Thursday, May 23, 2013

Hizbollah cannot afford to stay long in Syria's quagmire

Hizbollah is being drawn into the Syrian quagmire. as revealed by this week's reports of party members being killed fighting in the strategic Syrian town of Qusair.

Victory in Qusair is vital for the Syrian regime, as it would clear a corridor between Damascus and the coast, the stronghold of the Alawite community.

Much has been said of how Hizbollah's operations in Syria could destabilise sectarian relations in Lebanon. That worry is justified, and Hizbollah is caught between two imperatives: to bolster the regime of Bashar Al Assad, the Syrian president, or even help turn the tide of war in his favour; and to ensure that Lebanon remains calm, so that the party is not drawn into a debilitating domestic war against Sunnis.

Hizbollah believes it can reconcile these two objectives, and that ultimately the Lebanese situation is containable with the collaboration of the Lebanese army. However, the dangers are many.

In the short term, Hizbollah will want to ensure that the Qusair battle does not drag on. The party has been vital in the Syrian regime's effort to retake the area, reinforcing Mr Al Assad's ability to defend Damascus, transport weapons and men to and from the coast, and eventually perhaps even recapture lost territory in the north and north-east.

This strategy has benefited from Iranian and Russian assistance, intelligence and weapons. The prospect that Moscow will abandon Mr Al Assad in favour of a diplomatic solution today seems ludicrous. And yet this seems to be the view in Washington. The US is still focusing on the international peace conference in Geneva, and has delayed any talk of arming the Syrian rebels to prepare for the meeting.

The Russians and Iranians have a very different reading of the diplomatic track. They refuse to discuss Mr Al Assad's departure, and the offensive in Qusair suggests that they intend to help the regime reassert its military superiority before any political initiative is tabled. If Qusair falls to Mr Al Assad, then a conference would effectively serve to transform the military advances into political gains.

In this regard, Hizbollah is Iran's lever in Syria with the aim of avoiding an Assad defeat but also of preventing any diplomatic arrangement that might lead to the president's exit. The Russians have influence over Mr Al Assad, but were they to consider sacrificing him, he could always turn to Iran and Hizbollah to compensate. That may explain why Russia has supported him so completely.

It is still unclear how far Hizbollah will go on behalf of Mr Al Assad. Will it fight in areas outside Homs province and Damascus, where it is deployed today? Ideally, the party would prefer not to be caught up in an open-ended conflict - to limit its casualties, reduce sectarian pressures at home, and refocus on its paramount enemy, Israel.

This may be doable, if Qusair surrenders soon. While parts of the town have been recaptured, the rebels are putting up a ferocious fight in others. It's difficult to imagine anything other than a regime victory, since Qusair is virtually surrounded. Iran and Hizbollah have trained militias to hold the ground if they need to withdraw forces quickly back to Lebanon. The time frame and aftermath of a regime victory will define how Hizbollah's enemies react.

The Israelis are watching closely what happens in Qusair. The consolidation of a passage between the coast and Damascus would also provide geographic continuity between Alawite areas and predominantly Shia areas in Lebanon's northern Beqaa Valley, near Qusair. This could facilitate the transfer of weaponry from the regime to Hizbollah, especially in the event of a war between the party and Israel. Israel has already struck targets in Syria three times to prevent what it says were weapons shipments to Hizbollah.

More broadly, the takeover of Qusair may only harden the geographical divisions in Syria, with the regime controlling the coast, Damascus, and areas in between, while the rebels hold the rest of the country. Iran's sway on the ground could provoke the Israelis, since it means that Hizbollah has a wider area in which to function than previously. Particularly in Syria where there are no UN forces to supervise matters, Hizbollah could stockpile and transfer weapons, train combatants, and work around any eventual Israeli siege of Lebanon.

Israel can hinder this scenario, but its ability to fundamentally block it is limited. While Mr Al Assad has had close ties to Tehran for some time, he managed to maintain independence from Iran, generally keeping Syria out of fighting between Israel and Hizbollah. This will change if the Syrian leader owes his political survival to Iran. The cost could be Syria's greater integration into an Iranian-dominated security nexus in the two Arab states of the Levant.

There are fears that the loss of Qusair could provoke a violent Sunni backlash in Lebanon. Hizbollah reportedly expects car bombs to target Shia areas. The northern city of Tripoli, where Sunnis have fought Alawites sporadically for years, saw at least 10 deaths in sectarian fighting yesterday. There is speculation that Sunni gunmen may try to storm the mainly Alawite quarter, Jabal Mohsen.

To make matters worse, Lebanon is entering a political vacuum. The parliamentary elections planned for this summer are unlikely to take place, given the absence of an agreement over a new election law.

The prime minister-elect, Tammam Salam, appears far from forming a new government, owing to conflicting political demands and uncertainty over the situation in Syria.

Lebanon is used to politically tense summers, but the coming months could be the most treacherous for some time, as the country continues to suffer from the struggle next door. If Hizbollah really wants to avoid the worst, it will have to walk a tightrope successfully.

March 14 drifts away from the state

From the start of the debate over a new election law months ago, Hezbollah had a strategic objective, which it defined as a consequence of the fighting in Syria. The party’s overriding aim in the event of the decisive erosion or collapse of President Bashar Assad’s regime was to ensure that any law would guarantee Hezbollah and its allies a majority in parliament, or at least deny one to March 14.

Unfortunately, the reaction of disparate forces in March 14 was not to focus on what Hezbollah sought to achieve, but to satisfy their own parochial interests, accelerating the breakup of the opposition. Hence, the Lebanese Forces and Kataeb, who realized that the 1960 law would again win them only small parliamentary blocs, supported an Orthodox proposal that would have expanded their representation in parliament, but also have likely ensured that March 8 won a majority.

Geagea has since reversed himself on the Orthodox proposal. That’s commendable, for the law would not only have been bad for Lebanon’s national unity (with all the caveats in that idea), but also for Christians, who would have seen their divisions institutionalized.

Geagea’s about-face was justified by the fact that the Orthodox proposal could not have passed in parliament. That’s perhaps true, but the law he ended up supporting, namely a hybrid law, had very little chance of being approved either. And the systematic undermining of the 1960 law by most Christian politicians only ensured that no election law would ever apply. This leaves Lebanon on the threshold of a prolonged political vacuum, without a new parliament and with Tammam Salam seemingly unable to form a government.

This void at the top may have a serious impact on the armed forces, many of whose senior officers, including the commander, Jean Kahwagi, have either retired or are slated to retire this year. Without an effective government in place, replacing these officers will be delayed, at a time of great political tension. All those who rejected the 1960 law outright, when they could have said it would apply in the absence of any agreed alternative, have left Lebanon dangling.

The Lebanese Forces have reacted with anger against those making this claim. Their response has been to defend the need to ameliorate Christian representativeness. No one is suggesting that this is not important (even if it became clear that the Lebanese Forces and Kataeb were preoccupied mainly with their own representativeness), but they should have looked at the bigger picture, the same picture that Hezbollah, for our misfortune and similarly opposed to the 1960 law, never abandoned.

That picture is the control of the Lebanese state, its government, president, parliament, the armed forces and security agencies. Today March 14 is no longer advancing on that front. Instead, its main Sunni component, the Future Movement, has seen its ties with the Lebanese Forces deteriorate thanks to disagreement over the Orthodox proposal. One can fault Geagea, but it’s equally true that Future failed to adequately gauge Christian dissatisfaction, which would have allowed March 14 to devise a consensual approach to the election law.

The loss of momentum in March 14 began some time ago, with the defection of Walid Jumblatt the first and most severe of its setbacks. The absence of Saad Hariri, whatever its cause, has little helped the situation. And the discord generated by the election law has completed the transformation of the coalition emerging from the 2005 emancipation movement into a shadow of its former self.

This steady decline was most powerfully reflected in the elections at the Order of Physicians last weekend, While one should not go too far in reading March 8-March 14 dynamics into the process, since other factors were at play, the reality is that the outcome nevertheless confirmed in the mind of the public how weak March 14 had become.

This would not really matter if Lebanon’s identity and future were not at stake. March 14 once set itself up as a defender of the state. That mantra disappeared during the mandate of Najib Mikati, when the prime minister became a favorite target of March 14. Perhaps this was explicable, in that March 14 could not applaud a state dominated by Hezbollah and its allies. But in the process confidence in the state itself suffered, and March 14 lost its bearings and its cohesiveness.

The conflict in Syria further complicated the situation for March 14. The revolt against the Assad regime unleashed political forces that from the beginning threatened to engulf Lebanon. Hezbollah’s direct participation in the fighting took these risks to a higher level. The imperative for March 14 in this context was to help secure the stability of the state and do what it could to prevent Lebanese society from going down the path to civil war. That is not to say that the coalition should stay silent about Hezbollah’s actions, but rather that it should keep its eye on safeguarding peace in a state that March 14 intends (or must intend) to take over again one day.

This is impossible, some will respond, because of Hezbollah’s operations in Syria. No one can justify the party’s participation in the Assad regime’s repression, but did we ever expect it to behave otherwise? The Lebanese can wish the Syrian revolution the very best, but not adopt measures to endanger civil peace at home. And if Hezbollah ignores the impact on civil peace, then March 14 must exploit its shortcoming to win back levers in the state, without falling into the trap of sectarian strife. March 14 has no convincing project other than the state. It should not surrender it to Hezbollah.

Tuesday, May 21, 2013

Viable Arab democracies still possible despite violence

In his 2009 book No Enchanted Palace, the historian Mark Mazower examines the ideological origins of the United Nations. He argues that far from being an idealistic innovation, the UN was initially seen by many of its leading supporters as a body that could strengthen great power rule internationally.

This also reflected a world view with relevance today for the Arab world as it goes through considerable instability.

For Mazower, the UN was very much an updated version of the League of Nations. And in this context there was little opposition initially to the notion that some states were superior to others, and that the more advanced states were entitled to lead less advanced states until they reached a higher level of political development.

After the First World War, this principle was embodied in the mandates system. In the Middle East, it allowed European powers to take control of former Ottoman territories. This was imperialism under another name, even if the League of Nations was allowed, in theory at least, to supervise how the mandates were governed.

Today such an approach arouses indignation. Concepts of superior and inferior states cannot be readily expressed in a world wedded to equality, and the UN itself, between the 1950s and 1970s, became an institution of which many of its member states had overthrown European imperialism. And yet there is still a widespread view, when discussing democracy, that many societies do not have what it takes to sustain democratic orders similar to those in the West.

Take the American political scientist Francis Fukuyama, who once wrote that the end of the Cold War had brought an ideological "end of history", in which liberal democracy had won in the struggle of ideas. Mr Fukuyama revised his views in a book published in 2006: America at the Crossroads: Democracy, Power and the Neoconservative Legacy. In the book, he argued that democracy was not a "default regime" to which societies reverted when dictators were removed. On the Middle East, he affirmed that Arab societies were both culturally and institutionally unprepared for democracy.

This view reflected Mr Fukuyama's unease with the war in Iraq. If a true democracy was not forthcoming in Iraq, then why go to war in defence of democracy?

Mr Fukuyama's scepticism was echoed by others. Brent Scowcroft, a national security adviser to former president George H W Bush, made a similar statement in a 2004 interview: "It's not that I don't believe Iraq is capable of democracy. But the notion that within every human being beats this primeval instinct for democracy has not ever been demonstrated to me." Implicit in his remarks was that those George W Bush would be liberating in Iraq would not necessarily turn into model democrats.

Both Mr Fukuyama and Mr Scowcroft are not racists, and their arguments were hardly designed to justify an American mandate over Iraq. Quite the contrary. In looking at what is happening in many Arab societies today, from Egypt to Tunisia, and from Libya to Syria, it's easy to share their doubts. However, views like theirs are understood not very differently from those of individuals who believe that certain societies must dominate the world by virtue of their ability to manage stable democratic orders.

It is unavoidable, given the chaos that has gripped the Middle East and North Africa since December 2010, to wonder why it is that Arab societies seem incapable of navigating smooth transitions toward open, representative orders. But then, regardless whether it has become a reality, democracy is an ideal and in that sense the Arab impulse for emancipation has been remarkable. In Egypt, Libya and above all Syria, the number of people who have died supporting the overthrow of a dictator has reached levels unheard of in the West.

Arab societies may not be culturally or institutionally apt for democracy, to borrow from Mr Fukuyama, but several of them have been willing to fight undemocratic regimes they knew would not respond with pity or humanity. Fighting tyranny does not on its own guarantee democracy, some would argue, and it may heighten the contradictions making democracy less likely.

There is no doubt that the grinding interplay between state and society, between leaders and their people, is what helps open governing institutions up to the popular will. That is what we are witnessing in Egypt today, although whether this is destined to produce more democracy is questionable if the resulting instability brings back military rule. And in Iraq, the facade of democratic institutions may collapse if the autocratic methods of the prime minister, Nouri Al Maliki, precipitate a sectarian war.

Historically, political power in the Arab world has been anchored in top-down systems, with the ruler being the source of most authority. This was consolidated by a desire in many societies for stability, favouring autocrats who imposed it. So, the first step towards more representative orders is greater pluralism and a delegitimisation of the need to resort to violence, the ultimate weapon of autocrats.

Pluralistic orders are more difficult to hijack, even if they are not necessarily democratic. They create spaces independent of the state that can resist the overreach of a state's security organs. In the absence of fully functioning democratic institutions, expanding pluralism, particularly through civil society, is the best alternative. A more democratic system can slowly emerge from spaces of autonomy.

The idea that societies are superior or inferior to each other tells us little. But not all societies manage democratic institutions in the same way. There is no golden path to democracy, even if anchoring political and social pluralism provides one path. And that is perhaps what Arab societies should now focus on doing, as they look for ways out of the dilemmas created by the sudden onrush of freedom.

Washington blunders yet again in Syria

It is not reassuring that we know next to nothing about the details of the international conference on Syria that has been endorsed by the United States and Russia. It is even more worrisome that both countries view the conference in very different ways.

For the Obama administration, a conference would help initiate negotiations between the Syrian opposition and the regime, preferably leading to a transition away from Syrian President Bashar Assad. It could also lower the tension in Syria at a moment when the conflict there is threatening to engulf neighboring countries. And it would create an opening to address the fate of hundreds of thousands Syrian refugees in more practical ways.

Implicitly, talks would also help marginalize the most radical groups opposing Assad, by giving mainstream opposition groups room to shape a settlement. Given that many Syrians are likely to welcome measures to reduce the violence, so-called moderates would gain the upper hand, while the Al-Qaeda affiliated Nusra Front, which opposes negotiations, would find itself increasingly isolated.

For Russia, a conference must allow Assad to gain the upper hand in Syria. From the start the Russians have sought talks between the Syrian president and opposition forces amenable to a dialogue with him. This failed, but it is still the belief in Moscow that once any talks begin, they would allow Assad to bargain from a position of strength. Even in the doubtful event that talks were to lead to his exit, the reasoning is that his system would remain in place, and with it many of those with whom Russia has collaborated in Syria.

Moreover, the Russians feel this would vindicate their decision to arm Assad and provide him with intelligence assistance and military advice. Therefore a conference would consolidate his army’s recent advances, even as the Obama administration has decided to suspend plans to arm the Syrian rebels, to give the conference a chance. This decision has encouraged the two European countries most insistent about suspending the arms embargo on Syria, France and the United Kingdom, to become more hesitant about going ahead with that plan.

The poor American preparation for a conference has been criticized. In a recent article for the Foreign Policy website, Michael Weiss of the Institute of Modern Russia noted that the conference would be based on the Geneva Protocol of June 2012. This calls for a “Syrian-led political process leading to a transition that meets the legitimate aspirations of the Syrian people.” The protocol demands an end to armed violence by both sides and the release of political prisoners. It allows journalists greater freedom of movement throughout Syria. And it seeks the “consolidation of full calm and stability.”

However, Weiss adds, “since this would-be road map was cobbled together almost a year ago, more than 50,000 Syrians have died in the Assad regime’s desperate attempt to crush the uprising.” In other words, a return to Geneva takes into consideration neither the gains made by the opposition nor the crimes of the Syrian leadership.

The Americans have locked themselves into a situation where the pursuit of their stated objectives in Syria seriously risks undermining the interests of their allies, while Russia is under no obligation to surrender anything, and will continue to supply arms to the Syrian government. Nor are Iran and Hezbollah a part of the process (and the U.S. does not want them to be), so Hezbollah can continue attacking rebel-held areas in and around Homs, which will only strengthen the Russians’ hand.

Of course, the Syrian opposition can always say no to an international conference. But such a rejection would alienate the U.S. at a time when the military momentum appears to favor Assad’s forces. And while the Obama administration does not want to push the Syrian opposition more firmly into the hands of radical Islamist groups, it probably feels that such groups could be contained if a consensus to resolve the Syrian crisis peacefully is reached at a conference.

It is equally unclear how the U.S. plans to bring about Assad’s departure, a position Secretary of State John Kerry reaffirmed in Rome following his visit to Russia. After all, it is Assad who will attend or be represented at any international gathering, which will bestow on him undeniable legitimacy, backed by Moscow. To expect him to then agree to a political process that may ultimately lead to his ouster, in response to the demands of a Syrian opposition that currently finds itself on the defensive, is downright laughable.

The Obama administration’s mistake has been to suspend discussion of arming the rebels, when it should have done precisely the contrary: bolster the opposition militarily so that it would come to a conference in an advantageous position. But for the Americans, diplomatic success is all about mood and mutual confidence, and so goodwill gestures are necessary, even when they happen to be self-defeating. How odd for an administration that embraces political realism.

The Russians in turn, have every intention of sending Assad to a conference well positioned to resist all efforts to make him step down. Indeed, the Syrian president will likely impose many conditions before agreeing to be present at a meeting that, he and the Russians know, the U.S. is keen to see succeed, since it would allow Barack Obama to resist mounting calls for greater involvement in Syria.

Peace in Syria is desirable, but not at any price. American miscalculations will further damage the Syrian opposition and give Assad the means to use negotiations to impose his will on his depleted rivals and remain in office. Neither Russia nor Iran will challenge this. And with a short-sighted, risk-averse, amoral administration in Washington, they know they can get their way.

Friday, May 17, 2013

It’s vacuum time, again

Rejoice, the Orthodox proposal has now been declared dead. But the question, now that an alternative hybrid election proposal has also been withdrawn, is what comes next, amid signs that Lebanon may be entering a prolonged political vacuum?

The maneuvers and insincerity surrounding the Orthodox proposal were dizzying. Samir Geagea drove the final nail into the coffin of the scheme by declaring that it had no chance of being passed, and backing the hybrid proposal that blended a winner take all system with proportional representation. Geagea did the right thing in abandoning a law that would have been a disaster for his Maronite community, for Christians in general, and for the March 14 coalition.

The greatest anomaly was Michel Aoun. He is now attacking the Lebanese Forces for having dumped the Orthodox proposal. In reality, Aoun was trapped by his opposition to the 1960 law, because, tactically, he felt this would win him more popularity in the Christian community. What he wouldn’t say is that the 1960 law was the best thing that ever happened to him. It ensured that pro-Aoun Shiite electorates in Baabda and Jbeil, and even Kisirwan and the Metn in very tight races, would turn the tide the Aounists’ way.

This reality is what gave the general such large majorities in the last two elections, even though at the popular level the Aounists managed to lose Christian votes in relative terms. If anything explained Geagea’s rejection of the 1960 law, it was the fact that it twice gave Shiite electorates the deciding vote in Christian areas.   

Now Aoun has accused the Lebanese Forces of not being serious about the Orthodox proposal (when they were), which means that he finds himself defending a project that would have lost him many seats in parliament. For the Orthodox proposal, whatever its many shortcomings, would have weakened Aoun significantly.

Under the Orthodox proposal the general would have won seats in proportion to his appeal among his coreligionists. And since the Lebanese Forces and Kataeb, as well as other Christians opposed to Aoun, make up a sizable number of Christians, perhaps even a majority, there is no way that Aoun could have held on to the same bloc of seats that he had won under the 1960 law.  

Most interesting in this entire episode was how the Lebanese Forces kept lines open to the speaker of parliament, Nabih Berri. It was Berri who came up with the idea of a hybrid law as a compromise when the Orthodox proposal proved so divisive. He had initially urged March 14 to present its own preferred project which he could put to discussion before parliament against the Orthodox proposal. For weeks March 14 failed to come up with one, until Geagea agreed to drop the Orthodox proposal and re-enter the March 14 fold. Precisely what he was offered for this reversal is not yet clear.

Hezbollah supports Aoun on the Orthodox plan, but in reality its paramount aim is to deny March 14 a parliamentary majority. Now that the Future Movement has rejected the hybrid proposal (implicitly because it would bring in a March 8 majority), parliament will see its mandate extended, freezing the situation that we have today. In other words, Walid Jumblatt will continue to hold the balance between March 8 and March 14, depending on the issue.

The real concern underlining the election law was who would control the Lebanese state in the event of the overthrow of Bashar al-Assad in Syria. This was Hezbollah’s preoccupation, and it still is. The party cares little about the intricacies of election laws for as long as they achieve two objectives: ensure that Hezbollah maintains a headlock on the Shiite community; and prevent the party’s opponents from taking over the government, parliament, and presidency.

That is why Hezbollah’s focus today is on the government. Tammam Salam has struggled to cobble a cabinet together, and Hezbollah has rejected his idea of an 8-8-8 configuration of ministers (split equally between March 8, March 14, and centrists). “How can 45 percent of Lebanon’s parliamentarians who are from our coalition be represented by just one-third of ministers?” declared Hezbollah’s deputy secretary general, Naim Qassem, on Wednesday.

One would be tempted to answer that there is no constitutional stipulation that a government must reflect the weight of seats in parliament, but Qassem’s reaction shows that Salam’s headaches are far from over. With parliamentary elections unlikely to take place any time soon, suddenly the identity of Salam’s government – namely one that is in for the long haul, and that must embody national unity – has been imposed by political circumstances. And this is precisely the kind of government Hezbollah that has been calling for.

Everyone, it seems, has an interest in postponing elections, Hezbollah above all. With the situation in Syria having the potential to shift the party’s way thanks to its intervention in the area of Qusayr, the party prefers to wait and see if Bashar al-Assad regains the upper hand before allowing decisive elections. This would give it greater leverage to impose the election law it favors and shape the post-election climate. 

Everything today in Lebanon is about Syria. And until outcomes are more certain there, the Lebanese will float aimlessly, without an election, and possibly without a government.

Friday, May 10, 2013

FATCA finally comes home

Americans living abroad will be watching to see what happens now that Senator Rand Paul, a Kentucky Republican, has introduced a bill to repeal provisions of the Foreign Account Tax Compliance Act, or FATCA.

FATCA has released shock waves among Americans overseas, because it compels foreign financial institutions to report on their accounts to the US Internal Revenue Service. The IRS will thus be able to check their private accounts against what they report on their tax returns. Worse, it gives the US government an eye into the personal affairs of these Americans, allowing it to see what sums have entered or left their accounts, to and from whom, and when this occurred.

This is a level of interference that Paul, who represents the libertarian wing of the Republican Party and may be a presidential contender in 2016, has found intolerable, understandably so. In a press release the senator spelled out his rationale: “FATCA infringes upon basic constitutional rights, for under FATCA, private data of anyone considered a ‘U.S. Person’ would have details of their financial assets provided to the IRS without a warrant requirement, suspicious activity report (SAR), or any allegation of wrongdoing at all.”

Paul has also pointed to other aspects of FATCA worthy of contestation. The United States has ignored the sovereignty of states by imposing costly reporting requirements on foreign financial institutions. That’s because non-compliance with FATCA will entitle the American government to withhold 30 percent on all transactions by these financial institution conducted in the US.

FATCA does something even more objectionable. In many countries its implementation would lead financial institutions to break domestic laws barring the reporting of bank information to third parties or foreign governments. In other words financial institutions are asked to contravene domestic legislation in order to comply with the diktat of a foreign entity, the IRS. This absurd situation has pushed the US Treasury Department to negotiate inter-governmental agreements, or IGAs, with foreign countries to override such legal barriers.

The core of the IGAs is reciprocity: The United States promises to give foreign states information on their nationals with accounts in US financial institutions in exchange for their implementation of FATCA. While the US is virtually alone in taxing its citizens on their worldwide income, many countries are nevertheless interested in knowing what their citizens hold in accounts overseas, for the day when they decide to return home and re-enter the tax system.

It is at this stage that FATCA, which until then was under the radar of American political consideration, emerged as a potent issue. American banks, realizing they too would be saddled with costly reporting requirements to IGA partners, in other words to dozens of foreign governments, went to court. Both the Texas Bankers Association and the Florida Bankers Association filed a federal lawsuit against the Treasury Department and the IRS saying they would lose billions of dollars from the measure, and that the regulations imposed on them were improper.

The negative constitutional implications of imposed reciprocity were echoed by Paul. “[T]he Treasury Department, without the consent and authority of Congress, will force U.S. financial institutions to provide the bank account information of private customers to foreign nations,” his press release read.

Once FATCA was an American concern it became more vulnerable, even if the conventional wisdom is that that repeal will fail because Congress is too divided. There are several barriers before a bill can become law. Paul’s proposal is long overdue, but it will quickly be redefined as one to protect tax evaders, which will muddle party considerations. The IRS is a powerful actor in Washington. And at a time when President Barack Obama is keen to secure new revenues for an economy reviving only slowly, few Democrats (and perhaps even some Republicans) will want to side with Paul, especially if Obama is likely to veto the decision.

But legislative battles can also awaken diverse interests, and this is what Paul is betting on. The US banking sector, which doesn’t like FATCA’s implications, is influential in Congress. More generally, the United States will lose money if foreigners, who don’t want their finances revealed back home, start closing accounts and taking their money elsewhere.

The Credit Union National Association, which represents a majority of American credit unions, has also backed Paul’s bill. Like the banks, it fears that the IGAs will impose high costs on credit unions and undermine the privacy of their members.

As for businesses, they have been ambiguous about FATCA. To the displeasure of multinational corporations, Paul has held up Senate approval of several tax treaties, on the same grounds that he has contested FATCA. Corporations like predictable business environments and Paul’s resistance has prevented this. However, Americans in many countries have been unable to open bank accounts, because banks do not want the headache of reporting back to the IRS. This has created difficulties for American employees of American companies operating abroad. So while businesses prefer not to upset the IRS, if Paul’s repeal effort gains momentum, they may support it.

All this comes at a fluid time when there has been discussion of rewriting the US tax code and public unease with efforts to expand the government’s powers of surveillance. To Paul’s credit, his hostility to FATCA is primarily grounded in his concern for privacy. That is, indeed, what is most shocking in the legislation, which asks foreign institutions to gather data on Americans without oversight or security guarantees, when most Americans at home would reject such monitoring.

Rand Paul has suddenly made FATCA an internal American affair. He may succeed in repealing the legislation, or he may not, but Americans abroad finally see that someone is speaking on their behalf. What a shame that their government has failed to do so.

Thursday, May 9, 2013

Culture clashes can be moveable beasts

It is a fact that the notion of a clash of civilizations, first popularized by the American academic Samuel Huntington, is more relevant than ever in the minds of many people. Especially when it concerns Muslim-Western relations, there is a view that Muslim and Western values are incompatible. And yet Huntington’s argument that after the Cold War conflict would be defined not by ideology or economics, but by cultural differences, was prophetic as culture has become the principle basis for differentiation, even if it is often viewed in far too static a way.

The reaction to Huntington’s conclusion was generally one of unease. If what he said was true, then the future of the world could be very bleak indeed. Cultural differences would be regarded as sinister rather than as foundations of invigorating diversity. For many, Huntington seemed to be looking at the glass half empty, when the very concept of global interaction, and globalization in general, imposed a far more heartening reading of the situation.

Both sides had a point. Huntington was prescient for realizing that the causes of conflict would shift away from ideological antagonism (though the argument with respect to economics was less persuasive), even if they remained firmly in the realm of ideas. However it is also true that, in his rendering, global relations seemed to reflect an apocalyptic vision – that of perennial discord and enmity.

There is nothing wrong with discussing the disparities between Western and Muslim values, but to lend to the discussion unchangeable qualities on both sides is to miss the adaptable nature of culture and the ability of humans to modify cultural reactions in changing environments.

If one wants to question Huntington’s paradigm, it is in the sphere of perceptions where that has to be done. For many people in the West, the Arab uprisings since 2011 have been a case in point. These people have come to believe that what began as a yearning for democracy and freedom has ended up favoring Islamist groups that are neither particularly democratic nor tolerant of freedom, and who have usually sought restrictive legislation against women, a substantial portion of their populations.

But the reality lies in the nuances. For example, in Egypt and Tunisia, the Muslim Brotherhood and Ennahda have taken over major state institutions. While they have allowed behavior unheard of under the old regimes, they have also become increasingly contested as they have retained powers allowing them to restrict certain freedoms, such as freedom of expression, while riding roughshod over representative bodies.

Acknowledging the complex undercurrents of the Arab revolts is necessary in order to grasp what is going on. The notion that there is something irreconcilable between the aspirations of Arab societies and those of Western societies is simplistic, and often wrong, just as it is equally naïve to expect Arab societies in ebullition will wholeheartedly embrace Western values, such as secularism, the primacy of the individual at the expense of the group, and so on.

To demand such an embrace, no less than declaring it impossible, is to believe that culture talks in absolutes.

In the last 12 years since the 9/11 attacks, familiarity has led to a better Western understanding of the complexities in the Muslim world, while far-reaching changes in the Muslim world have undermined a black and white view of the region in the West. When Syrians revolted two years ago, they had no hesitation in asking for Western help, just as the overthrow of pro-Western autocrats was regarded favorably in the United States and Europe.

A Syrian or Egyptian still regards freedom much as a Frenchman or an American does, even if the preferred social contract each will advocate to protect those freedoms differs. Perhaps some will want more secularism, others more religion. But if the preferred social contract ends up undermining those same freedoms, then the chances are that new rebellions will occur at some stage.

Huntington was correct in looking toward culture as the boundary between Western and Eastern societies. But boundaries are ever-changing and values cross over between cultures by osmosis. To assume cultures are autarkic and rigid is as erroneous as to assume that cultural distinctions are invariably resolvable. The truth about culture lies in the middle; values are transposable, which is why identity is most enthralling when they are tethered the least.