Hope for Haiti?

This past weekend, I got together with some Haitian friends to size up our experience with the Haitian reconstruction effort. I met these friends shortly after the devastating earthquake of January 12, and we have served as a Board of Advisers of sorts for each other; we've provided moral support and recruited each other into our various projects for Haiti. We've grown quite close over the last few months -- I suppose tragedy has a way of bringing people together. But I was still surprised when we all seemed to share the same sentiment: Haitians have become disillusioned with the reconstruction process. Turns out our experience is more that just anecdotal. Despite the record pledges for aid to Haiti--pledges that both Clintons had a hand in organizing-- the reality on the ground is not much different than it was a few months ago.
In a recent article summing up the relative failure of reconstruction, the author cites the following statistics:

• Amount pledged for Haiti's reconstruction over the following 18 months at the March 31 UN conference: $5,300,000,000
• Percentage of this amount that has been paid: 1.9
• Amount of pledged U.S. bilateral search and rescue assistance to Haiti that was delivered in the wake of the earthquake: $0
• Value of aid the French government has promised Haiti through pledged contributions to UN agencies, NGOS and the Red Cross: $180 million
• Quantity of this aid that has been delivered: $0
• Estimated number of Haitians who remain homeless after the earthquake: 1,500,000
• Amount that has been collected for Haiti relief by U.S. charities: $1,300,000,000
• Number of Haitians without even tents or tarps for shelter: 232,130

Less than 2 % of international funds pledged for Haiti has actually made its way to the island? None of the US bilateral aid or French support through the UN or NGOs has been disbursed? The international community made many promises for a "New Haiti" that would provide the institutions and resources the Haitian people so desperately need to succeed. But that is not possible without the pledged funding. There were also promises that the Haitian voice would not be lost; Haitians living on the island and throughout the diaspora were to play a central role in the rebuilding process. These promises are not materializing and Haitians are losing hope. Fast.

Developing Countries Confront Global Economic Crisis

The global economic meltdown was so yesterday. Seldom does the crisis make it on to the front pages of any of the major newspapers anymore, but the struggle for recovery continues in the shadows. Already, fissures are appearing in the once-unified front of the developed countries. European governments such as Germany are calling for a greater focus on controlling deficit spending, while President Obama has called for more spending to shore up flagging economies. But while the North struggles over the various modes of recovery, the developing world must deal with the fallout. This week, for the first time the World Trade Organization is set to discuss the impact of the financial crisis on those countries. A powerful coalition of developing countries, including India, South Africa, Argentina and Ecuador, had lobbied vigorously for such a discussion because in their view the North's massive bailouts amounted to illegal subsidies that have adversely impacted financial markets in the developing world. Can these bailouts prompt a WTO dispute brought on by developing countries?

Hamid Mamdouh, director of the WTO's services division, is reported to have said "There is a legal cover for situations where members might deviate from their legal commitments and obligations" but the situation is not so clear cut. The General Agreement on Trade in Services (GATS) does include what is known as a "prudential carve-out," which is meant to allow regulators the policy space to address financial crises. Article 2 of the GATS Annex on Financial Services states that a WTO member “shall not be prevented from taking measures for prudential reasons.” The prudential carve out is subject to WTO dispute settlement, however, if a member believes the provision is being abused, is discriminatory or is a disguised non-tariff barrier to trade. The matter has never been litigated before, and what standard of review the WTO would apply under the circumstances is an open question.

But would a developing country (or a group) actually raise a dispute settlement claim? Beyond the legal issues, there are both economic and political considerations for developing countries to deal with. Countries like the United States have the political clout to fend off a potential case. Moreover, the economic recovery of the North is in everyone's interest -- developing countries rely on their markets, not to mention their technical and financial assistance. A dispute on this issue -- at least in the near future -- seems unlikely. But this makes the upcoming discussions at the WTO all the more important. The organization must provide a forum to at least acknowledge that developing countries are another in a long line of innocent victims of this economic crisis (photo credit).

Can Free Trade End Islamic Terrorism?

Does U.S. trade policy encourage Islamic terrorism? Edward Gresser, Director of the Progressive Policy Institute, suggests so. Muslim countries are left out of globalization's reach, Gresser maintains. U.S. trade policy should be used to bring these marginalized countries into the global family so as to more aggressively stamp out Islamic terrorism:

Our tariff regime puts many nations in the Middle East, whose young people are susceptible to the sirens of Islamic fundamentalism, at an unintended disadvantage. This works against our efforts to stamp out jihadism.

Grasser points out that most of the 57 Muslim countries participating in the world economy are experiencing something of a "de-globalization": Since 1980, the population of the Middle East has jumped from 175 million to 300 million, while that of Muslim south and central Asia has gone from 225 million to 360 million. But the Muslim world's share of global trade has contracted by 75% in a generation. The result? "A quarter of a billion young people are fighting for opportunities no more extensive than those their parents had in the 1970s."

Grasser's figures are stark and depressing, but he maintains the problem is easily fixed. All we need to do is create more preference programs for the Middle East--programs along the lines of the African Growth and Opportunity Act, or the myriad free trade arrangements with Latin America and the Caribbean.

While I am an optimist about the pacification role free trade can play, I am not sure opening up the world market to more Pakistani bedsheets and sweaters is the answer to the terrorism problem. As many others have noted, poverty alone does not begin to explain terrorism. If it did, we would have far more terrorists than we do now considering the state of many African, Caribbean, Latin American and Asian economies. History has shown us countries left out of the globalization revolution tend to become islands of poverty, isolation and despotic rule . . but not necessarily exporters of global terror (consider North Korea or Myanmar, for example).

Poor Middle Eastern countries experience the same trade challenges faced by poor countries the world over: lack of foreign investment that would allow them to grow export markets, greater tariff barriers in products like textiles and footwear, and difficulties meeting quality standards imposed by American and European regulations. These challenges must be confronted (and I would suggest from a global rather than regional approach), but would that necessarily lead to a reduction in terrorism? It seems unlikely. (photo credit)