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American subsidence in Asia: the poisoned chalice of hubris and loss of focus


China's diplomatic and economic presence is forcing all regional players to "reassess where their strategic interests lie," and those players are seeing China winning by default as the US continues to act in a dismissive, highhanded manner, retains a monomaniacal focus on terrorism -- worse Iraq -- effectively becoming another 'Pakistan' in linking all bilateral issues to the GWOT, and has already dropped to number two in terms of trade with key Asian nations.

Readers are referred to 'Peaceful Rise' overcoming 'China Threat' and Testing and strategic encirclement versus force on force, bluffing and risk-taking for an introduction to the means by which the PRC is extricating itself from the 'threat' posture framed by the US. In Failing to strengthen and rebuild functionally viable interstate relations , I note:

While it is a necessary requirement for the US to focus on al Qaeda and international terrorism, as opposed to Iraq per se, we must simultaneously look to the longer term of preventing erosion of access to resources, and the continuity and strengthening of functionally viable interstate relations. While we have treated a number of states in an offhand manner, notably those in the third world, those offended states had no counterbalance in terms of a market to which they could sell their goods and services and a sympathetic partner with whom to form beneficial alliance for economic and political gain. The economic resurgence of China has changed that balance. China's human-intensive form of diplomacy at all levels, levels that would fall beneath the attention and reach of US diplomacy, are changing the landscape.

I would also refer readers to China, the US, and the International Criminal Court for detail on China's skillful means of distinguishing its diplomatic approach from that of the US. On the best of days, Asian strategic thinkers worry about "long-term US staying power" and now wonder if and when our detachment over terrorism and the Middle East will end. While many seem to be "relatively relaxed about the current state of US engagement [and seem] relatively confident that the US will return to Asian pursuits," it may well be too late, even now:

Most US diplomacy with leading Asian states remains almost obsessively focused on Iraq and Afghanistan, and high-level visits are rare and rushed. As important as these concerns are to America and Asia alike, critical regional business is being left unattended.

The US reluctance to engage North Korea in direct bilateral talks has been difficult to explain or excuse, and now Japan and South Korea are venturing forward in direct bilateral interactions with Pyongyang, subtly forsaking a common front approach with Washington.

In Asia, however, security challenges have evolved rapidly with enormous strategic implications. China's rise is evident in virtually every walk of life and its considerable influence is now felt in every corporate boardroom, diplomatic gathering and military planning session throughout the region. By any aggregate measure (except in population size) the US remains the great power of Asia, but China now wields considerable hard, soft and every other kind of power in an increasingly interconnected region.

 The US has come far from the 1930s when it:

faced a world rapidly descending into regionalism; [responding] with the 1934 Reciprocal Trade Act that eventually became the GATT-WTO system. That system has been integral to the postwar revolution in trade, and to the widespread and unquestionable global economic growth it helped produce.

Bernard Gordon believes that the US is reaping the poisoned fruits of its earlier drive for FTAs and bilateral agreements, all essentially "preferential trade areas," that the US employed as "an instrumental tactic to achieve global trade progress in the WTO. The US "encouraged more of them everywhere, but nowhere more importantly than in East Asia, the world's most dynamic economic region and the scene of a developing economic "community."

I agree that the US does not have the primacy, authority, and viable threats that it had in the GATT years. US actions look feeble in comparison and it is ill-equipped fight a four front trade war:

In Europe, trade conflict is simmering over aircraft, subsidies and dumping. In the Western hemisphere, the Free Trade Area of the Americas -- the major U.S. initiative -- is comatose, and a "South American Community" will be announced shortly by the region's presidents. In East Asia, China and the ASEAN nations have agreed a large new trade deal that excludes the U.S. and sharply raises the prospects for global trade blocs. And needless to say, at the global level, the WTO's Doha Round is stalled.

Taken together with China's regional economic might, the PRC is demonstrably capable of building the regional relationships needed to eject the US and in the process become the dominant mercantile center of an Asian trading block that includes Asia's "most vibrant economic sub-region" (China, Hong Kong, Taiwan, South Korea, and Japan).

Part 3

Gordon Housworth

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Think of the Yuan as a reserve currency and the Dollar in the gentile senility of the Pound


Barring disasters such as an Asian Flu pandemic or a tactical nuclear exchange on the Korean peninsula that would stampede millions of starving North Koreans into NE China, alongside the more mundane threats of internal economic disruption, the watershed signing at the 10th ASEAN (Association of Southeast Asian Nations) summit in Laos of a Free Trade Agreement (FTA) between China and ASEAN nations to create an Asian free-trade market of 1.8 billion people by 2015, possibly as early as 2010, launched what I believe is a concrete start to the Yuan becoming a reserve currency in a greater and more successful version of Japan's Greater East Asia Co-Prosperity Sphere.

Multilateral regional formations are proliferating with China rather than the US as the hub, sometimes without America even in attendance.

Its significance or its comparison to US achievements in the FTA arena (largely nil) seems to have passed without notice in US highstreet press despite the fact that the pact will compete with the US and Europe as it "aims to drop most tariffs over the next five years, [includes] an agreement to liberalize tariff and non-tariff barriers on traded goods and one to set up a mechanism to resolve trade disputes, [will] form the first component of a comprehensive accord planned for completion by 2010 that will include the full liberalization of the services sector [and if] completed on time, the overall ASEAN-China deal will result in the creation of the world's biggest free-trade zone.

It's not like one couldn't see it coming:

In 2002, China and ASEAN began talks on a free trade accord, and China soon called for a "China-ASEAN" free trade area within 10 years. Beijing continues to prod, as in some "early harvest" tariff-reduction steps, and last month saw agreements for further gradual reductions. They included large exceptions for ASEAN's "sensitive sectors," but the process, under China's impetus, is underway. Indeed, Beijing recently proposed a step that a generation ago would have struck cold fear into Asia's other capitals: It exhorted representatives of Asia's 20 million "overseas Chinese" to "play a positive role in enhancing the good neighborly friendship and political trust between China and…ASEAN."

This year has seen other previously unthinkable cooperative steps, including talks among all 13 Asian Foreign and Finance Ministers to create an Asian Bond Market. No less important are growing calls to turn the "ASEAN plus Three" framework "into a regular summit of the East Asian Economic Community." 10 In July, ASEAN'S leaders met with China, Japan, and Korea ("the Three") and agreed to formally discuss that proposal later this month. 11 And most revealingly, Singapore – with close US ties and the region's best antennae – added its voice. Calling for an "historic reconciliation" between China and Japan, former ambassador to the US and UN Tommy Koh in August declared, "The vision is to create an East Asian Community."

Japan and India courted ASEAN leaders during the summit, while India and China commenced some very public, high level bilateral talks. India's "landmark partnership document" permits New Delhi to build economic relations with ASEAN as well as Japan, China and South Korea (ROK). Japan will shortly commence talks with ASEAN to reduce tariffs. China, India, South Korea and Japan seek to match the North American Free Trade Area (NAFTA) and the European Union (EU) by 2020. These trade patterns have resuscitated earlier ideas of an Asian economic "Community" that had lacked an economic powerhouse (Japan was disinterested) and the region's interactions were primarily with the US.

Part 2

China and India steal the show
By Siddharth Srivastava
Asia Times
Dec 2, 2004

PART 4: China steady on the peg
By Henry C K Liu
Asia Times
Dec 1, 2004

China adds its might to ASEAN
By Alan Boyd
Asia Times
Dec 1, 2004

Time for America to Trade Up
Wall Street Journal
November 30, 2004

Chinese Recruit Top Executives Trained Abroad
November 30, 2004

Revaluing the Yuan
by Worth Civils
November 23, 2004
Wall Street Journal

US Trade Policy: Legacy of the Sorcerer's Apprentice
Bernard K. Gordon
YaleGlobal, 5 November 2004

PART 1: Follies of fiddling with the yuan
By Henry C K Liu
Asia Times
Oct 23, 2004

A Global Power Shift in the Making
By James F. Hoge, Jr.
Foreign Affairs, July/August 2004

The US Turns Its Gaze From Asia at Its Own Peril
By Kurt Campbell
Financial Times
Jun 21, 2004

Gordon Housworth

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Refining a China forecast


Continuing our effort to refine a prediction for Chinese economic direction, I believe that China will:

(1) Increasingly digest and take advantage of foreign technology to create increasingly effective and efficient local products (and only then will it more rigorously enforce anti-piracy laws -- akin to what Japan is now doing in such areas as flat panels)

(2) Go beyond commercial, increasingly commodity products to embed unique Chinese standards that bar or slow foreign entry, i.e., increasing Chinese price-volume curve efficiencies while damping foreign efficiencies and denying revenue to Chinese competitors (e.g., DVD, CMDA, PC chipsets, Red Flag Unix, encryption algorithms)

(3) Continuing reduction or elimination of foreign royalty payments for any and all products - a corollary to (2) - be they products made for domestic Chinese consumption or export (the recent Microsoft contract cancellation is a mere tip of this iceberg)

(4) Displace less efficient foreign suppliers in foreign supply chains and so assume a greater percentage of a supply chain's critical path (e.g., US automotive OEMs will continue their pursuit of lowest cost suppliers to the point that they will abandon their historic 'domestic' suppliers for Chinese suppliers, thereby decreasing the critical mass of those offshore suppliers)

(5) Acquire one of the three PC manufacturers among the top ten firms that are not expected to survive the current in-progress shakeout of the global PC market by 2007 (Gateway has been the most frequently mentioned candidate but others are possible). I would expect that process to expand into other manufacturing sectors - see (6)

(6) Create reverse distribution channels under Chinese control for Chinese products thereby gaining stability while increasing price-volume efficiencies and further denying revenue to their competitors (China has watched the postwar Japanese model and will beat them at their own game)

(7) Move to gain influence on retail distribution chains in the US and elsewhere to continue that reverse distribution control. I will go so far as to put Wal-Mart in that category (a firm that cannot not now survive without Chinese products, either from indigenous Chinese firms or foreign transplants driven to China by the supply chain owners)

For those of you who think that Wal-Mart is a bit of a reach, I point to Wal-Mart's recent agreement "under pressure from the Chinese labor federation," to "permit branches of the official Communist Party-controlled union in its Chinese stores if employees requested it." The Chinese are superb at executing the long view, far better than the US, and this could well be the start of a gentle, incremental long range Chinese approach.

Many US and European actors will remember the postwar Japanese turnaround yet will be caught flatfooted by China's retracing that same path because China will traverse it far faster than did Japan. (It is almost axiomatic that each technology generation takes half the time of its predecessor as the baseline of technology, equipment, and knowledge available to the new entrant is significantly greater. "The China Price" is worth the read for the sweep and velocity of this trend line.

I also think that there is a parallel to the Nixon administration's green light to Japanese firms to hollow out early US technology/electronics markets, e.g., TV, radio, VCR, in return for Japanese support of US foreign policy aims, with the actions of the Clinton and Bush administrations to push down US product manufacturing costs under a misplaced view that this 'would draw China in' to the world economy as a 'controllable player.' If control remains a dominant factor, that control will shift to China rather than the US or the West.

Tech Firms Keep Riding Chinese Tiger
By Cynthia L. Webb
Washington Post
November 30, 2004
Note, Cynthia Webb's Filter column at the Washington Post is a good technology feed that amalgamates associated themes. This entry happens to deal with China.

"The China Price"
DECEMBER 6, 2004

EU spells out trade threat from China
By Ambrose Evans-Pritchard in Brussels
Telegraph (UK)
Filed: 30/11/2004

Are PC makers poised for major hit?
By John G. Spooner
November 29, 2004, 2:27 PM PT

China's Telecom Forays Squeeze Struggling Rivals
September 8, 2004

China goes it alone on high-tech standards
By Stephanie Hoo (Beijing)
AP/The Age 23 Jul 2004

Raising the Standard: China's Rush to Develop Technology Standards (Part I), (Part II), March 2004
China Standards Update, November 2004
China High Tech PR

Wal-Mart's Chinese workers can unionize
Associated Press
Nov. 23, 2004

Gordon Housworth

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Google Desktop Search (GDS) merely makes easy what was once a forensic exercise


I submit that the concern over 'excesses' of Google Desktop Search (GDS) is really a flag for what had long been available to both legitimate or illegal forensic sweeps of your system(s). The departure of GDS is that it now makes retrieving those items an effortless exercise for the ordinary fellow, or allows a thief to find items in a time window that reduces their exposure while maximizing their gain.

Google Desktop Search (GDS) indexes and finds documents that users may not wish to be found, such as browser cache with visited Web pages, online banking and purchase transactions, personal messages sent from Web e-mail programs and password-protected personal Web pages. On a PC with multiple users, GDS will search documents and web pages for all users. GDS searches the Windows cache, which can bypass some encryption programs entirely by finding cleartext temp files. That, in combination with the GDS ability to catalog and retrieve encrypted files, can add additional security problems, e.g., providing direct cleartext traffic as well as providing the cleartext-cyphertext pair that allows a mischief-maker (assuming that the owner is not using one time pads) to have the means to decrypt subsequent traffic without requiring access to the target machine:

GDS can also retrieve encrypted files. No, it doesn't break the encryption or save a copy of the key. However, it searches the Windows cache, which can bypass some encryption programs entirely. And if you install the program on a computer with multiple users, you can search documents and Web pages for all users.

GDS isn't doing anything wrong; it's indexing and searching documents just as it's supposed to. The vulnerabilities are due to the design of Internet Explorer, Opera, Firefox, PGP and other programs.

First, Web browsers should not store SSL-encrypted pages or pages with personal e-mail. If they do store them, they should at least ask the user first.

Second, an encryption program that leaves copies of decrypted files in the cache is poorly designed. Those files are there whether or not GDS searches for them.

There is a school of thought that users should have been aware that these vulnerabilities were there in first instance. While I am generally supportive of this reasoning, the burgeoning number of apps, many of them having launched with 'misbehaving' characteristics, continue to raise the bar for individual users. As application designers will not improve anytime soon, if you have anything to protect on systems over which you cannot control physical access, you should avail yourself of whatever assistance you can in order to know what is openly accessible, i.e., know what is at risk either directly or indirectly by inference from available search results.

I am of the opinion that one should turn the fiercest attack tools, GDS included, on one's own systems and networks, early and often, so that you find faults before the bad guys find them. Because they are looking:

Some people blame Google for these problems and suggest, wrongly, that Google fix them. What if Google were to bow to public pressure and modify GDS to avoid showing confidential information? The underlying problems would remain: The private Web pages would still be in the browser's cache; the encryption program would still be leaving copies of the plain-text files in the operating system's cache; and the administrator could still eavesdrop on anyone's computer to which he or she has access. The only thing that would have changed is that these vulnerabilities once again would be hidden from the average computer user.

Bad guys aside, I require an unambiguous firewall between GDS and Google web -- which for me is a completely separate tool no matter how good GDS is -- so as to prevent an inadvertent scan and upload of local materials to the Google virtual store. Even if the current version is secure, a coding slip in a subsequent GDS version could see one's data cataloged in an unrecoverable catastrophe. I would also like GDS not to launch in permissive mode, e.g., all functions enabled, but in restricted mode so that users would intentionally have to enable cataloging features.

There is precedent: Google has already erred with GMail and has had to produce more secure versions in order to prevent malefactors from harvesting GMail user IDs. To be fair to Google and, by extension, Microsoft, both firms have strived for functionality over security. It remains to be seen who can successfully reintegrate security while retaining functionality.

Were I a bad guy, I would be extending my standing sweeps of competitors via Google and Google cache in the event that a target's user inadvertently put the wrong thing into the scrum.

Desktop Google Finds Holes
By Bruce Schneier, ExtremeTech
November 29, 2004

Gordon Housworth

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Disastrous propaganda gap, belatedly recognized, yet deprived of realistic means to solve, Part 2


Part 1

It is a shame that most US readers had to go to Asia in order to read that "Al-Qaeda and radical Islamists are winning the propaganda war against the United States" and that US "policies in the Middle East, its fundamental failure to understand the Muslim world and a lack of imagination in using new communications technologies" were responsible.

Strategic Communication parses the 'support' spectrum in order to better define where the US could start to make a marketing effort. The results are painful:

  • Hard Support (for U.S. Government): Regimes and their retainers
  • Soft Support: Regimes and their retainers, a few technocrats
  • Neutral: Some of the professional class and some regular & poor
  • Soft Opposition: The overwhelming majority
  • Hard Opposition: A substantial minority (more than we want to admit)

The DSB warns readers not to underestimate the problem, especially in light of the fact that "Muslims see American policies as inimical to their values, American rhetoric about freedom and democracy as hypocritical, and American actions as deeply threatening" whereas "Americans are convinced that the U.S. is a benevolent "superpower" that elevates values emphasizing freedom and prosperity as at the core of its own national interest." We are too ready to operate under a belief system that "U.S. values" are in reality "world values."

The report lays out some communication principles that the US has yet to follow:

If there were a strategic communication corollary to the U.S. Military’s "intelligence preparation of the battle space" it would be: correctly analyze the combined impacts of audience, impact, message and means. We often speak of "the audience" we wish to influence as if there were only one. The reality is that in the global information environment in which we live and work there are numerous audiences that can be affected differently by the same message. Crafting an influence campaign means precisely identifying the key audience, but also other audiences as well.

What would we like our targeted audiences to see and what impact do we wish to have? Do we want them to "like" us? Do we want them to question and doubt the information they get from their own governments, like we did with Radio Free Europe during the Cold War? Do we wish them similarly to cease supporting militant jihadists in their midst? Or are these traditional approaches to strategic communications even the right questions?

In a section called What is the Problem? Who Are We Dealing With?, they note that the US has not only failed to separate "the vast majority of non-violent Muslims from the radical-militant Islamist-Jihadists," but has achieved the opposite:

  • American direct intervention in the Muslim World has paradoxically elevated the stature of and support for radical Islamists, while diminishing support for the United States to single-digits in some Arab societies.
  • Muslims do not "hate our freedom," but rather, they hate our policies. The overwhelming majority voice their objections to what they see as one-sided support in favor of Israel and against Palestinian rights, and the longstanding, even increasing support for what Muslims collectively see as tyrannies, most notably Egypt, Saudi Arabia, Jordan, Pakistan, and the Gulf states.
  • Thus when American public diplomacy talks about bringing democracy to Islamic societies, this is seen as no more than self-serving hypocrisy. Moreover, saying that "freedom is the future of the Middle East" is seen as patronizing, suggesting that Arabs are like the enslaved peoples of the old Communist World but Muslims do not feel this way: they feel oppressed, but not enslaved.
  • Furthermore, in the eyes of Muslims, American occupation of Afghanistan and Iraq has not led to democracy there, but only more chaos and suffering. U.S. actions appear in contrast to be motivated by ulterior motives, and deliberately controlled in order to best serve American national interests at the expense of truly Muslim selfdetermination.
  • Therefore, the dramatic narrative since 9/11 has essentially borne out the entire radical Islamist bill of particulars. American actions and the flow of events have elevated the authority of the Jihadi insurgents and tended to ratify their legitimacy among Muslims. Fighting groups portray themselves as the true defenders of an Ummah (the entire Muslim community) invaded and under attack to broad public support.
  • What was a marginal network is now an Ummah-wide movement of fighting groups. Not only has there been a proliferation of "terrorist" groups: the unifying context of a shared cause creates a sense of affiliation across the many cultural and sectarian boundaries that divide Islam.
  • Finally, Muslims see Americans as strangely narcissistic namely, that the war is all about us. As the Muslims see it, everything about the war is for Americans really no more than an extension of American domestic politics and its great game. This perception is of course necessarily heightened by election-year atmospherics, but nonetheless sustains their impression that when Americans talk to Muslims they are really just talking to themselves.

We better get started. These folks, mujaheddin and nationalists alike, know that God is on their side.

Pentagon uncovers propaganda failures
By Jim Lobe
Asia Times
Nov 30, 2004

Report of the Defense Science Board Task Force on Strategic Communication
September 2004
Office of the Under Secretary of Defense For Acquisition, Technology, and Logistics
Washington DC

Gordon Housworth

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Disastrous propaganda gap, belatedly recognized, yet deprived of realistic means to solve


While reflecting on the remarkably thoughtful gap analysis of US Strategic Communication -- the lack of same is more appropriate -- to the Muslim world, an excellent example of what the US is unknowingly, or inappropriately, contesting in its failed attempt to reach beyond the battle field and into the hearts and minds of Arabs and Muslims came across my desk:

While atrocities unleashed by the insurgents -- beheadings and bombings that have killed scores of civilians -- have at least anecdotally seemed to unleash popular revulsion, there remains a constituency in Iraq that celebrates the guerrilla war. Myths have grown up around it, all infused with religious imagery and notions of divine intervention. Residents trade stories: that the knights of the prophet Muhammad were seen riding through Fallujah's streets on horseback with their swords drawn; that birds guided by God cast stones at Apache helicopters; that a scented breeze descends on the fighters as they battle U.S. troops.

Some of the tales of mystic delivery of insurgents from US clutches have the flavor of tales of Amerindian indians and African tribalists that presumed themselves to be impervious to the bullets of cavalry or colonial forces. Whether those leaders actually believed their ability to avoid death in the face of the enemy, it appears that their followers and peers believed it.

A poor blacksmith and day laborer, Abu Mohammed, who has "carried out 17 or 18 "operations" outside Fallujah," certainly believes it while discounting any valor to US forces:

[Americans were] "strong in their technology, but I've never seen cowards like them. Fifteen thousand Americans against 2,000 mujaheddin, with their technology and their firepower? They say they were victorious, but what kind of victory was that? We have a principle: defending our country. Why are they coming here? For what?"

Yet mere muqawima, or resistance, is an insufficiently secular word for a jihad whose fighters transcend the status of combatants into mujaheddin required by Islam to contest infidel occupiers:

"Until the day of judgment, there will be jihad. If something happened in Lebanon, I would find a bridge to cross and go there to fight. And slay them wherever you catch them."

So great is the need for Arabs to regain a sense of worth that their excesses can be justified while ours are vilified:

In the propaganda that surrounds the insurgency, much of it on video CDs that can be bought for 50 cents in Baghdad, the images celebrate the technological divide. Footage of blasts from a tank barrel and fire from helicopter gunships shifts seamlessly to pictures of bloodied corpses and women in black, yelling.

Given the near abject failure of the US sponsored TV channel, Al Hurra (The Free One), it is refreshing to see the DSB look at Arab societies, and to some degree all Muslim societies, as a spectrum of actors that varied in "their receptivity and support for change/restoration," i.e., regimes, uncommitted sympathizers, Islamists and jihadis, instead of the binary division of Bad Muslims (Only terrorists & sponsors) and Good Muslims (Including friendly regimes and everybody else):

The official take on the target audience has been gloriously simple. If the enemy is a relatively small group of crazies and criminals "Bad Muslims" then the rest must be "Good Muslims" and thus the people we want our public diplomacy to reach.

The DSB notes that the Arab and Muslim World looks nothing like this binary view but "is a cacophony of competing and crosscutting groups, sub-cultures, and whole societies" in which a Muslim may be balancing up to five identities: as a Muslim, as a sectarian Muslim (Sunni, Sh’ia, Ismaili, etc.), as a national citizen, as an ethnic "citizen" (Arab, Kurd, Turkmen, etc.), and as a tribal or clan member that could reasonably break down into sectors:

  • Regimes and their retainers: (including the army, bigwigs, cronies, & hangers-on)
  • The professional class (also known in some quarters as "technocrats")
  • Establishment & activist Islamist prelates (plus social welfare & education networks)
  • Regular and poor Muslims (small entrepreneurs on-down)
  • Fighting groups and their networks

Part 2

After Fallujah, Son Is Gone but Fervor Remains
By Anthony Shadid
Washington Post
December 1, 2004

Report of the Defense Science Board Task Force on Strategic Communication
September 2004
Office of the Under Secretary of Defense For Acquisition, Technology, and Logistics
Washington DC

Gordon Housworth

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The wall and closures that drive short term security insures long term insecurity


Israel's Separation Wall and its thicket of internal closures (aka heavy restrictions on the movement of labor and goods in the West Bank and Gaza) conspire to create a failed Palestinian economy of such threat that it will subvert the hopes of partition to provide terrorist security and prevent birthrate dilution.

I find it specious that the Israeli Foreign Ministry can claim the Palestinian violence and PA corruption was responsible for the downturn in the Palestinian economy. The Palestinian economy has been persistently vulnerable to external shocks, particularly closure; the graph of Real Income Per Capita and Annual Closure Days have been inversely proportional at least since 1994, at least six years prior to the intifada:

From 1998 to September 2000, closure was again infrequent, remittances from Palestinian workers in Israel fuelled demand for domestic products, transaction costs fell and private investment increased. The economy also benefited from an economic boom in Israel, which enhanced opportunities for exports of Palestinian labor and goods.

Without this access to Israeli markets, the Palestinians were doomed as even prior to the intifada:

Labor supply is rapidly increasing, and the two most important sources of jobs absorption hitherto - employment in Israel and in the Palestinian Authority - are essentially saturated.

Commencing with the September 28, 2000, closures, "the most severe, sustained mobility restrictions imposed on the West Bank and Gaza since 1967," the West Bank and Gaza suffered a "precipitous decline in trade, employment, and investment." One has only to look at the checkpoint maps (pages 8 & 9) of the West Bank and Gaza to begin to grasp the impact on Palestinians. Barely a year after closures, unemployment had tripled, real incomes had fallen by a third - and were below the late 1980s, and the proportion of the poor (those consuming <US$2 per diem) had doubled.

Palestinians attempted to cope by the PA continuing the delivery of basic services, ghost workers again finding some work in Israel, households reducing expenditures and drawing down savings, informal self-help and sharing systems, and foreign donors largess without which "all semblance of a modern economy would have disappeared."

It has not been enough. A slight recovery in 2003 after two years of sharp decline was wiped out by stagnation in 2004. Unemployment has risen to 27 % (and nearly 40 % among the young people who comprise the majority of suicide bombers and militants), while the poverty rate has risen to 48 %. 1.7 million Palestinians now live below the poverty line (US$2.10 per diem day) while 600,000 of those live below the "subsistence" level ($1.50 per diem).

I've previously noted that, "I believe that the Security Wall is a failure of imagination, and will not bring Israel long term security as it will insure the economic collapse of what I call "Paltustan," the Palestinian Bantustan on its doorstep." In addition to the maps cited in that note, the PALESTINE Monitor map page is instructive in identifying the continuing gerrymandering of territory between Jew and Arab. Leaving aside issues of fairness in so doing, I believe that it creates an unstable economic statelette that will ultimately overwhelm the temporary security of the Israeli Separation Fence, called by the Arabs either a Segregation Wall or an Apartheid Wall:

"Closures [remain the] key factor behind today's economic crisis in the West Bank. They have fragmented Palestinian economic space, raised the cost of doing business and eliminated the predictability needed to conduct business."

While Israel has reduced curfew levels in Palestinian areas, checkpoint operations continue unabated such that Palestinian "Gastarbeiter" (guest worker) menial labor in Israel, e.g., construction, agricultural and restaurants, that were once the "lifeblood of the Palestinian economy" have been erased -- less than 1,000 from 30,000 pre-September 2000.

Israel's Disengagement Plan has yet to offer any significant impact on the Palestinian economy, since it proposes only a limited easing of closure. "Without major changes in this closure regime, [the] Palestinian economy will not revive, poverty and alienation will deepen." The PA needs two kinds of borders eased to prevent it from becoming an economic septic tank: opening external borders so that Palestinians gain better access to world markets, and a "radical easing" of internal closures.

Four Years - Intifada, Closures and Palestinian Economic Crisis
An Assessment
World Bank, October 2004

Disengagement, the Palestinian Economy and the Settlements
World Bank, June 23, 2004

World Bank and the Palestinian Central Bureau of Statistics (PCBS)

Fifteen Months - Intifada, Closures and Palestinian Economic Crisis
An Assessment
World Bank
March 18, 2002

Gordon Housworth

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How the British problem of Palestine became the American problem of Israel


I think that too many of today's US readers are captured in the still frames of the motion picture that defines 'news' without an ability to grasp the screenplay and make credible suggestions for endings. Having grown up with a younger generation that seemed to equate the Battle of Trafalgar with the Battle of Leyte Gulf, if either registered at all, I now find that many of my age peers can do no better. At times, I feel that I need a refresher myself.

Educated in architecture and urban design, Henry C K Liu seems an unlikely candidate to have thoughtful observations on international relations and economics, but I have found that to be the case. With Palestine still on my mind, I reflected on the fine history lessons Liu drew on Mess-O-Potamia and the Levant. As one of the few US nationals I know that had read the original UN transcripts debating the merits of the two choices for Palestine then before the UN, partition or a federal state, I was drawn to Liu's observations on Israel in A poisonous geopolitical jungle drawn from a January 1952 issue of Time Magazine:

The word 'American' no longer has a good sound in that part of the world. To catch the Jewish vote in the US, president Harry S Truman in 1946 demanded that the British admit 100,000 Jewish refugees to Palestine, in violation of British promises to the Arabs. Since then, the Arab nations surrounding Israel have regarded that state as a US creation, and the US, therefore, as an enemy. The Israeli-Arab war created nearly a million Arab refugees, who have been huddled for three years in wretched camps. These refugees, for whom neither the US nor Israel would assume the slightest responsibility, keep alive the hatred of US perfidy. No enmity for the Arabs, no selfish national design motivated the clumsy US support of Israel. The American crime was not to help the Jews, but to help them at the expense of the Arabs. Today, the Arab world fears and expects a further Israeli expansion. The Arabs are well aware that Alben Barkley, vice president of the US, tours his country making speeches for the half-billion-dollar Israeli bond issue, the largest ever offered to the US public. Nobody, they note bitterly, is raising that kind of money for them.

Time was prescient in its warning that "winning the hearts and minds of the Arabs away from communism was made hopelessly difficult by US policy on Israel." Still, Arabs forget that the US forced the Tripartite forces of the UK, France, and Israel to withdraw from Egypt after it had nationalized the Suez Canal (but offered to pay reparations, which it did). This 1956 war over Suez laid the groundwork for the 1967 Six-Day War "due to a lack of a peace settlement" following the 56 war in which Egypt won political victory even as it suffered a military defeat.

We forget that Hawks deposed Doves in 1950s Israel:

[Moshe] Sharett, albeit an ardent Zionist, attempted to develop policies based on constructive engagement, rather than belligerence and dehumanization, with neighboring Arab states. Sharett believed that Israel could have a special role to play in the developing nations of the world, including the Arab countries. Sharett was among the few in the Middle East who recognized that terror and counter-terror between Palestinians and Israelis would lead to an endless cycle of violence, which if not controlled by enlightened political leadership, would become a way of life that would eventually destroy both peoples. His political and diplomatic wisdom was always portrayed by the Israeli mainstream as "weak and cowardly". By contrast, Vladimir (Ze'ev) Jabotinsky's "Iron Wall" doctrine of Zionism that sought to expel the Arabs of Palestine by force has dominated the Israeli political scene to this day.

"As Time saw it, communism was producing a dual effect. It fanned anti-imperialism in the colonies while it created pressure in the West to placate Third World nationalism to keep it from going communist." The 1957 Eisenhower Doctrine that opposed international communism by providing military assistance to MidEast countries, including the employment of US forces was a gift to Israel:

Israel saw anti-communism in the Middle East as God's gift to the new Jewish nation on Arab land and became a fervent supporter of the Eisenhower Doctrine, with wholesale marginalization of the Israeli left and moderates in Israeli politics. Instead of moving in the direction of the Switzerland model, as a neutral oasis in a sea of rising Arabic nationalism against "divide and rule" imperialism, contributing to the development of the region for the benefit of all, Israel presented itself as an outpost of European imperialism and US neo-imperialism, setting itself up as a hostile garrison state in a region where Jews are outnumbered by 50 to one.

With regards to the Osirak attack, Liu noted the IAEA's concern that Israel "had damaged attempts by the international community, with the Nuclear Non-Proliferation Treaty (NPT), to control the nuclear genie which had been let out of the bottle in 1945 by the US":

The Israeli bombing of the Osirak reactor infuriated the Iraqis. They had followed international rules openly and accepted international inspections, and yet were bombed by a country which allowed no inspections of its own nuclear plants. [Richard] Wilson reported that Iraqi fast-track for bomb development began in July 1981, after the Israeli bombing. The preemptive strike seemed to have had the opposite effect to that intended. Worse still, Israeli and US intelligence deluded themselves into thinking that once bombed, the threat of Iraqi bomb-making was over. The Iraqi bomb program became generally known in 1991, and a number of experts wrote about it in the Israeli journal New Outlook. The general consensus was that the Israel had no justification in bombing Osirak.  Iraq, the rogue regime, swallowed the attack stoically. Yet the incident radicalized Iraqi politics.

Liu's series is worth the read on Iraq as well.

A poisonous geopolitical jungle
By Henry C K Liu
Asia Times
Sept 15, 2004

Gordon Housworth

InfoT Public  Strategic Risk Public  


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Smart card to single standardized cryptographic token to national identity card


A thoughtful observer of IT systems issues, George Ou, extended the concept of a smart card to a single standardized cryptographic token in Why stop at Single Sign On, why not Universal Sign On?:

Microsoft has the right idea by implementing Smart Cards that not only allow their employees to access their computing resources, but their physical campus as well. But why stop there? Smart Cards are essentially cryptographic tokens that not only enable "something you have" security, but strong authentication using PKC (Public Key Cryptography). A traditional metal key provides "something you have", but it can't provide PKC. PKC is used in most modern Cryptography systems like SSL, S/MIME, or PGP just to name a few. Essentially, it's the strongest form of authentication ever invented and it can also enable strong encryption by providing a secure key exchange.

So why stop at access to the building and computer systems, how about replacing all of the following applications with a single standardized cryptographic token with an integrated finger print reader and/or numeric keypad for good measure.

    • Credit Card and ATM Card replacement
    • Car key replacement
    • House key replacement
    • Building badge replacement
    • Computer and Network login
    • Wireless Access token
    • VPN Access token
    • Un-forgeable passport with Digitally Signed Photo
    • Un-forgeable driver's license with Digitally Signed Photo
    • Un-forgeable Social Security Number with Digitally Signed Photo

Ou closed with a comment to the effect that a user "could just carry a single token to do all that! Maybe on a key chain," which sprang to my mind as a personal, even national, ID card, yet some twenty responses stayed at the technical level of feasibility, thus my contribution:

Without debating the merits of a national identity card, my first read of your post was that it would effectively perform as one given that your 'use cases' describe the substantive core of an individual's interaction with society.

A brief scan of commentary did not, to my mind, flag such a "third rail" application, so I mention it here.

Readers should not take my comment as pro or con, although the current situation of fifty state driver's licenses -- documents originally designed to indicate one's ability to operate a class of motor vehicle that have been increasingly pressed into an ID function -- has been and remains ripe for criminal diversion.

Having lived overseas for many years, I reflexively carry my passport and proffer it here in the US when asked for ID. In a substantive, if not the majority, percentage of cases, I am asked for the less secure, more easily forgeable driver's license instead.

FYI, I would recommend more of Ou's observations as flags for risk. In It's been an hour and my IP phone is still bootingI saw a major security risk in the delay involved in the TFTP boot-up process. Were I a terrorist or criminal, I would look to cause a network drop, or a series of drops, and so deny my target the ability to use their phone system in whole or in part, and to certainly create uncertainty in the minds of users as to which part of the organization would be inop.

I maintain that VoIP is being looked at primarily through the eyes of commercial efficiency and not availability, redundancy, and security. Cheap piggyback architecture and poor implementation will cost firms dearly. They just don't know it yet.

Why stop at Single Sign On, why not Universal Sign On?
George Ou
ZDNet weblog
17 November, 2004

Gordon Housworth

Cybersecurity Public  InfoT Public  Strategic Risk Public  


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Persian Bactrian camel meets Arabian Dromedary at Arafat's funeral


Continuing to examine the impacts of Arafat's death, it is clear that Iran has forgiven Arafat and the Palestinians for their tilting in favor of Iraq in the 1980-1988 Iran-Iraq War. Upon Arafat's death, Iran:

praised Arafat, condemned Israel, and called for Palestinian unity against Israel. Arafat's name and Palestine are permanently linked, according to an Iranian government statement cited by the official Islamic Republic News Agency on 11 November... Iran offers its condolences to "the oppressed Palestinian people," [and] Expediency Council Chairman Ayatollah Ali Akbar Hashemi-Rafsanjani also offered his condolences.

As chance would have it, given that Ayatollah Ruhollah Khomeini had years ago declared that the last Friday of the holy month of Ramadan would henceforth be annually celebrated as Qods Day (Jerusalem Day), that day happened to fall on the same day as Arafat's funeral, 12 November. In preparation for that day, one of Supreme Leader Ayatollah Ali Khamenei's prayer sermons:

praised Palestinian "resistance" against Israel and he criticized the international community's "silence." "America is an accomplice itself. The hands of American administrations are stained with the blood of Palestinians right up to their arms. If a court there was to rule in the Palestinian case, the accused would not be only [Israeli Prime Minister Ariel] Sharon and the Zionists. The Americans accused in this case are also people such as Bush, his gangs, and American administrations."

In a deft touch no doubt made with an eye to rebroadcast on al Jazeera and other Arabic-language media, Khamenei switched from Farsi into Arabic, continuing to envelop Qods Day into an indictment of the silence of Arab governments that pay lip service to Palestinians and the defense of human rights, Muslim pride over "Palestinian courage," and "crimes committed by the usurping Zionist regime."

On Qods Day -- the funereal day -- Rafsanjani weighed in noting that "the Palestinian problem will continue until Western powers cut their support for Israel. Rafsanjani's comment that the solution to the "leadership void left by Arafat's death" was to hold free elections, a step that would incidentally give a leg up to Iranian backed Hezbollah membership.

While Rafsanjani professed that the "Palestinian issue affects Iranian domestic and foreign affairs," the US press, continuing what I see as its underreporting of Palestinian affairs, failed to detail the members of the Iranian delegation at Arafat's funeral who one might reasonably assume to have been selected for their ability to extend Iranian influence in Palestinian polity:

  • Foreign Minister Kamal Kharrazi
  • Hojatoleslam Ali-Akbar Mohtashami-Pur - secretary-general of the Support for Palestinian Intifada conference series, "founder of Lebanese Hizballah when he was ambassador to Damascus in the 1980s," a relationship that Mohtashami-Pur has maintained
  • Hussein Sheikholeslam - former ambassador to Damascus, participant in the 1979-1981 US hostage taking, Foreign Ministry's director for Arab affairs, thereby coordinating "Islamic Revolution Guards Corps participation in Hizballah operations."

"Representatives of Hizballah, Hamas, the PIJ, the PFLP-GC, the Palestinian Authority, Fatah, and Fatah Uprising met at [Mohtashami-Pur's] April 2001 and June 2002 "Support for the Palestinian Intifada" conferences." Mohtashami-Pur pursued talks with representatives of many of those groups while in Cairo for the funeral. One should expect that those conversations echoed the twin themes of earlier Iranian/ILNA traffic, aggressiveness and unity. Iran would encourage the former and join the latter.

Iran has relations with the Palestinian Authority (PA) and Fatah while it "materially supports more extreme Palestinian groups, such as Hamas, the Palestinian Islamic Jihad (PIJ), and the Popular Front for the Liberation of Palestine -- General Command (PFLP-GC)." Arafat's death is an opportunity for all competitors, 'foreign and domestic,' to challenge Fatah's domination of the PA.

Expect Mohtashami-Pur to insert Iran and Iranian supported groups into the Palestinian scrum.

Tehran Sends Terrorism Organizers To Arafat's Funeral
Bill Samii
15 November 2004, Volume 7, Number 40

Gordon Housworth

InfoT Public  Terrorism Public  


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