Three Huge Ways Pakistan Still Isn't Cooperating

The capture of Mullah Baradar doesn't change the fact that, on many important security issues, the United States and Pakistan still don't see eye to eye.

The dramatic news of Mullah Abdul Ghani Baradar's capture has revived a long-dormant spirit of optimism regarding the U.S.-led effort in Afghanistan. Eager for a clear-cut victory after the country's slow-motion collapse during the past five years, many hoped that the arrest of Baradar, Taliban leader Mullah Omar's top deputy, would not only be a turning point for the NATO war effort in Afghanistan, but would also usher in a new era of cooperation with Pakistan's main spy agency, Inter-Services Intelligence (ISI).

In the New York Times' article on Baradar's capture, the paper referred to unnamed Americans who think Pakistani officials, most notably Gen. Ashfaq Kayani, "have gradually come around to the view that they can no longer support the Taliban in Afghanistan ... without endangering themselves." Baradar's arrest was evidence of a "sea change in Pakistani behavior," Bruce Riedel, a former CIA official, told the Times.

Not so fast. The circumstances surrounding Baradar's capture are still murky, making it difficult to extract any meaning from the Pakistani decision to arrest the Taliban leader. And even if U.S. and Pakistani interests overlapped in the case of Baradar, there are still a slew of outstanding issues between the two countries that appear no closer to resolution.

"The basic problem is that there are things we don't know about this operation, and that we will probably never know," says Teresita Schaffer, director of the South Asia Program at the Center for Strategic and International Studies. The most optimistic explanation is that the ISI thinks the Afghan Taliban has become a threat to its interests in Pakistan, and has decided to move against the group. But Schaffer also floated another, less cheerful, possibility: Baradar, as suggested by this Newsweek profile, is more open to negotiations with Afghan President Hamid Karzai's government than some of the Taliban hierarchy's hard-line members. The ISI could have arrested him in a bid to thwart negotiations meant to assimilate the Afghan Taliban back into Afghanistan's political fold, which would likely cost Pakistan its influence as the group's patron. In other words, given the information available to the public, the Pakistanis could have arrested Baradar with the hopes of halting Taliban attacks against NATO forces in Afghanistan -- or they could have arrested him in an attempt to continue those attacks.

Even assuming that Baradar's arrest is a step in the right direction, there remains a long list of issues on which the United States and the Pakistani military do not see eye to eye. The most obvious is the Haqqani network, which operates out of North Waziristan and has become one of the most lethal threats to NATO forces in Afghanistan. Although General Kayani has shown a willingness to go after Taliban operatives in South Waziristan, the Pakistani military has repeatedly rebuffed U.S. requests to take on Haqqani operatives to the north. For years, U.S. officials have accused the ISI of maintaining links to tribal patriarch Jalaluddin Haqqani. In one particularly blunt message delivered in 2008, CIA Deputy Director Stephen Kappes traveled to Islamabad to tell the Pakistanis, "[W]e know there's a connection ... and we think you could do more and we want you to do more about it," as summarized by a senior American official to the New York Times. U.S. Defense Secretary Robert Gates has also stated publicly that Pakistan's ties to the Haqqani network, as well as other extremist groups in the tribal areas, "are a real concern to us." The ISI is thought to maintain its ties to Haqqani because it perceives his organization as a valuable asset in countering Indian influence in Afghanistan.

Pakistan's fixation with India has also led the country to sponsor Lashkar-e-Taiba (LeT), a paramilitary group focused on forcing India out of Kashmir. The United States designated LeT as a terrorist organization in December 2001, in the aftermath of the September 11 attacks; under Western pressure, then Pakistani President Pervez Musharraf also banned the group in 2002. Nevertheless, LeT reconstituted itself as Jamaat-ud-Dawa and continued to plan and carry out attacks against Indian interests, culminating in the spectacular November 2008 attacks in Mumbai. The Mumbai massacre raised to a fever pitch Western and Indian calls for Pakistan to crack down on the organization. "Pakistan has restricted the aboveground organization, Jamaat-ud-Dawa, but not to a significant degree," notes Stephen Tankel, a visiting scholar at the Carnegie Endowment for International Peace and author of the forthcoming Storming the World Stage: The Story of Lashkar-e-Taiba. "They can operate under different names, and they continue to raise funds."

If anything, Lashkar-e-Taiba has only escalated its activities in the past year. The day after Feb. 12's announcement that Pakistan and India would hold talks for the first time since the Mumbai attacks, a bomb exploded outside a crowded cafe in the Indian city of Pune, killing nine people. Indian authorities immediately made it clear where their suspicions lay -- with Lashkar-e-Taiba. Home Minister Palaniappan Chidambaram responded by announcing renewed efforts to interview David Headley, a Pakistani-American held in the United States who is allegedly an LeT member. Whether or not LeT's leadership ordered the Pune attack, Tankel says, "the group has clearly been emboldened and is ramping up its transnational activities." That isn't exactly an encouraging sign that Pakistan is doing everything in its power to clamp down on the organization.

Pakistan has charged seven individuals for involvement in the planning of the Mumbai attacks, including LeT's operational commander and the plot's alleged mastermind, Zaki ur-Rehman Lakhvi. Although this is an important step, Western and Indian officials have been frustrated by the trial's slow pace -- and particularly disappointed by a Pakistani court's decision to free Hafiz Saeed, the head of Jamaat-ud-Dawa, who they accuse of being behind the attack. The court claimed that it lacked sufficient evidence to hold him. In addition to New Delhi's anger that Saeed is not facing trial, Tankel stated, "there is concern on the Indian side that there are other people who aren't being tried, who should be tried." He added that some in India have also alleged Pakistan is inflating the importance of several of the LeT functionaries who are on trial.

Pakistan also maintains extensive contacts with underground figures with connections to India, most notoriously the Mumbai-born crime boss Dawood Ibrahim, according to a January Congressional Research Service report. Ibrahim's organization, reportedly with the ISI's assistance, carried out a number of bombing attacks on March 12, 1993, that killed 257 people. Ibrahim subsequently relocated to Karachi, where under the ISI's protection, his organization has "developed links to Lashkar-e-Tayyiba" and "found common cause with al Qaeda and shares its smuggling routes with that terrorist group," the report says. Pakistan has ignored repeated requests from India to extradite Ibrahim -- most recently, on the suspicion that he played a role in the 2008 Mumbai attacks.

The lack of progress in resolving these outstanding issues should discourage the United States from expecting a volte-face from Pakistan. "You have to remember the [Pakistani] military is in some ways very cautious," Schaffer says. "It has gone through a period of looking very bad in front of their people, and they don't want to look bad again." Pakistan's fraught relationship with India is not going away anytime soon, and for that reason, the military is loath to sever ties with its longstanding clients. So, however much Baradar's arrest may cause U.S. commentators to dream of a revolution in Pakistani foreign policy, they will likely have to satisfy themselves with incremental progress.

Law and Order: Oligarch Unit

The Mikhail Khodorkovsky trial gets even more absurd.

The Russian judicial system isn't generally thought of as a venue for humor, but the laughs emanating lately from the small courtroom on the banks of the Moscow River where former Yukos CEO Mikhail Khodorkovsky is being tried would make any standup comedian envious. They erupt from the gallery, as if on cue, each time the state prosecutor, Valery Lakhtin, opens his mouth. Even if he weren't facing the intimidating task of prosecuting the country's most famous fallen oligarch, the gangly, intellect-challenged bureaucrat representing the Russian state would have a tough time. He appears to lack an understanding of the simplest economic principles -- not to mention legal arguments. Challenging an objection from the defense this week, he countered with the unimpeachable point: "Prosecutors can't lie!"


The past week, however, after 16 interminable months of Khodorkovsky's latest trial, on charges of embezzlement and money laundering, saw some interesting developments. For the first time since the fallen mogul was arrested in 2003, top Russian officials have taken the witness stand. Even more striking is that their testimonies have supported Khodorkovsky's defense. The question on everyone's lips, then, is whether this is a sign that the Kremlin is softening its stance, or simply a new twist to Russia's most infamous show trial.

Khodorkovsky, one of modern Russia's original robber barons and the former head of Yukos, is nearing the end of an eight-year sentence on charges of fraud and tax evasion. Prior to his imprisonment, he was one of the wealthiest men in the world and a persistent thorn in the Kremlin's side, doling out tens of millions of dollars to opposition parties and pro-democracy organizations. In October 2003, however, he finally pushed then-President Vladimir Putin too far and was summarily arrested. Ever since, he has kept up a constant stream of criticism from his jail cell, corresponding with foreign and Russian journalists via smuggled letters. He is due to be released in October 2011 -- just five months before Russia's next presidential election. That might be a bit awkward, so he's now facing a further 22 years in a Siberian prison, accused of ordering the siphoning off of 350 million tons of oil and laundering nearly $25 billion in proceeds from 1998 to 2003.

Khodorkovsky, who maintains a six-person defense team but questions witnesses himself, frequently reminds the court that evading taxes (the first charge) on embezzled oil (the second) is not only illogical but impossible. The judge, like clockwork, strikes every such statement from the record.

On June 21, however, Khodorkovsky finally won a key argument when German Gref, the state-appointed head of Sberbank, Russia's largest bank, and long-serving economy minister during Putin's presidency, took the witness stand. Gref, associated with the "liberal" clan of the Russian elite that also produced current President Dmitry Medvedev, appeared at ease, tan, and calm, as he faced questions from Khodorkovsky.

But after three hours of technical back and forth on oil-pricing mechanisms, tax policy, and the relationship between subsidiary firms, Gref admitted that the evidence against Khodorkovsky was weak. "If such embezzlement had been discovered, I would have been made aware of it," he said.

The following day, Trade Minister Viktor Khristenko, whose portfolio included energy under Putin's presidency, was called before the court. He, too, conceded a critical point during his questioning. "The physical theft of oil from the system is possible," said Khristenko, "but I'm not aware of the theft of a million, or millions of, tons."

The very fact that high-ranking Russian officials were even allowed to appear is striking. The court has long denied Khodorkovsky the right to question the officials who witnessed or took part in his downfall. The court has refused repeated defense requests to call Putin, now the prime minister, as well as Igor Sechin, his deputy, whom Khodorkovsky has accused of orchestrating the campaign against him. (Rosneft, the state-owned oil company that Sechin chairs, emerged the big winner from Yukos's downfall, taking over its production assets at knockdown prices after the company was forced into bankruptcy.) Alexei Kudrin, Russia's powerful finance minister, has also refused to appear.

Putin's spokesman, Dmitry Peskov, denied any orchestrated effort to keep government officials from testifying. "When you are called to court, you have to go as a citizen," he said. Yet few think that Gref and Khristenko would have agreed to take the stand without checking with the Kremlin first. These unusual admissions -- from the two men directly involved in government oversight of Yukos's activities -- should bode well for the defense. In a U.S. court, the prosecution might well concede. But this is Russia.

"Nobody believes that this trial is about a fair competition between the prosecution and the defense," Masha Lipman, an analyst at the Carnegie Moscow Center, said in an interview. "This is a political trial and the decision has got to be political."

With elections just over the horizon, the sooner this decision comes, the better. Medvedev and Putin have both said they have yet to decide who will run for president in 2012, and members of Russia's siloviki clan -- those with security services backgrounds who favor strong state involvement -- are said to be nervous about the country's newfound liberal streak.

An April study by the Levada Center, an independent Russian pollster, found that despite zero coverage on state-run television, 44 percent of Russians were aware of Khodorkovsky's trial -- up from 33 percent one year before. Khodorkovsky, who amassed enormous wealth during Russia's shady post-Soviet privatizations, is not loved in Russia. But neither is Russia's politicized justice system, which Medvedev has vowed to reform.

"[The state] has painted itself into a corner," Lipman said. "Either they have to end this farcical trial with a complete travesty of justice and sentence him to a crime that seems totally absurd, or make a decision and let him walk. This is a difficult decision to make, but the time of reckoning is getting closer."

For now, the former tycoon's supporters are cautiously optimistic. In what will be taken as another encouraging sign, prosecutors on June 24 dropped a separate case against Vassily Aleksanyan, a former Yukos vice president and close Khodorkovsky ally who was detained three years ago on charges of money laundering and embezzlement. Sick with cancer and AIDS, he was released on $1.7 million bail in January last year, following an outcry from rights activists. Still, imagining a free Khodorkovsky -- a man for whom Putin is widely thought to harbor a personal hatred -- seems impossible.

Inside the trial, the absurdity continues, as it has nearly every day for the past 16 months. On June 22, it ended with Lakhtin, the prosecutor, screaming like a petulant child: "Khodorkovsky is bothering me as usual! He's not letting me ask any questions!"

Khodorkovsky responded with a rare show of anger, growling that the prosecutor was "directly lying." The judge rolled his eyes. Khristenko, the trade minister, stared at the ceiling, in seeming disbelief at what he had gotten himself into.

Getting Asia right means getting India right

On the positive side of the ledger, President Obama can claim credit for intensifying U.S. outreach to Indonesia -- although formalization of a new Comprehensive Partnership remains unfulfilled given the postponement of the President's trip there to launch it. President Obama also deserves plaudits for committing the United States to exploring membership in the East Asia Summit, meeting with ASEAN heads of state, and fostering strong relations with key ally South Korea. Here again, however, the Korea-U.S. Free Trade Agreement, whose implementation should be a centerpiece of the relationship, remains stalled; President Obama seems unwilling to push Congress to ratify it. In another welcome trade-related move, the President has expressed his support for the Trans-Pacific Partnership. This is a worthy minilateral trade initiative, but it excludes Asia's big economies and is no substitute for a wider Asia-Pacific trade liberalization agenda. These are all early steps in the right direction, but they do not amount to strategic accomplishments.

On the negative side of the roster, there is no question that President Obama has been dealt a particularly difficult hand in relations with core Asian ally Japan -- where a veritable political revolution last August deposed America's staunch allies in the Liberal Democratic Party and brought to power a new and untested government. It has defined itself in office in part by opposing a previously agreed plan to realign American forces in Okinawa, leading to growing concern over the future of the alliance. The U.S. administration has struggled with how to handle this unresolved conflict -- which has been badly mismanaged by Prime Minister Hatoyama and his colleagues. Resolution may be in sight, but the whole affair risks tarnishing the alliance at a time when Chinese and North Korean assertiveness is intensifying.

Indeed, President Obama has been on the receiving end, until recently, of an increasingly sharp-elbowed China's projection of its power and influence in world affairs, which has created the rockiest period in Sino-American relations since the EP-3 incident of 2001. Here, a firmer and more balanced approach to China early on -- one that prioritized U.S. relations with allies in Asia a little more and reassured China a little less -- could have paid strategic dividends. But the administration's recent recalibration of its policy promises a sturdier defense of American interests and values and, by extension, a more stable relationship. It may even result in a Chinese decision to allow the renmimbi to appreciate. This would be an important accomplishment indeed -- one that China should take in its own interests, given its overheating economy. It would be welcomed by India, South Korea, Indonesia, Singapore, and other U.S. partners in Asia whose competitiveness has suffered from China's artificially cheap currency.


Setting aside the complex crisis in U.S.-Japan relations and the ups-and-downs of U.S.-China relations, it is U.S. relations with India that have perhaps taken the biggest hit over the past year. This is a shame: building a strategic partnership with the world's biggest democracy, Asia's other rising giant, has been a bipartisan endeavor since President Clinton visited the country in 2000 and launched a new era of cooperation. The transformation in Indo-U.S. relations subsequently overseen by President Bush and symbolized by the civilian-nuclear deal would not have been possible without the strong support of Congressional Democrats - including Indian-Americans' then-favorite Senator, Hillary Rodham Clinton. For their part, successive Indian prime ministers have worked hard to shed the baggage of Cold War non-alignment in favor of a growing partnership with the United States to help catalyze India's rise in the international system.

So why the sense of malaise in relations between the world's largest democracies? I would posit four factors. First, President Obama and his team don't approach India with an eye on its value as an Asian balancer in a region being reshaped by China's explosive rise. Second, President Obama's selective and narrowly defined realism doesn't allow much scope for values-based cooperation between the two countries -- or even for U.S. recognition of the intrinsic importance of India's success in a world where China's model of authoritarian development is on the march. Third, President Obama's emphasis on multilateral diplomacy (on climate change and a nuclear test ban, for instance) puts the two countries on opposite sides of complicated issues that push them apart -- unlike on many bilateral issues, like defense cooperation and counterterrorism, where their interests closely align, and on which the relationship previously hinged. Fourth, and most pointedly, the Obama administration has made a strategic decision to ally with Pakistan to wind down the war in Afghanistan. This has elevated Rawalpindi over New Delhi in U.S. policy. It has encouraged Pakistan to leverage its American friends to put pressure on India in ways that re-hyphenate Indo-Pak ties -- to the detriment of Indo-U.S. relations.

President Obama's Asia policy remains a work in progress with some real possibilities to advance key relationships. But losing India may do more to weaken the U.S. position in Asia than any number of accomplishments in relations with Japan, South Korea, and other partners. A few important Obama administration officials understand this, but so far they remain a minority.

Why India Is No Villain

Barbara Crossette is wrong: This rising power helps solve far more problems than it creates.

According to the Financial Times' Lucy Kellaway, "Elephant in the Room" was the most popular cliché to appear in major newspapers and journals in 2009. It is perhaps appropriate then that Barbara Crossette's latest diatribe against India appeared in Foreign Policy under that headline. Although it claims to show that India causes "the most global consternation" and "gives global governance the biggest headache," it is merely a series of rants and newsroom clichés selected entirely arbitrarily to support the author's prejudice.

Listing India's alleged failings, Crossette makes the unfathomable assertion that it is India that causes the most consternation and the biggest headache for the world -- more than Afghanistan, Iran, Venezuela, North Korea, Pakistan, and China. Without an attempt to compare the failings across countries (And why only these countries? Why leave out the West and the rest?), it is logically impossible to arrive at the conclusion that one of them is the biggest culprit. But once you trade logic for hyperbole, you can fit just about any animal you like into the room. For Crossette, it is the pachyderm.

Consider these facts instead: The only country to have militarily intervened to halt an ongoing genocide is India, which it did in East Pakistan (Bangladesh) in 1971. After the December 2004 tsunami, it was India's navy that was the first international responder, deploying within 24 hours and delivering humanitarian assistance to Sri Lanka, Indonesia, and the Maldives. It subsequently coordinated operations with the United States, Japan, and Australia. India has been involved in U.N. peacekeeping from the very beginning and remains one of the biggest troop contributors to this day, often putting its soldiers in danger in conflicts that have nothing to do with national interests. Indian naval ships are also involved in maritime security operations from Somalia to the Strait of Malacca. Even this partial list is enough to prove that India is not, as Crossette believes, "a country of outsize ambition but anemic influence."

Let's take a closer look at Crossette's rap sheet. First, she agrees with a quote from an article that appeared in the Bulletin of the Atomic Scientists, a journal that advocates arms control (hardly a neutral source), arguing that India's refusals to sign the Nuclear Non-Proliferation Treaty and the Comprehensive Test Ban Treaty make it "comparable to other defiant nuclear states [and] will undoubtedly contribute to a deteriorating security environment in Asia." She doesn't explain how, because she would be hard-pressed to prove that India's "contribution" is comparable to that of China, which helped put the bomb in the hands of the likes of Pakistan, or North Korea, which brazenly violated the treaty it signed. Actions matter more than signatures.

Second, on the Doha round of trade negotiations, Crossette blames India for single-handedly foiling a deal that "nobody loved, but one that would have benefited developing countries most." Does she really know better than the developing countries themselves? It seems odd that they would not love a deal that "would have benefited [them] most." It is just as presumptuous and illogical to blame the failure of Doha on India alone. Gideon Rachman, for instance, argues that "the Doha round ultimately broke down because of a stand-off between the United States, India, China and the European Union over agricultural trade." Turns out it takes more than one hand to wreck a multilateral deal.

It is on the third point -- climate change -- that Crossette's proclivity for being selective with facts stands out most. She mentions the Indian environment minister's refusal to agree to binding carbon emission targets five months before the Copenhagen talks, but ignores his statement in Parliament five days before the negotiations pledging 20 to 25 percent carbon emission intensity cuts from the 2005 levels by 2020. Nonbinding yes, but nevertheless a serious commitment. And no country's commitments at Copenhagen were binding. She also ignores that in the end, the Copenhagen "deal" came about in part due to India's bridging of the differences between the United States and China.

Fourth, on the basis of one data point -- the scandal over a pay increase to Paul Wolfowitz's girlfriend that precipitated his resignation as president of the World Bank -- Crossette alleges that India "attacks individuals." Wolfowitz, she says, was ousted "not because his relationship with a female official caused a public furor, but because he had turned his attention to Indian corruption and fraud in the diversion of bank funds." It is undeniable that there is corruption in India, but Crossette glosses over the fact that in the interview she quotes, Steve Berkman alleges that World Bank officials were involved in it too. What the latter actually said, as paraphrased by a journalist for Rediff India Abroad, is that "the international bureaucrats who run the Bank ... are the ones who conspired to nail Wolfowitz using the mini-scandal with his girlfriend to call for his ouster." Where does that leave Crossette's argument?

Fifth, Crossette claims that India "regularly refuses visas for international rights advocates," a failing that she supposes occurs because such advocates are critical of the government. Granting that there is a case for India to be more liberal in its visa regime, the country does not lack robust, committed, and vocal human rights activists. Tune in to any Indian television channel. On the other hand, the U.N. Human Rights Council is not exactly a shining example of how the international community protects human rights. Domestic activism and the liberal democratic institutions that allow it are perhaps far more effective in safeguarding human rights.

Ultimately, Crossette's suggestion that India presents a "headache" for global governance is a manifestation of an outdated mindset. It ignores the growing convergence of interests between India and the United States on the biggest challenges of this century: from establishing a liberal, democratic order to managing the rise of China to containing jihadi terrorism to addressing climate change and a host of other challenges. For those worried about rising elephants, make room if you don't want to be squeezed.

I Don't Want to Hold Your Hand

How Saudi Arabia and the United States have grown apart.


What will be the image that frames the news reporting of June 29's White House meeting between U.S. President Barack Obama and King Abdullah of Saudi Arabia? Surely not another bow toward the desert monarch, as caught on video at the London G-20 meeting in April 2009. Or what hypercritics saw as a further deferential bob in Riyadh last June, when the president leaned forward so the shorter king could confer on him the King Abdul Aziz Order of Merit, a chunky necklace that Obama took off within seconds.

Of course, what the White House staff most wants to avoid is any image as awkward as the shot of President George W. Bush and then Crown Prince Abdullah walking arm in arm at the start of a meeting at Bush's Crawford, Texas, ranch in April 2002. The shot was memorialized by Michael Moore in Fahrenheit 9/11 and, with Moore himself superimposed in place of Abdullah, became the poster for the movie, plastered on thousands of theater walls across the United States.

More... We will have to wait for W's biography for his explanation of this gaucheness, which came to define his presidency. However, the prevailing assumption is that Abdullah, then the effective ruler of Saudi Arabia because of the ill health of King Fahd, had thrown Bush off balance by threatening to walk out of the summit before it started. Abdullah insisted on being able to take home a diplomatic prize -- anything to make his visit worthwhile. This demand wrong-footed Bush, who had thought the Saudis would still be -- and should have been -- on the defensive because of widespread accusations about their historical tolerance of the Islamic extremism that spawned the 9/11 attacks nearly eight months earlier. Bush grabbed Abdullah's arm as a way of saying: "Stay. Let's talk about it." The rest is history.

Obama and Abdullah already has met just two days before at the G-20 summit in Canada, but Abdullah is coming to Washington to talk one-on-one about Palestine and Iran. On the former issue, Abdullah thinks that Obama "gets it," as he has been tougher on the Israelis than Bush or Bill Clinton. On Iran, however, the Saudi king fears that his country's historically closest ally is naive, and dangerously so, for putting so much faith in diplomacy. The same emotional approach that causes Abdullah to anguish about the Palestinians also explains his distrust and antipathy toward the Iranians, whom he sees as typically untrustworthy Shiite challengers to Sunni, and therefore Saudi, custodianship of the holy places of Islam.

Despite the official blandishments, there are clear indications that under Abdullah, and especially since 2001, Saudi Arabia has put distance into its relationship with the United States. Abdullah is trying to gain more room to maneuver in the Sunni-Shiite rivalry and between extremists and moderates within Sunni Islam. To do so, he has to erode the notion that the House of Saud is a pawn of Uncle Sam.

A clear example of this distancing is the foundation of U.S.-Saudi ties: oil. Saudi Arabia, despite having the world's largest oil reserves, is no longer the largest global producer -- Russia takes that title. And though for many years, in a clear statement of diplomatic priorities, the kingdom was the largest foreign supplier of oil to the United States, it has now slipped behind Canada and Mexico. With the years of ritual denunciations from both Bush and Obama regarding U.S. "dependence on foreign oil," Washington can hardly complain, but the net result is less U.S. influence in Saudi Arabia.

On Iran, there is a widening if not unbridgeable gap between the two countries. The kingdom's own signals of the policy differences between Riyadh and Washington might well include the June 12 London Times story, which reported that the kingdom would allow Israeli jets to fly over its territory to complete a bombing raid on Iran's nuclear facilities. Although officially denied by Saudi officials, the Times stood by its report. Its editor would not run such a story without being confident of the sources.
The kingdom's own pursuit of (peaceful) nuclear energy is a clear sign that Riyadh thinks that the United States cannot or will not stop Iran's program. A June 17 Reuters story quoted an energy advisor to the kingdom as saying that not only was Saudi Arabia looking at nuclear power plants, but it should also be allowed to enrich the necessary uranium fuel itself. That mirrors the Iranian stance, though the ability to make low-enriched uranium for power plants is, but for a few technical tweaks, the same technology needed to make highly enriched uranium for an atomic weapon.

Saudi Arabia's ability to master this technology is doubtful -- but its ambition is not. By his own admission, Pakistan's controversial nuclear expert, Abdul Qadeer Khan, now notionally free after years of house arrest on allegations of rogue nuclear trading, visited the kingdom around 50 times and was on the technology subcommittee of the Jeddah-based Islamic Development Bank. According to Khan's 11-page confession letter, a senior prince at one point even offered Saudi citizenship to Khan and some of his aides. (They declined.)

Abdullah's determination to go nuclear, at least for generating electricity, is being encouraged by France, where he will travel after leaving the United States. French President Nicolas Sarkozy, who is noted for his tough approach on the Iran nuclear issue, has already pitched the idea during three visits to Saudi Arabia. If the kingdom pursues this, it will impact the centerpiece of U.S. nonproliferation efforts on the Arabia Peninsula: the so-called nuclear 123 Agreement with the United Arab Emirates (UAE), which won U.S. approval for nuclear power plants by renouncing enrichment technology. If Washington accepts Saudi enrichment, the UAE -- which in its bad old days, also offered Khan a passport -- would insist on renegotiating its deal.

The octogenarian King Abdullah often cuts a lonely figure in the clannish House of Saud. One almost sympathizes for him when he returns home and has to explain to his brother princes where the United States stands on key policy issues. Crown Prince Sultan, his designated successor and official stand-in during his absence, is reportedly enfeebled and unable to comprehend government affairs. Therefore, the ultra-cautious, conservative, and anti-Iranian views of Sultan's brother, Interior Minister Prince Nayef, who is emerging more clearly as the next in line, could be crucial. Both men were said to be involved in paying off Osama bin Laden in the years before 9/11. So, even if the enduring image from this most recent summit is a bow or an embrace, it appears likely that the kingdom will diverge even further from its decades-old bond with Washington.

Honduras Is An Opportunity

For a successful foreign policy, it is not just essential that a nation have clear objectives, but that it can differentiate between crisis and opportunity and manage both. That ability seems to be absent so far in U.S. President Barack Obama's administration, at least regarding its policies toward Latin America. This is particularly obvious when Obama's foreign policy is contrasted with his predecessor Ronald Reagan's. A brief review of the U.S. interventions in Grenada in 1983 and in Honduras in 2009 illustrates the point.

The U.S. actions in Grenada and Honduras are separated by a quarter century and 1,500 miles; they have shared and contrasting characteristics. The United States did not initiate the events that led to the Grenada invasion in 1983, as it did not instigate the removal of the President Manuel Zelaya of Honduras in 2009. In the former, a U.S. president utilized a real crisis to liberate a country and to signal to the world that he would fight for freedom elsewhere. In the latter, another administration demonstrated that it cannot differentiate between the friends and the enemies of freedom.

Twenty-six years ago this week, on October 25, 1983, Reagan made the dangerous and at the time loudly criticized decision to invade Grenada. This marked the first contraction of the Soviet empire in more than 50 years, and helped spur the fall of the Berlin Wall six years later and the end of the Soviet Union and the Cold War two years after that. Seldom in history has such enormous consequence resulted from an unacknowledged event.

Grenada was the high-water mark of the Soviet empire's expansion. In 1979, during the irresolute presidency of Jimmy Carter, Grenada fell into the hands of Maurice Bishop, a Marxist "revolutionary" who -- supported by Fidel Castro, the Soviet Union, East Germany, Libya, and other enemies of the United States -- imposed a dictatorial regime and turned the country into a base for communist expansion in the Caribbean.

Among other hostile moves, Bishop allowed Cuba to build an airbase large enough to accommodate Mig fighters and other military planes. Moreover, Bishop and his allies transformed Grenada into a base for political subversion of the Caribbean. When rival Marxist revolutionaries assassinated Bishop in 1983, the island descended into fratricidal violence. The lives of 800 foreign medical students, mostly American, were in danger. Against the wishes of some of his advisors, who preferred diplomacy, Reagan decided in 36 hours to invade and to remove the Marxist regime.

The invasion was deeply unpopular in the "international community," which denounced the move in a United Nations vote, 122 to 9. Only some neighboring nations in the Caribbean basin supported the United States. Even Reagan's closest ally, British Prime Minister Margaret Thatcher, bitterly protested. Uniformly, U.S. and European media lambasted the White House. Many in Congress angrily condemned the invasion at first, only to support it later (it could be said they were against it before they were for it) when evidence of communist deceit became overwhelming. For example, U.S. soldiers discovered ammunition caches in boxes labeled "Cuban Economic Office, Grenada," demonstrating the danger the island country posed.
With Grenada's liberation, however, Reagan signaled that he was serious about combating Soviet aggression. Grenada was the first major use of U.S. military force since Vietnam; the first successful rollback of a communist state and thus the repudiation of the "Breshnev Doctrine," named after the former Soviet leader who held that no "socialist" state would be allowed to revert to capitalism; and the first military defeat of Castro's army, which at the time was running amok in Africa and supporting terrorists in Latin America.

A quarter century later, in Honduras in 2009, a corrupt and demagogic president distanced his country from the United States and joined ALBA, the anti-American alliance created by Hugo Chávez and Fidel Castro. Zelaya attempted to subvert his country's laws in order to stay in power. But the institutions of democracy foiled him: The Honduran Supreme Court unanimously ruled that Zelaya had violated the Constitution and ordered his arrest. The president of the Congress, Roberto Micheletti, a member of Zelaya's own party, replaced him, a move the elected legislature nearly unanimously ratified. All told, every institution of civil authority and civil society supported Zelaya's legal removal. As with Grenada, the "international community" objected -- in this case, on the grounds that the ouster was really a coup. Inexplicably, the United States joined along in the pro-Zelaya baying.

Simply put, Zelaya's removal was not a crisis; it was an opportunity. Hondurans had simultaneously re-established the rule of law that Zelaya attempted to fracture and broke with the anti-U.S. Chávez and Castro alliance. This was a legal, autonomous, and liberating action by Honduras's political institutions. The United States had no right to intervene against the pro-democracy Hondurans, even if a terrible mistake provided an excuse.

In the chaos caused by Zelaya's arrest, some Army officers put him on an airplane out of the country. This was a violation of Honduran law; the Army has acknowledged it and has attempted to justify it by claiming that leaving Zelaya in the country would lead to violence. Zelaya's many calls since his removal for his countrymen to replace him by force do justify the Army's fears, if not the act of deportation itself. He should have been detained and made to answer to the many crimes with which he has been charged.

But the deportation of Zelaya is no excuse for the Obama administration to join with the hemisphere's leftist despots, even with the cover of international organizations, in calling for the illegal restoration of the ousted leader. To repeat, Hondurans ousted Zelaya legally, in accordance with their constitution. The United States did not have to cut off aid and impose sanctions on one of the poorest nations in Latin America for having rid itself of an autocrat determined to turn Honduras into an undemocratic, hostile state.

Reagan was bold and agile enough to use the unexpected events on Grenada to change the course of history. Grenada was a crisis that Reagan turned into an opportunity. Honduras was an opportunity that Obama turned into a crisis. It is not too late to change course in Honduras and take advantage of an unexpected opportunity.

Where China is investing

The Heritage Foundation has pulled together a fascinating study of Chinese investment -- showing (with really nice charts and maps!) just where all of those yuan are heading overseas.

A few things to note, plus one question....

Sub-Saharan Africa is the biggest single region for investment for the Chinese. (Plus, $36.4 billion is a lot of investment in a region whose total GDP is $744 billion.)

China spends the most money in Africa in the Democratic Republic of Congo. The resource-rich country is one of the very few on Earth whose economy has actually shrunk in the past 20 years (due to a brutal civil war).

For every dollar of U.S. investment, China spends 51 cents in Iran.

China invests nearly twice as much in west Asia as in east Asia -- a testament to its need for resources, more so than products.

China spends more in Australia than any other single country.

Why is China spending so much in Greece? Shipping?

Chinese Takeout

Cold economic realities dictate that China is going to be the big player in the new Afghan gold rush -- and Washington had better wake up to that fact, soon.

-BY AZIZ HUQ

The prospect of cobalt in Kandahar has sparked lively debate about whether new mineral wealth -- if it pans out -- will aid or hinder U.S. policies in Afghanistan, as well as whether the country will fall prey to the so-called resource curse, as political scientist Michael Ross and others fear. But a short-term focus on Afghan-U.S. relations might be a mistake: The real winner from new natural-resource wealth beyond the Khyber Pass will be China. If the United States really cares about stabilizing Afghanistan's central government and eliminating terrorist havens, it needs to start working now to persuade Beijing that these are shared goals.

First, some background: Chinese foreign investment and aid has accelerated dramatically over the past decade, especially in Africa. In November 2009 alone, for example, China's largesse amounted to $10 billion in low-interest loans and $1 billion in commercial loans to the continent. With Beijing as cheerleader, trade has soared from $1 billion in 1992 to $106.8 billion in 2008.

In part this is due to China's willingness to do business with undemocratic, corrupt, and brutal regimes -- for example, in the Democratic Republic of the Congo (DRC), Sudan, and Zimbabwe. The DRC provides the best cautionary parallel to Afghanistan: The discovery in the late 1990s of copper, coltan, and other minerals in eastern Congo gave new life to a civil war that has now claimed upwards of 4 million lives. Flagging combatants were funded by mineral extraction, and much of those resources eventually flowed to China. The fact that violence is still simmering in eastern Congo -- and despite the costs that extraction imposes on the Congolese people -- has not been enough to deter Beijing from wooing Congo's government for access to the country's abundant resources.

So, if there's any thought that war in Afghanistan might dissuade Chinese investment there, it's best to dispense with that notion immediately.

China, which has a narrow land border with Afghanistan, already invests heavily in the war-torn Central Asian state. The state-owned China Metallurgical Group has a $3.5 billion copper mining venture in Logar province. Chinese companies ZTE and Huawei are building digital telephone switches, providing roughly 200,000 subscriber lines in Afghanistan. Even back in the war's early days in 2002 and 2003, when I worked in Afghanistan, the Chinese presence was acutely visible in Kabul, with Chinese laborers on many building sites and Chinese-run restaurants and guesthouses popping up all over the city. As Robert Kaplan has pointed out, these investments come with a gratuitous hidden subsidy from the United States -- which has defrayed the enormous costs of providing security amid war and looting.

With its massive wealth, appetite for risk, and willingness to underbid others on labor costs and human rights conditionality, China is the odds-on favorite for development of any new Afghan mineral resources. Chinese firms will control the flow of new funds, and the way those funds are distributed between the central and local governments. It's all well and good that Barack Obama's administration has recommitted to building civil projects in rural Afghanistan, but consider the relative scale of building a school to establishing a multimillion-dollar mine (not to mention the transport networks and infrastructure required to get the extracted minerals out) and it's easy to see what kind of influence the Chinese will bring to the table.

It is critical for Washington to start making the case to Chinese leaders that pure self-interest mandates they leverage this power wisely -- to promote stability, not catalyze new conflict, in Afghanistan. So far, China's investment in Logar has been in keeping with its "noninterventionist" foreign policy and was accompanied by development aid, but no overt political strings. Washington must require more from Beijing, however, to avoid upending all its hard-won gains.

The Obama administration has already asked China to contribute troops to the Afghan effort. This is a good first step, but a few hundred token soldiers will not make China a strategic partner in its Afghan campaign. It needs to persuade Beijing that the campaign is indeed China's campaign, too -- if not by touting democracy promotion and human rights, then surely economic benefit -- and that U.S. and Chinese strategies on Afghanistan converge.

This is not as hard as it sounds: As China-Africa expert Deborah Brautigam's careful work shows, China has on some occasions acted as a surprisingly responsible lender, for example using resource-backed infrastructure loans that force some gains to be reinvested in development. Although many have warned of a new Sino-colonialism, Brautigam's work suggests that perhaps China's awareness of its gargantuan and growing need for foreign export markets will make it a better "colonial" power than any European country ever was.

For China as much as the United States, the goal of a stable, central Afghan government that provides no haven for terrorists is a desirable goal. China has worried in the past about whether Afghanistan might provide a refuge for Uighur separatists. Leaving aside the ethics and wisdom of Chinese policies in the Uighur community's home region of Xinjiang, it's safe to say that Washington and Beijing share a common goal in preventing terrorism. Both countries would benefit from a stabilized government in Kabul that is able to command the loyalty and respect of provincial governments and populations. That, however, requires that Hamid Karzai's government deal with its endemic corruption problem. And though no one expects Afghanistan to turn into Norway, perhaps it can be nudged away from the DRC path and toward the model of a Saudi Arabia or a Kazakhstan.

When it comes to corruption, however, state-run Chinese firms have not seemed troubled by greasing the wheels of power brokers in Sudan, Zimbabwe, or elsewhere. Getting Beijing to understand the rot this breeds seems a hard sell for the Obama administration. If that fails, however, Chinese ears might perk up somewhat at the mention of how integral a stable central government in Kabul is to the security of Pakistan, a close ally of Beijing.

Stability in Pakistan should be an important goal for China. It is by now clear that the Taliban's campaign west of the Durand Line is inextricable from the destabilizing efforts of Islamist militants in Pakistan. If China does not want another nuclear basket case on its border, then it should care deeply about instability in Afghanistan. Currently, however, Beijing is still freeloading, relying on Washington to provide security for its limited interests. Perhaps the tantalizing prospect of $1 trillion in minerals might be enough to change the strategic equation.

Working together, China and the United States have a better chance of guiding Afghanistan to a happy outcome for all than will Washington on its own. To be sure, this is no easy task: There's plenty of evidence that aid conditionality by Western governments has not done as much good as hoped. But cold economic realities dictate that Chinese firms are likely going to be the big players in this new gold rush, and Washington had better wake up to the fact that it has a short window in which to convince Beijing to collaborate in making Kabul a better place.

--- Aziz Huq is an assistant professor of law at the University of Chicago. In 2002 and 2003, he worked in Afghanistan as an analyst for the International Crisis Group (ICG) and has since worked in Sri Lanka, Pakistan, and Nepal for ICG.

Congo’s New Mobutu

As the Democratic Republic of the Congo turns 50 this month, its leader is taking a page from Mobutu Sese Seko’s playbook on repression. And the West is helping him.



You might expect that the Democratic Republic of the Congo -- which suffered under what was arguably the most brutal colonial administration in sub-Saharan Africa, a dismal three decades of repression under strongman Mobutu Sese Seko, and a regional war that resulted in the deaths of some 5.4 million and counting -- would want to move on from its past. But the country's 50-year independence celebration on June 30 will do exactly the opposite: In an attempt to recreate that historic day in 1960 when Congo's first prime minister, Patrice Lumumba, took over the reins of leadership from Belgium's King Baudouin, President Joseph Kabila has invited the former colonial power's current sovereign, Albert II, to be the guest of honor. Yet try as Kabila might, casting himself in the same light as Congo's iconic independence leader is proving a difficult sell these days. It's much more accurate to say that he is the new Mobutu.

More... The two leaders have a disheartening amount in common. Mobutu, archetype of the African strongman, was fond of pink champagne, leopard-skin hats, and pushing political opponents out of helicopters while his backers in Washington footed the bill. Mobutu siphoned vast profits from Congo's mineral wealth and presided over a willfully dysfunctional state. Kabila is less audacious -- so far -- but his government has a similar penchant for silencing political opponents. As to his backers, it's true that the good old days of Cold War money have ended, but what Congo has now is equally good: loads of donors, from the World Bank, the International Monetary Fund, and the European Union to bilaterals like Britain, the United States, and France, who hold their noses but don't let bad politics chase them out.

Now 50 years into Congo's woeful history as an independent country, the stakes are as high as ever to get things right -- and the consequences as dire if yet another leader chooses self-perpetuation over progress.

Why? Because today's Congo is about as dismal as a country can get. Nearly 80 percent of the country's 70 million people survive on less than $2 a day, annual government spending on health care amounts to just $7 per person (only Burundi spends less), and one out of every 10 infants never makes it to childhood. Three hundred thousand refugees are still afraid to return home despite the official end of the war seven years ago, and most of the country's 2 million internally displaced people fled their homes since 2007. And even as foreign rebels and homegrown militias continue to stalk the eastern borderlands and a new rebellion gains ground in the remote north, Kabila is calling for Congo's U.N. peacekeeping mission -- already struggling to compensate for the shortcomings of a singularly incompetent national army -- to begin pulling out. The symbolic withdrawal of 2,000 of the United Nations' 20,000 peacekeepers seems to have sated the young president's appetite for more sovereignty ahead of the June 30 celebrations. But many fear that with further downsizing Congo could backslide into generalized chaos.

Few had heard of Joseph Kabila before 1996 when he emerged from exile in Tanzania to serve as an officer in a Rwandan-supported rebellion led by his father, Laurent. When the rag-tag force swept practically unopposed across the vast country, Western governments reveled in Mobutu's downfall. But before long, Kabila the father, with his rampant cronyism and bizarre affinity for Marxist rhetoric, was eliciting gasps of horror from the likes of U.S Secretary of State Madeline Albright. His decision to break with his Rwandan backers in 1998 helped plunge Congo into the deadliest conflict since World War II. Laurent was assassinated by his bodyguard three years later, and his son, Joseph, took the reins. It was hoped that he would be a new leader, a symbol of progress and reconciliation. And when he won Congo's first democratic election in four decades in 2006, he did so much to the relief of Western diplomats who thought him flawed, but vastly preferable to his chief opponent, the populist former warlord Jean-Pierre Bemba.

But any chance that Kabila, then 35, would usher Congo toward a new era of freedom, democracy, and respect for human rights soon fizzled. In January 2007, just weeks after his swearing in, Kabila ordered police to clamp down on a small politico-religious sect known as Bundu dia Kongo, which was protesting what it alleged -- and not without reason -- was the rigging of the gubernatorial election in western Bas-Congo province. More than 100 members of the sect were shot or stabbed to death, and the security forces would return about a year later and slaughter over 200 more.

"The fact that we said nothing and the U.N. hushed up their own report into the incident told Kabila everything he needed to know about how much he could get away with in the future," one Western diplomat, who was posted to Congo at the time, told me.

Indeed, it was only the beginning. In just three short years, Kabila's regime has amassed one of the world's worst human rights records. The government has arrested, tortured, and murdered political opponents. In March 2007, hundreds of civilians were killed when clashes erupted between Kabila's army and Bemba's personal security detail on the streets of downtown Kinshasa. In the wake of the fighting, as Bemba fled to Portugal, military intelligence officers and soldiers rounded up hundreds of politicians and activists from his political coalition, suspected supporters, and civilians from his home province of Equateur. Around 100 cases of summary executions were reported to the United Nations during the crackdown, and investigators later discovered around 40 bodies, some blindfolded or with their hands tied behind their backs, floating in the Congo River. From August 2006 to May 2008, Kabila's elite Republican Guard alone was responsible for 125 summary executions and "disappearances," according to Human Rights Watch. More than three years on, the political opposition has yet to reorganize. Backed by a docile parliament and a stacked judiciary, Kabila is left to rule with a free hand.

But "rule" would be a gross overstatement. Africa's third-largest country is horribly fractured. Roads and railways have fallen into ruin, and expensive air travel is well beyond the reach of most Congolese. The result is an ever-deepening divide between the inhabitants of its jungle north and savannah south, its Lingala-speaking west and its Swahiliphone east, destroying national identity and fanning the flames of tribalism.

It is the country's lawless east where the byproduct of this callous neglect is felt most strongly, with conflict simmering and occasionally erupting. This is where Congo's army -- an ill-equipped and poorly trained force cobbled together under the 2003 peace deal from formerly rival government loyalists, rebels, and militia factions -- commits rampant human rights abuses, including looting, rape, and murder. In May last year, soldiers killed at least 50 Rwandan refugees in a village called Shalio, according to the United Nations. Between May and September, Human Rights Watch documented at least 270 killings, mostly of women, children, and the elderly, by government troops near the town of Lukweti. And in November, the army opened fire on villages where thousands of civilians had gather to receive measles jabs from French medical charity, Médecins Sans Frontières. These are just a few of the worst incidents that have come to light.

Against a backdrop of such lawlessness and violence, it would seem that one more death would be just a drop in the well. After all, human rights activists and journalists have been the targets of assassination since 2005, when leading human rights activist Pascal Kabungulu Kibembi was shot dead in the eastern city of Bukavu. But the recent murder of Floribert Chebeya, perhaps Congo's most respected human rights defender, has had an unprecedented impact.

On June 1, Chebeya was summoned to meet with General John Numbi, head of the national police force and a much-feared member of Kabila's secretive inner circle. For years, the activist had been a constant thorn in the side of the regime, helping to expose the killings of Bemba supporters in 2007 and campaigning for improved prison conditions. But perhaps his most blatant affront to Kabila was his call for an amnesty for 51 prisoners condemned for involvement in the murder of the president's father, Laurent.

Chebeya had been the target of threats and intimidation in the past and, in the weeks before his death, told friends he believed he was again under surveillance. He left his office at 5:00 p.m. A few hours later he sent a text message to his wife saying he was still waiting at Numbi's office. By 9:00 p.m. that evening, when he no longer answered his phone, friends and colleagues already feared the worst. He was found dead in the back seat of his car the next morning on the outskirts of Kinshasa's sprawling slums.
Details released by the police smacked of a ham-handed cover-up. The body of the 47-year-old was found in the backseat, surrounded by used condoms and sexual stimulants, as if he had somehow perished during a Viagra-fuelled tryst with a prostitute. His driver had disappeared and has yet to be found. Family members and U.N. human rights officials were given only limited access to the body, stoking further suspicion. "Floribert Chebeya was killed in circumstances which strongly suggest official responsibility," Philip Alston, the U.N.'s special rapporteur on extrajudicial executions, said in a speech to the Human Rights Council in Geneva on June 3. The day before, Secretary-General Ban Ki-moon had offered the world body's assistance in investigating the alleged murder -- assistance that was declined. Meanwhile, individual countries also protested. The United States issued a statement expressing that it was "deeply concerned." Britain urged Congo to carry out a full investigation.

Beyond the finger-wagging, however, there's been little else in the way of applying pressure or demanding transparency from Kabila's regime. On paper, the West should have leverage; donor financing amounts to $2.6 billion, almost half of Congo's 2010 budget, and that doesn't include the nearly $830 million the United Nations is requesting of donors for emergency humanitarian assistance and projects to prop up the failing -- or non-existent -- education and health care systems. Western governments, with the United States taking the lead, also pay nearly $1.4 billion annually for Congo's U.N. peacekeeping mission -- the world's largest.

However, the game is not that simple anymore. After winning the 2006 elections, Kabila set out to solicit foreign investment and diversify his donor portfolio, reducing his dependence on traditional Western partners in favor of Turkey, Iran, and India. Kabila's greatest coup so far was the signing of a $6 billion package with Beijing that essentially outsourced Congo's post-war reconstruction and development to Chinese companies in exchange for rights to tap lucrative copper and cobalt mines. Chinese firms are building or rehabilitating thousands of miles of roads and rail lines, hundreds of hospitals, health centers, and schools, and thousands of homes for government employees. Meanwhile, China's policy of not meddling in the internal affairs of its global partners has, for many in Kabila's government, come as a refreshing change from the West's endless lectures on good governance and human rights.

The West's involvement in Africa is not nearly as straightforward as it was during the Cold War. Today, the West wants more than just friendship; it wants change. Institutions such as the World Bank and the IMF demand economic and political reforms in exchange for loans. And bilateral aid often requires development gains, such as health and education. In Congo, however, the development needs are so great that it's enormously difficult to contemplate pulling aid money out over governmental misbehavior. No one wants to make a decision that would deprive children of clean drinking water or rape victims of medical treatment to prove a political point. "To a certain extent Kabila is holding them hostage to their own development goals. They've already invested heavily. They have to spend this money. And they have to show that past investments were not in vain," Jason Stearns, an independent Congo analyst and writer, said in an interview. "They're also hostage to their own budgetary processes. And he calls their bluff every time."

That's exactly what he'll do on June 30, when Kabila's triumphant moment will most likely go off without a hitch. After grumblings from Brussels about the shady circumstances of Chebeya's death, Kabila duly suspended his chief of police and several other officers while investigations are carried out. Though Dutch medical examiners were eventually allowed to assist with the autopsy, preliminary findings were inconclusive, and Congo's attorney general Flory Kabange Numbi said on June 3 that a joint investigation with outside participants was out of the question. In the end, it will be a superficial inquiry and one of Congo's most dogged advocates for justice and human rights will still be dead.

The second coming of Mobutu should be a major cause for concern for Congo's destitute population -- not to mention the prospects of establishing lasting peace in the region. But apparently, it isn't. If the IMF goes ahead with the expected cancellation of the bulk of the country's $13.1 billion debt in the coming weeks, Kabila will get an added boost as he opens his campaign for a second and, in theory final, term. "I see Kabila winning a second election, with the West overlooking violence and fraud that does not rise to levels which would be unacceptable politically, and then settling back into the same routine of attempting quiet diplomacy while he continues to consolidate power," a former Kinshasa-based diplomat told me.

"And then I expect a lot of feigned surprise when Kabila forces through changes to the constitution which enable him to stay in power beyond his second term."

An African iPhone? There’s No App for That.

Why Steve Jobs should let Africans buy his new toy.
BY DAYO OLOPADE | JUNE 24, 2010

When I touched down in Lagos, Nigeria, this week, the first thing I did was buy a cell phone. The city's Saka Tinubu district hosts dozens of mobile vendors arrayed in small shops, piled high with all the major brands: Nokia, Motorola, Samsung. Among them is Belle-Vista Phone Warehouse, which styles itself as a "Blackberry Outlet." Young professionals stopped by after working hours to scoop up the Storm, the Curve, and other popular smartphones nestled in the display cases. Apple's iPhone -- ubiquitous in American cities, and about to become more so with the release of the product's much-anticipated version 4 today -- was nowhere to be seen.

The best-kept secret about Africa in the last decade is the continent's rapid and creative adoption of modern technology. African countries have for the most part leapfrogged the technologies of the late 20th century to adopt those of the early 21st en masse. There are now 10 times as many cell phones as land lines in sub-Saharan Africa, and since 2004, the region's year-over-year growth has been the highest in the world. When Nokia's billionth handset was sold in 2000, it was in Nigeria.

Africa is a multimillion-dollar mobile market, and plenty of the major technology companies, Western and otherwise, are there already. Multinational telecoms like MTN, Safaricom, and Zain are competing to cover a continent of 500 million mobile consumers, improving connectivity and dropping prices. Low-tech Chinese imports and no-contract, prepaid plans have made the technology easily accessible; Belle-Vista alone sells 500 phones a month. Nokia, which established its first African research center in Nairobi in 2008, has just unveiled a telephone that will allow consumers used to toggling between two or three devices to use multiple SIM cards in the same phone. BlackBerry has likewise responded to explosive demand by opening an office in Nigeria this year. Google, whose Android operating system is the strongest competitor to the iPhone, has had a presence on the continent since 2007 and now operates in 45 African countries, hiring and training African developers to convert its well-known suite of Web applications (Maps, News, Finance) for local use -- often over mobile devices.

These companies and their technologies are opening a line into the flattening world we've heard so much about, creating markets, enabling information access, and building relationships in ways that have changed poor countries from the bottom up. But it's hardly philanthropic work -- market leader Nokia's regional revenues were 1 billion euros in 2009, and Research In Motion, named Fortune's fastest-growing global firm in 2010, sold 1 million BlackBerries last year in South Africa alone.

So where is Apple?

The earlier-generation iPhones are, ostensibly, available on the continent -- Vodacom, a subsidiary of British Vodafone, signed a 10-country distribution deal with Apple in 2008 that included South Africa and Egypt, and the phones do work on local networks. Vodacom has also announced that it will distribute and service the iPhone4 in Africa in the near future. But for the vast majority of Africans, Apple effectively doesn't exist. The iTunes store's music offerings have never been available on the continent; African IP addresses are blocked. The iPhone goes for $1,000 at local retailers -- 10 times the current U.S. price for the same model, a big-enough markup that most iPhones on the continent are purchased abroad instead -- and because of limited bandwidth and apps availability, owning one is "like having a Maserati in traffic," according to Tayo Oviosu, CEO of Pagatech, a mobile banking firm in Nigeria.

This is a shame, considering what even inexpensive, basic cell phones have done for Africa. In poor countries, cell-phone penetration has been linked to positive economic and developmental outcomes. A 2006 study of emerging markets suggests that a 10 percent increase in mobile penetration correlates with a 0.6 percentage point increase in economic growth rates. In Africa, the trend is lifting all boats: A fisherwoman without refrigeration in the Democratic Republic of the Congo can keep her catch on the line in the water, waiting for customers to call; selling access to a mobile phone in poor or rural areas of Uganda has become a viable business model. Professionals stuck in Johannesburg traffic make deals on their BlackBerries; demand for skilled labor in the information and communication technology sector has created 400,000 jobs in Nigeria since 2000.

The advent of mobile money -- the transfer of funds by cell phones, rather than banks or ATMs -- in poor countries has further expanded the reach and value of cell phones. Fifteen-thousand new mobile-banking customers sign up daily in Tanzania, 12,000 in Kenya, and 18,000 in Uganda. Paperless payment creates meaningful efficiencies: Bill-paying has ceased to be a day lost in line at the bank. Rather than sending an envelope full of cash with a bus driver to another town, an individual can text remittances to a distant relative or friend.

Africa has also led the way in putting mobile phones to NGO-like use. Using SMS platforms, organizations can send patients reminders to take medication, offer technical assistance to farmers, and provide mothers simple prenatal checklists. Ushahidi, a Kenya-based start-up, deployed its SMS-based crisis-mapping software in Haiti after January's earthquake, for which it was later honored by the Clinton Global Initiative. These mobile-centric models don't just do good -- they add real value to the sizable investment made by lower-income individuals in poor countries.

What could the iPhone contribute to this ongoing renaissance? The iPhone4 may serve these developmental functions better than anything else on the market, if its features are as described. The new FaceTime feature, for instance, which allows videoconferencing directly from a mobile device, could do much to support the distance education projects being pioneered at the University of South Africa and Makerere University in Uganda. In addition to GPS and access to the mobile Web, geotargeted applications could help traders find market prices, businesses find customers, and make news delivery and political organizing easier. All-in-one video shooting and editing software makes the iPhone4 a powerful media tool that competing smartphones like the BlackBerry or Nokia Nseries just can't duplicate. Even the longer battery life will add value in places where electricity is unreliable.

Most importantly, the iPhone's application development ecosystem would engage the talented, tech-savvy demographic on the planet's youngest continent. According to a paper from the Institute for Development Policy and Management at the University of Manchester, software production is an industry "essential for the growth of the economies of developing countries"; the $1.43 billion iPhone application market, with its low barriers to entry and friendliness to entrepreneurs, is ideal for Africa's burgeoning class of small-scale software programmers. In Kenya -- a country where software tinkering is popular enough to warrant a prime-time cable TV show -- some eager programmers created applications for the first iPhone well before it was even available in the country. "We're going to see people developing applications that solve specific challenges in the African context," says Oviosu. "If the iPhone comes here and catches on, of course we'll build [one]."

It isn't just Africans who are losing out from Apple's disinterest in the continent. As mobile data usage comes to replace traditional computing in Africa, the new unit of engagement for business, government relations, and humanitarian work may be the smartphone -- and it stands to reason that the company with the best local presence will reap the benefits of rising incomes and demand on a continent of nearly 1 billion. If it is Apple, it will reinforce the company's slogan: This changes everything. Again.

Japan's Fake Economic Reforms

Why Tokyo could use a little more creative destruction.

Just before the recently elected Japanese government released its new 10-year growth strategy, two top policymakers locked horns in a sterile economic debate. Heizo Takenaka, economic advisor to former Prime Minister Junichiro Koizumi, said the chief priority should be business-oriented supply-side measures to generate new wealth. Naoto Kan, the new deputy prime minister and finance minister, stressed the need to boost demand and help consumers. Arguing that the Koizumi cohort had failed, Kan said that companies would neither hire new workers nor boost capacity if they couldn't sell their output.

In the end, Prime Minister Yukio Hatoyama took Kan's approach, saying, "[The past government] was biased toward the supply side, and we intend firmly to generate demand." His government set goals of 2 percent GDP growth per year for the next decade and the creation of 4.76 million new jobs in fields like elderly care, health, the environment, tourism, and exports. The problem is that his "growth strategy" includes neither growth nor strategy. It lists targets but offers no means to achieve them.

Moreover, the goals themselves are off base. Hatoyama set a target of 2 percent per year GDP growth, starting from a 2009 baseline. But from 2007 through early-2009, the recession slashed GDP by a remarkable 9 percent. If the Japanese government based its goal from the pre-recession GDP levels -- as it should have -- its GDP target for 2020 works out to just 1 percent growth per year, a truly dismal rate. The targets on the jobs side are equally off. Over the next decade, the country's working-age population will plunge by 7.6 million people, or 10 percent, and the number of retirees will rise by 6.5 million. How can the Hatoyama administration promise 4.8 million additional jobs when Japan won't have the workers to fill them? No one expects a rush of immigrants or women into the workforce to counter this trend.

For Japan to revive, it has to move beyond Kan and Takenaka's false supply-side, demand-side dichotomy. As famed economist Alfred Marshall pointed out more than a century ago, scissors need two blades: supply and demand. Japan has trouble growing because both blades are so banged up that neither cuts very well. Plus, each blade's dullness worsens the other.

For 30 years, Japan has been afflicted with a chronic shortfall of demand, a kind of economic anorexia. Consumer spending is too low, mostly because household income is too low. Over the last decade, real wages per worker have fallen every year but one. The only reason consumption has risen is that households have slashed their once-legendary savings rates: from 17 percent in 1980, to 10 percent in 1997, to 2.3 percent in 2008. If people earned more, they'd spend more.

To make up this shortfall, decades of Liberal Democratic Party (LDP) governments used artificial stimulants: mammoth budget deficits, rising trade surpluses, and monetary steroids to gin up often-wasteful business and infrastructure investment. The unsustainability of this strategy came home to roost in the recent recession, when a collapse of exports and accompanying investment sent GDP southward. This collapse abruptly erased 70 percent of the recovery eked out since late 2001.

With the economy now operating 7 percent below capacity and economists worried about a relapse in 2010, the newly elected Democratic Party of Japan (DPJ) turned immediately to measures to increase demand. It proposed a good initial remedy: boosting household disposable income, partly by measures making it cheaper to have children. Instead of building more of the LDP's notorious "bridges to nowhere," the DPJ proposed spending around 21 trillion yen, 4 percent of GDP, on measures such as an annual rebate of $3,250 per child, reimbursement for high-school expenses (which even at public schools can amount to $5,000 per year), free child-age medical care, and tax cuts.

Unfortunately, the DPJ evaded the issue of financing its largesse. Its talk of cutting wasteful spending to come up with the funds proved hollow. As a result, the DPJ has already cut back or postponed some of these measures. Moreover, the DPJ has not offered a remedy for the structural defects in private labor and capital markets that produce such low household income in the first place.

The DPJ's difficulty in financing its programs brings up the supply side of the scissors. Japan will never find the resources to boost household income, support the elderly, and address its gigantic government debt unless it accelerates per capita GDP growth, hikes the tax base, and increases returns to investment.

With the number of workers declining, the only way to boost GDP is for each worker to produce more. At the moment, unfortunately, long-run productivity is growing only 1.5 or 2 percent per year. If the labor force declines 1 percent a year and productivity rises 1.5 to 2 percent, the math makes it clear: over the long haul, GDP can only grow a meager 0.5 to 1 percent, maximum -- which is just about what the Bank of Japan, the OECD, and other authorities estimate will occur after a few years of higher growth as the economy recovers.

Thus, Japan cannot achieve healthy long-term growth without a productivity revolution. Unfortunately, neither the DPJ nor the LDP has seriously addressed this need. There is lots of talk about more research and development spending and economic exotica like nanotechnology. But Tokyo should take a look at the United States' recent productivity revolution, where real improvements lay in old-line sectors such as retail and rust-belt manufacturing. Under the pressure of stiff competition, companies in these industries adopted new technologies and more efficient ways of doing business. Aside from a few world-beating sectors, like the automotive industry, Japan is so far behind world benchmarks of efficiency that it could enjoy a huge leap in growth just by catching up. Even in manufacturing, Japan is 30 percent below U.S. productivity levels.

The key is what economist Joseph Schumpeter called "creative destruction," or, as a South Korean minister once put it, "You can't have competitiveness without competition." In a healthy economy, jobs come and go. Companies come and go as newer, better ones beat them. At the same time, a healthy social safety net aids workers in their transition from firm to firm and job to job. Competition, plus a government-financed safety net, is the combination that best produces growth, high employment, rising wages, and income security, as Sweden and Denmark demonstrate.

Japan has neither condition. It preserves incumbent firms and jobs by stifling competition, meaning it has one of the lowest rates of labor mobility and company turnover among rich countries, and correspondingly low potential growth. The LDP claims as one of its alleged supply-side reforms to have aided labor flexibility by increasing the use of part-time and temporary workers, who now represent one-third of the labor force. In reality, by paying these "irregular" workers meager incomes, businesses have lowered real wages for everyone, thereby crippling consumer demand and creating an anti-reform political backlash. Rather than addressing the problem by providing safety nets and wage equality for "irregular" employees, the DPJ has promised to ban their use in some sectors, focusing on a futile effort to restore the old lifetime employment paradigm.

Some in the DPJ understand that genuine flexibility, better wages, and strong consumer demand are interdependent. But the party's political tacticians, especially Secretary-General Ichiro Ozawa, understandably do not want to alienate constituents in weak sectors or allies in the unions. Therefore, the DPJ has punted on the question of the economic fundamentals Japan needs to change.

Fortunately, there is a way out. These days, party loyalty and traditional political machines are weaker than ever. Voters are increasingly choosing on the basis of the economy. Hence, though it may seem in the short-term that there is a political need to placate assorted interest groups at the expense of economic growth, in the long-term that is the road to electoral defeat. That's what brought down the LDP in a landslide rejection in 2009. This new political equation will put pressure on the DPJ to come up with some genuine reforms.

Many in the DPJ already recognize this. Several members, for instance, have argued for allowing in cheaper food imports while giving income support rather than production subsidies to the dwindling ranks of aging farmers -- something that could have been political suicide in the LDP era. And younger Diet members -- many of whom came from the bureaucracy, business, or academia -- seem to understand that in the long run effective politics requires effective policies.

Hopefully, the new growth strategy announcement will prove nothing more than a disposable campaign pamphlet for this July's pivotal upper house elections. The DPJ needs to get a single-party majority in that chamber so it can rid itself of dependence on two small retrograde parties and focus on hashing out the tough economic issues. The things it had to say to win the lower house in 2009 and thinks it has to say to win this July are very different from what it needs to do in order to retain power. If it fails to revive Japan, it too will fall from power. More political realignments will ensue. Japan will have no political stability without prosperity, and no prosperity without serious reform.

Japan's Fake Economic Reforms

The Canadian Century

At the beginning of the 20th century, Canada was one of the richest countries in the world, enjoying boundless natural resources, a privileged place in the commercial empire established by still-dominant Britain, and access to the energetic American market. Against this backdrop, it didn't seem unreasonably boastful in 1904 when Prime Minister Wilfrid Laurier proclaimed that "the 20th century shall be filled by Canada."

Ninety years later, his words seemed more ironic than prophetic. The Canada of 1994 in many ways resembled the United States or Europe of today. Deteriorating public finances at every level were causing grave anxiety among both the public and experts. The federal government was plagued by persistent deficits. The national debt was growing at an alarming rate. The media and the international community were all predicting a day of fiscal reckoning with far-reaching implications. The Wall Street Journal went as far as to call Canada "an honorary member of the Third World."

Fast-forward again to today, and Canada seems to be back on track. The country's economy grew at an average rate of 3.3 percent between 1997 and 2007, the highest average growth among the G-7 countries, including the United States. Canada's job-creation record was nothing short of stellar. From 1997 to 2007, Canada's average employment growth was 2.1 percent, doubling that of the United States and exceeding employment growth in all other G-7 countries. Perhaps most importantly for future economic prosperity, during the same period Canada outperformed the G-7 average almost every year on business investment. Canada outperformed the United States on this measure in every year but three over the same period.

So perhaps Laurier was not wrong, just 100 years early. If the country continues on the path it is following today, it's not unreasonable to think that this will be the Canadian century, the era in which the country comes into its own as a world economic power and finally steps out of America's shadow.

The story of how a classic economic basket case transformed into a top global performer has implications beyond Canada. Every one of the tools Canada used to extricate itself from its parlous position is available to the United States. As the world's top economic powers gather in Canada for this year's G-20 summit, U.S. President Barack Obama and his team would be wise to study the Canadian model, or risk being left behind.

First, it's important to understand how Canada got off track. Prior to the early 1970s, Canada had a strict political culture, like many countries, which demanded balanced budgets and frugal government spending. Ottawa began to abandon this traditional discipline in the 1960s and 1970s, as federal spending increased from just under 15 percent of GDP in 1965 to 23 percent by 1993, but was not matched by equivalent increases in taxes. It was a phenomenon observed in many, if not most, industrialized countries during this period.

Between 1965 and 1996, Ottawa booked a grand total of four operating surpluses, and the real value of the national debt tripled. By the late 1980s, roughly a third of Ottawa's revenues were being used to pay interest.

Then there were the entitlement programs. The national public pension plan, the Canada Pension Plan, for instance, was increasingly unsustainable because its underlying assumptions, namely a growing population and continuous income growth, proved faulty. Huge premium increases or benefit cuts seemed the only way to carry the program through the looming retirement of Canada's enormous baby-boom generation.

The problem wasn't only in Ottawa. Canada's provinces, whose governments have much greater spending, taxing, and regulatory authority than U.S. states, were also hard at work creating a fiscal mess. As a share of the economy, provincial spending more than doubled between 1965 and 1993 while provincial debt tripled. The associated interest costs, as a share of revenues, also tripled.

By 1993, Prime Minister Brian Mulroney's Conservative government was beset by mounting internal pressure from the deficits, coupled with external pressures such as the Mexican peso crisis, which heightened capital-market worries about deficit-laden countries (three-month treasury bill rates more than doubled in 1995), and embarrassing international recognition of Canada's fiscal crisis, exemplified by the Wall Street Journal's mocking. The public was hungry for change, and in October 1993 the left-of-center Liberal Party of Canada led by Jean Chrétien came to power.

For the first year, the new government's promises of reform went largely unfulfilled. The turning point came in the 1995 budget when Finance Minister Paul Martin articulated a new direction for the federal government. "We are acting on a new vision of the role of government," he said. "Smaller government ... smarter government.

The Liberals' 1995 budget relied chiefly on spending cuts rather than tax increases to slay the deficit and began the long process of debt reduction. Spending was to fall 8.8 percent over two years. Large cuts in transportation, industry, regional development, and scientific support were made. The size of the federal government was to decline from 16.2 percent of GDP in 1994 to 13.1 percent in 1996. Public-sector employment was to fall 14 percent.

The new discipline paid off quickly. Federal government spending as a share of the economy fell even more rapidly than planned. Provincial government spending also decreased significantly from 25 percent of GDP to 20 percent. Federal budget surpluses were consistently reported beginning in 1997. The national debt fell by almost half (to a little over 40 percent of GDP) by 2007.

The quick return to fiscal surpluses coupled with stronger economic performance than expected meant Ottawa could cut taxes, including personal and corporate income taxes, capital gains taxes, and the corporate capital tax, which reinforced economic performance.

Canadian reforms didn't stop with balanced budgets. Chrétien's government went on to tackle and solve two previously untouchable entitlement programs: the Canada Pension Plan (CPP) and welfare.

The CPP, Canada's main public pension plan, is similar to Social Security in the United States. Previously deemed a political third rail, the CPP's unsustainable finances suddenly became fixable in Canada's new reform-minded political climate. The federal government and a number of its provincial counterparts seized the opportunity of the public's willingness to confront long-festering problems and bear the cost of reform. Nine provinces along with the federal government agreed to a set of reforms to the program that went into effect in 1998. These included increasing the payroll tax, modestly trimming benefits, and investing budget surpluses in equities.

One can quibble with the specific nature and cost-effectiveness of the reforms; no one, however, can disagree with the results: The program's financing was placed on a solid footing that will enable it to weather the costs of the retiring baby boomers.

Like the United States, Canada achieved historic reform of the country's welfare programs in 1996. Canada's approach, however, was more decentralized than Washington's. Ottawa offered a historic deal to the provincial governments: unprecedented freedom to make their own welfare policies. This unleashed a wave of fruitful experimentation and innovation in the provinces, while spending was cut at the national level. The results were stunning. Large numbers of Canadians, previously trapped in poorly designed benefit programs, returned to the workforce: By 2000, the number of welfare beneficiaries in Canada had declined by more than a million people, from 10.7 percent of the population to 6.8 percent.

In short, the Canadian economy took flight as reform took hold. Moreover, Canada weathered the recent recession better than its G-7 partners, so the reforms of the 1990s are the gift that keeps on giving. Consider that the recession in Canada lasted only three quarters, from the fourth quarter of 2008 to the second quarter of 2009. Beginning in mid-2009, the Canadian economy turned a corner and is experiencing real GDP and employment growth. Unemployment peaked at 8.7 percent in August 2009 and stood at 8.1 percent this May. None of Canada's major financial institutions had to be bailed out.

Some in Washington might dismiss the relevance of the Canadian example to the United States' fiscal problems because of the differences between the two countries' political systems. This is a misunderstanding of the Canadian experience. Many reforms that were put in place required extensive political bargaining with powerful interests, and provincial consent was often necessary. Moreover, as part of the reform package, the Liberals in Ottawa directly challenged several of their traditional interest groups, among them the civil service and social-welfare advocates -- perhaps a precedent for Obama to consider.

In fact, circumstances in Ottawa and Washington in the early years of Canada's reforms showed parallel patterns. The Liberals faced a fiscally conservative Reform Party opposition in Parliament, while Democratic President Bill Clinton was under similar pressure from Republican Newt Gingrich's congressional majority after 1994. This political alignment proved fruitful in moving both countries in a more fiscally responsible direction, but Canada was able to sustain reform whereas in the United States it quickly faltered. For example, the Clinton-era Republican Congress began reducing the federal deficit in 1994 until surpluses were finally achieved in 1998. Unfortunately, the status quo mix of overspending financed with deficits returned in 2002.

What made reform possible was the depth of the crisis Canada faced, the extent to which the Canadian electorate demanded an end to irresponsible public finances, and the degree to which the entire political class responded. Governments at all levels then moved on a broad front, making it clear that no established interests would be exempted from contributing to the cost of slaying the deficit, lowering both taxes and the debt, and making the Canadian economy an outperformer.

Every one of these lessons is entirely applicable to the United States today. America's budget mess can and will be fixed when the public demands action and the political class decides to set aside rancorous and extreme partisanship in pursuit of a robust economy, job growth, lower taxes, and focused government. Call it the Canadian way.