Canada and nuclear proliferation

Over the course of the summer, there have been a number of major global stories with international development dimensions: but one in particular, with major ramifications for the future security of the planet, has been completely missed by the world's media, for reasons that both baffle and disappoint me.

On 2 August, the Saturday of what in Canada is a long weekend, The Globe and Mail's Campbell Clark reported that Canada will 'accommodate India's entry into the club of countries that can trade openly in nuclear fuel and technology'. If correct, Canada has, during the lull of a long weekend during the height of the summer, when no one pays attention to international news, effectively killed the most effective international treaty preventing the spread of nuclear weapons, the Non-Proliferation Treaty (NPT).

Opened for signature on 1 July 1968, the NPT was designed to halt the spread of nuclear weapons beyond those that acknowledged that they had such weapons at the time of the NPT's agreement. Initially proposed by Ireland, signatories to the NPT agreed that:

• if they are not in possession of nuclear weapons they will not acquire them;
• if they are in possession of nuclear weapons they will seek to eliminate them;
• the use of nuclear technology for peaceful purposes was acceptable.
  

Currently, 190 states have signed the NPT, and only 4 significant countries have failed to sign: the nuclear-armed states of Israel, India and Pakistan, and the nuclear-capable state of North Korea.

Campbell Clark's report in The Globe stated that Canada was later this month going to agree to back an exemption being proposed by the United States for India at a meeting of the Nuclear Suppliers Group, an informal club of countries that trade in nuclear materials. The United Sates and the Indian government reached a contentious agreement to trade in nuclear materials a few years ago, and in order for the deal to proceed, the US and India must ratify it, but, crucially, the Nuclear Suppliers Group must exempt India from its restrictions on trade in nuclear technology and fuel such as uranium. Many believe that such an exemption, because of India's existing nuclear arms capabilities, has the potential to fuel a South Asian nuclear arms race with India's arch-rival, Pakistan.

Canada's change of stance is dramatic, because Canada has a long and troubled history of dealing with India on nuclear matters, going back to 1974, when Canadian technology acquired in the 1950s was used by India for a 'peaceful' nuclear explosion. In the aftermath of India's abuse of Canadian co-operation, Canada became an even more vocal supporter of the NPT, and Canada was traditionally viewed as being a proliferation hawk in the Nuclear Suppliers Group. However, this hostility now seems to have evaporated, with Foreign Minister David Emerson's commenting that 'you can't keep somebody in the penalty box forever'.

What Emerson fails to apparently appreciate is that to make India an exception to the NPT treaty will effectively kill it; why would any country abide by a nuclear technology control regime that exempts a non-signatory nuclear power from paying attention to the underlying principles of the regime? Or, to carry Emerson's analogy further, how sensible is it that if the team in the penalty box reaches agreement with another team in the division to ignore the rules of the game then the rules of the game have to be changed? Just as with the transformation of Canada's military from a peacekeeping to a war-fighting machine, which has been chronicled in this weblog, Canada's willingness to grant an exemption to India heralds a major transformation in the country's foreign policy, increasing its willingness to accommodate American foreign policy interests at the expense of its previous Pearsonian internationalism.

Canada in the world: what happened?

the US mortgage crisis and international development

Previous posts to this weblog have discussed the relationship between the US sub-prime credit crunch, and hence the ongoing US cyclical recession, and developing countries--most specifically, my post of 6 September 2007. That this link continues to bite was highlighted today in the Lex column of the Financial Times, which noted that US Treasury data now indicates that Chinese investors now own US$376 billion of the long-term debts of Fannie Mae and Freddie Mac, which, in its guise as a government-sponsored enterprise, is the principal US mortgage lender. As Lex drily notes--and as I all but suggested last September--the People's Bank of China is now a lender of last resort to a reeling US Treasury and Federal Reserve.

How this works was nicely illustrated by a graphic in the Financial Times this week, which is at the head of this post. US mortgages are sold by lenders to potential American homeowners. The lenders sell the debts on, to large US banks or, more commonly, Fannie Mae and Freddie Mac. All three institutions bundle their mortgage debts together into mortgage-backed securities, which are sold to credit market investors--pension funds, university endowments, as well as the large global financial institutions. This is where China comes in: for they have become either a substantial component of the credit market itself; or Chinese sovereign wealth funds, which are state-backed investment funds seeking ways of earning decent returns for the masses of foreign exchange that Chinese companies and the Chinese state have been amassing, have been buying parts of the large global financial market institutions that are heavily involved in the buying of mortgage-backed securities. In either instance, then, Chinese money is propping up the US financial system, and through that, the global economy, allowing it to adjust much more slowly to the changing realities in oil and commodities that it faces.

It is ironic indeed that global finance capital has come to rely upon developing countries for their salvation, ahead of the capitalist states that support their international operations. Ironic, but now new: we have been here before, but in a different guise, during the debt crisis.

prolonged absence

This weblog has been silent more often than not over the past 6 months. Much has happened around the world that is worthy of critical appraisal--Zimbabwe, Tibet, Burma...amongst others.

I hope that the weblog will resume normal service in the next little while. Please be patient.

the World Bank and poverty

According to the World Bank's website, 'at the heart of the World Bank’s work in more than 100 countries is the focus on poverty reduction. Almost one billion people live on less than $1 a day; 2.5 billion live on less than $2 a day. Beyond causing hunger and malnutrition, poverty makes people vulnerable to economic shocks, natural disasters, violence, and crime. They are often denied access to education, adequate health services, and clean water and sanitation.'

Excluding China, the number of people living on less than $1 a day has gone up since 1985. Excluding China, the number of billion living on less than $2 a day has gone up since 1985. This begs the question: if 'working for a world free from poverty' is at the heart of the World Bank's mission, why have the numbers of poor people increased in the past 20 years?

The people that work in the World Bank are not evil. They do not arrive at their office, in Washington, or in Hanoi, or in Maputo, and think 'How much poverty can I create today?' Indeed, the World Bank is full of well-meaning people who care passionately about poverty, who have learned a lot about the causes and consequences of poverty, and who have often worked very, very closely with poor people, in order to try and make the world a better place. I should know: many people I know have worked with, or still work for, the Bank, and they are not wicked people.

At issue, then, is how an institution full of well-meaning people can end up deepening the very phenomenon that they purport to want to remedy. How is it that the doctor ends up making the disease worse?

The answer lies in the institutional structure of the World Bank, and the career structure for those that work within it. The World Bank as an institution is dominated by representatives from the North, and, as Robert Wade of the London School of Economics has admirably shown in work that was published almost a decade ago, within those representatives, the role of the United States Department of the Treasury (the US finance ministry) is paramount. The US Treasury ultimately decides who becomes President of the World Bank. It has a disproportionate degree of influence in who assumes senior positions within the World Bank. Further, non-American Executive Directors at the Bank, who, along with the President, tend to set day-to-day policy and do pivotal things like approve loans, tend to understand the need to follow the lead of the United States in decision making. Thus, the Bank, which is staffed by a heterogeneous group of often very talented people, is an extremely hierarchical structure--almost Leninist in its design--in which those at the top make decisions in light of their belief system, and often (willingly) ignore good advice from those at lower levels of administration.

In terms of career structure, the World Bank tends to reward the orthodox. The World Bank is dominated by economists trained in the United States in neoclassical economics, which formally demonstrates the efficiency of free markets and private producers and the benefits of international trade and competition. People whose economic ideas stray from this agenda--people like Branko Milanovic and Joesph Stiglitz--have had a very hard time getting their ideas listened to, let alone accepted, and the message to the vast majority of the staff of the Bank is clear: don't upset the apple cart if you want to maintain the privileges that being a World Banker brings. Again, then, the career structure of the Bank is one that reinforces a pre-existing set of views, rather than challenging those views.

It is this combination of a hierarchical institutional structure and a career path that rewards orthodoxy over challenge which results in the World Bank clinging to a set of policy prescriptions that have, in essence, changed very little in 25 years and which have had a significant global impact, in that they have contributed to increasing the number of poor people in the world.

goodbye Rick Hillier

This weblog has been very quiet, for several months. The pressures of work have not allowed me to follow up several issues on which I have wanted to comment--the protests in Tibet, the elections in Zimbabwe, and the character of the World Bank and IMF, to name three. However, I have been roused out of my silence by the news yesterday that General Rick Hillier, Canada's Chief of Defence Staff since February 2005, is retiring.

Rick Hillier has been portrayed in the press as a straight-talking soldier concerned above all with the troops under his command, who has waged a struggle for the hearts and minds of Canadians to support the military while it undertakes its twice-extended mission in Khandahar. I have no reason to doubt the sincerity of Hillier's beliefs, but I do have reason to question them.

When Hillier became Chief of Defence Staff, Canada had 600 soldiers stationed in Kabul with NATO's International Security Assistance Force, known as ISAF. These soldiers were undertaking a fairly 'classic' Canadian international military operation: peacekeeping in the comparative safety of Kabul. Peacekeeping was what Canada's military, globally, was known for up until the appointment of Hillier. With that appointment, though, things changed.

As Janice Gross Stein and Eugene Lang convincingly demonstrate in their excellent The Unexpected War: Canada in Kandahar, it was Hillier who, in the wake of the Chretien government's opposition to the Iraq war and the Martin government's withdrawal from the United States' missile defence program, recognized an opportunity to placate the United States while at the same time fundamentally transforming Canada's military. That opportunity was the 'mission' in Kandahar, an infinitely more demanding assignment than Canada had undertaken in Kabul. The Martin government's agreement to send Canadian soldiers to Kandahar was basically Hillier's doing; those in the government had little idea about Afghanistan or Kandahar. They agreed because the 'mission' eased pressure on the United States military, both in Afghanistan but also in Iraq, and in so doing pleased those who had been unhappy with several foreign policy decisions that directly affected the United States.

It also did something else, however: Kandahar was and is a war zone. It is not a place where peacekeepers try to keep warring parties apart and maintain order. It is a place where order must be imposed through the use of force, because local warlords oppose the intervention in Afghanistan. As a result, Canadian forces have been heavily engaged, for the first time since the Korean War, in offensive military operations against opponents that the media dubs 'the Taliban' but whom, as Graeme Smith of The Globe and Mail has so ably demonstrated, are not the remnants of the former government of Afghanistan as rather an assortment of those opposed to Western military involvement in Kandahar. At best, the Pashtuns fighting the Canadians might be termed 'neo-Taliban'.

The point, then, is that Hillier has transformed the Canadian military from a peacekeeping force into a war-fighting machine. This has, no doubt, greatly increased the cohesion of the military themselves, and has also increased the recognition of the military amongst ordinary Canadians. It has, however, also led to the deaths of 82 Canadian soldiers and a significant reinforcement of opposition in Kandahar to the Canadian presence (many of whom are mistaken for American soldiers), which now totals 2500 soldiers. Most importantly, however, while the 'mission' has to terminate in 2011, Canada--and NATO--has no strategy in place to deal with the possibility that the country will remain largely hostile for the foreseeable future. This is a conflict that cannot be won militarily, as the history of Afghanistan shows, and will be difficult to win politically, given widespread views that the government of Hamid Karzai is not a national government but, at best, a weak Kabul government. Hillier has led Canada into what is, in essence, a no-win scenario; and for this, his tenure as Chief of Defence Staff will probably, over time, be viewed much more negatively than is currently the case.

recent activities, winter 2008

The new year promises to be a busy one. My teaching a Trent University will, of course, dominate a lot of my time between now and late April. Both the courses I teach, Human inequality in global perspective and Agrarian change and the global politics of food, are going well--the fall term results were as I would have hoped them to be.

Editorial work on my next book, again co-edited with C Kay, and entitled Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question will (finally) be completed in January; I will be glad to put that project to bed.

A review essay on Sardar Sarovar, entitled 'State, society and Sardar Sarovar', and dedicated to the memory of Ranjit Diwedi, will finally be published by Contemporary South Asia in March, as will my book chapter on gender relations and macroeconomics. Both have been in the pipeline for some time. Work on a book chapter on gender relations and the macroeconomics of the Millennium Development Goals is also almost complete. I will start work on a review essay on the World Bank's World Development Report 2008: Agriculture for Development, a note on landlessness in Vietnam's agrarian transition for the Journal of Agrarian Change, and catch up with two (somewhat delayed) book reviews for Development and Change. Finally, I will be giving seminars in the next 3 months at Queen's University in Kingston as well as at Trent University.

In terms of professional activities, I will be, as part of a team of external evaluators, be undertaking a review of York University's International Development Studies Program; that work will be done in January. I have also been asked, in my capacity as Co-Chair of the Editorial Board of the Canadian Journal of Development Studies, to review, along with other colleagues, the publishing model of the Journal, with an eye towards concluding deliberations on the future way in which the Journal will be published.

Clearly, it will be, as usual, a very busy few months.

revenge of the slums: the aftermath of the elections in Kenya

The events that have swept Kenya since the rigged re-election of President Mwai Kibaki on 27 December offer a deeply unsettling reminder of how the manipulation of identity, such as ethnicity, by dominant political elites can produce carnage on a mass scale. The international media has, in trying to interpret recent events, emphasized the ethnic dimensions of the conflict that has been ignited by the election by explaining the last 10 days in tribal terms—Kikuyu, Luo, and Kalenjin most especially, and indeed, these differences run deep. However, what has been missing in these accounts is the extent to which these differences have been and are politically constructed. The British, when they ruled Kenya, reinforced ethnic difference as a means of sustaining the power of the colonial state. After independence the elite that came to rule Kenya did the same, setting poor Kenyan against poor Kenyan by highlighting the ethnic ‘differences’ within the poor. This was particularly so in the Rift Valley region, where, as a result, there is a long-standing history of interethnic conflict; this was especially so under the regime of former President Daniel arap Moi, who used ethnic differences as a principal excuse to maintain a repressive state for many years.

The use of ethnicity as a means of politically organizing the subordinate, for the benefit of the ruling elite, and the use of repression as a means to sustain an elite privilege that is predicated upon the use of ethnicity, cannot however hide the fact that Kenya is a deeply stratified society. Class dynamics must be understood if the political economy of recent events are to be interpreted. Dominant political groups have used politics as a means of plundering the country, and thus enriching themselves, turning themselves into a indigenous ruling class. Kleptocracy runs deep in this elite. A principal exhibit: the Goldenberg scandal of the early 1990s, which witnessed, possibly, 10 % of the country’s GDP being extorted by members of the elite through questionable exports of gold and diamonds, a scam for which no member of the ruling class has ever been prosecuted. A second exhibit: the Anglo Leasing affair, in which government money was paid to companies that did not exist, or was paid to companies at dramatically over-inflated prices, diverting millions of dollars to shady businessmen who in turn passed on money to corrupt senior politicians. Repression and kleptocracy have been tolerated by the West, as Kenya has always been a key strategic ally in East Africa. Western indulgence, even during the last few years of Moi, when, in theory, the West was trying to clamp down on corrupt excesses, has allowed Kenyan political elites to turn a blind eye to the poverty, unemployment and landlessness that confronts a population of 38 million, half of which live on less than US$2 a day, and half of which are under 20. Kenya’s economy must create several hundred thousand jobs a year just to stand still, yet the capital-intensive export agriculture that supplies high-value fresh flowers and vegetables to Europe that is favoured by the government, and the import-intensive tourism industry that is favoured by Northern holidaymakers, do not produce those types of labour-intensive jobs.

No wonder the citizens of Kenya wanted change. They thought they were going to get it in 2002, when Kibaki was first elected, promising to fight corruption and produce hundreds of thousands of jobs. There was, amongst Kenyans, at the time a remarkable, rejuvenating sense of possibility. Instead, they got more of the same, as anti-graft campaigns were quickly dissipated, stalwarts of the Moi years quickly returned to positions of authority, and oppositional figures such as Raila Odinga were forced to quit.

That this cabal would seek to rig the presidential elections is thus not surprising, although the blatant character of it has shocked many, not least of all me. As is clear, the outcome of the parliamentary elections was a disaster for the President. The President’s Party of National Unity, which includes remnants of Moi’s former Kenyan African National Union party, lost the vote, and half the President’s cabinet, including some very nasty people such as Nicholas Biwott, Moody Awori, and Gideon Moi, son of the former President, lost their seats. Kibaki and his entourage therefore put into play a long-standing plan to rig the Presidential election results by delaying the results from Central Province, a Kibaki stronghold. Kibaki was being trounced outside Central Province; therefore, the results in Central Province were altered, so that, in some instances, apparently greater than 98 % of the electorate voted in some precincts for the President, a ludicrous ploy that would have made Nicolae Ceausescu proud. As a result, Kibaki was declared the winner by 230000 votes by the tainted Kenyan electoral commission. When the result was announced, security forces sealed off central Nairobi, because the political class knew what the impact of the declaration would be; the President was hurriedly sworn into office. The electorate, robbed of the change that it sought, exploded, particularly in the slums of Kibera and Mathare outside Nairobi, pools of humanity that Mike Davis would recognize as ‘existential ground zeroes’ which, because of their desire for change, had the potential to become volatile in the wake of their political expression being thwarted.

Raila Odinga, the Orange Democratic Movement’s (ODM) candidate for president, and a long-standing opponent of the one-party rule of former President Moi, expected the vote to be rigged; indeed, the ODM engaged in some irregularities as well. Reliable accounts suggest that the ODM had a pre-existing plan to react to the announcement of a Kibaki victory by calling on a campaign of civil disobedience. Thus, on the ground, there has been some encouragement of young hoodlums rampaging through the streets of Kisumu, Mombassa, Eldoret and the Nairobi slums; the ODM is not innocent. Nonetheless, the assignation of blame must be laid at the door of Kibaki, who has robbed the Kenyan people of the change that they clearly indicated they wanted.

The venality of Kenya’s ruling and middle classes cannot be overemphasized. They do not have to see the sea of poverty in which they live. They are ferried by car from place to place, living behind fairly secure walls, where they can bemoan the rioting on the street outside, and ignore their own culpability in it. That culpability runs deep: they have materially benefited from the kleptocratic repressive state run by Moi and Kibaki, and they believe in their right to rule. Many hardliners in the elite will therefore argue that the reduction in repression under Kibaki was a mistake, and what is needed, to manage the ‘tribal tensions’ of Kenyan society, is a return to repression.

Indeed, what that repression would entail has already been witnessed in the past few days; the security services have been responsible for a significant share of the violence. What is not clear, however, is how ordinary Kenyans would respond. Previously, politically-motivated ethnic conflict occurred in rural areas removed from the capital. What is now different is that conflict has moved full-scale into the slums of Nairobi, where the frightening possibility of these politically-constructed identities fostering neighbour turning on neighbour is very real; in the absence of political accountability the poor have started to devour the poor. Accentuating the possibility of a deepening quagmire of conflict are the presence of young criminal gangs that have sought to use the troubles in the slums as an excuse to terrorize and loot, while at the same time trying to increase the control of slumlords over the impoverished population that lives there; many of these gangs, which draw from unemployed and disempowered youth, are linked to political parties. In this existential ground zero, 300 are dead, upwards of 250000 people are displaced, rape gangs stalk the countryside, and children are burnt alive in a place of sanctuary.

Cote d’Ivorie has tragically demonstrated that the myth of stability can quickly degenerate into civil war when the demons of ethnicity that have been used by the ruling elite turn on the political choices that have been made by that very elite. The flame has been lit, and while political leaders dither in the safety of their sanctuary it is only ordinary Kenyans who can put it out. One can only hope that that is what they do.