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February 21-25, 2000Greetings from Global Policy Forum!
Scipio, the Roman general who captured Carthage, razed the city to the ground, killed or sold the populace into slavery, and plowed up the soil to sow salt there, so that nothing could ever live again on that ground. Some would say that the ancients had different moral standards. In our own day, though, war has also seen the terrible wrath of the victors imposed on a vanquished populace. Hiroshima and Dresden come to mind, as does Grozny, the shattered capital of Chechnya, so often shown in the press in recent days.
Economic vengeance, too, can have long-term and extremely perverse results, as John Meynard Keynes pointed out in his prescient 1919 critique of the Versailles Treaty "The Economic Consequences of the Peace." The UN's founders shared the view that German history might have been different if the victors had not imposed such a high price on their defeated opponent. But recently this view has been discarded and economic vengeance is back in fashion in certain circles. The sanctions imposed on Iraq by the United States and the United Kingdom are a case in point. They have created a deep human and political tragedy and strengthened the dictatorship. But the sanctions have continued for nine years after the war they were designed to avert was declared over, on February 27, 1991.
Last week at GPF, thanks to research by our colleague Rahul Rao, we considered the case of the Russian Federation. Though the Cold War ended far more peacefully than its Punic predecessor, this vanquished nation suffered terrible consequences, attributable in large measure to the victors and their vengeful policies, as orchestrated by the IMF and the US Treasury Department.
Never before in modern peacetime has a country collapsed into such economic and social ruin. The Soviet era was no paradise, but since the collapse of the Soviet Union virtually every aspect of life in Russia has deteriorated. The Bank of New York scandal reveals the vast slough of corruption and pillage. But the crisis goes much deeper, touching the core of the economy, the political system, the arrangements for health care and education, and even the most basic demographic reproduction of the population.
GNP per capita of the Russian Federation in 1986 was $8,375, according to World Bank figures, while in 1998 it had fallen to $2,300. Deteriorating exchange rates yield somewhat misleading numbers, but by most reckonings GNP per capital has plunged by about half. During the same period, income distribution skewed drastically, driving ordinary wages down and resulting in widespread impoverishment. Retired people, living on state pensions, have seen their incomes drop towards zero, while many employed workers have not been paid a wage in months or even years. The poverty rate rose from 1% in 1989 to about 30% in 1995 and is still rising.
From 1985 to 1995 Russian male life expectancy dropped from 64 years to 58 years, a highly unusual trend. In the same period, the mortality rate and the crime rate doubled, and the death rate rose steeply. The mortality rate of young adults doubled. The homicide rate nearly tripled. And from 1992 to 1999, the population has "crashed." Under the combined influence of rising mortality and a plummeting birth rate, the country lost 2.8 million people altogether during that time, of whom 784,000 in 1999 alone. "Russia is on the verge of a population catastrophe," warned the Director of the Russian Academy of Medicine in January.
If our reading of history is correct, Russia will likely explode into far more violence, more even than in Chechnya. Policy makers in Washington, Berlin and London almost certainly understand this and their plans doubtless include the most dire contingencies. We can only wonder what NATO may be planning for this looming humanitarian crisis.
At the UN, the Social Development meetings came to a close with scarcely a murmur about the Russian catastrophe. Next on the UN agenda is the annual meeting of the Commission on the Status of Women, an event that brings women's advocates worldwide to Turtle Bay each year for two weeks of vigorous discussion and debate. On Friday, at a meeting of the NGO Working Group on the Security Council, Jamaican Ambassador, Patricia Durrant, reminded us that she is the first woman to sit on the Security Council as permanent representative in nearly four years. She told us with a chuckle that the Security Council, with one woman out of fifteen, is no worse than the General Assembly, where only eleven women sit out of 188 member state representatives. Even the Scandinavian delegations have miserable gender records, though many women serve as parliamentarians and government ministers in those countries. NGOs should raise this issue with the governments. It is time for this situation to end!
In the Secretariat, women's representation is significantly better than in the delegations, but still far short of acceptable. In 1999, women were 38% of all professionals in the Secretariat, up from 35% in 1996. At the first director level ("D-1"), the lowest rank of the top management, women occupied 33% of the posts, up quite nicely from 19% in 1996. But higher ranks see diminishing numbers of women, with only 9% at the level of Under Secretary General. The most positive sign at the top has been the appointment of a woman, Louise Frechette, to the second-ranking post of Deputy SG. Those readers who would like to see the table with this data and an associated graph, produced last summer at GPF by Jessica Moffett, can find it on the site.
This week we posted UN financial data for the month of January, just released by the Secretariat on Friday. The UN regular budget is now in better shape than in recent years, because of arrears payments by the United States and some others, as well as more timely payments of the current year's dues. When peacekeeping is included, though, the picture changes and a dangerous mountain of arrears comes into view. Interestingly enough, the United States government owed more money to the UN on January 31, 2000 than it has owed during the past five years on the same date. The US owed the organization $1.734 billion, over $100 million more than the sum owed at the depth of the mid-decade financial crisis, on January 31, 1996. This persistent US debt shows that the Helms-Biden bill, passed with great fanfare by the Congress in the fall, and touted by the Clinton administration, is only a deceptive shell game, not a serious procedure for paying off the US debt.
While UN finances totter, the offshore financial industry is booming as never before. More and more, these services are offered on the world wide web. People with money to hide from the tax collector – or from police or securities regulators – need only sit down at their personal computer and set up accounts in distant and secretive havens. Two of the UN's most recent member states, Nauru and Vanatu, are getting off to a fast start in the offshore business by offering even more secrecy and lack of regulation than other Pacific rivals. For a mere $20,000, its possible to charter your own bank in these micro-states, no questions asked.
The New York Times ran an article on offshore internet sites in its February 27 edition. At one site, according to the Times, visitors have only to hit a button marked "Yes, I want to order my own bank now." "No need to maintain a physical presence in the host country," they are assured. Another site offers an offshore bargain – for just $399, a private account at "one of Estonia's largest banks" along with a free "Maestro Card." The site's "Millennium Freedom package, at just $2,299, offers an offshore trust account in Belize, an "ID Free Visa card," a mail drop address, and a year of free advice. Yet another site offers to establish "anonymous bearer share corporations" for a tidy fee that will allow clients to "get rid of lawyers, spouses, etc. forever."
According to the Times, there has been rumbling in Washington about these offshore deals. Senator Charles Schumer of New York is quoted as saying: "Any criminal worth his salt knows that if you want to avoid detection you go offshore – and with the Internet you can point, click and launder." Schumer has introduced legislation to block dealings between phony offshore banks and regulated financial institutions in the United States. But the Times also quotes a source as saying that "the vast majority of money laundering doesn't take place in the Caribbean or in Austria, but in New York and London. That's where the truly powerful people launder their money." So maybe Senator Schumer needs to look more closely in his own backyard. The Bank of New York, for instance, or Citibank, Chase and Morgan Stanley.
In addition to the usual banking services, some offshore sites offer extras for sale, like college degrees and titles of nobility. "With a title in front of your name, you will experience a difference in people's attitudes," a site notes. For just $495, offshoresecrets.com will make you a viscount or a marchioness, a knecht or a laird. Another site offers private information on "where to obtain a second, or even third diplomatic passport." Readers familiar with the GPF site will recall that some time ago we posted information on internet sales of national passports/citizenships, some of which come bundled with a driver's license (no driving test required).
The internet claims to have something for everyone. For the world's less fortunate folk, the one billion souls who are currently on the verge of starvation, the internet offers a supposedly magic solution. Web surfers have only to access the site "4mycommunity.com" which organizes -- in cooperation with the UN's World Food Program – a means of giving food for every merchant site accessed. "Every click counts!" boasts a banner on the home page. "Shop online and help!" Each click (taking you to Amazon.com, Toysrus.com, or a half dozen others), produces three cents worth of food, or 1.5 cups according to the description. When we looked at the site last week, it had evidently garnered about seven thousand clicks, producing just 1,300 pounds of food. Considering the dozens of emails we have received promoting this supposedly painless way to end world hunger, it is a pitiful result! This is the second embarrassment in net-based funding for the UN, following on UNDP's NetAid fiasco.
In GPF's own internet world, we are happy to announce that traffic on the site has continued to climb dramatically. This week, we have posted some especially interesting information. On UN finance, for instance, we have assembled reports on all of the press briefings by Under Secretary General Joseph Connor for the past five years. Some of this information was already on the site, but scattered, while some is entirely new. Mr. Connor oversees the UN's management and budget and his opinions give a unique perspective on the organization's finances. This week we have also posted the 1999 updates to our data series on the Security Council. Readers will find here the number of meetings, resolutions, vetoes and much more, giving an interesting perspective on the Council and its rhythm of work.
