BY KETEVAN ROSTIASHVILI | MAY 11, 2012
American historiography is quite diverse and contradictory over the role of the USA in the changing world. There are three major schools of thought: primacy, isolationism and selective engagement, which give quite different estimations of the US status in the world. Primacy school is oriented on exceptional role of the USA as a sole superpower in the world. Isolationists sharply criticize primacy school. In the country’s drawbacks they see the end of American hegemony. Selective engagement school is a compromise between primacy and isolationism schools and submits that the USA should possess only sufficient strength to defend the centers of economic might in the world, principally Europe and northeast Asia.
Advocates of primacy school assent that the USA is the major power in international politics and keeps its preponderant position by maintaining and expanding its military and economic strength. In 1999 Samuel P. Huntington estimated the USA as “the sole state with preeminence in every domain of power - economic, military, diplomatic, ideological, technological, and cultural - with the reach and capabilities to promote its interests in virtually every part of the world.” Scholars today continue to estimate the USA as a global superpower, which has “no equal”. The main argument is that U.S. capabilities are so overwhelming that other states cannot realistically hope to balance against it, nor do they have reason to because U.S. hegemony is benevolent,and it can maintain its preeminence into the deep of the 21 century.
Proponents of isolationism give just opposite vision of problems. They argue that the United States should devote more resources to domestic social problems and withdraw from involvement in international politics, as the American Empire has very high economic costs and weakens democracy at home. Isolationists believe that attempts to provide democracy abroad (especially in the Middle East) rests on dubious assumptions, leading to unnecessary American military interventions abroad, a geopolitical backlash and to the decline of the USA. Criticsof U.S. primacy or “imperialism” assumed that the pursuit of geopolitical militarism and further consolidation of the war system reinforces a crisis of empire, bringing “devastation of an imperial policy in an era of waning hegemony”.
BY MATTHEW D. CROSSTON | MAY 11, 2012
This apparent foreign policy surprise is partially the result of an interconnected process of push-and-pull: conservatives look to regain a dominant position for the future and democrats look to truly feel as if the President is one of them. This study is not so much how successfully he achieves peace between these two divergent camps, but rather how frustrating he seems to be to both for his failure to meet the stereotypical expectations of either side. One thing seems to be certain when looking at Obama foreign policy: external criticism of his positions seems to lead to a pragmatic overreaction that is more aligned with a moderate conservatism and makes him notoriously difficult to label with a broad left-leaning or right-leaning brush.
First the somber news: President Obama’s first term makes clear that there is no dawning of a new age in foreign policy development, benevolently bent on finding a ‘new means’ for dealing with 21st century conflict. Perhaps it was unfair to expect such a result, but then again it was Obama himself who seemed eager to rise to such a challenge. These ‘new means’ were meant to incorporate all of the tools and capabilities at the disposal of American might. (Obama 2007) It was Obama who boldly declared his administration would go beyond mere rhetoric and focus instead on achieving concrete results with these ‘new means.’ (Obama 2007)
The debate in the episode is in many ways a small-scale projection of the overall U.S. policy debate on the current and prospective U.S. role in the Arab Spring. It focused on the issues of U.S. military help, danger of militancy, and the Arab Spring view towards Israel and the United States. This article will focus on three of the most under-studies aspects of the U.S. role in the Arab Spring: American policy and the academic debate, the paradigm of ‘doing’ in U.S. foreign policy and the question of overlap between American domestic and foreign policies.
The widespread policy and media narrative of the Arab Spring is that the movement has been a surprise; emerging completely out of the blue, catching every political player flatfooted. ‘Even the regimes and administrations that were targeted by the Arab Spring movements couldn’t see it coming’[iii] – or so it is argued.
While this shock is somewhat understandable among the regimes of the Middle East whose administrations never really established rigorous ‘academia-watch’ departments that follow the academic literature and debate, I can’t really contextualize the surprise in the American executive branch circles as almost every branch have one or more academia-watch programs staffed by quite capable analysts. My curiosity grows even further as it was Gary Fuller, a former CIA political analyst who wrote about the danger of the Middle East ‘youth bulge’ back in 1989 and its possible dangers to regime stability, as well as U.S. Middle East policy[iv]. The youth bulge literature grew in the 1990s, highlighting statistical correlations between nations with youth bulge demographics and the likelihood of socio-economic discontent. Further studies by political scientists like Jack Goldstone,[v] Gunnar Heinsohn[vi] and more recently Richard Cincotta – Christian Mesquida[vii] reinforced Fuller’s observations. But the most critical warning was given by perhaps one of the most read books of its genre, Roger Owen and Şevket Pamuk’s work on Middle East economics, whose concluding chapter argued that based on the MENA region population growth statistics in the 1990s, the region had to maintain a minimum of %7 economic growth. Otherwise, authors warned, the region would fall to youth bulge demonstrations by 2010.[viii]
Furthermore, the assumption that the Middle East youth bulge would create such a domino effect was one of the hypotheses behind the 2003 War in Iraq. Bernard Lewis for example[ix], was aware of the repeated warnings by Middle Eastern demographics experts and argued that it was the duty of the United States to knock the first domino by invading Iraq. In a romanticist Wilsonian spirit, it was argued that the presence of a large U.S. force intended to overthrow perhaps the most hated dictator in the region would inspire the Arabs to rise and overthrow their dictators as well and create a region-wide movement like the Third Wave democracy movements in Eastern Europe. However, due to the way in which the U.S. entered the war in Iraq and handled the conflict ended up delaying this domino effect, effectively causing people to rally around their dictators against a possible American invasion, strengthening the position of the very dictators the United States sought to remove.[x]
However, despite the existence of a substantial literature that warned American policy-makers about the Arab Spring as much as two decades ago (including forecasts commissioned by the intelligence service) Washington appeared unable to make sense of what was happening in the region or what to do about it. This raises serious questions over the executive branch’s handling of academic information and forecasts.
I recall from the International Studies Association (ISA) annual conference of 2010, that a group of senior analysts from various government agencies were boasting how closely foreign policy and intelligence programs were following ‘all that’s going on in the literature’, in response to an inquiry from the audience questioning the government’s rationale of ignoring the academia’s warnings before the war in Iraq. Just about a month after the conference Mohamed Bouazizi’s act of self-immolation started the Arab Spring. Ever since the American administration has been scrambling – with mixed results – to situate itself with regard to the movement, still not convincing those who think the government organs are following the academic literature – at best – preferentially.
Go to Google and search for the query: ‘What should the United States do?’ – you will end up with thousands of issues and agenda topics on which some expert is ‘urging’ the United States to do something about. Carry on with the search adding a random country each time; you’d probably be surprised to see that American decision-makers are called on to act in some way on almost every country in the world and every global issue.
Although many American foreign policy professionals don’t like ‘the E-word’, feeling an urge to act in a large volume of area, including literally the other side of the world, is one of the main characteristics of an imperial consciousness.[xi] I don’t necessarily say this in a pejorative way: projecting an imperial consciousness is not the same as being an empire. Yet cost-benefit calculations don’t travel far with ‘normal’ states; their security concerns are geographically close.[xii] The ability to make these calculations globally is the mark of imperial ambition and capabilities.
With the primaries in the Republican Party well underway, the campaign season has finally gained momentum. The President’s recent State of the Union address left no doubt that Obama has shed his presidential “coolness” to re-gain the passion of the campaigner.
From now on, America will be increasingly absorbed by the process of choosing its next president. With each election comes a new level of spending, scrutiny of the candidates’ public record and private life, media coverage, and, no less important, drama and entertainment. The main networks such as Fox News and CNN have already set the stage for what they will broadcast once more as a “historical election” – with all the hammering insistence that 24-hour news channels are capable of. Nothing less than “America’s destiny”, commentators and presidential contenders like to repeat, will be decided on November 6, 2012.
An Introspective Campaign:
Yet, it is hard not to spot a growing sense of fatigue this year. At a time of crisis, parochialism is a great risk. These elections, in fact, may become remembered as the most inward looking the U.S. has had in decades. On the one hand, the battleground seems clearly delineated to the point of the obvious: how to put America back on track with employment and growth. An old Clintonian mantra has been recycled and updated for this electoral season: “It’s the economy, stupid 2.0”. On the other hand, the focus on domestic economic issues is mirrored by a deep concern with restoring American greatness. But so far responses to this challenge have been largely introspective. Mitt Romney and Newt Gingrich say they offer “no apology” for America’s actions in the world. They are fighting Obama not over a New America that can thrive in the world of the 21st century, but an original, purer America that is no longer and perhaps never was. Nor is Obama’s message necessarily more visionary and outward looking. That “decline is not a destiny” is declared by the Democratic President and its Republican rivals with the characteristic insistence of those who are struggling to convince themselves. Indeed calls for renewed American leadership appear imbued with a sense of real anxiety about the country’s future.
As the United States struggles to relaunch its economy and redefine its identity, the outside world has become the mirror in which America sees its weakness, not the place where it is reminded of its greatness. Republican contenders such as Ron Paul call for a total disengagement from the international sphere. Gingrich and Romney see the country besieged by foreign rivals and enemies, with only Israel standing tall as its sole true friend. The notion that a more globalized and interconnected world can be a positive force for peace and prosperity has disappeared in Obama’s latest strategy to “insource” jobs. In the State of the Union address, Obama moved a sharp critique to China’s unfair industrial and commercial policies. U.S. companies that were shipping jobs overseas were presented as almost guilty of treason and responsible for persistent high unemployment in the U.S. In public debates Mexican immigrants, Middle Eastern clerics, Indian students, Chinese workers and European socialists risk to be relentlessly and interchangeably portrayed as a danger to the American way of life.
The paradox is that America feels under siege by a globalizing and changing world that is largely, although clearly not exclusively, of its own making. The economic rise of China has been fuelled by the application of market-oriented principles extensively championed by the United States. The long hoped for reformist impulses sweeping across the Middle East should reassure Americans about the universality of democratic values rather than soliciting kneejerk suspicion. Rather than dwindling European socialism, it is rampant financial deregulation that should take the blame for America’s economic ailments. In the past, America largely believed it could remake the world in its own image. Now instead Americans seem to be turning their gaze away from the world, as if they were no longer comfortable with the image they saw.
Is Anybody Paying Attention Out There?
While the United States is increasingly introspective, the rest of the world appears simultaneously less interested in the direction America will take. Chinese officials greeted the Pacific pivot announced with great fanfare recently in Washington with remarkably underwhelming concern. In their minds, America has always had its eyes on the Pacific: since it intervened in the Philippines in the late XIX century, all the way to the Korean and Vietnam wars. Europeans also appear less emotionally attached to the current Presidential elections. Firstly, they are distressed and distracted by their own crisis. Secondly, they have no one to really loathe or love: Romney is no Texan cowboy, while Obama 2012 has lost much of the 2008 sparkle. The Middle East is going through its own revolutionary convulsions with notably little public interest in America bashing from the Arab street. In many quarters of the world the notion of American decline has taken hold. Hence, the implicit assumption seems among many, why bother paying attention to who will occupy the White House next?
During times of crisis, focusing on one’s own problems while ignoring others or treating them with contempt is a strong temptation. Yet it is also a dangerous one. After over a century of ascending American power and deepening institutional, economic, political and cultural interconnectedness, the United States’ destiny is ever more tied to that of peoples and countries across the globe. And vice versa. Public debates during this campaign season, however, have taken a risky turn. America’s economic interests and national identity are relentlessly defined in contrast with, or against, those of the rest of the world. Obama’s latest State of the Union address captured entirely this mood. This has left little space for constructive and pragmatic discussions about the challenges and opportunities posed by globalizing markets, the international consequences of Asia’s growth and rise, the effects of Europe’s economic and political woes, and the complexity of the new Middle Eastern dynamics that certainly cannot be reduced to a competition between the good reformists and bad Islamists.
Likewise non-Americans should be careful of falling pray to naïve cynicism and lofty dreams of decline. Indeed, whoever the next resident of the White House will be, what he will say and do will continue to be critical for international security, cooperation and prosperity. Europeans are worried about the U.S. “downgrading” of Europe. Yet, how the next President will lead America’s engagement in the Asia Pacific may turn out to matter more for Europe’s future than what Washington does across the Atlantic directly. Likewise, the way the U.S. will solve its economic troubles will undoubtedly have ripple effects for all. Failing to see the global stakes of the next Presidential elections will be at America’s and the world’s peril.
Emiliano Alessandri is Transatlantic Fellow at the German Marshall Fund of the U.S. in Washington DC
Gregorio Bettiza is a PhD candidate at the London School of Economics and Political Science (LSE) and a LSE IDEAS Transatlantic Relations Programme Research Associate.
This article first published at LSEIdeas.
The Resource Curse and its Challenge to Development
The idea of resource curse did not exist until the 1990s. The apparent paradox was that countries endowed with natural resources have performed worse than those with scarce or no resources at all (Auty 1993; Humphreys et al 2007; Ross 2001). In a simplistic comparison, the proponents compared East Asia’s success vis-à-vis Latin America and Africa’s resource-rich states. As economists focussed on the relationship between resource wealth and economic growth, what became evident was that “resources have led to worse economic performance” (Sachs & Warner 1997, 2001). As a way of affecting growth, a sudden increase in exports of minerals and hydrocarbons can shoot up exchange rates and negatively affect the competitiveness of the productive sectors – this is known as the Dutch disease effect. Political scientists, on the other hand, have been preoccupied with the ways resources – specifically oil – have influenced conflicts, patterns of decision making and democratic performance (Karl 1997; Ross 2001). At best, these arguments reflect rentier politics in the Middle East, which have been used to generalise the failures of achieving effective and inclusive governance in the midst of an oil boom.
However, what is evident is the shortcoming of development studies in understanding the opportunities and challenges brought about by the contemporary commodity boom. With the rise of neoliberal ideology, state led development – including state-managed extraction – has been discredited as a model of governing natural resources. Mining opening reforms have swept the developing world in the last three decades, in which the new geography of the bonanza has concentrated in resource-rich regions of Africa, Latin America, Middle East, and Central, South and Southeast Asia. Economic restructuring enabled foreign firms (sometimes also domestic ones) to engage directly with state agencies in crafting laws to recognise private property rights in previously nationalised markets. In the context of low prices between 1980s and 1990s, states were relegated in the margins as regulators rather than direct participants in the global economy. As foreign loans pumping ambitious megaprojects dried up, foreign investment was the only source of fresh capital to resuscitate the minerals and hydrocarbons industries. Apart from the difficulty of securing support from international investors, the costs of building domestic capacity for extraction has made nationalist programme of extracting resources infeasible. In fact, many developing countries privatised their state enterprises and the only remaining publicly financed extraction is in host countries with state-owned enterprises (SOEs).
Evidently, a new global context of development is shaping the politics of natural resources in the Global South. Since 2002, commodity prices took a steep rise, which has thus far changed very little despite the economic crisis hitting the core economies since 2008. The demand for oil, agriculture, and metal minerals are driven not by financial markets per se but by the insatiable need to secure access to resources by emerging powers, mainly Brazil, China and India. Equally, a fundamental shift in political economies has taken place across the developing world. This involves the simultaneous eclipse of state activism and the rise of private actors in governing resources at the global level – a trend that has not been reversed despite the opportunities for reforms offered by the commodity boom. The high prices have driven production upwards and a return to an age of resource dependency for these countries. While the salience of the resource curse hypothesis is incontestable, we still need more rigorous studies to understand the ways resources can offer opportunities for development in the Global South.
The challenge of the resource curse is two-folds. Firstly, economists are wary of possible positive means of achieving sustainable growth through sound resource management. One way of gaining more from resource rents is through a conscious state strategy of economic diversification, industrial upgrading and prudent fiscal management. To date, only countries with large internal markets have successfully diversified economic production, namely Argentina, Brazil, Indonesia, Malaysia, and Mexico. Even Chile and South Africa – despite centuries of resource extraction – continue to be dependent on metal minerals for their income. Other countries with weaker institutional capacities, notably in Africa and Latin America, are far more susceptible to the resource curse. A downturn in prices may have far reaching consequences especially if extractive resources dominate the export earnings. Therefore, social spending to reverse the poverty legacies of the past is contingent on the economic fate of commodity production.
Secondly, the political aspect of resource management seeks to find ways of institutionalising political reforms to strengthen administrative capacities of governments in adequately responding to external shocks, rent-seeking, and from predatory behaviour of state agents. What we have learned from the past, in Terry Karl’s analysis of Venezuela, is that politicians fall short in making difficult political choices to reform bureaucracies in an attempt to insulate the state from organised interest groups and deploy economic policies more effectively. Equally, in contexts where governance is influenced by external actors, states must exalt political autonomy from the forces of globalisation; they also need independent powers (without being wholly authoritarian) to build economic and social programmes that would not depend on commodity production. These are clearly long-term challenges that are never easy to address.
Governing Extractive Industries
I wish to focus on the political effects of the resource curse. In this debate, the key aspect of resource governance is the extent to which states can exalt autonomy in deciding the management of scarce resources. By political autonomy, I do not simply mean the capacity of elites to obstruct organised rent-seeking groups to capture extractive rents for personal interests. A larger aspect of governance involves finding the appropriate balance between state-led and market-led mechanisms in facilitating the internationalisation of extractive sectors. Put simply, how can state elites maximise foreign investment in natural resource sector without alienating foreign and domestic capital? Since the 1980s, the precursor of economic reforms in mining was low commodity prices and failing state enterprises – both of which led to a decline in commodity production and near collapse of resource-based economies. With high commodity prices, economic development in the new decade is marked by an opportunity to rebuild the state by expanding its scope in economic management as well as achieve greater democratic legitimacy by using rents from export earnings towards poverty reduction and social inequality.
Evidently, the return of the state in managing resources is far from a linear process. While in Latin America there is an argument to make about the activist role of states, the African cases paint a completely opposite picture. For example, Brazil and Chile never relinquished state control over the management of natural resources, evidently shown by the presence of state enterprises in petroleum and mining sectors respectively despite pressures for privatisation and liberalisation of the economy (Massi & Nem Singh 2011; Nem Singh 2010). In Argentina, Bolivia, and Ecuador, the governments emerging after a crisis of citizenship have sought to re-negotiate state-society bargains to use natural resources through export taxes as a way of addressing the poverty legacies of the past. With a proffered commitment to social equality, all of these governments argued to move beyond a privatised model of economic management. One way of dealing with the crisis of neoliberalism is to adopt a heterodox economic strategy consisting of prudent macroeconomic policies, expansive social spending, and attempts at revitalising industrialisation and limited renationalisation (Grugel & Riggirozzi forthcoming, 2009). This, evidently, varies across the region depending on national circumstances, historical context, and coalitional dynamics. Argentina and Brazil have succeeded in re-introducing industrial policy in its economic planning while Bolivia, Ecuador and Venezuela seems to have been ‘locked in’ to a situation of resource dependency.
In contrast, there are only incipient moves towards this direction in some African countries. In Zambia, copper has served as a source of patronage. Reforms to privatize copper were responses to economic restructuring with IFIs binding aid disbursement to economic performance. Between 1998 and 2000, due to low prices, the government changed the tax and mining regulations towards a more liberal orientation, to which the copper sector then had the lowest tax burden in the economy. Whilst the copper sector is experiencing rapid expansion in investments and production, the government has yet to dismantle the low tax regime to attract investment undertaken in the 1990s (Fraser & Larmer 2010; Haglund 2008). Taking a different case, Tanzania is a relative newcomer in the mining industry but its gold exports now rank third in Africa. The industry has attracted more than US$2 billion out of the total US$ 3 billion FDI coming into the country since 2000. The scale of dependency is extraordinary: gold mining currently contributes over 3% of government revenues in taxes in 2008 and roughly US$ 750 million in export earnings (ICMM 2009). Despite endeavours to re-negotiate taxes and royalties through changes in mining laws in 2010, transnational companies are taking the lead in developing the extractive industries with the government chiefly reacting to demands of private capital and donor agencies.
While my discussion here has focussed on what states can do within the context of neoliberal hegemony in managing extractive industries, the international community clearly has a significant role to play in making resource wealth work for the poor. However, so far, we still need more critical studies on global governance institutions and the construction of normative standards of good governance in managing resources. For one, the debate has been narrowly confined around revenue management where even autocratic governments like Azerbaijan passes the evaluation of the EITI Board yet it continually ranks poorly in the transparency index. More crucially, sound revenue management does not in any way address issues of dependency and a return to primary commodities production. The driving force behind such uncritical debate of growth models is that the whole good governance agenda masks the ideological underpinning of the reforms. Notwithstanding a few cases, like Brazil and Malaysia, economic restructuring in extractive industries are plainly reflexive of the neoliberal ideology. The forces of globalisation are deemed as inexorably pushing states to open their markets to serve the needs of the global economy.
Jewellord (Jojo) Nem Singh is PhD Candidate in the Department of Politics at the University of Sheffield, UK and also director of CESRAN-American Studies. His work has appeared in Third World Quarterly, Journal of Developing Societies, and Journal of Critical Globalisation Studies in addition to forthcoming book sections published by Palgrave and Zed Publications.
Auty, Richard M (1993) Sustaining Development in Mineral Economies: The Resource Curse Thesis. London & New York: Routledge.
Grugel, Jean & Pia Riggirozzi (forthcoming) ‘Post-Neoliberalism: Rebuilding and Reclaiming the State after the Crisis’, Development and Change.
Grugel, Jean & Pia Riggirozzi, editors (2009) Governance after Neoliberalism in Latin America. Basingstoke: Palgrave Macmillan.
Humphreys, Macartan, Jeffrey Sachs & Joseph Stiglitz, editors (2007) Escaping the Resource Curse. New York: Columbia University Press.
Karl, Terry Lynn (1997) The Paradox of the Plenty: Oil Booms and Petro-States. Berkeley: University of California Press.
Massi, Eliza & Jewellord Nem Singh. 2011. “The Politics of Natural Resources: A Critical Appraisal on the ‘Return of the State’ in Brazil.” Paper presented at the workshop Post-Neoliberalism: Towards a New Political Economy of Development for Latin America?, University of Sheffield, UK, October 07.
Nem Singh, Jewellord T. 2010. “Reconstituting the Neostructuralist State: Political Economy of Continuity and Change in Chilean Mining Policy.” Third World Quarterly 31, no. 8: 1413-1433.
Ross, Michael (2001) “Does oil hinder democracy?”, World Politics 53, 325-361.
Ross, Michael (1999) ‘The Political Economy of the Resource Curse’, World Politics 51: 297-322.
Sachs, Jeffrey & Andrew Warner (1997) Natural Resource Abundance and Economic Growth. Center for International Development & Harvard Institute for International Development.
Sachs, Jeffrey & Andrew Warner (2001) “The Curse of Natural Resources”, European Economic Review 45: 827-838.
This article first published at e-International Relations.
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