Global Economies

The Three Biggest Misconceptions about Pakistan

On December 13th, Ikram Sehgal a member of EWI’s board of directors and the chairman of Wackenhut Pakistan (Private) Ltd., one of Pakistan’s leading security companies, gave a talk at the institute on the “Three Biggest Misconceptions about Pakistan.”

First, Sehgal addressed the common fear that Pakistan’s nuclear capabilities are vulnerable to terrorists. “I know for a fact that Pakistan’s nuclear assets are safe,” said Sehgal, pointing out that there’s no evidence that the command structure guarding Pakistan’s nuclear assets includes Taliban sympathizers.  Sehgal added that Arab countries say they feel threatened by Iran, but not by Pakistan: “Countries apart from India do not feel threatened.” 

 

 

Second, Sehgal sought to refute the notion of Pakistan as an exporter of terror.  Sehgal believes that this misconception is exacerbated by western leader’s pandering remarks to India: “Both Cameron and Merkel clearly were wooing the Indian leaders and public for crass commercial purposes,” said Sehgal.

Sehgal pointed out that many people wrongly associate Pakistan with Osama Bin Laden and Al Qaeda, particularly given that no of the high ranking leaders of Al Qaeda are Pakistani. In Waziristan, said Sehgal, for every coalition soldier lost, Pakistan lost 11, including high ranking officers: “There is certainly terror in Pakistan, but it is not state sponsored.” 

Third, Sehgal addressed the misconception of Pakistan as a failed state, underscoring the tendency of Western media to lump the entire nation into an Islamo-fascist entity.   “Nothing could be further from the truth,” said Sehgal. “In this diverse nation of more than 170 million, Pakistan contains the entire spectrum of Islamic practice.” 

Sehgal argued that the Western media enforces false stereotypes of government corruption and cooperation with the Taliban and Al Qaeda.   And, conversely, fuels Pakistani conspiracy theories that the West is out to get them.

In a question-and-answer period following the talk, one participant asked Sehgal to address the fact that Pakistanis overseas have been involved in terrorist attacks.
“Within Pakistan, with educated young people, you won’t find the same virulent anti-western hatred that you find in the United Kingdom,” said Sehgal. “If you go to East London, you will find a lot of venom there.”

Just one more misconception about Pakistan that needed correction.

Click here to read coverage by the World Policy Institute

Click here to read Sehgal's piece in The News.

Anticipating Economic Shock: Who Rules the World?

In his weekly column in New Europe, Greg Austin discusses the challenges of global economic security and how it is connected to and affected by other major global challenges like climate security.

The inadequacy of current global institutions is widely recognized. The challenge is neatly summarized in a unique joint assessment by the United States National Intelligence Council and the European Union’s official Security Studies Institute. They concluded in October 2010: “The growing number of issues on the international agenda, and their complexity, is outpacing the ability of international organizations and national governments to cope.”  The report went to note that “threats such as ethnic conflicts, infectious diseases, and terrorism as well as a new generation of global challenges including climate change, energy security, food and water scarcity, international migration flows, and new technologies are increasingly taking center stage”.

The report concluded that global governance institutions needed “extensive institutional reforms and innovations” if we are to handle the new challenges.

In the last month, President Obama reminded us of the large unfinished agenda for reform of global institutions from the 2005 Millennium Review Summit convened by the United Nations when he backed India’s bid for a permanent seat on the UN Security Council.

But it is preparing for and responding to global economic shock, not the normal agenda of the Security Council, that deserves highest priority for innovation of global institutions. On 5 October 2010, the Food and Agriculture Organization published a report which noted, among other important conclusions, the mismatch between international development assistance and the needs for many countries to rely on agriculture as the foundation of their capacity to respond to economic shock. It concluded: “Agriculture accounts for a third of protracted crisis countries’ gross domestic product and two thirds of their employment. Yet agriculture accounts for only 4 percent of humanitarian ODA received by countries in protracted crisis and 3 percent of development ODA.”

In 2008, the World Food Program developed an Economic Shock and Hunger Index (ESHI) to better understand which countries are likely to become more vulnerable to food insecurity due to economic shock of the sort created by steep increases in oil prices before and during 2008.

The impacts of economic shock are diverse. For example, according to a 2001 World Bank study, the death rate among Russian working age men “increased by over 70 percent between 1990 and 1994 coincident with the introduction of market reforms”. More recently, one study notes that the global financial crisis of 2009 hit labour markets in OECD countries “more rapidly and severely than initially thought”. In particular, it “hit immigrants and their families particularly hard, threatening most of the progress accomplished in recent years in terms of labour market outcomes … for integration of immigrants and social cohesion.”

Most governments and observers no longer see this sort of domestic effect as an entirely domestic matter. There is growing interest in a coordinated global response both to the causes of economic shock and its effects. There is increasing intolerance for the large-scale disruption to human security that these shocks cause.

The global community does have some limited mechanisms responding to humanitarian crises caused by economic shock through provision of emergency relief in cases of starvation, famine or large scale natural disaster. The international community has not developed a systematic and comprehensive approach to dealing with the heavy human costs of economic shock, nor does it have the institutions to do so. Most countries pay little attention to the sum total of effects of economic shock beyond their own borders. There is no coherent approach to “anticipating” the security effects of global economic shock. Even the 2005 Millennium Review Summit did not specifically address this specific slice of economic security.

Who will do this? Who will govern the globe to protect against the recurrent threat of large scale economic shock?

Grading the President: Between Indian Hopes and American Reticence

Writing for India’s The Telegraph, Kanwal Sibal, a former foreign secretary of India and member of EWI’s board of directors, assesses the success of President Obama’s visit to India.

After considering the potential expectations from the American and Indian perspectives, Kanwal concludes that while the expectations were not met on every level, the visit was not unsuccessful.

There were four main focus points during Obama’s visit to India: the economy, India’s candidacy for permanent UNSC membership, terrorism and defense in India and the India-Pakistan relationship. 

Obama expressed concern about U.S. outsourcing, which did not bode favorably for the U.S.: “Obama has overplayed the outsourcing card and unnecessarily targeted India as a source of job losses.”  India-U.S. trade only accounts for one percent of the 2009 U.S. trade deficit.

Regarding India’s permanent membership to the UNSC, Sibal assesses, “His words do not amount to an unqualified support for India’s claim.”
Kanwal asserts that Obama made symbolic gestures regarding terrorism in India, but merely skimmed the surface of the issue.  At the heart of this are the conflicted relationships between the U.S., Pakistan and India.

Sibal concludes that the U.S.-India relationship will continue to have its challenges, but that Obama’s visit was an overall success: “All in all, he would merit a B+ grade.”

Click here to read Sibal's piece in The Telegraph

The U.S.–Pakistan Dialogue

Writing for The News, EWI Director Ikram Sehgal anticipates the third round of the U.S.-Pakistan Strategic Dialogue, which began in Washington on October 20 with an assessment of the countries’ relationship.

Sehgal, who found the last round of talks “pragmatic and even-handed,” highlights current areas of concern. In particular, he calls for a reevaluation of the aid that the United States has directed to Pakistan, asserting that “comparatively Afghanistan gets far more for doing far less.” According to Sehgal, the United States should bolster Pakistan’s economy through policies, like permitting market access for Pakistani cotton textiles, and with financial support for infrastructural projects (like dams and power plants) and job creation.

Turning to the military aspect of the bilateral relationship, Sehgal applauds Pakistan’s successful counterinsurgency operations and encourages the creation of a full-fledged counter terrorist force.

He calls upon the United States to replace its criticism of Pakistan’s military efforts with a substantive show of support, chiefly through a long-denied nuclear energy deal. And the United States must demonstrate real, disinterested concern for the Pakistani people: “The people of Pakistan must gain confidence that the U.S. is genuine about sustaining a meaningful long-term relationship.”

Click here to read this piece online

India’s Security Council Challenge

Writing for livemint.com, W. Pal Sidhu discusses India’s recent election to the United Nations Security Council (UNSC), which bore testimony to the country’s positive standing among its UN peers.

Sidhu discusses India’s difficult periods of turmoil and transition leading up to its current economic prominence and status as a world leader.  Following the Cold War, India hit a period of economic downturn and also lost its political ally, the Soviet Union: “In this period of transition, India was weak internationally and had little or no influence beyond its neighborhood, let alone in the powerful UNSC.”

Evaluating India’s status today versus in the past, Sidhu explains its significant progress: “Nineteen years later, the world and India are remarkably different.  Today, India is recognized as one of the economic engines that might alleviate the current global economic crisis.  A successful UNSC tenure will allow India to prove its global leadership credentials and also further its national interests.”

According to Sidhu, India’s success in the UNSC is contingent upon two factors: “First, whether it can restore the council’s legitimacy by supporting resolutions that are effective and implementable.  Second, India will have to prove that it can play with the big boys – the five permanent members of the UNSC.” In other words, India will have to demonstrate why its membership in the UNSC should be permanent.

For Sidhu, the real challenge may not turn out to be India’s election into the UNSC, but whether or not it can stay there.

Click here to read Sidhu's piece on livemint.com

The Challenges Facing Obama in India

Writing for Mail Today, Kanwal Sibal, a former foreign secretary of India and member of EWI’s board of directors, discusses the importance of President Obama’s upcoming visit to India, explaining the underlying challenges in maintaining this political alliance.

 Obama’s forthcoming visit to India is awaited with muted expectations.  Both sides need a ‘successful’ visit so that the substantial political investment already made in the bilateral relationship is protected.”

Despite Obama’s consistent praise of India’s prime minister, Sibal maintains that there is a disconnect between his actions and his words, specifically in reference to American outsourcing to India: “[Obama] has personally led the charge against American companies practicing outsourcing despite the substantive Indian business links this has created.” Sibal discusses the intricacies of the IT industry explaining that Obama’s criticism has the potential to hinder the bilateral relationship.

“Even if one construes such talk as playing to the domestic gallery at a time of huge unemployment, projecting India as a competitor stealing U.S. jobs advances no core U.S. interest vis a vis India, besides overlooking sizeable job creation by Indian investors in the U.S.” states Sibal.

Another complex aspect of the U.S.-India relationship is the United States’ relationships to China.  Sibal argues that the U.S. needs to acknowledge China’s increasing aggression in the South China Sea and the combined China-Pakistan threat to India.

Sibal concludes: “President Obama’s visit should be genuinely ‘successful’ in mutual interest, but how to ensure this in real substance, not in soaring rhetoric, given the complexities involved, presents a challenge.”

Click here to read Sibal's article in Mail Today (page 12).

EU Market Access, Not Aid

Writing for the News, EWI Director Ikram Sehgal argues that Pakistan’s officials need to make a stronger case for why the country needs better market access to the West. The concern in Europe is that textile imports from Pakistan will reduce the number of jobs held by citizens of the EU in the textile industry.

“The incongruity of this protest can only be gauged from the available statistics,” states Sehgal.

Sehgal follows this statement with statistics and examples of European imports from China, India and Pakistan.  Pakistan’s exports of 3.32 billion Euros to Europe in 2009 amounted to an increase of 1.26 billion Euros from 2005, constituting a mere 0.27 percent of Europe’s overall imports, and only 1.4 percent of the EU’s textile imports. 

“Pakistan’s exports are all commodity items for budget conscious customers which do not compete with the high end fashion items manufactured in Europe,” explains Sehgal.  With Pakistan’s main export of cotton, commodity comparison between Pakistan and Europe is akin to comparing apples and oranges – in other words, they are not comparable.

Sehgal continues by explaining the recent disasters in Pakistan such as the flood and the ongoing war, both of which have robbed the country of its already limited resources: “we cannot engage the hearts and minds of the populace effectively without the economic means to do so,” Sehgal assesses. 

The main concern from the Pakistani perspective is the issue of market access, which has recently improved.  Sehgal concludes: “The force-multiplier effect and optimism created by even the modest export figure increase sanctioned by EU will make a difference in alleviating the misery/disenchantment of the common man of Pakistan. The goodwill generated for the EU as well as the long-term benefits of stability in the region are tremendous.”

Click here to read this piece online

Economic Security for the Middle East

On October 13, The EastWest Institute and Zayed University in Abu Dhabi convened an international symposium aimed at defining and promoting economic security in the Middle East. Drawing hundreds of students, “Towards Stable and Prosperous Communities in the Middle East” featured top officials, business leaders and experts from more than ten countries.

His Highness Sheikh Nahayan Mabarak Al Nahayan, the United Arab Emirates’ Minister of Higher Education and Scientific Research and President of Zayed University, delivered the keynote address.

In his remarks, His Highness urged symposium participants to make concrete and innovative recommendations for action. “Your success and ours depends on building relationships across boundaries and borders and strengthening cooperation in all regions of the world,” he declared.

Francis Finlay, Co-Chairman of the EastWest Institute, spoke about Abu Dhabi’s “extraordinary” progress, pointing out that its strengths lie in actively seeking innovative ideas and sustainable practices from the rest of the world. 

For guests of Zayed University, one of the most remarkable signs of Abu Dhabi’s progress was the crowd of female students who attended the symposium. At a working lunch, both male and female students joined speakers and guests in discussing a broad range of topics, including women’s empowerment and the push for private-public partnerships to spur innovation. Dr. Louise Richardson, Principal and Vice Chancellor of the University of St. Andrews in Scotland, who chaired the first panel, said meeting the students was “the highlight” of her day.

In his concluding remarks, EWI President John Edwin Mroz also expressed his admiration for Abu Dhabi’s accomplishments and the vigorous nature of the discussions. “I don’t dare try to sum up the whole day!” he added. Indeed, the recommendations and conclusions of the panels ranged from a call to educate students as global citizens to appeals for companies to support in-country applied research. But as Mroz pointed out, the day ultimately demonstrated our global interconnectedness – and the importance of conversation as a tool for education and action. A full report on the symposium will follow.

China's Clean Energy Ambitions

On October 1, 2010, the EastWest Institute, with support from the China-United States Exchange Foundation, sponsored a discussion with Professor Xu Kuangdi on the status and development of China’s energy sector. Professor Xu is a leading scientist, the former mayor of Shanghai, and the former Vice Chairman of the Chinese People’s Political Consultative Conference (CPPCC). He is currently one of China’s most outspoken advocates for the development of clean energy technology.

In his presentation, Professor Xu highlighted China’s tremendous economic growth in the past 20 years and consequently the significant increase in need for energy resources. Although China already has established itself as a worldwide leader in resources such as wind and solar energy, the country still depends predominantly on coal. Professor Xu referenced Kuznets curve, a model in which a country at the outset is at the bottom of the curve—economically poor but environmentally clean. When the country begins to develop economically, environmental degradation also increases until the country reaches the top of the curve and thereby the highest level of pollution. As the country’s economy continues to grow, manufacturing eventually is replaced by other industries, and pollution subsequently decreases. Professor Xu pointed out that it is impossible for a country to develop economically without some increase in pollution. China, he believes, is currently in the middle of the upward curve and likely to peak at its worst level of pollution around 2030. But although environmental degradation is unavoidable, the severity of the pollution is controllable, and thus China’s most urgent task is to mitigate the damage to the environment by reducing energy consumption and carbon emissions. 

Professor Xu’s presentation and subsequent discussion with participants raised a number of approaches China could implement to develop clean energy resources, including the following:

  • Increase BTB recycling, a process that converts waste into energy. Professor Xu reported that one BTB recycling plant can recycle 50 kilotons of plastic, saving 300 kilotons of oil and reducing carbon emission by 150 kilotons.
  • Construct energy-saving cities and buildings by using, for example, light-emitting diode (LED) bulbs instead of conventional bulbs.
  • Continue the development of hydropower, like that of the Three Gorges project that is saving 50 million tons of coal each year.
  • Increase China’s capacity for solar energy, capitalizing in particular on the abundant sunlight received in the northwest areas of the country.
  • Decrease the number of cars in cities by requiring purchasers to bid for licenses.
  • Place the onus for reducing electricity use on the user by raising costs for those who exceed a certain amount of usage.
  • Increase local government officials’ commitment to environmental protection by encouraging the public to report on environmental degradation via the internet.

 Professor Xu concluded with the reminder that technological advancement takes time. Therefore, although changes in China’s energy consumption cannot be rushed, he expressed confidence that China can and will find the solutions to its energy needs.

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