FAO Quotables

"But being right, even morally right, isn't everything. It is also important to be competent, to be consistent, and to be knowledgeable. It's important for your soldiers and diplomats to speak the language of the people you want to influence. It's important to understand the ethnic and tribal divisions of the place you hope to assist."
-Anne Applebaum

Tuesday, March 15, 2011

Libya's No Rome, Turning Chocolate Into Oil and Diaspora to the Rescue?



There are three articles you should read today and I will comment briefly on each (the entire articles are NOT below, only excerpts for the most part).  

Fiddling While Libya Burns by Anne-Marie Slaughter
I am surprised and disappointed by this article.  For an author who is held in almost universal god-like reverence by foreign policy gurus, her arguments fall flat.  Furthermore,  the article's catchy title also doesn't work as a metaphor--Is Libya supposed to be Rome and Obama/American Nero?  I hope not, because Obama isn't Libya's emperor...but I digress.


'Opponents of a no-flight zone have put forth five main arguments, none of which, on close examination, hold up.
IT’S NOT IN OUR INTEREST Gen. Wesley K. Clark argues that “Libya doesn’t sell much oil to the United States” and that while Americans “want to support democratic movements in the region,” we are already doing that in Iraq and Afghanistan. Framing this issue in terms of oil is exactly what Arab populations and indeed much of the world expect, which is why they are so cynical about our professions of support for democracy and human rights.'
This is a gross oversimplification of possible Arab rationale for anti-American cynicism.


 Now we have a chance to support a real new beginning in the Muslim world — a new beginning of accountable governments that can provide services and opportunities for their citizens in ways that could dramatically decrease support for terrorist groups and violent extremism. It’s hard to imagine something more in our strategic interest.
If this is the litmus test then we must be fair and apply it world-wide which is something we can't afford to do financially.  I don't hear Dr. Slaughter clanging for us to step intervene in the Cote D'Ivoire.


IT WILL BE COUNTERPRODUCTIVE Many thoughtful commentators, including Al Jazeera’s director general, Wadah Khanfar, argue that what is most important about the Arab spring is that it is coming from Arabs themselves. From this perspective, Western military intervention will play right into Colonel Qaddafi’s hands, allowing him to broadcast pictures of Western bombs falling on Arab civilians. But these arguments, while important, must be weighed against the appeals of Libyan opposition fighters for international help, and now, astonishingly, against support for a no-flight zone by some of the same governments that have kept their populations quiescent by holding up the specter of foreign intervention. Assuming that a no-flight zone can be imposed by an international coalition that includes Arab states, we have an opportunity to establish a new narrative of Western support for Arab democrats.
As I have stated repeatedly on this blog, any bombs that fall should come from Arab aircraft!  But before that happens we need key questions answered.  To these questions I would add: Who are theses opposition fighters? Will they be better than the current system?  How will we know when to leave?

IT WON’T WORK The United States ambassador to NATO, Ivo H. Daalder, argues that stopping Colonel Qaddafi’s air force will not be decisive; he will continue to inflict damage with tanks and helicopters, bombing oil refineries and depots on his way to retaking key towns. But the potential effect of a no-flight zone must also be assessed in terms of Colonel Qaddafi’s own calculations about his future. Richard Downie of the Center for Strategic and International Studies argues that although Colonel Qaddafi cultivates a mad-dictator image, he has been a canny survivor and political manipulator for 40 years. He is aware of debates with regard to a no-flight zone and is timing his military campaign accordingly; he is also capable of using his air force just enough to gain strategic advantage, but not enough to trigger a no-flight zone. If the international community lines up against him and is willing to crater his runways and take out his antiaircraft weapons, he might well renew his offer of a negotiated departure.
I am not holding my breath on this one Dr. Slaughter.  This 'canny survivor' and 'political manipulator' is going give up in the face of a NFZ and international opposition?  If you'll buy that, I've got some oceanfront property...

IF IT DOES WORK, WE DON’T KNOW WHAT WE WILL GET Revolutions are almost always followed by internal divisions among the revolutionaries. We should not expect a rosy, Jeffersonian Libya. But the choice is between uncertainty and the certainty that if Colonel Qaddafi wins, regimes across the region will conclude that force is the way to answer protests. And when Colonel Qaddafi massacres the opposition, young protesters across the Middle East will conclude that when we were asked to support their cause with more than words, we blinked. Americans in turn will read the words of Mr. Obama’s June 2009 speech in Cairo, with its lofty promises to stand for universal human rights, and cringe.
Q is a murderous dictator but he's not fighting 'protesters' right now (not discounting the ones he's murdered/tortured/imprisoned) he fighting a civil war against armed rebel forces (may God bless them).  This is an important distinction.  Furthermore, if Q wins the other regimes aren't going to look to him as THE model; that's a stretch.

LET’S ARM THE REBELS INSTEAD Some commentators who agree with the analysis above say we could better accomplish our goals by providing intelligence and arms to the opposition. That would, of course, be much easier for us. It undoubtedly appeals to Mr. Obama as a neat compromise between the desire to help the protesters and the desire not to overrule his defense secretary’s reluctance to participate in a no-flight zone. However, we would be providing arms not to a disciplined military, but to ragged groups of brave volunteers who barely know how to use the weapons they have. They need action that will change the situation on the ground for Colonel Qaddafi, as well as his calculations. Moreover, by the time arms and intelligence could take effect, it is quite likely that Colonel Qaddafi will have retaken or at least besieged Benghazi, the opposition stronghold.
'Ragged groups of brave volunteers who barely know how to use the weapons they have'...really?  
This purple prose is a nice media bite but that's about it.  Many of these rebels are former military.  They may not have a cohesive campaign strategy but they know to shoot their weapons.    Having said that, I don't think we should arm them either...precisely because we don't know enough about WHO the people we are giving the weapons to.  

The United States should immediately ask the Security Council to authorize a no-flight zone and make clear to Russia and China that if they block the resolution, the blood of the Libyan opposition will be on their hands.
You think Russia or China would notice blood on their hands?

We should push them at least to abstain, and bring the issue to a vote as soon as possible. If we get a resolution, we should work with the Arab League to assemble an international coalition to impose the no-flight zone. If the Security Council fails to act, then we should recognize the opposition Libyan National Council as the legitimate government, as France has done, and work with the Arab League to give the council any assistance it requests.
Any use of force must be carefully and fully debated, but that debate has now been had. It’s been raging for a week, during which almost every Arab country has come on board calling for a no-flight zone and Colonel Qaddafi continues to gain ground. It is time to act.
Great then let the Arab nations act.  We've trained enough of their pilots and military.



More Flee as Violence Worsens in Ivory Coast
With the Nigerian elections fast approaching, the regional stability in the Gulf of Guinea is not something we can ignore.  We may not care about cocoa but if all hell breaks loose in Nigeria we are going to start caring...alot.
ABIDJAN, Ivory Coast (Reuters) — Gun battles between forces backing the nation’s two presidential rivals forced more people out of their homes here on Sunday, and others said they were prepared to leave because of the worsening violence.
Residents of the Abobo district in Abidjan, the country’s financial capital, said clashes between forces loyal to the incumbent president, Laurent Gbagbo, and those who support his rival, Alassane Ouattara, died down on Sunday after raging most of the day before.
“People are starting to leave because they fear more combat,” said one of the residents, Issa Dembele. “Personally, I’m preparing to evacuate my own family.”
The United Nations says that about 200,000 people — most of Abobo’s population — have left in the past two weeks.
Mr. Ouattara is widely recognized as having won the presidential election in November, but Mr. Gbagbo has refused to step down.
Forces loyal to Mr. Gbagbo began an assault on Saturday to drive Mr. Ouattara’s fighters out of Abobo, although residents said Mr. Ouattara’s supporters still controlled several areas.
The latest African Union effort to mediate the dispute failed last week, adding to fears of a return to civil war in Ivory Coast.
Allies of Mr. Gbagbo, who contended that the election was rigged, have refused to accept an African Union proposal for a Ouattara-led unity government.
International sanctions like a ban on European ships’ using Ivorian ports, together with the near-collapse of the banking system, mean supplies of Ivory Coast’s cocoa to world markets have virtually dried up. Ivory Coast is the world’s top cocoa grower.
About 400 people have been killed since the election, according to the United Nations, and more than 450,000 Ivorians have fled their homes for fear of attacks. About 90,000 of them have sought refuge in neighboring Liberia.

Homeward Bond By NGOZI OKONJO-IWEALA and DILIP RATHA


HERE’S a statistic you may not be aware of: about 50 percent of the world’s uncultivated, arable land is in Africa. This abundance of potential farmland offers Africa the opportunity to feed itself and to help feed the rest of the globe. But consider another statistic: because of poor roads and a lack of storage, African farmers can lose up to 50 percent of their crop just trying to get it to market.
This is a powerful statistic!  I am going to contact the authors to get their source material.
In other words, Africa needs not only greater investment in agriculture, but also in roads, ports and other facilities that are vital to moving the land’s products to consumers.
This is true.  For more on this connection read Mike Baker's excellent 'Toward an African Maritime Economy.'
Fortunately, part of the solution could lie with the almost 23 million African migrants around the globe, who together have an annual savings of more than $30 billion. Tapping into this money with so-called diaspora bonds could help provide Africa with the equipment and services it needs for long-term growth and poverty reduction.
These diaspora bonds would be in essence structured like any bonds on the market, but would be sold by governments, private companies and public-private partnerships to Africans living abroad. The bonds would be sold in small denominations, from $100 to $10,000, to individual investors or, in larger denominations, to institutional and foreign investors.
Preliminary estimates suggest that sub-Saharan African countries (excluding South Africa, which doesn’t have significant emigration) could raise $5 billion to $10 billion a year through diaspora bonds. Countries like Ghana, Kenya and Zambia, which have fairly large numbers of migrants living abroad in high-income countries, would particularly profit from issuing diaspora bonds.
There are precedents for such moves. Greece announced this week that it was preparing to issue $3 billion worth of diaspora bonds in the United States. India and Israel have issued diaspora bonds in the past, raising over $35 billion, often in times of financial crises.
Why would diaspora bonds work so well? For one thing, the idea taps into emigrants’ continuing patriotism and desire to give back to their home countries. And because diaspora populations often build strong webs of churches, community groups and newspapers, bond issuers would be able to tap into a ready-made marketing network.
Another advantage of diaspora bonds for African countries is that migrants make more stable investors in their home countries than people without local knowledge. They’re less likely to pull out at the first sign of trouble. And they wouldn’t demand the same high rate of interest as a foreign investor, who wants to compensate for the risk of investing in what would seem to them like a relatively unknown developing country.
Diaspora bonds could also be issued in the local currency, as migrants are likely to be less averse to the risk of currency devaluation. That’s because members of the diaspora have more use for local currency than foreign investors; migrants can always use it when they go back home or for family-related expenses.
Take, for example, an African living in the United States who now earns an annual interest rate of less than 1 percent on small deposits; a diaspora bond with an interest rate of about 5 percent certainly might seem attractive. To make the bond even more appealing, the countries the migrants reside in could provide tax breaks on interest income. Donor or multilateral aid agencies could also offer credit enhancements in the form of partial guarantees, to mitigate default risks.
Even more money could flow into Africa if countries tapped into the billions of dollars that members of the diaspora send home each year by using those remittances as collateral to raise financing from international markets. This approach has allowed banks in several developing countries — including Brazil, Egypt, El Salvador, Guatemala, Kazakhstan, Mexico and Turkey — to raise more than $15 billion since 2000.
Here’s how this works: When a migrant transfers foreign currency to a relative’s creditworthy bank in his home country, the bank pays out the remittance from its holding of local currency. That transaction creates a foreign currency asset equivalent to the size of the remittance, which can be used as collateral for borrowing cheaply and over the long term in overseas capital markets.
Such borrowing has no effect on the flow of money from migrants to their beneficiaries. Yet development banks, national banks in developing countries and donor agencies can partner to harness enough remittances and create enough collateral to raise significant sums of money to invest in agriculture, roads, housing and other vital projects.
The people of Africa are scattered around the globe, but many still feel a powerful sense of belonging to the continent. Through diaspora bonds and remittances, they could create a better future for their homeland.


Ngozi Okonjo-Iweala is the managing director of the World Bank. Dilip Ratha is the manager of its Migration and Remittances Unit.

My much more intelligent friends, is this a viable plan?  It makes sense to me.  What are the arguments against it?

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