Moscow-based military think tank has published a report that is likely to fuel more questions about the wisdom of Russia’s uncompromising support for the Syrian regime. It concludes that Russia really has few – if any – fundamental national interests to defend in Syria....
Russian support for Syria appears to be more emotional than rational, according to the Centre for Analysis of Strategies and Technologies, a consultancy with strong links to Russia’s defence community. It characterised the Kremlin’s Syria policy as a consensus of elites who “have rallied around the demand ‘not to allow the loss of Syria’ ”, which would cause “the final disappearance of the last ghostly traces of Soviet might” in the Middle East.
“The Syrian situation focuses all the fundamental foreign policy fears, phobias and complexes of Russian politicians and the Russian elite” said CAST.
Russia’s actual stake in Syria is not massive, according to CAST. It described Russia’s arms exports to Damascus as a “significant, but far from key” 5 per cent of total arms exports last year, and characterised Tartus, Moscow’s last foreign military base outside the former USSR, as little more than a pier and a floating repair shop on loan from the Black Sea fleet.
Now, it sounds an awful lot like CAST is arguing that Russian foreign policy leaders are wildly inflating their interests and acting in a -- dare I say it -- neoconservative fashion towards Syria.
I'd be very curious to hear from realists if they concur with this assessment. If it turns out that Russia is not acting in its national interests, it would be a body blow to both realism as policymaking advice and as an objective paradigm to explain world politics. Realists would no longer be able to say that the United States was the only great power not acting in its national interest. More significantly, if lots of great powers act to advance their emotional, historical, or ideollogical interests, then the world doesn't look very realpolitik at all.
Former Secretary of Defense Donald Rumsfeld has quite the provocative op-ed in today's Wall Street Journal. He argues that even though "every living former secretary of State" endorses it, the United States should withdraw from the World Trade Organization.
The [WTO] proposes to create a new global governance institution that would regulate American citizens and businesses without being accountable politically to the American people. Some [WTO] proponents pay little attention to constitutional concerns about democratic legislative processes and principles of self-government, but I believe the American people take seriously such threats to the foundations of our nation.
The [WTO] creates a United Nations-style body called the "Dispute Settlement Mechanism." "The Mechanism," as U.N. bureaucrats call it in Orwellian shorthand, would be involved in all commercial activity...
Disagreements among [WTO] signatories are to be decided through mandatory dispute-resolution processes of uncertain integrity. Americans should be uncomfortable with unelected and unaccountable tribunals... serving as the final arbiter of such disagreements.
Oh, wait... you know what I did? I misread Rumsfeld's op-ed. Replace "WTO" with "Law of the Sea Treaty" and "Dispute Settlement Mechanism" with "International Seabed Authority." That's what Rumsfeld is arguing against.
But, hey, that totally innocent mistake on my part does a lovely job of demonstrating the hollowness of the best of a bad set of arguments. [What are Rumsfeld's other bad arguments?--ed. I believe, in order, 1) I worked with Reagan; 2) Authoritarian states would also benefit; and 3) I smell socialism, no matter what the U.S. Navy says.] The United States surrenders small parts of its sovereignty on a fairly regular basis. America does this because the massive gains that come from every other country surrendering their sovereignty outweigh those costs and constraints. Rumsfeld's argument, however, simply asserts that no sovereignty loss is tolerable -- which is gonna be news to our WTO and NATO partners, for starters.
What's especially impressive is that the former Secretary of Defense managed to write a whole op-ed weighing the costs and benefits of this treaty without ever once mentioning either "China" or "South China Sea." By ratifying this treaty, the United States and its Pacific allies would put China into a corner on that and other disputes.
Instead, Rumsfeld ignores that particular argument. So, let's just come out and say it: Former Secretary of Defense Donald Rumfeld is soft on China.
Am I missing anything?
It would be an understatement to say that recent economic news across the globe has been... unsettling. With that in mind, Floyd Norris had a front-page essay in yesterday's New York Times on the failure of global policy coordination:
[T]here seems to be little willingness — or perhaps lit-tle ability — for the major countries to act together again. Squabbles have grown, some countries are in fiscal distress, and others face daunting domestic problems. The European situation is the most pressing. Banks are under pressure in many countries, for a combination of reasons. They did not raise as much capital as they might have when markets were more buoyant last year. In some cases, they appear to have been slow to recognize their real estate loan losses.
But the most important factor may be that national governments are weak — in every way possible.
This prompted FP head honcho David Rothkopf to tweet, "Current global economic leadership void likely to be seen by history as worst since that preceding Great Depression."
To which I have to say... bulls**t.
Bemoaning the lack of "global leadership" is the international relations equivalent of bemoaning the failure of a national leaders to possess the political will to Do The Right Thing or make the Really Big Speech that will change everything. Most of the time, "global leadership" doesn't change a thing.
For an example, in a follow-up tweet, Rothkopf provides a useful list of what ails the current global economy:
Euromess, rest of developed world spluttering, faltering EMs, bldg risk in global financial system, currency, trade issues
An excellent list -- and yet it's not at all clear whether global leadership would solve any of these problems. The Euromess a Europroblem. Weakening growth in the developed and developing world is a problem, but largely a function of domestic policies rather than global ones. The "currency war" meme has largely played out -- don't tell anyone, but the RMB is appreciating quite nicely right now. As for trade, Doha might be dead, but trade growth is still outstripping output growth. Protectionist actions have not matched protectionist sentiment -- indeed, the past few years might be definitive falsification of the "bicycle theory" of trade.
In fact, in some instances, global leadership might have exacerbated these problems. For example, one of the areas where there has been leadership is in the creation of the new Basel III core banking standards. And, hey, guess what's contributing to a drying up of cross-border credit?
Lending to banks in the eurozone fell $364bn or 5.9pc, with drastic reductions of 9.8pc in Italy and 8.7pc in Spain.
The BIS's quarterly report said the decline in lending was "largely driven by banks headquatered in the euro area facing pressures to reduce their leverage".
Banks must raise their core tier one capital ratios to 9pc by the end of this month or face the risk of partial nationalisation. The global Basel III rules are also pressuring banks to retrench.
So what, exactly, is "global leadership" supposed to do at this point? As I read it, those who complain about poor leadership want one of two things. First, they would like national leaders to excercise their "political will," defy domestic constraints, and push for greater economic growth. Fine, but remember -- asking politicians to exercise political will means asking them not to behave like politicians. As a rule, politicians don't do this.
Second, I think there is a desire for one leader to knock some global skulls together and get Germany to start consuming more and the ECB to print more money and China to stop saving and any other action that would jumpstart the global economy. Again, fine, but in the history of the global economy there has only been one instance in which one country had sufficient economic power to exercise this kind of leadership -- the United States of the late 1940s. Truman's leadership was important -- but the U.S. being responsible for close to half of the world's economic output was even more important. Even if Barack Obama had an iron grip over all of America's policy levers, he couldn't do what Truman did with the Marshall Plan and the Dodge Line. Leadership without power is simply someone ranting on a street corner.
Look, I don't like defending Angela Merkel or Barack Obama or the Standing Committee of the CCP Politburo. I do agree with my fellow wonks that they've made some mistakes. All I'm saying is that the notion that some kind of global policy coordination will lift the global economy out of its doldrums is a chimera. The biggest problems with the global economy are almost exclusively domestic in origin at this point. The big global steps, such as boosting IMF reserves, have already been taken. Greater trade liberalization might help a little, but it's not a panacea. Greater capital account liberalization might make things worse. Stronger global regulation might be the prudent long-term policy but it's causing havoc right now. Convincing Germany that a higher inflation rate might be a good idea would be wonderful, but anyone who suceeds at that would be pushing against 90 years of economic history.
So please, I beg my fellow wonks -- when you ask for more "global leadership," be specific -- what exactly do you want to see happen? Cause I don't think there's much at the global level that would really help right now.
Am I missing anything?
Yesterday your humble blogger attended a Hoover Institution conference devoted to China's evolving military and its implicatons for U.S. foreign policy. I can't say who said what, but I can say that atendees included several high-ranking military folk, multiple former policy principals, top China people from the academic and think tank communities, and at least one former presidntial candidate.
Chatham House rules prevent me from revealing who said what, but what was interesting was the areas of consensus among most of the attendees. In order:
1) China has bigger worries than the United States. It is easy to look at China's military modernization and interpret it as a dagger placed against the throat of the U.S. and its allies. It's worth remembering, however, that China currently spends more money on internal security than defense. Their actual capabilities in the anti-access/anti-denial area are... let's say a bit exaggerated (though growing). Sure, Beijing wants to expand its sphere of influence -- its a rising great power -- but it sees its greatest threats as internal rather than external.
2) If you want to worry about something, worry about China's civil-military relations. The U.S. defense establishment is quite keen on ramped-up military-to-military connections. It's the People's Liberation Army (PLA) that is not keen on this at all. The civilian leadership has... let's say limited control over numerous aspects of the PLA. Plus, the Chinese military has a corruption problem that makes the Bo Xilai scandal look like minor kerfuffle. Relations with the United States are difficult because of clashing interests... but also clashing styles. The PLA is quite transparent about intentions, but opaque about their capabilities. The United States is the reverse -- transparent about capabilities but ambiguous about intentions. This is not a recipe for comity.
3) The Chen case didn't really affect the Strategic and Economic Dialogue. This is not to say that the S & ED solved anything, but it did appear to be a productive meeting -- which is, after all, the point of a dialogue.
4) You know what would be super? The United States ratifying the U.N. Convention on the Law of the Sea (UNCLOS). There was unanimous consent the United States could do far more damage to itself than China ever could. Exhibit A on this front was the continued failure of the U.S. Senate to ratify UNCLOS. This is, in theory, the treaty that can provide the framework for resolving disputes in the South China Sea and East China Sea. It's a treaty backed by every president and secretary of state in the post-Cold War era. It's a treaty that the U.S. Navy desperately wants to see ratified. But because it hasn't happened yet, the U.S. always finds itself wrong-footed on these issues in negotiations. Well, I'm sure that in the current political climate, the Senate will eventually get around to it. Oh, wait...
There's a lot that's happened over the past week with respect to Chen Guangcheng's status, and your humble blogger could write a 5,000 word essay on it if
someone wanted to pay me gobs and gobs of cash because I'm remodeling my home I had the time. I don't however, so I have one big thought on the matter.
Before I begin, given the rapid real-time developments in the Chen case, I'm operating on the assumption that China's last Foreign Ministry statement suggests the denouement: Chen and his family will be able to go to the United States to study, and he then may or may not be allowed back into the country.
My Big Thought: contrary to just about every headline I've seen in the past three days, I think Chen's case demonstrates the surprising resilience of the Sino-American relationship. Recall what I wrote earlier in the week:
The fact that both Beijing and Washington have kept their mouths shut on Chen is a pretty surprising but positive sign about the overall stability/resilience of Sino-American relations. Bear in mind that according to the latest reports, much of the leadership in Beijing takesan increasingly conspiratorial view of the United States. As for the mood in Washington, well, let's just call it unfriendly towards China. Both sides are in the middle of big leadership decisions, making the incentive to cater to nationalist domestic interests even stronger than normal. With the rest of the Pacific Rim trying to latch themselves onto the U.S. security umbrella, this could have been the perfect match to set off a G-2 powderkeg.
Despite all of these incentives for escalating the dispute, however, it hasn't happened. Kurt Campbell was dispatched to Beijing, talks are ongoing, and neither side appears to be interested in ramping up domestic audience costs. That escalation hasn't happened despite massive political incentives on both sides to let it happen suggests that, contrary to press fears about Chen blowing up the bilateral relationship, there are powerful pressures in Washington and Beijing to find a solution that saves as much face as humanly possible for both sides.
Now, in the three days since I wrote that post, Chen has been released, calling every Chinese dissident, U.S. congressman and international reporter with a phone/recording device/Twitter account and is loudly and frantically describing the intimidation he and his family have experienced. The man has asked to be flown out on Hillary Clinton's plane as she departs from the Strategic and Economic Dialogue. In other words, everything that has transpired in the past three days has given a black eye to both the Chinese and American governments' handling of this case.
Despite the near-overwhelming incentive to ramp up bilateral tensions, however, it really hasn't happened. China's Foreign Mnistry has issued a couple of garden-variety press statements demanding a U.S. apology that won't be forthcoming. There have been no leaks or anonymous criticisms of the United States otherwise, despite the fact that this entire case is a burr in China's saddle at veery awkward moment. None of the U.S. State Department statements or press leaks have been terribly critical of the Chinese side either. Indeed, as the Washington Post observes:
Neither Clinton nor her Chinese counterparts mentioned Chen in their formal remarks at the end of their two-day meeting, saying instead that U.S.-Sino differences on human rights issues must not disrupt the broader relationship between the two world powers.
State Councilor Dai Bingguo, China’s top foreign policy expert, said his country and the United States still have “fundamental differences” on human rights issues. “Human rights should not be a disturbance in state-to-state relations,” Dai said. “It should not be used to interfere in another country’s internal affairs.”
Clinton promised to “continue engaging with the Chinese government at the highest levels” on the “human rights and aspirations” of all people.
This is pretty extraordinary. Even more extraordinary is the possiblity that despite Chen's outspokenness, he actually could be able to leave the country with his family.
Now, as the Post shrewdly observes, "China’s Foreign Ministry said the self-taught lawyer would have to apply 'through normal channels ... like any other Chinese citizen' — which would mean returning home to the village where he has been confined and beaten, in order to obtain a passport." Still, if the rhetoric between the U.S. and China on this boils down to Clinton asking the Chinese government to "expeditiously process" Chen's visa application, then this is a really big dog that didn't bark.
What do you think?
Your humble blogger has been silent on the ongoing Chen Guangcheng case in China. To be fair, however, I was merely copying what the Chinese and U.S. governments were doing: furiously not commenting on the case as the next Strategic and Economic Dialogue between Washington and Beijing commences.
Since other people are starting to
say really stupid things comment on it, however, I'm required by the International Brotherhood of Foreign Policy Pundits to weigh on the matter. So, a few random thoughts:
1) My expectation on how this will play out: unless Wen Jiabao has a lot more authority than I think, this ends in a year or so when Chen leaves China. Chen wants to stay in China. Given that he was under some kind of extralegal confinement rather than house arrest, one could envision Wen using this as a way of expanding on the "crush Bo" campaign currently emanating from Beijing. In other words, Wen could use this to clamp down on abuses by out-of-control regional governors. But, to be honest, I doubt Wen has that much authority -- in which case this ends with Chen out of China in a way that embarrasses Beijing the least.
2) The fact that both Beijing and Washington have kept their mouths shut on Chen is a pretty surprising but positive sign about the overall stability/resilience of Sino-American relations. Bear in mind that according to the latest reports, much of the leadership in Beijing takes an increasingly conspiratorial view of the United States. As for the mood in Washington, well, let's just call it unfriendly towards China. Both sides are in the middle of big leadership decisions, making the incentive to cater to nationalist domestic interests even stronger than normal. With the rest of the Pacific Rim trying to latch themselves onto the U.S. security umbrella, this could have been the perfect match to set off a G-2 powderkeg.
Despite all of these incentives for escalating the dispute, however, it hasn't happened. Kurt Campbell was dispatched to Beijing, talks are ongoing, and neither side appears to be interested in ramping up domestic audience costs. That escalation hasn't happened despite massive political incentives on both sides to let it happen suggests that, contrary to press fears about Chen blowing up the bilateral relationship, there are powerful pressures in Washington and Beijing to find a solution that saves as much face as humanly possible for both sides.
3) Mitt Romney has been vocal about Chen's case, concluding: "Any serious U.S. policy toward China must confront the facts of the Chinese government’s denial of political liberties, its one-child policy, and other violations of human rights."
To which I say... good for him!! It's the job of the opposition party in the United States to bring up questions about China's human rights problem. It's the job of the opposition party because the moment the opposition takes power, all those structural pressures I alluded to previously kick in, and the human rights rhetoric from the campaign trail inevitably fades away. So Republicans who expect a President Romney to be all over the human rights issue will be sorely disappointed. That said, even someone like myself who is more realpolitik-friendly nevertheless would be sorely disappointed if human rights faded away completely (it's also worth noting that after the Obama administration's first year in office, they seemed to find their rhythm with respect to talking about human rights towards China).
Am I missing anything?
So it turned out that this was the week that both the Romney campaign and the Obama campaign decided that foreign policy was an important thing to talk about during election season. Speaking personally, this is great!! I seem to have moved up in the Rolodex of those covering the campaign. Expect lots of juicy quotes in the months to come, and readers are warmly encouraged to proffer useful metaphors that I can provide in soundbite fashion over the next six months.
Unfortunately for the Romney campaign, this was not a great week to ramp up attacks along this line. The reasons is that, all told, the Obama administration had a pretty good foreign policy week. Not all, or even most of this, was of its own doing, but consider the following:
1) Iran has signaled a genuine willingness to talk compromise on its nuclear program in order to avoid the EU oil embargo kicking in. That might just be rhetoric, but it's interesting to note that even senior Israeli officials are starting to talk down the Iranian threat. The less Iran becomes a thing, the
lower gas prices can fall better for the administration.
2) The United States has maybe, just maybe, eliminated a major thorn in bilateral relations with Japan by finally reaching agreement on moving U.S. troops from Okinawa. We'll see if this holds -- everyone assumed that a 2006 agreement had put this problem to rest before successive Japanese governments
shot themselves in the foot raised it again, but this is the thing on this list for which the administration deserves the most credit. As an added bonus, the administration actually got some nice words from John McCain on comity with the Senate.
3) For some reason China seems to be in a more productive mood in their dealings with the United States, and Mark Landsler and Steven Lee Myers have taken notice in the New York Times:
For years, China stymied efforts to pressure Iran. Now, in addition to throwing its weight behind the sanctions effort, officials say, Beijing is also playing a more active role in the recently revived nuclear talks between Iran and six world powers — the United States, China, Russia, Britain, France and Germany. While in past negotiations, Beijing has followed in lockstep the positions taken by Russia, this time Chinese diplomats are offering their own proposals.
“One of the key elements of making this work is unity among the major powers,” said a senior administration official, who spoke on condition of anonymity to discuss diplomatic exchanges. “The Chinese have been very good partners in this regard.”
There are also signs of new cooperation on Syria. Only weeks after Secretary of State Hillary Rodham Clinton called China’s veto of a United Nations Security Council resolution “despicable,” China is supporting Kofi Annan’s peace plan for the strife-torn country and is deploying monitors to help oversee it. Even on North Korea, which China has long sheltered from tougher international action, the Chinese government quickly signed on to a United Nations statement condemning the North’s recent attempt to launch a satellite.
And there is progress on the economic front: American officials said China recently loosened trading on its currency, the remninbi, which could help close a valuation gap with the dollar that has stoked trade tensions between China and the United States during an election year.
To some seasoned observers of China, these developments are less a harbinger of a new era of cooperation between Beijing and Washington than evidence that, at least for now, the interests of the two countries coincide in some important areas.
The administration will nevertheless be happy to pocket the policy dividends.
4) Staying in Northeast Asia, it turns out that the big bad North Korean ICBMs are little more than a pipe dream -- and western analysts are starting to say that Kim Jong Un is naked in the public square:
North Korea tried to flex its military might with an extravagant parade on April 15, just three days after it admitted that its missile test had been a failure, but analysts now say that the new intercontinental ballistic missiles on display in the meticulously choreographed parade were nothing more than props.
The analysts studied photos of the six missiles and came to their conclusion for three primary reasons: 1. The missiles did not fit the launchers that carried them. 2. The missiles appear to be made out of both liquid-fuel and solid-fuel components that are unable to fly together. 3. The casings on the missiles undulate which suggests the metal is not thick enough to hold up during flight.
"There is no doubt that these missiles were mock-ups," Markus Schiller and Robert Schmucker, of Germany's Schmucker Technologie , wrote in a paper recently posted on Armscontrolwonk.com. "It remains unknown if they were designed this way to confuse foreign analysts, or if the designers simply did some sloppy work."
If the U.S. government can claim progress on Iran, China, North Korea, and Japan in one week, that's a good foreign policy week. Of course, for a lot of these issues, the administration is the beneficieary of circumstances rather that pro-active policies. Still, the administration deserves some credit for some of these development.
It's just one week, though. And I fear the most memorable statement about American foreign policy is this rather unfortunate choice of words:
NOTE TO WHITE HOUSE/CAMPAIGN SPEECHWRITERS: In the future, avoid having Biden utter any of the following: "big stick", "hard power", "pounding the enemy", "won't take no for an answer", and "smooth-talking his adversaries".
Am I missing anything?
The latest issue of The National Interest is out, and it's a special issue devoted to the "Crisis of the Old Order." Fittingly enough, I have a review essay in there of Charles Kupchan's latest book, No One's World: The West, The Rest, and the Coming Global Turn. Kupchan's book is pretty pessimistic about the current order:
In No One’s World, Kupchan joins the chorus arguing that the distribution of power has shifted away from the West and toward the “rest,” meaning non-Western nations. More significantly, Kupchan argues that these rising powers will not embrace the same ideas that governed the United States and Europe during the creation of the post–World War II and post–Cold War worlds: “The Chinese ship of state will not dock in the Western harbor, obediently taking the berth assigned it.” The conditions that caused the West to embrace secular, liberal, free-market democracy are not present in very large swathes of the globe. Instead, according to Kupchan, it will be no one’s world: a mélange of competing ideas and competing structures will overlap and coexist. No one great power or great idea will rule them all.
Somewhat surprisingly, I think I have the most optimistic take on the current order among all of TNI's contributors this issue -- which means, in turn, that I'm somewhat skeptical of Kupchan's claims. Read the whole thing to see why, but here's how I close:
[M]any of the regions that Kupchan highlights as being “different” from the advanced industrialized world are not really all that different. It is true that most democracies in Latin America and Africa do not currently resemble the Madisonian democratic ideal. On the other hand, the same conclusion would have been reached after examining a snapshot of southern Europe in the 1970s or East Asia in the 1980s. Indeed, one could have made the same arguments about an absence of horizontal linkages, the heavy hand of the Catholic Church, and the ways in which the state had centralized economic and political authority. The fact that these countries now resemble their democratic allies suggests that the past is not destiny.
The moment one realizes that democracies evolve over time, Kupchan’s argument seems even more static. No One’s World assumes that either the strongman or populist variants of democracy will perpetuate themselves. If anything, the opposite seems to be true: the more extreme versions of Latin American left-wing populism are imploding, while Brazil looks more and more like a conventional secular democracy. Even countries as closed off as Myanmar seem willing to embrace myriad aspects of the Western model. Kupchan is certainly right that the rest of the world will not automatically migrate toward the West. But the migration will likely be greater than he thinks. A world in which China and Russia are the global “outliers” looks very different from the one depicted in No One’s World, which posits a much more heterogeneous assemblage of regime types.
Annie Lowrey ably summarizes the outcomes of spring meetings of the IMF and World Bank for the New York Times. Here are her first two paragraphs:
Meetings of finance ministers and central bankers here over the weekend started with a pledge by wealthy nations to significantly increase the lending capacity of the International Monetary Fund to defend against the possibility of worsening economic conditions in the debt-laden euro zone.
But they ended on Sunday without a consensus on just how to speed up the economic recovery, stamp out the European debt crisis or lower unemployment around the world, officials said.
Now, I would say how you interpret this outcome is an excellent indicator of your overall opinion of post-crisis global economic governance. On the one hand, if you're Alan Beattie, Edward Luce, Ian Bremmer, Charles Kupchan, or Ted Truman, well, this outcome is a sign of chronic dysfunction. If the world's great powers can't agree on what to do with the specter of a double-dip global recession looming over them, there's little reason to hope. The glass is half-empty.
On the other hand, if you're John Ikenberry, Robert Kagan, Bruce Jones, or Alan Alexandroff, the glass looks half-full. Boosting the IMF's reserves by more than $400 billion ain't nothing, and it's faintly absurd to believe that any global governance structure will ever be able to "speed up the economic recovery, stamp out the European debt crisis or lower unemployment around the world."
I'll be tipping my hand as to which way I'm leaning in the coming months, but for now, I'm curious about my readers. What do you think? Is global economic governance a mess or doing reasonably well in trying circumstances?
Let's face it, far more Americans associate the name "Bo" more with Barack Obama's dog than with Bo Xilai, the now-disgraced former Communist Party chief of Chongqing (my generation of Americans will, of course, forever associate Bo with this). That might be about to change, however, because Bo is at the center of the most serious post-Tiananmen political scandal in China.
To recap: Bo was pushing hard for an appointment to the nine-person Standing Committee of the Chinese Communist Party's (CCP) Politburo -- the most powerful decision-making body in China. He might very well have received it too, based on the combination of his "princeling" ties, his populist, Maoist-style campaigns and the flock of high party officials visiting Chongqing to see how he was doing it.
Two months ago, however, Bo's police chief Wang Lijun showed up at the U.S. consulate in Chengdu seeking asylum. He left the consulate, but the reverberations haven't stopped. First Bo disappeared from public view, then his "Jackie Kennedyesque" wife Gu Kailai was charged with the murder of British citizen Neil Haywood, and then Bo was formally put under investigation and stripped of all his party posts.
So, what the hell happened? Slowly, details are starting to trickle out about Bo's methods in Chongqing and exactly what led to his downfall. In order, I'd suggest reading the following:
3) On how U.S. officials handled Wang's request for asylum, check out the New York Times' Steven Lee Myers and Mark Landler's excellent reconstruction of events in Chengdu.
5) Finally, read John Garnault's excellent FP Long Read on whether a Bo-style scandal is about to break out in the People's Liberation Army.
OK, now you know everything I know. So what do I know about Bo? Not much, except for four things:
A) For the past decade there was a lot of talk about how China had managed to routinize the authoritarian selection process. The transfer of power from Jiang Zemin to Hu Jintao seemed seamless. Well, say what you will about what's happening now, but it ain't seamless.
B) I tend to agree with Minxin Pei (and disagree with Cheng Li) that Bo's arrest is not an example of the system working, but rather the system coming veeeerrrrry close to a catastrophic failure. The fact China's official apparatus has clammed up after Bo's arrest is a clear sign that there's still a lot of infighting going on. The notion that this will therefore lead to a real reform/anti-corruption trend strikes me as based on hope more than reality (though see this previous post of mine as a hedge).
C) Despite the official no-comments, the fact that Chinese officials are now leaking like a seive to Western reporters is interesting, and suggests the ways in which a purge in this decade will not resemble pre-Tiananmen purges. It's not that there will be more rumors and conspiracy theories now than thirty years ago -- it's that all this stuff will not be on the Internet -- which will force the CCP to respond more than it would like.
D) Based on how things played out, the U.S. State Department deserves a tip of the cap for how it handled Wang's sojourn to Chengdu. The fact that there were no press leaks until yesterday is good -- anything the U.S. government says publicly about this episode needlessly embarrasses and angers the Chinese government. That said, given the current attitudes in Beijing about the United States, even the Times story is going to raise some hackles. Indeed, given the current strife inside China, it would be easy to envision Beijing making life difficult for the United States elsewhere as a way of using nationalism to paper over elite divisions.
Am I missing anthing? Oh, I'm missing plenty, and I strongly urge China-watchers to proffer their comments!
After the latest demonstration of Syria thumbing its nose at the Annan plan, Walter Russell Mead decided to go on a rhetorical bender against the United Nations:
The reality is that the UN today is less prestigious and influential than it was in the 1940s and 1950s. There used to be a time when General Assembly votes actually meant something. Newspapers used to report its resolutions on the front page. And the Security Council, on those rare occasions during the Cold War when it could actually agree on something, was seen as laying down the basic principles along which an issue would be resolved.
Now, this kind of rant is a rite of passage for a foreign policy pundit. I mean, there's no way you make it into the Council on Foreign Relations -- or Twitter Fight Club -- without at least one good, solid bashing of UN fecklessness.
That said, Mead's rant has this whiff of ... well, let's say erroneous assertion about it. Hayes Brown fisks Mead's blog post thoroughly and effectively, but I want to focus just on the above paragraph, because it makes such little sense.
First of all, exactly when did General Assembly votes ever mean anything? The only time during Mead's halcyon Cold War days of the UN in which the General Assembly mattered was the "Zionism = racism" resolution in 1975. I don't think making news because of an assinine statement really qualifies as "meaning something." The General Assembly was besotted with the New International Economic Order during the 1970s as well -- and, thankfully, these affirmations didn't amount to much either.
Second, Mead is correct that during the Cold War, Security Council agreeement made the front pages -- but that because it was just so friggin' rare. The Security Council was essentially in a state of permanent deadlock from the Korean War to the height of perestroika. Economic sanctions were approved a grand total of twice; the Security Council has imposed them juuuuust a wee bit more in recent years.
Sanctions are for sissies, though -- what about the blue helmets? Well, if Wikipedia is correct, UN peacekeepers were dispatched on thirteen missions during the Cold War era. Which happens to be exactly the same number of times UN peacekeepers have been approved since George W. Bush's "Axis of Evil" speech -- a period that is only one-fourth as long as the Cold War. There are, by the way, 16 ongoing UN peacekeeping missions. I can bash aspects of the United Nations as well as the next commentator, but this is not an organization that even remotely resembles its Cold War state of decrepitude.
Look, the effectiveness of the United Nations as an instrument of statecraft is entirely a function of the current state of great power politics. This means that it was close to useless during the Cold War, pretty damn useful during the heyday of U.S. unipolarity, and now somewhere in between with the growth of the BRICs. The United Nations is to the great powers as Michael Clayton was to his law firm.
If great power gridlock grows, the United Nations will likely grow more dysfunctional. But we're a looooooooooong way from the Cold War. And Mead should know that.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.