After nineteen years of North Atlantic efforts to promote “centrist” notions of democracy, i.e. economic liberty and multi-party elections, Joshua Kurlantzick of the Boston Globe reports the results:
The modern record of state-controlled business, by contrast, was chiefly one of failure. When the fascist and communist governments of the 20th century seized the reins of domestic industries, they ended up undermining development and bringing misery to millions of their own citizens. As private enterprise flourished in the West, the end of the Cold War and collapse of the Soviet Union were widely seen as a repudiation of the idea that governments could successfully control the business sector.
But the wake of the Cold War also sowed the seeds of a new discontent with free-market private enterprise. Many emerging nations were stung by ill-planned privatization strategies in the 1990s. In Latin America, a decade of privatization proved so unpopular that, in a regionwide poll taken in 2001, a majority of people across 17 countries viewed privatization unfavorably. Across Africa, this era, known as the "lost decade," resulted in rising poverty, and even longing for some nations' authoritarian past.
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Across Latin America and Central Asia, governments like Bolivia, Venezuela, and Kazakhstan also have reasserted state control over their oil and gas resources. Already, many of these national companies dwarf any rivals. State-owned oil companies around the world now control nearly five times the reserves of their private rivals; Saudi Aramco, the Saudi government's oil company, can pump roughly three times as much oil as any other firm, and has launched a massive $50 billion expansion program that will make it even more powerful. Corporate behemoths such as ExxonMobil and Shell may be among the largest private corporations in the world, but they are no longer the biggest players in their own industry.
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In aviation, an industry that requires vast amounts of capital, state-linked airlines now dominate private firms. From virtually nothing two decades ago, Dubai has built Emirates airlines, backed by the state, into a world leader and the second-most profitable airline in the world. The most profitable, Singapore Airlines, also enjoys state support - Singapore's state-owned fund owns nearly half the airline, as well as six of the country's other largest corporations.
Nations are entering global business in another way as well. Besides building companies, states are using their cash reserves to create their own investment funds, and have rapidly become major players in global finance.
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The rising price of oil has put a gusher of cash in the hands of authoritarian petrostates like Saudi Arabia and Russia, all of which now want to invest their cash hoards. With their pile of reserves, oil producers like the United Arab Emirates and Asian exporters have developed massive state-controlled funds that can buy into companies around the globe. Abu Dhabi's fund alone controls nearly $900 billion, while China's controls $200 billion and Kuwait's $250 billion.
Overall, state-controlled funds control as much as $7 trillion, according to several estimates, more than the entire hedge-fund industry. And they are growing.
"The [funds] will become absolutely massive in size in the not-too-distant future, and will have powerful implications for the financial markets," notes Morgan Stanley's Stephen Jen, an expert on state funds.
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The state capitalists also are gaining influence through their power in global finance. As firms like Merrill Lynch and Citigroup have found out, state funds provide a vital new source of investment across a world in need of capital. The funds are increasingly bailing out American banks, giving them significant leverage over the US financial sector.
And with that, I should think that we can all agree that our efforts to promote democracy have failed.
And then Obama said something about the Iraq War that wasn't incremental at all. "I don't want to just end the war," he said, "but I want to end the mind-set that got us into war in the first place."The minds on the horizon:
Scott Gration, a retired general who helped run the air war during the invasion of Iraq.On Scott Gration:
Sarah Sewall, who helped write the Army’s and Marine Corps’ much-lauded counterinsurency field manual.
Tony Lake and Susan Rice, veterans of the Clinton administration’s left flank.
Gen. Scott Gration, a retired Air Force jet pilot, says hello to me over the phone in Swahili. He learned about the crushing misery of the world's poor by growing up in Congo, where his parents were missionaries. After the violence following Congolese independence in 1960, Gration had an experience few Americans ever will: He became a refugee. "We lost everything we owned, and what we took with us, they confiscated," he remembers.On Sarah Sewall:
Sarah Sewall, a Harvard professor and another of Obama's closest advisers, also knows about stepping outside of her comfort zone. A longtime human-rights advocate with the disarmament organization, the Council for a Livable World, Sewall found herself in 2005 and 2006 with an unlikely partner: Gen. David Petraeus. He and two colleagues were rewriting the Army and Marine field manual for counterinsurgency and wanted Sewall's input on how to create a more just, humane, and successful doctrine. For agreeing to help, she was attacked by some on the left. "Should a human-rights center at the nation's most prestigious university be collaborating with the top U.S. general in Iraq in designing the counterinsurgency doctrine behind the current military surge?" Tom Hayden wrote online in The Huffington Post.Quoting Samantha Power, the theorist :
Sewall's involvement may have lost her some influence within the academic left, but she has become a hero to the military's growing circle of counterinsurgency theorist-practitioners. "Her impact on the thinking about the war and the conduct of the wars in Iraq and Afghanistan has been significant and not without cost," says Army Lt. Col. John Nagl, one of the counterinsurgency community's luminaries. "She has shown, in my eyes, great moral courage. I think Senator Obama is listening to someone who has thought long and hard about the use of force and who understands the kinds of wars we're fighting today."
This ability to see the world from different perspectives informs what the Obama team hopes will replace the Iraq War mind-set: something they call dignity promotion. "I don't think anyone in the foreign-policy community has as much an appreciation of the value of dignity as Obama does," says Samantha Power, a former key aide and author of the groundbreaking study of U.S. foreign policy and genocide, A Problem From Hell. "Dignity is a way to unite a lot of different strands [of foreign-policy thinking]," she says. "If you start with that, it explains why it's not enough to spend $3 billion on refugee camps in Darfur, because the way those people are living is not the way they want to live. It's not a human way to live. It's graceless -- an affront to your sense of dignity."
How would a US foreign policy promoting the dignity of Cubans be different from the current one?
While it may be impossible to say how ‘dignity promotion’ would play-out anywhere, I can suggest one action for Cuba that would not be inconsistent: Vacate and Abandon Guantanamo, lock, stock, and barrel.
