Wednesday, July 30, 2008

Why the Doha Round of talks died

Many world capitals are expressing their disappointment at the collapse of WTO talks that would have created a landmark global trade agreement.

Fingers are pointing at the regular three who seem to butt heads at global economic talks ... the US and the Asian powerhouses, India and China.

Australia's PM, Kevin Rudd, stayed up until the early hours of the morning playing desperate diplomacy by phone with world leaders, attempting to salvage a last minute deal. He failed. Indeed, so has the world. The EU also expressed bemusement at the collapse of the talks, but stopped short of conceding a complete end to hopes of a global free trade agreement.

The failure of the talks will increase pressure on national economies to deal with the current global crises such as oil, soaring food prices, and the credit crunch. Nonetheless, it will encourage nations to pursue their own bilateral free trade agreements and form trade blocs. Whether that increases instability and fails to bridge the poor-rich divide remains to be seen.

Australia and Chile showed no signs of wasting time as they quickly ratified a bilateral free trade agreement in the face of the collapsed WTO talks.

Below is a very insightful article in regards to the 'why' the talks failed, alluding to the inevitable impacts of globalisation.

Why the Doha Round of talks finally died

Carl Mortished
July 30, 2008
The Times

The bricks are crumbling in the house of global trade and the Brics, those fashionable emerging markets of Brazil, Russia, India, China, are crumbling, too, wracked by inflation, slackening growth and the flight of hot money.

In Geneva, Kamal Nath, the Indian Trade Minister, was gritting his teeth, doing his best to justify a wrecking operation that has earned him brickbats from all round. He has brought to an end a seven-year struggle for a global trade agreement that would open borders and reduce subsidies and he knows it.

However, he was not looking at his negotiating partners, the Brazilian, American, European and Argentinian ministers. He had his eyes fixed on Delhi, where the Indian Reserve Bank Governor was raising interest rates and signalling an economic slowdown.

Mr Nath's problem was the wretched farmers, not the East Anglian sugar barons or the American cotton kings, so often the butt of abuse. There is another group of farmers who wallow in subsidies, wreck government budgets and who demand high tariff walls to keep out imports of cheaper food.

These are India's peasantry and their political power is being felt on a global scale. Mr Nath could not afford to ignore them: India's rural population numbers 600 million, the last BJP Government was brought down for ignoring them and this Congress Party Government is unlikely to make that mistake.

The Indian farmers' demand for protection against import surges was the main obstacle to the tariff-cutting deal that failed in Geneva.

Mr Nath insisted on a “special safeguard mechanism” for certain agricultural products, notably pepper and oilseeds, that would allow India to impose swingeing tariff increases in the event of import surges.

It was a bizarre but alarming sideshow to the main thrust of the Doha Round of talks - a complex quid pro quo in which the emerging markets of Latin America and the Far East sought to trade access to EU and US agricultural markets in return for opening their doors to more American and European manufactured goods and services.

The Indian Trade Minister was casting himself in the guise of peasant victim, perched precariously on a bullock cart, accusing rich nations of “looking for commercial interests and enhancing prosperity rather than looking for content which reduces poverty”.

But India was opposed not just by the United States but by a host of developing nations in Latin America, including Brazil, Uruguay and Argentina, which see Asia as their prime export market for meat, grain and oilseeds. Rice-exporting Thailand was also unhappy about the Indian demand.

In its favour, India has been joined by China - another nation with a big hinterland of peasant poverty - which wants protection for its rice and soya bean farmers, and a host of smaller developing nations riding on their coat-tails.

The trade row finally destroyed the fiction beloved by development charities and poverty lobbysits that we live in a world divided between North and South, or rich and poor.

Instead, we live on a globe of powerful and conflicting interest groups - Asian peasants versus Latin American farm labourers, for example. Within the WTO, factions are appearing, combining and dissolving at a rapid rate. Among some of the powerful interest groups that emerged three years ago to take on the consumer giants of Europe and America, cracks are opening.

The Group of 20, an emerging market body dedicated to attacking EU and US farm tariffs and subsidies, has lost cohesion. India has split with the Latin American pro-farm trade group. It now leads a Group of 33 nations, including many Caribbean states, angling for more protection for their rural populations.

Unfortunately, the emerging market powerhouses are looking a bit sickly. Their stock markets are plummeting and their economies are gripped by inflation and stuttering as export trade begins to slow. The clamour for protection from those who were beginning to see the benefits of trade has drowned out those who argued for compromise.

It is small wonder that India and China are championing the cause of peasants, because governments in both countries fear the wrath of rural communities suffering from rising fuel and food prices and the cost of credit.

The solution preferred in Delhi and Beijing is protection, but it is costly and India is already paying dearly for it. The country's budget deficit doesn't look too bad at 3 per cent of GDP, but that excludes fuel and fertiliser subsidies. Add those and the deficit is a shocking 7 per cent of GDP. Yet the Government has no choice but to pay to keep peasants on the farm. The average of India's maximum agricultural tariffs is more than 100 per cent and Mr Nath argued yesterday for measures to let it go higher still.

China, too, is ruled by the economics of the farm, not factories of Guangdong. According to Standard Chartered, the cost of food, which absorbs more than a third of income, is beginning to hit spending. Food is crowding out consumer goods, exposing the risk that China's factories will struggle to find domestic buyers to replace insolvent Americans.

There are no Brics, the world is coupled; exports represent 40 per cent of Chinese GDP and it is clear that politicians in Beijing and Delhi fear a slowdown that will shut down factories, reduce the safety valve of migration to the cities, transforming the rural migrant into a potential constituent of a mob.

It is political fear that ended the trade talks in Switzerland, fear of the countryside rampant.

[Antoun]: Another short, but decent article on the same lines:

Where now for global free trade?

Owen Fairclough,
July 30,2008
France 24

It was the seven-year itch that proved too painful to scratch any longer. The on-off Doha round of talks that ran since 2001 finally ran out of steam in Switzerland.

The end was marked by an air of weary resignation - testament perhaps to the toll that nine days of talks took on those who slugged it out in Geneva.

There was genuine upset among many ministers that a single technical issue - special import safeguards to protect developing countries - torpedoed the talks.

Only the most punch-drunk boxers think about the next fight when they're lying on the canvas after a fifteenth round knockout, and those gathered in Geneva didn't oblige. Instead the assessments were brutally bleak: Brazil's foreign minister Celso Amorm reckons it could be at least three or four years before anyone has the appetite to mention global free trade deal.

Even EU Trade Commissioner Peter Mandelson, one of the ardent fans of free trade, doesn't see any prospect for resolving the core areas of lowering agriculture and industrial import tariffs in the near future.

Of course, it's easy to be alarmist when tempers are running high and fuses have been shortened by so many hours cooped up in the Green Room - the WTO's theatrical term for the candid discussions that unfolded over the past week and half.

Let's not forget that the Doha round collapsed in Cancun, Mexico, in September 2003. But by July the following year, the talks were back on.

The difference now is that those talks were held in a booming economic climate. The Geneva talks were conducted against a backdrop of rocketing food and oil prices, with some of the world's richest countries heading for recession.

No one's much in the mood for worrying about how the rest are faring: governments necessarily need to look after their own.

There's also a more immediate problem than trying to get everyone to open their diaries for a new Doha date. As the Geneva talks were biting the dust, Chile's foreign minister, Alejandro Foxley, was in Australia to wrap up an 850 million dollar free trade deal. It'll provide the two countries with tariff-free trade in raw materials like metals and products like wine.

Both Chile and Australia have been on-message with the WTO, lobbying other countries to open up their markets. But Foxley's suggestion that countries like Australia, Chile, South Korea, Canada, Mexico and Brazil could press ahead with their own trade deals should set alarm bells ringing in Geneva.

"There is something to be said that a group of countries like this should go ahead in trying to generate a result, better certainly that the one that was not achieved in Geneva," Foxley told reporters.

It's the kind of trade deal that flies in the face of the WTO's multilateral rhetoric. And as the global credit crunch exposes the perils of globalisation - for financial markets at least - the very concept of mulilateralism is likel

Tuesday, July 29, 2008

Karadzic trial exposes Lebanon hypocrisy

Serbia is on the verge of extraditing Bosnian war criminal Radovan Karadzic, accused mastermind of the infamous Srebrenica massacre of 8,000 Bosnian Muslim men.

The high-profile extradition follows a number of significant cases in the International Criminal Tribunal for the former Yugoslavia (ICTY), including former Serbian President Slobodan Milosevic and Croatian general Ante Gotovina.

It isn't the first war crimes tribunal that has been setup to investigate cases of ethnic cleansing and other war atrocities. The Hague has hosted a number of cases for the major war crimes committed in the 1990s, including Rwanda. No doubt it will continue to serve a role in bringing justice to ongoing and future conflicts. A tribunal for the current ethnic cleansing in Darfur has already been earmarked.

But international justice isn't just limited to The Hague. The United Nations has actively pursued and developed an internal war crimes tribunal in Cambodia for the gross human suffering inflicted upon its population by the notorious Pol Pot in the 1970s.

I do recall as a child hearing often the famous five warzones/human disaster places of the world ... Bosnia, Rwanda, Afghanistan, Cambodia and Lebanon.

For three of the above, some form of justice is being pursued, and the Afghanistan conflict is still sadly ongoing, which leaves Lebanon as the only country not to receive any justice for its brutal 1975 - 1990 civil war.

The Lebanese civil war claimed 150,000 - 200,000 innocent lives, many of whom are still missing. The conflict pitted sectarian tribes and ideological factions against one another as foreign powers fed their proxies with fuel and ammunition. Heinous crimes were committed ranging from massacres, the pillaging of villages, and entire ethnic cleansing of regions.

Yet, unlike the former Yugoslavia, Rwanda and Cambodia, the masterminds of Lebanon's notorious conflict are still in power in the country today.

To date, there has not been a single case filed in any court in the world against a Lebanese war leader for crimes against humanity. The war criminals are spread across the entire Lebanese political spectrum. Neither the pro-Syrian nor the pro-Israeli/American leaders are exempt of bloody guilt, but amazingly not a single one has ever been summoned before a war crimes tribunal.

Instead, Lebanon's hedonistic attitude (akin to that of the former Yugoslav countries) and hypocritical Western self-interests have meant that Lebanese warlords not only escape the music for their sins, but retain their power.

Here are some leaders that should be sitting alongside Karadzic at The Hague, to name a few:

Samir Geagea, leader for the right-wing Maronite (Catholic) Lebanese Forces faction that was responsible for the infamous massacre of the Palestinian refugee camps, Sabra and Chatila, in 1982, is now an active leader in the US-backed March 14 coalition with a number of members in cabinet. The Sabra and Chatila massacres claimed between 700 - 2,000 lives.

His supporters claim that fellow LF frontman, Elie Hobeika, was largely responsible, but as one of the leaders and main commanders of the LF at the time, there is no doubt Geagea's guilt can't be totally absolved. In addition, the Sabra and Chatila massacres are but a number of war crimes committed by the LF and Samir Geagea during the conflict. Regardless, no court or tribunal has ever investigated war crimes committed by Geagea.

Geagea did, however, serve time for a war-related crime, the assassination of former Prime Minister Rashid Karami, but was released as part of a political bargain in 2005. Human rights groups assert that Geagea didn't receive a fair trial, which is perhaps true, but freedom and subsequent political power should not have been the reward.

Nabih Berri, leader of the pro-Syrian Shia Amal Movement, was one of the main players in the civil war. Amal worked as the main pro-Syrian faction, and was the main Shia militia before Hezbollah gained ascendancy in the late 1980s. Amal fought bloody battles that inflicted greivous harm upon Palestinian refugees and Lebanese civilians, particularly in Beirut. Berri's bloodiest campaign was the Camp Wars, which claimed the lives of thousands of Palestinian refugees.

Berri is currently the Speaker of Parliament, the highest post awarded to a Shia, and Hezbollah's main ally.

Walid Jumblatt, leader of the Druze, Progressive Socialist Party (PSP), is one of the most influential leaders in the US-backed March 14 coalition. He has long held cabinet positions, both under Syrian reign and now with tacit US support. The atrocities he masterminded in the civil war seem a distant memory, as foreign powers (both Arab and Western) continue to reward Jumblatt with key positions of power in Lebanon's fragile political setup.
A brutal militia during the war, the PSP fought Samir Geagea's LF in the famously known "Mountain War". The PSP ethnically cleansed Christian mountain villages, pillaging homes and massacring thousands of Christians in the process.

Assad Hardan, leader of the Syrian Social Nationalist Party (SSNP), was the head of the SSNP's militant wing during the civil war. A staunch ally of the Syrian regime, the SSNP concentrated their militant efforts mainly against Israel's occupation force, but also conducted a series of war crimes against Israel's right-wing Christian allies in Lebanon. Hardan collaborated closely with the Syrian intelligence to do much of their dirty work.

The list could go on. Yasser Arafat was another accessory to the 15-year bloodletting in Lebanon, and the sins of the current Palestinian leaders in Lebanon did not die with Arafat. Palestinian militias wreaked havoc in Christian regions, claiming thousands of lives. Many of the leaders and militiamen who committed such atrocities still reside in the heavily armed Palestinian refugee camps.
Terrorists and war criminals walk freely in Lebanon, instigating mayhem, all at the behest of the foreign powers who have vital strategic interests in this tiny country.

The Lebanese people are also guilty of failing to break their hedonistic tradition and appropriate an internal fair and independent judicial system.

The Lebanese warlords granted themselves amnesty at the end of the civil war, largely overseen by Saudi Arabia. The amnesty has resulted in forgotten graves, corrupt power and continued instability. The door has never been closed on Lebanon's dark past, which is blinding it from pursuing a bright future. Anger and hurt is silently swept under a restive carpet, but the days in which this rage can be contained are numbered. Unless the skeletons of the past are put in their closet, our future will remain bleak.

The United Nations and the Western powers have turned a selective blind eye on Lebanon's right to a war crimes tribunal, effectively denying Lebanon the same human rights awarded to other warzones.

I hail the UN and the EU for successively pressing Serbia, Croatia and Bosnia to hand over the criminals that many in these countries deem as heroes. We, too, consider the likes of Geagea, Jumblatt, Berri and Hardan as heroes, but our hedonism doesn't excuse these warlords of their crimes. The human rights conventions needs to be applied to all countries of the world, not a select few.

I am equally disappointed in the world's major human rights organisations and NGOs for ignoring this obvious anomaly in global justice. Not a single organisation, not a single government, and not a single leader in the world has ever proposed a war crimes tribunal for the Lebanese civil war. That is not simply a mockery of the international criminal justice system and every enshrined human rights convention, but an insult to the tens of thousands of innocents who lost their lives, and the hundreds of thousands more who lost their homes.

We are all entitled to human rights, and that includes Lebanon.

Monday, July 28, 2008

Spotlight on FPM

I apologise for the extended absence from this blog. I took a bit of time off and wondered through the magnificent centre of Australia in a campervan. I have some writings on my trip, which I may share at a later date.

But it appears that so much has passed in the Middle East since I was away. Bashar al-Assad was welcomed in Paris, Israel finally agreed to a prisoner exchange with Hizballah (2 years after the request was made), and Lebanon at last received a national unity government.

Although it may appear that the reconfiguration of ministerial seats will only be accompanied by further political wrangling and shafting, I sincerely hope that isn't the case. There is a key difference with this ministerial make-up. For the first time, Michel Aoun's FPM has received a fair slice of the pie. Commentators have speculated the various reasons why, but that is of little interest to me.

The political wrangling and manouvring between the various parties and their regional patrons is not the subject of this post. Instead, it's what should be the focus of all Lebanese cabinet ministers that has attracted me to write ... the Lebanese people and our ailing economy.

The FPM have been awarded - what I believe to be - three key ministeries where they can make a sharp difference on the daily Lebanese life and make significant improvements to long neglected sectors of Lebanese industry ... electricity, telecommunications and agriculture.

The reasons why I have highlighted the FPM's role in the cabinet are as follows:

1/ The FPM are new additions to the Lebanese government
2/ The FPM is a party that has long demanded key cabinet positions because it believes it can implement significant reforms
3/ The FPM arrived on the Lebanese scene under the banner of reform, offering so-called Western, first-world solutions to Lebanese mediocrity

Well, it now has its chance to fulfil its promise to the Lebanese people. Who it strikes political deals with isn't what will give the FPM its credibility, its biggest challenge is now. They hold a position of power, what are they going to do with it?

Here's what I would like to see happen:

Lebanon in the 21st century still isn't providing electricity for its citizens on a 24 hour basis. Yet, citizens are required to pay 2 electricity bills. The industry is severely underdeveloped, and investment is lacking, which can be attributed to 15 years of Syrian sponsored corruption.

In addition, Lebanon's current power stations are a heavy burden on the environment. The Zouk power plant, for example, chokes the northern Beirut suburbs and is incredibly harmful to the environment, as well as the health of the citizens.

The lack of electricity is also a burden on industry and our economy. We cannot develop industrial sectors if we cannot provide electricity.

What can be done?

First and foremost, the Minister of Electricity needs to privatise the industry to entice investors to build power plants and operate the country's electricity.

Second, the Minister needs to allocate zones in secure regions that co-ordinate with residential towns/suburbs and the environment, so as to avoid any further embarrassment of having a smoking plant (Zouk) in a tourist town.

Third, the Minister needs to acquire the necessary funds that will entice investors in Lebanon so that the country is receiving electricity 24/7 from power plants, alleviating the people's reliance on unsafe, polluting generators.

I'm no expert, and I'm sure all the above involves a lot of work, and work that the FPM can now do. The desired outcome is:

1/ Electricity from power plants 24/7

2/ The reduction of generators

3/ One electricity bill for users

4/ The nationalisation of the electricity grid

5/ A variety of energy outlets as a result of privatisation

6/ An end to the stifling Lebanese corruption that is preventing electricity from improving

Another embarrassment for a country in the 21st century, Lebanon has one of the most expensive telecommunication rates in the world. Again, I attribute this to inadequate bureaucracy and corruption. This is another unnecessary expense that Lebanese are burdened to pay.

What can the Minister do?

1/ Push in telecommunication laws that regulate the industry, removes the current monopoly, ends corruption and restricts companies from overpricing. This will lower prices significantly, entice more competitors into the market, which will improve the infrastructure and technology.

2/ Dramatically invest in telecommunications technology. Lebanon is a tiny country, there is no excuse preventing the entire country from accessing broadband. Dial-up is the thing of the 90s, we're approaching 2010 and we're still far behind.

The desired outcome?

1/ An end to corruption in the industry

2/ An end to the monopoly

3/ Significantly lower prices

4/ Improved infrastructure, providing the entire country with broadband and naked DSL services

5/ More competitors and outlets

Agriculture has always been a traditional industry in Lebanon since the days of the Canaanites. So why isn't it a profitable business today in 2008?

There is great potential to be made from this industry. We have farms and fields already established, but not the business smart and appropriate investment to make it competitive in the global market.

The FPM needs to:

1/ Invest and support farmers, awarding farmers grants to establish their business and acquire state-of-the-art farming technology and equipment

2/ Find suitable markets abroad for our products through the introduction of agencies that liaise between local producers and potential buyers

3/ Appropriately zone farming and agricultural regions

4/ Locate under-developing or potential agricultural regions and develop them eg. Koura is the olive capital of the country, yet there are very few farms that are mass-producing olive-related products from cosmetics to olive oil, why?

What needs to be made public are strategies. I'm aware all the other political parties have had their stint at governance and haven't exactly done the best of jobs. The FPM has promised since its inception that it is the right party to lead the country. Many eyes will be fixed upon the FPM to see whether its promises are genuine or simply empty rhetoric. The Lebanese are too familiar with rhetoric. The FPM's credibility is on the line.