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BULLETIN
Wednesday, 10 March 2004

China's New Rulers: The Secret Files
Richard B Khoe. SAIS Review. Washington: Summer 2003. Vol. 23, Iss. 2; pg. 239, 5 pgs
Abstract (Article Summary)
Khoe reviews "China's New Rulers: The Secret Files" by Andrew J. Nathan and Bruce Gilley.

Full Text (1632 words)
Copyright Johns Hopkins University Press Summer 2003



China's New Rulers: The Secret Files, by Andrew J. Nathan and Bruce Gilley. (New York: The New York Review of Books, 2002). 237 pp. $22.

China long has conjured up a sense of mystery and intrigue among Western observers. Just thirty-five years ago during the Cultural Revolution, Western intelligence analysts were starved for knowledge about the insular country and reportedly relied on Hong Kong's market stalls as a vital information source. They eagerly scoured through trash piles to retrieve the newspapers wrapped around vegetables grown nearby in China's Guangdong Province, hoping to find precious bits of information about that country's basic living conditions, government policies, and political leadership. Of course, China has been fundamentally transformed since that time. Communism as an economic system now exists in name only, replaced by a rapidly expanding market-based system. Information about China and its people is now plentiful, perhaps to the extent of analytical paralysis.

One thing that has not changed, however, is the relative lack of information about China's political system and its leaders. At the Sixteenth Chinese Communist Party (CCP) Congress in November 2002, an entire bloc of younger cadres known as the "fourth generation" was elevated to the party's highest leadership positions. At the head of this group is Hu Jintao, who now holds two of the three key leadership positions-President and CCP General Secretary-that constitute supreme power in China. Hu is expected eventually to assume the third main position as Chairman of the Central Military Commission from Jiang Zemin. Remarkably little is known about Hu and his fourth generation peers, such as Wen Jiabao, Zeng Qinghong, and Wu Bangguo, who have assumed greater prominence in this era of increased collective leadership. Thus, China's New Rulers: The Secret Files, by Andrew J.. Nathan and Bruce Gilley, is a significant contribution to understanding who these new leaders are and how they think. The book thought-- fully removes the aura of mystery that surrounds the fourth generation, which many observers believe will initiate some degree of political reform over time.

Nathan and Gilley's book is similar, in many respects, to the newspapers found in Hong Kong markets thirty-five years ago. Both fill a need for basic yet critical information, and both give their readers a perspective that is at once voyeuristic and genuine. China's New Rulers draws heavily upon the Chinese-language book Disidai ("The Fourth Generation"), whose author, writing under the pseudonym Zong Hairen, obtained secret documents compiled by the CCP's Organization Department.' These documents are the personnel files used by the CCP itself to evaluate candidates for top party posts and are the product of meticulous research and interviews by party investigators. This is not the first time Nathan has relied on so-called secret files to expose the arcane workings of Chinese politics. He is known most famously for The Tiananmen Papers,2 which documents, through internal party memos and notes, the tragic sequence of events that led to the CCP's decision to use force against its own people in June 1989. Nathan is banned from visiting China to this day, and the government has denied the authenticity of both Disidai and China's New Rulers, albeit with little conviction. Nathan's fellow collaborator is former Far Eastern Economic Review reporter Bruce Gilley, who has authored a wellreceived biography of Jiang Zemin.3

The book's most valuable contribution is its insight into the mysterious Hu-probably the least known of the world's important leaders. Throughout his career, Hu has built an impressive resume that reveals surprisingly little about him. It is tempting, but ultimately imprudent, to infer in Hu personal qualities that could lead to prospective actions (e.g., political reforms) based on the positions he has held. For example, many believe Hu to be sympathetic to the concerns of China's rural population-such as the growing disparity with the rich urban coast-because of his service as party secretary in three of China's most impoverished provinces, including Tibet. According to party files, however, his provincial tenure was not marked with distinction, nor is there evidence of any great concern on his part for rural development. Because Hu headed the school that grooms the CCP's most promising cadres for leadership positions when it taught courses on social democracy, some believe he may favor political reform. However, nothing Hu has actually said verifies these supposed liberal tendencies, and there is no confirmation he had directed or was even authorized to approve the school's curriculum. In fact, there is stronger evidence that Hu's tendencies are more authoritarian. As Tibet's provincial governor in 1989, Hu declared martial law in the face of social unrest, setting an important precedent for the events that unfolded in Beijing just three months later. Notably, Hu was the first provincial leader to congratulate Beijing after the Tiananmen crackdown.

Hu leaves an indelible impression of "ordinariness" that leads the reader to question how he rose to power in the first place. Powerful patrons, good fortune, and, indeed, the non-threatening nature of his ordinariness seem to be the deciding factors. The authors highlight that Hu's friendship with CCP elder Song Ping proved instrumental to his rapid rise, and when Song retired from his post on the powerful Politburo Standing Committee (PBSC) in 1992, he lobbied hard for his protege to succeed him. Hu subsequently overtook peers with more substantive records of accomplishment when party elders decided the new PBSC member should be younger than fifty years old at the time of the 1992 Party Congress. (Hu was just three months shy.) As a result, Hu became the youngest PBSC member and was labeled the "core of the fourth generation of leadership." The PBSC slot effectively designated him as Jiang's eventual successor and led to official postings that were second in rank to Jiang, though largely of symbolic power. "What Hu did accomplish during his decade as heir apparent was to retain that status by staying out of the limelight," Nathan and Gilley write. He succeeded mainly by assuring a complex network of party factions that he did not threaten their interests, and, given that a high political position in China frequently leads to personal power and wealth, one cannot overstate the potency of these interests. Thus, Hu has demonstrated skillful political maneuvering, but he has shown little in the way of true leadership or consensus building.

The fourth generation figure that stands in contrast to Hu is Zeng Qinghong, Jiang's protege, who currently ranks fifth in the CCP hierarchy. China's New Rulers shows that unlike Hu, Zeng achieved a considerable amount in the last decade. He helped engineer the fall of three powerful rivals to Jiang, who rewarded him with a place in the CCP's inner circle. As head of the Organization Department, Zeng was responsible for making key personnel decisions and building up a loyal base of support to Jiang and himself, while Hu could only rubber-stamp these decisions. Zeng also played a leading role in crafting the "Three Represents" theory, which codifies the CCP's groundbreaking effort to admit capitalists into the party. Also in contrast to Hu, there is real evidence that Zeng may be a "closet reformer." His files describe him as "an ideological omnivore" who "feeds freely on whatever theory or idea seems to him the most practical way to make China a strong and respected nation." He has told friends he would be willing to reverse the official condemnation of 1989, increase competitive elections, and allow independent parties and media. Ironically, it is these liberal tendencies and his connection to Jiang that now obstruct his political ambitions. Zeng threatens the same vested interests that Hu successfully attracted. He received the largest numbers of "no" votes among current Politburo members and was limited to the fifth-- ranking position in the party despite his stellar record. Nevertheless, Zeng is a politician to watch closely and someone to whom the party may turn for strong and bold leadership.

China's New Rulers is not an impartial "who's who" of Chinese leadership. The authors inject a great deal of useful interpretive analysis with which readers may or may not agree. Also, because the book draws upon documents from the CCP itself, the source files themselves are "tainted." There is much to learn from the party's biases however, as the authors point out: "Most fascinating, the files tell us what the CCP sees when it looks in the mirror." By and large, the reflection is a reassuring one to Western readers. It reveals a party in the hands of younger and technically capable leaders who are well-intentioned and hold forward-looking views. Further, their stated foreign policy goals are rather benign and tend to disavow hegemonic ambitions.

As progressive as some of its stances are, however, the party remains ignorant of its glaring weaknesses. It seems little troubled that the domination of personal interests has potentially planted the seeds of its own undoing in the form of rampant corruption and weak leadership. The party also seems overly confident in its ability to shape people and events at will. Ironically, the explosion of economic dynamism that has strengthened China has inextricably tied the country's fortunes to global forces, for better or worse, and weakened the party's reach. The CCP response to problems within the scope of party control-rampant corruption and the weakness of stateowned industries and financial institutions-has been either feeble or ineffective. Thus, the best intentions of the party may matter little if internal weaknesses reach crisis conditions or are ignited by an external shock.

[Footnote]
Notes

[Footnote]
1 Zong Hairen, Disidai (New York: Mirror Books, 2002).
2 Zhang Liang, Andrew J. Nathan and Perry Link, eds., The Tiananmen Papers (New York: Public Affairs, 2001).
3 Bruce Gilley, Tiger on the Brink: Jiang Zemin and China's New Elite (Berkeley, CA: University of California Press, 1998).

[Author Affiliation]
Reviewed by Richard B. Khoe, M.I.P.P Johns Hopkins University, SAIS, 2003.

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"Avalanching" Bin Laden

By Stephen Brown
FrontPageMagazine.com | March 10, 2004

They are smoking the rats out of their holes.

The joint American-Pakistani military offensive, launched recently in the rugged Afghan-Pakistani border region, is making life difficult for Islamist forces. About 2,000 of the 12,000 American troops stationed in Afghanistan are involved in the action, dubbed "Operation Avalanche," to eliminate the Taliban, al-Qaeda, and other armed Islamist groups, and to capture their leaders. The American soldiers are positioned on the Afghan side of the border in what is termed a "hammer and anvil" operation: about 70,000 Pakistani troops are acting as the hammer to drive the Islamists across the border into the waiting American anvil.

At one point it was claimed that the allied forces had surrounded Osama bin Laden, however this turned out to be premature. Nevertheless, the military offensive has already achieved some successes. Besides the jihadists forced from their Pakistani refuge back across the Afghan border, the Pakistanis claim to have captured more than 20 foreigners, including nationals from Saudi Arabia, Egypt and Yemen. As well, among their number was Khalid al-Zawahiri, son of Osama bin Laden's deputy, Ayman al-Zawahiri, who recently released a taped message that threatened more terrorist strikes against the United States. The Pakistanis have also arrested 15 people for aiding the Taliban.

The first phase of Operation Avalanche is taking place in the tribal areas of Pakistan's North-West Frontier Province. Created by the British as a buffer between pre-partition India and Afghanistan, the North-West Frontier Province is made up of seven different tribal areas and contains a population of about six million. The Pakistani government exercises little control in the province where, besides a safe haven, the Islamist groups find support and recruits among the mostly Pashtun population.

And with its long (2,400 kilometers), porous border with Afghanistan, the region has long been a thorn in the side of the American military and the Afghan government, as it was for the Soviets in the 1980s. Taliban and al-Qaeda adherents fled there after the American invasion of Afghanistan more than two years ago, where they continue to stage attacks against allied forces and UN aid workers. One hundred US soldiers alone have died in Afghanistan since the invasion.

Pakistan's President General Pervez Musharraf is cooperating in the hunt for bin Laden as well as in the battle against the new jihad forming against coalition troops in Afghanistan. Since 9/11, Pakistan has been an important ally of the United States in the War on Terror, having captured more than 550 suspected Taliban and al-Qaeda operatives. Pakistani authorities have also allowed the FBI to set up office in their country where its officials interrogate captured terrorists, listen in on the communications network and conduct other intelligence gathering operations.

After 9/11, Pakistan pretty much had to join the American side in the War on Terror or suffer such consequences as aid reduction, refused loans, and a ban on weapons sales. America granted $395 million in aid to its ally last January, while another $3 billion has been promised to the South Asian country over the next five years. In addition, America will not sanction Pakistan for its role in the recently revealed nuclear proliferation scandal involving that country, receiving instead permission for American troops to operate on Pakistani territory in the spring.

The Pakistani army, often accused of hindering efforts against the Taliban due to Islamist sympathizers in its ranks, appears to be taking Operation Avalanche seriously. It has cut off all access into and out of the region and has ordered the tribes in the affected areas to cooperate or face such punishments as home demolitions. One observer says the tribesmen now cannot even drive around with tinted windows or they face three years in jail, confiscation of their vehicles and a $1,200 fine.

The strategy of the Islamist forces under attack is simply to lie low until the spring when they can launch their own offensive, possibly against Afghan cities. They will also continue their suicide bombing campaign. The Islamists have gained ground in Afghanistan in recent months, especially in the rural, southern Pashtun areas, and are threatening to undo all the gains made since the invasion.

The American-Pakistani offensive was launched at this time due to this worsening security situation in Afghanistan, which has caused a postponement of the Afghan elections, a step regarded as crucial in the rebuilding of the country. The campaign is meant to preempt any Islamist spring attack, as well. Besides, after two years in the country American forces believe they are much better prepared, intelligence- and military-wise, for such a large operation that is expected to last many months with the destruction of the Islamist forces as its ultimate goal. The capture of Mullah Omar and Osama bin Laden, while a very welcome bonus, are of secondary importance.

Concurrent with military operations, efforts are also being made to split the Islamist resistance by offering certain leaders a roll in the Afghan political process if they cease their attacks. Nevertheless the current offensive, unlike others in the past, still has as its goal the complete destruction of all Islamist forces. This, it is realized, is an important prerequisite for any peaceful political solution in Afghanistan, something which that unfortunate country has long desperately needed.


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Stephen Brown is a journalist based in Toronto. He has an M.A. in Russian and Eastern European Studies. Email him at alsolzh@hotmail.com.

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Afghanistan: The spring trap is sprung
By Syed Saleem Shahzad

KARACHI - In a clear indication that the spring offensive against suspected Taliban and al-Qaeda fighters on the Afghanistan-Pakistan border will be launched soon, United States Secretary of State Colin Powell is scheduled to arrive in Pakistan on March 17, a visit that comes on the heels of British Foreign Secretary Jack Straw's own journey to Islamabad last week. After Powell's trip, US Chief of Central Command General John Abizaid will also make his way to Pakistan.

These visits are all in preparation for the upcoming "game", one that will have broad consequences for the region. At a time when rebellious feelings are quickly taking root in the Pakistani tribal regions of South and North Waziristan - tribal leaders have unanimously demanded the withdrawal of Pakistani forces from the tribal areas - plans for the new operation are nearing their final stages.

An operation outline
The scope of the upcoming operation is far broader in both Afghanistan and Pakistan than it has been in the past, and is likely to be launched in April, according to high-level sources that spoke to Asia Times Online. An important development has already taken place on the Afghan front: access to Tora Bora has been restricted by international and Afghan military forces. While this piece of information made news around the globe, what is little known is that there is a truce between local Afghan military bosses in Jalalabad and local warlords associated with Hezb-i-Islami, the Afghanistan rebel group led by Gulbuddin Hekmatyar that is spearheading the Afghan resistance movement.

Meanwhile, on the other side of the border in Pakistan's Khyber agency and surrounding areas, it is alleged that Osama bin Laden built bunkers and tunnels, echoing the path he took in the Tora Bora mountains, from where he escaped advancing US-led troops in early 2002 after the fall of the Taliban. Sources maintain that if bin Laden is not arrested in Khyber agency, it is unlikely he will be located as it is the only static refuge besides Tora. At the same time, the region is where guerrilla fighters take refuge for longer periods to plan their next guerrilla attack. This information is very much known to US authorities, which is why Khyber agency is one of the next targets for the operation against al-Qaeda and the Taliban.

It is also believed that the spring operations will cover not only Afghan and the Pakistani tribal areas, but the city centers of both countries. The high-level sources say that the US is working to paralyze all possible support systems to the Taliban and al-Qaeda from cities in Pakistan.

In the next sweep, the US is expected to play an active role within Pakistan; however, the mission has been kept secret as this is a very sensitive issue in the country. The owners of major Pakistani press organizations have already been warned against coverage of events showing US involvement in Pakistan. And for foreign media correspondents, new proposals are under review to restrict their movements, as well as monitor their writing.

Pakistan's President General Pervez Musharraf, who faces significant domestic political pressure against US deployments in Pakistan, has repeatedly denied the presence of US troops.

Putting on the pressure
The US has already pressured Pakistan to take all the necessary steps to ensure the spring operation will be a success. In an extraordinary development highlighting the intricacies of the operation, the Corps Commander in Peshawar, Lieutenant-General Ali Jan Orakzai, has retired a month prematurely. Major General Safdar Hussain will take his place. Sources from Peshawar maintain that Orakzai will be installed as governor of Pakistan's North West Frontier Province in compensation for his premature retirement.

Orakzai has been in Washington's bad books since last year, when he visited the US and openly condemned the behavior of US authorities towards Pakistanis. Orakzai was an official guest, but was forced to go through a plethora of screenings and checks at the immigration counter on his arrival. As well as complaining about this particular incident, Orakzai spoke against what he felt was discriminatory behavior against Pakistanis at functions hosted by the Pakistani embassy in the US.

These changes in command come amid word that US authorities have made a special request: in the next phase of operations, all Pashtun officers should be separated from those officers actually involved in the spring offensive, whose names would be vetted by US authorities. (Pashtuns are generally sympathetic to the ethnic Pashtun Taliban.)

Orakzai is a Pashtun. Meanwhile, the new corps commander, Hussain, is from Punjab and enjoys good relations with US authorities. Previously posted in Pakistan's Inter-Services Intelligence (ISI) , where he coordinated with US forces, Hussain is highly knowledgeable about the north western Pakistani region. Traditionally, the Pakistan army has been dominated by Punjabi and Pashtun officers, but for the past two years Pashtun officers have been greatly cut to size. In recent promotions, 18 brigadiers were elevated to the position of major-general, while only one Pashtun was given the same title.

Elsewhere, a list of Pakistan's most-wanted terrorists has been compiled by a newly formed group called the Special Investigation Cell. This group is headed by a Federal Investigation Agency director from the Pakistani side and by a Central Intelligence Agency official from the US side. As per the list, several top jihadis were recently picked up and interrogated. These events were not reported in the media.

This correspondent spoke with one of the men picked up, who once belonged to the banned Lashkar-i-Taiba and who is now an inactive office bearer. He was previously picked up by ISI and US Federal Bureau of Investigation officials and jointly and separately interrogated by these agencies, which wanted to know the whereabouts of Arab fighters hiding in the port city of Karachi.

The man was given clearance after several days of interrogation, but was picked up again for the same reason, and once again set free after he went through several stages of screenings and investigations. He has been told that since he is on the US's most-wanted list, he will be in contact with these agencies in the future.

Under the new operation, many big names associated with the Jamaat-i-Islami, the Jamiat-i-Ulema-i-Islam (Fazalur Rehman) , Jaish-i-Mohammed and the Lashkar-i-Taiba are expected to be interrogated. The names include Maulana Masood Azhar and Abdullah Shah Mazhar, two top-ranking jihadis.

At the same time, all those who previously fought alongside the Taliban in Afghanistan, since released from Afghan jails, will be required to report weekly to their local Afghan police stations and will occasionally be picked up by intelligence agencies for screening. Those Pakistanis released from Afghan jails will not be set free by Pakistani authorities and will be dealt with under a stringent legal clause.

From Kabul to Jalalabad and from Khyber agency to Karachi, an infrastructure is being put in place, all of which is being supervised by US authorities, to make the spring operations a success. The depth of these plans suggests that the battlefields will heat up in the near future, on both sides of the Afghan-Pakistan border. But whether these steps will actually help the US catch Osama remains the million-dollar question.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)



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Iran demands entry to nuclear club
By Safa Haeri

PARIS - Iran on Sunday surprised the international community, and above all the United Nations' nuclear watchdog, the International Atomic Energy Agency (IAEA), by seeking to join the world's atomic club, calling on its members for a prompt entry.

"We want Iran to be recognized as a member of the nuclear club, that means Iran be recognized as a country having the nuclear fuel cycle, and enriching uranium. This is very difficult for the world to accept," Hassan Rohani, the secretary of the Supreme Council for National Security (SCNS), announced ahead of an important meeting this week of the IAEA. Five countries are officially inside that club - the United States, Russia, China, Britain and France.

The UN agency meets in Vienna to tackle Iran's and Libya's nuclear programs, which have been fed by a global black market linked to the father of Pakistan's atom bomb, Abdul Qadeer Khan. The governing board will consider two resolutions during the meeting, expected to last until Friday.

The first is Libya's long-secret atomic-weapons program, which Tripoli has agreed to dismantle under the supervision of the IAEA. The second issue is Iran, long accused by Washington, among others, of using its atomic-energy program as a front to build a bomb.

Tehran insists that its nuclear program is entirely peaceful and has called on the IAEA to leave it alone. "The case concerning Iran's peaceful nuclear activities should be completely closed at the IAEA board of governors and removed from its agenda," Rohani said on state television on Sunday.

He added that it was time for the IAEA, which launched an intensive investigation into Iran's nuclear program 13 months ago, to confirm the Islamic Republic's innocence.

The "request" for membership to the atomic club by Rohani, who handles the complicated, complex and controversial issue of Iranian nuclear activities and who conducts the difficult and tortuous talks with the IAEA, means that Iran has the capacity of making nuclear weapons, a potential that most US and European experts and intelligence services put at between three and five years to achieve.

Whatever the reasons that motivated Tehran's move, diplomats and experts say that Rohani's declaration not only will not appease international concerns about Iran's determination to set up a nuclear arsenal, but also convince the United States and the European Union to increase pressures on the Islamic Republic to stop all its atomic projects, or face drastic international sanctions.

In a report to be published at the end of this month, David Albright, a former UN weapons inspector and president of the Institute for Science and International Security, a US-based non-profit research organization specializing in nuclear matters, will disclose that Iran has the capacity to produce enough enriched uranium to build some 30 nuclear warheads a year.

In Tehran on Sunday, Rohani told the inaugural session of the Assembly of Experts, a body made up of 82 senior clerics that has the power to elect or dismiss the leader of the regime: "We have two goals ahead of us that we must achieve. One is closing Iran's nuclear dossier with the IAEA and bringing the board of governors to take it out of their agenda, and the other is to have Iran recognized globally as a nuclear country."

As Rohani was briefing the Experts, a hardline newspaper warned the IAEA to be "more realistic in its dealings with Iran or the whole game would be jeopardized", and an unidentified Iranian diplomat in Vienna threatened that Iran would resume uranium enrichment and revise its agreement to cooperate with the international nuclear watchdog if the dispute is not resolved in line with last October's agreement.

The envoy was referring to an accord signed on October 21 in Tehran between Rohani with the foreign ministers of Britain, France and Germany under which Iran agreed to sign the Additional Protocol to the Non-Proliferation Treaty (NPT) and suspend enriching uranium in return for getting access to advanced nuclear technologies for peaceful purposes, like the construction of nuclear-powered electrical plants.

"Iran will not wait forever to restore its legitimate national right to pursue peaceful nuclear activities and will not accept that the IAEA continue its double-standard policies toward Iran," the diplomat added, quoted by Mehr, a news agency close to the ruling conservatives.

At the same time, and in an obvious coordinated campaign aimed at intimidating the IAEA's board of governors, Mohsen Rezai, the secretary of the powerful Expediency Council that is chaired by former president Ayatollah Ali Akbar Hashemi Rafsanjani, said cooperation with the IAEA would become more difficult if the IAEA decided to limit Iran's peaceful and civilian nuclear activities.

Rohani, in his lengthy and detailed report to the Assembly of Experts, explained why he had to bow to the IAEA's demand to sign the Additional Protocol, revealing that in the event that Iran did not obey, "it would face the same fate as Iraq", meaning a possible military invasion of the country authorized by the UN Security Council.

"The pressures applied on Iran were so great that most of the world's leading industrial nations conditioned trading with us to the signing of the protocol, as seen in the Azadegan oilfields that the Japanese refused to develop," the SCNS influential secretary told a bewildered assembly. (See Japan, Iran sign major oil deal, US dismayed , February 20.)

However, Rohani expressed the hope that because of Iran's "clear-cut and full" cooperation with the IAEA, the board would not take the case to the Security Council for economic sanctions. "Even the Americans have indicated that they would not insist on the matter," he added.

Diplomats in Vienna said a draft resolution prepared by the US, Canada, Australia and New Zealand does not mention the Security Council and balances criticism of Iran with praise for granting the IAEA access to sites and agreeing to suspend all activities linked to the enrichment of uranium.

The IAEA will also discuss technology and equipment for enriching uranium sold to Iran by Pakistan's Khan. According to a report by Malaysian police based on the apparent confession of a wealthy Sri Lankan who serves as a middleman, Khan sold Iran a number of centrifuges for US$3 million. But Tehran has constantly denied the accusations, saying that it obtained second-hand material on the black market, with no information about its origin.

IAEA inspectors who found traces of aluminum enriched with new equipment known as P-2 say Iran concealed this equipment from them, but the radical daily Keyhan on Sunday accused the agency of "gross lies and total dishonesty", reiterating that Iran had told inspectors about all of its activities and installations.

In a sharp-tongued comment, Hoseyn Shariatmadari, a high-ranking intelligence officer appointed by Supreme Leader Ayatollah Ali Khamenei as editor, said that although the October 21 agreement with the foreign affairs ministers of Europe's big three was a choice between bad and worse, the IAEA, under pressure from the "US and Zionist circles has gone far beyond honesty in dealing with the Islamic Republic".

Quoting Khamenei as having warned the IAEA and the leading powers "not to try to challenge Islamic Iran's right to possess nuclear technology", Shariatmadari called on the authorities to be ready for "the big showdown" and urged lawmakers elected to the next Iranian parliament not to approve the protocol if the IAEA failed to accommodate Iran.

The additional protocol, which allows IAEA inspectors to carry out "instant" and unrestricted inspections of all Iranian nuclear installations and projects, has not yet been approved by the outgoing Iranian majlis (parliament).

According to Mehr, continuing accusations against Iran, despite its cooperation with IAEA inspectors, has irked the Iranian delegation, which has accused the agency of dealing with Iran in an "illogical manner ... There is nothing permanent. We signed the additional protocol ... and when to resume is in the hands of our system [the ruling Islamic establishment]," Rohani said at the assembly on Sunday, reiterating that Iran's atomic projects, like an electric plant that is under construction at the Persian Gulf port of Booshehr, with assistance from Russia, are for civilian purposes.

But Washington insists that Iran's ruling ayatollahs want to use atomic installations, and Booshehr, for advancing military aims.

The IAEA's latest report on Iran said that agency inspectors had unearthed designs and parts for the advanced P2 uranium enrichment centrifuge, capable of producing bomb-grade uranium at twice the speed of Iran's first generation P1 centrifuges. The agency also uncovered experiments in the creation of plutonium, which can also be used as the explosive in nuclear weapons, and polonium, which can spark a chain reaction in a nuclear weapon.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
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Iran threatens to end cooperation with IAEA

TEHRAN: Iran will halt its cooperation with the UN nuclear watchdog if European states fail to counter US pressure on the Islamic republic over its atomic programme, Foreign Minister Kamal Kharazi threatened on Wednesday.

Iran's decision to resume uranium enrichment, a possible material for making nuclear weapons, would not be constructive, Kenneth Brill, US ambassador to the Vienna-based UN nuclear watchdog, said. He was reacting at a press briefing to comments by Iranian Foreign Minister Kamal Kharazi that Iran intended to end its suspension of uranium enrichment once relations with the International Atomic Energy Agency (IAEA) were "normalized".

The Iranian minister also said Iran intended to end its suspension of uranium enrichment -- a key step in producing both nuclear weapons and atomic energy -- once relations with the International Atomic Energy Agency (IAEA) were "normalised." "Unfortunately, the agency allows itself to be influenced by the Americans," Kharazi told reporters here after a cabinet meeting. --Agencies



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Japan to shift aid focus from China to India
By Purnendra Jain

ADELAIDE - Japan is set to make a historic economic and political policy decision, shifting its foreign aid focus away from China - and to India.

For many years China has been the top recipient of Japan's Official Development Assistance (ODA) that symbolized Japan's economic commitment and political and diplomatic closeness to its powerful Asian neighbor. As recently as 2000, China received some 214 billion yen (US$2 billion) in loans as part of Japan's ODA, while India remained on the periphery of Japan's foreign-aid program; at that time Tokyo had just resumed its yen loans to New Delhi, which had been suspended to demonstrate strong disapproval of India's nuclear tests in 1998.

But this equation is changing fast. If proposed changes in Japan's ODA budget allocations are approved at the political level, China is certain to slip into the No 2 position and India will emerge as the leading recipient of Japan's ODA loans in 2004. China is likely to receive only 100 billion yen in 2004, about 20 billion less than last year - the total loan will be less than half the amount Beijing received in 2000. This is a steep decline. On the other hand, India is certain to receive an amount similar to what it received last year, or even a little more, which will be in excess of 111 billion yen.

An announcement is expected by the end of the month.

Why this shift?
Criticism of Japan's aid policy as being devoid of a philosophy, the misappropriation of aid money in recipient countries, and political scandals within Japan forced policymakers to address these issues through policy change. Moreover, cuts in the ODA budget every year since 2000 - the total budget in fiscal 2002 was $9.1 billion - have also prompted Japan to review its aid policy and set new priorities both in aid-funded projects and country focus. To this end, the government has established several commissions and advisory panels consisting of politicians, officials, business leaders and academics that have proposed numerous recommendations. A better balance between China and India is one of the aims of Japan's new direction in its aid policy.

The shift is no doubt an important milestone in Japan's foreign-aid policy. India was the first recipient of Japan's yen loans when this policy was implemented in 1958. But slowly, India's position declined over the years and countries such as Indonesia and China became the leading recipients of Japan's ODA in Asia. Cold War conditions saw Japan's and India's strategic interests drift apart, and led to a consequent fall-off in economic and diplomatic relations between Tokyo and New Delhi. On the other hand, China continued to rise in prominence in Japan's overall economic, diplomatic and strategic considerations after Beijing and Tokyo signed a treaty of friendship and cooperation in 1978.

With India's recent sustained economic growth, its technical preeminence globally, especially in the information-technology sector, and its diplomatic activism, particularly as a key player in the Group of 20 developing countries, and its push to secure a place as a permanent member of the United National Security Council in recent years, many countries are forced to sit up and take notice of India. Japan is no exception. One way to win back India's heart, hurt deeply in 1998 by Japan's policy response after the nuclear tests, is via its aid policy. Policymakers in Tokyo are convinced it's high time to strengthen diplomatic ties with India.

While China will undoubtedly feel a little disappointed with the continuous decline in Japan's flow of yen loans for infrastructure and other national projects and, more important, because of its status change from No 1 to No 2, Beijing is aware that it commands an overwhelming position in the minds of Tokyo's policymakers. China is a key player in Japan's recent economic recovery, and it is unlikely that Tokyo will intentionally make any policy that would upset the Chinese leadership.

Indeed, Beijing should take this development as a compliment. Japan's aid reductions to China are based on the assessment that China no longer requires Japan's financial assistance as much as it once did. In Japan's analytical framework, China's economy has matured and the country is now able to fund many of its infrastructure projects without support from Japan. Of course, China is not the first country to have seen this transition. There are other cases in Asia, such as South Korea and Singapore, which initially received development aid from Japan but with the growth in their economies they no longer required Japan's aid. Indeed, some of them are now members of the Organization for Economic Cooperation and Development and aid donors in their own right.

The ODA priority shift from China to India does not reflect Japan's policy shift in other areas. Japanese investment in China continues to rise and two-way trade is increasing, reaching a level last year never seen before. India still languishes both in trade and investment areas. It will be decades before the level of Japanese investment and trade with India is as high as with China. Indeed it may not reach that level at all.

The subnational factor
It is not just the national government and business leaders who regard China as a key and influential player for many years to come, Japan's subnational governments and local leaders have also realized the importance of China for their industries and future economic well-being.

In recent years, a large number of Japanese prefectural and city governments have opened their offices in Chinese provinces and cities. Their numbers are ever rising and some Japanese local governments are even closing their offices in countries such as Singapore and Thailand and relocating them to Chinese cities and provinces.

More than just in the area of economic linkages, subnational governments of Japan and China are forging strong ties in educational, cultural and scientific fields through sister-city agreements, whose numbers are increasing by the year.

While currently there are some 256 official sister-city agreements between Japanese and Chinese subnational governments, there is only one between India and Japan, formed as far back as in 1965. The first sister-city link between a Japanese and a Chinese subnational government was formed as late as 1973, and that number has now gone above 250. The Council of Local Authorities for International Relations - a national body in charge of promoting international linkages at the grassroots level - has offices in Beijing and Singapore, but none in South Asia. India appears nowhere on its radar screen.

Moreover, there are close to 40 offices of Japan's local governments in different locations in China, seeking business for their local companies, facilitating investment and coordinating cooperative projects. But there are no such activities in India.

The national government's ODA program should not be regarded as the only indicator of government aid and assistance in a bilateral relationship. Japan's subnational governments now offer a range of assistance to their Chinese counterparts, what can be easily regarded as a "local ODA" program. Japan's local governments have knowledge and expertise in areas such as city planning, transportation, the curbing of industrial pollution, environment management, garbage disposal, sewage and water supply, all of which can be highly useful to Chinese localities. Japan's localities are willing to transfer these skills and know-how, and their Chinese counterparts are embracing them. The Indian side neither courts such assistance nor do Japanese local officials have any such proposal for Indian cities.

A strong bilateral relationship in the future will not just be based on how much money a country doles out to another, but long-lasting friendly relations even in times of stresses and strains will be those whose foundations are based on solid ties at the grassroots and popular level. On this measure, China by far leads others in Asia in its relations with Japan.

While India may take some comfort in becoming the No 1 destination of Japanese yen loans, this does not necessarily signal a close and intimate relationship between the two.

But change, even if small and symbolic, does matter in international relations.

Purnendra Jain is a professor in the Center for Asian Studies at Australia's Adelaide University and president of the Japanese Studies Association of Australia.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
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`US forcing North Korea to increase nuclear deterrent'

LONDON: North Korea said on Wednesday the US stance in talks on its nuclear programme was forcing it to "further increase its nuclear deterrent force".

The state-run KCNA news agency quoted a Foreign Ministry spokesman as dismissing as unfounded statements by US officials that six-way talks in Beijing last month had been a success.

"The recent talks could not yield any results due to the fundamental difference between the DPRK (Democratic People's Republic of Korea - North Korea) and the US in their stands," it added.

Washington repeated its demand at the Beijing talks for the "complete, verifiable and irreversible dismantlement" of the North's nuclear programme.

The North Korean spokesman called that a "demand that can be forced on criminals only..., embarrassing and disgusting to hear," the news agency said in a report monitored in London.

Instead, the United States "should commit itself to completely drop its hostile policy towards the DPRK in a verifiable and irreversible manner," it added.

The spokesman repeated Pyongyang's denial of US allegations that it is pursuing a uranium enrichment programme to make nuclear weapons.

"The far-fetched US assertion about this programme is intended to attack the DPRK under that pretext just as it did against Iraq," the news agency quoted him as saying.

"The reckless US stance only pushes the DPRK to further increase its nuclear deterrent force."

The impasse in talks "does nothing bad to the DPRK as it will have time to take more necessary steps with increased pace", the spokesman added.

US officials say they believe North Korea already possesses one or two nuclear weapons.

In October the United States said the North had admitted to developing nuclear arms. Pyongyang later ejected UN nuclear inspectors and removed inspectors' seals from a mothballed reactor.

North Korea is viewed by Washington as one of the states at the heart of a network responsible for the spread of nuclear weapons technology. --Reuters
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KCNA...
Kim Jong Il's Great Personality Praised
Pyongyang, March 10 (KCNA) -- Members of the State Academy Ensemble of the Ministry of Interior of Russia on a performance tour of the DPRK expressed deep impressions of the noble traits of leader Kim Jong Il as a great man who is possessed of distinguished political capacity, extraordinary leadership ability and warm love for the country and the nation. Igor Shustikov, deputy head of the ensemble, after visiting the Revolutionary Museum of the Ministry of Culture, said the literature and art of Korea have reached a high phase under the wise guidance of Kim Jong Il. He is a genius of art who has brought a great turn in the development of Korean literature and art, he added.
Actress Natalia Kurganskaya, who is well known to the Korean people for her successful presentation of the immortal famous song "Dear General, Where Are You", said she liked this song loved by the Korean people and its melody is immensely expressive as befits the most famous song.
She said she was struck with wonders when she learned that it was created by Kim Jong Il. Seeing the audience overwhelmed with deepest longing for him while hearing this song reverberating from the stage, I could keenly feel their boundless trust in their leader.
Anatoli Lazhuk, general director of dance, said there are many famous generals in the world but he had not heard a story that the head of state of a country went out to the front and planted a tree. Kim Jong Il inspected a unit of the Korean People's Army and planted a tree and I can hardly repress admiration at his ardent patriotism, he added.
The world has never seen such a peerless patriot loving the country and the nation as Kim Jong Il does, he said, adding: I was deeply impressed by his great personality.

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EU and NATO at Odds on Peacekeeping Duties
Mar 09, 2004
NATO and EU officials are set to meet on March 10 in Brussels to hash out details surrounding the EU's December takeover of peacekeeping operations in Bosnia. NATO has said it will turn over the peacekeeping reins to the EU, but it wants to maintain command and control of ongoing counterterrorism operations. This signals more discord within the European Union -- Italy and the United Kingdom seem to support NATO -- and highlights suspicions about the effectiveness of fledgling EU defense capabilities. The NATO pressure also reveals a lack of confidence and a desire to stunt the EU force's operational development.

Musharraf Cursed if He Does, Ousted if He Doesn't?
Mar 09, 2004
Despite the media hype and fresh military operations on both sides of Pakistan's northwestern border, Osama bin Laden and the top leadership of al Qaeda are nowhere to be found. Certain elements within the Pakistani state and society are known to sympathize with the group, and it is likely that certain rogue elements within the Pakistani military and intelligence establishment are helping al Qaeda members evade capture.

Colombia: Who Isn't Out To Kill Castano?
Mar 10, 2004
Someone is trying to kill Colombian paramilitary chief Carlos Castano -- and U.S. intelligence might unwittingly be involved.
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Who "Misled" Whom?

By Steven C. Baker
FrontPageMagazine.com | March 10, 2004

When listening to one of his filibusters, it's hard to tell just what Senator John Kerry really thinks about many things, including Iraq. President Bush recently highlighted the inconsistencies that are inherent in Senator Kerry's legislative record and campaign rhetoric as they relate to Iraq. Summarizing precisely what will become clear to most Americans in November, he said about Senator Kerry that he is "in favor of liberating Iraq, and opposed to it."

The President's retort came after months of relentless assaults from the prospective Democratic presidential nominee. For example, Kerry rarely misses an opportunity to eschew personal responsibility for his October 2002 vote to authorize the use of force in Iraq; a vote that ultimately enabled President Bush to remove Saddam Hussein from power. The liberal Democrat from Massachusetts maintains that he voted in favor of "the process the president promised." According to the Senator, there was a "right way" to hold Saddam Hussein accountable and there was a "wrong way" to do it, and he charges President Bush chose to do it the wrong way.

But anyone with access to the internet can observe that the senator's 2002 vote authorized President Bush "to use the Armed Forces of the United States as he determines to be necessary and appropriate in order to: (1) defend the national security of the United States against the continuing threat posed by Iraq; and (2) enforce all relevant United Nations Security Council resolutions regarding Iraq." Contrary to the Kerry's accusations, Public Law 107-243 had nothing to do with a "process" but everything to do with granting the president the authority to execute foreign policy "as he determines."



Furthermore, Secretary of State Colin Powell clarified the Bush Administration's Iraq policy (i.e. "the process" the administration would pursue vis-?-vis the Iraq problem) before the United States Senate during a hearing on September 26, 2002, concerning "U.S. Policy Toward Iraq." In fact, Senator Kerry's exchange with Secretary Powell should dispel the notion that the Senator was "misled" - at any time - by President Bush, or that any so-called promises were broken.



For instance, Secretary Powell informed Senator Kerry: "It's certainly the case that I am making, and the president is making, to our colleagues in the Security Council: Don't go down this road unless you are prepared to take action if there is continued violation of the kind that we have seen in the past with respect to a new resolution." Secretary Powell even went so far as to warn Kerry, "if for one reason or another the United Nations does not wish to take that action... then the president reserves the right to take the action with like-minded nations, just as was done in Kosovo." The Kerry's response: "Fair enough."



Then, in an attempt to assuage the senator's continued concerns regarding the Bush Administration's rationale for seeking a congressional authorization to use force in Iraq, Secretary Powell reiterated that President Bush would use the authority granted to him by Congress "to act as part of a multilateral effort, but also, in the event that the president sees that the UN will not be able to act and decides that it is in our interest to act with like-minded nations. And we believe there would be like-nations at the time..." Kerry's response: "I understand."



Senator Kerry also likes to claim that President Bush "misled" the American people about the threat posed by Saddam Hussein's Weapons of Mass Destruction. But again, Secretary Powell's testimony on September 26, 2002, reveals the duplicity of this accusation. Secretary Powell told Senator Kerry: "I think the president has made it clear in all his conversations with members of Congress, in his presentations to the American people and his presentation to the United Nations that Iraq has to be disarmed. That is the major problem." The senator's response: "I agree. I agree completely."



Senator Kerry added: "I don't want any misinterpretation about my position. I really want none whatsoever. The issue, to me, is not whether Saddam Hussein should be held accountable. Of course he should. The issue is not whether or not these weapons are a threat. Yes, they are. The issue is: how do we go about this?"



At the time of this debate, Senator Kerry acknowledged that Saddam Hussein's WMDs and were "real" threats in "the capacity of those weapons to slide off to a surrogate terrorist group." Yet he fumed that the authorization to use force in Iraq - in order to protect the American people from these threats - was an "extraordinary broad overreach" in terms of the mandate that it provided the Commander-in-Chief. This is the most significant difference between candidate Kerry and President Bush; a distinction that the President emphasized recently: "It's a choice between an America that leads the world with strength and confidence or an America that is uncertain in the face of danger...Our opponents say they approve of bold action in the world, but only if no other government disagrees." The bottom line is that Kerry is willing to endanger the United States in deference to the "authority" of the United Nations and its preferred statecraft. In contrast, President Bush is determined to do what is necessary to confront America's enemies, with or without the UN's blessing.



In March 2003, President Bush commenced Operation Iraqi Freedom after years of Bill Clinton's feckless diplomacy. When it became clear that the United Nations would not act to enforce its own resolutions, including Resolution 1441, which granted Saddam Hussein "a final opportunity to comply" with his disarmament obligations, the President acted "with like-minded nations." This is exactly what Secretary Powell had forewarned five months earlier. This eventuality should not have surprised Senator Kerry, and if it did, which is the only conclusion he wishes to promote when he says that he was "misled" by the President, then he is not only unfit to be the Commander-in-Chief, but he's unfit to be a senator, as well.

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Deploying the full arsenal: Fighting hunger with biotechnology
Peter G Lacy. SAIS Review. Washington: Winter 2003. Vol. 23, Iss. 1; pg. 181, 22 pgs
Abstract (Article Summary)
One of the most important issues in the debate over biotechnology today is its potential to combat hunger in the developing world. This question is especially relevant as biotechnology struggles to find acceptance while countries in Africa and elsewhere in the developing world face famine. This paper reviews modern efforts to fight hunger and the projected future of the problem. What does biotechnology have to offer in response to this situation and what are the major obstacles to its deployment? The paper then explores ways to overcome these obstacles, arguing that while traditional efforts should be continued, biotechnology's potential to make a safe, meaningful contribution to fighting hunger is too significant to be overlooked.

Full Text (7450 words)
Copyright Johns Hopkins University Press Winter 2003


[Headnote]
One of the most important issues in the debate over biotechnology today is its potential to combat hunger in the developing world. This question is especially relevant as biotechnology struggles to find acceptance while countries in Africa and elsewhere in the developing world face famine. This paper reviews modern efforts to fight hunger and the projected future of the problem. What does biotechnology have to offer in response to this situation and what are the major obstacles to its deployment? The paper then explores ways to overcome these obstacles, arguing that while traditional efforts should be continued, biotechnology's potential to make a safe, meaningful contribution to fighting hunger is too significant to be overlooked.


Introduction

Among the many hotly contested issues in the debate over biotechnolor today is its potential to combat hun er in the developing world. This question is especially relevant as biotechnology struggles to find acceptance while countries in Africa and elsewhere in the developing world face famine. Proponents of biotechnology argue for the immense possibilities that it offers in the fight to end hunger, while opponents say that hunger can be combated successfully without dependence on what they consider dangerous genetically modified (GM) products. Anti-biotech activists often make the case that the inability to end hunger is due to failure in other areas. In a world awash with agricultural surpluses, they argue, we do not need biotechnology. Instead, we should redouble or refine our efforts to relieve distribution bottlenecks, open markets to exports from less developed countries (LDCs), increase investments in yield-enhancing hybridization techniques, boost foreign assistance budgets and medical aid programs, and focus on other areas where the record of success in combating hunger is characterized by less than satisfactory results or outright failure.

This paper reviews modern efforts to fight hunger and the projected future of the problem. It looks at what biotechnology has to offer and the debate surrounding it, and then explores ways to overcome the obstacles to realizing its potential to help wage a successful war on hunger. While traditional efforts should be continued, biotechnology's potential to make a safe, meaningful contribution to fighting hunger is too significant to be overlooked, and is in fact reason alone to embrace it.

Hunger Today in the Developing World

There are about 840 million undernourished people in the world today, about 30 percent of the world's population. Some 777 million of these people live in the developing world, and of these, 177 million are children under ten years of age.1 Hunger is linked to poverty, and vice versa. Hunger and malnourishment impede productivity, thereby dooming people to poverty. The poor, meanwhile, cannot afford food. Hunger, therefore, often becomes a selfperpetuating cycle.

More than two billion people worldwide suffer from malnutrition,2 meaning they live below the per capita daily caloric intake threshold of 2,350 calories that the UN Food and Agriculture Organization (FAO) defines as necessary for an adequate diet. This manifests itself in many ways. For example, almost two billion people in the developing world suffer from iron deficiency, 140 million people experience iodine deficiency, and 140 million children experience vitamin A deficiency. Today, fiftyfour countries are estimated to fall below the 2,350 average minimum calorie level.3

Hunger and malnutrition are particularly acute in sub-Saharan Africa. Three-fifths of Africa is unsuited to sustained yields in grain production and suffers from locust plagues and other scourges that restrain food production.4 Regional food production has dropped 23 percent in the past twenty-five years.- Today, 46.7 percent of the population lives on less than $1 per day, and 194 million people go to bed hungry, including 31 million children under five years of age, one in three of whom suffer from mental retardation, blindness, and other illnesses brought on by malnutrition.6 In 2002, drought, poor governance, and the ravages of HIV/AIDS meant that an estimated 14.4 million people in six southern African countries faced famine.

Hunger and Poverty in the Developing World


A Review of Modern-Day Efforts at Fighting Hunger

Despite the grim numbers, there has been significant success in the post-war era in combating hunger. The percentage of hungry people in the developing world has dropped by about one-half since 1970, from over 30 percent of 3 billion people in 1970 to 16 percent of 4.7 billion today.7 The world's undernourished population has also dropped in absolute terms, from 959 million to 777 million. Major victories have been achieved in China (where the number of hungry people has fallen by 74 million since 1990), Indonesia, Vietnam, Peru, and Nigeria. Across the developing world, the almost 30,000 children who die daily from hunger today is down from the 40,000 in 1985.8

This record of success is due to a variety of efforts carried out on many fronts. The most effective means of reducing hunger rates are general measures such as good governance, avoidance of war and political conflict, strong and stable economies, and social programs that protect the weakest in society. Specific efforts targeted at fighting hunger fall into five basic categories: technological advancements, foreign aid, expanded trade, financial investment, and multilateral cooperation.

Technological advancements

The Worldwatch Institute points out that while the output from fisheries and rangelands has increased five- and three-fold, respectively, since 1950, production in these two food systems has now hit a plateau. Future food growth must therefore come from the third system, croplands. Technological advances raised cropland productivity three-fold in the twentieth century, through irrigation, chemical fertilizers, hybridization, the development of shortstrawed wheat and rice varieties, and, most recently, genetics. The Green Revolution, launched in the 1960s and 1970s, used these techniques to double and triple the yields of rice, wheat, and corn in Asia, saving hundreds of millions of lives. Largely because of these advances, world grain yield per hectare increased from 1.06 tons to 2.73 tons per hectare between 1950 and 1998, and world grain consumption per capita rose from 247 kg to 319 kg over the same period.9 This increased food productivity has greatly contributed to the 50 percent drop in the percentage of undernourished people since 1970, and there is plenty of potential in LDCs for continued growth in yields through technological extension.

Foreign assistance

Overseas development assistance (ODA) was conceived after World War II as a means of helping LDCs to modernize and reduce hunger rates. In the early 1970s, the UN called on all Organisation for Economic Cooperation and Development (OECD) countries to dedicate at least 0.7 percent of their GDP to ODA; very few countries, however, have met that threshold. Total global ODA today stands at about $53 billion, down from $69 billion ten years ago,10 reflecting the global trend in declining aid ratios in the post-Cold War era.ll In particular, the U.S. contribution to total OECD aid fell from 60 percent in the mid-1960s to only 13 percent by the mid-1990s,12 and non-governmental organizations (NGOs) now contribute more resources to aid in aggregate than the U.S. Agency for International Development (USAID). Official aid targeted specifically at expanding LDC agriculture is experiencing an alarming decline. In 2001, USAID's funding for agriculture dropped to 11 percent of total U.S. aid, while agriculture represented only 10 percent of World Bank lending, the lowest level ever.13

After fifty years of experience, many donor countries are unwilling to keep pumping development aid into LDCs because they see no correlation between aid and economic growth, and thus limited impact on reducing hunger. Experts blame the failure of aid on flawed policies and applications in the North and South, including an overemphasis on industrialization at the expense of agriculture-based development, corruption in recipient countries, and the influence of strategic and commercial self-interest on donor country aid allocation. With many LDCs experiencing aid dependency and skyrocketing debt, there is much debate over alternatives to traditional aid methods, such as pursuing growth through partnerships or identifying grassroots development approaches better suited to local needs.

Trade liberalization

In the 1980s, efforts to fight hunger shifted away from government action to a reliance on open markets, with mixed results. A World Bank study found that countries that increased their share of exports and imports to GDP and reduced their tariff levels (e.g., China, Malaysia, Mexico, India, Thailand, Chile, Argentina, and Hungary) saw average economic growth rates increase from 2.9 percent in the 1970s to 5.0 percent in the 1990s.14 Hunger figures in these countries have seen some of the most dramatic declines anywhere. Those countries that decreased their share of trade to GDP and lowered their tariff rates the least (e.g., Burma, Pakistan, Honduras, and most sub-Saharan African countries) saw average economic growth rates drop from 3.3 percent in the 1970s to 1.4 percent in the 1990s. Hunger rates in these countries have remained some of the worst in the world.

However, embracing free trade is a necessary but insufficient element of national development strategies. Free trade is not an "easy" answer to the question of hunger either; its effectiveness depends on the underlying institutional and policy conditions in individual countries. To be successful, countries must support integration into the global economy with good governance measures such as putting the right institutions in place, reducing corruption, and improving infrastructure and public health systems.

Investment

Foreign direct investment (FDI) is another major tool to generate economic development and reduce hunger levels in LDCs. Industrialized countries in 2002 invested about $166 billion in LDCs through bonds, loans, and company ownership.ls An Institute for International Economics study of 183 FDI projects carried out in thirty countries since the mid-1980s found the majority (SS to 75 percent) to have a positive impact on host country income levels. The study suggested that most of the negative effects could be addressed through reforming host country policies and laws.16 Coupling these changes with new location incentives, rules of origin, and antidumping regulations in investing countries improves the chances for growth through FDI significantly.17

Microcredit is a particularly important tool in fighting hunger since it targets the rural poor, typically the poorest members of society. The Grameen Bank, which pioneered the concept in Bangladesh in 1976, has disbursed almost $3 billion in loans of less than $150 to individual entrepreneurs in LDCs. A typical borrower might be an impoverished mother who uses the funds to purchase a sewing machine, a cell phone, or even a cow-a small investment that enables her to produce a good or provide a service that meets a need in her community. One benchmark of the Bank's success is its impressive payback rate of over 90 percent. Today, Grameen Bank serves 2.35 million clients throughout Bangladesh, almost all women. The World Bank found that extreme poverty in these Bangladeshi villages where people had access to microcredit fell by 70 percent within five years. As of early 2002, there were about 30 million microcredit borrowers worldwide, 19 million of whom were once among the world's poorest people.18

Since well-structured FDI projects and microcredit can directly boost economic development in LDCs, they are some of the most successful tools for fighting hunger.

Multilateral cooperation

From the World Bank, to the United Nations Development Programme (UNDP), FAO, World Food Programme, and the World Trade Organization (WTO), the world's nations have demonstrated their intent to work together to confront poverty, hunger, and other problems that threaten global peace and stability. Several NGOs aiming to eliminate hunger have also emerged, including Bread for the World, Food First, and the Partnership to Cut Hunger and Poverty in Africa. Numerous international conferences, most recently the World Food Summits in 1996 and 2002, have helped bring resources and attention to this continuing problem. All of this cooperation has had an inestimable effect, yet more is clearly required to eliminate hunger.

Future Projections of World Hunger

Hunger continues to be an immense foreign policy challenge, and will likely remain so for many years to come. At the 1996 FAO World Food Summit, 190 nations set a goal of reducing the number of hungry people in the world by half in twenty years. The follow-up Summit in June 2002 reviewed studies showing that the number of undernourished people is falling at an annual rate of about 6 million, well below the 22 million per year average required to meet the FAO's goal.19 In certain countries, the hunger problem will remain especially acute. India will have one-third of the world's undernourished children. Sixteen million African farm workers (i.e., food providers) are expected to die from HIV/AIDS in the next twenty years, and hunger rates in some sub-Saharan African countries are actually expected to rise.20

Projected population growth rates threaten to overwhelm future efforts to feed the world. The FAO expects world population will expand to as many as 10-12 billion by 2050, with the vast majority of the increase occurring in the developing world.21 Because of the expected population boom, the absolute numbers of people going hungry will increase, even though the percentage may continue to decline. Countries facing dramatic population increases include China, India, Pakistan, Nigeria, and Ethiopia.22 Water scarcity is also emerging as an important constraint. Water tables fell on every continent in the 1990s, with particularly serious declines in North America, North Africa, the Middle East, India, and China.23 Given modern agriculture's heavy reliance on irrigation, water scarcity will be a major obstacle to increasing crop yields.

There is widespread agreement that the world's demand for food will double by 2025. Some observers believe the world's farmers and food industries can, with appropriate changes to policies and resource allocation, meet this increased demand. But with cultivable grain area reaching a plateau, population exploding, and water scarcity constraining production, there is no doubt that feeding the world will be one of the most important challenges governments and policymakers face in the coming decades.

Opponents of biotechnology argue that if foreign aid has failed to end hunger, then ODA budgets must be increased and refocused on grassroots development; if trade liberalization has not solved the problem, then more is required, or it must go hand in hand with better governance; where investment has come up short, then it must be replaced by better-structured investment projects; and if multilateral cooperation has failed, then these efforts must be redoubled. If governments around the world addressed distribution bottlenecks, corruption, bad domestic policies, and internal strife, etc. vigorously and creatively, then hunger would be a thing of the past.

All of this may be true. But can we afford to wait for such ideal results, which have yet to, and may never, be realized? If current methods have failed to feed six billion, we must use all available tools-deploy the full arsenal-if we are somehow to feed almost twice that number. Agricultural biotechnology is one of the most promising new weapons for successfully combating hunger, yet widespread controversy has created major obstacles to its deployment. What is the nature of this controversy and how can the obstacles be overcome?

Biotechnology Products on the Market and in the Pipeline

Modern biotechnology is essentially the introduction into organisms-often across species boundaries-of specific genes with the intention of fostering desirable new traits. It is superior to conventional cross-breeding in that it allows for a quicker, more precise, and more reliable transfer of traits, and draws on a wider variety of genetic material.

Since the introduction of GM crops in the mid-1990s, their share of planted acreage has steadily increased. As of 2001, the total area planted with GM crops was 52.6 million hectares (1.3 percent of total cropland area). More than 99 percent of this planting is in the United States, Canada, Australia, Argentina, and China, where more than five million farmers now grow GM crops.24 In all, sixteen countries currently grow GM crops and fifty varieties of GM foods are on the market today in the United States and elsewhere. Most traits commercialized so far address herbicide tolerance (77 percent of planted GM crops) and insect and disease resistance (20 percent). These products include herbicide- and insect-resistant cotton (Bt cotton), insect-resistant corn (Bt corn), herbicide-resistant soybeans, and fungal-resistant wheat. GM potatoes, tomatoes, sugar beets, and apples are also being marketed.

The United States is by far the leader in GM production, growing 70 percent of all GM crops. Two-thirds of food products on U.S. shelves contain GM ingredients, and one-third of all corn, three-fourths of all soybeans, and 40 percent of cotton are now GM.25 Herbicide-tolerant crops have reduced the need to plow, thus decreasing soil erosion (and resulting in less carbon dioxide escaping into the air). Pesticide use in the United States has decreased by 46 million pounds since the introduction of insect-resistant GM technology in 1995,26 while corn and cotton yields have increased by 5-10 percent. Because of lower chemical and other input costs, U.S. farmers improved their bottom line by $1.4 billion in 2001 using GM corn, cotton, canola, and soybeans.27

Since today's biotechnology products serve largely to boost production in developed countries, they increase total supplies and lower world market prices. For the moment, therefore, biotechnology is not benefiting income levels or efforts to fight hunger in LDCs. Only once scientists and policymakers adapt biotechnology to enhance local production and target specific needs in LDCs, can it begin to have a real impact on hunger.

Currently available GM products could be leveraged on a case-by-case basis to enhance some crop yields in LDCs. But the coming "second generation" of GM crops and foods is of even greater relevance and may provide significant benefits for poor farmers. "Golden rice"-rice genetically modified to contain high levels of Vitamin A-should be commercialized in Asia by 2006 and is expected to make a significant contribution to fighting Vitamin A deficiency, a major cause of blindness and death. The company that developed golden rice, Syngenta Corp., has offered it royalty-free to the world's poorest farmers. Unfortunately, concerns over biotechnology have led some Asian rice growers to postpone plans to plant golden rice. If fully adopted, golden rice could have a major impact on malnutrition in Asia, as rice is already a staple, and rice dependence is expected to double by 2025.28 Other products five to ten years down the pipeline include crops designed to tolerate cold, drought, and salt, and plants that can flourish in acidic soil.

Some LDCs are experimenting to produce foods that will help target their specific hunger problems. The Philippines is developing GM rice that resists bacterial blithe,29 while India is developing GM groundnuts that survive Indian peanut clump virus, as well as GM pigeon peas, chickpeas, and sorghum.30 China-a country with 33 million acres of saline soil-has experimented with salt-resistant tomatoes, soybeans, and rice.31 Kenya is developing virus- and drought-resistant sweet potatoes, and in South Africa, Bt cotton has already helped poor farmers reap financial gains due to higher yields.12

In the realm of pharmaceutical biotechnology, private sector researchers are developing about 400 plant-based drugs that promise significant benefits for fighting health problems and combating hunger. These include allergy-free soybeans, cancer-fighting tomatoes and tomatoes with vaccines for Hepatitis B and diarrhea, bananas with vaccines against diarrhea and cholera, spinach with rabies vaccine, a corn that treats cystic fibrosis, and potatoes, pearl millet, corn, cassava, and other vegetables with enhanced nutritional value. These products are also expected to become available in five to ten years and, because of their cost benefits as domestically-grown medical alternatives, they could have a significant impact on health care in LDCs.

The Debate over Biotechnology

Despite its demonstrated benefits and immense potential, biotechnology has met strong resistance in many countries and from many quarters. Concerns center around its perceived threats to human health and the environment, the role of the corporations involved in its production, and ethical and moral considerations connected with its creation. Myths and misinformation fuel many of these concerns. The following discussion attempts to respond to these concerns, and assess the origins and ramifications of anti-biotechnology resistance.

Dangers to health

Concerns over the health effects of biotechnology are widespread. One of the most common is that genetic material introduced into new foods could cause unexpected allergic reactions in consumers. Yet, regulatory authorities worldwide pay strict attention to allergenicity when assessing the safety of foods produced using biotechnology. Since GM foods first hit the market in 1996, there have been no known cases of allergy, illness, or death from consuming GM products. In the mid-1990s, regulatory action forestalled the introduction of genes from Brazil nuts into other foodstuffs on the possibility they would cause allergic reactions. In 2000, a number of corn products were pulled from shelves when they were found to contain GM StarLink corn intended only for cattle feed, producing much controversy but no apparent ill effects in terms of human health.33

The fact is that more safety tests have been conducted on GM foods than on any food products in history. The U.S. Food and Drug Administration, Environmental Protection Agency, and Department of Agriculture have approved every GM food available on the U.S. market today, and a broad, international consensus has emerged on the safety of GM crops for human consumption and the environment. This consensus includes the OECD, World Food Programme, World Health Organization, Third World Academy of Science, American Medical Association, American Dietetic Association, Swiss Association for Research and Nutrition, American Society of Toxicology, six national science academies, and nineteen Nobel Prize-winning scientists.34 At the 2002 World Food Summit, the FAO came out in support of biotechnology products as being as safe for human consumption as their traditional counterparts.31 Even the European Commission recently declared that "the use of more precise technology and greater scrutiny probably make GM foods even safer than conventional plants and foods."36

Nevertheless, since the potential for human health risks exists, continued regulatory scrutiny will be necessary to ensure that only those products suitable for human consumption enter the market.

Environmental damage

Greenpeace, Friends of the Earth, and other NGOs have warned about the possible emergence of environmentally hazardous "superweeds," new plants that draw unexpectedly on traits introduced through biotechnology. This is essentially a matter of gene flow, a phenomenon common in agricultural production, and one which scientists have experience at containing. Some critics worry about the possible side effects of GM crops on other species, such as the monarch butterfly; however, any negative impact on such species remains, for now, theoretical. What we do know is that examination of environmental impacts is taking place in every country that produces or consumes biotechnology, as well as through several of the international bodies mentioned above, significantly enhancing the risk control process. As with the question of risks to human health, the scrutiny of environmental impacts should, and in all likelihood will, remain intense.

The risks of biotechnology for both human health and the environment are being exaggerated. On the other hand, the proven and potential environmental benefits of biotechnology must be recognized, particularly the reduced reliance on dangerous chemicals that it makes possible. In Australia, for example, the use of Bt cotton has cut the country's pesticide use in half.37 In South America, biotechnology has the potential to help preserve rainforests by increasing yields on existing farmland, lessening the need to clear more land by felling trees.

Corporate control

Monsanto and other leading food science companies led the charge to develop agricultural biotechnology. Both these companies and their critics now recognize the error of introducing biotechnology to the public in ways that benefited corporate bottom lines more than they addressed consumer needs. This did not help the acceptance of a controversial technology. Company requirements that farmers re-purchase new GM seeds yearly, instead of allowing for replanting in the time-honored tradition, have also raised concerns over corporate control, as have plans to insert genes that would prevent such replanting (the so-called "terminator genes"). In addition, some companies are engaging in a mad rush to patent plant gene strains around the world, enraging LDC farmers who developed these strains over generations and who consider them "public goods."

Clearly, corporate behavior has contributed to the resistance these products have encountered, and companies are now trying to repair their image. Syngenta's offer to provide golden rice royalty-free to LDCs is one example, as is Monsanto's decision to make its sequence of the rice genome freely available (LDC research facilities should eventually benefit from this access). Biotechnology's proponents expect the pending "second generation" of GM products, with its potential for more direct benefits to farmers in LDCs and consumers everywhere, to improve the technology's acceptance.

Biotechnology is also seen as a production tool that, because of economies of scale and purchase costs, benefits only corporate and other large-scale producers. However, evidence is beginning to show that it can deliver benefits to smaller farm operations as well. For example, a study on the adoption of Bt cotton in South Africa concluded that "both large-scale and small-scale farmers enjoy financial benefits due to higher yields and despite higher seed CoStS."38

Ethical objections

Some opponents object to biotechnology on moral or ethical grounds, saying that human beings should not interfere with the "natural order" by modifying genes or crossing species boundaries. However, humanity has always made use of science in order to improve living conditions. Traditional plant and animal improvement processes such as cross-breeding and hybridization are obvious examples, and genetic engineering is essentially a refinement of such methods.39

Reflecting these various concerns, resistance to biotechnology is at a high level today, particularly in Europe. Fueled by pressure from the environmental lobby and other NGO sources, as well as genuine consumer preferences for conventional foodstuffs, Europeans have opposed the introduction of GM products into their food system. Although the European Union does not officially ban foods with GM ingredients, a de facto ban on approvals of GM products has existed in the EU since 1998.

There are recent signs, however, of a shift to a more accommodating European position. The European Commission in 2002 cited eighty-one separate studies supporting the view that GM foods on the market are as safe to eat as their traditional counterparts.40 Spain, France, and Portugal are currently growing GM crops, and Spain has reported benefits from Bt corn that include environmental improvements, higher yields, better quality, and increased income.41 In addition, dozens of European companies are developing products like GM beans, grapes, wheat, and bananas-but for now they are intended only for sale in LDCs or the United States, not in Europe.42 Finally, the new European Food Safety Authority is expected to lift the de facto ban in the EU.

Other industrialized countries have been slow to accept biotechnology as well. Switzerland and New Zealand remain biotechfree today, the latter taking a long look before approving any GM products for market entry. This is also the approach in some Asian countries. The resistance of some industrialized countries to biotechnology has even begun to dampen U.S. farmers' enthusiasm for planting GM crops and stifle the development of new products by biotechnology companies.

However, it is EU resistance to biotechnology that is the major obstacle to poor countries' development and use of biotechnology. Africa needs biotechnology more than any other region, yet the EU's position has made some African countries reluctant to take up this technology. Last year, Zambian President Levy Patrick Mwanawasa refused 17,000 tons of U.S. grain intended to forestall the famine facing 2.9 million Zambians out of fear the country would lose its export markets in Europe. Four other African countries facing similar food shortages-Mozambique, Malawi, Zimbabwe, and Lesotho-accepted GM corn, but only if the grain was first milled into flour (to prevent it from affecting the region's exports). European resistance could also affect Africa's livestock exports if they become GM-fed.

In some cases, concerns about the risks associated with biotechnology are preventing the establishment of national regulatory regimes that could facilitate the commercial importation or development of biotechnology in LDCs. In others, they are leading to the establishment of regimes that interfere with the technology's development and importation. China, for instance, recently reversed course on biotechnology and imposed restrictions on domestic varieties of GM rice, soybeans, vegetables, and tobacco, while requiring stringent safety tests and labeling for GM imports. Critics consider these constraints protectionist measures designed to shield China's huge domestic farming sector from further pain while it restructures to meet its WTO commitments.43

Pressure from NGOs also contributes to LDC resistance to biotechnology. The environmental lobby has targeted LDCs in a $175 million campaign to convince them to reject biotechnology.44 Greenpeace warned the Philippine government that there would be "millions of dead bodies and disease" if it accepted GM foods.41 The Sierra Club has called for a moratorium on all planting of GM crops,46 while the Earth Liberation Front has caused $40 million of damage to GM farms and laboratories around the world.47 Former Greenpeace co-founder Patrick Moore and others have questioned the honesty of the environmental lobby's arguments on biotechnology, denouncing them as scare tactics designed to raise funds in order to stay solvent.

Finally, some individual anti-GM activists play a prominent role internationally. India's Vandana Shiva opposes all forms of high-tech agriculture, which she says will destroy the land and "traditional farming." The ecologist-activist has opposed golden rice, attempted to block U.S. food donations to Indian cyclone victims that contained GM ingredients, and argued in favor of organic production as the "wave of the future."48 Partly as a result of Shiva's activism, India-a country with significant hunger challenges-has banned the domestic marketing of all GM food crops for supposed human health and rural employment reasons.49

Overcoming Obstacles to the Use of Biotechnology

Enough opposition to biotechnology could stall or defeat breakthroughs in important areas. Opposition could also result in GM products, once developed, going unused, left, as the saying goes, to "wither on the vine." Indeed, many approved GM foods are going unplanted in industrialized countries for fear of attracting NGO-inspired demonstrations or violence. For LDCs, the story is the same. Out of fifty-four African countries, only South Africa and Kenya have plans for developing GM products, and these plans are small scale and limited. The restricted availability and adoption of biotechnology in LDCs is due to several factors, including:

* Fear of lost export sales to Europe and elsewhere

* Intellectual property rights constraints

* Health and environmental concerns

* Inadequate scientific and research capacity in LDCs

* Absence of government regulatory mechanisms to oversee testing and regulation

* A general inability to assess biotechnology's potential and risks

These obstacles must be overcome before LDCs can take full advantage of biotechnology in addressing their nutrition needs. Let us review each in turn.

When coupled with appropriate domestic policies, trade liberalization can be one of the most important engines for growth in LDCs. Two-thirds of the developing world labor force is employed in agriculture. In Africa, rural small-holder farms provide over 80 percent of agricultural exports.50 It follows, therefore, that developing the export potential of LDC agriculture can generate significant growth and combat hunger. However, European export subsidies deny LDC producers their due market share, and EU opposition to GM products creates negative incentives for LDCs to invest in production-enhancing biotechnology and the supporting regulatory mechanisms, with disastrous consequences for economic growth and hunger levels in LDCs.

Many believe that if today's large food surpluses could find their way overseas, we could adequately feed the world. But, while channeling those surpluses to LDCs would feed people today, it would also undercut local agricultural sectors. Such a strategy would, in fact, have a dampening effect on efforts to raise local agricultural production, which is one of the best long-term solutions to hunger. Biotechnology can deliver these much needed production increases, and help people help themselves to break out of the poverty-hunger cycle. Although only four LDCs worldwide currently grow GM products, the initial results for productivity are positive (e.g., South Africa).

One way to resolve the biotechnology standoff is to establish a global system for setting safety standards that rely on scientific evaluation and risk assessment procedures. Such a system could include a labeling regime that facilitates the acceptance of uniform, science-based standards and common regulatory procedures. The ongoing negotiations in the WTO Doha Round are not the appropriate avenue for addressing this issue. Instead, efforts must be made to establish such a global system through alternative fora like the Codex Alimentarius Commission, which sets international food standards and guidelines. In the meantime, the concept of "substantial equivalence," in which GM products are tested to determine whether they are substantially different from their traditional counterparts, is already employed in many countries and can help smooth the way for approval in new countries. Mutual recognition agreements, in which countries agree to recognize each other's approval processes, can also help facilitate trade in GM products today.

Second, the international community needs to develop a shared vision of the role of GM crops that gets beyond current intellectual property rights issues such as the corporate patenting of gene strains. Consideration should be given to creating an international commission, perhaps under UN auspices, that could promote a broad public consultation that balances the corporate need to pursue profits with local needs in the battle against hunger.

As for the risks to human health and the environment, strengthened regulatory scrutiny and transparency will be essential to achieving broader public acceptance of GM products in Europe, LDCs, and elsewhere. A case-by-case assessment of risks will be required, with due attention paid to the effects on human health and the environment in each country concerned. As David Victor and Ford Runge have noted, "A failure in regulating biotechnology anywhere will harm the industry everywhere."51

Although private sector investment in biotechnology rose by $100 billion in the 1990s, greater governmental investment in research will be necessary to disperse the benefits of biotechnology more widely. In particular, increased U.S. government support for foreign agricultural research offers the best potential to raise income and lower hunger levels directly in the developing world. Yet governments in the developing world must invest more as well. In 1995, for every $100 of agricultural GDP, developed countries invested $2.70 in public research and development, while LDCs invested only $0.62.12 Public-private partnerships can help bridge this investment gap. A promising example is the case of South Africa, where the government is cooperating with industry on a $30 million research project to develop drought-resistant crops by 2003.53

LDCs are not currently in a position to invest substantially in the science of biotechnology, nor are they capable of creating the necessary regulatory institutions to govern its adoption and application. They must therefore work with developed countries not only to build their scientific capacity, but also to exchange information that will enhance their ability to construct and enforce regulations and institutions that will facilitate biotechnology's adoption in their own countries.

Last, any assessment of biotechnology's potential and risks in LDCs must take into account the specific and varied needs, conditions, and circumstances of these countries if hunger is to be eliminated there. This means that governments, businesses, and scientists operating in places such as New Delhi, Beijing, Capetown, and Sao Paolo should have a hand in their development. At the very least, it is essential for LDCs to stay abreast of the latest developments in biotechnology in order to make informed decisions.

Biotechnology's Role in Combating Hunger

The need to increase future food production is clear. Over 840 million people go hungry today, and hundreds of millions are expected to go hungry in the decades to come. With cultivable grain area plateauing, feeding tomorrow's global community will require making a choice: either we harvest remaining forests and plant crops on available marginal lands, or we find ways of boosting the yields of existing croplands in both developed and developing countries in ways that circumvent impending water shortages. These demands and constraints highlight biotechnology's potential.

World leaders agree on the production-enhancing benefits of biotechnology. FAO Director-General Jacques Diouf has said that since global food production must increase by 60 percent in coming decades, it makes sense to take advantage of the productivity benefits that biotechnology offers.54 To get around the current stalemate, Sakiko Fukuda-Parr, Director of UNDP, has called for the development of a "third way," one that involves strengthened measures to address the risks associated with biotechnology, accompanied by a focus on harnessing its potential to tackle the pressing need to improve the productivity of poor farmers.ss

There is no time to waste. Half of the world's poorest people live in uncertain climates, dependent on staple crops such as cassava and sorghum for survival.56 Africa in particular requires advances in food technology-and fast. Most Africans farm small plots of less than four acres, cultivating crops such as corn, sweet potatoes, cassava, and millet. Few have the capital to invest in agricultural improvements, and their harvests are vulnerable to the ravages of plant and animal diseases, pests, soil toxicity, floods, and droughts.57 These are some of the very problems that bio-engineers are tackling in today's laboratories.

However, biotechnology should not be considered a panacea, but rather a complement to traditional agricultural methods. Farmers in Africa and other LDCs could benefit from the application, where feasible, of existing herbicide-tolerant, disease-resistant, and insect-resistant crops (managing pest infestations in poor rural areas for example is a major problem), and particularly the promising new drought-, cold-, and saline-tolerant crops under development (one-fourth of the Earth's landmass is saline soil). From drought-resistant sweet potatoes in Africa to salt-resistant crops in China to golden rice in Indonesia and Bangladesh, biotechnology must be used to target specific problems in specific locations.

Deploying the Full Arsenal

The question of accepting or banning products made using modern biotechnology is an important issue that cuts across social, economic, and political boundaries. The battle lines in the debate are being drawn, and opponents of biotechnology are out in force. Fortunately, GM products have been well received in many countries. Recent polls show that 71 percent of U.S. consumers are willing to embrace products with GM ingredients.51 And a poll of 600 consumers in Thailand, China, and the Philippines suggests that most Asians do not mind buying or eating GM products either.59 The battle for public acceptance must be fought principally in Europe and increasingly in Africa and other developing countries that are concerned about their trade relations.

Developing countries need many things: improvements in infrastructure, credit for small farmers, development that targets women, stable societies and economic policies, anti-corruption policies, medical assistance, technology transfers, and greater and better aid, trade, investment, and cooperation from developed countries. Eradicating hunger will require fighting on all of these fronts simultaneously.

Agricultural biotechnology is an essential tool with immense potential to help developing countries improve crop yields and productivity, safely provide a broader array of more nutritious foods at lower costs, reduce harvest losses, and create higher and more stable rural incomes. And it can do this while also using less land and less water in production, improving pest control methods, reducing dependence on chemical fertilizers, and providing other environmental benefits. With such a powerful array of proven and potential benefits, biotechnology, if deployed, could lead to an agricultural revolution more dramatic than the Green Revolution, and potentially make the difference in waging a successful war on hunger.

[Footnote]
Notes

[Footnote]
1 Bread for the World, Hunger Basics, (11 December 2002).
2 John Mason, "Hunger Reduction Slows to Dismal Level," Financial Times, 16 October 2002.
3 Bread for the World, Hunger Basics.
4 Anthony J. Covington, "What's So Terribly Wrong with GM Food?" Asia Intelligence Wire, 18 September 2002.
5 Bread for the World, Hunger 2001: Foreign Aid to End Hunger (Silver Spring, MD: Bread for the Word Institute, 2002).
6 Sebastian Mallaby, "Phoney Fears Fan Famine in Africa," East African Standard, 16 September 2002.
7 FAO, The State of Food and Agriculture 2000 (Rome: FAO, 2000), 306.
8 RESULTS, Global Action, Worksheet, October 2002.
9 Lester R. Brown, "Feeding Nine Billion," in State of the World 1999 (New York: W.W. Norton & Company, 1999), 115-132.

[Footnote]
10 Worldwatch Institute, State of the World: More Connected, Less Stable, Press Release, January 2002, < http://www.worldwatch.org/alerts/0200 10.html> (11 December 2002).
11 Anders Narman, "Reconstructing Development Assistance and Co-operation," in David Simon and Anders Narman, eds., Development as Theory and Practice (Harlow, England: Addison Wesley Longman, 1999), 171.
12 Ibid., 159.
13 Bread for the World, Hunger 2002: A Future with Hope (Silver Spring, MD: Bread for the World Institute, 2002), 83.
14 David Dollar, "Globalization, Inequality and Poverty Since 1980," World Bank, September, 2001.
15 Institute of International Finance, as quoted in "A Helping Hand," The Globalist, 27 November 2001.
16 Theodore H. Moran, Foreign Direct Investment and Development: The New Policy Agenda for Developing Countries and Economies in Transition (Washington, DC: Institute for International Economics, 1998), 24-25.
17 Ibid., 163-168.

[Footnote]
18 RESULTS, "Microcredit," (21 December 2002).
19 Jacques Diouf, Press Release, United Nations FAO, 21 January 1999.
20 Bread for the World, Hunger 2002, 71-91.
21 FAO, The State of Food and Agriculture 2000, Rome 2000.
22 The UN expects China's population to grow from 1.3 billion today to 1.6 billion by 2050; India's from 1 billion to 1.6 billion; Pakistan's from 148 million to 357 million; Nigeria's from 122 million to 339 million; and Ethiopia's from 62 million to 213 million. Iran, Indonesia, Sudan, Egypt, and Bangladesh will also likely have trouble feeding their growing populations in coming decades.
23 Brown, 120.
24 Joel I. Cohen and Robert Paarlberg, "Explaining Restricted Approval and Availability of GM Crops in Developing Countries," AgBiotechNet 4 (October 2002).

[Footnote]
25 "Why Africans Are Starving," Wall Street Journal, 17 September 2002.
26 Judy Aita, "Developing Countries Should Adopt Biotech, UN Panelists Urge," U.S. Department of State International Information Programs, 24 September 2002.
27 Rachel Melcer, "Altered Crops Have Farmers Walking a Tightrope of Acceptance," St. Louis Post-Dispatch, 25 September 2002.
28 Reuters, "Asian Farmers Seen Sowing `Super Rice' in 2-3 Years," 19 September 2002.

[Footnote]
29 Carmelo Q. Francisco, "Philrice to Commercialize Genetically Modified Rice," Business World, 16 September 2002.
30 "GM Peanut a Field Trial Stage," Hindu Business Line, 14 September 2002.
31 "China Cultivates Salt-Resistant Cloned Tomatoes, Rice, Soya, Poplars," Asia Intelligence Wire, 15 September 2002.
31 Johann Kirsten and Marnus Gouse, "Bt Cotton in South Africa: Adoption and Impact on Farm Incomes Amongst Small- and Large-Scale Farmers," ISB News Report, October 2002.
33 New Scientist, "Much Ado About Nothing," 18 May 2002.
34 Marc Morano, "Green Activist Accused of Promoting Famine Wins Time Magazine Honor," CNSNews.com, 17 September 2002, (12 December 2002).

[Footnote]
31 "Irrational Fears of Frankenfood," Las Vegas Review-journal, 16 September 2002. 36 Francisco, "Philrice to Commercialize Genetically Modified Rice."
37 Denis Dutton, "Fear-Mongering Greens Doom Children to Death," New Zealand Herald, 28 September 2002.
38 Johann Kirsten and Marnus Gouse, "Bt Cotton in South Africa: Adoption and Impact on Farm Incomes Amongst Small- and Large-Scale Farmers."
39 International Policy Council on Agriculture, Food and Trade, Plant Biotechnology and Global Food Production: Trade Implications, Position Paper No. 7 (Washington, DC, October, 1998).
40 James Morris, "Biotech Food Can Save Millions of African Lives," International Herald Tribune, 19 September 2002.
41 "The Farm Level Impact of Using Bt Maize in Spain," Brookes West Consultancy, 27 September 2002 (21 December 2002).
42 Brandon Mitchener, "Politics Hamstring Europe's FDA," Wall Street Journal, 17 September 2002.
43 Joseph Kahn, "The Science and Politics of Super Rice," New York Times, 22 October 2002.

[Footnote]
44 "Why Africans Are Starving," Wall Street Journal. as Murray Lyons, September 19, 2002.
46 Why Africans Are Starving," Wall StreetJournal.
47 Michael Rodemeyer, "Ratcheting Down the Debate Over Biotechnology," Newark Star-Ledger, 24 June 2001.
48 Norman Borlaug estimates that organic production could feed only about 4 billion out of today's 6.1 billion people.
49 Morano, "Green Activist Accused of Promoting Famine Wins Time Magazine Honor."

[Footnote]
50 Partnership to Cut Hunger and Poverty in Africa, (12 December 2002).
51 David G. Victor and C. Ford Runge, "Farming the Genetic Frontier," Foreign Affairs 81, no. 3 (May/June 2002).
-12 Sakiko Fukuda-Parr, "Making New Technologies Work for Human Development," United Nations Development Programme, 6 September 2002. -13 Ibid.
-14 Jacques Diouf, Press Release, FAO, 21 January 1999.
551 Sakiko Fukuda-Parr,"Making New Technologies Work for Human Development."
56 Ibid.
57 Bread for the World, Hunger 2002, 81.
58 Institute of Food Technologies, "Survey: Consumers Support Food Biotechnology," 30 September 2002.
-19 Jason Leow, "Asians Are Game to Try GM Foods," Straits Times (Singapore), 22 September 2002.

[Author Affiliation]
Peter G. Lacy is the former Executive Director of the International Policy Council on Agriculture, Food, and Trade, a think tank in Washington, DC. Mr. Lacy is currently Director of International Research at Bryant Christie Inc., a consultancy headquartered in Seattle. He is an alumnus of the Johns Hopkins University School of Advanced International Studies.

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Posted by maximpost at 9:40 PM EST


BEHIND THE HEADLINES
U.S., Israel find that details
of Gaza withdrawal take time
By Ron Kampeas
WASHINGTON, March 9 (JTA) -- It's become "my-place-or-yours" diplomacy.
A group of three top U.S. Middle East advisers was to return to Israel this week to discuss Israel's plans for withdrawing from the Gaza Strip and possibly parts of the West Bank. A week ago, Israeli advisers were in Washington. Two weeks before that, the Americans were in Jerusalem.
On Thursday, Israeli Defense Minister Shaul Mofaz was due in Washington, where he was to discuss the withdrawal plan with Vice President Dick Cheney, Secretary of State Colin Powell and President Bush's national security adviser, Condoleezza Rice.
Underlying all the back-and-forth is U.S. frustration with a lack of clear Israeli ideas on how the withdrawal will take shape without Palestinian cooperation.
"We're not even sure if the Israelis are clear about what they want," one American official said ahead of the visit to Israel by Steven Hadley, Bush's deputy national security adviser; Elliott Abrams, his top Middle East adviser; and William Burns, the top State Department envoy to the region.
U.S. Jewish officials say Israeli Prime Minister Ariel Sharon's vagueness about his withdrawal proposal is at the heart of the confusion. Giora Eiland, Sharon's national security adviser, is eager to push ahead with a plan, they say, but Sharon is hanging back for now.
Why Sharon is playing his cards so close to his chest is anyone's guess.
"Everyone gives you different information," said Steven Spiegel, a scholar at the Israel Policy Forum, a group that backs U.S. prodding of Middle East parties to get back to the peace table. "A lot of people are scratching their heads."
Representatives of the four bodies behind the "road map" peace plan -- the United States, United Nations, European Union and Russia -- were due to meet in Washington on Wednesday.
Powell has joined his European counterparts in calling on the Israeli and Palestinian prime ministers to meet as soon as possible. He also wants Israel to explain its withdrawal plans.
"There are many other questions that we want to pose to our Israeli colleagues to make sure we have a good understanding of their plans for Gaza, and plans for the West Bank as well," Powell said Tuesday after meeting with Jordanian Foreign Minister Marwan Muasher.
Powell and Muasher had discussed the Sharon proposal but wanted more details.
"I think that if this is done in the context of the road map, if this is done in coordination with the Palestinians, then this might present an opportunity," Muasher said. "But it is important before we pass final judgment to talk to the Israelis and understand exactly what their intentions are regarding this issue."
When the Americans initially embraced Sharon's proposal for unilateral withdrawal last month, each side suggested it would take no time to get it into shape: a U.S. mission to Israel, an Israeli visit to Washington and then Bush and Sharon would wrap it up at a summit.
However, this week's round is at least the fourth such visit, and the Sharon-Bush summit -- originally set for sometime this week -- has been bumped at least until next month.
Reports in Israeli newspapers quote unnamed Israeli security officials as saying that the Bush administration is behind the delay, worried that a withdrawal could precipitate violence and adversely affect Bush's reelection chances in November.
"They're doing what they can to keep a lid on, maybe because they feel that doing something now is likely to lead to instability," Spiegel said. "If the administration wanted more, they'd be more active, they'd have someone on the scene day after day working with Eiland."
U.S. and Israeli officials insist the November elections have not played a role in delaying the presentation of a plan. U.S. officials have gone out of their way to praise the proposal as one that could entice the Palestinians to crack down on terrorism and rejoin the broader U.S.-led road map.
In the next few weeks, State Department spokesman Adam Ereli said, "What you can expect is continuing engagement by the United States with both parties to really help facilitate progress."
The White House's National Security Council issued a rare on-the-record endorsement of the Sharon proposal.
"The prime minister's ideas are promising and the discussions are very useful to examine the details and many ramifications," NSC spokesman Shawn McCormack told JTA. "The prime minister's proposals have the potential to be historic. We are all working within the framework of the road map and the vision outlined by President Bush."
U.S. officials say details of the pullout have been more daunting than U.S. and Israeli negotiators originally realized. They hearken back to Israel's last unilateral withdrawal, from southern Lebanon in May 2000.
Israel negotiated that move with the United Nations, getting U.N. approval for the exact contours of the withdrawal. Even so, Hezbollah seized on the unresolved status of the Shebaa Farms, a tiny patch of land in the Golan foothills that Israel captured from Syria in the 1967 Six-Day War, as a pretext to keep attacking Israel.
The lesson: If a crucial party has absented itself from the table, make sure everything is wrapped up tightly enough that provocateurs can't reignite a conflict.
"They're making sure a lot of details are sorted out so as not to end up with another Shebaa Farms-type of thing," another administration official said. "They're making progress, but a lot more remains to be done."
Another factor might be Israel's failure to anticipate the degree to which the Palestinian Authority lacks control in the Gaza Strip.
Hamas, the Al-Aksa Brigade and other terrorist groups have asserted control in some of the main refugee camps in the center of the strip.
Avi Dichter, head of Israel's Shin Bet security service, was in Washington this week, where he said that a withdrawal now was not likely to end terrorism, according to reports in Israeli newspapers.
Bush administration officials say another factor has been Sharon's attempt to work a tradeoff into any withdrawal: Gaza for parts of the West Bank. Israel wants U.S. recognition of its permanent control over Ma'aleh Adumim, Ariel and the Gush Etzion settlement bloc -- areas the Palestinians effectively ceded in 2000-2001 peace talks.
Sharon might need such a tradeoff to sell the package to hard-liners in his Cabinet -- support he is seeking this week. But he's unlikely to get administration backing for such a trade, the Americans say, because the idea is to get the Palestinians back to the table, not give them an excuse to keep away.
Israel also is seeking Egyptian agreement to secure the Gaza-Egypt border once Israel leaves. The border is a main route for Palestinians to smuggle weapons into the Gaza Strip.
Nabil Fahmy, Egypt's ambassador to Washington, told JTA that Egypt would withhold a decision until it was certain Israel's actions were designed to lead to the resumption of peace talks.
"We need to understand the details as far of the package and as far as the proposal," he said. "We're not aware of the full details of the position because much of it has not been resolved in Israel itself."
In any case, he said, "It has to be in the context of resolving the conflict on the basis of a two-state solution and ending the occupation."




? JTA. Reproduction of material without written permission is strictly prohibited.

Czech Jewish official brings
Kerry news of his Holocaust dead
By Magnus Bennett
PRAGUE, March 9 (JTA) -- It hasn't been long since Sen. John Kerry learned that he had relatives who were killed in the Holocaust.
Now Kerry, the presumptive Democratic nominee for president, is getting documents about the last days of his paternal grandmother's brother and sister.
During a visit to New York on Sunday, the chairman of Prague's Jewish community, Tomas Jelinek, presented the YIVO Institute for Jewish Research with copies of the original transport lists for Otto and Jenny Loewe -- Kerry's paternal grandmother's brother and sister, who were sent to their deaths on Nazi transports.
Jelinek said he decided to track down the records in Prague after learning about Kerry's Jewish roots from American media reports.
"I presented copies of the records to YIVO as a gift and asked them to pass them on to Sen. Kerry," Jelinek told JTA. "We know how touching this kind of information is for Jewish communities in Europe and thought it would be of interest to Sen. Kerry's family."
The records show that Otto, who was born in Budapest, was transported from Vienna to Terezin transit camp -- Theresienstadt -- in August 1942. He died at Theresienstadt on June 29, 1943.
His sister, Jenny, was transported later from Vienna to Theresienstadt. On Sept. 26, 1942, she was sent from Theresienstadt to the Maly Trostinec concentration camp in Belarus, where she subsequently was killed.
Jelinek presented the records at the launch of an exhibition of the works of the late Czech artist Alfred Kantor, who depicted scenes of everyday Nazi brutality during the Holocaust.
Kantor, who survived Theresienstadt, produced 127 drawings and sketches from memory after the originals had been lost. Kantor emigrated to the United States after the war and died last year in Maine.
Jelinek also was in New York to launch a fund-raising drive for a new $6 million senior home for Holocaust survivors in Prague, called Project Hagibor. The planned 60-bed facility aims to provide round-the-clock care for some of Prague's estimated 1,500 Holocaust survivors.
Former Czech President Vaclav Havel is behind the project.
"In the history of our country, the biggest killing of Czech citizens in one day happened in Auschwitz-Birkenau on March 8, 60 years ago," Havel wrote in a letter of support for the project. "Entire families, including children, were killed. The only thing that made them guilty was being Jewish."
Havel said he is afraid that there remains a lot of indifference in Czech society to the Holocaust.
"I am afraid -- something only a very few people admit -- that our present indifference towards this and other tragedies of the past and present makes us accomplices," he wrote.
"I am very happy that you are meeting today to honor the memory of those who are deceased and at the same time to support a project that should help to lessen the life hardships of those who used to be prisoners in the concentration camps and ghettos, at least in their twilight years," he wrote.




? JTA. Reproduction of material without written permission is strictly prohibited.


PM adviser: no plans for `eastern fence' in West Bank
By Amnon Barzilai, Haaretz Correspondent
Israel does not plan to build a separation fence in the eastern part of the West Bank because of the likely negative political fallout in the international arena, the man who heads the team plotting the route of the fence told Haaretz on Tuesday.
"The State of Israel will not build a separation fence in the eastern part of the West Bank because of the diplomatic damage it is likely to endure as a result," said Colonel (res.) Dan Tirza, who is considered the most senior professional adviser to Prime Minister Ariel Sharon on the issue of the fence.
"Legally and publicly, the building of the separation fence in the eastern sector is likely to cause serious damage to the state," he said. "So we shouldn't invest money in it."
Tirza also revealed that there will be a 2.3-kilometer hole in the eastern section of the separation fence being built around Jerusalem. The section where no fence or wall will be built is in the area of the Jerusalem-Ma'aleh Adumim road. It is still not clear what type of obstacle will be placed in the area. The Israel Defense Forces has prepared three alternatives that will soon be presented to Sharon and Defense Minister Shaul Mofaz, and will then be brought to the government for approval.
The inclination is not to completely seal off Jerusalem so as not to leave Ma'aleh Adumim, which has some 32,000 residents, outside of the separation fence. Tirza said that Kfar Adumim, which is home to 350 families and is east of Ma'aleh Adumim, will not be inside the fence.
Tirza's team, which meets once a week, includes members of the Defense Ministry, the IDF, and representatives of all the relevant planning and legal authorities in the country. The state prosecutor's office has barred the addition of settlers to the committee, despite such requests. Nevertheless, members of the committee, including Tirza, meet with settler representatives to hear their opinions about the route of the fence.
Tirza said his committee has tried to limit the damage wrought by the fence, and that they did not ignore the Green Line. "But one has to remember that the Green Line is not a defensive line," he said. "In places where I can, I move the route of the fence so as not to destroy olive groves and hot houses. Not a single home has been destroyed as a result of the route of the fence. Except for some homes built illegally in the area of Baka al-Garbiyeh."
So far, 26 petitions have been submitted to the High Court of Justice on the issue of the fence. Fifteen were either rejected or a settlement was reached between the sides. Eleven are still being considered by the court. Of these, eight have led to a delay in construction of the fence.
"The reason we haven't lost until now on these petitions is because we tried to take as many considerations into account as possible during the planning phase. We tried to find solutions with the local residents or their lawyers."
Tirza also said a number of Israeli lawyers, who represent Palestinians who own land along the route of the separation fence, are trying to "stir things up" and prevent their clients from reaching understandings or deals with the Israeli government over financial compensation for the seizing of their land.

Posted by maximpost at 12:59 AM EST
Permalink

The Folly of Dialogue Diplomacy
Simplicity, naivety, and deceitful complexity.
By Elio Bonazzi
In every aspect of human life, new ideas, designs, and concepts usually go through three distinct phases. A good dose of naivety characterizes the initial phase of every project, intellectual enterprise, or model; the intrinsic novelty of the subject-matter forces engineers, politicians, and intellectuals to make na?ve assumptions, which are progressively refined and adjusted, and new layers of complexity are added to the model, design, or political doctrine in order to better equip it to deal with complex realities.
Adding complexity, however, is only an intermediate phase. According to Antoine de Saint-Exupery, "Perfection (in design) is achieved not when there is nothing more to add, but rather when there is nothing more to take away."
The best models, designs, and political doctrines are simple. But their simplicity is the fruit of a complex process, which started with naivety, grew through complexity and achieved a level of harmony and integrity possible only after redundancy was eliminated, internal coherence realized, and unnecessary entanglement discarded, all the while striving to capture the true essence of the problem under analysis.
Experience teaches that it is very rarely, if ever, that a successful engineering design, or political or economical doctrine, deviates from common sense, or is counterintuitive. If somebody tried to convince us that in order to achieve an egalitarian society we need to stop taxing the rich and tax more heavily blue-collar workers, we would smell the proverbial rat. A sophism is a plausible but fallacious argument. Unnecessary complexity is deceitful, and often used to muddy the waters and to erect smokescreens that allow unfounded theories to appear logical and coherent.
Which is exactly what certain diplomats and State Department officials are doing when they call for a dialogue with the Iranian mullahs. Their intent is to normalize relations with Tehran in order to seek an understanding -- and possibly a deal -- with the theocratic regime in exchange for the Islamic republic's cessation of its nuclear program.
According to this foreign-policy school of thought, which for lack of a better term we call "realist," the recent outcome of the Iranian national elections, which marked the defeat of the reformists and the triumph of the Islamic hardliners, is good news. The sophists of the State Department would like to convince us that now that the excruciating internal debate between the Leftist mullahs and the conservative establishment is over, the "pragmatic conservatives" are ready to cut a deal with the West over Tehran's WMD programs.
If we leave for a moment the realm of sophisms, and revert to simplicity and common sense, we realize that the analysis of the Iranian situation is straightforward. One doesn't need a Ph.D in political science to realize that the Iranians feel encircled -- American and allied troops are in Afghanistan and in Iraq -- and only the nuclear bomb would make the mullahs feel invincible. We are discovering almost daily that the Iranians are more advanced than originally thought in their nuclear plans. On several occasions, they deceived the European Union and the international nuclear watchdog about their true intentions to buy time and continue pursuing their covert nuclear program.
A common trick is to have one theocrat announce Iran's strict adherence to the nonproliferation protocols; and then, a day later, have a different top cleric state exactly the opposite. This happened, for example, last week: Hassan Rohani, the secretary of the Supreme National Security Council, openly announced that an unspecified number of nuclear installations remain undeclared and that the Iranian authorities don't see the need to disclose all aspects of their nuclear program to the IAEA. But, only a few days earlier, the foreign minister of Germany, France, and Britain signed a last-minute deal in Vienna with Iranian representatives that once again stated Tehran's willingness to comply with the IAEA directives.
Why should we care what happens in Iran? Well, for starters, Iran directly sponsors Hezbollah terrorists in Israel, through Syria. Iranian killers are sent into Iraq to foment anti-American feelings. Iran represents today the single most dangerous threat to world stability. It represents an immediate threat to Israel and to the American troops deployed in Iraq and Afghanistan.
The natural conclusion is that Iran cannot be "fixed." The only possible way out is a regime change. Anybody claiming that "engagement" with the theocratic fascists in Tehran could produce positive results is following the Yellow Brick Road, and is either a genuine victim of the mullah-orchestrated game of deception, or has ulterior motives.
To justify their willingness to continue a hopeless dialogue with the Islamist leaders in Tehran, foreign-policy realists use convoluted and abstract scenarios, which are inevitably counterintuitive. A typical example is their claim that the outcome of the latest Iranian elections is positive because, now that the "pragmatic conservative clerics" finally got rid of their internal opposition, it clears the way to important diplomatic breakthroughs. It is yet another example of deceitful and unnecessary complexity.
Occam's Razor is a logical principle attributed to the medieval philosopher William of Occam. Scientific knowledge is based on experience and self-evident truths, and on logical propositions resulting from those two sources. Occam stressed the Aristotelian principle that entities must not be multiplied beyond what is necessary. In science, the simplest theory that fits the facts of a problem is the one that should be selected.
The basic facts are that the mullahs are developing the nuclear bomb and nothing will stop them. Hitler should have been stopped in 1936, as soon as he remilitarized the Rhineland in blatant breach of the Versailles treaty. The European nations failed to do so, and the end-result was World War II.
If the West doesn't stop Iran today, the consequences will be dire. The only way to prevent a potentially catastrophic outcome in the Middle East is to provoke regime change in Iran. The good news is that to achieve this goal no direct military intervention is required. No more American troops will have to die in a distant land. And the American taxpayers won't have to bear the costs of another expensive military campaign.
Simply declaring that the only U.S. policy towards Iran is regime change, and enforcing it at every level in the administration, would provoke shock waves in Tehran. A resolute and determined U.S. administration could release part of Iran's frozen assets, seized during the hostage crisis of 1979, and use them to fund the Iranian opposition movement, inside and outside of the country. The Islamic regime has lost popular support, and survives only thanks to a very efficient repressive apparatus, exactly like the Communist regimes in eastern Europe before the fall of the Berlin Wall. Imposing sanctions and isolating the regime would provide the final blow needed to overthrow the mullahs.
The strategy explained above is simple but not na?ve. It follows the principle of Occam's Razor, is internally coherent, and is based on common sense, historical facts, and the will of the people of Iran. If today we miss this historical opportunity to bring peace and long-term stability to the Middle East, we will have to achieve the same goal in a few years, when it will be much more difficult, expensive, and onerous. If we let the sophists of the State Department have their way, the inevitable showdown with the Islamist regime will only be postponed, but not avoided.

-- Elio Bonazzi is an Italian-born political scientist.
http://www.nationalreview.com/comment/bonazzi200403090852.asp
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U.S. Softens Its Rebuke on Iran Nuclear Issue, Appeasing Allies
By CRAIG S. SMITH
VIENNA, March 9 -- The United States agreed Tuesday to tone down its criticism of Iran in order to win European support for a demand that Tehran divulge more about its nuclear program, according to European diplomats here.
Washington dropped threatening language from a draft resolution being prepared at a meeting of the board of governors of the International Atomic Energy Agency, the United Nations' nuclear watchdog, and agreed to insert a paragraph praising Iran's cooperation so far. The board's 10 European members signed off Tuesday on the revised draft, and the United States will present it to remaining board members on Wednesday.
The resolution, which board members are expected to approve later this week, will be the third on Iran issued by the agency since the country was discovered last year to have a far more extensive nuclear program than was previously known. And it will be the second in which the United States has agreed to a weaker rebuke against Iran than it would like because of European fears of alienating the country.
Last November, the United States dropped its demand that an agency resolution threaten Security Council action if Iran again failed to disclose details of its nuclear program, which Tehran insists is for purely peaceful uses.
The resolution instead said that if any further serious failures came to light, the board would "consider all options at its disposal." The United States repeated that language in its initial draft this time but agreed Tuesday to remove the threat in favor of a simple reference to the previous resolutions.
The debate carries unsettling echoes of the controversy that preceded the war with Iraq, when European allies argued to give Iraq more time to prove it had no weapons of mass destruction. In Iran's case, France, Germany and Britain reached an agreement with Iran last year under which Iran would suspend its uranium enrichment program in return for easier access to technology and trade.
The Associated Press reported Tuesday that John R. Bolton, a United States under secretary of state, complained in a letter to the French, German and British governments that their stance was hurting the effort to get Iran to comply with its promises for full nuclear disclosure.
Iran gave the energy agency a detailed account of its nuclear program in October. But the country was later found to possess a more advanced design for uranium enriching centrifuges than it had declared, as well as other undisclosed equipment and plans.
The most pressing question remaining is the origin of traces of highly enriched uranium found on some of the equipment in Iran. Iran told the agency that the traces were on the equipment when it arrived in the country, and that since it had been bought through various middlemen, there was no way to identify its source.
But it is possible that Iran enriched the uranium itself, which would constitute clear evidence of Iran's intent to develop nuclear weapons and represent a major breach of its commitments to the agency.
The draft resolution calls for Mohamed ElBaradei, the director of the energy agency, to report on Iran's progress in May before its next board of governor's meeting in June, deferring the question of how to respond to Iran's omissions in its October declaration until June.



Copyright 2004 The New York Times Company
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>> OUR FRIENDS IN ISRAEL GET READY?

Mossad Cuts down Spying Functions
From DEBKA-Net-Weekly 147 Feb. 27
March 8, 2004, 1:03 PM (GMT+02:00)
Here come the A-teams
In the last five months, Israel's central intelligence agency has undergone a metamorphosis in typically deep hush. Once fabled for planting its agents anywhere and everywhere where important military or diplomatic happenings were played out, the Israeli Mossad has retired from the business of espionage and turned itself into a body devoted to special operations.
Many Mossad overseas stations have been shut down or re-staffed according to the new guidelines.
According to DEBKA-Net-Weekly 's exclusive intelligence sources, Mossad aspires to match its past excellence as a gatherer of intelligence by providing equally first-rate operations units, possibly unique in scale, whose broad mission is to secure and protect Israel's vital interests around the world and preserve the Jewish state against existential perils, which are currently defined as Iran's potential nuclear weapons and major al Qaeda terrorism. It is in the process of manufacturing a special operations infrastructure for serving such national security goals at the behest of government policy-makers.
Just as Israel's armed forces crack units are trained for operations behind enemy lines in the immediate region, Mossad's special operations units are to be programmed for operations over the horizon. Its intelligence-gathering resources have been cut down and adjusted to meet the needs of these operations; the remainder transferred to Aman, Military Intelligence.
DEBKA-Net-Weekly 's intelligence experts report that last summer, prime minister Ariel Sharon approved this Mossad reform program submitted by its director, Res. Maj.Gen. Meir Dagan. It went into effect in September 2003.
The Dagan plan is based on six arguments:
1. Israel's special operations units are tailored for action inside Israel and within the limited orbit of the neighboring Arab states.
2. A changed world has confronted Israel with fresh existential threats: Iran's nuclear weapons and fundamentalist Islamic terror spearheaded by al Qaeda, which is actively plotting 9/11 scale and unconventional weapons attacks - nuclear, chemical and biological - on the Jewish state. The traditional special operations units of the armed forces are not equal to these threats; they are not trained to fight them or equipped for long-distance action in remote arenas.
3. Hitherto, Israel lacked a force capable of operating at any point on the globe. But now, should an Al Qaeda team be discovered training in the Ferghana Valley of Central Asia for a dirty bomb attack on Tel Aviv, the Mossad will have an A-team ready and able to wipe out this faraway al Qaeda base. A similar team must be capable of dealing with Iran's secret nuclear weapons facilities and its long-range missile systems.
4. Mossad will retain only one intelligence resource, the ability to reconnoiter the operational targets assigned by the responsible government authority, namely the prime minister. It will be geared purely to such missions.
5. The new mode of operation must necessarily cut Mossad off from its traditional relationships with foreign intelligence bodies as well its domestic ties. This seclusion will enhance its ability to function in total secrecy.
6. The new undercover units will be equipped with the finest secret electronic gear and weapons Israel has developed.
DEBKA-Net-Weekly reports that some of the intelligence experts Sharon consulted before approving the transformation of Mossad were highly critical. They had no argument with the creation of an undercover operational structure for long-distance missions, but held that the loss of an experienced and esteemed resource for gathering political or even industrial intelligence around the world would be seriously detrimental to Israel's international standing.
According to sources familiar with his mind-set, Sharon's overriding motivation in approving the Mossad's overhaul was his acute sense of peril emanating most of all from the nuclear threat. This sense can be summed up in a word: We may find it interesting and even useful to discover who really pulls the wires in some country or other. But what use will this intelligence be if Israel is under nuclear attack?

Posted by maximpost at 12:27 AM EST
Permalink
Tuesday, 9 March 2004

>> CONVERSATION AS PROOF THE PROCESS NEEDS RALPH?
http://www.moretothepoint.com/
Anybody but Bush listen
All through the Democratic primaries, the dominant theme in the exit polls has been "anybody but Bush." In state after state, it's not the issues that are propelling John Kerry toward nomination but his so-called "electablility." That may be enough to bring anti-Bush Democrats to the polls, but will it be enough to win in November? With America politically divided as never before, will that give Independents and swing voters the final say? We hear more about partisan politics and the evolution of the 2004 presidential campaign from political scientists and reporters, and Democratic and Republican strategists.

Posted by maximpost at 9:39 PM EST
Permalink
Monday, 8 March 2004

>> OH TERESA?

The "Mother" of All House Parties
The East Bay for Kerry/MoveOn House party on December 7th combined the forces of two grass-roots organizations based in San Francisco East Bay Area. We had 200 guests eating, drinking, and watching the MoveOn Documentary "Uncovered" featuring Joseph Wilson and Rand Beers from the Kerry campaign.

When Teresa Heinz-Kerry arrived, she handed me a pin that read in the center: "Asses of Evil" with "Bush", "Cheney", "Rumsfeld" and "Ashcroft" surrounding it. She met, greeted and talked to a jam-packed room of Kerry supporters and others who came for the MoveOn documentary. Many were curious, others undecided, or belonging to other candidate camps.

Teresa talked about her life as the daughter of a physician in Africa, about life during a repressive regime, to life inside Washington DC, and a brief intimate glimpse into her courtship with John. She told a rapt crowd about how they met and their first date, and that he did not call again for six months, adding, "He was slow on the uptake". Just as she was about to add more to the story, the phone rang. It was the Senator.



The synchronicity of this call was not lost on the crowd. We all laughed. John then spoke about the Medicare Bill recently signed by the president that effectively forces people into expensive HMO plans and prevents Medicare from using its formidable consumer base to drive the bulk purchase of expensive prescription drugs down. He also spoke about the recent Bush Thanksgiving visit to our military in Iraq, carrying a platter laden down with a fake turkey, smiling for a photo op.

People were hungry for the food we had prepared, but more so, hungry for John's message of hope. After the call, Teresa took questions from the crowd. One of the questions was about grass-roots organizing, and the effect it had on the current presidential campaigns. Teresa responded that grass-roots has to happen at EVERY level, from the Internet, to canvassing and meeting people, to letter writing and phone calling. She reminded us that this was the way to connect with others and to get the message out.

A PBS producer working on a documentary on MoveOn interviewed Teresa. He asked, "Just as radio was for Roosevelt, and television was for Kennedy, the Internet has been defined as the new political grass-roots organizing tool for this era. What is your reaction to that?"

Teresa said, "The Internet is a great grass-roots organizing and political tool; but it is still an adjunct." The producer asked her to clarify. Teresa responded, "Until EVERYONE has access to a computer and knows how to access the Internet, it will still be an adjunct political grassroots organizing tool".

It was hard for Teresa to stay on schedule. The lovely voice of opera singer, Susan Gundunas was on hand to sing a few tunes, and that kept Teresa with us a while longer than expected. Before saying goodbye, she took with her some "Condoleezza Rice Crispies Bars" and "No Child Left Behind Chocolate Chip Cookies", sold to generate donations to the cause. She left with a lilt to her step, a warm smile, and some new converts, some of whom were uncommitted and undecided, and some who were definitely committed, but came over to our camp. Because of her.

She gave us a bit of what she does best, connecting us as a community with her heart, compassion, and willingness to fight throughout all her life for the good of all of us. As her husband, John Kerry has throughout his life. Teresa completed the picture many people had unfinished about John Kerry. Now they know they have a "Real Deal". From baking cookies, gathering food donations, staying up late cooking chicken wings, putting up artwork, and decorating that beautiful rambling modern home in the Oakland Hills, we at East Bay for Kerry did our job because we believe grass roots efforts include all of these finer, human details. We brought in more than 80 people to John's birthday party the next night, bringing the room to capacity at 350 the following night

Thanks to Teresa, we kept the party going on, and she helped us here at East Bay for Kerry, throw the Mother of All House Parties.

Fe Bongolan - December 11, 2003
East Bay for Kerry - Berkeley, CA



OFFICIAL 'KERRY FOR PRESIDENT' WEBSITE RIDDLED WITH OBSCENITIES

**Exclusive**
Sen. John Kerry's official election website is riddled with obscenities, the DRUDGE REPORT can reveal.
The Democrat nominee-in-waiting recently said radio stations are within their right to pull Howard Stern off the air if they object to the shock jock's racy show.
But an investigation reveals Kerry's own website is filled expletives, setting the standard for a new wave of 21st Century campaigning!
MORE
A sampling of web pages featured on Kerry's official site reveal:
"Bush f**ked up Afghanistan... Did I expect George Bush to f**k it up as badly as he did... cutting all your f**king legs off at the knees... Where the f**k is he?... scare the living s**t out of me... He has a pig-in-s**t grin on his face, he wanted to get into the s**t... doesn't play s**t in my book..."
In fact, typing in the terms "F**k" or "S**t" in the search box of the official Kerry For President site directly links the reader to the action!
A campaign source tells the DRUDGE REPORT that "John Kerry For President" online simply contains published material, and the senator was simply unaware on Sunday that the expletives were being carried on his own Internet server. [A search on the official Bush/Cheney re-election revealed no such curse words.]
"I think you'll see the offensive words removed," the top campaign source said.
Unlike over the air broadcast, there are no known foul language rules for official campaign websites.
Developing...

Filed By Matt Drudge
Reports are moved when circumstances warrant
http://www.drudgereport.com for updates
(c)DRUDGE REPORT 2004
Not for reproduction without permission of the author



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>> CONVERSATION WITH A KNOWING IRAQI...
http://www.speakingoffaith.org/programs/2004/03/04_islaminiraq/
Ahmed H. al-Rahim teaches Arabic language and literature at Harvard University. He's also a founding member of the American Islamic Congress, and has served as an advisor to American forces in Iraq.
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THE UNITED STATES, in Iraq and elsewhere, should cease promoting a secular civil society as the only alternative to a Taliban-like Shia theocracy. We cannot quell the religious yearnings of millions of Iraqis (and many others elsewhere) merely by fostering strong political and economic institutions and the sound values they embody -- to wit, democracy and capitalism. The most effective way to counter a theocracy is to include moderate, liberal religious elements in the civil society we are helping to erect.

The First Amendment's disestablishment clause is not a foreign policy tool, but a peculiarly American conception. Just because the American government is banned from promoting religion within the United States does not mean that the State Department and the Pentagon cannot promote religion overseas in societies that are undergoing profound societal changes. This last point is crucial: Overseas we are participating as a key architect and builder of new institutions; we are in what social scientists call "the design business." This is quite distinct from what we do at home: shoring up a solid social structure designed two centuries ago, careful not to rock the foundations or undermine the pillars on which it stands. In Iraq, Afghanistan, and many other Third World countries, we participate in the ground-breaking, foundation-laying stage, one in which elements we can take for granted at home -- such as a thriving religious life within civil society -- must be provided.

The current U.S. position reflects, whether deliberately or unwittingly, the "end of history" conception that all ideologies are on their last legs as the world embraces the American (or Western) ideals of democracy, human rights, and free markets. This notion, in turn, is but an extension of the Enlightenment conceit that modernity is based on rational thinking, which religion is not, and hence religion is "history" while secularism (reason, science) is the future. Accordingly, societies in which religion is "still" playing a key role are considered behind the times, underdeveloped. As we are learning, however, all over the world people have spiritual needs that cannot be addressed, let alone satisfied, by Enlightenment ideals.

We are witnessing an explosive growth of Christianity in East Asia (in 2000, China had 3.5 million Catholics, up from less than half a million in the mid-1980s); on the Korean peninsula, where nearly a quarter of the population is Christian, a 4,000 percent increase from the early part of the twentieth century; and in Africa (360 million Christians in 2000, compared to 10 million in 1900). We find an "outpouring of pent-up religious [fervor]," as sociologist Alan Aldridge put it, in Russia (which nearly doubled the number of adherents to the Russian Orthodox Church from 1970 to 2000) and other former communist nations in Eastern Europe. And there has been a rise in Islam not only in countries that were never modernized, but even in those that have had extensive secular, modern periods -- such as, most tellingly, Turkey. In the United States, although there are continuous debates over the depth of American religious commitments and the possibility of a religious revival, no one doubts that religion is a major force in American life and that important elements of our civil society are faith-based. We should export to Iraq -- and to other countries challenged by fundamentalism -- our mixed secular and religious civil society.

The reason religion cannot be suppressed, why religion is reasserting itself where it was formerly stifled or thriving where it was never held back, is that it speaks to profound questions to which many millions of people seek answers. These are transcendental questions such as why we are cast into this world, why we are born to die, and what life's purpose might be. In addition, there are moral questions such as what we owe to our children, to our elderly parents, and to our friends, communities, and nations. Neither democracy nor capitalism speaks to these issues. Secular humanism does provide some answers, but not ones all find compelling; the answers deal largely with moral issues but much less with the truly transcendent ones.

The quest for spiritual answers of one kind or another is evident both in former communist countries and in Islamic countries in which the theocracy is breaking down (such as Iran) or has been ended (e.g., Afghanistan). In all these countries, the breakdown of tyranny precedes an explosive growth of new kinds of anti-social behavior. (I write new kinds of anti-social behavior because other kinds -- corruption or spying on one's friends, co-workers, and neighbors, for instance -- were, of course, quite common in the pre-liberation days.) These countries experience sharp rises in drug abuse, HIV, divorce, and crime. The New York Times Magazine published a particularly distressing account of the reemergence of pedophiles in Kabul, who did not dare act out during the Taliban days.

The reason is obvious: Once police terror as the source of social order is removed, it must be replaced by some other source or else moral and social anarchy will arise. Order in a free society rests primarily on people choosing to refrain from anti-social behavior because of their moral upbringing and the informal enforcement of social norms. No free society can make police the mainstay of its social order; law enforcement's proper place is as a backup to an order largely undergirded by morality. Sending the military police into newly freed countries and training local cops are of course necessary, but they will not curb anti-social behavior unless accompanied by a new moral code. Religion has been and very much still is one major source of such mores. The religion we should promote is compatible with democracy and not oppressive in its own terms and institutions. Call it a "soft" religion.



I KNOW A BIT about how receptive Shiites are to a non-Wahhabi, moderate, soft Islam because they laid out their position during a three-day meeting in Iran that I attended a year ago. It ended just as the holiday commemorating the martyrdom of Imam Hossein began. Although the reformers -- headed by Dr. Seyyed Ataollah Mohajerani of the International Centre for Dialogue Among Civilizations -- organized the meeting, several hardliners also participated. The main point, repeatedly stressed during the meeting, was that both Shia camps -- the hardliners and the reformers -- want to live in an Islamic society. The main difference between them is that the prevailing hardliners are committed to enforcing the religious code through morality squads, secret police, and jails -- in short, the government -- while the reformers favor encouraging people to be devout rather than forcing them to abide by the Prophet's dictates. The line most often repeated was: "If you do not force people to come, they will want to come."

A similar approach was laid out by professor Muqtedar Khan of Adrian College in Michigan, who writes:

Moderate Muslims aspire for a society -- a city of virtue -- that will treat all people with dignity and respect. There will be no room for political or normative intimidation. Individuals will aspire to live an ethical life because they recognize its desirability. Communities will compete in doing good and politics will seek to encourage good and forbid evil. They believe that the internalization of the message of Islam can bring about the social transformation necessary for the establishment of the virtuous city. The only arena in which moderate Muslims permit excess is in idealism.

Many have attempted to outline the features of a soft Islam in recent years, resulting in several typologies of liberal, modest, modern, and Euro-Islam that are contrasted with militant, virulent, and fundamentalist Islam. Naturally, there is no agreement about the interpretation of relevant texts and traditions. Nor is it possible (or necessary) to review this large body of literature here. Rather, I seek to list several key features of the sort of Islam the United States should support in those parts of the world where it must counter Muslim fundamentalism.

Soft Islam, as the Islamic legal theorist Khaled Abou El Fadl has described it, differs from the fundamentalist version in that it draws on the members of the community for consultations (sharia) rather than relying on rulings from the mullahs. The concept of sharia has been traced to the pre-Islamic era, when tribal councils decided important public issues through consultation. Professor Forough Jahanbakhish of Queen's University in Canada adds that most modern scholars hold that such consultative bodies should be composed of representatives of the whole community, and not just elites.

In 2001, President Mohammad Khatami of Iran, the leader of the reformers, stated that "the constitution [of Iran] states that the rule is Allah's... but it also states that this Divine rule is based on people's opinions. Man is Allah's representative on earth and the right to rule does not refer to any specific person. Rather, it refers to all those who participate in elections and set the government's agenda." Another principle discussed by some -- including Abou El Fadl in his book And God Knows the Soldiers: The Authoritative and Authoritarian in Islamic Discourse (University Press of America, 2001) -- is one attributed to the Prophet: that "every mujtahid [the person exerting effort in deducing the law] is correct." This means, according to Abou El Fadl, that "one must search for the law without fear of failure" and that while humans strive to discover the Divine Will, "no one has the authority to lay an exclusive claim to it."

Others have stressed that the Koran is open to different interpretations rather than commanding one strict, rigid, by-the-book line. As Khan writes in his essay "Who Are Moderate Muslims?":

Ijtihad narrowly understood is a juristic tool that allows independent reasoning to articulate Islamic law on issues where textual sources are silent. The unstated assumption being when texts have spoken reason must be silent. But increasingly moderate Muslim intellectuals see Ijtihad as the spirit of Islamic thought that is necessary for the vitality of Islamic ideas and Islamic civilization.... For moderate Muslims, Ijtihad is a way of life, which simultaneously allows Islam to reign supreme in the heart and the mind to experience unfettered freedom of thought. A moderate Muslim is therefore one who cherishes freedom of thought while recognizing the existential necessity of faith.

Abou El Fadl, a professor at UCLA, provides examples of conflicting Koranic interpretations in And God Knows the Soldiers. The Koran, he explains, commands believers, "Do not take a life which God has forbidden unless for some just cause." Yet what constitutes "just cause" is susceptible to debate. The Koran also instructs, "And do not kill yourselves." But whether smoking, for example, is a form of killing oneself is also a matter of debate. Regarding the veil or headscarf (hijab) worn by many Muslim women, Abou El Fadl writes:

Most importantly, the historical setting and the complexity of the early context do suggest that the inquiries into the juristic basis of the hijab cannot be considered heretical. In this sense, labeling the hijab as a part of the usul [the foundations of the faith upon which disagreement is not tolerated], and using that label as an excuse to end the discussion in the matter, is obscenely despotic. It might very well be that this is yet another legal issue where the law of God is pursuant to the convictions of the pious adherent.

That last comment is particularly important. When religions are moderated, whether the reforms include praying in the vernacular or allowing men and women to worship together, there is a common fear that the whole construction will unravel. Hence, drawing a distinction between an inviolate core and the other elements is crucial to fostering the sense that one can reinterpret the various religious dictates while maintaining the religion's essence. Soft Islam builds on this difference between the core and the rest; rigid Islam denies the existence of such a distinction. Thus, the Iranian historian and reformer Hashem Aghajari has addressed the question of the mullah's religious authority in this way:

The Protestant movement wanted to rescue Christianity from the clergy and the Church hierarchy -- [Christians] must save religion from the pope. We [Muslims] do not need mediators between us and God. We do not need mediators to understand God's holy books. The Prophet [Jesus] spoke to the people directly.... We don't need to go to the clergy; each person is his own clergy.

A particularly important case of divergent interpretations of Islam, one antithetical to a civil global society and one very supportive of it, is found in the debate over the meaning of "jihad." Some Muslims interpret jihad to mean "holy war." A group of sheikhs in Cairo, expressing this view, has determined that, "According to Islamic law, if the enemy steps on Muslims' land, jihad becomes a duty of every male and female Muslim." Before the recent conflict, Iraqi Imam Omar Hussein Asengawy issued a fatwa -- an authoritative religious ruling -- holding that all Muslims were obligated to wage war against the United States in the event of an attack on Iraq. "Let's wage jihad together," he told his coreligionists last December, "to face the enemy and the infidel." At the heart of the "holy war" viewpoint is the presumption that all nonbelievers are lower-grade human beings, contemptuously referred to as kaffir.

In other, civil interpretations, jihad is conceived as a solely spiritual struggle. Abou El Fadl writes, "Jihad-- means to strive, to apply oneself, to struggle, and persevere. In many ways, jihad connotes a strong spiritual and material work ethic in Islam." Islamic scholar Seyyed Hossein Nasr explains in The Heart of Islam (Harper San Francisco, 2002) that "jihad is therefore the inner battle to purify the soul of its imperfections, to empty the vessel of the soul of the pungent water of forgetfulness, negligence, and the tendency of evil and to prepare it for the reception of the Divine Elixir of Remembrance, Light, and Knowledge."

These writings represent a small sample of a huge body of literature, yet they illustrate the basic character of a soft Islam. Such an Islam seeks to educate and encourage good conduct rather than coerce it, is open to reinterpretation on all matters but its core, welcomes participation by the members of the community rather than dictates from the mullahs, and spreads spiritually rather than by the sword.



ISLAM, LIKE JUDAISM but unlike Protestantism, is much more a behavioral and less a theological religion. Promoting soft Islam in Iraq and elsewhere cannot be accomplished solely through scholarly symposia on the meaning of moderate Islam or by creating anthologies and delivering lectures, although these activities all have their place. We must turn to policy. The most effective way to develop such a conception is to embody it in new institutions for the whole world to see. Moreover, as we remain knee-deep in rebuilding Iraq, concrete questions -- not just matters of theory -- must be faced.

Schools provide an especially suitable environment in which to start to examine the third way between theocracy and a secular civil society. Education in several Islamic countries is carried out in madrasas. These are the places where young people are drilled in Wahhabi Islam and anti-Western principles and pumped full of rigid interpretations of religious texts, learning by rote, with next to no exposure to science and the liberal arts. Madrasas are common in theocracies such as the Taliban's Afghanistan, Iran, Saudi Arabia, and northern Pakistan. If the dominant Shiites in Iraq have their way, these schools will be introduced in that country as well. In place of the madrasas, Delaware Senator Joseph Biden has suggested that we should promote secular, American-public-school-like institutions.

Another alternative is to provide two tracks of education within public schools. One track would be essentially secular (although children would learn about religion), and the other would dedicate a significant proportion of the teaching -- say, 20 percent -- to religious subjects. (We may not wish to advertise to Iraqis that this approach is followed in Israel, but that example shows that the approach is feasible.) In Malaysia, in which there is a large Muslim population but a relatively moderate one, both secular and religious education are provided: Muslim children can attend secular school in the morning and religious classes in the afternoon.

To ensure that the religious part of public schooling is used for soft religious teachings rather than for fundamentalist indoctrination, the teachers, although as a rule from a given religious group (Shiites in southern Iraq, for example), need to be qualified and selected by the school rather than by religious groups, and the teaching material must be approved by the ministry of education.

This is a sound educational system for several reasons: It prevents fundamentalist education; ensures that all children will acquire the rudiments of modern education; allows those parents who seek it to secure a significant amount of religious schooling for their children with the costs covered by the state; and ensures that children of different backgrounds -- secular and religious -- will mix, an outcome that is prevented when some of the children go to segregated religious schools. Above all, such a two-track system allows a government to promote moderate religions without preventing anyone who (or whose parent) wishes to have secular education from gaining it. Thus, it is a prime example of how a government can promote religion and still ensure that it will be liberal.

The institutionalization of a civil society with religious elements may also proceed through the provision of social services. In several parts of the Islamic world (in southern Iraq, for instance), various religious bodies provide social services. In France, social services -- including health care, welfare, and child care -- are provided largely by the secular arms of the government. A third way would be to continue to utilize whatever governmental and secular voluntary social services are available and to expand them while also drawing on religious services -- the way it is done in the United States. Despite America's uncommonly strong commitment to disestablishment, the U.S. government relies to a significant extent on voluntary religious groups to provide many social services. This is done either by contracting with various religious groups for the provision of social services or by allowing religious institutions -- Catholic or Jewish hospitals, for example -- to receive Medicare and Medicaid payments via individuals who choose to be served by them. As of 2001, 75 percent of the funding for the Jewish Board of Family and Children Services came from government sources. Catholic Charities' programs receive about 66 percent of their funding from government grants and contracts, and Lutheran Services in America receives more than 33 percent of its annual budget from government funds. Indeed, the United States is expanding its reliance on faith-based institutions following the Charitable Choice Act of 1996 and the Bush administration's faith-based initiative. All this could be applied to Iraq, relying on what amounts to two-track social services -- those provided by government agencies and those provided by faith-based institutions. Here too the government would impose some limitations on the ways in which religious groups can use public funds. Specifically, it would require that the funds be used fully for social services and not for political action or fundamentalist indoctrination.

Finally, a government keen on promoting a two-track civil society might pay the salaries of the Muslim clergy and the maintenance costs of mosques. To Americans this may seem highly controversial and a gross violation of the separation of church and state, but it is a common practice in many democracies: In Catholic countries such as Spain and Italy, for instance, as well as in Scandinavia and Germany. (In some countries, this is done indirectly; in some cases, the government collects a special church tax from those who attend church, but the net effect is that the clergy are publicly supported and not dependent on passing the plate.) Once the government pays for clergy, it is free to determine who qualifies as such. Fundamentalist preachers will surely not be banned from practicing, but they will not do so on public dollars. A group of moderate clergy may advise the government on who is qualified to serve in the public religious sector.

One may ask, "But what about Christians and other religious groups?" The same arrangements would apply to them. Social services could be delivered by these religious communities, their clergy compensated, and two-track teaching provided. Lest this sound too abstract, one should note that despite our insistence on the separation of state and church, we in effect are a two-track society; this reality is well illustrated by the fact that we allow various religious authorities to conduct marriages that are recognized by the state and also enable people to be married in a civil ceremony without any religious trappings.

The trouble is that so far, we have been approaching Iraq as if we favor only secular institutions. The 13 points released by the U.S. Central Command headquarters in Qatar in mid-April state that Iraq must be a democracy, that the rule of law must be paramount, and that the role of women must be respected -- all of which are fine, but all speak to the secular elements of the future Iraq. A two-track approach to constructing a civil society in Iraq, one that provides ample room both for soft Islam and for secular institutions, not only would serve better in countering fundamentalism than sheer secularism, but also would respond to a wider array of human needs.

MUCH OF THE recent literature on Islam focuses on the question of whether Islam is or can be made compatible with a democratic regime, an inquiry closely related but not identical to the question of whether there is a soft Islam that can serve as an antidote to Islamic fundamentalism. Can Islam live with free elections, tolerate a free press, grant equal rights to women, tolerate secular authorities, and the rest? Although there is little agreement on this subject, one of the earmarks of soft Islam is that it can coexist with democratic political institutions.

To provide but one example: Treating women as men's equals in moderate Islamic societies, instead of in the demeaning and abusive way of Islamic fundamentalism, draws on two rather different principles. One is respect for the U.N. Universal Declaration of Human Rights and other more general, secular liberal political theories, which extol the virtues of individual dignity and individual rights. Another is a soft interpretation of Islam based on arguments such as those made by Forough Jahanbakhish in Islam, Democracy, and Religious Modernism in Iran, 1953-2000 (Leiden, Netherlands: Koninklijke Brill, 2001): Previous generations have misinterpreted Islamic sources, and the inferior status of women is a product of the social conditions at the time of the Koran, not the moral teachings of it. In Nine Parts of Desire: The Hidden World of Islamic Women (Anchor Books, 1995), Geraldine Brooks questions whether rules that were clearly meant to apply only to the Prophet's wives, such as seclusion, should have been extended to all Muslim women.

The significance of the difference between these approaches is that if one draws, for political legitimacy, merely on respect for the U.N. Declaration and the ideals associated with it -- that is, on Locke and Kant, the Founders, and the Federalist Papers -- one in effect presumes that support for democracy must be secular. If one also draws on soft interpretations of Islam, one finds that Islam can be made compatible with democracy so that promoting religion as an essential element of civil society will not hinder the development of a liberal democracy. As Daniel Pipes, a scholar of the Middle East, has put it, "militant Islam is the problem, and moderate Islam is the solution."

It follows that by promoting soft Islam we get two for the price of one: We promote a religion that is compatible with liberal democracy as well as one that can serve as an effective antidote to the fundamentalists. I take it for granted that Iraq should have a democratic form of government. But it should be one that does not treat religion per se as a threat but, potentially, as a mainstay of civil society, and hence as something that should be promoted -- that is, to be sure, in its soft, moderate forms.

This article first appeared in the October-November 2003 issue of Policy Review. Reprinted with the permission of the journal and the author. Amitai Etzioni is a University Professor at George Washington University and author of the autobiography My Brother's Keeper: A Memoir and a Message (Rowman & Littlefield, 2003). Amitai Etzioni's book From Empire to Community: A New Approach to International Relations, in which a version of this essay appears, will be published by Palgrave Press in April, 2004.

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IAEA to meet on Iran, Libya nuclear programs
www.chinaview.cn 2004-03-08 13:11:10

VIENNA, March 8 (Xinhuanet) -- The governing board of the International Atomic Energy Agency (IAEA) will start a five-day meeting on the nuclear programs of Iran and Libya on Monday, during which two resolutions will be discussed.
Libya has agreed to dismantle its program under the supervision of the IAEA. But Iran, though claiming its innocence, has long been accused by the United States of using its atomic energy program as an excuse to build a bomb.
According to the IAEA's recent report on Iran, its inspectors had unearthed designs and parts for the advanced "P2" uranium enrichment centrifuge, capable of producing bomb-grade uranium, and uncovered experiments process in the creation of plutonium andpolonium, which can be used in nuclear weapons.
As to the report, Iranian Foreign Ministry Spokesman Hamid RezaAsefi denied the existence of the advanced nuclear equipment, describing those reports as "unfounded." He stressed that Iran's nuclear activities are intended for peaceful purposes and the country has not pursued and still does not pursue any nuclear weapons program.
On Sunday, Iranian Supreme National Security Council secretary Hassan Rohani said through state television that it was time for the IAEA to close the 13-month investigation into Iran's unclear program.
In an effort to dispel suspicion over its nuclear program, Iransigned an additional protocol to the Nuclear Non-Proliferation Treaty (NPT) last December, allowing unfettered UN inspections to its nuclear facilities. Enditem
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Saudi Arabia, China sign natural gas deal
www.chinaview.cn 2004-03-08 11:38:53
BEIJING, Mar. 8 (Xinhuanet) -- The Saudi government signed on Sunday morning a deal on natural gas drilling and production with the China National Petrochemical Corp (SINOPEC), according to a SINOPEC official.
The deal was inked by Saudi Minister of Petroleum and Mineral Resources Ali Bin Ibrahim Al-N'aimi and chief of SINOPEC Wang Jiming.
The agreement, covering an area of 40 square kms in the south of Saudi Arabia's Rub Al Khali Province, was also signed by the chairman of the leading Saudi Arabia oil provider, Arabian American Oil Company (ARAMCO), Wang told reporters after the signing ceremony.
Wang said the project was a landmark in the Sino-Saudi ties in general and in the bilateral economic and trade co-operation in particular.
He hailed the deal as a strong link which further cements the full-fledged relations between China and Saudi Arabia, saying he is confidence in the success of the deal and the project would hopefully bear fruits for both sides when it goes into operation.
He disclosed the total spending in the first phase of the project was set to be US$300 million, adding that SINOPEC has already made contacts with several banks over the funding of the scheme and some Saudi banks showed willingness to step in.
He said on January 27, SINOPEC secured an international tender staged by the Saudi government for gas excavation and production at the contracted zone.
Under the deal, SINOPEC and ARAMCO will launch a company for drilling and production at the contracted zone with ARAMCO holding a 20 percent quota.
Meanwhile, Al-N'aimi is also expected to sign two similar deals here in the day with the Russian Lock Oil on one hand and the Italian Iny and the Spanish Ribsol on the other.
Lock Oil will drill and produce natural gas at the A zone which covers 30,000 sq m and the two European partners will work at the 52,000 square km C zone, both at Rub Al Khali.
Last November, Saudi Arabia clinched deals for natural gas drilling and production with the international Shell and Total and the national ARAMCO groups. The three companies were offered concession terms up to 25 years and concession area of 210,000 square kms at Rub Al Khali too.
The projects were part of the Saudi government's reform and opening up policies in the economic field. Enditem
--------------------------------------------------
Saudis deny political motive in gas deals
Riyadh |By A Staff Reporter | 08-03-2004
Print friendly format | Email to Friend
Saudi Arabia yesterday ruled out any political motive in its choice of partners as it put the final seal on a series of groundbreaking gas deals with foreign companies.
The kingdom, which has the world's fourth largest deposits of gas, put pen to paper on contracts with Russia's Lukoil, China's Sinopec and an Italian/Spanish consortium.
The agreements marked Saudi Arabia's first invitation to foreign groups to make competitive bids for rights to explore for its gas.
Equally surprising was its choice of partners. None of the four winning bids came from an American company. But Saudi Oil Minister Ali Al Naimi played down any significance in that. "We actually chose the best bidders, and we are in fact very pleased at this diversification," he said yesterday in Riyadh.
Saudi Aramco took a 20 per cent share in each of the three contracts awarded. Although it announced the awards in late January, the deals did not become official until now.
The kingdom wants to use its undeveloped gas as fuel for an ambitious range of planned industries, including plants to treat and desalinate water and factories to make petrochemicals, steel and cement.
Despite Naimi's denials Martin Purvis of Edinburgh consultancy Wood Mackenzie said the auction's outcome appeared to be "a political play" concerning Russia and China.
Russia is Saudi Arabia's main oil rival. China, meanwhile, is a major buyer of Saudi crude. Its rapid economic growth will make it a still bigger market in the future.
Saudi Arabia hopes to build closer ties with both countries. There is, Naimi said: "No question in my mind that strengthening the economic relations will strengthen other areas of cooperation."
Sinopec's vice chairman Wang Jiming agreed, saying his company's involvement in the Saudi gas business would "help further to promote the country-to-country political relationship" between China and Saudi Arabia.
To find gas, Saudi Aramco's foreign partners must each explore an area larger than Kuwait.
Lukoil president Vagit Alekperov said his company was prepared to invest $3 billion over the life of its contract, and Sinopec suggested that it would consider investing a similar sum.
---------------------------------------------------------------
>> AAAHH THE UMMAH...

Two private enterprises have signed an agreement to transport some 250,000 cubic metres of liquefied natural gas (LNG) daily in tanks from Northwest China's Xinjiang Uygur Autonomous Region to the southern coastal city starting in June.
The project will save tens of millions of yuan a year for power plants and some industrial companies in the city's suburban Bao'an District, which will continue to use diesel as a major source of fuel before the LNG pipelines reach the area in 2006.
Shenzhen Tianmin Ltd, a privately funded company involving LNG trade and transportation, said its partner, Xinjiang Guanghui Group Ltd, will provide 60 million cubic metres of LNG annually in the beginning.
The first phase of Guanghui's LNG project, which is located in Tuha in Xinjiang, is expected to reach a daily output of 1.5 million cubic metres, or an annual production of about 500 million cubic metres.
Tianmin has invested 100 million yuan (US$12.0 million) to enable and ensure the safe transportation of 250,000 cubic metres of LNG from Xinjiang to Shenzhen - a 4,300 kilometre trek, said Wu Yihao, deputy general manager of Tianmin. He said this would be done with the use of advanced professional vehicles equipped with a container for cryogenic liquid as well as a Global Position Satellite system (GPS).
The company's annual transportation capacity will reach 300 million cubic metres, or about 820,000 cubic metres daily, by the end of this year, he added.
In 2005-06, China's first two LNG terminals are expected to be employed in Guangdong and Fujian, carrying liquefied natural gas from Australia and Indonesia.
Source: China Daily
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Japan, S.Korea Agree to Cooperate on N.Korea Issue
Sun Mar 7, 2004 09:06 AM ET
TOKYO (Reuters) - Japan and South Korea agreed on Sunday to work closely to persuade North Korea to abandon its nuclear arms ambitions, but gave only a passing attention to thorny bilateral issues.
Visiting South Korean Foreign Minister Ban Ki-moon held talks with his Japanese counterpart Yoriko Kawaguchi in which they stressed that their countries should cooperate on the North Korean issue, a Japanese official said.
The discussions followed six-country talks in Beijing last month on ending North Korea's nuclear weapons programs.
"At the last round of the six-party talks, Japan, the United States and South Korea worked well in closer cooperation with one another and moved a step forward," the official quoted Kawaguchi as telling Ban.
The February talks involving the United States, North and South Korea, Japan, Russia and China ended only with an agreement to set up a working group and hold a third round of discussions in the Chinese capital before the end of June.
But there was little evidence that those talks had narrowed the gulf between North Korea and the United States.
Washington has accused North Korea of pursuing a uranium enrichment program to make nuclear weapons.
North Korea repeated in Beijing its denial that it had a clandestine enriched uranium weapons program in addition to the plutonium-based bomb-making project it is offering to freeze in exchange for energy aid and diplomatic concessions.
"It is important for us to continue to urge North Korea to accept the complete, verifiable and irreversible dismantlement of its nuclear weapons programs," the Japanese official quoted Ban as telling Kawaguchi.
Ban flew to Tokyo only days after a row flared between Japan and South Korea over postage stamps showing a group of islets claimed by both states in a long-standing territorial dispute.
A group of Japanese lawmakers applied Friday to be allowed to buy customized stamps showing the group of islets, under a system where customers can have stamps made with their favorite images.
The row over the rocky outcrops, known as Takeshima in Japan and Tokto in South Korea, flared in January when Seoul issued stamps featuring the flora and fauna of the islands, despite protests from Tokyo.
The dispute over the islets, uninhabited except for a garrison of South Korean soldiers, has run since the end of World War II.
During Sunday's meetings, the Japanese and South Korean foreign ministers did not discuss the stamp issue, the Japanese official said.
The official also said the two ministers did not touch on another thorny issue -- visits by Japanese Prime Minister Junichiro Koizumi to Tokyo's Yasukuni shrine, which honors war criminals as well as ordinary war dead.
Since taking office in 2001, Koizumi has outraged Japan's Asian neighbors four times with visits to the shrine, seen as a symbol of the militarist regime that led Japan into war.
Kawaguchi and Ban stressed that the two Asian neighbors should deal with bilateral issues "sensibly" to prevent the feelings of the peoples from running high, the official said.
Many Koreans still harbour bitter memories of Japan's colonial rule of the Korean peninsula from 1910 to 1945.


? Copyright Reuters 2004. All rights reserved.
----------------------------------------------------------
>> PENTAGON WATCH...
>> NOT THAT ABRUPT? CONVERSATIONS....
Abrupt Climate Change
PART 1: Severe storms in the Netherlands and a prolonged drought in Europe leading to unprecedented human migration -- these are some of the scenarios laid out in "Imagining the Unthinkable," a report recently issued to the U.S. Department of Defense on the possible worst-case effects of abrupt climate change. Host Steve Curwood talks with Peter Schwartz, one of the co-authors of the report, about the human consequences of such a scenario.
PART 2: Living on Earth continues the conversation on abrupt climate change, as host Steve Curwood talks with Leon Fuerth, former national security advisor to Vice President Al Gore, about the military and economic implications in the event of a rapid shift in global climate.
PART 3: National security and politics aside, the paleo-record of climate change shows strong evidence that an abrupt shift in climate could be headed our way. Host Steve Curwood talks with Daniel Schrag, professor of earth and planetary sciences at Harvard University, about the science behind abrupt climate change.

CURWOOD: From the Jennifer and Ted Stanley studios in Somerville, Massachusetts, welcome to Living on Earth. I'm Steve Curwood.

[MOVIE TRAILER MUSIC]

CURWOOD: For moviegoers across the country, Memorial Day marks the release of a film based on a concept of abrupt climate change. It's Mother Nature gone wild, in the much-anticipated disaster flick, "The Day After Tomorrow."

[SHRIEKS OF PANICKING PEOPLE]

MALE 1: [LIVE NEWSCAST] Lower Manhattan is literally inaccessible.

[ROAR OF TERRIFIED CROWD]

MALE 2: [LIVE NEWSCAST] There's a wall of water coming towards New York City...

CURWOOD: Tornadoes dismantle Los Angeles, hail the size of grapefruit pummel Tokyo, and Manhattan freezes over in a single day as abrupt climate change makes its debut on the big screen.

MALE: Save as many as you can.


New York City gets hit hard in a global ecological catastrophe
in the movie "The Day After Tomorrow."
(? and ? 2003 Twentieth Century Fox)


CURWOOD: This Hollywood scenario may seem far-fetched, and the science of the flick is a bit wobbly. But a recent report to the Pentagon, based on an assessment from the National Academy of Sciences, points out abrupt climate change may be a very real threat to national and international security. "Imagining the Unthinkable," as it's called, outlines a worst-case-scenario in the event of a massive and abrupt shift in global climate - shifts that have happened in the relatively recent past.

One of the authors of the Pentagon report is Peter Schwartz, a future scenario planner. He frequently consults for the Defense Department. Peter Schwartz, welcome to Living on Earth.

SCHWARTZ: Thank you. Glad to be here.

CURWOOD: Now, your work makes you no stranger to the Defense Department, but - I have to ask you - you've been a consultant for Hollywood, right?

SCHWARTZ: Yes.

CURWOOD: What are some of the movie projects you've worked on?

SCHWARTZ: Well, the first one was a film called "War Games" back in 1981, then another one called "Sneakers," both computer hacker movies. Then another one called "Deep Impact," also a kind of worst case scenario, if you will, given what we're going to talk about, of a comet coming toward the earth and how you might respond to it. I worked with a good friend Walter Parks on all three of those, and then with Steven Spielberg on "Minority Report."

CURWOOD: And I can't help but ask you then, what's your take on this upcoming movie "The Day After Tomorrow"? And were you involved in its production in any way?

SCHWARTZ: I wasn't, but I was asked to be. I chose not to be, mainly because this is pure entertainment. They weren't really interested in making a realistic view. I think they were enamored of a number of the images that turn up in the movie. And that's okay, this is pure entertainment.

CURWOOD: Now, you and some of your partners at your office recently drafted a report for the Pentagon entitled "Imagining the Unthinkable," which is a worst case scenario for abrupt climate change. Why paint such a scenario in the first place? Why is climate change a military concern?

SCHWARTZ: Well, this begins, first of all, with the National Research Council report called "Abrupt Climate Change," which looked at the possibilities for a scenario of abrupt climate change. The Pentagon, not surprisingly, read that report, the senior staff there, and said `we should consider whether this might have some national security implications.' That's what triggered our study.

And so it was an exercise in thinking the unthinkable. And from their point of view, the unthinkable means `could this happen soon, and could it be much more severe than most climatologists would say?' So, if you think back to just only a few years ago, you might have wished that somebody had thought about what might happen if terrorists would send airplanes into tall buildings and buildings in Washington. It's in that spirit. It isn't trying to predict the future, it was trying to say `what if?'

CURWOOD: Now, there's a lot of information in the 22 pages you put together here, Peter Schwartz. Can you give us the bullet points of what you found?

SCHWARTZ: Well, most significantly, it is this: what we're saying is that, while it is unlikely, the most extreme case would be a scenario of fairly rapid warming in the near future - the next, say, decade or so - that would in turn trigger rapid cooling. What would happen is that the ice in the poles would begin to melt, as we're already seeing some of. Glaciers would begin to retreat. Both of these would release fresh water into the North Atlantic. Increased precipitation associated with all of that might also lead to rivers producing more fresh water to the North Atlantic. That freshening of the North Atlantic, which we have been seeing, would then trigger a collapse of the Gulf Stream. It would move several thousand miles south. It would no longer bring warm water to the North Atlantic, warming, particularly, Europe, parts of the northeastern United States and Canada.

And that would be part of a larger shift of a similar nature in a number of parts of the world in the kind of heat balance mechanisms, particularly of the ocean currents. So that's the kind of mechanism that triggers first warming and then cooling. The cooling would be something on the order of, over the northern hemisphere, of about five degrees or so over a decade or so. In fact, what we are describing is a picture of a world very similar to what happened 8,200 years ago, when the world's temperature, particularly in the northern hemisphere, dropped a similar five degrees in roughly a decade, stayed down for a century, and came back up for a decade.

CURWOOD: Let me just ask you one more thing on the science. People talk in terms of global warming. How do you explain to them that you see a cooling here?

SCHWARTZ: Well, global warming is another possible scenario. We have a fair amount of uncertainty about what's likely to happen. In fact what we could see - and as we emphasized, this is the worst case scenario - more likely is that you might see 50, 75 more years of warming that then could trigger a cooling. Or the cooling might never happen. I am personally of the mind that the more likely scenario that history tells us, is that we will get some sustained warming, and then we will experience abrupt cooling. The history of climate change is more often abrupt change, and it has frequently been large scale over very long periods of history.

CURWOOD: For the moment, let's assume that the worst case scenario that you were asked to conjure up is happening. Could you lay out a timeline for us, what would be happening in the United States over the next few decades?

SCHWARTZ: Sure. The immediate effects would be you'd start to see more variability in the weather. You'd see more severe storms, you would see more torrential rainfall, you might see very short winters, very little snow, more rain. One of the impacts that is plausible, but hard to predict, would be a shift in the location of tornadoes. There is believed to be a belt of tornadoes off-shore in the south. You might see more coming on-shore. So those would be some of the kinds of symptoms of a kind of disruptive change under a way in the warming phase.

In the cooling phase what you would see is more severe winters, the kind of thing that you're experiencing right now. But the more important thing you would see is a gradual diminishment of rainfall and then a movement into what we're calling mega-droughts, i.e. they would probably be regional, in what we've thought, more likely, would be the southeast. But it could also be the Midwest or the far West as well. You know, again, think the 1930s here. This is similar to that. It's not much worse, except for one important detail, which I'll come back to in a moment. But - extended droughts over years, five, six, ten years even. And leading therefore to significant fall in reservoirs, in rivers, and so on.

And the thing that is importantly different in terms of its consequences this time, as compared to the 1930s, was that in the 1930s we still had substantial reserves of groundwater we could tap. And while the effects were severe, they were ameliorated in part by the groundwater. We no longer have those reserves. That water is all committed, or used up in some cases. That is, the big aquifers of America are now fully committed. So we don't have spare capacity to deal with the rapid drop in rainfall. So that's the kind of trajectory we're talking about.

CURWOOD: In terms of conflict in the United States, what could happen with our neighbors? Like, what happens with Canada, for example?

SCHWARTZ: That's a very good question. I can imagine a scenario where things got so bad in Canada that some people might want to head south, but frankly I don't think the issues will be to the north. More likely they'll be to the south. And we have two key bodies of water, namely the Colorado and the Rio Grande that, in effect, we share with Mexico. And we already have issues about managing both of those. And in this scenario that could be very severe and produce pressure for migration northward, on the one hand, and disruptions to the management of the water and conflicts over water that we share with Mexico.

But another one that we've already begun to experience some issues over is fishing rights in the Atlantic. We've already seen struggles between Spain, Portugal, and France over fishing rights there, ourselves with respect to the Europeans and the Canadians in the Grand Banks. This could be a really significant issue, because, of course, the fish move with changing temperature of the seas as well. When the ecosystems of the seas change, the locations of the fish change. And we have now become dependent on various fish populations in both sides of the Atlantic. And you can imagine conflicts over access to fishing.

CURWOOD: Now, what are some of the geopolitical things that you forecast here in your scenario? What happens to people and politics under the scenario that you paint?

SCHWARTZ: Well, we see, for example - right now, an example of something that is the kind of consequence we might have to deal with and the kid of political issues - the unraveling of Haiti, and should we intervene or not. One of the possible disruptions is to water supplies in the Caribbean and Central America. The United States has already several times been hit by waves of refugees from that part of the world. And it is not at all implausible that we could be doing better, and others worse, and we could be hit - immediately in our environs, from the Caribbean, Central America, maybe even Mexico, but especially Central America and the Caribbean - with very large numbers of people headed our way. How do we cope with it? Should we intervene in advance? Should we send them water supplies rather than let them come here? There's all kinds of important political questions, technical questions and so on that would have to be resolved. And we're suggesting thinking about those kinds of things in advance, rather than having to improvise in the moment.

CURWOOD: Now, you write also that a possible reaction here in this country to abrupt climate change might be to turn inward, committing our resources to feeding our own population, shoring up our borders and managing increasing global tension. But how does the United States manage this global tension if at the same time it's closing itself off to the rest of the world? I mean, wouldn't this create even more tension?

SCHWARTZ: You're exactly right. I mean, that is the heart of the issue. That's part of why we're warning of this. We have an instinct to kind of stay at home, as it were. And under these circumstances you can imagine much of the population, particularly if there are significant disruptions and high costs domestically, saying, you know, let's take care of our own. Meanwhile you can imagine a political leadership looking around the world and saying, God, there are really terrible things, we've got to be helpful. And if we don't, that will still some home to us eventually one way or the other, and we better deal with it over there than over here. Now caught between a populace reluctant to intervene and the necessity of intervention. And we've been there before. And that kind of situation, I think, is not at all implausible in this circumstance.

CURWOOD: What happens to your report now that you've handed your findings over to the Pentagon?

SCHWARTZ: Well, unfortunately this has gotten a lot of negative publicity, in the sense that particularly The London Observer both implied that the Pentagon tried to suppress the report on the one hand, and secondly that they exaggerated our conclusions, made it a prediction rather than a worst case scenario. And then turned it around and said, well, see, this proves that the Bush administration is wrong. So, in fact, the likelihood is that very little will happen as a result of it. Had it been able to proceed in a more appropriate fashion, it would have been considered along with many other possible scenarios regularly considered by the office of net assessments and the Secretary of Defense's office - that they consider as the routine part of their thinking in the long run.

CURWOOD: So, let me see if I understand this right. Because the public and the press has kicked this around in perhaps, from your perspective, an overly dramatic fashion, it means that the Pentagon can't think about this at all?

SCHWARTZ: It means that this kind of thing gets suppressed for a while. It will come back up again. But it means that this is a taboo topic because you have a meeting about it, and it leaks out to the press again, and it just keeps the storm going, if you know what I mean.

CURWOOD: Peter Schwartz is a future scenario planner and chairman of the consulting firm Global Business Network, part of the Monitor Group. Peter, thanks for speaking with me today.

SCHWARTZ: My pleasure.

CURWOOD: Coming up, we'll continue the climate change conversation with two perspectives on the science and security implications of global warming. We'll be back in a minute, stay tuned. I'm Steve Curwood, and you're listening to NPR's Living on Earth.

[MUSIC: Pan American "Starts Friday" PAN AMERICAN (Kranky - 1998)]

CURWOOD: Welcome back to Living on Earth, I'm Steve Curwood. We've been talking about abrupt climate change, and "Imagining the Unthinkable," as a recent report to the Pentagon is titled. This document outlines a worst-case scenario of abrupt climate change that would cause massive disruptions in agriculture, the economy, and international diplomacy.

So far, the Pentagon has had no public comment on the report of its consultants. But soon climate change may be a hot topic on the national security agenda. With me to talk about the security implications of abrupt climate change is Leon Fuerth, Professor of International Affairs at George Washington University, and the former national security advisor for Vice President Al Gore. Leon Fuerth, welcome.

FUERTH: Thank you.

CURWOOD: Well, we've heard from a consultant to the Pentagon that an abrupt shift in climate could turn out to be a critical issue of national security if it should occur. I'm wondering if you could tell me from your own experience, working as a national security advisor here in the United States, Leon Fuerth, what do you think would happen strategically around the world? What changes, what imbalances in strategic alliances would happen, do you think?

FUERTH: I think what would happen is that the world as you knew it, organization as you knew it, relationships among states as you understood them, the rules of economics as you had understood them would all be shifting. I mean, our territory would remain inviolable, but our business may go to hell. At the level of strategic alignments, one of the continents that would experience the greatest dislocation would be western Europe, where the place would become much, much colder, possibly with the effect of severely damaging the economy of the northern tier of countries and causing a lot of people to try to move south, and creating tremendous internal migration problems for the European Union at the time.

CURWOOD: If there is a country in the world that the United States has a lot of business to do with in the diplomatic sense, in the world power sense, it has to be China. The scenario says that China's going to have pretty serious water problems, and that means food problems. It's a quarter of the world's people, and today they're rich and technologically savvy. What might happen between the United States and China in such a world?

FUERTH: Interesting question. One of the determinants is do we continue to need to borrow half a trillion dollars a year to finance the debt of the federal government of the United States, most of which has been coming from China. And it works out in a giddy sort of way. They lend to us so that we can buy their products.

Now if, let's say, two administrations from now, all of a sudden the climate patterns in China begin to shift drastically, it's natural to believe that trade, economy, and other issues are going to also be disturbed.

So, one of the things I think the United States should do in its own interest is to make itself less dependent on the scale of borrowing than we have been. Because if any of our creditors, for any reason, finds themselves unwilling or unable to continue to lend to us at this rate, then that house of cards can come down.

CURWOOD: So, Leon Fuerth, if you were the national security advisor today, what steps would you advise that the United States take to deal with the possibility of such a climate scenario?

FUERTH: First of all, I think we need a major effort to acquire better modeling in order to be able to calculate as accurately as possible, and in real time, what some of the effects might be. I would begin having people work out planning scenarios, including some of the social, economic, and political consequences in parts of the world where, let's say, the agricultural cycle is disturbed. Better to have people playing these mind games over what might occur while we still have time to think about action than to wait until the evidence is on hand that we're in the middle of it.

CURWOOD: What do you suppose is going on in the Pentagon now and in the Bush administration in the aftermath of this report?

FUERTH: Not much. I mean, what's interesting about this is that this is not like Orson Wells "War of the Worlds," where what you had was a fantasy that was put out there, which inadvertently frightened the public. What you have here is a response to a request from the Department of Defense for a scenario - imagine something. But what they did was imagine a thing on the basis of an event they considered quite possible. And so what it carries is a message, which is: it's time to get real about this while we still have the luxury of time and resources and allies to work the problem.

CURWOOD: Leon Fuerth is professor of International Affairs at George Washington University, and the former national security advisor for Vice President Al Gore. Thanks for taking this time with me today.

FUERTH: Thank you.

CURWOOD: We've been talking about the economic and political consequences of abrupt climate change, in light of a recent report to the Pentagon called "Imagining the Unthinkable." The authors stress that the scenario they paint "pushes the boundaries of current research on climate change." With me to talk about what we do know within the boundaries of climate science today is Daniel Schrag, professor of earth and planetary sciences at Harvard University. Hello, sir.

SCHRAG: Good day.

CURWOOD: What should you as a scientist - let's say the Defense Department calls you up and says, Professor Schrag, as part of our national security assessment, we are on the lookout for signs of abrupt climate change. What do you look for?

SCHRAG: There are a few possible modes of abrupt climate change that we've seen in the past, in the geologic past, that we could look for in the future. The most obvious one would be an instability in the large ice sheets on Greenland or Antarctica. So, if the West Antarctic ice sheet or if the Greenland ice sheet started to exhibit some very unusual behavior, and we thought that a large amount of ice might slide off the continent and into the ocean, this could cause a very abrupt rise in sea level. And would damage coastal cities around the world, devastating world economies.

CURWOOD: Hm, hmm. Now, Professor Schrag, the Defense Department is worried about this. They tend to have a short-term view of things. The effects that you've been talking about so far seem to be decades away. I'm confused - why is the Defense Department so concerned, apparently over the short-term here?

SCHRAG: Well, what I'm talking about may take years to decades to actually happen, and no one knows exactly when these sorts of things can occur, but one shouldn't think that these effects are just decades away. The truth is no one knows. We are already experiencing a world that is substantially warming because of human activities. We know this from the melting of ice in the tropics up at high altitudes, Kilimanjaro and in the Andes, and a lot of other pieces of evidence that tell us global warming is happening now.

CURWOOD: Now why does melting of ice in the tropics indicate global warming?

SCHRAG: Well, this is a really powerful piece of evidence that climate change is happening now. The middle of the troposphere, the middle of the atmosphere near the equator, is a very stable region of the atmosphere. There's very little weather there, there's very little variability. And so, as a result, if one starts to see warming there you know that it's a global signal, because there's very little variability normally.

In the case of these tropical glaciers, Lonny Thompson, from Ohio State University, has shown that these glaciers are melting for the first time in thousands of years. So that proves that it's not a 100-year cycle, or a 500-year cycle. This is truly an extraordinary event coincident with the enormous rise in carbon dioxide from burning fossil fuels. And to me, that's the most compelling evidence that climate change is happening now.

Now, when we cross certain thresholds that lead to abrupt change, no one has any idea. We don't think that Greenland or West Antarctica are going to melt and drop into the sea in the next 10 years. On the other hand, if they suddenly crossed an instability and started to collapse over a period of a few years, it would be too late to do anything about it. And no one knows exactly when that happens. So to me it makes sense that the Pentagon is planning for all sorts of possibilities, just like an insurance company.

CURWOOD: What kind of shape is the West Antarctic ice sheet in right now?

SCHRAG: Well, it's hotly debated. Some scientists think that the West Antarctic ice sheet is so large and massive that it's insulated from all changes, and that it takes thousands of years for the ice sheet to adjust to the warming that we're experiencing now. Other scientists think that there are mechanisms that we don't understand very well, whereby the ice sheet can actually move and adjust very rapidly. And if that's correct then we are in danger of that amount of ice falling into the ocean. And that amount of ice represents a substantial amount of sea level change.

CURWOOD: On the order of?

SCHRAG: On the order of six meters or so.

CURWOOD: 18 feet of more water.

SCHRAG: And that would pretty much wipe out every coastal city in the U.S.

CURWOOD: And how soon could that happen?

SCHRAG: Well, if it went in over a period of even a hundred years it would mean devastation. You can't even begin to calculate the amount of damage that that would do to the U.S. economy. And to the global economy. And if it went faster than that, which is possible, we'd really be in trouble. I think that really gets to one of the points about climate change. We're doing an experiment on the earth that hasn't been done in millions of years, and no one knows what's going to happen. And if we suddenly decide that a disaster's going to befall us, we may not be able to turn back the clock. Because the system has so much momentum, and is so powerful, we can't just assume that we can fix it.

CURWOOD: You folks who look at the changing climate often use computers to model. In fact that seems to be the basis of a lot of the predictions of the warming that's coming. How well do these models work when you look back at these other changes thousands and millions of years ago? How well do these computers predict something we already know the answer to?

SCHRAG: That's a very good question. It turns out that the answer is that sometimes they work very well, and sometimes they don't work very well. And of course a model is most interesting when it doesn't work well, because it tells us that something's missing. Remember that the models are only as good as the physics that we put into the model. And therefore the models reflect our understanding of the climate system based on modern observations, primarily over the last 50 years or so. Now, we're entering into a mode of climate with high atmospheric carbon dioxide that we haven't been in for tens of millions of years. So nobody has the right set of observations to completely describe the climate system in this mode.

What's interesting is about 50 million years ago, the earth was very warm. We think that carbon dioxide was high. We don't know exactly how high, we think maybe 1,000 to 3,000 parts per million, which is not that far off from where we're going to be 100 to 200 years from now. Now, at that time there were crocodiles living up in Greenland, there were palm trees in Wyoming. Palm trees can never have cold winters, and there were palm trees thriving in Wyoming, where today it gets very cold. Antarctica was a pine forest. Sea level was about 150 meters high than today. It was a completely different world. And the question is, can these models produce it? And when you try to put high carbon dioxide in the models and let them try to simulate the climate, it turns out they don't do a very good job. They actually don't get the world warm enough. There's something missing in the models that is a positive feedback that amplifies the effect of the carbon dioxide. But if that effect kicks in, the warming could be much more severe than the models are predicting.

CURWOOD: Yeah, I was going to say, you're starting to scare me here.

SCHRAG: Well, we should be scared.

CURWOOD: You're saying the models that are predicting this rather large shift don't predict these biggest shifts from the past. Therefore, we're missing something here.

SCHRAG: You know, we've been hearing in the debate about climate change in the public a lot of rhetoric that says because the climate scientists aren't certain, we should wait and not do anything about it. For me it's exactly the opposite. It's our lack of certainty, which is why we should do something now. Because the answer could be much worse than we expect. Climate change could be much more severe than anyone thinks.

CURWOOD: This summer there's going to be a movie out of Hollywood. I think it's called "The Day After Tomorrow." It paints an apocalyptic scene of, actually, the northeastern United States pretty much freezing over.

SCHRAG: I know. I get a lot of pleasure from looking at the preview. I show it in some of my talks. Unfortunately, I think that's probably a very unlikely scenario. I think the idea comes from the idea that the Gulf Stream will somehow collapse when the thermohaline circulation of the Atlantic stops. And therefore this will lead to an ice age and everything will freeze. The truth of the matter is that if the thermohaline circulation stops, it will affect a region around Britain and Scotland, but will probably not affect New York much at all. The movie was by the maker of "Independence Day," and I think after destroying Washington, D.C., he wanted to destroy New York City, and he found a way to do it.

CURWOOD: Why now all this attention to the question of abrupt climate change? The Greenland ice core samples that you told us about have been around for a long time, demonstrating that it didn't take more than a few decades to change a lot of temperature. And yet today, folks like the Defense Department, folks in Hollywood, are suddenly paying attention to the question of abrupt climate change. Why is that happening?

SCHRAG: I think there are powerful forces in our society that have a lot of economic stake in our current energy technology, and are resistant to change. And therefore have promoted the idea that this was just a theory, that climate change was just an idea that scientists had that they weren't sure about, and discouraged action on this front.

And I think a variety of different sectors of our society are beginning to wake up to the fact that we can't just put our head in the sand and hope that it goes away. We know that climate change is a serious risk. The probability of it being dramatic is very high, probably greater than 50 percent. And yet we're willing to spend almost nothing to protect ourselves. We need to buy at least some insurance. And to me, the minimum insurance policy is that we actually should have the technological capacity to do something about it. At the very least, we should be able to change our behavior if we want to. Right now we can't even do that.

CURWOOD: Daniel Schrag is a professor of Earth and Planetary Sciences at Harvard. Thanks for taking this time with me today.

SCHRAG: Thank you.
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Scientist 'gagged' by No 10 after warning of global warming threat
By Steve Connor and Andrew Grice
08 March 2004


Downing Street tried to muzzle the Government's top scientific adviser after he warned that global warming was a more serious threat than international terrorism.

Ivan Rogers, Mr Blair's principal private secretary, told Sir David King, the Prime Minister's chief scientist, to limit his contact with the media after he made outspoken comments about President George Bush's policy on climate change.

In January, Sir David wrote a scathing article in the American journal Science attacking Washington for failing to take climate change seriously. "In my view, climate change is the most severe problem we are facing today, more serious even than the threat of terrorism," he wrote.

Support for Sir David's view came yesterday from Hans Blix, the former United Nations chief weapons inspector, who said the environment was at least as important a threat as global terrorism. He told BBC1's Breakfast with Frost: "I think we still overestimate the danger of terror. There are other things that are of equal, if not greater, magnitude, like the environmental global risks."

Since Sir David's article in Science was published, No 10 has tried to limit the damage to Anglo-American relations by reining in the Prime Minister's chief scientist.

In a leaked memo, Mr Rogers ordered Sir David - a Cambridge University chemist who offers independent advice to ministers - to decline any interview requests from British and American newspapers and BBC Radio 4's Today .

"To accept such bids runs the risk of turning the debate into a sterile argument about whether or not climate change is a greater risk," Mr Rogers said in the memo, which was sent to Sir David's office in February. "This sort of discussion does not help us achieve our wider policy aims ahead of our G8 presidency [next year]." The move will be seized on by critics of Mr Blair's stance over the Iraq war as further evidence that he is too subservient to the Bush administration. It will also be seen as an attempt to bolster the Prime Minister's case for pre-emptive strikes to combat the threat of international terrorism, which he outlined in a speech on Friday.

Sir David, who is highly regarded by Mr Blair, has been primed with a list of 136 mock questions that the media could ask if they were able to get access to him, and the suggested answers he should be prepared to give. One question asks: "How do the number of deaths caused by climate change and terrorism compare?" The stated answer that Sir David is expected to give says: "The value of any comparison would be highly questionable - we are talking about threats that are intrinsically different."

If Sir David were to find himself pushed to decide whether terrorism or climate change was the greater threat, he was supposed to answer: "Both are serious and immediate problems for the world today." But this was not what Sir David said on the Today programme on 9 January when the Science article was published.

Asked to explain how he had come to the conclusion that global warming was more serious than terrorism, Sir David replied that his equation was "based on the number of fatalities that have already occurred" - implying that global warming has already killed more people than terrorism.

The leaked memo came to light after a computer disk was discovered by an American freelance journalist, Mike Martin, at the annual meeting of the American Association for the Advancement of Science in Seattle, where Sir David gave a lecture.

"The disk was lying on the top of a computer in the press room and I popped it into the machine to see what was on it," said Mr Martin, whose own article is published on the ScienceNow website, an online service operated by Science.

Mr Rogers' memo, written a few days before the Seattle conference, was aimed at limiting his exposure to questions from US and British media. While in Seattle, Sir David sat on a panel of scientists at one carefully stage-managed press conference, but his press office said he was too busy to give interviews afterwards to journalists.

Lucy Brunt-Jenner, Sir David's press officer, said she could not comment on internal government documents but said it would be wrong to suggest that Sir David was in any way muzzled. "Sir David had a press conference and he was available to the media at three times," Ms Brunt-Jenner said.

But Norman Baker, the Liberal Democrats' environment spokesman, said: "It's a clear attempt by the Prime Minister to keep Sir David quiet. The Government's chief scientist is the nation's chief scientist and I'd expect him to say what he thinks."
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Missing Gulf War pilot's family wants to interview Iraqis
Associated Press
JACKSONVILLE, Fla. -- An attorney representing the family of missing Navy pilot Scott Speicher is asking for permission to interview captured Iraqi officials to see if she can determine what happened to the pilot who was shot down 10 years ago in the first war with Iraq.
In a letter faxed to U.S. Sens. Pat Roberts, R-Kan., and Bill Nelson, D-Fla., attorney Cindy Laquidara said she had independent evidence placing Speicher in the custody of the man known as Chemical Ali, former Iraqi Gen. Ali Hassan al-Majid.
Al-Majid, captured by coalition forces in August, was considered to have been Saddam Hussein's hatchet man and the one who ordered a gas attack that killed 5,000 Kurds in 1988.
Laquidara also wants the government's help in locating Iraq's former ambassador to the United Nations, Mohammed Aldouri, for additional questioning.
In 2002, Laquidara traveled to New York and met with Aldouri. When Saddam Hussein was ousted, he left New York.
"We either are not capable of closing this matter following a war or we do not choose to pursue the answer," Laquidara's letter said. "Either is unacceptable."
Nelson's office said copies of the letter were given to Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld.
Calls to Laquidara's office Thursday were not returned.
At a recent briefing, Nelson learned the Defense Department was now not planning to offer the reward of up to $1 million that was authorized by Congress to learn the fate of the Jacksonville-based pilot.
Nelson wrote a letter to Rumsfeld asking him to not reconsider his earlier decision on offering a reward.
"I believe such an action would be a mistake," Nelson said. "At the very least, it would send a clear signal that finding out what happened to Scott Speicher is no longer a top priority."
Pete Contosgavlos, a Nelson aide, said, "Rewards in countries like this can be effective."
Earlier this week, Adm. Vern Clark, the chief of naval operations, said investigations in Iraq since the fall of Baghdad have found no evidence that Speicher was held in captivity after being shot down on the first night of the 1991 Gulf War.
The Iraqi government under President Saddam Hussein maintained from the start that Speicher died in the crash on Jan. 17, 1991, although his body was not recovered.
Speicher was 33 when he was shot down. He held the rank of lieutenant commander at the time; he has since been promoted to captain.
Speicher's family lived in the Kansas City area and moved to Florida when he was a teenager.

Posted by maximpost at 3:45 AM EST
Permalink
Saturday, 6 March 2004

Blair's 'international community' doctrine

By Paul Reynolds
BBC News Online world affairs correspondent

To intervene or not to intervene? That is the question increasingly on the minds of world leaders at the start of the 21st century.

To President Bush's doctrine of pre-emptive action, we now have to add British Prime Minister Tony Blair's doctrine of "international community."
This is a kind of half-way house between the freedom of action Mr Bush seeks to preserve and the rules of the United Nations Charter which allow intervention only in certain circumstances, such as reversing an act of aggression.

It is highly unlikely that the UN would want to go too far down the interventionist path. The UN exists to try to make individual action unnecessary.

And to some a doctrine of international community is a doctrine of international interference.

'Serbia' precedent

But the old rules are already under strain.

Nato's attack on Serbia over Kosovo in 1999 established the rule of a humanitarian intervention. It followed the worldwide guilt felt at the failure by the UN, or anyone else, to intervene in Rwanda.

Now Mr Blair wants to take the process further.

International terrorism post-11 September and the spread of weapons of mass destruction require a further redefinition of the rights of a nation-state, he argued in a speech on Friday.

He even mentioned the Treaty of Westphalia in 1648. That basically ended the religious wars in Europe and began the modern system of the nation-state, whose rights, he suggested, should be further curtailed.

He wondered whether international law should not be developed to avoid situations where "a regime can systematically brutalise and oppress its people and there is nothing anyone can do, when dialogue, diplomacy and even sanctions fail, unless it comes within the definition of a humanitarian catastrophe".

Tony Blair in fact first mentioned his doctrine of international community (and world figures like to be known for their doctrines) in a speech in Chicago in 1999. It was at the time of the Kosovo war

'Five rules' for intervention

It was a speech which Saddam Hussein should have read. It illustrated Mr Blair's inclination for action.

He outlined five rules for intervention - be sure of your case, exhaust all other options first, ask if military operations can be "sensibly" undertaken, prepare for the long-term and identify if your interests are involved.

Ideally, Mr Blair suggested in both speeches, the UN would lead the way. But the implication is that individual countries should act if the UN did not.

His problem of course is that "intervention" for some is "aggression" for others. His speech is also under attack from his critics for being too much of a justification of the war in Iraq.

UN's 'wise men'

Meanwhile, the UN itself is also trying to redefine intervention.

All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state
Article 2 of the UN Charter
Last September, the UN Secretary General, Kofi Annan, set up a committee of "wise men and women" to make recommendations about the UN's future role. It will report this December.

There are 16 members of the committee, an array of the international great and the good (and some say the deja vu).

The members include President Bush senior's National Security Adviser Brent Scowcroft, who opposed the latest war against Iraq, and former Norwegian Prime Minister Gro Harlem Brundtland, who always has the interests of the developing world at heart.

It is not a panel likely to recommend pre-emptive military action.

Lord Hannay, a former senior British diplomat and another member, indicated the limits of the committee's aims.

"The UN should get involved with countries under stress," was how he put it to the BBC.

'Different perceptions'

"We support a collective response to stop a state from sliding down the slope," he said.

Lord Hannay pointed out that there were "different perceptions" about what a threat was in different parts of the world. To some, poverty and Aids were the problem, not terrorism.

The thorn the committee may or may not grasp is the UN's Article 39 which itself accepts that the UN can act in advance of an overt act of war by one state against another.

"The Security Council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken," it states.

This article means that the UN can take its own collective pre-emptive action - and of a military kind. It could one day declare that, say North Korea, is a "threat to the peace."

That is really what Mr Bush and Mr Blair are on about. If the UN does not act, they argue, then individual states may do so themselves.

That in turn would be a long way from Article 2 of the UN Charter which says: "All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/uk_news/politics/3539125.stm

Published: 2004/03/06 15:08:17 GMT

? BBC MMIV

Posted by maximpost at 2:38 PM EST
Permalink

Russian Engineers Reportedly Gave Missile Aid to Iraq

March 5, 2004
Russian Engineers Reportedly Gave Missile Aid to Iraq
By JAMES RISEN
WASHINGTON, March 4 -- A group of Russian engineers secretly aided Saddam Hussein's long-range ballistic missile program, providing technical assistance for prohibited Iraqi weapons projects even in the years just before the war that ousted him from power, American government officials say. Iraqis who were involved in the missile work told American investigators that the technicians had not been working for the Russian government, but for a private company. But any such work on Iraq's banned missiles would have violated United Nations sanctions, even as the Security Council sought to enforce them. Although Iraq ultimately failed to develop and produce long-range ballistic missiles and though even its permitted short-range missile projects were fraught with problems, its missile program is now seen as the main prohibited weapons effort that Iraq continued right up until the war was imminent. After the first Persian Gulf war in 1991, Iraq was allowed only to keep crude missiles that could travel up to 150 kilometers, or about 90 miles, but the Russian engineers were aiding Baghdad's secret efforts illegally to develop longer-range missiles, according to the American officials. Since the invasion last March, American investigators have discovered that the Russian engineers had worked on the Iraqi program both in Moscow and in Baghdad, and that some of them were in the Iraqi capital as recently as 2001, according to people familiar with the intelligence on the matter. Because some of the Russian experts were said to have formerly worked for one of Russia's aerospace design centers, which remains closely associated with the state, their work for Iraq has raised questions in Washington about whether Russian government officials knew of their involvement in forbidden missile programs. "Did the Russians really not know what they were doing?" asked one person familiar with the United States intelligence reports. A spokesman for the Russian Embassy in Washington denied any knowledge of the allegations of recent Russian technical support for Iraq's missile effort. "The U.S. has not presented any evidence of Russian involvement," said Yevgeny Khorishko, a spokesman for the Russian Embassy. Russia and the former Soviet Union were among Iraq's main suppliers of arms for decades before Iraq invaded Kuwait in 1990, leading to the first gulf war. The Bush administration has previously said it had uncovered evidence that Iraq had unsuccessfully sought help from North Korea for its missile program, but had not disclosed the evidence that Iraq had also received Russian technical support. C.I.A. and White House officials refused to comment on the matter, and people familiar with the intelligence say they believe that the administration has been reluctant to reveal what it knows about Moscow's involvement in order to avoid harming relations with President Vladimir V. Putin. "They are hyper-cautious about confronting Putin on this," complained one intelligence source. In his public testimony last week about the worldwide threats facing the United States, George J. Tenet, the director of central intelligence, restated Washington's longstanding concerns about Russia's controls over its missile and weapons technology, without mentioning the evidence of missile support for the Hussein government. "We remain alert to the vulnerability of Russian W.M.D. materials and technology to theft or diversion," Mr. Tenet said. "We are also concerned by the continued eagerness of Russia's cash-strapped defense, biotechnology, chemical, aerospace and nuclear industries to raise funds via exports and transfers -- which makes Russian expertise an attractive target for countries and groups seeking W.M.D. and missile-related assistance." The Iraq Survey Group, the United States team that has hunted for evidence of Iraqi weapons of mass destruction, also found indications that Baghdad had received assistance from sources in Ukraine, Belarus and Serbia, according to American officials. In an interim report on the progress of the Iraq Survey Group made public in October, David A. Kay, then the C.I.A.'s chief weapons hunter, reported that his group had found "a large volume of material and testimony by cooperating Iraq officials on Iraq's effort to illicitly procure parts and foreign assistance for its missile program." It listed several examples detailing assistance from foreign countries, but apart from North Korea, no other countries were identified. More than 10 months after the end of major military operations in Iraq, American teams have still not found conclusive evidence that Iraq had any chemical, biological or nuclear weapons, raising doubts about one of the Bush administration's main arguments for going to war. Since he resigned from his post last month, Dr. Kay has said he believes that Iraq largely abandoned the production of weapons of mass destruction after the first gulf war, and that it gradually destroyed its remaining stockpiles during the 1990's. But Dr. Kay has said the evidence shows that Iraq tried to keep upgrading its ballistic missiles even as its other weapons programs were stalling out. In interviews with Iraqi scientists, examinations of documents and other sources, the Iraq Survey Group has determined that Iraq was actively seeking ways to upgrade its crude missile abilities in order to try to build a rocket fleet that could become a regional threat, reaching American forces based in neighboring countries. American officials now say that the United Nations restrictions that allowed Iraq to keep missiles with ranges of up to 150 kilometers had anunintended effect. From the Iraqi perspective, it meant that it was still legal for Baghdad to continue some missile development activities, since short-range missiles were permitted. By contrast, United Nations sanctions completely banned Iraq from keeping any chemical, biological or nuclear weapons, and it now seems that Iraq eventually abandoned those programs. Taking advantage of the loophole permitting short-range missiles, Iraq sought foreign advice on such technical matters as guidance and airframe systems in order to develop missiles with greater range and accuracy than its previous missiles, according to officials familiar with the intelligence. In his October interim report, Dr. Kay said Iraqi detainees and other sources had told American investigators that beginning in 2000, Mr. Hussein approved efforts to develop ballistic missiles with ranges from 400 to 1,000 kilometers. Still, the evidence gathered by the Iraq Survey Group suggests that Iraq's missile development efforts were poorly organized and ultimately unsuccessful. "They had too many scattered programs, and so they didn't focus their efforts on any one missile," said one person familiar with the intelligence on the matter. When United Nations weapons inspectors returned to Iraq in late 2002 just before the war, they found that Iraq had produced short-range Samoud 2 missiles that had slightly longer ranges than the United Nations sanctions allowed. In the weeks before the war, Iraq agreed to destroy many of those missiles, but those highly publicized actions were not enough to convince the United States that Iraq was in compliance with United Nations sanctions. In fact, the evidence suggests that Iraq was seeking to upgrade to missiles with greater range and accuracy than the older, Scud-based Samoud. After the war, the Iraq Survey Group found evidence that Iraq had agreed to pay North Korea $10 million for technical support to upgrade its ballistic missile program in violation of the sanctions. But American officials believe that North Korea never actually delivered anything to the Iraqis, even though it apparently kept Iraq's $10 million. By contrast, the Iraq Survey Group found evidence that the Russian missile engineers actually did provide technical support for the Iraqis for years. The Bush administration's reluctance to raise publicly the issue of Russian support for Iraq's missile program appears to stem from the White House's effort to cultivate better diplomatic relations with Moscow, particularly in the wake of last year's tensions over the war in Iraq. Russia opposed the war, but President Bush and Mr. Putin have still developed a good personal relationship, and there seems much less residual tension between Washington and Moscow over the war than there does between the United States and France and Germany. Since the Sept. 11 attacks on the World Trade Center and the Pentagon, the United States has also appeared more willing to view Russia's fight with separatists in Chechnya as part of the global war on terror.


Copyright 2004 The New York Times Company

Posted by maximpost at 2:21 PM EST
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How Bush can destroy Kerry fast

The Democratic Party chose a nominee Tuesday who probably cannot win the White House in November.

In opting for Sen. John Kerry of Massachusetts and turning down Sen. John Edwards of North Carolina, Democrats have broken from the pragmatism and moderation that dominated their party's profile under Bill Clinton and Al Gore in the 1990s.

Their party has now moved back to the liberal extremism of Walter Mondale and Michael Dukakis that characterized the 1980s -- with the same predictable result.

It is now up to President Bush to take advantage of this by implementing a three-part strategy in the coming campaign.

First, his paid media must attack Kerry's voting record to define him as an ultraliberal. There are likely those in the White House who are urging Bush to run positive ads. That won't work. Even if positive ads produce a small, short-term bounce for Bush, events soon will come to dominate, and the impact of those ads likely will evaporate.

But if Bush uses the next eight months to educate voters on Kerry's opposition to the death penalty, his vote against the 1991 Iraq war, his poor attendance record in the past year and his opposition to the Defense of Marriage Act, he could put this election away by defining Kerry right now.

Kerry has not been tested. He was nominated by running in the shadow of Howard Dean. Throughout the fall, all eyes were on the former Vermont governor. When he crashed and burned in late January, Kerry, as the liberal heir apparent, inherited his disappointed voters.

Meanwhile, Edwards never got the money or the momentum to run a decent race against Kerry because Gen. Wesley Clark -- remember him? -- crowded the field. By the time Edwards got Kerry one on one, the number of primary states stretched his resources to the point where he could not afford it.

But now, Kerry is a fair and inviting target. Bush has to zero in on him and push him to the left right now. Whether Kerry ever consorted with Jane Fonda is beside the point, but Kerry's voting record is not.

Second, while his anti-Kerry ads are running, the president himself needs to make Americans understand that the war on terror is still atop our national agenda. He needs to elevate the sense of threat so that his advantage as a war president begins to count.

Kerry has also made a big mistake in backing the criminal-justice approach to terrorism, seeking to transform the war on terror into a series of DEA-style busts. Voters recognize that Bush is right when he says that this is a war against nation-states that sponsor terror, not a hunt for criminal bands in the mountains.

Pundits say that Kerry's admirable war record makes national security irrelevant as a campaign issue. They couldn't be more wrong. His efforts to defund the CIA and his opposition to the funding of the Iraq war are all key targets for Bush.

Some of those who have Bush's ear may urge him to speak more about the economy and less about terror. This would be a big mistake. Bush must use his profile as president to make Americans understand how crucial staying the course in the war on terror is to our safety. Bush has lost a lot of support among women with the war in Iraq. But he can restore that support by stressing the need to make America safe from terror attacks and to stress how important it is to stick to this task.

Finally, Bush must begin to pull American troops out of Iraq after the handover in June. He should leave a sufficient number there, in safe, secluded bases, to intervene if the bad guys try to come back in power. But the daily drip of casualties must end.

President Johnson kept the troops in Vietnam and lost. President Nixon was withdrawing them, and he won.

If Bush's ads and surrogates savage Kerry while the president raises the profile of the war on terror and his foreign-policy team brings the troops home, this race could be over long before either Bush or Kerry is officially designated as the standard bearers of his respective party.


Dick Morris is the author of Off With Their Heads: Traitors, Crooks, and Obstructionists in American Politics, Media, and Business.


? 2004 The Hill
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John Kerry's Waffles
If you don't like the Democratic nominee's views, just wait a week.
By Michael Grunwald
Posted Wednesday, March 3, 2004, at 2:46 PM PT



Head to head

Last week, President Bush offered a wry critique of his Democratic challengers. "They're for tax cuts and against them. They're for NAFTA and against NAFTA. They're for the Patriot Act and against the Patriot Act. They're in favor of liberating Iraq, and opposed to it. And that's just one senator from Massachusetts." Now that John Kerry is the presumptive Democratic nominee, Republicans are sure to focus the spotlight on his history of flip-flops. Kerry did vote for the Patriot Act, the No Child Left Behind Act, and the war in Iraq, even though he constantly trashes the Patriot Act, the No Child Left Behind Act, and the war in Iraq. He voted against the Defense of Marriage Act, which limited marriage to a man and a woman, but he now says marriage should be limited to a man and a woman. (Although he also points out that he once attended a gay wedding.) And those are just the better-known issues on which Kerry has "evolved."


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Here, then, since John Edwards was too polite to mention them (though President Bush won't be), is a guide to some of Kerry's other reversals on substantive issues. This list doesn't include quickly withdrawn gaffes, such as Kerry's recent suggestion (retracted after an uproar from Jewish groups) that he might make James Baker or Jimmy Carter his Middle East envoy. It doesn't include long-renounced youthful indiscretions, such as his proposal after returning from Vietnam to eliminate most of the CIA. It doesn't include less clear-cut sins of omission and opportunism, such as his stirring denunciations of companies caught in accounting frauds, even though he supported a 1995 law protecting those companies from liability. And it doesn't include the inevitable fund-raising hypocrisies that accompany all modern campaigns, such as his donations from some of the "Benedict Arnold" companies he routinely rips on the trail, or his bundling of contributions from special interests despite his high-minded rejection of PAC money. Even so, the list is long, and it isn't all-inclusive. Kerry's supporters cite his reversals as evidence of the senator's capacity for nuance and complexity, growth and change. His critics say they represent a fundamental lack of principles. Either way, we'll be hearing a lot about them over the next eight months.

Issue Kerry's Original Position Kerry's Revised Position
Welfare Reform In 1988, Sen. Kerry voted against a proposal to require at least one parent in any two-parent welfare family to work a mere 16 hours a week, declaring the work requirement "troublesome to me." During his 1996 re-election campaign, when his Republican challenger, Gov. William Weld, was calling him soft on welfare, Kerry voted for the much stricter welfare reform law that Clinton signed into law.
Mandatory Minimums In 1993 and 1994, the senator from liberal Massachusetts voted against mandatory minimum sentences for gang activity, gun crimes, drug trafficking, and drug sales to minors, explaining in an impassioned speech that long sentences for some dealers who sell to minors would be "enormous injustices" and that some convicted drug offenders were "so barely culpable it is sad." He also said congressionally imposed mandatory minimums made no sense and would just create turf battles between federal and local prosecutors. Today, presidential candidate Kerry strongly supports mandatory minimum sentences for federal crimes, including the sale of drugs to minors.
Affirmative Action In 1992, Kerry created a huge stir among liberals and civil rights groups with a major policy address arguing that affirmative action has "kept America thinking in racial terms" and helped promote a "culture of dependency." Today, Kerry's campaign Web site vows to "Preserve Affirmative Action," noting that he "consistently opposed efforts in the Senate to undermine or eliminate affirmative action programs, and supports programs that seeks to enhance diversity." It doesn't mention any downside.
Death Penalty During one of his debates with Weld in 1996, Kerry ridiculed the idea of capital punishment for terrorists as a "terrorist protection policy," predicting that it would just discourage other nations from extraditing captured terrorists to the United States. Kerry still opposes capital punishment, but he now makes an exception for terrorists.
Education Reform In a 1998 policy speech the Boston Globe described as "a dramatic break from Democratic dogma," Kerry challenged teachers unions by proposing to gut their tenure and seniority systems, giving principals far more power to hire and fire unqualified or unmotivated teachers. Today, Kerry once again espouses pure Democratic dogma on education. His Web site pledges to "stop blaming and start supporting public school educators," vowing to give them "better training and better pay, with more career opportunities, more empowerment and more mentors." It doesn't mention seniority or tenure.
Double Taxation In December 2002, Kerry broke with Democratic dogma yet again in a Cleveland speech, calling for the abolition of the unfair "double taxation" of stock dividends in order to promote more investment and more accurate valuations of companies. Five weeks later, after President Bush proposed a second round of tax cuts that included an end to this double taxation, Kerry changed his tune. He voted against the dividend tax cuts that were ultimately enacted by Congress and now hopes to roll them back as president, along with Bush's other tax cuts for upper-income Americans.
Gas Taxation In 1994, when the Concord Coalition gave Kerry a failing rating for his deficit reduction votes, he complained that he should have gotten credit for supporting a 50-cent increase in the gas tax. Today he no longer supports any increase in the gas tax.
Social Security During the 1996 campaign, when I was a Globe reporter, Kerry told me the Social Security system should be overhauled. He said Congress should consider raising the retirement age and means-testing benefits and called it "wacky" that payroll taxes did not apply to income over $62,700. "I know it's all going to be unpopular," he said. "But this program has serious problems, and we have a generational responsibility to fix them." Kerry no longer wants to mess with Social Security. "John Kerry will never balance the budget on the backs of America's seniors," his Web site promises.
Trade Kerry has been a consistent supporter of free trade deals, and as late as December, when reporters asked if there was any issue on which he was prepared to disagree with Democratic interest groups, Kerry replied: "Trade." Slate editor Jacob Weisberg came away impressed by the depth of Kerry's commitment to the issue: "Unlike Edwards, he supports international trade agreements without qualification." But that was three months ago! In recent weeks, when Kerry has talked trade, he has talked nothing but qualification, calling for "fair trade" rather than "free trade," claiming to agree completely with the protectionist Edwards on trade issues, and vowing to "put teeth" into environmental and labor restrictions in agreements like NAFTA.


Michael Grunwald is writing a book about the Everglades.
Confidence Man
The case for Bush is the case against him.
By William Saletan
Posted Thursday, March 4, 2004, at 4:24 PM PT



Let his record speak for itself

"I know exactly where I want to lead this country," says George W. Bush in one of his new campaign ads. The ad, along with three others that began airing today, concludes with his official campaign theme: "President Bush. Steady leadership in times of change." In the revamped stump speech he has delivered twice in the last two weeks, Bush calls the election "a choice between an America that leads the world with strength and confidence, or an America that is uncertain in the face of danger."

And how does Bush view his challenger, John Kerry? The title of the attack ad posted on Bush's campaign Web site says it all: "Unprincipled."


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Kerry thinks it's the other way around. He's been telling Democrats Bush is "the biggest say-one-thing, do-another" president ever. Yesterday Kerry's campaign responded to Bush's ads by accusing the president of "unsteady leadership." In the Democratic primaries, this accusation worked for Kerry, because liberals think Bush is a liar. But most voters don't, for a good reason: It isn't true. If Kerry makes the election a referendum on Bush's honesty, Bush will win.

How can Kerry persuade moderates to throw out Bush? By turning the president's message against him. Bush is steady and principled. He believes money is better spent by individuals than by the government. He believes the United States should assert its strength in the world. He believes public policy should respect religious faith. Most Americans share these principles and think Bush is sincere about them. The problem Bush has demonstrated in office is that he has no idea how to apply his principles in a changing world. He's a big-picture guy who can't do the job.

From foreign to economic to social policy, Bush's record is a lesson in the limits and perils of conviction. He's too confident to consult a map. He's too strong to heed warnings and too steady to turn the wheel when the road bends. He's too certain to admit error, even after plowing through ditches and telephone poles. He's too preoccupied with principle to understand that principle isn't enough. Watching the stars instead of the road, he has wrecked the budget and the war on terror. Now he's heading for the Constitution. It's time to pull him over and take away the keys.

Bush was right to go to war against the terrorists who struck us on 9/11. He was right to demand the overdue use of force against the scofflaw Iraqi regime. But he couldn't tell the difference between the two threats. He figured that since both Saddam Hussein and Osama Bin Laden were evil, they had to be connected. Saddam must have helped orchestrate the 9/11 attacks. He must have built weapons of mass destruction to sell to al-Qaida.

In recent months, congressional hearings and document leaks have unearthed a disturbing history. Again and again in 2001 and 2002, U.S. intelligence agencies sent signals that Bush was wrong. The FBI and CIA debunked putative links between Iraq and al-Qaida. The CIA rejected the claim that Iraq had tried to buy uranium from Africa. In its National Intelligence Estimate, the CIA calculated that it could take Saddam up to five years to make a nuclear weapon and that he would transfer WMD to terrorists only if he were invaded. The Defense Intelligence Agency advised the administration that there was "no reliable information on whether Iraq is producing or stockpiling chemical weapons." The Air Force disputed the suggestion that Iraq had developed aerial drones capable of delivering chemical or biological toxins. Analysts questioned whether the White House was right that Saddam's aluminum tubes were designed for building nukes, or that two trucks the White House found suspicious were designed for making biological weapons.

Bush ignored every one of these warnings. They couldn't be true, because they didn't fit his theory. He couldn't stand the complexity of the facts or the ambiguity of intelligence. "Until we get rid of Saddam Hussein, we won't get rid of uncertainty," he told aides in November 2002. Four months later, on the eve of his invasion of Iraq, he declared, "Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised." After the war, when Diane Sawyer asked Bush about the discrepancy between what he had said--"that there were weapons of mass destruction"--and what U.S. inspectors had found--"the possibility that [Saddam] could move to acquire those weapons"--Bush replied, "What's the difference?"

That's Bush all over: Certainty. No doubt. No difference. But it makes a difference to Britain, France, and Mexico, which no longer trust our requests, based on U.S. intelligence, to cancel flights to the United States. And it makes a difference to China, which refuses to accept our report, based on U.S. intelligence, that North Korea is operating a highly enriched uranium program. Bush's overconfidence--reflected in a series of exaggerations wholly unnecessary to the punishment of Saddam for his noncompliance with U.N. inspections--has trashed our credibility and cost us vital help with other terrorist and WMD-related threats.

Bush was right to propose tax cuts in 1999. The economy was booming. The surplus was ballooning. Liberals were itching to spend the money on new programs, despite Bill Clinton's promises to pay down the national debt. Bush wanted to get the money out of Washington before that happened. That's why, under his plan, the size of the tax cut was to grow from year to year. The point was to keep the surplus from piling up, refunding more and more money as it poured in from a growing economy. That's also why Bush cut taxes across the board instead of targeting middle-class families who would spend the money immediately. He wasn't trying to stimulate the economy. He was trying to give the money back to the people who had paid it in, which meant largely the rich.

Then everything changed. The stock market tanked, and the economy slowed. Sept. 11 shook the nation's confidence and drastically altered military budget projections. Bush didn't need to drain a surplus anymore. He needed to fund national defense and stimulate the economy. He needed to get rid of his back-loaded across-the-board tax cut and replace it (as Jonathan Chait has explained) with front-loaded tax cuts aimed at consumers. Instead, Bush claimed that his original tax-cut elixir was just as good for the new malady as for the old one. The deficit exploded, the economy failed to recover the jobs it had lost, and much of the country remained unprotected from terrorism. The world changed, but Bush couldn't.

When Bush banned federal funding of research on new embryonic stem cell lines, he said sufficient research could proceed because "more than 60 genetically diverse stem cell lines already exist." Bush's HHS secretary, Tommy Thompson, said of the 60 lines, "They're diverse, they're robust, they're viable for research." In truth, nobody knew whether the cell lines were diverse, robust, or viable. To date, only 15 have been made available, and no one knows how many more will turn out to be usable. But Bush hasn't budged.* Last fall, in the name of human life, he signed into law a bill that required any doctor performing a second-trimester abortion to cut up the fetus inside the woman instead of removing it intact. Good principle, atrocious policy. His initiative to fund faith-based social programs has been a classic liberal misadventure, adding religious mini-bureaucracies to various Cabinet departments despite a study last year that showed faith-based job training programs were no more effective, and in some ways less effective, than regular job training programs.

Now, to save the family, Bush proposes to monkey with the Constitution. Why is this necessary? Because conservative states might be forced to honor gay marriages performed in liberal states, says Bush. But didn't the Defense of Marriage Act void that requirement? Yes, Bush argues, but DOMA might be struck down. Unwilling to wait for a ruling on DOMA, Bush prefers to circumvent the court system and local democracy by reopening the nation's founding document. He seeks to impose a permanent federal definition of marriage on "any state or city," regardless of what the voters in Boston or San Francisco want.

President Bush. Strength and confidence. Steady leadership in times of change. He knows exactly where he wants to lead this country. And he won't let facts, circumstances, or the Constitution get in his way.

Correction March 5, 2004: The article originally and incorrectly indicated that Bush overstated the number of "existing" stem cell lines. In fact, he did not. What Bush and HHS Secretary Tommy Thompson overstated was the number of cell lines known to be diverse, robust, and viable. (Return to the corrected item.)


William Saletan is Slate's chief political correspondent and author of Bearing Right: How Conservatives Won the Abortion War.


Posted by maximpost at 12:44 PM EST
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Businessman under scrutiny 25 years ago after ordering unusual supplies
Owen Bowcott, John Aglionby and Ian Traynor
Friday March 5, 2004
The Guardian
Allegations that Peter Griffin has been involved in providing equipment for Pakistan's clandestine project to develop a nuclear bomb first surfaced 25 years ago. He has always denied any wrongdoing. A company of which he was then a director, Weargate Ltd, was reported to have been involved in trying to ship ?1.25m worth of electrical equipment - inverters, which ensure continued supply of electrical current - to Pakistan.
The shipment was supposedly destined for the Special Works Organisation in Rawalpindi, the agency responsible for coordinating Pakistan's nuclear weapons. That programme was run by Abdul Qadeer Khan, the man now known as the father of Pakistan's nuclear bomb.
Last month Khan admitted that as well as heading Pakistan's nuclear programme, he had also set up a black market in nuclear technology, selling equipment on to Iran, Libya and North Korea. He has been granted clemency but has been under house arrest.
When Weargate was named, the company denied it was being used to procure equipment for the Pakistani nuclear industry. Simon Henderson, a Financial Times journalist who interviewed Mr Griffin at the time, recently reported that the businessman told him: "I am not helping Pakistan make a nuclear bomb, but why shouldn't Pakistan have a nuclear bomb anyway?"
The allegations surrounding the Weargate case nonetheless triggered public alarm about the way in which Pakistan was seeking "dual use" equipment, which might be used for military or civilian purposes, and could be exploited to construct a nuclear programme. The Department of Trade and Industry announced it would tighten up trade restrictions to include inverters - which were also then used by the British nuclear industry - in the list of controlled export items.
It is alleged that Mr Griffin first developed links with Mr Khan in the late 1970s and that he was in charge of procurement.
Mr Griffin first operated from his home, a rambling Victorian pile just outside Swansea. The British government became suspicious, partly because officials were alerted by small, highly skilled companies informing them that Mr Griffin was ordering unusual supplies. Mr Griffin, who travelled regularly around the world - including to Pakistan, according to various sources - did not export anything illegal.
In the early 1980s Mr Griffin moved most of his sourcing to Switzerland from where, officials believe, he had obtained supplies for years. It was probably during this period that Mr Griffin consolidated his relationship with a Swiss engineer, Urs Tinner, who often worked as the team's point man on the various factory floors checking specifications and overseeing product development.
It is unclear how long Mr Griffin remained in Switzerland or where he went next but in June 2000 he established Gulf Technical Industries (GTI) in Dubai as his next company with his son, Paul, and a local partner, Ahmad Hassan Rashid Ahmad al Abbar.
Dubai was where a trusted lieutenant of Mr Khan's, BSA Tahir, was based. Mr Tahir has been identified by both investigators from the International Atomic Energy Authority (IAEA) and President Bush as a key operator who helped extend the smuggling network.
Mr Tahir was senior executive with SMB Computers in Dubai. The firm, a computer supply company, has strenuously denied that it was aware of Mr Tahir's other activities outside his normal work, such as trading in nuclear equipment.
The Griffins were thrust into the limelight again last month following Mr Khan's public confession that he had pursued black market dealings with Libya, Iran and North Korea. Mr Tahir, a Sri Lankan national, both the Griffins and Mr Tinner all featured prominently in a detailed Malaysian police report about a factory run by Scomi Precision Engineering (Scope) in Shah Alam, 40 minutes drive from the centre of Kuala Lumpur.
The plant was said by Malaysian police to have been commissioned to manufacture components for centrifuges that could be used to enrich uranium. Scomi insisted it had no idea that the parts were for nuclear plants; it believed they were for the oil industry.
Addressed to GTI in Dubai and then reshipped to Libya, the components were seized by the Italians and American investigators en route to Libya last October. The Malaysian report is said by officials at the IAEA in Vienna to be "credible and accurate". According to sources in Malaysia and Vienna, the shipment of nuclear equipment on board the intercepted ship, the BBC China, was the last of four sent to Libya over a period of 10 months.
Around the same time, according to the Malaysian police report, Mr Griffin organised the creation of a plant in Libya for making centrifuge parts. He is alleged "to have supplied the lay-out plan for a workshop to enable Libya to produce centrifuges". He was also said to have sup plied machinery and a furnace and arranged to have Libyan engineers trained in Spain, the police report added.
Ahmad Hassan Rashid Ahmed al Abbar, the co-director of GTI, told the Guardian in Dubai he was the "local sponsor" for the company but denied knowing anything about its trading in nuclear technology products. "I have seen the reports about the Libyans but I have never met any Libyans," he said. "Mr Griffin and Mr Tahir knew each other quite well. I met Tahir once through Mr Griffin, a social event when they were opening an SMB computer office."
Swiss authorities have opened an investigation into whether Mr Tinner broke Swiss law by knowingly contributing to the production of nuclear weapons. The family has admitted that Urs Tinner's father had known Mr Khan since the 1970s but denied that they had broken any laws.
Both Peter and Paul Griffin have strenuously denied breaking the law in any way. Paul Griffin has previously told the Guardian that he has been "framed" and insists that all his exports have been cleared with the Department of Trade and Industry. Peter Griffin now lives with his wife in a villa in the south of France. Contacted by the Guardian, she said: "He is not making any comment."
The Guardian sent him a series of questions about his alleged involvement with AQ Khan. His wife yesterday replied: "I'm sorry but Peter Griffin has been advised not to answer any questions along these lines at the present time. He is expecting to release a press statement within the next 10 days."
Christopher Mills, a solicitor with Clyde and Company of Dubai, which is representing Paul Griffin, was also sent the questions. He told the Guardian: "Given where we are in our investigations we are not able to make any comment. When we are ready we are going to contact the press. There are matters that are out of our control and we don't know when we are going to get what we are going to get. We can't make any further comment for fear of prejudicing the work we are trying to do."

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Nuclear trails and trials By IKRAM SEHGAL


It is becoming increasingly difficult for Pakistan to distinguish between friend and foe, with even former PM Ms Benazir Bhutto who one would hope would be a friend and as a former PM more propriety, choosing to hunt with the hounds rather than helping us run like hares. Because of his "nuclear moonlighting", Dr Abdul Qadeer Khan (AQK), our hero cum villain combined, is an albatross around Pakistan's neck that has brought us to ground zero of world public opinion. While the internal lapses must be investigated thoroughly so that more skeletons do not appear on an already hot tin roof, those wishing Pakistan ill are targeting Pakistan (and the Army) on all sorts of counts, giving lip service only to AQK's illegal activity but ignoring the foreign network of companies and the personalities involved.
BSA (Bashir?) Tahir, a trusted Sri Lankan businessman confidante of AQK, was actively involved in supplying centrifuge components for Libya's uranium-enrichment programme. Tahir used SCOPE, a Malaysian subsidiary of SCOMI GROUP BHD, a Malaysian company involved in the petroleum services industry. Tahir, whose Malaysian wife was one of three of SCOPE's sponsor directors (she subsequently sold the shares to one of the other sponsors, PM Badawi's son), told the Malaysian Police that his involvement with AQK started sometime in 1994/1995 during Ms Benazir's government when AQK used Tahir's services to transship two containers with used centrifuge units through Dubai to Iran. US$ 3 million was paid in UAE Dirham by the Iranians, two briefcases of cash being kept in an apartment used as a guesthouse by AQK whenever he visited Dubai. Libya contacted AQK in 1997 (again during Ms Benazir regime), to obtain help and expertise in the field of uranium-enrichment centrifuge as well as supply centrifuge units for Libya's nuclear programme. Several meetings between AQK (accompanied by Tahir) and representatives from Libya represented by Mohamad Matuq Mohamad and another person known as Karim took place in early 1997 in Istanbul, subsequently in Casablanca and in Dubai. Project Machine Shop 1001 was meant to set up a workshop in Libya to make centrifuge components which could not be obtained from outside Libya. The machines for the workshop were obtained from Spain and Italy, the middleman involved in this project was Peter Griffin, a British citizen, owner of Dubai-based Gulf Technical Industries (GTI). Earlier Griffin arranged to send 7 to 8 Libyan technicians to Spain to learn how to operate the machines, he also supplied an Italian-made furnace to Libya for the workshop.
Late Heinz Mebus, a Swiss engineer, was involved in discussions between AQK and Iran to supply centrifuge designs. Gotthard Lerch, a German citizen residing in Switzerland, once worked for Leybold Heraeus, a German company that is alleged to have produced vacuum technology equipment. Gotthard Lerch is alleged to have tried to obtain supplies of pipes for the Project Machine Shop 1001 by sourcing from South Africa but failed to obtain it even though payment had been made by Libya earlier. Selim Alguadis, an engineer from Turkey, known to AQK since the 80s, supplied electrical cabinets and power supplier-voltage regulator to Libya. After the police action against the ship BBC China in Taranto, Italy on 4 Oct 2003, a consignment sent by Gunas Jireh, a Turkish national who supplied `aluminum casting and dynamo' to Libya for its `Project Machine Shop 1001'. Tahir is alleged to have arranged the transshipment of electrical cabinets and power supplier-voltage regulator to Libya through Dubai on behalf of Selim Alguadis. Swiss citizen Friedrich Tinner the President of CETEC and mechanical engineer, had dealings with AQK since 1980s and is reported to have prepared certain centrifuge components, including safety valves, sourcing many of the materials from several companies in Europe, arranging for the supply to reach Dubai and then on to Libya. Urs Friedrich Tinner, the son of Friedrich Tinner, was the consultant arranged by Tahir to set up the SCOPE factory in Malaysia, and was actively involved in manufacturing operations of the factory.
Nearly all the personalities/corporate entities in the nuclear smuggling/procurement racket were foreign nationals with various expertise. A vast majority of domestic critics are blissfully ignorant of not only the facts but also the horrible consequences for Pakistan if there really was an official "smoking gun". Not entirely blameless in failing to exercise stricter security controls, the government of the day is certainly far less culpable than the earlier civilian regimes when AQK first started to run amok. Remaining under very strict official controls during the regimes of late Zulfikar Ali Bhutto and Gen Ziaul Haq, AQK cleverly exploited the ambiguity and used his absolute authority to do what he pleased for the subsequent illegal "export" activities. When the executive controls and security safeguards became somewhat of a grey area between the military with advent of civilian regimes since 1989.
Unconfirmed reports had appeared in the media in the early 70s about Col Qadafi's cheque for US$ 5 million in late Zulfikar Ali Bhutto's name for our proposed nuclear program. This cheque being deposited with UBS in Switzerland and the purchase of gold thereof became a matter of subsequent in-family contention in the 90s as to the legal heirs. The recent nuclear contact with the Libyans is recorded between 1994 and 1997 during the period of Ms Benazir's regime, therefore her present diatribe against Gen Musharraf and the military could be a pre-emptive strike to ward off the charges of nuclear proliferation against her. Even without any direct "smoking gun", she is street-smart enough to be apprehensive that any such "nuclear taint" in the present post 9/11 environment would well be a "kiss of death" as far as her relations with western nations are concerned. Ms Benazir has made the astounding claim that during her first regime she set forth the BENAZIR DOCTRINE, officially disallowing exports of nuclear knowledge and material from Pakistan. What was the necessity for such a "doctrinaire" unless there were specific requests (and by whom?) for nuclear exports, indeed why has no one ever heard about the BENAZIR DOCTRINE for the last 15 years given that there was no apparent reason to keep this a secret and in fact every reason to make such a pledge public? During recent TV interviews Ms Benazir alleged that "Gen Pervez Musharraf is responsible for the nuclear exports to Libya", does she really believe this outrageous canard? With the President already treading a fail-safe line for Pakistan, it was extremely disappointing to see our former PM pursuing crass political objectives well knowing she was causing immense damage to the country. As an admirer of Ms Benazir's political talents and charisma, one expected her to uphold the national interest "even to the peril of her life".
Ms Benazir has a "crying wolf" history of going in for pre-emptive strikes to ward off corruption (and other) allegations, etc. Even her father went on and on about his making public the "Tashkent secret", four decades later we still do not know what it was! Wonderfully eloquent and media-wise, she has an inherent ability to state things straight-faced she knows to be patently wrong e.g. the Swiss money-laundering case which she denies ad nauseam even exists. Comparing herself to her late illustrious father "Zulfikar Ali Bhutto", the acknowledged "father of Pakistan's clandestine nuclear program", she claims the title of being the "mother of Pakistan's missile program". The best one can acclaim her is as the "mid-wife of the Taliban", they came into being under her regime's initiative in 1994 when the respected Maj Gen NK Babar was Interior Minister and Lt Gen Javed Ashraf Qazi, the then DG ISI. The government should trot out Qazi to detail on primetime TV as to the nexus between Ms Benazir and the Taliban. She may have more charisma than her father had, Ms Benazir does not display the same vision. While one does not question her patriotism, it is certainly sad that she did not exercise better judgment in leaving the Army alone, particularly at this critical time. Regretfully she is not the only one taking pot shots at us while we are staggering along on the nuclear trail while facing trial thereof in the kangaroo court of international public opinion.



Posted by maximpost at 11:37 AM EST
Permalink
Friday, 5 March 2004

>> THE "FLYING CARPET" SCANDAL CONTINUED...


FIRST WHIFF OF SCANDAL HITS IRAQ GOVERNMENT
AN INVESTIGATION IS LAUNCHED OVER MYSTERY PLANE FULL OF CASH
1.5 TONS OF NEW IRAQI DINARS, WORTH $20 MILLION
By Eli Lake
New York Sun

BAGHDAD, Iraq - Authorities here are investigating how a plane loaded with almost $20 million worth of the new Iraqi dinars managed to take off from Baghdad International Airport and land in Beirut.
The mysterious aircraft and the 1.5 tons of cash landed on January 15 in Lebanon. There, Lebanese customs agents seized the plane and the money and arrested three Lebanese citizens who were aboard the plane.
Now, Treasury agents attached to the Iraq Survey Group, the umbrella American intelligence organization that has its headquarters here, are trying to get the money back and determine if someone was trrying to steal it. The Iraqi Governing Council is wondering if all that money made its way from Iraq to Lebanon without at least some American involvement.
The affair has the potential to balloon into a scandal that could damage the acting Iraqi interior minister, who was involved. It also could feed complaints pushed by congressional Democrats in America, including Senator Kerry, that President Bush and his Coalition Provisional Authority have mishandled the postwar situation in Iraq.
One person asking questions is Iraqi Governing Council Member Muwaffek al-Rubai, who sits on the council's legal and financial committees investigating the contract. "The question to the CPA is, who has the 19.5 billion Iraqi dinars?" he told The New York Sun. "If you transfer such a container of cash, the transport company and security company has to know what is inside it. They transported the money from Baghdad International Airport to Beirut. They are in charge of the security of the airport."
"People are very mad about this," Mr. al-Rubai said. "I see poor, miserable people with no Mr. food to live on, who have no salary and no job, who have nothing, who are barefoot, in the south. And these people are playing with billions."
After the plane was seized, Iraq's interior minister, Nuri Badran, sent an urgent fax to his counterpart in Beirut asking for the release of the men and the cash.
One issue in the investigation is whether a contract from Iraq's new Interior Ministry to purchase electronic anti-jamming equipment and automobiles from a Cyprus-based concern called Laru Ltd. was in fact an intricate scheme to launder money. The contract has never been shown to the Iraqi Governing Council, nor have the goods been delivered to the Interior Ministry.
Depending on what the Treasury agents and the Iraqi Governing Council conclude, the position of Mr. Badran could be in jeopardy.
Mr. Badran sent an envoy on January 11 to a branch of the Rafidan Bank in northern Baghdad to make sure that a check for 19.836 billion dinars would be cashed when a Lebanese man presented it to the teller the next day, according to the manager of the bank, who spoke to The New York Sun on the condition that he not be named. This source said the money, which was paid in 25,000- and 10,000-dinar notes, was loaded at 10 a.m. on January 12 into three pick-up trucks guarded by American mercenaries armed with machine guns. On January 14, the Lebanese man, who the bank manager identified only as Akil, returned and cashed another check for 164 million dinars.
On the evening of January 15, all of cash was loaded onto a cargo plane flown by Flying Carpet Airlines at Baghdad International Airport, two Baghdad sources with knowledge of the affair told the Sun.
Unlike Royal Jordanian, which handles regular flights in and out of Baghdad, Flying Carpet's routes are notregularly scheduled. According to one American official who works on on logistics at the airport, "they call us when they are coming in and we don't ask any questions."
Shepherding the cash on the flight were a Lebanese businessman, Muhammad Issam abu Darwish; a former member of Lebanon's security services, Richard Jreisati, and Michael Mukattaf, a Lebanese currency exchanger whose father in law is the former president of Lebanon, Amin Gemayel.
The three men were detained when they arrived in Beirut by two Lebanese customs officials, Major Ibrahim Shams Eddin and his supervisor Ahmand Sulli, according to a legal statement from the office of the Lebanese Prosecutor General summarizing the incident. On that evening, Mr. Badran faxed a letter to the Lebanese Interior Ministrysaying the men were on official Iraqi business and that the money was part of a contract for security equipment. Two days later, a photograph of the fax including Mr. Badran's personal cell phone number, showed up in Lebanon's leading newspaper, An-Nahar.
The security contractor in charge of the airport, which is also an American military base, is Custer Battles LLC, a Virginia based security company whose executive board boasts former members of the American special forces and the CIA. When the Sun asked Don Ritchie, the chief of security for the airport and an employee of Custer Battles, what he knew about the January 15 flight to Beirut, he said,"According to corporate counsel, we should not talk about this at all." Indeed, the contract between Custer Battles and the Coalition Provision Authoritypledges that the contractor not to talk to the press.
One reason why Mr. Ritchie might not be talking is because after a hasty investigation by the Coalition Provision Authority's inspector general, Robert Dawes, that concluded there was no wrongdoing, a financial task force attached to the Iraq Survey Group is still asking questions. As on senior American official said," We are looking to make sure the funds were not absconded with; the funds are fleeing in essence. We don't want funds being used by insurgents to kill our soldiers or coalition soldiers. It's worth a second look."
The first look from the Coalition Provision Authority was quite cursory. According to two members of the Iraqi Governing Council who asked not to be named, less than two days after the Lebanese authorities seized the aircraft, the chief of the authority, L. Paul Bremer, told the Iraqi Governing Council in closed session that his staff had looked into the transaction and found nothing wrong. When Mr. Dawes did get around to investigating the matter, he only looked into whether CPA officials were in any way involved. But that investigation did not ask whether contractors like Custer Battles or other government agencies, like the CIA,may have played a role in helping transfer the money to Lebanon. Nor did this investigation examine whether Mr. Badran was engaged in legitinate business with Laru.
Mr. Badran is the son-in-law and close associate of an Iraqi Governing Council member, Ayad Alawi. Mr. Alawi's Iraqi National Accord has received CIA funding since the early 1990s. After the liberation of Baghdad, the INA offices were briefly in the same building as the CIA station in Baghdad. Since then the INA offices have moved to the building that once housed the national Baath Party headquarters, where Mr. Badran's main offices are in his duties as interior minister. Mr. Badawi declined repeated requests to be interviewd for this story.
An American spokesman for the Interior Ministry, Shane Wolfe, said there appeared to be nothing wrong. He said, "In this case the contract called for the payment in new Iraqi dinars. Since the contractor needed to pay most of his suppliers in dollars he needed a way to convert the money. The difficulties in transfering money and opening bank accountsplayed a role in this."
Despite an agreement from Lebanese authorities to return the money, the dinars have not yet made their way back to Baghdad.
--------------------------------------------------------------------------------------

>> CHARTS
http://www.heritage.org/Research/MiddleEast/bg1730.cfm

Models and Policies for Oil Production, Revenue Collection, and Public Expenditure: Lessons in Iraq
by Ariel Cohen, Ph.D.
Backgrounder #1730


March 4, 2004 | Executive Summary | |



Countries in both the developed and the developing worlds rely on a stable and secure supply of oil. However, abuses and misallocations of oil revenues often lead to social and political instability and, at times, armed conflict. The broader the political cooperation and public consensus, and the greater the transparency in the management of oil revenues, the greater the chance that the supplier will remain stable.

The challenge of devising optimal models and policies for oil production in developing or transitional economies is formidable. Resource-rich countries tend to fall behind non-oil economies in economic development, rate of growth in gross domestic product (GDP), GDP per capita, and human development.1 Oil often derails democratic development and causes civil strife and civil war. Other problems such as graft and "rent-seeking behavior" regularly accompany oil exploration and exploitation.

Many have noted that lagging institutional development, democratic deficiencies, and rampant corruption are the downside of the windfall profits from large-scale oil production. Political control of those natural resources makes political power paramount. Thus, politics becomes a competition for a near total control of wealth, resulting in a zero-sum game with devastating results for democratization and civil society.2

Simply put, unstable countries make poor oil suppliers. The examples abound, from Iraq to Iran to Venezuela.

Moreover, experience and research demonstrate that private ownership of any industry increases production and reduces costs anywhere in the world.3 Thus, consumers of energy should advocate privatization of the oil and gas sector worldwide. However, because of the industrial economies' thirst for oil, it is likely that Western governments and international institutions will remain quiet on privatization while denouncing the excesses of producers and abuses of natural resource property rights and revenue.

This paper analyzes current models of ownership and revenue management in the hydrocarbon sector, as well as their political implications, and suggests policies on property rights, tax collection, and public expenditure. The achievements in making the rule of law and transparency a paramount public policy and business value in the oil and gas industry have been limited at best.

Finally, this paper addresses some challenges that the Coalition Provisional Authority (CPA) and the Iraqi Governing Council (IGC) face in restoring and managing Iraqi oil production. It also offers recommendations for the Iraqi oil industry and public sector.



Production Mode: Privatization Versus State Management
The Iraqi oil industry is a case in point. Saddam's predatory dictatorship succeeded in bankrupting the country with the world's second largest oil reserves (after Saudi Arabia). The oil sector formerly provided more than 60 percent of Iraq's GDP and 95 percent of its hard currency earnings. Yet Iraq's GDP for 2001 was estimated at only about one-third its 1989 level. Iraq is also hobbled by $200 billion in foreign debt and reparation claims. This fiscal devastation is the result of a number of factors, including nationalization of the country's oil sector in the 1970s, extensive central planning of industry and trade, the 1982-1988 war with Iran, the 1990 invasion of Kuwait and subsequent Gulf War, and the U.S.-led war in 2003.

According to senior Iraqi Oil Ministry officials, Saddam ran the oil industry as his private kitty--with devastating results for the infrastructure and the treasury.4 Moreover, Saddam's disastrous policies led to Iraq's OPEC quota being taken over by other producers, primarily Saudi Arabia and Venezuela.

Importance of Privatization
Critics point out that centralized, state-owned industrial capacity in the oil sector is less successful than wholly owned private industry or public-private partnerships in attracting investment, integrating new technology, introducing international accounting standards and practices, boosting productivity, and observing environmental standards.5

Moreover, as many of the OPEC members exceed their production quotas, leading to a greater supply of oil and lower prices, it is not clear whether the countries that follow the centralized planning model are indeed maximizing their oil revenue.



Political Factors
Political underpinnings are crucial in forging a workable political model for oil exploration and exploitation. In the Iraqi case, the future model will probably need both to be popularly accepted and to be incorporated into the new constitution. Otherwise, civil strife may develop.

Oil disputes played a large part in the Biafra war in Nigeria in the 1960s, in which 1 million-3 million civilians were starved to death or bombed.6 Recently, tribal unrest in Nigeria resulted in Western and local oil workers being taken hostage.7 Secession movements in Indonesia parallel the distribution of oil, as the country's smaller and potentially oil-rich islands attempt to secede from overpopulated Java.8 Such conflicts should be avoided in Iraq, which is a relatively new political entity created by the British Empire after the defeat of the Ottoman Empire in World War I.

Since the creation of Iraq, relationships between the Kurds, the Sunni Arabs, and the Shi'a Arabs have been uneasy at best and murderous at worst. The Sunni Arabs have dominated Iraq since the Ottoman and British eras.

Beyond ethno-religious strife, clans and families are the smallest political units, and their interests may need to be taken into account in devising a stable political solution that allows equitable and sustainable sharing of oil revenues. Thus far, the process involved in drafting an Iraqi constitution has been a painful one, and there is no date certain by which agreement will be reached and the document will be ready.9 As Iraq develops its own constitution, principles of protection of private property must be extended to the oil industry and oil reserves.

Property Rights in Iraq
The launch of the Iraqi oil industry in 1925 was undertaken by a private consortium, the Iraq Petroleum Corporation, owned in equal shares (23.75 percent) by British Petroleum and Shell, Companie Francaise de Petroles, and two constituent parts of Exxon Mobil. Nubar Gulbenkian, the famous "Mr. Five Percent," owned the remaining 5 percent. The consortium was expropriated in 1964 and fully nationalized in 1972.10

Theoretically, if the property rights of the original consortium were restored, new companies would participate in bids for new field projects and the rehabilitation of existing oil infrastructure. In addition, the future government of Iraq might recognize some of the contracts concluded by the Saddam Hussein regime, such as the Russian Lukoil West Qurna concession, as valid. The Iraqi government could also examine other production-sharing agreements that Saddam's regime signed with China, France, and other countries.



Economic Efficiency
Partial privatization, which the CPA and the Provisional Council are pursuing, and low taxation are the right policies to follow. However, more needs to be done to achieve eventual privatization of reserves and extraction. As Iraqi needs for reconstruction are high, one way to increase the cash flow up-front is to sell off the reserves and tax the future oil revenues. This would better address the immediate needs of the Iraqi people without giving up natural resource royalties and rents.

The United States--through its senior representatives of the Departments of State and Defense in the CPA and its advisers on the ground, with the assistance of the International Monetary Fund (IMF), World Bank, and other international and non-governmental organizations (NGOs)--should begin advising the leaders of Iraq's three primary ethnic groups to establish policies that would lead to a thriving modern economy. These policies should be based on "best practices" developed around the world during the largest government privatizations in history, during the 1980s and 1990s.

Institutional Development and Controls
One of the greatest challenges in privatizing Iraqi oil and attracting foreign investment (in addition to building political consensus and building the institutions to implement it) will be ensuring equity, transparency, and the rule of law. To accomplish these goals, Iraqi political and government institutions, donor representatives, and international agencies should coordinate their activities while each plays its distinct role.

Courts, parliamentary committees, commissions, government accounting offices, ombudsmen, and chief prosecutors' offices may have competing jurisdictions on privatization. (Regrettably, this was often not the case in the great 1990s privatization in post-communist countries.) Legal and administrative challenges may increase public control while simultaneously miring the process in numerous court hearings and investigations. While such involvement, especially of Iraqi institutions, may increase transparency and public "buy-in," it may also slow down the process and open it to frivolous challenges. Indigenous NGOs and media also have a role. However, it is all too easy for politicians and unprofessional journalists to denounce and undermine privatization through demagoguery.

The Eastern European experience demonstrates that a strong executive branch with political commitment and a public mandate for privatization, combined with meticulous insistence on open and competitive bidding, can carry the day. In that respect, the process could be facilitated by inviting private foreign companies and officials with experience in the German Privatization Agency (Treuhandanstaldt), Estonian Privatization Agency, and similar organizations to serve as advisers to the Iraqi government.

Revenue Collection and Distribution Mode
Best management practices and financial controls in the taxation and expenditure stages of oil revenue accrual and disbursement are essential. The history of oil-rich states, from Saudi Arabia to Nigeria, provides ample evidence of a cycle of high revenue/high expectations/high expenditure followed by an oil market slump, a decline in revenue, and social unrest caused by fiscal and budgetary adjustments.11

These states, however, failed to use centrally managed oil revenues to jump-start development and prevent precipitous declines in their GDP per capita. Saudi GDP per capita peaked in 1981, when both the U.S. and Saudi Arabia had a per capita GDP of about $28,600. In 2001, U.S. GDP per capita was $36,000, while Saudi Arabia's was less than $7,500. According to the U.S. Embassy, "Per capita income [in Saudi Arabia] will continue to decline unless economic growth increases significantly and/or the birth rate drops."12

Political Factors
Iraqi policymakers should be aware of a "dual hazard" in politics of revenue taxation and expenditure. On the one hand, Iraq has a large, growing, and impoverished population whose basic needs are still unmet. Their representatives are likely to press for higher tax rates and deficit budgets and to lobby for borrowing against future oil receipts. Even with projected increases in oil production and revenue growth, Iraq will still be in the poor category or in the low end of the medium-income developing countries. However, if the Iraqi poor, especially the Shi'a, are excluded from budgetary decisions, such factions as Islamist Shi'a radicals (often connected to Iran), Sunni Islamists connected to al-Qaeda, and Ba'athists can be expected to use this exclusion as a pretext for agitation against the Iraqi Government Council and its pro-American successor.13

Iraq's challenge is to educate the political and technocrat classes, and the elites in general, on the dangers of high taxation and unbridled expenditure. Macroeconomic instability and a negative investment climate can be as damaging in the long term to a national economy as corruption.

Institutional Development and Controls
As Terry Lynn Karl wrote:

When states do not have to depend on domestic taxation to finance development, governments are not forced to formulate their goals and objectives and the scrutiny of citizens who pay the bills.... Excessive centralization, remoteness from local conditions, and lack of accountability stem from this financial independence.14
Under Saddam, Iraq was a good case in point. The dictator and the Ba'ath elites in Baghdad made all the economic decisions, such as nationalizing oil assets and using revenues to pay for the military, including programs to build weapons of mass destruction.

In post-Saddam Iraq, institutional controls on the revenue stream are vital. These should include creation of competent and independent central fiscal and budgetary bodies; a strong police force, including organized and white-collar crime divisions to prevent oil smuggling; and a tax collection agency sophisticated enough to prevent and investigate tax evasion. Such services need to be strong enough to stand up to the Iraqi national oil company and the international oil companies, which will handle an increasing number of exploration and extraction projects.

Since the Iraqi state most likely will remain weak and fractious after the U.S. transfers sovereignty on July 1, 2004, it should divest itself from providing most nonessential services, which can be delivered by the privatized non-government sector. Market demand, not government programs, is more likely to reflect the needs of the Iraqi people. Since government revenues can be generated up-front from privatization, keeping tax rates low (around the current 15 percent) is advisable.

The government can shift provision of services to the private sector while building a constitutional barrier to keep budget deficit spending below a certain level, such as 3 percent of GDP. Such a safeguard would keep the budget within reasonable limits, make the Iraqi dinar more stable, and instill both fiscal and budgetary discipline among the elite. Without such discipline, the state will attempt to use expenditures to buy its legitimacy.

Given the fragility of the Iraqi state--the combined result of Saddam's regime, the current conflict, and deep ethno-religious fissures--state dependence on oil revenues should be avoided. As in many other countries that have experienced cyclical oil wealth, windfall oil revenues can be stored in non-dinar, off-shore accounts--an Iraqi oil fund.

What Should Be Done
The Coalition Provisional Authority and the Iraqi Governing Council should:

Initiate a broad public debate about development of the rule of law and property rights, including mineral rights. This debate should include Western economists, Iraqi officials, and the public and should cover the future of oil production, taxation, and the distribution of income. As part of the debate, the CPA and IGC should conduct a comprehensive public campaign aimed at privatization of oil and gas industry assets and reserves, as well as broad institutional reform. Many Iraqi officials and other members of police and media elites are not aware of the macroeconomic factors that support privatization, keeping the oil revenue out of government's hands, and instituting publicly accountable and transparent decision-making processes on oil production.
Bolster property rights and the rule of law, including enabling legislation and regulations on oil and gas production that allow private ownership of all productive assets and minerals. This includes fostering an independent judiciary, training judges to handle complicated civil litigation such as energy law, and allowing international arbitration, including enforcement of arbitral awards.
Conduct a comprehensive audit of state-of-the art techniques of oil privatization, revenue generation, and management. This information should then be disseminated to the Iraqi political leadership, management of the oil and financial sectors, and broader elites. U.S. institutions (e.g., the CPA and U.S. Agency for International Development), major oil companies, nonprofit organizations, the IMF, and the World Bank should all be involved in this undertaking.
Ensure that the privatization process is transparent and perceived as being conducted in the interests of the Iraqi people.
Develop safeguards to prevent smuggling and diversion of oil and refined products from "well to wheel" and create a law enforcement climate in which the diversion for private use and theft of crude oil, refined products, or revenue is reported, prosecuted, and punished.
Improve revenue collection, such as taxation of oil sales, by establishing independent audit procedures, supporting public supervision by bona fide NGOs, and developing an independent media.
Assist in creation of a national, private, professionally and independently managed oil fund. A modified version of the Alaska arrangement, allowing for direct deposits of revenues into the private bank accounts of the Iraqi people, would go a long way toward legitimizing the future Iraqi government and privatization of oil assets.
Develop political legitimacy and transparency of oil revenue expenditure through open budgetary and legislative processes. As part of the open budgetary process, budgetary drafts prepared by legislative and governmental budgetary offices should be publicly available and discussed openly in the legislature before the final vote. Budget-watching indigenous NGOs should be allowed to participate in such discussions, thus enhancing the development of civil society in Iraq. Once the security situation improves, both the government and non-government sectors should be provided international technical assistance on budgetary issues.
Oil Revenue Management and International Energy Security
A private and transparently managed oil and gas sector is vital to global energy security and thus in the national interest of the United States. Returning Iraq to the international oil markets is important for the Iraqi people, the United States and other Western countries, and the global economy. This would provide locally generated revenue to finance post-war reconstruction, provide an additional 2 million-4 million barrels per day to the oil market, and relieve the U.S. of the financial burden of Iraqi reconstruction.

Iraq's output prior to the Gulf War was 3.5 million barrels per day, while the oil discovery rates (50 percent to 75 percent) on new projects in the 1990s were among the highest in the world. Given Iraq's own output projections, it may be capable of pumping as much as 6 million barrels (by 2010) to 7 million barrels (by 2020) per day--more than double current production levels. In view of demand projections, especially increased demand from the large Asian economies such as India and China, the global market can easily absorb such an increase. The U.S. Energy Information Administration forecasts that oil consumption in Asia will grow by 55 percent from 2003 to 2025 and that natural gas consumption will increase by 100 percent.15

Generating, accounting for, managing, and expending this revenue for the Iraqi people is a huge responsibility that is complicated by the state-owned and state-managed infrastructure, poorly defined property rights, absence of a functioning legal system, a shattered public service, lack of consensus on how to own and exploit the oil reserves, and the large number of Iraqi poor with pressing needs.

Privatization should be undertaken only after a public education campaign and a good-faith effort to build a consensus among the Iraqis that private ownership of industrial assets, including commodities, is economically more efficient than a government-owned system.

Oil revenue from Iraqi oil should be transparently managed, adequately taxed, and protected from government abuse and corruption. To facilitate this process, creating a professionally managed oil fund should be seriously considered. Such a fund would protect oil revenues from the long hands of the Iraqi politicians. As in the Alaska model, part of the revenue should be distributed directly to the bank accounts of every Iraqi.

These are only some of the answers and challenges facing state oil revenue management. Those tasked with solving these problems owe the people of Iraq their best efforts not to repeat the abuses of the past.

Ariel Cohen, Ph.D., is Research Fellow in Russian and Eurasian Studies and International Energy Security in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. This paper is based in part on a paper presented by the author at the Seminar on Public Policy of Oil Finance and Revenues Management, CSIS/Baker Institute, in Washington, D.C., on November 20, 2003. The author would like to thank Heritage Foundation research assistant Will Schirano for his asssistance in preparing this paper. He is also grateful to his colleagues Marc A. Miles and James Phillips for their helpful comments.


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1. Svetlana Tsalik, "The Hazards of Petroleum Wealth," in Caspian Oil Windfalls: Who Will Benefit? (New York: Open Society Institute, 2003), p. 1.

2. Benn Eifert, Alan Gelb, and Nils Borje Tallroth, "Managing Oil Wealth," Finance and Development, Vol. 40, No. 1 (March 2003), at www.imf.org/external/pubs/ft/fandd/2003/03/eife.htm (November 11, 2003). According to the authors, "Work on the theory of rent-seeking behavior illustrates how rent reorients economic incentives toward competition for access to oil revenues and away from productive activities, especially in nontransparent environments characterized by political discretion and unclear property rights."

3. World Bank, "Privatization: Eight Lessons of Experience," Policy Views from the Country Economics Department, July 1992.

4. Interviews with Mutasam Akram Hasan and Dr. Mussab H. Al-Dujayli, Istanbul, Turkey, January 29, 2004. Thus, for example, forcing high production levels without investment in modern technology and maintenance has resulted in massive penetration of water into the Kirkuk oil fields.

5. Ariel Cohen and Gerald P. O'Driscoll, Jr., "The Road to Economic Prosperity for Post-Saddam Iraq," Heritage Foundation Backgrounder No. 1633, March 5, 2003, at www.heritage.org/Research/MiddleEast/bg1633.cfm.

6. Federation of American Scientists, "The Biafra War," at www.fas.org/man/dod-101/ops/war/biafra.htm (November 11, 2003).

7. Oronto Douglas, Von Kemedi, Ike Okonta, and Michael Watts, "Alienation and Militancy in the Niger Delta: A Response to CSIS on Petroleum, Politics, and Democracy in Nigeria," FPIF Special Report, July 2003, at www.fpif.org/papers/nigeria2003.html (November 16, 2003). See also "Hostages from 4 Countries Head Home from Nigerian Oil Rigs," CNN.com, August 5, 2000, at www.cnn.com/2000/WORLD/africa/08/05/nigeria.hostages.reut (November 11, 2003), and "Nigeria: Forces Head for Oil Rigs," Africa Online, May 1, 2003, at www.africaonline.com/site/Articles/1%2C3%2C52870.jsp (November 11, 2003).

8. "Aceh's Rebel Chief Demands Full Independence from Indonesia," CNN.com, November 10, 1999, at 216.239.41.104/search?q=cache:G-37xS6574wJ:www.cnn.com/ASIANOW/southeast/9911/09/indonesia.aceh.03/
+aceh+independence+oil&hl=en&ie=UTF-8 (November 11, 2003). See also Embassy of Indonesia (Ottawa), "Rebels Urge Mobil Oil to Leave Aceh Province for Safety Reasons," January 4, 2001, at www.indonesia-ottawa.org/news/Issue/Aceh/010401_IO_01.htm.

9. "Iraqi Constitution Delayed," BBC World, October 1, 2003, at newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/middle_east/
3153732.stm (November 12, 2003).

10. Martin Hutchinson, "What to Do with the Oil," United Press International, March 24, 2003.

11. Tsalik, "The Hazards of Petroleum Wealth," p. 7.

12. Embassy of the United States (Riyadh), "Saudi Arabia 2002 Economic Trends," May 2002, at riyadh.usembassy.gov/wwwhet02.html (November 16, 2003).

13. Herbert Docena, " No Money, No Play: US on the Brink in Iraq," Asia Times, October 10, 2003, at www.atimes.com/atimes/Middle_East/EJ10Ak01.html (November 16, 2003).

14. Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro-States (Berkeley: University of California Press, 1997), p. 190, quoted in Tsalik, "The Hazards of Petroleum Wealth," p. 7.

15. Indo-Asian News Service, "India, China Will Drive Global Energy Use Increase," Asian Tribune, May 2, 2003, at www.asiantribune.com/show_news.php?id=4059 (November 16, 2003).

? 1995 - 2004 The Heritage Foundation
All Rights Reserved.
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Restarting the Flow: Restoring Iraqi Oil Production
by Ariel Cohen, Ph.D.
Backgrounder #1693

October 1, 2003 | |





The Iraqi people desperately need to have their oil flowing again to the global market. Restarting the flow of Iraqi oil would be a win-win proposition, as not only the Iraqis, but also consumers around the world would benefit from bringing the Iraqi oil supply back on line.

The main impediment to increasing Iraqi oil production at this point is lack of security--terrorist sabotage and looting. The recent attacks on pipelines and power stations are disrupting the flow of Iraqi oil and are clearly aimed at further impoverishing the Iraqis and even further disrupting their lives.

Since the end of major hostilities, saboteurs have bombed Iraqi pipelines more than eight times, causing $7 million per day in lost revenue.1 The culprits, including the remnants of Saddam Hussein's Ba'ath party and Islamic radicals, are following the old Leninist adage, "the worse, the better." They are betting on an upsurge in resistance to the U.S. presence in Iraq if they can severely disrupt the country's gasoline, electricity, and cooking gas supply. Saddam loyalists, local Islamist militants, and foreign jihadis who come to Iraq to fight the "infidels" believe that by escalating Iraq's suffering they can drive the Americans back across the ocean.

It is also true that the lack of security, the scarcity of gasoline and other fuels, and the intermittent supply of electricity are impeding the post-war reconstruction. Today, Iraq is producing less than half as much oil as it pumped before the war.

Saving Iraqi Oil Production
The attacks on the oil infrastructure are part of a premeditated campaign by the remnants of Saddam's regime and radical Islamist mujahideen organizations to stop the flow of Iraqi oil, harm the people of Iraq, and disrupt global oil markets. A secret memo dated January 23, 2003, reportedly issued by Saddam's security services, found in Iraq after the war, and published in the London-based Saudi daily Al-Hayat, directs pro-regime elements to destroy power generating stations and the water supply.2 It is likely that Saddam supporters and other terrorists are applying the same tactics to the oil industry.

Iraq is pumping 900,000 barrels per day--considerably less than the pre-war production level of 2.2 million-2.4 million barrels per day. The target of achieving pre-war production by the end of 2003 is in jeopardy, with further increases also in question. While Halliburton subsidiary Kellog, Brown and Root (KBR) and the U.S. Army Corps of Engineers are rehabilitating the Iraqi oil infrastructure, their mandate does not include providing pipeline security.3

The Iraqi oil ministry has begun paying tribal leaders in the south to keep saboteurs and thieves away from the pipelines.4 However, in at least one case, Sheikh Hatem Al Obeidi, an influential tribal leader who was on the government payroll to prevent attacks, instead abetted sabotage and was arrested by U.S. troops.5 Without security, neither the U.S. nor the Iraqis can repair the damage caused to Iraq's oil industry by the war or rehabilitate Iraq's infrastructure, which had fallen into a state of grave disrepair under Saddam.6

Meanwhile, the continued attacks are hurting both the Iraqi and Western economies. The West is still suffering from relatively high oil prices, as the economic recovery remains tenuous, and the Organization of Petroleum Exporting Countries has cut production by 900,000 barrels a day.7 As a result of the drop in Iraqi oil production and the Iraqi fiscal shortfall, U.S. taxpayers will need to subsidize 50 percent of the $6 billion Iraqi budget for fiscal year (FY) 2004.

On September 7, President Bush announced that he would request $87 billion for assistance to Iraq and Afghanistan for FY 2004, with the lion's share going to Iraq.8 A boost in oil production would remedy the Iraqi economic crisis, give the Iraqi people hope, and decrease levels of needed U.S. assistance funding.

Sabotage and Looting
The key impediments to reconstructing the Iraqi oil industry and raising its oil revenues are attacks on the 4,350-mile-long pipeline system and the 11,184-mile-long electric grid.9 The northern pipeline, which runs from Kirkuk to the Turkish port of Ceyhan, was attacked twice in June,10 twice in August, and twice again in September. After an attack on August 16, the pipeline burned for more than 48 hours. The pipeline from the giant Rumeila field in the south has also been bombed twice.

Security analysts divide these attacks into two distinct categories. The first is looting and plunder of the oil infrastructure, including fields, pumping stations, pipelines, and refineries. Organized crime is also raising its head, as demonstrated by the recent interception of a barge with 1,000 tons of stolen Iraqi oil.11 Smugglers usually ship oil to Iran, which reflags and re-exports it.

A much more serious threat, however, comes from groups opposing the U.S. and coalition presence, U.N. involvement, and the elements of Iraqi society participating in the Governing Council.

Thus far, senior U.S. officials, the Coalition Provisional Authority (CPA), and the the U.S. military have not publicly identified the main culprits in the pipeline attacks, which suggests that intelligence is insufficient.12 The ferocious terrorist bombings against personnel and the infrastructure continue.

The main threat comes from three types of groups:

Networks of the old regime operating underground, such as Ba'ath party officials, Iraqi intelligence officers, and Fedayeen Saddam militia.
Radical Sunni groups, such as the predominantly Kurdish Ansar al-Islam; Vanguard of Muhammad's Army; and others whom President Bush has characterized as "Al-Qaeda type fighters" and who are part of the international jihad movement.13 In his September 7 address to the nation, President Bush called Iraq "the central front of the war against terrorism."14 Anti-Western fighters are crossing into Iraq from Syria and the adjacent Gulf states, including Saudi Arabia.15 Funding for their movements comes from rich individuals and foundations in these same Gulf states and from the global radical Islamic community.
Extremist Shi'a groups, affiliated with Mullah Muqtada Sadr, suspected of attacks on leading Shi'a clerics.16 As the result of the assassinations, a militia called the Badr Brigade--the armed wing of the Supreme Council for the Islamic Revolution in Iraq--was allowed to operate after attempts to ban it by the coalition. Elements of the Lebanon-based Hizballah, an organization on the U.S. terrorism list, and other radical pro-Iranian groups and agents are also present in Iraq.


Key Iraqi pipelines have been paralyzed repeatedly by terrorism. On August 13, the day Iraq started pumping oil to the Turkish port of Ceyhan, terrorists attacked the Northern Kirkuk-Ceyhan pipeline. The same pipeline was attacked again on August 30.17 The pipeline, with a throughput capacity of 1 million barrels of crude per day, was attacked four times between May and September.18 Attacks occurred near the towns of Haditha and Hawja, which are close to the largest Iraqi oil refinery at Bayji.

Iraqi oil production is also suffering from years of centralized, state-run management of the oil sector, long-term lack of investment, and inadequate technical maintenance of the oil fields under Saddam. The absence of hard currency reserves to repair and restart the oil industry is slowing production. However, no investment and expansion are possible unless the physical security of the vast Iraqi oil infrastructure can be assured.

Pipeline Security: Planning and Execution
The military component of seizing Iraq's oil infrastructure during the war was brilliantly planned and executed. Unlike during the Gulf War, when Saddam succeeded in setting hundreds of Kuwaiti oil wells on fire, fewer than 10 wells were ignited in Iraq. U.S. and British troops seized and secured the oil fields, refineries, and pipeline infrastructure with minimal casualties and material damage. The final draft of an internal post-war report for the Joint Chiefs of Staff gave high marks for pre-war gaming and combined operations during the time of combat.

However, the post-war planning received the lowest grade, with "capabilities that fell short of expectations or needs, and need to be readdressed through new initiatives."19 CPA Administrator Paul Bremer has admitted that the U.S. forces are "stretched thin."20 Securing the oil infrastructure was an important part of post-war objectives, but the plans for post-war occupation of Iraq were not ready when the war started, and the Pentagon was forced to alter its original plan as the post-war violence escalated.21 Thus, it is not surprising that 80 percent of the damage to Iraq's oil infrastructure occurred after the war ended.22

Five months after the war, the U.S.-led coalition force in Iraq consists of 140,000 American troops and 20,000 international troops, including one British division and one Polish-led division. They are aided by over 54,000 Iraqi security personnel, including 37,000 police, 12,000 facility guards, and 5,000 border police and civil defense corps.

On September 4, in Baghdad, Secretary of Defense Donald Rumsfeld called for putting up to 75,000-100,000 former Iraqi officers and soldiers back in uniform to protect their country and fight its enemies. He also criticized Saudi Arabia and Syria for not doing enough to seal Iraq's borders.23

Faced with attacks on oil pipelines, the CPA is working to expand the Iraqi force charged with infrastructure protection. During this past summer, it discussed the provision of training to this security force with Kroll Associates and other private U.S. companies.24 With more international troops coming to Iraq, they can also assume responsibility for guarding the pipelines and infrastructure and training the Iraqi security forces, which will be tasked with protecting the pipelines in the future. As long as security is not restored, however, the American taxpayer will pay for this security force.

Criticism on the Hill and Beyond
Senators and Representatives, including prominent Republicans, as well as retired senior military officers have criticized the planning, numbers, and troop deployments in Iraq. Senator Richard Lugar (R-IN), chairman of the Senate Foreign Relations Committee, stressed his criticism of the planning done for post-war deployment but called on his colleagues to "rejoice" that the plan has been corrected. Representative Curt Weldon (R-PA), vice chairman of the House Armed Services Committee, expressed reservations about the planning for the war last winter.25

Senator Kay Bailey Hutchison (R-TX), Senator John McCain (R-AZ), columnist George Will, and Weekly Standard editor William Kristol--all outspoken proponents of Saddam's removal--have criticized the Administration for post-war mishaps.26 It is less surprising that Democrats, including Senators Joseph Biden (D-DE), ranking Democrat on the Senate Foreign Relations Committee, and Jack Reed (D-RI), a West Point graduate who served with the 82nd Airborne, are also criticizing the Administration for mistakes in post-war planning and deployment.

Among senior generals critical of the post-war performance in Iraq is General Anthony Zinni, the former head of the U.S. Central Command who has extensive experience in the Middle East and serves as a consultant to the U.S. State Department.27 The most prominent proponent of a bigger Army and a greater deployment in Iraq is General Eric Shinseki, the recently retired Army Chief of Staff, who called for "several hundreds of thousands of soldiers on the ground" and warned against a "twelve division strategy for the ten division army."28

Even if the actual size of the U.S. Iraqi deployment is not increased, it has to be refocused on intelligence and training of the Iraqi forces, while the number of coalition troops from other countries must go up, according to General John Abizaid, the current head of Central Command.29 This is also the opinion of the pre-eminent British military historian, John Keegan.30 Increased intelligence collection, anti-terrorist operations, and training should become the focus of the U.S.-led force in Iraq.

Protecting Iraqi Oil Revenue
The Bush Administration has issued an executive order barring claims in U.S. courts against Iraqi oil or proceeds from it.31 It has also coordinated with other permanent U.S. Security Council members--the United Kingdom, France, China, and Russia--on the imposition of a moratorium on Iraq's national debt.

The U.S. should further coordinate its actions with companies and sovereign claimants (states) to delay reparations for Gulf War damages and other claims. Iraq needs breathing space in order to restart its cash flow and get its oil industry up and running again.

Providing Security for the
Iraqi Oil Infrastructure
Iraq's oil reserves are the third largest in the world after Russia and Saudi Arabia. However, only 15 of its 73 discovered giant and large fields have been developed.32 Vast parts of the country remain unexplored.

According to current estimates, the investment needed to bring Iraqi production to about 3 million barrels a day will exceed $3 billion over the next two to three years. Over the next 10 years, $35 billion-$40 billion will be needed to boost production from the current 1.2 million-1.4 million barrels per day (MBD) to the pre-1979 production level of 5-6 MBD.

Before serious reconstruction work can begin, however, the physical security of the infrastructure needs to be achieved. To this end, the Bush Administration, including the CPA, and the Iraqi Cabinet should:

Conduct an assessment of security needs to provide for infrastructure protection in conjunction with the Iraqi oil ministry. Before serious reconstruction of the oil industry can begin, the coalition and the Iraqi cabinet must be able to assure physical security of Iraqi energy infrastructure.
Increase the number of Iraqi guards as needed to provide security. However, the rank-and-file and all officers must be adequately screened to root out Saddam's hard-core supporters and Islamic radicals.
Utilize coalition forces, especially the British, to train Iraqi security forces, including pipeline security units. British instructors have earned high marks the world over providing security and military training.
Hire an international security company to administer pipeline security and train the Iraqi security forces tasked with protecting the pipelines to complement military training.
Train the guards for the task at hand; deployment without training is self-defeating. The CPA has cut the training time for Iraqi police from 12 weeks to eight, and the quality of this force leaves much to be desired.33 Similar shortcuts in training for pipeline protection forces could lead to undesirable results.
Develop and conduct a public information campaign explaining to the Iraqis the importance of pipeline security and the resultant oil revenue. Such a campaign should emphasize the direct link between oil revenue and the provision of basic services and the growth in living standards.
Design a technological package to enhance infrastructure security, using satellite imaging, unmanned aerial vehicles/drones, video cameras, and sensors. This package would be integrated with the security provider (state or private).
Provide additional funding to repair the oil infrastructure. The rundown state of the oil infrastructure will require significant investment: up to $3 billion per year to get it up and running again. These funds can be provided on credit to the Iraqi Governing Council or the oil ministry, to be repaid from future oil revenues.
Work with the Iraqi oil ministry leadership appointed by the Coalition Provisional Authority and the Council to intensify the purge of former Ba'ath officials from the oil ministry and the oil industry.
Conclusion
Without adequate security, Iraqi oil will not reach global markets. Rebuilding the Iraqi oil sector through Western investment will not work as long as terrorists and looters are able to target technical personnel, pipelines, power lines, and other assets necessary for restarting oil production.

By liberating Iraq, the U.S. undertook an immense responsibility. Without Iraqi oil, the U.S. taxpayer will have to foot the bill for the occupation and reconstruction of Iraq. U.S. consumers will pay higher prices at the pump, and the U.S. and global economies will endure an indirect tax by paying higher energy prices. The alternative to restoring Iraqi oil production--misery for the Iraqi people and victory for the terrorists--is not an option.

Ariel Cohen, Ph.D., is Research Fellow in Russian and Eurasian Studies in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.34


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1. Radio Free Europe/Radio Liberty, "Iraq: Pipeline Fire Costing $7 Million a Day," August 18, 2003, at www.rferl.org/nca/features/2003/08/18082003075830.asp. See also Walter Rodgers, Nic Robertson, and Jason Bellini, "3 U.S. soldiers killed in ambush near Tikrit," CNN.com, September 18, 2003, at www.cnn.com/2003/WORLD/meast/09/18/sprj.irq.main. The most recent explosions occurred on September 8 and 18.

2. This document was translated by the Middle East Media Research Institute in its Special Dispatch Series No. 538, July 17, 2003. Available at http://memri.org/bin/articles.cgi?Page=archives&Area=sd&ID=SP53803

3. Energy Intelligence Group, "Oil Flows at Kirkuk as KBR Begins Damage Assessment," Eye on Iraq, May 1, 2003, at www.energyintel.com/EyeOnIraq.asp (subscription required).

4. Bassem Mroue, "Oil Ministry and U.S. Troops Take Measures to Protect Iraq's Main Pipeline from Thieves and Saboteurs," Associated Press, July 4, 2003, at www.enn.com/news/2003-07-04/s_6207.asp.

5. "Iraq Tribal Sheikh Arrested Over Oil Blasts," Agence France-Presse, August 31, 2003, at www.ptd.net/webnews/wed/cs/Qiraq-oil-blast-sheikh.RMbd_DaU.html.

6. Energy Intelligence Group, "Oil Flows at Kirkuk as KBR Begins Damage Assessment." War damage included the bombing of the K3 pumping station at Haditha and a number of pipelines that crossed the Tigris around Tikrit.

7. John W. Schoen, "OPEC Cuts May Crimp Economy," MSNBC, September 24, 2003, at www.msnbc.com/news/
971120.asp?0sl=-23.

8. George W. Bush, "President Addresses the Nation," September 7, 2003, at www.whitehouse.gov/news/releases/2003/09/
20030907-1.html.

9. Pamela Hess, "CPA Speeding Police Training in Iraq," The Washington Times, September 2, 2003, at www.washtimes.com/
upi-breaking/20030902-012831-9370r.htm.

10. Lamia Radi, "Fires Blaze on Iraq Oil Pipeline After Twin Bomb Attacks: Residents," Agence France-Presse, June 13, 2003, at iafrica.com/news/worldnews/244870.htm.

11. Pacific Disaster Management Information Network, "Iraq Humanitarian Assistance Report," August 11, 2003, p. 3, at www.who.int/disasters/repo/10470.pdf.

12. Douglas Jehl and Dexter Filkins, "Rumsfeld Eager for More Iraqis to Keep Peace," The New York Times, September 5, 2003, at www.nytimes.com/2003/09/05/international/middleeast/05RUMS.html.

13. See also Genaro C. Armas, "Troops Called Not an Answer," Associated Press, August 25, 2003.

14. George W. Bush, "President Addresses the Nation."

15. Secretary Donald H. Rumsfeld and General John Abizaid, "DoD News Briefing," August 21, 2003, at www.defenselink.mil/
transcripts/2003, /tr20030821-secdef0604.html. See also Stephen Schwartz, "Reading Najaf," The Weekly Standard, September 3, 2003.

16. Aparisim Ghosh, "Terror at a Shrine," Time, September 8, 2003, p. 30. See also Tarek Al-Issawi, "Previously Banned Militia Patrols Iraqi Holy City, with Coalition's Blessing," Canadian Press, September 6, 2003, at www.canada.com/news/world/story.asp?id=517B3E75-E27D-42A2-BD33-E47782C941A6. The Badr Brigade was previously disbanded by the coalition, but after the murder of Ayatollah Muhammad Bakr al-Hakim and an earlier attack on his uncle, it is now being allowed to function again.

17. "Iraqi Oil Pipeline Ablaze," News24, at www.news24.com/News24/World/Iraq/0,,2-10-1460_1409548,00.html, and "Iraq Council Makes Security Demands," MSNBC News, August 30, 2003, at www.msnbcnews.com/news/959639.asp?cp1=1.

18. "Iraqi Oil Pipeline Sabotaged," Agence France-Press, August 13, 2003; see also Joseph Logan, "Bomb, Tech Problems Hit Iraq Pipeline," Reuters, August 16, 2003, and Celcan Hacaoglu and Bruce Stanley, "Iraq Resumes Pumping Oil from Northern Oil Fields through Turkish Pipeline," Canadian Press, August 13, 2003, at www.canada.com.

19. Rowan Scarborough, "Joint Chiefs Report: U.S. Rushed Post-Saddam Planning," The Washington Times, September 3, 2003,
p. 1.

20. Armas, "Troops Called Not an Answer."

21. Ibid.

22. Bruce Stanley, "Security the Top Priority for Iraqi Oil Industry As Looting Continues," Oil and Gas Reporter, May 27, 2003, at www.oilandgasreporter.com/stories/052703/ind_20030527006.shtml.

23. Douglas Jehl and Dexter Filkins, "Rumsfeld Eager for More Iraqis to Keep Peace," The New York Times, September 5, 2003.

24. Douglas Jehl, "U.S. Considers Private Iraqi Force to Guard Sites," The New York Times, July 18, 2003, at query.nytimes.com/gst/abstract.html?res=F30C17FC3B580C7B8DDDAE0894DB404482.

25. Amy Fagan and Rowan Scarborough, "Post-Saddam Planning Failures `Unforgivable,' Democrats Say," The Washington Times, September 4, 2003, at washingtontimes.com/national/20030903-115853-1572r.htm.

26. Sig Chrstenson, "Some Republicans Doubt Progress on Iraq," San Antonio Express-News, August 31, 2003, at
news.mysanantonio.com/story.cfm?xla=saen&xlb=180&xlc=1048090.

27. Thomas E. Ricks, "Ex-Envoy Criticizes Bush's Postwar Policy," The Washington Post, September 4, 2003, at
www.washingtonpost.com/wp-dyn/articles/A27846-2003Sep4.html.

28. Mark Thompson and Michael Duffy, "Is the Army Stretched Too Thin?" Time, August 24, 2003, at www.time.com/time/magazine/printout/0,8816,477891,00.html.

29. Rumsfeld and Abizaid, "DoD News Briefing."

30. Jack Kelley, "Troop Strength Debate Ranging," Pittsburgh Post-Gazette, August 23, 2003, at www.post-gazette.com/pg/03235/214252.stm.

31. George W. Bush, "Executive Order Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq Has an Interest," May 22, 2003, at www.whitehouse.gov/news/releases/2003/05/20030522-15.html.

32. Emma Clark, "Iraq `Needs Foreign Oil Companies,'" BBC News, July 24, 2003, at news.bbc.co.uk/2/hi/business/3075521.stm.

33. Pamela Hess, "CPA Speeding Police Training in Iraq," The Washington Times, September 3, 2003, at www.washtimes.com/
upi-breaking/20030902-012831-9370r.htm.

34. The author would like to thank William Schirano, Research Assistant in the Kathryn and Shelby Cullom Davis Institute for International Studies, and Anita Greco and Irene Gorelik, interns at The Heritage Foundation, for their assistance with researching this paper. The author also wishes to thank Heritage Foundation colleagues Peter Brookes, James Phillips, and Jack Spencer, as well as Ed Badolato, Executive Vice President of the Shaw Group, and Dr. Gal Luft, Director of the Institute for Analysis of Global Security, for discussing concepts contained herein and commenting on the paper.



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? 1995 - 2004 The Heritage Foundation
All Rights Reserved.
Bolster Freedom, Not Dependence, in Iraq
by James Phillips and Marc A. Miles, Ph.D.
Executive Memorandum #900

September 19, 2003 | |





President George W. Bush has called on Congress to approve an $87 billion supplemental appropriations request, most of which is earmarked for Iraq. Congress should approve the Administration's request, which is sorely needed to stabilize Iraq, improve security against terrorist attacks, and finance reconstruction. But in the long run, only the Iraqi people can assure the successful transition to a secure and stable Iraq. Thus, Iraqis must be liberated from the restrictive economic system imposed by Saddam Hussein's dictatorship, just as they have been liberated from Saddam's tyrannical political system. As The Heritage Foundation's Index of Economic Freedom shows, countries with free and transparent economies are the ones best able to grow and prosper.

Saddam Stifled Private Enterprise
Saddam's regime inserted a number of restrictions into the Iraqi constitution and legal statutes that stifled private enterprise and assured state domination of the economy. The result was a sluggish economy increasingly dependent on the state-owned oil sector, which served the interests of Saddam's socialist Baath Party. In fact, Article 1 of the 1990 interim constitution, Iraq's most recent constitution, proclaims that the promotion of a socialist system is one of the basic goals of the state. Article 13 prohibits private ownership of natural resources and the "basic means of production." Article 18 prohibits foreign ownership of immovable property (land, buildings, and other permanent structures). Companies Law No. 21 of 1997 requires that all founders, shareholders, and partners of Iraqi companies must be Iraqi nationals or citizens of other Arab countries.

The net effect of these legal restrictions was to suffocate private enterprise, reduce job opportunities for Iraqis, perpetuate state monopolies over many sectors of the economy and discourage private investment. These distortions hurt the interests of the Iraqi people but enabled Saddam Hussein to appropriate Iraq's huge oil wealth to maintain himself in power, reward his supporters, and fund his grandiose ambitions to claim leadership of the Arab world and dominate the Middle East. Iraqis would be far better served by shaking off the dead hand of Saddam's Baathist commissars and undertaking free market economic reforms to jumpstart their limping economy.

Removing barriers to private Iraqi and foreign investment would also lower the burden on American taxpayers for rebuilding Iraq, which is projected to cost $50 billion to $75 billion. While Ambassador L. Paul Bremer, the Administrator of the Coalition Provisional Authority, has taken some steps to move Iraq toward a free market economy, including suspending tariffs and import fees, many laws that severely restrict free enterprise remain in effect.

To energize Iraq's moribund economy and help stabilize Iraq by giving Iraqis hope for a more prosperous future, the United States should:

Immediately abrogate the Iraqi constitution and legal edicts that obstruct economic reforms. The 1990 interim constitution, which was never approved by the Iraqi people through a free vote, was designed to prop up Saddam's Baathist regime by giving it total control over the country's economy. Ambassador Bremer should void the constitution and other harmful laws and strongly encourage the Iraqi committee charged with writing a new constitution to eliminate restrictions on private ownership of property. Setting aside these economic diktats would free Iraqis to own property, engage in private enterprise, and attract foreign investment that will help accelerate economic recovery.
Encourage the development of a modern legal system that recognizes property rights and is conducive to privatization. Protection and enforcement of property rights are important for fostering economic growth and foreign investment. Such guarantees are necessary to encourage Iraqis to take the risks necessary to invest in their own future. Iraqi laws should not discriminate against foreign or non-Arab nationals.
Prepare Iraqis for comprehensive structural reforms and privatization. The United States should encourage the Iraqi Governing Council to hire Iraqi expatriates and Western-educated technocrats who understand the benefits of economic freedom. The emerging Iraqi government should then launch a public information campaign to educate and prepare the people for structural reforms and privatization, particularly in the energy sector, which dominates the Iraqi economy. Suspending tariffs, freeing capital markets, and creating and protecting property rights is not enough. As the Index indicates, the Iraqi government should also sell state-owned enterprises, permit both foreign and local banks to do business with minimal regulation, reduce bureaucratic red tape, minimize labor laws, and implement low, flat taxes. Together, these reforms will create the basis for a strong market economy in Iraq.
Prepare a comprehensive economic reform package. Once the public is educated about reforms, the government must follow through. The U.S. government should continue to work closely with the Iraqi Governing Council to implement systematic economic reforms, including price deregulation; privatization of state assets in the utility, transportation, energy, and other sectors; liberalization of trade policy and seeking entry into the World Trade Organization; and a commitment to keep taxes, tariffs, and inflation low.
Conclusion
For more than three decades, Saddam Hussein's regime imposed severe political and economic restrictions on the Iraqi people. While the Iraqis have been liberated from Saddam's political repression, they continue to be hamstrung by Baathist-inspired economic repression. The United States should void these restrictions immediately and encourage the nascent Iraqi government to advance economic freedom to reinvigorate the economy. The sooner Iraqis are free to own property, invest private capital as they see fit, freely borrow from banks, set up businesses with minimal red tape, and trade products freely across the Iraqi border, then the sooner the Iraqi economy will revive, living standards will improve, and Iraqis will take ownership of their political future.

James Phillips is Research Fellow in Middle Eastern Studies in the Kathryn and Shelby Cullom Davis Institute for International Studies and Marc A. Miles, Ph.D., is Director of the Center for International Trade and Economics at The Heritage Foundation.



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? 1995 - 2004 The Heritage Foundation
All Rights Reserved.



The Road to Economic Prosperity for a Post-Saddam Iraq
by Dr. Ariel Cohen and Gerald P. O'Driscoll, Jr., Ph.D.
Backgrounder #1594
http://www.heritage.org/Research/MiddleEast/bg1594.cfm

September 25, 2002 | Executive Summary | |



As the Bush Administration and Iraqi opposition groups plan the future of a post-Saddam Hussein Iraq without its menacing arsenal of weapons of mass destruction (WMD), economic issues loom large. Iraq's economy has been grossly mismanaged for 40 years, and its people desperately need an alternative strategy to supplant the failed policies of its dictator. Sound economics are needed to help them rebuild their lives and their country after two decades of wars and four decades of repression under the current regime.
Saddam Hussein's regime has succeeded in bankrupting the country even though it boasts the world's second largest oil reserves after Saudi Arabia. Gross domestic product (GDP) for 2001, at the market exchange rate, is estimated to be only about one-third the level in 1989.1 Iraq also is hobbled by its $140 billion foreign debt.2 This devastation was wrought by such policies as the nationalization of the country's chief export commodity, oil; extensive central planning of industry and trade; the 1982-1988 war against Iran; and the invasion of Kuwait, which precipitated the 1991 Gulf War. And Saddam still stubbornly refuses to meet the terms for lifting the economic sanctions that the United Nations has imposed on his regime.

Saddam also has succeeded in diverting at least $6.6 billion--primarily in revenues from smuggled oil and kickbacks--to his program to develop nuclear, chemical, and biological weapons and platforms for their delivery. He continues to support terrorist organizations, such as Hamas and the Popular Front for the Liberation of Palestine (PFLP), which the U.S. Department of State includes on its list of state sponsors of terrorism.3 Presumably, a post-war U.S. military presence in Iraq and Iraq's future security forces will ensure that the new Iraqi government does not continue to develop WMD and support terrorism.

The future of Iraq depends not only on the ouster of the repressive regime, but also on the ability of the new Iraqi leaders to reverse the damage through policies that will spur real economic growth. The sooner the threat from Saddam's WMD programs ends and the Iraqi economy recovers, the sooner the United States and the other security forces will be able to depart.

A double strategy of ensuring security and enabling economic growth will need international support. The Bush Administration should help Iraqi opposition leaders to develop an economic reform package for their country. The new post-Saddam federal government should develop a modern legal system that recognizes property rights and is conducive to privatization; create a public information campaign that prepares the people for structural reforms and privatization; hire expatriates and Western-educated Arabic speakers with financial, legal, and business expertise for key economic positions; deregulate prices, including prices in the utility and energy sectors; prepare state assets in the utility, transportation, pipeline, energy, and other sectors for privatization; keep the budget balanced and inflation, taxes, and tariffs low; liberalize and expand trade; and launch an effort to join the World Trade Organization (WTO).

The Tough economic Road Ahead
Iraq's Lifeblood: Oil
As Chart 1 and Chart 2 show, the Iraqi economy is dominated by the oil sector, which provides more than 60 percent of Iraq's GDP and 95 percent of its hard currency earnings.4 The economic sanctions imposed by the U.N. in the past decade to try to force Saddam to give up his weapons of mass destruction not only have not worked, but have helped to depress foreign trade.


According to the U.S. General Accounting Office (GAO), however, oil smuggling and illegal surcharges of 25 cents to 50 cents a barrel on legal oil purchases bolster Saddam's regime. These illegal activities during 1996-2002 have provided unaccounted revenues of at least $6.6 billion,5 which Saddam has been free to spend to develop WMD and support terrorism.6 How much Saddam is actually spending on his deadly arsenal is hard to tell. The lack of information is so pervasive that the international financial institutions (IFIs), foreign government agencies, and private businesses that provide country economic analysis and data do not publish any official economic statistics or estimates for Iraq.7

This means that no recent data on Iraqi government consumption of GDP are available. In 1993, the most recent year for which data are available, government consumption amounted to 13.9 percent of GDP. According to the Economist Intelligence Unit,

Oil revenue has been the mainstay of government income since the 1950s. In 1968 the oil-based nature of the economy was reinforced by the introduction of a centralized socialist system, with the government regulating all aspects of economic life other than peripheral agriculture, personal services and trade.... Meanwhile, the state's centrality to the economy has increased because the vast majority of imports and foreign exchange have been controlled by the government.8
The socialist Ba'ath government has demonstrated gross mismanagement of the oil sector. During the 1960s, exploration stopped and the sector was nationalized, which bred corruption and mismanagement. Oil production has barely increased since 1980. In 2001, oil production stood at approximately 2.8 million barrels a day. Today, Saddam's regime controls oil exploration, extraction, refining, pipelines, ports, and all utilities, but oil export prices are set by the U.N. sanctions regime.

Taxing Imports, But Not Smugglers
The Economist Intelligence Unit notes that direct taxation has never been a preferred means of raising revenue in Iraq.9 As the International Monetary Fund (IMF) reports, "imports are restricted by [U.N.] sanctions. All imports subject to import duty are also subject to a customs surcharge.... Imports of commodities are normally handled by the public sector."10 Although the government of Iraq inspects and regulates all imports, a small private sector is involved in considerable smuggling and black market currency exchange activities.

Tough Investment Environment
Even though Iraq has permitted some foreign investment in its oil industry and private sector, mainly to help it rebuild from the damage of the Gulf War, it discourages most capital inflows. The legal system does not guarantee contracts. Inflation in Iraq remains high. From 1994 to 2001, Iraq's weighted average annual rate of inflation was 80.4 percent; for 2001-2002, the rate has ranged from 60 percent to 70 percent.11

The government controls almost all prices, and rationing is the norm for items like food. The regime continues to distribute imported goods in what is essentially a highly centralized command economy structure, although it does retain the ability to skew the distribution of food and other items as a way to favor cronies.

There is no application of modern property rights protected by legislation and enforced through the courts. The Revolutionary Command Council (RCC) of Iraq holds all executive, legislative, and judicial authority. The RCC's chairman, Saddam Hussein, appoints a council of ministers who are theoretically vested with executive authority, but in fact they are able only to rubber-stamp the decisions of the RCC and its chairman. The judiciary is not independent; consequently, there is no check on Saddam's power to override any court decision.



AFTER Saddam: The outlook for Iraq and World Energy Markets
One thing is clear: Saddam's regime, obsessed with control and coercion, is destroying the wealth of the Iraqi people. After liberation from this regime, it will be important for the Iraqi people to rebuild their economy, especially the oil sector, increase GDP and improve the standard of living, attract foreign investment, and improve government services through privatization.

The Cost of Rebuilding

The cost of rebuilding the country will be high. If Operation Desert Storm reconstruction costs are used as the basis for estimation, the cost of rebuilding Iraq after Saddam's regime falls will be in the $50 billion to $100 billion range.12 Together with repaying the Iraqi foreign debt, the more realistic figure is $200 billion.13 However, as long as structural economic reforms are undertaken, Iraq's vast oil reserves are more than ample to provide the funds needed to rebuild and boost economic growth.

The United States, through its executive directors at such IFIs as the IMF and World Bank, and other international governmental and non-governmental organizations, should begin to advise the future leaders of Iraq's three primary ethnic groups to establish policies that will lead to a thriving modern economy. These policies should be based on "best practices" developed around the world in the 1990s, when the largest government privatizations in history occurred.

During the Iran-Iraq War and the post-Gulf War sanctions period, Iraqi petroleum production declined significantly. Saudi Arabia filled the void, generating a net profit of $100 billion. The funds it generated represent monies that should have benefited the Iraqi people.14 (See Chart 3.)



Following the demise of Saddam Hussein, it is unlikely that the Saudi kingdom would transfer a fraction of its production quota under the Organisation of Petroleum Exporting Countries (OPEC) regime to Iraq to compensate for those lost profits and facilitate its rebuilding. Iraq will need to ensure cash flow for reconstruction regardless of OPEC supply limitations. Combined with the potential privatization of the oil industry, such measures could provide incentive for Iraq to leave the OPEC cartel down the road, which would have long-term, positive implications for global oil supply.

Potential Benefits of Leaving the OPEC Regime

An Iraq outside of OPEC would find available from its oil trade an ample cash flow for the country's rehabilitation. Its reserves currently stand at 112 billion barrels, but according to the U.S. Energy Information Administration, it may have as much as 200 billion barrels in reserve.15 Iraqi officials estimate even more: According to oil minister Amir Muhammad Rashad16 and Iraqi Senior Deputy Oil Minister Taha Hmud, the reserves can be as high as 270 billion to 300 billion barrels, making them equal to Saudi Arabia's.17

Iraq's 1990 output prior to the beginning of the Gulf War stood at 3.5 million barrels a day, while oil discovery rates on a few new projects in the 1990s were among the highest in the world: between 50 percent and 75 percent. Given Iraq's own output projections, it may be capable of pumping as much as 6 million barrels (by 2010) to 7 million barrels (by 2020) a day, more than doubling current production levels.18 (See Chart 4.)



Depending on the dynamics of global economic growth and world oil output, Iraq's increase in oil production capacity could bring lower oil prices in the long term. An unencumbered flow of Iraqi oil would be likely to provide a more constant supply of oil to the global market, which would dampen price fluctuations, ensuring stable oil prices in the world market in a price range lower than the current $25 to $30 a barrel. Eventually, this will be a win-win game: Iraq will emerge with a more viable oil industry while the world will benefit from a more stable and abundant oil supply.

PRIVATIZATION:
Learning from the past
Boosting oil exports and oil industry privatization by itself still may not be sufficient for growth over the long haul. To rehabilitate and modernize its economy, a post-Saddam government will need to move simultaneously on a number of economic policy fronts, utilizing the experience of privatization campaigns and structural reforms in other countries to develop a comprehensive policy package.

Several lessons from other countries' privatization experiences are particularly relevant to Iraq's situation. Specifically:

LESSON #1: Privatization works everywhere

Between 1988 and 1993, 2,700 state-owned businesses in 95 countries were sold to private investors.19 In 1991 alone, $48 billion in state assets were privatized worldwide.20 Privatizations led to higher productivity, faster growth, increased capacity, and cheaper services for consumers.

In one study, the World Bank reviewed 41 firms privatized by public offerings in 15 countries. This review demonstrates that privatization will increase the return on sales, assets, and equity. As privatized firms grow, they often increase their workforces. In another study, the World Bank reviewed 12 privatization efforts in four countries, and its findings also demonstrate why privatization is good for the economy as a whole, no matter where it is implemented.21

LESSON #2: Privatization works best when it is part of a larger structural reform program

Privatization needs to be accompanied by reforms to open markets, removal of price and exchange rate distortions, reductions in barriers to entry, and elimination of monopoly powers. In addition to these policies, governments should enact legislation that protects consumer welfare.22 Such successful structural reform and privatization programs were implemented in the 1990s in Poland, Hungary, the Czech Republic, and the three Baltic States, particularly Estonia.

LESSON #3: Privatization of large enterprises requires preparation

Successful privatizations of large enterprises may necessitate such advance actions as breaking them into smaller competitive units, recruiting experienced private-sector managers, adopting Generally Accepted Accounting Principles (GAAPs), settling past liabilities, and shedding excess labor.23

LESSON #4: Transparency and the rule of law are critical

Opaque privatization and allegations of corruption and cronyism provide political ammunition to the opponents of market-based policies. To eliminate those problems and be successful in its privatization efforts, the government must adopt competitive bidding procedures, objective criteria for selecting bids, and protocols for hiring independent privatization management firms, and establish a privatization authority with minimal bureaucracy to monitor the overall program.24

LESSON #5: A minimal safety net is necessary to support laid-off workers and prevent social unrest

Buyouts of the state-owned enterprise's management and labor force, as well as distribution of some of the privatized firm's shares to its management and labor force, can go a long way toward alleviating social tensions that might undermine public support for privatization.

LESSON #6: Privatization is taking place in the Middle East

Privatization is no longer an affair of affluent or middle-income countries. From Margaret Thatcher's Great Britain, privatizations of state-owned assets and structural reform policies spread to many countries in Africa, Asia, and Latin America, including the Philippines, Malaysia, Jamaica, and Sri Lanka. An internal study of World Bank managers in the Middle East and North African department found that many were enthusiastic in supporting privatization efforts in their regions.25 A number of Middle Eastern states, including Iraq's neighbors Turkey26 and Kuwait,27 are pursuing privatization of their telecommunications, transportation, utilities, and oil sectors and services, while others, such as Iran and Saudi Arabia, have declared their intentions to privatize assets and are in the policy discussion stage.28

Lessons from Oil and Gas Privatizations
Oil privatization remains a politically painful issue in many countries. Economic nationalists claim oil is a "national patrimony,"29 whereas socialists and radical Islamists call private and foreign ownership of natural resources "imperialist" and other such pejoratives. Such rhetoric has one goal: to keep a precious and profitable resource in the hands of the ruling elite, be it a communist party politburo, a dictator, or a group of mullahs.

In fact, oil is a commodity and should be managed according to the laws of economics and best business practices. Even a country as fiercely nationalist as Russia recognizes this and is undertaking the largest oil sector privatization in history. The lessons from past experience in oil privatizations are also positive. Specifically:

ENERGY SECTOR LESSON #1: First "entitize," then privatize

The Conservative government of Margaret Thatcher successfully privatized some British oil assets in the 1980s. In the early 1990s, Russia carved up its state-run oil ministry into regional monopolies. It created joint stock companies, later selling stock to the Russians, first, and then to foreigners. The Ministry of Privatization distributed some stocks to managers and workers in order to smooth the path to privatization. Since privatization, many of these stocks, such as in LUKoil, Tyumen Oil Co. (TNK), and Yukos, have risen in price considerably.

The Russian government did not go all the way, however. For example, it did not privatize Transneft, a company that controls its pipeline infrastructure, or fully privatize some oil companies, such as Slavneft and Zarubezhneft and GAZPROM, the giant natural gas monopoly that boasts the world's largest natural gas reserves and controls a 90,000 km pipeline network.30 The partial privatization effort has led to friction between state-controlled entities and the privatized-publicly held companies over pipeline access.

ENERGY SECTOR LESSON #2: Oil privatization generates high economic efficiency and market capitalization

The results of Russian oil privatization are fascinating: While the privatized Russian oil companies significantly expanded their production and exports and significantly increased market capitalization, GAZPROM did not. The government-controlled pipeline operator also has had difficulty providing adequate pipeline capacity to the quickly developing oil sector.

Meanwhile, privatized Russian companies not only have attracted Western portfolio investment, but also have been more successful than GAZPROM in attracting capital for foreign direct investment. Several leading Russian publicly traded oil companies also transformed their antiquated, Soviet-era accounting practices to the GAAP standard, hired Western managers, and became centers for dissemination of Western management and accounting skills across Russia's industrial sectors. Moreover, Russia's largest oil companies, such as LUKoil and Yukos, are fast becoming major global oil players. LUKoil recently purchased 1,300 Getty gas stations in the United States, and LUKoil and Yukos are selling American Depository Receipts (ADRs) on the New York Stock Exchange.

ENERGY SECTOR LESSON #3: Keep it clean, and keep it profitable

The major problem with the Russian oil privatization effort has been its relative opacity, especially in the early 1990s. Scandals included the oil-for-shares debacle in which Boris Yeltsin's government took loans from banks in exchange for shares of the oil companies. The government never repaid the loans, and the companies became the property of politically connected banks.31 The insider dealing provoked a political row that discredited privatization in the public's eyes.

Other problems in Russia have been privatization through vouchers and the denial of access to foreigners in early privatization stages in order to assuage nationalists in the parliament. These policies resulted in much lower revenues (by as much as a factor of 10) than the government could have received for the privatized assets.



AN ECONOMIC REFORM PLAN FOR POST-SADDAM IRAQ
The Bush Administration should provide leadership and guidance for the future Iraqi government to undertake fundamental structural economic reform. This process should include a massive, orderly, and transparent privatization of state-owned enterprises, especially the restructuring and privatization of the oil sector. These steps would greatly enhance needed access to global capital markets.

U.S. political commitment will be needed to motivate international organizations to provide appropriate expertise and technical assistance. Inter alia, these organizations could include IFIs such as the International Monetary Fund and the World Bank, and would likely encompass such diverse non-governmental organizations (NGOs) as the National Endowment for Democracy, the Center for International Private Enterprise, the American Bar Association, and the AFL-CIO.

In particular, the Bush Administration should convince the future federal government of Iraq to come to an agreement on how oil revenues are taxed and proceeds are distributed to the country's three distinct ethnic regions--Shiite Arabs, the Kurds, and the Sunni Arabs. Successfully privatizing the country's oil fields, refining capacity, and pipeline infrastructure will mean higher efficiencies and higher tax revenues in the oil sector.

What a New Iraqi Government Must Do

The Administration, the IFIs, and other economic decisionmakers should prepare and provide support for a future federal Iraqi government to:

Develop a modern legal environment that recognizes property rights and is conducive to privatization. Protection and enforcement of property rights and access to successful alternative dispute resolution mechanisms are vital policies for fostering economic growth and foreign investment. Iraq also will need to build modern and well-functioning regulatory and supervisory frameworks and institutions in the oil and gas, banking, securities, and financial services areas. Such a legal and business environment should be equitable and non-discriminatory, and it should not distinguish between Iraqi-Arab nationals and foreigners.
The U.S. government, its allies, and international organizations should be ready to provide technical assistance in the legal, economic policy, and public administration areas. Working cooperatively with the United States, the European Union, and the IFIs, the post-Saddam government of Iraq will need to boost the court system and the rule of law. It will need to provide legislation to allow the use of broad alternative dispute resolution mechanisms outside of Iraq, as the local laws may change too quickly (and the local court system too slowly) for local judges to be able to follow and apply new legislation. Education for judges about the latest legal developments in the economic area will also be important. The courts will have to boost the enforcement of court rulings independent of the executive branch. The central government will need to pay judges and court employees adequate salaries to keep corruption in check.

Educate and prepare the Iraqi population for structural reform and privatization through a public information campaign.
Only when the public, including key stakeholders, elites, and the population at large, understand the goals of economic reform will they become more receptive to change and less likely to succumb to the anti-Western demagoguery that undoubtedly will emanate from the remnants of the discredited Ba'ath establishment and Islamic fundamentalists. The new Iraqi government will need to use the media and the educational system to explain the benefits of privatization and the changes to come in order to ensure broad public support.

Hire Iraqi expatriates, as well as other Western-educated Arabic speakers with financial, legal and business backgrounds, for key positions in government.
Examples of this approach in Eastern Europe demonstrate that Western-educated experts can implement economic reforms better than a former socialist bureaucracy can. Younger, well-educated technocrats have an advantage in their ability to communicate effectively with both locals and Westerners, including international providers of technical assistance. In implementing structural reform, the best results are achieved by teams of local and Western experts working together.

Deregulate prices in Iraq, including prices in the utilities and energy sector.
Quick price deregulation will be key to ensuring an adequate supply of goods for consumers and ending rationing. It will contribute to increased exports of oil and gas, which in turn will provide additional earnings and tax revenues for the government to share among the regional and local governments.32

Prepare to privatize assets in the industrial, utility, telecommunications, banking, transportation, port and airport, and pipeline and energy sectors.
The post-Saddam Iraqi government should prepare to privatize government assets by creating government-held companies instead of ministries, issuing stock for these companies, and implementing guidelines that allow for the introduction of modern management practices and GAAP standards. The central government should hire consulting firms to execute comprehensive assessments of companies it wishes to privatize in order to itemize inventory, to take stock of assets and liabilities, and possibly to settle some of their debts in preparation for privatization.
In particular, the Oil Ministry and regional oil companies should be restructured to transform them into attractive government-owned oil companies as an intermediary stage before initial public offering (IPO). For example, one company may focus its work in the southern portion of the country, another in the central region (around Baghdad) and the Western desert, and the third around Kirkuk in the North. Three more companies may be created, one to operate the pipelines, the second to operate the refineries, and the third to develop natural gas.

The stages of preparation for privatization could include:

Taking inventory of assets and liabilities;

Exercising necessary efficiency-improvement steps, such as retraining and layoffs (with compensation);

Introducing GAAP and other modern financial and management practices;

Signing international conventions against nationalization of foreign investments, such as the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the Washington Convention), the World Bank's Convention on the Multilateral Investment Guarantee Agency (MIGA), and the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (1958);

Issuing company stock;

Running the companies under new, transparent, and efficient management for at least two years; and

Taking companies on road shows and completing IPOs in major financial centers such as New York and London, and floating stock in international markets.
Given adequate implementation of each of these stages, the time frame for this privatization effort could be four to five years after the new government is installed by the people of Iraq. During this time, the U.S. government and the IFIs would have to ensure that the political will for privatization remains intact. Management and accounting consultants hired by the new Iraqi government would have to ascertain that the program is transparent and on track.

Moreover, after privatization, Iraq must demonstrate that it is not losing tax revenue and that the government's oil revenue is distributed among the regions equitably and efficiently, allocated to the worthy causes, and not wasted, looted, or abused, which could undermine the entire economic reform program.

Keep the budget balanced and inflation, taxes, and tariffs low.
International experience demonstrates that lower and flatter taxes (in the range of 20 percent or less), applied uniformly and in a non-discriminatory fashion, are an important investment magnet, especially for a country like Iraq that is rich in natural resources. Moreover, oil revenues will allow Iraq to keep the budget balanced and import tariffs low. Such a stable macroeconomic policy is likely to attract massive investment from a variety of sources, including the Middle East and Asia, not just the West, and boost income and employment.

Liberalize and expand trade, and launch an effort to join the World Trade Organization.
A study by the Council on Foreign Relations has demonstrated that a majority of Middle Eastern countries suffer from high import tariffs, red tape, and corruption--problems that depress GDP growth.33 Elimination of import taxes and tariffs and implementation of trade liberalization would provide an additional economic development engine for Iraq. The Bush Administration should provide technical assistance for trade liberalization and support Iraq's eventual membership in the WTO.
Conclusion
For the Iraqi people, structural economic reform and comprehensive privatization of government assets is necessary to stimulate recovery and provide stability after years of disastrous economic policies under Saddam Hussein. The winning strategy of structural reform and privatization also would benefit the industrial world, the United States and its allies, countries of the Middle East, and the developing world.

Iraq's return to global markets would allow for a more abundant and stable energy supply, a higher cash flow for the Iraqi people, and numerous business opportunities for the region and the world. Iraq's restructuring and privatization of its oil and gas sector could become a model for oil industry privatizations in other OPEC states as well, weakening the cartel's influence over global energy markets.

Ariel Cohen, Ph.D., is Research Fellow in Russian and Eurasian Studies in the Kathryn and Shelby Cullom Davis Institute for International Studies, and Gerald P. O'Driscoll, Jr., Ph.D., is Director of the Center for International Trade and Economics, at The Heritage Foundation.


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1. U.S. Department of Energy, Energy Information Administration, "Iraq: Country Overview," at http://www.eia.doe.gov/emeu/cabs/iraq.html.

2. Ibid.

3. U.S. Department of State, Office of the Coordinator for Counterterrorism, "Appendix B: Background Information on Terrorist Groups," Patterns of Global Terrorism-2000, April 30, 2001, at http://www.state.gov/s/ct/rls/pgtrpt/2000/2450.htm.

4. Energy Information Administration, "Iraq: Country Overview."

5. U.S. General Accounting Office, U.S. Confronts Significant Challenges in Implementing Sanctions Against Iraq, GAO-02-625, May 2002, at http://www.gao.gov/atext/d02625.txt.

6. Alix Freedman and Steve Stecklow, "Secret Pipeline: How Iraq Reaps Illegal Oil Profits," The Wall Street Journal, May 2, 2002.

7. Gerald P. O'Driscoll, Jr., Edwin J. Feulner, and Mary Anastasia O'Grady, "Iraq," in 2003 Index of Economic Freedom (Washington, D.C.: The Heritage Foundation and Dow Jones & Company, Inc., forthcoming).

8. Ibid.

9. Economist Intelligence Unit, "Country Report, July 2002."

10. O'Driscoll et al., "Iraq," 2003 Index of Economic Freedom.

11. Ibid.

12. Bill Gertz, "Tab to Rebuild Iraq, Kuwait Estimated at $100 Billion," The Washington Times, March 4, 1991. More recent estimates confirm this range.

13. Julian Borger, "Post-Saddam Iraq Will Cost You, U.S. Warned," The Guardian, August 2, 2002, at http://www.guardian.co.uk/bush/story/0,7369,767755,00.html. Lawrence Lindsey, Director of the National Economic Council, is quoted as estimating a cost for the Iraq war of between $100 billion and $200 billion. It is unclear what is included in that figure. See Bob Davis, "Bush Economic Aide Says Cost of Iraq War May Top $100 Billion," The Wall Street Journal, September 16, 2002, p. 1.

14. "Round Table on Declining Oil Prices and Its Political Consequences in the Middle East," Middle East Studies, Vol. 6, No. 1 (Spring 1999), pp. 5-36, at http://www.netiran.com/Htdocs/Clippings/Economy/990322XXFE01.html.

15. Energy Information Administration, "Iraq: Country Overview," p. 14.

16. "Iraq's oil reserves bigger than Saudi Arabia, Minister Says," BBC Monitoring, August 6, 2001, Al-Jumhuriyah Web site in Arabic, August 4, 2001.

17. "Iraq's Oil Industry: An Overview," Platts, at http://www.platts.com/features/Iraq/oiloverview.shtml.

18. "Iraq Building E&D Project List for Post-U.N. Sanctions Period," The Oil and Gas Journal, Vol. 95, No. 15 (April 14, 1997).

19. Energy Information Administration, "Privatization and the Globalization of Energy Markets," Energy Plug, at http://www.eia.gov/emeu/plugs/plpgem.html.

20. Madsen Pirie, "Privatization," Concise Encyclopedia of Economics, at http://www.econlib.org/library/encl/privatizaiton.html.

21. World Bank, "Privatization: Eight Lessons of Experience," Policy Views from the Country Economics Department, July 1992, at http://www.worldbank.org/html/prddr/outdeach/or3.htm. For the latest annual update on global privatizations, see Reason Public Policy Institute, "Privatization 2002: Putting the Pieces Together," at www.rppi.org/apr2002.pdf.

22. World Bank, "Privatization: Eight Lessons of Experience."

23. Ibid.

24. Ibid.

25. Ibid.

26. See information at Republic of Turkey, Office of the Prime Minister, Ministry of Privatization Administration, http://www.oib.gov.tr/.

27. Dr. Shafiq Ghabra, "The View from Kuwait," The Middle East Forum, March 18, 2000. For more on Kuwait, see U.S. Department of Commerce, "Commercial Overview," at http://www.arabchamber.com/arab-coutnries/Kuwait/commercial_overview.htm. See also International Monetary Fund, "IMF Concludes Article IV Consultation with Kuwait," Public Information Notice No. 00/27, April 4, 2000, at http://www.imf.org/external/np/sec/pn/2000/pn0027.htm.

28. See Energy Information Administration, "Saudi Arabia," January 2002, at http://www.eia.doe.gov/emeu/cabs/saudi.html. On Iran, see "Round Table," Middle East Studies, at http://www.netiran.com/Htdocs/Clpppings/Feconomy/990322XXFE01.html.

29. Mary Jordan, "Drilling Stakes at Mexico's Heart," The Washington Post, January 25, 2002.

30. The Russian government retained 38 percent of GAZPROM shares.

31. Energy Information Administration, "Russia," at http://www.eia.doe.gov/emeu/pgem/ch4a.html.

32. John C. Hulsman, Ph.D., and James Phillips, "Forging a Durable Post-War Political Settlement in Iraq," Heritage Foundation Backgrounder No. 1593, September 24, 2002.

33. Bernard Hoekman and Patrick Messerlin, "Harnessing Trade for Development and Growth in the Middle East," Council on Foreign Relations, 2002.



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