Tag: Obama

ONE BANK HAS TORN THE WORLD IN TWO

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By Kristopher Klein
Staff Writer 

There is a new institution on the financial landscape. It includes five G7 member states and 26 regional member states and carries an endowment just under $100 billion. But there is one big issue that’s causing a stir—the United States refuses to participate even as its closest allies rush to join.

The rise of the China-backed Asia Infrastructure Investment Bank (AIIB) has fed the ‘American decline’ narrative popular among many news outlets. In the past weeks several notable American allies have agreed to join the bank. On March 12, the United Kingdom became the first US ally to announce that it would join the AIIB after originally deciding against membership. Several European countries, including Germany, France and Italy quickly followed. Two weeks later on March 26, South Korea announced that it too would join the AIIB. After three days, Australia and the Netherlands completed the humiliation. In light of these defections, the media remains transfixed to the unyielding opposition of the United States and its increasingly ‘isolated’ stance. When China first unveiled the AIIB, the United States used diplomatic pressure to prevent its allies from signing on to the new bank. However, those efforts failed in recent weeks after China agreed to scrap its veto power over the bank’s decision-making process in order to attract American allies. Despite the criticism directed towards the Obama administration, the strategy employed by the United States is not one of isolationism, nor has the United States been isolated. The United States is refusing to join the AIIB until China has solidified a system of decision-making that guarantees its actions are apolitical and responsible toward sustainable development.

The United States expressed great dissatisfaction when the United Kingdom joined the bank as its first Western member. According to a senior Obama administration official the United States remains “wary about a trend of constant accommodation of China, which is not the best way to engage a rising power.” The United States is concerned, and reasonably so, that the new bank will serve as a tool for the People’s Republic of China to challenge the established international system and the norms that exist within it.

America Is Not Being Isolated, It’s Being Wise.

China has a history of making loans to regimes that refuse to make the reforms necessary to secure a loan from traditional institutions such as the International Monetary Fund (IMF), World Bank or Asian Development Bank. In the decade from 1998 to 2008, during the worst of the genocide in Darfur, China gave the Sudanese government $1 billion in low or no interest ‘concessional’ loans. In 2004 shortly after Iran announced it would resume uranium enrichment, China agreed to invest $70 billion to develop Iran’s oil fields and to buy the oil they would produce over the next 30 years. Lending habits that place China on the side of abusive and reform-averse regimes have fueled concerns that the AIIB will not uphold existing international requirements to secure loans. In a statement to the UK’s Guardian newspaper, the National Security Council expressed concerns “about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards.”

In spite of withering criticism, the United State’s decision to withhold support for the AIIB has its merits. It would be unwise for the United States to back an institution that allows China to wield outsized influence over decision-making, particularly when that decision-making could lead to politically, economically and environmentally irresponsible investments. The agreement by Chinese officials to forgo veto power was a step in the right direction. However, more concessions can yet be gained.

Allegations of a hidden Chinese agenda

Concerns that the AIIB will be used to further China’s political agenda were raised last week when China demanded that Taiwan only be admitted to the bank’s membership if it applied with an ‘appropriate’ name. Taiwan, referred to by China as “Taipei, China” and officially known as the Republic of China (ROC), has been in a near constant state of conflict with the mainland since 1949, when defeated Nationalist Chinese forces led by Chiang Kai-shek fled to the island following the Communist Party’s rise to power and the establishment of the People’s Republic of China (PRC). The use of Taiwan’s AIIB membership as a chance to bring up the issue of its sovereignty is not only incredibly dark, but indicative of China’s intentions to use its influence in the AIIB to pursue its own political agendas.

Furthermore, Beijing’s maneuvering of its own bank’s role as an alternative to the IMF, World Bank, and the ADB have led to concerns that contracts funded by AIIB investments might favor firms that support Chinese political positions. China must provide credible assurances, that it will not use the AIIB as a tool of its own power before the institution can be considered politically kosher around the globe.

Suggestions have been made to pressure China to address concerns that its new bank will be used as a political tool, but thus far, China has not acted to assuage such concerns. South Korea recommended moving the bank’s headquarters to Seoul in order to alleviate concerns over China’s political intentions. However, China insisted that the headquarters remain in Beijing. South Korea did not attend the signing of the original document laying out plans for the creation of the bank.

All the scrutiny focused on the rise of the AIIB places substantial pressure on China to facilitate a system that dispels these concerns. It is imperative for the survival of the AIIB that China establishes fair guidelines for the bank. If voting structure and day-to-day operations of the bank are seen as being skewed or unfair, all of the progress China has made toward establishing its own alternative institution will be done in vain.

What The United States Should Do

If the United States truly wants the AIIB to adopt standards used by existing international institutions, it must first show China that it is willing to be fair with rules and procedures. In 2010 the IMF proposed changes to its voting structure that would increase the voting power of developing countries by 2.6 percent and redistribute voting power among developing and developed countries from over-represented countries to under-represented countries. Among the countries to gain the most voting share from these reforms are China and India. Though this set of IMF reforms has received backing from the Obama administration, it has not been implemented due to resistance from the U.S. Congress, which must ratify any change in the US’s voting quota. If Congress were to ratify IMF reforms, it could turn the current narrative to focus on the structure of the AIIB and place additional pressure on China to endorse both equitable voting power and stricter standards for lending in the new bank.

The focus of the United States should not be on the maintenance of its own voting power alone, it should be on the improvement of lending standards that it helped create to bring greater efficiency and reform progress to the international financial system. In order for the current regime of international standards to survive, the United States must show a willingness to allow its role within that structure to evolve. The perfect way of sending that message would be to ratify IMF reforms, while continuing to pressure China into accepting existing norms. Until the AIIB can prove itself to be impartial and responsible, the United States should limit its interactions with the institution.

THE TICKING EMBARGO

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Havana

By Alejandro Inzunza
Staff Writer

On Dec. 17 last year, President Obama and Cuban President Raul Castro announced a historic shift in relations between the United States and Cuba. After extensive negotiations brokered by the Canadian government and authorities in Vatican City, the presidents revealed that the U.S. and Cuba had agreed to normalize relations and would begin implementing policies to fully restore diplomatic channels in the coming months.

The talks commenced with a prisoner swap that included spies from both nations and the release of Alan Gross, an American subcontractor who had been imprisoned in the island since 2009. The swap has since been followed by negotiations pertaining to the normalization process which will include the establishment of an American embassy in Havana, a review of Cuba’s designation as a state sponsor of terrorism, easing travel restrictions to the island, and raising limits on remittances by Cuban-Americans and their businesses. In exchange, the Cuban regime has released 53 political prisoners and pledged to improve access to the Internet and other telecommunications technology.

Although initial rapprochement efforts have encountered diplomatic difficulties and domestic criticism, they are widely expected to be resolved in time for the 2015 Summit of the Americas to be held in Panama City this month. Cuba will attend the summit for the first time in history after a vote by Latin American countries resulted in unanimous support for the island-nation’s participation. The United States has consistently opposed Cuba’s attendance and actively lobbied members of the Organization of American States (OAS) to refrain from inviting Cuba in the past. This year’s summit will mark the first time both countries will share the hemispheric stage and will present an important opportunity for both nations to showcase diplomatic progress and update their bilateral relations. The American stance on Cuba has long been a source of tension and disagreement between the U.S. and countries in Latin America and has gradually eroded American influence in the region. The recent rapprochement developments provide an opportunity to improve ties with these nations and rethink American policy towards them as well. Furthermore, the 2015 Summit sets an appropriate stage for negotiations to begin on the biggest issue in U.S.-Cuban relations: the Cuban embargo.

In place since the early 1960s, the Cuban embargo is the longest-lasting trade embargo in the modern era. It was enacted with the purpose of ousting the Castro regime and outlaws most bilateral interaction between the United States and Cuba. It is outside the reach of presidential executive orders and requires Congressional action to be lifted or modified. Although the embargo has endured more than five decades thanks to its support by a powerful political machine, the social and demographic forces that have kept it in place are steadily eroding.

Most of the support for the embargo stems from older cohorts of voters and first-generation Cubans who immigrated to the United States after the Cuban Revolution, mostly to Florida. As these voter blocks start to dwindle and their political power begins to fade, politicians will have decreasing incentives to vociferously defend the continuation of the embargo and explore the alternatives. Already, a majority of Americans favor restoring diplomatic relations with Cuba and are becoming increasingly supportive of lifting the embargo. The trend is even stronger among younger Cuban-Americans in Florida, the state whose representatives have been the most ardent supporters of the status quo. The bloc of Cuban hardliners still represents an influential force in state and nationwide politics, albeit less so today than during any period in contemporary political history.

Arguments in favor of lifting the embargo have been widely discussed and detractors are increasingly falling flat. After all, it is hard to argue that a policy that has been in place for more than fifty years will only now begin to produce the intended beneficial outcomes. If anything, the embargo presents the perfect excuse to stir anti-Americanism in the region and excuse poverty and inequality in Cuba as a product of Yanqui oppression. The American tourism and business dollars that critics fear will flood Cuba and further empower the Castro regime are more likely to reveal the totalitarian corruption that actually oppresses the Cuban people. Poverty and struggle will be harder to justify once limits on trade and finance are lifted and will only serve to pressure failed economic policies to change.

In its quest to isolate Cuba, the United States has been slowly isolating itself instead. It remains the only major country without relations to Cuba and the only advocate for a policy that belongs in the years of the Cold War. It is time to pursue engagement and disavow isolationist policies that have led nowhere. The Cuban embargo is counterproductive and ultimately undermines American influence and interests in the immediate region.

Regardless of the merits or drawbacks of the embargo, the steady shift in American public opinion is undeniable and will inevitably alter the political landscape in time. Although a complete reversal of the embargo in the near future is unlikely given the current Republican control over both houses of Congress, prominent political figures are publicly advocating its end. The debate might set the stage for 2016, when the U.S. Senate is likely to change hands again. In the end, the Cuban question reflects an outdated policy whose revisiting was inevitable given enough time. Barring an international crisis, demographic trends favor a Cuban détente. Unless the Castro regime purposefully sabotages efforts to restore diplomatic relations, the end of the embargo is likely to happen in the coming years.

Image by Alejandro Inzunza

“THE INTERVIEW” CONTROVERSIES: ITS ROLE IN U.S.-NORTH KOREAN RELATIONS

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By Emily Deng
Staff Writer

Deemed controversial by both film critics and political analysts, “The Interview” has crude humor and a weak plot line that is far from innocuous as the film infamously concludes with the assassination of the Supreme Leader of North Korea, Kim Jong-un. Unlike typical entertainment reviews, “The Interview” sparked accusations and finger pointing from the top leaders of the United States and North Korea, as well as sparked an international debate on the role of free speech.

Seth Rogen and James Franco star as a TV show producer and host who are invited to interview the show’s number one fan – Kim Jong-un. The CIA jumps at the opportunity, and the goofy duo is tasked with the assassination of the Supreme Leader. The film cost $44 million to produce. It earned $1.8 million in theaters and $15 million in online sales, not including 750,000 illegal downloads from its release on Christmas Day. Though the film was expected to earn $20 million, it continues to be the top-selling film on YouTube since its release.

As early as June 2014, the not-yet-released film received negative reactions from the North Korean government. Spokesman Kim Myong-chol dismissed the film as “desperation of the U.S. government and American society,” while the state media announced that the film’s release would be considered “the most blatant act of terrorism and war and will absolutely not be tolerated.” In August, the film’s release date was postponed from October to December 2014.

Sony Pictures Entertainment, the parent company of Columbia Pictures, was attacked on November 24, 2014 by the self-identified group “Guardians of Peace.” Thousands of employees’ personal information such as confidential emails, salaries and social security numbers were leaked. Then, on December 16, the “Guardians of Peace” sent 9/11-like threats:

“Soon all the world will see what an awful movie Sony Pictures Entertainment has made. The world will be full of fear. Remember the 11th of September 2001. We recommend you to keep yourself distant from the places at that time. (If your house is nearby, you’d better leave.) Whatever comes in the coming days is called by the greed of Sony Pictures Entertainment. All the world will denounce the SONY.”

Sony reacted immediately on December 17, canceling promotional events, interviews and the Christmas release of “The Interview.” Several major theater chains dropped the film, similar to the 2012 Aurora shooting during a midnight premier of “The Dark Knight Rises.”

On December 19, 2014, the controversial film and the Sony hack were finally addressed on the political stage. President Barack Obama stated:

“We cannot have a society in which some dictator someplace can start imposing censorship here in the United States. Because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they start doing when they see a documentary that they don’t like, or news reports that they don’t like.” He continued by saying, “I wish [Sony] had spoken to me first. I would have told them, do not get into a pattern in which you’re intimidated by these kinds of criminal attacks.”

The President then explicitly accused North Korea for the attack. Sony reconsidered their decision and announced that it would be releasing the film on its original Christmas date in select theaters and online. In response, North Korea denied the accusation on December 22, 2014 and claimed that the American government was behind the film’s production. According to China’s Xinhua News, the internet and 3G in North Korea were shut down for several hours, for which North Korea officially accused the United States.

On December 24, 2014, Obama suggested that the United States was considering adding North Korea to the terror list. The country was removed from the list in 2008, but its re-addition would impose even stricter sanctions on North Korea. The International Business Times claims that such a move could incite military action from North Korea.

Americans’ right to free speech was heavily debated after Sony pulled “The Interview.” LA Weekly claimed that this move was “the end of free speech in Hollywood.” Many people, including Obama, Hollywood celebrities and political analysts, supported the release of “The Interview” to prove that Americans do not back down to terrorism. Though Sony’s decision was made out of cowardice, they corrected their mistake and the film has now drawn viewers beyond the target audience to exercise their rights.

As Americans celebrate their freedom of speech sitting comfortably in a movie theater or their own homes, North Koreans risk their lives for just the chance to see the film. Activist Park Sang-hak partnered with U.S. non-profit Human Rights Foundation to airdrop 100,000 DVDs and USBs by balloon into North Korea. Park believes that with enough exposure to the film, “North Korea will collapse.” North Korea has since threatened to kill Park.

Some North Koreans have risked severe punishment for watching the film. However, although a majority of viewers are anti-government, they still found the film offensive and distasteful, feeling that the film “depicted North Koreans as a bunch of idiots.” A few parts did ring true to North Korean viewers, such as when the leader Kim Jong-un had to answer the question “Why do you let your people starve?” in the interview with James Franco’s character.

Earning a 52 percent out of 100 on Rotten Tomatoes, many would agree that it was not a great movie. However, the film’s incitement of cyber-terrorism and the intense response from North Korea prove “The Interview” can no longer be considered a simple slapstick comedy with a political plot.

It is true that we should not let cyber-terrorists dictate our every move, but it can be said that critical responses to controversial media should also be expected. The controversy over “The Interview” shows that entertainment is becoming less benign and holds greater consequences beyond the screen. As we maintain our free speech in a modern world of space and time compression, future media will face greater repercussions in the larger international context.

Whether we like it or not, “The Interview” is now a symbol of free speech. American audiences sat through the poorly done satire just to prove a point or to see what all the hubbub was about. Meanwhile, Park and other defectors use the film to start chipping away at the wall that is North Korea.

Image by pburka