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After a decade of gloom, the sun seems at last to be shining brightly on Japan. Its economy has now grown at a respectable pace for four years and the clouds of deflation seem finally to have broken. International factors were the proximate cause of this improvement, but below the surface fundamental changes have also started to occur in the structure of the domestic economy. These changes are largely benign in nature, though they do raise questions about Japan's fiscal health, its ability to fund the twin US deficits, and the trajectory of its relations with its neighbors. The purpose of this speech is to explain how these dynamices will unfold and what they mean for Japan, East Asia, and the United States.

Robert Madsen is a Senior Fellow at MIT's Center for International Studies. He also advises such private equity firms as Unison Capital and the Robert M. Bass Group and was Asia Strategist at Soros Private Funds Management, which undertook leveraged buyouts and corporate restructuring in Europe and East Asia. From time to time he consults for several government agencies, including in the past year an economics ministry, a foreign ministry, an intelligence agency, and a central bank. Madsen graduated summa cum laude and Phi Beta Kappa from Harvard University's Department of East Asian Languages and Civilizations and then attended Oxford University as a Rhodes Scholar, where he earned a Masters Degree, with Distinction, and a Doctorate in International Relations. He additionally holds a J.D., with Distinction, from Stanford Law School and is a member of the California State Bar.

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Robert Madsen Senior Fellow Speaker Center for International Studies, Massachusetts Institute of Technology
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For over ten years, two research groups in Brazil have been publishing conflicting reports on the status of emissions from hydroelectic power plants. While both agree that dams do produce greenhouse gases, the two teams dispute one another's methods and the magnitude of results. Because emissions from dams are significantly more complicated than emissions from thermal power plants, the issue has become so specialized as to be ignored by many policy planners.

In The Dam Debate and its Discontents, we evaluate the divergent arguments on methods. While at first glance the issue seems far from being resolved, we find that the pieces are in place for a resolution. Specifically, we suggest international oversight to help converge research results and boost confidence in new findings.

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Philip Coyle is a recognized expert on U.S. and worldwide military research, development and testing, on operational military matters, and on national security policy and defense spending, including defense acquisition reform and defense procurement. He also has extensive background in missile defense, in military space systems, and in high-technology weapons, such as high power lasers and other directed-energy weapons.

From Sept. 29, 1994, through Jan. 20 2001, Coyle was assistant secretary of defense and director of Operational Test and Evaluation, in the Department of Defense, and he is the longest serving director in the 20-year history of the office. In this capacity, he was the principal advisor to the secretary of defense on test and evaluation at DoD.

Appointed by President George W. Bush to serve on the 2005 Defense Base Realignment and Closure Commission, Coyle is currently serving on that commission, and was nominated for this position by House Minority Leader Nancy Pelosi. Coyle has 40 years experience in research, development, and testing matters. From 1959 to 1979, and again from 1981 to 1993, he worked at the Lawrence Livermore National Laboratory in Livermore, California. From 1987 to 1993, he served as laboratory associate director and deputy to the laboratory director. In recognition of his 33 years service to the laboratory and to the University of California, the university named him laboratory associate director emeritus.

Coyle graduated from Dartmouth College with an MS in mechanical engineering (1957) and a BA (1956). His wife, Dr. Martha Krebs, was assistant secretary of energy and director of the office of science from 1993 to 2000, and was the founding director of the new California NanoSystems Institute, a research partnership between UCLA and U.C. Santa Barbara. They have four grown children and four grandchildren, and live in Los Angeles.

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Philip Coyle Former Assistant Secretary of Defense for Operational Tests and Evaluation Speaker
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Visting Professor David Kang comments in the Christian Science Monitor on the ongoing spat between Korea and Japan over disputed isles, just as the United States hopes to renew progress on the North Korean nuclear problem.

President Bush could hardly have picked a more critical time to host China's President Hu Jintao at the White House.

A flare-up in troubled waters between South Korea and Japan, faltering trilateral cooperation among the US, Japan, and South Korea, and the failure to persuade North Korea to come close to terms on its nuclear-weapons program all make China a pivotal player -- while raising questions about US strength and influence in the region.

"The United States can play a more profound role in stabilizing the region," says Moon Jung In, international relations professor at Yonsei University in Seoul. "China may be happy to see what's happening."

While the United States tries to persuade China both to reduce its yawning trade surplus with the US and get North Korea to return to six-party talks, a potentially explosive quarrel between South Korea and Japan is frustrating Washington's efforts to join its two northeast Asian allies in common cause on the nuclear issue.

"High-ranking officials of the South Korean government have been talking about Korean-US cooperation rather than trilateral cooperation," says Kim Sung Han, director of North American studies at the Institute of Foreign Affairs and National Security, affiliated with South Korea's Foreign Ministry.

"Trilateral cooperation is vital to resolving the North Korean problem," he says.

The tendency in Korea is to blame Japan for somehow wishing to assert its own role in the region, reminding both Koreans and Chinese of the history of Japanese imperialism in Asia, culminating in the conquest of much of the Chinese mainland and 35 years of colonial rule over the Korean peninsula.

Who lays claim to islands?

Memories of that history have leaped into the headlines as a result of a stand-off midway between Korea and Japan in what Koreans call the East Sea and the much of the rest of the world knows as the Sea of Japan.

The focal point is a cluster of 34 islets, basically uninhabitable, that both Korea and Japan claim as part of their national territory.

Korea calls the cluster "Dokdo," or "Solitary Island," while Japan calls it "Takeshima," or "Bamboo Island," and Japan also wants to give Japanese names to undersea rock formations surrounding the islands, basically volcanic rock thrust up from the sea.

The issue, simmering for years, reached a boiling point this week when Japan said it was sending two survey vessels to chart the waters around the islands, held by a garrison of Korean troops seen on Korean television manning anti-aircraft weapons and machine-guns as if to stave off enemy invasion.

Eager to prove his fearlessness in the face of the Japanese, South Korea's President Roh Moo-Hyun has ordered 18 patrol boats to form a blockade against the survey vessels.

"Some people are claiming territorial rights to former colonies that were once acquired through war and aggression," he told Christian leaders at a breakfast Thursday. Not just "good will," he said, as if preparing for war, but "wisdom and courage" were needed in such a crisis.

Shinzo Abe, Japanese government spokes-man, says the vessels are going there in defiance of a pledge of "stern action" by Korea's foreign minister, Ban Ki Moon, against any "provocation" by Japan.

Mr. Kim, of the Institute of Foreign Affairs and National Security, accuses Mr. Abe, an outspoken conservative who aspires to succeed Junichiro Koizumi as Japan's prime minister, of playing to the right-wing in refusing to address Korean sensitivities.

"Shinzo Abe has his own agenda," says Kim. "The Japanese are trying to increase their own role in the area of security. This is sending conflicting messages."

The sense here is that the US could rein in Japan but is reluctant to do so while cooperating closely with Japan on North Korea.

"The United States has been rather silent on these issues," says Kim Tae Hwan, research professor at Yonsei University. "Koreans have been very uncomfortable with the Japanese posture of aligning with the United States. Japan seems to disregard expectations from Korea."

While playing into the hands of China, the standoff over the islands also comes at an opportune moment in terms of South Korea's policy of rapprochement with North Korea.

Ministerial talks between North and South

South Korea's unification minister, Lee Jong Seok, goes to Pyongyang Friday for the first ministerial-level talks between North and South Korea in five months. He and his North Korean opposite number will have no trouble agreeing on the need to fend off what North Korea has already denounced as a "shameless" attempt at expansion.

It's a "very clear win-win" for both North and South Korea, says David Kang, a professor at Stanford University's Shorenstein Asia-Pacific Research Center. In the process, he says, the ruckus at sea "makes it look a lot as if Korea and China are cooperating more since they're both upset by Japan's moves."

Mr. Kang sees the standoff as "a distraction" that probably will not have "a fundamental effect on North-South Korean relations," but adds to the sense that six-party talks on North Korea's nuclear weapons are not likely to go anywhere.

"The US doesn't expect to make any progress on six-party talks," says Kang. "Nobody has a face-saving way out."

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Despite chatter about "the Chinese threat" during Chinese President Hu Jintao's recent visit to Washington, neither China nor the United States seeks to confront the issues plaguing their complex relationship. Pantech fellow and San Jose Mercury News foreign affairs columnist Daniel Sneider considers the muscular side of "China's peaceful rise."

The visit of China's President Hu Jintao to the United States this week is yet another opportunity for chatter about the "Chinese threat.'' In the lead-up to his arrival, we have heard rising voices from Congress and from the administration on everything from China's currency manipulation and piracy of intellectual property to its military buildup.

Do not be deceived. There is no real appetite in either Washington or Beijing for confrontation over any of these issues, much less a serious exploration of the challenge that China presents to American global leadership.

Neither government can afford an escalation of tensions. Economically, we are too intertwined. Strip away the packaging on the $200 billion trade deficit with China and you will find American companies running global assembly lines that begin in Ohio, pass through Malaysia, and end up in southern China.

Strategically, the United States is painfully dependent on China to try to cope with the greatest security challenge in northeast Asia: North Korea's nuclear program.

Beijing is wedded to its doctrine of "China's peaceful rise.'' First formulated three years ago, it aims to keep things calm with the United States and most of its neighbors, buying time to manage the tightrope act of continuing high growth while preserving domestic stability.

In any case, Washington is too bogged down in the Middle East to do more than bark now and then about China.

"At the strategic level, the United States is really focused like a laser on the Middle East,'' and the Chinese like it that way, said Asian security expert Kurt Campbell. "They appreciate the fact that with the U.S. attention focused elsewhere, it allows China to play a larger role in Asia as a whole,'' he told a gathering last week at the Center for Strategic and International Studies in Washington.

Typically, while Washington is focused on Hu's visit, the Chinese defense minister is in the midst of an unprecedented Asian tour that will take him to North and South Korea and to Singapore, Malaysia and Vietnam. China's prime minister has just finished a swing through Australia, New Zealand, Fiji and Cambodia.

In my own travels through Asia recently, from South Korea and Japan in the northeast down to Singapore, Vietnam and Hong Kong in Southeast Asia, I found a stunning growth in China's influence. The question of how to deal with China's rise is high on every agenda.

Everywhere people are looking over their shoulder, worried about China's burgeoning strength and presence. They are equally fearful that the United States is abandoning the field to China. But they also don't want to choose between these two powers.

That is even true in Japan, where the popular media and politicians are full of talk about the Chinese threat. But look a little closer and you will also find a growing counter-movement, particularly in elite policy circles, warning against becoming separated from the rest of Asia. The battle for succession to Prime Minister Junichiro Koizumi, who is stepping down in the fall, is now being shaped around this issue.

The China-Japan rivalry tends to reveal the more muscular side of China's "peaceful rise,'' one that Americans rarely glimpse. In Vietnam, senior foreign policy officials recounted what happened when the Japanese came courting to gain Vietnam's backing for a resolution to give them permanent membership in the U.N. Security Council, a key goal of Japan's foreign policy. Japan is Vietnam's largest aid donor and a major source of foreign investment.

China and Vietnam have a long and stormy history as neighbors, including wars that go back centuries and -- more recently -- a brief invasion in 1979 that ended in defeat for the Chinese. Relations these days are relatively good, however, fed by growing trade, heavily in China's favor.

Hu, in his role as leader of the Chinese Communist Party, sent a special envoy to talk to the leadership of the ruling Vietnamese Communist Party. Sometimes, a Vietnamese official told me, the Chinese can be very indirect. Not this time. The message was simple: "Don't do it!'' The ``or else'' was left unspoken.

The Vietnamese compromised, supporting Japan's membership but refusing to co-sponsor the resolution. China was not pleased, but apparently accepted it.

For the Vietnamese, a senior official explained, they must engage in a "lot of fine balancing.'' Vietnam "can't stop engaging China'' but wants to make sure China becomes a "predictable'' power.

In Washington, when the cloud of rhetoric clears, that formula pretty much sums up the reality of U.S.-China relations, too.

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Commentators across the political spectrum have suggested that a profoundly confrontational clash between western and traditional cultures is taking place. Are modernity & religiosity in fundamental conflict? Are western values - equated with modernity and secularism - incompatible with orthodoxy? Are traditions - based in religion and emphasizing the importance of established practices - antithetical to "progress"? Is the conflict so profound that it has become our new "cold war"? Join our panelists to explore one of the more disturbing challenges facing our world today.

Coit D. Blacker is director, Freeman Spogli Institute for International Studies and Olivier Nomellini Family University Fellow in Undergraduate Education. He also serves as co-chair for Stanford University's International Initiative. Professor Blacker is the author or editor of seven books and monographs, including Hostage to Revolution: Gorbachev and Soviet Security Policy, 1985-91 (1993); Reluctant Warriors: The United States, the Soviet Union and Arms Control (1987); and, with Gloria Duffy, International Arms Control: Issues and Agreements (1984). During the first Clinton administration, Professor Blacker served as Special Assistant to the President for National Security Affairs and Senior Director for Russian, Ukrainian and Eurasian Affairs at the National Security Council. Professor Blacker is a graduate of Occidental College (A.B., Political Science) and the Fletcher School of Law and Diplomacy (M.A., M.A.L.D., Ph.D.).

Amir Eshel is chair and associate professor of German studies and comparative literature, and director of the European Forum at FSI. His research focuses on German culture, comparative literature, and German-Jewish history and culture from the Enlightenment to the present. He is currently working on a book about the poetic figuration of historical narratives, and he is also involved in an interdisciplinary project on urban space in Berlin. At Stanford, he has taught courses on German Jewish literature, literature of the Holocaust, modern German poetry and the contemporary German novel. Before joining the Stanford faculty in 1998 as an assistant professor of German studies, he taught at the Universitaet Hamburg (Germany). He is a member of the American Comparative Literature Association, the Association of Jewish studies, the German Studies Association and the Modern Language Association. In 2002 he received the Award for Distinguished Teaching, from Stanford University's dean of the School of Humanities and Sciences. He received an MA and PhD in German literature, both from the Universitat Hamburg. He speaks Hebrew, German and English, and has a good knowledge of Yiddish and French.

Robert Gregg is the Teresa Hihn Moore Professor in Religious Studies (Emeritus), and serves as Director of the Abbasi Program in Islamic Studies. His scholarship includes a book on philosophies concerning death and grieving in ancient Greek, Roman, and Christian communities; two volumes concerning struggles over orthodoxy and heresy in 4th century Christianity that are focused on the "arch-heretic" Arius and reactions to his teachings; a translation of Athanasius' Greek Life of Saint Antony - the famous account of his activities as one of the first desert monks; and a study of 250 Greek, Hebrew/Aramaic, and Latin inscriptions from the Golan that allow glimpses of interactions between Jews, "pagans," and Christians in the Golan Heights and Syria, 1st-7th centuries CE. Professor Gregg's current research treats several "sacred stories" which appear both in the Bible and in the Qur'an-and examines interpretations of these scripture narratives by Jewish, Christian, and Muslim writers and graphic artists in each of the religions' early centuries.

Paula M. L. Moya is Associate Professor and Vice-Chair of English at Stanford University, where she recently completed a term as Director of the Undergraduate Program of the Center for Comparative Studies in Race and Ethnicity (CCSRE), and Chair of the Comparative Studies in Race and Ethnicity (CSRE) major. Her publications include essays on feminist theory, multicultural pedagogy, and Latina/o and Chicana/o literature and identity. She is the author of Learning from Experience: Minority Identities, Multicultural Struggles (University of California Press, 2002) and coeditor of Reclaiming Identity: Realist Theory and the Predicament of Postmodernism (University of California Press, 2000) and Identity Politics Reconsidered (Palgrave in 2006.) For the past five years, she has been actively involved as a founding organizer and coordinating team member of The Future of Minority Studies research project (FMS), an inter-institutional, interdisciplinary, and multigenerational research project facilitating focused and productive discussions about the democratizing role of minority identity and participation in a multicultural society. For more information, visit www.fmsproject.cornell.edu.

Raena D. Saddler grew up in St. Louis and attended high school at Colorado Academy in Denver. She is currently a Junior double-majoring in Religious Studies (with a focus on Christianity) and Psychology on the "Health and Development" specialization track (focusing both on adolescent development and clinical psychology). She is also minoring in International Relations with a focus on aid to lesser developed countries--Africa in particular. Raena is planning to spend next fall semester in Rome and come back to work on an honors paper for Religious Studies. She enjoys traveling abroad, and spends a few weeks every summer doing aid-work in Mozambique, Africa. Since coming to Stanford, Raena has been volunteering for three years at Menlo Park Presbyterian Church (MPPC) working with junior high and high school girls as a youth leader and small group leader. In addition to that, she is the head coach for the Menlo-Atherton High School JV women's lacrosse team. Outside of coaching she loves to be around kids and babysits for several families in the area. When she isn't going to class, babysitting, or coaching, she spends the rest of her time with her closest friends and boyfriend of two years.She is very passionate about youth leadership and social justice, and hopes to work for an international aid organization in the future.


Jointly sponsored by the Stanford International Initiative and the Undergraduate Admissions Office.

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Matthew Rojansky is a JD candidate at Stanford Law School and a CISAC predoctoral fellow. His research focuses on international law and security, counter-terrorism and counter-proliferation. He is currently conducting a study of UN Security Council legitimacy in the global counter-terrorism context, and developing a theory of network-based attribution for internationally wrongful acts. He has worked for the U.S. Department of Justice's Office of Special Investigations, the National Democratic Institute for International Affairs, the Israel Ministry of Foreign Affairs, and private law firms, where he has worked on international trade and IP litigation.

He received an AB in Soviet history from Harvard University. Next year, he will serve as a clerk for the United States Court of Appeals for the Armed Forces.

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Senator John Edwards offered key findings from the task force on Russia he co-chaired with Jack Kemp before a full audience at FSI on April 26, 2006. The task force report, titled "Russia's Wrong Direction: What the United States Can and Should Do," was sponsored by the Council on Foreign Relations, and examined Russia's dramatic move away from democracy and implications for progress on pressing global issues, such as Iran's nuclear ambitions, terrorism, and global health. The report was drafted by many of America's preeminent Russia scholars and policy practitioners, including Coit D. Blacker, director of FSI, and Michael A. McFaul, director of CDDRL.
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Senator John Edwards
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Kent Eaton is Associate Professor at the Naval Postgraduate School in Monterey, California. A political scientist by training, Dr. Eaton is interested in political institutions and comparative political economy. He is the author of Politicians and Economic Reform in New Democracies and Politics beyond the Capital: The Design of Subnational Institutions in South America. Currently Dr. Eaton is conducting research on police reform and on the relationship between decentralization and security in Latin America.

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Kent Eaton Associate Professor Speaker Naval Postgraduate School in Monterey
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The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

It will also reverberate here in the United States where policy-makers, too, are trying to wean the nation from costly imports, jittery markets and the foreign spigot. But we must learn the right lessons. Brazil's success came not from treating oil as an addiction but by producing even more of the stuff and by becoming even more dependent on world markets

Here in the United States, most attention to Brazil's fuel supply has focused on the country's aggressive program to replace oil with ethanol that is made by fermenting homegrown sugar. American newspapers are filled with stories about Brazil's famous "flex fuel" vehicles that make it easy to switch between ethanol and conventional gasoline.

Guided partly by Brazil's apparent success, American policy-makers are crafting new mandates for ethanol, and flex fuel vehicles are now taking shape. We have the impression that ethanol is king.

In reality, ethanol is a minor player in Brazilian energy supply. It accounts for less than one-tenth of all the country's energy liquids.

The real source of Brazil's self-sufficiency is the country's extraordinary success in producing more oil. After the 1970s oil shocks, when Brazil's fuel import bill soared, the government pushed Petrobras, the state-controlled oil company, to look asunder for new energy sources.

Petrobras delivered, especially at home, where the firm pioneered the technologies that make it possible to extract oil locked in sediments under the seabed in extremely deep water. In the middle 1970s Brazil struggled to produce just 180,000 barrels of oil per day while importing four times that amount. Today it produces about 2 million and is self-sufficient. Indeed, the current milestone of self-sufficiency arrives with the inauguration of Brazil's newest deep water platform, the "P50." When P50 reaches its full output later this year, that one platform will deliver more liquid to Brazil than the country's entire ethanol program.

Brazil's self-sufficiency offers three lessons for U.S. energy policy:

-First is that ethanol, with current technology, will do little to sever our dependence on imported energy. Today's approach involves growing a crop - sugar in Brazil, corn in the United States - and then fermenting the fruits to yield fuel. Sugar plants in Brazil's climate are a lot more efficient at converting sunlight to biomass than is corn in the Midwest, but U.S. policy nonetheless favors corn (and imposes tariffs on imported sugar) because the program is really a scheme to deliver heartland votes rather than a commercially viable fuel.

Yet, even with Brazil's favorable climate and sugar's inviting biology, ethanol is already reaching the limit. That's because the land and other resources devoted to ethanol can be put to other uses such as growing food and cash crops.

Indeed, today the Brazilian government is actually reducing the share of ethanol that must be blended into gasoline because sugar growers prefer to make even more money by selling their product as sugar on the world market rather than fermenting it into alcohol.

New technologies - notably "cellulosic biomass"- could breathe fresh life into ethanol and replace still more oil. Cellulosic biomass is intriguing because it cuts costs by allowing the entire plant - the cellulose in the stalks, as well as the prized grain or sugar - to be fermented into fuel.

Advocates for this technology, including President Bush in his State of the Union address, have wrongly confused the sexy promise of this new-fangled approach to making ethanol with the practical realities of fuel markets. Schemes to produce cellulosic biomass, today, work only under special circumstances and nobody has delivered the fuel at the industrial scale that would be required for the technology to become commercially viable.

-Second, we should learn that, for now, the greatest force to loosen the world's oil markets lies with oil itself. We can use oil more efficiently, as would occur with a gasoline tax or wise fuel economy standards. But we can also find ways to produce more of the stuff - as Brazil did with Petrobras.

The problem for U.S. policy-makers is that the richest veins for new production lie mainly outside the United States and beyond our direct control.

Indeed, the Brazilian government made Petrobras more efficient by putting the firm partly beyond its control as well. When the government sold part of the company on international stock exchanges, it accepted Western accounting procedures and other strictures that have given Petrobras the autonomy and accountability to its shareholders that, in turn, helped make it an efficient company.

We have a stake in seeing other countries do the same - from Algeria to Mexico to Iran and even Russia. But we must remember that Brazil did this on its own, in response to internal pressures for reform, with little leverage from foreign governments.

-Third, we should learn from Brazil not to confuse the goal of greater self-sufficiency with the illusion of independence. Even as Brazil has become self-sufficient it has also, ironically, become more dependent on world markets. That's because the Brazilian government has wisely relaxed price controls so that the prices of fuels within the country are set to the world market. Thus Brazilians see real world prices when they fill up at the pump, and the decisions about which cars to buy and how much to drive reflect real costs and benefits of the fuel they consume. That is why, even as the country becomes self-sufficient, Brazilians are working ever harder to be more frugal with oil - because the price at the pump is high and rising.

Dependence on oil is a liability that must be managed. But it is not an addiction.

Efficiency, sober policies toward modest alternatives such as ethanol, and more production - all tools of the manager, not the addict - are required. Brazil helps show the way, but only if we learn the right lessons.

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