International Organizations

Swiss banks as a model for financial regulation?

Wed, 09/30/2009 - 3:09pm
Political leaders around the world are trying to restrict banking bonuses given for short-term gains, which encourage the kind of reckless risk-taking that helped trigger the recession. And in a strange twist, the National Post says that to develop tougher regulations, everyone should look to Swiss banks -- more commonly associated with allegations of fraud and a notoriously adamant defense of clients' secrecy. Back in 2005, Credit Suisse developed a "performance incentive plan" that includes most of the banking bonus reforms discussed at the G20 summit. Credit Suisse mandated the paying of bonuses in shares, over longer periods of time and with a provision that "claws back" bonuses paid for deals that ultimately go sour.

European leaders are starting to follow suit; Britain's five largest banks have agreed to publish the pay of their key staff members, and will spread bonus payments over three years. French president Sarkozy has announced a set of even tougher and more broadly applied regulations.

Of course, not everyone thinks that bonus reforms are the way to go. Nobel prize-winning conomist Robert F. Engle III says

We shouldn't ban bonuses, but restructure the way they're paid so they're more commensurate with the risk the company is taking....What's important is we give the banking system the right incentives to figure this out. When companies get too big and too complex to fail, they would face a higher tax rate, which would go into a rescue fund. The banks are not excited about it, they would rather go back to business as usual."


You say P5+1, I say E3+3

Wed, 09/30/2009 - 11:59am

What do you call the grouping of the United States, France, Britain, China, Russia, and Germany, who are due to meet with Iran tomorrow for nuclear talks? In the U.S. it is generally referred to as the wonderfully awkward P5+1. But of course it all depends on your perspective:

The latter grouping is known either as the P plus 1 (the five permanent members of the Security Council plus Germany) or the E3 plus 3, the three Europeans countries plus the others.

This is even worse than P5+1. There's nothing really "European" about this group and it's bizarre to refer a set of countries with an adjective that only describes half of them. Why not the "Pacific rim countries plus 3" or the "English-speakers plus 4"?

The only solutions I can see are to expand the security coucil so that countires like Germany don't need a special invite, or add another country with a vowel so they can have a proper acronym.


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Benevolent oligarchy at the Clinton Global Initiative

Tue, 09/22/2009 - 5:33pm

"You don't have to hold public office to be a public servant," President Barack Obama said in his address here to the opening session of the Clinton Global Initative. If what his predecessor Bill Clinton says is any indication, it's better if you're not.

Clinton noted that as a former community organizer, Obama was himself an NGO veteran. Additionally, his wife Hillary spent much of the time he was in politics woring in a non-gvenerntal capacity. Noting how they're roles had changed, Clinton mused, " I think I got the long end of the stick."

Without disparaging its goals or methods, CGI does at times seems to embody a decidedly undemocratic ethos, the idea that wealthy donors and political VIPs, unencumbered by the legislative process can achieve the most good for the most people. As Clinton argued, enough heads of states and business leaders (including the CEOs of Coca-Cola and Wal-Mart who spoke at the session) share his views on the urgency of climate change leglistaion, "It's to to convince congresses and parliaments that we're on the right track."

Australian Prime Minister Kevin Rudd, who also spoke, argued for the virtues of the G-20 over the G-8, not becamse it is more representative, but because compared to the U.N. security council, it is far more efficient. "As the CEOs here could tell you, if there were 192 people on your board of directors, you wouldn't get very much done."

There wasn't much news in Obama's speech, it was a courtesy call that that he decided to make after finding himself "vulnerable to the charms" of the former president. Obama described the need for a "new spirit of global partnership" like that embodied by CGI. What is less discussed is that this type of global partnership oftens happens outside the traditional systems of governmance and depends on the good faith and wisdom of non-elected elites. 

Given what Obama has been facing on the hill lately (an ordeal Clinton certainly identifies with) that probably sounds pretty good to him these days.  


Understatement of the day: U.N. finds 'possible' war crimes in DRC

Wed, 09/09/2009 - 6:14pm

The United Nations High Commissioner for Human Rights, Navi Pillay, and his her office released two reports on violence in the eastern Democratic Republic of Congo in 2008, citing "possible war crimes and crimes against humanity" by the National Congress for the Defence of the People (CNDP), a rebel group formerly led by Laurent Nkunda and backed by the government of Rwanda.

Talk about your diplomatic understatement. The crimes involved dozens of killings and rapes. But for those following the DRC this statement has to seem kind of weak. There have been all sorts of atrocities in Eastern Congo for years, and the only questions really are which militia was guilty in which case. Possible? The U.N. head of mission in the DRC called the attacks war crimes immediately after they happened. 

Reuters reporters shrewdly dig into the problematic fact that while Nkunda was later arrested by Rwandan forces, it was his lieutenant, Jean Bosco Ntaganda (shown above), nicknamed "The Terminator" who was commanding the CNDP forces at the time of the November killings. Guess where he is? 

Ntaganda, who is being sought by the International Criminal Court on separate war crimes charges, wasintegrated into Congo's army in January along with other members of the Tutsi-dominated CNDP...

"We know he is there. We are aware of it. He was integrated. He wasgiven a role. And according to our partners, he does not play a role inthe operations that MONUC is supporting," said Kevin Kennedy, MONUC's head of communications.

"But it isn't our job to investigate the role of Bosco Ntaganda in the (army)," he told journalists in Kinshasa.

One other question for other Congo watchers out there. Doesn't a lot of focus seem to be just on the CNDP, when the Hutu FDLR militia has been committing terrible massacres for years? In fact, wasn't a key reason--along with grabbing minerals--for Rwandan support of Nkunda that he was protecting Congolese Tutsis from the marauding FDLR, many of whom were genocidaires? Maybe I've just missed it or Nkunda made such a good media character. Is the FDLR getting as much U.N. heat?

Update: This post originally mistook the gender and misspelled the name of U.N. Human Rights Commissioner Navanethem, or Navi, Pillay. 

LIONEL HEALING/AFP/Getty Images


Berlusconi wants in on the ogling action, too

Fri, 07/10/2009 - 5:09pm

Everyone's falling over themselves publicizing this little non-scandal, but looks like the media forgot this picture yesterday. We'd never hear the end of it if Silvio Berlusconi were left out of the fun!

AFP/Getty Images


The ICC continues to fight for relevance

Wed, 07/01/2009 - 4:39pm

Leading up to today's meeting of the African Union in Libya, the International Criminal Court (ICC) has been a sore point for Sudan's president Omar Bashir, who was indicted by the ICC last July for war crimes related to violence in Darfur. His indictment has led to protests against the court in Khartoum like one pictured above on May 27, 2009.

Bashir, along with other AU leaders like Libya's Moammar Gadhafi have criticized the court's focus on Africa, and even gone as far as to propose in advance of the AU meeting that states should withdraw from the Rome Treaty which established the court.

Pushing back, however, have been advocates of the ICC including former U.N. Secretary-General Kofi Annan. In an op-ed yesterday in the New York Times, he defended the court against its African critics:

One must begin by asking why African leaders shouldn’t celebrate this focus on African victims. Do these leaders really want to side with the alleged perpetrators of mass atrocities rather than their victims? Is the court’s failure to date to answer the calls of victims outside of Africa really a reason to leave the calls of African victims unheeded?

Moreover, in three of these cases, it was the government itself that called for ICC intervention — the Democratic Republic of Congo, the Central African Republic and Uganda. The fourth case, that of Darfur, was selected notby the international court but forwarded by the U.N. Security Council.

The I.C.C. represents hope for victims of atrocities and sends a message that no one is above the law. That hope and message will be undermined if the African Union condemns the court because it has charged an African head of state. The African Union should not abandon its promise to fight impunity. Unless indicted war criminals are held to account, regardless of their rank, others tempted to emulate them will not be deterred, and African people will suffer.
It doesn't look like the AU will actually decide anyone should withdraw, but the ICC is still under fairly heavy fire from other areas.  A recent article in the World Affairs Journal bytwo Darfur experts, Julie Flint and Alex de Waal blames the ICC's controversy and dysfunctional dynamics on its Argentine lead prosecutor Luis Moreno-Ocampo. In particular they criticize his handling of the Bashir indictment and his continuing to push for a genocide charge that was rejected as too thin by ICC judges. As the Washington Post's Colum Lynch reported yesterday, there is significant concern that Moreno-Ocampo's efforts could undermine peace negotiations in Sudan.

Regardless of whether Moreno-Ocampo remains in charge, the dilemma of the ICC in the foreseeable future is to figure out how to position itself as an arbiter of international law, not political jockeying. In an interview last year in Uganda, ICC Registrar Silvana Arbia addressed a similar question to that now being asked in regard to Sudan: Shouldn't the ICC be willing to be flexible to give peace agreements their best chance of success? Like her boss, she argued that allowing such machinations would undermine the legitimacy of the court, noting that "the warrants issued by the ICC cannot be used as a condition to negotiate a peace agreement."

But with so much scorn and a suspect arrested for only one of its outstanding warrants -- former Congo rebel commander Jean-Pierre Bemba Gombo -- the ICC needs help if it is to accomplish its mission of discouraging impunity. Even if no one withdraws (and Chile joined this week), few governments have thus far been willing to take much actionon the ICC's behalf. For now, it remains stuck with limited funding and no enforcement mechanism.

To preserve the ICC's relevance, the trial of Gombo will need to go very well, and some sort of progress will be needed on the Bashir case. What are the odds either of these will happen?

ASHRAF SHAZLY/AFP/Getty Images


Azerbaijan next to join NATO?

Mon, 06/08/2009 - 12:41pm

A NATO source tells Eurasianet that Azerbaijan is now more likely to join NATO than Ukraine or Georgia:

"Earlier, the perception in both Brussels [North Atlantic Treaty Organization [NATO] headquarters] and Baku was that Georgia should integrate into NATO first and Azerbaijan should follow," the source said. "However, the situation has changed and it might be that in the year to come Azerbaijan will become the frontrunner. Baku may enter NATO earlier than Ukraine and Georgia."

After Georgia’s 2008 war with Russia, "[m]any NATO member-states believe that . . . it is simply impossible to provide membership to Georgia," the source continued.

Ukraine’s domestic divisions over NATO and political turmoil have reduced its membership chances, he said. "It is unclear who will represent the Ukrainian government in six months or a year and what its position on NATO membership will be."

By comparison, Azerbaijan appears a bastion of stability. Among its other "strong advantages" are the country’s "strong cultural links" with NATO member Turkey and its strategic importance for the planned Nabucco and TGI (Turkey-Greece-Italy) gas pipelines, projects which "will deepen Western support [for] Azerbaijan in the coming years," according to the source.

Interestingly, a large part of the reason Azerbaijan is now in a better spot for NATO membership is that its government never lobbied particularly hard to join. Ukraine and Georgia, where this has been a long-standing priority, invited both Russia and internal critics to try to prevent them from joining.

For a number of reasons explained in the article, Azerbaijan still has a long way to go before it can join, but it does seem as if the best way for ex-Soviet countries to join Nato might be to act like they don't actually want to. 


Back in the OAS

Wed, 06/03/2009 - 4:51pm

The Organization of American States welcomes Cuba back into the fold:

Foreign ministers of the Organization of American States have voted to lift the suspension of Cuba, apparently paving the way for it to rejoin.

Revolutionary Cuba was suspended from the Washington-based organisation in 1962 over its 'incompatible' adherence to Marxism-Leninism."

Though former Cuban leader Fidel Castro was said to be uninterested by the development, the lifting of the ban is another signal that relations are improving between the Caribbean state and its neighbors.

For those who're counting, the embargo is 47 years old.

ORLANDO SIERRA/AFP/Getty Images