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November 07 [by Blaine Harden, Washington Post, Nov. 3, 2009] -- SEOUL -- North Korea's military, whose nuclear program vexes the Obama administration, has grabbed nearly complete command of the nation's state-run economy and staked out a lucrative new trade in mineral sales to China to make money for its supreme commander, Kim Jong Il. As it deepens its dominance over nearly every aspect of daily life, the Korean People's Army is also deploying soldiers to take first dibs on all food harvested in the isolated, chronically hungry country, according to the latest assessments of analysts. The army has earned hundreds of millions of dollars selling missiles and weapons to Iran, Pakistan, Syria and other nations. But its two nuclear tests, the most recent of which occurred in May, have triggered U.N. sanctions that are now choking off arms sales. So the army has come up with a new business model, taking over the management of state trading companies to rapidly increase sales of coal, iron ore and other minerals to China, according to trade data and analysts. The potential profits are eye-popping: China is one of the world's most voracious consumers of raw materials, and North Korea's mineral reserves are worth $5.94 trillion, according to an estimate by South Korea's Ministry of Unification. China has been critical of North Korea's nuclear program and missile tests, but it also has vastly increased its economic ties with Kim's government. . . . >>Read full article here. [by Alex Berenson, NY Times, Nov. 5, 2009] -- After weeks of speculation on Wall Street, prosecutors brought a fresh round of insider trading charges on Thursday that left no doubt they were aiming at hedge funds and the networks of market gossip that are endemic on trading floors. The charges, against 14 money managers, lawyers and other investors, followed the arrest last month of a hedge fund billionaire, Raj Rajaratnam, on charges that he had profited from inside information. In the latest criminal complaints, prosecutors described a network that used prepaid cellphones to avoid detection, and that was pierced in part through surveillance and wiretaps. One law enforcement official, speaking on condition of anonymity because the investigation is continuing, said the authorities expected to make more arrests in the coming weeks. The investigation is part of a broad Federal Bureau of Investigation push into crimes related to hedge funds, including the addition of a third securities fraud unit in New York, the official said. And for the first time, the authorities hinted that they might be brushing against the pinnacle of the hedge fund world, S.A.C. Capital Management, a $12 billion Connecticut fund company. Neither S.A.C. nor any current employee has been charged with wrongdoing. . . . >>Read full article here. World Bank Reform- What the World Bank Is Doing October 16, 2009—The World Bank Group is advancing multiple reforms to promote inclusiveness, innovation, efficiency, effectiveness, and accountability. It is expanding cooperation with the UN, the IMF, other multilateral development banks, donors, civil society, and foundations. But the effort must go further to realize a World Bank Group that represents the international economic realities of the 21st Century, recognizes the role and responsibility of growing stakeholders, and provides a larger voice for developing countries. Watch this space for regular updates on World Bank reform. 
Bank Reforming
to Meet New Challenges October 6, 2009— The World Bank is pursuing a program of reform to enable the institution to become more efficient and effective while also gaining legitimacy among the developing countries it serves. Increasing Voice and Participation 
We are reforming to enhance the voice and representation of developing and transition countries in the Bank Group, with an additional Board seat for Sub-Saharan Africa and an increase in the voting power of developing countries to at least 47 percent by spring 2010, aiming at 50 percent over time. Development Committee Paper on Voice and Developing Countries (pdf) Promoting Accountability and Good Governance 
Governance and anti-corruption are now key elements in Bank operations across sectors and countries, with lending in public sector governance comprising approximately $4.7 billion in FY08 and $5.8 billion in FY09. Governance and Anti-Corruption Reforming Investment Lending 
A major effort is underway to reform the Bank’s Investment Lending model so that it responds better to borrowers’ needs and a changing global environment. The new approach calls for more focus on results and risks; and streamlined processing of low risk operations while paying more attention to supervision and higher risk investments. Investment Lending Reform Increasing Transparency and Disclosure 
Under forthcoming disclosure policy reform, the Bank will disclose information unless there is a designated exception. Bank’s Policy on Information Disclosure | Disclosure of Information Policy Paper (pdf) Reviewing Internal Governance 
Report sets out proposals for strengthening World Bank Group governance and overall effectiveness, including voice and participation. Conclusions and Proposals (pdf) Source: World Bank. [Xinhua, Nov. 5, 2009] -- Petrobras, a Brazilian multinational energy company, signed a 10-year contract on Tuesday for a $10 billion financing from the China Development Bank Corporation, the company source confirmed Wednesday. The fund would be used to finance the Petrobras Business Plan 2009-2013 and would be made available to the company in several stages, according to Petrobras. The company said the contracts had been under negotiation since May 2009. "This funding has become symbolic because of the amount involved and because it represents a new stage for relations between developing countries' markets," the company said in the statement. When the first withdrawal is made, Petrobras said, a long-term agreement on the export of Petrobras oil to UNIPEC Asia, a subsidiary of Sinopec (China Petroleum and Chemical Corporation), would take effect. It forecasts the export of 150,000 barrels of oil a day in the first year, and 200,000 barrels in the nine subsequent years. November 06 [by Ko Shu-ling, Taipei Times, Nov. 6, 2009, Page 3] -- President Ma Ying-jeou (馬英九) yesterday contradicted himself when talking about bilateral trade agreements. While he said bilateral negotiations would put Taiwan in an unfavorable position, his administration is making strenuous efforts to sign an economic cooperation framework agreement (ECFA) with Beijing. Although Taiwan has signed five free-trade agreements (FTAs) with diplomatic allies in central America, Ma said trade volumes with the five allies combined comprise less than 1 percent of the country’s total trade volume. “We need to sign more FTAs with our major trading partners and mainland China is absolutely the No. 1 choice,” Ma said. He made the remarks while speaking at the opening ceremony of the Seventh Annual Global Chinese Business Leaders Forum held at Taipei’s Grand Hotel yesterday morning. The two-day event was organized by Global Views Magazine and cosponsored by the Committee of 100. Ma said there are “many factors” compelling his administration to be careful in leading the country forward, but its resolve is firm. Only by doing so can Taiwan find a way out, further reduce cross-strait tensions and attain peace in the Taiwan Strait, he said. As China is the country’s biggest trading partner, Ma said it was necessary for both sides to sign an ECFA in order to maintain trade volumes. Bilateral trade has grown from NT$40 billion (US$1.25 billion) in 2000 when the Democratic Progressive Party (DPP) came to power to NT$130 billion last year when the Chinese Nationalist Party (KMT) took power. China-bound exports have increased from 24 percent of total exports in 2000 to 40 percent last year, he said. The number of foreign tourists has also grown by 11 percent, he said. Over the past year, Ma said his administration has been frustrated and received much criticism, but also learned a lot of lessons. He emphasized the path his administration was taking was the correct one and vowed to stay the course. Looking ahead, Ma said the future looks promising. The fourth quarter is estimated to see 5 percent growth, although over the year, the economy is projected to contract 4 percent. Many local and international institutions have forecast the country’s growth next year at 3 percent to 4 percent, he said, adding that the situation looks “cautiously optimistic.” Emphasizing that reform must not stop and progress cannot slow down, Ma said the country was in a race against time and with its neighbors. There is both cooperation and competition between both sides of the Strait, but the influence of the world’s Chinese is growing, he said. __________________________________________________________________________________ See also: Editorial - “ECFA not a zero-sum game, BOFT chief tells lawmakers”, Nov. 4, 2009; Quoting an editorial from the Taipei Times: “The signing of an economic cooperation framework agreement (ECFA) between Taiwan and China would be a mutually beneficial move, not a zero-sum game, Bureau of Foreign Trade (BOFT) Director-General Huang Chih-peng (黃志鵬) told the Legislative Yuan yesterday. . . . A report recently released by China’s Ministry of Commerce said tariff reductions resulting from the ECFA were expected to boost China’s GDP by 0.63 percentage points, or more than US$27 billion. Meanwhile, a study commissioned by the MOEA and conducted by the Chung-Hua Institution for Economic Research (中經院) shows that the ECFA could push up Taiwan’s GDP by 1.72 percentage points, or US$6.9 billion. . . .” Mainland-Taiwan economic agreement will benefit both, Oct. 28, 2009; According to the MOC, “The ECFA would help reduce trade barriers gradually and bring positive effects to the economies, trade and most industries across the Straits, according to a latest research report completed by the academy of international trade and economic cooperation under the MOC. Official figures revealed that the combined cross-Straits trade volume stood at 129.22 billion U.S. dollars in 2008.” China-Taiwan Relations: Temporarily in the Doldrums, Oct. 23, 2009; David G. Brown writes, “Taipei’s attention remains focused on the proposed ECFA agreement. In late July, the Ma administration released the report assessing the implications of an ECFA agreement, which was prepared by the pro-government Chunghua Institute of Economic Research. It portrayed the net benefits of an agreement, recognized that some sectors would be disadvantaged, and recommended ways to maximize benefits and mitigate negative effects. Economists affiliated with the opposition Democratic Progressive Party (DPP) predictably criticized the report as too favorable and issued a more critical report of their own. Public opinion remains divided about the desirability of an ECFA, especially since its contents remain undetermined. . . .” Chinese FTA better than ECFA: forum, Aug. 7, 2009; Ko Shu-ling wrote, “The administration of President Ma Ying-jeou should ask Beijing to sign a free trade agreement (FTA) under the framework of the WTO, rather than seeking to ink an economic cooperation framework agreement (ECFA) under the “one China” principle, participants at an economic forum said yesterday. . . .” Taiwan President Ma prepared to talk politics with China if reelected in 2012, June 6, 2009; “Taiwan President Ma Ying-jeou . . . . emphasized that Taiwan wanted to become an ASEAN partner in the same fashion as China, Japan and South Korea. Ma denied there was a timetable to sign an Economic Cooperation Framework Agreement (ECFA) with China, but repeated his stance that an agreement was necessary or Taiwan might become marginalized as ASEAN cut trade tariffs with China, Japan and South Korea beginning next year.” DPP’s “Sit-in” intends to spur new democratic movement in Taiwan, May 22, 2009; Dennis Engbarth wrote, “Besides declaring that the DPP would "must win" the upcoming city and county mayor polls, Tsai also announced that the DPP would launch a petition drive for one million signatures for a referendum on whether Taiwan should sign an "economic and cooperation framework agreement" (ECFA) with the PRC as advocated by the KMT. . . .” [by Ellen Barry and Michael Schwirtz, NY Times, Nov. 5, 2009] -- 
(Left, Anastasia Baburova, 25, a reporter trainee, and Stanislav Markelov, 34, a human rights lawyer, who were shot to death by a masked gunman in January after they left a news conference in Moscow; Photo/Novaya Gazeta/AP). MOSCOW — Two young people identified as ultranationalists will face charges in the January shooting that killed a crusading lawyer and a reporter, an attack that cast a pall over Russia’s dwindling circle of human rights activists. Prosecutors on Thursday announced the arrest of Nikita Tikhonov and Yevgenia Khasis, both in their 20s, who appeared in court with black hoods over their heads. The chief of Russia’s Federal Security Service, Aleksandr Bortnikov, said that the suspects were identified during a crackdown on extremist groups in Moscow, and that the killer had confessed. The attack on the lawyer, Stanislav Markelov, and the reporter, Anastasia Baburova, was brazen even by Moscow standards. . . . >>Read full article here. [by Clifford J. Levy, NY Times, Nov. 2, 2009] -- MYTISHCHI, Russia — It was late on a Monday afternoon at the drunk tank in this Moscow suburb, but it could have been any day, at any hour, at any similar facility across this land. People would come. They always do. Such is Russia’s ruinous penchant for the bottle — and the challenge facing a new government policy to curb it. . . . In recent years, as Russia has rebounded and engaged more with the world, alcohol has hindered its development. Foreign companies that operate here are particularly aware of the toll as they grapple with lower productivity. Russians consume roughly 4.75 gallons of pure alcohol a person annually, more than double the level that the World Health Organization considers a health threat. The consumption figure for the United States is about 2.3 gallons. The country will have difficulty resolving its demographic crisis — its population is predicted to drop nearly 20 percent by 2050 — if it does not confront its alcohol problem. Life expectancy for Russian men is now 60 years, in part because of alcoholism. . . . >>Read full article here. 
Featured Article, Library of Economics and Liberty, November 2, 2009 by Fred S. McChesney Armen Alchian: An Economist-Lion in Winter Editor's Note: The following was written before the announcement that the 2009 Nobel Prize in Economics Sciences would be awarded to Elinor Ostrom and Oliver E. Williamson, choices the author does not dispute. It was written only in the belief that Armen Alchian also should some day win that Prize. Being named as winner of the Nobel Prize in Economic Sciences says little about one's long-run stature among economists. Nor are Nobel laurels a necessary condition for recognition as a great economist. No better proof of that proposition is the standing among economists of Armen Alchian, an intellectual giant as a theorist and an educator.1 With Alchian now in his nineties, it is appropriate to review his many noteworthy contributions to economic science. Foremost is his work in property rights. Before Alchian, economists took for granted the existence of private property. Adam Smith's famous principle of the invisible hand works only if individuals have property rights over their own bodies and over the fruits of their labor. The point is so obvious that it seemed to require no discussion—thus, economists did not discuss it. But Alchian, in a series of pathbreaking articles, pointed out that property rights are defined differently in different institutional contexts and that the differences matter.2 For example, some fifty years ago, Alchian raised an question that was timely then but even more debated today: Why do university professors obtain tenure, effectively a right to work and be paid for life?3 Tenure is the norm even at private colleges and universities, but it does not exist in any other sector of the private economy. Alchian noted the standard argument that tenure was necessary to protect professors' ability to "search for truth," but countered that the true basis for tenure was the structure of property rights within the university. . . . >>Read full article here. Posted by Anoop Singh, Nov. 3, 2009, Asia EconoMonitor -- Now here’s the puzzle: how is it that Asia has rebounded sooner and more strongly than the rest of the globe from the economic slump when the region is so heavily dependent on exports for its growth? This, and the future prospects for the region, are two of the key issues we analyzed in the latest Regional Economic Outlook (REO) for Asia and the Pacific, recently launched in Seoul and Tokyo. There are three pieces to the puzzle of Asia’s rebound: -
Exports (in value added terms) account on average for about one-third of GDP in emerging Asian countries, while many of the region’s large firms depend on global capital markets to finance their investment projects. -
Recovery in the rest of the world has been unsteady. -
Yet Asia’s own GDP figures for the third quarter have been impressive: Korea grew nearly 3 percent in that quarter alone, Singapore grew even faster, and China’s growth accelerated to 9 percent year-on-year, propelled by booming investment. The answer to the puzzle How do these pieces fit together? One part of the answer is the powerful measures the region took to counteract the crisis. Soon after the global downturn hit, Asian authorities boosted government spending, reduced interest rates sharply, and provided liquidity to strapped financial markets. . . . 
Construction workers in Korea. Across Asia the economy is rebounding. Another part of the answer is that in this business cycle, international trade has fluctuated far more than the GDP of advanced countries. As you can see in the chart below, global trade collapsed at the end of 2008 — so output in Asia’s export-oriented countries fell further than that of countries at the center of the crisis. But since February, trade has been normalizing rapidly, tracing out a pronounced V-shape, clearly visible on the graph. Unsurprising then that Asia’s recovery is duplicating that V-shaped. . . . 
How do we sustain Asia’s recovery? So far, so good. But future recovery may prove more challenging. . . . >>Read full article here. [by Edmund L. Andrews, NY Times, Oct. 9, 2009] -- SANTA BARBARA, Calif. — Ben S. Bernanke, the chairman of the Federal Reserve, said on Monday that Asian nations were pulling the global economy out of its downturn but warned that both Asia and the United States needed to do more to reduce global trade imbalances. Speaking at a conference on Asia hosted by the Federal Reserve Bank of San Francisco, Mr. Bernanke said Asian countries had bounced back from the global recession faster than the rest of the world and had reported “impressive” growth. “Asia appears to be leading the global economic recovery,” the Fed chairman said, noting that the region as a whole expanded at an annual rate of 9 percent during the second quarter and that some countries, including China, grew at rates of more than 10 percent. But Mr. Bernanke also warned that huge trade imbalances between the United States and the rest of the world had played a central role in the global economic crisis and that they could do so again. . . . >>Read full article here. [NY Times, Nov. 4, 2009] -- 
The Securities and Exchange Commission said Wednesday that JPMorgan Chase had agreed to pay $75 million in penalties and as well as forfeit $647 million in termination fees to settle civil charges that its securities firm had engaged in an “unlawful payment scheme” to win municipal bond business in Jefferson County, Ala. The county, home of Birmingham, the state’s largest city, has been pushed to the brink of bankruptcy as a result of the bond offerings and credit-default swap transactions involved in financing sewer projects. The county’s sewer debt grew to $3.9 billion, including the swap termination fees. The settlement reduces the sewer debt to $3.2 billion. In addition to forfeiting the $647 million in fees, the S.E.C. said J.P. Morgan Securities would make a payment of $50 million to Jefferson County. It will also pay a penalty of $25 million. The firm settled the charges without admitting or denying the allegations against it. . . . >>Read full article here. November 05 [by David Jolly, NY Times, Oct. 28, 2009] -- Norway on Wednesday became the first European country to raise interest rates since the onset of the financial crisis, citing a nascent rebound in the global economy and inflationary pressures in its petroleum-exporting economy. Inflation has been higher than expected and unemployment is “considerably lower than previously projected,” the Norges Bank governor, Svein Gjedrem, said in a statement announcing the one-quarter point increase in the overnight deposit rate, to 1.5 percent. While the global economy remains in a deep downturn, the central bank chief said, “there are signs of renewed growth.” With the sense of crisis ebbing, the global monetary and financial authorities have begun to consider the need to withdraw the emergency measures, including massive fiscal stimulus and rock-bottom interest rates, that were implemented to keep the world economy afloat. But analysts do not expect the Federal Reserve, the European Central Bank or their counterparts in Japan or Britain to take near-term action. Norway, a Scandinavian country of 4.6 million people, is a major oil and gas exporter, and as oil prices rising to nearly $80 a barrel currently, from below $45 at the end of 2008, the economy has stabilized. “This action reflects the fact that Norway’s huge oil surplus and supportive fiscal policy have helped to insulate the economy from the worst of the global economic downturn,” Ben May, an economist at Capital Economics in London, wrote in a research note. “Accordingly, it is unlikely that other central banks in the region will follow suit and hike rates anytime soon.” On Oct. 6, the monetary authorities in Australia, another important commodity exporter, raised their main interest-rate target by one-quarter point to 3.25 percent, becoming the first Group of 20 nation to increase borrowing costs. . . . >>Read full article here. [by Jackie Calmes, NY Times, Oct. 21, 2009] -- WASHINGTON — When economists met privately with Democratic leaders of the House on Wednesday, the topic was how to pump billions more into the economy to stimulate job creation. They left with a homework assignment: How to cut trillions from future federal budget deficits. That seemingly contradictory mix captures the unusual political and policy tension in the White House and Congress these days as the politicians deal with an economy that has begun a slow but jobless recovery and a public that is increasingly fretful about the accumulating debt. Not since the early 1990s have Washington’s policy makers faced this balancing act between demands for immediate economic stimulus and pressure for longer-term plans to restore fiscal stability. But this time is a lot worse, both in the severity of the economic downturn and the size of the deficit. . . . >>Read full article here. by M. Ulric Killion. A recently written short essay by Emrullah Uslu and titled “Judicial Opposition Criticizes the AKP Government,” and appearing in the Eurasia Daily Monitor, should be of interesting to those following modern judicial reforms in the Republic of Turkey (Turkey). The AKP government represents what hails as the Justice and Development Party or White Party (i.e., Turkish: Adalet ve Kalkınma Partisi). The issue of reforming Turkey’s judiciary system transcends domestic borders. This is because even the Bretton Woods Institutions (BWIs), such as The World Bank, continue to follow Turkey’s modern judicial reforms. A case in point is that during the December 10, 2004 – Program: Judicial Reform for Improving Governance in Turkey, several representatives of governments, international bodies, non-governmental organization and other institutions, including the World Bank, are in attendance as participants. The concluding remarks for the 2004-Program were actually delivered by Roberto Dañino, who was, then, the senior vice president and general counsel of the World Bank, before resigning in 2006. Demonstrating the international interests in judicial reforms in Turkey, the 2004-Program was actually a World Bank-funded program, and is only one of several judicial reform programs that have been funded by sources outside Turkey. Judicial Reform Projects in Turkey The “Judicial Modernization and Penal Reform” program was sponsored by the Council of Europe, and entails a budget of 10 million Euros, with a duration period from 2003-2005. For the period of 2006, there is the “EU/Phare Twinning Covenant Domstolsverket” program was sponsored by the SIDA (The SwedishInternational Development Cooperation Agency), which was implemented by the Domstolsverket - The Swedish National Courts Administration. For the duration of 2006, there was the “Pre-study in Turkey on Development of the Judiciary” program sponsored by the SIDA and implemented by the Swedish National Courts Administration (SNCA), though in partnership with the Ministry of Justice of Turkey. During the period from 2001- 2002, there was the “Judicial Sector Exchange Program” sponsored by the DRL (Bureau of Democracy, Human Rights and Labor, U.S. Department of State), with a budget of $400,000. For the years 2005-2006, there is the “Support to the Establishment of Courts of Appeal” program sponsored by the EU Development Projects and implemented by the Brussels 5 - EC institutions, with a budget of EUR 800,000. Then there is the Oct.-Dec. 2005 World Bank-sponsored “Judicial Reform Learning Program in Turkey” program that was implemented by the PREM and LEG. Earlier in 2000, there is the “Strengthening of the Judiciary I Southeast Europe (Albania, Bosnia & Herzegovina, Bulgaria, Croatia, FYROM, Greece, Romania, Turkey and where possible Yugoslavia)” program sponsored by the SELDI (Southeast European Legal Development Initiative) and implemented by the “The International Development Law Institute.” There is of course the earlier mentioned 2004- Judicial Reform for Improving Governance in Turkey program that was sponsored by the World Bank. During the period 2003-2006, there is the “Strengthening Human Rights Capacity in Turkey” program sponsored by the SIDA and implemented by the Raoul Wallenberg Institute of Human Rights and Humanitarian Law, with a budge of SEK 30 626 000. Judicial reform programs of this variety generally premise on a democracy promotion approach, thus, entailing an expectation of enhancing the institutional capacity of governments and their institutions. In the specific context of judicial reform, this generally means an expectation of improving institution capacity in areas such as access to justice, building networks, improving access to information, and improving the quality of judicial and legal education. The earlier mentioned programs, likewise, intend to improve the capacity of Turkey’s judicial system; i.e. carry out much-needed reforms, develop and implement strategies designed to address obstacles to reform. Notwithstanding judicial programs from the 1990s, the earlier mentioned judicial reform programs in the 2000s also intend to address gaps, as in comparison to developed countries and economies, in developmental goals. Notwithstanding good governance models or policy, these are the gaps (or lags) mostly occurring in the areas of agriculture, energy, finance, transportation, communication, health and education. Majid Mohammadi writes, “After decades of failures of developmental projects in authoritarian states, international community reached to this point that development will not be sustainable without reform in the areas of law, justice and public administration. Compared to billions of dollars spent on security and defense and hundreds of millions of dollars spent on infrastructural development, mostly funded (granted or loaned) by the international donors, millions of dollars spent on good governance is not noticeable.” In terms of modern judicial reforms in Turkey, International bodies funding various judicial reforms programs expect that Turkey will improve both the functionality and efficiency of its judiciary system. A problem, however, may be that these international bodies funding reforms also expect that improvements in functionality and efficiency should parallel Western standards, or more particularly, the EU (European Commission and the Council of Europe) model. In defense of international bodies funding these programs and urging judicial reforms in line with Western standards, it seems reasonably that closing the gap (lag) might necessitate that countries and economies, such as Turkey, should align the conditions of its judicial system with international standards, such as the United Nations and the EU models. Turkey’s Judicial Opposition Emrullah Uslu, in “Judicial Opposition Criticizes the AKP Government,” writes: The long standing dispute between Turkey's ruling Justice and Development Party (AKP) and the judiciary has once again resurfaced in recent weeks. Since 2007 the judiciary has led the opposition against the AKP. The constitutional court attempted to shut down the AKP and ban the prime minister from politics, while supreme court judges use every occasion to criticize the AKP government, and local courts file cases against President Abdullah Gul (EDM, January 13, May 20). Recently the Supreme Board of Judges and Prosecutors (HSYK) differed with the justice ministry's annual appointment lists. In the Turkish judicial structure the HYSK, which consists of five elected members from the supreme court and the council of state and two from the justice ministry (Justice Minister Saadullah Ergin and his undersecretary), has undisputed power to appoint judges and prosecutors on an annual basis. Judges and prosecutors' appointments usually occur in late June. This year, however, due to the disagreement between the justice ministry and the HSYK to determine who should be appointed and to which particular court, this process has suffered delays. The Turkish press reported that the conflict between the two centered on whether the prosecutors should remain in place, investigating the Ergenekon criminal network and the prosecutors who investigated unsolved political murder cases in the Kurdish region in 1990's and arrested Colonel Cemal Temizoz for his alleged involvement (Radikal, July 21). Justice ministry officials insist that the Ergenekon prosecutors and those who investigated the unsolved murder cases in the Kurdish region must remain in their posts to maintain their judicial independence. However, Ali Suat Ertoson a member of the HSYK, reportedly presented an alternative list to appoint new prosecutors to examine these issues (Star, July 24). While the crisis continues a photograph was leaked to the press showing Ertosun in a meeting with an Ergenekon suspect standing trial in the case (Yeni Safak, July 18). In addition, Ertosun has reportedly spent two days with Brigadier-General Ali Aydin, the commander of the Kayseri Regional Gendarmerie, where the suspect Colonel Temizoz works (Bugun, July 27). Consequently, the AKP government has pressured the HSYK to fire Ertosun (Yeni Safak, July 18). In response, the Deputy Head of the HSYK, Kadir Ozbek, released a statement refuting the allegations against Ertosun, and stating that his meeting with the Ergenekon suspect was a "normal procedure" (Cihan News Agency, July 27). . . After three weeks of deadlock, the HSYK suggested a possible compromise. The HSYK members agreed that the current Ergenekon judges and prosecutors would retain their positions on the condition that the ministry launches an inquiry into the complaints and charges against the Ergenekon prosecutors -if sufficient evidence exists. . . The HSYK, meanwhile, will be responsible for making a decision on the inquiry (Hurriyet Daily News, July 28). . . In the aftermath of this reconciliation, HSYK elected members issued a written statement criticizing the justice ministry, the AKP government and the media. . . The statement, however, did not mention whether the board has discussed replacements relating to Ergenekon and unsolved murder cases in the Kurdish region. The justice ministry responded to the HSYK's press statement by insisting that replacing the Ergenekon and unsolved murder case prosecutors violated the judicial independence of the prosecutors. It also accused the HSYK members of an unlawful attempt to use the authority of the justice ministry (Zaman, July 30). Uslu’s essay, though insightful, speaks to on-going problems of Turkey’s judicial model and judiciary reforms, including a Western perceived need for greater independence of Turkey’s judiciary. His essay also presents issues of the efficient and effective delivery of foreign aid by Western donors intending to promote judicial reforms in other countries. The Functional and Efficient Judiciary During his closing remarks at the earlier mentioned 2004-Program, Roberto Dañino (2004), in a review of the program modules, described six modules; i.e. Module 1, Module 2, etc. He also stated that there are “four essential dimensions for the process of reforms” which are “institutions, the legal system, enforcement and social commitment.” Dañino then went on to summarize each of the program modules. In Module 1, they (or participants) “examined the Principle Problem of the Judiciary establishing basic definitions, agreed on essential principles and also reviewed case load management, the practice of calling experts, and judicial personnel policy.” In Module 2, they “discussed Ethical standards, their Enforcement for Judges and the Legal Professionals and Accountability of the Judiciary.” In Module 3, they “reflected on the crucial role of Appointment, Promotion, Discipline and Removal of Judges and the complex nature of independence and accountability.” Module 3 also deserves further attention. This is because Dañino mentioned two important functions of judicial review. According to Dañino, “The first is to limit government power, and the second is to protect the rights of individuals. When a judiciary is truly independent, then its decisions are respected and enforced and the institution is less subject to political influence. However, judicial independence must be balanced by accountability of the judiciary and the obligation to carry out its duties while following the highest ethical standards. Judicial corruption ultimately destroys judicial independence.” In Module 4, they “focused on European Union Accession in relation to access to justice and continuing education.” In Module 5, they “discussed access to justice in relations to alternative dispute resolution (ADR) given that such services also improve the ability of a legal system to offer and deliver justice.” In Module 6, they reviewed they discussions, “noted points of fundamental agreement, and received” their “Action Plan which will become a useful guide for follow-up activities.” Nonetheless, as earlier mentioned, Uslu’s essay speaks to on-going problems of Turkey’s judicial model and judiciary reforms, including a Western perceived need for greater independence of Turkey’s judiciary. This also presents issues of the delivery of efficient and effective foreign aid that intends to promote legal reforms. The Issues of Legal Reform and Western Donors The issues of legal reforms are critical to all models of development. In the context of Turkey, it presents a challenge to a final accession to the EU. On April 14, 1963, Turkey submitted its application to accede to the EU (then the European Communities). In 1963, Turkey became an associate member of the EU. In 1995, Turkey signed a Customs Union agreement with the 1995 and, on December 12, 1999, at the Helsinki summit became an official candidate for full membership. A negotiation process addressing Turkey’s full membership actually commences on October 3, 2005 with most authorities perceiving that accession, and assuming resolution of pending issues (i.e., judicial reforms), predicting a process that may take as long as ten years from this date. Although Turkey also became a member of the Council of Europe in 1949, the Organization for Economic Co-operation and Development (OECD) in 1961, the Organization for Security and Co-operation in Europe (OSCE) in 1973, and an associate member of the Western European Union in 1962, Turkey’s membership bid to the EU remains pending (Cendrowicz, Time, Sept. 8, 2009). Borrowing from the title of Cendrowicz’s article, “Fifty Years On, Turkey Still Pines to Become European.” All of this, ultimately, presents issues of the efficient and effective delivery of foreign aid by Western donor countries intending to promote judicial reforms in other countries and economies, especially non-Western countries and economies. In this respect, the EU and other countries may be wise to take their lead from earlier suggestions of the Brookings Institution and the Center for Strategic and International Studies (CSIS). This is because, “in June 2006, a joint task force convened by the Brookings Institution and the Center for Strategic and International Studies (CSIS) released recommendations for reorganizing and reprioritizing U.S. foreign aid programs. The Brookings-CSIS Task Force called for a comprehensive review of foreign aid, led by Congress but involving key non-governmental organizations (NGOs) and government agencies, with the Goldwater-Nichols Defense Reorganization Act of 1986 serving as its model. The Brookings-CSIS Task Force advocates a U.S. development mission that is on parity with U.S. defense and diplomacy, which could result in the creation of a Department for Global Development for bringing together more than fifty U.S. government units involved in aid delivery. The task force also noted that U.S. spending on foreign assistance has seen its greatest increase in forty years, an expansion that also produced a growing incoherence in policy and a fragmentation in organization. What was observed to be a critical problem was the threat to hard power assets, resulting in the United States needing to deploy its soft power more effectively and efficiently” (Killion, 2007; Brookings-CSIS Task Force Releases New Recommendations on Transforming Foreign Aid, Brookings Inst., June 22, 2006). The 2006 report of the joint task force “centered on the United States failing to take fuller advantage of potential synergies, with these disparate efforts sometimes working at cross purposes. The task force essentially found that the United States punches well below its throw weight in the international community, which should be unmatched when measured in absolute aid dollars. For these reasons, U.S. foreign aid must move away from a one-size-fits-all approach and should be redirected by a unified framework fusing U.S. objectives supporting capable foreign powers and countering security, humanitarian and transnational threats with differentiation based on governance and economic capacities. As a result, U.S. aid programs must be customized to the capacity and need of beneficiary-countries, while also recognizing that beneficial-countries afflicted with poor governance routinely perform the worst in addressing human needs” (Killion, 2007). In the context of the efficient and effective delivery of U.S. foreign aid and legal reforms, there is the parallel example of U.S. foreign aid intending to promote legal reforms in Mainland China. This is because “United States foreign operations appropriations for China primarily support democracy-related programs, such legal training, legal aid, criminal defense, labor rights, the development of NGOs in China, monitoring human rights conditions in China from outside China, and preserving Tibetan culture. United States funding has been substantive in the area of legal reforms. The U.S. Congress has approved substantive funding for such programs, reflecting a growth from $10 million in 2002, to $23 million in 2006. From 1999 to 2006, U.S. government funding for democracy-related programs in China was about $110 million. Although the major recipients are Temple University (rule of law project), the International Republican Institute (village elections project) and the Asia Foundation (civil society project), many experts and authority suggest that U.S. congressional funding for legal reform efforts in China have produced limited benefits due to the lack of judicial independence, weak enforcement of laws, constraints on lawyers and political corruption” (Killion, 2007; Thomas Lum, U.S.-Funded Assistance Programs in China, CRS Report for Congress, May 18, 2007. General Accounting Office, Foreign Assistance: U.S. Funding for Democracy-Related Programs, Feb. 2004). For these reasons, the EU would be wise to follow the recommendations set forth in the 2006 report, especially concerning the delivery of foreign aid intending to effect legal reforms that align the conditions of Turkey’s judicial system with international standards, such as the EU models. As observed by the eminent Professor Stanley Lubman, in the context of China and legal reforms, “China’s difficult transition is reflected in its legal institutions” and “The United States can assist China to build its legal institutions without preaching” (Stanley Lubman: A letter to Obama, WSJ, Nov. 4, 2009). Nonetheless, Professor Lubman admittedly argued that the United States should increase its support for legal reforms. Professor Lubman writes: In recent years the U.S. government, including your predecessor’s administration, has increased the support that it has given to strengthen labor rights, legal aid, open government, and administrative law, augmenting the support for these and other institution-building efforts by multilateral and U.S. NGOs. The current administration ought to increase that support while restraining highly public calls that urge China to speed up its adherence to Western values. You might suggest creation of a modest program of U.S.-Chinese cooperation on legal issues” (Lubman, 2009). Conclusion It should now be understood, colloquially speaking, that Western donors should not simply throw vast sums of money at a problem without regard for issues such as efficiency and effectiveness, and even functionality. As previously mentioned, Western donors funding various judicial reforms programs expect that Turkey will improve both the functionality and efficiency of its judiciary system. A problem, however, are Western donors expecting that improvements in functionality and efficiency should parallel Western standards, or more particularly, the EU model. As the case of China and legal reforms arguably demonstrate, it may be unreasonable to expect that the closing of this gap necessitate that recipient-countries of donor aid will align the conditions of its judicial system with international standards, such as the EU models. Additionally, Professor Lubman’s argument for continued support for legal reforms is not contra distinguishable from the thesis of this essay. This is because the essay does not intend to urge a denial of all foreign aid directed to or intending to promote legal reforms in other countries such as China and Turkey. Rather, what is being called for is the efficient and effective delivery of foreign aid, including foreign aid intending to promote legal reforms in other countries. It is for these reasons, the earlier report from the 2006 joint task force, which was convened by the Brookings Institution and the Center for Strategic and International Studies (CSIS), provides invaluable insights to this historical problem of Western donors. Moreover, in the event, Turkey ever accedes to the EU one reasonably suspects that it will largely be a political-based decision (e.g., China’s 2001 accession to the WTO despite a Western-perceived-need for reform of its judiciary). Sources: Emrullah Uslu, Judicial Opposition Criticizes the AKP Government, Eurasia Daily Monitor -- Volume 6, Issue 146, July 30, 2009. Roberto Dañino, Concluding Remarks, Judicial Reform for Improving Governance in Turkey, Dec. 10, 2004. Majid Mohammadi, Judicial Reform Projects Sponsored by International Donors in Egypt and Turkey, USAID (http://www.usaid.gov), Oct. 17, 2006. Leo Cendrowicz, Fifty Years On, Turkey Still Pines to Become European, Time, Sept. 8, 2009. Brookings-CSIS Task Force Releases New Recommendations on Transforming Foreign Aid, Brookings Inst., June 22, 2006. Thomas Lum, U.S.-Funded Assistance Programs in China, CRS Report for Congress, May 18, 2007. General Accounting Office, Foreign Assistance: U.S. Funding for Democracy-Related Programs, Feb. 2004. Stanley Lubman: A letter to Obama, WSJ, Nov. 4, 2009. Ulric Killion, Modern Chinese Rules of Order (2007), Chapter 8. Copyright © Protected - All Rights Reserved M. Ulric Killion. [CECC Newsletter, No. 5, 2009] -- Macau Government Passes Controversial National Security Law On February 25, 2009, the Macau Special Administrative Region (SAR) passed a new National Security Law that includes provisions regarding treason, secession, subversion, sedition, theft of state secrets, and acts by foreign political organizations or Macau groups deemed to endanger state security. The law incorporates select citizen and legislator suggestions but because the final law leaves several terms undefined, it potentially has negative implications for Macau citizens' freedoms of expression and association. The extent to which the Chinese government will extend its framework for protecting state secrets to Macau, remains unclear. Provisions in the law related to state secrets may allow for diminished transparency in the way some aspects of the "one country, two systems" relationship between the mainland and Macau will be handled. The Macau Special Administrative Region (SAR) passed a new National Security Law on February 25, 2009, as it was required to do under Chapter II, Article 23 of the Basic Law of the Macau Special Administrative Region of the People's Republic of China that was adopted in 1993 and went into effect in 1999. The new law includes provisions detailed below regarding treason (Article 1), secession (Article 2), subversion (Article 3), sedition (Article 4), theft of state secrets (Article 5), and acts by foreign political organizations or Macau groups that endanger state security (Articles 6 and 7). The length of prison terms for state security crimes include 10 to 25 years for treason, secession, and subversion, 1 to 8 years for sedition, and 2 to 15 years for stealing, collecting (citan), procuring, or making public state secrets. According to a July 9, 2003, New York Times article, the proposal of a similar law in Hong Kong led to demonstrations by approximately 500,000 people on July 1, 2003, after which the Hong Kong government withdrew the bill. Macau's National Security Law reflects some attention to public suggestions made on the initial bill during a 40-day consultation period and legislators comments on the revised bill (Chinese—revised bill shown side by side with original version in the Consultation Report of the National Security Law [draft], pp. 53-68). However, the final law leaves several terms undefined—with possible implications for Macau citizens' freedoms of expression and association. Moreover, as described below, concerns remain over the law's failure to clarify the extent to which the mainland's framework for state secrets will extend to Macau. Finally, the law includes in its definition of state secrets, "other related matters having to do with the relationship between central authorities and the Macau SAR as set forth in the Basic Law of the Macao Special Administrative Region of the People's Republic of China." It is unclear what implication this wording will have on the transparency with which the "one country, two systems" relationship between the mainland and Macau will be handled (under the Basic Law of the Macau Special Administrative Region of the People's Republic of China, this relationship is to remain in effect until 2049). Implications for Freedom of Expression and Association
While recognizing the need for national security legislation, citizens also expressed concern that the law's unclear definitions could impinge upon the freedoms of association and expression in Macau, according to the summary of suggestions and comments in the Consultation Report of the National Security Law [draft] compiled by the Macau SAR government (p.18). . . . State Secrets and Their Determination, and the Macau SAR-Mainland Relationship
Article 5 of the law criminalizes the act of stealing, collecting (citan), procuring, or making public state secrets, which "endangers or harms the independence, unity, or integrity of the state or its internal or external security interests." Article 5 defines "state secrets" as "documents, information, or objects" meeting two general requirements. The first is that "it has already been confirmed" that the document, information, or object "should be given state secret [status]." The second is that the document, information, or object must "involve national defense, foreign relations, or other related matters having to do with the relationship between central authorities and the Macau SAR as set forth in the Macau SAR Basic Law." . . . . Article 5 does not, however, specify what matters would be considered "related" to national defense or foreign relations. Nor does the article define the terms in the phrase "harms the independence, unity, or integrity of the state." . . . . Prohibitions Against Acts by Macau and Foreign "Political Organizations" That Harm National Security
Article 6 criminalizes the behavior of "foreign political organizations or groups," if that behavior is found to endanger national security. Article 7 criminalizes the establishment of links by Macau political organizations and groups with foreign political organizations and groups for the conduct of acts found to endanger national security. . . . >>Read full article here. [by P. S. Suryanarayana, Op-Ed, The Hindu, Nov. 1, 2009] -- The forum of Asia-Pacific Economic Cooperation (APEC) continues to keep India out. Not just geography but also geopolitics is the basis of this reality. At the moment, there is also no authoritative word whether an APEC summit, scheduled to be held in Singapore this month, will review the India question. Formally, APEC’s existing moratorium on admitting new members is due for review at only next year’s summit in Japan. In these circumstances, India’s non-APEC credentials resonate with the continued exclusion of the United States from the forum of East Asia Summit (EAS). India, like China and Japan among others, is a founding member of the 16-state EAS. And, the geopolitical footprint of EAS does have some overlapping implications for APEC as well. This is an issue that may come into soft focus, more so behind the scenes, during the prospective APEC summit in Singapore in mid-November. Essentially, the Asian and Pacific regions were hyphenated to form APEC as a group of select economies, not sovereign states, along the Pacific Ocean rim. There is nothing wrong with such an identity, except that it has remained a barrier to the entry of India and a few others into this key intercontinental club. The United States, China, Japan, Russia, Australia, several Southeast Asian states, Hong Kong as a special administrative region of China, and the non-sovereign Chinese Taipei are among the 21 APEC economies. A profile of this nature does make APEC an attractive forum for potential members like India. No bets can, of course, be placed with any certainty that India will in fact benefit greatly by becoming an APEC member. However, if APEC now begins to act decisively, it will rank next only to the global Group of 20 (G20) in addressing international economic concerns. And, as a G20 member, India knows that APEC cannot be brushed aside as an inconsequential forum. This is so, despite the fact that APEC is not in the same league as the Group of 8 (G8) industrialised countries. G8 is a caucus within G20; some developing countries too are beginning to coordinate their positions like an informal bloc among the 20 trouble-shooters. Politically, APEC membership can never also match the substantive status of veto-empowered permanent membership in the United Nations Security Council. For now, such a role at the U.N. is surely out of New Delhi’s reach, regardless of the spin that India might rather not aspire for an undemocratic veto right. Overall, a potential APEC membership will, therefore, be something that India cannot exclude from its world-view. A sub-optimal scenario is of course possible still. If APEC loses momentum, because of the rise of G20 on the global economic scene, the Asia-Pacific outfit may become a pale shadow of its original self. APEC may then look like the forum of Asia-Europe Meeting (ASEM), essentially a secondary trade bloc with no mandate for a global role. However, the prospective APEC summit in Singapore can still help keep the forum relevant to the global economy. APEC surely has a very large economic profile that ASEM cannot at all match. Three of the world’s topmost economies, including the U.S. as the highest-ranking one, are in the Asia-Pacific forum and not ASEM. Secondly, but no less importantly, new ideas of community-building now resonate across the Asia-Pacific region. Being a unique economic forum, does APEC have a futuristic agenda at all? By window-dressing or real efforts, the U.S. economy is projected to be on its way out of a deep recession, almost just in time for this month’s APEC summit. Host Singapore is also exuding a feel-good sense of confidence about not only the City-State’s own economic recovery but also the APEC summit. Three major issues Three major economic issues are expected to dominate the summit, according to Michael Tay, APEC’s Executive Director, and other officials. For the first time, this forum plans to shine the spotlight on inclusive growth in the member-economies. Broadly defined, inclusive growth denotes concern for the economic well-being of all sections of society. Such growth is a humane version of the statistical niceties like gross domestic product and per capita income. So, if discussed with empathy for people’s welfare as the purpose of economic activity, the planned focus on inclusive growth can make APEC better. Other related ideas are sustainable growth and balanced development, according to U.S. officials. Sustainable growth is meant to promote economic activity in a manner designed to ensure planet-friendly climate as well. Trade being an APEC concern, officials expect the prospective Singapore summit to try and give a political thrust to the worldwide Doha Round. The third but not the least of APEC concerns now is to facilitate investment flows, not just trade, across the intercontinental region. The politics of the prospective APEC summit will centre as much on personalities as on some new ideas already in focus. U.S. President Barack Obama and the new Japanese Prime Minister, Yukio Hatoyama, both fond of the mantra of change, will participate. Unlike in the case of the global forum of G20, the essentially regional entities of EAS and APEC have somewhat overlapping geopolitical concerns. It is, therefore, possible that Mr. Hatoyama may, in a broad-brush manner, brief the other APEC leaders about his long-term vision of an East Asia Community. A Japanese official emphasises that Mr. Hatoyama has said that the corner-stone of the superstructure of his foreign policy would be the Japan-U.S. alliance. In this regional political milieu, Australian Prime Minister Kevin Rudd cannot let go of an opportunity to expound his idea of an Asia Pacific Community. The theme will be in tune with APEC’s geopolitical sweep. However, the proposal, as outlined by him so far, will allow India, a non-APEC member, a pride of place in a possible Asia Pacific Community. Interesting, therefore, will be Mr. Obama’s response, if any, to the new ideas from Mr. Rudd and Mr. Hatoyama. No less important will be the responses from China, expected to be represented by President Hu Jintao at the planned Singapore summit, and from Russia too. Some expert opinions, expressed in other situations, are very much relevant, though, to the present context. Sheng Lijun, an expert on China-U.S. ties, has seen Beijing as being engaged in bringing about “chemical, not physical changes” in Washington’s foreign policy. In his view, both the U.S. and China seek to “reform” each other. Tim Huxley, an expert on Asia-Pacific equations, says that Mr. Hatoyama has not signalled any intention of “breaching Japan’s alliance with the U.S.” At the same time, he believes that freelance theories about the emerging anti-China coalitions are also “exaggerated” in the present circumstances. Potential membership of the forum of Asia-Pacific Economic Cooperation is something that India cannot exclude from its world-view. [by Andrew Jacobs, NY Times, Nov. 3, 2009] -- 
(In the city of Chongqing, China, a cavalcade of ranking officials and lowbrow thugs have been players in a mass public trial that has exposed the unseemly relationship between gangsters, police officers and the sticky-fingered bureaucrats. Hong Guibi said she was attacked and her husband killed for refusing to give a Communist Party chief part of their land; Photo/Gilles Sabrie/NY Times). CHONGQING, China — Wen Qiang had a fondness for Louis Vuitton belts, fossilized dinosaur eggs and B-list pop stars. For a public employee in charge of the local judiciary, he also had a lot of money: nearly $3 million that investigators found buried beneath a fish pond. But Mr. Wen’s lavish tastes were nothing compared with the carnal appetites of his sister-in-law, Xie Caiping, known as “the godmother of the Chongqing underworld.” Prosecutors say she ran 30 illegal casinos, including one across the street from the courthouse. She also employed 16 young men who, according to the state-run press, were exceedingly handsome and obliging. In recent weeks, Ms. Xie, Mr. Wen and a cavalcade of ranking officials and lowbrow thugs have been players in a mass public trial that has exposed the unseemly relationships among gangsters, police officers and the sticky-fingered bureaucrats. The spectacle involves more than 9,000 suspects, 50 public officials, a petulant billionaire and criminal organizations that dabbled in drug trafficking, illegal mining, and random acts of savagery, most notably the killing of a man for his unbearably loud karaoke voice. But like all big corruption cases in China, this one is as much about politics as graft. The political machine in Chongqing, a province-size mega-city of 31 million people in the southwest, has been broken up by a new Communist Party boss, Bo Xilai, who is the son of a revolutionary party veteran and has his eye on higher office. . . . So far six people have been sentenced to death. Ms. Xie got off relatively lightly, receiving an 18-year prison term on Tuesday. . . . >>Read full article here. [by Stanley Lubman, WSJ, China Real Time Report, Nov. 4, 2009] -- As part of our ongoing series of commentary from leading experts in their respective fields, Stanley Lubman, a long-time specialist on Chinese law, writes a letter to President Obama on the eve of his visit to China this month. Mr. Lubman teaches at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999). Dear President Obama: I missed the opportunity to meet you when I taught at the Harvard Law School about Chinese law, but I am seizing the chance to address you in this blog before you go to China. I have some thoughts that you should keep in mind about what the current state of Chinese legal institutions might tell you about the state of China itself and how the U.S should regard both — and what we can do to help. Chinese law, like China, is a work in progress. China rose from social and economic wreckage to become the nation that has grown faster over a thirty-year period than any other nation in history. Within such a short period, it would have been impossible anywhere to create a functional legal system—a framework of institutions that defines the limits of individual, organizational and government conduct within a network of rationally applied and publicly ascertainable rules. Chinese law has been and is evolving, albeit uncertainly. Deng Xiaoping’s apt description of economic reform as “crossing the river by touching the stones” is well-known, as are the shrinking of the state-directed economic sector and the extensive privatization of the economy. These dramatic changes have also produced severe economic and social dislocations. The gap between rich and poor is huge and growing, and regional disparities are serious. Less talked about and unimaginable to Americans is the growth of a flux in social values. Family and workplace ties have been impaired; many workers in state-owned enterprises that have been privatized have lost the social security that once came with their jobs and lasted throughout their lives; medical care, especially in the countryside, is in dire condition. The non-state economy that has arisen is, in many localities, a corporatist one, in which local business and political elites are closely tied together and business ethics is a contradiction in terms. The Chinese leadership is currently willing to undertake legal reform only under its authoritarian dominance, but even if it wanted to do more, how could a legal system be built well in the midst of such social disarray? China’s difficult transition is reflected in its legal institutions. One helpful description of the law of a society in transition can be found in a recent article by Hong Kong University law professor He Xin, who distinguishes between law at a time when the national emphasis is on economic development, and during a subsequent period—China’s today— when law is needed to move from exclusive reliance on economic development to what he calls, borrowing the current Chinese slogan, “harmonious society building. ” In this latter stage, the central government can use administrative law to restrain arbitrary conduct at lower levels of government. China’s leaders may not be interested in Western-style democracy, but they are very concerned about governmental accountability, and they have drawn on American and European experience and institutions.to promote “open government regulations” and e-government via the Internet. Local governments’ experimentation with increasing public participation in government is expanding slowly, and some provinces are interested in adopting regulations on administrative procedure, as Hunan province already did last year. The size of China and the pace of social change combine to make the central government’s control over lower levels of government vary considerably from place to place and time to time. As a result, in practice there is not one China, but many, and local variations make legal institution-building all the more difficult. The United States can assist China to build its legal institutions without preaching. In recent years the U.S. government, including your predecessor’s administration, has increased the support that it has given to strengthen labor rights, legal aid, open government, and administrative law, augmenting the support for these and other institution-building efforts by multilateral and U.S. NGOs. The current administration ought to increase that support while restraining highly public calls that urge China to speed up its adherence to Western values. You might suggest creation of a modest program of U.S.-Chinese cooperation on legal issues. While you are in China, you might explore whether there is interest in Beijing in welcoming foreign assistance in legal areas of common interest. Presidents Clinton and Jiang Zemin discussed the possibility in 1997 and agreed on some areas of cooperation. Although Congress dropped the ball in refusing to provide funding, US foundations helped fill the gap. Your administration could move more decisively. The need is there, China accepts foreign assistance in numerous areas, and experience shows that the U.S. can contribute to deepening legality in China. PRESS RELEASE: PRESS/TPRB/322 4 and 6 November 2009 TRADE POLICY REVIEW: BOTSWANA, LESOTHO, NAMIBIA, SOUTH AFRICA AND SWAZILAND Deeper integration is necessary for more balanced development Since the previous review in 2003, SACU members (Botswana, Lesotho, Namibia, South Africa and Swaziland), have collectively expanded at an average annual rate of about 4% in real terms, although this GDP growth has been somewhat erratic mainly reflecting infrastructure and other constraints, according to a WTO Secretariat report on the trade policies and practices of SACU. The five member states of this Customs Union continue to show substantial differences in levels of economic development and, so far, the only trade policy instruments harmonized are the applied customs tariff, excise duties, duty rebates, refunds and drawbacks, customs valuation, non-preferential rules of origin, and contingency trade remedies. The report notes that the complete implementation of the 2002 SACU Agreement, which entered into force in July 2004, would result in further harmonization of policies, deeper economic integration and more balanced development that now seem elusive. While noting that South African economy, the biggest and most advanced of the Union, remains relatively diversified, the report also says that the principal policy imperative faced by the other SACU countries remains diversification away from the current key export products (diamonds and other minerals in Botswana and Namibia, textiles in Lesotho and sugar in Swaziland). The report, along with policy statements by the Governments of the Southern African Customs Union (SACU), will be the basis for the third Trade Policy Review (TPR) of SACU by the Trade Policy Review Body of the WTO on 4 and 6 November 2009. The following documents are available in MS Word format. -
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Revisions of the above documents may be issued approximately 2 weeks after the meeting. -
Chairperson’s concluding remarks (coming soon) -
Minutes of the meeting are available approximately 6 weeks after the meeting. -
Questions and answers by WTO Members are available approximately 6 weeks after the meeting. ______________________________________________________________________________________________________________________ See also: >> Press release: http://www.wto.org/english/tratop_e/tpr_e/tp322_e.htm
>> More on Botswana: http://www.wto.org/english/thewto_e/countries_e/botswana_e.htm
> >More on Lesotho: http://www.wto.org/english/thewto_e/countries_e/lesotho_e.htm
> >More on Namibia: http://www.wto.org/english/thewto_e/countries_e/namibia_e.htm
> >More on South Africa: http://www.wto.org/english/thewto_e/countries_e/south_africa_e.htm
> >More on Swaziland: http://www.wto.org/english/thewto_e/countries_e/swaziland_e.htm. November 04 WTO NEWS: SPEECHES — DG PASCAL LAMY 2 November 2009 Lamy underscores the urgency of responding to the climate crisis Director-General Pascal Lamy, in his keynote address at the Carleton University on 2 November 2009 in Ottawa, Canada, said that responding to the climate crisis “is urgent, and is a top priority on the international agenda”. He noted that at the 2007 Trade Ministers’ meeting in Bali on the relationship between trade and climate change, his “message was, and continues to be, designed to uphold the Copenhagen Climate Summit at the end of the year”. This is what he said: Climate First, Trade Second — GATTzilla is Long Gone Ladies and gentlemen, In 2007, I attended the Trade Ministers’ meeting in Bali on the relationship between trade and climate change. In Bali, I sent a simple message: climate first, and trade second. And that message still stands today. It was, and continues to be, a message that is designed to uphold the Copenhagen Climate Summit at the end of this year. Ladies and gentlemen, the climate crisis that we are witnessing today is the single biggest challenge to civilization as we know it. Responding to that crisis is urgent, and is a top priority on the international agenda. Because that crisis is so serious, responding to it requires that we unleash all our resourcefulness and creativity. While the multilateral trading system has a key role to play on the international economic and political landscape, that trading system is designed to enhance, and not reduce, human welfare. It cannot stand as a barrier to the fight against climate change — in particular, to the conclusion of a “global” environmental accord. My message in Bali, therefore, was that climate negotiators needed to conclude an international treaty from which the WTO would take its cue. To truly enhance human welfare, the trading system needs to respond to the signals that would be sent to it by a successful Copenhagen accord. A trading system that ignores the emerging carbon price — that ignores the damage to our planet that greenhouse gas emissions cause — would reduce our welfare. No wonder then that the creators of the WTO enshrined the concept of Sustainable Development, right in the Preamble of the WTO accord. . . . >>Read full speech here. by Adam S. Posen, Peterson Institute for International Economics Op-ed in Eurointelligence, Sept. 21, 2009  [Synopsis]: The global financial and economic crisis has done lasting damage to the trend rate of growth in major economies, particularly the United States. A lot of human and financial capital, especially in residential construction, financial services, and auto production, has been lost or foregone due to the crisis. These sectors cannot be expected to grow as rapidly as they did earlier this decade. People will have to find employment in new fields, and the capital investment available in these fields to make people more productive will lag. The financial sector is unlikely to do a good job of allocating financing to new uses and businesses for a while. Not only will banks be rebuilding their balance sheets and raising capital, which will restrict lending, but also banks and other funders are likely to make poor choices at the margin about whom to lend to until their government guarantees are reduced and their capital restored. Appetite for riskier investments will be low, hindering innovation. And the rising US public debt levels as well as greater awareness of looming healthcare costs will crowd out private investment for at least a few years. The United States has tended to bounce back fully from past recessions, but this crisis will likely worsen the strain on employment and postpone the next technological leap, thus making full recovery that much more protracted and difficult.
[An excerpt reads]: “At a conference I co-organized at the Bank of Italy this month, two American economists gave rather optimistic assessments. They saw the US economy as quite flexible, the share of the financial sector in the US economy to be reallocated to other uses quite small, and the functionality of the financial system for allocating real investment to be relatively unimpeded. Hence, they thought there was plenty of room for demand to run hot, and even for greater stimulus policy, before the slack in the economy was taken up—they also thought that there would be no lasting damage to US trend growth. A number of European participants in the conference disagreed. Even in the continental economies where the financial sector had not grown so large, there was concern that aggregate supply had shrunk. . . .” >>Read full article here. [Xinhua, Nov. 3, 2009] -- China has yet to receive the official message from Rio Tinto that China can use a different pricing mechanism in the 2010 iron ore negotiations, said Chen Xianwen, director of the Marketing Department of the China Iron and Steel Association (CISA) here Tuesday. Sam Walsh, chief executive officer of Rio Tinto's iron ore unit, said Monday in Sydney that China could purchase iron ore under a new mechanism next year on the condition that China did not put up any unreasonable terms. "Setting a different pricing mechanism for China will be a beneficial solution both to China and Rio Tinto," said Chen. Shan Shanghua, secretary general of the CISA, said, "China will not accept the price that the three biggest mining companies offered to other countries' mills. Since China imports nearly half of the world's iron ore output, it's fair for us to ask for a bigger price cut." China's steel output was expected to reach 550 million tons in 2009, up 10 percent from a year earlier, driven by the government's 4-trillion-yuan (586 billion U.S. dollars) stimulus package, Luo Bing, vice-chairman of the CISA, said Tuesday. Rio's new act was considered a sign of improving relations between China and the world's second-largest iron ore exporter. The relationship strained after four Shanghai-based Rio Tinto executives were arrested on charges of commercial espionage in August.
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