Daily Archives: July 28, 2011

It is time for real compromise in Libya. The principal reason to support the intervention in the first place was to protect the people of Libya. Decisive action aligned the west with popular movements sweeping the Middle East and north Africa — a goal justified by both ideals and interests.  For the same reasons, stopping the fighting now is more important than an opposition victory on the current terms advocated by the National Transitional Council in Benghazi.

Some conditions remain non-negotiable. Muammer Gaddafi must step down. If he remains inside Libya, it must be in a place and on terms that prevent him from maintaining a personal power base. The fighting must stop and both sides must pull out of population centres. But everything else should be on the table.

Remember how the intervention began. The only ground on which the Arab world and then the United Nations could agree on the use of force was the protection of Libyan civilians. Security Council resolution 1973, which authorised the no-fly zone and other measures, listed a long set of humanitarian concerns and justifications, beginning with  “the responsibility of the Libyan authorities to protect the Libyan population”, and noting the perpetration of gross and systematic human rights violations and possible crimes against humanity. On April 14 Nato and its partners announced that they would continue “a high operational tempo against legitimate targets” (ie,  intensive bombing) until Col Gaddafi ended attacks and threats of attacks against civilians and civilian-populated areas, verifiably withdrew all his forces to bases, and permitted humanitarian access to all Libyans who need help.

Those are genuine humanitarian conditions, but de facto they would require Col Gaddafi to give up all the military gains he has made against opposition forces by pulling out of all the cities that are currently contested. He has no incentive to give up the fruits of his military victories except in return for an acceptable political agreement with the opposition.

Here is where the views of leading coalition members come into play. The US, Britain and France appear to have political red lines of their own, most notably the non-participation of any Gaddafi family members in some kind of transitional governing arrangement. Since Col Gaddafi himself has refused any suggestion that does not include the face-saving formula of allowing him to transition at least some power to one of his sons, real progress is stymied until Col Gaddafi is killed either by a bomb or one of his own associates. Yet none of his family members have any incentive to advocate compromise, as his fate and theirs are tied.

I fully understand why the idea of any member of the Gaddafi family continuing to hold power of any kind is so repugnant. I in no way accept a moral equivalence between the two sides; Col Gaddafi’s abuse of his own people extends back nearly a half century. I was an early and vocal supporter of the UN intervention in Libya precisely because I foresaw that Col Gaddafi’s ruthlessness and disregard for the lives and prospects of his citizens imperiled a city of 700,000 people. I also share the genuine commitment of many in the NTC to create a liberal democratic Libya that protects and empowers all Libyans.

Yet it is time to rethink, because the longer the fighting continues, the longer it is likely to continue. This is counter-intuitive; both sides assume that each is wearing the other down and thus “victory” is just a matter of weeks or months. But in a conflict like this one, where for various reasons neither side has the ability to deliver a decisive blow, the fighting itself creates a cycle of radicalisation and entrenchment that makes it progressively harder rather than easier to reach a settlement.

At the outset, I and many others saw the conflict not as a civil war but as an uprising of the Libyan people against their government. I continue to think that widespread opposition to Gaddafi exists in Tripoli and across Western Libya. But opposition to Gaddafi has not translated into mass uprising or manifest support for the Benghazi forces, in no small part because the more family members lose loved ones, suffer prolonged privation and life disruption, and are victims of the kinds of human rights abuses that reporters and non-government organisation observers are beginning to document on the part of opposition forces, the more reason they have to believe Col Gaddafi’s propaganda and conclude that the devil they know is better than the devil they don’t.

The more sacrifices individual fighters make for their cause the more they hate and harden their positions, on the grounds that only a complete victory can justify the mounting costs of the struggle. The longer the fighting continues, the more opposition members will have blood on their hands as well. Moreover, the destruction of ongoing warfare undermines the economic and social preconditions for any meaningful political order in Libya over the coming years.

Meanwhile, the human costs to the Libyan people that Nato seeks to protect mount daily. In battle zones, widespread death and rape, with the attendant destruction of families and the all-too-human desire for revenge. The destruction of vital infrastructure necessary for economic activity, from oil production to ordinary small business. The flooding of the country as a whole with arms, which will spur further conflicts and raise the overall levels of violence in communities across the country. The continued shortages of food, medicine, power and other basic necessities of life, the disruption of education, business, travel, and interaction with the outside world. The deepening of tribal divisions and ancient enmities across the country.

All this will make it much harder to rebuild a Libya with a government that actually serves rather than oppresses its people: the ultimate goal not just in Tripoli, but across north Africa and the Middle East. We have seen such a political tragedy unfold many times before, in Iraq, Afghanistan, Somalia and the Democratic Republic of Congo. The relative success stories, such as East Timor and Kosovo, are ones where the fighting ended quickly once the basic objective had been achieved. It is time to explore all possible avenues to add Libya to that list.

The writer is the Bert G. Kerstetter ’66 University Professor of Politics and International Affairs at Princeton University and former director of policy planning for the US state department

Response by Shashank Joshi

Moral superiority does not ensure military victory

Humanitarian intervention seems to afflict different ends of the political spectrum with different pathologies. For swathes of the right, humanitarian intervention can never be sound strategy; for the left, never humanitarian. But the onset of war reveals a new type: the pure interventionist, convinced that the righteousness of the cause entails the imminence of victory and the impossibility of compromise.

Regarding Libya, this cognitive dissonance is widespread.

Many remain unable to understand that moral and military superiority do not overlap. But in the absence of overwhelming strength, obstinacy is a recipe for a prolonged war that could poison the fruits of eventual victory (and some manner of victory is near-certain, given the progressive withering of every supply line into Tripoli). As Anne-Marie Slaughter astutely notes, it is difficult to understand the enduring effects of war on the people until political institutions and social relations stand in tatters at the end.

Many draw false analogies from Nato’s war for Kosovo, a campaign in which limited means were commensurate with limited objectives, falling well short of regime change.

More still are unwilling or unable to distinguish between
Gaddafi’s departure comprising a necessary outcome, as opposed to a precondition, of negotiations. The result has been the demonisation of those, like Slaughter, who favour a negotiated rather than a purely military solution.

This reflects a sharp paradox. The moralisation of foreign policy is the sine qua non of liberal intervention, but in furnishing the ideological basis of such wars it renders a settlement all the harder – whether the Taliban or the Gaddafi regime, engaging with evil is a hard sell.

Effective strategy however, requires more than sticks; it requires handing carrots to those who are manifestly undeserving. The international coalition is entitled to have different objectives to those of the Libyan opposition without thereby abandoning their cause or betraying their trust. Indeed, the rebels’ proximity to the war, and the sacrifices they have made in an obviously noble cause, may all the more cloud their own assessments of the war’s likely course.

British leaders, repeating overconfident projections for months
now, and obscuring to parliament and people the full costs of the operation, are in danger of discrediting the vitally important concept of humanitarian intervention in the long-term. That would be a shame, for it is an instrument of foreign policy which will inevitably be required in the years ahead when the next democratic wave hits the rocks.

The writer is an associate fellow at the Royal United Services Institute

Our country cannot afford politics as usual at a moment of such vital import for now and for the longer term. Many Americans have experienced great hardship since the recession began; unemployment has become long-term for large numbers, with potentially permanent damage through loss of skills; and current economic conditions could well remain stressed for an extended time due to the strong headwinds we face. Policy decisions can make a real difference to these conditions, for better or for worse.

Looking to the longer term, we could well be at an historic crossroads.  With our dynamic culture and other strengths, we should succeed if we meet our policy challenges. If we don’t, we will likely languish.

The issues we face are complex and there are very different views about what to do. But policy makers who operated on facts and analysis, not ideology and politics, who worked to find common ground and who made politically tough decisions could reach enough agreement to ameliorate our shorter term duress and position us for longer term success. The key is the political will of our people and our leaders.

It is imperative, for both the nearer term and the longer term, that we meet the deficit commission’s goal of $4,000bn of deficit reduction over roughly 10 years, which would first stabilise and then begin to reduce our debt to gross domestic product ratio. That programme must include room for public investment in areas critical to our economic future, a balance of revenue increases and reductions in all categories of spending that enables the government to provide the services and safety net that most Americans expect (albeit with appropriate reform), and an effective date two or three years from now to allow time for recovery to hopefully take hold.

The argument against raising taxes during a recession is a red herring given the deferred effective date, and in any case would apply equally to spending cuts. Opponents of President Bill Clinton’s 1993 deficit reduction programme also said that the tax increases – almost entirely on the most affluent – would lead to recession or worse. Instead, we had the longest economic expansion in the nation’s history – in part because of the confidence created by sound fiscal conditions – with massive job creation, widespread income increases, and ultimately the first fiscal surplus in 30 years. That notwithstanding, the ideological opposition to revenue increases continues, creating deeply counter-productive pressure on programmes critical to our economic future and the economic security of our people.

It is delusional to think that our fiscal problems can be solved predominantly by cutting non-defence discretionary spending, which can be roughly defined as the regular functions of government apart from defence, social security and the healthcare programmes. The numbers simply won’t work – the Congressional Budget Office estimates that on a realistic appraisal of our current policy outlook, our deficit will be 7.5 per cent of GDP in 2021, and non-defence discretionary spending is roughly 4.4 per cent of GDP today. Moreover, the damage to our economic future from focusing predominantly on non-defence discretionary spending (which includes education, infrastructure and the many other aspects of public investment) would be enormous.

A serious deficit reduction programme could be attached to increasing the debt limit, which is an absolute imperative, given the effects not doing so could have on market risks and on confidence in our political system. At the very least, the debt limit should be raised without harmful conditions.

Meanwhile, work must continue toward accomplishing the full fiscal objective. As many specifics as possible could be set now, with guidelines for the rest that are concrete and structured to be as hard to evade as possible in future years.

Such an approach would greatly reduce the severely dangerous bond and currency market risks of our current fiscal trajectory. Those risks are more likely to materialise in the longer run but market psychology is unpredictable and disruption in the shorter term cannot be ruled out.

Moreover, our current unsound fiscal outlook is likely to increasingly undermine business and consumer confidence, both by creating uncertainty about future economic conditions and policy and by symbolising a broader inability to manage our economic affairs and provide effective governance. Conversely, the 1993 deficit reduction programme showed how strongly a sound fiscal programme can improve confidence, which in turn increases investment and hiring.

Because of the corrosive effects of our fiscal outlook on confidence, which will worsen as our debt to GDP ratio deteriorates, I do not believe a healthy recovery can begin without a sound fiscal regime.

Serious longer-term deficit reduction would also make a temporary stimulus safer and more effective, by countering the market risks and adverse confidence effects that could be associated with additional deficit measures. Linked to such a fiscal programme, a temporary stimulus, such as continuation of the payroll tax holiday and of the unemployment insurance extension, could well be warranted to combat the paucity of demand.

Without serious deficit reduction, the balance of effects of a temporary stimulus is a much harder question. We do need additional demand, especially with the increasing incidence of long-term unemployment and the fiscal drag in 2012 from the end of the current stimulus. The risk is that the political system could be seen as unable to address the difficult issues of serious deficit reduction, but able to act only on providing lower taxes or increasing programmes. That could possibly become the straw that breaks the camel’s back on market psychology. And business and consumer confidence could be further undermined, partly offsetting the stimulus and possibly with more lasting effects. Moreover there are real issues about whether a stand-alone stimulus would be likely to have an ongoing benefit, given our unsound fiscal underpinnings and other headwinds, and whether it will pay for itself, even over time. The points here are not dispositive either way on a free standing stimulus, but simply show that the decision is not simple or one-sided.

For the longer term, our success – and avoidance of unsatisfactory performance – depends on a sound fiscal regime. That regime would prevent an otherwise virtually inescapable market and economic crisis, create an interest rate environment conducive to growth, buttress confidence, and provide the resources for essential public investment, economic security and national defence, which would otherwise inevitably be significantly under-funded.

The writer was US Treasury Secretary from 1995 to 1999 and is co-chairman of the Council on Foreign Relations

Response by Uri Dadush

US can afford to be bolder in repairing its finances

Robert Rubin is correct in pointing to the critical state of US public finances and also in underscoring that that any realistic solution must combine tax increases and expenditure cuts across the whole spectrum of government spending. He is also correct in his claim that permanent expenditure cuts are just as likely to have a depressing effect on demand as permanent tax increases.

Precisely because of concerns about the US fiscal trajectory, however, and given that the US economy is in the middle of a recovery, I am less convinced by his call to hold on implementation of the programme “over the next two to three years until the recovery takes hold”. Though there is a case for targeted support for the unemployed – unemployment remains high and long-term unemployment is higher still (45 per cent of the unemployed have been so for more than six months compared to an average of 18 per cent since 1980) – the US economy is likely to continue to expand and create new jobs.

Recent indicators point to a US corporate sector in good shape, with capacity utilisation only about 2 per cent below the 20-year average, consumer confidence resilient and world trade continuing to grow rapidly; these factors together with low interest rates will play an important role in propping up demand. Again delaying budget consolidation in this situation may well be counterproductive, especially if it undermines confidence about the government’s determination to put its fiscal house in order, as it might well.

Partly because it has paid so little attention to it so far, there is lot that the US can do to correct its fiscal trajectory. US tax revenue over the last decade is the second lowest among the larger advanced countries, after Japan – whose public finances are in disastrous shape. The taxes paid by US corporations represent a much lower share of gross domestic product than either Greece or Italy , according to the Organisation for Economic Co-operation and Development. The US gasoline tax is a fraction of the OECD average.

The International Monetary Fund projects that US gross debt will reach 112 per cent of GDP in 2016; the only countries with higher debt are Japan and three European periphery countries under market attack: Italy , Greece and Ireland . However, among this group, only Japan will see a larger deterioration in its debt/GDP ratio than the US over the next five years. Net debt levels (excluding US government debt held by the Federal Reserve and other public agencies) are lower all around, but tell the same story. The US is also a complete outlier in its spending on healthcare and defence. And, like most other advanced countries, the US will see a large deterioration in its fiscal balances just as a result of aging: its old age dependency ratio is projected to rise from 19.5 per cent in 2010 to 32.7 per cent in 2030.

Unlike Italy , Greece and other European countries in bad fiscal shape, the US can count on a highly competitive and flexible private sector, an independent monetary policy, flexible exchange rate and, for the time being at least, its safe haven status and unparalleled ability to attract foreign investors. For these reasons, it can afford to be bolder than even Mr Rubin suggests in tackling its large fiscal problem.

The writer is senior associate and director for the International Economics Program at the Carnegie Endowment for International Peace

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