Global Economies

The film is written, directed, and produced by the award-winning brothers Marc and Nick Francis. Their inspiration for the film came from meeting Chinese workers during their previous work in Ethiopia. “That image [of Chinese workers in Africa] sparked our curiosity. We wanted to dig a bit deeper and then start to explore what does that mean,” Nick explained. He added that they wanted “to tell a story about China and the world and [China’s] impact on the world.”

The film focuses on Zambia, not Ethiopia, because of China’s long relationship with that country, dating back to Zambia’s declaration of independence from the United Kingdom in 1964.  Today, China invests heavily in Zambia’s copper mines, which provide vital raw materials for its booming manufacturing sector.  However, the film’s primary focus is on the human dimension: how the Chinese interact with Zambian workers on these projects.

It’s not just the big Chinese companies that are sending their people to Zambia and other African countries. Many Chinese citizens are moving to Africa to seek new opportunities to prosper, typically investing in low-cost businesses. For example, some Chinese immigrants buy land for chicken farms and have steadily expanded their operations.

The story of Mr. Liu, one of three main characters in the film, demonstrates the immediate changes in Africa arising from a growing Chinese presence. Mr. Liu is a prosperous entrepreneur who purchased four chicken farms. He comments that his move to Africa from China has transformed him from an “employee to [an] employer,” a drastic and important change in his life. It was clear he felt a sense of purpose and success as the boss of many local employees. Mr. Liu is one of thousands of Chinese entrepreneurs in Zambia who came in search of  better opportunities.  All of which raises questions about the impact that Chinese immigration will have on the culture of the continent. Will the cultures mix and intermarry? If so, which country and society will the children identify themselves with the most? It is too soon to be able to truly gauge the impact of this new wave of immigration, but clearly Africa will undergo significant economic change as a result.

Along with the immigrants, Chinese contract workers living temporarily in Zambia add to the complexity of the Sino-African relationship. Chinese firms have been contracted to provide a wide range of services throughout the continent. The film observed the interaction between the Zambian government and Chinese professionals working on a road, clearly illustrating the difficulties.

The exchanges between the two parties illustrate mounting tensions. The Chinese employ the Zambians for manual labor and closely supervise their work. In one case where there were 62 Chinese supervisors for 855 Zambian workers the atmosphere of distrust between them was almost palpable. In the film, the Zambians complain about a lack of respect on the part of their Chinese colleagues and argue that they are not treated humanely.  Some of the friction may be the result of inevitable misunderstandings.  “Linguistic-cultural differences are vast,” explained Nick Francis.  Since the contract workers are on relatively short assignments, there often isn’t much effort to provide training that might alleviate some of these tensions. Once their projects are completed, the contract workers return to China.

In the film, Chinese officials describe their country’s relationship with Africa as "win-win" with both sides benefiting from the exchange of money and material. This relationship has also led to the use of Chinese currency, the yuan, within Zambia. As a result of China’s heightened presence, the Chinese media now cover far more news about the region than before. However, partnerships are rarely completely equal and Africans are beginning to question China’s increased involvement. Last year the Zambians elected President Michael Sata, who has taken a tougher stance on Chinese investment projects than his predecessor, Rapiah Banda. Sata has promised to demand project permits, labor rights, limitations on the number of expatriates and improved safety standards. He also may crack down on unregistered Chinese laborers. The harshest critics of the partnership charge that Chinese investments are another form of neocolonialism.

But others see real mutual benefits flowing from the growing Chinese presence. Africa is motivated to develop quickly in an attempt to mimic China’s stellar rise. As of April 2012, China had invested $2.1 billion in business projects and infrastructure, creating over 50,000 jobs.  In 2011, trade between China and Zambia totaled $3.4 billion. Nick Francis maintained that China’s current involvements in Africa are “just the tip of the iceberg;” more projects are certain to come. He added that the West should take note of this trend, and should “renegotiate its relationship with Africa” to avoid becoming irrelevant to its development. That would mean dispensing with old paternalistic assumptions about the continent, he concluded.

When China Met Africa provides revealing insights into the expanding role of Chinese investments in Africa. Westerners can learn a lot from it, while Chinese officials and businessmen should ponder its lesson as well. As a rising global power, China needs to understand how it is perceived in regions where its economic activity is on the rise. In Africa and elsewhere, the challenge will be to ensure that the Chinese presence is understood and valued by both sides.

Eirëne, a New York-based start-up focused on for-profit development projects, convened a group of young leaders to speak with Mroz about the state of international politics and the many obstacles to development initiatives.

“Through our Center for Purpose, we host dialogues that allow us to learn, innovate, and collaborate,” said John Kluge, co-creator and managing partner of Eirëne. “They create context for how we build purpose-driven ventures and how we can make them better. No one can solve billion person problems alone, hence the need for cross-sector, cross-generational partnerships and exchanges.”

Mroz’s presentation, titled “Stepping Up to the New Global Realities,” identified the rise of the global middle class as a major security test, citing the strain such growth places on vital resources, especially food, water and energy.

Expert predictions estimate today’s energy infrastructure can sustain a global middle class population of about one billion, but the current number is more than twice that already. Mroz also stressed the interdependence of food security and water security, lamenting the fact that key food and water players rarely interact with each other in beleaguered regions like the Horn of Africa.

In looking at the impact of resource scarcity on the ground, Mroz cited the polling firm Gallup’s means of testing for unrest among a populace. The results of this test, which consists of four questions, is termed a “deadly cocktail” when all responses reflect dissatisfaction. The answers to these questions, which touch on employment, corruption, and food availability, can give an early warning to revolutionary activities; negative responses to these queries spiked immediately prior to last year’s uprisings in Egypt and Tunisia.

Click here to watch Gallup Chairman Jim Clifton discuss the “deadly cocktail” and other issues at EWI’s Affordable World Security Conference.

The means of effectively mobilizing for security, Mroz added, have changed dramatically over the past 30 years. “Partnership models once consisted solely of the business and policy communities,” he explained, “but today’s development challenges demand additional participation from the technology, legal, and investment sectors.” It is also necessary to capitalize on the untapped potential of “under-30 policy and business influencers” as well as “the power of women,” two demographics largely absent from today’s political institutions. 

The off-the-record portion of the consultation touched on political tensions in Southwest Asia, especially Iran and Syria, as well as major threats to international cybersecurity.

If enacted, the bill would impose financial and visa restrictions on Russian officials who have been linked to the criminal prosecution of hermitage capital lawyer Sergey Magnitsky.

Miller held that, "much as the Jackson-Vanik amendment did in 1975, I think this would be yet another source of tension in the bilateral relationship."

Click here to listen to the full interview at Voice of Russia.

Tell us about the World Economic Forum.

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, industry, political and other leaders of the society to shape the global agenda. It was founded by Professor Klaus Schwab 42 years ago.

You were nominated as the first Ethiopian Young Global Leader (YGL) in 2009; tell us a bit about the Young Global Leaders.

The YGL is a unique multi-stakeholder community of young leaders within the WEF community who, when nominated, are under the age of 40, coming from all regions of the world and representing business, government, civil society, arts and culture, academia and media, and social entrepreneurs. We meet several times a year to convene, catalyze and positively impact the global agenda through community initiatives and task forces. We try to work on some of the major challenges we face in the 21st century.

World Economic Forum for Africa will soon be held in Ethiopia. I know that you were one of the people that helped make this happen. How was this initiative started?

South West Energy is the only Ethiopian company which is a member of the World Economic Forum even till now, and we hope that this will change in the near future. So when I got involved in the World Economic Forum community a lot of people were not familiar with Ethiopia or about the potential we have. I tried to spend a lot of time working on this fact both within the WEF and YGL communities. The WEF Africa Forum usually takes place in Cape Town. A few years ago there was a decision to hold the Forum every other year in another African city. When the time came to select a choice for the 2012 Summit, working closely with the Africa team we helped the WEF in selecting Addis Ababa as the venue for 2012.

Instead of focusing on human rights, he added, Americans are preoccupied with China’s growing economic clout and what this means for the U.S. economy.

Firestein, EWI’s vice president for strategic trust-building and Track 2 diplomacy, noted that 2012 represents a rare convergence of leadership transitions (or potential transitions) in the United States and China, as well as Russia and other key countries. “This makes it a very unique and significant year in the politics of U.S.-China relations,” he said.

Firestein highlighted the shifts in the perception of China in U.S. political discourse over the past two decades. China is no longer seen through a human rights prism, he explained, as was the case in the early 1990s. Instead, it is viewed through a prism of economics, trade and national competition.

In the foreign policy parts of the Republican presidential debates, he pointed out, China wasn’t even mentioned. And in his 2011 State of the Union address, President Barack Obama referred to China “not in the foreign policy section … but rather in the domestic policy section.”

Lastly, Firestein said that the issue of China is a mirror “not for a candidate’s toughness, but rather for our nation’s adequacy or inadequacy.” In one example, Firestein noted presidential candidate and former Massachusetts Governor Mitt Romney’s recent comment that his funding priorities would be determined by asking what is “so critical that it's worth borrowing money from China to pay for.”

U.S. perceptions of China have “moved from ‘they’re different from us’ to ‘they’re beating us,’” Firestein said, adding that the coming leadership transition and election would challenge the establishment of a stable relationship between the two powers.

Click here to watch the Affordable World Security Panel “China and America: The Pivotal Relationship for Cooperative Security” in its entirety.

On March 20, Firestein was a featured speaker at the monthly meeting of the Colorado Foothills World Affairs Council, a non-profit organization focused on promoting education and an understanding of international affairs. There, he discussed Chinese foreign policy and U.S. interests in China.

Click here to watch Firestein's remarks at the Colorado Foothills World Affairs Council.

The Jackson-Vanick amendment, which restricts trade with Russia as a response to immigration policy, was enacted by the United States in 1974. In light of Russia's impending admission to the World Trade Organization, many consider Jackson-Vanick to be an outdated impediment to U.S. economic growth. Others claim that its trade restrictions are necessary as a means of punishing Russia for human rights violations.

Miller holds that, while the effectiveness of Jackson-Vanick has long been disputed, "the administration is going to have to give something to the human rights folks." 

Click here to read the article in CQ Weekly.

Those reluctant to graduate Russia have valid concerns—after all, the Russian government’s human rights record is under constant attack. But maintaining Jackson-Vanik restrictions on Russia is simply the wrong response to these concerns.  At best, Jackson-Vanik is completely ineffectual in promoting human rights and rule of law in Russia. At worst, it is counter-productive.

The Obama administration’s top trade priority this year is getting Russia graduated from Jackson-Vanik, and timing is crucial. When Russia formally joins the World Trade Organization (WTO) later this year, the United States will be in violation of WTO rules because Jackson-Vanik attaches conditions to the U.S.-Russia trade relationship. This means that American businesses will be at a disadvantage in Russia because the carefully negotiated reduced tariffs will not be extended to U.S. goods and services.

The administration faces an uphill battle in Congress—both Democrats and Republicans have objections to granting Russia permanent normal trade relations (PNTR). Those objections are both economic (intellectual property concerns, market access) and political (commitment to rule of law, respect for human rights). Human rights proponents fear that graduating Russia from Jackson-Vanik would deprive the U.S. of leverage over the Russian government. But Russia has been determined to be in full compliance with Jackson-Vanik every year since 1994, so it currently provides no sanctions on Russia. It could only do so should the Russian government abandon the free-market and start restricting emigration.

Practical considerations aside, the Jackson-Vanik amendment has been mythologized as a piece of legislation that has advanced the cause of human rights and allowed hundreds of thousands of Soviet citizens to leave. But its record is decidedly mixed. Rather than being responsible for freeing countless Jewish and other emigrants from the Soviet Union, the amendment may actually have resulted in thousands of would-be emigrants being denied exit visas.

Emigration numbers varied considerably during the Cold War as Soviet citizens wishing to emigrate became pawns to the U.S.-U.S.S.R. relationship. Immediately after the amendment came into force, emigration from the Soviet Union dropped by 35 percent. Numbers slowly climbed, reaching a pre-collapse peak in 1979 of 51,320. But the next year, emigration declined by 58 percent as the Soviet government sharply decreased the number of exit visas issued.  At the very least, this is a decidedly mixed record.

The expectation that Jackson-Vanik would provide some leverage on Soviet human rights practices was not unreasonable. The Soviet Union was eager to build a stronger trade relationship with the United States and mounted a lobbying effort to try to ensure that the amendment was not passed by Congress.  General Secretary Leonid Brezhnev met with several Senators in the Kremlin and with more Senators in the Blair House on a June 1973 trip to Washington.  The expectation was that the Soviet Union’s economic needs would outweigh its desire to keep dissidents from emigrating. This expectation, however, was not borne out.

Despite Jackson-Vanik’s questionable achievements, it is currently all that the U. S. has in terms of legislation to try to pressure the Russian government to improve its record. But rather than rely on an outdated and ineffective tool, human rights advocates, including those in Congress, should work with the administration to expand the arsenal of effective policy options to address Russia’s backsliding on democratization and human rights. The U.S. government, no matter which party is in control, is going to be concerned about human rights. The Russian government does not like this, but it is clearly an important dimension of U.S. foreign policy.

Both the House and Senate have introduced “replacement” human rights legislation to address ongoing concerns in Russia. The proposed legislation is a response to the death of 37-year-old Russian lawyer Sergei Magnitsky, who was killed in pretrial detention in 2009. A surprising coalition of Republicans and Democrats would like to link Russia’s graduation from Jackson-Vanik to passage of a Magnitsky bill, which would impose a visa ban on 60 Russian officials linked to Magnitsky’s death.

But the Obama administration has declined to support a Jackson-Vanik for Magnitsky quid pro quo. U.S. Ambassador to Russia Michael McFaul recently branded this a “weird linkage” and dismissed the notion that “somehow holding Jackson-Vanik is going to make Russia more democratic or help us with Syria."

Some of the most prominent members of the Russian opposition movement have taken a clear stand on Jackson-Vanik, strongly questioning its linkage with current human rights concerns. “At the end of the day, those who defend the argument that Jackson-Vanik’s provisions should still apply to Russia in order to punish Putin’s anti-democratic regime only darken Russia’s political future, hamper its economic development, and frustrate its democratic aspirations,” their recent joint statement declared. “We, leading figures of the Russian political opposition, strongly stand behind efforts to remove Russian from the provisions of the Jackson-Vanik Amendment. Jackson-Vanik is not helpful in any way -- neither for promotion of human rights and democracy in Russia, nor for the economic interests of its people.”

Nonetheless, the opposition leaders advocate selective sanctioning of Russian officials complicit in human rights abuses and mention the Magnitsky legislation by name. The State Department, however, has already instituted a visa ban on some officials believed to be linked to Magnitsky’s death, and it argues that the new legislation would mandate investigations of assets of Russian officials that would be difficult to carry out. There are also concerns that provisions of the Magnitsky bills are illegal (such as not providing an appeal mechanism for those sanctioned) or of dubious precedent (punishing people who have not been found guilty of a crime). The administration is also concerned that the Russian government would retaliate against the Magnitsky legislation by withholding cooperation on Iran, the Northern Distribution Network to Afghanistan and other strategically important areas.

A Jackson-Vanik for Magnitsky quid pro quo could end up trading one piece of ineffective legislation for another. Still, the administration is going to have to give something to get Congress to agree to graduate Russia from Jackson-Vanik—it is, after all, an election year and Russia is a popular target, especially after its recent actions vis-à-vis Syria. In anticipation of having to put more substance to its human rights efforts,  in October the administration submitted a congressional notification for the creation of a civil society fund to provide long-term support for Russian NGOs—but no further action has been taken.

Critics of Russia view Russia’s unconditional graduation from Jackson-Vanik as a sign of weakness on the part of the United States and a victory for Russia. But even most major U.S. Jewish groups, who strongly supported the amendment’s creation, have also come out in favor of repealing Jackson-Vanik. And now it is the United States, not Russia, who will bear the cost of keeping Jackson-Vanik on the books—to the tune of some $9 to $10 billion annually in unrealized benefits from Russia’s WTO accession. Rather than linking human rights to trade, human rights should be promoted as important in its own right, and the U.S. should develop a whole arsenal of tools that are more substantive than symbolic.

Jacqueline McLaren Miller is a Senior Associate in EWI's Strategic Trust-Building Initiative, where she runs the U.S. and WMD programs.

Veteran diplomat Zhou Wenzhong has taken center stage at the Boao Forum for Asia (BFA), following in the footsteps of his influential predecessor Long Yongtu, known for his success in negotiating China's accession to the World Trade Organization (WTO) in 2001.

A Jiangsu native, born in Chongqing in 1945, Zhou was the former ambassador to the United States, and counts fluent English among his many skills.

As the General Secretary of the BFA, Zhou hopes that the upcoming annual Asian forum, which will kick off next month, can go beyond the region and attract as many emerging economies as possible.

Click here to read the rest of this article at China.org.cn.

Led by Prof. Michael F. Oppenheimer, the team presented its Pakistan 2020 report, which explores three possible future scenarios for the country.

The event connected participants in the United States, Belgium, the United Kingdom, and Pakistan to weigh in on prospects for Pakistan’s future over the course of the next decade.

Oppenheimer’s colleagues included: Shamila Chaudhary, an analyst for Eurasia Group who served as the director for Pakistan and Afghanistan at the National Security Council from 2010-2011; Pakistan 2020 team lead for the CGA Scenarios Initiative Rorry Daniels; and Regina Joseph, who wrote up one of the scenarios for the report. The Carnegie Corporation-funded project was the result of NYU’s Pakistan Scenarios workshop held on April 29, 2011, which brought together 15 expert participants to develop three “plausible, distinct and consequential scenarios that merit the attention of U.S. foreign policy makers.”

Each scenario for Pakistan in 2020, though hypothetical, was designed to produce policy insights through considering potential futures.

The first hypothetical scenario, “radicalization,” envisions a Pakistan consumed by populist fervor as a result of “perceived military threats, spiraling economic losses and political infighting.” This results in the rise of a democratically elected conservative military officer who pursue a radical Islamic agenda for the country.

The second scenario, “fragmentation,” foresees economic instability as crippling the capacity of the state to govern, leading to a federally and regionally unstable Pakistan rife with insecure nuclear materials.

The third and most optimistic scenario, “reform,” sees a growing middle class fostering a centrist, economically oriented political movement. A political party born out of this movement then serves to displace much of the power currently held by political and military elites.

While the third scenario may be the least likely to occur, Oppenheimer said, “it is sufficiently plausible for the U.S. to try to work toward that scenario, in part because the other two … involve significant risks and damage to American interests and American security.”

Chaudhary argued that balkanization in Pakistan was unlikely. She maintained that Pakistan should instead be expected to “muddle through” current challenges. The first and third scenarios, both of which heavily rely upon the democratic process, would seem to support her view that Pakistan’s military, media, political parties and religious organizations are an example of “democracy at its best and at its worst.”

Najam Abbas, a senior fellow at the EastWest Institute who called in from London, commented that the situation requires a “macro-layer of analysis to probe the implications of Pakistan's 64-year-long [history of] a chaotic polity and shaky economy,” and aspects that “lead us to triggers that perpetuated strong individuals but weaker institutions.”

EWI Board Member Ikram Sehgal, speaking from Pakistan where he is chairman of a private security company, said pervasive corruption in Pakistan’s institutions was “the most important issue to the people of Pakistan” and a major cause of current instability.

German Ambassador Guenter Overfeld, EWI’s Vice President for Regional Security, calling in from Brussels, argued that corruption in Pakistan was in fact “a symptom of poor governance, not a cause.”

Pakistan 2020 is the seventh such report on potential futures for key countries conducted by the GCA Scenarios Initiative. Past reports have covered Iran, Iraq, China, Russia, Turkey and Ukraine.

Click here to read the report in full.

Click here to access the CGA Scenarios blog.