In the latest news and analysis…
German Chancellor Angela Merkel and French President Nicolas Sarkozy met to discuss a way out of the financial crisis currently spreading across Europe. While they spoke of greater integration, they dismissed as premature the idea of euro bonds that would make all members jointly responsible for the debt of each member. The two leaders did, however, propose a tax on financial transactions both to generate revenue and to discourage speculation, but it is far from certain they will have the support necessary to implement it: “Both Merkel and Sarkozy have mentioned the prospect in the past, but resistance from the US and UK — and promises that firms will pull up stakes and do business elsewhere — has held back efforts by any one jurisdiction from pressing ahead,” according to the Wall Street Journal.
While Europe and America struggle with taming massive public debt, Cote d’Ivoire is opting to skip debt payments even though it has sufficient funds to meet its obligations. Perhaps surprisingly, the International Monetary Fund appears to approve of the decision: “I think that [investors] would be happier with a government that missed a few [payments] and made it up later and had a strong recovery, than a government which met its debt service in a timely manner but failed to relaunch the economy,” the organization’s local director told Reuters.
The UN’s World Food Programme acknowledges that some of its aid to Somalia has disappeared but calls the scale of theft recently reported by the Associated Press “implausible.” Calling the food crisis in the Horn of Africa “man-made,” a World Bank economist says controls on local markets are to blame for high food prices that are exacerbating widespread hunger. “Maize is cheaper in the United States and in Germany than it is in eastern Africa,” according to Wolfgang Fengler. Cambridge University’s David Nally agrees the current humanitarian disaster is not a purely natural one but unlike Fengler, believes the world’s powerful countries must share in the blame for what he considers violence: “The portrayal of the passive victim enables NGOs and Western governments to assume the role of rescuer without having to ask uncomfortable questions about their own complicity in the suffering that is unfolding.” Although he stresses that there is no “clearly identifiable agent” responsible for the famine, he believes the global economy and its priorities play a substantial role. Nally concludes by arguing “the more it’s shown that “the sort of thing which happens in that place” is partly an outcome of policies designed in this place, the more responsibility we have to do something about it. When viewing images of starving children or reading about deaths from malnutrition in the daily newspapers, we ought to consider critically the architecture of violence behind the picture or story, not merely the sad abjection of the victim. There is a need, as Susan Sontag once said, to put privilege and suffering on the same map.”
The Associated Press’s Jonathan Fahey writes that the “golden decade” of America’s defense industry has ended and its companies’ shares are likely to continue their downward trend. But one area that may prosper, given the financial and human resources advantages it offers, is the development and manufacture of drones: “The era of manned airplanes should be seen as over,” according to the Brookings Institution’s Michael O’Hanlon. The latest in drone technology is on display in Washington, DC this week at the Association of Unmanned Vehicle Systems International annual convention. And far away from the showroom floor, a US drone strike has reportedly killed four people in Pakistan.
The US pursued 3.5 foreign bribery cases for every one undertaken by the rest of the world during the last decade, according to the new Global Enforcement Report released by Trace International. In other corporate accountability news, the back-and-forth continues following last week’s New York Times op-ed that claimed a piece of American legislation aimed at preventing minerals from fuelling conflicts is actually having a devastating effect on the Democratic Republic of Congo. In a letter to that same paper’s editor, Margot Wallstrom, UN special representative of the secretary general for sexual violence in conflict, argues “the United States government should be commended for its leadership in trying to regulate “conflict minerals” and to starve rebels of the resources and weapons they need to kill and rape.”
The Center for Global Development’s Kimberly Ann Elliott makes a case for imposing so-called Deterrence of Illegitimate Resource Transfers (DIRT) sanctions on Syria. To impose such sanctions would mean to “declare that any new loans to the Syrian government, and new contracts with the state-owned oil industry, are illegitimate and need not be honored by a democratic successor government.” As with normal sanctions, the DIRT variety would aim to diminish the resources of a leader deemed undesirable by the international community (in whole or in part) and to motivate said leader to change his or her ways. But these specialized sanctions would also “spare a future, legitimate government and its people from having to repay an “odious debt” or abide by contracts tainted by corruption” while allowing it to “still retain access to international credit markets.”