Pundita

Five posts plus two notes since Saturday. Pundita is on a mini-vacation the rest of this week. The next post will be on Thursday.

Best regards to all.

"So much is riding on the poll that some have called it the most significant on the continent since the first democratic elections in South Africa in 1994.

High turnout as Congo goes to the polls
> Voting goes smoothly in largest UN-run election
> Hope for future as fears of violence prove unfounded

Xan Rice, east Africa correspondent
Monday July 31, 2006
The Guardian

Up to 20 million people turned out to vote yesterday in the Democratic Republic of Congo's first multiparty elections for four decades.

Watched by 17,600 UN peacekeepers, 80,000 local police officers and 1,000 EU troops, people queued before dawn at 50,000 poll stations. On huge ballot papers - six broadsheet-size pages each - they voted for a president, a parliament and a future free of the war, corruption and misrule that have plagued the country since independence.

"We've only had coups d'etat and dictators in this country: phantom governments," Emmanuel Kiye, a 48-year-old mechanic told Associated Press in the capital, Kinshasa. "Now we'll have a government of the people."

Joseph Kabila, the 35-year-old incumbent who took power when his father, Laurent, was assassinated in 2001, is the clear favourite to win the presidential vote. Among the 32 other candidates, his closest challengers are expected to be the former rebel leader Jean-Pierre Bemba and Dr Oscar Kashala, a Harvard-educated cancer researcher who returned from the US to contest the poll.

Congo's 25 million registered voters, who were frisked for weapons before dipping their right thumb in purple ink, were also asked to choose from 9,700 candidates vying for 500 seats in the national assembly.

The election, which was repeatedly postponed because of insecurity and logistical problems, was boycotted by some leading figures including the veteran politician Etienne Tshisekedi, who said the poll was rigged.

There was also a strong feeling among some opposition supporters that Mr Kabila is being unfairly backed by the west, particularly the EU.

But most Congolese have embraced the electoral campaign that saw candidates handing out T-shirts, caps and even money - one millionaire candidate apparently dropped banknotes from his helicopter.

Fears of widespread violence during the voting proved unfounded. While one polling station in the diamond-mining town of Mbuji-Mayi, a stronghold of Mr Tshisekedi, was torched by youths, there were no reports of deaths or widespread intimidation.

Observers said turnout appeared high, and could match the 80% achieved during last year's constitutional referendum.

Speaking from Lubumbashi in the south-east of the country yesterday, British MEP Richard Howitt, one of 1,200 foreign election observers in the Congo, said: "People are voting very enthusiastically. This does seem to be a well-contested election."

Results of the presidential race are not expected for three weeks. If no candidate achieves 50% of the vote, the top two will face a run-off, possibly in November.

So much is riding on the poll that some have called it the most significant on the continent since the first democratic elections in South Africa in 1994.After enduring 32 years of plunder by Mobutu Sese Seko, who ensured that one of the world's most mineral-rich countries remained impoverished, Congo was plunged into a war that drew in five countries and helped cause 4 million deaths.

After a peace deal in 2002, the UN's largest peacekeeping force was deployed to try to disarm the myriad rebel groups roaming the country. Donors pumped in more than £220m - Britain was the largest contributor, with £36m - to prepare for what is the most expensive election ever supervised by the UN.

If the count proceeds smoothly and the main parties accept the results - which is by no means guaranteed - it could usher in a new era of peace, stability and development. If not, some of the rebel leaders-cum-politicians could return to the bush and plunge the Great Lakes region into chaos once again.

Michael Wright: I got a message on my voice mail "She's talking about the ancestors again and also about a kind of 12 inch high animal that lives in burrows in the Kalahari. Is she okay?" What's up?

Pundita: Nothing's up. I'm fine, fine.

MW: Not by that tone of voice.

P: What am I supposed to talk about? The Bush Democracy Doctrine dead in the water?

MW: Do you recall Robert Zoellick resigned from the state department in June? I am surprised you're not still walking on air.

P: Who's Rice picking to replace him? Count Dracula? Actually, that would be an improvement over yet another of her Cold War buddies.

MW: I think you're being premature to assume the doctrine is dead.

P: Okay, it's not dead; it's being sold off piecemeal by State.

MW: Who do you like for the next President of the United States?

P: Laura Bush.

MW: I'm asking a serious question.

P: I am writing her in as a proxy candidate for her husband.

MW: You don't want Dubya to leave office during this phase of the war?

P: I live in fear of the next US president.

MW: You think Iran is counting the hours until Bush and Cheney leave office?

P: And every other terror sponsoring state, including China.

MW: You don't like Cheney for president.

P: I respect Cheney but not as much as I fear him. He's part of the Cold War clan. Bush managed to break with the Republican branch of that clan over foreign policy and war doctrine. Yet I think Cheney was among the few in the party who didn't stab Bush in the back because of it.

I am afraid the new era is still very fragile, if it's gotten here yet. It's still more of a point on the horizon. It could vanish with the next White House administration.

MW: I think many see the choice as multilateralism or regionalism. You hear that argument in the talk about the collapse of the Doha round. "Now the world will revert to regionalism and bilateral deals and eventually drift back to the beggar thy neighbor trade environment of the 1930s."

P: They don't see the choice as between sound government and the collapse of civilization, do they?

MW: No, they don't see it that way, Pundita.

P: The ancestors see it that way. The meerkat clans of the Kalahari see it that way.

MW: [laughing] Okay, I'll stop trying to cheer you up.

Now we have arrived at our annual feature called, "Pundita coddles lazy readers," whereupon we answer questions that have piled up from people who want to swallow a pill every evening and know all the important news of the day.

1) In what might be a nod to blogosphere denizens who have only eyes and not ears, John Batchelor now writes what seems to be a weekly column for The New York Sun.

2) The New York Sun no longer demands a subscription before its pages are available to the Internet reader. Because this decision might be revoked at any time, make use of the freebie while you can in order to get great daily war reporting and access to Batchelor's weekly column. In honor of the Sun's graciousness, Pundita is graciously posting a link to their newspaper on her blog's sidebar.

3) For the reader who pleaded that I bring Ouija out of mothballs, I venture that John Batchelor's July 28 New York Sun piece titled Green Light is the clearest insight about how the enemy is thinking at this time. John's advantage over Ouija is that he doesn't cost a fortune in repairs, lapse into archaic Romanian, or channel a Hungarian resistance fighter whose English consists of ve mik goulash from dead KGB.

4) No, I should think that if you had a headache that night or had to grade papers that is not an excuse to miss Batchelor's show. The only valid excuse is if the night ICU nurse wrestles your portable radio and earphones away from you.

But in that case you might consider emulating the tactic of a friend of mine, who has hired a Batchelor Show Minder. (Not to be confused with a Puffy Head Minder.) The minder dutifully listens to every segment and summarizes for his clients.

In this way the clients manage to sound halfway intelligent every morning around the water cooler.

5) The reason you can't read the John Loftus report on the John Batchelor Show website is because Loftus delivers the report on John's radio show.

6) The reason you missed the Loftus report that night is because he reported during the first half hour of the show. The time of 10:35 PM ET is approximate for the report's airing. Sometimes the report is earlier and sometimes after 11:00 PM or even later.

The varying time slot of the reports seems to depend on the war -- whether it's in a very hot phase, as it is now -- and Loftus' schedule. During hot phases, Loftus almost always reports during the first hour of the show or right after the 11:00 PM ABC news break.

7) A rule of thumb is that during a hot phase listen to the show's opening segment (right after the ABC news report at approximately 10:05 PM ET) to hear whether Batchelor mentions when Loftus and Aaron Klein will present their reports.

8) No, it is not false advertising for the website to put Loftus' name or the name of Batchelor's other guests over a link to a newspaper article not written by the guests. The guest name over the link simply signifies that Loftus will be discussing a topic that evening which relates to the article.

9) You will stop having these types of complaints if you remember that John Batchelor's radio show, with millions of daily listeners, is part of the mediasphere and not the blogosphere.

Batchelor and his researchers cull excellent news articles and post them to the website but the site is not the radio show. The site does carry some audio transcripts of 'special' conversations; e.g., interviews with terrorists, but the Current Intelligence section is simply a guide to topics that will be covered during a show.

10) For those who want Batchelor's website to post transcripts of every guest interview -- well, you can write Batchelor with the request (his email address is posted on the site). But if you don't have time to listen to the show, when will you find time to read the transcripts?

John's segments fall into two categories: timely and timeless. The segments that deal with history and 'social' themes will be just as informative years from now. The other category reflects fast-changing daily events, which often build on each other. If you don't keep up, you'll fall behind the news curve very quickly during war time.

Dymphna had some interesting comments in response to yesterday's "Nobody Moves..." post, which I added at the end of the post as a 'Midnight Update.'

Pundita: [Re your comment about the tone of my letter -- see previous post] "... I guess she assumed were soothing words of comfort"??? No, I was just giving a serious reply to a serious question.

For the Fjordman series, look down the left sidebar at the Gates of Vienna blog page. The cumulative effect is powerful, because it's as though the clapper keeps striking the bell, and the reverberations are amplifying each other. The sum is a portrait of disaster looming. I wasn't kidding about it being one of my focal concerns; if the Vikings' descendants fight like their forebears, what will the berserker rage look like this time? And if they don't wake up in time to fight, how would that conceivably be better?

Nonetheless, I believe -- not think, believe -- we will win. The only questions are how and how long, which is another way of asking how much it will cost us.
Annlee Hines"

Dear Annlee:
Exactly, to your last observation. It doesn't help to think, while being blown up by a suitcase bomb on the Metro, "Well, we're gonna win eventually." That kind of scenario is what scares me right now. However, what is also scary is that there is something other than a win or a loss.

A large number of Muslims are bent on racial suicide, although it took a chapter in Anna Prouse's book (Two Birthdays in Baghdad) to bring this into the public spotlight. (See my post Clans.) The Muslims in Iraq have the practice of marriage among close relatives, with the high rate of serious birth defects that affect the offspring of such unions.

The Muslims Prouse dealt with were clearly aware of the connection between the high rate of infant deformities among their clans and inbreeding, yet they were determined to continue in the 'old' ways. When you connect this suicidal practice with polygamy, you can see why I titled a post The Name of the Four Horsemen's Squire is Polygamy. I was not taking dramatic license; I was stating a bald fact.

However, the other option is that the Muslims who cling to suicidal practices will be destroyed without the values of Western civilization coming out a winner. The means of destruction could be devastating to all. The ancestors who watch over this race are terribly ruthless, Annlee. They have to be. I am reminded of that every week while taking in the grim lessons of Meerkat Manor.

It is the survival of the human race that is important to the ancestors, not the religious beliefs and secular values of the civilizations we have raised up. For as I've warned before, our ancestors did not claw their way out of the trees to see their descendants give up -- or commit suicide. One way or another humanity will be snatched from the jaws of annihilation, but some ways are unbearable for all but the cruelest to ponder.

Yet humanity is always in the position of Youssarian, the strangest meerkat in Flower's clan -- strange because he is so terribly human in his thinking.* For weeks we assumed that he was a neurotic idiot, only to discover that his strangest actions were a desperate, compassionate attempt to ward off wholesale infanticide. Yet for the survival of the clan, Flower could not allow all those grandchildren of hers to live.

On the other hand, Flower's decision to move the clan to another burrow instead of outright slaughtering the babies, and her daughter Daisy's attempt to save two babies, suggest that Youssarian's bid for compassion was not entirely ignored.

As above, so below. The dilemmas of those tiny creatures, their attempts to balance highly socialized 'family' values with the demands of survival, mirror our own dilemmas. Humanity, gifted with the awful responsibility of conscience, does not have much choice in certain matters except to muddle through as best we can, and pray the outcome brings the balm of hope.

* If you have not watched the Meerkat Manor series from the beginning, trying to understand Youssarian is akin to trying to comprehend Hamlet if you haven't seen his encounter with the ghost.

I think Pundita once confessed to her readers that she is a very nervous person. My extreme nervousness, which is legendary in some quarters, has caused people who give dinner parties I attend to warn the other guests, "If you happen to drop your napkin while seated at the table, for God's sake explain why you're leaning over and add that you don't have a gun strapped to your ankle."

I bring up the topic of my fragile nerves because on Thursday evening I sent Annlee Hines notice that I'd republished portions of her essay. I added that I did it because I needed shoring up due to my fear that there would soon be another terrorist attack on American soil. Annlee replied with what I guess she assumed were soothing words of comfort --

"Pundita,
I worry as well, on about three seemingly disparate fronts. One is the Mideast, of course -- I think the Israelis must suck it up and finish the job this time. It won't come cheap, but peace never does, as TigerHawk pointed out in his series of essays on deterrence. I think this is the first: How "proportionality" destroys the best chance for peace.

A second front is the descent into madness in Scandinavia in particular, Western Europe in general. Since I know you read Gates of Vienna, you've no doubt read Fjordman's series, as well as the other posts there. The canary not only stopped singing in the mine, he's dead -- toes up and feathers falling out -- but the governments continue to pretend we all hear the carols, still. I guess I'd call it the Emperor's New Ears Syndrome.

Finally, when order collapses, legitimacy takes time to become established -- and the ones who generally get there fustest with the mostest are those with the least regard for the rule of law. On a macro scale, that would be the transnational crime syndicates. Will they offer to clean up the neighborhoods and will the governments accept (since it relieves them of dirtying their lily hands)? Or will the criminals perceive an opportunity to "invest" in gratitude and move in on their own, thereby banking a little moral credit with the locals by making the trains run on time, as it were?

But what happens when the amoral bad guys and the super-moral bad guys collide over the same turf? Between criminals and Christians, I'd bet on the criminals. Between criminals and Islamofascists ... I would have to bet on who has the better armament, but I'd shade my bet on the new fascists. After all, dying in the fight is a win for them: "I was running for my life, and you were only running for your dinner," to recall the child's parable. The stakes will be uneven, favoring deep evil over petty evil (and isn't that a heck of note -- when the transnational thugs are the petty evil of our times?).

We have paid the Danegeld too many times already -- and if the price is too high now as a result, we have only ourselves to blame for the bad guys expecting the status quo we allowed them to have. I don't remember how I stumbled over to this blog. The writer at Treppenwitz makes the point that while we are not responsible for the evil others do, we are responsible for not doing what we could have to prevent more. So now we must do even more, as evil has learned to expect a chump change price.

The alternative to the bleatings of the proportionalists and cease-fire mavens? Remember Churchill. And Maggie. And Patrick Henry. And Sp4 Pat Tillman. And --

Only we can cause our defeat. If we live up to our heritage we cannot lose.

Hang in there. Friday's almost here.
Annlee"

Actually, I had not read Fjordman but it so happened that when I popped over to Gates of Vienna to find the series I came across the latest guest entry by the very same Fjordman titled Norwegian Authorities Still Covering Up Muslim Rapes

[. . .] In 2001, two out of three charged with rape in Norway’s capital were immigrants with a non-western background according to a police study. Norwegian women were victims in 80 percent of the cases.

Unni Wikan, a professor of social anthropology at the University of Oslo, in 2001 said that “Norwegian women must take their share of responsibility for these rapes” because Muslim men found their manner of dress provocative. The professor’s conclusion was not that Muslim men living in the West needed to adjust to Western norms, but the exact opposite: “Norwegian women must realize that we live in a Multicultural society and adapt themselves to it.” [. . .]

The number of rape charges in Oslo has continued to rise, reaching record levels in 2005. There is ample evidence of brutal gang rapes, something that used to be rare in Scandinavia, being committed by immigrants against native girls. For instance, 21st of July 2005, three men were charged with gang raping a 15-year-old Norwegian girl, who was dragged into a car while waiting for a bus at the bus station in the town of Fredrikstad. All the men were of “foreign origin”. Such cases have become almost routine.

The only possible explanation for why we are no longer presented statistics showing the percentage of immigrants involved in this is that the authorities are covering it up. Usually, this would have made the media call for the government’s resignation. This has not happened, although I know several journalists have been reading the posts I have made about this topic, both in English and in Norwegian. [. . .]

Some Pundita readers were upset when I verbally patted the air in response to Michael Ledeen's honest, angry letter about European appeasers, which I published on this blog last year.

I think there is nothing more dangerous than a European looking for a scapegoat. Let's face it: it wasn't the descendents of Mohammed who launched pogroms and set up the Nazi death camps.

The problem is that the Muslim immigrants from the poorest classes -- just those Muslims in Europe who are putty in the hands of Iranian and Syrian instigators -- don't know where the trip wire is for Europeans.

So I venture the warning given by the Treppenwitz writer would be misapplied if taken beyond the Israel-Hezbollah conflict. Everyone in the bar watching the pounding the Marine got, and the Marine himself, shared the same referents. Everybody knew where the invisible line was.

Some would argue that the instigators want the Europeans to explode and crack down hard on the Muslim immigrants, as a means to further radicalize the poor in Muslim communities across the globe. That view assumes there would be many Muslims left in the wake of the European idea of harsh retaliatory measures.

I suppose Ledeen would still argue that the post- WW2 Europeans came to place the desire for a comfortable life above all other values. Maybe so. But the concept of values applies to rational thought. Once the wire is tripped, one is in a purely visceral realm.

Speaking of the rising tide of European concern about their Muslim immigrant populations:
In Neutral Switzerland, A Rising Radicalism: Islamic Extremists Newly Seen as Threat
By Craig Whitlock
Washington Post Foreign Service
Thursday, July 20, 2006; Page A14

BERN, Switzerland -- For centuries, this Alpine nation has successfully relied on a strict policy of political neutrality to insulate it from the wars, invasions and revolutions that have raged outside its borders. These days, a new threat has emerged: one from within.

As they have elsewhere in Europe, Islamic radicals are making inroads in Switzerland. Last month, Swiss officials announced the arrests of a dozen suspects who allegedly conspired to shoot down an Israeli airliner flying from Geneva to Tel Aviv. In a related case, a North African man has been charged with organizing a plot from Swiss soil to blow up the Spanish supreme court in Madrid.

For years, even after the Sept. 11, 2001, attacks in the United States, Swiss officials assumed that their country was one of the last places Islamic radicals would look to attack. Long considered a slice of neutral territory in a world full of conflicts, Switzerland trades on its status as home to the International Committee of the Red Cross and other diplomatic institutions.As the global jihad movement becomes more decentralized and fragmented, however, Swiss security officials are warning that their country could become a target.

In an intelligence report completed in May, the Swiss Federal Police reversed previous assessments that the domestic risk of terrorism was nearly nonexistent. The report concluded that Switzerland had become "a jihadi field of operation" and predicted that terrorist attacks were "an increasing possibility."

"It would be dishonest to say that these groups are ready to act in Europe but that Switzerland is an island and that these groups could not be active in Switzerland, too," Jean-Luc Vez, director of the federal police, said in an interview here in the Swiss capital. "It is very, very important for us to say this to the Swiss politicians and the Swiss people."

The changes in Switzerland mirror those in other smaller European nations that, until recently, didn't see themselves as likely targets for Islamic terrorists.

In Sweden, another country with a long history of neutrality, prosecutors last month convened a top-secret closed trial of three terrorism suspects in the southern city of Malmo. Authorities have not identified the suspects or disclosed any evidence. But Swedish media have reported that the arrests were made at the request of British counterterrorism investigators.

In Denmark, counterterrorism authorities say they remain on high alert after a Danish newspaper printed cartoons of the prophet Muhammad that spurred boycotts, death threats and violent protests in Islamic countries.And in the Netherlands, the Dutch government has classified the risk of a terrorist attack as "substantial," a threat level proportionally higher than in the United States, where homeland security officials judge the risk as "elevated." The Dutch government established its threat-ranking system in November 2004, when an Islamic radical killed the Dutch filmmaker Theo van Gogh.Like Denmark, the Netherlands has contributed troops and other support to U.S.-led military campaigns in Afghanistan and Iraq. But until the van Gogh killing, Dutch officials had played down the threat of terrorism at home.

Since then, the number of Islamic radicals in the country has increased, as has the number of fundamentalist imams who are seeking to recruit new followers, said Tjibbe Joustra, the Dutch national coordinator for counterterrorism. He said international conflicts such as the war in Iraq are fueling the problem, although the Netherlands has also been polarized over its difficulties in assimilating Muslim immigrants.

"I'm afraid we are seeing an increase in radicalization in the Netherlands," Joustra said in a telephone interview. "In their search for motivation and their search for reasons to radicalize, they are no longer looking so much at national issues as international ones."

Jacques Pitteloud, a former coordinator of the Swiss intelligence agencies, said that in the past Swiss officials were primarily concerned that outside radical networks might try to use the country as a logistical base to raise money or support operations elsewhere. Most terrorism suspects arrested or questioned after Sept. 11, 2001, were foreigners just passing through.

That has changed recently, he said. Most of the suspects in the Israeli airliner case, for example, are immigrants who were granted Swiss residency."We might be facing a new era in homegrown terrorism," said Pitteloud, now the director of the Center for International Security Policy, an arm of the Swiss Federal Department of Foreign Affairs.

"We don't feel like we are a primary target, but in the end, Switzerland is a symbol of quite a lot of things that radical Islam hates."

Officials worry about attacks on foreign embassies and institutions in the country.

An estimated 350,000 Muslims live in Switzerland, constituting about 5 percent of the population. Swiss officials said they have done a better job integrating foreigners into the population than other European countries and have fewer radical mosques and organizations.

But "we have seen early signs now of anti-Swiss propaganda on the Internet," Pitteloud said. "We have our fair share of radical Islamists, there is no doubt, many of whom we don't know what to do about because many of them are refugees and we can't just kick them out.

"Swiss lawmakers are considering a proposal that would allow police and the domestic intelligence service to tap the phones of suspected radicals or access their computers, even if there is no evidence of criminal wrongdoing. A similar measure was rejected last year in the Swiss parliament.

Andreas Wenger, director of the Center for Security Studies at the Swiss Federal Institute of Technology in Zurich, said the warnings from Swiss intelligence and security services have been slow to register.

"Part of the political spectrum in Switzerland still has the feeling that because we are neutral and not associated with great power politics, that we are less likely to become a target," Wenger said. "The public perception is behind other European countries, most definitely."

Vez, the federal police chief, said domestic spying restrictions have hurt Switzerland's ability to swap counterterrorism intelligence with its allies. "The biggest problem has been the sharing of information with our partners in Europe," he said. "Intelligence-sharing functions like a market. 'If you want something from me, you have to give me something.'"

Switzerland effectively had to build a counterterrorism program from scratch after the Sept. 11 attacks. It keeps a national database of radical suspects, but the watch list is not easily accessible by many police agencies.In October 2004, Spanish authorities announced that they had broken up a plot by a cell of Moroccan radicals to drive a truck bomb into the National Court building in Madrid. They identified the leader of the cell as Mohammed Achraf, 31, who had sought asylum in Switzerland and been jailed two months earlier in Zurich on minor charges.

Spanish authorities said that Achraf organized robberies in Switzerland and funneled cash to Madrid to finance the plot, and that he continued to plan the attack even while he was locked up in a Swiss jail.Swiss officials said they didn't realize at first that Achraf, who used several identities, was a suspected radical or that he was under investigation in Spain. Achraf has since been extradited to Madrid. He was indicted in March along with 31 other defendants.

In June, Swiss prosecutors said Achraf had been in contact with a member of the cell that had "the serious intent" to shoot down the Israeli plane.Investigators have released few details about the alleged plot, and it is not known whether it had progressed beyond the planning stages. Swiss and Israeli news media have reported that the Israeli airline El Al canceled flights from Geneva to Tel Aviv for a week in December 2005 after it was warned by Swiss counterterrorism officials.

Prosecutors said that the cell consisted of about a dozen members and that it committed robberies throughout the country and transferred money to other cells in Spain and France. Cell members in those countries were arrested about the same time as part of a coordinated international investigation.

Seven suspects in Switzerland are being held in preventive detention, while four others have been released, said Hansjuerg Mark Wiedmer, spokesman for the Swiss Attorney General's Office. None of the suspects has been publicly identified. Under Swiss law, they can be held indefinitely without facing formal charges since they represent a flight risk, Wiedmer said.

Hans Hofmann, chairman of the intelligence oversight committee in the Swiss parliament, said the arrests showed that the country was vulnerable.

"Swiss intelligence is realizing that you can't just sit back and cross your arms and say, 'We're not a target because we're a small country,'" he said. "Switzerland is no longer able to exclude itself from the rest of the world in the face of a globalized threat."

Midnight Update
Whereupon Dymphna weighs in with a few pithy comments in response to this post--

"[. . .] The Baron loathes the concept of proportionality and for his rant on its ultimate stupidity, he also designed a graphic to go with it. See post here. [. . .]

Switzerland must be suffering from a severe case of hubris. Considering the fact that Said Ramadan, the son of the founder of the Muslim Brotherhood, moved there in 1961 and that Said's son, Tariq Ramadan, did much of his proselytizing in Switzerland.

Switzerland has been asleep at the wheel for a long, long time. I think when they do finally wake up, we'll see some spine stiffening of the first order, though. I hope.

What the Swiss don't get is that it's not 1945 anymore. Jihadists don't recognize neutrality. [. . .]
Dymphna"

A few nights back John Batchelor recounted on his radio program that his Russian contacts predict the US will be forced to attack Iran by October. I suspect the prediction is tinged with wishful thinking on the part of Russia's military. (How cool would it be if we solved their Iran problem for them?!) And I am not sure why the analysts see October as the drop-dead date for US military action against Iran.

In any case, I think it's safe to assume that on whatever date Iran feels they've been backed into a corner they will throw everything they have -- or, more precisely, every group of terrorists they control -- at the United States and our allies in the war on terror.

So I found myself recalling The Worst of All Possibilites, a guest essay written last year by Annlee A. Hines. This seems an appropriate time to review her major points:

[. . .] we have far more spectators than players in this universe. We prize rule of law, and (I believe) rightfully so. But a comment made about the overemphasis on law made me think: lawyers, by training, want to minimize, if not outright eliminate, risk for their clients.

Sometimes, like the soccer player meeting the ball rather than avoiding it, we ought to mitigate risk rather than minimize it. But only those who are, or have been, players understand that.

Those who have only been spectators see only the risk and want it eliminated. Being spectators, they don’t understand that it can never be eliminated.

How much of our conflicts about the direction America should take are like that disconnect between the players and the spectators? How much is about the desire by those who are not actually responsible -- and thus, have nothing to lose by being wrong -- to have perfection, a total elimination of risk, a situation of not one mistake being made?

Those who are, or have been, players know that what you see from the sidelines is a wholly different perspective from what you see on the field; the angles of view are simply too divergent to see the same situation in the same way.

Further, the player is right there in the middle of it; he or she must make a choice and live with the consequences. The spectator can critique the consequences of someone else’s choice and even replay the contest, thanks to modern technology, pointing out how the player should have seen this and done that.

The players may have a chance later to review but are too busy dealing with the consequences of their choices, and the choices of the other players, to kibitz during the heat of contest.

And only the player really understands that the outcome of the game is a result of the choices made by all the players in the game, our side and their side, too. [...]

The stakes are fully as high now as they were in the 1930s -- and at times, we are still voices in the political wilderness because the old appeasement crowd has not been swept out entirely, especially, as Pundita reminds us, from Foggy Bottom.

We may take breaks, we may rest at half-time, yet it needs to be a half-time of our choosing and no one else’s. We must stay in the game or we shall cede the field. When we cede the field to the appeasers it’s only a question of “How long?” before they cede the entire match to the enemy. In seeking to avoid the worst they lead us to the worst of all possibilities.

The enemies we face today, whether Islamic fascists or transnational organized crime syndicates, despise the very things that define democracies, and so we are truly in a fight for our survival. Winston Churchill had some advice in 1941 about how we should wage such a fight:

“Never give in -- never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honor and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy."

This is also a good time to review the points in Annlee's Planning for Survivable Networks. The book is full of anecdotes about companies that did well, and did poorly, in the wake of the 9/11 attack and other disasters. I note that Annlee does not sit in the bleachers:

The book opens with the author being rocked by a terrorist-caused explosion . . . the bombing she survived occurred at Ramstein Air Base in Germany, 20 years before. A retired Air Force officer, she has dealt with threats all over the world for many years. Her direct command and control experience has taught her many lessons, which she shares with the reader . . .

The quote is from the John Loftus report, July 26, on John Batchelor's show. Remember the show is available on satellite radio if your local ABC station does not carry it. Keep your ears perked to the war reports because things are now getting very dicey with regard to Iran's part in the Hezbollah-Israel conflict.

Did Susan Schwab think up that word?

US won't dump WTO talks, but path unclear -- Schwab
By Doug Palmer
Reuters via The Washington Post
Wednesday, July 26, 2006; 6:26 PM
WASHINGTON (Reuters) - The United States is strongly committed to reaching a new world trade deal, but two days after talks were suspended the way forward is unclear, the top U.S. negotiator said on Wednesday.

"We're ... 48 hours away from the crisis, the breakdown, the deadlock, the explosion," U.S. Trade Representative Susan Schwab said in her first U.S. press conference since a weekend meeting meant to save the world trade talks ended in failure. "Feelings are a little raw," she said.

The trade round, officially known as the Doha Development Agenda, was put into a deep freeze on Monday after the G6 group of key trading partners failed to agree on how far to cut farm subsidies and tariffs. In the aftermath, the United States and the European Union have swapped charges about who was most to blame. [...]

"The Doha round is obviously in serious trouble, but it isn't dead yet and the United States has no intention of abandoning the Doha round," Schwab said.

Schwab said she would travel to Brazil on Thursday to talk with Brazilian Foreign Minister Celso Amorim about "what happens next." The two agreed shortly after the failed meeting in Geneva that "we had come too far to abandon all the work we had put into (the world trade talks)," Schwab said.

Over the course of an hour with reporters, Schwab suggested it could take as long as three years to bring the talks to a successful conclusion or as little as six months.She also gave no clear indication when the Bush administration would seek a renewal of trade promotion authority, which expires July 1, 2007.

That legislation allows the White House to negotiate trade deals that cannot be amended by Congress and its expiration has always been seen as the deadline for the global talks.

It took the Bush administration nearly two years to win trade promotion authority after President George W. Bush came into office in January 2001. Getting an extension could be even more difficult if Democrats win control of Congress from Republicans in the November congressional elections this year.

"If by the spring of 2007, we have the outline of an Doha Round that is an attractive package ... it would seem more likely that we get a positive reception to a TPA (trade promotion authority) vote," Schwab said.

But differences over farm subsidies and tariffs may be so intractable, trade promotion authority might have to expire before countries get serious about negotiating, she said.

Schwab said it was time to move past "blamemanship" for the Geneva meeting, but several times let her annoyance with EU Trade Commissioner Peter Mandelson show.

"I'd love to swing at that one. I just can't. I'm sorry," Schwab said, when asked about a report that Mandelson had urged Bush to veto any extension of current U.S. farm subsidies.

She brushed off suggestions that a personality conflict with Mandelson might be an impediment to a deal.

"None of this stuff is personal ... I have a very different style than he does, and that's fine," she said.

"Dear Pundita:
Regarding your theory that Iran wants to dispose of Hezbollah. I don't agree, but assuming you're on the right track, could it be that whatever Iran originally had in mind, they seriously underestimated the response and now they're locked in a proxy war with Israel? A war that is building to an Armageddon-like exchange with Israel?
Joseph in Phoenix"

Dear Joseph:
Confucius must have had a saying to cover your question, but I assume that Iran’s military has war-gamed the kind of scenario you imagine and found it does not inspire confidence among their major trading partners. If there is one thing Germany, China and Russia hate it’s mess.

As I’ve indicated before, Iran has everything to gain by presenting their nuclear program as reasonable -- even though nobody outside Iran believes it to be reasonable. But as long as they keep up an act, the world community is nicely boxed in. They would have to drop the act if they set off Armageddon.

But then miscalculation becomes a potent force in any war and can overtake all planning. So we watch and wait and keep our ears perked during the war report segments on John Batchelor’s radio program. So far, John Loftus and Aaron Klein's reports have been on the money.

And don't miss Batchelor's latest column for The New York Sun titled War Elephant. One can only hope that Europe will somehow overcome their 20th Century history and prove Batchelor wrong in this case.

I am not sure why I found the following report hysterically funny. Maybe it's because there has been so much fighting at the WTO meetings about subsidy reductions. I mean, if nobody ever knew how much subsidizing was going on, how did they ever imagine they'd work out equitable deals?

Or maybe it struck my funnybone because Lamy sounds so earnest when he observes that one can't forge deals in the absence of information. But dagnabbit they somehow managed to wrangle for years in the absence of reliable data.

The whole thing reminds me of the tea party in Wonderland.

Humans. God might not like us but He'll never forget us.

Bloomberg News via International Herald Tribune
WTO sees discrepancies in subsidy data
Published: July 24, 2006

(GENEVA) The World Trade Organization said Monday that it had little reliable data on how much money governments spend subsidizing farmers and industries like steel, mining or banking, complicating efforts to simplify trade.

Under WTO rules, governments must submit details of their subsidy spending each year. In practice, though, fewer than half of the Geneva-based organization's 149 members do so, and even then, there are discrepancies with national spending.

There is "an extraordinary paucity of reliable and systematic information on subsidies," Pascal Lamy, the director general of the WTO, said in a 223-page report.

"It is simply impossible to make good policy or to forge mutually beneficial international cooperation in the absence of information."

The most recent available data at the WTO show that the United States spent on average $16.3 billion annually in aid from 1998-2002. That is less than half of the $41.5 billion reported in national accounts for the four-year period, the WTO said.
Japan, for the same period, reported $4.2 billion to the WTO of a total $34.3 billion actually spent on aid, according to the report, while the European Union reported $96.3 billion of $109 billion.

Still, the WTO's subsidy data do show that the world's 21 most industrialized nations account for $250 billion of the $300 billion spent annually in 69 countries on subsidizing their industries. That amounts to 1.4 percent of developed economies' gross domestic product and 0.6 percent for emerging nations.

Patrick Low, director of economic research at the WTO, said that while it was clear that subsidies to farmers were falling, the same could not be said of mining, coal, forestry, shipbuilding and carmaking industries where government support was "most pervasive."

On subsidies to services like banking or tourism, "we know almost nothing," he said.

"The data is very incomplete," Low added.

". . .the withdrawal of Syrian troops from Lebanon last year -- following huge anti-Syrian protests in the wake of Lebanese ex-Prime Minister Rafik Hariri's assassination -- changed the balance of power. The assassination has been widely blamed on Syria. Damascus denies responsibility, but the Syrian withdrawal helped Hezbollah become the most powerful military force in Lebanon, and increased its political clout." *

"Dear Pundita,
Regarding your opinion that Iran is treating Hezbollah as a pawn that they decided to sacrifice [by encouraging them to escalate attacks on Israel]. Where did you get that strange idea, may I ask? I haven't found anything in published reports on Hezbollah and their relationship with Iran to support your thesis.
Khalil in Toronto"

Dear Khalil:
Read published reports on Hezbollah's relationship with Syria, not Iran, to follow my line of reasoning. And recall that Iran's military has a tendency to dispose of puppets that jerk too hard on their strings.

The popular wisdom is that Iran, feeling pressured by the UNSC, encouraged or instructed Hezbollah to yank Israel's beard; this is explained as the means for Iran to show the world they have muscle. That's convoluted logic, to my mind. Iran has everything to gain by pouring oil on troubled waters and stalling for time -- strategies that have served them well in their negotiations with the E3 about Iran's nuclear program.

Enter the hamfisted machinations of Assad's security apparatus, which led to Hariri's assassination, which led to a blowout that undercut Syria's power seat in Lebanon. Hezbollah has maintained that they're just keeping the seat warm for Syria but in the process they have gained tremendous power for themselves. Indeed, before they escalated their low-intensity conflict with Israel, Hezbollah was inching closer to pressuring the United States to recognize them as a legitimate political power.

Then suddenly Hezbollah seemingly acted with gigantic stupidity. The only way the situation stacks for me is that Nasrallah knows he would live two days if didn't do what Tehran asks. The question is why Tehran would want to rock the boat in the Middle East at this time, which only further alarms the UNSC.

One way the situation stacks is if Nasrallah's recent actions suggest the same pattern that occurred with Zarqawi and various Iraqi clerics that Iran controlled: When they became powerful figures in their own right Tehran egged them to greater excesses, then farmed out their assassination.

Of course, there are other explanations but if I have erred, I have erred on the side of respect for the enemy. Among too many Western analysts I find there is a persistent habit of underestimating the enemy; the habit is rooted in condescension, to my mind.

But I will admit that Pundita's Sahib-0-Meter is so sensitive that it has a hair-trigger needle. The needle flew into the red range when I read analyses that posited the underdog mindset of the Shia Muslim as the reason for Hezbollah's escalated attack on Israel. In other words, the little brown people -- once finding a huge, historic political victory in their grasp -- just couldn't resist blowing it because they love being martyrs.

Thank you but Pundita prefers her own version of events.

* From a primer on Hezbollah

Dymphna writes about the hymen restoration industy for Muslim women in the US. She also got hate mail. You go, girl! If you really tick off the creeps they'll start an anti-Dymphna blog but there I go, boasting again. Where is my Puffy Head Minder?

The following conversation with "Michael Wright" took place last year shortly after the scope of the disaster from Hurricane Katrina became evident. I think I might have cribbed from the discussion for a couple posts related to Katrina's aftermath but I don't think I published the conversation. Parts of the discussion would leave new readers at sea unless they first boned up on the China Mystery Disease posts. But I’ve spruced up the transcript and publish it now because it touches on so many Pundita themes that it makes a good review.

Michael Wright: Is there anybody [connected with foreign aid and development projects] you don’t see as a crook who hasn’t . . . been caught?

Pundita: It’s nothing personal. It’s that I adhere to the Las Vegas casino manager’s rule when large amounts of money are sloshing around.

MW: They’re all crooks by the fact of walking in the door. You know too many World Bank stories.

P: Well, talk to the World Bank. If you don’t assume that everything on the project right down to the wing nuts will be stolen your oversight mechanisms will be grossly lacking. From there, it’s guaranteed you will be picked clean. You won’t have even a phone so you can ask for replacement parts. They’ll even steal the wall calendar so you can’t report what day you were robbed.

MW: [Laughing] I think -

P: You’re laughing because you think I’m stretching a point.

MW: The problem is that those things happen in other countries; they can’t happen here, not in modern America.

P: Yes. That’s the mindset that has to be overcome. Talk to hotel managers in Las Vegas. Customers will carry out the bathroom fixtures. I don’t mean the towels; I mean they’ll walk off with the plumbing if given the chance.

MW: But would [the "not in this country" mindset] carry so far as to put thousands in harm’s way?

P: Not intentionally but many ‘will’ themselves to overlook the obvious because these kind of things don’t happen in America, as you say - at least, they don’t happen in modern America. That mindset makes people sitting ducks for the law of unintended consequences [as happened with President Bush’s initially slow response to the Katrina disaster].

If you switch to a wide angle lens when studying the situation, you come away with the distinct impression that a very limited set of considerations could have set in motion a wide array of reactions that were greatly out of context to what was going on.

MW: By “wide angle” you mean --

P: Take the mysterious pig disease that struck China last year, which touched off dire speculations it was an epidemic that could mushroom to a pandemic affecting the entire globe. If you took the reports at face value, you’d be examining factors that pertain to disease. But you need to place the reports within the context of China’s political climate and where they are on the development curve.

Once you do that, you’re bringing in many more factors to examine. For example, the state of the pork industry in China, the tremendous importance that pork meat now has in globalized trade, the improvements in disposable income - globally more people can afford to eat more meat - and the dearth of land in many regions that makes pig breeding more feasible than cattle breeding.

So then you look around for a precipitating factor. Did anything happen in the pork industry around the time of the pig disease outbreak that could have touched off a kind of range war in China - a pork producers or pork processors war?

I’m not saying that’s what happened. Yet it’s something you have to look for, when faced with reports of the threat of a global outbreak from what could have been a highly infectious lethal disease - a new strain of lethal disease, no less.

Michael Wright: If you’re in government, the military, you have to make critical lightning fast decisions when there is almost no hard data….

Pundita: Well, there was some hard data. If history is a guide, that’s why John Loftus got the nod from his contacts at CENTCOM and/or the CIA to talk about the scare stories. Something very strange, very ominous, was going on in Sichuan province.

It was a situation that bore close watching and might have required a rapid, draconian response from the US government. Yet there was not enough data to get a handle on what was going on, much less make an official announcement or take overt diplomatic action. The world press quickly picked up on the pig disease outbreak, at least China’s official version, so a warning was put out.

But yes -- megapopulations stuffed together in close proximity in key trade regions and military base sites mean that governments have to be very quick on their feet about even the hint of a highly infectious disease outbreak. You don’t have the luxury of waiting for events to unravel and reveal a clear picture. SARS taught us that.

MW: On the other hand, if you react too quickly or with the wrong response, hundreds of millions [of dollars] are down the tube and entire economies can be plunged into chaos.

P: Exactly.

MW: So [with the pig disease] you were looking at it as a case study: “Welcome to the 21st Century.”

P: Yes, and possibly, “Welcome to the next level of information warfare.” There is some suggestion that whatever was going on in China, elements in the PLA [People’s Liberation Army] seized on events to deliver a scary warning to Japan and the US and even North Korea about their bio-war program. Remember, this situation blew up at a time when the US was engaged in saber rattling and Japan was dropping hints that they were considering re-arming in a big way.

MW: Then again, the pig disease could have been a biowar experiment that got out of the lab. Yet the thing that hit me hardest, as your essays piled up, was that it wasn’t necessarily a disease. It could have been an illness brought on by some kind of poison or toxic substance.

P: We didn’t know what the heck it was and still don’t. All that was known for absolute certain at the time was a biomedical scientist with a vested interest in vaccine development [Henry Niman] had read the worst possible into the Wang Boxun interview and the other anecdotal accounts of the outbreak.

MW: [He saw] a doomsday combination of Ebola virus and a mutation of H5N1.

P: Don’t forget bubonic plague was also in the reported mix! Let’s not neglect Dr. Wong-Wang’s fan club. But getting down to the rock bottom of what was actually known was not easy, which is why I took my readers on that merry chase through data-land.

MW: Niman could be right, though, if Wang was on the level.

P: You bet. So if you’re in government, you can’t afford to take a wait-and-see attitude before arriving at decisions on how to proceed in an early phase of a threat assessment. You have to run all the possible scenarios -

MW: But make sure to use a wide-angle lens.

P: Actually, you’d need IMAX [3D] lenses because you might not necessarily get enough clues by focusing only on the pork industry. China is awash in chemical pollutants from industrial byproducts and industrial accidents. There was no real regulation for decades. The symptoms of the pig disease could match those of poisoning from some types of toxic waste. So you’d need to examine that angle also.

Also, if you’re looking at the pork industry, you have broaden the search to include the stock and commodities market; look for a big stock offering around that time that was somehow connected with China’s pork industry. Look for big short selling of pork belly futures, and so on.

You’d want to look at all the most well known types of scenarios and see if they could somehow connect with the pig disease outbreak. If you stay focused on trying to figure out whether the reported disease is what China’s government says, you’re running in circles. The government provided no medical evidence to back up the strep suis diagnosis they put out, which does not jibe with key reported symptoms, the high death toll, and other factors.

MW: There was the outbreak, and the attempt by China’s government to cover up the outbreak. It was about a month before they officially acknowledged the outbreak, which only fed the rumors, which fed riots and distrust of the central government.

P: It was a textbook situation. Johnson & Johnson faced the situation in the 1960s. Contrary to myth their initial reaction was to downplay the threat from the cyanide-laced Tylenol capsules. That decision cost lives. So that’s how they learned. They did an immediate recall of all Tylenol bottles. Then they dealt with the entire situation down to the atomic level. That is how they restored faith in the Tylenol brand and saved the corporation.

MW: That should be required reading for all governments at all levels.

P: Oh yeah. You don’t want to think about how many lives would have been saved, and how many governments would have been spared, if the Tylenol crisis were a required study for bureaucrats the world over.

MW: But J and J knew exactly where to focus their search - Tylenol capsules - and what the agent was. China’s government might not have known what was going on and its exact locus.

P: All the more reason to tell China’s pork industry to go sit on a tack, if the industry was putting pressure on Beijing not to scare people off pork. There are times when it is best to yell, “Fire!” even if you only smell smoke. Johnson and Johnson learned that in the hardest way. They figured it was a homicidal maniac who reasonably couldn’t open bottles in stores far from the locus of the first attack. On paper the reasoning was correct. But they didn’t know where bottles could travel to once bought, and they had no idea how many bottles had been tampered with.

MW: You can’t fine-tune the assumptions at the early stage so you have to explain that to the public and hope they’ll understand if your direst warnings don’t pan out.

P: Yes, but I don’t think hope floats very far in this context. People in the USA have gotten used to ‘blanket’ product recalls when there is a machinery malfunction or health threat. People don’t stop buying cars or GM products if GM has to do a recall. If it keeps happening a lot - well, that’s a different story. But people aren’t idiots unless you train them to be. Sure, if you have a history of not telling anything unless it’s wrung out of you, then people will panic if you get honest all at once. So you have to factor that in -- make sure that the first announcement goes very thoroughly over the ground. Then update frequently.

MW: They can’t do that in China because many people still don’t have radios -

P: Aw, c’mon. Every village has at least one working radio. And they have colored cloth and flagpoles. You can work out a signal system. And guess what? At least one person in every village in China is literate and they have newspapers in China.

Instead, Beijing launched the ‘From the Moon’ means of informing citizens about a health crisis. First, take time to print up brochures. Then send out from Beijing 50,000 health workers to go knocking door to door all over China.

MW: I wonder if FEMA was taking notes. I think every village the world over with satellite reception has been glued to the communal television since the flooding began in New Orleans.

P: One good thing to come out of Katrina is that the chaos graphically illustrates to the poor in the developing world that they’d better stop depending on the United States to solve their problems.

MW: You’ve given the same warning countless times on your blog.

P: Sometimes readers get mad at Pundita for being mean; my mean mode is the best I can do because I can’t shake [the world] by the shoulders and yell, “Wake up!”

Times change, weather patterns change, things happen out of the blue. America is a great country but in the wake of Katrina the world has seen “that America is only the land of the half rich” as a British commentator put it.

MW: Not even half rich; I don’t think peoples in developing regions fully grasp that most of the Americans rushing to do volunteer work in the hurricane strike zones and give money to Katrina’s victims are not rich.

P: Time the world came to that grasp. Many people have a view of America that was handed down to them by parents who saw America’s largess during the Cold War era. Through the World Bank and other means, we gave billions to regimes that were willing to stand against Soviet expansion. We built them however many palaces and Sahib Zones they wanted. We made generations of elites filthy rich and did the Bread and Circus thing for countless poor. We also did much genuine good for countless poor.

MW: We came to be seen as gods and just as feckle and mysterious.

P: Pretty much so. Because of that [the US concept of] democracy became a mystery too. So I hope the people in lands such as Iran and throughout the developing world continue to stay tuned to their satellite TV stations. Watch as we recover from Katrina and rebuild. If they don’t see with their very own eyes how things work in a democracy, and that even a great democracy is very imperfect and always a process in motion, they will never get the idea that democracy means government by the people.

MW: I think the same lesson needs to be impressed on many Americans. It amazes me how people in Louisiana kept voting in administrations that they knew were corrupt then complaining about the corruption.

P: Sounds like the feudal serf mentality. Maybe it’s a holdover from thinking that arose from the plantation era. That thinking should have died out but maybe it was kept alive or resuscitated by an extensive welfare state. Whatever the story in Louisiana, I think it’s true that many Americans still tend to see democratic government as the country squire.

MW: I think we’ll be learning a lot about Louisiana government in the coming months. You’ve written that many people in fledgling democracies remain willing to ditch democracy at the first stiff breeze. To a great extent they’ve idealized democracy or been told an idealized story about it.

P. Yes. Democracy is just a bunch of people in charge instead of an elite. A bunch of democrats can make mistakes too. You pick up and go on, try to correct the mistakes, not vote back a dictator when things go very wrong. People in nascent democracies can come to understand this in graphic terms if they stay tuned to the Katrina aftermath and the media keeps the story going.

MW: I think the media will do that, at least in other countries, because people can’t get enough of the story. Some of it’s gloating, of course -- all-powerful America shown to be just like everyone else in many ways. But much of it is fascination, suspense. It’s a great drama and it’s been one cliffhanger after another.

P: I see coming down from the mountain as a good thing for American foreign policy and the world. America is supposed to be the world leader, not the Wizard of Oz. You need to see the leader, see how he acts under pressure, if you are to learn to follow his lead. You can talk all you want about democracy; people need to see how the gizmo works to understand what you mean.

MW: You think people in poorer countries can relate better to the Katrina disaster than to 9/11?

P: Oh, definitely. There were not filmed images of bodies littering the streets after 9/11 chiefly because anyone caught in the collapse of the Trade Towers was pulverized. I know that grisly point is very hard for an American to think about, but you need to put yourself in the place of a villager in Asia, the Middle East or Africa who is living in monsoon, earthquake or tidal wave alley.

How to put this? Most people in the world have not had a skyscraper collapse in their immediate vicinity. But the images of New Orleans were something many people the world over could relate to. In fact, several reporters on the scene said it looked like Bangladesh after a flood. That’s right. And Bangladesh after a flood looks like many places in the world after a flood or earthquake.

People watching the TV could see wrecked domiciles, survivors crying for help -- just go down the list; everything they saw, many people the world over could relate to in a very personal way. And coming so soon after the televised images of the Tsunami devastation, they could relate even more. So I believe that for the first time, many people feel a connection with Americans -

MW: Is that why you were so angry about DOS [US State Department] rejecting offers from aid from some countries?

P: I was angrier than I can remember being in a long time although I could have predicted State’s reaction. But I was angry for a lot of reasons. It was the final straw for me with DOS. They are - I think that agency is beyond redemption or repair.

MW: But a lot of it is isolation, tunnel vision; they probably didn’t even consider that people the world over were watching and feeling sympathy.

P: Yeah. Try to imagine being Cuban, Iranian, Venezuelan or Russian when the President of the United States stands up to thank the list of nations who gave -

MW: And not hearing your name called. The gifts should be accepted in the name of the people in the countries.

P: Exactly. Many of the donor nations are dirt poor. [But what did [the rejected nations] hear from State? “Your donation is not even for garbage because you are Cuban or Iranian; you’re not even fit to give.”

Imagine how you would feel. State just never stopped to think how the refusal would be perceived because there is nobody home at State to think. There is a Zombie, which was set in motion during the Cold War. The only thing Zombie knows how to do is bury the Soviets. A million years from now, there will be this creature still after the Soviet Empire. Put it in a rocket ship; it will hunt Soviets on Mars.

Michael: I know you’re not happy with the State Department -

Pundita: And not just a garden-variety zombie. This is Super Zombie; the Teflon Zombie. Do you ever hear any reporter going after State? No. It’s always the Congress or the White House … now I’ve lost my train of thought - where were we?

MW: I think we’d decided that all things equal, it was best for at least the poorest people in the world to see Americans at their most human. The Leftist press and governments with an ax to grind are excluded.

P: Well, they can try spinning this any way they please; it will backfire although they can’t see this now. Same with Abu Ghraib. At first they were dancing on the ceiling to see what Americans had done. Then came the inquiries and the arrests and prison sentences. So then the people watching their state-controlled TVs said, “Whoa. That would never happen in our country.”

That’s when coverage of Abu Ghraib was yanked in places such as Iran and China.

The silver lining to Katrina and the awful initial government handling of the evacuation, which began days before the hurricane struck, is that all peoples with access to satellite TV now have a common reference point. Conceivably that will save countless lives down the line, provided governments learn the lessons paraded across the TV screen.

Parade Magazine Intelligence Report
Is America Stingy?
By Lyric Wallwork Winik
Published: July 2, 2006

When it comes to foreign aid, the U.S. government ranks near the bottom: Based on percentage of gross national income given to impoverished countries, we’re No. 21 out of 22 among donor nations-barely ahead of Italy. (After World War II, the U.S. gave 15% of its budget; today, it’s less than 1%.) Meanwhile, the world often sees the military as our main form of global outreach.

“People are calling America stingy,” says foreign-aid expert Carol Adelman, who created the Index of Global Philanthropy for the Hudson Institute. “But Americans give abroad the way they do at home: through private institutions.”

Adelman’s new index calculates that Americans -- from the superwealthy to those with modest means -- donate more than 3 1⁄2 times what Washington gives. Private gifts topped $71 billion in 2004 (the latest figure available), including $442 million for global health from The Bill and Melinda Gates Foundation. Created by the software mogul and his wife, the foundation has given $6 billion to date to help eradicate diseases worldwide. On a smaller but equally effective scale, community foundations like one in San Diego give “microloans” and grants to help entrepreneurs start small businesses in Mexico, China and elsewhere.

Many Americans find ways to give other than cash. The CEO of Overstock.com created Worldstock to help poor and disabled artisans sell their crafts worldwide. Architecture for Humanity creates shelters after wars or disasters. A Methodist Church near Baltimore built a home for AIDS orphans in Namibia.

Does all this private giving let Washington off the hook? No. And Carol Adelman says the government could learn a lot from the private programs, which -- to get money and volunteers -- have to prove that their projects work.

“Public - private partnerships between government and charities would more effectively use every dollar of [federall] aid,” she adds.

If anyone has data to indicate that private - public partnerships for dollar foreign aid (versus loans and cash equivalent projects) are less prone to theft and waste than federal aid, Pundita would dearly love to see the reports.

I'd like to see American professional fundraisers turn their awesome skills to raising donations from the wealthy in countries that chronically need massive infusions of aid. And publish the refusals on the Internet.

Crisis in Lebanon may Threaten Other Regimes in the Region
Foreign News Desk
Tuesday, July 18, 2006
Zaman.com

"Israeli attacks on Lebanon have divided the Arab world as to its position with Hezbollah.

The crisis will seriously affect the balance of power in the Middle East, and it will enhance Iran’s influence, Hezbollah’s “principal supporter,” in the region.

US allies -- Egypt, Saudi Arabia, and Jordan -- hold Hezbollah responsible for the crisis, while Sunni populated Arab countries support Hezbollah.

The recent developments are believed to widen the gap between Arab governments and their citizens.

New York Times reported that Saudi Arabia, Jordan and several Persian Gulf states chastised Hezbollah for “unexpected, inappropriate and irresponsible acts” at an emergency Arab League summit held on July 16 to discuss the “Lebanon” crisis.

The newspaper described Arab leaders’ criticism of Hezbollah, instead of blaming Israel, which has been killing civilians in Lebanon, as “unusual.”

The shift in attitude was attributed to the “Iranian threat,” although hostility towards Israel has escalated following the Israeli attacks on Lebanon and the Gaza.

Shiite influence on balance of Powers

Washington’s pressure to “oppose Hezbollah” is a significant factor in the Arab leaders’ stance against the Hezbollah.

Furthermore, New York Times claimed that if Arab governments continue to ignore the public opinion, they may face the danger of “being overthrown.”

The British newspaper Times wrote recent clashes will affect the power balance in the region deeply.

Clashes between Israel and Hezbollah will also affect not only Israel but also pro-Western countries such as Saudi Arabia, Egypt, and Jordan as well, the news reads, adding that countries with substantial Shiite majority like Iran, Iraq, Lebanon and Syria, make a “Shiite crescent.”

Iran gains prestige in the region

Los Angeles Times put Syria and Iran on one side, Egypt, Jordan, Saudi Arabia, and Gulf countries, which are concerned about increasing Shiite influence, on the other.

The newspaper qualified Shiite Hezbollah as a significant factor in this division.

Widespread Sunni public support for Hezbollah opens a new avenue for Iran, Hezbollah's principal patron, the paper wrote.

Mouin Rabbani, a Jordan-based analyst with the International Crisis Group, told the paper that Sunni leaders are concerned that Shiite influence may increase if Shiites seize power in Iraq.

LA Times wrote that Hezbollah has gained popularity in the recent crisis, and added even in the predominantly Sunni Syria people are carrying posters of Nasrallah on car and shop windows.

Imam Hamdi, a political scientist at the American University in Cairo, told the paper, “Hezbollah managed to do something for Palestinians that all the Arab governments with their huge armies haven't been able to. It very much discredits these regimes in the eyes of the people.”

Pundita is tuckered from a weekend keeping up with the news from St. Petersburg and the Middle East. Four posts up yesterday; this will be the only one for today.

ST PETERSBURG, Russia (Reuters) - U.S. Trade Representative Susan Schwab will fly on Monday to the headquarters of the World Trade Organization in Geneva to seek progress in talks on the Doha round of free trade talks, her spokesman said.

"President (George W. Bush) made it clear he wanted a robust Doha round and Ambassador Schwab is going to meet with some of her counterparts to work on a breakthrough," spokesman Sean Spicer said in an e-mail sent to Reuters.

"We hope other nations will match the bold offer that the U.S. has on the table."

Pundita thinks the Bush team can continue to hope unless they grapple with the fundamental issues driving the Hong Kong 100 revolt.

In other news related to the G8 summit, AP put out a report on the energy statement that emerged from the meeting which was prominently featured on AOL business news yesterday and today. The slant is typical of mainstream reporting on Russia. The writer barely waits one paragraph before using the G8 statement to bash Putin's government. Here's a representative passage:

Concerns over Russia's reliability as an energy supplier were highlighted after an ugly New Year price fight with Ukraine saw supplies to Europe disrupted when Moscow temporarily switched off the gas to its ex-Soviet neighbor.

That led to criticism that Russia had destabilized European energy supplies by using its vast energy clout to punish Ukraine's western-leaning government, and highlighted Europe's dependance [sic] on Russia for a quarter of its oil and gas.

The report does not mention that the WTO ordered Russia to end their big energy subsidy for Ukraine as a precondition for the US dropping objections to Russia's joining the WTO.

Russia's attempt to suspend the subsidy predictably ticked off Ukraine's government, which created a backlash against Russia in Ukraine and Western Europe, which is just what the Get Putin factions wanted.

The kicker is that the US wasn't even interested in the economic benefits of ending the subsidy. They saw the subsidy as a means by which Russia maintained influence in Ukraine and they wanted to block that avenue.

If you ask what that has to do with trade -- Washington has politicized the WTO to such an extent that the poorer countries finally rebelled, which by many twists and turns is how we find Bush calling for a last-ditch effort to save the Doha Round.

If you have a hard time believing that grown men and women in our government could act in such fashion -- I believe situations like that caused Stephen Cohen to charge that Washington has launched a cold war against Russia.

Those grownups in Washington are puppets for US and Euro lobbies that want a big piece of Russia's energy sector, and/or their strings are pulled by China lobbies, which want to keep Russia off balance. Or they live in fear that the Soviet Union will rise again. If they keep trying to destroy Russia their fear will come to pass.

What really ticks me off is having to defend Putin, who is a sarcastic cuss. His remark about not wanting Iraqi-style democracy in Russia was below the belt but as usual he thought he made a bon mot. There is not much worse than a Russian technocrat who fancies himself a wit.

Oh wait I can think of something worse. Front organizations for Russian gangsters that advertise themselves as democracy advocates.

[. . .] the failure to achieve Chapter 7 status for the resolution -- the use of military force to make sure it is obeyed -- leaves the door open for a debate about whether its provisions have real teeth or are just a bark.

It was notable yesterday that Russia and China were staying silent on claims by the US, Japan and Britain that the resolution was "legally binding".

The answer to the latter question is probably nothing. The absence of an official sanctions committee to monitor compliance with the resolution and report on any breaches is a significant weakness that leaves the measure prone to abuse.

US ambassador John Bolton tried to put a positive face on this yesterday when he said: "You can have this kind of resolution without going through the normal sanctions kind of regime."

Yes, you can -- but it won't do you much good when it comes to a multilateral response against those prepared to assist rogue states such as North Korea to spread their weapons of mass destruction.
-- David Nason, The Australian

Let's face it. Paris Hilton's Chihuahua has more teeth than this resolution and frankly Ms. Hilton is more skilled at striking deals than Christopher Hill, the lead US envoy to the North Korea non-talks.

All I can add is that we need to find a way to stop Robert Zoellick from frolicking with a panda again the next time he visits China.

We need a deputy secretary of state who is aware that no amount of trade with China will change the nature of their government or loose their hold on North Korea -- and who advises the secretary of state accordingly.

The quote is from Dan Riehl, who writes with wonderful common sense about the strides toward lasting peace that have been made in the Middle East since the US put a big footprint there.

"Pundita:
Sam is asking if you've noticed a war has broken out in the Middle East.
Not Born Yesterday in New York"

Dear NBY:
Well, this is not so much war as bailing water. By now the leaders in Hezbollah and Iran's military know President Bush well enough to be certain that there is a certain inexorable quality about statements in his Axis of Evil speech. Iran thought they could simply wait out Bush's presidency.

Then Israel disengaged from Gaza; that, in combination with the erection of a wall meant that it was very hard to attack Israel except by the means of rockets. And disengagement left Fatah, Hamas, Hezbollah and countless drug runners and smuggling gangs in a struggle for power. It's not been lost on the world that the stuggle is not helping the Palestinian masses one bit.

In short, Hezbollah was useful to Iran before Israel's disengagement from Gaza; now they are a liability. We've recently seen how Iran sacrificed another pawn -- Zarqawi, who at least had the sense to know when he was targeted by Iran. But Sheikh Nasrallah looks like one of those guys who believes in following his paymaster's instructions all the way to the bottom. In any case Hezbollah is going out with a bang -- shooting off as much of their arsenal as they can before Israel's military kills them.

Pundita does not live in a cave. It's just that I remember to look over my shoulder when taking in the day's war news. Iraq is mostly peaceful. Afghanistan is mostly peaceful. Arafat is dead. Saddam Hussein is behind bars. Syria's Assad is on the ropes. Al Qaeda is on the ropes.

And the Iranian military were forced by the successes of the US in Iraq to promote a hardliner for their national leader. So they finally revealed to the world the true face of Iran's government. What's more, Iran's support of Hezbollah, a Shia organization, has now made them very unpopular wih their Sunni neighbors. In case you've forgotten, the Shia are an island in an ocean of Sunnis.

In fact, the US-led war against the terror masters is going swimmingly well. Yet the Iraq stock market index will have to rival the Dow Jones, and Israel and Iran will have to dance together at each other's weddings, before Bush detractors abandon the Baghdad Bob routine.

Russia is the largest economy outside the WTO, and the United States remains the only country with which it has not yet reached a deal on accession to the 149-nation organization

It still looks as if the talks will be sewed up with three months. As for the mention of March as the accession date -- I'll take Minister Lavrov's word on how long it will take to wrap up the rest of the red tape but I would like to see things move as quickly as possible. It's really insulting to the Russian people that the WTO entry process has been dragged out by Russia hawks in Washington. But I see that Lavrov is putting a diplomatic face on the matter.

Russian FM Lavrov denies stalling of WTO talks with US
STRELNA (near St. Petersburg), July 16 (RIA Novosti) - Foreign Minister Sergei Lavrov on Sunday denied reports that the latest round of bilateral negotiations with the United States on Russia's accession to the World Trade Organization had been a failure.

The talks, held near St. Petersburg Friday ahead of this weekend's Group of Eight summit, produced no final deal on Russia's admission to the world's largest trade body, primarily over disagreements over Russia's barriers to U.S. beef and pork. But substantial progress was reportedly made on other contentious issues, including copyright law and sales of manufactured goods.

Speaking at a news conference on the sidelines of the current G8 summit, Lavrov said: "It was decided to continue the talks, to complete them in October, so that the issue of Russia's WTO accession can be resolved by March."

"We have more than once found ourselves in a situation where our American partners are not ready to make a definitive decision. The U.S. government is a complex mechanism. So I would not over-dramatize the matter," the minister said. "Of course, it would be good [for Russia] to join the WTO, [thereby] securing an advantage for some of our economic sectors. But we have other opportunities to develop our economy."

Lavrov also said Russia was ready to discuss additional requirements for accession to the WTO, but only on the condition of reciprocity.

"We will not take on additional commitments, outside WTO standards. We will discuss broader, non-standard, requirements, if our partners reciprocate."

Russia's economics minister, German Gref, on Saturday called U.S. meat imports "the main stumbling block" in the WTO accession talks. He said Russian negotiators had refused a U.S. demand for an immediate increase in beef and pork imports before a review of the American veterinary control system, due to be finished in October. But the protection of intellectual property rights was no longer an issue in the talks, he said.

Russia is the largest economy outside the WTO, and the United States remains the only country with which it has not yet reached a deal on accession to the 149-nation organization.

Bush will get the deal through Congress. Price for Russia? High.

Bush, Putin unveil nuclear plans at G8

[. . .] The goodwill exuded by Bush offset Russia's disappointment at failing to get a deal with Washington that would pave the way for Russian entry into the World Trade Organisation.

That fell through after negotiations that went early into the morning failed. "There is more work to be done," Bush said. But the two sides subsequently agreed to set a deadline to wrap up talks within three months. [. . .]

Well, it's that time of year again. I see things are off to a rollicking start:

Bush snubs Putin by meeting opposition groups first According to the (London) Times Online, "President Bush reinforced his concerns about his Russian counterpart's record on democracy today when he went straight to meetings with local activists on his arrival in St Petersburg for this weekend's G8 summit."

So now the only suspense about this year's G8 meeting is whether:

> President Bush's speechwriters will give into temptation and insert nasty comments about Russia's government into his speech at the summit, and

> The arrival of the lead US trade negotiator in St. Petersburg signals that the USA is finally withdrawing objections to Russia's entry to WTO.

We might even see a breakthrough announcement at the summit about Russia's bid to enter WTO. That's provided President Putin heeds Pundita's earlier advice to speak in Chinese-accented Pidgin English while in the presence of American journalists, President Bush and other American statespeople.

For readers who can't quite aurally visualize -- I don't do this well without a couple beers in me but it goes something like, "We try hard to make like America wish for WTO. We work hard make you proud and make you a lot of money."

None of the intellectual crap that Putin and his ministers tend to haul out. (E.g., "Do you understand you're practicing a double standard with our entry requirements?")

And no more Russian folk sayings. The one Putin let fly about an eating wolf not listening is silly. How many wolves has Vice President Cheney or anyone in Washington for that matter actually met with in the wilds? So how would they understand the metaphor?

Just suck it up and try to sound as Chinese as possible so we can finally see an end to the charade about WTO requirements for Russia.

I interject that I want no more letters expressing irritation at Pundita for insulting the Chinese people. I'm not insulting them; I'm paying tribute to shrewdness.

Chinese who speak Oxfordian English have learned to revert to Pidgin while in negotiations with the US Department of State and answering US congressionals who are angry about China's record on human rights.

Why do Chinese with excellent English do such a thing? Because they've learned to communicate in the results-oriented style so dear to the hearts of US diplomats and elected representatives.

Just think how much misunderstanding President Putin could have avoided if he hadn't tried to explain when President Bush asked him last year why he'd suspended elections for Russia's governors.

Instead of giving a history lesson Putin should have replied, "We make elections again when Russia governors no longer make their own foreign policy and rig elections. This will be soon after I finish making examples of the worst cases."

And if Putin must explain, follow the advice that a Pundita reader offered last year: Keep to a metaphor that Americans can emotionally connect with; e.g., "Russia today is like Chicago in the 1930s."

Now, with regard to reporting on the G8 summit: Peter Lavelle left Moscow earlier this week for St. Petersburg but it seems his television commitment and other reporting duties are taking priority over his Untimely Thoughts blog. So you might have an easier time finding his G8 summit commentary and interviews by watching his TV show.

The show ("IMHO") airs every Sunday during the last 15 minutes of every 'even' hour. You can watch the show on the Web at russistoday.ru (click Watch RT now). The site is free.

Also, John Batchelor announced that Steve Cohen will guest next week to comment on US-Russia relations at the G8 meeting. This is a good place to mention that if you have not yet read Dr. Cohen's June 21 essay on Washington's undeclared cold war I urge you to read it, if only as a guide to the shark-infested undercurrents at the summit.

My only quibble with Cohen's observations is that he is another one who tries to explain. Granted, because he's a good professor he can break things down so even an idiot can understand. But after all these years of speaking God's Truth about Russia and not being heard by Washington and their lackeys in media, he should rethink. The problem is not so much political or even traced to greed for control of Russia's energy sector. The problem is epistemological.

For that reason Pundita stood and applauded the other night when Steve simply said to John Batchelor's audience: Russia is holding all the cards in this new cold war.

That's right. Russia is no longer jockeying with the US on NATO terms; they're cozy at home in their own turf, Central Asia. Germany won't hesitate to fold on this one. So Washington should act like smart big boss. Not play pair of twos against full house. Do the same two-faced thing we did with regard to China; first admit Russia to WTO then make stringent demands on Russia's government. Pass the soy sauce.

"An export credit agency is an agency of--or backed by--a government. Usually overseen by the finance, trade, or economics ministry, an ECA uses taxpayer money to make it cheaper and less risky for domestic corporations to export or invest overseas. Almost all industrialized nations have at least one ECA.*

Pundita, [re post on crony capitalism]. You asked what the government could do to help countries move toward genuinely competitive capitalism. For starters the US and other G8 governments could deal with the worst excesses of their export credit agencies.
Mark in Long Island

Dear Mark:
You are opening a big subject. If Noam Chomsky is right in his assessment that ECAs are de facto welfare for corporations, I doubt our elected officials and representatives will want to rein them in -- not unless enormous pressure is applied from the voter. However, Pundita is not knowledgeable enough about the subject to say whether I agree with Chomsky.

In any case, ECAs influence a government's foreign policy and this is done outside the spotlight of public scrutiny. And they are on record for financing highly questionable and even discredited development projects in the world's poorest countries.

So let's introduce the other readers to the arcane world of export credit agencies. Wikipedia flatly states that their very short article on the topic needs to be expanded by an "expert." So far there have been no takers.

I include a link to the Wiki article because it contains a handy reference list of the world's most well known export credit agencies. But let's start our journey of understanding with a dramatic story from a highly informative (although clearly biased) article on ECAs written for the layperson. It’s titled Worse Than the World Bank? Export Credit Agencies -- The Secret Engine of Globalization from the Winter 2003 issue of The Backgrounder.

“ . . .one of the most important benefits that corporations are receiving from ECAs is not financial backing at all--but rather political backing. Corporations prize the political power that comes with an ECA loan, guarantee, or insurance policy-- power that can be exerted on developing countries.

For example, after the electricity board of the Indian state of Maharashtra cancelled its agreement to purchase overpriced power from Enron's Dabhol power plant, the U.S. government exerted extreme pressure on the Indian government to pay, in a strategy coordinated at the highest levels of the U.S. government (the National Security Council) and involving even Vice-President Richard Cheney and Secretary of State Colin Powell.

The U.S. did not do this just to assist Enron, but also to protect the hundreds of millions of dollars in U.S. taxpayer loans and insurance that had been supplied by U.S. ECAs.22 According to the Associated Press, U.S. government threats have even included cutting off aid to India.”

That should be enough to whet your interest. Pundita suggests reading through the entire Backgrounder article, which contains some eye-popping pie charts. And don't miss the part about the ECAs leaving behind mountains of debt. But to get down to brass tacks:

[. . .] Indeed, the increasing role of ECAs in the global economy--directly backing hundreds of billions of dollars of international trade and investment and leveraging much more in purely private flows--raises the question of the extent to which government intervention through ECAs has actually driven the process of economic globalization.

Why ECAs Are Troubling
Not only are ECAs by far the single largest part of public financial flows from North to South, but as we will see, they are also the least examined, the least transparent, the least accountable, and, in some ways, the most harmful. Among the issues critics of ECAs raise are that they:

· Support destructive projects that even the World Bank will not touch
· Lack basic environmental, human rights, corruption, and other safeguards
· Undercut their governments' own developmental and environmental policies and multilateral agreements
· Contribute heavily to developing countries' debt burdens
· Have little or no transparency or accountability
· Provide corporate welfare by passing business' risks and losses on to unwitting taxpayers
· Contribute significantly to the arms trade, the expansion of nuclear power, and global warming.

The Beginnings of Change
Many nongovernmental organizations (NGOs) began to grapple with export credit agencies after discovering that they had become the principal financiers of the projects local communities in developing countries were battling because of environmental or social impacts, corruption, or other ills. A loose international network of NGOs and trade unions has grown rapidly over just the last three to five years, working on many of the issues discussed in this paper.

In 2000, 347 NGOs from 45 countries documented their calls for reform with a platform statement known as the Jakarta Declaration. NGOs have successfully campaigned to stop or delay certain ECA projects, such as the Maheshwar dam in India and the Ilisu dam in Turkey. And NGOs have forced a few countries to adopt some significant ECA reforms, at least on the issues of transparency or the environment.36

Moreover, every G8 communique' between 1997 and 2001 included language encouraging or mandating international negotiations towards multilateral environmental reforms for ECAs.

However, after nearly five years of these international discussions and negotiations (which take place at the OECD), governments have failed, and most countries have decided to implement a proposal that NGOs rightly regard as a total sham.37 (Negotiations are set to re-open later [in 2003].)

Moreover, attempts to address nonenvironmental issues surrounding ECAs--such as debt, corruption, and human rights, have either been similarly weak or simply nonexistent.

How Are ECAs to Be Dealt With? The Policy Debate
Many people favor eliminating ECAs, seeing them as socially harmful trade subsidies that benefit neither the ECAs' home countries nor the recipient countries. But if ECAs are going to exist, clear reforms should be the minimum price of their continued existence. At the very least, ECAs must abide by strict rules in order to prevent the crushing debt, human rights abuses, corruption, environmental damage, and other impacts that now frequently accompany ECA activities.

These rules would fall into three categories:

· Screens, assessments, and binding standards to ensure that ECAs do not support transactions causing environmental or social harm, labor or human rights abuses, and/or unjustifiable debt.

· Measures to prevent ECA support for transactions involving corruption.38

· Transparency, including consultations with potentially affected communities and other stakeholders and the public release of project information before a project's approval,and the release of data on the nature and extent of the ECAs' activities.

Governments should not support projects that devastate local communities and the environment and leave little behind besides a few well-lined pockets and mountains of debt. If they continue to do so through their ECAs, the most destructive chapters in the history of development are sure to be repeated.

What Can You Do?
Like other previously anonymous institutions (the World Bank, IMF, WTO, etc.), ECAs will never change unless and until their impacts and their role in the global economic system are exposed and publicized. Otherwise, they will continue to operate in near-anonymity and obstruct any efforts for change. The time has come for ECAs to be dragged into the public light--and for us to demand change from governments, legislatures, the G8 and OECD, and ECAs themselves. ECAs must become accountable to the world.

1. To contact organizations working on ECAs. Visit eca-watch.org to find lists of nongovernmental organizations (NGOs) in over 30 countries working on ECAs.

2. For more information. Visit environmentaldefense.org/go/eca or eca-watch.org. Also, this backgrounder is drawn from a larger paper that you may wish to read to delve deeper into the subject. It is entitled "Globalization's Most Perverse Secret: The Role of Export Credit and Investment Insurance Agencies," and it's available at environmentaldefense.org or new-rules.org.39

A word of caution about the author's use of the World Bank as a comparison: The Bank is one among many development banks. So to attempt to view the perceived sins of the EFAs against those of the World Bank doesn't convey an accurate picture of the damage that 'bad' development bank projects and programs have done.

*From the Backgrounder report.

Africa usually makes it into US headlines on the strength of bad news so Pundita yearns to leap for joy when a ray of good news on Africa escapes to the front page. But after a few years of Africa watching, one learns: Africa is Africa. Drought, blights, tribal wars, vast wealth up for grabs, a rigid pecking order, ruthless contempt for those at the bottom of the rung. Yet if all that provides the warp of Africa's weave the irrepressible creativity, entrepreneurship, and pluck of Africa’s people is the woof.

I thought of the weave while reading this week's Sunday Washington Post's front page (early edition, I think) story In War-Torn Congo, Going Wireless to Reach Home -- For Poor, Cellphones Bridge Digital Divide by Kevin Sullivan. The article is quite long but because I am reluctant to inflict the Post's registration process on Pundita readers I republish the entire report in a Pundita post all its own.

If you are interested in bringing democracy to rural areas of the world, the impact of cell phone technology on the lives of the poorest, or just hungry for good news about Congo during their post-war era, you will be riveted by Sullivan's well-written article.

But there is a problem with the report: Sullivan's description of the World Bank-led $200 million program to buy back guns and retrain the Congolese warriors who laid down arms. It is too hopeful and in stark contrast to the UK Guardian Observer’s July 2 on-site report, Congo's jungle terrorists disband by Rony Carroll. The report is a typical mixture of good and bad news from Africa: The brutal mayi-mayi militia has disbanded but now faces the wrath of the civilian population they ravaged for a decade. Carroll passes along short words for the vaunted Bank-led program that Kevin Sullivan found hopeful:

In recent weeks other [former mayi-mayi] commanders have led barefoot bands to demobilisation centres which are supposed to distribute clothes, blankets, a radio and $110 (£60) to each combatant, the prelude to vocational training and transition to civilian life. Despite $200m of World Bank funding, the demobilisation is a shambles, say UN officials. Kits and cash are being delivered late or not at all and few of the promised courses in baking, tailoring, farming and mechanics have materialised. Many of those who surrendered, in effect, have been abandoned.

I think the truth of the situation is somewhere in between a shambles and a positive development, but I present the other side to underscore the care needed while interpreting news from Africa. Here is part of Kevin Sullivan’s account about the same program::

. . .[cell phone] technology is also being used to create peace, as with a program to disarm more than 150,000 men and women who fought in Congo's gruesome war.

One recent morning in downtown Kinshasa, Fiston Disundi walked up to a little white Celpay cash point booth and handed over his government ID.

The woman in the booth entered his ID number into her cellphone and sent a text message to Celpay's computer database. Ten seconds later the response came back. Disundi, 27, was a former soldier who had turned in his AK-47 rifle in January. That meant he was entitled to a monthly $25 cash payment, which she promptly handed over to him.

The World Bank, Britain, France and other big donors have put up $200 million for the year-old program, designed to turn Congo's warriors into wage earners. So far more than 75,000 people have handed over their guns in exchange for job training and a cash incentive: an initial $110 payment, followed by monthly $25 payments for a year.

Initially, clerks using thick account books with handwritten entries were having trouble making the thousands of payments efficiently. So, in February the program contracted with Celpay to modernize the process.

Disundi said when he received his first two $25 payments, he waited nearly six hours in long lines while clerks dug through record books to find his details. But when he went to the Celpay booth recently, the transaction took less than a minute. The system also confirmed that Disundi was where he was supposed to be: Ex-combatants must agree to stay in their home regions rather than gathering with others in hotspots. [. . .]

So it would seem that at least the buyback portion of the program is having success in areas where ex-combatants have access to Celpay (Sullivan describes the company in the article). This leaves the job training aspect of the program up in the air.

The warp is not so easy to spot in a report that Dymphna at Gates of Vienna blog found a few weeks back at the Acton Institute’s Power Blog. She sent the article with the careful observation that the news looked “interesting.” On the surface, the report seems good news:

Ecumenical News International (ENI) relates the launch last month of a new initiative in Africa, designed to “to mobilise a strong African voice in development.” The effort is called African Monitor and is led by the Anglican Archbishop of Cape Town, South Africa, Njongonkulu Ndungane.

Anyone who spends much time at all looking at the economic development situation in Africa quickly realizes the lack of independent, nongovernmental, native voices. As African Monitor states, “This African civil society voice can thus be seen as the too often missing ‘fourth piece of the jigsaw’ alongside existing stakeholders of donor governments and institutions; their African counterparts; and donor-based NGOs and civil society.”

African Monitor’s mission is to begin to fill this need: “African Monitor is an independent body, acting as a catalyst within Africa’s civil society, to bring a strong African voice to the development debate, and to raise key questions from an African perspective.” The initiative represents a truly unique and much needed enterprise, since before the creation of African Monitor “there was no existing pan-African network that can provide such a catalyst across the sub-Saharan region, and taking a perspective across aid, trade, development and financial flows.”

In his address before the opening of the group, titled, “Let African Voices speak out for effective action on Africa’s development,” Archbishop Ndungane emphasized the need for accountability and true follow-through on the part of donors and developed nations: “We saw that Africa’s grassroots voices, currently marginalised and fragmented, could be harnessed to pursue these ends, and that faith communities, the most extensive civil society bodies on the continent, could provide the backbone of networks to bring these voices into the public arena.” [. . .]

All very hopeful, to be sure, but there is a slightly different cast to the Africa Monitor’s reason for existence when we turn the keynote speech at the May launch of the first African Monitor workshop. From the wording, it sure doesn’t look like they’re trying for independence. It looks to Pundita as if the African Monitor was set up to monitor programs that the United Nations has approved as part of their Millennium Development goals.

In other words Pundita suspects the African Monitor is another front for the scoundrels at the United Nations. Of course that is prejudging but through bitter experience Pundita has learned to assign guilt at the beginning so she can be pleasantly surprised if a minor miracle occurs.

I will be happy to apologize profusely if I'm wrong on this one. But burned in my memory is a photograph of a plump, richly dressed African regional official beaming and accepting a UN-related award for a village development project. Behind her stood a group of unsmiling, skeletal-looking village women wrapped in rags.

This is a good time to remind Pundita readers of the Africa blogs by the courageous and hard-working Ingrid Jones. Ingrid is one of the 2005 winners of the prestigious Pundita Weblog Awards, which was given for her Sudan Watch blog (see sidebar). But Ingrid covers more than the situation in Sudan. If you also want to keep abreast of human rights-related events in Congo, Ethopia, Niger, and Uganda, stop first at Ingrid's blog by that country's name, which I will be listing on the sidebar when I snatch a moment.

Congo Watch
Ethopia Watch
Niger Watch
Uganda Watch

Why don’t we end on a hopeful note by taking a gander at pictures of the first working model of the $100 laptop for the “One Laptop Per Child” program, which Ingrid posted at her Niger blog here.

This post is a companion piece to the other Pundita post today, Interpreting Africa news: neither sing nor cry. Here I republish Kevin Sullivan’s article in its entirety, I consider it that important. An armload of roses to the Washington Post editor who featured Sullivan's eport on the Sunday Post’s (early edition?) front page.

In War-Torn Congo, Going Wireless to Reach Home --
For Poor, Cellphones Bridge Digital Divide
By Kevin Sullivan
Washington Post Foreign Service
Sunday, July 9, 2006; Page A01

["]KINSHASA, Congo -- Until not long ago, if Zadhe Iyombe wanted to talk to his mother, he had to make the eight-day boat trip up the Congo River to the jungle town where he was raised. In a country with almost no roads, mail or telephone system and a grisly guerrilla war raging, making that exhausting and dangerous trip was about the only way he could find out if his 59-year-old mother was still alive.

Then he got a cellphone.

Now he talks to his mother every day. And once a week, with a simple new feature in African cellphones, he uses a text message to transfer five minutes of airtime to her phone to make sure she can always call him.

"Now I know immediately how she is doing," said Iyombe, who lives here in the capital, 400 miles southwest of his mother's home. "These phones make everything easier. It has totally changed life in Congo."

As surely as the light bulb and the automobile before them, the cellphone and text messaging are radically changing the way people live in the developing world. In widespread use for about five years in much of Africa, technology long taken for granted by the world's rich has made life easier, safer and more prosperous for the world's poor.

For the first time, millions of Africans are able to communicate easily with people who are beyond shouting distance. Farmers and fishermen, for example, use text messaging to check market prices, eliminating middlemen and increasing profits -- and preventing long trips to the market on days it is canceled.

In cities, cellphones are becoming a basic tool of electronic commerce, allowing consumers to transfer money to merchants with a few presses on the keypad.

Restaurant owners now can advertise by sending bulk texts to their customers, promising something delicious for lunch. People call a doctor, mechanic or police officer instead of walking miles to find one. News of births, deaths and illnesses instantly reaches the farthest corners of the jungle, where mothers like Iyombe's struggle with the concept of their children's voices emerging from a little plastic box with buttons.

"Before, if you had a sick baby in the middle of the night, he could easily die," Iyombe said, holding the Nokia phone that has raised his ambitions and expectations of life. "Now you can call somebody to help."

Worldwide, there are more than 2.4 billion cellphone users, with more than 1,000 new customers added every minute, according to industry analysts. About 59 percent of users are in developing countries, making cellphones the first telecommunications technology in history to have more users there than in the developed world.

Cellphone usage in Africa is growing faster than in any other region and jumped from 63 million users two years ago to about 152 million today, according to David Pringle, a spokesman for the GSM Association, a trade group that represents cellular companies whose customers account for 80 percent of the global total.

Few places are seeing faster growth than Congo, which has 3.2 million cellphone customers and just 20,000 conventional land lines. At least 8,000 new cellphone customers sign up each day here; the number of users has increased more than tenfold in the past five years.

When one of Congo's first cellphone networks opened in 1999, it had capacity for 4,000 customers, but 30,000 people lined up outside the office demanding a phone, said Gilbert Nkuli, of Vodacom Congo, the largest of the five cellphone companies competing in the country's booming market.

Africa has attracted multimillion-dollar investments from many of the world's major cellphone companies, including Finland-based Nokia and U.K.-based Vodafone. Vodacom Congo is co-owned by Vodafone and a South Africa-based company, while Celtel, the second-largest provider in Congo, is owned by a Netherlands-based company that has operations in 14 African countries.

The two operators have built about 700 cellphone towers across Congo. Vodacom's Nkuli estimated that 70 percent of the country's 60 million people now live in areas with cellphone coverage.

"People would rather be without a shirt and trousers," Nkuli said, "and they'd rather go for days without food, instead of not having a phone."

Dealing in Minutes
Down a rutted dirt road on the tattered outskirts of Kinshasa, Iyombe, 36, sat in the tiny two-room house he shares with his wife. He had been hoping for a career as an electrician, but when he finished his training in 2001, he couldn't find a job. The Congolese economy had been run into the ground by three decades of corrupt dictatorial rule by Mobuto Sese Seko. Then, after Mobutu was overthrown in 1997, the country dissolved into a war that has left 4 million people dead.

Amid all the despair, Iyombe spotted something new and promising: people carrying cellphones. The more he looked, the more he saw his future in the little gadgets. So he saved and borrowed, spending $500 for his first phone (the average price has since come down to about $40), and started charging people to make calls.

Now he's at the heart of Kinshasa's new airtime economy, in which minutes on a cellphone are a commodity that can be used, bartered or sold for cash.

In Kinshasa's noisy street markets, thousands of people sit at little wooden benches with signs that say appel , French for "call." They keep one or two -- sometimes four -- cellphones in their laps. They buy airtime in bulk from phone companies, then charge customers a small premium to make calls.

Amid the exhaust-choked chaos, airtime dealers sit patiently under colorful umbrellas or in wobbly plastic chairs offering exactly the same service as perhaps 30 or 40 other dealers working the same corner. They're all busy all the time.

At his little stand, which was the first one in his neighborhood, Iyombe said, he sells hundreds of calls a week and makes a profit of about $20 -- a fantastic weekly wage in a country where most people live on $1 a day. Iyombe supports his wife and pays rent for an aunt and school fees for two nephews. "I love my work," he said, wearing the bright red T-shirt of Celtel.

A large part of Iyombe's business is transferring airtime for his customers. They give him cash, and he transfers the minutes from his phone to wherever the customer wants them sent -- a friend, a relative or a business partner, often in some distant corner of this country the size of Western Europe.

The transfer takes only a few seconds: Iyombe needs only to enter the amount of airtime and the phone number of the person receiving it. Cellphone companies have added that function to phones in the past year.

Iyombe said many of his customers transfer airtime so that family members in the countryside can resell it. Customers in Kinshasa send airtime to a brother or parent in a distant village, who then sets up under a shady tree and acts as a human phone booth. They sell calls on their phone and earn enough cash to feed their families. In many Congolese villages, cellphone ownership marks the divide between haves and have-nots.

Iyombe said text messaging has been slowed by widespread illiteracy but has started taking off in recent months as people learn key words to text, such as "Call me." He said it is becoming more popular largely because a text message costs five cents, compared with 26 cents for a one-minute voice call. When his mother wants to talk to him, he said, she sends a text telling him to call.

"It was a little difficult getting her to use texts, but now she's very good at it," he said, smiling at the thought.

The demand for cellphone calls has sprouted several offshoot industries. For a fee, people type text messages for the illiterate. In places where there is little or no electricity -- which means most of Congo -- entrepreneurs set up small diesel-powered generators and connect plug boards with 30 sockets. People plug in their phones to charge for a couple of hours for about 30 cents.

Iyombe keeps his own small generator to make sure he's never without battery power.
"Without these cellphones, we wouldn't be able to move forward," he said.

Mobile Accounts
Iyombe spoke while sitting in the larger room of his house, which is just big enough for a bed -- and a television he bought in a cellphone transaction.

Last year he walked into an electronics shop in the city center and picked out the 20-inch TV. To pay, he punched a few buttons on his cellphone and transferred a down payment of $150 into the shop's bank account. The shopkeeper received a text message confirmation that the money had been transferred successfully, and Iyombe walked out with his new TV. Iyombe settled his bill with three more $50 payments via his cellphone.

"I went in empty-handed, but I could still buy something because I had my phone," he said.

Conveniences such as laptops, Internet access, ATMs and credit cards are rare or nonexistent in Congo, so entrepreneurs are devising ways to use cellphones to serve the same functions.

Iyombe is one of about 25,000 Congolese subscribers to Celpay, a company that offers Internet banking through cellphones. Celpay customers make cash deposits into their Celpay accounts and can access their accounts, transfer money or pay bills with their phones.

Dozens of businesses, including gas stations and grocery stores, now allow customers to pay for goods through Celpay. The company that distributes Coca-Cola and Heineken beer also uses the system to collect payment, which means drivers no longer have to carry a safe full of cash on their trucks and constantly worry about bandits.

When Iyombe wants to make a deposit to his account, he can go to one of more than 100 "cash points" set up across the country. Most are small booths with a person sitting inside with a cellphone and a cash box, known here as "human teller machines." Iyombe gives cash to the clerk, who sends a text message to Celpay noting the deposit. Iyombe then receives a text message confirmation that the money has been credited to his account.

Lazarus Muchenje, chief executive of Celpay, said his company is trying to capitalize on the Congolese embrace of cellphone technology: "We are using the credibility of the cellphone network." Celpay is owned by FirstRand Banking Group, a major South African financial institution.

At a busy gas station in Kinshasa, manager Tharcisse Tshimanga said he gets six or eight customers a day paying with their phones.

"People trust this," he said. "It's made everything easier."

Tool of Corruption, Peace
Cellphones have also created a new kind of corruption in a country rife with it: People here tell of government officials demanding bribes in the form of airtime transferred to their cellphones. Local officials said they believe armed rebel groups use cellphones and texts to coordinate their operations in the country's eastern provinces, where they fight regularly with 17,000 U.N. peacekeepers, the largest U.N. force in the world.

But the technology is also being used to create peace, as with a program to disarm more than 150,000 men and women who fought in Congo's gruesome war.

One recent morning in downtown Kinshasa, Fiston Disundi walked up to a little white Celpay cash point booth and handed over his government ID.

The woman in the booth entered his ID number into her cellphone and sent a text message to Celpay's computer database. Ten seconds later the response came back. Disundi, 27, was a former soldier who had turned in his AK-47 rifle in January. That meant he was entitled to a monthly $25 cash payment, which she promptly handed over to him.

The World Bank, Britain, France and other big donors have put up $200 million for the year-old program, designed to turn Congo's warriors into wage earners. So far more than 75,000 people have handed over their guns in exchange for job training and a cash incentive: an initial $110 payment, followed by monthly $25 payments for a year.

Initially, clerks using thick account books with handwritten entries were having trouble making the thousands of payments efficiently. So, in February the program contracted with Celpay to modernize the process.

Disundi said when he received his first two $25 payments, he waited nearly six hours in long lines while clerks dug through record books to find his details. But when he went to the Celpay booth recently, the transaction took less than a minute. The system also confirmed that Disundi was where he was supposed to be: Ex-combatants must agree to stay in their home regions rather than gathering with others in hotspots.

Sitting in the shade in the intense morning heat, Disundi, a thin man with a scruffy beard, said he'd been carrying a gun since 1997, when his parents were killed by a mortar shell that fell on their house. "I saw so many terrible things," he said. "I felt nothing anymore. I was just waiting to die."

He said he's relieved not to be carrying a weapon. He wants to become a mechanic so he can support his two children.

"I don't want them to go through what I've been through," he said.

He has no job and almost no money. But he has a cellphone, which rang over and over as he talked. [”]

Copyright The Washington Post 2006

Particularly upsetting to defenders of free markets is that crony capitalism gives capitalism a black eye wherever it goes....

One of the irritating habits of the American mainstream media is their insistence that President Vladimir Putin has been rolling back democracy in Russia. There never was democracy in Russia; there were crony capitalists managing a democracy stage show with the complicity of the USA and some EU governments. That has also been the case for much of the developing world.

I think you could graph the extent of US-backed crony capitalism in a developing country with the extent of anti-Americanism there. I'd say the same holds true for the connection between European-backed crony capitalism and anti-EU feelings. There is also a connection between anti-globalism and crony capitalism's worst excesses in the developing world.

Latin America is swerving left, and distinct backlashes are under way against the predominant trends of the last 15 years: free-market reforms, agreement with the United States on a number of issues, and the consolidation of representative democracy. This reaction is more politics than policy, and more nuanced than it may appear. But it is real.
--Jorge G. Castañeda
Latin America’s Left Turn
Foreign Affairs
May/June 2006

Okay, now we're ready to bone up on the meaning of crony capitalism:

[...] One legitimate reason for the opposition to capitalism in Latin America is that it frequently has been "crony capitalism" as opposed to the competitive capitalism that produces desirable social outcomes. Crony capitalism is a system where companies with close connections to the government gain economic power not by competing better, but by using the government to get favored and protected positions. These favors include monopolies over telecommunications, exclusive licenses to import different goods, and other sizable economic advantages. Some cronyism is found in all countries, but Mexico and other Latin countries have often taken the influence of political connections to extremes. [. . .] The excesses of cronyism have provided ammunition to parties of the left that are openly hostile to capitalism and neo-liberal policies. [...]
--Gary Becker
Moving Left in South America (*)
The Becker-Posner Blog
May/June 2006

There is more than one reason for Latin America’s leftward turn, and once you’ve read the essays by Castañeda and Becker in their entirety you'll be well positioned to grasp the scope of the trend.

What, if anything, can the US government do to help the most affected countries move toward ‘competitive’ capitalism?

I would prefer to see the Office of Business and Commercial Affairs removed from the US Department of State but at the least Congress could closely monitor it. The office puts US businesses in a position to influence US foreign policy outside the glare of the American public’s attention.

But I think the government is very limited in what they can do until more US voters get clear on the connection between anti-American sentiment and the neocolonialist outlook and actions of many globalized US companies.

Yet the worst offenders wrap their plundering in the language of free markets, globalization, and patriotism. Hey it isn't patriotic to rip off the world’s poorest with the help of their oppressive governments; it is damn stupid, in these days of portable nukes.

Ayn Rand would roll in her grave at such a distortion of capitalism's intention, which of course is free competition, not state control of the marketplace.

* Hat tip to the World Bank Group's Private Sector Development (PSD) blog for alerting me to Becker’s analysis.

"Everything that has happened runs counter to Hu Jintao's talk of democracy and governing by law. We live in a nation without law, a nation without morality."

While reading of the draconian official response to Chen’s whistleblowing I found myself recalling Thomas Pentagon’s New Map Barnett’s inane comment about China in his latest book: "China . . .is not really a threat to anyone except small island nations off its coast . . ."

I think there must be a special hell for China's American apologists.

Chinese to Prosecute Peasant Who Resisted One-Child Policy
Decision Reveals Growing Clout of Beijing Hard-Liners
By Philip P. Pan
Washington Post Foreign Service
Saturday, July 8, 2006; Page A12

BEIJING, July 7 -- The Chinese government is preparing to prosecute a blind peasant who exposed excesses by authorities in enforcing the one-child policy in eastern China, where local officials were accused by residents of forcing thousands of people to undergo sterilization or to abort pregnancies. The decision, disclosed by court officials Friday, follows a prolonged bureaucratic stalemate in the ruling Communist Party over how to handle the allegations in the city of Linyi, and it highlights the growing clout of hard-liners in the party since President Hu Jintao took office three years ago.

Chen Guangcheng, 34, the blind rural activist who drew international attention to a violent crackdown on unauthorized births in Linyi last year, is scheduled to be tried July 17 on charges of destruction of property and assembling a crowd to disrupt traffic, according to his attorney, Li Jinsong.

The charges stem from an incident in March in which Chen is accused of leading a protest against local officials who had illegally confined him to his house and who were beating villagers who tried to help him, Li and residents of Chen's village said.

Chen's trial could renew international scrutiny of China's population-control practices, and it represents a major setback for reformers in the government who have been trying to soften the one-child policy and eliminate the abuses long associated with it.

"There isn't much hope," said Chen's wife, Yuan Weijing, by telephone from the family farmhouse, where she has been detained. "Everything that has happened runs counter to Hu Jintao's talk of democracy and governing by law. We live in a nation without law, a nation without morality."

The U.N. Population Fund, which has a significant presence in China, has repeatedly raised Chen's case with the Chinese government, and senior U.S. officials have also pressed the government to release him.

In late May, two U.S. diplomats who tried to visit Yuan were physically removed from the village by local officials, she said.

Nearly a dozen lawyers from Beijing have also attempted to visit the village in recent months without success, and several have reported being threatened, detained or beaten by officials or thugs hired by them.

Li said police allowed him and a colleague to meet with Chen last month, but said they prevented them from discussing his defense. When they tried to visit Chen's village to interview his wife and gather evidence, thugs assaulted them and overturned their car, he said.

"They're afraid of information getting out," said Li, who recorded a death threat he received in Linyi, located 500 miles southeast of Beijing. "They don't want the leadership in Beijing to know the truth about what's happening there."

Before he was detained in September, Chen had tried to organize a class-action lawsuit against Linyi officials, alleging they were illegally forcing parents with two children to be sterilized and women pregnant with a third child to have abortions. Residents also accused officials of detaining and torturing relatives of people who fled the crackdown.

Chen's cause drew support from lawyers, scholars and civic activists across the country, and the government agency responsible for population policies in China, the National Family Planning and Population Commission, launched an investigation in August. At the time, a senior commission official, Yu Xuejun, said he supported the efforts of "ordinary people" in Linyi to assert their rights in the courts, and even offered to help them find lawyers.

A month later, the commission announced it had uncovered evidence of the abuses in Linyi and said some officials there had been fired and detained.

But local authorities fought back, placing Chen under house arrest and launching an aggressive campaign to damage his reputation and deny his allegations. Party sources said Linyi officials distributed a report in Beijing that portrayed Chen as a tool of "foreign anti-China forces," accused him of violating the one-child policy and made much of the fact that he had received overseas funding for his work as an activist on behalf of the disabled.

Linyi officials also lobbied the Foreign Ministry and the powerful Propaganda Department, which agreed to ban any discussion of Chen in the state media and the Internet, the sources said.

For months, the party appeared torn about how to proceed, but the decision to prosecute Chen suggests that the Linyi officials have outmaneuvered others in the government who wanted to use the case to send a strong signal to local officials that forced sterilization and abortion would not be tolerated.

The government has declined to say how many officials were punished in Linyi or to identify any of them, but a Beijing official said "very, very few" were disciplined and a journalist said he was told the total was no more than five. Li Qun, the party chief in Linyi, and other local officials also declined repeated requests for comment.

By linking Chen to hostile foreign forces, party sources said, the Linyi officials made it politically risky for anyone to intervene on his behalf. The national population commission, for example, rebuked Linyi officials and singled them out for criticism, but refrained from defending Chen or bringing the case to top party leaders, the sources said.

"In the current political environment, in this political system, no official has any incentive to help him," said one Chinese scholar involved in the case who spoke on condition of anonymity. "The risks to your career are great, and there's little to be gained . . . . So the conservatives have a big advantage."

Chen's case was also complicated by an internal party debate over the future of the one-child policy. Some party officials and scholars have urged the government to relax the policy, arguing that it now causes more harm than good and that China faces a retirement crisis as its working-age population shrinks. But provincial leaders and others in the party have resisted.

A party official involved in the debate said Hu and others on the ruling Politburo Standing Committee are unwilling to take a position on the issue ahead of a leadership conference next year. As a result, he said, many in the party are not sure whether they should support Chen or condemn the Linyi officials.

REVISED SATURDAY morning

A map of how Mexico voted on Sunday is even more striking than those red-blue maps showing [the US] electoral divide. Relatively wealthy northern states that have prospered from business ties spanning the nearby US border went heavily for [Felipe] Calderon. The poor, distant, left-out southern states went for AMLO [Andres Manuel Lopez Obrador], as did metropolitan Mexico City, where AMLO has served as mayor.
--Eugene Robinson, Washington Post, July 7

Felipe Calderon, who campaigned on the pledge, ‘Let’s have six more years of hoping free-market reforms trickle down to Mexico’s poor,' has been declared the official winner.

Amlo is hotly contesting the tally, of course. It will be settled in the court by September 6 or maybe sooner if Amlo calms down and puts on his thinking cap. The narrowness of Calderon's victory (he won by 35.88%, Amlo won by 35.31%) puts Amlo in a great position to wring concessions out of Mexico’s hopelessly corrupt ruling party.

Already Calderon has felt constrained to offer Amlo a position in the new Cabinet, which underscores Calderon's weak victory. And even after the court rubberstamps the official tally, Mexico’s Congress will still be sharply divided. That observation cuts both ways; there is no question that the majority of Mexico’s middle- and upper class prefer six more years of the known rather than Amlo’s left-leaning populist reforms. So there are advantages for Amlo in being the narrow loser.

All this begs the question: Who is the clearest winner in Mexico’s election? To be kind, one might say “Democracy,” because this presidential election is a big improvement over the last and an impressive 59% Mexicans voted.

But the biggest winners are the banks and companies that charge fees for handling remittance payments from Mexicans working in the USA.

Yet many workers, who send money to relatives back home who've not seen the benefits of Fox's free market reforms, were unable to vote in Mexico’s presidential election. That's because the border-town polls were overwhelmed by the large number of US-based Mexicans who tried to vote.

From anecdotal accounts, the poorest Mexican workers who descended on the border-town polls were voting for Amlo or trying to. Or to be more precise, they were voting to throw out Calderon’s corrupt political party.

If all the US-based Mexicans who tried to vote for Amlo could have done so, would that have given Amlo the quarter million votes he needed to tie or beat Calderon? It certainly would have made Calderon’s victory even narrower.

But then we have to remember that this is Mexico we’re talking about. The ruling class there is still firmly in charge. So, not surprisingly, PAN picked up more congressional seats in the election:

Fox's Party Gains in Mexico Congress, Universal Reports
July 4 - (Bloomberg) -- Mexican President Vicente Fox's National Action Party overtook the Institutional Revolutionary Party as the biggest seat-holder in Congress in the July 2 elections, Universal reported.

Fox's party gained 62 seats in the 500-seat lower house for a total of 210 and six seats in the 128-member Senate, for a total of 53. The Institutional Revolutionary Party, which ruled Mexico for seven decades before Fox's 2000 election win, lost 90 seats in the lower house for a total of 113 and 21 seats in the Senate for a total of 37, Universal said.

The figures indicate the National Action Party has the most seats in the both houses of Congress. The Party of The Democratic Revolution has the second-most seats in the lower house and the same number of seats as the Institutional Revolutionary Party in the Senate, Universal said. [...]

Dave Schuler at The Glittering Eye responds to Monday's Pundita post on the WTO Doha round, which calls for a Pundita response:

"Dear Pundita:
I've already posted my thoughts on the incipient collapse of the [WTO Geneva] talks here.

Frankly, I have reservations about Robert Wade's analysis. First, consider this lead-off quote:

"Forcing through very low tariffs on industry will not lead to a more even global distribution of income and wealth"

Is that objective a legitimate one? There's a simple way of creating a "more even global distribution of income and wealth": make America poorer. That won't make a single child in Zambia (for example) healthier or prevent him or her from starving. Perhaps it will assuage the guilt of a few European intellectuals.

"This will give you better market access for your agricultural exports, in line with your comparative advantage"

That isn't what Lopez Obrador has been saying in his campaign for the Mexican presidency. What he's been saying is that America's comparative advantage in agriculture is so overwhelming that protections are needed to prevent economic disruption in Mexico.

Well, economic disruption is exactly what's needed. Without it poor people will just stay poor. [Regarding Wade's observation:]

"A recent study of 50 developing countries [with] substantially liberalised trade during 1980-2000 found that only 20% (mostly in east Asia) experienced a significant increase in exports and in value-added manufacturing; half the countries experienced de-industrialisation."

I wish the actual study had been cited in the article. How did they disaggregate the effects of trade liberalization from the effects of China's and India's abandoning their policies of autarky or European countries exporting their industries to China? Or the shell game that those signatories who've actually lived up to their obligations under
the Kyoto Protocol have used to do so?

This strikes me as post hoc propter hoc.

As I noted in my own post I think we ought to abolish agricultural subsidies. But anybody who thinks that abolishing our subsidies will suddenly make Mexican corn (for example) competitive is fantasizing. The numbers just aren't there.

The Europeans and Americans aren't the only ones with market-distorting agricultural subsidies. North Vietnam's (!) enormous subsidies for coffee production have thrown the world coffee market into a cocked hat.
Dave Schuler"

Dear Dave:
I have no quarrel with the observations in your post nor with the criticism you expressed about Wade’s views. However, Pundita is intent on frying bigger fish than agricultural subsidies, which are red herring in the context of analyzing the Doha agenda. To repeat the question I stated in the Monday post: Is the Doha agenda workable under any conditions?

Perhaps I should have made it clearer that I highlighted Professor Wade’s Guardian piece because it specifically addresses the rationale for the Doha round and outlines the ‘counterinsurgent’ Nama agenda. No other article I found on the collapse of the WTO Geneva talks does this.

In short, whatever one might think of Wade’s specific arguments and conclusions, he unerringly goes to the heart of the matter – “trade aid” vs. Nama -- and from there pronounces Doha unworkable. He is right in that regard.

Many Americans (indeed, many outside the trade negotiations!) don’t understand that the Doha round rests on the concept of using trade concessions to aid the development of the poorest countries (which contribute only 1% or less to global trade).

Is fashioning development aid out of laws pertaining to global trade a helpful, let alone rational, approach to aiding the LDCs? The approach certainly plays havoc with the concept of free trade and undercuts the rationale for a trading organization, which of course has the objective of trade and not global development aid!

And of course it sweeps development aid issues under the rug of trade deals. It is also patently unfair to the most productive developing countries, which, after climbing out of LDC status, are expected by the Doha round to make trade concessions to the LDCs in a manner that even the richest developed country can balk at!

Indeed, the concept behind the Doha round is so screwy that one has to look at the historical context to understand how it came about: The round was launched in November 2001 –- two months after it was brought home to the world’s most productive nations that the least productive countries make a great breeding ground for terrorism.

And even as early as 2001 Tony Blair, Gordon Brown and others in the EU were viewing with concern the massive debt that several African nations had incurred. At that time they were casting around for ways to reduce the debt without actually writing it off. (A debt write-off was out of the question from the US side.) They saw in the idea of using trade deals to fashion development aid a means to offset the debt payment burden for the poorest countries.

Also, by 2001, the multilateralism espoused by the Chirac School of foreign policy, and which underpinned the creation of the World Trade Organization, was running afoul of the harshest realities of unrestricted globalized free markets for the poorest nations. Here’s a representative sample of the criticism of WTO and globalization that had built by early 2001:

As for the so-called positive relationship between free trade and growth, the emerging consensus is laid out by Harvard Professor Dani Rodrik:

"Do lower trade barriers spur greater economic progress? The available studies reveal no systematic relationship between a country's average level of tariff and non-tariff barriers and its subsequent economic growth. If anything, the evidence for the 1990's indicates a positive relationship between import tariffs and economic growth.

“The only clear pattern is that countries dismantle their trade restrictions as they grow richer. This finding explains why today's rich countries, with few exceptions, embarked on modern economic growth behind protective barriers but now display low trade barriers."

In the face of such evidence, C. Fred Bergsten, the head of Washington's Institute of International Economics (IIE), a noted partisan of free trade and the WTO, now says that there "has to be an honest recognition and admission that [free market globalization] has costs and losers," [that] "globalization does increase income and social disparities within countries" and "does leave some countries and groups behind."
--March 2001, Walden Bello, Bangkok Post

Whether or not you agree with Bergsten’s conclusion, it represented the climate of opinion in 2001, which set the stage for the first Doha round.

However, the grand idea behind Doha did not go swimmingly well in actual practice. In fact, it went virtually nowhere except to generate a lot of paperwork and meetings and generally irritate everyone at the subsequent negotiation rounds. By the time of the Hong Kong Doha round in December 2005, the developing countries were in full-scale revolt.

At the conference they formed a coalition of the poorer countries (the Hong Kong 100, by now grown to 110) to demand the impossible: that the rich countries live up to the principle on which the Doha round was founded. The revolt was led by the more developed countries; specifically, India and Brazil, with China quietly egging them on.(1)

Now watch carefully; don’t blink: Because the Doha principle is unworkable, why go to war over it? Well, do we honestly expect India and China to sit up nights worrying about the plight of African governments that are so corrupt and inept that giving them more aid in any form is pouring money into a black hole?

And do we expect the trade ministers in the up-and-coming countries to go along with trade concessions to the LDCs that they didn’t receive when they joined the WTO?

To put it bluntly, staging a revolt was the only way to grind Doha to a halt and thus, hold onto trading advantages for the most productive developing countries. That is why the collapse of the next round of talks (last week in Geneva) was a foregone conclusion.

Indeed, India’s trade minister pronounced the talks a bust before they got underway. He even refused to be on time for the opening of the conference on the insulting excuse that he wanted to watch a World Cup game between Germany and Argentina. (Argentina’s trade rep showed up on time for the conference.)

Through such actions India’s government is saying that if the WTO is going to create laws that strong-arm the poorer countries into charity under the rubric of trade, India declares the trade talks –- and WTO -- a farce.

Here Pundita must pause to remind the naïve among our readers that of course India and the other productive developing countries do not come right out and say all that. How can they, without being perceived as – er, not terribly concerned about the world’s poorest? In lieu of bluntness they mounted a storm of protest that they knew would break against the iron will of the richest countries, thereby neatly collapsing Doha.

Professor Wade’s view clearly does not question the rationality of the Doha round; he seems to believe that what we really need is a round of talks with more teeth than Doha. So he does not question the concept on which Doha is founded, whereas Pundita does – and which I argue any reasonable person without a degree in economics should.

If one is tempted to laugh at the thought that trade laws could really be used as outright aid: realize that the same scoundrels dug in and around the United Nations are not playing when they call for the rich to completely turn out their pockets to the poor.

Calls are mounting to make the WTO more “democratic” in its decision-making process by establishing a parliamentary system of voting; indeed, the idea has had trouble getting off the ground only because of arguments that the rich countries at WTO would still have means to circumvent a parliamentary system of voting. (1)

The Jeffrey Sachs contingent wants the world’s poorest nations, which again I stress contribute 1% or less to world trade, to have as much say on trade matters as the world’s most productive nations.

That’s where things are heading; perhaps all that has saved us to this point from such madness is the common sense of the most productive developing countries. They don’t like being on a decision-making par with nations that are a bottomless pit for aid; neither should any sensible government negotiating trade deals.

1) For a very clear primer on the issues cited by the Hong Kong 100, see two articles at the BBC website; they're a 'must' read if you're trying to understand the current impasse at the trade talks and the larger issues pertaining to the Doha round:

POOR NATIONS UNITE AT TRADE TALKS and Key issues at the Hong Kong talks.

2) From Wikipedia:

While most international organisations operate on a one country, one vote or even a weighted voting basis, many WTO decisions, such as adopting agreements (and revisions to them) are officially determined by consensus of all member states. The advantage of consensus decision-making is that it encourages efforts to find the most widely acceptable decision.

Main disadvantages include large time requirements and many rounds of negotiation to develop a consensus decision, and the tendency for final agreements to use ambiguous language on contentious points that makes future interpretation of treaties difficult.

In reality, WTO negotiations proceed not by consensus of all members, but by a process of informal negotiations between small groups of countries. Such negotiations are often called "Green Room" negotiations (after the colour of the WTO Director-General's Office in Geneva), or "Mini-Ministerials", when they occur in other countries. These processes have been regularly criticised by many of the WTO's developing country members which are often totally excluded from the negotiations.

I've bumped today's post on crony capitalism until after the 4th. I want to start plowing into the debacle at the WTO trade talks. The stalemate at Geneva this past weekend gives signs of ringing down the curtain on the Doha round of trade talks, which started in November 2001. (For a look at various points of view on the failed talks see the next post.)

Pundita’s question is whether the Doha agenda is workable under any conditions. The agenda rests on the concept of using trade concessions to aid the development of the poorest countries (which contribute 1% or less to global trade).

Is this approach to aiding the LDCs a rational basis for trade deals between virtually all the world's countries? Today, only 15 small nations have no involvement with the World Trade Organization; all the rest belong to WTO, or have observer status there and/or are working on entry to the WTO).

Anger about perceived US and EU obstructionism over the issues of agricultural subsidies and tariffs diverts attention from the bald fact that the 'advanced' developing countries are not happy with WTO trade aid (which amounts to trade concessions) to the least developed countries. The concessions give the LDCs a big edge over the ADCs in trade with the most developed countries.

Those who see in the stalled WTO talks a further challenge to multilateralism are looking at things from 11 years ago, when the WTO evolved out of the old boy’s club called the International Trade Organization. Today, so many countries belong to WTO – each country representing for their own interests – that the sheer volume and complexity of trade issues forces many countries into bilateral agreements and regionalized trading blocs.

So where does this leave the Little Guys? Well, right now they’re mad as hell and not going to take it anymore. One hundred of the world’s developing nations staged a revolution at the WTO talks in Hong Kong in December. They refused to make any more tariff and subsidy compromises with the developed nations until the intention of the Doha round (trade aid) was honored.

The HK 100 again stuck to their guns at the Geneva talks this weekend; India’s lead trade negotiator walked out of the meeting and pronounced it a bust even before the conference got under way.

Robert Wade, professor of political economy at the London School of Economics and author of Governing the Market, hopes the Doha round is dead. He argues in today’s UK Guardian that the Nama agenda (which he explains in the following piece) has overrun the Doha agenda.

He’s right. But again, we need to look at the big picture of today’s trade negotiations before hoping a new, improved round of talks will rise from the ashes of the Doha round. First, though, we’ll look at where things stand from the professor’s point of view:

The Doha talks must fail for the sake of the world's poor
By Robert Wade
The Guardian
Monday July 3, 2006

"Forcing through very low tariffs on industry will not lead to a more even global distribution of income and wealth

"Among those who care about multilateral trade negotiations the air is thick with talk of crisis in the Doha trade round. Should we be crossing our fingers that agreement is reached around the sort of deal that the parties are negotiating? Pascal Lamy, the World Trade Organisation's director general, says that the price of "failure" would be high.

"The question is: high to whom? The price of failure to agree a deal within the current parameters would certainly be high for the developed countries; but it is not clear that it would be high for most developing countries. To simplify: developed countries have low tariffs on industrial and service imports and high tariffs (or other forms of protection) on agricultural imports. Developing countries have substantial tariffs on industrial and service imports and on some agricultural imports.

"In the Doha round, developed countries are saying to developing ones: "You must make cuts in industrial, service and agricultural tariffs, and then we will make cuts in our agricultural tariffs and other agricultural supports. This will give you better market access for your agricultural exports, in line with your comparative advantage; and we will get better market access for our industrial, service and agricultural exports."

"The developed countries are insistent that developing countries make big cuts in protection on non-agricultural imports, so much so as to yield the acronym Nama (non-agricultural market access). The developed countries are making a big push to get developing countries to accept Nama proposals.

"Most developing countries face serious dangers of de-industrialisation if they accept the basic terms of this negotiation. They risk becoming more specialised than at present in the production of primary commodities and simple, labour-intensive products, and even less diversified in the production of more complex, rich country goods.

"This may suit the collective interest of developed countries quite well, but it would be a bad result for the world. I take it as given that the world interest (at least of the human species) favours a more equal distribution of income and wealth. My argument is that faster, catch-up economic growth and industrialisation in developing countries is unlikely in conditions of free trade, for at least three reasons.

"First, virtually no country has managed to industrialise and become "advanced" without going through a stage of protecting new basic industries. As the domestic industrial sector became deeper the now-advanced countries liberalised their trade selectively and gradually.

"The colonies of these countries were forced to liberalise quickly and unselectively, and experienced rapid de-industrialisation. It is a general law of industrialisation that more advanced countries try to open the markets of less advanced ones to their products, claiming that doing so is good for all.

"Second, industrialisation in today's developing countries is unlikely in conditions of free trade because they will then tend to specialise in exports from their existing efficient industries and agricultures. Their further development depends on diversifying into higher value-added activities in which they are not presently efficient. Their diversification into new activities is unlikely without the use of industrial policy, including both tariffs and other forms of support.

"A recent study of 50 developing countries which substantially liberalised trade during 1980-2000 found that only 20% (mostly in east Asia) experienced a significant increase in exports and in value-added manufacturing; half the countries experienced de-industrialisation.

"Third, the developed countries have tightened their protection of new technologies through the WTO's trade-related intellectual property (Trips) agreement, making it more difficult for developing countries to obtain advanced technologies than in the more permissive regime when today's advanced countries were developing.

"So the developing countries should strenuously resist the Nama agenda. They should push for rules that allow developing countries more latitude to set tariff levels in line with the maturity of their industries, and with variation rather than uniformity in tariffs across industries in line with differences in the time needed for upgrading. And they should push for relaxation of Trips.

"No one is saying that such trade rules guarantee success. Trade protection, like any powerful instrument, can be used well or it can be used badly as it has been in Latin America, India, New Zealand and elsewhere. On the other hand, we can be fairly sure that by forcing developing countries to move quickly to very low tariffs on industry, the Doha round, if it "succeeds", will push many developing countries towards de-industrialisation.

"In which case, better that it "fails". Then the newly assertive bloc of leading developing countries could take the initiative for a new trade round within more sensible parameters. So no crossed-fingers for the "success" of the Doha round."
R.Wade@lse.ac.uk

US alone can lead the WTO salvage mission
Seetha
DNA India
Sunday, July 02, 2006
"[ . . .] US trade representative Susan Schwab came to Geneva, say sources in the Indian [WTO] delegation, with no mandate to move forward on agricultural subsidies. The huge subsidies the US gives to its farmers enable them to sell their products cheap in the world market, making it difficult for other countries to compete, they add. The last US offer was a 53% cut in these subsidies. In return, it wanted very substantial cuts in agricultural tariffs globally.

"The US’ rigid position stood out from that of the EU, which expressed its willingness to extend tariff cuts from 39% to 50%, provided the former climb down on the agricultural subsidies front. WTO director-general Pascal Lamy, who has the responsibility of salvaging the round lies, will have his work cut out in persuading the US to yield ground. But even assuming he gets some concessions from the US on agriculture, the question of industrial tariffs still remains. The battle for the developing countries will be tougher here, because the US and the EU — at daggers drawn on agriculture — stand together on this. They want a tariff cut formula that will mean developing countries will undertake big cuts, something the latter are not ready to concede.

"If the US makes improved offers on agriculture, it will demand its pound of flesh on industrial tariffs. That will clearly put Nath in a cleft stick, caught between the need to protect agriculture and industry.

"Nath has been making the point that the Doha Round is a development round and is all about increasing trade flows from developing countries to the developed countries, and not the other way around. But it’s not clear if the developed bloc will pay much heed to this."

http://www.dnaindia.com/
report.asp?NewsID=1039153

India expects new talks to break WTO deadlock
Mumbai Mirror Bureau

"[India's Commerce and Industry Minister] Kamal Nath wanted to come back from Geneva two days before the meeting ended as there was no negotiating space at WTO

"New Delhi: “I cannot be in a meet that does not recognise Indian farmers’ need. I had gone to Geneva to see what Indian farmers can get and not what they can give,” Commerce and Industry Minister Kamal Nath said on his arrival here on Sunday after he pulled out of the WTO Mini Ministerial meet as Indian farmers’ interests were not being protected at the meet.

"He, however, hoped for new talks by July-end to break an impasse in World Trade Organisation negotiations which collapsed in Geneva on the weekend. The December 2006 deadline for completing Doha round now seems quite difficult with the Geneva talks collapsing.

"The Minister disclosed that he had decided to return from Geneva two days before the meeting was scheduled to end as there was no point of continuing as the major trade powers failed to make any breakthrough.

“I came to the conclusion that there is just not any negotiating space, because there is really a difference of perception. We could not have been part of any agreement that does not address the development concerns of developing nations,” Kamal Nath told Mumbai Mirror.

"On the US charge that the developing countries were seeking protection for 98 per cent of their products, Nath noted that they were in fact seeking 100 per cent protection for their agriculture and infant industries. It is a period of reflection for developed countries as they could provide leadership to strengthen a multilateral trading system.

"India’s stand has been endorsed by 110 developing countries, which feel that developed countries should give something for the betterment of the developing nations. Nath added, “We want a pact at WTO which increases our economic growth from 8-9 per cent to 10-11 per cent and it cannot subscribe to an agreement that brings it down to four-five per cent.”

"At WTO, the developing countries are demanding greater access to the agricultural markets of developed countries while the industrialised nations want the developing countries to open up their markets for services and industrial goods.

"The talks are stuck because no agreement is in sight on cut in agriculture tariffs and domestic subsidies that developed countries should make so that products from developing countries could enter their markets and compete.

“We could not have been part of any agreement that does not address the development concerns of developing nations”

http://www.mumbaimirror.com/nmirror/
mmpaper.asp?sectid=13&articleid=
7220062275043772200622719796

Poor states ‘let down’ as WTO talks falter
by Mathabo Le Roux
Business Day
"[ . . .] South Africa's chief trade negotiator, Xavier Carim, called the line taken by the US and the European Union (EU) “anti-developmental” and out of touch with the agreement reached at Doha that poorer countries should benefit from the round. “We’re really running out of time,” Carim said. There was, however, a sharper understanding of the critical issues that needed to be breached.

"The key issues that remain are the extent to which the US is prepared to reduce agricultural subsidies and the EU’s standing on the reduction of agricultural tariffs.

“With the EU it is a matter that they say they are prepared to do more, but there is no indication of what that means. It is a very nebulous offer,” Carim said.
The other issue that remains, from a developed world viewpoint, is developing countries’ failure to move on a reduction on industrial tariffs.

"Developing countries are, however, exasperated at the extent of reductions in industrial tariffs demanded by developed countries, with one commentator from the Congress of South African Trade Unions (Cosatu) calling it “a joke”.

"The industrial tariffs were a different dynamic, with developed countries proposing tariff cuts which could be damaging to industrial development in the developing world, Carim said.

"On the table is a demand for tariff cuts of up to 70% on industrial goods, which he called extremely severe.

“It does not compare with what they are prepared to give on agriculture, and in terms of industrial discussions they are offering reductions of 23%. There is complete imbalance.”

"South African trade union representatives who attended the Geneva talks said a commitment on industrial tariffs could have severe implications, preventing SA from formulating and implementing “decent industrial policy” aimed at economic growth and job creation.

“Above all, we feel this must be a real development round, without new demands for concessions from us,” said Cosatu economist Neva Makgetla. “No deal is better than a bad deal.”

"Not all developing countries would lose if the demand on industrial policies was pushed though, said a Cosatu spokesman."

http://www.businessday.co.za/
articles/topstories.aspx?ID=BD4A225713

[Australia] PM blames Europe over WTO talks
By Shane Wright
Australia Finance News
July 03, 2006

"PRIME Minister John Howard today blamed Europe for the near collapse of world trade talks, saying it had to go further to slash farm protection levels.

"Mr Howard, who may be dragged into the World Trade Organisation (WTO) talks directly, said it was European intransigence on agricultural protection that was putting the negotiations at risk.

"The leaders of the G6 grouping - Australia, Brazil, India, Japan, European Union (EU) and the United States - may have to involve their leaders in a summit to break the deadlock on the trade talks.

"It follows the failure of world trade ministers to come to an agreement on a framework that would pave the way for cuts in farm subsidies and tariffs, and greatly increase quotas for agricultural goods.

"WTO Director-general Pascal Lamy has been given the job of talking directly to major players during the next four weeks to hammer out some type of agreement. Failure on his part could have the talks, that have already been going for five years, drag on indefinitely.

"Mr Howard said Europe and Japan had so far failed to match the more ambitious proposals put up by the US that would go some way to opening trade in agricultural products across the globe.

"The Americans, to their credit, got the ball rolling, and unless there's an adequate response from the Europeans it won't happen," he told Macquarie radio.

"So I still believe that the big stumbling block is the intransigence of the European Union."

"A recent Organisation for Economic Cooperation and Development report found the EU paid its farmers more than $180 billion worth of protection during 2005 - the most by any developed nation bloc.

"But Mr Howard remained upbeat that despite the major setbacks facing the WTO, the negotiations had not completely collapsed.

"It is critical that we don't allow these talks to fall over, but they'll fall over unless the countries that practice the highly protectionist agricultural policies - and that's the Americans, the European Union and the Japanese - agree to reduce their protection," he said.

"Australian farmers were not so upbeat, with the National Farmers' Federation expressing fears there may not be a deal for some time.

"Federation president David Crombie said that unless the international community worked together, any chance to slash agricultural protection could be lost.

"Because of the lack of movement from the European Union on agricultural-market access and, as a result, no further movement from the United States on agricultural domestic support, precious little has been achieved this week," Mr Crombie said.
"It now looks most unlikely that agreement on a final Doha deal will be reached any time soon - this will be a severe blow to Australian farmers."

"Trade Minister Mark Vaile, who took part in the Geneva talks, said the failure so far to reach a deal could be a wake-up call for the WTO and its 149 member nations.

"You need to have a near death experience to sort of, crack open the door, if you like, to move to the next stage," he told ABC radio.

"The events of the last couple of days and this impasse is what could be loosely called a near death experience."

http://finance.news.com.au/story/
0,10166,19668571-462,00.html

Call for Lamy to step in after talks stalemate
By Alan Beattie and Frances Williams in Geneva
Financial Times
July 3 2006 03:00

"Leading countries in the Doha round of trade talks have asked Pascal Lamy, head of the World Trade Organisation, to broker a deal between them after a meeting of ministers this weekend was deadlocked from the start.

"The Geneva-based talks, involving several dozen ministers, stalled as soon as they opened on Friday. The US again demanded bigger cuts in farm tariffs while most other countries once more said Washington should first cut farm subsidies, a stand-off that Mr Lamy said would lead to crisis. The talks, planned to continue until today, petered out on Saturday.

"With an end-July deadline for agreeing the size of tariff and subsidy cuts looming, the Group of Six - the US, EU, Japan, Brazil, Australia and India - asked Mr Lamy to mediate between them. Peter Mandelson, EU trade commissioner, scotched rumours that Mr Lamy would produce his own proposed text, saying: "Pascal Lamy should act as the catalyst, but not the author of an agreement."

"Mr Lamy will report back in two weeks on whether a G6 deal is possible. Mr Mandelson said heads of government could also be asked to break the logjam.

"At the weekend Washington was often a lone voice calling for much biggercuts in farm tariffs. Brazil, a prodigious agricultural exporter and usually aUS ally in farm talks, this time put pragmatism and solidarity first, lining up with other developing countries to say that US stubbornness was preventing progress.

"The EU is trying further to isolate the US by reaching an accord on farm tariffs with the influential Group of 20 developing countries, led by Brazil.

"Brussels is privately talking about a 51 per cent average cut in tariffs; its first offer of 39 per cent was widely derided as inadequate.

"The new figure would be close to the G20's proposal, which by most calculations is a 54 per cent average cut but which the EU reckons is 52 per cent. Both are well below the US's call for an average 67 per cent reduction.

"The theatre of combat this weekend involved proposals to let governments protect farm products from across-the-board cuts in agricultural tariffs. Susan Schwab, US trade representative, said the problem was the "three Ss" - the "sensitive" and "special" products on which cuts can be reduced or eliminated, and the "special safeguard mechanism" that allows poor countries to block sudden surges in farm imports.

"A group of more than 40 developing countries, led by Indonesia, want to be able to protect at least 20 per cent of all types of farm products to help their small farmers and rural communities. The US cited a recent calculation by WTO staff that some developing countries with farming concentrated in a few products could protect more than 90 per cent of their actual production. Washington wants them restricted to 1-2 per cent of all types of farm products.

"Mike Johanns, US agriculture secretary, said: "Tariff cuts cannot be undermined by open-ended loopholes."

"Mari Pangestu, the Indonesian trade minister who wants to protect rice growers, said WTO members had already agreed that countries could designate "special products" based on agreed criteria.

"The US cannot tell us what is and is not eligible," she said. "We agreed to an appropriate number of special products, not a limited one."

"The US and EU also continued an arcane squabble about how much the US plan for cutting subsidies would actually constrain American farm spending.

Copyright The Financial Times Limited 2006
http://www.ft.com/cms/s/
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