Author: Pablo

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The Parallels between Fiji and Thailand

Although it may not seem likely on the face of it, there are some significant similarities between the political situations of Fiji and Thailand. To understand why, we must start with some background and definitions. Fiji and Thailand are modern examples of praetorian societies. Prateorian societies are those in which social group and political competition occurs in non-institutionalized fashion. Rather than use mediating vehicles such as courts, parliaments, collective bargaining and the like, inter-group competition assumes direct action characteristics: street demonstrations, riots,strikes, lockouts, blockades, and outright physical conflict. This can be due to the failure of such institutions to accommodate social group and political competition within established boundaries of rules and procedure, or it can  be due to social and political group disregard for the institutions themselves. Where institutions such as parliament and the courts still function, they tend to microcosmically replicate the zero-sum approaches of the society at large: dominant groups manipulate the system to their own advantage and use it to punish their opponents. In turn, opponents attempt to wrest control of state institutions for their own gain. Compromise and toleration of difference are lost in the struggle.

The reason social praetorianism occurs is that there is not a shared majority consensus on the political “rules of the game.” This can be due to the lack of ideological consensus or disenchantment with the system as given. Either way, it spells trouble in the form of political and social instability. As a reflection of the surrounding society, this gives rise to something known as military prateorianism. Taking its name from the praetorian guard of Roman emperors, who were said to be the makers and unmakers of kings, a praetorian military emerges as the dominant political actor in socially praetorian societies by virtue of  the force of arms. It s the default option given generalized institutional failure, and as such is characterized by an internal (rather than external) security orientation, high levels of politicization and a strong interventionist streak.

There are two types of praetorian militaries: arbitrator (or mediator) and ruler. Arbitrator military praetorians assume control of government when civilian institutions break down, but do so only to re-establish the constitutional order and provide the law and order that gives civilian actors the time and space to re-establish a consensus on the rules of the political “game.” They usually enter into power via relatively peaceful coups and set themselves a non-partisan agenda as well as a specific timetable for withdrawal from government. The point of the intervention in the political system is to stop political bickering and re-establish the institutional bases of civilian rule.

Ruler military praetorians have no such limitations. Often emerging in the wake of repeated attempts at military arbitration between competing civilian groups, the ruler military has no timetable for withdrawal and a political, social and economic agenda of its own. They tend to be more violent than their arbitrator counterparts, in no small part because they see civilian society as undisciplined and chaotic and civilian politicians as venal, self-serving and corrupt. The modern archetypes were the military-bureaucratic regimes of Latin America in the 1970s, the Pinochet regime in Chile being the most notorious of them. They tend to hold power for a half decade or more in order to transform, via the use or threat of force, the basic socio-economic and political parameters of the praetorian societies in which they are located. When they withdraw, they do so under rules of the game they set down for their civilian successors.

Thailand has oscillated between periods of arbitrator and ruler military rule, interspersed with numerous failed attempts at democratic governance. In the current political crisis, the pro-royalist “yellows” (of airport blockade fame) and pro-government “blues” are vying with anti-government “reds”  (of ASEAN summit cancellation fame) to vie not so much for democracy (which is what they all claim) but for the favor of the Thai military when it finally steps back into power. The yellows are more elite and middle-class in social origin, whereas the reds are lower middle and working class in composition, so the historical odds favor the yellows (the blues are a cross-section of party loyalists of the current Prime Minister, disaffected yellows and hired thugs). But with an ailing King and more reds than yellows taking to the streets, the military may be swayed away from its traditional pro-royalist stance in the interests of securing majority support for a reformative coup. If this analysis is correct, it implies the inevitability of another Thai coup, most likely leading to a ruler military regime that embarks on a program of political reform that breaks with the partisan lines of the past. Given that it confronts a significant Muslim insurgency in the south of the country that has links to similarly-minded insurgent groups in the Philippines, the Thai military will be loathe to be drawn into politics and will only do so if the present levels of social praetorianism threaten to escalate into unacceptable levels of violence that challenge its monopoly of organized coercion within the territorial limits. It is for the Thai civilian elite to prevent this from happening, and so far they have shown no inclination to do so.

The Fijian military has repeatedly intervened in the country’s politics over the last two decades, and the Bainirarama regime is no exception. Fiji’s social praetorianism stems from the conflicts between indigenous Fijians and Indo-Fijians, a conflict that has socio-economic class as well as ethno-religios and linguisitic characteristics. Its civilian political elites have proven incapable of achieving consensus and have a strong penchant for corruption and nepotism. Thus the military sees itself as the “saviour” of Fijian society. With this latest “coup-within-a-coup,” (see Lew’s post immediately below) the Fijian military praetorians appear to be moving from an arbitrator to a ruler role, perhaps because they believe that the country is nowhere close to consensus on a reformed and reconstituted rules of the political game. I have written previously (“Bullying Fiji Part 2: The Inside Game”) some of the reasons why this may be so, but the larger point is that it appears that no amount of pressure from New Zealand or Australia will alter the conviction of Commodore Bainimarama and his colleagues in the Fijian armed forces hierarchy that it is in the country’s best interests to prevent a Thai-type scenario from developing. The UN may be able to exercise some pressure in curtailing Fijian military involvement in multinational “blue helmet” operations, but even then, with Russia and China on the Security Council, the likelihood of passing resolutions authorizing this form of sanction on Fiji for what is an internal matter is, to say the least, unlikely.

The are two dangers to ruler militaries, one specific and one general. The longer leaders of ruler militaries stay in power, the more enamored of the perks of the position they become. Whatever their good intentions at the onset, they tend to become increasingly despotic over time, losing sight of the original project in order to concentrate on their personal fortunes. That increases resentment against the regime and factionalisation within it, which essentially returns the praetorian situation to where it began. Moreover, the longer a military is in power, overseeing civilian ministries and involving itself in politics, the less its leaders are maintaining and honing their war-fighting command skills. This may not be an issue for a country without enemies, but for countries with internal or external threats, the erosion of a war-fighting capability strikes to the heart of the military raison d’etre and emboldens adversaries of all persuasions. Put another way, to remain in power is to lose war-fighting capability, and to lose war-fighting skills (including command skills) is to invite attack. This is especially true for the Thai military, but even the Fijians need to consider this given their regular deployment of troops to foreign conflict zones under UN mandate.

The final problem is that whether the military intervenes or not, and whether it does so in arbitrator or ruler guise, on-going situations of social praetorianism is the key element leading to state failure. One only need look at the recent history of Afghanistan, Somalia and Pakistan to understand the implications.

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Another American Century, or an Empire in Decline?

In my professional life  I read as a matter of course the debates about so-called US “hegemony” and whether or its “liberal” view of its role in international affairs will continue for the forseeable future (in this context “liberal” refers to the American idealist tradition of trying to re-make the world in its preferred image, whatever that may be. It is an overarching view that supercedes neo-conservative, neo-realist, constructivist or institutionalist approaches to the international engineering project). I think that the issue is worth consideration by a broader audience.

Some believe that, as the sole military superpower and core economic cog in the global system of finance, production and exchange, the US, albeit over-extended by the military adventures in Iraq and Afghanistan and beset by its financial market melt-down, remains unassailable in its position of dominance in world affairs and will continue to be so for at least the next 30-50 years. If anything, the debacles of the W. Bush administration are seen to have taught US political elites the need for a more sophisticated, broad based approach to both foreign policy and state regulation of  markets as well as domestic political representation, all of which have their crystalisation in the presidency of Barack Obama. For this view, the American capacity for self-renewal in the face of adversity is boundless, which is why it will continue to dominate world affairs in the 21st century.

Others think that the US century has past, and that the emergence of China, in particular, spells the end of its hegemonic position in the world. There is still a decade or more to run before it is eclipsed by the PRC, but in this contrary view the US’s days as the pre-eminent international actor are numbered, particularly given the emergence of other powers (India, Brazil, Russia, the EU, perhaps Australia, Iran and Turkey) and US inability to curb its consumption, dependence on fossil fuels and adherence to nationalist-conservative ideologies as the bulwark against the “socialist” tendencies of Obama and his purported ilk. Mired in arguments about gay marriage and abortion, viscerally fearful of (dark-skinned) immigration, beset by domestic “culture wars,” the US is seen as a self-absorbed, narcissistic giant about to be toppled by a global community sick and tired of its arrogance, ignorance, bullying and meddling.

I am of two minds on this. For all its military misadventures the US can still do what no other country or combination of countries can do when it comes to projecting force. Guerrilla wars may bog it down but will never threaten its core interests. Likewise, although its economy is stagnating, it still dwarfs any other regional, much less national market and still has a dramatic repercussive effect on all other markets in the global commodity chain. It may be somewhat bowed, but it is as of yet unbroken.

On the other hand, its cultural vacuousness, its myopia, its clear signs of decline on all fronts relative to a decade ago suggest that the US is, in fact, slipping from the position of superpower to that of just another major power amongst others, and that it can do nothing to prevent the international system moving from the the unipolar configuration of the immediate post-Cold War era to something that although as of yet unclear, will certainly be multi-polar in a decade or so.

Which leads me to ask three questions: 1) at the point that the US feels itself being eclipsed (should that occur), will it wage a last ditch war (or wars) to prevent that from happening, and if so, will these conflicts go nuclear (which is where the US arguably has its most decided military advantage in terms of delivery platforms as well as array of warheads)? 2) will the world be a better place in the event that it does cede its preeminent role to rising powers? 3) what is the “proper” class, environmental or otherwise “progressive” line to take on this?

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Rethinking market socialism.

The crisis of the latest incarnation of market -driven economics, particularly in its financial sector, has raised the possibility of political-economic alternatives not so much as remedies but as significantly different approaches to the structuring of national economies in a global system of production and exchange. One of these is a revamped–as opposed to resurrected–market socialism. For those who are not familiar with the concept, a quick synopsis is found here. Although current conditions are different from those that led to the original formulation, some basic tenets can be discerned and elaborated upon. Basically, within a market system of supply and demand, the state operates as a macroeconomic manager (not just a toothless regulator) by obtaining majority stakes in strategic assets (be they primary good or value added). In parallel, at a mircroeconomic level it moves to promote significant (be it as a majority or as part of a tripartite arrangement with the state and capitalists) worker ownership in strategic industries (such as through employee stock option programmes  (ESOPs) or by encouraging the formation of cooperatives) in exchange for wage restraint and greater productivity. The logic is that with workers as co-owners of the industries in which they are employed, they will understand managerial rationales as well as the conditions on the production line, thereby promoting what could be called “equitable efficiency” in production.  Non-strategic components of the economy can be encouraged to follow suit but will not be forced to engage in such “socialising” programmes, but will be taxed at a higher rate if worker participation schemes are not incorporated. All sectors will follow the laws of economic efficiency followed by private firms–that is, the market logics of supply, demand and prices. Hence, the object is to prevent rent seeking behaviours usually associated with state ownership of the means of production–to wit, no “make work” or ghost worker schemes, no padding of employee roles, no patronage or clientalistic networks etc. Needless to say, unions may see a threat in this, but their self-interest as agents should not detract from the potential benefits of ownership accrued by workers as a class as well as principals of unions (where they are organised). Union shareholding schemes might be one way to reconcile the interests of agents and principals in such an event.

Under such a market socialist approach a restrained individual taxation rate that increases the amount of discretionary income to wage-owners as well as as capitalists can be complemented by a differential corporate rate that rewards worker ownership with lower rates while maintaining a higher rate for “traditional” firms–i.e. those that appropriate the surplus generated by workers in the form of profits that are in the majority distributed to non-workers (be they shareholders or managers).

With a greater State macroeconomic presence as a stakeholder in strategic industries and manager of microfoundational (the orientation of specific  industry) policy, coupled with active promotion of worker participation in ownership of the industries in which they are employed, backed by a taxation policy that rewards those who see the wisdom of making workers co-owners and understand that the State, as representative of all sectoral interests, is better suited for macroeconomic management than individual capitalists or their associations, a new market socialist project can be advanced that will filter global market dynamics into a more nuanced, and fairer, distribution of wealth and income in society. In a small island trade-dependent state, socio-economic stability depends on this.

There is actually a model for such a system, although it has yet to incorporate worker ownership schemes as part of its developmental project. That model is Singapore and the only reason it does not incorporate policies of worker ownership  into what is otherwise a state-dominated export-oriented economy that is successful is that it is a)authoritarian and thus can impose its will without worrying about the filter of mass consent;  b) foreign investors resist worker participation as a condition for investment; and c) as a result of the previous two factors, foreign workers on temporary visas unprotected by labor laws reserved for Singaporean citizens are used to structurally undermine any moves in that direction.

As a liberal democracy NZ can not emulate everything that Singapore does, but what it can do is note the commanding position of the State in its macroeconomic affairs, to include its use of  State holding companies as channels for public investment in a range of “private” industries as well as its use of taxation as an incentive for corporate investment and production, on the one hand, and household consumption on the other. Admittedly, the argument presented here is just a simplified sketch of the possibilities of market socialism in the present conjuncture, but the intention is to raise the point rather than fully elaborate upon it. The latter task is left to the readers.

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A Green Neo-Realist Foreign Policy Manifesto

Now that the Green Party has matured into the third most important political party in NZ, it is time that it develop an equally robust foreign policy stance that moves beyond its visceral commitment to pacifism, human rights and civil liberties, international ecological defence and anti-imperialism. Although laudable goals that still have a place on the Green foreign policy agenda, these foundational pillars need to be supplemented by a more nuanced and less ideologically rigid, but no less idealist in principle, approach to New Zealand’s foreign affairs.

Lets start with defence and intelligence. The Green Party should maintain their absolute commitment to conventional and unconventional weapons non-proliferation, nuclear disarmament, prohibitions of chemical and biological weapons and bans on the manufacture and sale of land mines and other indiscriminate munitions. It should maintain its commitment to seeing the NZDF externally focused on peace-keeping and nation building as its major priority. It should resist efforts to turn the NZDF in to a mini Australian armed forces, and resist the calls for the NZDF to follow Australia, the US and the UK into battle no matter the context or justification. But it also has to realise that NZ’s own defence is premised on its being a good international security partner, and that it cannot abrogate its responsibilities in that field. To that end, the Greens should support efforts to restore a close air/ground support wing to the NZAF in order to provide NZ peace-keeping troops with independent air cover in foreign conflict zones. Even when under multinational military control such as the ISAF mission in Afghanistan, military protocols allow services of each country to protect their fellow troops as a priority. If NZ is going to continue its level of international troop deployments in conflict zones like Afghanistan, East Timor, the Solomons and elsewhere, the ability to provide protective air cover to its troops on the ground is surely a worthy cause. And, as it turns, out, be they rotary or fixed wing, surplus close air support platforms in the inventories of several NATO and other countries come relatively cheap when compared to the aborted F-16 purchase of a decade ago.

Likewise, the Greens needs to support the reinforcement of the Navy’s long-range patrol and interdiction capability, if for no other reason than to protect the resources located in the NZ Exclusive Economic Zone and to deter illegal poaching of whale and endangered fish in the waters adjacent to it. Moreover, such a capability can also serve in anti-piracy roles in the sea lines of communication most vital to new Zealand’s trade, and to keep track of the increasing presence of foreign submarine and surface fleets in and around New Zealand waters. Passivity in the face of such probes will likely be interpreted as acquiescence or inability to counter them, which will encourage further encroachments into the EEC, if not the territorial limit itself. That is also why the Greens need to support the continuing emphasis placed on the NZSAS as the country’s special operations branch. What it can do differently is question the deployments they undertake on behalf of foreign powers, perhaps broadening the scope of their activities to areas outside of the usual SOLIC (special operations and low intensity conflict) scenarios.

 Thus, the Greens should support efforts to increase NZDF spending to  1.5 percent of GDP, in line with the lower threshold of OECD nations, but with a specific focus on the Green “line” of defense and security priorities. No more over priced and ill-suited LAVs, no more $1 million-a-copy anti-tank shoulder fired rockets–just the best weapons and platforms for the NZDF’s unique “niche” role in international security affairs. Even if coat-tailing on previous Labour initiatives, a neo-realist Green approach to defence can provide a human security orientation that extends beyond the traditional security concerns of the major parties.

With regard to intelligence, the Greens must continue their valiant opposition to the unaccountable and often rogue behaviour of  the NZSIS and Police intelligence. But it must couple its demands for more democratic accountability and transparency–something that may begin with the appointment of Russell Norman and Tariana Turia to the Parliamentary Security and Intelligence Committee–with a more reasoned demand that external intelligence collection be separated from domestic intelligence collection and delegated to different agencies. Counter-intelligence functions can be shared because foreign espionage often follows commercial and criminal avenues, but the business of spying in foreign places is very different than spying on one’s own citizens. Thus the Police should be responsible for the latter, with all of the attendant legal safeguards that purportedly govern their operations, whereas the NZSIS can limit itself, along with the GCSB, to external intelligence collection and analysis. No other political party has even mentioned this, much less understood the multiple rationales as to why decentralisation of intelligence functions is actually an important step towards removing the authoritarian culture so deeply imbedded in New Zealand’s intelligence apparatus. In line with these reforms, the Greens should demand that the PSIC be elevated to the status of select committee allowed to review classified material in closed session. Only then will real parliamentary oversight of the intelligence apparatus be possible.

In terms of trade, the Greens need to modify their generic opposition to trade. Instead of a seeming blanket opposition to open economies, the NZ Green Party needs to understand that for a vulnerable isolated and resource-scarce country like NZ, trade is a lifeline. It is here to stay as the mainstay of macroeconomic policy. Therefore, the issue should not whether to trade or not to trade, but how to trade? The answer, as I have mentioned in previous posts, is to trade fairly as well as (or as opposed to) freely. Trading fairly means to concentrate not just on tariff reduction and other bi-or multilateral entry conditions, but on after-entry conditions pertinent to labour rights, working conditions, gender and indigenous issues, wages, health, safety and environmental standards. The goal is to promote a level of regulatory symmetry n the trade relationship, thereby leveling the playing field or at least standardising the rules of investment and competition in the interest of productivity, growth AND human dignity in the labour process. This is as true for NZ investment abroad as well as foreign investment in Aotearoa. The basic thrust is to do onto other (foreign) laborers as what one would do onto oneself (or one’s co-nationals). Capitalists may not like the impact on their short-term profits of promoting such trade agreements, but it is in their longer-term interests, in terms of a guaranteed restrained rate of profit, that they play fair and symmetrically. Moreover, such a stance places NZ at the forefront of trade debates that emphasize a balance between profit, growth and larger communitarian considerations.

Diplomatically, the Greens need to promote a strengthened constructivist-institutionalist approach to foreign policy. Constructivism in foreign policy is focused on normative value change in key policy areas (say, human rights and disarmament)  and institutionalism is focused on strengthening multilateral institutional approaches to conflict resolution and global peace and stability based on shared ideals.  Although Labour advocated such an approach, it too often has compromised its stance in order to curry favour with trade or defence partners. National has no commitment to idealism in foreign affairs. Thus it is left for the Greens to push hardest for an ongoing, if not increased commitment to finding multilateral institutionalised approaches to the sources of international disputes, and to push for progressive value change within international organisations and regional institutions. In doing so it will help continue New Zealand’s reputation as an honest international broker, mediator and arbitrator committed to supra-and transnational methods of grievance redress and resolution. After all, if the world is truly to move away from the anarchic” state of nature” that is the realist conception of international affairs, it needs to move beyond the nation-state as the ultimate adjudicator of international disputes. It is up to small countries to make the case. It is their self-interest to do so, and that is eminently realist in conception. It is, in other words, a bit of Green (neo) realism at play.

All of this is a big task and may run counter to the wishes of more militant elements in the “watermelon” constituency of the Green Party (which should be seen as a source of strength rather than as a weakness). Now is the time to move beyond the parochial environmentalism, classism and other foundational Green principles and towards an agenda that attracts more mainstream voters in pursuit of being a legitimate swing vote and therefore real power broker in the New Zealand political system. This foreign policy manifesto is a gesture in that direction. That does not mean abandonment of  the foundational principles, but the enhancing and expanding of them. This is important because only the Greens have the ability to contribute significantly to a shift in the status quo political discourse currently on display. No other party does.

 After all, with ACT having prostituted its libertarian principles to the crime and punishment authoritarians headed by Mr.Garrett (see Lew and Anita’s posts on the issue  below), the Greens are the only honest political party left in parliament–with them, what you see is what you get, full stop. Given that unique position of advantage, now is the time for the Green Party to develop more depth to their policy agenda, which is why this post is tabled.

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Blog Link–Reigning in the Spies

The new Parliamentary Intelligence and Oversight Committee has been announced, and it has the potential to be a milestone for intelligence oversight in NZ. Tariana Turia and Rodney Hide were appointed by John Key (who chairs the committee), and Russell Norman was chosen by Phil Goff (who also serves on the committee). Turia and Norman lead parties that have had their members spied on by the SIS or Police, and Hide has opposed on libertarian grounds the expansion of security based constraints on civil liberties (he opposed passing of the Terrorism Suppression Act, among other things). Thus three out of the five new members have been critical of the intelligence services, which is in stark contrast to previous members during the Fifth Labour government. Although the possibility of their being coopted cannot  be discounted, there is an equal if not greater possibility that their appointment signals a shared belief by Mr. Key and Mr. Goff that the time has come for a review of the way intelligence operations are conducted in NZ. Lets hope so. There are already signs that moves in that direction are afoot–Mr. Key’s request of the SIS Inspector General to report to him on the domestic spying programme and SIS Director-General Warren Tucker’s apparent commitment to more transparency being two examples–but what is needed is for the committee to undertake a thorough review of the NZ intelligence apparatus, including its legal charter, operational conduct and organizational focus, and its accountability to parliament as well as to the government of the day. In short, rather than the ineffectual government and SIS lapdog that it was during the Fifth Labour government, the committee needs to grow some teeth and bite hard into the meat of the matter–the lack of transparency and accountability traditionally exhibited by important elements of the intelligence community. That requires a re-write of its charter, since it is not a select committee and therefore does not have the independence or authority to demand classified briefs (or any other information) from the agencies it supposedly oversees. A more detailed review of the potential for reform embodied in the new committee is offered in this month’s “Word from Afar” column at Scoop (http://www.scoop.co.nz/stories/HL0903/S00147.htm). For the moment, the new committee should be applauded, yet more importantly, encouraged to undertake its responsibilities in pursuit of a new culture of democratic accountability and transparency in the NZ intelligence services.

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Clocks and Clouds

Juan Linz wrote that political time was like cloud time—it moved at a different pace than chronological time, yet had a discernable rhythm of its own. I would like to reverse the metaphor to note that when it comes to political and economic cycles in liberal democracies, it is political time that is more chronological, whereas economic time is more akin to cloud time.

 Under conditions of liberal democracy, political time is codified, demarcated and predictable. Elections are held at regular intervals, parliaments sit for a given amount of days in a calendar year; government departments issue annual reports and respond to inquiries in prescribed (if not timely) fashion, bills are introduced in specified ways within specific timeframes, etc. Even political debates take on a predictable rhythm, with arguments over finances occurring around the time of government budget announcements (in New Zealand that is usually in May), and partisan and personal attacks occurring during periods of relative policy stability. Come summer, most things political more or less stop for the holidays, then resume in the Fall.

Economic time, however, is another matter. Capitalist economies are obviously cyclical, but the cycles are twofold and not coincident with political time. First, there is the “boom and bust” cycle in which markets expand and contract in pursuit of (re) equilibrated growth. This is the cumulus cloud time of economic cycles. That is, the short cycle dimension of capitalist economics, marked by sudden shifts in direction driven by the warming or cooling of market preferences. In parallel, there is a long cycle in which capitalist economies shift between market-driven or state-managed forms. This is the cirrus cloud dimension of economic time. The sclerosis, stagnation or failure of one economic form, such as the market failures now evident, leads to the shift to the other. Thus, the Great Depression spelled the end of laissez faire market economics and the advent of welfare statism, which after the resolution of World War 2 led to nearly forty years of prosperity in the liberal democratic world. In turn, by the 1980s the era of state-centered economics had come to an end, saddled as it was by rent-seeking behaviours, clientalism and systemic inefficiencies produced by bureaucratic distortions of the productive process. What emerged in response was neoliberal market economics. This era was driven by deregulation, trade opening and monetarist macroeconomic prescriptions that were premised on the belief—subsequently proven to be unfounded—that finance capital would be the most accurate determiner of global productive investment.

Two decades later, the era of neoliberal economics has concluded in ignoble fashion. Note that this market-oriented cycle lasted half as long as the previous state-centered cycle, which in turn was shorter than the original period of laissez faire. This shortened lifespan is due to the combination of market-driven globalization of production coupled with exponential advances in telecommunications and transportation. Phrased differently, it would seem that the economic cirrus clouds have sped up at a time when the negative cumulus layer has deepened, all while political time remains constant. Therein lies the rub.

It is generally held that market failures lead political shifts to the Left so as to facilitate the move to state-centered macroeconomic policy. Conversely, state-centered failures are said to lead to shifts to the political Right so as to facilitate the adoption of market-oriented strategies. In the 1930s and 1980s this rule generally held true for advanced democracies. But since economic and political time are not coincident, it is by no means a universal truth that such will occur at every moment of cyclical transition. The current moment is a case in point.

In the US the rule seems to have been upheld, as is true for several European countries. But in France, New Zealand, Japan and Italy, among others, Right-oriented governments are confronted with market failure and the need to provide political space for an economic transition. The political cycle in these countries does not allow for their immediate replacement with Left-oriented governments. There is a lack of synchronicity between political clock and economic cloud time in these countries. This places the ideological beliefs and policy prescriptions of such Right governments under pressure, since in principle they are averse to increasing the role of the state in macroeconomic affairs. Yet the magnitude of the current market failure is such that the role of the State, at least as a macroeconomic regulator, needs to be considered. This consideration needs to happen quickly, since the temporal horizons on finding solutions is near immediate given the speed at which the global recessionary pressure wave is advancing. Put another way,  the cumulus and cirrus aspects of economic time have come together in a perfect storm of economic necessity that Right governments find particularly difficult to address, much less resolve without betraying their foundational principles. To do so is to tacitly admit that there are inherent flaws in market logics that require State intervention in order to be overcome (in the reverse of the betrayal of foundational principles and tacit admission of State-capitalist failures by so-called “Third Way” Labour parties).

Thus the dilemma for Mr. Key’s government: how to reconcile clock and cloud time in a small island democracy at the outer edge of an economic storm front? From what has been seen so far, it appears that he has opted to shift to the Left, but as of yet without categorically stating that he is doing so. With ACT in the government coalition, that makes for interesting theater in the months ahead. Or to conclude with yet more metaphor abuse: could there also be internal storm clouds on NACTIONAL’s horizon?

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Are FTAs OK?

The Feb 27 announcement that NZ and Australia have signed a Free Trade Agreement (FTA)  with the ten member Southeast Asian regional grouping known as ASEAN has been hailed as another triumph for NZ’s economic openness, especially coming at a time when protectionist and nationalising policies have re-emerged in response to the global market crisis now ongoing. Although Trade Minister Tim Grosser signed the AANZ-FTA agreement at the 14th ASEAN summit in Thailand, it was MFAT officials working under instruction from the 5th Labour government who sealed the deal (after 4 years of negotiations), and it is these officials who are now beginning talks with India on a bilateral FTA similar to the one signed last year with the PRC. Yet, amid all the self-congratulation by government officials and business leaders, the nagging questions remains: are such FTA’s always good for the average Kiwi?

Pro-trade advocates will say yes on three counts. First, increased markets for NZ exports means more jobs in those sectors as well as their subsidiaries and ancillary industries. Second, increased foreign investment opportunities for NZ firms will eventually increase dividends for Kiwi shareholders. Third, access to a wider range of import markets means more competition and lower prices for Kiwi consumers. But there is more to the picture than this seemingly positive sum outlook.

The AANZ-FTA, like the FTA with the PRC and the P4 FTA signed earlier by NZ with Brunei, Singapore and Chile, is more properly seen as a tariff reduction scheme. In the case of the AANZ-FTA, the goal is to reduce common tariffs by 96% by 2020, thereby paving the way for the development of a a EU-style common market along the Western Pacific Rim that can compete with the EU, the US and emerging giants like the PRC, India and Brazil. NZ estimates are that it will eventually enjoy a 99% reduction in tariffs on its exports to ASEAN while ASEAN members will receive an 85% reduction on their imports to NZ. With US$ 31 billion is ASEAN exports to Australia and NZ  and US$16.8 billion of Australian and New Zealand exports to ASEAN members in 2007 (75% of that volume being between Australia and ASEAN, with NZ exporting US$4.6 billion to ASEAN members in 2008)), the objective is to raise the flow of goods and services ten fold over the next decade. Tariff reduction is seen as the key to achieving this goal, as it will lower transaction costs and remove fiscal impediments to investment within the partnership.

The problems with this arrangement stem from the asymmetries in the respective economies involved, from the lack of “after-entry” provisos, and from the dubious character of some of the regimes involved. With regard to the latter, the AANZ-FTA includes Myanmar and Brunei, two despotic regimes whose trade reliability and fiscal responsibility, much less human rights records, are open to question. It includes Thailand, which has the appearance of a politically failing state where sex tourism weirdness competes with highly exploitative labour-intensive low-cost production as the primary source of GDP, all amid grave ethnic conflict in its southern regions. It includes Laos and Cambodia, two states that barely meet the criteria for inclusion in a globalised trade regime. Its leading members, Singapore, Indonesia, Malaysia and the Philippines, have issues of political and/or corporate governance (be it in a lack of corporate transparency and/or a lack of political accountability), and the remaining member, Viet Nam, is a one party authoritarian regime that, if not as retrograde as Myanmar, has yet to exhibit the developmental potential of some of its most proximate neighbours. ASEAN is, in other words, a polyglot of corruption, nepotism, economic underdevelopment and exploitation mixed with crass materialism and indifference towards basic human rights and civil liberties in a highly charged ethnically diverse and stratified demographic, with a profoundly unequal distribution of resources and reliability amongst its members. Is that what NZ wants in terms of preferential trading partners?

Not surprisingly, the AANZ-FTA, which is due to go into effect on July 1 2009, has no common labour standards, including provisions regarding collective bargaining, right to organise, female and child labour, occupational health and safety and quality control. It has no environmental clauses. All of those are left to the industries involved. The Fontera PRC subsidiary’s Melanin scandal gives an indication of what can happen when such is the case.

Then there is the issue of size asymmetries and economies of scale. Is it plausible to think that with Australia coupled to NZ on one side of the AANZ-FTA ledger, NZ is going to be an equal beneficiary of the new tariff regime? If Australia turns out to be the major focus of ASEAN trade, will that not accelerate worker exodus and capital flight from NZ to Aussie under the terms of the CEP? Is it plausible to believe that with the lack of labour and other standards, NZ businesses in a variety of value added or service sectors will not have an incentive to re-locate their workforce in ASEAN countries where wages and benefits are lower? Is it plausible to think that NZ, with an export base in relatively inelastic primary-good industries and their derivatives (say, milk powder or paper pulp) will enjoy an equitable balance of trade with more elastic value-added importers? Is it plausible to think that foreign investors will not use the opportunity provided by relaxed investment regulation to assert direct control over NZ productive assets (which is an issue that also is at play with regards to the FTA with the PRC)? What NEW productive activities will actually  be created in NZ that will help diversify the economy while providing new employment opportunities that require so-called “knowledge-based”  skills? (For an earlier discussion of the problems of asymmetric trade, with specific regard to the PRC FTA, see http://scoop.co.nz/stories/HL0803/S00263.htm).

These are the questions that need to be asked in the parliamentary debates leading up to the July 1, 2009 ratification date. It is important that the Greens and other groups with concerns about FTAs avoid the appearance of knee-jerk protectionism that they have been saddled with in the past (as was the case with NZ First). Instead, the emphasis must be on the hidden “F” in an FTA–the FAIR aspect of trade, which for a small democracy such as NZ is as important as its free aspect. After all, free trade is not necessarily synonymous with fair trade, and it behooves the political Left to make that point since no one else (to include Labour) will.

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Indentured Servitude, Modern Asian Style.

A few weeks back I wrote a post about European complicity in an Asian experiment in developmental authoritarianism. Aside from one blogger who felt that the post was racist because I noted the Confucian justification for this particular brand of authoritarianism, most readers understood that my points were simple: that when living in an authoritarian country one does not have to subscribe to the local cultural logics and ideological justifications for oppression; and it is dangerous for small liberal democracies like NZ to have returning ex-pats and new immigrants who subscribe to such logics assume positions of political and economic control.

Now I will give a specific example of why I believe this to be true. It involves the plight of maids in the Asian state in which I reside.

In this country maids are not covered by local labour law. They are required to learn English before their arrival. Employers are required to post a $5000 bond for securing their services, which is forfeitable if the maid engages in “unacceptable” behaviour. Such behaviour include getting pregnant, drinking in public and consorting with foreigners. By law, maids have zero days off per year–read that again: ZERO days off. The length of the working day and conditions are set by the employer. By law, maids have to be foreign, in this case usually Philipine, Indonesian, Indian, Bangladeshi, Thai, or mainland Chinese. They must always be female, and they must, unless otherwise specified, be under the age of 30. Maid recruitment agencies specialise in different nationalities depending on the employers preferences. Some employers want docile characters, some want ethnic kin, some want high school grads, some want children-friendly, some want cleanliness freaks, some want sultry, some want young (18 is the legal age for contracting a maid). It all depends on the employer’s penchants and proclivities. For their service, maids are paid, in a very generous household, a salary of $200/week.

Maid quarters are most often windowless cubicles located off an open air laundry with a toilet, washbasin and cold water shower. In many cases the maid cubicle has external locks to prevent their unauthorised exit from the employer’s premises.

Given the bond requirements, there is no incentive for employers to allow the maids out of sight. Thus the no-holiday rule plays neatly into the employer’s (and the state’s) rationale. To be sure, an employer can forfeit  the bond if the maid, say, falls to her death while cleaning the windows of a high-rise apartment (that has happened). But the thrust of the laws are to control the maids, not protect them. The servitude of the maids is such that foreign MNCs calculate in their relocation packages not only the costs of losing the bond should the maids of their executives misbehave, but also the costs of the maid being upgraded to the status of domestic partner (which is common to the point of becoming a joke amongst resident expat Europeans). 

The incidence of maid abuse is a well guarded but open secret. Since they are not covered by labour law, any maid subject to sexual, physical, financial or emotional abuse must report the complaint to the Police. The Police are wary of “he said, she said” type of complaints and are ordered to be suspicious of foreign nationals in any event, so it takes an extraordinary (young) woman to make a formal complaint knowing that the best result will be her deportation.

NZ has strong diplomatic, economic and security ties with this country. In fact, it has  a Free Trade Agreement with this country as well as a defense partnership. NZ-born executives populate the upper reaches of its managerial elite, and they enjoy the services of these maids. NZ fetes this country’s leaders whenever they visit. In fact, NZ uses this particular country as a model for economic development in a trade-dependent state. Yet at no point, either under Labour or National, has the NZ government questioned the propriety of close relations with a country that uses indentured servants as part of its economic development. The country in question is not the PRC–that is a whole other kettle of stinking fish.

There is much more to this picture but I will stop with this question. Do you, as a New Zealander, countenance close state-to-state relations with a country that uses indentured servitude as a component of its development strategy?

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Boliviarian or Stalinist?

Victory in the constitutional referendum on removing term limits on Venezuelan presidents and National Assembly members has been heralded as a mandate for Hugo Chavez to continue the process of deepening his so-called “Boliviarian Revolution.”  His supporters see the open-ended election option as the best guarantee that the socialist and populist -inspired reforms implemented by Chavez during the last decade will continue for the next one. Opponents (who received 46 percent of the “No” vote to 54 percent in favour of the “Yes” vote in the referendum) believe that this event will entrench the slide towards Stalinism evident for the last few years (in which Chavez engineered constitutional reforms that allow him to stack the judiciary and parliament with his followers, and places the armed forces at the service of his “Bolivarian” ideals).  Given the heat generated on both sides, the question is whether Chavez is a a neo-Stalinist in disguise or a new form of democratic socialist responding to the exigencies of the 21st century Latin American context.

To be clear: Chavez has handily won every election he has contested, has survived a (US-backed) coup attempt and was restored by popular acclaim, has reduced poverty levels and increased literacy and health standards with massive funding  from state-controlled oil profits (and with Cuban technical assistance in the form of hundreds of doctors and teachers performing their “internationalist” missions–a Cuban version of the US Peace Corps, if you will), has provided developmental aid and low-cost petroleum to several Latin American neighbours as well as low-income communities in the US, has expanded Venezuela’s web of diplomatic and economic partners, and has served as a champion of the anti-imperialist cause in Latin American and elsewhere by pushing for more egalitarian trading blocs organised around “socialist” principles of fair exchange. He is the most popular Venezuelan leader since Simon Bolivar himself, and like Juan Peron in Argentina, Getulio Vargas in Brazil or Lazaro Cardenas in Mexico during the last century, his appeal to the working and lower classes is equalled by his hatred by the local elites and distrust by larger foreign powers.

On the other hand, Chavez has closed down opposition media and imposed a censorship regime on what his government deems to be “traitorous” commentary; he has armed citizen militias to ensure the “purity” of his “revolution” and to guard against traitors; he has replaced independent military commanders with personal cronies and embarked on a massive military spending spree in anticipation of a US attack that most security analysts believe is a figment of his imagination; he has failed to deal with the country’s escalating crime rate and deteriorating infrastructure; he has failed to invest in the oil industry to the point that production is now 25 percent below what it was ten years ago (although that was disguised by high oil prices up until this past year); he allocates public good provision based solely on partisan adherence to his Boliviarian Party, with the funding criteria being that no funding goes to agencies or individuals not affiliated with his Party. To that effect he has required state registration of all organised interests and collective actors, thereby marginalising those who refuse to register or register as independents or unaffiliated. He has embraced Iran, North Korea and Russia as diplomatic partners, and has threatened to nationalise foreign assets in Venezuela without market value compensation (or negotiation of value). He has been accused of funding and supplying weapons to guerrilla forces in Colombia and elsewhere in the region, as well as providing illegal cash payments to sympathetic politicians in other countries (the most prominent being a money-for-influence scandal involving president Kischner of Argentina). His government is accused of replacing the kleptocratic oligarchy of the Accion Democratica and COPEI governments in the past with red-clad slogan-spouting thieves in the present.

With oil prices in decline and demand slacking, lower anticipated revenues means budgetary shortfalls will hit hard this year, forcing Chavez to curtail some of his spending projects. Some argue that is why he pushed for the re-election referendum now, before the recession bottomed out, so that he could impose austerity and betray his campaign promises by force. There are signs of organised anti-semitism among Boliviarian militias and para-military squads, and there are reports that student activists as well as wealthy opposition figures have been the subject of intimidation, beatings and arbitrary arrest. Yet, the elections that Chavez wins, and the referenda that he holds, are inevitably characterised by impartial observers as fair and clean, so such acts would appear to be unecessary in any event. Since Chavez has a fair dose of political smarts, why would he authorise activities that were not needed given his popularity and ability to rule in a transparent fashion?

To be sure, being anti-imperialist does not mean that he is democratic. Engaging in popular redistribution programs does not mean he is democratic. Enjoying a large positive majority in public opinion polls does not mean that he is democratic. But what all of this does mean is that unlike the Latin American military dictators of the 1960s through the 1980s (all backed by the US), he can walk the streets of Caracas without fear of a riot–and not because his armed supporters surround him. Thus the question must be asked: even if he annoys Western powers, irritates neighbouring governments, buys favours at home and abroad and exhibits messianic and narcissistic traits that are at times both intemperate and intolerant, is it not for Venezuelans to decide what he is and  is not? Although he can continue to run for office, so long as elections remain free, fair and the standard for leadership selection, and even admitting the advantages that go to an incumbent such as he (where he can use the entire state machinery to mobilise his supporters), it is that mechanism–the institutionalised uncertainty of elections–that ultimately allows Venezuelans to decide whether Boliviarianism is a benefit or a curse. The combination of free elections, the need to address social problems in a non-partisan way, and the uncertain fortunes of a sclerotic  oil-dependent economy are the best hedge against further personalisation and authoritarian hardening of the Boliviarian dream.

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Is New Zealand Unsafe?

The Dutch travel advisory on New Zealand, which followed two violent assaults on Dutch tourists this summer, places Aotearoa alongside other destinations such as the Congo, Sri Lanka, Nepal and Brazil as places where tourists are targets of criminal, as opposed to political violence. Criminal targeting of tourists in New Zealand is neither new or surprising; in fact, it has  a rather long history. What is apparently new is the escalating violence of crime in New Zealand, not only against tourists but against the population at large. In fact, it is locals, not tourists who suffer the brunt of criminal violence in this country. That much is obvious.

But what are the causes for the upsurge in violence, and what can be done about it? This is one area where the Left are at a disadvantage, as Right anti-crime advocates can always use the issue of personal responsibility and the  “get tough” canard as their rallying cry (as ACT did this past election). To that the Left has a variety of responses, most centred on decreasing poverty rates, decriminalising various low-level offenses and focusing on rehabilitation rather than punishment of offenders. But then the media offers more stories about more rapes and murders, gang intimidation. bail violators, increasingly aggressive boy racers, thuggish taggers and their angry (and armed) detractors, home invasions, domestic violence, child abuse and murder, all seemingly nurtured in a climate of police ineptitude, indifference, bias and corruption. For the pubic at large, the news is bad on all fronts, and it spells one thing: the criminals are winning, and the Left have no response other than to wring their hands.  The last election clearly shows that the NZ public are not buying the Left approach to criminality, so new answers need to be formulated.

It is easy to point at alcohol and P as the cause of increased violent crime. It is easy to blame the vulgarisation of social discourse. It easy to blame failed families, the deleterious impact of the dole in creating generations of welfare addicts, the failings of the education system, bad role models in sports and pop culture, the influence of pernicious foreign music and video and their local imitators. It is easy to blame race or cultural factors. It is easy to push for tougher sentences and bigger prisons (even private ones). But is that really getting to the heart of the problem? Could it be that there is something at the heart of the NZ collective psyche at the beginning of the 21st century that has given foundation to the urge towards violence? Or is the issue structural?

Put another way. Could it be that in NZ the neoliberal-inspired, market darwinist experiments of the last 20 years have coupled with a pre-neoliberal bullying, raping, drinking, patriarchical and xenophobic culture to terminally erode notions of collective solidarity and empathy and replace them with an over-exalted hyper individualist ethos in an environment of ostentatious material wealth, shallow celebrity culture, over-the-top conspicuous consumption and increasing income inequality? (Now THAT was a mouthful!) Under such conditions, where the gap between the haves and the have-nots grows exponentially while the dominant socioeconomic themes  are for individuals to maximize their opportunities regardless of consequence, could it not be that this offers a social sub-text that extends past the “greed is good” mantra of radical libertarians and into the rationalisations of the criminally minded? Could it be that there is an ugliness inside the NZ collective psyche that was raised to the surface by two decades of market-driven prescriptions and the material dislocations they brought to both traditional and new members of the local underclass–an underclass that now finds emulators throughout the social spectrum? Could it be that a culture that produced Ed Hillary and Willie Apiata produces them only as exceptions to a general rule of selfishness and latent rage that takes just a minor provocation or enticement to be unleashed? Could that be the root of the problem?

Of course, issues of police competence, individual responsibility, generational dysfunctionality, and punishment versus rehabilitation need to be addressed by the Left in a way that does not cede the floor to the Right when it comes to tackling the issue. But where the Left has its best argument is in the socioeconomic bases of increasingly violent criminality in NZ, and it is in that argument that the Left’s solutions to the issue may be found. One thing is for sure: tax cuts will not solve the problem, and until then New Zealand has become a country that for  locals and tourists alike is alarmingly unsafe. I am no criminologist, so must defer to those who are when it comes to formulating a comprehensive remedy for the problem of increasingly violent crime in NZ. But I can say this: Above all other issues of domestic policy, it is this issue that the Left needs to confront if it is to regain political credibility in the eyes of the (scared) electorate.