Panda Diplomacy: Not So Cuddly Anymore

September 19, 2010 Leave a comment

image from the Korea Times

A giant panda gift from the Chinese government has long been a symbol of bilateral cooperation and improved relations. Most recently, China threw around its weight, panda-style, after a diplomatic rift with Japan. In early September, two Japanese naval vessels tried to intercept a Chinese boat near the Diaoyu islands, a disputed territory of the East China Sea, resulting in a collision. The Japanese seized the fishing vessel and brought the crew to Japan for questioning. The Chinese demanded the crew’s release, issuing stern public statements about the illegality of the detainment.  Shortly after the incident, a Chinese team was sent to Japan to investigate the unexpected death of a giant panda on loan to a Japanese zoo. Japan could be fined up to US$500,000 for the panda death.

The practice of using pandas as a tool to improve international relations dates back to the Tang dynasty, more than a thousand years ago. Historical records from the period describe the presentation of two pandas to a Japanese court. In the 1970s, the practice gained popularity under Mao Zedong, sending pandas to several foreign governments, most famously presenting President Nixon with two pandas at the end of the famous 1972 visit. From 1958 to 1982, China gave 23 pandas to nine different countries. In 2005, two pandas were given to the people of Taiwan after a meeting between the Communist Party of China and Taiwan’s Kuomintang. In January 2006, U.S. Deputy Secretary of State Robert Zoellick was photographed hugging a 5-month-old panda cub during a visit to Sichuan Province. The photograph was presented by the Chinese media as a sign that Zoellick supported improved bilateral relations.

In 2005, China said it would no longer gift pandas to foreign nations. Instead, pandas would only be “lent” out (for as much as US$1 million/year) for biological breeding and research purposes. Still, the recent altercation with the Japanese and their pandas shows that the zoo will still remain a battlefield.. China’s panda diplomacy is looking a little less cuddly these days.

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A Wasted Opportunity for Justice

August 1, 2010 Leave a comment

photo from personal collection

1.7 million killed. 4 years of starvation, torture and bloodshed. A country ripped apart. In one of the most brutal atrocities in recent history, Cambodia’s Khmer Rouge, between 1975 and 1979, systematically murdered almost one-third of its population. Finally, on July 25th, more than 30 years after the Khmer Rouge was pushed from power, a United-Nations backed court convicted one Khmer official for his involvement in the killings. The Khmer Rouge’s leader, Pol Pot, died in custody in 1998. Kaing Guek Eav, more commonly known as Duch, served as leading official of the Khmer Rouge’s infamous S-21, overseeing the torture and killing of more than 14,000 people.  Duch has claimed that he had not visited the prison’s cells and torture chambers, admitting cowardice and ignorance.

The court sentenced Duch to 35 years in prison, which has been reduced  to 19 years for  time already served and for a period of illegal detention. The court took into account Duch’s cooperation, his limited expressions of remorse and a possibility for rehabilitation.  Understandably, The reaction to Duch’s sentence has been fury. The idea that this man could one day walk free is too much to bear for a population whose suffering is still unresolved. As one former prisoner of S-21 prison so aptly puts in, “We are victims two times, once in the Khmer Rouge time and now once again.” Cambodia has no death penalty, but the prosecution sought a 40-year sentence. Duch plans to appeal the sentence.

Last year, I visited Cambodia’s S-21 prison in Phnom Penh, where blood stains still lay visible on the cells’ floors. It was an unbelievable experience to see a even small picture of what Cambodia went through just about three decades ago and to walk outside where the elderly stand playing with children. The Cambodian people deserve justice. Instead, they have another tragedy to add to their history books. Although Duch is the first of five officials to be tried, there is little hope of any real justice.

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Slow and Steady: the rise of the Renminbi

July 20, 2010 Leave a comment

cartoon from davegranlund.com

On June 19th, the Chinese government announced plans to allow the RMB to appreciate against the dollar. By allowing more flexibility of its exchange rate, the decision could help defuse long-standing controversy over the valuation of the RMB. After three years of allowing the RMB to appreciate, in 2008 China’s central bank decided to peg its currency to the dollar. Since the central bank’s June announcement, the RMB has hit a high of 6.77 against the dollar. The RMB’s .5% daily trading band remains unchanged. The timing of the announcement was opportune, as China’s currency was an expected topic of discussion at June’s G20 summit in Toronto.

The reaction from the U.S. has been guarded. President Obama acknowledges the policy announcement as a step forward but claims it is too early to evaluate the effects on the global economy. Members of Congress have long argued that the undervaluation of the RMB gives China an unfair trade advantage. New York Senator Charles Schumer has been instrumental in pushing for legislation to “correct” this imbalance. This year, Senator Schumer introduced a bill to authorize placing retaliatory duties on artificially cheap Chinese imports. The Senate is expected to vote on the bill later this month. In response to the decision to allow the RMB to appreciate, albeit slowly, against the dollar, Schumer maintains his pessimistic stance claiming that without further detail to China’s plans, “we will have no choice but to move forward with our legislation”. Critics of China’s currency policy point to a June World Bank report recommending a more flexible RMB exchange rate. The report suggests a more flexible exchange rate would make China’s monetary policy more independent, which would allow the central bank to have more control over interest rates.

It is unclear how significant of an impact a small appreciation of the RMB will have. For U.S. companies, a stronger Chinese currency would increase Chinese consumers’ buying power and make U.S. goods more affordable in the Chinese market. A stronger RMB would make Chinese exports more expensive in foreign markets, making domestic goods more competitive. At the same time, American consumers will pay more for Chinese goods.

China’s decision to depeg the RMB from the dollar is seen as mostly being in China’s interest. Worries about inflation, competitiveness of Chinese sales to Europe and a desire to increase Chinese consumers’ purchasing power are all important drivers of the PRC’s recent decision. A stronger RMB will lower the cost of China’s high commodity imports. Most importantly China’s decision to allow a gradual appreciation of the RMB should be seen as a decision independent of foreign interests and pressure. Still, this will not stop the rest of the world from pushing for a faster, bigger rise in the RMB.

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After the Cheers Die Down

June 26, 2010 Leave a comment

Shanghai June 2010 photo from personal collection

Total Investment

2008 Beijing Olympics: $40 billion +

2010 South Africa FIFA World Cup: $5 billion+

2010 Shanghai World Expo: $45 billion

2004 Athens Olympics: $14.4 billion

Through competitive bidding processes, countries battle to host global extravaganzas like the Olympics and World Cup. Prospective hosts see these events as important opportunities to build nationalistic pride and bolster standing on the world stage. At such enormous costs, are the benefits really worth it? While national governments prepare cities with beautification campaigns, build new infrastructure, and rush to mask social problems, the focus is on building the “right” global image. Thabo Mbeki, a former president of South Africa, voices this hope, claiming the World Cup “will be remembered as a moment when Africa stood tall and resolutely turned the tide of centuries of poverty and conflict.” The popularity of this belief is proven through the aggressive push from developing countries to host future global sporting events.

After the cameras and crowds return home, countries must face the reality of their huge investments. These investments rarely create sustainable benefits. World-class stadiums and upgraded infrastructure often remain underutilized. In China’s case, with vast cash reserves, the country can absorb the waste. But, what about less financially stable countries? Athen’s 2004 Olympics racked up a bill of more than $14 billion dollars. Some have cited this profligacy as part of Greece’s bigger pattern of fiscal irresponsibility. The last three hosts of the World Cup, Germany, Japan, and South Korea, had no problem absorbing the costs of hosting the event, but what about South Africa?

Critics and disgruntled citizens lament the ways the billions of dollars could have been spent. South Africa’s glaring social problems, including unemployment over 35%, surely could have been alleviated from such a large investment. Although South Africa is baring most of the event’s costs, FIFA stands to get most of the profits. Still, the overwhelming focus is on the intangibles. Over and over again we hear about the implications of hosting such an important event. Apparently, national pride costs a lot these days…

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Cursed Treasure?

June 16, 2010 Leave a comment

cartoon from Bruce Beattie, Creators Syndicate Inc.

Afghanistan’s future outlook has been turned upside-down. With the discovery of an estimated $1 trillion in untapped mineral deposits, the country has something to celebrate for the first time in many, many years. The deposits, located in some of Afghanistan’s most politically unstable regions, include huge veins of iron, cooper, gold, cobalt, and lithium (used in the manufacture of batteries for laptops and BlackBerrys), creating the possibility that Afghanistan could become a global mining center. The possibilities seem endless. More than $34,000 for every Afghan man, woman, and child and the arrival of unlimited amounts of FDI surely amount for a celebration. However, the reality may be more worrisome.

With corruption and insurgency plaguing the country on federal and local levels, the discovery of valuable commodities may only exacerbate Afghanistan’s problems. Under the current regime, it is likely much of the mineral wealth would be diverted and abused. Conflicts between mineral-rich provinces and the federal government seem more likely than cooperation. Like the conflicts over “blood diamonds” and oil in Africa, valuable commodities can often paralyze a country.

The effects of the mineral discovery will have regional and global implications. The untapped mineral wealth will surely intensify competition for investment between powerful regional players like China and India. Two Chinese firms have already committed themselves to a $4 billion investment in a major copper mine, south of Kabul, representing the biggest non-military foreign investment in Afghanistan to date. Afghanistan’s Ministry of Mines has stated that bidding could begin as early as this fall. According to  Pentagon representatives, because the Afghan Ministry of Mines is not ready to manage this process, the U.S. will be assisting the government agency. This will be a partnership ripe for conflict. If Afghanistan is able to ensure better security, competent management, cooperation, and control over government corruption, the country could benefit greatly from its new-found mineral wealth. Unfortunately, that’s a lot of “if’s”.

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Water Warfare- to the Last Drop

June 2, 2010 Leave a comment

image from timesofmalta.com

Gold, diamonds, oil, and platinum- the world’s most valuable commodities, right? Yes, with one major exception. We often forget that the commodity necessary for life, water, is both finite and invaluable. According to the World Health Organization, the lack of water to meet daily needs is a reality today for one in three people around the world. This problem is getting worse as the world population grows, the pace of urbanization increases, and agriculture, industry, and households require more water. Almost one fifth of the world’s population (about 1.2 billion people) live in areas where water is physically scarce. Non-profit organizations, conservation movements, and multinational firms are striving to become more active in protecting the world’s most valuable resource.

Worldwide, agriculture accounts for 70% of water usage, industry for 22%, and domestic usage for 8%. Therefore, it makes sense that the most focus should be on increasing agricultural efficiency. Agricultural endeavors like corn ethanol production, which use vast amounts of water, should be reconsidered. Instead of merely educating the public about conserving their water usage, consumers should be educated about the difference they can make by changing their purchasing behavior. For example, the production of beef requires much more water than chicken, peanuts much more than soybeans, and orange juice much more than tea. Multinational companies could be instrumental in this type of campaign. The cost would be low and the benefits high, as the companies would increase their socially-responsible images and potentially lower their costs of producing more water-intensive products.

Beginning in 1999, Coca Cola came under intense scrutiny when it was accused of aggravating an Indian state’s water scarcity situation. Coke products were protested and the company eventually left the Indian state called Kerala in 2004. Since then, companies like Nestle and Coca Cola have publicized their commitments to water sustainability. Coca Cola already partners with the WWF in its water conservation efforts. Federal governments, green movements, and firms have a responsibility to join in the dialogue- before it’s too late.

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The Vietnam War: A Political Stumbling Block?

May 22, 2010 Leave a comment

cartoon by Taylor Jones, Cagle Cartoons

As Richard Blumenthal, Bill Clinton, John Kerry, and several other American politicians now know, their time during the Vietnam war can be sticky to recall. Most recently, Richard Blumenthal, Connecticut’s attorney general and a candidate for the U.S. senate has caught heat for “misstating” his Vietnam service on several occasions. Blumenthal, admits that he has misspoken in the past when he said he served in Vietnam, but said it was “absolutely unintentional”. Yeah…right. His claims are insulting to those who served in Vietnam and lead one to question his integrity and character. To make matters worse, Blumenthal responds: “I will not allow anyone to take a few misplaced words and impugn my record of service to our country.” His arrogance is overwhelming.

In past elections, we’ve seen Bill Clinton labelled a draft dodger, George W. Bush  criticized for enjoying cozy service in the Texas Air National Guard, Dick Cheney mocked for avoiding the draft with claims that he had “other priorities in the ’60s than military service”, and the legitimacy of John Kerry’s Vietnam military service achievements questioned. All this would make you think that current-day political candidates would be more careful while talking about their military service during Vietnam. Apparently, Dick Blumenthal never got that memo. Blumenthal, who never left the east coast during his 6-month service in the reserves, has spoken in front of veterans about the abuse Vietnam vets suffered upon their return to the U.S., using language making it seem as if he was among them. He has never corrected any publications’ claims that he served in Vietnam and has using unclear and misleading language to further these claims. This, coming from an attorney general and a Senate candidate, is worrisome.

Thanks to politicians, “misspeaking” and “misrecalling” have become often-heard excuses. When was the last time we heard a public figure apologize for LYING? As attorney general, Blumenthal has demanded honesty, fair advertising and accountability from Connecticut companies. He should be held to the same standards. No excuses. Although Blumenthal has won the Democratic nomination, he should realize that he is on thin ice.

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