Security

FSI scholars produce research aimed at creating a safer world and examing the consequences of security policies on institutions and society. They look at longstanding issues including nuclear nonproliferation and the conflicts between countries like North and South Korea. But their research also examines new and emerging areas that transcend traditional borders – the drug war in Mexico and expanding terrorism networks. FSI researchers look at the changing methods of warfare with a focus on biosecurity and nuclear risk. They tackle cybersecurity with an eye toward privacy concerns and explore the implications of new actors like hackers.

Along with the changing face of conflict, terrorism and crime, FSI researchers study food security. They tackle the global problems of hunger, poverty and environmental degradation by generating knowledge and policy-relevant solutions. 

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Featuring research-themed talks by investigators from CDDRL, CHP/PCOR, CISAC, Shorenstein APARC, Food Security and the Environment, and Forum on Contemporary Europe.

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Orhan Pamuk was born in Istanbul in 1952 and grew up in a large family similar to those which he describes in his novels Cevdet Bey and His Sons and The Black Book, in the district of Nisantasi. As he writes in his autobiographical book Istanbul, from his childhood until the age of 22 he devoted himself largely to painting and dreamed of becoming an artist. After graduating from the American Robert College in Istanbul, he studied architecture at Istanbul Technical University for three years, but abandoned the course when he gave up his ambition to become an architect and artist. He went on to graduate in journalism from Istanbul University, but never worked as a journalist. At the age of 23 Pamuk decided to become a novelist, and giving up everything else retreated into his flat and began to write.

His first novel Cevdet Bey and His Sons was published seven years later in 1982. The novel is the story of three generations of a wealthy Istanbul family living in Nisantasi, Pamuk's own home district. The novel was awarded both the Orhan Kemal and Milliyet literary prizes. The following year Pamuk published his novel The Silent House, which in French translation won the 1991 Prix de la découverte européene. The White Castle (1985) about the frictions and friendship between a Venetian slave and an Ottoman scholar was published in English and many other languages from 1990 onwards, bringing Pamuk his first international fame. The same year Pamuk went to America, where he was a visiting scholar at Columbia University in New York from 1985 to 1988. It was there that he wrote most of his novel The Black Book, in which the streets, past, chemistry and texture of Istanbul are described through the story of a lawyer seeking his missing wife. This novel was published in Turkey in 1990, and in French translation won the Prix France Culture. The Black Book enlarged Pamuk's fame both in Turkey and internationally as an author at once popular and experimental, and able to write about past and present with the same intensity. In 1991 Pamuk's daughter Rüya was born. That year saw the production of a film Hidden Face, whose script by Pamuk was based on a one-page story in The Black Book.

His novel The New Life, about young university students influenced by a mysterious book, was published in Turkey in 1994 and became one of the most widely read books in Turkish literature. My Name Is Red, about Ottoman and Persian artists and their ways of seeing and portraying the non-western world, told through a love story and family story, was published in 1998. This novel won the French Prix Du Meilleur Livre Etranger, the Italian Grinzane Cavour (2002) and the International IMPAC Dublin literary award (2003). Snow, which he describes as 'my first and last political novel,' was published in 2002. In this book set in the small city of Kars in northeastern Turkey he experimented with a new type of 'political novel,' telling the story of violence and tension between political Islamists, soldiers, secularists, and Kurdish and Turkish nationalists. In 1999 a selection of his articles on literature and culture written for newspapers and magazines in Turkey and abroad, together with a selection of writings from his private notebooks, was published under the title Other Colours.

Pamuk's most recent book, Istanbul, is a poetical work, combining the author's early memoirs up to the age of 22, and an essay about the city of Istanbul, illustrated with photographs from his own album, and pictures by western painters and Turkish photographers.

Pamuk was awarded the Nobel Prize in Literature in 2006. The press release read "who in the quest for the melancholic soul of his native city has discovered new symbols for the class and interlacing of cultures."

http://www.orhanpamuk.net/

Sponsored by the Mediterranean Studies Forum, the Freeman Spogli Institute for International Studies' S.T. Lee Lecture, the Division of International Comparative & Area Studies, the Abbasi Program in Islamic Studies, and the Forum on Contemporary Europe.

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Orhan Pamuk 2006 Nobel Prize in Literature Winner Speaker
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The current boom of investment arbitration under NAFTA as well as ICSID and other arbitral regimes has demonstrated that the enforcement of treaty obligations has become a standard feature of international law in this particular field of international economic law. The increased probability of actual enforcement of international standards of investment protection is generally welcomed in a system, such as the international legal order, which normally suffers from rather weak enforcement structures. At the same time, the proliferation of investment dispute settlement mechanisms bears its own risks. The concurrent availability of different investment dispute settlement mechanisms may lead to parallel proceedings or to the re-litigation of already decided cases. The CME/Lauder v. Czech Republic arbitrations where the same dispute was arbitrated under two different bilateral investment agreements and the CMS v. Argentina and the LG&E v. Argentina cases where similar issues were addressed demonstrate the inherent danger of a multiplication of procedures if the answers found by different tribunals are contradictory. The proliferation of investment disputes has broader structural implications which need to be addressed in order to secure the viability of this system of international arbitration.

August Reinisch is professor of public international law and European law at the University of Vienna. From 2004 to 2006 he served as Dean for International Relations of the Law School of the University of Vienna. He is also a professional lecturer at the Bologna Center/SAIS of Johns Hopkins University. He currently serves as arbitrator on the In Rem Restitution Panel according to the Austrian General Settlement Fund Law 2001 and as president of an UNCITRAL investment arbitration.

He holds Master's degrees in philosophy (1990) and in law (1988) as well as a doctorate in law (1991) from the University of Vienna and an LL.M. (1989) from NYU Law School. He is admitted to the Bar of New York and Connecticut (since 1990).

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August Reinisch Speaker University of Vienna School of Law, Section Program on International Investment Law in International Arbitral Practice
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CISAC awarded honors certificates in international security studies to 14 undergraduates who completed theses on policy issues ranging from speeding up the detection of a bioterror attack to improving the World Bank's effectiveness at post-conflict resolution.

Among the 2006-2007 participants in CISAC's Interschool Honors Program in International Security Studies were award winners Brian Burton, who received a Firestone Medal for his thesis, "Counterinsurgency Principles and U.S. Military Effectiveness in Iraq," and Sherri Hansen, who received the William J. Perry Award for her thesis, "Explaining the Use of Child Soldiers." The Firestone Medal recognizes the top 10 percent of undergraduate theses at Stanford each year, and the Perry recognizes excellence in policy-relevant research in international security studies.

CISAC honors students "can make the world a more peaceful place in several ways," FSI senior fellow Stephen Stedman told students and guests at the honors ceremony. "They can graduate and find jobs of power and influence [and] they can identify real world problems and solve them."

This year's class, which included several double-majors, represented nine major fields of study: biology, history, human biology, international relations, mathematics, management science and engineering, physics, political science, Russia-Eurasian studies. Some students headed to business or policy positions, while others looked forward to advanced studies in law, medicine, biophysics, security studies, or other fields.

"I hope that this is the beginning, not the end, of your contributions to policy-relevant research," CISAC senior research scholar Paul Stockton, who co-directed the program with Stedman, told the students. He added, "In every potential career you have expressed a desire to pursue, from medicine to the financial sector and beyond, we need your perspectives and research contributions, to deal with emerging threats to global security."

Many students expressed interest in realizing that hope. Burton said his aspiration is to attain "a high-level cabinet or National Security Council position to cap a long career of public service in foreign policy."

Katherine Schlosser, a biology major who is headed to Case Western Reserve University for joint MD-master's in public health program, said she hopes to "keep conducting innovative research and to eventually rejoin the international security studies community in some capacity."

The 2007 honors recipients, their majors, thesis titles, advisers, and destinations, if known, are as follows:

Brian Burton, political science
"Counterinsurgency Principles and U.S. Military Effectiveness in Iraq"
Firestone Medal Winner

Adviser: David Holloway
Destination: Georgetown University, to pursue a master's degree in security studies

Martine Cicconi, political science
"Weighing the Costs of Aggression and Restraint: Explaining Variations in India's Response to Terrorism"
Adviser: Scott Sagan
Destination: Stanford University Law School

Will Frankenstein, mathematics
"Chinese Energy Security and International Security: A Case Study Analysis"
Adviser: Michael May
Destination: The Institute for Defense Analyses in Alexandria, Va., for a summer internship

Kunal Gullapalli, management science & engineering
"Understanding Water Rationality: A Game-Theoretic Analysis of Cooperation and Conflict Over Scarce Water"
Adviser: Peter Kitanidis
Destination: Investment Banking Division at Morgan Stanley in Los Angeles

Sherri Hansen, political science
"Explaining the Use of Child Soldiers"
William J. Perry Award Winner

Adviser: Jeremy Weinstein
Destination: Oxford University in England, to pursue master's degree in development studies

Andy Leifer, physics and political science
"International Scientific Engagement for Mitigating Emerging Nuclear Security Threats"
Adviser: Michael May
Destination: Harvard University, to pursue a PhD in biophysics

James Madsen, political science
"Filling the Gap: The Rise of Military Contractors in the Modern Military"
Adviser: Coit Blacker
Destination: World travel; then San Francisco to open a bar

Nico Martinez, political science
"Protracted Civil War and Failed Peace Negotiations in Colombia"
Adviser: Stephen Stedman
Destination: Washington, DC, to serve as a staff member for Senator Harry Reid

Seepan V. Parseghian, political science and Russian/Eurasian studies
"The Survival of Unrecognized States in the Hobbesian Jungle"
Advisor: James Fearon

Dave Ryan, international relations
"Security Guarantees in Non-Proliferation Negotiations"
Adviser: Scott Sagan
Destination: Stanford University, to serve as executive director of FACE AIDS

Katherine Schlosser, biology
"Gene Expression Profiling: A New Warning System for Bioterrorism"
Adviser: Dean Wilkening
Destination: Case Western Reserve University in Cleveland, to pursue a joint medical degree and master's in public health

Nigar Shaikh, human biology and political science
"No Longer Just the 'Spoils of War': Rape as an Instrument of Military Policy"
Adviser: Mariano-Florentino Cuellar

Christine Su, history and political science
"British Counterterrorism Legislation Since 2000: Parlimentary and Government Evaluations of Enhanced Security"
Adviser: Allen Weiner
Destination: Stanford University, to finish her undergraduate degree; Su completed the honors program as a junior.

Lauren Young, international relations
"Peacebuilding without Politics: The World Bank and Post Conflict Reconstruction"
Adviser: Stephen Stedman
Destination: Stanford University, to finish her undergraduate degree; Young completed the honors program as a junior.

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NATO will hold an important summit meeting in Prague, Czech Republic, in November 2002. At this meeting, the current nineteen members will decide whether to invite up to an additional nine states to join the organization. In addition, a number of other issues may be discussed including the Partnership for Peace, the new NATO-Russia Council, the proliferation of weapons of mass destruction, terrorism, defense expenditures by members, European defense issues, NATO command structure and the possible delegation of authority to the Secretary General of NATO. Based on interviews with NATO officials, Professor Caldwell will discuss the issues most likely to be discussed at the Prague Summit.

Encina Ground Floor Conference Room

Dan Caldwell Pepperdine University Speaker
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The events of September 11, 2001 have heightened concerns about the potential for terrorist actions involving nuclear or radioactive materials and facilities. Questions about the vulnerability of such materials and facilities have forced governments to implement new security measures at the national level; however, such measures are of limited value in addressing influential factors in play beyond national boundaries. The existing nuclear weapons among states, is insufficient to address this new threat. A new, broader international nuclear security regime needs to be constructed. This regime must also take into account the growing influence of sub-state, trans-national actors. A key element in this new nuclear security regime is the important role international organizations can play in shoring up the weakness of the nation-state in a chaotic, post-Cold War international environment.

Ron Stansfield is current Coordinator of International Programmes at the Canadian Nuclear Safety Commission (CNSC) in Ottawa. Mr. Stansfield has over a quarter century of experience in international security issues, including non-proliferation, arms control and disarmament. Prior to joining the CNSC in 1991 as Senior Advisor on Non-proliferation, he served as Director Parliamentary Affairs at the Canadian Department of National Defence from 1988-1989. From 1975-1988, he held several positions at the Canadian Department of Foreign Affairs and International Trade (DFAIT), including Head of the Conventional and Nuclear Arms Control Section of DFAIT's Defence Relations Division (1986-1988) and diplomatic assignments in the Netherlands (1981-1985) and South Korea (1977-1979). From 1998-2001, Mr. Stansfield was seconded to the International Atomic Energy Agency in Vienna as a Senior Policy Office for nuclear non-proliferation and safeguards issues in the Agency's Office of External Relations and Policy Coordination. Mr. Stansfield is a graduate of the University of Saskatchewan and the Norman Paterson School of International Affairs at Carleton University.

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Ron Stansfield Canadian Nuclear Safety Commission Speaker
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A terrorist attack on a single 90-ton chlorine tank car could generate a cloud of toxic gas that travels 20 miles. If the attack took place in a city, it could kill 100,000 people within hours. Now multiply that nightmare by another 100,000. That's the approximate number of tank cars filled with toxic gases shipped every year in the United States.

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The possibility of terrorists obtaining and using a nuclear bomb cannot be ignored, write CISAC's William J. Perry and Michael M. May and Ashton Carter, at Harvard, who co-directs the Preventive Defense Project with Perry. Their op-ed, "After the bomb," in the New York Times, argues the federal government should plan for how it would take charge, save lives, maintain order, and guide citizens in making evacuation decisions if such a disaster were to occur. The three experts on nuclear weapons and nonproliferation outline key considerations for planning an effective response to a terrorist nuclear attack -- a response that would preserve lives and democracy.

The probability of a nuclear weapon one day going off in an American city cannot be calculated, but it is larger than it was five years ago. Potential sources of bombs or the fissile materials to make them have proliferated in North Korea and Iran. Russia's arsenal remains incompletely secured 15 years after the end of the Soviet Union. And Pakistans nuclear technology, already put on the market once by Abdul Qadeer Khan, could go to terrorists if the president, Gen. Pervez Musharraf, cannot control radicals in that country.

In the same period, terrorism has surged into a mass global movement and seems to gather strength daily as extremism spills out of Iraq into the rest of the Middle East, Asia, Europe and even the Americas. More nuclear materials that can be lost or stolen plus more terrorists aspiring to mass destruction equals a greater chance of nuclear terrorism.

Former Senator Sam Nunn in 2005 framed the need for Washington to do better at changing this math with a provocative question: On the day after a nuclear weapon goes off in a American city, "what would we wish we had done to prevent it?" But in view of the increased risk we now face, it is time to add a second question to Mr. Nunn's: What will we actually do on the day after? That is, what actions should our government take?

It turns out that much could be done to save lives and ensure that civilization endures in such terrible circumstances. After all, the underlying equation would remain a few terrorists acting against all the rest of us, and even nuclear weapons need not undermine our strong societies if we prepare to act together and sensibly. Sadly, it is time to consider such contingency planning.

First and foremost, the scale of disaster would quickly overwhelm even the most prepared city and state governments. To avoid repeating the Hurricane Katrina fiasco on a much larger scale, Washington must stop pretending that its role would be to support local responders. State and local governments--though their actions to save lives and avoid panic in the first hours would be essential--must abandon the pretense that they could remain in charge. The federal government, led by the Department of Homeland Security, should plan to quickly step in and take full responsibility and devote all its resources, including those of the Department of Defense, to the crisis.

Only the federal government could help the country deal rationally with the problem of radiation, which is unique to nuclear terrorism and uniquely frightening to most people. For those within a two-mile circle of a Hiroshima-sized detonation (in Washington, that diameter is the length of the Mall; in New York, three-fourths the length of Central Park; in most cities, the downtown area) or just downwind, little could be done. People in this zone who were not killed by the blast itself, perhaps hundreds of thousands of them, would get radiation sickness, and many would die.

But most of a city's residents, being further away, would have more choices. What should they do as they watch a cloud of radioactive debris rise and float downwind like the dust from the twin towers on 9/11? Those lucky enough to be upwind could remain in their homes if they knew which way the fallout plume was blowing. (The federal government has the ability to determine that and to quickly broadcast the information.) But for those downwind and more than a few miles from ground zero, the best move would be to shelter in a basement for three days or so and only then leave the area.

This is a hard truth to absorb, since we all would have a strong instinct to flee. But walking toward the suburbs or sitting in long traffic jams would directly expose people to radiation, which would be the most intense on the day after the bomb goes off. After that, the amount would drop off day by day (one third as strong after three days, one fifth as strong after five days, and so on), because of the natural decay of the radioactive components of the fallout.

More tough decisions would arise later. People downwind could leave their homes or stay, leave for a while and then come back or leave and come back briefly to retrieve valuables. The choices would be determined by the dose of radiation they were willing to absorb. Except in the hot zone around the blast and a few miles downwind, even unsheltered people would not be exposed to enough radiation to make them die or even become sick. It would be enough only to raise their statistical chance of getting cancer later in life from 20 percent (the average chance we all have) to something greater--21 percent, 22 percent, up to 30 percent at the maximum survivable exposure.

Similar choices would face first responders and troops sent to the stricken area: how close to ground zero could they go, and for how long? Few would choose to have their risk of death from cancer go up to 30 percent. But in cases of smaller probabilities--an increase to 20.1 percent, for example--a first responder might be willing to go into the radiation zone, or a resident might want to return to pick up a beloved pet. These questions could be answered only by the individuals themselves, based on information about the explosion.

Next comes the unpleasant fact that the first nuclear bomb may well not be the last. If terrorists manage to obtain a weapon, or the fissile material to make one (which fits into a small suitcase), who's to say they wouldn' have two or three more? And even if they had no more weapons, the terrorists would most likely claim that they did. So people in other cities would want to evacuate on the day after, or at least move their children to the countryside, as happened in England during World War II.

The United States government, probably convened somewhere outside Washington by the day after, would be urgently trying to trace the source of the bombs. No doubt, the trail would lead back to some government--Russia, Pakistan, North Korea or other countries with nuclear arsenals or advanced nuclear power programs--because even the most sophisticated terrorist groups cannot make plutonium or enrich their own uranium; they would need to get their weapons or fissile materials from a government.

The temptation would be to retaliate against that government. But it might not even be aware that its bombs were stolen or sold, let alone have deliberately provided them to terrorists. Retaliating against Russia or Pakistan would therefore be counterproductive. Their cooperation would be needed to find out who got the bombs and how many there were, and to put an end to the campaign of nuclear terrorism. It is important to continue to develop the ability to trace any bomb by analyzing its residues. Any government that did not cooperate in the search should of course face possible retaliation.

Finally, as buildings and lives were destroyed, so would the sense of safety and well-being of survivors, and this in turn could lead to panic. Contingency plans for the day after a nuclear blast should demonstrate to Americans that all three branches of government can work in unison and under the Constitution to respond to the crisis and prevent further destruction.

A council of, say, the president, the vice president, the speaker of the House and the majority leader of the Senate, with the chief justice of the Supreme Court present as an observer, could consider certain aspects of the government's response, like increased surveillance. Any emergency measures instituted on the day after should be temporary, to be reviewed and curtailed as soon as the crisis ends.

Forceful efforts to prevent a nuclear attack--more forceful than we have seen in recent years--may keep the day from coming. But as long as there is no way to be sure it will not, it is important to formulate contingency plans that can save thousands of lives and billions of dollars, prevent panic and promote recovery. They can also help us preserve our constitutional government, something that terrorists, even if armed with nuclear weapons, should never be allowed to take away.

William J. Perry, a professor at Stanford, and Ashton B. Carter, a professor at Harvard, were, respectively, the secretary and an assistant secretary of defense in the Clinton administration. Michael M. May, also a professor at Stanford, is a former director of the Lawrence Livermore National Laboratory.

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WASHINGTON, May 24 (IPS) - This year the Association of Southeast Asian Nations celebrates its 40th birthday, and it has big plans. After four decades of being largely a political and security alliance, ASEAN is accelerating its plans for economic integration.

ASEAN leaders are so eager to pull together into an economic community that they recently decided to move the goalposts. The economic benchmarks originally planned for 2020 have been moved up to 2015.

"The mission of this economic community is to develop a single market that is competitive, equitably developed, and well integrated in the global economy," says Worapot Manupipatpong, principal economist and director of the office of the Secretary-General in the ASEAN Secretariat. He was speaking last week at an Asian Voices seminar in Washington, DC, sponsored by the Sasakawa Peace Foundation.

The single market of 2015 would encompass all ten members of ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam. According to the projections of the ASEAN Secretariat, the single market will be accomplished by removing all barriers to the free flow of goods, services, capital, and skilled labor. Rules and regulations will be simplified and harmonised. Member countries will benefit from improved economies of scale. Common investment projects, such as a highway network and the Singapore--Kunming rail link, will facilitate greater trade.

Although there will not be a single currency like the European Union's euro, the ASEAN countries will nevertheless aim for greater currency cooperation.

"ASEAN's process of economic integration was market-driven," says Soedradjad Djiwandono former governor of Bank Indonesia, and it was influenced by the "Washington consensus" favoring increased liberalisation. "It is a very different framework from the closed regionalism of the Latin American model," he continues. With multilateral talks on trade liberalisation stalled, efforts have largely shifted to bilateral negotiations. "There has been a proliferation of bilateral agreements that developed countries use as a way to push a program for liberalising different sectors," Djiwandono concludes.

So far, ASEAN points to increased trade within the ten-member community as an early sign of success. But, overall trade share -- 25 percent -- pales in comparison to the 46 percent share of the North American Free Trade Agreement countries or the 68 percent share of EU countries. And with intra-ASEAN foreign direct investment rather low -- only 6 percent in 2005 -- financial integration lags behind trade integration.

The ASEAN approach differs in several key respects from the EU model, which originated in a 1951 coal and steel agreement among six European nations. ASEAN's origins, in contrast, have been primarily political and security-oriented, observes Donald Emmerson, director of the South-east Asia Forum at the Shorenstein Asia-Pacific Research Center at Stanford. "The success attributed to ASEAN is that it presided over an inter-state peace ever since it was formed. There's never been a war fought between ASEAN members."

Also distinguishing ASEAN from EU is the latter's institutionalisation. "ASEAN is radically different," Emmerson continues. "The much discussed ASEAN way is consultation, not even voting, since if they vote, someone will lose. Sometimes the consultation goes on without result. Sometimes decisions are reduced to the lowest common denominator. It also means that rhetoric predominates." This consultative process will be tested in November, when ASEAN leaders gather to adopt a charter, something that the EU has so far failed to accomplish.

Another difference with Europe is the enormous economic disparities among the ASEAN members, with Singapore and Brunei among the richest countries in the world and Laos among the poorest. These economic disparities are reproduced within the countries as well.

Worapot Manupipatpong points to two ASEAN initiatives for closing the gap. There is help for small and medium-sized enterprises. And the Initiative for ASEAN Integration,"basically provides technical assistance to Cambodia, Laos, and Myanmar so that they can catch up with the rest of the ASEAN members," he says. "Attention will be paid to where these countries can participate in the regional networks, what comparative advantage they have, and how to enhance their capacities to participate in the regional development and supply chain."

Then there are ASEAN's efforts to address "public bads," according to Soedradjad Djiwandono. "When there is a tsunami or a pandemic," he argues, "the worst victims are the marginalised or the poor. Addressing that kind of issue has some positive impact on reducing inequality."

"The gap between the early joiners and the later joiners will continue to be substantial because ASEAN has always been more of a forum and less of a problem-solving organisation," observes Karl Jackson, director of the Asian Studies Program at the School for Advanced International Studies at Johns Hopkins University. "As a result one would expect that these gaps would be closed only as individual countries increase their rates of growth." He attributes the inequality within countries to the middle stage of growth experienced by almost all societies: "Inequality increases before the state becomes strong enough to redivide some of the pie and take care of the gross inequalities caused by rapid economic growth."

ASEAN is banking on financial and trade liberalisation increasing the overall regional pie. On paper it is an ambitious project. But "the low hanging fruit have been plucked," says Donald Emmerson. Tariffs on the "easy commodities" have already been reduced to less than 5 percent. But non-tariff barriers to trade remain, and member countries are very protective of certain sectors.

Also tempering the region's optimism is the memory of the Asian financial crisis. The crisis began in Thailand in 1997 and spread rapidly to other countries in the region. One school of thinking holds that capital mobility -- "hot money" -- either caused or considerably aggravated the crisis. Since the ASEAN integration promises greater capital mobility, will the region be at greater risk of another such crisis?

"One consequence of the economic dynamism of the Asia-Pacific region," notes Donald Emmerson, "is that the accumulation of vast foreign exchange reserves -- obviously in China, but in other countries too -- more than anything else represents an asset that can be brought into the equation as a stabilising factor in the event of a financial crisis." Also, he continues, as a result of the ASEAN plus Three network, which adds China, South Korea, and Japan to the mix, the 13 countries have "made serious headway toward establishing currency swap arrangements that would come into play in an emergency on the scale of an Asian financial crisis."

Karl Jackson also looks to currency reforms as a hedge against future crisis. The Thai baht and the Indonesian rupiah are now unpegged currencies. "You will not have a situation in which the central bank of Thailand loses 34 billion US dollars defending the baht," Jackson argues. "Instead, the baht will appreciate or depreciate according to market forces."

But Jackson still remains cautious about the future. He points to the large number of non-performing loans in the Chinese banking sector. Also, there is "this anomaly of the U.S. absorbing two-thirds of the savings coming out of Asia, plugging it mostly into consumption rather than direct investment," he observes. "Eventually there has to be some kind of readjustment. The real value of the dollar must fall." (END/2007)

Reprinted by permission from IPS Asia-Pacific.

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