SENATOR TED KENNEDY MEMORIAL LECTURE - Pretoria, South Africa

SENATOR TED KENNEDY MEMORIAL LECTURE

New Beginnings, Enduring Challenges:

American Foreign Policy to Africa from Kennedy to Obama

Witney W. Schneidman

University of Pretoria

Pretoria, South Africa

October 27, 2009

Fifty three days ago, a lion among us, Senator Ted Kennedy, was buried in Arlington National Cemetery close to his beloved brothers, President John F. Kennedy and Senator Robert F. Kennedy.

With Ted Kennedy's passing, everyone one in the world lost a champion of democracy, a crusader for human rights and a passionate defender of dignity.

In his eulogy, President Barack Obama compared Senator Kennedy to the "Happy Warrior" that the British poet, William Wordsworth, spoke of when he wrote:

As tempted more; more able to endure,
As more exposed to suffering and distress;
Thence, also, more alive to tenderness.

Senator Kennedy's reach was enormous. Whether it was health care for all, opposing futile wars, making it possible for collegiate women to have resources in sports equal to men, or ensuring equality for the handicapped, the Senator touched the lives of all Americans in a way that few have.

Following the death of Bobby Kennedy, he eulogized his brother with three lapidary phrases that resonate today, and aptly describe Teddy himself: "he saw wrong and tried to right it, he saw suffering and tried to heal it, he saw war and tried to stop it."

An outsized personality and a beacon for liberal passions, Ted Kennedy embodied the famous adage--that you can accomplish anything you want if you do not care who gets the credit, and, as a result, he is duly credited for making our nation a better nation, and this world a better world.

As a legislative deal maker, the Senator was exceptional. There is the famous story of how he won the support of a Texas Committee Chairman on an immigration bill. Senator Kennedy walked into the meeting with a plain manila envelope, and showed only the Chairman that it was filled with the Texan's favorite cigars. When the negotiations were going well, he would inch the envelope closer to the Chairman. When they stalled, he would pull it back. Before long, the deal was done.

Ted Kennedy understood Africa.

At the urging of his brother, Jack, he first visited the continent in 1956 after graduating from Harvard to gain insight into the African countries emerging from European rule, traveling to Morocco, Tunisia and Algeria.

It was in Algeria, that he encountered the certainty of French colonial rule and, after being in Algiers, understood that it was no match for the determination of the Algerian independence movement.

Ted returned to Africa five years later, weeks after President Kennedy took office, visiting the Congo, Rhodesia, Ghana, Guinea and elsewhere.

Senator Kennedy's commitment to ending apartheid, therefore, came from his understanding of the reality of decolonization in Africa.

And this is why, as President Mandela said after his death, Ted Kennedy "made his voice heard in the struggle against apartheid at a time when the freedom struggle was not supported in the West."

Kennedy's inspired campaign against apartheid included a protest at the gates of Pollsmor prison in defiance of the South African police where he demanded Mandela's release.

Kennedy was a fierce champion in the U.S. Senate of what became the Comprehensive Anti-Apartheid Act, signed into law on this day, October 27th, 23 years ago.

In short, Senator Kennedy reflected the outrage of many Americans who saw apartheid as an affront to humankind.

But Ted was not the first Kennedy to connect with this remarkable nation.

On June 6th 1966, speaking to a gathering of the National Union of South African Students on the Day of Affirmation at the University of Cape Town, Ted's brother, Bobby Kennedy, then the junior Senator from New York, gave what many consider the greatest speech of his extraordinary life.

Saluting the courage of many South Africans who opposed apartheid, and reassuring them that they indeed had friends in the outside world, Kennedy said:

"It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current which can sweep down the mightiest walls of oppression and resistance.

Kennedy Africa Policy

The American poet, David Whyte, in his poem, "Working Together," writes:

We shape ourself to fit this world / and by the world are shaped again.

And so it is with a nation's foreign policy, and American policy toward Africa is no exception.

In the next 30 minutes, I will endeavor to convey the outlines of American policy toward Africa from Kennedy to Obama, with a focus on Southern Africa, and will close with some observations about what to expect from this administration.

Now if some of you are asking yourselves, how long did he say he was going to speak, let me assure you that I aspire to reflect the positive aspect of the observation made by Mark Twain, that it is "wise men who speak because they have something to say; fools speak because they have to say something."

When President Kennedy was sworn into office on January 20th, 1961, he inherited a world that was a battleground between extremes of the right and left, between democracy and totalitarianism, extinction and survival.

For Kennedy, this battle was most acute in the developing world, the Third World, where nationalism, which he recognized as consistent with the values of democracy, was being threatened by the prospect of communist subversion.

Following a trip through strife-torn Asia in 1951, Kennedy remarked that nationalism "is the most important international fact of life in the second half of the twentieth century."

Therefore, Kennedy concluded, the United States could no longer afford to buttress the "inequitable status quo" of colonialism. The nationalist era had to be acknowledged and engaged.

At the same time, the United States had interests in Africa and elsewhere, especially security and commercial interests, which some argued demanded caution and continuity in policy.

This dichotomy, between nationalism and anti-communism, defined the contours of American policy toward Sub-Saharan Africa during the Cold War.

Breaking the Mold?

The first months of the Kennedy Administration did indeed see a break from the past.

At the United Nations, the Administration voted against Portugal's ongoing colonial rule and extended material and political support to Frelimo in Mozambique and the FNLA in Angola.

At the same time, there were those in the Pentagon and elsewhere in the bureaucracy who believed Portuguese threats to deny refueling rights for American military aircraft on the Azores in the mid-Atlantic, thereby weakening America's capability to protect Western Europe, and lobbied against engaging the new order in Africa.

As the author Richard Mahoney puts it, policy in the Kennedy Administration was defined by a trade off of Africa versus the Azores.

As for South Africa, some policymakers argued strenuously that the country made a valuable contribution to Western security. After all, South Africa had allowed the U.S. to establish a deep space military tracking station near Pretoria.

Ultimately, the Kennedy Administration suspended all arms sales to Pretoria but decided not to support African efforts to expel South Africa from the United Nations.

By the time of President Kennedy's death on November 22, 1963, it was apparent that the problems of Southern Africa would not be resolved easily or quickly.

When presented with a resolution in the General Assembly in the summer of 1963 that would increase pressure on Portugal and South Africa, Kennedy asked his advisers how the French would vote.

When he was told that they would "seek the best of both worlds," he said "let us try that this time."

Kennedy understood intuitively the observation of the British philosopher, Edmund Burke, who said that, "Not the least of the acts of statesmanship is gracefully to grant what eventually cannot be withheld."

Nevertheless, his decision to seek the best of both worlds ensured a policy defined by ambiguity.

The objectives of enhancing U.S. security and supporting self-determination in Africa were both served, albeit imperfectly.

Still, the administration did not abandon either objective.

The Johnson Conundrum

African issues intruded early into the Johnson presidency.

The unprecedented ten-nation African tour by China's prime-minister, Chou En-Lai, in December 1963, and his comment that Africa was "ripe for revolution" transfixed many in Washington who increasingly viewed Africa as a great prize in the growing competition for global influence among the U.S., the Soviet Union and the People's Republic of China.

Nevertheless, Johnson, preoccupied with the war in Vietnam and turmoil at home, paid little sustained attention to the continent.

While the U.S. did impose sanctions on Rhodesia, Johnson took no position on the rapid rise of American investment in South Africa.

The net effect, by the end of the Johnson administration, was to virtually extinguish what had been a raging debate in the American foreign policy establishment between regionalists versus globalists, Africanists versus Europeanists, security interests versus support for decolonization, largely in support of the status quo.

In January 1968, Vice President Hubert Humphrey made a nine-nation visit to Africa in a belated effort to show America's commitment to the continent's well being.

In a speech in Lusaka, he criticized Portugal, Rhodesia and South Africa for turning "their faces from the inevitable triumph of self-determination," as he put it. Unfortunately, the U.S. government seemed to be doing the same.

Nixon's Retreat

For Richard Nixon and his national security adviser, Henry Kissinger, their most immediate task was to extract the U.S. from Vietnam and to ensure that the nation was not easily drawn into future conflicts in Third World trouble spots, or what they described as "peripheral" areas.

A central component of the Administration's diplomatic strategy was the policy of détente, which linked increased cooperation with the Soviet Union to Moscow's agreement not to seek unilateral gains in the developing world.

Another dimension to Nixon's global security strategy was the opening of relations with the People's Republic of China.

As Kissinger would write in his memoirs, he hoped that the U.S.-China rapprochement would act as a further brake on Soviet ambitions in the Third World.

Policy toward Southern Africa was codified early in the Nixon Administration with the issuance of National Security Decision Memorandum 39. The key paragraph stated:

"The Whites are here to stay and the only way that constructive change can come about is through them. There is no hope for the blacks to gain the political rights they seek through violence, which will only lead to chaos and increased opportunities for the communists. We can through selective relaxation of our stance toward the white regimes, encourage some modification of their current racial and colonial policies…"

Morality aside, key elements of this analysis proved profoundly wrong when on April 25th 1974, the Armed Forces Movement, led by General Antonio de Spinola, toppled the dictatorship in Lisbon setting the scene for a rapid end to 400 years of Portuguese colonial rule in Southern Africa.

And as the Administration was soon to find out, the incentives provided to the Soviet Union through détente were no deterrent to Moscow's decision to increase its influence in Southern Africa.

The "peripheral" area of Angola quickly became the focal point for a renewed scramble for influence in Africa.

With a fortuitous sense of timing, the Chinese chose this moment to exit Angola, wisely declining to pick sides in this increasingly violent transition.

The Cold War conflict in Angola escalated quickly.

The U.S. initiated a covert operation, that didn't stay covert for very long, with the assistance of South Africa. Cuba made the decision to deploy 20,000 troops, and a vicious deadly proxy war broke out.

Ultimately, international and domestic criticism compelled Washington to back off its support of South Africa, and Congress cut funding for the CIA's effort to wage war in Angola.

On November 11, 1975, the MPLA declared Angola's independence.

The U.S. would not normalize relations with the Angolan government for the next 18 years.

The Soweto uprising, on June 16, 1976, further portrayed Henry Kissinger and his boss, President Gerald Ford, as unable to impact, let alone positively influence, the course of events in what appeared to be an increasingly complex and unsettled region of the world.

It was against this backdrop that I began to learn about Africa.

My first defining experience on the continent was in Uganda where I was on January 21, 1971, when Idi Amin staged a successful coup d'etat.

Shortly, thereafter when I started to study the 20 countries I had visited in my year traveling after high school, I realized that America was in the minority of nations that had stable, predictable political transitions.

In much of the world, it seemed that if change occurred at all, it was often sudden and chaotic.

And in Africa, the countries were very young, and in Southern Africa, struggling for independence or majority rule.

This mix of people, politics and geography captured my imagination at an early age and compelled me to set my personal compass on U.S.-African relations as a career, and to do what I can to advance a positive agenda.

The Carter Interregnum

So naturally, I resonated with President Carter's ambassador to the United Nations, Andrew Young, who stated in January 1977 that the new administration would have "a very aggressive policy to move towards majority rule in Southern Africa."

And in sharp distinction to the Nixon-Kissinger approach, Carter stated: "We have based our policies on the belief that the peaceful transfer of power to the black majority is not only necessary and desirable but possible."

Like previous administrations, the Carter team struggled to come up with the right calculus of pressures and incentives to move Pretoria toward majority rule.

A principal instrument became U.S. support for the Sullivan Principles. These principles, developed by the Reverend Leon Sullivan, an individual whose legacy I work to extend at the Leon H. Sullivan Foundation in Washington, compelled American companies in South Africa to end segregation in the workplace and provide training and other opportunities for black workers.

By the end of the Carter administration, there was a sense that little had been accomplished.

The Assistant Secretary of State for Africa, Richard Moose, noted in 1980 that "change" had taken place in South Africa, but that it would be a mistake to "interpret the difference as progress."

Constructive Engagement

With Ronald Reagan assuming the presidency in 1980, the United States once again shifted its gears.

As Princeton Lyman, a former U.S. ambassador to South Africa, writes in his book, "Partner to History," "two giant forces, destined to clash," were at work in shaping American policy toward South and Southern Africa.

One force, put in play by the Assistant Secretary of State of African Affairs, Chester Crocker, was the policy of constructive engagement that linked the withdrawal of Cuban troops from Angola to Namibia's independence, and offered improved relations with Pretoria for its cooperation with this plan.

The other force was the growing strength of the anti-apartheid movement in the U.S. that linked civil rights leaders, student protesters and local government activism into a major national campaign.

Reagan's indifference to majority rule and growing domestic strife in South Africa, appearing on American televisions every evening, fueled the anti-apartheid movement in the United States.

Starting in November 1984 when Randall Robinson and three others were arrested for refusing to leave the office of the South African ambassador in Washington, more than three thousand Americans would be arrested in front of the South African embassy.

Within several years, nineteen states, sixty-eight cities and one hundred and nineteen colleges and universities had imposed some sort of sanctions or pressure on South Africa and American companies doing business there.

By the time Crocker left the State Department, after the election of George H.W. Bush, Southern Africa was changed forever.

First, the Cold War was over, and the Soviet leader, Mikhail Gorbachev, had stated explicitly that the problems of Southern Africa could not be solved through military force. As well, Cuba withdrew its forces from Angola, Namibia was on the verge of independence, and South Africa ended its long and very costly destabilization of Mozambique.

Once again, America's historic objectives in Southern Africa of advancing self-determination and majority rule while limiting the advance of communist governments had been imperfectly served, to say the least.

It fell to Congress and civil society in America to intensify pressure on Pretoria, largely through economic sanctions, while the Reagan administration served a more narrow, but vital, set of interests.

By now, I have ignored the advice of Benjamin Disraeli: be amusing, never tell unkind stories; above all, never tell long ones. But there is an important point to this story for which I would like to think the noted British prime minister would make allowance.

Clinton and Africa

With the end of the Cold War and the collapse of the Soviet Union and the onset of South's Africa's transition to democracy, American policy to Africa under President Clinton searched for new direction.

That search reflected the story of the famously absent-minded Albert Einstein who once boarded a train and was asked by the conductor for his ticket. After fumbling in his pockets for several minutes, the conductor said he would arrange for his passage to be paid, to which Einstein replied, "it is not the cost I am worried about, I need to be reminded about where it is that I am going."

And so it was with Clinton Africa policy.

The new president inherited a humanitarian mission in Somalia that quickly turned into a searing foreign policy disaster when, in October 1993, two American black hawk helicopters were shot down and the bodies of 16 American soldiers were dragged through the streets of Mogadishu as the world watched on CNN.

Caution toward Africa led Washington to stand by a year later as more than 800,000 people perished in genocide in Rwanda. This inaction created one of Bill Clinton's deepest regrets as president, as he would subsequently declare and apologize for.

However, in that same year, 1994, the U.S. Secretary of Commerce, Ron Brown, led a trade mission to South Africa and Botswana in which he signaled for the first time that the U.S. had legitimate commercial interests on the continent.

Ron Brown's commercial diplomacy toward Africa reflected important changes taking place across the continent, notably the emergence of civil society, democratic governance and economic reform.

In fact, President Clinton's unprecedented 12-day 6-nation African visit in 1998, in which I participated in my capacity as Deputy Assistant Secretary of State for African Affairs, was designed to highlight these positive trends which, in the intervening years, have come largely to define this continent.

At the same time, the Clinton Administration and the new ANC government in South Africa had little knowledge of each other and, in fact, eyed each other warily in key areas.

To address these concerns, Washington and Pretoria made the important decision to create the Gore-Mbeki Bi-National Commission in an effort to foster a greater understanding of each other's objectives and to shape American support for South Africa.

We worked hard in the Clinton Administration to build on the success of the BNC, and this led to the creation of the U.S.-Angola Bilateral Consultative Commission, the U.S.-SADC Forum, and the U.S.-Nigeria Economic Cooperation Commission in an effort to deepen America's understanding and support for the process of economic and political reform.

One of the most important accomplishment of this era was President Clinton's signing into law of the African Growth and Opportunity Act.

AGOA acknowledged that by providing African nations with enhanced access to the American market, trade would become a stimulus to economic development. Moreover, it codified what Ron Brown had understood, that trade and investment are a cornerstone of U.S.-African relations.

AGOA also forged a bipartisan consensus in Congress, which is still very much alive today, based on the recognition that it is in America's national interest to invest resources in Africa's development.

With the deadly attack by al-Qaeda on the American embassies in Dar es Salaam and Nairobi and the robust effort to end the conflict between Ethiopia and Eritrea in the Horn of Africa, the shape of America's post-Cold War approach toward Africa began to take form: the U.S. had enduring security interests on the continent, conflict resolution was a priority but so was enhancing democracy and commercial ties through trade, investment and development assistance.

The question remained, as always, how should the U.S. balance competing objectives to advance its interests while supporting key African goals.

Bush's War on Terror

When the United States was again attacked by al-Qaeda on September 11, 2001, universal condemnation—and support for America--was instant and virtually uniform from NATO to the African Union and around the world.

Yet as soon as President Bush declared, "if you are not with us, you are against us," it became apparent that the United States was prepared to act unilaterally in what the White House saw as a new global confrontation between good and evil, survival and annihilation.

In what quickly became defined as a "global war on terror," the Bush Administration attacked and overthrew the Taliban in Afghanistan, and 18 months later invaded Iraq,

Within months, American foreign policy was dominated by the draining consequences of a seemingly endless war in a remote country. At the same time, the war on terror, condemned by much of the world's public opinion, increasingly took on the menacing overtones of a collision with the world of Islam.

As the American national security adviser, Zbigniew Brezinski, wrote, "nemesis nips at the heels of hubris."[1]

Accordingly, expectations for Bush in Africa were quite low, but in fact, he surpassed the expectations of many, including myself--evoking the African proverb: don't insult the crocodile until you cross the water.

President Bush made a major effort to end the north-south civil war in the Sudan, and identified the violence in Darfur as genocide. He extended and improved AGOA twice. He also created the President's Emergency Plan for AIDS Relief, the Millennium Challenge Corporation, and, later, the President's Anti-Malaria Initiative.

Even though its diplomatic roll out was poorly communicated, the creation of the U.S. Africa Command also belongs in this group of important policy innovations toward Africa.

For sure, key conflicts went unresolved during the Bush Administration, especially in Darfur, Somalia, the eastern DRC, Zimbabwe and the Niger Delta. Nevertheless, Africa is likely to be the most positive aspect of the Bush foreign policy legacy.

Obama Takes Over

Looking back at the broad sweep of American policy toward Africa, I draw several conclusions.

In both the post-colonial and post-Cold War eras, Washington has faced an enduring challenge of balancing and integrating the complex of American policy objectives so that the U.S. and the vast majority of nations on this continent can advance a common agenda.

The challenge is not about regionalists versus globalists, or Africanists versus Europeanists, it is about developing a policy that is coherent, sustainable and achieves mutual goals.

Clearly, some administrations have done better at this than others.

Second, aligning U.S. priorities with Africa's priorities, be it self-determination in the 1960s or strong governance and accelerated economic development today, can be extremely challenging but it is essential that we both try, and succeed, if the U.S. and Africa are to advance their many common interests.

Finally, it is apparent that if the U.S. focuses its attention only on governments, and neglects engagement with the broader elements of African society, such as parliaments, universities, women's organizations, entrepreneurs and other members of civil society, American policy on the continent will never realize its full potential, and this will also be a constraint on Africa's progress.

So what are the prospects for the Obama administration's policy toward Africa?

Perhaps most importantly, I would argue that Obama's global security agenda is one that most African governments support.

As the president stated many times throughout the campaign and since taking office, "the security and well being of Americans is inextricably linked to the security and well being of people elsewhere."

And as he said in his inaugural address, "we reject as false the choice between our safety and our ideals."

Be it environmental degradation caused by climate change, attacks on innocent civilians by religious extremists, the threat posed by nuclear weapons, disease, or people who do not have enough to eat, the United States cannot afford inaction when the fabric of nations and regions threatens to unravel.

This does not mean that the United States can, or will, or, indeed, believes it ever could, solve every problem. To the contrary.

As President Obama said at the United Nations last month, the U.S. expects help from others in addressing global security issues.

As he put it: "Those who used to chastise America for acting alone, cannot stand by and wait for America to solve the world's problems alone. (The Obama administration) has sought…a new era of engagement with the world. Now is the time for all of us to take our share of responsibility for a global response to global challenges."

With regard to Africa, there has never been an American president as knowledgeable of this continent as Barack Obama, given his Kenyan heritage.

But the President isn't alone. Secretary of State Hillary Clinton, my former boss, the U.S. ambassador to the United Nations, Susan Rice, and my former colleague, the Assistant Secretary of State for African affairs, Ambassador Johnnie Carson, among others, bring an extraordinary depth of experience, insight and commitment to their task of shaping American policy toward Africa.

For these individuals, and many others in the American government, at the core of the American agenda in Africa is good and effective governance, accountability and transparency.

As President Obama said in Cairo in June and Accra in July: "each nation gives life to democracy in its own way, and in line with its own traditions. But history offers a clear verdict: Governments that respect the will of their own people, that govern by consent and not coercion, are more prosperous, they are more stable, and more successful than governments that do not. And this is not just about holding elections. It is also about what happens between elections."

In addition to governance, the Obama administration is committed to ending ongoing conflicts, food security, energy security, taking steps to protect Africa against the negative consequences of climate change, promoting renewable sources of energy, supporting the Millennium Development Goals in an effort to eradicate extreme poverty and enhanced trade and investment.

Not only is President Obama committed to doubling double foreign assistance by 2014, he has already announced a $3.5 billion food security initiative, as part of a larger G8 program.

On her seven-nation tour in August, Secretary Clinton gave more definition to the U.S. agenda in Africa. In addition to the issues already mentioned, the Secretary underscored the need to make AGOA more effective, to end sexual violence against women especially in the eastern DRC, and to put relations between South Africa and the United States on a stronger and more productive footing—something that is already paying dividends under the very able leadership of Ambassador Gips and his colleagues in the South African government.

Against this backdrop, it is worth noting how President Obama envisions his legacy in Africa.

In an interview with allAfrica.com prior to his Ghana visit, Obama echoed Winston Churchill's observation that "Continuous effort - not strength or intelligence - is the key to unlocking our potential."

As the president put it: "I would like, at the end of my term in office, to be able to say that the United States was an effective partner with countries throughout Africa in building the kinds of institutions--political, civil, economic--that allowed for improved standards of living and greater security for the people of Africa; that we moved them on a trajectory in which they are integrating with the global economy; and that a young person growing up in Johannesburg or Lagos or Nairobi or Djibouti can say to themselves, I can stay here in Africa, I can stay in my country and succeed, and through my success, my country and my people will get stronger."

This perspective is reflected in a recent article by President Paul Kagame of Rwanda who wrote: "Africa and the United States may be on the verge of a new partnership, not one of dependency and aid but one of shared ideas, vision and investments that increase our mutual prosperities."

So, it's fair to ask, will we get there?

I recently read the poem, "Behold Mama, Flowers," by the distinguished South African poet, Dr. Mongane Wally Serote, and there is a verse that says:

what will happen now memories keep coming back and the future is a wall scrawled with the graffiti of my memories what will happen now even as I wave the truth away as if it were smoke coming to my eyes my sight knows

And it is that sight, that vision, which Ted Kennedy spoke of shortly before he died, when he said: "I hope for an America where we can all contend freely and vigorously, but where we will treasure and guard those standards of civility which alone make this nation safe for both democracy and diversity."

Be assured that Senator Kennedy wanted the same for every nation on this great continent.

At the same time, he, like President Obama, would say that it is up to each of us to make this happen because, as Senator Kennedy said time and again in his signature phrase: "…the work goes on, the cause endures, the hope still lives and the dream shall never die…"

Thank you.

---

[1] Zbigniew Brezinski, Second Chance: Three Presidents and the Crisis of American Superpower, (New York: Basic Books, 2007)

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Iran’s Ignoble Act

The semantics over whether the Iranian authorities actually did “confiscate” Shirin Ebadi’s 2003 Nobel Peace Prize medal as has been alleged by Norway, or merely “removed” it from her bank’s safe deposit box (together with other personal items) in connection with a ‘tax evasion’ case as is being claimed by the Iranians, is neither 
here nor there.

What is more relevant, considering that both the blocking of the bank account and the confiscation of the award is illegal under Iranian law, is whether the move has been motivated by petty politics. At least that is what Mohammad Ali Dadkhah, a spokesman for Ebadi’s human rights group, says is what has happened.

And given that Ebadi is an outspoken critic of the government and human rights violations, that indeed sounds more plausible. Also, the fact that the Nobel laureate has been strongly critical of the June presidential polls must have prompted a regime known for its intolerance of any degree of political dissent to carry out this ignoble act. Therein lies the most obvious motive. And the minutiae of any counter-argument or ‘technical’ justification can only make a disgraceful act 
more despicable.

Not surprisingly, the Norwegian Nobel Committee’s permanent secretary, Geir Lundestad, has said categorically that the move was “unheard of” and “unacceptable.” Surely, Teheran too is well aware of its plummeting reputation and credibility in the international community — primarily as a consequence of such singular acts of 
political vindictiveness.

Of course, President Mahmoud Ahmadinejad did secure enough votes in the controversial June 12 polls to remain in power. But it must be remembered, his re-election also sparked the largest street protests in the country since the 1979 Islamic revolution. Ahmadinejad has a lot to answer and the Iranian civil society knows it better than anyone else.

The persecution of Ebadi (including her husband or family or friends) on any pretext can only further discredit an already discredited government. Ebadi herself, who had left Iran shortly before the June polls, continues to receive all kinds of vicious threats.

She has announced that she would “return whenever it is useful for my country.” But before she returns, it would be best if the Iranian authorities reverse their decision and return Ebadi her prized Nobel medallion with full honours and, if it’s not too much to ask, with some good grace as well for good measure.Not to do so is 
not an option.

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America Can No Longer Afford its Wars

Congressman David Obey, a Wisconsin Democrat who is chairman of the powerful House Appropriations Committee, has come up with a novel idea: American should pay for the 
wars they are waging.

Obey’s proposal, which is backed by ten other congressmen, sounds startling — until one realises that both the Bush and Obama administrations have never properly financed their foreign wars by forcing Americans to pay for them through higher taxes.

Instead, Washington has deferred the $1 trillion to date costs of the Afghanistan and Iraq wars by simply adding them to the national debt, and paying interest on the balance owing.

So very few Americans feel the real financial costs of these wars. Future generations will get stuck with the bill.

But this kind of deceptive national accounting is becoming increasingly difficult in the face of President Barack Obama’s $1.4 trillion deficit this year, and his impending decision to send 30,000 to 40,000 more US troops to Afghanistan. Each American soldier in Afghanistan costs $1 million per annum, according to the US Congress Research Service. Thirty or forty thousand more US troops will thus cost $30 to $40 billion in additional war costs on top of the $200 billion annual cost of garrisoning Iraq and Afghanistan. Much of this money will have to be borrowed from China and Japan.

Obey and his allies want to impose a graduated surtax on Americans of 1-5 per cent, depending on their income level, to fund the actual costs of what are now Obama’s wars. Otherwise, warns Obey, the huge cost of keeping up to 100,000 US troops in Afghanistan will ‘destroy the other things we are trying to do in our economy.’ Chief among which is health care.

In a clear choice between guns or butter, Obey estimates ten years of war in Afghanistan will cost the same $900 million as providing a comprehensive health plan for all Americans. Unfortunately, chances of a war surtax passing Congress are nil. While the Afghan and Iraq wars are increasingly unpopular among Americans, a tax increase at a time of over 10 per cent unemployment will ignite the same kind of furious reaction that met President Obama’s proposed national health plan, and endanger Democrats facing 
midterm elections. As the Obama administration appears set to plunge deeper into the Afghan morass, the real costs of Afghanistan and Iraq are still being concealed from the public and Congress. The $200 billion annual cost for both wars is only a part of the growing expenses faced by Washington.

The annual bill for US intelligence, which employs over 200,000 people, has doubled to $75 billion, in large part to support foreign wars and operations against anti-US Muslim groups. Costs of occupying Afghanistan rose to $300 billion this year, and will increase sharply next year. Operations in Iraq will cost $684 billion in 2009.

Washington spends $25 billion funding foreign armies, the bulk of which goes to the Mideast, Afghanistan, Iraq and Pakistan. Aid to Islamabad will rise to $15 billion over the next five years, including secret ‘black’ payments.

The US supports 168,000 ‘contractors’ in Iraq, many of them gunmen. CIA runs 74,000 mercenaries in Afghanistan. The new fortified, 50 hectare US Embassy in Baghdad will cost $700 million; the new embassy in Islamabad, $800 billion. Islamic militants call them ‘crusader castles.’

Add to these costs the expense of maintaining fleets in the Gulf and Indian Ocean, and military bases in the Gulf and Diego Garcia to support operations in Iraq and Afghanistan; hugely expensive military airlift; $100 per liter fuel delivered to US forces in Afghanistan; and, of course, financial inducements to many smaller nations to send handfuls of troops to Afghanistan and Iraq.

Thus the real cost of Afghanistan and Iraq is much higher than $200 billion annually. Yet President Obama, heedless of such costs, appears determined to expand the Afghan War. It seems clear that ‘peace candidate’ Obama has fallen increasingly under the influence of America’s powerful military-industrial-financial complex and neoconservative ideologues. In short, the same calculus of forces that guided the Bush administration!

Even America’s mighty economy cannot for long support waging wars across the Muslim world. Unaffordable wars have been the ruin of many an empire, and the American Raj seems headed in the same direction.

Eric Margolis is a veteran US journalist who reported from the Middle East and Asia for nearly two decades

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UAE Offers Additional Funds to Banks

The UAE Central Bank said that local banks and branches of foreign banks can borrow funds, if needed, from a new funding facility it has set up to support the banking system.

“(The) Central Bank of the UAE ….stands behind UAE banks and branches of foreign banks operating in the UAE,” said a central bank statement. The bank said that it has issued a notice to all banks in the country about the new “special additional liquidity facility”, which it said would be linked to their current accounts at the central bank, at the rate of 50 basis points above the three-month Emirates Interbank Offered Rates or EIBOR.

The statement came days after the government of Dubai announced its intention to seek a six-month delay in debt payments for its flagship Dubai World conglomerate, saying the restructuring plan was aimed at ensuring the group’s long-term success.

The new facility would be in addition to emergency funding facilities the central bank and the federal finance ministry had announced late last year to help fend off the impact of the global credit crisis. The central bank had set up a $13.6 billion emergency bank lending facility in November 2008, followed by the finance ministry, which injected two tranches of $6.8 billion each into bank deposits from a $19 billion rescue facility.

The central bank said on Sunday that the country’s retail commercial banking system has a strong and stable deposit base and has weathered the global financial crisis better than any other.

“The UAE banking system is more sound and liquid than a year ago, with foreign interbank deposits and Medium Terms Notes, or MTNs, and Euro Commercial Papers or ECPs, issued by UAE banks stand reduced by 25 per cent,” the statement said in an apparent attempt to boost confidence in the country’s financial industry.

“From the consolidated balance-sheet of banks, interbank deposits of the UAE banking system constitute 10.3 per cent of the liabilities side, with foreign interbank deposits constituting five per cent per cent only,” it said.

A senior banker said the move appears to be a “wise precautionary measure”, which would give a strong signal to the market that the central bank stands behind the banking system. “The banking system at present is quite strong with substantial liquidity circulating in the system”, he said.

“Since the central bank is bank’s last resort, its policy announcement that it stands behind UAE banks and branches of foreign banks is a very strong message to the businesses, at a time when they really need reassurance,” said Dr Qaiser Anis, a chartered accountant 
based in Abu Dhabi.

The move is not only calculated but very timely as well, he said. Government had also guaranteed bank deposits for three years, starting from September last year, so there is nothing to worry about the financial system, the chartered 
accountant said.

Bankers said the central bank wants to ensure that late last week’s volatility in the global markets do not spill over into the UAE.

“This will support the liquidity and soundness of the banking system in the UAE and especially in Dubai. The central bank is sending a strong message to everyone that they are providing ample liquidity and the guarantee to banks in the UAE,” said John Sfakianakis, chief economist at Banque Saudi Fransi-Credit Agricole Group in Riyadh.

Stock markets in Asia fell for a second day on Friday as investors dumped shares in banks and construction firms seen as exposed to Dubai. However, European shares, which fell in early trading on Friday, regained their poise later in the day.

Shares on Wall Street, which was closed on Thursday for the US Thanksgiving holiday, opened lower but firmed up early in Friday’s trading session. The New York Stock Exchange fell initially by 2.7 per cent from Wednesday’s close, while the Nasdaq was down by 2.3per cent.

Credit-rating agency Standard & Poor’s placed four Dubai-based banks on its “credit watch” list late on Thursday, shortly after cutting the debt ratings for several Dubai government-owned and related companies. S&P said it was concerned about the banks’ high exposure to Dubai World.

Markets recoiled after the Department of Finance announced on Wednesday that Dubai World would be seeking to postpone its debt payments until May 30, 2010. Dubai World owes $59 billion in debts.

Its property subsidiary Nakheel is due to repay a $3.52 billion Islamic bond in December. Bank of America-Merrill Lynch estimated that Dubai entities will owe total debt payments of $3.8 billion this year, $12.3 billion in 2010, $19.0 billion in 2011 and $18.0 billion in 2012.

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Growing number of US homeowners are at risk of losing their property

Data from the Mortgage Bankers Association shows almost one in eleven US homeowners face repossession

Almost one in eleven Americans is at imminent risk of losing their home, as the housing crash continues to claim thousands of victims, more than three years after prices began to fall.

Data from the Mortgage Bankers Association show that almost 5% of all American homeowners are already in the process of having their properties repossessed, while another 4.5% are at least 90 days in arrears with their mortgage repayments. In total, that means more than 9% – almost one in eleven – are on the brink of being forced to hand back their keys, on top of the many hundreds of thousands who have had their homes repossessed since the crisis began.

"The underlying dynamic in the housing market is just dreadful," said Graham Turner, of consultancy GFC Economics.

Treasury Secretary Tim Geithner recently persuaded Congress to extend the homebuyers' tax credit – part of President Obama's $800bn (£485bn) stimulus package – until next April.

The scheme offers $8,000 to first-time buyers, but mortgage applications dropped off sharply in November, when it was due to expire. The White House, alarmed at the prospect of a renewed slump in the market, extended the credit, and opened it up to existing homeowners.

The US economy expanded at a healthy annual rate of 3.5% in the third quarter – though that may be revised down when new official figures are released this week. But Turner warned that without an end to the housing slump, any recovery will be short-lived, and the Obama White House will come under intense pressure.

"We're going to have a political crisis. Obama realises that you can't keep spending money when it's not even having much effect. It will come to a head when the current tax credit expires in April – then people will say, enough is enough."

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Britain poised to lose jobs as £10bn nuclear power plant contract goes to US

Nuclear firm Westinghouse expected to appoint Shaw Group to lead its construction programme

Thousands of jobs that were to have been created in Britain to build the next generation of nuclear power plants could be heading overseas instead, after Westinghouse, the nuclear company sold by the government three years ago to Toshiba, chose one of its largest shareholders as the lead contractor to build reactors.

Westinghouse is expected to confirm this week that it has appointed US-based Shaw Group to head up its £10bn nuclear programme, passing over the favourite for the contract, rival engineering group Fluor.

Industry sources said that Shaw is likely to source far more reactor components from overseas than Fluor, which has close relationships with British manufacturers. The Unite union claimed that 10,000 new jobs in the UK would not be created as a result of Shaw being selected.

Shaw was one of the main contractors to build Total's controversial Lindsey refinery and made 51 workers there redundant this year, which sparked a series of wildcat walk-outs around the country over the use of foreign labour.

British-based manufacturers such as BAE Systems and Rolls Royce are also understood to be concerned that lucrative contracts to make reactor modules could be lost to Shaw's manufacturing bases in the US and Belgium. A spokesman for Westinghouse in the US confirmed that Shaw had been appointed but claimed that "up to 80%" of the components would be sourced from the UK. He admitted that this was not finalised as none of the supplier contracts had been signed.

He added that Shaw had teamed up with British construction firm Laing O'Rourke for the bid, but the firm will not be involved in providing any of the high specification reactor components.

Japanese firm Toshiba owns 77% of Westinghouse, with 20% owned by Shaw Group. Westinghouse is hoping to secure contracts to build at least four of its AP1000 reactors with E.ON and RWE npower, who have formed a nuclear joint venture in the UK, soon after Christmas.

Dougie Rooney, Unite's national energy officer, said: "The implications are massive. With Fluor, there is a far greater opportunity to get UK companies involved. Shaw has no allegiance to the UK and it's wrong that a company with an equity share should be involved in the competition."

It was also claimed by several industry sources that Westinghouse had initially recommended to Toshiba that Fluor be appointed, but that the parent company insisted that Shaw be chosen instead. A Westinghouse spokesman in the US said that Shaw and Westinghouse already had a partnership to build reactors in the Middle East and the US. "It was a decision made in conjunction with a number of parties, including our parent company Toshiba," he said. "It's our intention to use British labour as much as possible."

Rival French reactor firm Areva is building the rest of the UK's reactors, on behalf of EDF Energy, and has only promised to allow British firms to bid for up to 70% of the supply contracts.

Business secretary Lord Mandelson has drawn up a "low-carbon industrial strategy" to enable British manufacturers and workers to benefit from the country's huge construction programme of less polluting power plants such as wind farms and nuclear reactors. Mandelson has also repeatedly spoken of the need for the government to demonstrate "industrial activism", or a willingness to intervene on behalf of key sectors of the economy.

But British manufacturers in the power sector have so far yet to benefit. The closure of the Vestas wind turbine plant in the Isle of Wight became totemic of the UK's inability to develop its own renewables industry. Unions are now anxious that manufacturers could similarly miss out on the opportunities from plans to build at least 10 new reactors in the UK.

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Ahmed Humaid al Tayer Appointed Head of the DIFC

The newly appointed governor of the Dubai International Financial Centre (DIFC) has pledged to build on its success in promoting Dubai as a vital hub for capital and investment.

Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, on Saturday issued a decree naming Ahmed Humaid al Tayer to replace Omar bin Sulaiman, who had led the DIFC since its creation in late 2004.

“We are here to establish an international financial centre for the UAE, to serve the region and to co-operate with other centres from Hong Kong to Frankfurt and London,” said Mr al Tayer, who is also the chairman of Emirates NBD, the largest UAE bank by assets.

His appointment followed an announcement last week that Sheikh Mohammed had named himself and two family members to replace three of Dubai’s most prominent officials on the board of the Investment Corporation of Dubai (ICD), the main government asset-management vehicle.

Bankers and analysts downplayed suggestions in international reports that the appointments represented demotions or signified a political schism.

While the crisis has raised criticisms about the borrowing used to slingshot Dubai’s growth earlier this decade, they said the transfers were part of a broader financial restructuring to help refinance the roughly US$10 billion (Dh36.73bn) in debts that Dubai needs to repay next year. That sum is part of an estimated $85bn in total debts owed by the Dubai Government and the companies it controls.

Mr bin Sulaiman will remain the deputy chairman of the Central Bank, a spokesman for the regulator confirmed. The Central Bank has lent Dubai $10bn for the Dubai Financial Support Fund, which is overseeing efforts to restructure the emirate’s debts.

The three remaining officials also retained key positions. Mohammed al Gergawi, who was removed from the ICD board, also serves as the chairman of Dubai Holding, which manages the personal wealth of Sheikh Mohammed. He is also the Minister of Cabinet Affairs.

A second ICD board member replaced last week, Mohammed Alabbar, remained the chairman of Emaar Properties, the government-controlled developer, as well as the chairman of the Dubai Economic Advisory Council.

The third former ICD board member, Sultan Ahmed bin Sulayem, remained the chairman of Dubai World, the government-owned holding company that controls DP World and owns another key Dubai developer, Nakheel Development.

“Every board member who is leaving and coming, their contribution is highly appreciated,” Mr al Tayer said yesterday. “We are always soldiers to this country, to serve our country.”

The DIFC is in many ways an emblem of Dubai’s achievements. Established in 2002, the organisation is one of Dubai’s Government-owned free zones, designed specifically to position the emirate as a hub for financial services and investment.

In addition to not having taxes on income or profits, the DIFC offers 100 per cent foreign ownership, while the UAE as a whole still requires that companies be at least 51 per cent Emirati owned.

“The fact that Dubai is established as one of the major financial centres of the world is testament to the vision of the local authorities and the investment made in physical infrastructure and people skills,” said Peter Gotke, a vice president at The Bank of New York Mellon, which like many major banks has its offices in the DIFC.

“Whilst the DIFC lives that vision, the regulators and authorities have continued to evolve laws and access to make the region accessible and liquid.”

The DIFC, like many Dubai Government-controlled entities, became highly leveraged in the course of its expansion. As a real estate development, however, DIFC is doing relatively well, analysts say.

Despite financial difficulties faced by many tenants, there is still a waiting list of at least 400 wanting to take up space, said a report last month by the ratings agency Standard and Poor’s.

DIFC racked up further debts when it paid $630 million in early 2006 for a 3.5 per cent stake in the European stock-exchange operator Euronext, which gave it a 2 per cent stake in NASDAQ Dubai. DIFC also owns one-fifth of Borse Dubai, the holding company for both NASDAQ Dubai and the city’s larger stock exchange, the Dubai Financial Market.

DIFC bought a 2.2 per cent stake in Deutsche Bank in early 2007 and also owns stakes in Dubai Aerospace and in the private equity firm Abraaj Capital. DIFC typically financed these investments with private equity-style leverage, Standard and Poor’s said, paying for about a fifth of the investment in cash and borrowing the remainder.

That strategy left it vulnerable when the financial crisis started and credit for refinancing dried up. Standard and Poor’s said the DIFC had a debt-to-capital ratio of 76 per cent. The DIFC received a $1bn lifeline from the Dubai Department of Finance last year, which it used to repay $500m in loans.

The company is also due to repay a $350m loan this week. It has $1.25bn in debt due in mid-2012.

By: Wayne Arnold and Uta Harnischfeger - The National

uharnischfeger@thenational.ae

warnold@thenational.ae

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