Bolivians Use Ancient Methods for Sustainable Farming

BBC reports on a project in Bolivia’s Amazon region in which farmers make use of an irrigation technique that’s hundreds of years old. The pre-Columbian system involves raised earth platforms to protect crops from floodwaters while making use of canals for irrigation. Proponents of the two-year-old project say it could help poor farmers counter the effects of climate change, slow deforestation, and boost food security.
The project may help to cut down on the need to clear forests.

Poor farmers in the heart of Bolivia's Amazon are being encouraged to embrace the annual floods - by using a centuries-old irrigation system for their crops.

They are experimenting with a sustainable way of growing food crops that their ancestors used.

It could provide them with better protection against the extremes of climate change, reduce deforestation, improve food security and even promise a better diet.

These are the bold aims of a two-year-old project being carried out by a non-governmental organisation near Trinidad, the capital of the department of Beni.

The system is based on building "camellones" - raised earth platforms of anything up to 2m high, surrounded by canals.

Constructed above the height of flood waters, the camellones can protect seeds and crops from being washed away.

The water in the canals provide irrigation and nutrients during the dry season. The canals remain full after the floods recede
"We are only just now learning how our ancestors lived and survived"Maira Salas,Copacabana farmer
Pre-Columbian cultures in Beni from about 1000BC to AD1400 used a similar system.
" One of the many extraordinary aspects of our camellones project is that poor communities living in the Beni today are using a similar technology to that developed by indigenous pre-Columbian cultures in the same region to solve a similar range of problems," says Oscar Saavedra, the director of the Kenneth Lee foundation.

He experimented for six years in his own garden to develop the complex system of hydrology.

Ancient and modern communities face the same problems - regular flooding followed by drought.

"The floods were the basis for development and the flourishing of a great civilisation," says Mr Saavedra.

There were bad floods in 2006 and 2007, but last year the region saw the worst flooding in at least 50 years.

The floods affected some 120,000 people - a quarter of Beni's population - and caused more than $200m (£119m) of damage.

That experience prompted many local women to enlist in the camellones project.

"I had planted rice, maize, bananas and onions on my plot of land. But the water left nothing," explains Dunia Rivero Mayaco, a 44-year-old mother of three from Puerto Almacen near Trinidad.

"I lost my house too. We had to live three months in temporary accommodation on the main road. The children got ill there.

"So that's why I am working here on the camellones. I didn't want to lose everything again."
About 400 families are now enrolled in the project in five locations, growing mainly maize, cassava and rice.

Many of the sites are still in an experimental phase, but the early signs are promising. Productivity appears to be on the increase.

"These camellones will help us when the floods come," says Maira Salas from the village of Copacabana, a 20-minute boat ride down the river Ibare.

"Crops like bananas that die easily have a better chance of survival. We are only just now learning how our ancestors lived and survived.

"They did not have tractors to build the camellones, and they survived for years. It's incredible."

Villagers are encouraged to embrace the floods and see them as a blessing, not a curse.

During the rainy season, large expanses of land in Beni are under water for several months - except for the raised areas.

When the water recedes into the tributaries that run into the Amazon, it takes nutrients with it leaving a sandy brown soil in which it is difficult to grow crops.

But in the camellones project, the water left by the floods is harnessed to bring fertility to the soil and irrigation during times of drought.

In short, from being victims of the floods, poor people could become masters by turning the excess water to their advantage.

Extreme weather events
International charity Oxfam is supporting the project in part because it offers poor people the possibility of adapting to climate change.

If, as predicted by many experts, the cycles of El Nino/La Nina are going to increase in intensity and frequency, then the project has the capacity to help poor families cope better with the extreme weather events and unpredictable rainfall that are to come.

"It should not matter when the rains come as the water can still be managed at whatever time of the year," says Mr Saavedra.

Other potential advantages of the scheme include:

The system uses natural fertilizers, and in particular an aquatic plant in the canals called tarope which both purifies the water and acts as a fertilizer when spread over the soil
The canals can also provide fish stock, animal fodder and nutrients for the soil
The camellones can act as a natural seed bank which can survive flooding
The system can reduce the need to cut down the forested areas around the communities. This is because the soil on traditional plots of land is often exhausted after two to three years. This forces the farmers to clear more land for planting by cutting down the forest.
All this seems too good to be true.

Some of the women say the real test will come when there is a bad year of flooding or a severe drought. So far, 2009 has not been one of the worst.

There are other huge challenges ahead. One is to try to provide the families with an income from tomatoes or garden produce.

Another is to overcome the scepticism from some local people about the time and physical effort invested in the camellones compared to other sources of local employment.

Mr Saavedra is convinced the camellones project can be expanded, even to other countries.

"This process could be repeated in various parts of the world with similar conditions to the Beni like parts of Bangladesh, India and China.

"It could help to reduce world hunger and combat climate change," he says.
BBC News, Trinidad, Bolivia

The First Law of Petropolitics

Iran’s president denies the Holocaust, Hugo Chávez tells Western leaders to go to hell, and Vladimir Putin is cracking the whip. Why? They know that the price of oil and the pace of freedom always move in opposite directions. It’s the First Law of Petropolitics, and it may be the axiom to explain our age.

When I heard the president of Iran, Mahmoud Ahmadinejad, declare that the Holocaust was a “myth,” I couldn’t help asking myself: “I wonder if the president of Iran would be talking this way if the price of oil were $20 a barrel today rather than $60 a barrel.” When I heard Venezuela’s President Hugo Chávez telling British Prime Minister Tony Blair to “go right to hell” and telling his supporters that the U.S.-sponsored Free Trade Area of the Americas “can go to hell,” too, I couldn’t help saying to myself, “I wonder if the president of Venezuela would be saying all these things if the price of oil today were $20 a barrel rather than $60 a barrel, and his country had to make a living by empowering its own entrepreneurs, not just drilling wells.”
As I followed events in the Persian Gulf during the past few years, I noticed that the first Arab Gulf state to hold a free and fair election, in which women could run and vote, and the first Arab Gulf state to undertake a total overhaul of its labor laws to make its own people more employable and less dependent on imported labor, was Bahrain. Bahrain happened to be the first Arab Gulf state expected to run out of oil. It was also the first in the region to sign a free trade agreement with the United States. I couldn’t help asking myself: “Could that all just be a coincidence? Finally, when I looked across the Arab world, and watched the popular democracy activists in Lebanon pushing Syrian troops out of their country, I couldn’t help saying to myself: “Is it an accident that the Arab world’s first and only real democracy happens not to have a drop of oil?”
The more I pondered these questions, the more it seemed obvious to me that there must be a correlation—a literal correlation that could be measured and graphed—between the price of oil and the pace, scope, and sustainability of political freedoms and economic reforms in certain countries. A few months ago I approached the editors of this magazine and asked them to see if we could do just that—try to quantify this intuition in graph form. Along one axis we would plot the average global price of crude oil, and along the other axis we would plot the pace of expanding or contracting freedoms, both economic and political, as best as research organizations such as Freedom House could measure them. We would look at free and fair elections held, newspapers opened or closed, arbitrary arrests, reformers elected to parliaments, economic reform projects started or stopped, companies privatized and companies nationalized, and so on.
I would be the first to acknowledge that this is not a scientific lab experiment, because the rise and fall of economic and political freedom in a society can never be perfectly quantifiable or interchangeable. But because I am not trying to get tenure anywhere, but rather to substantiate a hunch and stimulate a discussion, I think there is value in trying to demonstrate this very real correlation between the price of oil and the pace of freedom, even with its imperfections. Because the rising price of crude is certain to be a major factor shaping international relations for the near future, we must try to understand any connections it has with the character and direction of global politics. And the graphs assembled here certainly do suggest a strong correlation between the price of oil and the pace of freedom—so strong, in fact, that I would like to spark this discussion by offering the First Law of Petropolitics.
The First Law of Petropolitics posits the following: The price of oil and the pace of freedom always move in opposite directions in oil-rich petrolist states. According to the First Law of Petropolitics, the higher the average global crude oil price rises, the more free speech, free press, free and fair elections, an independent judiciary, the rule of law, and independent political parties are eroded. And these negative trends are reinforced by the fact that the higher the price goes, the less petrolist leaders are sensitive to what the world thinks or says about them. Conversely, according to the First Law of Petropolitics, the lower the price of oil, the more petrolist countries are forced to move toward a political system and a society that is more transparent, more sensitive to opposition voices, and more focused on building the legal and educational structures that will maximize their people’s ability, both men’s and women’s, to compete, start new companies, and attract investments from abroad. The lower the price of crude oil falls, the more petrolist leaders are sensitive to what outside forces think of them. I would define petrolist states as states that are both dependent on oil production for the bulk of their exports or gross domestic product and have weak state institutions or outright authoritarian governments. High on my list of petrolist states would be Azerbaijan, Angola, Chad, Egypt, Equatorial Guinea, Iran, Kazakhstan, Nigeria, Russia, Saudi Arabia, Sudan, Uzbekistan, and Venezuela. (Countries that have a lot of crude oil but were well-established states, with solid democratic institutions and diversified economies before their oil was discovered—Britain, Norway, the United States, for example—would not be subject to the First Law of Petropolitics.)
To be sure, professional economists have, for a long time, pointed out in general the negative economic and political impacts that an abundance of natural resources can have on a country. This phenomenon has been variously diagnosed as “Dutch Disease” or the “resource curse.” Dutch Disease refers to the process of deindustrialization that can result from a sudden natural resource windfall. The term was coined in the Netherlands in the 1960s, after it discovered huge deposits of natural gas. What happens in countries with Dutch Disease is that the value of their currency rises, thanks to the sudden influx of cash from oil, gold, gas, diamonds, or some other natural resource discovery. That then makes the country’s manufactured exports uncompetitive and its imports very cheap. The citizens, flush with cash, start importing like crazy, the domestic industrial sector gets wiped out and, presto, you have deindustrialization. The “resource curse” can refer to the same economic phenomenon, as well as, more broadly speaking, the way a dependence on natural resources always skews a country’s politics and investment and educational priorities, so that everything revolves around who controls the oil tap and who gets how much from it—not how to compete, innovate, and produce real products for real markets.
Beyond these general theories, some political scientists have explored how an abundance of oil wealth, in particular, can reverse or erode democratizing trends. One of the most trenchant analyses that I have come across is the work of UCLA political scientist Michael L. Ross. Using a statistical analysis from 113 states between 1971 and 1997, Ross concluded that a state’s “reliance on either oil or mineral exports tends to make it less democratic; that this effect is not caused by other types of primary exports; that it is not limited to the Arabian Peninsula, to the Middle East, or sub-Saharan Africa; and that it is not limited to small states.” What I find particularly useful about Ross’s analysis is his list of the precise mechanisms by which excessive oil wealth impedes democracy. First, he argues, there is the “taxation effect.” Oil-rich governments tend to use their revenues to “relieve social pressures that might otherwise lead to demands for greater accountability” from, or representation in, the governing authority. I like to put it this way: The motto of the American Revolution was “no taxation without representation.” The motto of the petrolist authoritarian is “no representation without taxation.” Oil-backed regimes that do not have to tax their people in order to survive, because they can simply drill an oil well, also do not have to listen to their people or represent their wishes.
The second mechanism through which oil dampens democratization, argues Ross, is the “spending effect.” Oil wealth leads to greater patronage spending, which in turn dampens pressures for democratization. The third mechanism he cites is the “group formation effect.” When oil revenues provide an authoritarian state with a cash windfall, the government can use its newfound wealth to prevent independent social groups—precisely those most inclined to demand political rights—from forming. In addition, he argues, an overabundance of oil revenues can create a “repression effect,” because it allows governments to spend excessively on police, internal security, and intelligence forces that can be used to choke democratic movements. Finally, Ross sees a “modernization effect” at work. A massive influx of oil wealth can diminish social pressures for occupational specialization, urbanization, and the securing of higher levels of education—trends that normally accompany broad economic development and that also produce a public that is more articulate, better able to organize, bargain, and communicate, and endowed with economic power centers of its own.
The First Law of Petropolitics tries to build on such arguments but to take the correlation between oil and politics one step further. What I am arguing in positing the First Law of Petropolitics is not only that an overdependence on crude oil can be a curse in general but also that one can actually correlate rises and falls in the price of oil with rises and falls in the pace of freedom in petrolist countries. The connection is very real. As these graphs demonstrate, the pace of freedom really starts to decline as the price of oil really starts to take off.

An Axis of Oil?
The reason this connection between the price of oil and the pace of freedom is worth focusing on today is that we appear to be at the onset of a structural rise in global crude oil prices. If that is the case, this higher price level is almost certain to have a long-term effect on the character of politics in many weak or authoritarian states. That, in turn, could have a negative global impact on the post-Cold War world as we have come to know it. In other words, the price of crude should now be a daily preoccupation of the U.S. secretary of state, not just the treasury secretary.

Since 9/11, oil prices have structurally shifted from the $20–$40 range to the $40–$60 range. Part of this move has to do with a general sense of insecurity in global oil markets due to violence in Iraq, Nigeria, Indonesia, and Sudan, but even more appears to be the result of what I call the “flattening” of the world and the rapid influx into the global marketplace of 3 billion new consumers, from China, Brazil, India, and the former Soviet Empire, all dreaming of a house, a car, a microwave, and a refrigerator. Their rising energy appetites are enormous. This already is, and will continue to be, a steady source of pressure on the price of oil. Without a dramatic move toward conservation in the West, or the discovery of an alternative to fossil fuels, we are going to be in this $40-to-$60 range, or higher, for the foreseeable future.
Politically, that will mean that a whole group of petrolist states with weak institutions or outright authoritarian governments will likely experience an erosion of freedoms and an increase in corruption and autocratic, antidemocratic behaviors. Leaders in these countries can expect to have a significant increase in their disposable income to build up security forces, bribe opponents, buy votes or public support, and resist international norms and conventions. One need only pick up the newspaper on any day of the week to see evidence of this trend.
Consider a February 2005 article in the Wall Street Journal about how the mullahs in Tehran—who now are flush with cash thanks to high oil prices—are turning their backs on some foreign investors instead of rolling out the welcome mat. Turkcell, a Turkish mobile-phone operator, had signed a deal with Tehran to build the country’s first privately owned cell-phone network. It was an attractive deal: Turkcell agreed to pay Iran $300 million for the license and invest $2.25 billion in the venture, which would have created 20,000 Iranian jobs. But the mullahs in the Iranian Parliament had the contract frozen, claiming it might help foreigners spy on Iran. Ali Ansari, an Iran expert at the University of St. Andrews in Scotland, told the Journal that Iranian analysts had been arguing in favor of economic reform for 10 years. “In actual fact, the scenario is worse now,” said Ansari. “They have all this money with the high oil price, and they don’t need to do anything about reforming the economy.”
'Or, how about a Feb. 11, 2006, story in The Economist about Iran, which stated: “Nationalism is easier on a full stomach and Mr. Ahmadinejad is the rare and fortunate president who expects to receive, over the coming Iranian year, some $36 billion in oil export revenues to help buy loyalty. In his first budget bill, now before parliament, the government has promised to build 300,000 housing units, two-thirds of them outside big towns, and to maintain energy subsidies that amount to a staggering 10% of [gross domestic product].”
Or, consider the drama now unfolding in Nigeria. Nigeria has a term limit for its presidents—two four-year terms. President Olusegun Obasanjo came to office in 1999, after a period of military rule, and was then reelected by a popular vote in 2003. When he took over from the generals in 1999, Obasanjo made headlines by investigating human rights abuses by the Nigerian military, releasing political prisoners, and even making a real attempt to root out corruption. That was when oil was around $25 a barrel. Today, with oil at $60 a barrel, Obasanjo is trying to persuade the Nigerian legislature to amend the constitution to allow him to serve a third term. A Nigerian opposition leader in the House of Representatives, Wunmi Bewaji, has alleged that bribes of $1 million were being offered to lawmakers who would vote to extend Obasanjo’s tenure. “What they are touting now is $1 million per vote,” Bewaji was quoted as saying in a March 11, 2006, article by VOA News. “And it has been coordinated by a principal officer in the Senate and a principal officer in the House.”

Clement Nwankwo, one of Nigeria’s leading human rights campaigners, told me during a visit to Washington in March that since the price of oil has started to climb, “civil liberties [have been] on a huge decline—people have been arbitrarily arrested, political opponents have been killed, and institutions of democracy have been crippled.” Oil accounts for 90 percent of Nigeria’s exports, added Nwankwo, and that explains, in part, why there has been a sudden upsurge in the kidnapping of foreign oil workers in Nigeria’s oil-rich Niger Delta. Many Nigerians think they must be stealing oil, because so little of the revenue is trickling down to the Nigerian people.
Very often in petrolist states, not only do all politics revolve around who controls the oil tap, but the public develops a distorted notion of what development is all about. If they are poor and the leaders are rich, it is not because their country has failed to promote education, innovation, rule of law, and entrepreneurship. It is because someone is getting the oil money and they are not. People start to think that, to get rich, all they have to do is stop those who are stealing the country’s oil, not build a society that promotes education, innovation, and entrepreneurship. “If Nigeria had no oil, then the entire political equation would be different,” said Nwankwo. “The income would not be coming from oil and therefore the diversification of the economy would become an issue and private enterprise would matter more, and people would have to expand their own creativity.”
Indeed, the link between oil prices and the pace of freedom is so tight in some countries that even a far-sighted leadership can be diverted from the path of economic and political reform by a sudden spike in crude prices. Consider Bahrain, which knows it is running out of oil, and has been a case study of how falling oil revenues can spur reform. Even it has not been able to resist the temporary seduction of higher oil prices. “We are having good times now because of high oil prices. This may lead officials to be complacent,” Jasim Husain Ali, head of the University of Bahrain’s economic research unit, recently told the Gulf Daily News. “This is a very dangerous trend, as oil income is not sustainable. [Bahrain’s] [d]iversification may be enough by Gulf standards, but not by international standards.” No wonder a young Iranian journalist once remarked to me while we were on a stroll in Tehran: “If only we didn’t have oil, we could be just like Japan.”
Geology Trumps Ideology
With all due respect to Ronald Reagan, I do not believe he brought down the Soviet Union. There were obviously many factors, but the collapse in global oil prices around the late 1980s and early 1990s surely played a key role. (When the Soviet Union officially dissolved on Christmas Day 1991, the price of a barrel of oil was hovering around $17.) And lower oil prices also surely helped tilt the postcommunist Boris Yeltsin government toward more rule of law, more openness to the outside world, and more sensitivity to the legal structures demanded by global investors. And then came Russian President Vladimir Putin. Think about the difference between Putin when oil was in the $20–$40 range and now, when it is $40–$60. When oil was $20–$40, we had what I would call “Putin I.” President Bush said after their first meeting in 2001 that he had looked into Putin’s “soul” and saw in there a man he could trust. If Bush looked into Putin’s soul today—Putin II, the Putin of $60 a barrel—it would look very black down there, black as oil. He would see that Putin has used his oil windfall to swallow (nationalize) the huge Russian oil company, Gazprom, various newspapers and television stations, and all sorts of other Russian businesses and once independent institutions.
When oil prices were at a nadir in the early 1990s, even Arab oil states, such as Kuwait, Saudi Arabia, and Egypt, which has substantial gas deposits, were at least talking about economic reform, if not baby-step political reforms. But as prices started to climb, the whole reform process slowed, particularly on the political side.
As more and more oil wealth piles up in petrolist countries, it could really begin to distort the whole international system and the very character of the post-Cold War world. When the Berlin Wall fell, there was a widespread belief that an unstoppable tide of free markets and democratization had also been unleashed. The proliferation of free elections around the world for the next decade made that tide very real. But that tide is now running into an unanticipated counter-wave of petro-authoritarianism, made possible by $60-a-barrel oil. Suddenly, regimes such as those in Iran, Nigeria, Russia, and Venezuela are retreating from what once seemed like an unstoppable process of democratization, with elected autocrats in each country using their sudden oil windfalls to ensconce themselves in power, buy up opponents and supporters, and extend their state’s chokehold into the private sector, after many thought it had permanently receded. The unstoppable tide of democratization that followed the fall of the Berlin Wall seems to have met its match in the black tide of petro-authoritarianism.

Although petro-authoritariansim does not represent the sort of broad strategic and ideological threat that communism posed to the West, its long-term impact could nevertheless corrode world stability. Not only will some of the worst regimes in the world have extra cash for longer than ever to do the worst things, but decent, democratic countries—India and Japan, for instance—will be forced to kowtow or turn a blind eye to the behavior of petro-authoritarians, such as Iran or Sudan, because of their heavy dependence on them for oil. That cannot be good for global stability.
Let me stress again that I know that the correlations suggested by these graphs are not perfect and, no doubt, there are exceptions that readers will surely point out. But I do believe they illustrate a general trend that one can see reflected in the news every day: The rising price of oil clearly has a negative impact on the pace of freedom in many countries, and when you get enough countries with enough negative impacts, you start to poison global politics.
Although we cannot affect the supply of oil in any country, we can affect the global price of oil by altering the amounts and types of energy we consume. When I say “we,” I mean the United States in particular, which consumes about 25 percent of the world’s energy, and the oil-importing countries in general. Thinking about how to alter our energy consumption patterns to bring down the price of oil is no longer simply a hobby for high-minded environmentalists or some personal virtue. It is now a national security imperative.
Therefore, any that does not also include a credible and sustainable strategy for finding alternatives to oil and bringing down the price of crude is utterly meaningless and doomed to fail. Today, no matter where you are on the foreign-policy spectrum, you have to think like a Geo-Green. You cannot be either an effective foreign-policy realist or an effective democracy-promoting idealist without also being an effective energy environmentalist.

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SOURCE:
Thomas L. Friedman
May/June 2006
Thomas L. Friedman is a columnist for the New York Times and author of, most recently, The World Is Flat: A Brief History of the Twenty-First Century (New York: Farrar, Straus & Giroux, 2005).

REFERENCE:
For a detailed look at the link between oil wealth and stunted political systems, see Michael L. Ross’s “Does Oil Hinder Democracy?” (World Politics, April 2001). Sustaining Development in Mineral Economies: The Resource Curse Thesis (New York: Routledge, 1993), by Richard M. Auty, explains why countries endowed with natural resources often fail to develop. Jeffrey D. Sachs and Andrew M. Warner flesh out this thesis in “Natural Resource Abundance and Economic Growth” (Washington: National Bureau of Economic Research, 1995).
Political scientist Javier Corrales demonstrates how today’s high oil prices empower modern authoritarians in “Hugo Boss” (FOREIGN POLICY January/February 2006). Moisés Naím’s “Globoquiz: Guess the Leader” (Newsweek International, Dec. 1, 2004) notes the surprising, oil-driven similarities between Hugo Chávez and Vladimir Putin, and “Russia’s Oily Future” (FOREIGN POLICY January/February 2004) analyzes Moscow’s shift toward petrostate politics.
Thomas L. Friedman contemplates the consequences for the global economy—and energy market—of the rise of India and China in The World Is Flat: A Brief History of the Twenty-First Century (New York: Farrar, Straus and Giroux, 2005). Daniel Yergin’s Pulitzer Prize-winning The Prize: The Epic Quest for Oil, Money, and Power (New York: Simon & Schuster, 1991) is the definitive history on the connections between oil and modern economies.

Asia and the financial crisis

The United States hopes to convene next month a meeting of leaders from the G-20 group of countries to discuss the international financial crisis and come up with proposals to help prevent the economic meltdown triggered by the collapse on Wall Street last month. India and China have been invited — along with the rich industrialised countries of the G-8 and a number of middle-income emerging economies — but have not yet decided on their level of participation. India’s concerns essentially revolve around two issues. First, the utility of such a summit lies in the level of preparation that goes into it and a poorly prepared summit that fails to generate a consensual framework may prove counter-productive. Secondly, there is little sense in India and other Asian countries like China being asked to lend a shoulder if the United States and Europe are not prepared to accept the democratisation of the governance structure of the global economy, particularly of the World Bank and the International Monetary Fund that are biased in favour of North America and Europe.
If Prime Minister Manmohan Singh decides to go to Washington, he must take with him a clear set of proposals for dealing with the crisis and aimed at bringing about a reconfiguration of the governance structure of these bodies. Everyone agrees that the Bretton Woods institutions have performed miserably in the run-up to the crisis. But the crisis was not simply a failure of supervision on their part. It was a logical outcome of the mother of all moral hazards caused by the power of seignorage enjoyed by the United States since World War II and especially since the 1970s when the heyday of the dollar began in earnest. Simply put, the U.S. was able to live on a perpetual debt cycle secure in the knowledge that its economy would not be pauperised by the inevitable crash in the same way as the economies of Argentina or South East Asia were in the 1990s because its national money serves as the international reserve currency and will never be allowed to lose too much value. During the Asia-Europe Meeting in Beijing last week, there was an acute awareness of the burden of adjustment being cast on other big economies such as China, Japan, India, Korea, and Europe. To the extent to which globalisation has linked the fate of all economies, a certain amount of burden-sharing is inevitable. But India must ensure that the G-20 comes up with a balanced set of proposals that will include the right mix of emergency financial measures as well as long-term structural changes. Above all, New Delhi must closely consult with Beijing, Tokyo, Seoul, and Paris so that Asia and Europe speak with one voice on November 15.

Financial crisis, Part 2

October 31, 2008
Developing countries need urgent help. The IMF is acting quickly, but it needs help, too.
First came the financial earthquake in the US and Western Europe. Now, the aftershocks are shaking the developing world. Countries from Ukraine in Eastern Europe to Pakistan in South Asia need urgent financial attention. Helping them requires a global effort.
It wasn't long ago that many of these countries – known as "emerging markets" in finance lingo – were thought to be immune to financial problems in the developed world. Their governments had decent balance sheets, had paid back international loans, and even stored up funds in "rainy day" reserves. In fact, they were being talked about as engines that could pull America and other wealthy countries out of recession.
But now they're suffering, too. Demand for their goods and commodities is drying up as the great consumer market of the world – the US – folds its wallet.
Even worse, jumpy foreign investors are pulling out of the emerging-market countries, and that's caused currencies in Brazil, Mexico, South Korea, Turkey, South Africa, Hungary, and elsewhere to plummet. With weak currencies as well as foreign capital on the run, banks and companies in such countries – and in some cases, governments themselves – are unable to borrow or pay off loans.
There are multiple dangers here. For starters, America's climb out of recession will be all the more difficult without emerging markets to grab on to. At the same time, banks in Western Europe are neck-deep in shaky loans to these countries. One example: Austrian banks' outstanding loans to Eastern Europe are worth more than half of Austria's economic output, or gross domestic product. Default on these loans would spell financial disaster for East and West Europe.
And don't forget the geopolitical considerations. Several of the former Soviet states that are now democracies are in serious financial trouble. And nuclear-armed Pakistan – a weak democracy that is home to Al Qaeda and Taliban terrorists – needs close to $5 billion just for short-term survival.
Thankfully, the world is not standing idly by. The International Monetary Fund (IMF), made up of 185 countries and their donations, is acting with speed, muscle, and flexibility.
Last week, it agreed to loan $2 billion to Iceland and $16.5 billion to Ukraine. This week, it worked with the World Bank and European Union to assemble a hefty $25.1 billion rescue package for Hungary. It is in talks with Pakistan.
One complaint about the IMF is that it sets stringent austerity conditions on its loans, just when countries are hurting. This week, however, it announced $100 billion in short-term credit for countries that are basically sound, but have become victims of capital flight and currency devaluation. No strings attached. That's a wise and welcome move.
The IMF is doing exactly what it was set up to do, but will likely need more help. It has a total of $250 billion that can cover small- and medium-sized countries. But economists predict 15 to 20 emerging markets will need assistance, and if a big one like Brazil comes knocking, the IMF won't have enough.
This is a good topic for the global economic summit next month. As Americans have realized that Wall Street and Main Street are connected, so the developed world needs to understand that it's in this together with the developing one.
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SOURCE:
The Monitor's Editorial Board, http://www.csmonitor.com

China and the World VII:China's Military Growth Creates Uncertainty for U.S.

Chinese People's Liberation Army officers march during a welcoming ceremony for visiting King Abdullah II of Jordan in October, 2007

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China's Military Growth Creates Uncertainty for U.S.

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In nearly every aspect of military capability — from cruise missiles to submarines, satellites to cluster bombs — China has been working hard to modernize its military. Some see this as a natural result of China's emergence as a rising power, while others see danger to the United States and its interests in Asia.
The evidence of China's military modernization is ample: double-digit increases for military spending since 1989; the rapid expansion of China's cruise and ballistic missile force and the deployment of hundreds of missiles along China's coast across from Taiwan; the rapid expansion of China's submarine force and the modernization of the missiles those submarines carry; and last year, China's destruction of one of its own satellites by a land-based missile, announcing China's unexpected capability in anti-satellite warfare.
There is no doubt that China is a rising military power, says Kurt Campbell, a former Defense Department official who now heads the Center for a New American Security.
"No country has risen to a status of great power as rapidly as China has, I would argue, over the last 20 years," Campbell says.
Cause for Alarm?
With its rapidly expanding economy, its growing thirst for energy and its own perception of itself as an emerging power, it makes perfect sense that China should modernize its military capabilities, says Ralph Cossa, director of the Pacific Forum, a think tank in Honolulu.
"They want to have a force commensurate with their political and economic standing in the world, and we shouldn't be surprised by that. And we shouldn't necessarily be frightened by that," he says.
Still, some in the United States are frightened. They see China's expansion of its military as a direct challenge to the United States. Just peruse the titles of several new books: The Coming War with China, Showdown: Why China Wants War with the United States and China Shakes the World: A Titan's Rise and Troubled Future.
Susan Shirk is not among the alarmists. But in her recently published book, China: Fragile Superpower, Shirk writes: "History teaches us that rising powers are likely to provoke wars."
"Let's remember why they provoke war," she says. "They provoke war because of the reaction of the present-day powers, and not only because of their own behavior. And I have to say that there are reasons to be worried on both scores."
Perhaps no one knows more right now about China's military, and especially its naval capabilities, than Adm. Timothy Keating, head of Pacific Command, based in Honolulu. It's his job to watch China's military. He's been to China several times, seen its weapons systems up close and talked with China's military leaders.
He admits China is developing impressive military capabilities, but "the Chinese are behind us," he says. "Unmistakably, they know it. In their words — I'm quoting some of them — they're 25 years behind us."
Growing Transparency
One of the reasons that some analysts in the United States are so concerned about China's military development is that it is, in part, hidden. Chinese leaders have not explained why they shot down their own satellite last year, why a Chinese submarine last year shadowed the U.S. aircraft carrier Kitty Hawk, or why they talk about acquiring aircraft carriers of their own.
But, Keating says, little by little, China is becoming more transparent about its military.
"Increased transparency can yield to greater trust," he says. "That reduces the potential for misunderstanding. Misunderstanding can lead to conflict or crisis."
No area is more fraught with potential conflict for China and the United States than Taiwan, which China regards as part of its territory. Taiwan's recent presidential election — won by a candidate who wants to improve relations with the mainland — may go a long way to cooling potential conflict there.
But Shirk says China's military modernization has been all about Taiwan and denying the United States military access to it and the surrounding area in case conflict breaks out.
"They want us to really think twice about confronting China's military power in such a contingency," she says.
'Internal Weakness'
China does have the capacity to threaten the actual homeland of the United States: It possesses 20 intercontinental ballistic missiles that carry nuclear warheads and could reach the country. But these missiles are not on high alert, and the warheads are stored separately.
Although China is modernizing these missiles, it believes its nuclear arsenal is a minimal deterrent, and in recent years it has not modified that doctrine.
Campbell says he believes that with the United States focused primarily on the Middle East, recent administrations have not paid enough attention to what is going on with China's military.
"It's not, I think, any outward and, you know, specific steps that China has taken that are cause for immediate American concern," he says. "But it is a pattern of very substantial steps that have led to a rather sharp increase in Chinese power."
China's recent unrestrained crackdown in Tibet adds another element to an understanding of China's military. The People's Liberation Army is used not only against foreign threats but also against internal challenges as China's communist leadership sees them.
In order to maintain the PLA's loyalty to the civilian leadership, Shirk says she believes the military demands and gets its way on military spending. She sees that "as a reflection of China's internal weakness, and that they need to satisfy the military in order to keep the Communist Party in power."
That's why Shirk calls China a "fragile superpower," and the events in Tibet are the most recent evidence of just that.

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SOURCE:

Mike Shuster,

NPR's Diplomatic correspondent & roving foreign correspondent,

April 6, 2008

China and the World VI:Russia, China's Fortunes Reversed in Frontier City

Cobbler Yo Xiaoching, who works in Blagoveshchensk, Russia, says it's impossible to find work across the river in China.

Chinese venders at Blagoveshchensk's outdoor market.He Wenyan, director of the Hua Fu construction company, stands at the top of his Asia Hotel, Blagoveshchensk's tallest building by far. He dominates construction in the city

He Wenyan's Asia Hotel, set to open in May.

The Chinese city of Heihe, as seen from the Russian side of the Amur River, is expanding quickly.
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Russia, China's Fortunes Reversed in Frontier City
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Few places in the world have been more directly affected by China's booming economy than its once-mighty neighbor to the north. In Russia's sprawling Far East, Chinese people and capital are moving in as Russians abandon the depressed region.
Russia's relationship with China is starkly clear in the city of Blagoveshchensk, which sits on the Amur River that divides the two countries.
In the 1960s, the former communist allies fought bloody skirmishes along the river. When relations began to thaw in the 1980s, Chinese people flocked across the border to buy Soviet cars, farm machinery, kitchen utensils — anything they could get their hands on.
Now the trade moves in the opposite direction.
Finding Work
Across the bank of the narrow Amur River from the depressed Blagoveshchensk, the city of Heihe is growing quickly.
On the Chinese side of the river, people overloaded with large plastic bags packed with clothes and other Chinese goods cram onto hovercraft ferries that leave every few minutes. The passengers are mostly Russians, paid by Chinese to carry goods to the other side.
Back in Blagoveshchensk, Chinese venders hock some of the goods at a bustling outdoor market, just as in other cities across Russia's Far East. But the Chinese do more than sell merchandise. They are also finding other lines of work.
Next to one stall, cobbler Yo Xiaoching hammers new soles onto a pair of shoes. He says it's far easier to find work in Russia than in China. The math says it all: Russia's vast, empty Amur region has fewer than a million residents. The Chinese region of Heilongjiang across the river is bursting at the seams with almost 40 million people.
"There's no work on the Chinese side at all," Yo says in Russian. New, strict Russian immigration laws have limited the number of Chinese working in Blagoveshchensk, but Yo says finding employment is still easier on the Russian side of the river.
In addition to clothes and electronics, most of the food for sale comes from China, and Blagoveshchensk also has many Chinese restaurants and cafes. But in a city dominated by old decaying log houses and squat Soviet concrete hulks, the biggest sign of the Chinese presence is construction.
Conflict and Dependence
Set to open in May, the Asia Hotel is the tallest building by far in Blagoveshchensk and it will have the city's only world-class accommodations. The hotel is being built by a Chinese company. When its CEO drives up, he's in a Bentley coupe, the only such car in the Amur region.
Inside the hotel's massive revolving restaurant, He Wenyan says Blagoveshchensk would be far worse off without the Chinese.
"We're good for the Russians," he says. "We're helping sustain their market economy."
But most Chinese in Blagoveshchensk maintain a low profile and keep to themselves. Racist hate crimes are on the rise in Russia, and nationalists speak of a Chinese menace growing on Russia's border. But Blagoveshchensk residents tend to be less suspicious of the Chinese than they were even a few years ago.
On the city's main street, clothes designer Tatyana Sorokina says she feels closer to China than Moscow, in the European part of Russia thousands of miles away.
"That's just a fact of life ... after all, China's just across the river. We depend on the Chinese for so many things. Any development here is good for us," she says.
A Long-Term Threat?
Dependence on China is hardly new. Residents say they wouldn't have weathered Russia's steep economic decline in the 1990s without affordable Chinese products. Nikolai Alexandrovich, 80, says he remembers surviving mainly on potatoes from China during the worst years of Stalinism in the 1930s.
"Today we'd be walking around naked and hungry if it weren't for the Chinese ... because our own authorities are just concerned with battling each other for control and lining their own pockets," he says. "They've only helped Russia's Far East decline."
But while locals feel they have much to gain from the Chinese, analysts warn that the Kremlin is in denial about the long-term threat to Russia's Far East. China is buying Russian arms for its major military buildup and pressuring Moscow to speed the building of oil and gas pipelines to feed China's growing need for energy, even as Russia faces problems meeting its own energy demands.
Sociologist German Zheliabovskii says Moscow doesn't realize that, sooner or later, Russia will have to share land with China.
"Our military alone won't be able to hold the Far East," Zheliabovskii says. "There have to be Russian people living here."
Zheliabovskii points out that Russia only took Blagoveshchensk from the Chinese in 1856 — and that China may soon control the city once again.

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SOURCE:

Gregory Feifer,

NPR's Moscow Correspondent,

April 5, 2008

China and the World V:Political Factors Complicate China's Clout in Mideast

Saudi Arabia's King Abdullah, shown in a 2007 file photo, made China his first foreign visit as leader of the world's largest oil producer

A vendor waits for customers at a shop selling Chinese goods at Dragon Mart in Dubai. Officials say the 1.6 million-square-foot shopping complex may be the largest Chinese trading hub outside mainland China

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Political Factors Complicate China's Clout in Mideast

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When Saudi Arabia's newly crowned King Abdullah set off on his first foreign visit as leader of the largest oil producer on the planet a few years ago, his destination was not the world's largest oil importer and only superpower, the United States. Instead, in what some saw as a harbinger of a new era, he visited China.
And while the king has his own plane, he followed a popular route: There are now at least twice as many flights between the Gulf region and China than there are between the Gulf and the United States.
With a booming economy fueling a voracious demand for energy, China is soon expected to eclipse the United States as the leading oil importer — with the majority of that oil coming from the Middle East.
China's rise is coming at a time when the U.S. economy is struggling and the U.S. image is badly tarnished in the Middle East. That has some Western analysts talking about a historic shift to the East, but those in the Gulf region say that's not happened just yet.
Controversial Ties
Saudi Arabia, Oman and the United Arab Emirates are all shipping huge amounts of oil to China. As China's energy appetite has grown, Beijing increasingly values its ties with the oil-rich and relatively stable countries in the Gulf.
But hunger for oil also has pushed China to seek out ties in a number of the world's trouble spots: Angola, Nigeria, Sudan and Iran. China's economic interests in Sudan and Iran in particular sometimes put it at odds with the West, and China has been forced to modify, at least somewhat, its desire to keep its focus on trade and not politics.
After long ignoring the atrocities of government-backed militias in western Sudan, China recently has begun prodding the government in Khartoum and rebel groups to negotiate. China also has endorsed three United Nations Security Council resolutions sanctioning Iran over its nuclear program.
But those shifts have not been reflected in Beijing's trade and economic policies on the ground. Its new rhetoric notwithstanding, China remains Sudan's biggest weapons supplier, and in Tehran, foreign ministry official Ali Rezaiee told NPR that Chinese investment in Iran is booming despite the U.N. resolutions.
"You know, it's interesting to see all those investments and issues are intact," he says. "They have their own business with us. At the same time, they are under too much pressure from the U.S. side."
But it's not just Washington that's unhappy with China's strengthening economic ties to Iran. Analyst Mustafa Alani at the Gulf Research Center in Dubai says China may soon be forced to sacrifice some of its interests in Iran if it wants to maintain good ties with the Arab world and access to its oil.
"I think the Chinese must understand our deep concern related to the Iranian nuclear program," Alani says. "This is not a marginal issue; this is a major issue here in the region. If China wants to emerge as a major power in the region supplying 60 percent of Chinese energy, they must understand the relation of buyer and seller will not last for long."
'Not a Mature Power'
Alani says the atmosphere in the region is one of extreme uncertainty, with the U.S. image badly damaged by the invasion of Iraq and the ensuing rise of Iran. Some are looking to China to step in, but for now Alani remains skeptical.
"Certainly in the region we feel the United States losing credibility, and we feel that in the near future we're going to see a vacuum in the region," he says. "But we still believe the Chinese [are] not a mature power: Politically, it's still really very weak; strategically, it still is not trusted. We don't feel China is a replacement to United States in any sense."
But economically, the shift is well under way. For centuries, imperial China and the Mideast had thriving economic ties as goods traveled back and forth along the Silk Road. Then, in the mid-20th century, communist China served as an ideological model, and sometimes arms supplier, to Arab nationalists and socialists in the region.
"In the old days, there was a strong admiration for China. We were going through the Algerian revolution and then the Palestinian resistance and what have you, and China was looked on like an inspiration," says Walid Kazziha, who heads the political science department at American University in Cairo.
But analyst Abdel Moneim Said at the Al-Ahram Center for Strategic and Political Studies says that today the message from China is not one of egalitarian redistribution of power and wealth, but quite the opposite.
"Actually, China is giving two bad lessons to the Middle East," he says. "Number one: Violating human rights has nothing to do with development; you can have both. The second is that highly centralized political power does not mean necessarily an impediment for progress. ... Usually China is used as an example against local reformers."
Economic Allure
That model is one that democracy advocates loathe. But the economic allure of the new China is impossible to ignore, which is perhaps nowhere more obvious than at Dragon Mart in the United Arab Emirates.
The 1.6 million-square-foot shopping complex, nearly three-quarters of a mile long, sprawls more or less in the shape of a dragon along the Dubai-Oman Highway. Inside, some 4,000 Chinese firms offer everything from children's toys and "Double Happiness" cigarettes to forklifts and heavy machinery. Officials say it may be the largest Chinese trading hub outside mainland China.
At the same time, Mideast investors finding it harder to conduct business in the United States are increasingly sending their money east. Dubai-based DP World, burned by a political backlash in the United States after it acquired American port holdings, is now funding a half-billion-dollar port project in China. Tens of billions of dollars' worth of oil projects are under way. Inexpensive Chinese cars are selling as fast as they arrive in Egypt, and, to the dismay of Egyptian craftspeople, most pharaonic souvenirs now come with a "Made in China" sticker.
One Gulf economist predicts that regional investment in Asia, including China, could reach a quarter of a trillion dollars within five years. But many of these oil-rich states will be watching China's evolving Mideast policy carefully, hoping that Beijing recognizes that it will have problems becoming and remaining an economic superpower if it doesn't pay more attention to political relations in this sensitive and complicated corner of the world.

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SOURCE:

Peter Kenyon, NPR's Foreign Correspondent, Cairo,

Middle Eastern and North African countries from Syria to Morocco,
April 4, 2008