Normative Narratives

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The Democratic Costs of a “Grexit”

To Grexit, or not to Grexit?

Greece’s negotiations with its creditors have not gone smoothly.  The Greek government treated an interim deal reached in February as a starting point for negotiations, while it’s creditors considered it more of an non-negotiable outline of a deal. The result has been two sides talking past each other; the longer this situation persists, the more likely a “Grexit”–Greece leaving the Eurozone and / or EU–becomes.

There is a ton of middle ground for the two sides–both want Greece to return to growth and full employment. The Greek government also wants a safety-net for people negatively affected by labor market and other structural reforms; pushing already impoverished people further into poverty is not only morally reprehensible, it is bad economics.

To prevent this result, Greece has passed an “anti-poverty law” to protect its most vulnerable citizens. The problem is financing this program; the Greek government needs room to implement needed structural reforms without further destabilizing Greek society.

In addition to staving off a humanitarian crisis, Greece also needs a long-term growth strategy beyond structural reforms. There are few options for the Greek government:

1) It can completely comply with creditor demands.

2) It can continue to push its lenders for more fiscal space (smaller primary surplus and / or promises of greater EU level aid / debt relief).

Or,

3) It can default on its debts and exit the Eurozone.

The first option is a non-starter, as the Greek government feels current demands would exacerbate social and economic hardship in Greece.

The second option would allow Greece to leverage more public money for safety net programs, educational and workforce training programs, and public private partnerships. This would allow Greece to avoiding default while mapping out a plan to boost economic growth.

The last option would be painful in the short-run as Greece would get battered by financial markets and possibly have to deal with currency instability as it reintroduced the drachma(?), but it would open policy space and make Greece much more competitive in terms of cost of doing business. A Grexit could also lead to a domino effect–if other ailing E.U. countries see a post-E.U. Greece succeeding, it would bolster anti-E.U. parties within these countries.

It is obvious that the second choice is in everyone’s best interests. Unfortunately, that is no guarantee this route will be taken:

Herman van Rompuy [former head of the European Council of EU leaders] told a Brussels conference that if Greece were to leave the euro zone, that would also have geopolitical repercussions in the current standoff with Russiaover Ukraine, emboldening Moscow to see Europe as weak.

Van Rompuy urged all sides to consider the political and geopolitical implications of such a step and not just the economic and financial arguments.

“I hope we will never have to answer the Grexit question,” he added

Greece staying in the E.U. is important for both sides of the negotiation. There are enough crises in the world without manufacturing one in Greece. It is exactly times like these when budgetary restrictions should be relaxed in the name of pragmatic, longer-term priorities. But so far Greece and it’s lenders have been unable to map out a solution that worksall parties involved, and so the current impasse and possibility of an “accidental Grexit” persists.

Greece did submit a new proposal to it’s creditors yesterday, and it was apparently strong enough that it got an unofficial endorsement from French Prime Minister Francois Hollande. This could be meaningful development, as heads of major European states have to this point been reluctant to acknowledge Greek concessions. It is a step towards the “political dialogue” Tsipras has been pleading for (framing the debate less in adversarial terms between debtor and creditor, and more as a mutual compromise between equal partners working towards a common goal).

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“Democracy in Recession”

If Greece were to leave the EU, (aside from the economic impact) there would be significant geopolitical repercussions, including a Greek pivot towards Russia. The Greek government has already signaled it disagrees with EU sanctions on Russia. More recently, it was reported that Putin and Tsipras “did not discuss financial aid” on the sidelines of the St. Peteresburg International Economic Forum. Generally speaking, whenever someone has to defend that something “wasn’t discussed”, it means it either was discussed or very likely will be in the future.

This is not to say that Greece would stop being functioning as a democracy if it leaves the EU. In fact, it is a strong belief in democratic ideals that underpin the current standoff between Greece and it’s creditors. But a fracturing of the EU would certainly be a blow to the ideals the EU stands for–peace and prosperity through a cooperative, democratic international system. Specifically, if Greece signed a natural gas pipeline deal with Russia, it would undermine the current sanctions regime against Russia.

Even more alarmingly, Greece’s problems are emblematic of a greater inward shift by major democratic powers:

A recent NATO Poll found that “At least half of Germans, French and Italians say their country should not use military force to defend a NATO ally if attacked by Russia,” the Pew Research Center said it found in its survey, which is based on interviews in 10 nations.

In the United States, the study notes, support for NATO remains fairly strong. Americans and Canadians, it says, were the only nationalities surveyed in which more than half of those polled believed that their country should take military action if Russia attacked a NATO ally.

This is further evidence of a worrying global trend, what Thomas Friedman calls “Democracy in recession”:

“…perhaps the most worrisome dimension of the democratic recession has been the decline of democratic efficacy, energy, and self-confidence” in America and the West at large. After years of hyperpolarization, deadlock and corruption through campaign financing, the world’s leading democracy is increasingly dysfunctional, with government shutdowns and the inability to pass something as basic as a budget. “The world takes note of all this,” says Diamond. “Authoritarian state media gleefully publicize these travails of American democracy in order to discredit democracy in general and immunize authoritarian rule against U.S. pressure.”

Diamond urges democrats not to lose faith. Democracy, as Churchill noted, is still the worst form of government — except for all the others. And it still fires the imagination of people like no other system. But that will only stay true if the big democracies maintain a model worth following. I wish that were not so much in question today.

Look, I get it. The world is still emerging from a generational economic crisis. Democracies are first and foremost accountable to their electorates, and in the face of short-term problems it is difficult to sell the importance of dealing with seemingly longer-term issues. But this is what we should demand of our political leaders–the ability to meet peoples short term needs while simultaneously laying the groundwork for long-term peace and prosperity.

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The Democratization Process

Modernization theory and recent history support the idea that sustained democratic movements must result from organic desire by local factions. When these natural movements towards democratic governance emerge, they must be nurtured.

Democratic movements are always opposed by those who stand to lose power should they succeed. If the primary champions of democracy (the U.S. and the E.U.) seem increasingly unwilling to provide the resources needed to defend those who share our values, democratic movements are less likely to take shape against adversaries that tend to have economic and military advantages.

Autocratic rulers have always used propoganda and media control to make democracy look less appealing. This job becomes easier when traditional democratic stalwarts appear unable to govern effectively at home, and unwilling to defend their ideals abroad.

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Conflict Watch: To Break Escalating Cycles of Violence in Africa, Follow Mandela’s Example

Neighboring African countries, the Central African Republic and South Sudan, are currently engaged in sectarian conflicts. Due to the proximity of these countries, and the relative instability the region even during peaceful times, these conflicts are likely to have “spillover effects”, leading to greater regional instability:

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South Sudan: 

South Sudanese soldiers fired indiscriminately in highly populated areas and targeted people for their ethnicity during recent fighting in Juba, Human Rights Watch said today. The clashes in South Sudan’s capital, which broke out on December 15, 2013, saw scores of civilians killed and, according to witnesses and victims, soldiers specifically targeted people from the Nuer ethnic group.

The fighting followed deepening tensions between President Salva Kiir, an ethnic Dinka, and the former vice president, Riek Machar, a Nuer. Victims and witnesses told Human Rights Watch that government soldiers of the Sudan People’s Liberation Army (SPLA) and police questioned residents about their ethnicity and deliberately shot ethnic Nuer.

“The awful accounts of killings in Juba may only be the tip of the iceberg,” said Daniel Bekele, Africa director at Human Rights Watch. “Government officials – whatever their politics – need to take urgent steps to prevent further abuses against civilians and quickly deescalate rising ethnic tensions.”

“We are deeply concerned that ethnically-based attacks on all sides will lead to revenge attacks and more violence,” Bekele said.

“South Sudanese leaders, especially President Kiir and Riek Machar, need to do all they can to stop soldiers under their control from committing abuses against people, particularly because of their ethnicity,” Bekele said. “The UN Mission should also ensure that it fully implements its mandate to protect civilians and proactively patrol Juba, and flashpoint areas like Bor.” 

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Central African Republic:

Christian militias responding to rampant abuses by Muslim armed groups have committed atrocities against Muslim communities in northern Central African Republic, Human Rights Watch said in a report released today. Concerned countries should immediately bolster the African Union peacekeeping force in the country and support efforts by France to protect civilians, Human Rights Watch said.

The 43-page report, “‘They Came To Kill’: Escalating Atrocities in the Central African Republic,” based on weeks of field research in Ouham province, documents the surge in violence by Christian anti-balaka (“anti-machete”) militias since September 2013. The anti-balaka have killed several hundred Muslims, burned their homes, and stolen their cattle. So-called ex-Seleka forces, former members of the predominantly Muslim rebel alliance that overthrew the government in March, retaliated against Christians with the apparent knowledge of their commanders.

“The brutal killings in the Central African Republic are creating a cycle of murder and reprisal that threatens to spin out of control,” said Peter Bouckaert, emergencies director at Human Rights Watch and author of the report. “The UN Security Council needs to act quickly to bring this evolving catastrophe to a halt.”

While the anti-balaka describe themselves as self-defense forces aiming to protect their own villages, their actions and rhetoric are often violently anti-Muslim.

The Security Council should immediately authorize a UN peacekeeping mission under Chapter VII of the UN Charter, Human Rights Watch said. It should have a robust mandate and the means to protect civilians, promote human rights, and create an environment conducive to the delivery of humanitarian aid.

“Urgent support for peacekeeping in the Central African Republic is crucial to bring stability to a tense situation, protect the population from abuses, and ensure that humanitarian aid reaches those at grave risk,” Bouckaert said. “The potential for further mass violence is shockingly high.”

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Internal struggles, such as the ones facing South Sudan and the CAR, risk turning into full fledged “protracted social conflicts“. The “protracted” element of these conflicts, has yet to be realized, and therein lies the hope for reconciliation. The fact that these conflicts are still in their infancy gives hope for reconciliation over retribution. However, as fighting continues and more legitimate grievances build up on each side, this possible outcome becomes less likely.

It is not that each side does not have legitimate grievances; indiscriminate killings by all sides make continued violence in the name of “retribution” very likely. This would further escalates conflicts , perpetuating “cycles of violence” which over time would turn these new social conflicts into more-difficult-to-end “protracted social conflicts”.

It is up to leaders on both sides of these conflicts to call for ceasefires and try to work out their differences peacefully. To ensure ceasefires are observed–to give reconciliation a chance–the United Nations should strengthen peacekeeping operations in these countries. 

It is no coincidence that I have invoked the rhetoric of one of Africa’s greatest leaders, the late Nelson Mandela. If they possess enough political will (and with some outside peacekeeping support), political leaders can stress reconciliation over retribution, breaking otherwise escalating cycles of violence.  Seeing brother kill brother, Mandela is surely turning over in his grave. Hopefully, his recent death has strengthened his legacy throughout Africa, shaping leader’s responses to these conflicts.


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Transparency Report: America The Post-Racial? Not So Fast…

While there is no single definition of a post-racial society, I like the definition offered on Wikipedia:

Post-racial America is a theoretical environment where the United States is devoid of racial preference, discrimination, and prejudice.

Having defined what a post-racial American society entails, the next natural question would be “have we achieved this normative goal ?” Despite anecdotal evidence (Barack Obama was elected and re-elected as our President!), I would argue that America is not yet a post-racial society. It is important to make this distinction, as prematurely declaring “mission accomplished” ultimately makes accomplishing this goal all the more difficult.

Two specific issues–minority voting rights and school desegregation–highlight that work still remains to be done when it comes to achieving a post-racial society. Recent Supreme court decisions would make it seem that racial bias is no longer an issue in America; experiences in everyday life suggest otherwise.

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Voting Rights:

During the 2011 legislative sessions, states across the country passed measures to make it harder for Americans – particularly African-Americans, the elderly, students and people with disabilities – to exercise their fundamental right to cast a ballot. Over thirty states considered laws that would require voters to present government-issued photo ID in order to vote. Studies suggest that up to 11 percent of American citizens lack such ID, and would be required to navigate the administrative burdens to obtain it or forego the right to vote entirely.

Despite this frenzy of state legislation to counteract so-called voter fraud and to protect the integrity of our elections, proponents of such voter suppression legislation have failed to show that voter fraud is a problem anywhere in the country. Aside from the occasional unproven anecdote or baseless allegation, supporters of these laws simply cannot show that there is any need for them. Indeed, despite the Department of Justice’s 2002 “Ballot Access and Voting Integrity Initiative” promising to vigorously prosecute allegations of voter fraud, the federal government obtained only 26 convictions or guilty pleas for fraud between 2002 and 2005. And other studies of voter fraud consistently find that it is exceedingly rare – a 2007 Demos study concluded that “voter fraud appears to be very rare” and a 2007 study by the Brennan Center found that “by any measure, voter fraud is extraordinarily rare.” The Voting Rights Project will continue to fight these laws that disenfranchise millions of eligible voters without any legitimate justification.

Despite evidence of voter discrimination based on race as recently as the 2012 Presidential Election, a Supreme Court ruling this June essentially removed federal oversight over state and local voting laws (which is the level at which all elections are held):    

The decision in Shelby County v. Holder revolves around Section 4 of the Voting Rights Act, which establishes a “coverage formula” to determine which states and local governments fall under Section 5, and therefore need to get approval before changing their voting laws. The justices ruled that Section 4 is unconstitutional, and that the formula used for decades — revised and extended several times by Congress — can no longer be used to establish those “preclearance” requirements: “The conditions that originally justified these measures no longer characterize voting in the covered jurisdictions.” 

Supreme Court Justice Ginsburg’s dissenting opinion on the ruling highlights the need to restore Section 4 and the potential dangers of prematurely gutting the Voting Rights Act:

With overwhelming support in both Houses, Congress concluded that, for two prime reasons, §5 should continue in force, unabated. First, continuance would facilitate completion of the impressive gains thus far made; and second, continuance would guard against back­-sliding. Those assessments were well within Congress’ province to make and should elicit this Court’s unstinting approbation.

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School Desegregation:

African-American and Latino students are less likely to attend racially and ethnically diverse schools today than at any other time in the last four decades. This, almost 60 years after the landmark Supreme Court ruling that desegregated schools, represents a major setback for one of the core goals of the civil rights movement.

“Our school district is extremely segregated,” said Caitlin McNulty, an English-as-a-second-language teacher at Valley West Elementary School in Houston. “Part of that is just we have a huge minority population in our district, period, so I’d say the majority of our schools are at least 80 percent minority.”

In her school district, African-Americans and Latinos made up more than 90 percent of the student population last year. Only seven of the 705 students at her school were white — less than one percent.

“That’s not out of the ordinary” in her district, McNulty said. “It’s just not representative of the population that’s here.”

In the 1971 case Swann v. Charlotte-Mecklenburg Board of Education, the Supreme Court ruled unanimously that public school districts could pursue desegregation by busing students from highly segregated neighborhoods into majority-white schools. The goal was for schools to be “racially balanced” and be compliant with the 1954 Brown v. Board of Education decision.

But in 1991, the Oklahoma City v. Dowell case ended a federal order to desegregate Oklahoma schools, opening the door for numerous court cases that have rolled back desegregation efforts across the country. The court ruled that as long as school districts made a “good faith” attempt to remedy past segregation, they would no longer have to try to integrate public schools.

Commenting on the findings of the Civil Rights Project’s study, the University of South Carolina School of Law’s Derek Black said that “integration steadily increased in our public schools from the late 1960s well into the 1980s and fundamentally enhanced the quality of education received by students of all races. But through a combination of willful, blind and benign neglect, nearly all of those gains have been lost.”

In Texas and other states experiencing resegregation of their schools, students now often grow up interacting only with other students who look like them.

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Some may say “so what? whats the big deal? overt racism is no longer a problem in America and beyond that a persons racial biases (or lack-thereof) is their personal choice” However, racial bias in voting rights and school segregation have implications beyond just educational attainment and electoral outcomes. Both of these variables shape the enabling environment for a more racially inclusive and egalitarian society.

Voting rights are important because, based on who is elected to office, different policies will be enacted. By depressing minorities abilities to choose their elected officials, a snowball effect begins, with the end result being that the concerns of these marginalized groups are not addressed by our politicians. Inequalities increase and social exclusion persists. Minorities do not have the right to unilaterally determine who is elected / what policies they pass. However, they should have the same rights of every other citizen in affecting the outcomes of elections.

School re-segregation has an inter-generational effect on racial equality. When students go to desegregated schools, they interact with children who come from different racial and socioeconomic backgrounds. These experiences, particularly early in life, go a long way towards shaping peoples attitudes towards race and can help break damaging stereotypes. Every future leader of America will go through school, who they go to school with could very well affect their future policy decisions.

There is also the idea that “separate but equal” is never truly equal. If minority students are systematically herded into sub-par schools, they will go on to get worse jobs and racial inequality will increase in the future. American concepts of “equality of opportunity” and “meritocracy” are at stake; recent evidence suggests that inequality and social immobility have been trending upwards unchecked for decades.      

It is nice to dream of a post-racial America–it is a normative vision I surely share with millions of other Americans. However, simply saying “race is no longer an issue” does not make it so. This premature declaration will reverse recent gains made in racial equality and depresses the future prospects of minorities, threatening the “American Dream” itself. Political will is needed to counter inequality of opportunity in America, and it is clear that race must still be a consideration when harnessing this political will into public policy.


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Economic Outlook: African Leaders Demand Better Deals in Chinese Extractive FDI

Original Article:

In Niger, government officials have fought a Chinese oil giant step by step, painfully undoing parts of a contract they call ruinous. In neighboring Chad, they have been even more forceful, shutting down the Chinese and accusing them of gross environmental negligence. In Gabon, they have seized major oil tracts from China, handing them over to the state company.

China wants Africa’s oil as much as ever. But instead of accepting the old terms, which many African officials call unconditional surrender, some cash-starved African states are pushing back, showing an assertiveness unthinkable until recently and suggesting that the days of unbridled influence by the African continent’s mega-investor may be waning.

For years, China has found eager partners across the continent, where governments of every ilk have welcomed the nation’s deep pockets and hands-off approach to local politics as an alternative to the West.

Now China’s major state oil companies are being challenged by African governments that have learned decades of hard lessons about heedless resource-grabs by outsiders and are looking anew at the deals they or their predecessors have signed. Where the Chinese companies are seen as gouging, polluting or hogging valuable tracts, African officials have started resisting, often at the risk of angering one of their most important trading partners.

“This is all we’ve got,” said Niger’s oil minister, Foumakoye Gado. “If our natural resources are given away, we’ll never get out of this.”

“We’ve got to fight to get full value for these resources,” Mr. Gado said. “If they are valued correctly, we can hope to bring something to our people.”

“The Chinese are genuinely unprepared for this degree of pushback,” Mr. Soares de Oliveira said.

China’s Foreign Ministry rejected the notion that its role had been anything but fruitful. In Niger, it said, it has improved the economy, has hired local residents and is building schools, digging wells and carrying out other “public welfare activities.” In Chad, it said, it has urged companies to protect the environment and will seek to resolve the dispute through “friendly negotiation.” In Gabon, as elsewhere, it said, it supports cooperation “on the basis of equality, amity and mutual benefit.”

Few nations in the world are as weak as Niger, where nearly half of the government budget comes from foreign donors. But the nation long had unfulfilled oil dreams that were largely ignored by major companies. In 2008, two partners came together secretively — the country’s autocratic ruler, Mamadou Tandja, and China National Petroleum — and signed an unpublicized deal that seemed to give both parties what they wanted.

But far less clear, then and now, was whether Niger — one of the world’s most impoverished countries, regularly threatened by famine — would substantially benefit from the deal.

Mr. Tandja got a costly oil refinery in an area of Niger that he needed to win over with the promise of development, but the need for such a project in this low-energy-consuming nation has been sharply questioned by experts, not to mention the mysterious $300 million “signing bonus” Mr. Tandja’s administration received….The refinery has a capacity that is three times Niger’s consumption, and the overall cost should have been only $784 million, according to a United Nations expert. Niger must still pay 40 percent of the original cost, with money lent to it by the Chinese.

In return, the Chinese got access to untapped oil reserves in the remote fields on Chad’s border on terms that still make Oil Ministry officials here wince. Beyond that, local residents have protested that the Chinese presence has brought few jobs, low pay and harsh working conditions.

“In the context of this fight, we are revisiting these contracts to correct them,” said Mr. Gado, the oil minister in the new democratic government led by an opponent of Mr. Tandja. “In the future, we will pay closer attention, to not make the same mistakes.”

“This is a lesson we are giving to the Chinese: we are keeping a close lookout on them,” said Mahaman Gaya, the Oil Ministry’s secretary general. Mr. Gado has not made his last trip to Beijing.

Niger’s lesson is being applied elsewhere as well: African governments, grateful as they are for Chinese-built roads and ministry buildings, are no longer passive partners.

“Are we going to continue to ignore what the Chinese companies are doing?” asked Mr. Doudjidingao, the Chadian economist. “I think this is the beginning of a change between African states and the Chinese. It’s a consciousness-raising, so they won’t be guilty in the face of history.”

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Natural resources need not be a “curse”, but avoiding human rights violations in extractive industries takes political will, government oversight, and corporate accountability. In order to help African governments, which tend to be underfunded and sometimes corrupt, the Chinese government should hold it’s companies accountable for their extra-territorial human rights obligations (especially considering these companies are state-owned!). Sure this may result in higher costs in the short-run, but businesses thrive on consistency and stability; it is better to pay a little more now then have no idea what the cost may be in the future.

Commitments must be made on the side of the African government’s too; if the Chinese agree to work with them on vetting extractive contracts for human rights implications, then the terms agreed upon will be honored for the life of the contract. This is admittedly challenging in an unstable political climate, where the government of today may not necessarily be the government tomorrow. I am not talking about regime changes, I am talking about revolutions, coups, and other means of fundamentally altering the structure of the government. But still, deals should be made with a mutually beneficial long-term view.

Certain types of foreign direct investment, known as “market-seeking” FDI, are characterized by better deals for host-countries. Willing to forgo some of the labor and regulation saving costs, companies pay a little more because they wish to not only produce at a cheaper cost, but to also empower locals to become future customers. Unfortunately, “extractive” FDI does not lend itself to such benevolent partners. It is therefore the job of the government(s) involved to ensure that human rights obligations are upheld; in an industry with tens of billions of dollars in annual profits, paying to ensure the local poor are receiving a fair deal should not be an issue.

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It is not only foreign powers that wish to exploit Africa’s natural resources, cheap labor and lax environmental standards. Natural resources can be easily stolen, especially in countries with lax security / highly organized criminal networks. Furthermore, often times corrupt government officials are willing to provide protection for oil thieves in exchange for personal riches:

Thieves steal an estimated average of 100,000 barrels a day, the report said; working in elaborate networks and protected by corrupted security officials, they tap into the huge and isolated network of pipes that crisscross the country’s swampy southern Niger Delta region. The price of oil fluctuates, but a hypothetical per-barrel price of $100 would mean an annual loss of $3.65 billion. Oil closed at $107.28 per barrel on Thursday.

“Top Nigerian officials cut their teeth in the oil theft business during military rule,” it said. “Over time, evidence surfaced that corrupt members of the security forces were actively involved. The country’s return to democracy in 1999 then gave some civilian officials and political ‘godfathers’ more access to stolen oil.” Security officials are said to extort payments from the oil thieves in return for protection, according to Chatham House.

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There is no easy answer to sustainable human development in Africa. However, it is self-evident that the presence of natural resources should expedite the development process, not slow it down or reverse it. This requires political will from both host countries and governments representing foreign investors. But political will is not enough, multiple layers of accountability are needed to ensure the gains of resource extraction go to help the people in the countries which own these resources. Corporate accountability is one aspect which, alongside political accountability, can help ensure that the rule of law is upheld with respect to contracts, and that deals are properly vetted for human rights considerations.

There is, however, another part of the story. African governments would be right to instill the idea within their citizenry’s that profits from natural resource production indeed do belong primarily to the people. Bad contractual terms are more easily remedied than organized criminals and corrupt officials stealing resource rents. In order to remedy this issue, social accountability could go a long way. Empowering people with political rights, and institutions for voicing grievances (such as ombudsman offices and / or NHRIs, or institutions created specifically for extractive industry grievances) can help turn nationalism and self-interests into meaningful accountability on a scale that is otherwise unachievable.

If people in the developing world are convinced resource profits will go to development programs, and governments are committed to these programs and institutions that promote social accountability, then perhaps we can move past the point in history where the presence of natural resources is considered a “curse” and move toward a future where natural resource profits help expedite human development (as they should!). It appears the political will is slowly accumulating throughout Africa, this is great news as tighter regulations always work better when imposed regionally in order to avoid a “race to the bottom”. The UN Post-2015 Development Agenda will also help achieve this goal, as it is set to have human rights considerations and accountability at it’s core.