China now owns so many dollars that it can’t sell them off without driving the dollar down and triggering the very capital loss its leaders fear.
There is a solution. China wants some of this debt to be transfered to be denominated in RMB from dollars and they want to be able to invest in strategic companies like Caterpillar GE or even Boeing. What the US wants is for China to spur consumer spending, allowing US companies free range to implement the distribution networks they have perfected in america (i.e. Wal-Mart to Credit Cards). This is a intelligent compromise that would bind the nations closer together and make them both stronger.
But the problem is there simply is a huge lack of trust. Americans see china as totalitarian and repressive and the Chinese see america as imperialist and repressive. Neither really wants to be bound closer to the other, even if it is in both of their strategic interests.
One can only hope that over time the mistrust built up between our two countries (legitamate and otherwise) will dissipate and allow a powerful partnership to develop. The problem is there isn't much time. We have many problems to solve, doing so together really is our only chance to do so.
Tuesday, April 14, 2009
Maybe its worse than I thought
Allied Militants Threaten Pakistan’s Populous Heart
In my last post I mentioned that as long as the Punjab and Sindh were stable, threats to Pakistan were really marginal. The above NY Times article says that the Punjab is becoming destabilized, so that is really bad news. What is confusing is I thought that the Taliban was primarily a Pashtun phenomenon, however it appears that islamic miilitancy is gaining ground amongst the Pujabi as well. Further I fear, al queda has a terrible strategy. They saw in Iraq how effective shia sunni strife could be in destabling a country, well Pakistan has shia sunni tensions that al queda may seek to exploit by targeting the shia. This is because to extreem members of al queda shia are apostates and thus deserving of death so attaches against them can be justified. As the article alludes, there is great devision between the wealth rulling classes and the poor in Pakistan. How much can the goverment really be effective against these millitant groups establising local zones of influence and intimidation? Especially when the millitants can paint those that oppose them as american stooges? Things are not good...
Thursday, April 9, 2009
Thoughts on Pakistan.
There are a couple things in the news that got me thinking about Pakistan.
There was this Washington Post David Ignatius Column
A Short Fuse in Pakistan
and some blog posts from his recent visit to Pakistan.
There was also this charlie rose interview. Is it just me or is Kissinger slowly turning into Jabba the Hut?
I didn't realize how chaotic and threatened the mood felt in Pakistan. However before hyperventilating it is important to understand the basics of Pakistan. The structure of Pakistan can be (overly) simply described as follows: The largest population center is in the east/central region of the country centered on Lahore and is known as the Punjab. This and the primary region of support for the two Pakistan Muslim Leagues N and Q one dominated by (N)awaz Sharif the other make up of supporters of former president Musharraf. The second major population center, known as the Sind, is in the south centered on Karachi (the largest and wealthiest city in Pakistan located on the arabian sea coast). The Pakistan Peoples Party and the current president Zardari (husband of the late Benazir Bhutto) draws large support from this region. In some ways the Pujab/Sind rivalry is the center of the political feuding in Pakistan. The third population center which stretches from Peshawar to Islamabad(the capital and location of Ignatius' reporting). This region is primarily Pashtun in the west and melds into the Punjab in the east.
The instability primarily exists in the north west, which was never really controlled by anybody, and primarily threatens only the Peshawar/Islamabad region. The primary support for the taliban comes from the Pashtun ethic group which is the largest ethnic group in Afganistan (~40%, 12 million) and the second largest(~15% 26 million) after Punjabi(~45%) in Pakistan. While it is a nightmare senerio and thus must be planned for seriously, I am highly dubious that the taliban would be able to overwhelm the entire country of Pakistan given that the army draws resources from all over the country. In Afganistan (since it happened previously) the situation is different and it is of course possible for the Taliban to take control.
The root of the instability is that the government of Pakistan doesn't really control what goes on along parts of its north west border with Afghanistan (vividly reported in this
episode of Frontline, I'm looking forward to this new instalment as well). In fact the government is mostly strategically indifference to the Taliban and even supported it pre 9/11. This is because Pakistan sees a strategically aligned Afghanistan as a way to prevent India from accomplishing a strategy of encirclement. Now however, the government is finding that it too is becoming a target of the extremists. This normally would cause a reaction from the state (i.e. see Saudi Arabia) but the response is complicated because many people see the real problem being that Pakistan has sold itself out to America, and believe if you got rid of the Americans then the threat would go away.
So how do you solve this mess? I'm not really sure. But here are some essential pieces in my view.
1) Convincing Pakistan that its long term strategic interests lie in partnership with India and other countries in south asia, using its connections with the english speaking world to build economic growth. Finding a permenent resoltion of Kashmir is of course central (and intractible).
2) Extremist groups, including parts of the Taliban, are Pakistan's number one strategic threat. They are the ones that will set off bombs in Pakistani cities, not India.
3) The taliban is a diverse group. Along with parts which support al-queda, there are elements that express the legitimate political ambitions of the Pashtun people. Any solution to the military problem in Afganistan and Pakistan must clearly and explicitly separate these two elements.
4) The US wants a long term strategic partnership with Pakistan, but is not interested in manipulating its politics or having a long term military presence.
Great reporting by Ignatius.
There was this Washington Post David Ignatius Column
A Short Fuse in Pakistan
and some blog posts from his recent visit to Pakistan.
There was also this charlie rose interview. Is it just me or is Kissinger slowly turning into Jabba the Hut?
I didn't realize how chaotic and threatened the mood felt in Pakistan. However before hyperventilating it is important to understand the basics of Pakistan. The structure of Pakistan can be (overly) simply described as follows: The largest population center is in the east/central region of the country centered on Lahore and is known as the Punjab. This and the primary region of support for the two Pakistan Muslim Leagues N and Q one dominated by (N)awaz Sharif the other make up of supporters of former president Musharraf. The second major population center, known as the Sind, is in the south centered on Karachi (the largest and wealthiest city in Pakistan located on the arabian sea coast). The Pakistan Peoples Party and the current president Zardari (husband of the late Benazir Bhutto) draws large support from this region. In some ways the Pujab/Sind rivalry is the center of the political feuding in Pakistan. The third population center which stretches from Peshawar to Islamabad(the capital and location of Ignatius' reporting). This region is primarily Pashtun in the west and melds into the Punjab in the east.
The instability primarily exists in the north west, which was never really controlled by anybody, and primarily threatens only the Peshawar/Islamabad region. The primary support for the taliban comes from the Pashtun ethic group which is the largest ethnic group in Afganistan (~40%, 12 million) and the second largest(~15% 26 million) after Punjabi(~45%) in Pakistan. While it is a nightmare senerio and thus must be planned for seriously, I am highly dubious that the taliban would be able to overwhelm the entire country of Pakistan given that the army draws resources from all over the country. In Afganistan (since it happened previously) the situation is different and it is of course possible for the Taliban to take control.
The root of the instability is that the government of Pakistan doesn't really control what goes on along parts of its north west border with Afghanistan (vividly reported in this
episode of Frontline, I'm looking forward to this new instalment as well). In fact the government is mostly strategically indifference to the Taliban and even supported it pre 9/11. This is because Pakistan sees a strategically aligned Afghanistan as a way to prevent India from accomplishing a strategy of encirclement. Now however, the government is finding that it too is becoming a target of the extremists. This normally would cause a reaction from the state (i.e. see Saudi Arabia) but the response is complicated because many people see the real problem being that Pakistan has sold itself out to America, and believe if you got rid of the Americans then the threat would go away.
So how do you solve this mess? I'm not really sure. But here are some essential pieces in my view.
1) Convincing Pakistan that its long term strategic interests lie in partnership with India and other countries in south asia, using its connections with the english speaking world to build economic growth. Finding a permenent resoltion of Kashmir is of course central (and intractible).
2) Extremist groups, including parts of the Taliban, are Pakistan's number one strategic threat. They are the ones that will set off bombs in Pakistani cities, not India.
3) The taliban is a diverse group. Along with parts which support al-queda, there are elements that express the legitimate political ambitions of the Pashtun people. Any solution to the military problem in Afganistan and Pakistan must clearly and explicitly separate these two elements.
4) The US wants a long term strategic partnership with Pakistan, but is not interested in manipulating its politics or having a long term military presence.
Great reporting by Ignatius.
Friday, April 3, 2009
Commet on: Eugene Robinson, "What We're Not Talking About"
What We're Not Talking About
By Eugene Robinson
Friday, April 3, 2009; Page A19
Nowadays I have been wondering if America's greatest divisions aren't race but class. All of my friends are comfortable hanging fellow college grads white or black. But how many of us would feel comfortable chillin in a trailer park or housing project?...
By Eugene Robinson
Friday, April 3, 2009; Page A19
Nowadays I have been wondering if America's greatest divisions aren't race but class. All of my friends are comfortable hanging fellow college grads white or black. But how many of us would feel comfortable chillin in a trailer park or housing project?...
Comment on: David Brooks "Greed and Stupidity"
By DAVID BROOKS
Published: April 3, 2009
Dueling explanations for the financial crisis overlap, but lead to different ways of thinking about where to go from here.
For me the central point is that the system was set up to reward excessive risk because someone else (namely the taxpayers) were the ultimate providers of insurance against systemic risk.
For me it doesn't much matter how you regulate or what size you break companies up into, unless you change the fundamental dynamic that people can make high profits while risking someone else's money, the process will repeat, not because people are "bad" its just that people follow their economic interests.
Wednesday, April 1, 2009
Thoughs on David Ignatius Video Blog about Iraq
This made me think about the central irony of the Iraq war. We get attacked by al qaeda so we start a war with the Bathists in power in Iraq even though they had no direct involvement with al qaeda. Next the presence of americans fighting in Iraq is a great mobilizer for al qudea so Iraq becomes a hotbed of terrorist activity. After years of denial and ineffective strategy we make a deal with the Bathists and other Sunnis (now called the awakening) to defeat al queda. So you make an alliance with the guys you went in to overthrow to solve a problem that didn't exist before you went in. Nice.
To be fair, different from before we went in the majority Shiites have power now which is more fair, but I doubt that many Sunnis have given up their notions that Iraq is really "rightfully" theirs to govern, and the for the Kurds being part of Iraq is mostly a matter of convince. However, the up side is that Iraq really does exist. Meaning that there is a set of stories about the historical Iraq that most Iraqis have in the back of their mind that binds the country together and imbibes the notion of Iraq with a sense of legitimacy. Thus I still think that with good leadership and good neighbors, despite the troubles past and future (the future ones described by Ignatius in the video), Iraq can still succeed.
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