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Hand of Reason - Part 3

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How to Ditch Political Pundits and Build a Grounded World View

 

The internet and 24-hour news cycles have dramatically increased the volume of information on policy, making it quite difficult to actually find the stuff worth reading or watching. Here are our strategies for filtering out the noise and learning as much as possible about the world we live in.

Cancel Your Cable. That’s not to say you should stop watching your favorite TV shows. Just about every show can be found online, giving you more control on when and where you indulge in the Jersey Shore or True Blood. Generally speaking though, the 24 hour news networks are probably doing you more harm than good. Analysis tends to be thin. Calls from the left claim media is controlled by right-leaning corporations and calls on the right claim the same media is comprised of left-leaning journalists. We simply believe measured and thoughtful analysis of policy does not make good television, hence its absence. Current domestic and global dilemmas cannot be reduced to sound bytes. Cut your cable and pick up a book.

Read Often. And by often, we mean constantly.

Get Two Daily/Weakly Publications that Balance Each Other. We happen to be fans of The Economist/Financial Times combo but feel free to substitute the Wall Street Journal, New Yorker, New York Times, The Atlantic, or any other publication that you prefer. The point is to have two publications pretty close to the center. There’s nothing wrong with going a bit to the left or the right, just try to balance it with sources from the other direction. Substituting with an online news source such as BBC.com also works and if you have the language skills, definitely follow a non-english publication like Le Monde.

Don’t Only Read Books or Newspapers. Pick up an academic journal but don’t worry, their covers are more intimidating than their articles. For foreign policy, we recommend Foreign Affairs to get your feet wet. While the format of the Foreign Affairs doesn’t allow the authors to dive too deep into their arguments, each issue is an adequate gauge of some of the more prominent arguments being proposed in current policy debates. Once your Foreign Affairs articles leave you wanting more, pick up an academic journal subscription. If math and huge data sets aren’t you’re thing, stick to the social sciences. Between sociology, history, political science, anthropology, and the other disciplines, there’s numerous first-class journals worth reading. They’re also more accessible than you think, head to your closest library and find one that explores topics you’re interested in.

Neither Accept nor Reject the Author’s Claims. At least until you’ve developed a depth of knowledge for that particular topic. Every issue, whether it be immigration, national defense spending, or health care, is rife with complications and controversies. Authors frequently pick sides but few let the reader in on the broader theoretical arguments and assumptions underpinning their claims. That being said, you should always aim to critique the author’s claims, especially if you steadfastly agree with them. This will encourage you to be critical of your own world view and find ways of evolving it.

Bookstores Do Not Offer Good Selections for Books on Current Affairs. Your bookstore may be different but our experiences have been lackluster. Whether it’s Barnes and Noble or the local independent, current affairs selections tend to be a mix between the New York Times Bestsellers, a few new releases, and the latest rhetoric from the minority American political party. Amazon.com can be just as difficult. Amazon always has it, the problem is knowing what’s worth reading. The best way to find books is by reading other periodicals, books, and papers. If you find a particular book is referenced and cited frequently, you should probably read it.

Expand Your Mind Online. There are a few sources that consistently release material of substance online. Here are the ones we follow:

  1. TED: A wealth of innovative and groundbreaking ideas by an astounding array of experts. If you have not spent time digging through TED, you owe it to yourself to do so.
  2. FORA.tv: While we still love FORA, it’s not quite as awesome as it used to be. Recently, FORA has decided to monetize much of its content, offering video of conferences from $25 to $80 per event. We have no problems with charging for premium content but since its introduction, the quantity and quality of free content has declined. Nevertheless, there’s still content worth watching and we’ll continue to follow FORA.
  3. Academic Earth: Entire college courses and lectures from leading universities are posted online. Not that many courses have been posted yet but considering each course has 10+ lectures, there should be plenty to keep you busy until more courses are posted.
  4. FRONTLINE: With over 90 archived programs available online, FRONTLINE has a wealth of information worth exploring.

Set Your Home Page to Google News. Now that you’ve cut yourself off from up-to-the-minute news cycles, use Google News to keep tabs on any breaking news and to gauge which stories are consistently grabbing head lines. You don’t even have to read any of the articles on a regular basis unless you want to. Your other news subscriptions will fill you in on the details. If you want, it’s easy to set up news feeds for certain key words which will make following specific topics a breeze.

Start Using RSS Feeds and Follow Experts. Don’t look for bloggers; look for experts that blog. There’s plenty of political bloggers vying for your attention; most don’t deliver content any better than the typical news network so it’s best to avoid them. There’s always exceptions, just be sure you know their biases. To find the experts that maintain high quality blogs is not easy. A good place to start is the Foreign Policy RSS feeds. Also check out the list of academic blogs at AcademicBlogs.org. We’ll be sure to post links of those we follow on the right sidebar. If you don’t know what RSS feeds are or don’t have an RSS feeder set up, check out Google Reader. Basically, subscribing to RSS feeds delivers updates on blogs and websites right to your reader, similar to email subscriptions. It makes checking dozens of websites much easier.

If you have any other tips for how to find solid analysis, be sure to post them below.

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The Response to the Financial Crisis – Joseph Stiglitz

As an early critic of the Washington Consensus (an opinion that got him fired from his position as the Chief Economist at the World Bank) and a 2001 Nobel Prize winner, Joseph Stiglitz has repeated challenged the conventional norms regarded economic and financial policy. Frequently, he has been proven completely correct. Within the below video, Stiglitz offers his insights into the underlying trends that led to the financial crisis, as well as critiques of the government’s response. Our notes follow.

In 2005 and 2006, Stiglitz became increasingly alarmed with real estate fueling such a large portion of the economy. Between two thirds and 80% of the economy was attributed to real estate markets, and economies simply cannot be so dependent upon a single variable. The housing bubble had kept the economy going to such an extent that average household savings rates had actually fallen to zero.

Banks kept much of their bad lending off their balance sheet. They managed to cover it well enough to hide it from themselves as well as regulators. Banks also knew that other banks were hiding their bad loans which led to a complete breakdown in trust that ultimately led to the financial crisis. This credit paralysis could have shut down the economy if governments had not stepped in.

In short, the conditions that led to the financial crisis were the result of incentives that encouraged bad lending by bankers and excessive risk-taking.

The Federal Reserve largely ignored the problem, believing there was no bubble even as it began to collapse.

The thirty year period after the Great Depression employed sufficient regulation to avoid bubbles of this magnitude. The stripping of those regulations in addition to avoiding regulation of new financial tools like credit-default swaps has allowed modern bankers to pursue greater risk. There are two reason for the deregulation, (1) lobbying by the financial industry and (2) the promotion of free market ideals by economists. The “invisible hand” of markets and the pursuit of self-interest does not automatically lead to increased prosperity for the whole. Stiglitz’s Nobel Prize work on asymmetric information between actors addresses this issue.

During the Great Depression, similar debates arose over deficits. In 1937, the stimulus of the New Deal was cut back which halted the recovery and put it into another decline.

Obama has done comparably well with handling the economy in response to the crisis. His policies included all of the necessary components: enacting a stimulus, addressing mortgages, restructuring banks, and pursuing  financial regulation. Bush had only focused on funding the banks without imposing restrictions, an extreme form of trickle-down economics which never works.

Obama’s support of the stimulus was the right policy decision. However, the stimulus was not nearly big enough and there were seriously flaws with the design of the stimulus. For example, there should have been more aid to the states, which has become increasingly evident. The stimulus should not have included tax cuts either; it only leads to increased saving which completely defeats the objective of a stimulus. Nevertheless, unemployment would have been around 12% without the stimulus.

While Obama has attempted to address the mortgage problem, he has neglected underwater mortgages entirely (where the debt is worth more than the house). this will lead to higher defaults on mortgages in 2010 than 2008 and 2009, further impeding economic growth.

There was no vision for the kind of financial system we wanted and needed. The purpose of a financial system is to allocate capital and manage risk. Our financial system mis-allocated capital and created risk. The bank bailout perpetuated this system, making problems like “too big to fail” even worse.

New regulation has largely been completely absent (Note: this has changed with the recent passing of the financial reform bill).

The vast majority of the financial sector believes that if the government had not saved many of the banks and provided a stimulus, the American economy would be in a deep depression. The government should not only be responsible for saving the financial sector in a crisis, but it should also be responsible for regulation to avoid reaching a crisis in the first place.

There is a large degree of confusion between the bank bailout and the stimulus, two completely separate programs. Stiglitz remains incredibly critical of the bank bailout because it did not increase lending. The money was used for bonuses and dividends but not recapitalization. This occurred because we did not attach conditions. Furthermore, the preferred shares that the government received in return were worth only two thirds or less of what the government gave to the banks.

There needs to be a new regulatory framework and incentive structures. The “too big to fail” banks must be addressed as well; there is little incentive to keep them from gambling in the future if the government is forced to save them. Transparency is another serious problem. There has been a move towards less transparency which only leads to less trust in the future.

Conflicts of interest have arisen by allowing commercial banks to also be investment banks. The Glass-Steagull act prevented this but was appealed under the Clinton Administration. This tends to enlarge banks as well as provides incentives for not being conservative.

Many in the financial sector are also critical of current policies. The government is essentially subsidizing the major banks, distorting the market and creating an uneven playing field for competitors.

While we have been dealing with the short term problems of the crisis, long term problems like the environment have continued to get worse. In fact, we are now less prepared to solve these other problems because of the massive debt we have undertaken in the attempt to resolve the crisis.

GDP is not a reliable indicator of economic progress. Before the crisis, 40% of the GDP was in the financial sector, much of which was speculation. In other words, GDP can be significantly distorted, especially by bubbles. GDP does not measure the sustainability of economic growth. Similarly, prices frequently do not account for the use of scarce resources like air which further distorts economic metrics of progress. If we correct some of our measurements, we could avoid such adverse effects on the environment.

Response:

Since Stiglitz’s interview, a financial reform bill has passed. As many commentators have highlighted, it spans over 100,000 pages. Here’s an excerpt from a Washington Post article:

The legislation will roll out various measures over time, ensuring that Washington and Wall Street will see the dramatic changes unfold over several years.

Almost immediately, a new Federal Insurance Office will be set up, and the government will have the authority to seize big, failing companies as soon as the bill is enacted.

Other changes include a new regulator of consumer financial products, regulations on derivatives, and restrictions on banks that are federally insured from trading for their own benefit. The New York Times has an excellent summary of the bill and the intended results. As the articles point out, there are many critics of the bill on both sides, claiming it is either not expansive enough or that its policies will simply be ineffective. Considering the complexity and size of the bill, it will be some time before a thorough analysis of its policies and effects is accomplished.

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Power Transition Theory

Power Transition Theory attempts to predict periods of heightened conflict within the international system by differentiating between global hegemons and potential challengers. The graph below gives a simplified overview of Power Transition Theory:

 

The probability of war will increase during the power transition, the shaded area, and conflict will result from one of two circumstances:

  1. The rising great power attacks the declining hegemon because it is dissatisfied with the current world order.
  2. The declining hegemon preemptively attacks the rising great power to get rid of the challenger early.

The theory was initially developed by A.F.K. Organski in World Politics and has been given further attention in Power Transitions: Strategies for the 21st Century.

The obvious application of this theory is on the rise of China and how the current international order may change in response. While Power Transition Theory does not predict a war between the United States and China, it does state that as China’s influence increases within the international system so too will the probability of conflict.

For an overview of the potential conflict between the United States and China, Steve Chan has published his work on the topic in China, the US and the Power-Transition Theory: A Critique. In short, Chan concludes that China is unlikely to initiate a confrontation with the United States.

Richard Ned Lebow and Benjamin Valentino provide a more general critique of Power Transition Theory in their paper Lost in Transition: A Critical Analysis of Power Transition Theory, arguing that there is little evidence to support the major criteria of the theory since true hegemons rarely emerge. Lebow and Valentino also argue that war produces power transitions instead of being cause by them. Most power transitions occur relatively peacefully.

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Dead Aid – Dambisa Moyo

In direct contention with the pervading assumption that international aid is critical for the survival and eventual growth of the most impoverished countries, Dambisa Moyo contends that aid has actually inhibited these countries from achieving sustainable economic growth. Instead of providing a basic level of sustenance for a country, aid encourages corruption and locks a country into a cycle of debt that prevents viable economic sectors from developing. In this opposition, Moyo recommends a combination of foreign direct investment, intentional and regional trade, bond markets, increasing domestic savings, and reducing the costs of remittances while tailoring these options to the specific circumstances of each country.

Chapter 1 – The Myth of Aid

There are three factors that have contributed to a resurgence within the African economies: the rise in commodity prices, the benefits of a positive policy dividend from the market-based policies instituted in the 1980ss, and notable strides in the political landscape. That being said, the current situation is still incredibly challenging (3-5).

There are three types of aid: [1] humanitarian or emergency aid, [2], charity-based aid, [3] systematic aid (7).

Moyo focuses on systematic aid and defines it as the sum total of both concessional loans and grants between countries (8-9).

Chapter 2 – A Brief History of Aid

The development agenda following the Bretton Woods conference marked the first recognition of an international development agenda in the 1940s. This agenda focused on producing a cash injection for the devastated economies of Europe following World War II. This effort has largely been considered an unrivaled success (10-12).

The success of Bretton Woods translated into optimistic assumptions that similar cash injections through aid could assist developing countries, particularly Africa, by the mid-1950s (13).

The 1960s saw greater attention to large-scale funding for infrastructure projects from aid (14-15).

As a result of the food and commodity prices shocking fuel by the rise oil prices in the 1970s,  development became far more poverty oriented and no longer focused on infrastructure projects (16).

Following the 1979 oil crisis, policy makers began focusing on tightening monetary policy. For example, the IMF formed the Structural Adjustment Facility to impose restructuring programs on countries requiring loans. Combined with the increased affinity for neo-liberalism of the 1980s (an international relations paradigm that advocates for the loosening of government regulations in favor of the private market), stabilization and structural adjustment dominated development thinking of the time. Stabilization included reducing a country’s economic imbalances such as its import-export ratio while structural adjustment included trade liberalization through the removal of trade subsidies. This would culminate in the Washington Consensus and become the backbone of development strategy by 1989 (18-22).

Development policy shifted once again in the 1990s as the failures of past aid-based development model became increasingly apparent. The cost of servicing previous debt by African countries outweighed the inflow of aid, creating a reversal flow of funds. Ineffective political leadership and weak institutions were blamed for Africa’s economic woes. Western institutions began attempts to reform governance, instilling democracy within struggling economies. Others advocated for eliminating debt as a development strategy (22-26).

The 2000’s have been marked by the commercialization of aid through celebrities like Bono that call for increased aid in addition to the elimination of current debt. This is not a viable solution however, it merely replaces old debt with new debt (26-28).

Chapter 3 – Aid Is Not Working

Typical explanations for why aid does not work are geographical, historical, cultural, tribal, or institutional. While Moyo acknowledges that these factors have certainly impacted development to varying degrees, she asserts that by far the unifying theme of countries that struggle with development is their dependence on aid (29-35).

The Marshall Plan is frequently cited as an example of aid working. However, the Marshall Plan differs greatly from the context of development aid. The Marshall Plan only delivered a fraction of GDP, was finite, injected cash into previously functioning institutions, and focused primarily on infrastructure.  None of these aspects hold true for development aid (35-37).

Proponents also point to the so-called International Development Association (IDA) graduates that consist of the most notable emerging economies like China and India. Once again, aid flows to these countries were relatively small with short durations (37-38).

Aid is said to work with conditionalities, regulations attached to aid that encourage any given country to reform in certain ways. However, these regulations are rarely enforced and aid continues to flow even when the regulations are openly violated (39).

The policy environment is cited as a prerequisite for effective aid. Development will not occur until democracy and sound fiscal, monetary, and trade policies are enacted. Moyo explains that democracy does not lead to economic growth, it actually needs economic growth to strengthen (40-44).

Evaluations of aid tend to be confined to short term metrics. In other words, delivering 10,000 mosquito nets to Africa focus on the immediate impact on communities having the nets. Little attention is given to the several local mosquito net makers that go out of business, further weakening the economy. Furthermore, little thought is given to what happens after the mosquito nets have torn and are no longer used. Aid evaluations must include second, third, and fourth order effects on the economy so as to accurately reflect the impact of aid(44-45).

Countless empirical academic studies have concluded that aid does not encourage development (46).

Chapter 4 – The Silent Killer of Growth

Aid produces rampant corruption by propping up corrupt governments that severely impact the development of critical institutions such as small business, the rule of law, and efficient government (48-49).

Rent seeking becomes a consistent problem of aid: the procurement of money by government authority without the production of wealth of through trade (52-53).

There are two reasons why Western institutions continue to lend despite rampant corruption: the pressure to continue lending and a lack of consensus on which countries are corrupt and which ones are not (54-56).

There are four economic challenges introduced for a country receiving aid: [1] reduction of domestic saving and investment in favor of greater consumption, [2] inflation, [3] diminishing exports, and  [4] the difficulty in absorbing large cash influxes(60-65).

Chapter 5 – A Radical Rethink of the Aid-Dependency Model

Even if aid could be shown to be a producer of economic growth, there are two other reasons to pursue alternatives. First, donors are growing weary of granting aid. Second, both the recent global financial crisis as well as aging populations throughout the west have placed donor countries under a great degree of financial strain, limiting their ability to secure funds for aid (74-75).

Chapter 6 – A Capital Solution

Accessing bond markets is a far more viable option for accumulating capital but must be done in a series of stages. First, the country must obtain a rating from an internationally recognized rating agency. Second, the country must woo investors. Once investors have been convinced of the country’s commitment to repay and terms have been agreed upon, the country secures more capital (78).

There is a great deal of interest in emerging economies at the moment which should be fully utilized by countries seeking long-term development goals (79-81).

In the case that a country does default, there is no reason it cannot reenter the market as long as it addresses the underlying problems that produced the default (86).

Assertions that struggling economies cannot tap international bond markets is not correct. Countries have chosen to forgo this type of capital. For the few countries that will seem as too hazardous for investment, there are three options. [1] Risk can be pooled regionally or between groups of countries. [2] Other countries can offer insurance or payment protection to the investor if the initial country defaults. [3] A guarantee structure has also proven effective. An international organization only guarantees the first bond of several. As that bond is repaid, the guarantee rolls over to the following bond in sequence. [4] Securitizing a bond is another option: the process of allocating specific cash-flow to repay the debt such as oil revenue (94-95).

Chapter 7 – The Chinese Are Our Friends

African countries must also improve its amount of foreign direct investment (FDI) in order to increase economic growth. Low labor costs and an abundance of investment opportunities make African an excellent choice for investors, however, lack of infrastructure and extensive bureaucratic and regulatory restraints outweigh the benefits of doing business in Africa. To change this, African policy makers must woo FDI investors in addition to building a regulatory and legal structure that supports businesses  (99-102).

China has been a significant source of FDI in Africa. Simply put, Africa has the resources that China needs to continue its astounding growth rates (103-105).

Largely, China’s engagement with Africa has met with disapproval by the West. Africans tend to scoff at this because of the fact that it has often been the West’s aid and good will that has propped up some of the regions more ruthless dictators such as Zaire’s President Mobutu, Uganda’s President Idi Amin, and the Central African Republic’s Emperor Bokassa. China’s hassle-free, no questions-asked approach provides African leaders the opportunity to pursue their own reforms instead of attempting to meet the demands of Western policy makers (108).

The 2007 Pew Report, Global Unease with Major World Powers (the link includes a summary, the data set, and the full report), found that favorable views of China have been increasing throughout Africa and more people tend to view China positively than they do the United States (109-110).

Chapter 8 – Let’s Trade

Developing trade between Africa and the globalization market will be essential to long term growth. Due to political pandering and the desire to maintain a vibrant agricultural base for strategic concerns, the West has protected its agriculture through subsidies and trade restrictions. Developing countries are then unable to compete in agriculture, crippling their ability to trade in a globalized market. Beyond the West, many other countries also enact similar trade barriers on agriculture such as China, Turkey, Brazil, Mexico, Egypt, and India. By far the most serious problem is between African countries. African countries place inordinate tariffs on each other and significantly curtail regional trade  (114-117).

While trade with China continues to be a lucrative opportunity for Africa, it should not depend on a single trading partner. Focusing on regional trade and removing inter-country trade barriers would go a long way in encouraging trade and increasing the ability for Africa to compete in the global market place (122-125).

Chapter 9 – Banking on the Unbankable

The Garmeen Bank pioneered a process of lending to the poorest sectors of an economy called micro-financing, The Garmeen model places borrowers into groups and lends nominal amounts, ($100 for instance) to one member of the group at a time. The group does not receive a second loan until the first is paid. While there is no joint liability, group members ensure that each others’ loans are paid in full. This model has achieved a large degree of success (126-127).

Variations of the Garmeen model and incorporating much of the world’s poorest allows them to secure capital to promote economic growth. Over time, providing small loans to the previously unbankable has the prospect of developing enterprise and a successful economy (130).

Remittances, capital flows from relatives or diasporas, account for a significant degree of capital flow into Africa and should not be hindered because they help pay for imports and repay external debt. In short, Africa countries should develop efficient and cost effective systems for those living abroad to send money home to encourage these capital flows (133-136).

Savings provide another avenue of capital but Africa must provide transparent financial institutions in order to encourage saving throughout the continent (137-140).

However, Africa cannot pursue these financial innovations as long as poor governance continues to plague the continent and raise the risk of investment. Since aid has directly encouraged and supported poor governance, aid-dependency must be resolved by no longer granting aid (143).

Chapter 10 – Making Development Happen

Aid should stop flowing to aid-dependent countries in five years. In the time being, a three stage process should be pursued. [1] Developing an economic plan that reduces a country’s dependency on aid each year. FDI, trade, micro-financing, remittances, and savings all provide viable prospects for providing more capital in the place of aid. [2] Reducing spending and trimming national budgets will reduce the amount of capital needed in the short term to give time for FDI, trade, and other investments the time to spur the economy. [3] Strengthening institutions to ensure that progress is not lost and growth can continue to accelerate (145-148).

The Bottom Line:

A pivotal book. Moyo strikes an excellent balance between readability and thoroughness, referring to numerous academic studies throughout the book while keeping the writing and content easily accessible. Whether you are involved with development policy or have simply bought the latest (RED) iPod, you need to read this book.

Response:

Moyo makes a compelling argument against broad intergovernmental aid. Nevertheless, one of the primary arguments of Jeffrey Sachs, the developer of the Millennium Development Goals and author of The End of Poverty, is that targeted aid to local communities that increases GDP per capita above $300 breaks the poverty trap and allows for economic progress to begin. Until that trap is broken, households cannot amass enough capital for reinvestment, which is critical for economic growth. As Moyo notes, massive flows of aid to any given country do not produce this effect. Rampant corruption, a lack of growth, and rent seeking by public officials become the norm. In short, aid may be able to alleviate poverty and jumpstart an economy but the problem is with the implementation. Unfortunately, there may not be a reliable way to deliver aid to local communities in Sachs’ vision on a broad scale. In which case, stopping aid and pursuing other avenues for raising capital as Moyo advocates may still be the best way to spur economic development throughout Africa.

Secondly, Moyo does not discuss the complexities of trade barriers thoroughly enough. There is little question that Western subsidies on agriculture create a severe impediment to growth throughout emerging economies. However, there is a valid geostrategic argument to be made for not removing the subsidies. Without subsidies, most Western countries would most likely import that vast majority of their food products, creating a potential weakness during conflict.

Taking a realist perspective, removing trade subsidies would tilt the balance of power to countries that may violently challenge the Western hegemony, a risk not worth the increased growth in the developing world. There are also counterpoints to the geostrategic argument as well. A neoliberal would likely argue that increased economic prosperity will result in a greater adoption of democratic norms and then use democratic peace theory (democracies seldom fight each other, therefore, if every country is a democracy there should be relatively little war) to argue that concerns for the balance of power are largely irrelevant. Moyo merely acknowledges that there is a geostrategic argument but does not attempt to debase or critique it.

Citation:
Moyo, Dambisa. Dead Aid. New York: Farrar, Straus and Giroux, 2009.

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The Consequences of Military Action Against Iran – Paul Rogers

The Oxford Research Group has recently released the report “Military Action Against Iran: Impact and Effects” by Paul Rogers analyzing the likely ramifications of military intervention in Iran by either the United States or Israel that targets Iran’s nuclear capabilities. The report concludes that military action is highly inadvisable and should be avoided at all costs.

While public protest recently demonstrated the degree of civil strife within Iran, the nation is likely to experience unifying support for the Ahmadinejad regime and encouraging the country to redouble its efforts to acquire nuclear weapons. Complete elimination of Iran’s nuclear facilities is highly unlikely and neither Israel nor the United States would be capable of preventing acquisition of nuclear weapons through military strikes. Wholesale destruction of Iran’s nuclear program is simply not possible.

Not only would Iran concentrate its efforts to acquire nuclear weapons, a protracted conflict throughout the Middle-east would begin, creating further instability in the region. Iran may substantially increase support of anti-Western groups in Iraq and Afghanistan, employ paramilitary or missile attacks on Western oil production in the gulf, close the Straights of Hormuz, or attack Israel with conventional weapons. Furthermore, these actions will not occur immediately following the attack on Iran’s nuclear facilities but are viable options to Iran over the long term as means of retaliation.

Rogers offers two other policy prescriptions in place of a military strike. First, efforts to reach a diplomatic settlement should be dramatically increased. The other option is to accept the eventual acquisition of nuclear capability by Iran and begin the process of balanced regional denuclearization.

Response

The costs of of any military engagement with Iran will greatly outweigh the benefits and will not achieve the primary goal of preventing the nuclearization of Iran. In fact, it will likely compromise other objectives in the region by escalating tension within the Israeli/Palestinian conflict, solidifying support for Ahmadinejad’s regime, further eroding the West’s influence in the region, and generally impeding further progress towards the adoption of democratic norms within the Middle East.

Even though Rogers makes a substantiated and compelling argument, his report could have been strengthened in two ways. His two options for policy towards Iran should have been greatly elaborated. He readily admits in the report that such an undertaking is beyond the scope and purpose of the report but the reader is most definitely left wanting a the end. A general outline of the process for regional de-nucealrization as well as specific prescriptions for how to strengthen diplomatic efforts would have been incredibly useful.

Second, a strong argument can be made for why a nuclear Iran does not result in an existential threat to the United States or Israel but Rogers does include or build upon it. Without concluding that a nuclear Iran does not pose a pertinent threat to national security, proponents of military action can easily evoke the “one percent” doctrine argument of the Bush Administration and claim that even the slightest chance of Iran utilizing weapons of mass destruction must be prevented at all costs. Any resulting regional turmoil or impediment to other objectives in the Middle East would no longer outweigh the temporarily and fleeting benefits of a military strike, therefore negating Rogers argument. While the “one percent” includes several glaring faults, the argument must be addressed nevertheless.

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Encounter Point – An Israeli/Palestinian Conflict Documentary

The documentary, Encounter Point, presents a leveled perspective of the Israeli and Palestinian conflict, examining the efforts of individuals and organizations attempting to achieve reconciliation such as the Bereaved Families Forum and Seeds of Peace. The perspectives of the Israelis as well as the Palestinians are discussed in equal measure while giving a cursory overview of many of the more notable characteristics of the conflict including the Israeli security wall, suicide terrorism, security checkpoints, the settler movement, and the lack of dialogue on both sides.

Fundamentally, Encounter Point offers hope to the viewer that these attempts at reconciliation will ultimately result in enough dialogue to produce progress within the conflict. While the film does not present anything groundbreaking from much of the other literature and media on the subject, it does present numerous heart-wrenching moments that will inevitably draw the viewer into the conflict. Here’s the seven minute trailer:

Response:

While depictions of individuals persuading others to pursue non-violent approaches to the conflict are incredibly important, I question the scalability and ultimate success of such efforts. Organizations that pursue reconciliation offer a pertinent tool to resolving the conflict, but do not address the structural policies that are producing civil unrest and perpetuating the conflict. Applying David Kilcullen’s insights of counterinsurgency and use of complex systems theory, eliminating structural inputs of the situation is critical in achieving peace. While reconciliatory dialogue may overcome boundaries within the system and enable non-violent actors to more effectively operate, this approach may be unable to counter the underlying causes and inputs of the conflict. In short, Encounter Point serves as a brief but noteworthy overview of the conflict, however, caution should be taken in drawing too much optimism from these individuals efforts.

Those unfamiliar with the Israel/Palestinian conflict will find the film deeply informative. On the other hand, viewers with a background on this conflict will be left wanting and will not discover anything they haven’t already found elsewhere.

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Hide & Seek: Intelligence, Law Enforcement, and the Stalled War on Terrorist Finance – John A. Cassara

John A. Cassara, a former CIA Case Officer and Treasury Special Agent, delivers an autobiography of his career while providing policy prescriptions for more effectively curtailing terrorism finance. Most notably, Cassara illustrates the role of trade-based money laundering in moving funds throughout global criminal networks and the necessity of developing intelligence and enforcement tools to impede trade-based money laundering. As Cassara quickly explains, this book is not a source for professional peers but an overview of Cassara’s career and insight on terrorist finance for the layperson. In other words, Cassara has refrained from pursuing a great deal of depth in exchange for accessibility.

Cassara’s Take-Home Points:

  • There is a four-step process to the intelligence cycle: [1] planning and direction, [2] intelligence collection, [3] processing the information, and [4] dissemination of the information to policy makers. Intelligence collection is the most difficult step for combating terrorist threats; the importance of reliable human intelligence cannot be overstated (7-9).
  • The CIA has an overreliance on the polygraph. Often, the only candidates capable of passing the examination are those that lead very sheltered lives, the kind of people that cannot recruit sources of human intelligence in the back alleys of the world (26).
  • Sometimes, the only reliable method of penetrating a criminal organization is through an undercover operation. Some countries forbid such operations in fear that they will incite criminal action or go rogue. The U.S. avoids these possibilities through various safeguards (41-42).
  • Interagency cooperation and targeting the international movement of funds were critical aspects of combating the Mafia (61).
  • Money is laundered in three stages: placing, layering, and integration. First, illicit funds must be placed into a financial institution. Second, the source of the funds is obscured through complicated transactions such as wiring funds through multiple accounts in multiple jurisdictions. Finally, the funds are made legitimate by investing in tangible goods such as property or a business (62-63).
  • There are two major types of financial crime investigations, reactive and proactive. In reactive cases, the criminal investigator is assigned to the case after the crime has been committed. For proactive cases, investigators assess trends and patterns to intercept on-going criminal activity (64).
  • To effectively counter money laundering, a country must only establish a financial intelligence institution after enacting anti-laundering law (67-68).
  • U.S. intelligence agencies often demand intelligence from their foreign counterparts but do not readily reciprocate which alienates foreign intelligence services. Intelligence sharing must be mutual (69).
  • Gold is an excellent tool for money laundering because it is a widely acceptable medium of exchange and it can act as a commodity or a de facto bearer instrument (72-73).
  • Many trade networks are based on ethnic or family business ties. These are alternative remittance systems that are also known as parallel banking, underground banking, or informal value-transfer systems. These systems completely bypass Western financial reporting mechanisms and have been largely ignored by Western investigators (73).
  • With a downsizing of the CIA’s Directorate of Operations, the agency relied more heavily on foreign liaison services for intelligence. Coupled with a lack of emphasis on promoting language ability, the United States has been at a disadvantage in collecting international intelligence (100).
  • Under the Clinton Administration, an edict was adopted that forbid the Agency from recruiting or handling any source with a criminal record. Since the best sources of human intelligence are personally involved in criminal networks, the edict has significantly impaired the procurement of intelligence (103).
  • Dubai is a central hub in illicit movement of goods, money, and people, particularly its Free Trade Zones (108-109).
  • Even though money was specifically allotted for Customs’ investigations into illicit textile transshipments, the Department of Justice did not have the resources to follow through with prosecution and the investigations did not produce tangible results. Coordination between government departments cannot be ignored (118-119).
  • While the State Department and CIA naturally attract people that are effective in international environments, other agencies such as Customs do not enjoy the same advantage. Agencies with a domestic focus tend to send incompetent agents abroad to get them out of the way, hampering international investigations significantly. More emphasis must be placed on sending the right agents overseas (124-125).
  • In the late 1990’s, the Black Market Peso Exchange (BMPE) was the single largest money-laundering operation in the Western Hemisphere. BMPE involved drug cartels selling U.S. dollars at a discount to brokers in Columbia for clean pesos. The peso brokers would then use the funds to purchase trade goods (143).
  • Hawala is an alternative remittance system used throughout the world. For example, a patron in New York City will approach a local hawaladar to send money to a family member in Pakistan. The hawaladar takes the money, contacts another hawaladar in Pakistan, and asks him to pay the family member out of pocket. Periodically, these hawaladars will settle their accounts through a wire transfer, trade goods, or other transaction. The majority of funds moved within the network are completely legitimate but there is no way to discern illicit funds within the network. Since this network functions completely on trust through tribal, clan, and family relationships, it is incredibly difficult for Western law enforcement to gain intelligence or pursue criminal networks through hawala (144-147).
  • People use hawala for several reasons including a lack of convenient, inexpensive, reliable and transparent financial institutions within a given country. With widespread corruption and intimidating bank forms, many people revert to hawala for their banking needs (149-150).
  • Western institutions largely ignore alternative remittance systems like hawala and do not attempt to acknowledge, regulate, or incorporate them into Western financial monitoring (155-157).
  • While an employee of the Treasury Department ‘s Financial Crimes Enforcement Network (FinCEN), Cassara was tasked with reorganizing and improving FinCEN’s analytical division, the Official of Investigative Support (OIV), and identified four problems: [1] most of the work performed by the divisions was data retrieval and not analysis, [2] there was no proactive analysis, [3] investigative opportunities were frequently, if not always, missed, and [4] there were far too many high-ranking staff members and not enough analysts. Senior management prevented any of these problems from being addressed by Cassara (160-166).
  • Financial intelligence was not developed to detect terrorist funding; it was designed to monitor the enormous profits from narcotics. Moreover, FinCEN failed to produce intelligence on September 11 because it did not have the proper data-mining tools, expertise, personnel, proactive infrastructure, or management systems (177).
  • Even after September 11, FinCEN continued to pursue terrorist through the Bank Secrecy Act (BSA) data and did not accept the importance of the hawala network (177).
  • The U.S. has been able to develop a three-pillar strategy in combating terrorist finance. First, training and technical assistance programs are provided internationally to build the financial intelligence capacity throughout the international community. Second, enforcement and intelligence agencies conduct operations against terrorist financing networks. Third, attempts to deter terrorist financing are implemented through publically naming, shaming, and blocking financing assets of suspected terrorists (188).
  • For the first pillar, five broad categories of training would be provided for countries that were developing their anti-money laundering regimes from scratch: [1] the creation of anti-money laundering laws that adhere to global standards, [2] creating financial intelligence while regulating and supervising financial institutions, [3] the creation of a financial intelligence unit (FTU), [4] the adoption of enforcement tools, and [5] trade-based money laundering (191-193).
  • Countermeasures against terrorist financing do not differ greatly from money laundering (191).
  • Even though productive investigations are typically initiated in the field by an investigator, many countries, including the United States, have focused on pursing bureaucratic quick fixes to respond to money laundering and terrorist finance (194-195).
  • A significant amount of funding for al-Qaeda originates in charities. Because there is a lack of transparency in the monetary channels between charities and al-Qaeda, the majority of the funding that reaches al-Qaeda occur without the knowledge of donors, staff, or even the charity itself (203-205).
  • The Afghanistan Transit Trade Agreement (ATTA) is regularly abused by smugglers and money launderers, contributing to terrorist financing and serves as the foundation for an Afghan trade and money laundering cycle. Dubai plays a central role in this cycle while Pakistan and Iran serve as hubs for the network. Goods flow into Afghanistan while heroin flows out (215-217).
  • Ineffective tax policy is a major contributor to the widespread misuse of ATTA and smuggling. Until extensive tax reform is undertaken, people will likely continue to use smuggling networks just to avoid the burdensome tax system (218).
  • Pakistan has a long-standing offer to collect joint customs tariffs and prevent the abuse of the ATTA, but neither Pakistan nor Afghanistan can oppose regional warlords with vested interests in the smuggling cycle (221).
  • The international community must regulate trade by monitoring imports and exports if it hopes to hamper money laundering and terrorist finance. To that end, Cassara proposes creating a trade transparency unit (TTU) that could collect and analyze suspect trade data. Since the tools and infrastructure for this are already in place, the costs of a TTU would be minimal (223-225).
  • Cassara’s policy prescriptions include: [1] address trade-based money laundering through trade transparency, [2] reform the federal government personnel system by providing more flexibility for managers, pay flexibility, and rotating employees throughout departments and agencies, [3] establish managerial accountability boards to provide oversight of management, [4] reform or abandon FinCEN, [5] fully exploit BCA data that is vastly underutilized before adopting additional regulations, [6] encourage the military to also pursue intelligence on terrorist finance and money laundering, [7] task state and local law enforcement with intelligence gathering on terrorist finance, [8] emphasize enforcement of already established regulations, [9] reestablish the Interagency Coordination Group, [10] analyze the effectiveness of the Department of Homeland Security (DHS) and assess the impact that DHS has had on agencies, [11] fill tax loopholes, and [12] resolve the immigration problem (231-245).

Bottom Line:

Cassara may have deliberately chosen to avoid a great deal of depth in order to obtain broad accessibility but fails to succeed in either regard. Writing an engaging book is no small feat and Cassara simply does not have the skills to pull it off. The result is a book that lacks both information and engagement. Undoubtedly, Cassara has the background and insight to present a foundational book in the field of terrorist finance but his choice to write for the layperson has produced a book that is neither valuable for the layperson nor the professional.

Response:

Cassara’s book suffers from serious structural flaws. Instead of systematically discussing topics and pointedly critiquing U.S. agencies’ responses to terrorist finance. Cassara’s writing has a tendency to pursue numerous tangents and suffers from an inability to develop a cohesive argument throughout much of the book. It is evident that Cassara could easily devote an entire chapter to the topics of hawala, gold transfer, and trade based money laundering. Cassara also attempts to examine reasons for how intelligence failures led to September 11. Unfortunately, none of these discussions are given the depth or priority they disserve and are intermingled throughout the book. And as a result, the book falls far short of its potential. Given the subject matter and the numerous points Cassara attempts to make, a chronological structure does not best serve the interests of the book.

Likely as a result of Cassara’s unwillingness to pursue a degree of professional rigor within his writing, Cassara discusses several topics briefly and with unsubstantiated claims that greatly weaken his ethos.

For example, Cassara mentions the need to strictly enforce immigration laws as a policy prescription for successfully combating terrorist finance. He claims that the majority of the American people do not want amnesty programs or easier paths to citizenship. The only reason that Congress has not pursued tougher regulation is because of “big-business interests.” These claims by Cassara are not backed by evidence of any kind. A brief remark about the importance of immigration policy and how the current status quo is not sustainable within the United States would be understandable but Cassara employs shortsighted analysis without evidence to advocate for a particular interpretation of an extraordinarily complex topic. While most of the book seems to be the result of thorough analysis, trite arguments such as this only weaken Cassara’s more pertinent conclusions.

There are few arguments by Cassara that are fully developed and the reader must take the vast majority of his claims on good faith.

Citation:
Cassara, John A. Hide & Seek: Intelligence, Law Enforcement, and the Stalled War on Terrorist Finance. Washington D.C.: Potomac Books, Inc., 2006.

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Stopping Global Population Growth – Hans Rosling

As the developer of the Gapminder software as well as having delivered five previous Ted Talks, Hans Rosling has become an authoritative voice on global health and development statistics. Furthermore, his presentations are always riveting. In his most recent Ted Talk, Rosling discusses the global population growth since 1960 and how the popular distinction between the “West and the Rest” is no longer relevant.

Our Notes

In 1960, the world was defined by a distinct gap between the West and the developing world, with about one billion people in the West and two billion in the developing world. Saving to purchase cars characterized the West while developing countries were still struggling to secure food and shoes.

In 2010, there is no longer a gap between the industrialized world and the developing word. Emerging economies fill the continum between the two extremes. However, the distance between the industrialized nations and developing economies has widened significantly since 1960. The developing world still contains about two billion people, with emerging economies containing about four billion, and the West also maintaining a population of about one billion.

By 2050, it is fairly evident that China will meet industrialized standards and become part of the industrialized world, raising the number of people that live in industrialized countries to two billion. Emerging economies will continue to progress towards Western living standards but only if sufficient investment is made into green technology to offset the costs of global warming. If this investment is made, their growth and progress of three billion people can be expected to be just short of current Western living standards.

The bottom two billion of the developing world will grow to four; this process is already underway and cannot be curtailed. If progress isn’t made to raise developing countries into emerging economies so that they no longer struggle to obtain food and shoes, population growth could continue to grow beyond four billion in this demographic. Since population growth in the rest of the world is stagnating, targeting the developing world and raising their standard of living is the only way to prevent population growth from exceeding nine billion.

To do this, child survival rates must be increased in developing countries. Rosling believes that this can be accomplished. If it is, the West will no longer lead the world but provide a foundation that emerging and developing countries can build upon.

Our Response

The implicit assumption in Rosling’s argument is that the world order is a function of economic standards and with increasing standards throughout the world, the international system will inevitably become increasingly multi-polar. While economic conditions certainly impact the international system, they may not be the only variable of influence. Military power, global influence through culture, and international norms may impede the rise of many countries in obtaining global influence on par with the current global hegemon, the United States. As a realist would argue, states seek to maintain their relative power and will likely subvert other states to prevent a shift in the system. Often, shifts in the international system are marked by violence.

There is no consensus on the future of the international system and whether or not it will continue to be dominated by the United States, a different hegemon, a bipolar arrangement, or become increasing multi-polar as Rosling argues. Keep in mind that the debate is incredibly complex and this response gives only the briefest of overviews.

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Counterinsurgency – David Kilcullen

Following the success and praise of his previous book, The Accidental Guerrilla, David Kilcullen has released a compilation of his previously published articles on counterinsurgency that have impacted and evolved the theoretical understanding of the field. From the “Twenty-eight Articles” that initially went viral to a summary of his doctoral dissertation, Kilcullen’s analysis can now be located in one book. Kilcullen, one of the leading counterinsurgency analysts, provides a wealth of information for COIN practitioners that stems from extensive hands-on experience.

Kilcullen’s Take-Home Points:

  • There is no panacea of counterinsurgency. Every operation must be specifically tailored to the environment and populace, accounting for the unique cultural and governmental aspects that initially gave rise to the insurgency. Thus, organizational learning for counterinsurgents is absolutely essential (1-3).
  • There are only two fundamentals to every counterinsurgency. First, the driving force behind the insurgency must be understood. Second, the well-being of civilians must be at the forefront and well ahead of any attempt to kill the enemy (3-4).
  • Critics of counterinsurgency claim that a government or military can kill its way to victory in an insurgency. Kilcullen points out that even highly aggressive and ruthless counterinsurgent operations distinguish between the enemy and the populace (5-7).
  • The center of gravity in an insurgency is its connectivity to the general population (7).
  • Both democracies and autocracies do poorly when confronting insurgencies that are not domestic when compared to insurgencies from within. This is due to the difficulty of understanding the unique characteristics of another culture and society. Furthermore, any expeditionary force will eventually withdraw, leaving them at a disadvantage since all actors know their presence is not a constant. Lastly, there is another government influencing the environment, complicating the operation and reducing cohesiveness (11-12).
  • Kilcullen’s first essay in the book, “Twenty-eight Articles,” contains 28 points that counterinsurgents should know before deploying.  The majority of the articles target a military audience, points pertaining to a wider audience are summarized below (29-49).
  • Counterinsurgency operations should begin in secure areas and slowly expand outward; do not attempt to gain control of areas that are firmly under the insurgents’ control until substantial progress has been made (37-38).
  • All actions should account for a global audience and seek to persuade that audience (39-40).
  • Local women can be valuable assets but beware of children who are often recruited by insurgents (40-41).
  • Counterinsurgency is primarily performing the work of civil servants while armed. Operations will consist of addressing political and societal problems while being shot at (43).
  • Keep programs small and avoid scaling them throughout the entire operating environment (44).
  • Do not attack the enemy, attack the enemy’s strategy and deny the enemy’s objectives (45).
  • Extraction plans must be kept secret (46).
  • The second article of Kilcullen focuses on suggested metrics to evaluate the progress of the Afghanistan counterinsurgency. As Kilcullen notes, any metrics can be quickly outdated as the insurgency evolves. Nevertheless, metrics should be designed to evaluate the local population, the host-nation’s government, the security forces, and the insurgents of any counterinsurgency operation (51-76).
  • Kilcullens’ third essay is an abridged version of his doctoral dissertation. Using Indonesian insurgency as a case study, Kilcullen concludes that when central power structures are weakened from a number of factors, local leaders can develop political and military power, using coercion through insurgency or guerrilla campaigns to diffuse power from the central authority to local actors (82-83).
  • Environmental factors can exacerbate the diffusion of power.  Topographically isolated areas, scattered population groupings, poor infrastructure, severe terrain, and traditional social hierarchies are more prone to a loss of control by a central authority (83).
  • The Indonesian government defeated the Darul Islam insurgency in West Java with the implementation of a new counterinsurgency strategy: “Planning Guidance for Perfecting Peace and Security” (PK4). The strategy involved classifying areas as government controlled “A” areas, contested “B” areas, and insurgent controlled “C” areas. Once control was consolidated in A areas, civic action and psychological operations were undertaken in conjunction with large-scale cordon-and-search operations in C areas. In two years, the strategy had defeated an insurgency that had proved incredibly resilient for the preceding twelve years (90-91).
  • PK4 utilized a unique cordon-and-search operation that enabled the Indonesian military to conduct operations with a minimal number of troops. Traditional cordon-and-search operations require a large degree of manpower to perform effectively. The Indonesian military formed a perimeter around a C area, an insurgent controlled hill, by taking civilians in the area and placing them into a cordon. A small surveillance element would oversee operations and require each village chief to hand over a certain number of people that were involved in the insurgency. This tactic is known as pager betis (91-92).
  • The Indonesian army learned five lessons from the conflict that it would implement in future insurgent campaigns. [1] Pagar batis is incredibly effective. [2] A focus should be given to destroying insurgent cells, a counter-force approach. [3] Decapitating an insurgent movement can be instrumental. [4] Utilizing local militias is essential. [5] Special operations play a key role in the implementation of operations. These lessons should not be transferred to other counterinsurgency operations necessarily; their success depended on unique circumstances. For example, a decapitation strategy worked so well because Darul Islam was a hierarchical structure (93-94).
  • The Indonesian army attempted to apply the same techniques against the FRETILIN insurgency in East Timor and resulted in a stalemate. The Indonesians’ inability to tailor counterinsurgency operations to the unique characteristics of the conflict resulted in failure. Because the terrain did not allow an easy encirclement of insurgent areas, pagar betis was completely ineffective. Furthermore, the low population density meant there was not a surplus in labor within villages for the cordon operations, and food and water supplies quickly became a problem when people were removed from their villages. As opposed to the predominately Muslim population of West Java, most of the East Timor residents are Catholic. This increased social divides between the populace and the military—also predominantly Muslim—and reduced the military’s effectiveness. Lastly, FRETILIN had a network structure which is highly resistant to a decapitation strategy (97-102).
  • The globalization of information has given insurgents the ability to impose political and economic costs on counterinsurgencies through a global audience. Unless governments also adapt to this new communication environment, counterinsurgents will be at a disadvantage (102-104).
  • The fourth article is a combat monograph of a politically sensitive skirmish on the border of East and West Timor between Australian forces, the Indonesian military, and militia forces supported by Indonesia. Kilcullen negotiated a cease-fire with the Indonesian forces, addressed the media in an effort to prevent the incident from becoming an international incident, and endured a UN investigation following the incident. The incident was primarily the result of poor mapping and a lack of consensus on the exact location of the border (109-145).
  • Kilcullen provides a number of lessons for combat forces that he learned from the skirmish. Examples include: combat performance is never as good as performance during training, poor mapping is not an excuse for poor navigation, patrols should be planned thoroughly, contact drills should be practiced daily, personal equipment should be ruthlessly stripped down to bare essentials, and language skills must be developed within a military (137-145).
  • The origins of insurgency are similar to that of government. An insurgency is a group of non-state actors gaining local influence through the exercise of law and order, specifically through dispute resolution and mediation. This influence can then be translated into formal political authority through the process of state formation from the bottom-up (149).
  • A primary insight of “classical” counterinsurgency theory is that insurgents challenge a state by preventing the government from performing its functions such as the monopoly on force, local-level political legitimacy, the rule of law, taxation, control of movement, and regulation of the economy (149).
  • Support of the people does not cause an insurgents’ strength; the strength of the insurgents produce popular support. People support the organization they believe is most capable in providing stability and security (151-152).
  • There is a lack of a generalized theory of state formation from the bottom-up. Most international actors pursue top-down state formation which is not as effective at bottom-up strategies in post-conflict environments. This is a key problem in Afghanistan. State centric policies will not succeed when confronting the Taliban and priority should be given to enhancing local institutions and security (155-159).
  • Counterinsurgency and counterterrorism professionals need to communicate better with the peace-building and development community (160).
  • In Afghanistan, top priority should be given to anticorruption action, governance reform, creating a functioning government at the local level, and making people feel safe (160).
  • The failures of Afghanistan stem from a failure in securing legitimacy in the eyes of the Afghan people (160).
  • Terror is a tactic of insurgency. The War on Terror is not a conflict against terrorism but a defensive war against a globalized Islamist insurgency and should be approached as such. Counterinsurgency doctrine is more relevant to this conflict than counterterrorism doctrine (165).
  • Classical counterinsurgency theory has its limitations. It was designed to respond to defeat an insurgency in a single country by the host nation. Complex systems analysis can overcome this limitation and provide additional insight. In short, complex systems analysis reveals that the principle strength in a global insurgency is the links between organizations. Sever the links and the global Islamist insurgency no longer poses a threat to the international order. Kilcullen terms this strategy “disaggregation” (166-167).
  • There are eight basic types of links: [1] ideological, [2] linguistic and cultural, [3] personal history, [4] family relationships, [5] financial [6], operational and planning,  [7] propaganda, and [8] doctrine, techniques, and procedures (175-181).
  • Ayman al Zawahiri, the main al-Qaeda operational planner, articulated al-Qaeda’s strategy in two phases. The first would focus on the Middle-East, force the U.S. out of the region, and restore the caliphate. The second stage would use the caliphate to wage a jihad against the West and reorder the international system to include the Muslim world in a dominant role (168).
  • The global Islamist insurgency consists of numerous organizations and groups that are not centrally controlled by al-Qaeda. While ideological and tactical similarities exist, there are also distinct differences (169-170).
  • The theatres of the Americas, Western Europe, and Australasia do not have ongoing Islamist insurgencies. Insurgents use these theatres for subversion, fundraising, and organizational development. The Iberian Peninsula and Maghreb, Greater Middle East, East Africa, The Caucasus and European Russia, South and Central Asia, and Southeast Asia do have active Islamist insurgencies in addition to an active al-Qaeda presence (169-175).
  • Many of the actors involved in these insurgencies predate the recent global insurgency by decades and have little connection to it. Others are deeply involved and may prey on local groups to further their own ends (181).
  • The military activities of these networks are subservient to the other shared activities in which they participate. In other words, these insurgent networks can be described as a variant of a traditional Middle Eastern patronage network. They resemble a tribal group or organized crime syndicate more closely than a military organization (183).
  • Insurgency paradigms more accurately describe the global Islamist insurgency than terrorist stereotypes (186-190).
  • Considering the lack of a global government, classical counterinsurgency will not work. Only a global government could provide the degree of integrated operations to make classical counterinsurgency a successful approach (191).
  • Applying complex systems analysis to insurgencies finds several new insights, revealing them to be: [1] social systems, [2] energetically open but organizationally closed, [3] self-organizing systems, [4] nonequilibrium dissipative structures, [4] greater than the sum of their parts, [5] actors within ecosystems, [6] subject to theatres that have an adaptational, evolutionary dynamic (193-196).
  • Just like organic systems, insurgencies comprise seven elements: [1] nodes, [2] links, [3] boundary, [4] subsystems, [5] boundary interactions, [6] inputs, and [7] outputs (196-198).
  • Targeting the links, outputs, and inputs is more effective than targeting individual nodes (195).
  • The hierarchy of the globalized insurgency is a virtual state. It controls no territory but competes with world governments by controlling distributed systems that form elements of state power (200).
  • Local insurgent groups will disagree with globalized insurgents where different cultural norms conflict. This divergence can be exploited by counterinsurgents (203).
  • Not only are insurgencies complex systems, they are complex adaptive systems. The most adaptive groups within an insurgency will be the strongest (205).
  • With enough energy input from external circumstances over time, insurgencies can reach a “critical mass” and become self-sustaining. At this point, addressing the societal dilemmas or structures that gave rise to the insurgency will not eliminate support for it. This also means that the global insurgency may not be primarily fought in the Middle East but in Southeast Asia if its allowed to “go critical” (205-207).
  • The failure in Vietnam for the United States was not a result of an inability to attack a wide range of the elements that comprise an insurgent system. Contrary to popular opinion, the counterinsurgent strategy was fairly successful. However, its success sparked a wider war by provoking a crossborder invasion by North Vietnam. At this point, there was little political will to continue, resulting in withdrawal and failure (208-210).
  • The greatest threat to the counterinsurgency in Iraq is a lack of political will that results in premature withdrawal (211).
  • Each theatre and insurgency must receive a tailored systems analysis, not a template counterinsurgency strategy from other theatres and operations (211).
  • The current strategy of aggregation in the War on Terror—lumping all terrorism, failed states, rogue states, and strategic competitors together and treating them as a single entity—has the potential for strategic overreach, exhaustion of political will, and failure (213).
  • A strategy of disaggregation would focus on: [1] interdicting links between theatres, [2] denying regional and global actors the ability to link and exploit local actors, [3] disrupting flows of information, personnel, finance, and technology within the insurgency, [4] denying sanctuary areas, [5] isolating extremists from local populations, [6] disrupting inputs like personnel, money, an information from external actors, [7] preventing or ameliorating local communal and sectarian conflicts (214-215).

The Bottom Line:

This is not the best book for those new to the study of counterinsurgency. Kilcullen’s book will aid those with a foundation in classical counterinsurgency theory as well as a general knowledge of the U.S. operations in Afghanistan and Iraq more so than the general audience. For practitioners and scholars of COIN, this book is essential if the reader is unfamiliar with Kilcullen’s writings. For the general audience or those that already follow the work of Kilcullen, there are likely more pressing books to give priority to.

Response:

In Kilcullen’s last essay, he focuses on viable strategies to defeat the current global Islamist insurgency that makes up the War on Terror. However, he neglects to examine whether or not it’s even possible to mobilize a global Muslim populace in a global insurgency. He readily admits the cultural differences that exist within and between insurgencies that can decrease operational capabilities but does not apply this same concept to the Islamist societies. Indeed, nationalism within Afghanistan and Pakistan, for example, has not been readily adopted, facing fierce resistance towards efforts to consolidate state institutions and identities. If states are having such difficulties in unifying a populace, a global jihadist movement is unlikely to fair much better at a larger scale. The emergence of a Muslim caliphate that is directly opposed to the West is no small undertaking and requires a substantial degree of analysis and evidence before national security policy can developed in anticipation of it. While Kilcullen offers a highly intelligent strategy to combat radical Islamist terrorism through “disaggregation,” his implicit assumption that this insurgency possesses legitimate challenges to the West may be overstated.

While Kilcullen’s emphasis on a population-centric approach to COIN, the importance alleviating suffering for the populace may be overstated. Some scholars have claimed that civilian control methods that also force civilians to endure hardship can be effective in an insurgency. Kilcullen represents one of the more prominent experts that recommend alleviating as much suffering as possible for the populace and the reader should be aware of critiques of that perspective. For a recent debate between the two perspectives, John A. Nagl and Gian P. Gentile each wrote two articles debating the topic in Joint Force Quarterly 58.

Citation:
Kilcullen, David. Counterinsurgency. Oxford: Oxford University Press, 2010.

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The Wisdom of Whores – Elizabeth Pisani

After nearly a decade of conducting AIDS/HIV research in Southeast Asia, Elizabeth Pisani recants the lessons she has learned while helping governments and NGO’s reduce the spread of this disease. From stressing the importance of adequate disease surveillance to clearly outlining the ways that AIDS/HIV spreads throughout societies, Pisani clearly states the measures that must be taken in order to curtail the AIDS/HIV epidemic. In short, needle exchange programs as well as abundant access to condoms and lubricant for at-risk populations—mostly prostitutes, their customers, and drug injectors—offer the most potential for limiting the infection rate.

Pisani’s Take home Points:

 

  • Policies that work in Africa will not work elsewhere. Additionally, effective HIV monitoring must include behavior, not just blood testing (37-38).
  • The transmission rate of HIV through anal receptive sex is incredibly high. Therefore, any effective HIV prevention method must include male and transgender sex workers such as the waria in Indonesia (58).
  • Within Asia, the majority of men that frequent prostitutes are married but this is because a majority of men in Asia are married. Single men have a slightly higher probability of visiting prostitutes (62).
  • Soldiers and policemen are highly likely to visit prostitutes as well; Pisani has often classified them as a high-risk group for contracting HIV in her behavioral studies (64).
  • A primary problem with condom promotion in Asia is that condom use falls dramatically when men have sex with a girl on a recurring basis. Even with prostitutes, condom use plummets when a male customer begins to visit the same prostitute and the relationship elevates even slightly above a formal business relationship (66).
  • It has become far more socially acceptable to be openly gay within Asia, creating an environment similar to the US and British gay revolution during the 1970’s that saw the increased spread of HIV. There is no reason HIV cannot be controlled in a highly active gay scene as long as condom use is promoted and adopted (73-75).
  • The correlation between risky sex and drug use is incredibly high because people frequently make poor decisions while using drugs (75-76).
  • Drug injection, by far the riskiest behavior as a result of the prevalence of sharing needles, is the single greatest behavior in spreading HIV throughout the world, including the West (76).
  • Pisani has learned several lessons and insights about quantitative behavioral research: though improvements have been made, researchers still don’t always know how the people they are talking to represent the larger population (91); research questions can be faulty (93-97); researchers sometimes attempt to “fix” data to account for faulty questions (97); people give different answers based on who they are talking to, neutral interviewers provide the most reliable data (104); mistakes are common throughout the data management process (106); biological testing has a host of logistical problems that distort data if not properly managed (118).
  • Africa has been a complete failure for the HIV prevention industry (124).
  • The dominant mantra maintains that poverty and gender inequality spread HIV. While a lack of development certainly does not help HIV prevention, it is not the primary influence in spreading HIV (127).
  • HIV is not particularly infectious; certain behaviors transmit far more readily than others. Anal sex, forced sex, and having other STIs all increase the chance of transmission. Males can also more readily transmit HIV if they are uncircumcised (129-131).
  • A person’s viral load will greatly influence whether or not they transmit HIV. People have high viral loads immediately after infection, after haveing any other infections, and shortly before death. Since those that have obvious signs of AIDS do not have much sex, the vast majority of transmissions occur immediately after the initial infection. Many HIV transmissions probably occur before a person would even test positive. (131-133).
  • In regions where several sexual partners are common, men are uncircumcised, and STDIs go untreated, HIV will spread quickly (134).
  • In Africa, there is a myth of the “innocent” wives being infected by their promiscuous husbands. This is not a correct depiction; many wives have sex with men other than their husband and often have had multiple sex partners before marriage. In every African country where data is available, unmarried women are more likely to be infected with HIV than unmarried men (137).
  • HIV has become a development problem in much of Africa but the initial crisis was a result of a lack of effort in HIV prevention (144).
  • The explosion of HIV in Africa is the result of people developing sexual relations in nets instead of strings -multiple partners at once instead of a string of partners—and untreated STDIs. Without the proliferation of circumcision and condom use to put a break on infection rates, HIV transmission has run rampant (156).
  • In the rest of the world, HIV transmission is largely the result of drug injection, anal sex between men, and those that buy and sell sex (157).
  • As HIV treatment becomes more effective with the widespread use of antivirals that keep HIV in check, HIV prevention must also escalate to counter the increased duration of the infection risks due to prolonged life expectancies of current HIV victims (164).
  • Peer education to increase condom use does not work among sex workers because they are competitors in the market place. Peer education only works where there is an actual a sense of community (181-183).
  • Within the US, people that pledge to abstain from sex until marriage do wait slightly longer to have sex than their peers. However, they do not have fewer partners than non-pledgers, are less likely to use condoms, and contract just as many STIs. 72 percent have sex before marriage (190-191).
  • Abstinence promotion has been tagged to aid given by the United States, forcing many NGOs to recommend that prostitutes quit their jobs to avoid HIV. This policy fails measurably domestically and there is no evidence to indicate it fairs any better internationally (192-199).
  • When sex workers do not use condoms, it is usually a result of intoxication instead of being able to charge for a higher fee (212-213).
  • Contrary to the alarmism over human trafficking, Pisani has seen little evidence of it firsthand. In fact, she has only encountered one person that was obviously trafficked. Though she does not claim that human trafficking  is nonexistent, Pisani suggests that its occurrence may not be has prevalent as many sources suggest (213-214).
  • About 70% of injectors are not junkies; they are doctors or yoga instructors. To reduce HIV transmission, these users must have legal means to get clean needles (236).
  • Many injectors do not use clean needles because it is illegal to carry them (238).
  • Methadone is a oral drug that reduces the craving for heroin. Prescription methadone programs do reduce heroine and needle use, reducing the HIV transmission rate. However, care must be taken ensure the correct dosage. Otherwise the programs are ineffective (239-240).
  • In Indonesia, heroin is often easier to obtain in prison. Needles are not. This turns prisons into HIV factories. Similar conditions exist in England, Russia, the United States, and elsewhere (243-245).
  • Needle exchanges work especially well in prisons and methadone programs are also likely to be highly effective (246-247).
  • Needle exchanges and other harm reduction programs do not promote drug use; they actually curtail it and assist people in quitting drugs (250).
  • Not only do junkies have sex, contrary to popular myth, their partners often engage in risky behavior that is highly likely to further pass on HIV(276).
  • In Southern Africa HIV is an extensive problem that requires a myriad of different approaches to reduce. For the rest of the world, programs that deal with how sex and drugs transmit HIV are the only programs that will work (271).
  • International funds from the United States require that supplies and drugs be purchased from the United States. This creates a procurement nightmare that wastes a great deal of funding (283-284).
  • HIV/AIDS programs are not required to show results, creating  a highly inefficient NGO environment that poorly utilizes time and money on programs that have little or no impact (289-290).
  • To reduce the prevalence of HIV/AIDS: [1] programs that aim to reduce sex frequency do not work, [2] places that people go to meet new sex partners should be “bombarded” with condoms and lubricant, [3] incentives should be in place to ensure condoms are used every time sex is bought or sold, [4] clean needles should be legally available at a subsidized price, [5] needles should be given to those in need especially in prisons, [6] though effectiveness is limited, methadone programs can work to a degree, [7] prevention services should be bundled with antiviral treatment, [8] other STIs should be treated in communities and screening processes should be employed on sex workers, [9] give infant formula to mothers that are infected, [10] circumcise men in communities with high rates of HIV, and [11] recognize that homosexuality is prevalent and provide programs for these communities as well (311-313).
  • HIV programs will have to be tailored to specific localities (314-315).

Bottom Line:

This book is required reading for anyone involved with AIDS/HIV. Not only has Pisani presented a decades worth of work in an incredibly engaging book, her work has immediate implications for NGOs and governments worldwide. Highly accessible and deeply informative characterizes the entire book.

Response:

Overall, Pisani provides an insightful book. She responds to numerous counterarguments, provides a vast array of empirical evidence, as well as many personal anecdotes as case studies. Her passion and demand for policy clearly shows. She has avoided adopting any degree of ideology, developing policy recommendations that stem directly from evidence. Her work should be commended and utilized.

Pisani is a staunch advocate for HIV/AIDS prevention and her policies stem from that perspective. In other words, her analysis does not include other perspectives within social sciences. For example, Pisani argues that forcing NGOs to purchase supplies and materials from U.S. companies creates a highly inefficient system for providing AIDS/HIV prevention and treatment. However, she does not provide an economic analysis of this policy. In short, the added revenue to U.S. companies and subsequent boost to the American economy may outweigh the ineffectiveness within the HIV/AIDS prevention and treatment industry. Or it may not. Either way, Pisani neglects to provide analysis and her policies should be analyzed from several lenses before being adopted to avoid any unintended consequences.

Lastly, Pisani acknowledges the political dilemma for implementing her policy suggestion: people don’t like doing nice things for junkies like needle exchanges. She fails to provide any solutions to overcome this dilemma. Though creating awareness and understanding of the HIV epidemic is certainly one useful strategy (and one assumes this book is part of that strategy), Pisani never explains a framework for moving forward. Then again, Pisani is an epidemiologist and shouldn’t be faulted for not developing a strategy of policy advocation.

Citation:
Pisani, Elizabeth. The Wisdom of Whores: Bureacrats, Brothels and the Business of Aids. New York: W. W. Norton & Company, 2008.

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