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Rosamond L. Naylor
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Energy self-sufficiency at home can mean widespread starvation abroad, FSE director Rosamond L. Naylor and deputy director Walter P. Falcon write in a May 18 San Francisco Chronicle op-ed.

Crude oil prices hit $120 a barrel this month, translating into gas pump prices above $4 a gallon in parts of the United States. As a result, the rallying cry of energy self-sufficiency is gaining strength, reinforcing the U.S. policy of promoting renewable fuels, particularly corn-based ethanol, to reduce dependence on imported oil.

But a different rallying cry—food self-sufficiency—is becoming louder in many developing countries where rice, wheat and other staples are in such short supply that food riots have erupted. China, India, Argentina and several other countries have raised export restrictions on key crops to ensure food supplies for their consumers. That move has further increased world prices.

It is important to remember two key lessons from similar chaos in world food markets in 1973-74. First, attempts to gain domestic price stability create global price instability. And second, once policies are established to protect food markets, they are not easily dismantled. It took two decades for rice trade to expand in Asia, and even then, it remained limited.

The United States must take a lead in confronting the world food crisis. But to do so will require a genuine commitment to improving the well-being of people around the world—and recognizing that energy self-sufficiency at home can mean widespread starvation abroad.

In its starkest form, the global food crisis is about rising agricultural commodity prices that place hundreds of millions of poor people at greater risk of malnutrition. Most of the 800 million people globally who survive on a dollar a day or less live in rural areas and work on farms.

The two- to fourfold jump in prices during the past 18 months for internationally traded commodities, such as rice, wheat, corn, soy and vegetable oils, has resulted in fewer and smaller meals for the poor. The rise in the number of malnourished people globally is only beginning to be tallied.

High food prices have been associated with high petroleum prices. The cost of crop production is up, the value of the dollar is down, and biofuels are an attractive alternative to fossil fuels for transportation. Diverting one-fifth of the U.S. corn crop to corn-ethanol production and setting a renewable fuels mandate of 20 percent of U.S. motor fuel consumption by 2022— a fourfold increase in 15 years—has driven up prices for corn and substitute crops, especially soybeans.

Demand for corn, soy and other livestock feeds already had been rising due to increased meat consumption by China and other emerging economies. Add some major weather, pest and disease shocks, and the market for staple agricultural commodities tightened dramatically in 2006 and 2007.

Moreover, a surge in speculative activity has exacerbated market volatility.

How should the three presidential candidates, in particular, address this crisis?

For starters, the United States should retreat from its heavy promotion of corn-based ethanol and allow the markets to settle. Although the 2008 U.S. Farm Bill, passed by the House and Senate last week, includes a reduction in the ethanol blending credit from 51 cents to 45 cents per gallon, the subsidy remains high and is offset by other biofuels production incentives.

President Bush plans to veto the bill, but both the House and the Senate passed it with more than the two-thirds majority needed to overturn a veto. The presidential candidates, Sens. John McCain, Barack Obama and Hillary Rodham Clinton, were all absent for the vote.

The bill increases the Food Stamp Program by $10 billion to help poor Americans buy food at higher prices, but there are no measures that will assure developing countries and international markets that global food supplies will be adequate and that prices will come down. Congress needs to endorse the World Food Program's new strategy of providing food aid in the form of cash instead of surplus grain shipments, a strategy that would allow food-deficit countries to purchase their calories regionally and thereby promote agriculture closer to home.

It also would be wise for the U.S. Agency for International Development to expand, not abolish, investments in agricultural research for low-income countries.

The world can produce plenty of crops at reasonable prices for food and feed, if appropriate agricultural investments are made. But it cannot produce enough crops for food, feed and fuel at prices affordable to half of the world's population.

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A multitude of corporate governance reforms were enacted in Japan from 1997-2005. As a result of one of those reforms, beginning in 2003 Japanese companies had the option of choosing a committee system of corporate governance, one partially modeled on the American system, rather than the auditor system.

On May 14, SPRIE Researcher Robert Eberhart spoke at a SPRIE seminar about his current research assessing the effect of the Japanese reforms and the question of whether the corporate system in Japan will ultimately be converging with the Western model.

We compared two groups of committee system and auditor system companies and found that the firms using committee system governance, the so-called American model, were significantly valued higher as measured by Tobin's q--thirty- and forty-percent higher.

In researching the performance of Japanese companies under the committee system, Eberhart's current study has found significantly (30%-40%) higher Tobin's q scores for those companies following the committee system over those following the auditor system. This observation seems independent of other financial variables differentiating these companies. The research focused on 63 companies in the pharmacueuticals, electronics, and machine industries.

Tobin's q is the ratio of a firm's market cap to the replacement value of its assets. Since the change in Tobin's q was immediate, based on monthly data, this suggests a change in market evaluation, Eberhart noted, since the asset value would not have changed so quickly.

One possibility, Eberhart ventured, is that by opening themselves up to the committee system, management is indicating a confidence in the veracity of the firm's fiscal monitoring system, and the market is responding to that confidence.

Eberhart concluded by noting that these results are preliminary and further research is necessary to precisely determine the nature of these performance differences.

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Business Informatics

In today’s businesses information technology plays a central role. It is not only tightly knit into most enterprises’ core business processes but can also be a major source of innovation. For a considerable time the research in computer science has been concerned both with developing solutions that enable or facilitate particular business activities as well as with the provision of an infrastructure that is capable of providing the necessary data and computing capacity to these applications.

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CISAC faculty member John W. Lewis argues in the Boston Globe that the North korea diplomatic initiative launched by President Bush in October 2006 will come to naught if the administration fails to follow through on promises it made to encourage Pyongyang to destroy its nuclear weapons programs.

The diplomatic initiative launched by President Bush in the wake of North Korea's nuclear weapon test in October 2006 has made substantial progress in rolling back the nation's drive to become a nuclear power.

That success, however, will be for naught if the administration fails to follow through on promises it made to encourage the Democratic People's Republic of Korea to destroy its nuclear weapons programs. The United States must honor its commitments in order to begin normalizing relations with North Korea.

Unfortunately, a recent barrage of criticism against the administration's policy aims to derail this process. Even as Pyongyang has taken more than 80 percent of the required steps to disable its Yongbyon nuclear weapons facilities, the fulfillment of US obligations has stalled.

The critics who want to stymie all forward movement, are, for the most part, the same specialists who can take credit for jettisoning in 2003 the agreement with North Korea, known as the 1994 Agreed Framework, which had stopped its plutonium production for almost a decade. Only after the collapse of the Agreed Framework did the North Koreans process the fissile material needed to build and test nuclear weapons. Three years later, in 2006, the president adopted a more realistic policy that is now under attack.

Many of the policy's critics denounce a declaration of the North's nuclear programs that has not yet been finished and argue that we must have clarity about North Korea's role in the construction of a Syrian nuclear facility and its uranium enrichment path to nuclear weapons.

Whatever the role of Korea in the Syrian reactor project, that facility no longer exists. Israel destroyed it last September.

Last year, the United States downgraded from medium to low its confidence level that North Korea continues to pursue a uranium enrichment program. In October, Pyongyang allowed US inspectors into a missile factory, where it said that aluminum tubes suspected of being used in that program were being remade into missile parts. North Korea handed over aluminum samples that later showed traces of enriched uranium, but analysis was inconclusive.

The United States apparently has secured Pyongyang's agreement to pursue these types of "clarifying" activities. Moreover, China has agreed on the importance of a verification regime aimed at assuring a "complete and correct" declaration, and a key goal of the next round of talks would be to fashion that regime.

Recent developments are even more impressive. On May 8, the North Koreans passed to a US State Department official a trove of 18,822 pages of operating records for the Yongbyon 5MWe reactor and reprocessing plant, which date back to 1986. That is 18,822 pages more than we ever had before, and begins a verification process previously impossible.

Also, the International Atomic Energy Agency and US nuclear experts have overseen the shutdown and continuing disablement of all key plutonium production facilities at Yongbyon. Discussions have been held to ship out the monitored unused reactor fuel rods.

If diplomacy is to succeed, Washington needs to begin delivering on some of the promises it has made as part of the Six-Party agreements. It must move toward normalizing relations with Pyongyang: That means beginning "the process of removing the designation of the DPRK as a state-sponsor of terrorism" and starting to "advance the process of terminating the application of the Trading with the Enemy Act with respect to the DPRK."

We know that North Korea seeks better relations with the United States to create the environment essential to facilitate economic recovery, give it more diplomatic space, and smooth the way for an upcoming political succession. Since the New York Philharmonic concert in Pyongyang last February, it has begun portraying the United States in a more positive light to its own people, laying the groundwork for a major breakthrough in relations with the United States.

This breakthrough is needed if the United States is to achieve its ultimate objective: to cap, roll back, and completely eliminate the North's nuclear weapons program.

Critics in Washington, like those in Pyongyang, are afraid of exploring the future and only want to cling to the past. That isn't the way out.

John W. Lewis, professor emeritus at Stanford University, is coauthor of "Negotiating with North Korea: 1992-2007."

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Siegfried S. Hecker
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Siegfried S. Hecker and William J. Perry argue that the Bush administration should not walk away or slow down talks with Pyongyang, instead it should focus on limiting North Korea's nuclear capabilities by concluding the elimination of plutonium production.

The Bush administration's North Korea strategy is being criticized from the right and the left for letting Pyongyang off the hook. Some advocate scuttling the six-party talks. Others suggest slowing our own compliance with the agreement to get North Korea to make a full declaration of its nuclear program first. We disagree with both positions. Our mantra should be: It's the plutonium, stupid.

North Korea does have the bomb -- but a limited nuclear arsenal and supply of plutonium to fuel its weapons. The Yongbyon plutonium production facilities are closed and partially disabled.

In separate visits to North Korea in February, we concluded that the disablement was extensive and thorough. We also learned that Pyongyang is prepared to move to the next crucial step of dismantling Yongbyon, eliminating plutonium production. This would mean no more bombs, no better bombs and less likelihood of export. After this success, we can concentrate on getting full declarations and on rolling back Pyongyang's supply of weapons and plutonium.

We must not miss this opportunity, because we have the chance to contain the risk posed by North Korea's arsenal while we work to eliminate it. As dismantlement proceeds, negotiations should focus concurrently on the plutonium declaration, the extent of the uranium enrichment effort and Pyongyang's nuclear exports.

Pyongyang's declaration of 30 kilograms of plutonium (sufficient for roughly four to five bombs) falls short of the estimate of 40 to 50 kilograms, based on our past visits. We believe that North Korea is prepared to produce operating records and permit access to facilities, equipment and waste sites for verification. Obtaining and verifying its declaration of plutonium production and inventories is imperative. Let's proceed.

Pyongyang continues to claim that it has made no efforts to enrich uranium, despite strong evidence to the contrary. Although it appears unlikely that these efforts reached a scale that constitutes a weapons threat, a complete accounting is required. Dismantlement of the Yongbyon facilities should not, however, be postponed to resolve this issue. In October 2002, the Bush administration accused North Korea of covert uranium enrichment, only to have Pyongyang withdraw from the nuclear Non-Proliferation Treaty and produce plutonium to fuel the arsenal that we are now attempting to eliminate.

Nuclear exports are of greater concern. As recently revealed evidence demonstrates, North Korea sold nuclear technology to Syria, much as it sold missile technology. North Korea must cooperate if we are to get to the bottom of the Syrian incident and ensure that it is not repeated elsewhere. Israel eliminated the Syrian threat, for now, by bombing the reactor at Al Kibar. But it is imperative that Pyongyang reveal the nature and extent of its export operations and, most important, whether it has similar deals underway with Iran.

We do not advocate letting Pyongyang off the hook, but a "confession" regarding Syria is not the critical issue. We have good knowledge of what the North Koreans supplied to Syria. What we really need is information from North Korea that will help us deal with potential threats. For example, was North Korea acting alone, or was it part of a more sophisticated proliferation ring involving Pyongyang's trading partners and suppliers? North Korea's leadership must resolve all three declaration issues fully, and these will take time to verify.

To ultimately succeed in the peaceful elimination of nuclear weapons, we must understand why North Korea devoted its limited resources to going nuclear. The September 2005 six-party joint statement addresses many of these concerns, promising mutual respect for national sovereignty, peaceful coexistence, and a commitment to stability and lasting peace in Northeast Asia, as well as normalization of relations. Given the acrimonious history of our relations, such steps require a transformation in the relationship between North Korea and the United States, a change that will first require building trust -- step by step.

The six-party negotiations have put us on that path, and there is much evidence of winds of change blowing in North Korea that will make navigating that path easier (the recent New York Philharmonic concert in Pyongyang is one such symbol of change; the joint industrial facility at Kaesong is another). But North Korea's reluctance to provide full declarations and the Syria revelations have moved us in the wrong direction.

Nevertheless, walking away from the talks or slowing them at this point would be counterproductive. Instead, in its remaining months, the Bush administration should focus on limiting North Korea's nuclear capabilities by concluding the elimination of plutonium production. If it can also get answers on the Syrian operation and resolve the question of uranium enrichment, it will put the next administration in a stronger position to finally end the nuclear threat from North Korea.

Siegfried S. Hecker and William J. Perry are with the Center for International Security and Cooperation at Stanford University. Hecker was director of the Los Alamos National Laboratory from 1986 through 1997. Perry was secretary of defense from 1994 through 1997.

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Ohio Wesleyan University presented CISAC Co-Director Scott D. Sagan with an honorary Doctor of Laws degree during its 164th commencement ceremony on May 11. The citation accompanying the honor states: "Scott D. Sagan's grandfather, J. Waskom Pickett, a bishop in the United Methodist Church, served as a missionary in India and advised his grandson on the importance of helping to make the world a better place. Sagan's father, the late Dr. John Sagan-a beloved 1948 Ohio Wesleyan graduate, OWU trustee, and vice president/treasurer of Ford Motor Company-often mentioned the student's Golden Rule: 'Find out what you enjoy doing most, and then figure out a way to get paid for that activity.' Dr. Scott Sagan has found great enjoyment-and success-in following both his father's and grandfather's advice: his career has combined his love of research and teaching about international relations with influential policy work that has reduced the danger that nuclear weapons pose to the United States and to the rest of the world."

Sagan, a professor of political science, "is one of the most widely cited scholars of international relations in the United States," the citation states. "His seminal publications have shaped the way scholars and policy makers have thought about the risks of nuclear terrorism." In addition, CISAC, which Sagan has helped lead for the past decade, "is widely recognized as one of the world's preeminent university-based think tanks conducting policy research on global security matters."

Ohio Wesleyan is a private, undergraduate liberal arts college in Delaware, Ohio.

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