Trade & Globalization: Media Appearances and Press Releases

Parag Khanna in Financial Express | India Doesn’t Count Yet

Communications — Sun, 27 Apr 2008 07:59:00 -0400

New America in the News:

Financial Express | India Doesn’t Count Yet

US — a second world nation? The thought may be radical to most, but that’s exactly what Parag Khanna, fellow at New America Foundation argues in The Second World: Empires and Influence in the New Global Order, saying the 21st century will be dominated by three first-world superpowers: the United States, China and the European Union. And they will compete for resources in nations in east Europe, Latin America and West Asia — countries of the second world. Suman Tarafdar tries to figure out where the world is headed.

Financial Express: Why do you see the US becoming a second world state? Where did it fail to read the geopolitical mutiny?

Parag Khanna: The US did fail to read the ways in which pivotal second world states such as Iran and Venezuela could stand up to the US and sustain their defiance, not to mention the insurgencies in Iraq and Afghanistan. America’s imperial overstretch is palpable in its Economy that has been weakened by the war and exposed other domestic vulnerabilities such as a crumbling infrastructure, declining health and education standards, and deep political divisions. Those latter factors are hallmarks of second world countries.

Financial Express: The ‘deep differences in interests among the big three make forging a “culture of peace” difficult,’ yet the three are also bound to each other by economic ties. Where does the resolution lie?

Parag Khanna: A “culture of peace” can have several sources, such as mutual economic dependence in investment and trade, and also the reality of nuclear deterrence. It could be that rather than defining their interests in divergent terms — such as in the pursuit of exclusive access to oil and gas resources — powerful states such as China, India and America could focus on expanding supply through joint exploration and development. One sees this happening already between Japan, China, and Korea in the waters between them. Also, there are issues such as terrorism and climate that affect all powers as well, and need to be addressed jointly. . .

Parag Khanna on NPR | America's Waning Influence in 'The Second World'

Communications — Tue, 15 Apr 2008 15:04:00 -0400

New America in the News:

NPR | America's Waning Influence in 'The Second World'

Parag Khanna believes that America's dominant moment is over. In his new book, "The Second World: Empires and Influence in the New Global Order," he argues that the 21st centruy will be dominated by three first-world superpowers: the United States, China and the European Union. . .

Jamie Zimmerman in Globe and Mail | 'Trade Deal for Colombian Rights'

Communications — Tue, 08 Jan 2008 12:53:00 -0500

New America in the News:
A trade deal is good for Colombian human rights (The Globe and Mail - Canada)
Studies suggest increased trade may help improve human- and labour-rights deficiencies. In their recent book Trade Imbalance: The Struggle to Weigh Human Rights concerns in Trade Poliymaking (link), Susan Aaronson and Jamie Zimmerman argue that increased trade brings about increased "integrity rights," such as freedom from arbitrary imprisonment, torture and killings. ...

New York Times Magazine Reviews Parag Khanna's 'The Second World'

Communications — Sat, 08 Dec 2007 13:15:00 -0500

New America in the News:

“The first and second worlds are being reunited into something which has no name yet, nor a number,” wrote the sociologist Ralf Dahrendorf back in 1990. “Perhaps it will just be the world.” Or perhaps not! The United States, China and the European Union seem to be forming an irritable triplet: no one of them can dominate either of the other two. They may make common cause, but it is just as likely that they will compete for control. And the places where they will compete have been labeled, by the New America Foundation analyst Parag Khanna, the second world.

The second world used to mean the Soviet Union and its dependencies. Khanna has appropriated it (in his coming book of the same name) for countries that have substantial economies but do not belong to the Big Three. Turkey, Brazil, Saudi Arabia, Venezuela, Algeria, Russia, possibly India and South Africa — it’s the most successful members of the old nonaligned movement, more or less, plus resource barons, and when you add them all up it amounts to a good chunk of the world. The U.S., the E.U. and China court them — even depend on them — for vital resources and to adjust their own balance of power. ...

For the complete review of Parag Khanna's forthcoming book The Second World, please follow this link.

J. Galbraith and Economic Growth Forum in Atlanta Journal Constitution

Communications — Fri, 30 Nov 2007 13:51:00 -0500

New America in the News:

The home foreclosure crisis slamming into the nation's neighborhoods is having the effect of about "one Hurricane Katrina per month," James K. Galbraith, an economist with the University of Texas at Austin, said Friday at a forum examining the credit crisis.

In the immediate aftermath of Hurricane Katrina in the fall of 2005, nearly 275,000 Gulf Coast residents were forced to move into group shelters, according to the Federal Emergency Management Agency.

Economists who recently completed a study for the U.S. Conference of Mayors predicted the number of home foreclosures will hit 1.4 million in 2008.

Foreclosure is the legal process by which property may be sold by a lender to pay off a defaulting borrower's loan. Often, foreclosures drive down prices for entire neighborhoods as homes sit vacant.

When new buyers fail to purchase those empty houses, "the inventory doesn't go away," Galbraith said at the event sponsored by the New America Foundation, a research group. "The houses stay there — and they decay," hurting the value of even occupied homes around them.

This can compound the mortgage slump's economic damage. As home values decrease, Americans may no longer be able to get the home-equity loans that used to help them pay for cars, remodeling projects and more. "A slump in housing could have an effect on our ability to grow — for quite a long time to come," Galbraith said. ...

For more information, please follow this link. James Galbraith spoke at a forum organized by the Economic Growth Program and American Strategy Program with New America Foundation. More information about that forum can be found on the Events Calendar.

Douglas Rediker in CQ Weekly on Sovereign Wealth Funds

Communications — Sun, 04 Nov 2007 13:25:00 -0500

New America in the News:

Last week, the New York hedge fund Och-Ziff Capital Management disclosed that it was selling a $1.3 billion ownership stake to an investment firm controlled by the government of Dubai. In September, another Dubai-controlled fund announced that it was buying about a fifth of the Nasdaq stock exchange. A Chinese government bank just entered into a partnership with the investment bank Bear Stearns Companies Inc. And the Blackstone Group private equity firm recently sold a $3 billion ownership stake to China's state investment company.

Flush with cash thanks to big trade surpluses and high oil prices, some foreign governments are looking for new ways to invest. Instead of playing it safe and buying U.S. Treasury securities, many are using special investment arms known as sovereign wealth funds to take ownership stakes in U.S. companies in such sectors as financial services and technology to maximize their returns. Many of the deals will not be subject to government review because, while the dollar amounts are large, the purchasers won't be controlling the companies.

The buyout activity is nonetheless posing a dilemma for Congress, which just addressed concerns about foreign investment that grew from a deal last year, quickly scuttled, that would have given a firm linked to the Dubai government control of operations at some U.S. ports. Last month a new law took effect to strengthen and clarify the rules governing the Committee on Foreign Investment in the United States, or CFIUS, a panel of executive branch agencies that screens the sale of American businesses to foreign interests; the Bush administration is now developing regulations to implement it.

The rapid growth of sovereign wealth funds is prompting some U.S. officials and policy experts to question whether the nation needs to consider more safeguards -- or at least a more consistent approach to regulating foreign acquisitions that would both assuage national security concerns and enable foreign investors to know what to expect when they contemplate making a deal in the United States. ...

So far, members of Congress have primarily focused on individual deals. That will have to change, said Douglas Rediker, a global finance expert at the New America Foundation, a public policy think tank. Sovereign wealth funds bring "this whole level of influence that's brought to bear on the markets as a whole, that involves currencies and the subtleties of specific investments and broader investment classes," he said. "That traditionally has not been within the realm of what Congress deals with." ...

Rediker notes must purchasers in several high-profile deals, including the Chinese purchase of part of Blackstone and the agreement between Dubai and Och-Ziff, each took 9.9 percent stakes of the U.S. firm. He speculates that the acquiring companies reasoned that a 10 percent stake constituted a de facto threshold for heightened scrutiny.

Rediker and his wife, Heidi Crebo-Rediker, recently wrote a paper arguing that the United States needs a comprehensive review of all its legislation and regulations governing foreign investment, then needs to develop a policy for monitoring foreign government investments smaller than the "controlling" interest that triggers a CFIUS review.

The Redikers contend that this would not scare away foreign investors but encourage more deals, as long as funds were certain about the treatment they would receive.

"You put some vigorous rules in place, but they are absolute, so people know [if] they make X investment, there's going to be Y result. Right now the area below which a full-blown CFIUS review is triggered is fraught with political risk, and political risk takes its toll on investment," Douglas Rediker said. ...

For the complete article, please visit CQ.com. (subscription only)

Doug Rediker and Heidi-Crebo Rediker Highlighted in National Journal

Communications — Sat, 03 Nov 2007 07:54:00 -0400

New America in the News:

Remember the slogan about Bill and Hillary Clinton in the 1992 presidential race -- two for the price of one? The New America Foundation seems to be getting something similar with the hiring of husband-and-wife tandem Douglas Rediker and Heidi Crebo-Rediker (although they'll both get paid at the think tank). The Redikers, former investment bankers in Europe, have returned to the United States to co-direct the foundation's Global Strategic Finance Initiative. The couple met in Washington about 20 years ago. After Douglas worked in Hungary and Heidi worked in Russia, they married in London, where they have spent the past 16 years working for Merrill Lynch and Lehman Brothers, among other firms. ...

At New America, the Redikers will have their hands full explaining the pace of financial markets to Washington legislators and regulators. "Policy makers still operate under a time consideration that is much more deliberative," Douglas says. "Markets operate in seconds."

For the complete article, please visit The National Journal website.

Washington Post Quotes Doug Rediker on Sovereign Wealth Funds

Communications — Tue, 30 Oct 2007 06:12:00 -0400

New America in the News:

The government of Libya, flush with oil, has amassed $40 billion and is ready to put it in play on Wall Street. China recently acquired a huge stake in one of the biggest names in U.S. finance. Tiny Qatar is adding $1 billion a week to its investment coffers and is trying to buy the leading grocer in Britain.

Developing nations, especially in Asia and the Middle East, are aggressively stockpiling some of the largest concentrations of investment money in history. The cash hoards, called sovereign wealth funds, are controlled not by state-run companies or private investors but by governments.

These investment pools are equal to or even bigger than the largest pension and private-equity funds in the United States, and many are highly secretive about their activities. The Abu Dhabi Investment Authority has an estimated $875 billion to invest, while China's first stab at a sovereign wealth fund, which started last month, has $200 billion. The largest private-equity firm has about $90 billion under management.

Sovereign wealth funds have been around for decades. But enriched by the surge in the price of oil, which settled at a record $93.53 yesterday, and the trade gap between the United States and Asia, these funds have grown to gigantic proportions. This has alarmed U.S. politicians and regulators, some of whom held a series of meetings on the topic here this month. Some on Wall Street say the growing prominence of these funds portends a fundamental shift in financing power away from Western nations. ...

About two dozen countries have established sovereign wealth funds, including Iran, the United Arab Emirates, Singapore, Kuwait, Australia and Russia. While precise data about each of the funds can be difficult to obtain, most Wall Street analysts agree that the value of the funds has reached about $2 trillion and is likely to grow at least fivefold by 2012.

"We want to be encouraging people to invest as much of this money in the U.S. as we can," said Douglas Rediker, a former investment banker who works at the New America Foundation in the District. "We are driving our way around the country every day and sending them our U.S. dollars at $3 or $4 a gallon. ... You really want those dollars recycled back into your economy, because if they aren't, it means they are going somewhere else and the dollar is less attractive and will continue to weaken." ...

For the complete article, please follow this link. Douglas Rediker co-directs the Global Strategic Finance Initiative with Heidi Crebo-Rediker, at New America.

WBAI-FM NYC Radio Interviews Janine Wedel on Blackwater Quagmire

Communications — Sun, 07 Oct 2007 03:54:00 -0400

New America in the News:

New America Fellow Janine Wedel was quoted by WBAI-FM New York City Radio on the Blackwater quagmire in Iraq. Ms. Wedel's WBAI interview follows her op-ed titled “The Shadow Army,” appearing in Boston Globe on September 30, 2007, where she argues against the privatization of military and intelligence forces.

"One of the major problems is that, while military contracting is increasing, the number of Defense department people that are available to oversee contractors has declined."

For more on this story, please visit the WBAI-FM website.

William Hartung in the Grand Rapids Press on Iraq Arms Deal with China

Communications — Thu, 04 Oct 2007 04:55:00 -0400

New America in the News:

Iraq has ordered $100 million worth of light military equipment from China for its police force, contending the United States was unable to provide the material and is too slow to deliver arms shipments, Iraqi President Jalal Talabani said Wednesday [Oct. 3, 2007]....

The capabilities of Iraqi security forces are pivotal to the U.S. exit strategy in Iraq, with the creation of a viable police force critical to reconciliation. Talabani said only one in five Iraqi police officers is armed and called for faster weapons delivery from the United States to beef up Iraq's fledgling army.

Iraq's police force is noted for infiltration by militias and insurgents out to use national resources for their own ends, said William Hartung, director of the New America Foundation Arms and Security Initiative.

"Besides, aside from possibly wanting newer models, there are piles of arms and weapons floating around in Iraq," he said...

For the complete article, please visit www.MLive.com.

On Point Interviews Flynt Leverett on Iraq Oil

Communications — Fri, 21 Sep 2007 09:36:00 -0400

New America in the News:

Iraq has the world's third largest proven reserves of oil, and they're barely tapped. This week, the price of oil reached $82 dollars a barrel -- the highest in history. And Alan Greenspan says in his new memoir that, at least for him, the U.S. invasion of Iraq was "largely about oil." Iraq's ocean of oil is a source of endless speculation, maneuver, sectarian tension, war and conflict -- inside Iraq and out -- over who gets what and how. The oil companies are circling. The world is thirsty...

Flynt Leverett, Director of the Geopolitics of Energy Project with the American Strategy Program at New America Foundation, discusses the Iraq oil equation. To listen to the show, please visit the On Point web site.

The Advocate Quotes Afshin Molavi on the Global Economy

Communications — Wed, 08 Aug 2007 10:21:00 -0400

New America in the News:

In 1913, a young Franklin D. Roosevelt wrote in a private letter that a war among the major European powers would be so deadly and destructive that it could not be imagined. In 1914, he learned differently.

There are so many historic examples of war being so unlikely, so terrible in its prospect that it just "could not" happen. And yet it did.

That is why, in the large sweep of history, people who want to see peace should never underestimate the potential for war. Even those, like the mistaken Roosevelt, who feel rising prosperity is an antidote to conflict.

For centuries, the Silk Road of central Asia was a long and difficult, but valuable, pathway between the eastern and western worlds. Today, analyst [Afshin] Molavi says, a new Silk Road runs through the emerging economies of China, India and the Persian Gulf.

"The new Silk Road is largely the result of the confluence of China's and India's economic growth and high oil prices," said Molavi, a fellow at the New America Foundation in Washington.

"Key 'caravan posts' on the new Silk Road are regional economic 'winners' or rising stars: Dubai, Beijing, Mumbai, Chennai, Tokyo, Doha, Kuala Lumpur, Singapore, Hong Kong, Riyadh, Shanghai, Abu Dhabi," Molavi wrote in The Washington Post. "The old Silk Road civilization centers such as Persia (Iran), the Levant (Lebanon, Syria, Jordan) and Mesopotamia (Iraq) lag behind."

Vast real estate and industrial construction projects are under way along the new Silk Road, with Chinese, Korean, Indian and Japanese companies competing feverishly for business. While Molavi noted that American officials are busy with the crises in Iraq and Afghanistan, the United States should not miss the significance of long-term development along the new Silk Road.

Is prosperity an antidote for conflict?

"Security in the Persian Gulf is now as important to Beijing and New Delhi as it is to Washington. China will no longer be content to perch under America's security umbrella, and the Indian navy now more assertively patrols the Arabian Sea," Molavi argued. "What's more, China and India have far more influence with Iran than we do - and less tolerance for a disruptive war. Many of the (Iranian) Islamic republic's political elites are also business elites, eager to find a way out of conflict."

Perhaps, as Molavi argued, a Western strategy of seeking to engage the volatile regimes of Iran and China into an emerging new Silk Road economy will have a moderating impact on their policies. But good behavior and economic prosperity don't always go hand in hand.

Look at China's aggressive military build-up in a region where it has no realistic security threats. Look at Iran's nuclear ambitions and deranged threats to eradicate Israel from the map.

Economic engagement is important in itself, and as a secondary security strategy. But we should not make the same prediction young Mr. Roosevelt made almost a century ago.

For more on this story, please visit The Advocate web site.

AFP Quotes Steven Clemons on World Bank, Paul Wolfowitz

Communications — Sun, 20 May 2007 09:25:00 -0400

New America in the News:

The crisis that brought down Paul Wolfowitz from the presidency of the World Bank has laid bare a chasm existing between the United States and European countries since the invasion of Iraq in 2003.

Wolfowitz, 63, was deputy defense secretary and one of the principal architects of the Iraq war in the administration of US President George W. Bush before he took the helm of the World Bank in June 2005.

Even at that time, European countries opposed to the war felt badly about the choice made by Bush, but resigned themselves and went along with it...

Wolfowitz announced Thursday he would resign on June 30 after a bank panel found he had violated the organization's code of conduct by arranging a hefty pay and promotion deal for his girlfriend, a fellow bank employee.

"I think a lot of agendas converged in taking down Paul Wolfowitz," argued Steve Clemons, an expert with the New America Foundation.

"I think there was residual resentment of Wolfowitz's treatment of Europeans and the whole kind of international process that lay just beneath the surface of much of this. But it wasn't the determining factor," he said...

For the complete article, please visit the Agence France Presse website.

New Statesman Cites Barry Lynn on Free Market, Grocery Sector

Communications — Mon, 23 Apr 2007 18:21:00 -0400

New America in the News:

Groceries were always the best illustration of the merits of free markets. How ridiculous it would be if we decided collectively - by annual ballot, say, or by entrusting the decision to some Whitehall bureaucrat - which fruits and vegetables the shops should stock and in what quantities. A system whereby competing retailers offer individual consumers a daily choice is obviously better. Yet we are close to driving the free market out of the grocery sector...

For example, as the all-party parliamentary group for small shops pointed out in a report last year (High Street Britain: 2015), retail is usually a good sector in which to start up your own business because the entry barriers are very low. Many budding entrepreneurs have used retail as a stepping stone to other sectors. An important form of self-help and enterprise is therefore disappearing. So is a source of innovation. Supermarkets now sell some organic food but I doubt they would have done so without the example of independent retailers.

Most notoriously, the supermarkets screw their suppliers. We sometimes forget that choice matters (or ought to matter) as much to us when we are selling as when we are buying. In the US, wrote Barry Lynn of the New America Foundation in Harper's Magazine last year, Wal-Mart doesn't just dictate price to its suppliers. It also dictates how they package their products, how they transport them and gather and process information about them. At a snap of a supermarket's fingers, a farmer may have to switch from one variety of cabbage to another. And where a supermarket has local dominance, anyone with retail skills to sell has to accept its wages and working conditions or do without a job...

For the complete article, please visit the New Statesman website.

To read Barry Lynn's article in Harper's, please click here.

CNN Interviews Afshin Molavi on the Rise of Dubai

Communications — Thu, 04 Jan 2007 02:50:00 -0500

New America in the News:
JONATHAN MANN, CNN CORRESPONDENT: Building dreams in Dubai. A tiny synthetic city-state has transformed itself and is now literally changing the landscape around it, making its own new world out of oil money and ambition.

Hello and welcome...Joining us now to talk about it is the author of that "National Geographic" piece, former Reuters correspondent based in Dubai, Afshin Molavi, now of the New America Foundation...Let me ask you first of all, Dubai does not have all that much oil compared to its neighbors. So where's all the money coming from?

AFSHIN MOLAVI, NEW AMERICA FOUNDATION: Well, you know, in many ways, I mean, you're absolutely right, Jonathan. Dubai is, in fact, running out of oil. Around 6 percent of its GDP comes from oil.

But they occupy a very important strategic geography. They are right near the very oil-rich countries of the Arabian peninsula, Saudi Arabia, Qatar, Kuwait. They are very close to India and India's rise is in many ways nourishing Dubai as well. And very close to the Iranian plateau, where there is a great deal of historical wealth in many ways.

So Dubai has benefited from being the place -- the place to invest. If you are a Saudi investor, and after 9/11 you didn't want to deal with the strictures that the United States government was putting on you as an investor, if you're a Kuwait investor, if you're an Iranian, you go to -- suddenly, there's a place in your own region, as you've described, a Manhattan of the Middle East, where you can put your money.

So they've very much benefited from the oil price rise. The GCC countries alone, which are Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the United Arab Emirate, combined, they are about the 15th largest economy in the world. So there is a lot of wealth in the area, and when they're looking for good investment opportunities, Dubai is the best bet.

MANN: Now, in Dubai, why all the mega projects? Everything you've said so far makes it sound like a very reasonable place to put your money, but it's outsized. I don't know, it's not irrational, but it's certainly got some wild ideas about construction. Why are they building all that stuff?

MOLAVI: You know, this is a debate that's gone back to, you know, the very beginnings of Dubai and the rise of modern Dubai.

When Sheikh Rashid bin Saeed Al Maktoum, who is the father of the current rule of Dubai, Sheikh Mohammed, decided to widen Dubai's creed in the late 1950s, it was a massive construction project, and everybody said, well, why is he doing this? You know, what ships are really going to come to Dubai and trade in Dubai? Businessmen are not going to come and set up shop in Dubai.

But they have a pretty simple philosophy. It's build it and they will come. And thus far, in the expansion of the creek, in the creation of this massive Jebel Ali Port in 1975, and in the creation of these massive hotels and resorts, they seem to have -- this idea of build it and they will come seems to have worked.

Last year alone, Dubai attracted more tourists than India. I mean, think about that for a moment. A country -- a city-state of 1 million to 1.5 million people attracted more tourists than a country of a billion people. So in some respects, this model has worked for them.

MANN: It has worked in a very bizarre and lucky way, in a sense, because when people talk about Dubai, they talk about its success, they talk about its economy. They don't talk about its politics. There doesn't seem to be any politics, which is strange when you think about it, with so much wealth to be divided up, there doesn't seem to be much competition or disagreement about how it's being divided. Where is the politics that Dubai should be having?

MOLAVI: Yeah, no, that's an important point. And in many ways, Dubai politics today is very much like Dubai politics of 100 years ago, where you have the Al Maktoum ruling family and who engage in politics by engaging in what are called majlises, these gatherings of Dubai notables, in which they discuss the relevant issues of the day. Now, those Dubai notables do not have necessarily any power, but the Al Maktoums do listen to them.

Now, Dubai also is in an odd position because it has about 10 percent of its population as UAE nationals, so you've got about 85 to 90 percent of the population who don't even hold passports of the country that they're living in. So it's massively dominated by expatriates. So it would be a very unique experiment in democracy if they were to move towards that goal...

For the complete interview, please visit the CNN website.