What’s Next for Libya

Mahmoud Jibril is the leader of Libya’s National Transitional Council, the official name adopted by the group of Libyans who have nearly overthrown Muammar Ghaddafi’s government. He has been educated in Egypt and the United States and represents an interesting paradox. His connections with both the West and the Arab world have given him the ability to work closely with partners in both regions with the result that countries as diverse as France, the UK, Saudi Arabia, and the United Arab Emirates have officially recognized the NTC as the governing body in Libya.

Mr. Jibril also worked in the very government his movement has overthrown. He was the head of the National Economic Development Board from 2007 until the fall of the Ghaddafi regime. As head of the NEDB, Mr. Jibril lead efforts to privatize many of Libya’s industries and to liberalize the overall economic structure of Libya. through his position at the NEDB, Mr. Jibril worked closely with the United Nations Development Programme in an effort to spur and sustain economic growth and development in Libya.

Now that the NTC seems poised to take over the halls of government in Libya, it remains to be seen what kind of leaders they will be. There have already been reports that the armed rebels are filling in the peace-keeping roles abandoned by Ghaddafi forces and that they are doing a rather admirable job. The rebels may be filled with joyous exuberance, but it seems that most of the rest of Libya too is filled with a sort of cautious optimism. Let’s hope that the people of Libya can realize true self-determinaiton and self-rule and can create a model for the world.

*Author’s Note: While I respect the fact that, geographically Libya is traditionally considered to be part of Africa, by custom, tradition, religion, lifestyle, and societal norms, the Libyan people share a great deal in common with the people of Southwest Asia.

 

Tunnel!

I came across this story today. Apparently, the Russians want to build a 65 mile tunnel under the Bering Straight to connect Russia and Alaska. the intended use will be freight transportation to the tune of 100 million tons of goods per year.

 

Standing Up to Tyranny

As the rebels in Libya march into Tripoli in apparent victory, this story was published by the BBC magazine about Hans Litten. Mr. Litten was one of the first to question Hitler’s methods in open court, before the Nazi leader would rise to power. The story is captivating so I’ll just leave you to read it for yourself.

The man is still revered in Germany and Europe today. There’s even an international prize named after him.

 

Drilling the Gulf

Let me introduce you to the United States Bureau of Ocean Energy Management, Regulation and Enforcement. They are the branch of the Department of the Interior tasked with overseeing the safe management of the nation’s mineral wealth on the Outer Continental Shelf. When the Deepwater Horizon rig blew up in April 2010, it was BOEMRE that should have been overseeing the whole process. In the wake of the Deepwater Horizon catastrophe, President Obama suspended the auction of drilling rights in the Gulf of Mexico.

The United States retains mineral rights, generally speaking, for land that lies under the surface of the ocean up to about 200-250 miles from the coast – though there’s a whole process of law for determining the exact extent of U.S. territorial claims at any given point. The government leases rights to mineral companies to develop tracts of land. These leases are generally auctioned off to the highest bidder. The way the system is supposed to work is that a company, say BP, is supposed to bid on the rights to develop a given tract of land (or ocean floor). If BP wins, they are supposed to then proceed with the development of those tracts and begin to extract the mineral wealth below, say oil. However, companies will often bid on and win these lease contracts at very low prices and then instead of developing them, simply hoard them. In response to this hoarding, the BOEMRE has instituted new rules that will go into effect when the U.S. resumes lease auctions in December. One of these new rules includes upping the minimum bid price to $100 per acre for tracts in water depths of 1,300 feet or more; up from a previous minimum of $37.50. The $100 price point is important as this is the price under which the BOEMRE found oil companies were more likely to hoard rather than develop. The minimum bid for tracts in shallower water will remain at $25 per acre.

These tracts, more than 20 million acres in all, are expected to produce between 222 and 423 million barrels of oil and between 1.49 and 2.65 trillion cubic feet of natural gas.

The BOEMRE is currently going through a massive reorganization in response to the Deepwater Horizon tragedy, including the creation of the Investigation and Review Unit. Let’s hope that these reform truly do lead to a more secure, sustainable energy solution. Yes, I know it’s still fossil fuels, but if we’re going to use them, at least we should use them responsibly.

 

Indigenous People of South America

There have been two stories in the news recently about indigenous peoples in South America. First, Indigneousnews.org is reporting that the last remaining (previously) un-contacted tribe in Paraguay is being systematically ousted by Brazilian cattle-ranchers. In this case, it seems the land is being illegally taken from the tribe as the land had previously been purchased from the cattle ranchers by the government with the condition that it be returned to the tribe. It seems that this subgroup of the Ayoreo people was first contacted in 2004 and that since that time they have faced constant pressure from the cattle ranchers to abandon their lands. It remains unclear whether the Paraguayan government has the capability to fully protect their native people from encroachment from large farming and timber interests.

The second story of the struggle of indigenous people in South America comes from Peru where President Evo Morales has announced the construction of a trans-national roadway despite the protests of indigenous people whose land the roadway would cross. This is an interesting move for Mr. Morales. He is the first indigenous person ever elected to the position of President in Peru, and the first person of native ethnicity to be democratically elected in any Latin American country since Benito Juarez was elected President of Mexico in the 1850’s. Mr. Morales’ platform has centered on social reform and fair and equal treatment for indigenous people. Mr. Morales has demonstrated Marxist leanings greatly influenced by the political thought of Che Guevara, so to take such a strong stand against a significant part of his own constituency demonstrates that the voices of these indigenous people may be fading away.

It is almost a given that eventually there will be no more “un-contacted” people. As long as we as humans are driven to explore, contacting these native people will be unavoidable. What we can control however, is how we continue to interact with them and how we treat their rights as human beings.

All right, I’m off my soapbox. Enjoy the weekend.

 

The Sacred Dollar

Standard & Poor’s, the credit rating agency, downgraded the United States’ credit rating last Friday. You mat have seen the headlines. S&P claimed that despite the compromise on raising the debt ceiling, and avoiding default, the U.S. government has failed to address their core debt issues and thus U.S. treasury bills do not warrant the highest AAA rating.

The dollar has long been the symbol of safe investing. In fact, in investing, the interest rate on t-bills is called the “risk free rate”. Well it seems that with the downgrade, there is less international support for the greenback. China has renewed their call for a reserve currency that is not American. What that essentially means is that China is calling for the U.S. to either 1) address the growing debt problem, or 2) face a world in which China will no longer buy American bonds.

Either way, since the incarnation of the Euro, the dollar has seen its dominance slowly slip away. Since 2007 (and in some cases earlier) many OPEC members have quoted oil contract prices in currency other than dollars. Since dollars had been the traditional unit of measurement of oil contracts, and since every country on Earth uses oil in one form or another, accepting other currencies in exchange for oil was a huge first step in creating a multi-currency global economic system. And earlier this year, the Chicago Mercantile Exchange began denominating certain oil futures in Euros.

Despite all the negative publicity and the seemingly never-ending slide in value of the USD, it doesn’t appear that the currency of the United States will be going away any time soon. Too much business is still transacted in dollars and too many countries still hold U.S. debt. What is more likely is the dollar will no longer be allowed to dominate the currency market and we will no longer be able to simply “print money”. The dollar – and by extension the U.S. economy – will have to adapt and show that it is still a safe haven for investors in a world with more choice.

Update 9 August:

There’s a deeper discussion of the relationship between the Chinese and U.S. economies available here. [Yahoo! News]

 

The Euro Effective at Last

I was in a class taught by a German professor once. At the beginning of the course on European Union history he held up a Euro coin and asked the class what it was. Fellow classmates answered “Currency,” or “Cooperation,” or “Unity” or other similar feelings. These answers were close, but what the professor was getting at is the Euro is a miracle. This was in 2004 and the EU had just expanded from 14 to 24 members. Having a single currency (and thus a single monetary policy) shared by the majority of the members was considered by many to be nothing short of a full-fledged miracle. Now the EU has 27 member nations, 17 of whom use the Euro. Most of the rest will eventually switch over to the Euro once they meet the Eurozone criteria.

However with so many nations using a single currency, there is bound to be problems with integration and implementing a single monetary policy. The difficulty is compounded by the fact that there are nearly as many types of economies as member states. Some members are net importers while others are net exporters. These divergent economies make it difficult to come up with a single strategy and the European Central Bank has had to play a much bigger role in stepping in to preserve economic union. This is the latest move by the ECB to forestall a European-wide economic collapse. However the debt crises in Greece and Portugal are still fresh in European investors’ minds.

So how exactly has the Euro been effective? Well, for starters, only very recently has anyone (in this case Greece) even considered the possibility of leaving Club Euro. For all the anti-Euro sentiment, members of the Eurozone remain fiercely committed to the idea of a Europe united through currency. The Chancellor of Germany, Angela Merkel, spearheaded the Greek bail-out plan as part of an effort to stabilize the Euro.

Sixty years ago, if you had asked a German or a French or a Greek if there would be political unity in Europe you would have been laughed back to this century. The French and Germans had just finished battling each other for the third time in 150 years, and the whole of Europe was coming to grips with the loss of an entire generation of young men. From this tragedy, the French and the Germans decided to do the only thing they could to avoid war; they decided to share the resources of war – coal and steel. From this European Coal and Steel Community grew the idea of a United States of Europe. And the way these Europeans chose to lay down the foundations of political unity was with economic unity. A political union would grow from economic, monetary, and fiscal unity. Indeed, in the face of reverting to nationalistic solutions, members of the Eurozone have instead chosen to pick themselves up and to unite politically to preserve the economy.

 

News from Malawi

Malawi is a country of nearly 16 million people in south-eastern Africa. Sandwiched between its much larger neighbors of Mozambique, Tanzania, and Zambia, Malawi rarely makes headlines. However there is a movement growing in Malawi that is largely reminiscent to those events currently happening across the Arab world. Malawians have risen up in protest against their president Bingu wa Mutharika. Mr. Mutharika assumed office following a controversial election in 2004. He would soon after split with his political party to form his own Democratic Progressive Party (DPP). Mr. Mutharika, as head of his own political party, effectively nominated himself to stand for re-election in 2009. He and his party were swept into office garnering more than twice the number of votes as the opposition party. His popularity in Malawi had largely been driven by economic growth. In 2010, the Malawian economy grew by 6.7% driven by agriculture and mining operations. Even though this is a slower rate of growth than 2009 (7.6%) due to lower agricultural yields caused by drought in northern Malawi, the economy has nevertheless remained steady and growing during the otherwise global downturn.

So why have the people risen up now? In recent years, Mr. Mutharika has grown increasingly dictatorial. He has nominated his brother to succeed him in the 2014 presidential election and in 2010, he married his second wife (his first had died of cancer in 2007) in a ceremony, funded at public expense, costing $1.3 million. The GDP per capita at purchasing power parity (a measure of per capita GDP that takes into account the actual purchasing power of the people in their own market) of Malawi is only $800. Despite the growth of the economy, Malawi remains one of the poorest countries in the world. After Mr. Mutharika expelled the British High Commissioner for a disparaging remark the Commissioner made about him, the Brits withdrew aid to Malawi. The EU quickly followed suit, suspending their aid. These recent protests have also forced the United States to suspend their aid to Malawi’s energy sector. It is estimated that up to 40% of Malawi’s development budget is based on aid from foreign nations, so these suspensions from some of the largest providers of aid, have really cut into the Malawian federal budget. All told, Malawi has seen nearly $750 million in aid money suspended.

The destruction and violence in Malawi is also threatening to spill over into the rest of the Southern Africa Development Community (SADC), a treaty among 15 southern African nations including Angola, Botswana, Democratic Republic of the Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia, and Zimbabwe. The SADC’s mission, taken from their website, is “[T]o promote sustainable and equitable economic growth and socio-economic development through efficient productive systems, deeper co-operation and integration, good governance, and durable peace and security, so that the region emerges as a competitive and effective player in international relations and the world economy.”

The organizers of the protests in Malawi have given Mr. Mutharika until August 17 to respond peacefully to their demands and for him to leave office. Let’s hope that there is a peaceful resolution to this conflict and that the people of Malawi can rejoin the world economy and continue to grow their country and their society.

 

Crime Doesn’t Pay. But What If the Conviction is Faulty?

David Hicks is an Australian citizen who was captured by the Afghan Northern Alliance in Afghanistan where he was found training with al-Quaeda. He was turned in to U.S. forces and sent to the U.S. detention center in Guantanamo Bay, Cuba. He was held there until 2006 when he was convicted under the Military Commissions Act. The U.S. Supreme Court later ruled in Hamdan v Rumsfeld that these commissions to be illegal under U.S. law, effectively invalidating his conviction.  Mr. Hicks also claimed that he was tortured and mistreated by both U.S. and Afghan forces. Following these allegations, and the voiding of the initial charges against him, Mr. Hicks had new charges brought against him, including providing material support to terrorists. In exchange for a severely reduced sentence, Mr. Hicks and his defense team cut a deal whereby he pleaded guilty to a single count of providing material support to terrorists. Mr. Hicks was returned to his native Australia and served nine months in prison there.

Now, Mr. Hicks has written a book detailing his experience and ordeal in Guantanamo. In the book, Mr. Hicks claims he was falsely arrested and reasserts his allegations of torture and abuse and estimates of his royalty income so far are about $107,000. The Australian government however, has sued to freeze the assets generated from the sale of Mr. Hicks’ memoir and the Court has agreed and frozen the trust account holding the royalty monies. Australia has a law, as do many other countries around the world, the United States included, that prohibits criminals from making money off of their crimes. These laws usually specifically forbid selling rights to the story or producing a film or book about the crime. In this case however, Mr. Hicks claims that his initial conviction, the one that produced the events detailed in the book, was declared invalid and therefore should not bar him from receiving the profits from the telling of these events.

At the moment it is unclear what the outcome will be; the government is still in talks with Mr. Hick’s legal team about how to resolve the situation. But Mr. Hicks’ father is claiming that this move is politically motivated and the Green Party has agreed, calling the move a “[S]how trial designed to deter authors from publishing politically sensitive material.” Whatever the outcome, perhaps it’s worth considering that we should all be entitled to tell our tale in our own words.

 

The Arab Spring

In what has come to be known as “The Arab Spring,” revolutions, protests, civil war, or demands for regime changes have occurred in 17 nations across the Middle East and north Africa. Among the most televised were the protest that took place in Tahrir Square in downtown Cairo. Many protesters were killed in clashes with police forces loyal to former head of state Hosni Mubarak. Following the protests, which caused the toppling of Mubarak’s regime as well as the dissolution of Parliament and the suspension of the Egyptian Constitution, a peace was restored to Egypt as the country and the people began to rebuild. Some however, chose to remain in Tahrir Square as a living memorial to those who had died as martyrs for their country.

There has been a growing impatience with these lingering protesters, however. There is little threat of renewed, prolonged violence, as most people accept, or even openly support the cause represented by these temporary residents of Tarhir, but most have come to think that it is time to move on. However, the Egyptian Army forcibly removed lingering protesters yesterday, amid calls from some residents of Tahrir to finally reopen the Square. The removal lead to heated skirmishes not seen in six months since the height of the revolution.

This removal also coincides with the beginning of Ramadan, the month-long period for fasting, spiritual purification, and communion with God celebrated by Muslims. Hopefully this skirmish is over quickly and the people of Egypt can move on to rebuilding their lives and their country.