This comment was just a general point about the USA and the Middle East. By 'conservative economic policy' I primarily meant the Washington Consensus. My view is that failure in effectiveness of these policies has primarily resulted from weak human capital in the implementing countries, eg the US failure on prudent oversight of the finance sector.

What I am wondering is partly, if these policies make good sense in terms of promoting economic growth, why is it so hard to generate broader public support on the basis of evidence, so that terrorists and others who aim to wreck the economy will find it more difficult to get popular support? Surely greater investment in advocacy and implementation for the policies of the Washington Consensus would do more for security than some of the dubious uses of the current Pentagon budget?

If the conservative economic policies provide a sound basis for effective governance, they should also provide a basis for economic growth and reduction of civil conflict, and are therefore essential to peace and security. Given that a dollar spent on the military is a dollar less for promotion of sound economic governance, the opportunity cost of US military spending looks very high. At the margin, my impression is that security is enhanced more by effective spending to generate economic growth than by expanding the military. For example, the current crisis could have been prevented if the US had diverted say 1% of its military budget (ie seven billion dollars) to improved prudent oversight of financial institutions.

A similar amount of investment could readily develop algae biodiesel as a commercial alternative to fossil fuels, with great benefits for climate security and energy security.

Similarly, less than 0.1% of military spending could have prevented the New Orleans hurricane disaster, which was certainly a security nightmare for all affected.

The USA decision to spend such a vast amount of money on its military just does not seem to be justified on security grounds.

RTulip: The USA decision to spend such a vast amount of money on its military just does not seem to be justified on security grounds.


Why We Fight. A Film by Eugene Jarecki http://www.sonyclassics.com/whywefight/


Chalmers Johnson discusses "Blowback Syndrome: Oil Wars and Overreach"


The Corporation http://www.thecorporation.com/ A Film by Mark Achbar, Jennifer Abbot, and Joel Baken

What I am wondering is partly, if these policies make good sense in terms of promoting economic growth, why is it so hard to generate broader public support on the basis of evidence, so that terrorists and others who aim to wreck the economy will find it more difficult to get popular support? Surely greater investment in advocacy and implementation for the policies of the Washington Consensus would do more for security than some of the dubious uses of the current Pentagon budget?

Robert:

Thanks for your message.

Since our topic is US policy respecting the Middle East, if we are talking about US aid to Middle Eastern countries (that is, U.S. aid given to a country on the condition that the recipient country applies internally the Washington Consensus economic policies), the U.S. appears to provide substantial economic aid to only 4 such countries: Iraq, Egypt, Jordan, and Israel. See http://www.census.gov/compendia/statab/ ... n_aid.html .
I believe that the U.S. economic aid to the Palestinians, detailed at http://fpc.state.gov/documents/organization/60396.pdf , is included in the Census Department's total figure for U.S. economic aid to Israel. Of those four recipient countries, in only two of them, Iraq and Israel, does there appear to be military insurrection against the government. In Iraq, military insurrection was, in my view, provoked by the U.S’s invasion of that country and overthrow of its government. In Israel, the armed insurrection arose, in my view, not from ill-managed U.S. aid, but from an unjust political situation: a huge proportion of the population had their property rights violated by being displaced from their land, and they are fighting to get their property back. I believe that in Iraq, the armed insurrection will cease once the U.S. leaves, and that in Israel, the armed insurrection will end once a two-state peace agreement is implemented between Israel and the Palestinians.

Therefore, respecting the Middle East, I do not see any relationship between armed insurrection and U.S. economic aid. What evidence do you have of such a relationship in the Middle East?

Looking again at the Washington Consensus, there are ten broad sets of recommendations:

Fiscal policy discipline;
Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
Tax reform – broadening the tax base and adopting moderate marginal tax rates;
Interest rates that are market determined and positive (but moderate) in real terms;
Competitive exchange rates;
Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
Liberalization of inward foreign direct investment;
Privatization of state enterprises;
Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions; and,
Legal security for property rights.

I think it is fair to say the US is supporting these policies in Iraq, but in Israel the US subsidies for settler rampages and land theft in Palestine are in conflict with the Washington Consensus view that legal security for property rights is essential for economic growth.

My point was not that US or other donor economic aid causes insurrection, although given the hypocrisy around settlements in Israel that is debatable. Rather, it is that if we assume an existing level of stability and rationality (so not talking about Afghanistan), aid directed to improved governance and growth should be a better strategy for peace building than the prevailing military security approach, so US resources should be rebalanced more towards such 'smart power' strategic understanding of security.

Aaahhh, I'll bet nothing feels quite as good as justifying violence with prosperity.

My point was not that US or other donor economic aid causes insurrection, although given the hypocrisy around settlements in Israel that is debatable. Rather, it is that if we assume an existing level of stability and rationality (so not talking about Afghanistan), aid directed to improved governance and growth should be a better strategy for peace building than the prevailing military security approach, so US resources should be rebalanced more towards such 'smart power' strategic understanding of security.

Robert:

Thanks for clarifying. In my view, one cannot presently assume "an existing level of stability and rationality" respecting Israel, because Iran is arming Hezbollah and Hamas which are actively making war on Israel within and from outside its borders; nor can one assume such a level of stability and rationality respecting Iran, because of Iran's professed policy of developing long-range nuclear weapons, threatening to make total war on Israel and on Eastern and Central Europe, and arming Israel's two principal military opponents, Hezbollah and Hamas. Given this security environment, I believe the U.S.'s pursuing a primarily non-military strategy within Israel and in defense of Israel respecting her neighboring enemies (and in defense of Eastern and Central Europe respecting Iran), would be utterly ineffective, and, to the extent that the U.S. is Israel's principal ally (and that the U.S. has committed through NATO to defend Eastern and Central Europe), quite irresponsible. Rather, I believe that this dire security environment justifies the U.S.'s substantial military response. I note that the U.S. is actively pursuing diplomacy in the Middle East as well, through the special envoys to Israel/Syria and Iran and through talks with Russia to pressure Iran to end its nuclear program. I believe that the U.S.'s substantial military response in the Middle East (and in Eastern and Central Europe, to protect them from Iran), to the extent that it demonstrates the U.S.'s formidable capability and willingness to defend Israel (and Europe), increases the likelihood that these negotiations will succeed. I believe strength will yield peace. And I believe that once negotiated peace prevails within Israel and between Israel and Syria, Lebanon, and Iran, then the U.S. will be justified in prioritizing economic development in the Middle East.

Arming the Middle East
Stephen Zunes | January 28, 2008
http://www.fpif.org/fpiftxt/4926

Arms control analysts have consistently argued that the Middle East is too militarized already and the recipient governments already possess military capabilities well in excess of their legitimate security needs. Yet President Bush is effectively insisting that this volatile region does not yet have enough armaments, and the United States must send even more.

As disturbing as this is – depending on the time frame for the arms sales – it does not necessarily represent a dramatic increase in the rate of arms transfers. For example, since 1998, the United States has sent over $15 billion of American weaponry to Saudi Arabia alone. By contrast, even though Israel’s strategic superiority vis-à-vis all its potential regional adversaries is stronger than ever and Israel is already by far the highest recipient of U.S. military assistance, the proposed arms package to Israel marks a dramatic 25% increase over current levels.

The administration has claimed in recent years that it has disavowed the policies of its predecessors that propped up undemocratic regimes in the name of regional stability and was now dedicated to promoting freedom and democracy in the Middle East. Nevertheless, all seven of the Arab countries included in the proposed arms packages are led by autocratic governments that have engaged in consistent patterns of gross and persistent human rights abuses. In addition, Israel – while having the only democratically elected government among the recipients – remains in belligerent occupation of much of Palestine’s West Bank and Syria’s Golan Heights and has a longstanding history of using American weapons against civilians and related violations of international humanitarian law.

Though supporters of the recently announced arms sales to the Gulf argue that if the United States did not sell weapons to these oil-rich nations someone else would, neither the Bush administration nor its predecessors have ever expressed interest in pursuing any kind of arms control agreement with other arms exporting countries. A number of other arms exporters, such as Germany, are now expressing their opposition to further arms transfers to the region due to the risks of exacerbating tensions and promoting a regional arms race.

The United States is by far the largest arms exporter in the world, surpassing Russia – the second largest arms exporter – by nearly two to one.




United States Reemerges as Leading Arms Supplier to the Developing World By Rachel Stohl, Senior Analyst October 3, 2007 http://www.cdi.org/friendlyversion/prin ... entID=4116

On Sept. 26, 2007, the Congressional Research Service released the most recent version of its annual arms transfer report, “Conventional Arms Transfers to Developing Nations, 1999-2006.” For the period 2003-2006, the United States ranks as the world’s largest exporter of arms to developing nations, and regained its place atop the list of arms exporting nations (in 2005 the United States fell behind Russia and France to place third in terms of new arms export agreements concluded with developing nations). In 2006, the United States concluded $10.3 billion – nearly 36 percent of all arms transfer agreements with the developing world (up from $6.2 billion in agreements in 2005). Russia, last year’s leading exporter to developing nations, placed second with $8.1 billion (approximately 28 percent of new agreements) and the United Kingdom was third with $3.1 billion (nearly 11 percent) in new deals with the developing world.