Enterra Insights

The Return of the Pirates

Since the events of 9/11, governments, port operators, and shipping firms have been trying to figure out to make the global supply chain more secure without impeding the flow of international goods. The primary focus, of course, was on terrorism. A new threat, however, has begun to grab headlines -- piracy. For decades, piracy (in terms of financial losses) was a tiny blip on the screen compared to losses from fraud. But Somali pirates have ratcheted up the attention paid to the problem with their seizing of ship carrying Soviet-era arms, a Saudi supertanker, and an attempted seizure of a luxury liner. Pirates will find this attention most unwanted. One of Enterra Solutions product lines deals with Global Supply Chain Management and Fusion Centers. Piracy is one of the data sets likely to be shared by future fusion centers. There are already organizations tracking and reporting such data.

Pirates have historically been considered criminals, but some analysts believe they are better labeled terrorists ["Piracy Is Terrorism," by Douglas R. Burgess, Jr., New York Times, 5 December 2008]. In today's world if you want to get someone's attention, you label a group terrorists. Burgess argues that in the case of piracy, however, labeling them terrorists is more than headline grabbing semantics:

"The golden age of piracy has returned. Just as Henry Every and William Kidd once made their fortunes in the Red Sea, a new generation has emerged, armed with grenade launchers and assault rifles, to threaten trade and distract the world’s navies. With the recent capture of the Saudi supertanker Sirius Star, a crime that once seemed remote and archaic has again claimed center stage. And yet the world’s legal apparatus is woefully confused as to how to respond to piracy. Are the Somali pirates ordinary criminals, or a quasi-military force? The question is not insignificant. It has virtually paralyzed the navies called to police the Gulf of Aden. The German Navy frigate Emden, on patrol this spring to intercept Qaeda vessels off the Somali coast, encountered pirate vessels attacking a Japanese tanker. But since it was allowed to intervene only if the pirates were defined as 'terrorists,' the Emden had no choice but to let the pirates go. Currently, 13 vessels are held by pirates in the Gulf of Aden, while the navies of a dozen nations circle almost helplessly."

The challenge, Burgess argues, extends beyond the capture of pirates. You can't simply dispense with swift and sure justice by stringing the pirates from the yardarm and unceremoniously dumping their bodies into the sea. You must retain them, transport them, provide them with a defense, and, when convicted, incarcerate them. Few countries apparently want the bother of all that.

"In theory, any nation can shoulder the burden of prosecution. In fact, few are eager to do so. Prosecuting pirates puts enormous strain on a country’s legal system. A state whose ship was not attacked, and whose only involvement with the incident was as rescuer, might balk at being asked to foot the bill for lengthy and costly proceedings. Yet it might find itself forced to do so, if neither the victim’s nor the pirates’ state is willing. As Somalia has not had a recognized government since the early 1990s, the situation is all the more precarious for would-be capturers. The result is that ship owners, knowing that no rescue is imminent, pay the ransom. This emboldens the pirates further, and the problem worsens."

Burgess argues that by defining pirates as terrorists you make them an international problem and thereby lay the responsibility for prosecuting and incarcerating them on the international community rather than a specific nation-state.

"The solution to piracy lies in the very nature of piracy itself. The Roman lawmaker Cicero defined piracy as a crime against civilization itself, which English jurist Edward Coke famously rephrased as 'hostis humani generis' — enemies of the human race. As such, they were enemies not of one state but of all states, and correspondingly all states shared in the burden of capturing them. From this precept came the doctrine of universal jurisdiction, meaning that pirates — unlike any other criminals — could be captured wherever they were found, by anyone who found them. This recognition of piracy’s unique threat was the cornerstone of international law for more than 2,000 years. Though you wouldn’t guess it from the current situation, the law is surprisingly clear. The definition of pirates as enemies of the human race is reaffirmed in British and American trial law and in numerous treaties. As a customary international law (albeit one that has fallen out of use since the decline of traditional piracy) it cuts through the Gordian knot of individual states’ engagement rules. Pirates are not ordinary criminals. They are not enemy combatants. They are a hybrid, recognized as such for thousands of years, and can be seized at will by anyone, at any time, anywhere they are found. ... Recognizing piracy as an international crime will do something else: It will give individual states that don’t want to prosecute pirates an alternative — the international court. If pirates are recognized under their traditional international legal status — as neither ordinary criminals nor combatants, but enemies of the human race — states will have a much freer hand in capturing them. If piracy falls within the jurisdiction of the international court, states will not need to shoulder the burden of prosecution alone."

Although Burgess is undoubtedly hoping that his op-ed piece will stimulate book sales (he is the author of The Pirates’ Pact: The Secret Alliances Between History’s Most Notorious Buccaneers and Colonial America), he makes a strong argument. He reminds us that "in a trial before the Old Bailey in 1696, Dr. Henry Newton, the Admiralty advocate, declared, 'Suffer pirates and the commerce of the world must cease.' More than 300 years later, the world is suffering again. Fortunately, this time we have the answer." Another author hoping his op-ed piece generates book sales, John S. Burnett -- who the author of Dangerous Waters: Modern Piracy and Terror on the High Seas and who is working on a book about the hijackings off the Somali coast -- offers another solution to the Somali piracy problem: help create a viable Somali government ["Grand Theft Nautical," New York Times, 5 December 2008]. He writes:

"Given the failure to stop the pirates, shipping companies are now diverting their fleets — instead of sailing through the Suez Canal and the Gulf of Arden, tankers and other merchant vessels are forced to travel around the tip of South Africa to get from the Middle East to Europe and the United States, all of which adds weeks to the passage and increases the cost of delivery. But this is merely a short-term solution. The only long-term fix has to take place on shore, in Somalia. Somalia has not had a recognized functioning government since 1991. Law is dispensed through the barrel of a gun."

Burnett notes that the closest Somalia has come to establishing a peaceful regime was when the Islamic Courts Union were in control in 2006 and imposed Sharia law. "Though there were cruel tradeoffs," Burnett reports, "the Islamists virtually eradicated piracy. (The crime was a capital offense punishable by beheading.)" The thought of a fundamentalist regime with loose ties to al Qaeda establishing itself in the Horn of Africa was unthinkable to the Bush administration and it supported a Somali intervention by Ethiopian forces that "replaced the Islamists with an ineffective transitional government." The result, Burnett notes, was the return of piracy "with an intensity not seen since the 17th century." Somalia is much like Afghanistan, Burnett argues. Historically no one has been able to impose their will on numerous tribes found within its borders.

"If the West really hopes to eliminate the scourge of piracy in these strategic shipping lanes, then it should consider involving the courts union, the only entity that has proved it could govern the country, and its militant wing, Al Shabaab, in a new government. If there is movement to talk to the Taliban in Afghanistan, then there should be some effort to talk to the fundamentalists in Somalia. If the Islamists were permitted to form a viable, functioning and effective government, this shattered land might be able to return to the community of nations — and supertankers will be able to deliver oil to the United States without fear of getting hijacked."

I suspect that recommendation is too radical for most politicians and security analysts. Perhaps Burnett has forgotten the terrible conditions imposed by the Taliban in Afghanistan under the guise of Sharia law. The conditions were particularly abhorrent on women and girls. Trading one evil for another is not the answer. Burnett is right that the answer in Somalia is helping create a viable central government; but one based on liberal democratic principles rather than Sharia law. In the meantime, Burgess' solution is a much better alternative. The UN Security apparently agrees ["UN Strips Pirates of Somali Haven," Mclatchy -Tribune News Service, 4 December 2008].

"The UN Security Council has passed a resolution permitting member countries to enter the territorial waters of Somalia to fight piracy. The U.S.-sponsored resolution, passed unanimously by the Security Council on Dec. 2 [2008], is valid for 12 months. It welcomes the recent initiatives taken by countries like India, Canada, France, Russia, Britain and the U.S. to counter piracy off Somali coast. The Security Council resolution is expected to come as a big help to countries like India that are fighting Somali pirates. Under international laws, naval ships are free to patrol international waters. Indian naval vessels and those from the other countries were constrained so far to enter the territorial waters of Somalia, a situation the pirates have taken full advantage of. The resolution also makes very clear the support for the European Union mission that is about to be launched and welcomes the North Atlantic Treaty Organization initiative to escort World Food Programme shipments until the EU mission is up and running."

Later the U.N. Security Council authorized attacks on Somali pirate bases ["Security Council approves attacks on Somali pirate bases," The Kansas City Star, 16 December 2008].

"The U.N. Security Council voted unanimously ... to authorize nations to conduct land and air attacks on pirate bases on the coast of Somalia. ... The council authorized nations to use 'all necessary measures that are appropriate in Somalia' to stop anyone using Somali territory to plan or carry out piracy in the nearby waters traversed each year by thousands of cargo ships sailing between Asia and the Suez Canal."

Peter Fromuth, a lawyer who served at the State Department and the U.S. Mission to the United Nations during the Clinton administration, notes that the earlier Security Council vote directs the UN to come up with an international strategy for dealing with pirates ["Pirates, Again," Washington Post, 4 December 2008].

"The Security Council gave Secretary General Ban Ki-moon 90 days to come up with [a strategy]. The usual nostrums do not look promising. Late last month, for example, the council adopted a British plan for travel and financial sanctions against the pirates' leading lights. That's fine, but the pirates seem to have their own means of travel and finance, including million-dollar bounties that fall from the sky in suitcases -- and no one seems to know who the leaders are anyway."

Fromuth notes that several groups have offered suggestions for dealing with piracy.

"The Organization of African Unity wants a U.N. peacekeeping force to tame Somalia, but the United Nations has sought recruits for months without success. Private security guards will shoot it out with bandits for $5,000 to $20,000 a day, but many ships carry flammable cargos, so seaborne firefights between thugs and testosterone-soaked mercenaries are best avoided. The global shipping association wants to seal off Somalia with a blockade. Since the country has the longest coast in Africa, that's a little ambitious."

You don't have to blockade the entire coastline, Fromuth point out, just the sections capable of supporting piracy.

"Somali pirates need havens that have water deep enough not to run trophy ships aground yet that are close enough to towns for resupply. From the capital, Mogadishu, north around the Horn of Africa into the Gulf of Aden, Somalia has only a few suitable places: Eyl, Hobyo and Haradhere on the Indian Ocean; Bosaso on the Gulf of Aden; Mogadishu itself; and possibly one or two more. Separate the pirates from those havens, and their cost-risk ratios may once again favor fishing. At each of those ports, cooperating naval vessels could establish a sort of police line to challenge, board and inspect suspicious craft, both leaving and returning. Evidence of piratical acts or intent would trigger confiscation of their boats, weapons and materials and the detention of crews for prosecution. One small naval ship per port, equipped with a helicopter and smaller boats, would suffice. The dozen ships patrolling these waters could handle this task with ships to spare for pirate duty farther out at sea."

Fromuth agrees with Burgess that sufficient legal precedent already exists to conduct such operations. He laments, however, that the international community doesn't seem willing to take up the challenge.

"The concept of a blockade was rejected last month by a NATO spokesman as something not 'contemplated' by the Security Council. Now, though, it should be. Trillions of dollars in commercial cargos transit the sea lanes annually; so long as they do, thugs in boats will prey on them. The world has a chance to shut down the Somali pirate franchise. Let's not squander it."

The Economist argues that letting the Horn of Africa remain a vast lawless expanse "threatens to transmit shockwaves through a seam of fragile and strife-torn African states from Sudan to the Congo" ["The Lawless Horn," 23 November 2008 print edition]. The magazine agrees with Burnett that the Ethiopian option supported by the United States "backfired." It also agrees that the solution requires negotiating, but with moderate Islamists if any can be found.

"A long-term solution demands ... establishing stability inside Somalia itself, depriving the pirates of a sanctuary, and preventing the jihad-tinted anarchy there from spilling over Somalia’s borders. But since there are no serious military forces available to defeat the insurgents, a proper answer will entail reshaping the country’s politics and stepping up attempts to woo the more biddable Islamists—if there are enough left and a deal with them is still possible."

I'm generally an optimist; but it is difficult to find anything about Somali too be optimistic about (see my post Somalia -- Poster Child of Failed States). There is one bright note; the piracy situation there has drawn China into closer cooperation with the rest of the international community ["China to Aid in Fighting Somali Pirates," by Maureen Fan, Washington Post, 18 December 2008]. The piracy situation in Somalia underscores why it remains an important international security objective to strengthen failed and failing states so that they can join the international community as contributors to the common good. That road begins with security and, as Fromuth notes, the ranks of countries volunteering to help create a security there is short (Ethiopia to be exact -- and it had ulterior motives and will soon be leaving). An international response to piracy provides an opportunity to address Somalia's security situation beginning from the sea and working inland. I suspect, however, that it will be a long time before the international community moves beyond the "at sea" phase.

America's Competitive Edge

A famous line from William Shakespeare's Hamlet reads, "The lady doth protest too much, methinks." In an article about innovation in America in The Economist, the magazine lays out its case that too many American businessmen are, like the lady, protesting too much ["A gathering storm," 22 November 2008 print edition]. The result of all this protestation, it believes, is that "corporate America is losing its self-confidence" and it argues that it "should not."

"Listen to the growing cries of despair coming from some leading business people, and you might imagine that corporate America’s competitiveness could be the next victim of the global financial crisis."

Not all business people, the article notes, have joined the chorus of worriers.

"Jeffrey Immelt, the boss of GE, the world’s largest industrial firm, sees opportunity amid the woe. 'Companies and countries that really play offence vis-à-vis technology and innovation are going to come out ahead,' he said ... at an event in New York to present GE’s coming innovations in health-care technology. With those words, he touched on a debate that has been heating up for many months. Even before the financial crunch began, many businessmen were worried that America was losing its lead in innovation to India and China. They were particularly upset that Asian rivals had been investing with more gusto in teaching young people mathematics and science, and in advanced scientific research. America’s National Academy of Engineering even issued a report last year, 'Rising Above the Gathering Storm', arguing that America’s 'economic and strategic security' was in question because of lack of investment."

The U.S. has a right to worry about the future of its education system (see my post entitled U.S. Science and Math Scores Remain Worrying). There are also probably good reasons to be worried about being outspent by Asia in research and development. But business concerns are more often aimed at tax and trade policies than either education or R&D. Business people know, however, that they will garner little public sympathy talking about tax relief.

"The Council on Competitiveness, an influential group of American company bosses, university presidents and labour leaders, issued a terse report on the matter on November 11th and demanded that Barack Obama 'take bold action to recapture America’s competitiveness' in his first 100 days in office. Craig Barrett, the chairman of Intel, the world’s biggest chipmaker, has also made similar complaints of late. And in a speech in Washington, DC, on November 18th Eric Schmidt, chief executive of Google, an internet giant, claimed that government-funded research done in university laboratories was 'the core aspect of America’s competitiveness'. Without a dramatic increase in investment in such research, and in math and science education, Americans risked becoming mere 'captive consumers' at the mercy of rising Asian powers, he argued."

Americans, of course, can't become "mere captive consumers." That's because in order to be consumers people must have money and in order to have money people must have jobs and in order to have jobs there must companies with employees. Lose the companies and you lose the consumers. That's the real argument behind the concerns of those who believe the U.S. is losing its competitive edge -- not that the U.S. will be a country of consumers, but that it will be a country filled with the unemployed. Is it a realistic concern? That's the question The Economist tackles next.

"Does the relative decline of America as a technology powerhouse really amount to a threat to its prosperity? Nonsense, insists Amar Bhidé of Columbia Business School. In 'The Venturesome Economy', a provocative new book, he explains why he thinks this gloomy thesis misunderstands innovation in several fundamental ways. First, he argues that the obsession with the number of doctorates and technical graduates is misplaced because the 'high-level' inventions and ideas such boffins come up with travel easily across national borders. Even if China spends a fortune to train more scientists, it cannot prevent America from capitalising on their inventions with better business models."

The normal flows involved in globalization are people, resources, and capital. In the information age, the flow of ideas has also become important. That is Bhidé's argument. Great ideas are no longer protected behind iron or bamboo curtains, but competed on the world stage.

"That points to his next insight, that the commercialisation, diffusion and use of inventions is of more value to companies and societies than the initial bright spark. America’s sophisticated marketing, distribution, sales and customer-service systems have long given it a decisive advantage over rivals, such as Japan in the 1980s, that began to catch up with its technological prowess. For America to retain this sort of edge, then, what the country needs is better MBAs, not more PhDs."

The modifier "better" is important. I suspect a lot of Americans believe that it was unprincipled executives with MBAs who betrayed their trust and plunged the world into its worst financial crisis in a generation. Given a chance to vote on who they trust most, I suspect people with PhDs would win hands down over people with MBAs. I would also argue that it is entrepreneurs, not necessarily people with MBAs, who form the backbone that creates "the commercialization, diffusion, and use of inventions" that Bhidé argues is so important.

"America also has another advantage: the extraordinary willingness of its consumers to try new things. Mr Bhidé insists that such 'venturesome consumption' is a vital counterpart to the country’s entrepreneurial business culture. Is he right? The lack of long-term data means this has become 'a quasi-theological dispute', says Robert Litan of the Kauffman Foundation, a charity that provided some funding for Mr Bhidé’s work. But the contrarian should not be dismissed out of hand. For a start, he is right to argue against making a fetish of invention. Edison did not invent the light bulb and Ford did not think up the motor car, but both came up with the business-model innovations required to profit from those marvels. And as GE’s Mr Immelt likes to say, his firm is not great at invention, but it is outstanding at 'turning $50m businesses into billion-dollar businesses'. Adam Segal of the Council on Foreign Relations, a think-tank, points out that the sensors that America’s soldiers use are no longer secret technology, but they use them in sophisticated ways that rivals cannot copy easily."

I'm a bit surprised that The Economist gives so much credit to U.S. businesses for taking inventions they did not create and successfully marketing them. The Asians have certainly had their share of successes in that area. There was a time when the U.S. manufactured most its own electronics, but Sony, Panasonic, Samsung and others eventually dominated that market creating America's well-known trade deficit. Having said that, I nevertheless agree with Bhidé that where ideas originate is not as important as what is done with those ideas.

"There is another reason to take the current 'techno-nationalism', as Mr Bhidé calls it, with a grain of salt. Even if China and India really are surging ahead in the number of technical graduates (and research by Vivek Wadhwa of Harvard University casts doubt on the quality of many of those degrees), innovation is not a zero-sum game. On the contrary, there is growing evidence that the rise of the giant emerging economies may even help those companies from the rich world that take a global approach to innovation. For several years Booz & Company, a management consultancy, has compiled a ranking, called the Global Innovation 1000, of the world’s leading firms ranked by investment in research and development. It has shown in the past that spending more on research has no correlation with better financial performance. But this year’s study, recently released, found that multinational firms that took a global approach to research outperformed those that concentrated their research spending in their home market."

IBM's Sam Palmisano would undoubtedly argue that in a globalized world a globally integrated enterprise is what gives a business a leg up on competitors (see my post Multinationals 2.0). The Economist seems to agree.

"'Being global and open is now necessary for innovation,' says Henry Chesbrough of the University of California, Berkeley. Cost is only one reason (and not usually the main one, Booz argues) to have a global research presence. Another advantage is the ability to tap into pools of talent abroad. But the most important advantage is the ability to listen to, and learn from, customers in new markets. As well as helping designers come up with products relevant to those markets, it also allows innovation to flow the other way. Indians often share mobile phones, notes Stephen Johnston of Nokia, so the handset-maker developed software to allow multiple phone-books on a single handset; this idea is now being brought to Western markets so that users can, say, separate their home and work contacts. Similarly, GE has developed low-cost medical scanners for Asian markets that are now being sold in other poor countries, too."

Clayton Christensen of Harvard Business School, as the article later admits, has argued that "listening to customers" can result in a company getting blindsided. In his best seller The Innovator's Dilemma, Christensen noted that customers will tell you they want what you are selling right up until the moment that something better (or good enough and cheaper) comes along. The Economist's article continues:

"Clayton Christensen of Harvard Business School is not fully persuaded by the arguments put forth by Mr Bhidé (who happens to be a former classmate). He thinks Chinese and Indian firms may in time 'disrupt' established American companies just as personal computers challenged mainframes, and he worries about America’s education system. But he accepts Mr Bhidé’s notion that it is more useful to teach technical skills to managers and factory workers than merely to crank out more theoretical scientists. Most importantly, Mr Christensen agrees with Mr Bhidé that there is no case for protectionism. Some techno-nationalists argue, for instance, that 'American innovation' should receive preferential tax treatment or subsidies. Such proposals make little sense given the increasingly global and open nature of innovation. As Mr Chesbrough wryly puts it: 'What’s good for Intel may not necessarily be good for America.'"

Another thing that Christensen and Bhidé share is optimism -- a characteristic I have repeatedly insisted marks entrepreneurs for success. The reason that I believe entrepreneurs are more important to America's future than MBAs is that entrepreneurs are naturally curious and MBA graduates don't necessarily have to be. A naturally curious person will pursue whatever education he or she requires to succeed and that education may not always be found in a classroom. The old adage that experience is the best teacher has been around for a long time. According to The Phrase Finder, "The great Roman leader Julius Caesar recorded the earliest known version of this proverb, 'Experience is the teacher of all things,' in 'De Bello Civili' (c. 52 B.C.). Over a century later, the Roman author Pliny the Elder in 'Naturalis Historia' (A.D. 77) wrote, 'Experience is the most efficient teacher of all things,' and the Roman historian Tacitus said simply, 'Experience teaches,' in his 'Histories' (c. 209)." I suspect that one of the reasons that Harvard MBA program relies so much on case studies is that it wants to provide its students with a broad range of experiences (even if they are others' experiences) in a short period of time. I may not agree with The Economist that what the country needs is more MBAs, but it got one thing right, there is absolutely no reason for American business to lose its self-confidence.

Politics in the Middle East

With people watching closely to see what happens as a new U.S. administration comes to power, Washington Post columnist David Ignatius reminds us that there are a number of political changes blowing in the wind. None are more important than those sweeping the landscape in the Middle East ["Turkey's Domino Theory," 21 December 2008]. The focus of Ignatius' column is a Turkish political strategist named Ahmet Davutoglu and his thoughts about how events might unfold in 2009.

"As Ahmet Davutoglu, Turkey's leading foreign policy strategist, explains the series of political choices that are ahead in the Middle East next year, he might be describing a row of dominoes. If they fall in the right direction, good things could happen. But if they start toppling the wrong way, watch out."

My colleague Tom Barnett has described the situation a "Big Bang" that began with the invasion of Iraq. The consequences of the Big Bang are sweeping outwards like ripples caused by a rock thrown into a pond. But whether you call them ripples or dominoes, the effects of political change in the Middle East are inextricably connected. Ignatius recommends that we pay attention to what Davutoglu says because he has been involved in of many of the changes that are now underway. Ignatius writes:

"Davutoglu's domino theory deserves careful attention from Barck Obama's team as it thinks about Middle East strategy. The Turkish official knows his stuff. As the top adviser to Prime Minister Recep Tayyip Erdogan, he has managed Turkey's successful mediation between Syria and Israel as well as other delicate diplomacy in this messy part of the world. ... Davutoglu has overseen a shift in Turkish diplomacy over the past several years -- away from Europe and toward the surrounding region that, until a century ago, was governed from this ancient city. This change of emphasis upsets some Turks, but I'll get to that later. What's intriguing about Davutoglu's analysis is that it involves a series of elections. That's good news for a region that has had too little democracy. The bad news is that voters may make choices that confound U.S. policy -- and that make peace in the region more difficult. 'We want the world community to understand that these elections are important, and that they will affect the Obama presidency,' explains Davutoglu."

The Bush administration came to office with high hopes that it could help create a more stable Middle East. President Bush pushed for the creation of a Palestinian state and for Palestinian elections. The administration's hopes, however, evaporated as the Muslim world perceived his war on terrorism as a war on Islam. Even the Palestinian elections didn't help create a more stable environment. Hamas won the elections -- much to the chagrin of the Bush administration -- and the Palestinians are now deeply divided. Nevertheless, Davutoglu's list of important regional elections begins with the Palestinians.

"The term of President Mahmoud Abbas expires Jan. 9, and with it, his authority to negotiate on behalf of the Palestinian Authority. Abbas had hoped that his term might be extended for a year as part of a reconciliation with the radical group Hamas. Abbas may instead call for presidential and parliamentary elections early next year. Right now, polls show his Fatah organization ahead of Hamas, 42 percent to 28 percent. But the situation is explosive, quite literally, because Hamas's cease-fire with Israel expired [in mid-December]. If Hamas votes with rockets, Israelis will become even more pessimistic about a two-state solution."

The Palestinian/Israeli problem is a stick of dynamite that burns at both ends. The other end of the explosive duo, Israel, is also holding elections.

"Elections will take place Feb. 10 to replace the government of Prime Minister Ehud Olmert. Polls are predicting a victory for hard-line Likud candidate Binyamin Netanyahu, who has been a sharp critic of Olmert's efforts to create a Palestinian state. A Netanyahu victory would complicate U.S. policy choices, to put it mildly. 'If hard-liners begin to win [among Palestinians and Israelis], that means the issue will be security,' says Davutoglu. 'Security will be more important than peace.'"

Security is always the trump card. The international community has understood for years that the key to peace in the Middle East begins with solving the Palestinian/Israeli conflict. It is the catalyst that unites Muslim frustrations and America has long been viewed as taking Israel's side in any conflict in the region. Despite its fervent support of a Palestinian state, the Bush administration managed to deepen long-held Muslim suspicions rather than alleviate them. Next on Davutoglu's list of elections to watch is Iraq.

"The Jan. 31 local elections could reinforce the accord reached when the Iraqi parliament endorsed a three-year limit on the U.S. military presence. But it could also deepen Iraq's regional and sectarian tensions -- and provoke a new flare-up of violence just as Obama is preparing to withdraw troops."

That, of course, could affect operations in Afghanistan, because troop increases there will be tied to troop levels in Iraq according to Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff. Wedged between Iraq and Israel are Syria and Lebanon. For decades, Syria has meddled in Lebanon's political affairs. Analysts expect the Syrians to be active as "Lebanon goes to the polls to elect a new parliament in April, with a final round of voting in June." According to Ignatius, "Iran and Saudi Arabia already are pumping in tens of millions of dollars to support their favorite candidates." Iran is the next domino in Davutoglu's chain:

"In June, a crucial presidential election will take place in Iran, which will determine whether radical President Mahmoud Ahmadinejad stays or goes. Davutoglu says his slogan is 'zero problems on our borders.' The next few months will test whether that optimistic strategy is viable."

It's not just elections that will affect Turkey's border security. Because of Enterra Solutions' work in northern Iraq, I have closely followed the problems between Turkey and the rebel Kurdish group known as the PKK. That situation will not be solved by elections this coming year. Yet solving it is important for regional stability and economic progress. Turkey wants to play a significant, if not dominant, role in the region's economic development. That is one reason it has refocused much of its foreign policy away from Europe and toward the Middle East. Ignatius returns to that subject:

"Not everyone here is enthusiastic about the Turkish government's new stress on regional diplomacy. Critics argue that although Erdogan is still officially committed to joining the European Union, he is actually abandoning that goal. 'They have lost enthusiasm on the E.U. All their energy now is on regional politics,' contends Sedat Ergin, editor of the daily newspaper Milliyet. Some Turks also worry that as Erdogan turns away from Europe, he is becoming less tolerant of his opponents. Critics cite his call in September [2008] for a boycott of Milliyet and other papers that had reported on a corruption case in Germany involving members of his party. 'His limit of tolerance for freedom of the press and freedom of expression is pretty low,' argues Soli Ozel, a columnist for Sabah newspaper. Davutoglu stresses that Turkey's new regional role isn't a throwback to the days of the Ottoman pashas. The world has changed. Democracy rules. But that doesn't guarantee people will vote the way the United States wants."

People vote first for security (which often translates to voting along ethnic lines) then for their pocketbooks. The broad community of democratic states needs to convince fledgling democracies that stability and prosperity are best pursued through moderate policies and increased tolerance. They need only look at Iran to see how intolerance and radical policies have depressed what should be one of the region's best economies. I don't expect 2009 to be a peaceful year, but it will be an interesting one.

Testing the Rhetoric of Sustainability

In a special on-line report, The Economist looks into its crystal ball and writes about the year ahead [The World in 2009]. One of the lead articles deals with the topic of sustainability ["The year of unsustainability", Daniel Franklin, editor]. As the title of the article indicates, the magazine is not very optimistic. It begins its assessment by noting that there exists a certain ambiguity associated with the term "sustainability."

"For business, the buzzword of 2008 was 'sustainability'. Never properly defined, it meant different things to different people, which of course added to its charm. In part it was a new way of packaging the clumsy old 'corporate social responsibility' (CSR). And it added a virtuous green dimension: sustainable business would help to save the planet. So companies appointed chief sustainability officers and printed (or, to avoid felling more rainforest, electronically distributed) sustainability reports full of photographs of green fields and blossom. But that was then."

The magazine sees corporate social responsibility as humanity's fairweather friend. When times get tough, the hearts of businesses' harden. Ironically, the article notes, "sustainability" may soon be equated to resilience or even survival.

"In 2009 sustainability will take on a new meaning in boardrooms: staying in business. As recession bites and growth slows, bankruptcies will soar. To sustain profits, companies will slash costs and cut jobs, while consumers will be even less prepared to pay extra for organic food or air-travel offsets."

The magazine's prediction is that past commitments to social responsibility and environmentally friendly practices will turn out to be little more than rhetoric -- and it argues there is nothing wrong with that.

"The budgets for worthy projects in the developing world, let alone for supporting opera houses, will be trimmed or cut altogether as their champions find the spending impossible to defend amid the lay-offs. Even the easy wins in the sustainability business—saving both money and the planet by cutting energy usage—will be less rewarding with lower oil prices. Some of this will be salutary. In the face of the fashion for CSR, companies have tended to make two mistakes. First, they have been too defensive about the benefits they bring to society by the simple fact of being in business. They provide employment, as well as the goods and services that their customers want—and the threat of job losses and even bankruptcies will serve as a powerful reminder of this basic reality. Second, many companies pretend that their sustainability strategy runs deeper than it really does. It has become almost obligatory for executives to claim that CSR is 'connected to the core' of corporate strategy, or that it has become 'part of the DNA'. In truth, even ardent advocates of sustainability struggle to identify more than a handful of examples. More often the activities that go under the sustainability banner are a hotch-potch of pet projects at best tenuously related to the core business. The coming shake-out will help to remove some of this froth."

It's difficult to argue with the article's reasoning. Rich companies, like rich men, can afford to be charitable. Philanthropy is much more difficult in hard times. It's also true that businesses don't take enough credit for providing a public good in the form of employment, taxes, and products (when those products are produced ethically and adhere to high standards of quality). But, as the article goes on to note, being good corporate citizens doesn't necessarily rely on making huge donations to pet projects.

"It would be wrong for companies to conclude that they can forget about trying to be good. The forces that have pushed companies to fret about sustainability—the scrutiny from the internet, multiplying lobby groups, popular concern about global warming, the threat of lawsuits for misbehaviour on human rights—are not about to disappear. Nor will the desire of potential recruits to work for companies with 'values' suddenly vanish. In the competition for the best business-school graduates and other high-flyers, especially once the economy starts to recover, companies that show that they were not mere fairweather friends of sustainability will be at an advantage."

The article doesn't touch on another area where companies can do good by helping themselves. In emerging market countries, especially those blessed with natural resources, companies that want to extract those resources require healthy and skilled workers. Helping provide healthcare and training benefits both the company and the community at large. Such self-enlightened "sustainability" efforts are win-win activities (see my post Training, Education, and Development). The article continues:

"If companies are not seen to take their social responsibility seriously, governments will intervene to change the rules by which they operate. Some will force companies to sell greener products (for example, by banning the sale of incandescent light bulbs). Others will legislate on executive pay, or oblige banks to lend money in ways the state deems desirable. After rescuing the financial system, many Western governments will imagine that they are the best judges of how to run businesses responsibly."

Most socialist experiments have not ended well, but neither have attempts at deregulation. The larger challenge raised by the article is that governments have issues of their own to work out and trying to run failing businesses at the same time may be a bridge too far. Just like businesses, predicts the article, governments will likely try to back off some the commitments they made during flush times.

"In 2009 governments face their own test on 'sustainability'. A summit in Copenhagen at the end of the year is supposed to hammer out a post-Kyoto agreement to cut greenhouse gases. Already pressure is growing to avoid the growth-inhibiting restrictions needed to meet ambitious carbon-cutting targets. Failure to reach a deal will mean, in effect, that the world gives up seriously seeking to stop global warming. Instead, attention would turn to ways the world might adapt to climate change rather than prevent it. Governments and businesses alike have talked up their commitments to sustainability in recent years. In 2009 both will have to show whether they really meant it."

As a side note, my colleague Tom Barnett argues in his forthcoming book Great Powers: America and the World After Bush, that adapting to climate change is not such a bad thing.

"There’s the bigger argument offered by [Danish economist Bjørn] Lomborg in his brilliant little 2007 book, Cool It! Like Lomborg, I see no reason to debate whether the world is getting warmer or whether human activity is causing such change. Both points seem reasonably well established by the global scientific community. The real question is whether or not we need to elevate global warming to the status of the greatest crisis of our age. ... As Lomborg argues, our ultimate goal shouldn’t be the reduction of greenhouse gases or global warming per se, 'but to improve the quality of life and the environment' for future generations. ... Why not ask [the] emerging global middle class how the global economy can best meet its needs and expectations for a better life? Why not center globalization’s ideology in that massive middle instead of on the extreme have/have-not margins? ... If the West’s fundamental offer to these emerging economies is to curtail their growth potential as a way of avoiding future resource wars, then we will end up doing nothing more than guaranteeing that such conflicts occur. ... Human history, as Lomborg points out, says we do better when it gets warmer and that we do worse when it gets colder. It also tells us that it’s far easier (and cheaper) to cool people in hot climes than keep them warm in cold ones."

The bottom line is not that profits trump social responsibility but that if corporate responsibility is really going to be "part of a company's DNA" then it must create a win-win situation that benefits both the company and the community at large. First and foremost, as the article points out, that can only be accomplished if a company survives. A well-intentioned company that goes out of business can offer "zero" contributions to society.

Happy Holidays

Today the Christian world celebrates Christmas. Regardless of the faith you keep or the principles that guide your life, celebrating a season that focuses on the joy of giving and serving is good for the world. Amanda Bradley wrote:

It only takes one smile to offer welcome ... and blessed be the person who will share it.
It only takes one moment to be helpful ... and blessed be the person who will spare it.
It only takes one joy to lift a spirit ... and blessed be the person who will give it.
It only takes one life to make a difference ... and blessed be the person who will live it.

During this holiday season, I encourage you make a difference in someone's life. As Benjamin Franklin said, "Well done is better than well said." Franklin also said, "A man wrapped up in himself makes a very small bundle," which is one reason why so many people who selfishly focus on "finding themselves" get lost in the process. Spencer Kimball offered this advice:

"The more we serve our fellowman in appropriate ways, the more substance there is to our souls. We become more significant individuals as we serve others. We become more substantive individuals as we serve others, — indeed, it is easier to ‘find’ ourselves because there is so much more to find!"

My wish for you this holiday season is that you find yourself actively involved serving others in some way. Be more courteous and kind. Be more generous and thankful. If you do, you will indeed have a happy holiday season.

Good News about Measles

One of the fundamental efforts being made by the international community is to reduce the number of deaths caused by various treatable diseases. Among the targeted diseases are AIDS, malaria, and measles. These diseases take a devastating toll around the globe, especially on children. Every day an estimated 540 children die from measles. Most of these deaths could be prevented with vaccination. That is the goal of The Measles Initiative and it is reporting tremendous progress since its efforts began. According to a press release issued on 4 December 2008:

"Measles deaths worldwide fell by 74% between 2000 and 2007, from an estimated 750,000 to 197,000. In addition, the Eastern Mediterranean region which includes Afghanistan, Pakistan, Somalia, and the Sudan has cut measles deaths by a remarkable 90% - from an estimated 96,000 to 10,000 - during the same period, thus achieving the United Nations goal to reduce measles deaths by 90% by 2010, three years early."

Like any international program that achieves success, the Measles Initiative is a cooperative effort. Founding partners of the Measles Initiative include: the American Red Cross, the United States Centers for Disease Control and Prevention (CDC), the United Nations Foundation (UN Foundation), UNICEF and the World Health Organization (WHO). The press release continues:

"The significant decline in measles deaths in the Eastern Mediterranean region was the result of intensified vaccination campaigns including several countries with hard-to-reach areas. In 2007, more than twice the number of children were immunized in the region through such campaigns as compared to 2006. 'There are thousands of health workers and volunteers from our Red Cross and Red Crescent family who deserve much of the credit for this success. They give their time to literally go door-to-door informing, educating and motivating mothers and caregivers about the critical need to vaccinate their children,' said Bonnie McElveen-Hunter, Chairman of the Board of the American Red Cross. 'This mobilization helps us to consistently reach more than 90% of the vulnerable population and save countless lives.'"

There is both good news about measles reduction and bad coming out of Africa.

"The African region was the largest contributor to the global decline in measles deaths, accounting for about 63% of the reduction in deaths worldwide over the eight-year period. In 2007, measles outbreaks occurred in a number of African countries due to gaps in immunization coverage, reinforcing the need to continue immunization support. 'It's absolutely wonderful that so many children are off to a healthy start in life thanks to the progress we've made in combating measles through immunization,' said Dr Julie Gerberding, CDC Director. 'Other children's lives are still at risk, however, so it's time we refocus our attention on sustaining our immunization efforts in countries where rates are low.'"

One area where more effort is definitely needed is Southeast Asia -- an area in which the Measles Initiative includes India.

"The progress in South-East Asia has been limited - with just a 42% decline in measles deaths. This is due to the delayed implementation of large-scale vaccination campaigns in India, which currently accounts for two-thirds of global measles deaths. Political commitment in India is essential if the 2010 global goal is to be achieved."

Measles, of course, is just one of the numerous challenges that face India. The country needs to create jobs, build its infrastructure, improve its educational system, eliminate the evils of the caste system and address its many health concerns. Although these are all daunting challenges, they must each receive attention if India is to achieve economic prosperity. Although the Measles Initiative is thrilled with the progress to date, those involved are not resting on their laurels.

"'The progress that has been made shows what can be achieved through measles vaccination campaigns, but much more needs to be done,' said Ann M. Veneman, Executive Director of UNICEF. 'It is a tragedy that measles still kills more than 500 children a day when there is a safe, effective and inexpensive vaccine to prevent the disease.' The world's success in reaching the 2010 measles goal depends on ensuring that all children receive two doses of measles vaccine including one dose by their first birthday, strengthening disease surveillance systems, and providing effective treatment for measles. 'Progress also depends on addressing the considerable funding gap,' said Kathy Calvin, Executive Vice President and Chief Operating Officer for the UN Foundation. 'The shortfall stands at US$176 million for 2009-2010, of which US$35 million is urgently needed for 2009. With continued funding and increasing ownership and commitment of countries, we can sustain our progress and achieve our goal by 2010. We ask our supporters to stay with us and strongly encourage new supporters to join us in our effort to save lives.'"

If you are looking for a way to make a difference in the world this holiday season, donating to the Measles Initiative is one way to do so. You can donate online through the American Red Cross. The Measles Initiative has so far supported the vaccination of more than 600 million children in more than 60 countries. If you can't afford to make a financial donation to a worthy cause during these difficult times, consider giving of your time to community service. You'll feel better about yourself and you'll help make this world a little better place for all of us.

Trade and Peace in Africa

Bad news out of the Congo and Sudan flows like muddy river water after a rainstorm. Herman J. Cohen, a former assistant secretary of state for Africa from 1989 to 1993, believes that the only way to clear the water and bring lasting peace to Africa is through increased trade ["Can Africa Trade Its Way to Peace?," New York Times, 15 December 2008]. The focus of Cohen's op-ed piece is the conflict in the border region between the Congo and Rwanda.

"The conflict in eastern Congo over the past 12 years has been as much a surrogate war between Congo and neighboring Rwanda as an internal ethnic insurgency, as a United Nations report underscored last week. The only way to end a war that has caused five million deaths and forced millions to flee their homes in Congo’s two eastern provinces is to address the conflict’s international dimensions. The role of Rwanda — which borders the provinces and which denied the accusations in the United Nations report over the weekend — is of prime importance. The international community has worked hard to resolve the conflicts among the various parties: the sovereign states of Rwanda and Congo as well as the assorted militias and private armies that are sponsored by these two governments and by opportunistic local warlords. But despite the deployment of 17,000 United Nations peacekeepers, and many efforts at mediation with constructive American support, the situation appears intractable."

Cohen is reminding us of the aphorism, "A sign of insanity is to keep doing the same thing and expect a different outcome." If negotiations and military force have not worked to solve the problem, he wonders what if anything will. Before providing his recommended solution, Cohen gives us a history lesson.

"The failure of international diplomacy is related to the economic roots of the problem, which began with the 1994 genocide in Rwanda. Until the economic conundrum is addressed, there is little prospect for a solution. The genocidal war between the majority Hutu and the minority Tutsi in Rwanda spilled into Congo, and the eastern part of that vast country has been unstable ever since. When Tutsi rebel forces took power in Rwanda in June 1994, more than a million Hutu fled to Congo, where they settled into refugee camps on the Rwandan border. After two years of cross-border raids from the refugee camps by exiled Hutu soldiers who had participated in the genocide, the Rwandan Army attacked and destroyed the camps, with the quiet but unambiguous approval of the United States in the absence of another solution to the violence. Most of the Hutu refugees returned to Rwanda, but about 100,000 of them, along with the exiled Hutu soldiers, moved westward as a disciplined group into Congo’s interior. The Rwandan Army pursued the escaping Hutu and caught up with them near the city of Kisangani at the headwaters of the Congo River. The refugees were massacred, but the former Hutu soldiers escaped to neighboring countries. The move against the refugee camps was the first step in a well-planned action by Rwanda in 1996 and 1997 to overwhelm the weak Congolese Army and, with the help of the Congolese opposition, overthrow the 30-year dictatorship of Mobutu Sese Seko. With logistical support from Uganda and Angola, the military action succeeded in less than three months. A new government in Congo was installed under President Laurent Kabila, an exile handpicked by the Rwandans. And from 1996 to today, the Tutsi-led Rwandan government has been in effective control of Congo’s eastern provinces of North and South Kivu. This control has been maintained through intermittent military occupation and the presence of Congolese militias financed and trained by the Rwandan Army."

Cohen goes on to explain that Rwanda's objectives are as much economic as they are security.

"During these 12 years of Rwandan control, the mineral-rich provinces have been economically integrated into Rwanda. During this time, Congo’s governments have been preoccupied with internal and external wars elsewhere, and have been unable to combat foreign control of the eastern provinces, a thousand miles from the capital, Kinshasa."

As you can imagine, no government willingly gives up control of "mineral-rich" provinces. It was only a matter of time before leaders in the Congo were going to reassert themselves.

"Two years ago, Congo held multiparty elections that were judged to be transparent and credible by international observers. For the first time in a decade, there was hope for stability. President Joseph Kabila (the son of Laurent Kabila, who was assassinated in 2001) turned his attention to trying to gain control of the eastern provinces. Unfortunately, this has led to increased conflict and suffering. The main source of the current violence is an insurgent force of ethnic Congolese Tutsi commanded by Laurent Nkunda, a former general in the Congolese Army. He claims to be fighting to defend the Tutsi community from discrimination and from the former Rwandan Hutu fighters who have returned from neighboring countries and now operate in the forested hills of eastern Congo. General Nkunda’s military operations, however, are aimed mainly against the Congolese Army’s efforts to restore Congo’s sovereignty over its eastern provinces. His force is well armed and financed by the Rwandan government. The armed Hutu presence in the provinces provides the Rwandan government with a pretext to justify its interference there."

Having set the stage, Cohen goes on to suggest that the solution to instability and conflict in the region is establishing a trading regime that benefits both the Congolese and Rwandan people.

"Having controlled the Kivu provinces for 12 years, Rwanda will not relinquish access to resources that constitute a significant percentage of its gross national product. At the same time, Congo’s government is within its rights to take control of the resources there for the benefit of the Congolese people. This economic conflict must be taken into account. This provides an opportunity for the incoming Obama administration. Acts of war and military occupation aside, there is a natural economic synergy between eastern Congo and the nations of East Africa, including Rwanda, Burundi, Tanzania and Uganda. The normal flow of trade from eastern Congo is to Indian Ocean ports rather than the Atlantic Ocean, which is more than a thousand miles away. After his inauguration, Barack Obama should appoint a special negotiator who would propose a framework for an economic common market encompassing Congo, Rwanda, Burundi, Kenya, Tanzania and Uganda. This agreement would allow the free movement of people and trade. It would give Rwandan businesses continued access to Congolese minerals and forests. The products made from those raw materials would continue to be exported through Rwanda. The big change would be the payment of royalties and taxes to the Congolese government. For most Rwandan businesses, those payments would be offset by increased revenues. In addition, the free movement of people would empty the refugee camps and would allow the densely populated countries of Rwanda and Burundi to supply needed labor to Congo and Tanzania."

Although Cohen's op-ed piece makes it sound like negotiating the establishment of economic common market will be easy, he understands it will be extremely difficult. People have long memories and embrace grudges for generations -- especially when grudges concern bloody acts of murder. The genocide in Rwanda was a terrible, but Cohen is correct that the only way forward is to leave the past behind. One thing that is helping are convictions coming out of the International Criminal Court that stem from atrocities committed during the genocide ["Rwandan Officer Found Guilty of 1994 Genocide," by Lydia Polgreen, New York Times, 18 December 2008]. But, as Polgreen points out, there is a long way to go.

"'Everybody has dirty hands' in eastern Congo, said [René Lemarchand, an Africa scholar who has been writing about the troubled Great Lakes region for decades]. 'But I think it is a good time to take our distance toward Rwanda and recognize there is still an awful lot of dirty linen to be washed.'"

Even though negotiating a regional common market won't be easy, the hardest part of what Cohen is suggesting will be to get the rebels to lay down their arms. Fighting and bullying have become a way of life for the rebels. And rebel leaders are like all leaders; they do not give up power easily. More often than not, they are criminals who have committed terrible atrocities and are deserving of standing trial before the International criminal court. Knowing that is their fate, however, is not an encouragement for them to stop fighting. General Nkunda, the rebel now in control of much of the Congolese territory that borders Rwanda, certainly shows no sign of giving up the fight ["Congo Warlord Linked to Abuses Seeks Bigger Stage," by Lydia Polgreen, New York Times, 19 December 2008]. Polgreen reports:

"That General Nkunda, who is suspected of committing a litany human rights violations, could be a leading figure in [an alliance of convenience between General Nkunda and other enemies of the president could lead to the ouster of Congo’s first democratically elected government in four decades] is a chilling thought for many Congolese. A recent journey through territory he controls revealed a host of contradictions between the image he puts forward and reality, including evidence of mass killings, the extraction of onerous payments from residents, illegal profiteering from the mineral trade and the conscription of child soldiers."

Cohen believes, however, that once rebels like Nkunda stop receiving financial support they can be dealt with in a more effective way.

"If such a common market could be negotiated, Rwanda and Congo would no longer need to finance and arm militias to wage war over the natural resources in Congo’s eastern provinces. Without government backing, the fighting groups would either dissolve on their own or be integrated into legitimate armed forces. If undertaken with enough will and persistence, an American-led mediation to create a common market in East Africa could end the war and transform the region."

I'm all in favor of creating a regional common market. In fact, I have written that regionalization is going to be important for African development. But Cohen is wildly optimistic if he thinks that rebel groups will "dissolve on their own or be integrated into legitimate armed forces." Before the rebels give up their arms, they need assurances that good jobs await them (preferably not in the military) and they will probably need to be trained for those jobs. Most rebel fighters have nothing else since they were youth. Without a significant rehabilitation program, rebels are more likely to become criminals than farmers or laborers. Many of them will have come to enjoy the feeling of superiority they feel when people cower before them or flee at their approach. Such men are probably best incarcerated until they have been given skills that make them fit to contribute to society.

The fact it will be difficult to negotiate a common market agreement and get the rebels to stop fighting doesn't mean the international community shouldn't try. It does mean that if they are going to attempt they can't do it on the cheap. Real resources will have to be committed to establish conditions that foster success. Basically, Cohen wants to create a regional globalization that provides for the free movement of people, resources, and capital. It can work, but the path is steep and only the truly committed should start up that path.

U.S. Science and Math Scores Remain Worrying

Most people are aware that for a couple of decades U.S. test scores in science and math have been falling behind those of some international students (mostly Asian students). Recent test scores indicate that the situation has not improved ["Scores on Science Test Causing Concern in U.S.," by Maria Glod, Washington Post, 10 December 2008]. As I wrote in another post back in February 2007, "The information age is also the age of mathematics. Many of the challenges that will face businesses in the future will require math graduates more than business graduates to solve them. One of the reasons that many pundits see a bright future for Asia is because many Asian education systems stress mathematics in their core curricula." Glod writes:

"U.S. students are doing no better on an international science exam than they were in the mid-1990s, a performance plateau that leaves educators and policymakers worried about how schools are preparing students to compete in an increasingly global economy. Results of the Trends in International Mathematics and Science Study (TIMSS) ... show how fourth- and eighth-graders in the United States measure up to peers around the world. U.S. students showed gains in math in both grades. But average science performance, although still stronger than in many countries, has stagnated since 1995. Students in Singapore, Taiwan, Japan and Hong Kong outperformed U.S. fourth-graders in science. The U.S. students had an average score of 539 on a 1,000-point scale, higher than their peers in 25 countries. In eighth grade, Singapore topped the list, with an average score of 567. Students in Taiwan, Japan, South Korea, England, Hungary and Russia were among those earning higher marks than their U.S. counterparts. The average score in the United States was 520."

There is a small, but dedicated, dedicated group of educators and community activists that have been trying to increase interest in math and science in the United States, but their efforts remain on the fringes of education. For an example of on-going efforts, read my post Speaking in Numbers. Glod notes that if we're progressing we're falling further behind.

"'We need to pay attention to the results. We're just static, and other countries are improving,' said Francis Eberle, executive director of the Arlington County-based National Science Teachers Association."

Some critics believe that science test scores demonstrated little improvement because science was downplayed, if not ignored, during the Bush administration. There were even occasional accusations that the administration tried to manipulate scientific studies. Many hope that will change with a new administration.

"President-elect Barack Obama has promised to make math and science education a national priority. He said the federal government would work with states to improve science education, beginning in preschool, and he plans to establish a teaching scholarship program to recruit graduates with backgrounds in math and science."

It will take more than rhetoric, however, to get students interested in math and science. As I wrote in the post cited above, polls have shown that parents recognize the importance of math and science but are so ignorant in those subjects that they don't know how to begin introducing their children to them or they are afraid to expose their lack of knowledge. Until adults get excited about science and math, they shouldn't expect their children to get excited either.

"The TIMSS tests, administered every four years since 1995, were taken last year by a sampling of students in the United States and more than 50 other countries. In the United States, more than 20,000 students in nearly 500 public and private schools participated. U.S. students made notable strides in math. Since 1995, the average score among fourth-graders has jumped 11 points, to 529. But students in Hong Kong, Singapore, Taiwan, Japan, Russia and England were among those with a higher average. Hong Kong topped the list with an average score of 607. Eighth-graders also had a higher average score than in 1995 and bested counterparts in 37 countries. But they lagged behind peers in Taiwan, South Korea, Singapore, Hong Kong and Japan, among other places."

While the Bush administration's record on science is mixed, its record on math is stronger.

"Some educators and officials attribute the gains to a renewed focus on math education in recent years. The 2002 federal No Child Left Behind law requires schools to administer annual math tests, with the goal of steadily improving performance. In 2006, President Bush appointed a panel to recommend ways to ensure that students are prepared for algebra. Secretary of Education Margaret Spellings said the scores 'reconfirm what we have long known: If we set high expectations, our children will rise to the challenge.' She added that 'flat science scores ... remind us that we can't afford to be complacent.' The benefits of tough standards and a focus on foundational skills were reflected in test score gains in Minnesota, according to William Schmidt, a Michigan State University professor who worked with Minnesota education officials. In 1995, before the state implemented math standards based on international benchmarks, Minnesota fourth-graders trailed peers across the country. But in the 2007 TIMSS testing, Minnesota outpaced the nation and trailed only Hong Kong, Singapore, Taiwan and Japan. 'It says, "America you can do it, and the way to do it is to have coherent, focused and rigorous standards,"' Schmidt said. The scores led to renewed calls to bolster science and math in the nation's schools by increasing the ranks of well-prepared teachers and providing other support."

Stagnant test scores have not gone unnoticed on Capitol Hill.

"'While it's good news that fourth-graders have made significant gains in math, it's troubling that our students are still behind their international peers in both math and science -- fields that are key to our country's economic vitality and competitiveness,' said Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee. 'It's increasingly clear that building a world-class education system that provides students with a strong foundation in math and science must be part of any meaningful long-term economic recovery strategy.'"

Government leaders around the world have watched the rise of the Asian tigers and they clearly understand the relationship between improved education (especially in math, science, and engineering) and a prosperous economy. American students, however, follow the money. In recent decades compensation has been best in finance and on the business end (rather than the R&D) end of the private sector. The current financial crisis might stimulate some students to pursue science, math or engineering degrees rather than business or finance degrees; but without good, well-paying jobs waiting for them at the end of their educational trail, any gains created by the current crisis will be short-lived.

Update on Malware

Last month on Election Day, I posted a blog entitled Public/Private Partnerships in Cyberspace that discussed efforts aimed at increasing Internet security. New York Times' technology columnist John Markoff reports that, despite government and commercial efforts, the bad guys are winning ["Thieves Winning Online War, Maybe Even in Your Computer," 5 December 2008]. This may be the season to be jolly, but Markoff provides no joyful news. He writes:

"Internet security is broken, and nobody seems to know quite how to fix it. Despite the efforts of the computer security industry and a half-decade struggle by Microsoft to protect its Windows operating system, malicious software is spreading faster than ever. The so-called malware surreptitiously takes over a PC and then uses that computer to spread more malware to other machines exponentially. Computer scientists and security researchers acknowledge they cannot get ahead of the onslaught."

This is bad news indeed. Not only is connectivity needed to help pull the world out of its financial funk, it is critical to help the millions of people still held firmly in poverty's grasp to break free. I have repeatedly written about the importance of trust in helping foster a growing and sustainable global economy. Malware erodes that trust and costs innocent victims billions of dollars. More on that topic later.

"As more business and social life has moved onto the Web, criminals thriving on an underground economy of credit card thefts, bank fraud and other scams rob computer users of an estimated $100 billion a year, according to a conservative estimate by the Organization for Security and Cooperation in Europe. A Russian company that sells fake antivirus software that actually takes over a computer pays its illicit distributors as much as $5 million a year. With vast resources from stolen credit card and other financial information, the cyberattackers are handily winning a technology arms race. 'Right now the bad guys are improving more quickly than the good guys,' said Patrick Lincoln, director of the computer science laboratory at SRI International, a science and technology research group."

Back in October, Markoff wrote another article about botnets that I commented on in my post entitled An Update on Zombies. It provides an excellent background for this article. In my November post, I noted that the effort to improve Internet security needs to be an international effort -- a fact highlighted in Markoff's most recent column:

"A well-financed computer underground has built an advantage by working in countries that have global Internet connections but authorities with little appetite for prosecuting offenders who are bringing in significant amounts of foreign currency. That was driven home in late October when RSA FraudAction Research Lab, a security consulting group based in Bedford, Mass., discovered a cache of half a million credit card numbers and bank account log-ins that had been stolen by a network of so-called zombie computers remotely controlled by an online gang. In October, researchers at the Georgia Tech Information Security Center reported that the percentage of online computers worldwide infected by botnets — networks of programs connected via the Internet that send spam or disrupt Internet-based services — is likely to increase to 15 percent by the end of this year, from 10 percent in 2007. That suggests a staggering number of infected computers, as many as 10 million, being used to distribute spam and malware over the Internet each day, according to research compiled by PandaLabs."

If there were not big financial rewards associated with these criminal activities, the nefarious people involved wouldn't be spending the time and money recruiting zombie computers to strengthen their botnets. Rout them out in one place and they simply reemerge in another.

"Security researchers concede that their efforts are largely an exercise in a game of whack-a-mole because botnets that distribute malware like worms, the programs that can move from computer to computer, are still relatively invisible to commercial antivirus software. A research report last month by Stuart Staniford, chief scientist of FireEye, a Silicon Valley computer security firm, indicated that in tests of 36 commercial antivirus products, fewer than half of the newest malicious software programs were identified."

That's not very reassuring for those of us who load anti-virus and anti-spyware programs on our PCs and use them religiously. Markoff does point to one glimmer of light.

"There have been some recent successes, but they are short-lived. On Nov. 11, the volume of spam, which transports the malware, dropped by half around the globe after an Internet service provider disconnected the McColo Corporation, an American firm with Russian ties, from the Internet. But the respite is not expected to last long as cybercriminals regain control of their spam-generating computers."

That is why I argue that efforts to make the Internet safer must be international. The pressure to find and prosecute cybercriminals must be unrelenting. Any country that doesn't cooperate fully should be declared a pariah and, as much as possible, be severed from international connectivity. The punishments for cybercrime need to be as painful as the crimes are rewarding. As long as rewards outweigh risks, the criminal community will thrive. Criminals know how to conduct cost/benefit analysis.

"'Modern worms are stealthier and they are professionally written,' said Bruce Schneier, chief security technology officer for British Telecom. 'The criminals have gone upmarket, and they’re organized and international because there is real money to be made.' The gangs keep improving their malware, and now programs can be written to hunt for a specific type of information stored on a personal computer. For example, some malware uses the operating system to look for recent documents created by a user, on the assumption they will be more valuable. Some routinely watch for and then steal log-in and password information, specifically consumer financial information. The sophistication of the programs has in the last two years begun to give them almost lifelike capabilities. For example, malware programs now infect computers and then routinely use their own antivirus capabilities to not only disable antivirus software but also remove competing malware programs. Recently, Microsoft antimalware researchers disassembled an infecting program and were stunned to discover that it was programmed to turn on the Windows Update feature after it took over the user’s computer. The infection was ensuring that it was protected from other criminal attackers."

It's not just the sophistication but the volume of malware that disturbs analysts. An accompanying graphic to Markoff's column shows that the number of unique malware applications that have been discovered is closing in on 20 million. Markoff reports that "Microsoft has monitored a 43 percent jump in malware removed from Windows computers just in the last half year." He also notes that the average user has no idea whether his or her computer is one of the millions of zombie computers in operation.

"The biggest problem may be that people cannot tell if their computers are infected because the malware often masks its presence from antivirus software. For now, Apple’s Macintosh computers are more or less exempt from the attacks, but researchers expect Apple machines to become a larger target as their market share grows. The severity of the situation was driven home not long ago for Ed Amaroso, AT&T’s chief security official. 'I was at home with my mother’s computer recently and I showed her it was attacking China,' he said. '"Can you just make it run a little faster?" she asked, and I told her "Ma, we have to reimage your hard disk."'

Markoff eventually gets to the subject of trust.

"Beyond the billions of dollars lost in theft of money and data is another, deeper impact. Many Internet executives fear that basic trust in what has become the foundation of 21st century commerce is rapidly eroding. 'There’s an increasing trend to depend on the Internet for a wide range of applications, many of them having to deal with financial institutions,' said Vinton G. Cerf, one of the original designers of the Internet, who is now Google’s 'chief Internet evangelist.' 'The more we depend on these types of systems, the more vulnerable we become,' he said."

As the CEO of a company purveying resilience, I am vividly aware of how vulnerabilities can affect operations and resiliency. Government leaders are also beginning to understand how cybercrime can have both security and economic repercussions.

"The United States government has begun to recognize the extent of the problem. In January, President Bush signed National Security Presidential Directive 54, establishing a national cybersecurity initiative. The plan, which may cost more than $30 billion over seven years, is directed at securing the federal government’s own computers as well as the systems that run the nation’s critical infrastructure, like oil and gas networks and electric power and water systems. That will do little, however, to help protect businesses and consumers who use the hundreds of millions of Internet-connected personal computers and cellphones, the criminals’ newest target."

With mobile computing (which includes the explosion of smartphones) on the rise, it should come as no surprise that cellphones are targets. With an increasing number of people using cellphones for financial transactions, especially in emerging market countries, sustainable development could well rest upon the shoulders of those fighting the good fight. In bad financial times, however, those fighting the good fight are often early casualties (because "wars" expend precious resources that business owners believe could be spent better elsewhere). They might want to rethink their priorities.

"Despite new technologies that are holding some attackers at bay, several computer security experts said they were worried that the economic downturn will make computer security the first casualty of corporate spending cuts. Security gets hit because it is hard to measure its effectiveness, said Eugene Spafford, a computer scientist at Purdue University. He is pessimistic. 'In many respects, we are probably worse off than we were 20 years ago,' he said, 'because all of the money has been devoted to patching the current problem rather than investing in the redesign of our infrastructure.'"

The challenge, of course, is that no single country can "redesign" the infrastructure to make it more secure. The thing that makes the Internet resilient is the fact that no one controls it. There is no single point of failure. Again, only an international effort has any chance of creating a more secure future; but difficult financial times means that a cooperative effort is unlikely. Nevertheless, now is no time to go lax. Our best efforts are needed because the forces of good are equally matched in skill level by the forces of evil.

"The cyber-criminals appear to be at least as technically advanced as the most sophisticated software companies. And they are faster and more flexible. As software companies have tightened the security of the basic operating systems like Windows and Macintosh, attackers have moved on to Web browsers and Internet-connected programs like Adobe Flash and Apple QuickTime. This has led to an era of so-called 'drive-by infections,' where users are induced to click on Web links that are contained in e-mail messages. Cyber-criminals have raised the ability to fool unsuspecting computer users into clicking on intriguing messages to a high art. Researchers note that the global cycle of distributing security patches inevitably plays to the advantage of the attacker, who can continually hunt for and exploit new backdoors and weaknesses in systems. This year, computer security firms have begun shifting from traditional anti-virus program designs, which are regularly updated on subscribers’ personal computers, to Web-based services, which can be updated even faster."

With all of the recent announcements of layoffs, there is one upside to the growing malware problem -- some people's jobs look secure.

"Security researchers at SRI International are now collecting over 10,000 unique samples of malware daily from around the globe. 'To me it feels like job security,' said Phillip Porras, an SRI program director and the computer security expert who led the design of the company’s Bothunter program, available free at www.bothunter.net. 'This is always an arm race, as long as it gets into your machine faster than the update to detect it, the bad guys win,' said Mr. Schneier."

If the global economy is going to grow and if millions of more people are going to be helped out of poverty, the bad guys can't win. If the bad guys win, they will do their best to keep emerging market nations just below the threshold of success. They need places from which they can operate and relatively unsophisticated economies provide them with just the toehold they need into the developed world's networks without having to dodge the developed world's enforcement mechanisms. That is another reason that my colleague Tom Barnett believes that the U.S. strategy (and broader international community strategy) should be to shrink the Gap (meaning reduce the number of relatively disconnected nations in which criminals can hide and flourish). It's all about trust.

China -- 30 Years of Reform

It was 30 years ago that the resilient Chinese politician Deng Xiaoping began reforming China's economic system by embracing free market reforms. Audra Ang, in an article published in the Washington Post, reports on a speech delivered by the current Chinese Communist Party leader Hu Jintao to mark the occasion ["30 years transform China, but not its politics," 18 December 2008]. She writes:

"China marked the 30th anniversary of the start of its capitalist revolution with a speech Thursday from Communist Party leader Hu Jintao, who urged continued economic reform but said it would not lead to Western-style democracy. He praised the economic changes of the last three decades, including opening the door to free market reforms and foreign trade, which have brought a massive transformation to the country. 'Since the reform and opening up, the fundamental reason for all the achievements and progress we have made has been our creation and development of the socialism with Chinese characteristics,' Hu said in a speech during a ceremony at the Great Hall of the People. The concept, frequently touted by the leadership, refers to the jettisoning of the centrally planned economy while maintaining strict authoritarian one-party communist rule. The theory 'not only showcases the vitality of contemporary Chinese Marxism, but also opens more room for further innovation of theories,' Hu said during his 90-minute address, which was nationally televised. 'We need to draw on the beneficial fruits of mankind's political achievements, but we will never copy the model of the Western political system,' Hu said."

I'm sure that the newspaper -- not Ang -- wrote the headline that claims politics in China has not changed over the past 30 years. To be sure, China remains a one-party system, but that party has made significant changes over the past three decades. Government-controlled newspapers now selectively report on government corruption -- something that was unheard of 30-years ago. The government still incarcerates some political protestors, but it is has become somewhat more tolerant than in the past. Hu's remarks underscored the fact that politics have made some changes and that further "innovations" would be made in the future. I suspect that single-party rule will be around for some time, but that more multiple candidate elections will also be held -- beginning on the local level. The Chinese people are eager to vote some of the rats off the ship. Hu offered his remarks in the Great Hall of the People.

"The Great Hall was the site of a Communist Party gathering on Dec. 18, 1978, that endorsed small-scale private farming, the first step toward abandoning the late leader Mao Zedong's vision of communal agriculture and industry. China's economy has since grown into the world's fourth-largest behind the U.S., Japan and Germany. Annual per capita income has soared to about 19,000 yuan ($2,760) last year, up from just 380 yuan in 1978. Along with private enterprise and capital markets have come greater prosperity and stability than ever before. Virtually all Chinese families now have at least one television and, in the cities, a washing machine -- rare items three decades ago. Some 15 million families own private cars, and many Chinese also own their own homes. 'Nowadays, we worry instead about eating too well rather than not eating enough,' says Guo Linchun, 78, retired music teacher in Beijing. 'Now, living standards have improved so much, we see not only televisions, so many people even own cars.'"

Anyone who watched the Beijing Olympics knows that not all is rosy in China, however. Rapid industrialization brought with it a number of environmental and social problems.

"The modern industries have also brought many modern ills: pollution, industrial accidents and product safety scandals. And China's heavy reliance on exports and foreign investment ensures that the uncertainties now afflicting the global economy are haunting the Chinese as well. Hu said China needed to firmly focus on economic development to weather the current crisis. 'Standing still and regressing will lead only to a dead end,' he said."

The fact that Chinese leaders are not looking to once-again hide its economy behind a bamboo curtain is a good thing. They have been acting as responsible international actors during the current financial crisis. They have also learned that economic prosperity has emboldened China's new middle class.

"As economic growth slows and factories close, job losses threaten to fuel political unrest. Authorities have slashed interest rates and promised to spend more than half a trillion dollars to stimulate the economy. The latest problems may widen a wealth gap that has already alarmed China's leaders, who worry about social instability caused by people who have missed out on China's economic boom. 'In the past 30 years, we attached great importance to promoting a harmonious society through achieving social equality while developing the economy,' Hu said."

Anyone familiar with China knows that most of the wealth there can be found along the urban coastal areas, while the more agricultural rural areas in the interior remain mostly impoverished. Although the Chinese are a patient people and take a long-view of history, leaders there understand that the wealth gap can create a great deal of impatience among those who globalization has passed by. One subject about which Chinese leaders have not had a change of heart is Taiwan.

"[Hu] also said one of the other great achievements of the last 30 years was 'opposing Taiwan independence.' China and Taiwan split amid civil war in 1949. Beijing continues to claim the self-governing island as part of its territory, and has threatened force if Taiwan declares formal independence."

One need only look at the development of China's military to be convinced that two of its leaders' top priorities are securing internal political stability and ensuring that Taiwan does not become an independent state. Internal stability is a big concern because millions of Chinese remain in poverty's grip.

"Despite the massive growth and China's material wealth, it is still considered a developing country. According to the World Bank's most recent estimates, more than 100 million of the 1.3 billion Chinese still live on less than $1 a day. That's way down from 800 million three decades ago, but hundreds of millions more get by on just $1 to $2 a day. Simmering protests over pollution and industrial accidents have prompted authorities to pledge better enforcement of environmental, labor and safety standards."

Political change will come more slowly than most Western observers might like, but change will come. It must come because if China is to assume its place at the head table of world affairs it must play by the same rules that other leading nations play by. China has moved a significant way down that path already. The Beijing Olympics demonstrated that Chinese leaders care a lot about how the world views them and their achievements. If the international community is to progress, it must move forward together. That doesn't always happen. On the 30th anniversary of China's reform movement, however, it's fitting to put off criticism for a day and congratulate the Chinese people on coming so far so fast.