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Wednesday, May 16

High intrigue

For readers who are still not convinced that the issue of the World Bank presidency isn't terribly important, read on. Keep in mind that World Bank President is the go-to website not only for news surrounding the Wolfowitz Affair but also for World Bank insider intelligence reports on the matter.

The affair is building to a crescendo with rumors flying this afternoon that Wolfy is throwing in the towel; meanwhile the tiger he has for an attorney continues in pouncing mode.

So I have a vision of World Bank board members gathered around a computer with a Hacking for Dummies book propped open under the monitor. But the attack could have come from other factions including Wolfy's camp, or even a media outlet that smells blood in the water and doesn't want Wolfowitz's departure from the Bank to be scooped by a website......

4:08 PM, EDT
"Pundita,
Our website is down. Our hosting company says it's almost certainly a denial of service attack. The pattern of activity is very suspicious.
Best from Britain,
Alex Wilks
World Bank President "

6:36 PM
Dear Alex:
Just opened your email and raced to your site; relieved that it's back up. If it happens a second time, Pundita will set up howl.

6:55 PM
Pundita,
"Thanks v much. We're back as you say and planning to stay that way (took off all graphics, for one thing).
Alex"

Alex,
Re the graphics remark -- so you think it might have been a technical glitch?? Or still suspicious?

"Pundita,
No, still totally suspicious. The attackers were apparently hitting our graphics folder - fastest way to get us off.
Alex"

Alex,
Ah ha! This calls for a Pundita post. The TV set with a question mark is still on your front page; Pundita is very ignorant of such matters but that's a graphic; right?

"Pundita, you're spot on re what is a graphic. But it's weird if you see that right now on your version of our site. I have not seen the TV screen since we came back live. Firefox gives a 'spacer spacer, spacer' notice, with just the word TV. IE gives a placeholder for a graphic but not the graphic. Please refresh your browser.
Alex"

More on State-Pentagon battles, and there's no such thing as diplomatic war

Two interesting takes on Monday's post about the conflict between the Pentagon and State Department regarding the Pentagon's involvement in foreign aid. Dan Riehl focused on the possibility of Newt Gingrich positioning himself for a run at the US presidency, which I hadn't considered.

Yet I remain mystified as to why Newt is coming down on State's side in the Pentagon-State conflict. I seem to recall that in the early years after 9/11, Newt was a vociferous critic of State. Does he think he can score points with Condoleezza Rice by turning on the Pentagon?

In any case, Newt's argument for civilian-led foreign aid in conflict situations is not only unrealistic, it also overlooks the vast power that State's unelected bureaucrats have gained. The Pentagon is perhaps the only effective counterweight, given that State's operations are virtually immune from congressional oversight and can be greatly resistant to White House policies.

John Loftus also weighed in:

"Pundita:
I recall that in postwar Germany and Japan the [U.S.] military had a traditional political function, G-5, and was in charge of administering occupied areas. State supplied a political adviser (Polad) but was kept out of the chain of command. Even the High Commissioner of Germany (HICOG) was usually a retired general.

Unfortunately, Colin Powell changed the status quo; State led the post-war administration in Iraq with disastrous results. Barbara Bodine was actually the mayor of Baghdad!

If it is only a question of competence, I think the military should take the lead role every time.
John Loftus "

Dear John:
Whenever I hear of Barbara Bodine I remember John O'Neill's attempts to investigate the bombing of the U.S.S. Cole and Bodine's intervention on behalf of the Yemen government. The incident illustrates the severe case of Clientitis that befell State starting in the 1980s.

The US invasion of Iraq had such a big public relations angle; it was a 'diplomatic war' (a contradiction in terms). Officially, the US never 'occupied' Iraq and so couldn't carry out the kind of actions that led to successful stabilization and reconstruction of Japan and Germany. Yet those actions are the only intelligent ones when an invading force has toppled a government and found the country and political parties in ruins.

I was horrified by the argument that Paul Bremer used to insist that Iraq's state-run factories remain shut. Bremer wanted private investors to buy the factories! Of course the investors never showed up. He was making an economics argument in a situation that screamed for post-conflict stabilization measures by a military.

I note that one part of the Pentagon-State war seems to be going the Pentagon's way, but not before a pitched battle occurred:
Paul Brinkley, a deputy undersecretary of defense, has been called a Stalinist by U.S. diplomats in Iraq. One has accused him of helping insurgents build better bombs. The State Department has even taken the unusual step of enlisting the CIA to dispute the validity of Brinkley's work.

His transgression? To begin reopening dozens of government-owned factories in Iraq. [...](1)
1) Defense Skirts State in Reviving Iraqi Industry by Rajiv Chandrasekaran, May 14, The Washington Post.

Weakening US defense of Wolfowitz?

Alex Wilks at World Bank President reports this morning on telling language that may signal the White House is withdrawing support for Wolfy:
The Bush administration seems to be shifting strategy in the face of mounting opposition to Paul D. Wolfowitz. On ABC News a White House official told ABC's Jonathan Karl that 'all options are on the table' regarding world bank president Paul Wolfowitz, and 'it is an open question' whether he should remain as president of world bank.
Read more.

Tuesday, May 15

Ah, Mr Wolfowitz, you overlooked World Bank Staff Rule number 500,051.2, Paragraph 613

"Pundita, dear, it seems you got your wish. Paul Wolfowitz hasn't yet chained himself to his desk but he has been fighting to stay at the Bank, as you advised. I notice that after launching a series of volleys, you have been very quiet about Affaire Wolfie. Are you too busy jabbing pins into an effigy of Hilary Benn to comment on the drama or offer more advice?
Boris in Jackson Heights"

Dear Boris:
Visit Dan Riehl's blog for links, if you want to keep up with the latest well-meaning but naive impassioned defenses of Wolfy from various US media sources. And drop by World Bank President blog for all the news, analysis, speculation and delicious insider gossip about the Battle of the Bank.

I seem to recall writing an essay in 2005 that was titled "Courtiers and Indentured Servants" or something like that, in which I tried to convey a little of the world inside the World Bank. Yet the Bank is impossible for outsiders to comprehend unless they are steeped in the history of large imperial courts in Byzantine times.

The Bank evolved into a Byzantine organization. This is due to an extraordinary convergence of factors; among them, the Bank's international charter and peculiar status as a quasi-bureaucratic for-profit bank that must answer to many governments and, in many respects, to another quasi-bureaucratic transnational organization -- the International Monetary Fund.

So to see the Bank as merely a bureaucratic organization is to miss by a mile. The Bank's way of doing things is a throwback to a time that no longer exists. It reminds me of the plot of Jurassic Park; something that died out but was resurrected due to human meddling.

Here I can imagine several readers rolling their eyes in impatience. I am not taking you through all this so you can understand Wolfowitz's situation or even the Bank. I am continuing my quest to discern the outlines of the 21st Century for American foreign policy.

Yesterday Sebastian Mallaby penned a dizzy defense of the World Bank but in the course of which he highlighted a growing trend among powerful governments that is little understood by Americans -- and indeed by most people the world over. In arguing for the Bank's continued existence, Mallaby wrote:
Private investors tend not to finance global public goods -- projects that are important for the world but not a priority for any one country.
You might want to read the sentence a few times for the full import to sink in but I'll continue with the quote:
The world needs to cut carbon emissions, for example, but an individual country won't capture all the benefits of a clean coal plant, since these benefits are shared globally. Because of this "externality" problem, there is a role for the World Bank in subsidizing anti-carbon policies.(1)
Mr Mallaby is saying that the development needs of sovereign nations are not necessarily in synch with initiatives that the most powerful nations deem good for the world. This argument has been gaining steam for more than a decade in the European Union and the United Nations.

Implementing the argument has not been successful. Thus, the World Bank is now seen by governments that want to globalize certain initiatives as one means to integrate the response of developing nations to "external" issues, whether or not the nations can afford "global good" projects.

This use for the World Bank is a long, long way from the Bank's charter and intention, which is to service sovereign nations. Yet when you clear away all the smoke surrounding the attacks wafting from Europe about Wolfowitz's tenure, you find that little fire we can term "redoing the Bank's charter to accommodate global good projects."

So. Americans are not on target when they charge that the Europeans are out to get Wolfy because they want a European to lead the Bank. Honestly and truly, the Europeans who are leading the charge don't care whether someone from Mars is the president. What they want is a president who will pull the Bank in the direction of projects that are not country specific but which address external needs that the UN deems to be for the greater good.

Leave aside whether or not we agree with the goal; is Wolfowitz capable of managing this kind of transition? Yes and no. There is a litmus test to determine whether a person can get along at the World Bank:

If you can reply, "As you wish" to a directive without giving away in the memo, or to those in earshot, what you intend to imply by the remark, you are qualified to work at the Bank.

Paul Wolfowitz flunked the test, as did the Americans he brought into the Bank as his assistants. In 2005 I thought he was doing well at learning Bankese but from all accounts, he learned the lingo in the way a tourist in France speaks French by reading a guidebook of terms. In any case, learning pronunciation is only a part of getting along at the Bank.

The other side of the story is that the people who most want him out of the Bank are studiously overlooking a crucial point: if they want the World Bank to lead in externalizing project benefits, now more than ever there must be a lid on corruption. Why? Because if a government doesn't find the loan to be of immediate value to their country, why should they invest in closely monitoring the Global Good loans?

So Paul Wolfowitz has the right vision but things went horribly wrong at the implementation stage. Maybe he would say that you can't term a rocky path as a failure. My heart is with that argument but in the long run we'll all be dead. If you don't have things moving within a couple years in the business world, you need another approach.

My only advice to Wolfy at this time is to observe that when you don't understand the lay of the land, you can only fall back on playing yourself to the hilt if you insist on staying. Wolfy is very forceful and uncompromising in his approach, which is why I suggested a hunger strike and chaining himself to his desk during his fight to remain World Bank President. While he's subsisting on vitamins and water, he can remember that every day he fights on is another day that news about the World Bank will be on the front page of major newspapers. Which is exactly where discussions of the Bank need to be.

1) Endgame at the World Bank by Sebastian Mallaby, May 14, 2007, The Washington Post.

Monday, May 14

Senate Foreign Relations Committee and Newt Gingrich have amnesia about State's record.

Overview: State needs to move over and make more room for Pentagon-led foreign assistance programs.

"The U.S. Department of State is committed to promoting U.S. economic and commercial interests overseas. Secretary Warren Christopher has put the economic security of the American people at the top of our foreign policy priorities."
-- U.S. Department of State, Business Services Office of the Coordinator for Business Affairs, August 1995
May, 2007
The Pentagon is seeking to make permanent and expand to other countries some security and foreign assistance programs underway in Iraq and Afghanistan that traditionally have been supervised by the State Department and the Agency for International Development.

Legislation sent to Capitol Hill -- under the title of Building Global Partnerships Act of 2007 -- would allow the secretary of defense, "with the concurrence of the secretary of state," to spend up to $750 million to help foreign governments build up not only their military forces, but also police and other "security forces" to "combat terrorism and enhance stability." [...]

In February testimony for the House Armed Services Committee, Marine Gen. Peter Pace, chairman of the Joint Chiefs of Staff, called for an interagency National Security Initiative Fund "to better invest in countering terrorism with other countries."

"We need a dramatic leap forward in our relationship with interagency and international partners," Pace said [...]. Terrorists sometimes "hide in countries with whom we are not at war," he said, adding that in many cases the best way to respond "is by augmenting the capacity of those countries to defeat terrorism and increase stability." [...]

The Pentagon's growing role in foreign assistance has drawn criticism. Last month, former House speaker Newt Gingrich (R-Ga.) told a Council on Foreign Relations meeting that "we do not want uniformed military doing what others should be doing." He suggested that State Department funding should grow by 50 percent so ambassadors could lead such projects.

Last December, following an investigation directed by then-Chairman Richard G. Lugar (R-Ind.), the Senate Foreign Relations Committee reported that "as a result of inadequate funding for civilian programs . . . U.S. defense agencies are increasingly being granted authority and funding to fill perceived gaps" in public diplomacy and foreign economic assistance. The result "risks weakening the Secretary of State's primacy in setting the agenda for U.S. relations with foreign countries," the report said.
(1)
For almost a decade running up to September 11, 2001, the US Department of State did indeed set the agenda for US relations with foreign countries, even though that was supposed to be the job of the White House and Congress. The resulting debacle for US security became evident to the public only in the aftermath of the 9/11 attack.

As the dust from the attack settled it became clear that under State's watch, every region on earth except Europe, and every trouble spot with the exception of the Israel-Palestinian dispute and North Korea, had been ignored by US foreign policy except with regard to business deals.

One might argue that State was only carrying out the policy of the Clinton administration, which gave top priority to expanding US trade and servicing ex-Soviet states that were candidates for European Union membership. But once Clinton left office, State continued with the agenda of placing global business dealings before national security. And State waged an aggressive campaign against President Bush when he made US security the top priority for US foreign relations.

Newt Gingrich and the members of the Senate Foreign Relations Committee know all this, so I can only speculate on the cause of their collective amnesia. Perhaps it occurred from repeated blows on the head delivered by foreign and domestic business lobbies.

Readers who assume that State got their head screwed on straight under Condoleezza Rice's leadership should recall her recent statement that promoting democracy is the top priority of US foreign policy. No, the top priority is defending the United States; promoting democracy in the world is just one component of defense strategy.

It's not much help if State gets pried away from their "Global Business Rules" mindset only to wander in the thicket of promoting democracy as the top priority for the US government's security agenda.

State cannot admit to the real priority because doing so offends numerous business interests here and abroad, and takes some power away from State and gives it to the Pentagon. State is still operating according to the view that US defense and intelligence agencies should be under the authority of the foreign office's diplomacy.

Yet much of the world is a pastiche of weak governments under pressure from armed groups with ties to crime syndicates and terrorist organizations that operate across borders. Such a world can't be ministered to only through State's diplomacy and USAID grants. Ethiopia's lessons in Somalia underscore the way things really are:
"Get it done quickly and get out." That, says a senior U.S. diplomat here, was the goal of the little-noticed war that Ethiopia has been fighting, with American support, against Islamic extremists in Somalia. But this in-and-out strategy encounters the same real-world obstacles that America is facing in Iraq and Afghanistan.

Conflict is less the problem than what comes after it. That's the dilemma that America and its allies are discovering in a world where war-fighting and nation-building have become perversely mixed.

It took the Ethiopians just a week to drive a Muslim radical movement known as the Islamic Courts from Mogadishu in December. The hard part wasn't chasing the enemy from the capital but putting the country back together. [...]

"The Ethiopians are looking for an opportunity to exit, but not until they are confident that the security environment will prevent a return to chaos," says a State Department official who helps oversee policy for the region.

And in Somalia, a backward country that has had 14 governments since 1991, that process of stabilization will be anything but easy. [...]

The Ethiopians have now concluded that they can't withdraw completely anytime soon; they must instead stay and train a friendly Somali army that can support the pro-Ethiopian "Transitional Federal Government." [...]

In 2002, Centcom established a regional outpost in the dusty port city of Djibouti, at the entrance to the Red Sea. It now has about 1,500 U.S. military personnel. Some of them are out digging wells, building schools, vaccinating goats and otherwise "waging peace," as a spokesman there explains. That's the nation-building side.

The Djibouti base also provides logistical support for U.S. Special Forces teams that are hunting down what's left of the al-Qaeda terrorist cells that bombed U.S. embassies in Kenya and Tanzania in 1998.
[...](2)
Readers who want insights about State's course during the decade running up to 9/11 should read Joel Mowbray's Dangerous Diplomacy. They might also read, or re-read, Pundita's 2004 post The America Desk at State: The Office for Commercial and Business Affairs, which helps explain why State was so willfully blind to the gathering threats in the 1990s.

1) Pentagon Hopes to Expand Aid Program

2) Ethiopia's Iraq

Friday, May 11

Samuelson's wrong assessment of China's predatory trade practice

Readers who have been with this blog for years know that Pundita wouldn't hesitate to blame the Chinese for anything. Yet I find myself at odds with Robert J. Samuelson's analysis of why China's trade practices can be termed "predatory."
China is already the world's third-largest trading nation and seems destined to become the largest. On its present course, it threatens to wreck the entire post-World War II trading system. Constructed largely by the United States, that system has flourished because its benefits are widely shared. Since 1950, global trade has expanded by a factor of 25. By contrast, China's trade is mercantilist: It's designed to benefit China even if it harms its trading partners.

[...] For China to expand production, demand must come from its own consumers or other nations -- or some other country's production must be displaced. [...] As China moves up the technology chain, it may become the low-cost export platform for more and more industries. This could divert production from the rest of Asia, Europe, Latin America and the United States.

It is not "protectionist" (I am a long-standing free-trader) to complain about policies that are predatory; China's are just that. The logic of free trade is that comparative advantage ultimately benefits everyone. Countries specialize in what they do best. Production and living standards rise. But the logic does not allow for one country's trade systematically to depress its trading partners' production and employment. Down that path lie resentment and political backlash
.
What are the policies Samuelson finds predatory?

> China's refusal to revalue the yuan, which according to a source he quotes may be 40% cheaper than it "should" be. "The resulting competitive advantage props up exports, production and jobs [in China]."

> High Chinese savings rate and their lagging behind the US in consumerism, both of which Samuelson finds irresponsible. "Personal consumption spending is a meager 38 percent of GDP; that's half the U.S. rate of 70 percent."

> China's pesky habit of using their "surplus" personal savings, supplemented by business savings and foreign capital, to fund the construction of factories. "That raises the need to export."

All this conduces to China not being a team player in the global trade arena:
Everyone complains about America's trade deficits, but they actually symbolize global leadership. Access to the U.S. market has promoted trade by enabling other countries to export. But the deficits cannot grow indefinitely. Imagine now a trading system whose largest member seems intent on accumulating permanently large surpluses.

Nor, it might be added, are surpluses ultimately in China's interests. They drain too much of its production from its citizens and contribute to growing domestic economic inequality. What everyone needs is more balanced Chinese economic growth, less dependent on exports.
And Samuelson calls himself a free trader, huh? Since when did the free trade philosophy include accusing a country of social dumping? For that's what Samuelson is complaining about. He seems afraid that Americans will have to dump their standard of living to be competitive with the Chinese.

Samuelson expresses concern for the Chinese and the reasons for their high savings rate. "The Chinese save at astonishingly high levels, partly because they're scared of emergencies. The social safety is skimpy."

Would that more Americans were scared of emergencies, eh? Fewer of us would be heavily in consumer-driven debt. And just think what our captains of industry could do with our savings surplus. Why, we might even hope to compete with the Chinese.

I am happy that Samuelson musters compassion for the plight of Chinese without social benefits such as unemployment insurance, but this has nothing to do with the issue of free trade. Neither do any of his complaints.

Samuelson doesn't strike me as being so much in support of free trade as in support of a way of life for Americans -- a way of life that he wants developing countries to support by being less competitive. He wants the Chinese to alter their behavior so that Americans don't have to alter their behavior and expectations for what the good life entails.

We don't want smelly, polluting industries in our back yards. So ship the industries to China or anywhere but the USA. We don't want to injure so much as a thumbnail while on the job, so send the dangerous jobs and loose safety regulations to China or anywhere but the USA. We don't want unions to choke American industry, so set up union-free industrial plantations in China or anywhere but the USA.

China does engage in a predatory and mercantilist trade practice: the government supports industries that dump on the least developed nations Chinese-made goods sold at below manufacturing cost. And they dump wherever they can get away with it, including the USA.

Why Samuelson does not mention this well-known practice of the Chinese government is beyond me. Yet he has misdirected attention to social dumping issues and currency manipulation. I wish I knew why. A shot in the dark is that he thinks protectionism will result, if the United States and other nations go after the real issue with China's way of doing business.

Thursday, May 10

Bolivarian, Chavista, or Venezuela's version of 1950s USA?

"Pundita:
Have you lost your marbles? I thought you were anti-communist and a big supporter of free market policies. I can understand your reservations about wholesale application of some neoliberal economic remedies to the poorest developing countries, but from your [post of yesterday] it looks to me as if you've gone gaga over Hugo Chavez's ideas. He's a communist, in case you hadn't noticed.
Chicago Dan"

Dear Chicago Dan:
First of all, some clarifications, which don't really speak to your observations. I hurried yesterday's post into publication without proofreading then went back and edited it. Mostly minor edits but for readers who saw the early edition, I mistakenly omitted the site of the seven Venezuelan refineries up for sale; they are in the United States.

Also, I highlighted why I think the Trickle Down theory has had such a hard time working in certain Latin American countries:

"He's saying to put your own country first, then hop around the world. I wouldn't exactly call that an anti-globalist position. I'd call it a refutation of the Trickle Down theory when applied to very poor countries with a very small middle class.

Although Chavez says his revolution aims to create a classless society, he's actually taking actions to rapidly create a large middle class."

And a reader suggested that I substitute "Bolivarian Strategy" for "Southern Strategy" on the arguments that Venezuela is still in the northern hemisphere even though it's in South America, and because "Chavez's strategy is actually called Bolivarian." The reader also disputed that Venezuela should be termed a "very poor" country, given its oil wealth.

Both criticisms are fair; although Chavez's political philosophy is just as often called "Chavismo."

Now for the communist label. Whatever his sympathies in that direction during his youth, I do not think the label sticks to Chavez as Venezuela's leader. Certainly there is a fear that he will bring in communist government, and that was also my initial fear. From all I've seen, I think he's trying whatever will work to correct the obscene economic inequalities in a nation swimming in oil wealth.

Have you seen some of the stats on Venezuela? About 85% of the population live in urban areas yet 32% of Venezuelans lack adequate sanitation. Only 3% of sewage is treated; most major cities in the country lack treatment facilities. Almost 20% of Venezuelans lack access to potable water, one of the highest rates in South America. All that leads to widespread diseases related to raw sewage and impure drinking water. Infant mortality in Venezuela is 19 deaths per 1,000 births, five times higher than that of Sweden. But why? In a country with oil wealth?

Those are unacceptable statistics. The problem with the Trickle Down theory of economics is that the trickles only get down to a certain level, then they get recycled within the ruling class. This situation won't stand, and it always leads to revolutions, which lead to a severe backwash, which leads to a police state, and so on.

I think what Chavez is trying for is roughly a Venezuelan version of the USA in the 1950s, which saw the rise of a large middle class. The middle class was raised on the back of a G.I. education bill, powerful unions, and state-controlled monopolies of key strategic industries. Is that recipe communist? Doesn't the Trickle Down economic remedy work best when applied in a nation with a large middle class?

Maybe you're right, Dan; maybe Chavez has hoodwinked me. But let's take a look at the Wikipedia article on Bolivarianism. The Wiki editors sniff that the article needs more citations but still it's a useful starting point.
Bolivarianism is a set of political doctrines that enjoys currency in parts of South America, especially Venezuela. Bolivarianism is eponymous with Simón Bolívar, the 19th century Venezuelan general and liberator who led the struggle for independence throughout much of South America. One of the main ideals of "Bolivarianism" is promoting the unification of Latin America. The most prominent exponent and architect of modern Bolivarianism is currently Venezuelan president Hugo Chávez.

In recent years, its most significant political manifestation is in the government of Venezuela's president Hugo Chávez, who since the beginning of his presidency has called himself a Bolivarian patriot and applied his interpretation of several of Bolívar's ideals to everyday affairs, as part of the Bolivarian Revolution. That included the 1999 Constitution, which changed Venezuela's name to the Bolivarian Republic of Venezuela, and other ideas such as the Bolivarian Schools, Bolivarian Circles, and the Universidad Bolivariana de Venezuela.

The central points of Bolivarianism, as extolled by Chávez, are:

> Venezuelan economic and political sovereignty (anti-imperialism).

> Grassroots political participation of the population via popular votes and referenda (participatory democracy).

> Economic self-sufficiency (in food, consumer durables, etc...).

> Instilling in people a national ethic of patriotic service.

> Equitable distribution of Venezuela's vast oil revenues.

> Eliminating corruption.

Chávez's version of Bolivarianism, although drawing heavily from Simón Bolívar's ideals, was also influenced by the writings of Marxist historian Federico Brito Figueroa and Argentinian political scientist Norberto Ceresole. Chávez was also thoroughly steeped in the South American tradition of socialism and communism early in his life, such as that practiced by Jorge Eliécer Gaitán, Fidel Castro, Che Guevara and Salvador Allende. Other key influences on Chávez's political philosophy include Ezequiel Zamora and Simón Rodríguez. This has been seen as seemingly contradictory, as Bolivar viewed himself as a supporter of free-markets and liberal rights, whilst current "Bolivarianism" includes neo-Marxist policies.

Although Chávez himself refers to his ideology as Bolivarianismo ("Bolivarianism"), Chávez's supporters and opponents in Venezuela refer to themselves as being either for or against "chavismo," indicating a public perception that Chávez's political philosophy does not originate from Bolívar so much as from his own views. Thus, Chávez supporters refer to themselves not as "Bolivarians" or "Bolivarianists," but rather as "chavistas."

Later in his life, Chávez would acknowledge the role that democratic socialism (a form of socialism that emphasizes grassroots democratic participation) plays in Bolivarianism. For example, on January 30, 2005 at the World Social Forum in Porto Alegre, Brazil, Chávez declared his support for democratic socialism as integral to Bolivarianism, proclaiming that humanity must embrace "a new type of socialism, a humanist one, which puts humans, and not machines or the state, ahead of everything."

He later reiterated this sentiment in a February 26 speech at the 4th Summit on Social Debt held in Caracas.
I think what has the US government so greatly worried is that Bolivarianism talks about unifying Latin America, and the nightmare is a communist version of the European Union. Brazil would never go along with any attempt to unify Latin America, and the same could be said for Mexico. But I don't see why setting up favorable trade networks and greater development cooperation among Latin America's poor countries is a bad idea.

The simple truth is that for whatever reasons, the poorest in Latin America have not benefited from the IMF way of doing things. So, try something else. Chavez is trying. Does not mean he'll succeed but he's got astute advisors who appreciate the value of capitalism.

Wednesday, May 9

Revenge of the Banana Republics: Hugo Chavez's Southern Strategy gathers steam

It's becoming clear that it is misleading to apply the term "leftist" to the movement led by Hugo Chavez. The multinational strategy is a backlash against foreign control of key industries, but that doesn't make it leftist in the traditional sense. Consider the planned ALBA bond issue, which copies the capitalist approach of the World Bank to obtaining loan money:
Mr. Chavez ... raised the idea of issuing a regional bond to raise money for social spending as he hosted a summit of "the Bolivarian Alternative for the Americas" (ALBA), a leftist bloc and trade group that includes Venezuela, Cuba, Bolivia and Nicaragua.

"I proposed that we issue an ALBA bond. I hope that we can do it. ... And that we issue it here in Venezuela, as we did with Argentina, and bring in $1 billion," said Mr. Chavez, addressing leaders April 29 on final day of their talks. The Venezuelan president said the money acquired would be put in a fund to provide credit for ALBA nations.


Mr. Chavez and other leaders signed accords for Venezuela to supply fuel under preferential terms and join other countries in cooperative projects on education, telecommunications, mining and other areas.

He said Venezuela will guarantee to supply 100 percent of the energy needs of ALBA members plus Haiti. ALBA was created in 2004 by Cuba and Venezuela as a counterproposal to U.S. backed free-trade plans.
And in a move that can only be envied by US and European energy companies
Mr. Chavez said Venezuela eventually plans to help build a network of refineries in Nicaragua, Haiti, Ecuador, Bolivia and Dominica, and to refurbish Cuba's Cienfuegos refinery, to provide a stable supply of oil -- and the earnings it generates -- to Latin American countries. [...]

Under special oil arrangements offered by Venezuela, ALBA member nations will be able to finance 50 percent of the bill for fuel through low-interest loans, and 25 percent of the total bill will go into a special "ALBA Fund" to support local projects using loans, he said.
You know what he's talking about? How to put this in a few words -- he's talking about an intelligent development strategy that is specifically targeted to helping the poorest nations in the Western Hemisphere. This is what large development banks such as the World Bank were supposed to be doing all these decades.

Can it work? Sure it can work in the globalized era of employment opportunities. The traditional threat of the biggest commanding-heights companies that invest in developing countries is that they'll pull out all their technical assistance if their company is forced to leave. Be sure to shut the door behind you; today, technical assistance is readily available from the global employment pool.

Of course, getting control of the foreign-owned companies is never pretty.
Mr. Chavez began a nationalization drive in January to impose state control over "strategic" companies. His government took over multibillion-dollar oil operations from major foreign-oil companies last week and announced on Thursday that it would not be paying them cash compensation.

"We do not expect to pay out money in order to arrive at some arrangement with the companies," said Oil Minister Rafael Ramirez, according to the transcript of an interview with state television.

Mr. Ramirez did not elaborate on how else the government might compensate BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France's Total SA and Norway's Statoil ASA, which have invested more than $17 billion in the projects.

Mr. Ramirez also said that one of the companies, Houston-based ConocoPhillips, would be expelled from the country and barred from staying on as a minority partner in a state-run joint venture if it continues to resist the state takeover. ConocoPhillips is the only oil company that has not signed an agreement in principle recognizing state control.
Isn't this a leftist ploy? In this context I'd call it hardball. What can you call a country where a huge majority of the citizens live in an abject poverty while a small elite dances with captains of foreign-owed strategic industries? "Right" and "Left" labels don't quite apply. "Fighting abject poverty entrenched in a nation for generations" applies.

Where is the U.S. Department of State Department in all this? On the moon. The failure of the US approach to Latin America, which since the 1980s has emphasized the IMF interpretation of the Trickle Down economic remedy for the world's poorest countries, is the starkest example of the foolishness of the US Euro-centric foreign policy.

In more news about Hugo Chavez's strategy, last week he announced that he plans to sell the seven oil refineries in the United States held by Venezuela's Citgo Petroleum Corporation. He's also going after the banks.
"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Mr. Chavez said. "If banks don't agree with this, it's better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits."

It was not clear if Mr. Chavez was referring only to Venezuelan banks like Mercantil Servicios Financieros CA and Banco Provincial SA, or also major foreign banks with subsidiaries in the country, like New York-based Citigroup Inc. and Spain's Banco Bilbao Vizcaya Argentaria SA and Banco Santander Central Hispano SA.

Mr. Chavez also warned that his government could take over steel producer Sidor, which is majority controlled by Luxembourg-based Ternium SA.[...]

Sidor "has created a monopoly" and sold most of its output overseas, forcing Venezuelan producers to import pipes from elsewhere, Mr. Chavez said.

The company should be giving priority to supplying national industries, he said, ordering Mining Minister Jose Khan to come back from Sidor's headquarters with a recommendation in 24 hours.

Sidor and banks in Venezuela did not respond to requests for comment.

"I don't think it'll happen immediately. They're just threats," said Franklin Rojas, director of Caracas-based economic institute CIECA.

Mr. Rojas noted that Mr. Chavez would likely run up against his close ally, Argentine President Nestor Kirchner, if he tried to nationalize Sidor, whose parent company, Ternium, is controlled by a major Argentine conglomerate, Techint Group.
Chavez is not making empty threats. He's taking the same approach as Russia's under Vladimir Putin. He's saying to put your own country first, then hop around the world. I wouldn't exactly call that an anti-globalist position. I'd call it a refutation of the Trickle Down theory when applied to very poor countries with a very small middle class.

Although Chavez says his revolution aims to create a classless society, he's actually taking actions to rapidly create a large middle class.

The real bottom line is that a nation's government can't be effective if it's hostage to foreign concerns that don't plow a substantial amount of their profits back into the nation.

All quotes in this post are from two May 8 Associated Press reports featured in The Washington Times Americas Briefing:

Chavez to sell refineries

Banks, top steel maker latest targets for nationalization

The Americas Briefing is published every Tuesday. Stay tuned.

Tuesday, May 8

The crumbling Core

Overview: the more inclusionary the United States tries to be in multilateral approaches, the more unclear our values and aims.

I asked ZenPundit Mark Safranski for his comments on my post, US 21st century foreign policy and wrong application of game theory, which references a column by Fareed Zakaria titled Losing Another War in Asia. Mark's reply focused on Thailand, one of the two countries that Fareed Zakaria mentioned in the course of passing along the observation that Asian leaders are reluctant to take measures seen as pro-American. Mark also zeroed in on remarks by Singapore's Lee Hsien Loong about US policy on Israel. To recap Lee's remarks:
[Lee] reminded [Zakaria] that nearly half of Southeast Asia's population is Muslim and said, "The single most important thing that the U.S. could do to shift its image in the region would be to take a more active role on the Israeli-Palestinian issue and in a balanced way. The issue is more important for Southeast Asia's Muslims than even Iraq."
"Hi, Miss P:
Singapore's critical G2G American relationship is with PACOM, not State. On the military boards I frequent and in reader email from active duty personnel, I hear nothing but praise for "The Singhs." As sailors have much to gripe about these days with nannyish Navy policies, it's a high compliment.

[However] Prime Minister Lee comes from a country with a stern record of summarily hanging infiltrators who are agents of disorder, including Muslim terrorists. They even elevated one instance in the 60's to international law precedent, their high court citing our Ex Parte Quirin decision. But most Americans are unaware of such things, including, I'm sure many people in our foreign affairs community.

Lee's statements sound nice for Singapore's large Muslim neighbors, which is why, in my view, he said it. After all, it costs Singapore nothing for its PM to prattle on with Mr. Zakaria; sacrificing some real Singaporean interest to get America to jerk Israel around is out of the question.

Thailand is a Buddhist nation with a shadowy Salafist insurgency bleed-over from Malaysia. They don't give a hang about the Palestinians and the Thai army is capable of effective counterinsurgency with American aid. So far, internal politics in Bangkok has occupied the senior generals' attention but if the army is forced to react, much like with the influx of Cambodians in the 70's, it will camp on the border if necessary.

Zakaria may be a better writer of prose than an analyst. Or he's spinning. I don't read him often enough though to tell.
Mark"

Dear Mark:
I recalled that you're interested in group dynamics and human networks, which I suppose is why I hoped you'd help me work through my intuitions about Zakaria's piece. Yet I was so busy trying to figure out what Zakaria is really driving at that I neglected to consider the context in which Lee was advising him on Asian matters; your observations fill in the blanks.

That Zakaria didn't make an effort to mention Singapore's position suggests that he wasn't trying to analyze Lee's remarks; he simply found them handy to his argument that the US government needs to do more to woo Asia.

What does "doing more" entail? Zakaria holds up China's approach to foreign relations as a model.
Beijing has become remarkably adept at using its political and economic muscle in a patient, low-key and highly effective manner. China's diplomacy emphasizes its core strengths -- a long-term perspective, a nonpreachy attitude and strategic decision-making that isn't bogged down by internal opposition or bureaucratic paralysis.

Over the last decade, for example, China has greatly improved its historically tense relations with Southeast Asia. It's taken a more accommodating political line, provided generous aid packages (often far outstripping those provided by the United States) and moved speedily on a free-trade deal with the Association of Southeast Asian Nations (ASEAN). Japan wanted to cut a similar deal but has dithered, racked by power struggles between political and bureaucratic factions in Tokyo. The United States can't even begin such a conversation with ASEAN because we will not talk to Burma. One result: this summer China plans to hold military exercises with some of these countries, most of which have been U.S. allies for decades. [...]
Zakaria goes on to say that "no one is comfortable with an Asia dominated by China" then turns to Lee for advice on how the US might become more popular in Southeast Asia. In part that's what prompted my remark that the world is not high school.

The other part is what keeps me pacing the floor and asking myself why I'm so bent out of shape by Zakaria's piece -- and I'm not satisfied with my dig about a misapplication of game theory, whether or not it's correct.

Zakaria's observations are part of a cacophony of advice arising from many quarters that boils down to the need for the US to be more multilateral and more accommodating to a vaunted new multipolar world order. Perhaps Zakaria's most telling remark is:
Few people in Asia are actively pining for "the Chinese Dream" because it's not really clear what that is -- and to the extent that there is one it sounds suspiciously like the American Dream.
It is very easy for China to present itself as being in sync with the American Dream because the United States and China are big trading partners; both are members of big multilateral institutions such as the World Trade Organization, the United Nations, and the World Bank; and the US seeks China's help in multilateral negotiations such as the six party talks.

Multilateralism works to the extent that there is a cohesive group with a cohesive agenda. It collapses when the group has unlimited membership with wildly different and even starkly opposing agendas. This is exactly what has happened at the World Bank, UN, WTO, and to a lessor extent NATO.

A multilateral approach can be effective when the goal is carefully circumscribed, as in the Sharm el-Sheikh summit on the UN international compact with Iraq; there the goal was simply to internationalize help to Iraq. Yet I think Zakaria's advice is symbolic of a policy movement in Washington that applies multilateralism indiscriminately, or grossly distorts the concept. They sound like high school students who feel they can't survive unless they merge their identity with what they think is the prevailing view in the school halls.

The upshot is that Barnett's "Core" is in danger of collapsing under the law of unintended consequences -- a situation that the European Parliament is already wrestling with as more countries pile into the European Union. On the American front, a slapstick element is entering US policy decisions:

"Say, let's promote India and Brazil for the UN Security Council!" Oops, India and Iran are becoming big trade partners. And now our oldest European allies are worried that their influence at the UN will be lessened by the addition of newer powers. And what are we going to do about Brazil joining Hugo Chavez's Bank of the South?

The attempt to control or influence by inclusion is heading toward silliness, as witness Condoleezza Rice's recent remarks that Saudi Arabia's regime is "moderate" and "mainstream."

("What's moderate about Saudi Arabia?" [Natan] Sharansky demanded. "Its record of religious tolerance?")(1)

But State is convinced that the US needs Saudi Arabia to help resolve sectarian violence in Iraq, so calling the Saudi rulers moderate and mainstream is a nice way to rationalize making a tyranny a leader in helping Iraq's democracy. Yet each time the United States makes such accommodations, the more muddied US objectives seem to outside observers.

Of course this is not a perfect world, in particular for a superpower nation, and yet the more the US feels pressed to engage with despotic governments, the more care needed to distinguish US aims from those held by governments that oppose democracy.

So I think it's time to take a deep breath and review the context in which the US raised up large multilateral institutions. The world was a different place then; maintaining a Core that held together was relatively easy. But the very success of the Core from the mid-20th Century onward in bringing along many nations means that today, regionalism and bilateral agreements drive the policies of the rising powers -- and the developing nations they do big trade with. These policies understandably conflict with US aims in many ways, and attempts to accommodate the policies greatly dilute American policy objectives.

So what's the solution for the US? One approach would be to recast US multilateralism not according to a core of entities (nations) or trade practices but a core of shared values.

I have never heard a good argument against the US setting up an American international development bank, along the lines of the World Bank. There's no reason why the US couldn't set up such a bank, and make nation membership conditional on democratic government.

The same approach could be applied to creating a version of the United Nations that tags membership to democratic government.

In short don't abandon multilateralism, just abandon what it's become, which is a cauldron of democratic and anti-democratic aims with the latter overwhelming good policy initiatives by the democracies.

This does not necessarily mean abandoning membership in the World Bank or UN or multilateral trade agreements based on WTO criteria for inclusion. It means drawing a line at the dangerous premise that the democratic notion should be applied to the amount of say that nations have in a multilateral gathering. If it's "one nation, one vote" -- today a majority of the world's nations are nondemocratic and a solid majority among those are virulently anti-democratic.(2)

"Pundita:
I think you are correct that the nature of multilateralism is changing and that we have not been doing very well in recognizing that fact.

Some of our political appointees are not entirely cognizant of the help other states could provide if they are properly incentivized (the French professional intel/ military folks, for example, should be well regarded). On the other hand, most of the SES level bureaucrats have outdated expectations of Europe that seem to have frozen around the time Pompidou was president of France.

The outward pressure provided by the Soviets that reinforced Western solidarity has vanished and, with the emergence of a vacuum, the Western states have drifted apart to an extent, following their national interests.

I think our best bet is to plan on crafting policies that attract allies on the basis of their economic self-interest (the more corrupt they are, the shorter the time horizon we should have in mind).

In my opinion we can gather a constellation of bystander-mendicant states to shout Kumbayah with us after we have attracted the help of the genuinely useful states like Australia or India (useful meaning "have troops who can and will stand and fight" -- in this sense a company of Peshmerga are worth a division of the Dutch).

Thomas Barnett divides the Core into "Old" (US, Western Europe, Japan) and "New" (Russia, India, China, E. Europe - Brazil is on the edge, a "seam" state, as is Turkey). Currently he sees the New Core as more pragmatic and having the initiative in setting the tone of emerging international rules, like China's "non-preachy" relationship with African horror states like Sudan and Zimbabwe.

I think we will see other New Core states imitate China's foreign policy stance as they do not have the resources on the margin to offer (or threaten) more. Barnett believes the U.S. has room to lead here but the current administration lacks the imagination to capitalize diplomatically on their recognized willingness to use force.

(I think the administration is deeply divided at the senior levels on strategic policy with Bush in the middle as reluctant and erratic arbiter.)

I do not think China is our friend or our enemy. A friend [...] once described the Sino-American relationship to me as "golden handcuffs." Our economy is now integral to the stability of the rule of the CCP, which has to produce a dramatic level of real GDP growth to maintain political legitimacy. They hedge their economic system with enormous dollar reserves. It is a bizarre symbiotic relationship that I'm not sure Nixon had entirely anticipated (certainly Mao did not).
Mark"

Mark,
Thanks for your additional comments. This is a fascinating discussion about a very important subject. So, while I am going to end this long post here, I will close with what I hope is a leading question: If there is a new core and old core, which is the core? Can there be two cores?

1) A Lasting Freedom Agenda, Jackson Diehl, The Washington Post

2) UN A Haven For Despots, Fred Gedrich, The Washington Times

Monday, May 7

Congratulations, President Sarkozy

If the United States wasn't at war, I would have stayed up all night partying over the news that a strongly pro-American Frenchman was now France's President. By 2003, I had learned that joy is out of place in war. Casting out joy is the only way I could avoid the other extreme of despair. Yet the thought of an era of genuinely warm relations between a French government and Washington is very heartening. Now for the cold realities.

President Nicolas Sarkozy's promised economic reforms face great opposition from France's unions and the Left, and even the most pro-change French know the reforms will cause widespread pain. Sarkozy would be a fool to rile the Left any more than he has to. So Americans shouldn't get their hopes up that Sarkozy's election means a radical shift in US-French relations in the near term; we should be happy with slow fence mending. The only place I might hope to see changes soon is in France's approach to Iraq, but I sit hard on the impulse to hope.

Sarkozy will have his coming out party as an international leader at the G8 summit next month. For now, a quick trip around the Middle East and Africa for immediate reactions to Sarkozy's victory:

Both sides of the Israel-Arab divide see hope in Sarkozy's election victory. Israeli Prime Minister Ehud Olmert said he is confident that Israel’s relations with France will strengthen during Nicolas Sarkozy’s presidency. In the past, Israel’s relations with France were often tense, with Israeli leaders viewing Paris policy toward the Jewish state as one-sided in favor of the Palestinians. Benjamin Netanyahu, head of the conservative Likud opposition party, called the election of Sarkozy good news for relations between Israel and France.

“Sarkozy is a friend of Israel and my personal friend. He wants to work in favor of peace and security for Israel,” the former Prime Minister was quoted as saying by the Israeli radio. (1)

Syria and Hezbollah have expressed hope that Sarkozy will bring a more "balanced" approach to France's relations with Lebanon and Syria.
President Bashar Assad in a telegram expressed hopes that relations between Syria and France, which have been marred for the past two years, "would develop for the two countries' interests" [...]

Chirac has led the international charge in support of Lebanon, organizing in January a Paris donors' conference that raised more than US$7 billion in soft loans and grants for Lebanon. In addition, he sent French troops as peacekeepers to southern Lebanon to monitor a cease-fire that ended the fighting last year between Hezbollah and Israel.

Chirac's involvement in Lebanon caused a stir last year when Lebanese President Emile Lahoud, a pro-Syrian, publicly criticized the French president. The unusual high level rift was seen as the lowest point in bilateral relations since Lebanon gained independence from France in 1943.

Lahoud has urged Chirac to stop intervening in Lebanese domestic affairs, accusing him of siding with the anti-Syrian governing faction. He even blamed Chirac for excluding the Lebanese leader from a summit of French-speaking nations held in Romania in September. Chirac has rejected the charges.

Understandably, Lebanon's governing coalition hoped Sarkozy's presidency would mean continued French support.

Within minutes of the results, Saad Hariri, head of the parliamentary majority in Lebanon and son of slain leader Rafik Hariri, sent a message of congratulations to Sarkozy, expressing confidence that historic ties will continue to develop."This is the hope of all the Lebanese who remember France and the French for their permanent stand toward their causes, and this I pledge to continue to work to achieve it in my political and parliamentary position in Lebanon," Saad Hariri said in a statement.

The late Rafik Hariri was a friend of Chirac and the outgoing president is leading the efforts to create an international tribunal to try killers of the former prime minister.

There has been quiet concern in the country's parliamentary majority that with Chirac leaving office, personal, hands-on involvement by France may become a thing of the past.

The governing coalition in Beirut needs French backing, particularly in the U.N. Security Council, which discussed the tribunal last week and could adopt it without Lebanon's approval because of a deadlock between the government and opposition over its formation
.(2)
On the Iran front, we can imagine that Tehran isn't jumping for joy. Sarkozy is expected to push for a tough stand against Iran's attempts to build nukes and their anti-Israel actions. In late April he told an interviewer that Iran represents
"the most important problem on the international scene." The calls made by President Mahmoud Ahmadinejad for the destruction of Israel are the most profound threat to international peace, he said.(3)
On the African front, African leaders in countries that see large numbers migrating to France have greeted Sarkozy's victory with caution:
President Bouteflika of Algeria said the French people had chosen "a man of action", President Wade of Senegal called it "a brilliant election".

But the messages have been lukewarm at best, reflecting the uncertainty his win brings for French ties with Africa.

Mr Sarkozy has spoken of reforms in France`s relationship with Africa, in particular over immigration and trade.

Some African leaders are concerned Mr Sarkozy`s notions of reform could be a double-edged sword with uncertain consequences for the continent.

Mr Sarkozy lacks the personal contacts in Africa and the Middle East that Jacques Chirac and Francois Mitterrand enjoyed before and during their presidencies.[...]
(4)
1) European Jewish Press

2) Associated Press via International Herald Tribune

3) EURSOC

4) Angola Press

Sunday, May 6

China's toxic medicine counterfeiting causes mass deaths

China's counterfeiters have been using a poisonous industrial solvent in counterfeit cough syrup and other liquid cold medications, which has caused mass deaths around the world.

China's is not the only government aiding and abetting the Harry Limes of the world, but it's the biggest and most frightening example of the harm that is done through lax measures against counterfeit medications. The following New York Times investigatory article is long so I'm only posting the first part, which is enough to warn the reader in the starkest terms.

I hope the fallout from the NY Times report will put counterfeiting high on the list of discussion items at the upcoming G8 Summit and galvanizes the US and all other nations to tighten up on safety regulations for imported medicines.
From China to Panama, a Trail of Poisoned Medicine
By WALT BOGDANICH and JAKE HOOKER with contributions from Renwick McLean and Brent McDonald
The New York Times, May 6, 2007

The kidneys fail first. Then the central nervous system begins to misfire. Paralysis spreads, making breathing difficult, then often impossible without assistance. In the end, most victims die.

Many of them are children, poisoned at the hands of their unsuspecting parents. The syrupy poison, diethylene glycol, is an indispensable part of the modern world, an industrial solvent and prime ingredient in some antifreeze. It is also a killer. And the deaths, if not intentional, are often no accident.

Over the years, the poison has been loaded into all varieties of medicine -- cough syrup, fever medication, injectable drugs -- a result of counterfeiters who profit by substituting the sweet-tasting solvent for a safe, more expensive syrup, usually glycerin, commonly used in drugs, food, toothpaste and other products.

Toxic syrup has figured in at least eight mass poisonings around the world in the past two decades. Researchers estimate that thousands have died. In many cases, the precise origin of the poison has never been determined. But records and interviews show that in three of the last four cases it was made in China, a major source of counterfeit drugs.

Panama is the most recent victim. Last year, government officials there unwittingly mixed diethylene glycol into 260,000 bottles of cold medicine -- with devastating results. Families have reported 365 deaths from the poison, 100 of which have been confirmed so far. With the onset of the rainy season, investigators are racing to exhume as many potential victims as possible before bodies decompose even more.

Panama’s death toll leads directly to Chinese companies that made and exported the poison as 99.5 percent pure glycerin. Forty-six barrels of the toxic syrup arrived via a poison pipeline stretching halfway around the world. Through shipping records and interviews with government officials, The New York Times traced this pipeline from the Panamanian port of Colón, back through trading companies in Barcelona, Spain, and Beijing, to its beginning near the Yangtze Delta in a place local people call “chemical country.”

The counterfeit glycerin passed through three trading companies on three continents, yet not one of them tested the syrup to confirm what was on the label. Along the way, a certificate falsely attesting to the purity of the shipment was repeatedly altered, eliminating the name of the manufacturer and previous owner. As a result, traders bought the syrup without knowing where it came from, or who made it. With this information, the traders might have discovered -- as The Times did -- that the manufacturer was not certified to make pharmaceutical ingredients.

An examination of the two poisoning cases last year -- in Panama and earlier in China -- shows how China’s safety regulations have lagged behind its growing role as low-cost supplier to the world. It also demonstrates how a poorly policed chain of traders in country after country allows counterfeit medicine to contaminate the global market.

Last week, the United States Food and Drug Administration warned drug makers and suppliers in the United States “to be especially vigilant” in watching for diethylene glycol. The warning did not specifically mention China, and it said there was “no reason to believe” that glycerin in this country was tainted. Even so, the agency asked that all glycerin shipments be tested for diethylene glycol, and said it was “exploring how supplies of glycerin become contaminated.”

China is already being accused by United States authorities of exporting wheat gluten containing an industrial chemical, melamine, that ended up in pet food and livestock feed. The F.D.A. recently banned imports of Chinese-made wheat gluten after it was linked to pet deaths in the United States.

Beyond Panama and China, toxic syrup has caused mass poisonings in Haiti, Bangladesh, Argentina, Nigeria and twice in India. In Bangladesh, investigators found poison in seven brands of fever medication in 1992, but only after countless children died. A Massachusetts laboratory detected the contamination after Dr. Michael L. Bennish, a pediatrician who works in developing countries, smuggled samples of the tainted syrup out of the country in a suitcase.

Dr. Bennish, who investigated the Bangladesh epidemic and helped write a 1995 article about it for BMJ, formerly known as the British Medical Journal, said that given the amount of medication distributed, deaths “must be in the thousands or tens of thousands.” [...]
(1)
1)
http://www.nytimes.com/
2007/05/06/world/06poison.html?hp

Friday, May 4

De-escalating the Syria-Israel confrontation

Visit Riehl World View for a roundup of news and interesting opinion on Condoleezza Rice's meeting at Sharm el-Sheikh with her Syrian counterpart. The meeting takes on great importance in light of David Makovsky's analysis of whether Israel and Syria are headed to war. Makovsky's advice specifically addresses UN Security Resolution 1701, which was the outcome of last summer's war between Hezbollah and Israel.
[1701] deployed thousands of U.N. peacekeepers to southern Lebanon. The presence of such forces there has constrained Hezbollah, even though the peacekeepers have not attempted to disarm Hezbollah fighters. However, a key provision of the resolution -- an international embargo to prevent weaponry from entering Lebanon -- has not been met. Just two weeks ago the Security Council voiced concern that this resolution has not been implemented fully.

It has been widely reported that arms from Syria are being smuggled into Lebanon, and Israeli officials say that Hezbollah is hiding Syrian-manufactured 220mm rockets just beyond the jurisdiction of the peacekeepers but within range of northern Israel.

There is open speculation in Israel and Lebanon about the possibility of the conflict resuming this summer.

Two other factors add fuel to the fire. First, Syria is colluding with Hezbollah to destabilize the Lebanese government, fearing Beirut's commitment to prosecuting the killers of former prime minister Rafiq al-Hariri, the beloved leader slain in February 2005.

Second, in an eerie echo of the run-up to the 1967 war, U.S. and Israeli officials say Moscow is once again telling Damascus that Israel has plans to attack Syria. Israeli security officials say that Syria's new military deployments reflect this Russian advice. Concerned that such a deployment might dangerously turn from defensive to offensive, Olmert took the unusual step of declaring last month that Israel has no desire to start a war with Syria. But the prospects for miscalculation remain high.

Syria believes that Israel sees war as a means of regaining a deterrent that was weakened last summer, and Israel believes that Syria sees its relationship with Iran and Hezbollah as a winning combination.

On top of all this, Hamas's approach to a cease-fire in Gaza is one of observation, not enforcement. Specifically, Hamas has done nothing to halt the firing of more than a thousand Qassam rockets from Gaza, which Israel evacuated from in 2005, into southern Israel over the past year, and last week it publicly asserted responsibility for some such attacks. The cease-fire has never been defined, so there are no obligations constraining the Israelis or Palestinians.

It is worth recalling that Hezbollah's provocative attack last summer was staged in sympathy: It kidnapped two soldiers after Hamas kidnapped Israeli Cpl. Gilad Shalit last June.Amid all these problems, and given Olmert's teetering position and the Arab League's insistence after its March summit in Riyadh that its peace plan is a take-it-or-leave-it proposition, it is hard to believe that Secretary of State Condoleezza Rice will succeed in negotiating a "political horizon" -- namely, fleshing out guiding principles that would govern a resolution of the Israeli-Palestinian conflict -- until the Israeli political situation stabilizes and there is greater clarity about and a moderate direction to the Palestinian "unity government."

This situation does not argue for U.S. passivity. Rather, Rice should lead an international coalition to defuse multiple looming crises in Arab-Israeli arenas. The international community can and should agree to follow up U.N. Resolution 1701 with one involving the deployment of U.N. peacekeeping troops on the Syrian-Lebanese border. Avoiding another outbreak of violence could make Rice's political horizon a more likely possibility once the Israeli leadership crisis eases.

Not exactly the wrong stereotype

"The wrong sterotype:
Pundita,
The Chinese can pronounce the "l" sound just fine, thank you very much. The Japanese don't have it in their language which is why they have trouble with it.
[Anonymous]"

Dear Anonymous:
Thanks for your comment. I am aware that the "l" pronunciation problem is with the Japanese language. (I am also aware that it's been a long time since Chinese diplomats used "me" in place of "I" in their communications.) I should have taken time to come up with real Chinese Pidgin or at least explain my falling back on Japanese Pidgin.

My only defense is that after decades of pent-up frustration with Beijing's Professional Cute routine in their international relations communications I collapsed in laughter when I read the Stratfor analysis. Then I thought of how the Japanese must also feel about China finally getting into a much-deserved hotseat and rushed the thought into a post.

Now I go to prant -- plant -- that rosebush.

At Sharm el-Sheikh, the pot calls the kettle black

May 3, Sharm el-Sheikh
“Sometimes it appears people in diplomacy use talk as a reward or punishment,” said the Saudi foreign minister, Prince Saud al-Faisal, in an interview after his own 30-minute meeting with Ms. Rice. “That seems to me very childish. We are frustrated when people don’t talk together.” (1)

April 28
"In a serious rebuff to U.S. diplomacy, King Abdullah of Saudi Arabia has refused to receive Iraqi Prime Minister Nuri al-Maliki on the eve of a critical regional summit on the future of the war-ravaged country ..."(2)

With no woman in a red dress around to blame for snubbing Malaki, King Abdullah fell back on the time-honored excuse of a scheduling conflict. Still and all, Sharm el-Sheikh was a success because the goal to internationalize assistance to Iraq was met.

In attendance were Iraq's neighboring states; the UN Security Council's five permanent members of Russia, China, France, Britain and the United States; representatives of G8 industrialized nations, the Organization of the Islamic Conference, and the Arab League plus Egypt and Bahrain. The UN-led international compact between donors and the Iraqi government was ratified at Sharm el-Sheikh; the compact provides a framework for regional and international economic assistance to flow in time with Iraqi government reform.

At the Thursday meeting at Sharm el-Sheik negotiations
centered around trying to persuade the international community, particularly the Persian Gulf countries, to agree to a debt relief and financial aid for Iraq. The United Nations secretary general, Ban Ki-moon, said that donor countries, including Britain, Saudi Arabia and China, pledged to waive $30 billion in Iraqi debt.

In return, Baghdad promised to enact a series of reforms, like better inclusion of the country’s Sunni minority in the political process, an oil law and better legal protections for Iraqi Sunnis and Kurds.

“The national unity government is committed to providing all necessary services for the deprived people, and because these services need huge finances, we call on all the friends and brothers participating in this conference to write off Iraq’s debt to enable it to start reconstruction and development projects and rebuilding its infrastructure,” Prime Minister Nuri Kamal al-Maliki of Iraq said in a speech before the group. “Your support will enable the national unity government to move forward with the political process and consolidate democracy and impose law and order.”

But there is a clear quid-pro-quo at play, and while conference attendees verbally pledged 80-percent debt relief and billions in aid, they left themselves room in case the Shiite-led Iraqi government did not make good on its promises to reform and reach out to minority groups.

Indeed, assembled diplomats, particularly the Sunni Arab envoys, said they remained unconvinced that Mr. Maliki’s government would take the necessary steps.

“We don’t see anything happening in Iraq in implementation,” Prince Saud said in the interview. “Our American friends say there is improvement: improvement in violence, improvement in the level of understanding, improvement in disarming militias. But we don’t see it.”

Prince Saud added that it seemed premature to produce an international agreement to help out Iraq. He said that during his meeting with Ms. Rice on Thursday, he expressed his reservations on the process and his concern that the Maliki government was not doing enough to stabilize the country.

“You have to have national consensus,” Prince Saud said. “If you move to improve the situation, you can’t do it from the outside.”

American officials acknowledged that much of the help for Iraq is contingent on Baghdad. “That point is valid,” admitted Ryan C. Crocker, the United States ambassador to Iraq. “If you’re not moving forward on these issues, the centrifugal forces will take hold and move you back. The international compact is a good thing, it deserves support, but it’s very important to move forward on the national compact
.”(1)
Yes, the Saudis have a point, but the Iraqi PM wants some assurance from Saudi King Abdullah that the Saudis will stop trying to run Iraq's internal affairs. He'd also like Tehran to keep their paws off.

1) The New York Times, May 4

2) The Washington Post, April 29

Thursday, May 3

Thank God, no more Pidgin English from China's diplomats

From Stratfor
The April 24 attack against a Chinese energy exploration project in Ethiopia is having some significant reverberations throughout the Chinese policy community. The issue is that the Chinese Foreign Ministry's generation-old mantra, "We are part of the developing world," is no longer shared by the developing world, which now largely sees the Chinese as being just as exploitive as any other major industrial power.

This disconnect has already provoked the premature dumping of China's foreign minister. What other changes lie in store for China's coming-of-age, both in China and in the wider world?
There's the end of an era. Me so happy not hear "We just poor developing country" anymore, me go prant rosebush honor joyfur occasion.

Wednesday, May 2

Whither the Bush Democracy Doctrine?

Here's a conundrum:

On April 27, Turkey's Foreign Minister Abdullah Gul, who is perceived by many Turks to represent a push by Turkey's clerics to Islamize the government, came within 10 votes of winning the presidency. That prompted the military, which has led three coups since 1960 to preserve Turkey's secularist government, that they had an "unshakable determination" to defend Turkey's secularism.

That galvanized the European Union's Enlargement Commissioner, Olli Rehn, to announce primly that the army's reaction to the presidential vote was a "clear test case" of whether it could respect the EU's "democratic values."

But anyone past the age of 12 knows that if the clerics win out, Turkey heads down the road toward Taliban-style government, which is why more than a million Turks took to the streets after the vote to protest Gul's candidacy. They know that secularism is the bulwark of democracy.

On the other hand Rehn has a point: if you're going to suspend the democratic process in favor of military rule until the vote comes out a certain way, is this democracy in action?

The US government has been running into one version or another of this conundrum ever since President Bush articulated the democracy doctrine. As Jackson Diehl nicely summed it in his April 30 op-ed A Lasting Freedom Agenda Bush's second term
... has seen the virtual collapse of Iraq's democratic experiment, the consolidation of autocratic governments in Russia and Venezuela, the extinction of the liberal reform movements that Bush briefly inspired in the Arab Middle East -- and the de facto reversal of Bush's "freedom agenda" by his own State Department.
Officially, State is still supporting the democracy doctrine. On April 16, at a State meeting of their Advisory Committee on Democracy Promotion, Secretary of State Condoleezza Rice asserted that the "first goal" of American foreign policy should be developing democracies.
... without well-governed, democratic states, you're likely to have failed states or authoritarian states that are going to submerge but not deal with the unhealthy political forces that lead to extremism.(1)
We'll ignore the silly statement that democracy promotion should be the first goal of America's or any country's foreign policy; the first goal of a rational foreign policy is defense of the country. But within the context of national defense, yes, in the 21st century there is a direct connection between disenfranchised populations and the highly portable warfare that can bring a democratic country to its knees.

Yet the defense priority for the United States also means cutting deals with leaders of nondemocratic governments, such as the ones in Pakistan and Saudi Arabia. The globalized business priority means doing big business with China's repressive government. So it's an open secret that State is applying the democracy doctrine in highly selective fashion.

I long for a Turkish version of Boss Tweed to resolve the conundrum. Forget a military coup; just keep recounting the votes until the tally comes out in favor of the secular candidate. Pundita readers who are not American should not be shocked at my advice. See The Gangs of New York, a movie I've mentioned more than once on this blog, to be clear that the rise of American democracy was a very messy and very corrupt process.

Tweed was thoroughly corrupt, but he also had a sense of history and two eyes in his head. He understood that Brooklyn and the rest of New York city neighborhoods couldn't keep absorbing huge waves of immigrants and freed slaves who had no say whatsoever about the abuses they were suffering at the hands of the "natives" who controlled every aspect of government. Better to give the immigrant populations the hope that they had some representation than to see them form armies that brought down the society. Events proved Tweed right, as you can see from watching the movie.

But then, would argue a promoter of sharia government, why not apply Tweed's reasoning to the millions of Turks who want a government run by clerics? For three reasons:

First, those millions are not disenfranchised by their secular government.

Second, successful secular democracies are being inundated with refugees from repressive governments that represent or promote sharia over secularism.

The third reason is that we are not here to be happy and secure. We are here to grow, which invariably means taking on great suffering and risk.

I still have somewhere in my files an old Washington Post report on the large number of Catholic Latin American immigrants to the Washington, DC region who are converting to Islam. Why they are converting? A big reason for the females is the sense of security they have from walking around the streets wearing a tent. One young convert said that after she starting wearing the veil, Latino construction workers stopped whistling at her and making catcalls -- attentions which she'd always hated and feared. Others are converting from the sense of security they have from Islam's uncomplicated strictures and being able to leave important life decisions to clerics.

How to tell these people that when humans leave a womb, they can't crawl back in -- and that every attempt to do so inevitably brings horrific suffering to themselves and others? The easy rides are over for humanity.

Yet already Nigerians have lost faith in their young democracy because the democratically elected government is terribly corrupt. "Military rule is best because the military will not allow people to do anything they want," observed one disappointed Nigerian. "The cheaters are too much for democracy."

There are ways other than military rule to stop corrupt government officials from doing anything they want. One way is a strong judicial system; another way is cracking skulls. But first Nigerians have to get past the notion that democracy is electing a bunch of patriarchs who will do everything for you. They are still looking for a chief.

Many around the world say they believe in reincarnation but do they ever stop and think through the implications? Many are still longing for a chieftain to run their lives for them. Yet one look at all the clay feet in today's government leaders suggests that history's most enlightened chieftains are not incarnating in droves to lead the same flocks again.

Why? Probably because the reign of great splendor, security and peace lasts only as long as the chief. True or not, that's how I explain it to myself when I long for more security. Think about it: after you play daddy to a tribe about a thousand times, it gets old. You say, "Wait a minute. I'm leaving behind a bunch of thumb-suckers. Then they pray to me to return. Then I return and get them out of their jam, and what happens? They go back to sucking their thumb as soon my incarnation croaks."

I suspect the ancestors have put their foot down. If humanity gets hit with enough corrupt and hideously inept chiefs, we will eventually get off our collective butt and do government ourselves.

In any case we should no longer expect government to be a doting patriarch who will protect us and absolve us of the suffering involved in mastering personal freedom and the great responsibility the mastery process entails.

This discussion is fun but does not treat what the United States can do to help promote democracy worldwide, and whether the US can sustain the push for democracy in developing countries when it conflicts with short-term US national interests.

Fareed Zakaria, who is an influential commentator (in 2006 he was named one of the world's 100 most influential Harvard graduates), represents one way of looking at the problem; his view has coin in Washington. He disputes the Bush administration's push for democratic elections:
He has often argued that helping countries to modernize their economies and societies is a more secure path to development and liberty than pushing for elections and democracy.

His second book, "The Future of Freedom", develops this latter theme more fully. In it, he argues that democracy works best in societies when it is preceded by "constitutional liberalism", which he defines as the rule of law, rights of property, contract, and individual freedoms. He has written that historically liberty has preceded democracy, not the other way around. He has argued that countries that simply hold elections without broad-based modernization -- including economic liberalization and the rule of law -- end up becoming "illiberal democracies
".(2)
Watch The Gangs of New York for a graphic illustration as to why Fareed's argument is flawed. The residents of Five Points were treated worse than serfs and had very few liberties, but the journey of a thousand miles began at the ballot box -- even though the ballots were stuffed.

At the same time, voting cannot sustain anything but a stage-show democracy without growing the civil society infrastructure that Fareed discusses. This is where US aid and development dollars can be put to good use.

I think it's early days to dismiss Bush's doctrine, which is only as old as his second inaugural address. I return to Jackson Diehl's column, which features his interview with Natan Sharansky -- whose views on democracy greatly influenced Bush's thinking.
"It's not that the democracy policy was adopted and applied and turned out not to work," Sharansky said.

"There was never a strategy for applying it. There was no unity of purpose. Hardly any political leaders besides Bush believed in the concept. Even here in America there was terrible resistance. It's not enough that the president believes in the policy and wants to act. He has to be able to carry the country and the bureaucracy with him."

Sharansky has seen this happen before. As a Soviet dissident, he was exultant when President Jimmy Carter promised to make human rights promotion a top priority of his presidency and responded to a letter from Sharansky's mentor, Andrei Sakharov.

"Then one after another we were arrested. Carter spoke out but did nothing," Sharansky recounted. "We all felt abandoned and terribly disappointed."

That's how most Arab liberals in the Middle East now feel about Bush. But Sharansky sees the shift toward greater human freedom as a series of waves.

"It's a very rare phenomenon that this policy exists in a U.S. government," he said. "It existed for a short period of time in the '70s, and it existed for a brief time now, more strongly. It will come back again, and stronger the next time. It will happen because the countries of the free world will realize that we are in a fight for survival with extremist ideology around the world, and we have no stronger weapon than the desire of people to live in freedom."

Sharansky hasn't given up on Bush. In February, he proposed to the president that he attend an unusual conference Sharansky is organizing with former dissident and Czech president Vaclav Havel and former Spanish prime minister José María Aznar -- a dialogue between dissidents and political leaders. Beleaguered advocates of human rights from Egypt, Syria, Sudan, Cuba, Belarus and Russia, among other places, are expected for the meeting June 4-6 in Prague. And now, so is Bush. "It will give him a chance to renew his policy," Sharansky said. "People who live under dictatorship still believe in it, and will go on fighting for it."
If the conference is a brainstorming session, it will be interesting.

1) Dana Milbank, April 17, The Washington Post section Washington Sketch.

2) Wikipedia

Tuesday, May 1

Is there an attorney in the house? From her statement to the Bank's board, does Shaha Riza have grounds for a discrimination suit?

"The irony of my working to ensure women's participation and rights through the work of the World Bank and to be then stripped of my own rights by this same institution seems to have escaped most journalists, commentators and women's rights activists."

Visit American Thinker for the transcript of Paul Wolfowitz's statement to the Bank Board. Below is the transcript of Shaha Riza's statement from the American Thinker website. If you're a woman over 50 with a career, better knock down a beer before reading:

"May 01, 2007
Monday Shaha Riza and Paul Wolfowitz made their clearest most detailed and powerful statements to the World Bank. I was fortunate enough to be able to obtain in pdf format copies of their statements to share with American Thinker readers. Any errors in grammar or in transcription from the originals are my fault alone."
-- Clarice Feldman, chief investigative correspondent, American Thinker.


SHAHA RIZA STATEMENT

BOARD OF EXECUTIVE DIRECTORS, AD HOC COMMITTEE

April 30,2007


I come before you today with my counsel, Victoria Toensing, at your request to assist you and the World Bank in resolving a problem that is not of my making. Let me summarize quickly what I consider to be the key facts of this difficult and painful situation, which has grown out of all proportion to the merits of the circumstance, and has now done harm to the Bank as well as to me.

1. My professional status at the Bank predates the arrival of the new President. I began work in the Bank in 1997.

2. There is no Bank regulation or staff rule that required me to leave the Bank in order to resolve this situation.

3. I was not given a choice to stay and, against my personal preference and professional interests, I agreed to accept an external assignment in 2005 upon the insistence of the Ethics Committee.

4. Against Bank rules and the Agreement I signed with the Bank, the details of the assignment and my personnel file have been leaked to the press and staff. As you well know my salary and grade level are quite common for World Bank staff that have years of experience, background and education similar to mine.

5. The cumulative effect of the decision made in 2005 and the recent media circus over the issue have done significant harm to my career, my personal well-being, and my prospects to continue the work I love and where my expertise resides.

Let me start with some personal reflections and then address each of these issues.

Personal reflections.
Over the weekend I met a wonderful American woman who told me I should fight back for "us" WOMEN. It never occurred to me as an Arab and Moslem woman that one day I would be asked by an American woman to fight on her behalf. I take her plea as a tribute to all Arab and Moslem women who have fought and are fighting for their rights.

The irony of my working to ensure women's participation and rights through the work of the World Bank and to be then stripped of my own rights by this same institution seems to have escaped most journalists, commentators and women's rights activists.

I have been told by my many friends at the World Bank and outside the Bank that I should speak out about my professional accomplishments to counter the one-dimensional and insulting portrayal in the media, not just in my defense but for the sake of all professional women--including women at the World Bank. It is diffcult for me to do so because I have always tried to focus on my work and not on publicity and I simply do not know how to blow my own trumpet.

However, in deference to the advice I have received from so many women I respect, I will quote the testimonies of my former managers in the World Bank in their evaluation of my performance.

My status at the Bank.
As the gender coordinator for the Middle East and North Africa region (MNA) in the World Bank from 1998 to 2001, I was described as follows: "Shaha brought an unprecedented level of energy, enthusiasm, commitment and professionalism to this work.. ..[and] an in depth understanding of issues and situations in the region that has enabled her to guide our approach to clients and made her a real asset to the region's work." (2002) This is indeed praise from Ngozi N. Okonjo-Iweala, a woman I admire and respect for her accomplishments in the World Bank who went on to become Finance Minister of her country, Nigeria.

In 2003, after I had been appointed the Acting Manager for External Communications, my supervisor wrote: "Her leadership on gender issues in her previous job in MNA has paid handsome dividends as MNA was way above the Bank average in mainstreaming gender issues in our work." He continued: "What Shaha has done for gender (sensitization, practical solutions and effective outreach) she is well on her way to accopmplish for outreach and external communications. She is clearly operating at level GH and I strongly recommend that she be promoted to that level as lead Communications Specialist." Jean-Louis Sarbib, Vice President for MNA, then goes on to justify his reasons for my promotion.

Despite his testimony, I never got the grade level promotion either as an in situ promotion, which accounts for 80% of promotions to grade H in the World Bank. Nor was the position opened for a competitive process, as I had requested from two consecutive MNA Vice Presidents. I can only attribute this to discrimination - not because I am a woman, but because I am a Moslem Arab woman who dares to question the status quo both in the work of the institution and within the institution itself. The open hostility against me by at least one Member of the Board of Directors who the former US Executive Director, Robert Holland, referred to in his Wall Street Journal Op. Ed. of April 20, was well known on the Board and by Bank staff.

Request that I leave the Bank.
It was a shock to me, when after the nomination of the new President, a senior member of management, in the name of three Vice Presidents, strongly suggested that I leave the Bank. I felt under attack by a powerful group that had no right to make assumptions or come to this conclusion given there was no Bank rule requiring my exit.

When after eight years in the service of the World Bank, I was told that the Board's Ethics Committee had resolved that I should leave-- through no fault of mine, but because of an alleged conflict of interest, it was not just a blow to my career and professional trajectory but also a blow to my faith in the ability of the institution to protect its staff, and to its claim over the past ten years, to pay more attention to gender and diversity.

I could not understand at the time or now why I was being singled out for this treatment when the then-Managing Director Shengman Zhang' s spouse, Lingzhi Xu, was working at the Bank and before her Maritta Koch-Weser, Caio Koch-Weser's spouse, when he was a Managing Director. Neither spouse was asked to leave the institution. It is very important to note than in all the years that I had worked in the World Bank I had not directly or indirectly reported to the previous President and my professional interaction was limited to a handful of times. Thus, I was surprised I was being asked to leave because under Staff Rule 4.01,Paragraph 5.02, the requirement is that neither peron may "supervise[]the other, directly or indirectly, and their duties [should not be] likely to bring them into routine professional contact." In this regard, recusal from all my personnel decisions, as requested by the President, should have sufficed to resolve any alleged "conflict" as recusal went further than at least one of the situations described above.

Leaks and recent exposure.
As this artifically created crisis swirled around me, I have continued to work hard on what I have spent the last 20 years advocating: reforms, women's rights and citizen's participation in the Middle East and North Africa. Two years ago, my life and career were torn asunder. In the past month I have suffered anguish that I cannot fully describe at this proceeding because it is so painful . I have been made to appear to have no qualifications for my position when, in fact, I am clearly well qualified. I am sad to say leaks and off-the-record statements have encouraged hurtful and inaccurate media.

Whatever happened to my Confidentiality Agreement with the Bank? Why were my rights as a World Bank staff member violated -- and who allowed them to be violated?

And so I come back to you, the ad hoc group, to ask you and other Members of the Board about what you plan to do about the breach of the Agreement signed with me --and about the disclosure of my personnel file in violation of Staff Rule 2.01 "Confidentiality of Personnel Information." As you know, I am a staff member of this institution and I have rights that this institution has not protected. Yet to date I have been offered no protection -- which would be offered any staff member -- against the leaking of documents that are, according to the formal policy of the Bank, part of confidential personnel matters.

Damage to Career.
In normal circumstances I might not have minded being assigned a year or two to another agency. That type of assignment is not new to this institution. But I did not want to leave the Bank for five or possibly ten years with no guarantee of whether, or how, or at what level I could return. I was being banished fiom the Bank without regard to the quality of my work performance or my commitment to the mission of the Bank. To review a few of my concerns:

* I was 51 years old and being asked to remove myself from a career path to an employment limbo for five, if not ten years. The rest of my professional career in the Bank was being adversely affected.

* I would be out of the normal World Bank structure, removed fiom peer and professional contacts that lead to new assignments.

* I would not have the ability to make lateral moves or seek other assignments to take me to the next grade.

Confronted with the prospect of being banished from the World Bank for at least five years, I fought for my rights over several meetings. I negotiated directly with Mr. Xavier Coll, Human Resource Vice President. I continue to believe that I should not have been asked to leave and that I was unjustly treated for reasons that I had no control over and still do not understand. I still question the role and motives of the Ethics Committee in its decision to ask me to leave. I was not, and I am not, satisfied with the arrangement.

Nevertheless, despite my unhappiness and justified anger, I tried my best to accommodate the Ethics Committee in order to avoid a protracted dispute that would distract the Board, and management and staff from their important work.

Let me be very clear about my legal position in 2005. I was ready to pursue legal remedies. I would have preferred to fight the unfair situation. I only acquiesced to signing the Agreement so as not to cause turmoil at the Bank.

Equally important, I still question why this furor about the arrangement, which was made to remove me from the Bank, has erupted now. It is clear from the now public documents that it was the Chairman of the Board's Ethics Committee, Mr. Ad Melkert, who advised my placement outside the Bank. I did not want to leave.

Mr. Melkert stated in writing that I should be "relocated to a position" outside the Bank, and that "the potential disruption of the staff member's career prospect will be recognized by an in situ promotion on the basis of her qualifying record as confirmed by her shortlisting for the current job process and is consistent with the practice of the Bank."

It is clear that the Ethics Committee had available any materials that they wished to review in regard to my placement outside. Indeed, the Chairman of the Ethics Committee stated in his letter to the President dated October 24,2005, that "the outcome is consistent with the [Ethics] Committee's findings and advice.. .and the Committee concurs with your view that this matter can be treated as closed." This letter makes it obvious that the Ethics Committee must have looked at the Agreement and considered it satisfactory. If it did not, it was negligent in its duties.

By February 2006, all Board Members had to be fully aware of the arrangement due to the e-mail from "John Smith," which specifically questioned my salary. The response of the Ethics Committee to this e-mail was that the allegations "did not appear appropriate for further consideration by the Committee." The question therefore remains: why was this issue resurrected in recent weeks?

Moreover, during my negotiations with Mr. Coll, neither he nor anyone else ever suggested to me that my compensation package might violate Bank policy in any way. In his letter to me on September 1,2005, Mr. Coll stated that the "perceived conflict is not of your making," adding: "There is no precedent of this kind and no personnel policy that clearly applies to resolve it."

It is certainly the case that World Bank salary rates are significantly higher than the pay of national civil servants, at least in North America. It is up to shareholders to review the pay scale of the World Bank job classifications. But I should not be singled out for isolated finger-pointing when my salary level is within the same range as staff in my grade level who were not forced to leave their jobs.

Final thoughts.
I still hope that the Bank Board and Management will have the courage to admit that actions and decisions concerning the many diverse relationships in this institution have been addressed arbitrarily and without clear guidance. The careers of many spouses, particularly those appointed to country offices, are disrupted by ad hoc or arbitrary implementation of staff rules. I hope that this unfortunate episode will be used constructively to address these very pertinent issues. be made part of the record.

Thank you for giving me the opportunity to state my case. I request my statement be made part of the record.

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