DEVELOPMENTS

President-elect Barack Obama already has considerable reason to worry about America's trade relationship with China.  In November, China ran up a record-breaking $40 billion USD monthly trade surplus, and the country's top economic planning agency reported that this year's annual trade surplus of USD 280 billion is set to surpass last year's record.  These staggering figures, however, mask the fact that China's trade numbers have fallen steeply, raising substantial concern about the Chinese economy's viability.  On December 13th, Central bank governor Zhou Xiaochuan and other top economists told a forum that China may well be slipping into deflation.  China, which relies on exports for as much as 40% of gross domestic product (GDP), must preserve its export regime, either through subsidizing industries or devaluing its currency, if it is to maintain the 8% annual GDP growth its leaders believe is necessary to preserve social stability. But if it either protects its export industries or devalues its currency, the world risks a trade war. Some export companies have already received value-added tax breaks and others may be expected.

BACKGROUND

The mercantilist regime on which China built its prosperity over the last two decades is in serious trouble.  Imports fell from a healthy 15.6% in October to -17.9% in November as China's consumers put the brakes on spending.  Exports growth collapsed as well, to -2.2% year-on-year, the first time since June of 2001 that exports had gone negative.  According to government figures, exports account for as much as 40% of China's GDP, up from 20% in 2001.

This is only a snapshot of what is going on inside the country.  And the key to the full picture–rebuilding the export regime–risks a trade war with the United States and the Eurozone, both of which are increasingly inclined to save their own industries through protectionism.  According to the U.S. Department of Commerce, total October trade figures showed a trade deficit in a goods and services of $57.2 billion.  Of that, $28 billion was with China alone.

That makes China a particular bête noir in the halls of the U.S. Congress. China's first devaluation, of 0.79 % of its currency against the U.S. dollar, got U.S. Treasury Secretary Henry Paulson onto an airplane for Beijing to try to talk them out of further devaluations.

Certainly, China poses a huge trade problem. The country has been amassing the biggest surplus in world history for most of the last two decades, the latest and by far the biggest to join a parade of export-oriented economies that began with the Japanese in the 1960s, extending through to the so-called tiger economies in a progression that included South Korea and Taiwan on to Singapore, Malaysia and Thailand, and substantially enriched the region while luring manufacturing from the U.S.

But China had a vast export advantage built on a huge labor force and average per-capita GDP of only $339 USD in 1990, according to the China Statistical Yearbook. Once the paramount leader Deng Xiaoping opened the country to western investment, Taiwanese and Hong Kong companies flooded into the Pearl River and Yangtze River Deltas to take advantage of the cheap labor, and China quickly became the workshop to the world.  The Taiwanese and Hong Kong factories were quickly followed by Americans and Europeans who wanted to take advantage of lax labor conditions and cheap per-hour costs. Accordingly, manufacturing in particular began to flee the United States, falling as a share of domestic employment from 28% in 1960 to 10% in 2006.

As alarm continued to grow in the U.S. over the trade deficit, the Americans continued to push the Chinese to raise the value of their currency against the U.S. dollar. The Chinese two years ago adopted a so-called "crawling peg," with the renminbi (Chinese currency) creeping up from 8.68 yuan: $1USD to 6.83 in late November.  Despite the vast trade volumes, the renminbi is still not a convertible currency, except for some Hong Kong dollar deposits, which as we will see turned into a river.

The creep stopped as the Chinese became alarmed at the performance of their own economy, which appears to be in worse shape than most of the world's economists were aware of.  Reports in October 2008 disproved with a vengeance much of the brave talk over the last two years that Asia had de-coupled from the West and was able to stand on its own economically.

Against that backdrop, China probably cannot afford to devalue its currency any further despite some predictions that the renminbi could come down by another 5-10% against the U.S.dollar. In addition to retaliatory measures, it also risks capital flight. China doesn't want a currency crisis on top of a steeply descending economy.

If the currency is going to remain stable, it is up to the U.S.to do something about its own economy.  And the worst thing it could do–and one that is increasingly possible–is opt for protectionism. The incoming U.S. Congress is overwhelmingly Democratic, and the Democrats got through the 2008 elections with the help of organized labor, and organized labor is antipathetic to free trade.  Nancy Pelosi, the San Francisco Democrat who rules as House Speaker, is not only pro-labor but has, in the past, been hostile to China.  With the U.S. economy descending towards the harshest landing since the Great Depression of the 1930s, protectionist sentiment is almost certain to rise.

As former President Bill Clinton did in the past, Obama comes into office showing a certain amount of public antagonism to free trade, and not just to China. He voted against a bilateral trade pact with Colombia, and has made strong statements about renegotiating the North American Free Trade Act (NAFTA), although those statements have been characterized privately by aides as political posturing prior to the election. His threat to name China a currency manipulator has also caused unease. It remains to be seen if he means it.

Like Clinton, Obama's top economic and trade advisors include, for instance, Rahm Emmanuel, his chief of staff, a Clinton administration alumnus who played a crucial role in gaining congressional approval of NAFTA.  Head of Obama's White House economic team Lawrence Summers and Treasury secretary Timothy Geithner are linked to Robert Rubin, who as former President Bill Clinton's top economic adviser, pushed the North American Free Trade Agreement, which labor opposed.  The question now is whether Obama will find a way out of his comments about China. He has delivered volte-face after volte-face so far, including naming Hilary Clinton Secretary of State after criticizing her heavily during the presidential race, for instance, and seems to have got away with it.

ANALYSIS

On June 17, 1930, U.S. Rep. Willis C. Hawley and U.S. Sen. Reed Smoot pushed through the Smoot Hawley Tariff Act, one of the most notorious blunders in U.S. legislative history. It raised tariffs on some 20,000-odd imported goods to record levels, kicking off a retaliatory trade war that is widely held to be the catalyst for the Great Depression.  Whatever China's leaders or the U.S. Congress do, one assumes they will not dare another round of retaliatory tariff and other trade measures.  America's labor unions, battered by three decades of diminishing power, played a crucial role in electing Barack Obama. They want what they consider to be their due, and they see China as the source of many of their troubles, from cheap shoes to cheap toys to cheap precision parts that have drastically cut the standard of living of the American worker.

In China, on the other hand, the confidence with which the country's leaders initially greeted the global slowdown has largely disappeared as they have discovered how interconnected they are to world markets, particularly to the United States and the Eurozone. But they face a growing dilemma –stability. China has famously been likened to a man on a bicycle.  If the bicycle stops moving, the man falls over.  GDP growth of 8% is the figure the country's leaders have repeatedly cited as the point at which the bicycle might fall over.  Already, there have been scores of reports of riots in the Pearl River and Yangtze River Deltas as factories have closed and left workers high and dry.  To attempt to alleviate the problems, China's leaders hurriedly pushed through a 4 trillion Rmb stimulus package, equivalent to about 4% of GDP.  It is questionable if it will be enough.

What the United States and China obviously need over the coming months is close consultation.  One of the few bright spots in George W Bush's dismal administration is the attention U.S. Treasury Secretary Paulson has shown towards China. It is essential that Obama continue that relationship, ideally with a powerful ambassadorial appointment and visits to the Middle Kingdom by his top economic advisors, if not the new President himself.  And his bigger problem will be to keep the protectionist hawks in his own administration at bay while the global economic convulsion works its way through the system and the two countries achieve equilibrium again.
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John Berthelsen is editor of Asia Sentinel.  Prior to Asia Sentinel, he was managing editor of The Standard newspaper in Hong Kong.  Mr. Berthelsen was also a correspondent for Newsweek Magazine, the Asian Wall Street Journal and the Sacramento Bee.  He has lived in and reported from five different countries in Asia.

cartoon by Peter Nicholson

DEVELOPMENTS

As the global community deals with a financial crisis of astronomic proportions, the casualties continue to mount.  The latest endangered institution is
free trade.  The level of protectionist rhetoric sounded by politicians, particularly in the U.S., has risen significantly, reflecting the current mood of the country.  In this year's Pew 'Global Attitudes' survey, only 53% of Americans surveyed view trade as beneficial to the country.  This number contrasts starkly with the European general attitude towards trade.  Europeans questioned in the survey hold a far more favorable view of trade.  While these figures may appear surprising on the face of things – both sides of the Atlantic are feeling the pains of the economic downturn, and in some cases are firmly entrenched in recessions – Europe stands to lose a lot more than the U.S. if free trade is scaled back.

This has given European heads of state cause for concern, with British Prime Minister Gordon Brown strongly urging other members of the G20 to resist the urge to embrace protectionism and Peter Mandelson, Britain’s Secretary of State for Business and Enterprise, asking President-elect Obama to reject what are perceived to be protectionist instincts within the U.S. Democratic Party.  German premier Angela Merkel, whose country relies on exports for over a third of its economy, has also expressed concern that the global community may be tempted to employ protectionist measures as a means of shoring up the economy, stating that this will ultimately do more harm than good.

BACKGROUND

Protectionism, a government policy usually undertaken to restrict trade between nations, has long been applied by developed nations as a means of quelling domestic panic in times of financial turbulence.  These policies can take a variety of forms, including tariffs on imports, government subsidy of sensitive industries, and even overtly rigid regulations preventing foreign investment.  In the 1970's, both the U.S. and Europe increasingly applied protectionist measures in response to the contracting global economy.  This resulted in government subsidization of multiple industries and discouragement of foreign competition. 

The unpredictable nature of the current global financial crisis, coupled with a particularly volatile U.S. election that imparted, at best, mixed messages about trade, has given proponents of protectionism an unusual amount of political muscle.  Yet the assumption that a clamp down on trade will directly improve measures of economic prosperity, such as unemployment numbers, is in direct contrast to previous experience.  Examples from past recessions, such as the early 1980s, suggest that protectionist measures such as the quotas placed on the import of Japanese automobiles into the U.S. in 1981 only served to strengthen the Japanese auto industry.  The prices of those vehicles were artificially inflated, significantly increasing the profit margin enjoyed by their manufacturers.  The tariffs did not have the desired effect on the U.S. auto industry, and now, as was the case then, Detroit is in dire straits.

Both the U.S. 2008 Democratic primaries and the Presidential campaign were focused on returning the U.S. to the forefront of economic prosperity.  The labeling of free trade as the culprit for job losses has exacerbated Europe’s distrust of the current U.S. political climate. While in Europe there are fewer calls directly discouraging foreign investment, appeals like those made by French President Nicolas Sarkozy to take ownership of multiple industries represent the most blatant support for protectionist measures yet.

ANALYSIS

Recent developments have only served to add fuel to a fire that has been slowly burning over the last few years.  Both Europe and the U.S. have slowly upped the ante by making protectionist moves while continuing to espouse the importance of free trade.  The last few years have seen an insidious rise of protectionist measures, increasingly applied under the guise of improving national security. This is evidenced by the uproar caused when Dubai Ports World–a subsidiary of a holding company of the government of Dubai–completed a take-over that would have given the company control of several U.S.
ports. The take-over became heavily politicised, with members of Congress citing national security concerns as a reason to block the deal (despite the fact that the UAE is an ally of the U.S.).  Likewise, despite a very close relationship between Europe and the U.S., the EU has been guilty of giving Airbus significant subsidies to ensure that the company wouldn’t lose its dominance to U.S.-based Boeing.  It has become par for the course to pay lip service to globalization while continuing to take actions that undermine its importance in a 21st century global economy.

The global financial crisis has illustrated not only the interconnectedness of the economy, but also the need for a coordinated response between Europe and the U.S.  In order for global markets to undergo a much needed correction, it is essential that both avoid overtly politicizing the rescue of specific sectors or putting nationalism above economic health and prosperity. This connection of world economies through trade will inevitably cause some sectors to suffer more heavily than others. Conversely, some sectors will flourish and new strengths will be realized.  Competition will likely increase, to the benefit of consumers.

It would be a recipe for disaster to repeat the mistakes of America’s 1970s stagflation crisis, which compounded a poor economy and high inflation with wage and price controls that caused the recession to last longer. Time will tell whether President-elect Obama's hard-line stance on the need to re-evaluate current trade agreements, a staple of the campaign trail, will play a prominent role in the shape of his administration.  Either way, the importance of steps taken in the coming months by governments in both the U.S. and Europe is currently more symbolic than tangible. Ultimately, however, the question to be answered remains: will the U.S. stay open for business with Europe, or are we closing the ranks?
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Efe Izilein is a Business Development Associate for UK Trade & Investment in New York. The views expressed are her own.

President Bush with Syrian Ambassador Imad Moustapha

DEVELOPMENTS

During and after his campaign, President-elect Barack Obama promised to engage early in the Israeli-Palestinian peace process.  If he keeps his word, one crucial piece in the puzzle will be Syria, which the Bush administration invited to the Annapolis conference–a Middle East peace conference held in November–much to the delight of certain senior foreign policy experts.  Any U.S. effort to broker a regional peace agreement will require the Obama administration to re-evaluate its trade relationship with Syria.  Though neither country is the other’s top trade partner, reconsideration of sanctions at a time when Syria is undergoing major market reforms may have a positive cascading effect that advances Washington’s regional interests.

Since September 11th, 2001, the Bush Administration has added to the list of sanctions against Syria.  The Syria Accountability Act of 2004 prohibits the export to Syria of most goods that are more than 10% composed of U.S.-component manufacturing parts.  Section 311 of the USA PATRIOT Act, which is used to “protect the U.S. financial system from corrupt financial institutions,” sanctions the Commercial Bank of Syria (CBS).  Finally, a series of presidential executive orders issued from 2003 to 2008 prevent certain Syrian individuals and entities from participating in the U.S. financial system.  The 20 Syrian individuals blocked from doing so include senior Syrian government officials.  The proposed 2007 Syria Accountability and Liberation Act would sanction countries and individuals who help Syria access Weapons of Mass Destruction (WMDs) or invest more than $5 million in the Syrian energy sector.
   
Yet despite these enacted and proposed constraints, the Syrian economy continues to reform and grow. Diminishing oil supply, employment-age population growth, rising foreign direct investment, and expanding trade volume have spurred President Bashar al-Asad to make a number of much needed changes.  The list of reforms include cutting lending interest rates, curbing black market currency trading, liberalizing customs duties, updating Syria’s 16-year foreign investment law to encourage foreign direct investment, consolidating exchange rates, creating the authority for his government to issue debt, and beginning national stock market operations in 2009. These reforms have benefited the U.S., which exported $361 million worth of goods to Syria in 2007, an increase of more than 50% from 2006.  Meanwhile, Syria is pursuing joint business ventures with Iran in the automobile and energy sectors.

Sanctions have complicated U.S. corporations’ efforts to enter the Syrian market. Syrian Prime Minister Muhammad Naji al-Otari has accused General Electric of declining to bid on Syrian government contracts to build two large power plants in the country that were posted for bidding on the international market five times from 2005 to 2007. Al-Otari further accused GE of influencing Japanese-owned Mitsubishi to abstain from the same bidding process. Still, Fords manufactured in Germany find their way to Damascus showrooms, as do American goods transshipped from Dubai or Lebanon.

BACKGROUND

Politically, the implications of a revamped U.S. policy on trade with Syria are unclear. The U.S. has sanctioned Syria since the 1970s. In 1978 the U.S. placed it on the U.S. terrorism sponsor list.  Three years later, the U.S. stopped providing foreign aid to Syria.  Most recently, the U.S. conducted a cross-border raid from Iraq into Syrian territory, yet the U.S. maintains formal diplomatic relations with the 20 million-strong republic led by President Asad and his authoritarian, military-dominated government. At different times Syria has played spoiler and facilitator in the Middle East peace process. Recently, Damascus’s alleged involvement in the 2005 assassination of Lebanese Prime Minister Rafik Hariri, its alleged pursuit of WMD, its permissive support of Hezbollah, and its 26-year alliance with Iran, have placed it in the former camp.

Economically, Syria is a middle-income developing country.  It imports raw materials for use in its dominant oil and agriculture sectors while exporting oil, refined products, cotton, clothing, fruits, and grains.  It joined the Greater Arab Free Trade Area (GAFTA) and signed a free trade agreement with Turkey. Syria began the World Trade Organization (WTO) accession process in 2001, but the United States opposes Syria’s proposed membership in the WTO.  Elsewhere, Syria is working with European Union and neighboring Mediterranean nations to create a Mediterranean free trade area by 2010. As of 2006, Syria’s top trade partners in descending order were China ($691 million worth of goods imported in 2006), Egypt, South Korea, Italy, and Turkey.  In recent years, the U.S. has been a net exporter of goods to Syria, selling more than $313 million in exports to Damascus in 2007.

ANALYSIS

Evaluations of sanctions against Syria have been mixed.  Proponents argue that smart sanctions rightly punish Syrians who support actors opposed to U.S. interests in the region, while broader legislative acts discourage U.S. business involvement in Syria’s energy sector.  Opponents argue that the sanctions are at best ineffective and at worst counter-productive: trade volume with Syria has increased since the latest round of sanctions were enacted and U.S. goods will always find a way into Syrian markets via transshipment.  Lifting sanctions would improve prospects for Syrian-Israeli cooperation, encourage Syrian support of U.S. military efforts in Iraq, lure Syria away from its collaboration with Iran and support of Hezbollah, and boost profits for American companies by allowing them to compete for contracts they could not previously enter into. 

In re-considering trade relations with Syria, the Obama administration will have three choices. First, it can continue the status quo, a likely option given that Syria’s lucrative non-U.S. business partnerships might undermine efforts to alter its political posture.  Second, the administration could remove sanctions that limit American business ventures with the Syrian government, preserve smart sanctions against Syrian individuals and entities, oppose Syria’s World Trade Organization  accession, and establish a timeline for the removal of each constraint, conditioned upon certain changes in Syrian government behavior.  Third, the administration could tighten the vice, enacting pending legislation before Congress that would add to the list of sanctions against the Asad regime.  

Of these three paths, if President-elect Obama intends to achieve a stable Middle East peace before his term ends, he will have to give serious consideration to option two. No other option persuades Syria as effectively to become the productive contributor to Middle East peace it has shown it can be in the past.
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Marc Sorel is the Middle East Region Editor for Foreign Policy Digest.

DEVELOPMENTS

During a time of immense economic uncertainty, the free trade agreement (FTA) between the U.S. and Colombia, one of America’s staunchest Latin American political allies, may prove the most contentious trade vote put to Congress this year.

The worldwide pursuit of regional trade agreements, which knock down trade barriers faster than their complicated multilateral cousins, has been a high priority for the United States Trade Representative (USTR) during the Bush Administration. In light of this agenda, the US-Colombia FTA was ‘fast-tracked’ in 2003 as part of regional Andean negotiations including Peru, Ecuador, and Bolivia. The bilateral agreement is considered to be particularly attractive to the US given Colombia’s roughly $463 billion GDP.

Despite controversy over Colombia’s labor rights violations, drug trafficking, and continued armed conflict, the FTA negotiations successfully concluded in early 2006 and by November, 2006 the USTR and the Colombian Trade Minister had signed the pact. However, by the time the FTA was put to vote in April of 2008, it had stalled amidst House Speaker Nancy Pelosi’s allegations that the agreement would negatively impact American workers already suffering from overseas job migration. House Democrats further argued that level of violence against labor organizers in Colombia was too high to support free trade. Led by Pelosi, the House passed an unprecedented resolution which delayed the bill indefinitely and gave Pelosi control over the voting timetable. As of last month, the US-Colombia FTA faces an uphill battle to passage, which is ultimately unlikely to serve either nation’s interests.

BACKGROUND

The violence pervasive in Colombia where civil-war has raged for four decades, has played a role in a US-Columbia FTA. Colombia has one of the world’s highest rates of violence, and drug-related crime trails only cancer as the highest cause of death. The nation is a cocaine production hotbed, supplying roughly 90% of U.S. consumption, and is burdened by the Revolutionary Armed Forces of Columbia (FARC) – arguably the oldest and most violent of Colombia’s left-wing rebel groups. It is further beset by right-wing paramilitary organizations, which, along with the FARC, are listed as terrorist organizations by the U.S. and the E.U.

Congressional opponents of the FTA cite these high levels of violence, noting that 2,200 union members have been assassinated since 1991 and that arrests resulted in a mere thirty-seven convictions. The AFL-CIO has been a particularly strong voice of opposition, arguing that labor rights concerns should derail the FTA. House Democrat Sander Levin asserts that 39 union workers were killed in 2007 and that Columbia’s labor rights laws are not up to International Labor Organization (ILO) standards.

While violence in Colombia remains the nation’s primary burden, since President Uribe became president in 2002 rates of homicide, kidnapping, infrastructure attacks, and terrorist attacks have fallen drastically There have also been steep declines in trade unionist killings, which made up just 0.226% of murder-related deaths in 2007.  In 2007, the assassination rate declined more than 80%. Furthermore, the government has demobilized over 31,000 rebels and convinced 14,000 more to surrender. 2008 was a banner year which saw kidnappings at a two-decade low, rebel desertions at record highs, and the July rescue of fifteen high profile FARC hostages, including three U.S. contractors.

Despite protectionist concerns from the AFL-CIO and U.S. industry in light of a potential FTA, economists predict mild increases for U.S. exports under the agreement. Under the Andean Trade Preferences Agreement (ATPA) signed in 1991, thousands of Colombian products enter the U.S. duty-free, in stark contrast to the high tariffs and duties (more than one billion USD since 1991) on U.S. products seeking Colombian market entry. Furthermore, although yearly U.S. government studies indicate ATPA product imports have had some negative effects on domestic cut-flower and asparagus sales, consumers saw net welfare gains and the U.S. economic impact was negligible. The International Intellectual Property Alliance (IIPA) affirms that the FTA would help to prevent U.S. losses due to copyright violations and enforcement failures. Thus, despite domestic union concerns, the U.S. economy would seemingly stand only to gain from a Colombian FTA.

Finally, Colombian FTA opponents claim the pact would destroy the Colombian economy. Colombian NGOs allege that their agricultural sector will be crippled by U.S. agricultural subsidies and that one million farmers could lose their jobs. However, the U.S. carries a $2.8 billion trade deficit with the Andean region and one sixth of U.S. imports from Colombia are agricultural products, facing average tariffs of just 0.1% under the ATPA, which would be renewed under the FTA. ATPA renewal is also needed to protect the 5,600 Colombian products currently entering duty-free and which have supported Colombian job growth. It’s also worth noting that the top 40% of American exports to Colombia in 2006 comprised not agricultural goods but manufactured equipment. Additionally, the U.S. is the largest source of billions of new foreign direct investment (FDI) in Colombia, especially in petroleum and coal due to increased demand and improved exploration.
 

ANALYSIS

It may happen that the U.S.-Colombia bill is reintroduced in the ‘lame duck’ congressional session following the U.S. presidential election, to address the issue before the new administration takes office, especially given that President-Elect Barack Obama has previously stated his strong opposition to the FTA.

Obama supports the AFL-CIO’s anti-FTA position, citing labor assassination concerns and the need to defend human rights.  However, taken into context, the 2007 murder rate for Colombian unionists was below that for the general Colombian population and certainly lower than the murder rate in Washington, DC.

It should be noted that not all Democrats oppose the bill. Congressional Democrats looking to pass a $300 billion economic stimulus bill may offer the Colombia FTA as a trade-off. Additionally, a letter to Congress, urging the treaty to pass, was signed by 35 former Democratic members of Congress, and there are indications that Pelosi may, in fact, support it after all. While it remains possible that Obama could veto the bill, should it be passed by Congress, this is unlikely given that the President-Elect supported the similar Peru FTA.

There are also strong regional foreign policy implications for an Obama administration to consider. As a long-time supporter of the U.S., Colombia provides a regional ally that stands in sharp contrast to the fiery anti-American rhetoric of the neighboring Venezuelan government of Hugo Chavez. The Uribe administration has been enormously cooperative, having extradited more than 800 fugitives to America and worked with the ILO to establish a protection program and special unit for the investigation of violence against trade unionists. Moreover, Uribe is also a necessary ally in the ‘War on Drugs,’ one of the reasons why the ATPA was enacted. The ATPA has had a small but measurable effect on drug-related crop eradication, and the Colombian Government has demonstrated its commitment to further measures, having seized 900 tons of cocaine and heroin between 2004 and 2008.
 
From a purely economic standpoint, the FTA is very unlikely to harm or help America, given that Colombia’s GDP is a fraction of that of the U.S. Politically, however, sacrificing the FTA with Colombia in favor of partisan interests or misplaced job migration concerns is both short-sighted and irresponsible, as an appropriate trade policy engages in fostering human rights, expanding economic development, and supporting democratic governments. One study indicates that not approving the FTA would increase unemployment by 1.8% in Colombia and decrease FDI by 4.5%. Given recent global financial turmoil, the advantages of promoting regional economic stability are plain. Moreover, increased prosperity in Colombia, combined with constructive dialogue between the two countries means that the FTA’s passage would not only be a politically astute decision for the Obama Administration and the Democratic Congress to make, but also the decision most likely to best protect the interests of those vulnerable segments of Colombian society about which they are concerned.

Colombia’s Progress against Violence, 2002-2007

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Source: Colombian Ministry of Defense and Ministry of Social Protection.

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by Jaclyn Selby has worked as a regional geopolitical consultant (Intellibridge, CastleAsia) and consults for the Defense Threat Reduction Agency and for a National Geospatial-Intelligence Agency contractor.

DEVELOPMENTS

Headlines from Africa in 2008 recounted brutal riots in Kenya, a war in the Democratic Republic of Congo, and election-driven chaos in Zimbabwe.  But there was also good news.  The International Monitory Fund has estimates economic growth for sub-Saharan Africa in 2008 at 6%, compared to global growth rates of 3 or 4%—a good sign given global food and fuel price shocks in the last year.  Relative peace in former conflict zones like Cote D’Ivoire, Mozambique, Rwanda is noteworthy.  In fact, President Bush announced the reopening of the Peace Corps in Rwanda this February, 14 years after the genocide forced the offices to close.

BACKGROUND

The 54 countries in Africa have different cultures, resources and political characteristics.  And while 2008 has brought episodes of violence and instability in some countries, such problems should not overshadow progress made in others.  This year not only marked a number of peaceful presidential and parliamentary elections, but improvements in governance, public health and environmental protection. 

As noted in the Washington Diplomat, Botswana and Mauritius have led the continent in successful reforms.  Both are strong electoral democracies that have combated corruption and have the highest per capita income.  Botswana has received the highest credit rating from Moody’s and Standard & Poor (two of the leading international credit agencies).  Mauritius is the second most improved economy according to the 2008 Heritage Foundation Index.  Botswana and Mauritius have shown that multiparty electoral democracies are alive and well in Sub-Saharan Africa.

The International Criminal Court (ICC) made news this year, showing its determination to hold accountable those who commit crimes against humanity.  The ICC arrested Jean-Pierre Bemba, a rebel leader from the Central African Republic (CAR) for crimes against humanity and war crimes.  Bemba allegedly gave orders for murder, rape, sexual mutilation, torture and even cannibalism while leading the rebel army of the Movement for the Liberation of Congo.  The ICC prosecutor also hinted his next target could be Sudan’s president Omar al-Bashir, by asking ICC judges to indict al-Bashir for war crimes committed in Darfur.

On the public health front, there was welcome news in the fight against malaria, a disease which kills nearly 3 million people a year.  The World Health Organization reported in 2008, that its new 3-pronged attack plan has demonstrated remarkable results.   Trials in Rwanda and Ethiopia are the first to show a greater than 50% reduction in malaria deaths.  The plan includes widespread distribution of long lasting insecticidal mosquito bed nets, indoor artemsinin-based insecticide sprays, and preventive pregnancy treatment. 

Those fighting HIV/AIDS in Africa debated controversial new studies associating male circumcision with lower incidence of HIV/AIDS.  Researchers presented results from three African trials at the AIDS 2008 Conference in Mexico City showing a 50-60% drop in HIV/AIDS infection in men, ages 12 – 30.  As a result of the findings the United Nations Joint Programme on HIV/AIDS now recommends the provision of safe circumcision services in targeted countries.  But the technique has its critics.  Many in the public health community question the reliability of these trials.  The next few years will likely yield more studies before the debate is settled.

ANALYSIS

Looking to 2009, countries such as China, India, Malaysia and the United States are investing in Africa, providing hope for new alliances and development opportunities.  The new Obama administration may change the United States relationship with many African countries.  Barack Obama will preside over a fully operational AFRICOM, the new regional Department of Defense headquarters for the African continent.  AFRICOM was created to serve U.S. national interest by improving Africa’s regional security and long-term stability. It will coordinate U.S. military efforts with African nations, diplomatic missions and other international organizations.  AFRICOM programs have already provided assistance in school and clinic construction, military training programs, and leadership programs.

Obama’s appointment of Dr. Susan Rice as U.S. Ambassador to the United Nations is also noteworthy.  The former Assistant Secretary of State for African Affairs was a strong advocate for the U.S. to support the peacekeeping effort in Sudan.  Her commitment to establishing diplomatic channels with many of the Sub-Saharan countries signals more good news to come with a little help from the U.S. 

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Olivier Kamanda is Editor-in-Chief of Foreign Policy Digest.