COUNTRIES AT THE CROSSROADS GOVERNANCE BLOG

Food Crises Test the Mettle of Middle East’s Undemocratic Regimes

The global food crisis, which was among the principal matters discussed at last month’s G8 Summit in Hokkaido, Japan, affects few regions more severely than the Middle East. Widespread poverty means that large numbers of people who previously scraped by on very little can no longer make ends meet. Moreover, the reliance of most Arab countries on food imports, as well as the political tensions that divide their societies, makes the problem of rising food costs a particularly acute governance challenge for Arab governments.

Spotlight on Indigenous Rights

The UN Permanent Forum on Indigenous Issues has released the final report on its seventh annual session, held between April 21 and May 2. The gathering focused on the issue of global climate change, highlighting the fact that indigenous peoples were already suffering disproportionately from the phenomenon despite having contributed very little to its causes. The report also warned that many of the proposals for halting global warming could negatively affect indigenous groups without proper consultation. In other words, climate change countermeasures could become the latest in a long line of state-supported development campaigns that largely ignore the needs and rights of indigenous peoples. Observance of those rights is often a revealing indicator of a country’s performance on broader governance issues, including rule of law, property rights, political representation for minorities, and freedom of expression.

Who Will be Burned by the Dragon's Flames?

The Economist cover last week featured a snarling image of a dragon, accompanied by the phrase “Angry China,” to illustrate the challenges to domestic governance and foreign affairs posed by resurgent Chinese nationalism. Flare-ups of Chinese resentment toward actions and criticisms by foreign states are, of course, nothing new. As a briefer from the Council on Foreign Relations describes, Chinese nationalism is deeply rooted in grievances related to China’s historic relations with the Western world and is inextricably tied to the initial rise of Chinese communism as a movement. There are several important aspects of the issue of Chinese nationalism, not the least of which is its effects on the government’s foreign relations, as well as broader global attitudes toward China’s rise. However, no less important is the relationship of Chinese nationalism to internal governance.

As the CFR analysis, the Economist article, and just about every other piece on Chinese nationalism notes, the outbursts are inseparable from issues connected to internal governance. As the Economist puts it, “the appeal to nationalism is a double-edged sword: while it provides a useful outlet for domestic discontents, it could easily turn on the government itself...popular anger, once roused, can easily switch targets.” A complementary article uses the ecological nightmare of Tai Lake, once a prime tourist attraction, to illustrate the type of governance shortcomings driving the protests that the government tries to channel toward nationalism. Another piece, in the Financial Times, notes that the control of information by the Chinese state is extremely distorting insofar as many young Chinese think the West is conspiring against them because they do not grasp the idea of organic, non-government backed expressions of protests such as the worldwide demands for greater Tibetan rights. Ironically, even as China’s economic integration with the world continues headlong, China's repressive media environment means that many of its citizens are acting on the basis of dire misconceptions about how the rest of the world works.

One of the keys here is the question of sustainability. As the introduction to the Countries at the Crossroads 2007 report details, China is a welter of contradictions. Maintaining a lid on political ferment even as China continues its integration into the global economy brings new pressures on the government from every direction, presenting an unprecedented challenge. As citizens become more aware of rising inequality within China and the opportunities that are denied them due to arbitrary and capricious governance, pressures for more responsive and effective governance will invariably grow. Nationalism is clearly a tried and true outlet for such pent up pressure in many countries. However, it is generally insufficient. Of the many virtues of greater political openness is that it enables peaceful outlets for citizen frustration – in essence societal safety valves that can ameliorate growing socio-economic unease.

The current governance approach presents clear gaps and is not likely to be sustainable. It is unclear how long China will continue to economically advance absent meaningful political reform. In particular, the massive shortcomings in rule of law, rampant corruption, and the ongoing environmental catastrophe will inevitably have an impact on the ability of the state to keep its citizens politically pacified and could also harm China’s continued attractiveness as an investment destination. However, the images of growing nationalism serve as an important reminder that China’s leaders must look to new ways of addressing the growing expectations of their people.

Photo Credit: Flickr user Jrwooley6

An Opaque Giant Embraces a Secretive Neighbor

The economic, geopolitical, and social implications of China’s prolonged economic expansion have been felt and debated in almost every corner of the globe. Perhaps nowhere, however, has the impact of China’s rise been more dramatic than right in its Southeast Asian backyard. One of the countries most affected is also home to one of the world’s most opaque regimes – Laos. Historically, relations between Laos and Vietnam have been closer than those with China. However, China’s sheer size, massive economic output, and hunger for Laotian natural resources have inevitably resulted in Laos being sucked ever-further into China’s orbit.

Despite having adopted modestly market-oriented economic policies in the 1980s, the Lao government remains an utterly closed system. All decisions are made by highly centralized Lao People’s Revolutionary Party (LPRP) elites, patronage is the preferred transactional currency, and corruption is endemic. As the 2007 Countries at the Crossroads report acidly notes, “the rule of law is honored more in the breach than the observance.”

In recent years, Chinese production has flooded Laos with new products, while Laotian exports, mostly in the form of raw materials, have surged more than 650 percent just since 2004. Just last week the two countries agreed on a new package of projects at a Greater Mekong Subregion summit. Of particular importance is the pace of infrastructure development, which is a natural realm of cooperation given both countries’ interest in expediting increased land- and river-based trade.

However, the criticisms that often accompany the presence of Chinese investment are present as well. A recent episode involves the granting of a lease for the land encompassing the Vientiane area’s largest wetland to Chinese investors in exchange for the construction of a sports complex. Like all such decisions in Laos, it was the result of largely secret negotiations. However, by Laotian standards, the outcry greeting the pronouncement was significant, or at least notable enough that the government felt obligated to hold a press conference to deny that tens of thousands of Chinese would be moving onto the land or that the wetland would be destroyed. Nonetheless, the mechanisms behind the transaction, the details of the plan, and perhaps most importantly, the impact on the residents currently dwelling near the project, all remain highly uncertain.

This sort of story has become typical within countries doing business with China, especially ones with weak institutions. As the Crossroads report also notes, one of the few semi-exceptions to Laos’ murkiness has been in foreign aid distribution, where demands for a modicum of transparency have in the past been at least partially accepted. The Chinese feel little such compunction; the author of the Crossroads report, Martin Stuart-Fox suggests in a Reuters story that intra-elite rivalry for Chinese kickbacks is probably at the root of the controversy rather than real concern over the decision-making process and its potential impact on the land. In addition, the record of both the Chinese and Laotian governments in issuing compensation to people whose land is seized is very poor.

Perhaps the fact that the government even felt the need to explain its actions represents an example of the very slow movement that is about the most that can currently be expected of the LPRP. At the very least, greater attention will likely be paid to the project’s impact than might be expected in the absence of any debate. The optimistic view is that it will be an opportunity for China and Laos to show that they are responsive to local and international concerns. Given the increasing opprobrium heaped on China’s investment and management style, it would be wise to demonstrate improved willingness to coordinate and engage in dialogue with locals. But given the history and nature of both countries’ ruling regimes, such an outcome would be very surprising indeed.

Photo of Chinese construction in Laos by Flickr user fredalix

A Perfect Storm of Poor Policy

Reuters reports that overfishing along the African coasts has had a pernicious effect on fish stocks, harming local fishing economies and in some cases robbing communities of a critical source of protein. As the article points out, corruption is a key factor driving the problem:

[Report author Andre] Standing told IRIN that the problem did not "stem largely from rogue fishing companies who evade laws and break regulations with impunity", but "vested interests" that allowed this situation to occur, and that these "vested interests span not only foreign governments and inter-governmental organisations, but also African elected leaders and public officials."

The destructiveness of this sort of activity is difficult to overstate, especially for the severely impoverished areas that are most affected. Aside from the nutritional impact, what should be a sustainable resource is rendered unsustainable by the scale of fishing. Maintaining healthy fisheries is extremely difficult – witness the collapse of stocks in developed countries including the US. And in the African cases, the foreign actors – Taiwanese, Russians, Tunisians, and others – engaged in the practice do not have nearly so large a stake in maintaining healthy fisheries as do locals. Indeed, with fishing licenses purchased from corrupt politicians such a bargain, a tragedy of the commons arises – if the Japanese don’t hurriedly maneuver to gain access, the Spanish or Algerians will. To make matters even worse, the end value of the fish dwarfs the amount being paid for fishing rights. Very little of the fish is processed in the countries; rather it is caught and shipped to the fleets’ home countries for processing and resale. In Mauritania, for instance, only 12 percent of the catch is processed locally. Thus, the export of non-value added commodities so frequently assailed when discussing other extractive industries continues.

For poor countries, where decision making power all too often rests with venal politicians and bureaucrats, reaching solutions is highly difficult. Aside from the fundamental issue of corruption, fisheries management requires international coordination both with other governments and private interests, as well as highly technical monitoring projects, all in a region where harmonizing even between national and subnational governments can be uneven. As the article suggests, increased transparency might represent the best prospects for bringing order to this messy process:

"Efforts by civil society to improve transparency in the extractive industries and logging industries should be a source of inspiration here. In particular, the Publish What You Pay Campaign has helped put pressure on governments and companies to address corruption” [said Standing].

It can only be hoped that these efforts bear fruit quickly, for fish stocks can take significant time to recover. In the meantime, the situation serves as yet another stark demonstration of the breadth of damage that is caused by corrupt and short-sighted policymaking.

UPDATE: See also this report from MIT on the same issue

Picture by Michael Sarver found at MIT International Review

Of Scapegoats and Straw Men

Peruvian president Alan Garcia took to the pages of Lima’s most august newspaper, El Comercio, on Sunday 10/29 to decry what he sees as (sorry, Spanish only) an unpardonable ideological rigidity on the part of his opponents, which he characterizes thusly:

“Y es que allí el viejo comunista anticapitalista del siglo XIX se disfrazó de proteccionista en el siglo XX y cambia otra vez de camiseta en el siglo XXI para ser medioambientalista.”

“And it’s that [in a town that voted to oppose new mining ventures] the old anticapitalist communist of the 19th century unmasked himself as the protectionist of the 20th and now changes his stripes in the 21st to be an environmentalist.”

The president’s proposition is to launch Peru into the developed world by throwing open Peruvian resources, from aquaculture to mines, to private capital investment. Garcia contrasts this innovative vision against the sagging principles of an army of unspecified straw men, who seek to block rural development because peasant community lands are deemed “by demagoguery and trickery” to be sacred and who “have created the figure of the ‘uncontacted tribesmen’” (by which he means Peru’s very real isolated indigenous tribes) in order to obstruct the exploitation of $90/barrel oil reserves in the Amazon. It continues from there, bringing in mining, an industry where environmental concerns are “so last century” (“un tema del siglo pasado”), aquaculture, agriculture, and even education.

Would that it were so easy, Sr. Presidente! While those who would deny the potential utility of capital investment are fringe indeed, there aren’t very many people like that. However, there are a great many people who welcome investment but do not think the Peruvian state has yet proved itself trustworthy to carry out many of its appointed duties, whether the task is holding mining firms accountable for environmental harm, improving and enforcing basic labor standards, extracting the state’s fair share of resource-based income, or enacting direct or indirect redistribution programs to combat the country’s entrenched inequality. These folks would like to see Garcia expend some political capital on reforms before the government allows investment capital expanded space in what are undeniably fragile ecological and social environments.

Having presided over Peru in two very different eras – the 1980s of internal conflict and economic collapse, and the current era of relative peace and economic expansion – Garcia knows how hard it is to govern a geographically large, socially fragmented country. In particular, Peru has suffered from underdeveloped institutions ranging from disarticulated political parties to a judiciary that lacks the confidence of 95% of the population. But changing those things is difficult and time-consuming, and achieving success is uncertain. Better and easier, it seems, to find the magic bullet – resource exploitation, clearly – that will lead Peru to the Promised Land, and boldly identify the scapegoat – environmentalists, apparently – that always seems to get in the way.