India, the IMF's Poster Child for Capital Flows

♠ Posted by Emmanuel in , at 12/06/2010 12:00:00 AM
It's always one step forward, two steps back with the IMF moving into a post-Washington Consensus age, it seems. We've talked about it becoming kinder and gentler with regard to conditionalities--or maybe not. Today, let's revisit the tolerance of states implementing capital controls in contravention of the Washington Consensus--or maybe not. IMF Managing Director Dominique Strauss-Kahn seemed to raise more questions than answers in his recent speech in Delhi lauding India's approach to the subject matter. Unlike a certain even more populous neighbour, India does not actively clamp down on capital inflows (or at least so far). Unlike a certain nominally socialist regime, nor does it try to manage the level of its currency.

So, for what it's worth, this latest iteration of DSK is broadly in the Washington Consensus mould. (Hear that, China?)
Today, India is once again receiving strong capital inflows—more than $50 billion over the last year, or 4 percent of GDP. And while other countries facing surging capital inflows cry foul, India has neither undertaken massive intervention, nor further tightened its existing system of capital controls—in fact the limits on foreign investment in long-term debt were recently increased.

In my view, this approach is the right one. As noted by Prime Minister Singh at the Seoul Summit, “even as we try to avoid a destabilizing surge in volatile capital inflows, there is a strong case for supporting long-term flows to stimulate investment, especially in infrastructure.” He also pointed out that recycling surplus savings into investment helps address developmental imbalances. I am confident that with India’s strong track record of vigilance, capital flows can be put to good use without sacrificing financial stability.

Shifting focus to the medium term, how best to achieve strong global growth?

Rebalancing global demand holds the key. In economies with excess external deficits, public and private saving must increase. And in economies with excess current account surpluses—including many in Asia—domestic demand needs to increase. Stronger financial safety nets and financial market development can promote this shift from external to internal demand. In many emerging economies—including China—currency appreciation is also an important part of the solution. Finally, structural reforms remain essential in all countries to raise productivity and boost growth.
It could've come straight out of Bernanke's mouth if you ask me. And for those looking at more ammunition for the argument that the IMF remains an America-friendly institution first and foremost, DSK lauds the imminent $600 billion helicopter drop care of B-B-B-Bennie and the Feds:
Because public debt in the advanced economies is so high, the burden of this support falls on monetary policy. And because interest rates are already very low, less conventional measures may also be needed. In the U.S, for example, the Fed recently announced a $600 billion program of quantitative easing. It aims to prevent damaging deflation and support the recovery. Of course, the Fed’s actions carry implications for the global economy—and I will address the issue of capital flows shortly. This is why it is so important to have a collaborative approach to rebalancing the global economy.
I guess some things never change.
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Korea-US FTA Negotiated; US Congress Up Next

♠ Posted by Emmanuel in , at 12/04/2010 04:41:00 AM
Whoa, the Obama administration has actually negotiated a trade deal. As trade junkies know, one of the leftover bilaterals from the Bush administration was KORUSFTA. One stumbling block was US automakers demanding better access to the Korean car market. (Remember that this had also been a US demand on Japan during the Nineties that was all for nought, so I don't expect anything substantially different here in terms of results.) Another stumbling block was Korean resistance to American exports of beef from older cattle that was supposedly more prone to mad cow disease. I wasn't really expecting both to be resolved soon, so go figure. Perhaps a newly-belligerent North Korea has just reminded South Korea how tenuous its security situation remains so many decades after the Korean conflict, hence the need to cosy up to Washington.

At any rate, the story is not over yet as the focus shifts from international economic diplomacy to domestic politics. The Korean parliament will need to ratify this deal. Remember, this is the same National Assembly where legislators started beating each other up over KORUSFTA a few months back. Meanwhile, the Obamanites will also have to shepherd this FTA through the US Congress since Obama doesn't possess the fast-track authority his predecessor enjoyed for most of his term.

From the Yonhap News Agency:
South Korean President Lee Myung-bak called for early ratification of the revised free trade agreement (FTA) between Seoul and Washington, expecting it to be beneficial for both countries, according to Cheong Wa Dae Saturday. On Friday (Korean time), the two countries finalized revisions of the FTA in Washington, ending a three-year deadlock over U.S. demands for wider access to South Korea's auto market.

Kim Jong-hoon, the chief negotiator for Seoul, said "a substantial outcome" was made on automobiles and other areas during the talks. The presidential office issued a statement by Lee expressing his hope that the new FTA would be quickly ratified in both countries so that the free trade pact can "finally bear fruits."

Lee also said the FTA should bring huge economic benefits for both countries and will help take the South Korea-U.S. alliance to the next level. "The latest agreement is significant in that it equally reflects interests of both countries and has formed the basis for a 'win-win' situation," Lee was quoted as saying. "Everyone worked together to find alternatives that would be acceptable by both sides in order to ratify and put in effect the KORUS FTA...With the KORUS FTA, our exports will enjoy major growth," Lee said. "And our economy will have an opportunity to improve in its quality."

Lawmakers on Saturday, however, said ratifying the latest agreement will not be easy, recalling violent clashes at the National Assembly over the ratification of the previous deal in December 2008. Rep. Nam Kyung-pil of the ruling Grand National Party (GNP), who heads the National Assembly standing committee on foreign affairs and trade, said reaching a new deal was one thing, but putting it through the parliament was another.

"Additional negotiations between governments and ratification at the National Assembly are on different levels," Nam said. "Once the details of the latest talks are available, then our committee will have in-depth discussions. We will also have to take into account opinions of the public and the reaction by the U.S. Congress." Rep. Yoo Ji-jun, also of GNP, said a "stern review" will be necessary to ensure the balance of interests has been maintained after new negotiations.

The ruling party welcomed the revised pact. Its spokeswoman Bae Eun-hee said the FTA gives the export-driven South Korea a chance to beef up its presence in one of the world's largest markets. She also urged political opponents against turning "this matter of our livelihood into a political ideology," and said parties from both spectrums should exercise bipartanships for the sake of national interests.

The main opposition Democratic Party (DP), however, argued the latest FTA was a result of "humiliating" negotiations that will block South Korean automobiles from entering the U.S. market. "If we have made unilateral concessions or the balance of interests has been compromised, then we won't accept the new deal, since it will be detrimental to our national interest and also to healthy development of South Korea-U.S. relations," said the DP spokeswoman Cha Young.
UPDATE: Jonathan at Trade Diversion collates news reports that suggest that since KORUSFTA was negotiated while fast-track authority was in effect (under the Bush administration), its stipulations will hold when Obama introduces this FTA to Congress. That is, legislators cannot modify its content but only vote on it on a straight yea/nay basis.
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Qatar Rightly Beat US to Hosting 2022 World Cup

♠ Posted by Emmanuel in ,, at 12/03/2010 12:03:00 AM
It seems that, in the world of football at least, we have some sort of sporting affirmative action going on when it comes to choosing host nations for the world's most viewed sporting event. Unless you have no interest in sport whatsoever, you are probably well aware that Russia won the rights to hosting the 2018 event, beating the mighty UK. Perhaps an even more impressive feat was tiny Qatar, population 1.3 million, beating both the US and Australia for 2022 bragging rights. Let's just say that politicking at these sporting associations is very interesting--think of the International Olympic Committee or the Federation Internationale de l'Automobile (F1 and the World Rally Championship's governing body). Even by their standards, however, FIFA is well nigh inscrutable. BBC Panorama (the UK's investigative reporting show) had an elaborate feature on alleged bribery and corruption at FIFA that many blame for the UK ultimately winning...2 out 22 votes and getting booted out of the first round.

Which brings me to an important point: whereas the likes of the World Bank and IMF (among others) may favour the US or the EU as a function of their political-economic clout, this doesn't necessarily follow at FIFA. Indeed, by "rational" standards, there is utterly no reason to choose Russia over the UK. The latter has far better existing transportation, accommodation, and stadium facilities. The English Premier League should also count for something, no? The former will have to deliver on these fields of dreams--if you build them, they will come in 2018. Unsurprisingly, however, I was pleased with this result since I typically root for the underdog and would welcome variety since London will host the 2012 Olympics anyway. We need variety in international event hosts, right?

I was thus doubly amused reading an op-ed front and centre on the Yahoo! front page slamming FIFA for its even more inscrutable decision to select Qatar over the US and Australia. Lots more of this thing in the US media. Americans rightly point out that they successfully hosted the 1994 World Cup--a snoozer in some respects but that's not the host's fault--but well organized nonetheless. Still, it looks like A Bunch of Whiny Caucasian Americans Who (Claim to) Watch Soccer Complaining About the Unfairness of International Organization. Just desserts, I say. The UK thought they could sway the decision by sending PM David Cameron, Prince William, and the traitorous chav David Beckham to boot to Zurich. All for naught--or more precisely, 2 out of 22 votes. The US did its bit by sending Slick Willie but also got nothing to show. So much for "star power." I thought Australia had similar infrastructure advantages as the US but without the baggage of being America and having hosted the event in the last two decades, but no dice. Qatar, meanwhile, had Zinedine Zidane as a hired gun (plus Gabriel "Batigol" Batistuta and Barcelona FC Coach Pep Guardiola, and . They paid him a winner's fee of $15 million, but you can it was worth it insofar as the mission was accomplished.

What we have, then, is the US utterly outmanoeuvred in the unfamiliar political landscape of world football. If the US soccer team at best is a minor power, Qatar is ranked 113th in the world and wouldn't have qualified for the titular event for a long, long time. And the negatives for Qatar are not limited to that as the critics keep whingeing. Add a scorching summer averaging over 100 deg Fahrenheit and hence the need to prepare twelve air-conditioned venues. However, look on the bright side:
  • Given the purported money drain that the World Cup is (but why would the US be back to bidding on an event it last hosted when Slick Willie was president?), cash-strapped America should be happy to let the moneybags Qataris waste their money;
  • If the Qataris want an even bigger vanity project than owning the world's most famous department store, then give it to them--it's for those who want to prove they've arrived on the world scene;
  • After FIFA courting the African market, why not the Middle Eastern market as well?;
  • Sepp Blatter has a history of bringing the World Cup to new places, and doesn't Qatar qualify?
In its own inexplicable FIFA-esque way, it all makes perfect sense: expressed in dollars and cents, pounds, shilling, and pence. The College of Cardinals choosing the Pope has nothing on the FIFA Executive Committee selecting World Cup hosts. And you can take that to the bank. Corruption? Sour grapes, I say. How badly do you want it, anyway? It's power politics in sport at its most barefaced.

Sepp baby, here's a hint: in 2026, think "Southeast Asia"!
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Thinktank Titans: Chatham House at 90; CFR at 88

♠ Posted by Emmanuel in at 12/03/2010 12:01:00 AM
For you international relations junkies out there, the Royal Institute of International Affairs (Chatham House) recently held its 90th anniversary event here in London. In the United States, the Council on Foreign Relations (CFR) came into being shortly thereafter in 1922. Both are the product of the same idea. Aside from Chatham House Director Robin Niblett, CFR President Richard Haass was invited to participate. The podcast is available from Chatham House and traces the history of these two notable thinktanks:
In 1919, British and American delegates to the Paris Peace Conference conceived the idea of an Anglo-American Institute of foreign affairs to study international problems with a view to preventing future wars. In the event, the British Institute of International Affairs was founded in London in July 1920 and received its Royal Charter in 1922 to become the Royal Institute of International Affairs. American delegates developed the Council on Foreign Relations in New York as a sister institute and both are now among the world's leading international affairs think-tanks.

This special members event to mark the founding of the Chatham House in 1920 will assess how both Chatham House and the Council on Foreign Relations have evolved over the past 90 years in order to live up to the goals of their founders. Dr Haass and Dr Niblett will also discuss the key themes of international affairs for the future that are driving the two institutes' current research agendas.
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Welcome to British Higher Education "Apartheid"

♠ Posted by Emmanuel in , at 12/02/2010 12:04:00 AM
Ah, student protests turning into violence. These have now happened on three separate occasions in the UK: November 10 featured the break-in of Conservative headquarters. November 24 had more of the same in the general vicinity. There's a distinctly Sixties whiff about them as 153 protesters were arrested while protesting at Trafalgar Square on Tuesday. What's more, these incidences are going on all over England. Now, British higher education is arguably the world's next best after that of the United States. However, dire financial times may have direr consequences for universities in the UK than those in the US. Why? Simple: nearly all higher education institutions worth their salt in the UK are public institutions, while there are far more private ones in the US. Hence, when the coalition government goes on a budget-cutting spree here, next to none worthy of note are exempted...in England. So even if cash-strapped American states reel in spending on their public universities--most notably California--it doesn't affect the likes of Ivy League universities or their ilk.

Followers of British politics know that the legislative processes in the UK have been undergoing "devolution" since 1999 that transfers rulemaking to the national [England, Scotland, Wales, Northern Ireland] level. That is, the likes of the Welsh Assembly and the Scottish Parliament have more discretion over any number of matters--including education, particularly higher education. (For overseas readers, the Beeb has a neat primer on what areas have and have not been devolved such as national security.) This peculiarity of British politics is making for interesting times when it comes to the cost of attending university.

As you most probably know, the coalition is implementing measures moving towards the removal of caps on university fees. Not so long ago, university students were bellyaching about the ceiling being raised to £3000-some a year. Now, the coalition is in the process of removing ceilings altogether and charging home students the same as non-EU students, i.e., the full fare of £9000 and above. This change has been particularly challenging for the Liberal Democrat minority coalition partners. They bear the brunt since, prior to the elections several signed off on a pledge not to raise tuition fees. The interesting thing, however, is that the Welsh and the Scots are not following suit. So, not only are English students aggrieved by these fee rises, but they feel hard done by since others in the UK will not have them. Cue education "apartheid":
Thousands of students clashed with police in London in the third major protest against the fee rises, with children as young as 10 joining the marchers. Further demonstrations took place in Birmingham, Leeds, Sheffield, Liverpool, Manchester and Bristol...A group of up to 200 people was eventually surrounded in Trafalgar Square and refused to leave. Graffiti was daubed on public statues and fires lit at the base of Nelson's Column as missiles were thrown at riot police.

Meanwhile it emerged that the English face a university education "apartheid" after Welsh students were told they would be exempt from a sharp rise in tuition fees. The Welsh Assembly government announced that it would heavily subsidise the degree courses of about 90,000 students each year, even if they studied at universities in England, Scotland or Northern Ireland.

It means that Welsh students will pay about £3,200 a year to attend university, while the English will be charged up to £9,000 under Coalition reforms. English students taking courses at Welsh universities will still have to pay full fees. The disclosure led to claims last night that English taxpayers would effectively be subsidising cheaper courses for Welsh undergraduates.

At present, the Welsh Assembly receives an annual grant of £15 billion from the Treasury to fund devolved services including health, education and housing. Spending per head was about £5,500 this year, compared with £4,800 in England. The Welsh announcement coincided with growing conflict in the Coalition over higher education policy...

Yesterday, Leighton Andrews, the Welsh Education Minister, said universities in Wales would be able to increase tuition fees to £9,000, but students from the country would not be expected to bear the extra cost. Instead, they will pay the same fees in 2012 as they did this year, with the Welsh administration subsidising courses.

"The public purse will continue to subsidise higher education for Welsh domiciled students," said Mr Andrews. "Higher education should be on the basis of the individual's potential to benefit and not on the basis of what they can afford to pay." He claimed the fee reforms would be funded by cutting the direct teaching grant for Welsh universities. Some 69,690 Welsh students currently study in their home country and another 18,475 in England, Scotland and Northern Ireland.
But wait, it gets even better--if you're a Scottish student, that is. For, they may yet to continue with current policies that allow Scottish students free attendance to university:
The threat of a tuition fee "apartheid" affecting English students is heightened by the situation in Scotland. Scottish students do not pay tuition fees, although a discussion document on possible reforms to the system will be published in coming weeks.
So the English will effectively be subsidizing Welsh students, the charge goes. Their universities will maintain fees near the $3000 level. Consider that Welsh institutions include some of the UK's best alike Aberystwyth and Cardiff and that's a pretty good deal. Meanwhile, it's sweeter still if the Scots keep their universities free for Scottish students or raise them slightly. St. Andrews, Edinburgh, Glasgow, etc. are undoubtedly quality institutions.

Apartheid thus takes two forms: First, it's your misfortune being English and being at or near the age for applying to university just when fee rises will come into effect. Second, English taxpayers may actually be subsidizing other nation's students. It's not-so-fun stuff, and it certainly points out challenges in devolution. While meant to increase local discretion, it does have the potential to raise equity issues of who gets what education when and where.

Methinks the nagging question is why jobs are hard to come by for newly-minted graduates. It should be the focus of attention rather than going to obtain a university degree that doesn't necessarily promise employment thereafter.
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Save Our World, Create Chinese Consumer Culture

♠ Posted by Emmanuel in ,, at 12/02/2010 12:01:00 AM
So the post title is a bit hyperbolic, but not much. If global economic imbalances imperil the existence of the contemporary trade and globalization, then job#1 is alleviating them. In case you missed it, the New York Times Magazine had a very interesting article over the weekend on the challenges of getting China to move towards a consumer culture. While the US has swung too far in that direction, China is arguably at the opposite extreme. Both must change.

There are certainly many examples of PRC noveau riche splurging (see the accompanying photo essay), but that's not what will get consumption up in China but Jiang average opening up his or her wallet. I have actually written an academic piece that makes similar points--it's in China's best interest to become less manufacturing intensive on environmental grounds, revaluation of the renminbi will encourage domestic consumption by increasing local purchasing power, etc.--but I'll save that for a later day. In the meantime, the NYT article gets the general outlines of this story right, although I have more to say about the marketing aspects of creating Chinese consumer culture:
In China’s halting efforts to build a new economy today, there is an intriguing parallel to the United States: Both the world’s largest economy and its latest challenger need to remake themselves. As Guo bluntly told me, “You are facing transformation, too.” The United States needs to shift away from debt-financed consumption with little long-term benefit and toward investments that can create good-paying jobs, like education, infrastructure, energy and scientific research. China needs to invest less and consume more — to keep growing rapidly and, in the process, to stimulate economic growth around the world. In both countries, significant changes are necessary to create more sustainable growth. And in both countries, they inspire fierce internal opposition.

We tend to think of the United States and China as rivals, and they will continue to compete in coming years, over which will build the industries of the future and which will be the dominant power in Asia and the world. But our problems are also linked, just as the Chinese export boom and the American consumption boom depended on each other and, together, helped create the financial crisis. The worst outcome now, for both countries, might well be economic stagnation in China. That would slow U.S. growth and could lead to political chaos in China. The best outcome would be for both countries to reshape their economies gradually, benefiting both. In neither country will it be easy.
Also see another post that questions China's inability to create globally recognized brands, hindering its companies' abilities to move up the value chain.
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Cash-Strapped West = Declining Aid to Africa

♠ Posted by Emmanuel in ,, at 12/01/2010 12:10:00 AM
Who's to provide aid to Africa when many developed countries themselves could use some inflows? It seems this article is obvious enough: as more and more Western countries come under pressure to rationalize their fiscal policies, among the items on the "to-cut" list is overseas development aid. The trigger-happy UK coalition has supposedly "ring-fenced" foreign aid and then some, but the situation may not be the same in other countries once the reality of more austere times sets in. What are the geopolitical implications of bean-counting Western countries? Answer: African countries coming under the greater influence of free-spending China.

From the Nigeria's Daily Trust (c/o All Africa) comes this feature in which the Chief Economist of the African Development Bank Mthuli Noube cautions African states to prepare for this seeming inevitability:
Foreign aids inflow from donor countries are drying up and in the next 15 years, many poor African countries may not be able to access the window, Chief Economist of the African Development Bank Group (AfDB) Professor Mthuli Ncube has alerted. He attributed the new trend to several economic factors that are redefining economic relations around the world, some of which include the economic recession in Europe and America, and Africa's new economic partner - China.

Economic recession has forced some European countries like Britain, France, Germany, Ireland, Greece and Portugal to consider austerity measures with rising concerns that immigration and development budgets may be stifled. From 1960 to 2008, foreign donors have pumped over $650 billion in aids into the continent with a population of about one billion people...

Professor Ncube said African countries must focus on building infrastructure and strengthening intra-continent economic ties. China, he said, has introduced a new model to aid through its policy of 'resources for infrastructure'. Chief Investment Officer, Private Sector Department of AfDB Godfrey Mwindare told this reporter in Tunis that the entrance of China into Africa would create competition and fair deal, and that the continent is not currently benefitting from its extractive resources.

Africa's trade with China has doubled every three years since 2000 and hit $107 billion in 2008, eclipsing the United States as the biggest trading partner. Trade with China fell to $90 billion in 2009 because of the global recession. But the US Commerce Department said trade ties with Africa fell from $141 billion in 2008 to $86 billion in 2009.

Some 800,000 Chinese workers are now in Africa, according to a website that focuses on China in Africa, www.saiia.org.za. Addressing a press conference last Friday top economist and former CEO of France's international development agency, the Agence Française de Dévelopement Jean-Michel Severino said Africa has come of age to decipher its needs, and that the era of compassionate aids was over.
So the rise of China in relation to the West has manifold implications on other parts of the world. As we've asked many times before [1, 2, 3, 4, 5, 6, 7, 8], has the yellow man's burden replaced the white man's burden or do the Chinese something more constructive than the colonizers of yore? In particular, do proceeds from China's hunger for natural resources benefit more folks and create jobs in Africa?

Also see a recent post looking at historical aid flows from 1960 to the present.
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Whatever's Become of the Financial Stability Board?

♠ Posted by Emmanuel in at 12/01/2010 12:01:00 AM
Whatever happened to the Financial Stability Board (FSB) that came into effect during the earlier G-20 meetings? It didn't have much to say to the G-20 at the most recent meetings in Seoul. The reasons why we haven't heard much about this Bank of International Settlements (BIS)-hosted entity since then can stem from two major sources: (a) it isn't doing enough that merits attention or (b) the work it does is highly technical and isn't ready fodder for the business sections of newspapers. As Eric Helleiner explains in his new article in Global Policy, it's likely a mix of both reasons as to why its profile has been relatively low. Given the difficulty of the tasks it faces, chances of widespread accord on current proposals remain low. What follow are the abstract and the policy implications from the article though the rest is of course well worth reading:
---------------------------------------------

ABSTRACT

Created in April 2009, the Financial Stability Board (FSB) represents the G20 leaders’ first major international institutional innovation. Why was it established and what role will it play in global economic governance? The creation of the FSB has been linked to a US-led effort to strengthen an international prudential standards regime that had evolved in the years leading up to the 2007–08 global financial crisis. The FSB faces a number of serious challenges in its new role: developing effective mechanisms for monitoring and encouraging compliance; promoting the development of effective international standards and fostering consensus on their content; establishing its legitimacy vis-à-vis non-members and within member countries; and clarifying its relationship with other global governance institutions. Since these are very difficult tasks, the FSB may be forced to assume a less ambitious role in international regulatory politics than some of its creators initially envisioned.

POLICY IMPLICATIONS
  • The creation of the FSB is part of an ambitious effort to strengthen international prudential standards in response to the recent global financial crisis.
  • The FSB faces many challenges: developing effective mechanisms for monitoring and encouraging compliance; promoting the development of effective international standards and fostering consensus on their content; establishing its legitimacy vis-à-vis non-members and within member countries; and clarifying its relationship with other global governance institutions.
  • If these challenges prove too daunting, the FSB can still play an important, though less ambitious, role of fostering international cooperation to support a more pluralistic and decentralized international regulatory order.
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Hillary "Internet Freedom" Clinton's WikiLeaks Issue

♠ Posted by Emmanuel in , at 11/30/2010 12:02:00 AM
Face it: we all have issues. However, it seems Missus Clinton's foibles are more high-profile than those of the rest of us. Here's yet another case in point. Just a few months removed from making a grandiose speech on the virtues of "Internet freedom" [picture above] in the wake of those dastardly Chinese clamping down on Google's violation of Chinese censorship laws, there's now apparently an Americans exception reserved for WikiLeaks. Unless you've been hiding in a cave somewhere between the border of Afghanistan and Pakistan, there has been a media firestorm over the leakage of an interesting set of State Department communications to major international newspapers like the New York Times, The Guardian, and Der Spiegel. Unfortunately, the ol' freedom 'n' democracy shtick is being contextually applied. If it's America's erstwhile rivals, the problem is one of dealing with "government censors." When it comes to the US government being at the receiving end of some "Internet freedom," however, it becomes an "illegal act" according to the secretary of state. Compare:
Hillary "Internet Freedom" Clinton (January 21, 2010): Some countries have erected electronic barriers that prevent their people from accessing portions of the world’s networks. They’ve expunged words, names, and phrases from search engine results. They have violated the privacy of citizens who engage in non-violent political speech. These actions contravene the Universal Declaration on Human Rights, which tells us that all people have the right “to seek, receive and impart information and ideas through any media and regardless of frontiers.” With the spread of these restrictive practices, a new information curtain is descending across much of the world. And beyond this partition, viral videos and blog posts are becoming the samizdat of our day.

Hillary "Stealing Classified Documents" Clinton (November 29, 2010): The United States strongly condemns the illegal disclosure of classified information. It puts people’s lives in danger, threatens our national security, and undermines our efforts to work with other countries to solve shared problems. This Administration is advancing a robust foreign policy that is focused on advancing America’s national interests and leading the world in solving the most complex challenges of our time, from fixing the global economy, to thwarting international terrorism, to stopping the spread of catastrophic weapons, to advancing human rights and universal values. In every country and in every region of the world, we are working with partners to pursue these aims.
My, my, such legalistic verbiage. It sounds awfully familiar. Where have I heard such language before? Why, it's those famous Internet freedom violators the Chinese who've said similar things in their white paper on the Internet (Google, take note):
China adheres to rational and scientific law-making, and reserves space for Internet development. Relevant laws and regulations pertaining to basic Internet resource management, information transmission regulation, information security guarantee and other key aspects define the responsibilities and obligations of basic telecommunication business operators, Internet access service providers, Internet information service providers, government administrative organs, Internet users and other related bodies. The citizens' freedom and privacy of correspondence is protected by law, which stipulates at the same time that while exercising such freedom and rights, citizens are not allowed to infringe upon state, social and collective interests or the legitimate freedom and rights of other citizens. No organization or individual may utilize telecommunication networks to engage in activities that jeopardize state security, the public interest or the legitimate rights and interests of other people.
Oops, there went the digital exceptionalism bit. In the end, the US, China, and the rest are all on the same boat in citing similar reasons for curtailing unfettered Internet freedom. Further recall what Missus Clinton said in her bid for Internet freedom that seem strange in light on current US actions:
Hillary "Internet Freedom" Clinton (January 21, 2010): On their own, new technologies do not take sides in the struggle for freedom and progress, but the United States does. We stand for a single internet where all of humanity has equal access to knowledge and ideas. And we recognize that the world’s information infrastructure will become what we and others make of it. Now, this challenge may be new, but our responsibility to help ensure the free exchange of ideas goes back to the birth of our republic. The words of the First Amendment to our Constitution are carved in 50 tons of Tennessee marble on the front of this building. And every generation of Americans has worked to protect the values etched in that stone.
The main points are these -
  1. Whatever your opinion of WikiLeaks' actions as well as those of the US government in response, the idea that all of us netizens should have "equal access" to knowledge and ideas doesn't quite hold when it's the US having a taste of "Internet freedom";
  2. The US still wants to exercise its sovereignty, as do the likes of China and other purported enemies of digital democracy. Accordingly, this demonstrates that most countries--including the United States--do feel obliged to rein in the supposedly extraterritorial "single Internet" features of the Internet if it so suits their purposes;
  3. Similarly, the United States is citing its laws to enforce its will on foreign entities--sort of like Google in China, huh? As long as there is no clear global "Law of the Internet"--Google may want to change that (foolishly, I believe)--I guess we all must return to national law.
Channelling Daniel Drezner, then, I agree that there is no real hypocrisy being revealed by the difference between what America says during diplomatic discourse and its internal communications reveal as the WikiLeaks founder Julian Assange suggests. Rather, the hypocrisy lies in the very notion of Internet freedom. When other countries (especially those unfriendly to America) perform cyber-censure by claiming to apply law, it's a violation of free speech. When the US attempts to do the same, it's an "illegal" act that must be brought to justice. The Chinese didn't even allude to throwing Google personnel in jail. Who's paranoid here?

The excuse that American personnel and informants are being put in danger doesn't wash, either. As Evgeny Morozov points out, cyber-dissidents supposedly empowered by "Internet freedom" face these dangers already [1, 2] instead of facing those which are more abstract at this point in time.

Ah well, you know ol' Missus Clinton. Let's just say that she's prone to using, how should I describe it, grandiose language. We all remember that chestnut of a quote while she was first lady, "This vast right-wing conspiracy that has been conspiring against my husband since the day he announced for President." Nowadays we have a cyber-update of the same sentiment. With some American dirty laundry being aired out in public, "this disclosure is not just an attack on America’s foreign policy interests. It is an attack on the international community – the alliances and partnerships, the conversations and negotiations, that safeguard global security and advance economic prosperity." In the end, the only clear result of this exercise may be the State department exercising more circumspection in its intra-agency communications since, embarrassingly enough, there is apparently a culture of leaking there. It's not quite a tight ship. Telling others to be guarded in their communications with Americans is nothing novel, obviously.

I guess what goes around comes around। It makes you wish Missus Clinton didn't start fooling around with "Internet freedom" since everybody knows who the joke is on this time. You can carve that in 50 tons of Tennessee marble.

UPDATE: Also see the State Department's letter to Julian Assange prior to the release of the cables. Same legalese banana.
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Cancun Climate Conference: An Incremental Solution

♠ Posted by Emmanuel in , at 11/29/2010 12:28:00 AM
[NOTE: I've been rather silent on environmental issues these past few weeks, so I hope this post and the one before it rectify this imbalance ahead of the Climate Change Conference in Cancun which starts later today.] While I remain ambivalent about the idea of civil disobedience as a spur to public acceptance of climate change as an important global policy issue, I am rather more upbeat about an article which just appeared in the LSE house journal Global Policy. Although my biases may be showing, I do believe it showcases some of the most cogent commentary on global policy issues you can find nowadays. That it's freely accessible (for now) is further icing on the cake. Here is another case in point -

Having witnessed the no-event that was last year's Copenhagen summit, I am wary that the one which begins in Cancun will have a similar result. In trying to fashion a grand deal that pleases so many parties, the UN has had a very hard time pleasing even some. Call it Doha Development Agenda disease. In general, I believe that the The end result of overambition may be a failure to agree on particular issues concerning climate change which different countries share. Accordingly, Robert Falkner, Hannes Stephan, and John Vogler offer a different approach: why not chop climate change down into manageable, bite-size pieces that more countries will find digestible? This kind of gradualism makes perfect sense to me given the complexity of this topic.

The abstract and policy implications follow, though the rest is well worth reading:
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ABSTRACT

This article reviews the options for future international climate policy after the 2009 Copenhagen conference. It argues that a major reassessment of the current approach to building a climate regime is required. This approach, which we refer to as the ‘global deal’ strategy, is predicated on the idea of negotiating a comprehensive, universal and legally binding treaty that prescribes, in a top-down fashion, generally applicable policies based on previously agreed principles. From a review of the history of the ‘global deal’ strategy from Rio (1992) to Kyoto (1997) and beyond we conclude that this approach has been producing diminishing returns for some time, and that it is time to consider an alternative path – if not goal – for climate policy. The alternative that, in our view, is most likely to move the world closer towards a working international climate regime is a ‘building blocks’ approach, which develops different elements of climate governance in an incremental fashion and embeds them in an international political framework. In fact, this alternative is already emergent in international politics. The goal of a full treaty has been abandoned for the next climate conference in Mexico, which is instead aiming at a number of partial agreements (on finance, forestry, technology transfer, adaptation) under the UNFCCC umbrella. For this to produce results, a more strategic approach is needed to ensure that – over time – such partial elements add up to an ambitious and internationally coordinated climate policy which does not drive down the level of aspiration and commitment.

POLICY IMPLICATIONS
  • The current approach to negotiating a comprehensive, universal and legally binding ‘global deal’ on climate change is unlikely to succeed. A strategic rethink is needed on how to advance global climate protection in the current global political and economic environment.
  • An alternative approach is the ‘building blocks’ strategy, which develops different elements of climate governance in an incremental fashion and embeds them in a broader political framework. In fact, such an approach is already emergent in post-Copenhagen international climate politics.
  • The building blocks approach offers the hope of breaking the current diplomatic stalemate but remains a second best scenario. It promises no swift, short-term solutions, risks strengthening the logic of free-riding and may lead to excessive regulatory fragmentation.
  • A more strategic, long-term vision is required for the building blocks model to lead to the creation of an ambitious international architecture for climate protection and prevent the slide into a purely decentralised, ‘bottom-up’ approach.
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