“I am writing to respond to your essay “The Emperor is Naked.” You should visit Iran. I assure you we have running water there. We even have modern cities just like those in America. Most Iranians love democracy and America. We don’t love the Western arrogance and condescension that your viewpoint represents. [Unsigned]”
Dear Unsigned:
Pundita’s regular readers know that she takes poetic license when steamed. But clearly Pundita is slipping if you mistook insults for condescension, so let me rephrase. You say you have modern cities like those in America. Show me the city in America where the residents gather 100,000 strong to watch the stoning death of children. Show me that city.
Pundita has met people in a remote region in Asia who live in caves and wear animal skins. They are just a few steps up from the Stone Age but they have more civilization in their social customs than the Iranians. So what does it matter if German engineers showed you how to make water run? You’d be just as well off drinking from a stream.
Iranians do not “love” democracy. They covet democracy, in the way a pasha covets an expensive bauble. Others have it, so why can’t you? You’re waiting for the whole package and if your leaders won’t give it to you, you’ll keep looking for a leader who will. That’s why Iranian students find nothing strange about prancing around in American jeans and discussing American cinema, then writing up a petition as their response to barbaric tribal customs including stoning deaths of children for the crime of nothing at all. They’re waiting for the democracy bauble to arrive, as if possession of this gem will purge them of tolerance for barbarism and restore conscience and dignity to their society.
You tell Pundita that most Iranians love Americans. Most Iranians don’t know Americans. Once you get to know us, I guarantee you’re not going to like us because we represent the inverse of the Pasha mindset, which is still entrenched in your part of the world.
Boiled down, the Pasha mindset is “Only slaves and women take out the garbage.”
In one sentence the American mindset is “Do it yourself.”
That’s the real reason the Persians had contempt for the Greeks, particularly by the time of Alexander’s era. They saw him running around taking soil samples and making notes and said to each other, “Only slaves and paid retainers work up a brain sweat. Real men write poetry and command others to do their bidding.”
Now in the old days, it wasn’t like that. Persian kings tilled their own field and busted their brains figuring out how to repair a plough. Then along came the 900 Lazy Bastards, who always appear on cue when a large group of humans show a spark of collective intelligence.
So it came down to a day in 1985, when Pundita met a German who earned money on his annual vacation by driving a German-made van from Germany to Nepal. His route took him through a part of Iran. He told me that the villagers were starving and praying for the return of the Shah’s son. Last year I recounted the story to an Iranian expat. He told me, “I’ve got news for you. The villagers are still starving and still praying for the return of the Shah’s son.”
Still waiting for pasha, after all those years.
.
Monday, March 21
Thursday, March 17
The Kaiser Soze model of democracy
Pundita is only halfway through embroidering a sampler of the following quotes for hanging above the fireplace. My apology to The Scotsman newspaper and Jim Cusak for breaking protocol by posting lengthy quotes from their piece . I hope they'll forgive me this one time, in honor of the day and the gravity of the article's implications.
The quotes speak volumes about where democracy is headed in small countries in these days of globalized crime syndicates, if citizens don't keep a very close watch. Supporters of 'managed' democracy revolution please take note of which century this is. The days are long past when only a handful of wealthy governments could afford to stage-manage the overthrow of governments in small countries.
It's a good thing the bank robbers overlooked that it's not possible to launder tens of millions of stolen bank notes in a small country, else the police might not have discovered the larger scheme.
In case you missed the details of the heist:
http://www.cnn.com/2004/WORLD/
europe/12/22/ireland.bank.robbery/
How the money laundering scheme unraveled:
http://news.scotsman.com/
latest.cfm?id=4156391
The Scotsman piece quoted above:
http://news.scotsman.com/
opinion.cfm?id=193642005
.
The quotes speak volumes about where democracy is headed in small countries in these days of globalized crime syndicates, if citizens don't keep a very close watch. Supporters of 'managed' democracy revolution please take note of which century this is. The days are long past when only a handful of wealthy governments could afford to stage-manage the overthrow of governments in small countries.
It's a good thing the bank robbers overlooked that it's not possible to launder tens of millions of stolen bank notes in a small country, else the police might not have discovered the larger scheme.
Members of the Garda [Ireland's police] Special Branch, Fraud and Criminal Assets Bureau had just launched its biggest ever set of raids on the offices of accountants, solicitors and finance companies across the country, looking for documents linked to offshore accounts, property deals, business ownerships and money transactions estimated to run into hundreds of millions of euros.Happy St. Patrick's Day, everyone.
Ostensibly linked to the search for the £26.5m [$39m] stolen recently in Belfast, in reality the raids were about something more. There is said to be a massive amount of financial activity, ranging from pubs to trading corporations, situated in countries outside the EU in order to avoid the scrutiny of EU financial regulations. And they all have one thing in common: they are linked to the IRA.
The amounts involved were evidently for a purpose far beyond personal enrichment. There is now a belief that the finance operation uncovered is intended to fund a massive campaign to subvert politics in the Republic of Ireland, undermining its political parties and institutions. Gardai now talk in apocalyptic terms. The scheme is, they say, the IRA’s banking system to be used to overthrow the government of Ireland.
A key part of the grandiose plan was the subverting of Sinn Fein’s political opposition. The IRA is in the process of building a black propaganda campaign to attack members of the Irish parliament and other elected representatives. Across the country, the IRA has been spying on members of Fianna Fail, Fine Gael, Labour and the Progressive Democrats. Units of IRA volunteers, under the guise of Sinn Fein "activists", have been building up dossiers on members of opposing political parties.
This information is to be used to destroy the careers of politicians and public figures at key points in the run-up to the next Irish general election, in which Sinn Fein hopes to establish itself as a major presence in the Dail.
Gardai and Irish army intelligence believe the leadership of the Provisionals has decided it has completed its strategic project in Northern Ireland, having overthrown the SDLP to become the biggest nationalist party, and has now turned its attention to its grand plan of taking power in the Republic. Within republican circles this project is referred to as the "re-conquest of the south".
This project requires hundreds of millions of euros to pay for the small army of activists of all shades, ranging from the local "community" workers to high-flying financiers handling the organisation’s money
The truth has finally dawned on Bertie Ahern’s government that, rather than be content with a political agreement that would have seen Sinn Fein in a Stormont Executive in the north, the Provisionals were intent on an altogether bigger prize.
-- 02/20/05 article, "IRA's dirty cash funds power grab," The Scotsman.
In case you missed the details of the heist:
http://www.cnn.com/2004/WORLD/
europe/12/22/ireland.bank.robbery/
How the money laundering scheme unraveled:
http://news.scotsman.com/
latest.cfm?id=4156391
The Scotsman piece quoted above:
http://news.scotsman.com/
opinion.cfm?id=193642005
.
Wednesday, March 16
Kofi Annan and Jeffrey Sachs hissing mad
"If you can't have Eliot Spitzer as World Bank President, will Paul Wolfowitz do? Sachs went through the roof over Wolfy's nomination. Looks like Kofi Annan, Time magazine and Jeffrey Sachs failed to head off Bush at the pass. Maybe Bush got more than Bolton in exchange for sacrificing "two knights, a bishop and rook."
[Signed] Chicago Dan
Dear Dan:
Yes, this has been a bad month for the Mercantile School of foreign policy. But if what you're implying is true, think what that means. The World Bank and the United Nations were supposed to be US foreign policy instruments. While Americans were sound asleep, the Franco-German alliance in the European Union walked off with them. If Bush felt the need to agree to back the EU's offer of concessions to Tehran in exchange for muted resistance to the Bolton and Wolfowitz nominations, that would show how much ground the US lost during the past 15 years.
However, there shouldn't be too much resistance to Wolfowitz, if European and Japanese big-ticket contractors stop and think it through. Iraq needs a lot of reconstruction and development--and not penny-ante projects. They need to rebuild the entire country. With Wolfowitz at the Bank's helm, it's guaranteed that big-ticket Bank loans for infrastructure projects will flow in great number to Iraq.
That's the kind of work the World Bank loan model was created for. And because Iraq will soon be filthy rich from oil revenues, they can be expected not to default on the loan payments. So the Half a Bridge rule would not apply to Iraq. The Bank would lend enough money so that the projects would be top-quality.
Once the Iranians see what's going on in Iraq with Bank construction and development, they will be green with envy. In that event, all they have to do is get rid of their Taliban-syle government and give up the nuke program, and they can get in on the bonanza.
As for the hundreds of millions of the poorest in African countries--as Pundita has observed many times, the Bank was not set up to be an aid organization. Clean up the Bank and let it do what it was designed to do. The Bank can help, but rely primarily on other organizations, including USAID, to rescue the poorest.
As for Annan, that buzzard is lucky he's still got his job. He should chalk up the win to Bush over the matter of Wolfowitz.
As for the Merchantile School, Shaheen Fatemi of the American University in Paris has some choice words for the Brussels crowd in his essay Whose Side is Europe On?
Let's hope Secretary Rice sees Dr. Fatemi's essay and takes special note of the subtext in his observation:
http://iranvajahan.net/cgi-bin/news.pl?l=en&y=2005&m=03&d=16&a=3
.
[Signed] Chicago Dan
Dear Dan:
Yes, this has been a bad month for the Mercantile School of foreign policy. But if what you're implying is true, think what that means. The World Bank and the United Nations were supposed to be US foreign policy instruments. While Americans were sound asleep, the Franco-German alliance in the European Union walked off with them. If Bush felt the need to agree to back the EU's offer of concessions to Tehran in exchange for muted resistance to the Bolton and Wolfowitz nominations, that would show how much ground the US lost during the past 15 years.
However, there shouldn't be too much resistance to Wolfowitz, if European and Japanese big-ticket contractors stop and think it through. Iraq needs a lot of reconstruction and development--and not penny-ante projects. They need to rebuild the entire country. With Wolfowitz at the Bank's helm, it's guaranteed that big-ticket Bank loans for infrastructure projects will flow in great number to Iraq.
That's the kind of work the World Bank loan model was created for. And because Iraq will soon be filthy rich from oil revenues, they can be expected not to default on the loan payments. So the Half a Bridge rule would not apply to Iraq. The Bank would lend enough money so that the projects would be top-quality.
Once the Iranians see what's going on in Iraq with Bank construction and development, they will be green with envy. In that event, all they have to do is get rid of their Taliban-syle government and give up the nuke program, and they can get in on the bonanza.
As for the hundreds of millions of the poorest in African countries--as Pundita has observed many times, the Bank was not set up to be an aid organization. Clean up the Bank and let it do what it was designed to do. The Bank can help, but rely primarily on other organizations, including USAID, to rescue the poorest.
As for Annan, that buzzard is lucky he's still got his job. He should chalk up the win to Bush over the matter of Wolfowitz.
As for the Merchantile School, Shaheen Fatemi of the American University in Paris has some choice words for the Brussels crowd in his essay Whose Side is Europe On?
Let's hope Secretary Rice sees Dr. Fatemi's essay and takes special note of the subtext in his observation:
In the collective memory of the Iranian people the images of European leaders happily and proudly posing in pictures with the criminal leaders of the Islamic Republic are bitter souvenirs for the future.With an eye to the future, there should be fewer concessions to Brussels. It's not only the eyes of Iranians that are upon us. The whole world is watching to see if we will stand behind our fine words about democracy.
http://iranvajahan.net/cgi-bin/news.pl?l=en&y=2005&m=03&d=16&a=3
.
Courtiers and Indentured Servitude
Dear Pundita, May I ask why you omitted the Second Rule of Foreign Policy from the list of essays on development? The list you put up on your home page? You brought out very important points in the essay. I think it should be included in the list. Also, I suggest you talk a little about the realities for the expats who work at the World Bank. That would help people understand why there's so much waste and inefficiency connected with Bank projects and why the Bank resists an external audit.
[Signed] Kumar in Bethesda
Dear Kumar:
We didn't put that essay on the sidebar because we forgot to do it. Thank you for the reminder; Pundita has corrected the oversight. Yes it might be a help, if Americans outside the international organization 'community' based in Washington, DC learn what happens to non-American Bank employees if they get fired. I forget how many days or hours they have to leave the USA, but they don't have much time to take their children out of school, collect all their belongings, and return to their own country.
If that brings forth, "Aw too bad" from American readers--well, how would you like to live with the thought that if you get fired from your job in the USA that means having to put your child in school in some place such Pakistan? And not in an 'enclave' school reserved for American children of diplomats and other Americans working there.
I'm not trying to elicit your sympathy but to convey why "Don't rock the boat" is the operating philosophy for World Bank employees. Most of the employees are not American and many are from LDCs--less developed countries, or what used to be called the Third World. If they screw up in their work or get on the wrong side of a Bank higher-up, it's back to wherever they came from. That place is usually a far cry from the safety and freedom that Americans enjoy.
The Bank looks after their employees well--great health benefits, and so on. But working for the Bank is a form of indentured servitude; it's a Golden Cage. And if you work at Bank headquarters in the USA, you're not free to tell the boss to go to hell then quit your job--not unless you want to lose everything you've built up in America.
This reality has created a culture inside the Bank that evokes to remarkable degree the courts of ancient imperial dynasties. This extends to the highly ritualized labyrinthian Bank language used in memorandums and reports. It's courtier language. The idea is to ensure that what you say is so hard to pin down that the ax can't find your head.
That culture doesn't make for reflexive responses to problems, which doesn't mean the Bank can't be reflexive. The World Bank has so much power, wealth and expertise that when the will is there, the Bank can move against a problem with awesome speed and efficiency. The hard part is getting the will to that point.
Very few people get fired from the Bank just because of the situation I outlined. But that means supporting a lot of bad job performance, a bloated workforce, and it means a work culture built on fear. If you justifiably fear speaking up at your job when you see things that are really wrong, what kind of organization can you expect to see evolve from a culture of fear?
.
[Signed] Kumar in Bethesda
Dear Kumar:
We didn't put that essay on the sidebar because we forgot to do it. Thank you for the reminder; Pundita has corrected the oversight. Yes it might be a help, if Americans outside the international organization 'community' based in Washington, DC learn what happens to non-American Bank employees if they get fired. I forget how many days or hours they have to leave the USA, but they don't have much time to take their children out of school, collect all their belongings, and return to their own country.
If that brings forth, "Aw too bad" from American readers--well, how would you like to live with the thought that if you get fired from your job in the USA that means having to put your child in school in some place such Pakistan? And not in an 'enclave' school reserved for American children of diplomats and other Americans working there.
I'm not trying to elicit your sympathy but to convey why "Don't rock the boat" is the operating philosophy for World Bank employees. Most of the employees are not American and many are from LDCs--less developed countries, or what used to be called the Third World. If they screw up in their work or get on the wrong side of a Bank higher-up, it's back to wherever they came from. That place is usually a far cry from the safety and freedom that Americans enjoy.
The Bank looks after their employees well--great health benefits, and so on. But working for the Bank is a form of indentured servitude; it's a Golden Cage. And if you work at Bank headquarters in the USA, you're not free to tell the boss to go to hell then quit your job--not unless you want to lose everything you've built up in America.
This reality has created a culture inside the Bank that evokes to remarkable degree the courts of ancient imperial dynasties. This extends to the highly ritualized labyrinthian Bank language used in memorandums and reports. It's courtier language. The idea is to ensure that what you say is so hard to pin down that the ax can't find your head.
That culture doesn't make for reflexive responses to problems, which doesn't mean the Bank can't be reflexive. The World Bank has so much power, wealth and expertise that when the will is there, the Bank can move against a problem with awesome speed and efficiency. The hard part is getting the will to that point.
Very few people get fired from the Bank just because of the situation I outlined. But that means supporting a lot of bad job performance, a bloated workforce, and it means a work culture built on fear. If you justifiably fear speaking up at your job when you see things that are really wrong, what kind of organization can you expect to see evolve from a culture of fear?
.
Democracy Stage Show Kit
The stage-managed Orange Revolution in Ukraine was a product of what could be called the Democracy Stage Show Kit. The kit comes complete with instructions on how to stage civil disobedience, how to use the media, and coaching on how to line up your talking points. The basic kit is not new. It's as old as big money buying mobs. In the modern era the kit was refined by Western governments and used to peel some former Soviet regions from the Kremlin's influence.
A problem with the kit (aside from the question of whether it's really a democratic revolution if a foreign government is behind it) is that it doesn't teach how democratic rule is administered. The problem is easily solved if the democracy revolution is stage managed by a powerful democratic foreign government. Such governments have the money and expertise to throw in after the revolution phase. They can teach the leaders how set up a real democratic government. When that situation is not the case, there's nothing more untidy than gaining the palace then having to ask each other, "Now what do we do?"
With that thought, it might be helpful if someone published, Democratic Government During the First Hundred Days for Dummies. To Pundita's knowledge, the Democracy Stage Show Kit is not yet available for sale on the Internet--not as a package for $294.95 plus shipping and handling. Yet things are approaching that point; there are now organizations (ostensibly) independent of any national government that will advise any movement worldwide calling themselves democracy advocates on how to confront their non-democratic government.
On paper, that's not such a bad idea--provided foreign government influence can be kept out of the confrontation process. Yet there is an insidious drawback to the packaging of democratic revolution, which works greatly against real democracy.
That people in a democracy have the right to stage mass protests is not the same as saying that mass protests are a demonstration of democratic government. They're demonstrating a benefit of such government. Yet many people who use the Democracy Stage Show Kit are not clear on the fact that democratic government requires the rule of law, not the rule of a crowd.--and that democracy demands increased personal responsibility on the part of the self-governed.
These two concepts--rule of law and personal responsibility--are strikingly absent in the sales pitch for the Democracy Stage Show Kit. What you hear most in the pitch is "freedom." People are encouraged to seek more freedom. But freedom is not free. It's a tremendous responsibility, which imposes considerable discipline on the individual and takes up much time.
That's just why dictators keep being returned to power. After the glow of a stage-managed democracy revolution wears off, the populace realizes how much work and responsibility it entails to make democracy work. Thus, many become willing to make a tradeoff between freedom and free time. They go looking for a hardworking fool to take on the burden of governing responsibility--preferably, a benevolent fool.
This impulse doesn't stem so much from laziness as from the need to conserve energy. Those who labor 12 hours a day in fields, coal mines and factories don't have much energy left over for the task of self-governance. But of course there is no such thing as a benevolent dictator when push comes to shove.
Thus, the conundrum. One might characterize the 20th Century as the era in which democracy won the argument about which form of government is best. The 21st Century will pound home the point that you can't have it both ways: you can't have the luxury of letting someone else take on responsibility for your governing and expect to have good government.
This argument is not easy for the developed nations to make. The majority in advanced countries have labor-saving devices and disposable income, which allow them to conserve enough energy to spend on activities that go beyond eking out an existence. So they have enough energy for the task of participating in the work of government, which democracy demands. Large swaths of humanity still don't have much energy beyond tending to survival basics. That means it's easy for them to hope that a benevolent dictator is a bearable compromise between lack of freedom and physical exhaustion.
Humanity will work through the conundrum; we have no choice, given our current population and where the figure is headed. Democracy is not only the best form of government in terms of protecting human rights, it's also the only workable form of government in the era of huge human populations. We have simply passed the era when a small elite could be counted on to properly manage the problems of governing a populace. It takes large numbers of people to efficiently govern populations that run into the hundreds of millions.
But you can't have responsibility for governing without attendant authority. Thus, the authority of the elite must be shared with the majority of the citizenry. That's what democracy does: it confers authority on the people along with the responsibility for government.
Today, and in country after country, the elite running non-democratic governments are simply overwhelmed with the everyday problems of managing hundreds of millions of people. The other side of the coin is that those millions can be too exhausted to undertake the weighty, time-consuming responsibility of choosing good government representatives and overseeing them.
Technology is one part of the solution. Satellite-linked town halls, computerized voting, talk radio stations in rural areas, and other technologies can reduce the amount of physical labor it takes for citizens to participate in government. Yet the technology is wasted, if the people using it are not clear on the nature and operation of democratic government.
So another part of the solution is education. That's the problem with kits. They don't teach the fundamentals--they're not meant to be educational; they're meant to be used. The Democracy Stage Show Kit doesn't teach the principles of the democracy gizmo and how to put the gizmo together and keep it working. Chanting "Freedom!" and flashing the "V" sign is no help to understanding the system and operations of democratic governance.
Unless more people learn how the democracy gizmo works, they will continue in the counterproductive practice of relying on an elite to make democracy work for them. Hello, that practice is obsolete, given our population number. Today, when the elite screw up, they can climb into their helicopter and fly away. The millions left behind have to clean up the mess. Flashing the "V" sign at it generally doesn't work.
.
A problem with the kit (aside from the question of whether it's really a democratic revolution if a foreign government is behind it) is that it doesn't teach how democratic rule is administered. The problem is easily solved if the democracy revolution is stage managed by a powerful democratic foreign government. Such governments have the money and expertise to throw in after the revolution phase. They can teach the leaders how set up a real democratic government. When that situation is not the case, there's nothing more untidy than gaining the palace then having to ask each other, "Now what do we do?"
With that thought, it might be helpful if someone published, Democratic Government During the First Hundred Days for Dummies. To Pundita's knowledge, the Democracy Stage Show Kit is not yet available for sale on the Internet--not as a package for $294.95 plus shipping and handling. Yet things are approaching that point; there are now organizations (ostensibly) independent of any national government that will advise any movement worldwide calling themselves democracy advocates on how to confront their non-democratic government.
On paper, that's not such a bad idea--provided foreign government influence can be kept out of the confrontation process. Yet there is an insidious drawback to the packaging of democratic revolution, which works greatly against real democracy.
That people in a democracy have the right to stage mass protests is not the same as saying that mass protests are a demonstration of democratic government. They're demonstrating a benefit of such government. Yet many people who use the Democracy Stage Show Kit are not clear on the fact that democratic government requires the rule of law, not the rule of a crowd.--and that democracy demands increased personal responsibility on the part of the self-governed.
These two concepts--rule of law and personal responsibility--are strikingly absent in the sales pitch for the Democracy Stage Show Kit. What you hear most in the pitch is "freedom." People are encouraged to seek more freedom. But freedom is not free. It's a tremendous responsibility, which imposes considerable discipline on the individual and takes up much time.
That's just why dictators keep being returned to power. After the glow of a stage-managed democracy revolution wears off, the populace realizes how much work and responsibility it entails to make democracy work. Thus, many become willing to make a tradeoff between freedom and free time. They go looking for a hardworking fool to take on the burden of governing responsibility--preferably, a benevolent fool.
This impulse doesn't stem so much from laziness as from the need to conserve energy. Those who labor 12 hours a day in fields, coal mines and factories don't have much energy left over for the task of self-governance. But of course there is no such thing as a benevolent dictator when push comes to shove.
Thus, the conundrum. One might characterize the 20th Century as the era in which democracy won the argument about which form of government is best. The 21st Century will pound home the point that you can't have it both ways: you can't have the luxury of letting someone else take on responsibility for your governing and expect to have good government.
This argument is not easy for the developed nations to make. The majority in advanced countries have labor-saving devices and disposable income, which allow them to conserve enough energy to spend on activities that go beyond eking out an existence. So they have enough energy for the task of participating in the work of government, which democracy demands. Large swaths of humanity still don't have much energy beyond tending to survival basics. That means it's easy for them to hope that a benevolent dictator is a bearable compromise between lack of freedom and physical exhaustion.
Humanity will work through the conundrum; we have no choice, given our current population and where the figure is headed. Democracy is not only the best form of government in terms of protecting human rights, it's also the only workable form of government in the era of huge human populations. We have simply passed the era when a small elite could be counted on to properly manage the problems of governing a populace. It takes large numbers of people to efficiently govern populations that run into the hundreds of millions.
But you can't have responsibility for governing without attendant authority. Thus, the authority of the elite must be shared with the majority of the citizenry. That's what democracy does: it confers authority on the people along with the responsibility for government.
Today, and in country after country, the elite running non-democratic governments are simply overwhelmed with the everyday problems of managing hundreds of millions of people. The other side of the coin is that those millions can be too exhausted to undertake the weighty, time-consuming responsibility of choosing good government representatives and overseeing them.
Technology is one part of the solution. Satellite-linked town halls, computerized voting, talk radio stations in rural areas, and other technologies can reduce the amount of physical labor it takes for citizens to participate in government. Yet the technology is wasted, if the people using it are not clear on the nature and operation of democratic government.
So another part of the solution is education. That's the problem with kits. They don't teach the fundamentals--they're not meant to be educational; they're meant to be used. The Democracy Stage Show Kit doesn't teach the principles of the democracy gizmo and how to put the gizmo together and keep it working. Chanting "Freedom!" and flashing the "V" sign is no help to understanding the system and operations of democratic governance.
Unless more people learn how the democracy gizmo works, they will continue in the counterproductive practice of relying on an elite to make democracy work for them. Hello, that practice is obsolete, given our population number. Today, when the elite screw up, they can climb into their helicopter and fly away. The millions left behind have to clean up the mess. Flashing the "V" sign at it generally doesn't work.
.
Tuesday, March 15
Finger of Shame
The author of The Glittering Eye website wrote Pundita to inform her that he'd added her thoughts to his roundup of blogosphere opinions about Jeffery Sachs's ideas for ending the worst poverty. The roundup is interesting because it shows quite a range of thoughtful opinion and provides some good source material for those wishing to go more deeply into the subject.
The Glittering Eye author also published praise for Pundita's blog, which will greatly please the team when I read it to them at our next policy meeting. Here we must take a moment to correct the author's guess that Pundita is an American female residing in the United Kingdom. Pundita is an American female who resides so close to Ground Zero that our commuting route was shut down by the 9/11 bombing of the Pentagon. We live a short Metro ride from downtown Washington, DC and the Pentagon. So as with all Washingtonians, Pundita is very heavily invested in the successful outcome of the war on terror.
I also note that the author indicated he had just begun to plumb the essays on Pundita's blogspot and thus could only give his readers his initial impression. He noted that Pundita's focus is "foreign affairs with a special concentration on international development."
Pundita's essays on development are in the manner of playing Dutch Aunt. The first time I heard about Barnett's Core & Non-integrating Gap thesis I blurted, "The Core is everyone who knows how the World Bank works. That leaves Americans and Arctic penguins to fill the Non-integrating Gap."
Amazon chieftains wearing nothing but feathers know more about the workings of the World Bank and the IMF than Americans. That's why I have written about development policy--not because I have a particular interest in the topic but because the system of development banks and what they've created is a piece of the puzzle that more Americans need. That's in order to gain a clear picture of today's world outside US shores and how US foreign policy intersects with it. The World Bank is not only a bank, it's also an instrument of US policy. But while nobody in America was paying close attention, some bright souls outside our shores said, "Wait a minute. If they can do it, we can do it."
So the situation today is akin to a favorite plot vehicle of horror movies. She wakes in the dark and nudges hubby: Dear, there's something in the room with us. Nah, it's just the house settling. Shhhsh; did you hear a floorboard creak? All right we can settle this by turning on a light.
African Development Bank
Asian Development Bank
Brazilian Development Bank
Caribbean Development Bank
Central American Bank for Economic Integration
Council of Europe Development Bank
Development Bank of Singapore
Economic Development Corp. of Goa
Eastern & South African Development Bank
European Bank for Reconstruction & Development
Hungarian Development Bank
Inter-American Development Bank
Islamic Development Bank
Korea Development Bank
National Development Bank of Sri Lanka
Nordic Development Bank
North American Development Bank
Russian Regional Development Bank
World Bank Group (IBRD, IDA & related)
I've gotten tired of adding to this list
For added scare effect I didn't separate the regional development banks from the multilaterals--the ones that lend to entire regions around the globe. And the mix helps illustrate the rise of regionalism and its challenge to the policies of the multilateral institutions.
So when critics talk about reforming the World Bank, they're treating the Bank as if it operates in a vacuum. And when they talk about reforming the International Monetary Fund, what about the Arab Monetary Fund? And what about Citibank and other commercial banks that follow in the wake of the development banks like sharks follow the wake of an ocean liner?
It's not only the development banks that lend to the poorest governments. If there's even a hint that a poor country can be mined for a valuable natural resource, the commercial banks throw loan money at the government. That's after they see that a MDB (multilateral development bank) is willing to risk writing loans to whatever dictator or junta controls the resource.
Regionalism has meant that the World Bank is not as effective a US policy instrument as it used to be. Governments have gotten good at playing one development bank against another to squeeze out more loans. And they've set up regional banks that resist multilateral policies.
Meanwhile, the development bank system set in motion conditions that at best treat only the symptoms of the worst poverty in the LDCs (less developed countries) and at worst, created horrors that almost defy description.
The tragic irony is that the horrors during more recent decades arose from well-thought projects. It's just that the planners overlooked a few factors that only emerged on their radar after the disaster struck.
Truly, if you want to play God, you need to consider an awful lot of factors when it comes to project planning and execution. That's what the Bank economist meant when he told me the Bank is proof that you can't fix anything in this world without breaking something, somewhere down the line. So you have to be really, really smart about how much breakage you'll allow and how to manage it.
It's possible that Jeffrey Sachs has the idea of circumventing the mechanism of development bank loans or least greatly supplementing them with outright aid. Without having read his book (or even the Time excerpt) I'm guessing he's envisioning a kind of global Manhattan Project to eradicate the worst poverty. But then the problem becomes, who runs the project?
This problem arose during US relief to the tsunami victims. The Indian government told the US, "Thanks but no thanks" because they saw the offer as an attempt by the US to gain more influence in India and make bereft Indians into poster children for American largesse.
Then an Indian Yogini who lives in a literal backwater peeled off 20 million dollars to throw into the relief pot for Indian victims. What she pulled out of her pocket is peanuts in India. There are temples in India that take in one million dollars a day. It's nothing for many Indians to blow a million bucks on a wedding. Stop and think how much money that translates to in rupees, and how far a rupee goes in India.
As for China--have you ever seen Shanghai? That's Bling Bling City. Last season an Amazing Race team had to beg on the streets in Shanghai as part of a game penalty. They made so much money so fast, one team member said she was returning to Shanghai to beg full time after the show ended. It's nothing for large numbers of Chinese to walk into car dealerships and plunk down the full price of an expensive imported car.
As for poor Africa--there's so much money sloshing around Africa you don't even want to think about it. So if you really want to know how to help the poorest of the world, Pundita will tell. The way is to stop making an industry out of helping the poorest. The way is to treat people as if they're people not much different from you.
What do you do, if you see someone in your neighborhood not lifting a finger to help with a much-needed community project? You point the finger of shame, isn't it so? You ask them, "What's wrong with you? Why don't you help?" And you don't take excuses.
As soon as poor Indian villagers hook up with talk radio, they start pointing the finger of shame right and left at greedy, corrupt officials in their village. That's how they get projects done--and without the money for the projects being ripped off.
Even 10 years ago, it was not possible to apply this time-honored method toward getting people in LDCs to show more heart toward each other. Today, with the Internet, satellite TV and talk radio, it's easy to point the finger of shame.
That's what Jeffrey Sachs is trying to do: point the finger of shame at America and the West about the horrible plight of Africa's poorest. But....what's wrong with the Africans? Do they lack a gene that renders the richest among them incapable of turning out their pockets to help their own poorest? Only when a World Bank official is around.
Now let's back up and take a closer look at the Amazing Race team begging in Bling Bling City. They were begging with a cameraman in tow. So of course Chinese lined up to be filmed giving money to begging Americans.
Human nature. Amazing thing about it is that it's the same for all. Time to stop treating peoples in the poorest countries as if they're a different species. That doesn't mean halting all development projects and aid. It means shifting much more responsibility for development and aid back to where the responsibility belongs. It also means ceasing to use aid as a foreign policy instrument.
.
The Glittering Eye author also published praise for Pundita's blog, which will greatly please the team when I read it to them at our next policy meeting. Here we must take a moment to correct the author's guess that Pundita is an American female residing in the United Kingdom. Pundita is an American female who resides so close to Ground Zero that our commuting route was shut down by the 9/11 bombing of the Pentagon. We live a short Metro ride from downtown Washington, DC and the Pentagon. So as with all Washingtonians, Pundita is very heavily invested in the successful outcome of the war on terror.
I also note that the author indicated he had just begun to plumb the essays on Pundita's blogspot and thus could only give his readers his initial impression. He noted that Pundita's focus is "foreign affairs with a special concentration on international development."
Pundita's essays on development are in the manner of playing Dutch Aunt. The first time I heard about Barnett's Core & Non-integrating Gap thesis I blurted, "The Core is everyone who knows how the World Bank works. That leaves Americans and Arctic penguins to fill the Non-integrating Gap."
Amazon chieftains wearing nothing but feathers know more about the workings of the World Bank and the IMF than Americans. That's why I have written about development policy--not because I have a particular interest in the topic but because the system of development banks and what they've created is a piece of the puzzle that more Americans need. That's in order to gain a clear picture of today's world outside US shores and how US foreign policy intersects with it. The World Bank is not only a bank, it's also an instrument of US policy. But while nobody in America was paying close attention, some bright souls outside our shores said, "Wait a minute. If they can do it, we can do it."
So the situation today is akin to a favorite plot vehicle of horror movies. She wakes in the dark and nudges hubby: Dear, there's something in the room with us. Nah, it's just the house settling. Shhhsh; did you hear a floorboard creak? All right we can settle this by turning on a light.
African Development Bank
Asian Development Bank
Brazilian Development Bank
Caribbean Development Bank
Central American Bank for Economic Integration
Council of Europe Development Bank
Development Bank of Singapore
Economic Development Corp. of Goa
Eastern & South African Development Bank
European Bank for Reconstruction & Development
Hungarian Development Bank
Inter-American Development Bank
Islamic Development Bank
Korea Development Bank
National Development Bank of Sri Lanka
Nordic Development Bank
North American Development Bank
Russian Regional Development Bank
World Bank Group (IBRD, IDA & related)
I've gotten tired of adding to this list
For added scare effect I didn't separate the regional development banks from the multilaterals--the ones that lend to entire regions around the globe. And the mix helps illustrate the rise of regionalism and its challenge to the policies of the multilateral institutions.
So when critics talk about reforming the World Bank, they're treating the Bank as if it operates in a vacuum. And when they talk about reforming the International Monetary Fund, what about the Arab Monetary Fund? And what about Citibank and other commercial banks that follow in the wake of the development banks like sharks follow the wake of an ocean liner?
It's not only the development banks that lend to the poorest governments. If there's even a hint that a poor country can be mined for a valuable natural resource, the commercial banks throw loan money at the government. That's after they see that a MDB (multilateral development bank) is willing to risk writing loans to whatever dictator or junta controls the resource.
Regionalism has meant that the World Bank is not as effective a US policy instrument as it used to be. Governments have gotten good at playing one development bank against another to squeeze out more loans. And they've set up regional banks that resist multilateral policies.
Meanwhile, the development bank system set in motion conditions that at best treat only the symptoms of the worst poverty in the LDCs (less developed countries) and at worst, created horrors that almost defy description.
The tragic irony is that the horrors during more recent decades arose from well-thought projects. It's just that the planners overlooked a few factors that only emerged on their radar after the disaster struck.
Truly, if you want to play God, you need to consider an awful lot of factors when it comes to project planning and execution. That's what the Bank economist meant when he told me the Bank is proof that you can't fix anything in this world without breaking something, somewhere down the line. So you have to be really, really smart about how much breakage you'll allow and how to manage it.
It's possible that Jeffrey Sachs has the idea of circumventing the mechanism of development bank loans or least greatly supplementing them with outright aid. Without having read his book (or even the Time excerpt) I'm guessing he's envisioning a kind of global Manhattan Project to eradicate the worst poverty. But then the problem becomes, who runs the project?
This problem arose during US relief to the tsunami victims. The Indian government told the US, "Thanks but no thanks" because they saw the offer as an attempt by the US to gain more influence in India and make bereft Indians into poster children for American largesse.
Then an Indian Yogini who lives in a literal backwater peeled off 20 million dollars to throw into the relief pot for Indian victims. What she pulled out of her pocket is peanuts in India. There are temples in India that take in one million dollars a day. It's nothing for many Indians to blow a million bucks on a wedding. Stop and think how much money that translates to in rupees, and how far a rupee goes in India.
As for China--have you ever seen Shanghai? That's Bling Bling City. Last season an Amazing Race team had to beg on the streets in Shanghai as part of a game penalty. They made so much money so fast, one team member said she was returning to Shanghai to beg full time after the show ended. It's nothing for large numbers of Chinese to walk into car dealerships and plunk down the full price of an expensive imported car.
As for poor Africa--there's so much money sloshing around Africa you don't even want to think about it. So if you really want to know how to help the poorest of the world, Pundita will tell. The way is to stop making an industry out of helping the poorest. The way is to treat people as if they're people not much different from you.
What do you do, if you see someone in your neighborhood not lifting a finger to help with a much-needed community project? You point the finger of shame, isn't it so? You ask them, "What's wrong with you? Why don't you help?" And you don't take excuses.
As soon as poor Indian villagers hook up with talk radio, they start pointing the finger of shame right and left at greedy, corrupt officials in their village. That's how they get projects done--and without the money for the projects being ripped off.
Even 10 years ago, it was not possible to apply this time-honored method toward getting people in LDCs to show more heart toward each other. Today, with the Internet, satellite TV and talk radio, it's easy to point the finger of shame.
That's what Jeffrey Sachs is trying to do: point the finger of shame at America and the West about the horrible plight of Africa's poorest. But....what's wrong with the Africans? Do they lack a gene that renders the richest among them incapable of turning out their pockets to help their own poorest? Only when a World Bank official is around.
Now let's back up and take a closer look at the Amazing Race team begging in Bling Bling City. They were begging with a cameraman in tow. So of course Chinese lined up to be filmed giving money to begging Americans.
Human nature. Amazing thing about it is that it's the same for all. Time to stop treating peoples in the poorest countries as if they're a different species. That doesn't mean halting all development projects and aid. It means shifting much more responsibility for development and aid back to where the responsibility belongs. It also means ceasing to use aid as a foreign policy instrument.
.
Sunday, March 13
Pharaoh
"Pundita, I just read Juggernaut2. You're overlooking the Darwinian angle. Somebody has to lose in the global competition for big-ticket contracts. If you give good training to people in the poorest countries, as America has been doing in the developing countries like China and India, the people from the poorest countries won't be poor anymore but it's because they'll take away jobs from Americans.
[Signed] Tom in Sioux City"
Dear Tom:
Your argument might have held water a century ago. But industry is no longer materials-based in advanced societies, it's knowledge based. The latter creates more jobs than Americans can ever hope to handle. However, there is a way to tilt the playing field against America and against all democracies that engage in global trade. The unfair advantage comes when democratic peoples compete with despotic governments. This is because the despot can order his subjects to learn whatever profession and work in whatever industry gives an edge in exports. Thus, China graduated something like 300,000 engineers last year.
Do you get executed in China if you don't take up the career the communist party bosses deem necessary for the greater good of the Chinese people? It's a question intelligent Chinese don't ask. There are unpleasant penalties, if you don't do well in friendly communist party classes designed to help you mend unsociable thinking.
The treatment of peoples as a cog in the machine of state is an old story in communist countries; it's an old story even in the Old Testament. It's the story of Pharaoh, who could encourage his subjects to work on a building project and enslave those who said they'd rather be doing something else.
That's how the playing field is tilted against the American worker. A democratic government can't walk into your house and tell you what career your children will undertake. Red China's leaders can map out an industry in which they want to compete, and sequester as many Chinese as they need to learn and fill the job slots needed for that industry.
That's what the West created by putting regimes such as the one in China on equal footing with democratic nations. That's what you uphold, every time you buy a product made in China. That's what American business upholds, every time they set up a branch in China. That's what the World Bank and other development banks uphold, every time they write a loan to China. They uphold the rule of Pharaoh.
That is the problem India and other developing democracies face. India, for all it's flaws in government, is a free country. The Indian government doesn't force its citizens to work in a particular industry or learn a particular school subject. That puts India and other developing democracies at a big trade disadvantage with Pharaoh governments.
That, too, you and I and everyone else in the developed world uphold, when we don't demand that Pharaoh deliver his people from bondage before we'll trade with him, admit him to the United Nations, and write development loans to him.
Pundita hastens to add that the World Bank and other development banks shouldn't be blamed for the situation. The development banks are government-sponsored lending institutions. As long as the member countries supporting the development banks put Pharaoh on an equal footing with democracies, the development banks will continue to write him loans.
Oddly enough, American corporations and patent attorneys get huffy because India cuts corners on patent laws in the struggle to be competitive in global markets. So India must play by the rules, but it's okay for American corporations to increase Pharaoh's wealth and global power.
A Pundita Prize to the first reader who can tell me the downside to the Pharaoh method of staying competitive in global trade. And I'll give you three guesses as to which countries and financial institutions have to bail out Pharaoh, every time his industry map doesn't keep up with leapfrogging advances in technology.
.
[Signed] Tom in Sioux City"
Dear Tom:
Your argument might have held water a century ago. But industry is no longer materials-based in advanced societies, it's knowledge based. The latter creates more jobs than Americans can ever hope to handle. However, there is a way to tilt the playing field against America and against all democracies that engage in global trade. The unfair advantage comes when democratic peoples compete with despotic governments. This is because the despot can order his subjects to learn whatever profession and work in whatever industry gives an edge in exports. Thus, China graduated something like 300,000 engineers last year.
Do you get executed in China if you don't take up the career the communist party bosses deem necessary for the greater good of the Chinese people? It's a question intelligent Chinese don't ask. There are unpleasant penalties, if you don't do well in friendly communist party classes designed to help you mend unsociable thinking.
The treatment of peoples as a cog in the machine of state is an old story in communist countries; it's an old story even in the Old Testament. It's the story of Pharaoh, who could encourage his subjects to work on a building project and enslave those who said they'd rather be doing something else.
That's how the playing field is tilted against the American worker. A democratic government can't walk into your house and tell you what career your children will undertake. Red China's leaders can map out an industry in which they want to compete, and sequester as many Chinese as they need to learn and fill the job slots needed for that industry.
That's what the West created by putting regimes such as the one in China on equal footing with democratic nations. That's what you uphold, every time you buy a product made in China. That's what American business upholds, every time they set up a branch in China. That's what the World Bank and other development banks uphold, every time they write a loan to China. They uphold the rule of Pharaoh.
That is the problem India and other developing democracies face. India, for all it's flaws in government, is a free country. The Indian government doesn't force its citizens to work in a particular industry or learn a particular school subject. That puts India and other developing democracies at a big trade disadvantage with Pharaoh governments.
That, too, you and I and everyone else in the developed world uphold, when we don't demand that Pharaoh deliver his people from bondage before we'll trade with him, admit him to the United Nations, and write development loans to him.
Pundita hastens to add that the World Bank and other development banks shouldn't be blamed for the situation. The development banks are government-sponsored lending institutions. As long as the member countries supporting the development banks put Pharaoh on an equal footing with democracies, the development banks will continue to write him loans.
Oddly enough, American corporations and patent attorneys get huffy because India cuts corners on patent laws in the struggle to be competitive in global markets. So India must play by the rules, but it's okay for American corporations to increase Pharaoh's wealth and global power.
A Pundita Prize to the first reader who can tell me the downside to the Pharaoh method of staying competitive in global trade. And I'll give you three guesses as to which countries and financial institutions have to bail out Pharaoh, every time his industry map doesn't keep up with leapfrogging advances in technology.
.
Saturday, March 12
The Juggernaut, Part 2: Half a bridge is better than none
In Part 1 Pundita looked at the World Bank as part of the 'system' of development banks. I explained that the basic development bank model is actually designed to benefit the industries--represented on projects by contractors--that work on projects the development banks underwrite, execute, and oversee for governments. It is the system that must be examined when asking how the World Bank can better serve the poorest countries. Those who suggest dismantling the Bank don't understand the system, which is so successful at employing industries that if the Bank closed down, other development banks would arise to take up the shortfall.
Yet the proliferation of development banks set in motion a destructive cycle that is hard to break and keeps the LDC ('least developed country') governments hooked on development bank loans. In this essay I examine a spinoff cycle that doesn't get attention from the public because it's not part of the most glaring mistakes of past development bank projects. Yet this cycle is the most damaging in the long run because it tamps down human potential. And it is connected with entrenched social problems in both LDC and developed countries--problems that range from drug addiction to terrorism cells. West Europe has become a backwater for these problems. So to begin:
Many people outside the banking community don't realize that the World Bank is much more than a bank in the general understanding of the term. The Bank not only loans money for development projects, the Bank is also involved in every aspect of the project. The Bank has their own engineers who specialize in particular projects, their own procurement specialists and project financial analysts. This is on the theory that the poorer countries cannot fully provide the pool of expertise needed to properly execute the projects, even though the projects do make use of local talent.
So on paper World Bank projects have a valuable educational component. Bank project engineers, other Bank professionals and contractors from advanced countries work with the locals, who use that route to learn about modern technologies and methods. The catch is that the LDC governments can't afford to borrow the kind of money that uses state-of-the-art building methods, materials, and technologies.
I remember a Bank power engineer telling me that he couldn't leave the Bank to work in private industry because the advances in his field were so rapid that he no longer had the qualifications to be competitive. This was despite all the dams he'd helped build in developing counties. He explained that the dam projects he worked on for the Bank used technologies 20 years behind current ones.
But it's not only Bank engineers who can find themselves stuck behind the times. The LDC locals who work on the projects are not getting the information/technology transfer that helps them become competitive in the modern world. They are only competitive in trade with countries that are in the same boat.
Now one might argue that advanced societies don't owe technology transfer to the backward countries, and that any teaching element connected with development bank projects is gravy. True on both counts, if you keep the discussion narrowed to the actual projects. But if development and foreign aid pours trillions over decades into bringing the poorest countries out of abject poverty, and the countries stay in abject poverty, this signals a flaw in the approach. The Half a Bridge approach to development lending institutionalizes business and lending practices that provide poor-quality infrastructure. This sets up a destructive cycle. The practice:
1. Contributes to an inferior pool of local workers, so that LDC governments continue to hire contractors from advanced countries for projects that must be done right (e.g., Sahib Zone buildings, oil industry infrastructure).
2. This creates a brain drain: the brightest and most determined nationals flee their LDC to receive education abroad and work in advanced countries.
3. This shrinks the LDC's tax base, meaning that educational institutions remain inadequate for turning out skilled workers.
4. This further entrenches bad conditions for the LDC poorest, who flee to advanced countries and take the most menial jobs or go on the dole.
5. This creates an immigrant underclass in the developed countries.
6. The underclass supplies crime and terrorism syndicates with an inexhaustible supply of cheap, disposable labor.
Then people in developed countries ask, "Why are we overwhelmed with illegal drugs, child prostitution, gangs of thieves, and nut cases who think it's fashionable to blow themselves up?"
To understand the part that development banks play in these situations, walk the cat backward through the above cycle. Then keep walking back through the cycle outlined in Juggernaut Part 1. To review:
1. At some point governments have to pay for the loans they receive from development banks,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing their countries?"
If you keep walking the cat backward, you can stop before reaching Bretton Woods. When the IBRD model was applied to advanced countries that had simply fallen backward, as happened in West Europe during WW2, it was a success. The trouble began with Robert S. McNamara's tenure as president of the World Bank.
McNamara did not understand how the IBRD gizmo worked. He believed the myth about the IBRD, which leaps over the critical factor of how the Bank really works. To review, when studying the Bank's failures, it's chasing red herring to think in terms of "development." The IBRD was not designed to "develop" a country. It was designed to keep businesses afloat by giving them contracts financed by loans to governments.
McNamara didn't understand this, which is not a slur on his intelligence. The World Bank is so complex in its workings that it takes Bank employees about two years to learn to navigate the basics of the Bank's way of doing things. (Reading books on how the Bank works only shaves a few months off the learning curve.) So when Americans are put in the president's chair they are at the mercy of the Bank's mandarins--senior management who have been working at the Bank for years. That's what happened to McNamara.
To cut a story, Robert McNamara assumed that the IBRD could apply their loan model to "developing" the world's poorest countries out of abject poverty--countries that had not fallen backward but had always been backward, by modern standards. However, what the IBRD gizmo does, when applied to the LDCs, is the same thing it does when applied anywhere: provide gainful employment for many skilled contractors from advanced countries. So to blame the Bank for failing to develop the LDCs is akin to blaming your electric blender because it doesn't toast bread. The Bank wasn't set up to do what McNamara wanted done.
But it compounds the error of misapplying the IBRD model, if the Bank underwrites projects that operate according to the theory that half a loaf is better than none. What use is it to build a bridge with outmoded materials, structural design, and inefficient building methods--a bridge that when completed is insufficient to handle the vehicular traffic?
Pundita will tell the use: the need for major repairs within a year of the bridge's opening requires the development bank to write yet another loan to the government. That loan will be serviced by contractors using technologies 20 years behind the times. That will create the need for another loan....
Again, all this works splendidly to keep many contractors gainfully employed. But if the goal is to help the LDCs pull themselves up, this is not the way to go about it. The highest cost of the Half a Bridge theory is that it wastes human intelligence. It condemns minds to learning things that are obsolete in the modern world.
The reader might ask whether this Half a Bridge style of business also holds back the contractors from the developed countries--the ones who specialize in servicing highly technical projects for development loans. I doubt there's ever been a study done on the question. But I imagine if an engineering firm can coast on projects that don't require the employees to be at the cutting edge and don't require R&D--that would leave the firm dependent on doing work that is obsolete in the advanced countries.
For a very brief and cutting overview of Robert McNamara's contributions to the World Bank, see:
http://www.techcentralstation.com/072904E.html
.
Yet the proliferation of development banks set in motion a destructive cycle that is hard to break and keeps the LDC ('least developed country') governments hooked on development bank loans. In this essay I examine a spinoff cycle that doesn't get attention from the public because it's not part of the most glaring mistakes of past development bank projects. Yet this cycle is the most damaging in the long run because it tamps down human potential. And it is connected with entrenched social problems in both LDC and developed countries--problems that range from drug addiction to terrorism cells. West Europe has become a backwater for these problems. So to begin:
Many people outside the banking community don't realize that the World Bank is much more than a bank in the general understanding of the term. The Bank not only loans money for development projects, the Bank is also involved in every aspect of the project. The Bank has their own engineers who specialize in particular projects, their own procurement specialists and project financial analysts. This is on the theory that the poorer countries cannot fully provide the pool of expertise needed to properly execute the projects, even though the projects do make use of local talent.
So on paper World Bank projects have a valuable educational component. Bank project engineers, other Bank professionals and contractors from advanced countries work with the locals, who use that route to learn about modern technologies and methods. The catch is that the LDC governments can't afford to borrow the kind of money that uses state-of-the-art building methods, materials, and technologies.
I remember a Bank power engineer telling me that he couldn't leave the Bank to work in private industry because the advances in his field were so rapid that he no longer had the qualifications to be competitive. This was despite all the dams he'd helped build in developing counties. He explained that the dam projects he worked on for the Bank used technologies 20 years behind current ones.
But it's not only Bank engineers who can find themselves stuck behind the times. The LDC locals who work on the projects are not getting the information/technology transfer that helps them become competitive in the modern world. They are only competitive in trade with countries that are in the same boat.
Now one might argue that advanced societies don't owe technology transfer to the backward countries, and that any teaching element connected with development bank projects is gravy. True on both counts, if you keep the discussion narrowed to the actual projects. But if development and foreign aid pours trillions over decades into bringing the poorest countries out of abject poverty, and the countries stay in abject poverty, this signals a flaw in the approach. The Half a Bridge approach to development lending institutionalizes business and lending practices that provide poor-quality infrastructure. This sets up a destructive cycle. The practice:
1. Contributes to an inferior pool of local workers, so that LDC governments continue to hire contractors from advanced countries for projects that must be done right (e.g., Sahib Zone buildings, oil industry infrastructure).
2. This creates a brain drain: the brightest and most determined nationals flee their LDC to receive education abroad and work in advanced countries.
3. This shrinks the LDC's tax base, meaning that educational institutions remain inadequate for turning out skilled workers.
4. This further entrenches bad conditions for the LDC poorest, who flee to advanced countries and take the most menial jobs or go on the dole.
5. This creates an immigrant underclass in the developed countries.
6. The underclass supplies crime and terrorism syndicates with an inexhaustible supply of cheap, disposable labor.
Then people in developed countries ask, "Why are we overwhelmed with illegal drugs, child prostitution, gangs of thieves, and nut cases who think it's fashionable to blow themselves up?"
To understand the part that development banks play in these situations, walk the cat backward through the above cycle. Then keep walking back through the cycle outlined in Juggernaut Part 1. To review:
1. At some point governments have to pay for the loans they receive from development banks,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing their countries?"
If you keep walking the cat backward, you can stop before reaching Bretton Woods. When the IBRD model was applied to advanced countries that had simply fallen backward, as happened in West Europe during WW2, it was a success. The trouble began with Robert S. McNamara's tenure as president of the World Bank.
McNamara did not understand how the IBRD gizmo worked. He believed the myth about the IBRD, which leaps over the critical factor of how the Bank really works. To review, when studying the Bank's failures, it's chasing red herring to think in terms of "development." The IBRD was not designed to "develop" a country. It was designed to keep businesses afloat by giving them contracts financed by loans to governments.
McNamara didn't understand this, which is not a slur on his intelligence. The World Bank is so complex in its workings that it takes Bank employees about two years to learn to navigate the basics of the Bank's way of doing things. (Reading books on how the Bank works only shaves a few months off the learning curve.) So when Americans are put in the president's chair they are at the mercy of the Bank's mandarins--senior management who have been working at the Bank for years. That's what happened to McNamara.
To cut a story, Robert McNamara assumed that the IBRD could apply their loan model to "developing" the world's poorest countries out of abject poverty--countries that had not fallen backward but had always been backward, by modern standards. However, what the IBRD gizmo does, when applied to the LDCs, is the same thing it does when applied anywhere: provide gainful employment for many skilled contractors from advanced countries. So to blame the Bank for failing to develop the LDCs is akin to blaming your electric blender because it doesn't toast bread. The Bank wasn't set up to do what McNamara wanted done.
But it compounds the error of misapplying the IBRD model, if the Bank underwrites projects that operate according to the theory that half a loaf is better than none. What use is it to build a bridge with outmoded materials, structural design, and inefficient building methods--a bridge that when completed is insufficient to handle the vehicular traffic?
Pundita will tell the use: the need for major repairs within a year of the bridge's opening requires the development bank to write yet another loan to the government. That loan will be serviced by contractors using technologies 20 years behind the times. That will create the need for another loan....
Again, all this works splendidly to keep many contractors gainfully employed. But if the goal is to help the LDCs pull themselves up, this is not the way to go about it. The highest cost of the Half a Bridge theory is that it wastes human intelligence. It condemns minds to learning things that are obsolete in the modern world.
The reader might ask whether this Half a Bridge style of business also holds back the contractors from the developed countries--the ones who specialize in servicing highly technical projects for development loans. I doubt there's ever been a study done on the question. But I imagine if an engineering firm can coast on projects that don't require the employees to be at the cutting edge and don't require R&D--that would leave the firm dependent on doing work that is obsolete in the advanced countries.
For a very brief and cutting overview of Robert McNamara's contributions to the World Bank, see:
http://www.techcentralstation.com/072904E.html
.
Keeping Up Appearances
"I am writing in response to your Friday post. You seem to view the European Community as completely unprincipled and on the side of America's enemies. This view is wrong and very disturbing, and I hope it's not shared by many Americans.
[Signed] Henry in Leeds"
Dear Henry:
I stated that the EU is founded on the principle of trade; that to be true to the principle Brussels can be counted on to side with their (important) trading partners, even if this pits them against America. And, I should add, even if this pits them against the foreign policy of certain EU governments. Brussels, as the seat of EU government, is currently dominated by the views of the chief founders of the EU, which are Germany and France. That situation might change over the years but that's the way things are now. And the EU is in the process of adopting a single foreign policy.
Pundita fails to see what's wrong or disturbing about the above statements. What's disturbing is that Washington doesn't recognize the fact of the European Union's growing power and cohesiveness. They don't recognize that during the past decade, Brussels has been moving toward placing the United Nations alliance above the NATO alliance. Many in Washington have not confronted that Brussels isn't only talking about giving the UN more power. Brussels is implying that the UN, not NATO, is the premier alliance for the European Union.
If that's Brussels' choice, that's their prerogative, but that calls for a revision of the US view of NATO. At the least it calls for Brussels to clarify their position at the official level. But we can't call for that clarification until Washington confronts where we are now. Until there is clarity, the US Department of State will continue to adhere to the clearest position, which is to treat the NATO alliance as if it's frozen in time, even though the position is irrational.
All right, that's enough chat about the price of tea in Outer Mongolia and the best weather to plant corn. Tehran is blackmailing Brussels. That's why the US shouldn't go along with the so-called negotiations.
If you had told Brussels in August 2001 that by 2003 the US would be camped in Baghdad, they would have laughed 'til they cried. But once they saw it might come true then it was, "Uh oh. Saddam keeps really accurate records of his weapons purchases. We need to head off the US at Turtle Bay Pass!"
Now the same crew is trying to head us off over Tehran. The French, German and British governments need to stop playing the role of Hyacinth. We're going to find out sooner or later which companies the Tehran regime contracted with to build their nuke weapons facilities.
.
[Signed] Henry in Leeds"
Dear Henry:
I stated that the EU is founded on the principle of trade; that to be true to the principle Brussels can be counted on to side with their (important) trading partners, even if this pits them against America. And, I should add, even if this pits them against the foreign policy of certain EU governments. Brussels, as the seat of EU government, is currently dominated by the views of the chief founders of the EU, which are Germany and France. That situation might change over the years but that's the way things are now. And the EU is in the process of adopting a single foreign policy.
Pundita fails to see what's wrong or disturbing about the above statements. What's disturbing is that Washington doesn't recognize the fact of the European Union's growing power and cohesiveness. They don't recognize that during the past decade, Brussels has been moving toward placing the United Nations alliance above the NATO alliance. Many in Washington have not confronted that Brussels isn't only talking about giving the UN more power. Brussels is implying that the UN, not NATO, is the premier alliance for the European Union.
If that's Brussels' choice, that's their prerogative, but that calls for a revision of the US view of NATO. At the least it calls for Brussels to clarify their position at the official level. But we can't call for that clarification until Washington confronts where we are now. Until there is clarity, the US Department of State will continue to adhere to the clearest position, which is to treat the NATO alliance as if it's frozen in time, even though the position is irrational.
All right, that's enough chat about the price of tea in Outer Mongolia and the best weather to plant corn. Tehran is blackmailing Brussels. That's why the US shouldn't go along with the so-called negotiations.
If you had told Brussels in August 2001 that by 2003 the US would be camped in Baghdad, they would have laughed 'til they cried. But once they saw it might come true then it was, "Uh oh. Saddam keeps really accurate records of his weapons purchases. We need to head off the US at Turtle Bay Pass!"
Now the same crew is trying to head us off over Tehran. The French, German and British governments need to stop playing the role of Hyacinth. We're going to find out sooner or later which companies the Tehran regime contracted with to build their nuke weapons facilities.
.
Friday, March 11
Pundita plays Alice to Condoleezza Rice's Red Queen
"The Europeans have a strategy which is to show the Iranians that if they are prepared to live up to their international obligations there is an alternative path to confrontation and there is a path to a better future. We are supporting that diplomacy but this is most assuredly giving the Europeans a stronger hand, not rewarding the Iranians." --US Secretary of State Condoleezza RiceBut the Europeans are rewarding Iran by offering them concessions. Wait, let's speak with more precision--granted, the enemy of diplomacy, but in the interests of defending the logic of the English language and indeed the logic of all language, let's name something for what it is: the Europeans are rewarding Iran by offering them bribes.
So if the United States supports the European offer of bribes....isn't that rewarding the Iranians? Asks Alice of the Red Queen.
Can we wring logic from Rice's first major executive decision as secretary of state? Within the concept of a chess game, yes. Brussels looks at John Bolton in the way they look at Genghis Khan. So the exchange of chess pieces is that the US sacrifices support of democratic principles in exchange for muted resistance from Brussels to the Bush nomination of Bolton as the US ambassador to the UN.
If you tell me that's not logical, given that sending Bolton to the UN is meant to bolster Bush's democracy doctrine--it's Red Queen logic. You get to make your own laws of logic when you're the world's most powerful nation. However, it occurred to Bush that there's something screwy about sacrificing two knights, a bishop and rook in exchange for a pawn. Thus, the White House directed everyone to notice that today's announcement came from the State Department, not the White House.
In this way, the White House hopes to divert attention from the fact that State's announcement studiously omitted the Bush administration's red-line position on Iran. Up until today, the White House demanded the complete and permanent end to Iran's nuclear fuel cycle activities. The demand was not specified in the State Department's official announcement today.
Thus, Iran and Brussels won a huge tactical victory. The bone to Washington is a leaked EU classified document that says the EU will back US calls to refer Iran to the UN Security Council if Iran does not scrap programs linked to nuclear arms. But this position is not official--again, it's stated in a leaked internal document. And neither the document nor any statement by Brussels puts a time limit on when Brussels will decide that Iran has refused to scrap their nuclear weapons program--a program that Iran refuses to acknowledge.
Is there any other logic to Rice's decision to capitulate to Brussels? Logic no, hope yes. The hope is that by backing the EU approach to negotiations with Tehran, this will tamp down calls building in Germany to leave the NATO alliance.
Thus, the true face of the US Department of State is clearly revealed. The State Department is NATO spelled backward. So there's no mystery to Secretary Rice's approach to Brussels--or Moscow, for that matter. It is a Cold War approach, which is at the heart of NATO.
For all the talk of Rice being a new direction for State, she is simply a different label on the same system. On paper, there are good reasons for the US continuing the NATO alliance. The reasons ignore the actual situation, which is that the most powerful European members are not allied with the US. In 2002, Germany and France clearly demonstrated that they were allied with Saddam Hussein's regime. Along with the United Kingdom, they now show that they're allied with the regime in Iran.
The catch is that one can't be allied with the Tehran regime and the US. Indeed, one can't be allied with both the European Union and the United States--a fact that Tony Blair had to acknowledge by backing the Franco-German approach to Tehran's clandestine nuclear weapons program.
Let's be clear about what the European Union is. It's the third-largest governing institution in the world. It's the world's largest economy, even though its land mass is half the size of the continental United States. The EU is also the world's leading exporter and largest internal trading market.
In short, the EU a trading bloc which is now in the process of ratifying a constitution that will bring all its members under one military and one foreign policy run from Brussels. It's a union of countries founded on trade principles.
The union represented by the United States is founded on democratic principles. So there is an inherent conflict between the two unions. The Brussels approach to Tehran's nuclear weapons program is a perfect example of the conflict. When push comes to shove, Brussels will side with whatever position supports their trade.
That's consistent with the European Union's founding principles. But if the United States allies itself with those principles, we sacrifice our founding principles. To avoid confronting this reality Washington clings to NATO, which is founded on more transcendent ideals than the EU. And thus, Secretary Rice's attack on logic today. That the attack came on the anniversary of the Madrid train bombings is not a good day for those who took Bush's Inaugural promises seriously.
.
3/11
In memory, in condolence, to the people of Spain. Americans have not forgotten your outpouring of sympathy on America's darkest day. Faith and courage will carry us through these troubled times.
.
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Creatures from the Theoretical Bubble Lagoon
"Pundita! Where is the Juggernaut 2 essay you promised us? You're not going to go wandering off talking about Russia again, are you?"
[Signed] Not Born Yesterday in New York
Dear NBY:
Yes yes Pundita hasn't forgotten. It's just that we've been plunged into a dark mood, which ruffles the calm mien required to discuss the World Bank. We don't approve of burdening the reader with our personal problems but so far this week a dear colleague attempted suicide, there was a storm in the Atlantic Ocean, and Pundita learned that the Council on Foreign Relations managed to steal the Theoretical Bubble machine from the Pentagon and get the contraption working again.
The colleague was coaxed from a window ledge on his office building, which is not situated in this country. He held out for five hours, all the while screaming at police and bystanders that the Washington Post is in the pay of Russian oligarchs. His wife told me by satphone that with time and beadwork he'll recover but right now he's under heavy sedation.
The Theoretical Bubble Machine has always had a bug. Once it's switched on, it keeps making bubbles. These drift on the air currents to Geneva, where over time the bubbles formed a lagoon. Every once in a while the creatures who live in the lagoon mass for an attack on Washington, which they are doing as I write these very words. An ominous sign is this New York Times headline:
Is it all that wrong to want to make concessions to NATO allies? Up to a point, no. But as Shaheen Fatemi pointed out on John Batchelor's show and in his response to Takeyh's piece, there's plenty wrong with assigning legitimacy to the Tehran regime:
When the weather gets dangerously cold in Washington this means the squirrels have trouble scrounging croissant crumbs and French fries. The seagulls have every fast food outlet and Starbucks in Washington mapped out. Then can spot a croissant crumb from two miles up and if a squirrel is there first, well, the squirrel is toast.
All this falls back hard on Pundita. We once made the mistake of explaining to the squirrel member of the team what is meant by the term, "World Bank consultant." Since then, every time there's a winter storm Pundita has to run policy meetings with scores of consultants scampering across the conference table.
Why don't they simply dig up the nuts they spent the Fall burying instead of asking to get beat up by seagulls? Pundita has a theory. The Winter and Spring finds the squirrel accusing Pundita and the other team members of stealing his hoard. One day it hit me: he can't remember where he buried most of the nuts. Perhaps the effect of junk food and pastry on the squirrel brain.
.
[Signed] Not Born Yesterday in New York
Dear NBY:
Yes yes Pundita hasn't forgotten. It's just that we've been plunged into a dark mood, which ruffles the calm mien required to discuss the World Bank. We don't approve of burdening the reader with our personal problems but so far this week a dear colleague attempted suicide, there was a storm in the Atlantic Ocean, and Pundita learned that the Council on Foreign Relations managed to steal the Theoretical Bubble machine from the Pentagon and get the contraption working again.
The colleague was coaxed from a window ledge on his office building, which is not situated in this country. He held out for five hours, all the while screaming at police and bystanders that the Washington Post is in the pay of Russian oligarchs. His wife told me by satphone that with time and beadwork he'll recover but right now he's under heavy sedation.
The Theoretical Bubble Machine has always had a bug. Once it's switched on, it keeps making bubbles. These drift on the air currents to Geneva, where over time the bubbles formed a lagoon. Every once in a while the creatures who live in the lagoon mass for an attack on Washington, which they are doing as I write these very words. An ominous sign is this New York Times headline:
Data is Lacking on Iran's Arms, U.S. Panel Says WASHINGTON, March 8 - A commission due to report to President Bush this month will describe American intelligence on Iran as inadequate to allow firm judgments about Iran's weapons programs, according to people who have been briefed on the panel's work....Now study this paragraph from an article published in the International Herald Tribune of March 8, 2005. Ray Takeyh, a Senior Fellow at the Council on Foreign Relations recommends that:
The United States should officially participate in the EU-Iran discussions and put on the table its economic sanctions, acknowledgment of Iran's territorial integrity and recognition of its existing regime.Taken together, what do these March 8 stories mean? They mean that the US contingent in NATO is sucking up to the Euro contingent in a bid to hold the alliance together.
Is it all that wrong to want to make concessions to NATO allies? Up to a point, no. But as Shaheen Fatemi pointed out on John Batchelor's show and in his response to Takeyh's piece, there's plenty wrong with assigning legitimacy to the Tehran regime:
Appeasement of the regime in Tehran will not stop them from pursuing their weapons policy, nor will it diminish their support of terrorism. But it will keep them in power longer and will allow them to prolong their oppression of the Iranian people.Now what does this have to do with a storm in the Atlantic and Pundita's bad mood? Well, every time the Creatures slosh their way toward Washington, this sets up a disturbance in the Atlantic Ocean. This causes a storm, which drives the seagulls into downtown Washington, DC. The situation is not so bad in the warm months but when the storm rises in the winter, as it did earlier this week, this creates what passes for dangerously cold and windy weather in the Greater Washington, DC region. It wouldn't be dangerous weather in say, Chicago or Albany, but this region is the only place in the galaxy where local meteorologists refer to 3 inches of snow as "The White Death."
When the weather gets dangerously cold in Washington this means the squirrels have trouble scrounging croissant crumbs and French fries. The seagulls have every fast food outlet and Starbucks in Washington mapped out. Then can spot a croissant crumb from two miles up and if a squirrel is there first, well, the squirrel is toast.
All this falls back hard on Pundita. We once made the mistake of explaining to the squirrel member of the team what is meant by the term, "World Bank consultant." Since then, every time there's a winter storm Pundita has to run policy meetings with scores of consultants scampering across the conference table.
Why don't they simply dig up the nuts they spent the Fall burying instead of asking to get beat up by seagulls? Pundita has a theory. The Winter and Spring finds the squirrel accusing Pundita and the other team members of stealing his hoard. One day it hit me: he can't remember where he buried most of the nuts. Perhaps the effect of junk food and pastry on the squirrel brain.
.
Thursday, March 10
We're so glad you enjoyed the G8 luncheon, India and China! With wine and tip that comes to 5 billion dollars.
Pundita received a number of emails in response to the Juggernaut essay. Some readers wanted to know if I made up the story about the origin of the IBRD. Other readers asked whether I had read the Time magazine cover story on Jeffrey Sachs's book (The End of Poverty) and whether I agreed with his proposals for ending the worst poverty in the world by 2025.
Pundita learned about the Sachs book from the Guardian Unlimited, which is the only newspaper to read if you want to know what the Democrat Party and the left wing of the Supreme Court are up to these days.
We have yet to read the Sachs book but from the Guardian column about the book it's clear that the Creatures from the Theoretical Bubble Lagoon are massing for another attack on Washington. After all, this is the run-up to the IMF Spring meeting, the White House decision on the next World Bank president, and the upcoming G7/8 meeting. Pundita warned her readers months ago that this is the Trifecta. If you think the Sachs book wields a sledgehammer, you ain't seen nothin yet.
President Bush is partly to blame. He agreed in 2002 to give 0.7% of the US national income to foreign development goals. Why he should agree without first demanding an independent audit of every development bank to which the US belongs is beyond a reasonable mind. But Jeffrey Sachs is an economist so he doesn't need to be reasonable. Thus, according to the Guardian, he argues that there is little evidence that corruption has been the main obstacle to development in Africa.
Well of course there's little evidence. How can there be evidence without an audit? In any case, development banks are not set up to serve the poorest. They are set up to serve the trickle-down theory. The development banks are designed to keep contractors and subcontractors gainfully employed. The idea is that if enough businesses can stay afloat, the country will stay afloat and stay away from war.
So Pundita fails to see why Sachs assumes the IMF and the World Bank can be reformed and remade to help in the task of saving the world's poorest on the theory those organizations have accumulated useful expertise and experience. If your phone company has been trying for 40 years to get your service back on, the experience and expertise they've accumulated during those decades of trying is neither here nor there--if you want phone service. If the Bank and the IMF haven't gotten it right by now, clearly their expertise and experience have limited value for the task Sachs envisions.
Of course both organizations have tremendous expertise and experience, both of which are valuable at certain stages of a country's development. But Jeffrey Sachs is the wrong person to advise on such matters. Even the Guardian, which predictably supports any idea meant to squeeze more aid money out of the United States, can't avoid a glaring contradiction in their praise of Sachs.
That was essentially Iraq's problem under Saddam Hussein, as Pundita has noted before. Behind the stage paint of the Europeanized Baathist fascist government stood a tribalized clan society.
That was also the situation in the Soviet Union. The shock therapy that Professor Sachs and his cronies shoved through in Russia created the oligarchs, who proceeded to vampire their country's wealth and retain inordinate power through clan affiliations.
Once the stage paint was scrubbed from the Europeanized fascist model of government, it turned out that Russia and the rest of the FSU countries had been running according to ancient clan laws. The structures of modern government simply weren't there--a situation which Sachs and his bubble-headed school of economics completely ignored.
So. Now Professor Sachs brings his intellect to bear on the plight of the world's poorest countries. Pundita will read his list of recommendations and report back to her readers. Point by point.
In the meantime, we impatiently await India's first luncheon at the G7/8 meeting. Yes, India has finally received an invitation to the lunch. If memory serves, this will be China's second lunch.
Pundita can't wait for the Chinese and Indian delegations to arrive. It's going to be music to hear the anti-Globalist protesters yelling, "Stop robbing the poor!" at the Chinese and Indians sneaking in the back entrance to the luncheon.
.
Pundita learned about the Sachs book from the Guardian Unlimited, which is the only newspaper to read if you want to know what the Democrat Party and the left wing of the Supreme Court are up to these days.
We have yet to read the Sachs book but from the Guardian column about the book it's clear that the Creatures from the Theoretical Bubble Lagoon are massing for another attack on Washington. After all, this is the run-up to the IMF Spring meeting, the White House decision on the next World Bank president, and the upcoming G7/8 meeting. Pundita warned her readers months ago that this is the Trifecta. If you think the Sachs book wields a sledgehammer, you ain't seen nothin yet.
President Bush is partly to blame. He agreed in 2002 to give 0.7% of the US national income to foreign development goals. Why he should agree without first demanding an independent audit of every development bank to which the US belongs is beyond a reasonable mind. But Jeffrey Sachs is an economist so he doesn't need to be reasonable. Thus, according to the Guardian, he argues that there is little evidence that corruption has been the main obstacle to development in Africa.
Well of course there's little evidence. How can there be evidence without an audit? In any case, development banks are not set up to serve the poorest. They are set up to serve the trickle-down theory. The development banks are designed to keep contractors and subcontractors gainfully employed. The idea is that if enough businesses can stay afloat, the country will stay afloat and stay away from war.
So Pundita fails to see why Sachs assumes the IMF and the World Bank can be reformed and remade to help in the task of saving the world's poorest on the theory those organizations have accumulated useful expertise and experience. If your phone company has been trying for 40 years to get your service back on, the experience and expertise they've accumulated during those decades of trying is neither here nor there--if you want phone service. If the Bank and the IMF haven't gotten it right by now, clearly their expertise and experience have limited value for the task Sachs envisions.
Of course both organizations have tremendous expertise and experience, both of which are valuable at certain stages of a country's development. But Jeffrey Sachs is the wrong person to advise on such matters. Even the Guardian, which predictably supports any idea meant to squeeze more aid money out of the United States, can't avoid a glaring contradiction in their praise of Sachs.
Prof Sachs rose to prominence 15 years ago as the chief designer of "shock therapy" for the post-communist economies of Poland and Russia, emphasising an immediate transition to free markets and drastic cuts in state spending. In his new book he argues that the market-oriented prescriptions of the IMF have been part of the problem, by cutting away at the fabric of poor societiesThe theory pushed by Sachs was as much a part of the problem as the IMF, a point which the Wikipedia encyclopedia alludes to in a chapter on shock therapy theory. The author points out the downside of the theory:
A developed Western economy rests upon and tends to take for granted a framework of law, regulation and established practice (including between parts of the domestic and international economy) that cannot be instantaneously created in a society that was formerly authoritarian, heavily centralised and subject to state ownership of assets. Even re-defining property law and rights takes time.That's some downside. But establishing the framework is a thousand times harder in a country where the rule of law was only superficially applied by a colonial rule. That's what African countries faced, while they served for decades as experimental labs for IMF theories.
That was essentially Iraq's problem under Saddam Hussein, as Pundita has noted before. Behind the stage paint of the Europeanized Baathist fascist government stood a tribalized clan society.
That was also the situation in the Soviet Union. The shock therapy that Professor Sachs and his cronies shoved through in Russia created the oligarchs, who proceeded to vampire their country's wealth and retain inordinate power through clan affiliations.
Once the stage paint was scrubbed from the Europeanized fascist model of government, it turned out that Russia and the rest of the FSU countries had been running according to ancient clan laws. The structures of modern government simply weren't there--a situation which Sachs and his bubble-headed school of economics completely ignored.
So. Now Professor Sachs brings his intellect to bear on the plight of the world's poorest countries. Pundita will read his list of recommendations and report back to her readers. Point by point.
In the meantime, we impatiently await India's first luncheon at the G7/8 meeting. Yes, India has finally received an invitation to the lunch. If memory serves, this will be China's second lunch.
Pundita can't wait for the Chinese and Indian delegations to arrive. It's going to be music to hear the anti-Globalist protesters yelling, "Stop robbing the poor!" at the Chinese and Indians sneaking in the back entrance to the luncheon.
.
Tuesday, March 8
The Juggernaut
"I knew you would go through the roof over Snow's mention of Bono but I bet Snow dropped the name as a nod to Europe. My money's on Paul Wolfowitz for next World Bank president. [Signed] Chicago Dan"
Dear Chicago Dan:
9/11 was all our tomorrows--all the problems we put off 'til tomorrow while fighting two world wars and the Cold War. Once you see the connection between the development bank business model and 9/11, I guarantee your first reaction will be, "Shut down the World Bank." But the World Bank is but one of many development banks. You can no more shut down the business model created at Bretton-Woods than you can return to before the atom was split.
We cannot and must not prepare ourselves to live with more 9/11s, but we can't deal with the most intractable problems in the developing world unless we grapple with the downsides of the development bank. The candidates now under consideration for Bank president show that Washington has not even confronted what the World Bank was set up to do. So we need to return to Ground Zero, the real Ground Zero, and build up understanding from there:
After the American command saw the first US casualty figures for the Normandy invasion, they looked at each other and said in effect, "The Three Strikes rule must not apply."
Less than two months later, the International Bank for Reconstruction and Development (IBRD) was signed into existence.
American commanders saw that the survival of civilization depended on assuming that if left to their own devices the Europeans would be at each other's throats again, as soon as they climbed out of the ruins of World War 2 and probably even before. Given the state of modern weaponry that meant another world war. That was untenable.
The question was how to ensure that the Europeans were not left to their own devices. There was talk of the US annexing Europe. There was consideration of the basic idea behind Hitler's Third Reich--the third Holy Roman Empire. The last time Europeans had more or less gotten along was under the Roman Empire.
I don't know who came up with the idea or how long before Normandy the idea might have been kicking around. But at some point people said, "Wait a minute. What are we really talking about, when we say Roman Empire?"
What comes first to your mind's eye when you visualize the Roman Empire? No, not troops. You see the Coliseum, roads, aqueducts, vast plazas of marble government buildings.
The Holy Roman Empire was Nirvana for building contractors. It was construction projects and materials procurement, not troops, which caused so many diverse peoples to put up with the Romans. Rome's mania for building was the gift that kept on giving to every outpost in the empire.
As soon as chieftains living in mud huts figured out that you didn't need to make raids on a neighboring tribe to get rich, humanity took a leap forward. Chieftains turned themselves into procurement specialists, building project managers, and entire industries to serve Roman building sprees.
The endurance of the Rome Empire rested on a business model that allowed peoples to sublimate war into competition for building contracts. That is the basic idea behind the IBRD.
So, contrary to myth, the IBRD, which along with spinoffs is now known as the World Bank Group, was not designed to reconstruct postwar Europe. It was not designed to develop Europe. The IBRD was designed to produce a business model that allowed European industries to compete for government building projects financed by low-cost loans.
If the Europeans wanted to go on bashing each other after two world wars, they could do it by competing for business contracts issued by governments--contracts paid for with money borrowed from a bank that loaned exclusively to governments.
Someday, a building materials procurement specialist will write a history of the world. Then many mysteries of history will be revealed. And it will be clear that one of the brightest ideas human brains ever hatched was signed into agreement at Bretton Woods. The development bank model of business is the biggest single factor in the relative peace the world has enjoyed during the past half century.
What's the catch? Many years ago, while first learning about the World Bank, I put that question to a Bank economist. I asked if the World Bank ran the world.
He replied, "No. The IMF runs the world. The World Bank fixes the world."
I observed that the Bank was like no bank I'd ever banked at, so he could he tell me in one sentence what the World Bank actually was?
He replied, "The Bank is a juggernaut."
After chewing that over I replied in the manner of Alice, "But a juggernaut is an engine of destruction. Doesn't your definition of the Bank conflict with the Bank's mission to fix the world?"
"Not at all," replied my guide to Wonderland. "The World Bank is irrefutable proof that you can't fix anything in this world without breaking something, somewhere down the line."
What the Bank can't fix about itself is the very success of its business model, which spawned numerous imitations. You've heard of nuclear proliferation. There is also development-bank proliferation. There is now a version of the World Bank in every world region you can conceive, including the "Islamic Region."
The proliferation set trouble in motion. As long as the IBRD model was serving a relatively small group of competing contractors--the Europeans and Americans--there was enough contract pie to go around. But once everybody and his uncle jumped in, that was a different game. Everybody's clamoring for contracts, which means writing more and more development loans. But there are only so many national governments on earth. Those governments can only contract to put up so many bridges, dams and buildings.
To see where this has led, an episode of the Amazing Race found the teams in a Gulf Arab state. One contestant blurted, "Look at this place! There's a mosque on every corner!"
Ah, but you mustn't think "mosque" when seeing a mosque, if you want to understand development banks. Think cement contract, steel girder contract, electrical contract, copper tube contract, plumbing contract, painting contract....
In short, there is now cutthroat competition among peoples all over the world to get government contracts funded by development bank loans. That means the contract pie is fast reducing to the size of a poptart.
When development banks proliferated, this set in motion a destructive cycle:
1. At some point governments have to pay installments on the development loans,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing them?
There is also an insidious aspect to the development bank model as applied to LDCs (least developed countries). It keeps the LDCs always moving backward in relation to the developed countries, which sets up another destructive cycle. Pundita will discuss that cycle in Juggernaut, Part 2.
.
Dear Chicago Dan:
9/11 was all our tomorrows--all the problems we put off 'til tomorrow while fighting two world wars and the Cold War. Once you see the connection between the development bank business model and 9/11, I guarantee your first reaction will be, "Shut down the World Bank." But the World Bank is but one of many development banks. You can no more shut down the business model created at Bretton-Woods than you can return to before the atom was split.
We cannot and must not prepare ourselves to live with more 9/11s, but we can't deal with the most intractable problems in the developing world unless we grapple with the downsides of the development bank. The candidates now under consideration for Bank president show that Washington has not even confronted what the World Bank was set up to do. So we need to return to Ground Zero, the real Ground Zero, and build up understanding from there:
After the American command saw the first US casualty figures for the Normandy invasion, they looked at each other and said in effect, "The Three Strikes rule must not apply."
Less than two months later, the International Bank for Reconstruction and Development (IBRD) was signed into existence.
American commanders saw that the survival of civilization depended on assuming that if left to their own devices the Europeans would be at each other's throats again, as soon as they climbed out of the ruins of World War 2 and probably even before. Given the state of modern weaponry that meant another world war. That was untenable.
The question was how to ensure that the Europeans were not left to their own devices. There was talk of the US annexing Europe. There was consideration of the basic idea behind Hitler's Third Reich--the third Holy Roman Empire. The last time Europeans had more or less gotten along was under the Roman Empire.
I don't know who came up with the idea or how long before Normandy the idea might have been kicking around. But at some point people said, "Wait a minute. What are we really talking about, when we say Roman Empire?"
What comes first to your mind's eye when you visualize the Roman Empire? No, not troops. You see the Coliseum, roads, aqueducts, vast plazas of marble government buildings.
The Holy Roman Empire was Nirvana for building contractors. It was construction projects and materials procurement, not troops, which caused so many diverse peoples to put up with the Romans. Rome's mania for building was the gift that kept on giving to every outpost in the empire.
As soon as chieftains living in mud huts figured out that you didn't need to make raids on a neighboring tribe to get rich, humanity took a leap forward. Chieftains turned themselves into procurement specialists, building project managers, and entire industries to serve Roman building sprees.
The endurance of the Rome Empire rested on a business model that allowed peoples to sublimate war into competition for building contracts. That is the basic idea behind the IBRD.
So, contrary to myth, the IBRD, which along with spinoffs is now known as the World Bank Group, was not designed to reconstruct postwar Europe. It was not designed to develop Europe. The IBRD was designed to produce a business model that allowed European industries to compete for government building projects financed by low-cost loans.
If the Europeans wanted to go on bashing each other after two world wars, they could do it by competing for business contracts issued by governments--contracts paid for with money borrowed from a bank that loaned exclusively to governments.
Someday, a building materials procurement specialist will write a history of the world. Then many mysteries of history will be revealed. And it will be clear that one of the brightest ideas human brains ever hatched was signed into agreement at Bretton Woods. The development bank model of business is the biggest single factor in the relative peace the world has enjoyed during the past half century.
What's the catch? Many years ago, while first learning about the World Bank, I put that question to a Bank economist. I asked if the World Bank ran the world.
He replied, "No. The IMF runs the world. The World Bank fixes the world."
I observed that the Bank was like no bank I'd ever banked at, so he could he tell me in one sentence what the World Bank actually was?
He replied, "The Bank is a juggernaut."
After chewing that over I replied in the manner of Alice, "But a juggernaut is an engine of destruction. Doesn't your definition of the Bank conflict with the Bank's mission to fix the world?"
"Not at all," replied my guide to Wonderland. "The World Bank is irrefutable proof that you can't fix anything in this world without breaking something, somewhere down the line."
What the Bank can't fix about itself is the very success of its business model, which spawned numerous imitations. You've heard of nuclear proliferation. There is also development-bank proliferation. There is now a version of the World Bank in every world region you can conceive, including the "Islamic Region."
The proliferation set trouble in motion. As long as the IBRD model was serving a relatively small group of competing contractors--the Europeans and Americans--there was enough contract pie to go around. But once everybody and his uncle jumped in, that was a different game. Everybody's clamoring for contracts, which means writing more and more development loans. But there are only so many national governments on earth. Those governments can only contract to put up so many bridges, dams and buildings.
To see where this has led, an episode of the Amazing Race found the teams in a Gulf Arab state. One contestant blurted, "Look at this place! There's a mosque on every corner!"
Ah, but you mustn't think "mosque" when seeing a mosque, if you want to understand development banks. Think cement contract, steel girder contract, electrical contract, copper tube contract, plumbing contract, painting contract....
In short, there is now cutthroat competition among peoples all over the world to get government contracts funded by development bank loans. That means the contract pie is fast reducing to the size of a poptart.
When development banks proliferated, this set in motion a destructive cycle:
1. At some point governments have to pay installments on the development loans,
2. they can't pay without an adequate tax base and expanding economy,
3. hard to expand a 'commanding heights' (socialist) economy,
4. but if governments move away from socialist government, the contract pie shrinks for contractors--the ones who depend on getting business from governments that get loans from development banks,
5. when the contract pie shrinks, many contractors go belly up,
6. that shrinks the country's tax base,
7. return to "1" and repeat the cycle several times,
8. the government defaults on the loan payments,
9. the development banks stop writing loans,
10. more contractors go out of business,
11. the tax base shrinks even more,
12. the broke debtor governments stand outside the annual G7/8 meetings and rend their clothing and gnash their teeth,
13. the G7/8 put together some kind of debt relief (i.e., refinancing the loans and writing more loans),
14. Return to "1" and repeat the cycle.
Then Americans ask, "Why is it so hard for these poor countries to get away from socialist government, which is killing them?
There is also an insidious aspect to the development bank model as applied to LDCs (least developed countries). It keeps the LDCs always moving backward in relation to the developed countries, which sets up another destructive cycle. Pundita will discuss that cycle in Juggernaut, Part 2.
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Monday, March 7
John Snow suggests Bono for World Bank President post, Pundita suggests Tinkerbell for Snow's post
"Pundita, have you heard? [US Treasury] Secretary Snow said he wouldn't rule out Bono as a candidate for World Bank president. Isn't that a hoot?
[Signed] Claudia in Taos"
Dear Claudia:
Every German finance minister serving in the post-WW2 era has been completely convinced that his American counterpart was barking mad. The candidates John Snow likes for World Bank president help explain why. But at least John Snow barks madly on Earth. The last Treasury Secretary, Paul O'Neill, stationed himself on Pluto. There he met Bono.
So there we were in the post-9/11 days, with the world on fire and the US economy teetering. President Bush would come to work in the morning, look around the conference table and ask Cabinet members, "Where's my Treasury Secretary?"
He was running around Africa with Bono. After Bush fired him, O'Neill wrote a book in which he complained that Bush wouldn't listen to him after their first meeting. But after you've heard, "Arf arf arf arf arf arf arf!" you don't need to hear the thoughts expressed a second time.
As to where America's presidents find these people--well, at least since the post-WW2 era the treasury secretary post has been largely ceremonial. The Federal Reserve has run US economic policy, except for the years during which the Bundesbank ran it.
As to how the German central bank came to run American economic policy--Pundita can't remember whether it was the head of the Bundesbank or Germany's finance minister who rang up Paul Volcker (then Chairman of the Federal Reserve) and yelled at him in at least three languages. At the time the American economy and thus the entire world was 48 minutes away from falling off the edge of the planet.
Things were such a mess that the Bundesbank told the Fed, "We're faxing you instructions in simple English. Do everything on the list, don't ask why, just do it."
But if Bono for next World Bank President is a scary thought, promise you won't run screaming if I tell you what's been running the World Bank. Sebastian Mallaby, a journalist who has written about the Bank, spilled the beans. Mallaby recounts that when he was ushered into his first interview with James Wolfensohn, he found Wolfensohn seated with Bono, Swami Agnivesh and the Archbishop of Canterbury.
That's the crew that's been advising the head of the world's most powerful development bank.
At least Bono is well-meaning; he's deeply concerned about the world's very poorest. The same can't be said for George Soros and Mikhail Khordokovsky, who were greatly responsible for the choice of Wolfensohn for Bank president.
As to how that situation came about--Soros's money helped put William Clinton in the White House. Soros had a strong reason for backing Clinton. Two years at Oxford did not teach Clinton how international finance works, much less how development banks work. So with Soros in effect running the State Department and President Clinton hanging on his every advice, the next task for Soros and his oligarch buddies was to find a World Bank president they could work with. Thus it came to pass that Clinton's choice for Bank president was James Wolfensohn, an investment banker.
Oligarchs can clean out investment bankers in six banking days flat. That's why stealing close to a billion dollars from the IMF was a walk in the park for Ukrainian oligarchs. Money says they were caught only because a rival oligarch clan ratted on them.
As to how much the oligarchs have skimmed from the World Bank with Wolfensohn at the helm, we can't find out because the Bank won't allow an independent audit. That's why we need Eliot Spitzer for the next World Bank President beep this is a recording.
Here, readers might ask whether Mallaby's eyeglass prescription might have needed adjustment at the time he met Wolfensohn. It's entirely possible. The man introduced as Shree Swami Agnivesh was probably Khordokovsky in an orange turban. The archbishop was quite probably Soros in purple miter. Wolfensohn and Bono wouldn't have known the difference.
But where there's life and fiscally responsible German bankers there's hope. Pundita has hatched a stopgap solution. Bush should ask Paris Hilton if she wouldn't mind allowing Tinkerbell to fill the post of US Treasury Secretary. Don't laugh before you've considered my reasons:
1. Tinkerbell has a very pleasing yip. She could get a better hearing from Bush during Cabinet meetings than the present treasury secretary.
2. The German finance minister loves Chihuahuas.
3. Tinkerbell's human family knows more about international finance than the last three treasury secretaries put together.
4. Chihuahuas happen to be the best lizard catchers. Handy during economic summits.
5. She would make the cover of newsweeklies more times than all other treasury officials and world leaders combined. Thus, Tinkerbell would popularize the subject of economics and direct a much-needed spotlight on the US Treasury post.
6. She is sane.
Given that the Treasury post is largely ceremonial, it's obvious from the above that Tinkerbell is the very best candidate for the Cabinet slot.
A bonus is that Paris Hilton reports that Tinkerbell is an excellent judge of male character. That trait would be invaluable in helping the Treasury Secretary decide on candidates for the post of World Bank President.
This seems a good place to review Pundita essays that address deeply entrenched problems in the poorest countries and my pick for World Bank president.
Verticalization of corruption
Why widescale poverty is entrenched
Why it's so hard to see the real problems
Democracy Stage Show Part 1
Democracy Stage Show Part 2
Eliot Spitzer for Bank President Part 1
Eliot Spitzer for Bank President, Part 2
.
[Signed] Claudia in Taos"
Dear Claudia:
Every German finance minister serving in the post-WW2 era has been completely convinced that his American counterpart was barking mad. The candidates John Snow likes for World Bank president help explain why. But at least John Snow barks madly on Earth. The last Treasury Secretary, Paul O'Neill, stationed himself on Pluto. There he met Bono.
So there we were in the post-9/11 days, with the world on fire and the US economy teetering. President Bush would come to work in the morning, look around the conference table and ask Cabinet members, "Where's my Treasury Secretary?"
He was running around Africa with Bono. After Bush fired him, O'Neill wrote a book in which he complained that Bush wouldn't listen to him after their first meeting. But after you've heard, "Arf arf arf arf arf arf arf!" you don't need to hear the thoughts expressed a second time.
As to where America's presidents find these people--well, at least since the post-WW2 era the treasury secretary post has been largely ceremonial. The Federal Reserve has run US economic policy, except for the years during which the Bundesbank ran it.
As to how the German central bank came to run American economic policy--Pundita can't remember whether it was the head of the Bundesbank or Germany's finance minister who rang up Paul Volcker (then Chairman of the Federal Reserve) and yelled at him in at least three languages. At the time the American economy and thus the entire world was 48 minutes away from falling off the edge of the planet.
Things were such a mess that the Bundesbank told the Fed, "We're faxing you instructions in simple English. Do everything on the list, don't ask why, just do it."
But if Bono for next World Bank President is a scary thought, promise you won't run screaming if I tell you what's been running the World Bank. Sebastian Mallaby, a journalist who has written about the Bank, spilled the beans. Mallaby recounts that when he was ushered into his first interview with James Wolfensohn, he found Wolfensohn seated with Bono, Swami Agnivesh and the Archbishop of Canterbury.
That's the crew that's been advising the head of the world's most powerful development bank.
At least Bono is well-meaning; he's deeply concerned about the world's very poorest. The same can't be said for George Soros and Mikhail Khordokovsky, who were greatly responsible for the choice of Wolfensohn for Bank president.
As to how that situation came about--Soros's money helped put William Clinton in the White House. Soros had a strong reason for backing Clinton. Two years at Oxford did not teach Clinton how international finance works, much less how development banks work. So with Soros in effect running the State Department and President Clinton hanging on his every advice, the next task for Soros and his oligarch buddies was to find a World Bank president they could work with. Thus it came to pass that Clinton's choice for Bank president was James Wolfensohn, an investment banker.
Oligarchs can clean out investment bankers in six banking days flat. That's why stealing close to a billion dollars from the IMF was a walk in the park for Ukrainian oligarchs. Money says they were caught only because a rival oligarch clan ratted on them.
As to how much the oligarchs have skimmed from the World Bank with Wolfensohn at the helm, we can't find out because the Bank won't allow an independent audit. That's why we need Eliot Spitzer for the next World Bank President beep this is a recording.
Here, readers might ask whether Mallaby's eyeglass prescription might have needed adjustment at the time he met Wolfensohn. It's entirely possible. The man introduced as Shree Swami Agnivesh was probably Khordokovsky in an orange turban. The archbishop was quite probably Soros in purple miter. Wolfensohn and Bono wouldn't have known the difference.
But where there's life and fiscally responsible German bankers there's hope. Pundita has hatched a stopgap solution. Bush should ask Paris Hilton if she wouldn't mind allowing Tinkerbell to fill the post of US Treasury Secretary. Don't laugh before you've considered my reasons:
1. Tinkerbell has a very pleasing yip. She could get a better hearing from Bush during Cabinet meetings than the present treasury secretary.
2. The German finance minister loves Chihuahuas.
3. Tinkerbell's human family knows more about international finance than the last three treasury secretaries put together.
4. Chihuahuas happen to be the best lizard catchers. Handy during economic summits.
5. She would make the cover of newsweeklies more times than all other treasury officials and world leaders combined. Thus, Tinkerbell would popularize the subject of economics and direct a much-needed spotlight on the US Treasury post.
6. She is sane.
Given that the Treasury post is largely ceremonial, it's obvious from the above that Tinkerbell is the very best candidate for the Cabinet slot.
A bonus is that Paris Hilton reports that Tinkerbell is an excellent judge of male character. That trait would be invaluable in helping the Treasury Secretary decide on candidates for the post of World Bank President.
This seems a good place to review Pundita essays that address deeply entrenched problems in the poorest countries and my pick for World Bank president.
Verticalization of corruption
Why widescale poverty is entrenched
Why it's so hard to see the real problems
Democracy Stage Show Part 1
Democracy Stage Show Part 2
Eliot Spitzer for Bank President Part 1
Eliot Spitzer for Bank President, Part 2
.
Sunday, March 6
The Emperor is Naked
"Pundita! It's not like you to be mean to Bush! I understand what you're saying [in previous post] but he's just trying to find ways to persuade Iran not to continue with their nuclear weapon development. I don't think it hurts for Bush to say he's considering Europe's plan to offer incentives to Iran. It makes him sound reasonable.[Signed] Sleepless again in St. Louis"
Dear Sleepless:
It makes him sound dizzy. That is one reason Pundita jumped all over him. Tehran is not engaged in nuclear weapon development. We have their word on that. So it makes no sense to offer them incentives not to do something they're already not doing. In other words, we can't nail the slippery bastards. That means we'll have to bomb half of Iran to rubble before we can figure out where they're hiding the nuke-building facilities. The good news is that Iran won't look much different after the bombing than before. Once you get out of the cities you're in the 5th Century BCE.
This observation brings us to the crux of the problem. If you have to hire German or French engineers just to figure out how to put up an electricity grid, and if you're stoning children to death as government policy, you're just not ready for modern weapons. But no one in the modern world told the Iranians that. Why? Because they have oil. Everybody pandered to them. Nobody told them the truth about themselves. Nobody cared enough about them to speak straight.
So they're like emperors who have never once been contradicted. They do not have an idea of civilized behavior, much less responsible behavior. Yet they are completely convinced that they're doing just fine in the modern era. So if they can't have a nuclear weapon, they are going to throw a tantrum and break things.
The first thing Dr. Phil would advise is that you don't play into that. You don't offer incentives for the same reason you don't bribe children into stopping a tantrum. And for the same reason you don't pay thugs not to rob you. If you go down that road, the thug will be back next week asking for another payment.
Every adult with half a brain knows all this. So why are European officials heading for Geneva this week for yet another round of negotiations about a nuclear weapons program Tehran says they don't have?
The answer is that by keeping the discussion centered on nukes, the EU3 hope to distract the world's attention from the fact that they're pandering to a regime that makes history's barbarian chieftains look like the model of civilized behavior.
.
Dear Sleepless:
It makes him sound dizzy. That is one reason Pundita jumped all over him. Tehran is not engaged in nuclear weapon development. We have their word on that. So it makes no sense to offer them incentives not to do something they're already not doing. In other words, we can't nail the slippery bastards. That means we'll have to bomb half of Iran to rubble before we can figure out where they're hiding the nuke-building facilities. The good news is that Iran won't look much different after the bombing than before. Once you get out of the cities you're in the 5th Century BCE.
This observation brings us to the crux of the problem. If you have to hire German or French engineers just to figure out how to put up an electricity grid, and if you're stoning children to death as government policy, you're just not ready for modern weapons. But no one in the modern world told the Iranians that. Why? Because they have oil. Everybody pandered to them. Nobody told them the truth about themselves. Nobody cared enough about them to speak straight.
So they're like emperors who have never once been contradicted. They do not have an idea of civilized behavior, much less responsible behavior. Yet they are completely convinced that they're doing just fine in the modern era. So if they can't have a nuclear weapon, they are going to throw a tantrum and break things.
The first thing Dr. Phil would advise is that you don't play into that. You don't offer incentives for the same reason you don't bribe children into stopping a tantrum. And for the same reason you don't pay thugs not to rob you. If you go down that road, the thug will be back next week asking for another payment.
Every adult with half a brain knows all this. So why are European officials heading for Geneva this week for yet another round of negotiations about a nuclear weapons program Tehran says they don't have?
The answer is that by keeping the discussion centered on nukes, the EU3 hope to distract the world's attention from the fact that they're pandering to a regime that makes history's barbarian chieftains look like the model of civilized behavior.
.
Friday, March 4
Brussels sells Bush the Brooklyn Bridge
"What do you think of Bush's new willingness to consider offering incentives such as WTO membership...in exchange for Iran giving up their nuclear weapon program?"
Tom in Sioux City"
Dear Tom:
The disastrous EU negotiations with Tehran about nukes have left Brussels staring down the barrel of spectacular failure to demonstrate that they're capable of making effective foreign policy for the entire of Europe.
Add to this, the longer Washington remains aloof from the EU3-led* negotiations with Iran, the more questionable Europe's claim to be a friend of democracy and civilization.
Add to this, the Iranian democracy advocates have expressed their outrage at European complicity with the regime in Tehran. So Brussels knows that if the regime falls, Europe will be pushed to the back of the line for Iranian oil purchases and big-ticket business contracts with the new government. This would include a flood of development bank loans, including World Bank loans, which would be made to a democratic government in Tehran.
Also, a democratic government in Tehran would cancel many outstanding defense-related government projects now underway in Iran and demand a review of the contractors and subcontractors for the projects. It is guaranteed that a democratic government would keep European contractors in the courts for years if not decades, just as a matter of principle, rather than continue with many of the contractors.
So Brussels is not only looking at a massive diplomatic failure and loss of Face; they're also having contemplate the billions of euros that key European industries stand to lose, if the regime in Tehran is booted. This loss would be coming on top of the billions they lost when Iraq's regime was toppled and the money lost from European participation in the Oil for Food Program. All this would come on top of Russia's repatriation of their energy industry.
That's why Europe's media yowled and nattered that Bush must come to Europe prepared to listen. Brussels had only one shot, which was to ask Bush behind closed doors to at least voice consideration for joining Europe with offering incentives to Tehran. In exchange, Brussels would back Washington's call for sanctions against Iran. This would be in the event Tehran betrayed incentivized promises to give up their ambitions for a nuclear weapon.
President Bush fell for it, over protests from the Pentagon and Vice President Cheney. Thus, the United States is now on record for a willingness to consider offering incentives to a regime that finds nothing barbaric about stoning adults and children to death.
Even if Bush decides not to go along with incentives to Tehran, it's now on record that Europe's betrayal of the Iranian democracy movement is not censured by the United States of America. That's what Brussels needed.
As to whether the United States got anything in return for selling out our principles--we got the word of goverrnments who had already sold out on civilization. Even if the EU3 went on record with the assurances they used to bait the trap, we have to assume that Europe would use the United Nations and every other means at their disposal to stall the implementation of sanctions.
They would stall until Tehran presented clear evidence that they had a nuclear weapon. That would allow Brussels to rescind their agreement on the grounds that the sanctions only applied to preventing Iran from acquiring a nuclear weapon. That would force negotiations to start all over again.
To put all this another way, Brussels is committed to seeing that the current regime in Iran remains in power as long as possible. Toward this end, they want help from the USA in giving legitimacy to the regime by agreeing to bargain with them. They might not get what they want, but they got what they needed by selling President Bush the Brooklyn Bridge.
* The EU3 are Germany, France and Britain.
.
Tom in Sioux City"
Dear Tom:
The disastrous EU negotiations with Tehran about nukes have left Brussels staring down the barrel of spectacular failure to demonstrate that they're capable of making effective foreign policy for the entire of Europe.
Add to this, the longer Washington remains aloof from the EU3-led* negotiations with Iran, the more questionable Europe's claim to be a friend of democracy and civilization.
Add to this, the Iranian democracy advocates have expressed their outrage at European complicity with the regime in Tehran. So Brussels knows that if the regime falls, Europe will be pushed to the back of the line for Iranian oil purchases and big-ticket business contracts with the new government. This would include a flood of development bank loans, including World Bank loans, which would be made to a democratic government in Tehran.
Also, a democratic government in Tehran would cancel many outstanding defense-related government projects now underway in Iran and demand a review of the contractors and subcontractors for the projects. It is guaranteed that a democratic government would keep European contractors in the courts for years if not decades, just as a matter of principle, rather than continue with many of the contractors.
So Brussels is not only looking at a massive diplomatic failure and loss of Face; they're also having contemplate the billions of euros that key European industries stand to lose, if the regime in Tehran is booted. This loss would be coming on top of the billions they lost when Iraq's regime was toppled and the money lost from European participation in the Oil for Food Program. All this would come on top of Russia's repatriation of their energy industry.
That's why Europe's media yowled and nattered that Bush must come to Europe prepared to listen. Brussels had only one shot, which was to ask Bush behind closed doors to at least voice consideration for joining Europe with offering incentives to Tehran. In exchange, Brussels would back Washington's call for sanctions against Iran. This would be in the event Tehran betrayed incentivized promises to give up their ambitions for a nuclear weapon.
President Bush fell for it, over protests from the Pentagon and Vice President Cheney. Thus, the United States is now on record for a willingness to consider offering incentives to a regime that finds nothing barbaric about stoning adults and children to death.
Even if Bush decides not to go along with incentives to Tehran, it's now on record that Europe's betrayal of the Iranian democracy movement is not censured by the United States of America. That's what Brussels needed.
As to whether the United States got anything in return for selling out our principles--we got the word of goverrnments who had already sold out on civilization. Even if the EU3 went on record with the assurances they used to bait the trap, we have to assume that Europe would use the United Nations and every other means at their disposal to stall the implementation of sanctions.
They would stall until Tehran presented clear evidence that they had a nuclear weapon. That would allow Brussels to rescind their agreement on the grounds that the sanctions only applied to preventing Iran from acquiring a nuclear weapon. That would force negotiations to start all over again.
To put all this another way, Brussels is committed to seeing that the current regime in Iran remains in power as long as possible. Toward this end, they want help from the USA in giving legitimacy to the regime by agreeing to bargain with them. They might not get what they want, but they got what they needed by selling President Bush the Brooklyn Bridge.
* The EU3 are Germany, France and Britain.
.
Thursday, March 3
The Enclave Mentality and the Oriental Stranger Syndrome
"Pundita, Your explanation [in 'Anti-jive Policy' essay] about government corruption in the developing world is very depressing. You're saying that much of it is not really corruption as Americans understand the term but a way life that could take generations to change. There seems to be no solution except attempts to educate."
Ann in Cincinnati"
Dear Ann:
Pundita did not state that the situation could take generations to change. Yes, there has to be a process of education but the process must be first on our side. Rush Limbaugh spent last week in Afghanistan. He wanted to see the situation there with his own eyes. Rush told his audience a story that perfectly illustrates the essence of the problem on our side:
At first there was tremendous resistance among the Afghanis to voting. An Afghani explained his reluctance to a US solider he'd become friends with. He didn't want to vote because the winner would stalk the people who voted for the loser and shoot them.
The soldier told him, "Naw, that's not how it works in a democracy; if you lose, you just regroup and try to make your guy the winner in the next election."
The Afghani asked, "Really?" The soldier replied, Yeah really.
That was all it took. The Afghani went and told his family and friends. Thus, the US military realized the problem, and pretty soon word was flying around Afghanistan that a democracy means you don't get shot if you vote for the loser.
Well, how were the Afghanis supposed to know unless someone told them?
Rush also told a story about Ayatollah Sistani; Sistani nixed the US advice that the Iraqi Constitution had to be ratified by a majority of Iraqis. Conversation with Americans he'd gotten to know revealed that he thought the US had made up the rule for Iraq. The Americans told him, Naw, that's what Americans did; that's why American democracy is so strong.
Sistani decided to investigate. After a few weeks of studying American history, he realized that by gum, the Americans were telling the truth; thus, he saw the logic of not adopting a constitution without majority agreement.
Now in consideration of the billions of dollars the World Bank and Washington have spent on analyzing The Native, you might think the stories Rush Limbaugh told are anomalies. You would be wrong. The stories point to the Enclave Mentality, which has dominated US foreign policy thinking since US relations with Native populations began. The mentality is lifted whole cloth from the European colonizing mindset.
Americans are greatly mistaken if they think the mindset died out along with European colonizing. Today, Americans doing oil business in Nigeria live in enclaves, which keep them isolated from virtually all Nigerians except the officials and the wealthiest businesspeople. This situation is repeated all over the world.
The Native officials do provide the Enclave Americans with a picture of the host country and its peoples. However, the picture is the same type that World Bank employees drawn from the developing world write up in policy papers for the Bank. The Natives gauge what the Bank wants to know, then frame their analysis of the Native from that viewpoint. Therefore, galactic-sized chunks of reality are omitted from the analyses.
The Bank's view is as skewed as Washington's. Washington runs on policy papers; to be more specific, it runs on one page two-syllable abstracts of policy papers. Congressionals are supposed to read the policy papers but most only read the abstracts, which are piled to the ceiling in their office. They leave the chore of reading the actual papers, which can run to 1,000 pages with 20 pages of footnotes, to their aides. These aides are straight out of college and their brains must function on the nutrition provided by peanuts, popcorn and cola.
These are the Americans charged with comprehending and summarizing policy papers for Congress. Their boss stuffs the summary and abstract into his briefcase and reads them on the way to his congressional committee sessions, which set budgets and help shape US defense/foreign policy.
With regard to the Pentagon and CIA, their analysts actually read the policy papers and even comprehend them in some cases, but they read with a magic marker in their head. Every sentence has to be reframed in terms of budget considerations and DoD or Intel protocols. That means their analysis of the papers omit galactic sized chunks of reality.
The picture that Americans receive from government officials in foreign countries is the same type that the British overlords received from the rajas in India. The rajas were mostly concerned with keeping their power. Thus, the strongest message that came through to the British was "Don't rile the Natives any more than you have to."
The French developed a very creative way of dealing with the same message, maybe because the French didn't possess the navy the British had in those days. The French thought up the Modernity Kit, which they hawked to every chieftain they wanted to trade with. They convinced the chiefs that you're a thoroughly modern person if you master the French language, learn to eat with a knife and fork, and develop an appreciation for chamber music.
Thus, generations of colonized peoples were raised up without a clue as to what really constitutes modern Western government. They got only the outward forms: the marble buildings of bureaucracy and judiciary, the 15 copies of a directive that had to be signed and stamped, the filing cabinets and the ritual banter between judges and lawyers.
That is how it came to pass that vast tracts of humanity have no idea what makes for American democracy and how it came about. They do not know that America was built by women wearing long dresses and men with beards--men and women who were not terribly bright, who were for the most part narrow-minded and insular, and whose education was pretty much confined to reading the Bible. In short, vast tracts of humanity don't know that America was built by the same kind of people they are.
Now what does it take to correct that misperception? Yet more mountains of policy papers? Yet more billions spent on educational programs? The creation of yet more international organizations?
First it takes understanding the major roadblock, which was inadvertently alluded to by Banfsheh Zand-Bonazzi, the editor of Iran Press News during a conversation she had one night with John Batchelor. She mentioned in passing that the Iraqi borders weren't locked down by the Coalition forces because the British didn't want to offend the so-called nomadic tribes.
The tribes insisted that they be allowed to pass back and forth between Iran and Iraq whenever they wanted. These aren't just any old tribes; they control a lot of business including oil business in Iran. Zand-Bonazzi said bluntly that the British wanted to protect British business interests in Iran.
As to why the US military command in Iraq went along with it, Pundita is not sure. But given the history of US-British relations during the Cold War, which parallels to remarkable degree the plot of Thelma and Louise, it's likely the US command in Iraq didn't have a clue. The British command lectured their American counterpart about the importance of striking non-threatening poses while dealing with the Iraqi Native. Don't wear helmets, wear caps; don't carry your weapons in such obvious fashion, etc.
The British pointed to the relative peace and quiet of Basra to shore up the lectures. Well of course it was peaceful and quiet in Basra. The most powerful tribes were happy they could cross the border at will. The Iranian military and al Qaeda were happy they could use Basra as an easy entry point into Iraq.
Don't tear your hair because you'll be bald by the time you finish reading this essay. What Zand-Bonazzi was talking about is a very old story--it's as old as trade among different tribes. However, it was the colonizing trade model that created the enclave. During Victorian times, the mentality gave rise to the Oriental Stranger Syndrome, which is the Enclave Mentality filtered back to the home peoples who hear third hand about Natives.
The Oriental Stranger kept legions of British novelists, scholars and newspaper reporters gainfully employed. He also took the heat off London's embattled police force, which was fighting a crime wave that emanated from inhumane working conditions in London factories and slave wages paid the factory laborers. Muffled in turbans and reeking of garlic and other strange odors, the Oriental Stranger stalked the gaslit streets of London, wreaking murder and mayhem on Christianity, Western Civilization and British who didn't make it home before dark.
The Oriental Stranger did not spring whole cloth from the fertile imagination of fiction writers and reporters. He sprang from their imaginings about tales told by British soldiers garrisoned in far-flung outposts and British traders who lived in enclaves in the outposts. These tales rested largely on what the outpost rulers told the British about the outpost peoples.
This doesn't mean the stories were complete fiction; they were a window on the world outside the enclave. But you can see very little of the world if you look at it from a window inside your house. In the same manner, the Enclave view shows very little about the peoples outside the enclave.
The Oriental Stranger Syndrome is not really 'prejudice' in the sense of bigotry. It's what happens when you live near peoples you never really interact with. They are always The Stranger, and strangers are always suspect. Thus, you never let your guard down, you never say what you really think, you never really communicate. This sets up a cycle where the Stranger also sees you as a stranger. The upshot is that many colonized peoples learned the outward forms of modern life but didn't get the essences, the subtexts, the referents.
A good example of where this situation leads is the US military and business consultants stationed in Saudi Arabia. They lived in garrison and enclaves, they were trained not to make any criticism of the cultural practices they saw when they had to leave the enclaves. They were trained to look without seeing, and to avert their eyes about many things they looked at. This created a mystique of American power and menace and kept the knowledge Americans had about their culture locked up with them in the enclaves. That allowed the most radical elements in the Saudi society to interpret American culture and democracy to the Saudis.
So while it's ghastly that it had to happen this way, the ongoing terrorist attacks forced the US military out of the Green Zone in Baghdad. That meant legions of American kids and Iraqis had no choice but to interact with each other in a way that never would have happened, if the US occupation of Iraq had gone as the White House originally envisioned.
The same happened in the Afghanistan theater of war. American kids spilled off the military helicopters, looked around and asked, "Where's the base?" An Afghani would ride up, hand the soldiers the reins to a horse and say, "Here it is."
During an earlier era, the CIA and the Afghanis understood the common enemy--the Soviets--and were able to communicate effectively at that one level. That's a far cry from the communication needed to help the Afghanis build up their nation and a functioning democracy while dealing with insurgencies. The US military learned that they could not stay in their garrisons. They had to get out and go live with the Afghanis and they had to explain who Americans are and how we think.
Same happened in Iraq. What do American kids know about diplomacy and trade? And how many of them are walking textbooks on democratic government? They just reacted to the Iraqis in the way they react to people in their home towns. In other words, they acted human, which allowed the Iraqis to learn about them and respond in kind. This was despite the Green Zone, which is an enclave.
The terrorist attacks forced the US military to keep coming out of the enclave, and forced the Iraqis to keep talking with the Grunts. So despite the situation that Zand-Bonazzi mentioned, and despite the Green Zone, the Oriental Stranger syndrome was broken. No surprise, this was followed by the willingness of several Iraqi patriarchs to give a democratic election a try.
Thus another illustration of the truth in the old adage, "Your worst enemy is also your best friend." The enemy's ongoing terrorist attacks in Iraq have done more to further the cause of democracy than most Americans can imagine at this time.
After the Colombine massacre, a neighbor of one of the killers lamented that if only they'd gotten to know their neighbors and engaged with the kids on their block, maybe they would have noted the killers' increasingly strange behavior and mentioned it to the parents. The neighbor added, "But we were just so busy working and commuting; we didn't have the time to engage with the neighbors."
Better make the time because we can't expect a policy analyst to identify the most serious warning signs here or abroad. Yet the signs are not hard to read if we stop, look and listen and engage, engage, engage.
You won't ever lose your compass if you remember that people are not economics and political models of behavior. They are people. They are people whether they live next door or ten thousand miles away; if you forget that, then you must look at people through the narrow window of policy papers and intelligence briefings.
And you must be prepared to wait generations more, before the developing world grapples with the issues Pundita discussed in the Anti-jive Policy essay. But where is the rocket science in the points I brought up? Does it take a special gene to grasp that one can't stick with the clan system, which was designed to serve a few thousand people, and hope to get rid of entrenched corruption in a centralized government that administers to many millions of people?
.
Ann in Cincinnati"
Dear Ann:
Pundita did not state that the situation could take generations to change. Yes, there has to be a process of education but the process must be first on our side. Rush Limbaugh spent last week in Afghanistan. He wanted to see the situation there with his own eyes. Rush told his audience a story that perfectly illustrates the essence of the problem on our side:
At first there was tremendous resistance among the Afghanis to voting. An Afghani explained his reluctance to a US solider he'd become friends with. He didn't want to vote because the winner would stalk the people who voted for the loser and shoot them.
The soldier told him, "Naw, that's not how it works in a democracy; if you lose, you just regroup and try to make your guy the winner in the next election."
The Afghani asked, "Really?" The soldier replied, Yeah really.
That was all it took. The Afghani went and told his family and friends. Thus, the US military realized the problem, and pretty soon word was flying around Afghanistan that a democracy means you don't get shot if you vote for the loser.
Well, how were the Afghanis supposed to know unless someone told them?
Rush also told a story about Ayatollah Sistani; Sistani nixed the US advice that the Iraqi Constitution had to be ratified by a majority of Iraqis. Conversation with Americans he'd gotten to know revealed that he thought the US had made up the rule for Iraq. The Americans told him, Naw, that's what Americans did; that's why American democracy is so strong.
Sistani decided to investigate. After a few weeks of studying American history, he realized that by gum, the Americans were telling the truth; thus, he saw the logic of not adopting a constitution without majority agreement.
Now in consideration of the billions of dollars the World Bank and Washington have spent on analyzing The Native, you might think the stories Rush Limbaugh told are anomalies. You would be wrong. The stories point to the Enclave Mentality, which has dominated US foreign policy thinking since US relations with Native populations began. The mentality is lifted whole cloth from the European colonizing mindset.
Americans are greatly mistaken if they think the mindset died out along with European colonizing. Today, Americans doing oil business in Nigeria live in enclaves, which keep them isolated from virtually all Nigerians except the officials and the wealthiest businesspeople. This situation is repeated all over the world.
The Native officials do provide the Enclave Americans with a picture of the host country and its peoples. However, the picture is the same type that World Bank employees drawn from the developing world write up in policy papers for the Bank. The Natives gauge what the Bank wants to know, then frame their analysis of the Native from that viewpoint. Therefore, galactic-sized chunks of reality are omitted from the analyses.
The Bank's view is as skewed as Washington's. Washington runs on policy papers; to be more specific, it runs on one page two-syllable abstracts of policy papers. Congressionals are supposed to read the policy papers but most only read the abstracts, which are piled to the ceiling in their office. They leave the chore of reading the actual papers, which can run to 1,000 pages with 20 pages of footnotes, to their aides. These aides are straight out of college and their brains must function on the nutrition provided by peanuts, popcorn and cola.
These are the Americans charged with comprehending and summarizing policy papers for Congress. Their boss stuffs the summary and abstract into his briefcase and reads them on the way to his congressional committee sessions, which set budgets and help shape US defense/foreign policy.
With regard to the Pentagon and CIA, their analysts actually read the policy papers and even comprehend them in some cases, but they read with a magic marker in their head. Every sentence has to be reframed in terms of budget considerations and DoD or Intel protocols. That means their analysis of the papers omit galactic sized chunks of reality.
The picture that Americans receive from government officials in foreign countries is the same type that the British overlords received from the rajas in India. The rajas were mostly concerned with keeping their power. Thus, the strongest message that came through to the British was "Don't rile the Natives any more than you have to."
The French developed a very creative way of dealing with the same message, maybe because the French didn't possess the navy the British had in those days. The French thought up the Modernity Kit, which they hawked to every chieftain they wanted to trade with. They convinced the chiefs that you're a thoroughly modern person if you master the French language, learn to eat with a knife and fork, and develop an appreciation for chamber music.
Thus, generations of colonized peoples were raised up without a clue as to what really constitutes modern Western government. They got only the outward forms: the marble buildings of bureaucracy and judiciary, the 15 copies of a directive that had to be signed and stamped, the filing cabinets and the ritual banter between judges and lawyers.
That is how it came to pass that vast tracts of humanity have no idea what makes for American democracy and how it came about. They do not know that America was built by women wearing long dresses and men with beards--men and women who were not terribly bright, who were for the most part narrow-minded and insular, and whose education was pretty much confined to reading the Bible. In short, vast tracts of humanity don't know that America was built by the same kind of people they are.
Now what does it take to correct that misperception? Yet more mountains of policy papers? Yet more billions spent on educational programs? The creation of yet more international organizations?
First it takes understanding the major roadblock, which was inadvertently alluded to by Banfsheh Zand-Bonazzi, the editor of Iran Press News during a conversation she had one night with John Batchelor. She mentioned in passing that the Iraqi borders weren't locked down by the Coalition forces because the British didn't want to offend the so-called nomadic tribes.
The tribes insisted that they be allowed to pass back and forth between Iran and Iraq whenever they wanted. These aren't just any old tribes; they control a lot of business including oil business in Iran. Zand-Bonazzi said bluntly that the British wanted to protect British business interests in Iran.
As to why the US military command in Iraq went along with it, Pundita is not sure. But given the history of US-British relations during the Cold War, which parallels to remarkable degree the plot of Thelma and Louise, it's likely the US command in Iraq didn't have a clue. The British command lectured their American counterpart about the importance of striking non-threatening poses while dealing with the Iraqi Native. Don't wear helmets, wear caps; don't carry your weapons in such obvious fashion, etc.
The British pointed to the relative peace and quiet of Basra to shore up the lectures. Well of course it was peaceful and quiet in Basra. The most powerful tribes were happy they could cross the border at will. The Iranian military and al Qaeda were happy they could use Basra as an easy entry point into Iraq.
Don't tear your hair because you'll be bald by the time you finish reading this essay. What Zand-Bonazzi was talking about is a very old story--it's as old as trade among different tribes. However, it was the colonizing trade model that created the enclave. During Victorian times, the mentality gave rise to the Oriental Stranger Syndrome, which is the Enclave Mentality filtered back to the home peoples who hear third hand about Natives.
The Oriental Stranger kept legions of British novelists, scholars and newspaper reporters gainfully employed. He also took the heat off London's embattled police force, which was fighting a crime wave that emanated from inhumane working conditions in London factories and slave wages paid the factory laborers. Muffled in turbans and reeking of garlic and other strange odors, the Oriental Stranger stalked the gaslit streets of London, wreaking murder and mayhem on Christianity, Western Civilization and British who didn't make it home before dark.
The Oriental Stranger did not spring whole cloth from the fertile imagination of fiction writers and reporters. He sprang from their imaginings about tales told by British soldiers garrisoned in far-flung outposts and British traders who lived in enclaves in the outposts. These tales rested largely on what the outpost rulers told the British about the outpost peoples.
This doesn't mean the stories were complete fiction; they were a window on the world outside the enclave. But you can see very little of the world if you look at it from a window inside your house. In the same manner, the Enclave view shows very little about the peoples outside the enclave.
The Oriental Stranger Syndrome is not really 'prejudice' in the sense of bigotry. It's what happens when you live near peoples you never really interact with. They are always The Stranger, and strangers are always suspect. Thus, you never let your guard down, you never say what you really think, you never really communicate. This sets up a cycle where the Stranger also sees you as a stranger. The upshot is that many colonized peoples learned the outward forms of modern life but didn't get the essences, the subtexts, the referents.
A good example of where this situation leads is the US military and business consultants stationed in Saudi Arabia. They lived in garrison and enclaves, they were trained not to make any criticism of the cultural practices they saw when they had to leave the enclaves. They were trained to look without seeing, and to avert their eyes about many things they looked at. This created a mystique of American power and menace and kept the knowledge Americans had about their culture locked up with them in the enclaves. That allowed the most radical elements in the Saudi society to interpret American culture and democracy to the Saudis.
So while it's ghastly that it had to happen this way, the ongoing terrorist attacks forced the US military out of the Green Zone in Baghdad. That meant legions of American kids and Iraqis had no choice but to interact with each other in a way that never would have happened, if the US occupation of Iraq had gone as the White House originally envisioned.
The same happened in the Afghanistan theater of war. American kids spilled off the military helicopters, looked around and asked, "Where's the base?" An Afghani would ride up, hand the soldiers the reins to a horse and say, "Here it is."
During an earlier era, the CIA and the Afghanis understood the common enemy--the Soviets--and were able to communicate effectively at that one level. That's a far cry from the communication needed to help the Afghanis build up their nation and a functioning democracy while dealing with insurgencies. The US military learned that they could not stay in their garrisons. They had to get out and go live with the Afghanis and they had to explain who Americans are and how we think.
Same happened in Iraq. What do American kids know about diplomacy and trade? And how many of them are walking textbooks on democratic government? They just reacted to the Iraqis in the way they react to people in their home towns. In other words, they acted human, which allowed the Iraqis to learn about them and respond in kind. This was despite the Green Zone, which is an enclave.
The terrorist attacks forced the US military to keep coming out of the enclave, and forced the Iraqis to keep talking with the Grunts. So despite the situation that Zand-Bonazzi mentioned, and despite the Green Zone, the Oriental Stranger syndrome was broken. No surprise, this was followed by the willingness of several Iraqi patriarchs to give a democratic election a try.
Thus another illustration of the truth in the old adage, "Your worst enemy is also your best friend." The enemy's ongoing terrorist attacks in Iraq have done more to further the cause of democracy than most Americans can imagine at this time.
After the Colombine massacre, a neighbor of one of the killers lamented that if only they'd gotten to know their neighbors and engaged with the kids on their block, maybe they would have noted the killers' increasingly strange behavior and mentioned it to the parents. The neighbor added, "But we were just so busy working and commuting; we didn't have the time to engage with the neighbors."
Better make the time because we can't expect a policy analyst to identify the most serious warning signs here or abroad. Yet the signs are not hard to read if we stop, look and listen and engage, engage, engage.
You won't ever lose your compass if you remember that people are not economics and political models of behavior. They are people. They are people whether they live next door or ten thousand miles away; if you forget that, then you must look at people through the narrow window of policy papers and intelligence briefings.
And you must be prepared to wait generations more, before the developing world grapples with the issues Pundita discussed in the Anti-jive Policy essay. But where is the rocket science in the points I brought up? Does it take a special gene to grasp that one can't stick with the clan system, which was designed to serve a few thousand people, and hope to get rid of entrenched corruption in a centralized government that administers to many millions of people?
.
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