Tuesday, July 14, 2009

Western Reporting and The Curse of the Present

This was a reply to a Chinese friend of mine who had been incensed by the reporting of the riots in north west China. He had written to me that:

"The western media is still in 19th century colonism era, it just reports remote strange things to pleased its own audience or make them pour their cheap sympathy, rather than to find out the truth."

Here's the somewhat refined response:

On the matter of Xin Jiang I understand that this has been a very delicate subject in China. In defence of the news business I would say that western reporters write what they see. However the problem is one of context.

Newspapers in the west deal largely with the present not the past. Editors in London and New York are not that interested in what happened in Xin Jiang over the last 60 years. They know more about Italian holiday destinations than Central Asian ethnic identity.

Because western journalists lack a historical memory they forget how difficult it was to modernise their own societies and economies. They forget that whole races were wiped out (eg Native Americans), people enslaved (Africa), countries shackled (India) and others drugged (China).

The history of how rich countries got rich is a sorry affair but today's western newspapers are not burdened by this knowledge. They prefer to point the finger at developing societies and say protect minority rights when they themselves never did. This is newspapers' "curse of the present".

The best argument that western reporters have is that developing countries should not make the same mistakes that developed countries did. I have some sympathy with this. But this "best practice" argument is only relevant when western newspapers can say fairly that they are truly interested in the development of poorer nations. It is in poorer countries where the west's political project (liberty, democracy etc) comes into conflict with established culture and establishment power.

But which western newspaper can honestly say they are interested in such things rather than the death of a musician? I have yet to find one. After working for six years in South Asia I have become cynical about the moral pedestal placed under the seat of many journalists.

Saturday, July 11, 2009

Nationalising Thought in Iran and China

Below is a eye-catching piece of web journalism by the The NYT's Lede Blog, put together by Robert Mackey It compares the Iranian and Chinese responses to and media management of two very different revolts. The main thrust is a focus on the changing nature of authoritarian regimes. There are two points that stick out.

The first is that Iran and China have traded complete control for limited freedom. The main way of doing this is to convert their captive minds to consuming ones. That being free to choose your partner, your brand of shoes etc led to people in the Balkans wanting to choose their national identity must worry Tehran and Beijing. Which is probably why nationalism and a strong sense of historical victimhood is strongly cultivated by both Iran and China. This is in a sense an attempt to control the past.

The second deals with how to control the present. The mass organisations that run the two ancient states have a keen sense of the propaganda war within. In both Iran and China the game is to nationalise thought - to control the processes by which information is moulded into shape and therefore define the contours of the debate. They are not falling into the trap of Soviets who tried to battle the west by saying they were the real democrats or trading human rights abuses.

Instead it is about creating a real time narrative to events and hence a beginning, middle and end to the news cycle. In Iran the Supreme Leader says the result is final, has a faux investigation and ends by declaring a few irregularities but the President is Ahmadinejad. The keep matters simple he authorises deadly force to be used against protestors. In Xin Jiang it is by painting the Han as victims of criminal minds spurred by a rebel terrorist group of Uyghurs. There are guided tours and media centres set up for visiting journalists. All dissidents will be struck hard. Nasty stuff but it is designed to make sure bad elements capitulate to the demands of state propaganda.

July 8, 2009, 6:48 pm
Managing Dissent in China and Iran

Just weeks after the disputed presidential election in Iran, outside observers find themselves in a somewhat familiar situation: trying to piece together a sense of what is happening in China’s Xinjiang Province in the aftermath of anti-government protests that turned violent. In China, as in Iran, state-controlled media has called the protesters “rioters” and the violence on the streets “terrorism” rather than characterizing it as a spontaneous reaction by demonstrators confronted by security forces.

As my colleague Michael Wines reported on Monday, getting a clear sense of what is happening on the streets of Urumqi is not made easier by the fact that China’s government, like Iran’s, has made a concerted effort to control information about the unrest by placing restrictions on the foreign press and limiting access to the Internet for government opponents. So once again we find ourselves reading reports from news outlets controlled by or sympathetic to the state, relying on what foreign reporters who have been given strictly limited access to the area can learn and following the Twitter feeds of bloggers who reflect on and translate some of what is being said inside the country.

Beyond the way they manage dissent, Communist China and the Islamic Republic of Iran are obviously very different countries, with very different cultures and systems of government. One person who has thought about the parallels that do exist between the way the two regimes try to control their populations is the journalist Steve Coll. In a discussion of Iran’s government with Dorothy Wickenden and Hendrik Hertzberg of The New Yorker two weeks ago, Mr. Coll argued that the Iranian regime had studied the way China’s government responded to the pro-democracy movement in 1989 and “tried to construct” what he called a “post-Tiananmen China model” system of control.

In the discussion, recorded for The New Yorker’s Web site two weeks ago, Mr. Hertzberg suggested that it is not clear “what kind of society and regime Iran really is.”

“It’s not a simple dictatorship,” he said “The models that we have to tell us what kind of a place Iran is from the past are not particularly useful.”

That led to this exchange between Ms. Wickenden and Mr. Coll:

Dorothy Wickenden: Many people have been reminded of Tiananmen Square as they’ve watched this, as it’s become more and more brutal. What lessons do you think the authorities in Iran have drawn from the Chinese government’s successful crackdown?

Steve Coll: That you have to be decisive and that you have to be unified at the state level and to manage your commands in the security forces very carefully, because the Chinese almost cracked up under the pressure of routing those students from Tiananmen. But I think Rick’s right: this is not China 1989, or Iran 1979… this is an unusual hybrid state with a lot of resilience in its authoritarian and security structures. [...]

It’s a weird pluralistic dictatorship because they’ve been trying to follow what they think of as the Chinese model post-Tiananmen, where you create enough space culturally — rock concerts: good; jobs and businesses and entrepreneurship: good; defiance of state edicts, state power to be responded to brutally. So in creating this weird pluralistic dictatorship, I don’t think anybody in the state, at the top or in the street, quite understood where the balance might have shifted in this attempt to sort of both accommodate and control, especially in reference to young people, and they’re the ones that the state has always feared, in this kind Chinese model way: let them blow off steam listening to their strange music, let the women in north Tehran show a little ankle on the street if that’s really what they want to do, but there are bright lines. Part of what’s going on here I think is a kind of testing on both sides of where those lines might have shifted, given the accommodations that the regime has sponsored and the pluralism it has sponsored.

On Wednesday The Guardian’s diplomatic editor Julian Borger reported that Iran’s feared Basij militia is under the direct control of Mojtaba Khamenei, the son of Iran’s supreme leader, Ayatollah Ali Khamenei — which suggests that Iran’s leadership is indeed exhibiting strong control of the security forces.

Mr. Coll’s description of the post-Tiananmen China model recalls a comment the Croatian writer Slavenka Drakulic made in the 1990s about the Yugoslav Communists - that their decision to grant people freedom to travel and buy consumer goods helped keep the population from resenting the regime and pressing for dramatic political change. While the harsher form of authoritarianism in Czechoslovakia, for example, produced a coherent opposition whose frequently jailed leaders were ready to take over running the country communism collapsed, in Yugoslavia a less resentful population was content to stick with its former communist leaders after the fall of the Berlin Wall, with disastrous consequences. As Ms. Drakulic wrote in her book The Balkan Express:

Recently an American friend asked me how it happened that the most liberal and best-off Communist country was the one that now had the war. . . . The answer is so simple that I’m almost ashamed of it: we traded our freedom for Italian shoes.

The recent crackdown on the Internet in the immediate aftermath of the Xinjiang unrest came just after the protests in Iran were self-reported by members of the opposition with Twitter, YouTube and Facebook accounts. That might seem to be a case of China learning from Iran’s experience. But, as David Bandurski of the China Media Project wrote last month, before the violence in Urumqi, China’s government seems to have been learning how to deal with unrest in the Internet age based on its own experience with protests in the past year:

Not so long ago, the suppression of any and all information about mass incidents in China was a matter of virtual certainty. But Chinese officials have surprised over the past year. They have often been right on top of strikes, riots and opinion storms. And crisis management has been, at least on the surface, more about press conferences and press releases, and less about police muscle. At CMP, we have used the term Control 2.0 to talk about an emerging new order of information management and control in China, something more nuanced and clever, and something altogether more Hu Jintao. [...]

The difference with Control 2.0 is that the party is moving from a defensive position, as passive controllers and censors, to a more active position. That is to say, they are now on the offensive.

Control 2.0 is control that makes a shrewdly realistic assessment of China’s new information environment — the result of the Internet, predominantly — and recognizes there are some events that cannot be entirely controlled. So the core of Control 2.0 is reporting at the first possible moment those news events that cannot be concealed, getting the government’s official explanation and version of the facts out first. This pre-empts other media, including international media.

By getting the information out, officials can get the “peripheral media” (especially influential portal news sites, but also commercial newspapers) to work for them. These media feed off of the original Xinhua reports, amplifying their effect. Those same reports, with only slight permutations in many cases, become AFP, Reuters and AP reports. Finally, using those methods that create the smallest stir, you kill the information it is most critical to keep under wraps, keeping rabble-rousing professional media away, and punishing those media that “don’t listen.”

Mr. Bandurski notes that in June 2008, in an address to the People’s Daily newspaper, President Hu himself outlined the need to develop a “new pattern of public opinion guidance,” explaining:

In the age of the Web, everyone can potentially be a source of information and a wellspring of opinion. It is as though everyone has a microphone before them. This has raised the bar on the need for public opinion channeling. Faced with sudden-breaking issues, it is not sufficient for the government and mainstream [official] media to release information. They must also move quickly to understand the pulse of new information emerging on the Internet, reacting quickly to public doubts. This requires that governments, and especially propaganda offices, be equipped with the ability to rapidly and accurately compile and analyze public opinion.

Given the speed with which Twitter accounts were set up by members of the Iranian Revolutionary Guards last month, to taunt and hunt down opposition bloggers, it seems that President Ahmadinejad may be paying close attention to President Hu’s lectures.

Thursday, July 9, 2009

The decline, rise and fall of Asia

Missed this one, but in Foreign Policy last month Minxin Pei argues potently against the idea that the Asian century has begun. I thought his book China's Trapped Transition was a fantastic counterpoint to all the guff about China running the world. His take is more that China is ruining the world. Whatever one believes, you cannot dismiss Minxin's take.

Think Again: Asia's Rise

Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do. BY MINXIN PEI | JUNE 22, 2009

"Power Is Shifting from West to East."

Not really. Dine on a steady diet of books like The New Asian Hemisphere: The Irresistible Shift of Global Power to the East or When China Rules the World, and it's easy to think that the future belongs to Asia. As one prominent herald of the region's rise put it, "We are entering a new era of world history: the end of Western domination and the arrival of the Asian century."

Sustained, rapid economic growth since World War ii has undeniably boosted the region's economic output and military capabilities. But it's a gross exaggeration to say that Asia will emerge as the world's predominant power player. At most, Asia's rise will lead to the arrival of a multi-polar world, not another unipolar one.

Asia is nowhere near closing its economic and military gap with the West. The region produces roughly 30 percent of global economic output, but because of its huge population, its per capita gdp is only $5,800, compared with $48,000 in the United States. Asian countries are furiously upgrading their militaries, but their combined military spending in 2008 was still only a third that of the United States. Even at current torrid rates of growth, it will take the average Asian 77 years to reach the income of the average American. The Chinese need 47 years. For Indians, the figure is 123 years. And Asia's combined military budget won't equal that of the United States for 72 years.

In any case, it is meaningless to talk about Asia as a single entity of power, now or in the future. Far more likely is that the fast ascent of one regional player will be greeted with alarm by its closest neighbors. Asian history is replete with examples of competition for power and even military conflict among its big players. China and Japan have fought repeatedly over Korea; the Soviet Union teamed up with India and Vietnam to check China, while China supported Pakistan to counterbalance India. Already, China's recent rise has pushed Japan and India closer together. If Asia is becoming the world's center of geopolitical gravity, it's a murky middle indeed.

Those who think Asia's gains in hard power will inevitably lead to its geopolitical dominance might also want to look at another crucial ingredient of clout: ideas. Pax Americana was made possible not only by the overwhelming economic and military might of the United States but also by a set of visionary ideas: free trade, Wilsonian liberalism, and multilateral institutions. Although Asia today may have the world's most dynamic economies, it does not seem to play an equally inspiring role as a thought leader. The big idea animating Asians now is empowerment; Asians rightly feel proud that they are making a new industrial revolution. But self-confidence is not an ideology, and the much-touted Asian model of development does not seem to be an exportable product.

"Asia's Rise Is Unstoppable."

Don't bet on it. Asia's recent track record might seem to guarantee its economic superpower status. Goldman Sachs, for instance, expects that China will surpass the United States in economic output in 2027 and India will catch up by 2050.

Given Asia's relatively low per capita income, its growth rate will indeed outpace the West's for the foreseeable future. But the region faces enormous demographic hurdles in the decades ahead. More than 20 percent of Asians will be elderly by 2050. Aging is a principal cause of Japan's stagnation. China's elderly population will soar in the middle of the next decade. Its savings rate will fall while healthcare and pension costs explode. India is a lone exception to these trends-any one of which could help stall the region's growth.

Environmental and natural resource constraints could also prove crippling. Pollution is worsening Asia's shortage of fresh water while air pollution exacts a terrible toll on health (it kills almost 400,000 people each year in China alone). Without revolutionary advances in alternative energy, Asia could face a severe energy crunch. Climate change could devastate the region's agriculture.

The current economic crisis, moreover, will lead to huge overcapacity as Western demand evaporates. Asian companies, facing anemic consumer demand at home, will not be able to sell their products in the region. The Asian export-dependent model of development will either disappear or cease to be a viable engine of growth.

Political instability could also throw Asia's economic locomotive off course. State collapse in Pakistan or a military conflict on the Korean Peninsula could wreak havoc. Rising inequality and endemic corruption in China could fuel social unrest and cause its economic growth to sputter. And if a democratic breakthrough somehow forces the Communist Party from power, China is most likely to enter a lengthy period of unstable transition, with a weak central government and mediocre economic performance.

"Asian Capitalism Is More Dynamic."

Hardly. With the United States brought low by Wall Street and the European economy enfeebled by its welfare state and inflexible labor market, most Asian economies appear in great shape. It is tempting to say that Asia's unique brand of capitalism, by seamlessly weaving together strategic state intervention, corporate long-term thinking, and insuppressible popular desire for material betterment, will outcompete either the greed-devastated U.S. model or the hidebound European variant.

But though Asian economies-with the notable exception of Japan-are among the fastest-growing in the world today, there's little real evidence to suggest that their apparent dynamism comes from a mysteriously successful form of Asian capitalism. The truth is more mundane: The region's dynamism owes a great deal to its strong fundamentals (high savings, urbanization, and demographics) and the benefits of free trade, market reforms, and economic integration. Asia's relative backwardness is a blessing in one sense: Asian countries have to grow faster because they're starting from a much lower base.

Asian capitalism does have three unique features, but they do not necessarily confer competitive advantages. First, Asian states intervene more in the economy through industrial policy, infrastructural investment, and export promotion. But whether that has made Asian capitalism more dynamic remains an unresolved puzzle. The World Bank's classic 1993 study of the region, "The East Asian Miracle," could not find evidence that strategic intervention by the state is responsible for East Asia's success. Second, two types of companies-family-controlled conglomerates and giant, state-owned enterprises-dominate Asia's business landscape. Although such corporate ownership structures enable Asia's largest companies to avoid the short-termism of most American firms, they also shield them from shareholders and market pressures, making Asian firms less accountable, less transparent, and less innovative.

Finally, Asia's high savings rates, by providing a huge pool of indigenous capital, undeniably fuel the region's economic growth. But pity Asia's savers. Most of them save because their governments provide inadequate social safety nets. Government policies in Asia penalize savers through financial repression (by keeping deposit rates low and paying household savers measly returns on their savings) and reward producers by subsidizing capital (typically through low bank lending rates). Even export promotion, ostensibly an Asian virtue, seems overrated. Asian central banks have invested most of their massive export surpluses in low-yielding, dollar-dominated assets that will lose much of their value due to the long-term inflationary pressures generated by U.S. fiscal and monetary policies.

"Asia Will Lead the World in Innovation."

Not in our lifetime. If you look only at the growing number of U.S. patents awarded to Asian inventors, the United States appears to have a dramatically receding edge in innovation. South Korean inventors, for example, received 8,731 U.S. patents in 2008-compared with 13 in 1978. In 2008, close to 37,000 U.S. patents went to Japanese inventors. The trend seems sufficiently alarming that one study ranked the United States eighth in terms of innovation, behind Singapore, South Korea, and Switzerland.

Reports of the death of America's technological leadership are, to paraphrase Mark Twain, greatly exaggerated. Although Asia's advanced economies, such as Japan and South Korea, are closing the gap, the United States' lead remains huge. In 2008, American inventors were awarded 92,000 U.S. patents, twice the combined total given to South Korean and Japanese inventors. Asia's two giants, China and India, still lag far behind

Asia is pouring money into higher education. But Asian universities will not become the world's leading centers of learning and research anytime soon. None of the world's top 10 universities is located in Asia, and only the University of Tokyo ranks among the world's top 20. In the last 30 years, only eight Asians, seven of them Japanese, have won a Nobel Prize in the sciences. The region's hierarchical culture, centralized bureaucracy, weak private universities, and emphasis on rote learning and test-taking will continue to hobble its efforts to clone the United States' finest research institutions.

Even Asia's much-touted numerical advantage is less than it seems. China supposedly graduates 600,000 engineering majors each year, India another 350,000. The United States trails with only 70,000 engineering graduates annually. Although these numbers suggest an Asian edge in generating brainpower, they are thoroughly misleading. Half of China's engineering graduates and two thirds of India's have associate degrees. Once quality is factored in, Asia's lead disappears altogether. A much-cited 2005 McKinsey Global Institute study reports that human resource managers in multinational companies consider only 10 percent of Chinese engineers and 25 percent of Indian engineers as even "employable," compared with 81 percent of American engineers.

"Dictatorship Has Given Asia an Advantage."

No. Autocracies, mainly in East Asia, may seem to have made their countries prosperous. The so-called dragon economies of South Korea, Taiwan, Singapore, Indonesia under Suharto, and now China experienced their fastest growth under nondemocratic regimes. Frequent comparisons between China and India appear to support the view that a one-party state unencumbered by messy competitive politics can deliver economic goods better than a multiparty system tied down by too much democracy.

But Asia also has had many autocracies that have impoverished their countries-consider the tragic list of Burma, Pakistan, North Korea, Laos, Cambodia under the murderous Khmer Rouge, and the Philippines under Ferdinand Marcos. Even China is a mixed example. Before the Middle Kingdom emerged from self-imposed isolation and totalitarian rule in 1976, its economic growth was subpar. China under Mao also had the dubious distinction of producing the world's worst famine.

Even when you look at autocracies credited with economic success, you find two interesting facts. First, their economic performance improved when they became less brutal and allowed greater personal and economic freedoms. Second, the keys to their successes were sensible economic policies, such as conservative macroeconomic management, infrastructural investment, promotion of savings, and pushing exports. Dictatorship really has no magic formula for economic development.

Comparing a one-party state like China with a democracy such as India is not an easy intellectual exercise. Obviously, India has many weaknesses: widespread poverty, poor infrastructure, and minimal social services. China appears to have done much better in these areas. But appearances can be deceiving. Dictatorships are good at concealing the problems they create while democracy is good at advertising its defects.

So the autocratic advantage in Asia is, at best, an optical illusion.

"China Will Dominate Asia."

Not likely. China is on course to overtake Japan as the world's second-largest economy this year. As the regional economic hub, China is now driving Asia's economic integration. Beijing's diplomatic influence is expanding as well, supposedly thanks to its newfound soft power. Even China's once antiquated military has acquired a full plethora of new weapons systems and significantly improved its ability to project force.

Although it is true that China will become Asia's strongest country by any measure, its rise has inherent limits. China is unlikely to dominate Asia in the sense that it replaces the United States as the region's peacekeeper and decisively influences other countries' foreign policies. Its economic growth is also by no means guaranteed. Restive secession-minded minorities (Tibetans and Uighurs) inhabit strategically important areas that constitute almost 30 percent of Chinese territory. Taiwan, which is unlikely to return to China's fold anytime soon, ties down substantial Chinese military resources. The ruling Chinese Communist Party, which views perpetuating its one-party state as more important than overseas expansionism, is not likely to be seduced by delusions of imperial grandeur.

China has formidable neighbors in Russia, India, and Japan that will fiercely resist any Chinese attempts to become the regional hegemon. Even Southeast Asia, where China appears to have reaped the most geopolitical gains in recent years, has been reluctant to fall into China's orbit completely. Nor would the United States simply capitulate in the face of a Chinese juggernaut.

For complex reasons, China's rise has inspired fear and unease, not enthusiasm, among Asians. Only 10 percent of Japanese, 21 percent of South Koreans, and 27 percent of Indonesians surveyed by the Chicago Council on Global Affairs said they would be comfortable with China being the future leader of Asia.

So much for China's charm offensive.

"America Is Losing Influence in Asia."

Definitely not. Bogged down in Iraq and Afghanistan and mired in a deep recession, the United States certainly looks like a superpower in decline. Its influence in Asia has apparently receded as well, with the formerly mighty dollar in less demand than the Chinese yuan and the North Korean regime openly flaunting Washington's will. But it is premature to declare the end of U.S. geopolitical preeminence in Asia. In all likelihood, the self-correcting mechanisms in its political and economic systems will enable the United States to recover from its current setbacks.

America's leadership in Asia derives from many sources, not just its military or economic heft. Like beauty, a country's geopolitical influence is often in the eye of the beholder. Although some view the United States' declining influence in Asia as a fact, many Asians think otherwise. Sixty-nine percent of Chinese, 75 percent of Indonesians, 76 percent of South Koreans, and 79 percent of Japanese in the Chicago Council's surveys said that U.S. influence in Asia had risen over the past decade.

Another, perhaps more important, reason for the enduring American preeminence in Asia is that most countries in the region welcome Washington as the guarantor of Asia's peace. Asian elites from New Delhi to Tokyo continue to count on Uncle Sam to keep a watchful eye on Beijing.

Whether it's over blown or not, Asia is poised to increase its geopolitical and economic influence rapidly in the decades to come. It has already become one of the pillars of the international order. But in thinking about Asia's future, let's not get ahead of ourselves. Its economic ascent is not written in the stars. And given the cultural differences and history of intense rivalry among the region's countries, Asia is unlikely to achieve any degree of regional political unity and evolve into an EU-like entity in our lifetime. Henry Kissinger once famously asked, "Who do I call if I want to call Europe?" We can ask the same question about Asia.

All told, Asia's rise should present more opportunities than threats. The region's growth not only has lifted hundreds of millions out of poverty, but also will increase demand for Western products. Its internal fissures will allow the United States to check the geopolitical influence of potential rivals such as China and Russia with manageable costs and risks. And hopefully, Asia's rise will provide the competitive pressures urgently needed for Westerners to get their own houses in order—without succumbing to hype or hysteria.

Saturday, July 4, 2009

Apostacy and Economics

Having been persuaded by the inflation hawks for some time that the globe faces a world of rising prices, I have decided to renounce that belief. The reason is I do not think the industrialised world can pull itself of the tailspin without radical action.

There is no global uptick of demand. Germany's collapse is because it acted in Europe like China did to the rest of the world - exporter of first resort. Markets have gone and so has growth. Japan remains in a deep funk politically and economically. The UK has managed pale growth thanks to a sterling devaluation and massive spending. The US economy is doing worse than many imagined.

The rich world is wondering what is there to sell at a good price - and who can buy it? There is also in the rich world an excessive desire to save. Governments are discovered their Minsky moments - and are now effectively lending to their nation's households and businesses to bail them out.

The threat is now deflation. Falling prices, the paradox of thrift and the era of Austerity. People's tastes will become blander through lack of purchasing power. Goods will be under-engineered. Simpler and cheaper will be the watchwords of our coming lifestyles. As Keynes said, the facts have changed. Time To Change Your Mind.