Pakistan and India: Irreconcilable or Just Stubborn?

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Trucks wait at the India-Pakistan border. (Photo: Wikimedia Commons)

Huma Sattar is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Heritage Foundation

Pakistan and India share a long, unyielding history. The past is marred with political and territorial conflict, militarization, and a general sense of mistrust on both sides.

Since 2003, trade between the two countries has grown seven-fold, with Indian imports into Pakistan taking 80 percent of the share, according to data reported by International Trade Centre. While formal figures report bilateral trade of U.S $2.3 billion for 2013, some estimates contend that a larger share of bilateral trade between Pakistan and India comes through indirect or informal routes. Trade is estimated to be double what statistics report with significant Indian imports coming through Dubai into Pakistan.

Many studies which have aimed to estimate potential bilateral trade between Pakistan and India have concluded consistently that there are enormous economic synergies that can exist between the two economies given their trade complementarity and geographic proximity. Mutually preferential cooperation would benefit both Pakistan and India.

However, Pakistan has still not granted Most Favored Nation status (MFN) to India despite talks that seemed to have made progress in the past few years. Judging by the recent statements made by officials from Pakistan, it seems the country will remain flummoxed by the idea of granting MFN to India, contending one or more of the following as reason for their reservations:

  • India gave MFN to Pakistan in 1996. For Pakistan, however, the trade deficit has only increased.
  • MFN to India will hurt the local economy of Pakistan.
  • Increasing trade with India has hardened India’s stance on Kashmir.

Unfortunately for Pakistan, the merits of these arguments are wearing thin. In fact, putting the Kashmir issue and trade on the same table ensures that neither side relents and both issues remain unaddressed. 

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Nigeria’s 2015 Elections: The Debates Must Go On

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Just over two weeks ago, Nigeria’s Independent National Electoral Commission (INEC) made the shocking (but not entirely surprising) decision to delay the country’s elections by six weeks. Citing ongoing instability caused by Boko Haram in the country’s Northeast and INEC’s own uncertainty about its ability to deliver outstanding voter cards to nearly 40 percent of the country’s 70 million registered voters, the decision to delay has divided opinions.

On one hand, there is doubt that Nigeria’s woefully inept security forces could provide the kind of protection voters need, and the potential disenfranchisement of hundreds of thousands of voters due to violence would not bode well for a country making efforts to become a more genuine democracy.  On the other hand, there is little reason to believe the military will be ready to both take out Boko Haram and create a secure voting environment in just six weeks. Furthermore, given the high stakes in the race between current President Goodluck Jonathan and General Muhammadu Buhari – in the closest and most hotly contested since the end of military rule in 1999 – many are interpreting the election delay as politically motivated.

What is interesting about most of the dialogue currently surrounding the elections, however, is that it is largely focused at the center. Indeed, think tanks and election-oversight bodies have released study after study with polling data and predictions for presidential electoral outcomes, as well as scenarios for how the elections will impact an already delicate security situation across the country.

Though much of the international community is focused on the preparations for and outcome of the presidential contest now scheduled for March 28 , there is very little conversation about the state level elections taking place two weeks later on April 11.

While the national level race is certainly interesting and important, the top issues facing Nigerian voters must ultimately be dealt with locally. Economic empowerment through job creation is a prime example. Despite Nigeria’s substantial oil revenues, the country nonetheless suffers from massive unemployment and income inequality – the primary factors contributing to endemic poverty, low quality of life, and the growth of insecurity.

The solutions for boosting employment and opportunities for Nigeria’s poor and disenfranchised will not come from the Presidency. State and local governments will need to work in coordination with local businesses to create an enabling environment for small, medium, and large enterprises to thrive.  Therefore, the outcome of state elections will have as much (if not more) impact on the daily lives of Nigerians than the contest for the presidency.

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Populism and the Internet in Latin America

The rapid growth of the Internet in Latin America between 2001 and 2008. Today 57% of South Americans use the Internet. (Charts: ZookNIC)

The rapid growth of the Internet in Latin America between 2001 and 2008. As of 2014 57% of South Americans are online. (Charts: ZookNIC)

By William Vogt

Since the rise and fall of the Arab Spring, debate has raged in the fields intersecting communications, technology, and international affairs: will Internet growth be a liberalizing influence that will create stable, prosperous democracies?

So far, this answer appears to be a qualified “no.” Connected and educated youths have not created the groundswell necessary for reform in many politically unstable countries. On the other hand, investments in information communications technologies (ICTs) have greatly improved local economies in many developing countries and hold promise in exposing and rooting out corruption.

In this last point, fighting corruption, the rise of the Internet as a social and economic force has created perplexing political trends. Increased Internet penetration does reduce at least one key aspect of corruption affecting free market interactions: barriers to market entry (for producers and consumers) due to opaque regulations and powerful oligarchies. In fact, studies have shown that merely the act of searching broad terms like “corruption” on an online search engine has significant impacts on the ability of the state to engage in corrupt, anti-competitive practices like demanding bribes from businesses.

This trend, however, does not hold globally and there is one part of the world that has created a particularly worrying balance between the forms of democracy and what is functionally a system of corruption: Latin America. Over its long history this region has developed a unique political culture with a prominent role for the ideology frequently described today as “populism.”

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Being the Change-Maker You Want to See in the World

Feb2015 Lawrence

Lawrence Yealue, II is a CIPE-Atlas Corps Think Tank LINKS Fellow at Accountability Lab

Throughout history, people have continually sought positive social and economic change, and found creative ways to make it happen. This change has been driven by a sense of dissatisfaction with the status quo, for example in the case of the Civil Rights Movement in the U.S. and the anti-Apartheid efforts in South Africa. But the list is endless.

Our societies have evolved and will continue to do so because there are many sources of dissatisfaction in every corner of the world, including terrible acts of suppression, segregation, and discrimination that threaten human dignity. I believe that humans are by nature kind, loving, and fair – but a lack of honesty, transparency, and accountability can create negative dynamics that lead to unacceptable behaviors.

For me, there is nothing more satisfying that seeing a change-maker leading the change they want to see. Some of my own greatest heroes include the likes of Martin Luther King, Jr. and Nelson Mandela.

I see countless change-makers of this mold emerging through young leadership programs across the world. In particular, the program I am now part of, the CIPE-Atlas Corps fellowship. The overall objective of the program is to bring young leaders from across the world to research institutions in the US in order to build the skills and capacity they need to drive reform. This empowers them to create even greater change when they return to their home countries.

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An Unsustainable Future for Algerian Fuel Subsidies?

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Photo: Wikimedia Commons

 

precipitous fall in oil prices in the last seven months has led many oil-producing nations to reconsider their incredibly costly fuel subsidies, which drain government budgets and distort the economy. Yet Algeria, which relies on oil for most  of its government revenue, has taken a different path: freezing public-sector hiring and investment while keeping its subsidies in place – a decision which may only increase its dependence on oil exports in the future.

On Christmas Eve of 2014, Algerian Prime Minister Abdelmalek Sellal announced that, in response to the drop in oil revenue and impending economic crisis, the administration would freeze public sector hiring and new state investment projects. However, the Prime Minister and other officials have insisted that, for the moment, fuel subsidies will remain in place, keeping domestic fuel prices at some of the lowest levels on the African continent – 25 cents per liter, or about 95 cents per gallon.

“The administration is making decisions based on the outlook of the global oil market and on Algeria’s middle- and long-term capacity to support an economy fueled by hydrocarbons,” said Slim Othmani, President of CIPE partner Cercle d’Action et de Réflexion autour de l’Entreprise (CARE), in a recent interview.

In other words, this approach will only deepen the country’s dependence on oil and gas revenues. Not only is this a gamble, it also misses an ideal political moment to recalibrate the fuel subsidies. The government could use the pressure of outside economic forces to make the argument for internal change, and the natural consequences of dropping oil prices could bring home the reasons for reform. Plus, cutting subsidies when fuel is cheap will make the process less painful to consumers.

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Can Ukraine Stamp Out its Corruption Culture?

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Ukraine’s “Euromaidan” protests were driven by activists fed up with corruption. Can the new government turn things around?

When it comes to opportunity for anti-corruption reform on a massive scale, few countries have ever been as ripe for change as Ukraine today. Western countries and the International Monetary Fund are pushing hard for transparency and clean government. They enjoy unprecedented leverage over Ukraine’s political and economic elites, who need billions in loans to stave off economic ruin. Ukraine’s populace, which took to the streets a year ago to oust a president reviled for his flamboyant corruption, is maddened at the lack of a single, high-profile corruption prosecution since then. Investors, once attracted to Ukraine by a highly educated workforce, cheap industrial assets, and some of the world’s most fertile farmland, have made it clear that corruption is a deal breaker.

Freshly elected Ukrainian leaders committed to reform and European integration are taking seemingly drastic steps on the anti-corruption front. In October, they passed an impressive package of laws that provide the framework to investigate, prosecute and imprison wrongdoers. Just as important, the new laws require the training and monitoring of the tens of thousands of public servants – from traffic cops to school principals to MPs – who collectively represent the “demand side” of Ukraine’s corruption equation.

To implement these new laws and flesh out the details, Ukraine’s elected leaders are turning to technocrats from countries counted as anti-corruption success stories – mostly Georgia and Lithuania. They are laboring away this winter in various ministries and in the Presidential Administration, trying to figure out how to train and empower the men and women who, in the face of a decades-old corruption culture and vastly outnumbered by colleagues benefiting from the status quo, will be the shock troops of anti-corruption reform. Taken together, these are impressive, ambitious moves in a country of 45 million, by far the largest state in the post-Soviet space to attempt such a housecleaning.

All this was on display last week during a fact-finding mission by CIPE’s lead anti-corruption expert in Ukraine, Drago Kos, who also serves as the chairman of the Working Group on Bribery of the Organisation of Economic Cooperation and Development. Kos, a plainspoken man who began his career in the Slovenian police force, spent a week in Kyiv, building rapport and sharing opinions with the Ukrainians at the forefront of the anti-corruption effort.

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Public-Private Dialogue: The Key to Good Governance and Development

An increasing number of policy and governance challenges around the world demand private sector participation to generate viable solutions. Such challenges include poverty reduction, inclusive growth, government accountability, business integrity, national competitiveness, innovation, and access to opportunity. Although the obstacles to dialogue can be high, the value of dialogue is now widely recognized by governments and business leaders alike. Notably, the 4th High Level Forum on Aid Effectiveness in Busan, Korea, recommended that countries embrace “inclusive dialogue for building a policy environment conducive to sustainable development.”

In CIPE’s latest Economic Reform Feature Service article, Benjamin Herzberg, Program Lead, Leadership, Learning and Innovation at the World Bank Group, my colleague Kim Bettcher, Senior Knowledge Manager at CIPE, and I explore the importance of PPD and discuss its practical applications around the world. 

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