Monday, December 23, 2013

Some stories worth considering at year's end.

Most Underreported Foreign News Stories of 2013

Every year there are a few events that fly under the radar of the media but have a seminal impact nonetheless. Five PJ Media columnists agreed to contribute their knowledge and expertise to tell us what they consider to be the most underreported foreign news stories of 2013.
Next week, we’ll feature more PJ Media columnists giving us their thoughts on the most underreported domestic news stories of 2013.
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The most underreported foreign news story of 2013 is the pogrom against Christians in Islamic countries. It is doubtful that there is a close second place finisher. The story is gruesome and the rationale for both the killing and the silence about it lies in a mainstream interpretation of Islam – one that is far more prevalent in the Middle East than the West will admit.

The pogrom is the inexorable result of Islamic teaching and Western indulgence. It is, after all, directed at Christians because there are no more Jews left to persecute. The latter have long made their exodus from Muslim countries where Jewish communities once flourished. Despite this fact, and despite that fact that Muslims living in Israel enjoy more freedom and self-determination than in any Arab country of the Middle East, the West – very much including the United States – has legitimized the premise that Jews should be driven from East Jerusalem, Judea and Samaria, just as they were pressured to evacuate Gaza, in order to birth a Palestinian state.

The charter of Hamas, like the charter of Hezbollah, calls for the extermination of Jews. Yet the West increasingly treats these terrorist organizations as if they were regular political actors espousing respectable agendas. Moreover, all of the blather about a “two-state solution” always assumes an Israel in which Muslims live freely and a Palestinian state purged of Jews. The message to Islamic supremacists is clear: Aggression works and, for all our incessant chatter about toleration and diversity, there will be no comeuppance for the religious persecution and institutional discrimination innate in sharia governance.

Having established these principles, Islamic supremacists have now turned their hostile attention to the remaining Christian minorities in the Middle East. Life was no picnic for Copts in Mubarak’s Egypt, but at least they had some hope of the law’s protection. When Mubarak was ousted, the stepped up persecution of Christians was a direct result of the fallacy that popular elections serve to “democratize” countries bereft of democratic culture. Predictably, elections were contested on explicitly sectarian terms, with Christians portrayed as “enemies of Islam” and obstacles to the majority vision of a caliphate established pursuant to sharia tenets. Massacres against Christian communities and the torching of Christian churches and homes became standard fare. If anything, the situation has worsened since this year’s coup against Egyptian President Mohamed Morsi of the Muslim Brotherhood, which Muslims blame Christians for supporting.
Meanwhile in Iraq, where the United States endorsed the adoption of a sharia constitution, the United Nations estimates that a million Christians have fled the country in the last decade. In Syria, Christians are systematically targeted by the Sunni jihadists waging a civil war against the Assad regime. Thousands of Christians were evacuated from Sudan this year because the Islamic-supremacist government regards them as enemies of the sharia state. Similarly in Shiite Iran, where sharia is the law of the land, Christians are systematically imprisoned for practicing and preaching their faith.

Sadly, we could have written this essay at the end of 2012, and the story will be no different at the end of 2014. If Muslim societies are not confronted about religious persecution, they are encouraged to persist in it. That is our shame.
Andrew is a former federal prosecutor and New York Times bestselling author. He blogs at Ordered Liberty. [1]

The most underreported foreign story of 2013 is the decline of American power. Not that there hasn’t been plenty written about it. But there hasn’t been nearly enough. Since World War II, America has led the free world. That is changing, at an accelerating pace, with enormous implications around the globe. As America retreats, as America disarms, as America abandons its free-wheeling capitalist ways, gums up its economic engines, stiff-arms its allies and defers to its enemies, the openings grow ever larger for the shaping of a different and darker world order.

We are entering an era of opportunism — cruder and more dangerous than in a very long time. If America no longer plays the leading role in shaping the rules, then who does? Beijing’s politburo? Vladimir Putin’s Kremlin? The sprawling, unaccountable and morally corrupt system of the United Nations? All of them together, in a rising axis of technologically enhanced despotisms, while smaller powers try to cut whatever deals they can with the regional godfathers?

This past year saw many parts of this story covered in detail. There has been endless print about the U.S.-led diplomatic dalliance with Iran, from which Iranian officials emerged to announce their “inalienable right” to enrich uranium, while America officials advertised as an achievement a half-baked short-term nuclear deal that has been neither clarified nor implemented. Not only has the U.S. failed to stop the “unacceptable” Iranian bomb program; America has gone far to erode its own credibility in denouncing as unacceptable — yet de facto accepting — everything from rogue nuclear programs to the theft of massive amounts of information from its own National Security Agency. Where does this go?

There’s also been plenty written about the rise of Putin’s increasingly despotic and ambitious Russia — looming over Ukraine, and reasserting itself in the Middle East. This year brought the U.S. climbdown over Syria, in which the Assad regime’s use of chemical weapons translated into gains for Moscow and irrelevancy for Washington. Another story was China’s territorial jockeying, along with Japan’s growing worry about the reliability of the old U.S. defense umbrella. On North Korea, there has been plenty of copy devoted to young hereditary tyrant Kim Jong Un conducting his maiden nuclear test — North Korea’s third since 2006 — while the U.S., alerted in advance, looked on.

And then there are such matters as the U.S. dollar, the world’s longtime reserve currency, and a mighty factor for generations in the relative stability of world finance and trade. There are by now reasons to wonder if the future of the dollar may be shakier than the future of Iran’s nuclear program.

I could go on, but the basic point is, there have not been enough stories connecting the dots (and there are some very big dots out there) to provide the larger picture of the real implications of America’s retreat. There is a world of turf and wealth, increasingly up for grabs. In the global war of ideas, America, engrossed in its own frenzy of fundamental transformation and regulatory sludge, is at best voting “present.” Increasingly, the tinder is being laid for conflagrations that seem unreal, unthinkable. Right up until the old question, why didn’t we see it coming?

Claudia is journalist-in-residence with the Foundation for Defense of Democracies, and heads its Investigative Reporting Project. She blogs at The Rosett Report. [2]

Our “reporters” just don’t want to dig into the largely untold story of the ongoing, mostly secret, negotiations between the Obama administration and the Iranian regime over the fate of several Americans held in Iran. And yet, if the Iran-Contra story is a reliable guide, it is altogether possible that hostage negotiations are at the heart of the “relationship” that Obama is trying to forge with the mullahs.

I was the “secret back channel to Iran” for a few months in 1985.  That channel was originally arranged by the Saudis, who arranged for the Israelis to meet Manouchehr Ghorbanifar, who in turn arranged for the Israelis and the Americans (both me and a retired CIA official) to meet high-ranking Iranians. The conversations covered several subjects, but the “hook” that catalyzed the meetings was the fact that Iran, and its creature Hezbollah, held several American hostages, the most notable of whom was William Buckley, the CIA station chief in Beirut.

The Reagan administration was very concerned about Buckley’s fate (and there were others as well), and as the conversations proceeded, the hostage question became a central issue. As Ghorbanifar warned, we all became hostages to the hostages. Buckley died under torture, and in my time there was just one “success.” An American clergyman was released.

I was asked by a good reporter from the New York Times, Steve Engelberg (who now runs ProPublica), if he was missing anything about the hostage release. I couldn’t tell him about the secret negotiations, but I suggested that he ask “what did the Iranians get for it?” The point being that the Iranian regime didn’t go in for many acts of Christian charity. After the story of the arms deals with Iran became public, Engelberg told me that he should have paid closer attention.

Over the past few years, similar negotiations have been going on, and similar deals have been made. This was made quite clear by President Obama himself when he had his “historic conversation” with Iranian President Rouhani, during which Obama talked about three American hostages in Iran. [3] This is no secret; it was briefed to the press by the White House. Yet there has been no serious followup. The closest thing to coverage has been the story of the release of an Iranian scientist who had been jailed in California for sanctions-busting.  And that story was broken in the Israeli press, not the American media. [4]
If you read that story, you will see several things the American media refuse to investigate: the secret talks that have been going on for years; the hostage swaps that have been part of the “relationship”; the role of Oman as a key intermediary.

It’s a very important story, because as the Israeli account stresses, it is a key part of the buildup to the “agreement” reached in Geneva, and it is of a piece with that lopsided deal. In this matter, as in the nuclear deal, Iran got a lot and we are still asking for them to fulfill promises. If Obama asked Rouhani about the American hostages, and if the United States released an Iranian involved in criminal activity in the United States, you can be sure that Obama expected the release of American hostages, notably Robert Levinson, whom we have recently learned was working for the CIA.

One final teaser:  I am sworn to secrecy on the details, but if the reporters worked a bit on this stuff, they’d find a lot more where Levinson came from. And they might wonder if Obama, like Reagan, became hostage to the hostages.

Michael is the Freedom Scholar at the Foundation for Defense of Democracies. He is a highly regarded expert on Iran’s Green Movement and maintains close ties to opposition groups inside Iran. He blogs at Faster, Please. [5]

One of the most underreported stories of 2013 is the one simmering in the background, known mostly to the public through the horror-comic figure of Kim Jong-un: North Korea. RAND’s recent paper, “Preparing for the Possibility of a North Korean Collapse,” should be required reading for those interested in the subject.
It paints the picture of a mangy tiger stuck atop a pole, unable to climb further, yet incapable of going down. The problem for everyone — South Korea, Japan, the United States (and surprisingly even North Korea itself) — is what happens when the North Korean tiger eventually falls to the ground. Academics in Beijing having openly given the Kim Family Regime (KFR) ten years to survive, tops.

And when it collapses an imploding North Korea will at best unleash a World War Z-style horde of starving, desperate refugees on both China and South Korea, or at worst precipitate a regional nuclear war. The problem, we learn, really begins with Ronald Reagan. In 1990, following the collapse of the Soviet Union, Chinese and Russian subsidies to Pyongyang dropped dramatically. North Korea, already impoverished, went into a tailspin without those checks and sits with half the GDP of 15 years ago and unable to rise.

Shorn of its subsidies and terminally inefficient, as many as 3.5 million people starved in the early 1990s. Things got so bad that North Korea reluctantly allowed a black market to arise to avoid total starvation. The present result of that expedient was a curious society that is run at the lowest levels by illegal traders and producers bribing apparatchiks to look away while at the highest levels a nomenklatura labors in is fantasy world on starvation wages made bearable only by a direct provision of state housing, food, and commodities.
Everything that works in North Korea is illegal, and the black market created a permanent threat to the Kim Family Regime since the money is mostly in the black market. From time to time the regime devalues the currency, replacing the existing bills in circulation by revaluing them one for a hundred in order to destroy the cash of the private sector, which has countered by dealing in foreign currency, effectively destroying the Kim Family Regime scrip.

Today the average North Korean is almost 20 times poorer than his South Korean counterpart and sits, except in Pyongyang, mostly in darkness. When South Korea donated electricity to the North in a humanitarian gesture, the rickety electric grid shorted out under the unexpected juice and the experiment was terminated. People have forgotten what it is for the lights to work or to eat to their fill. Food reserves are nil as the country has not produced at self-sufficiency in decades.

Ten years, the Beijing academic predicted, ten years at the most. We learn from RAND that many politicians in South Korea dread the terminal diagnosis, for in the best-case collapse scenario, only 3 to 4 million starving people are expected to head straight for the DMZ, heedless of barbed wire and landmines in a mad scramble for food. China is bracing for an even bigger tide across the Yalu and has probably prepared plans to meet the horde at least 20 miles inside North Korea, to hold them on the Korean side of the border in order to prevent human locusts from ravaging the Chinese countryside.

The nightmare scenario, according to RAND, is that if North Korea does not collapse sweetly, it may be swept up in a civil war, with both the ROKs and the Chinese compelled to intervene, not only to feed the starving millions but to bring the vast stocks of chemical, nuclear and biological weapons which the KFR have developed over the years under control. In that collapse, such weapons would be the nearest thing to gold.
Nor is America without its concerns. RAND author Bruce Bennett points out that a collapsing North Korea might in extremis fire a ballistic missile at Japan, the U.S. or even — in a fit of incompetence of irrationality — at China. Failing that, the NOKORs still have thousands of artillery pieces overlooking Pyongyang, able to destroy where they could not build. Nobody knows how crazy the NOKORs are and nobody wants to find out.
South Korean politicians almost wish Ronald Reagan had never been born and that the Soviets were still around to feed the NOKORs. But since they’re not, rehabilitating North Korea, assuming the Chinese don’t take it over, will force the ROKs to double the income tax for at least 10 years. And in exchange, they will get a sullen nation literally stunted into midgets from malnutrition, where even the average intelligence level has been retarded by brain damage from hunger.

And that’s the best case. The worst case is so bad nobody wants to think about it.

It will surprise readers to learn that nobody worries more about that day than the North Korean elite themselves. When the collapse comes, they understand they will all be out of a job, no better qualified than janitors in South Korea. So they are determined not to sell themselves over cheaply. Both the ROKs and the Chinese know they must bribe the North Korean elite to come along quietly, for although Pyongyang cannot withstand either Seoul or Beijing, they can make a mess of things.

Ironically, the Kim Family Regime may be looking for a way out, because the natives are restless and while they have so far been able to put down challenges by killing any dissidents down to the grandchildren, they cannot keep it up forever. Kim Jong-Un must be looking for a way to survive but cannot see his way to any neat transition any more than Seoul can.

Everyone is trapped in the Communist hell that was constructed by Kim Il-sung and there is no way out. That’s the story that lies underneath the veneer of the grotesque soap opera in Pyongyang, the one we laugh at but don’t understand. The least reported story of the year.

Imagine then, if you will, Dennis Rodman, not as a court clown, but as the unintentional bearer of a message in a bottle, qualified precisely because of the one thing he surely is not: a member of the secret or diplomatic service of the West. What does the note in the bottle say: “Help me? Help me?”

But how, fat boy? How?

Richard has been a software developer for nearly 15 years. Before that, he worked in forestry, assisted in the negotiations between Muslim rebels in the southern Philippines and the Cabinet, organized tribespeople in the Philippines and played a role in the anti-Marcos movement. He blogs at The Belmont Club. [6]

China just made the first soft landing on the moon in four decades, the first in four decades. That drew a yawn from the American media: after all, we did it when the Boomers were in junior high school. It wasn’t exactly a Sputnik moment like 1957, when the Russian leap into space sent America’s military-industrial establishment into overdrive. But China’s technological capacity is reaching critical mass. In a few years we will see the old China of smokestacks and cheap labor fade into the past and a new high-tech China emerge, ready to compete with the West. There’s no single technological feat that defines this development: China doesn’t need to innovate, only emulate. But the combined effect of a whole array of technological improvements adds up to a daunting challenge to the West.

The Plenum of the Chinese Communist Party in November launched a set of reforms that formalize trends already underway. The change is as drastic as in 1978, when Deng Xiaoping reversed Mao’s peasant-based economic policy and launched the smokestack-and-export economy that has carried Chinese growth so far. Household income in China has grown by 16 times – that’s 1,600% — since 1987, the greatest advance of living standards in history. It has turned a peasant population into urbanites with vastly superior education, health, and expectations.

The Western media focuses on China’s failures, for example the vastly-overblown problem of ghost cities. China is moving 600 million people from the countryside to cities in the space of 25 years, the largest migration in history, the equivalent of Europe from the Urals to the Atlantic. That means building the equivalent of every European city from Cork to Yekaterinburg. There will be a few slipups in a project so massive. But the overall plan is succeeding.

Americans don’t like the idea that a dictatorship might overtake a democracy. I don’t like it either, but a well-run dictatorship can trump a badly run democracy. The media has been so busy feeding our self-love that it has ignored the year’s biggest story.

Here are a few highlights:

· China’s shore-to-ship missiles can sink a U.S. aircraft carrier 200 miles or more from its shores (its missiles reach space and go straight down, and our countermeasures aren’t designed for that sort of threat)
· China will have the most industrial robots of any country by 2014

· Tianhe-2 is the world’s fastest supercomputer

· Beijing Genomics Institute has the world’s largest DNA sequencing capacity

· China had 505 million Internet users in 2011 and expects E-commerce to double between 2012 and 2015
· “Starting from almost no live surveillance capability 10 years ago, today the PLA has likely equaled the US’s ability to observe targets from space for some real-time operations.” (World Security Institute)

China already spends nearly 2% of GDP on R&D, about equal to the European Community. Some of that is wasted but a lot of it isn’t. China now mints twice as many hard-science PhDs as the U.S. Many of them are mediocre products of diploma mills, but a lot of them are as good as anyone out there. In computation, missile technology, satellites and Internet technology, China has reached world class. In other fields — high-performance jet engines and chip design, for example — it lags behind. But China managed to persuade Turkey, a NATO member, to buy its anti-missile system rather than a Western competitor’s by quoting a lower price and offering to teach the Turks how to manufacture it themselves.

After China imposed an Air Identification Zone overlapping its neighbor’s airspace, American commentators became concerned about China flexing its military muscle. China’s military stance and its economic policy are inseparable and have been for years. As Richard Bitzinger wrote in 2008, “The Chinese have aggressively pursued a dual-use R&T strategy that stresses the development of advanced civilian technologies – particularly in the areas of electronics and information technologies, aviation, space launch vehicles, satellites, and advanced manufacturing – that can be spun-off to defense products and production. Over the past decade, Beijing has worked hard both to encourage further domestic development and growth in these sectors and to expand linkages and collaboration between China’s MIC and civilian high-technology sectors – and it appears to be paying dividends.”

Reuters reported on Sept. 16, 2012, “Beijing presses ahead with an ambitious program to privatize most of a vast arms industry employing more than a million workers at more than 1,000 state-owned enterprises. The long term goal is to transform some of the leading contractors, such as China State Shipbuilding Corporation (CSSC), Aviation Industry Corporation of China (AVIC) and China Aerospace Science and Industry Corporation into homegrown versions of American giants Lockheed Martin and Northrop Grumman or Britain’s BAE Systems.”

Here are a couple of examples of what tech will do to the Chinese economy.

By 2020, every city in China will have free public WiFi. Instead of putting fiber optic cable into every home, China will build hubs serving local areas that beam high-quality Internet television into homes, at a fraction of the cost. A peasant will be able to get off the bus in any Chinese city, buy a WiFi handset for $50, and do her shopping, banking, and communications on the web. China will leapfrog the Wal-Mart and Bank of America model of brick-and-mortar growth and go straight to the Amazon model.

China’s high-speed rail network has produced a jump in productivity as businesses reach customers, goods reach markets, and labor meets employment in record time. China now plans to build high-speed rail through Southeast Asia, and eventually all the way to Istanbul — along with broadband Internet and pipelines. It’s the biggest infrastructure buildout in world history and it will transform the Asian economy. Southeast Asian countries already are making plans to turn their peasants into high-value-added farmers sending fresh goods by 200-mile-an-hour train to the Chinese market.

This is history’s great exemplar of creative destruction. China will destroy the smokestack economy that Deng built just as Deng destroyed the peasant-centered system that Mao built. It is creating a new tech-driven economy.

A lot of this is growing beneath the surface, like mushrooms. Chinese stocks have underperformed the indices of the industrial nations. One reason for this is that the companies on the destruction side of the ledger are all listed, and investors can’t yet buy the companies on the creation side. For example, Bloomberg reported Dec. 20: “Chinese stocks traded in New York fell the most in a week, led by telecommunications operators, after Alibaba Group Holding Ltd. said it’s seeking to offer phone services. The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. dropped 1.5 percent to 103.94 yesterday. China Unicom (Hong Kong) Ltd., the nation’s second-biggest wireless carrier, retreated the most since October and China Mobile Ltd., the biggest operator, slumped.”

Alibaba is China’s Google, Amazon and UPS rolled into one, and you can’t buy it – yet. (The main reason that Yahoo’s stock price doubled in the past year is that it owns a chunk of Alibaba). Alibaba will take business away from the established mobile carriers, but that’s not yet reflected in equity prices. The two most dynamic Chinese companies — Alibaba and the telecommunications equipment giant Huawei — aren’t tradable. Yet the build-out of national broadband and the explosion of e-commerce are the cutting edge of the new Chinese economy. Linking mobile phone service to e-commerce is a disruptive idea that should contribute strongly to economic growth through the expansion of domestic demand. But it’s hard to capitalize this growth on the equity market, at least for the time being. Hard, but not impossible: the China tech sector returned twice as much as the NASDAQ 100 during the past six months.

The Chinese government has a two-fold problem: starving the unproductive state-operated sector of the economy of capital and empowering competent private owners. In the broadest terms, it seems that the government wants to keep credit tight, but open the sluicegate for IPOs. Outside the traded market, some trillions of dollars of shadow market capitalization are incubating. Investors may be raising cash by selling the traded market in order to have dry powder for IPOs during 2014.

Tight credit and an open IPO market is a viable approach. In a tech-driven emerging economy, there are many entrants and many failures. Creative destruction calls for equity rather than debt financing (one winner can compensate for ten losers in a stock portfolio but not in a bank loan book). We expect a boom in Chinese stocks, but not necessarily in the stocks now available for purchase. We’ve argued all along (per our “Two China’s” thesis) that aggregate equity indices are an entirely misleading measure of China’s direction, and that the burgeoning tech sector is the place to focus.

China’s tight money policy is exactly correct: it starves the tumors in the SOE sector and sets the stage for a broad reorganization of the economy. As shadow market capitalization turns into traded market cap, entrepreneurs will have the capacity to shift productive assets away from sclerotic management into competent hands.

What should America do about it? Acting tough doesn’t help. We have to be tough. There’s only one thing that matters, and that is doing what we used to do best: innovate. The economic environment — budgetary, fiscal and regulatory — is more hostile to innovation than at any time since World War II. We need more defense spending, not less, but spending geared to the scientific cutting edge — the kind of focus that gave us the moon shot and the victory over Russia in the Cold War. China is not good at innovation. If our rate of innovation proves to China that its system cannot keep up with us, that system eventually will change. Complaining about China’s system while we shoot ourselves in the foot, though, makes us an object of contempt. One senior statesman of an Asian country dismissed Barack Obama as “your NGO president.” As long as we have leaders who run the U.S. government as if it were a non-governmental organization at the UN, we will get nowhere.

We’ve been in tough places before, but we’ve never had this kind of competitor on our heels. It ought to be a Sputnik moment. And the press should start reporting it.

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