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Sorry for the Inconvenience – Brazil is Under Construction

written by thegeneration

by Michelle Sinness

Contributing Writer

When Brazil won the Confederations Cup final soccer game on Sunday night, June 30th, 2013, the streets of Brazil’s first capital city, Salvador, erupted into a celebration. Fireworks illuminated the sky, and cheers, laughter, and applause resounded through the small bar where over one hundred people were gathered to watch the match on two small televisions.

However, it was not only the win that was cause for celebration. Periodically, during pauses in the game and during halftime, the television coverage cut to the protesters that were marching outside of the stadium. Just as they would if Brazil had scored a goal, the people that were gathered in the bar jumped out of their seats to whoop and cheer in support of the protests. The movement that recently exploded onto the streets of Brazil had become a source of pride.

Soccer has been a part of Brazilian national identity since the 1930 to 1954 military dictatorship used the game to unify the population and construct a strong sense of nationalism. The arrival of the FIFA Confederations Cup in 2013 and World Cup in 2014 seems long overdue for a country that lives and breathes soccer. Most Brazilians are proud to finally have the opportunity to host the games and consider it a testament to Brazil’s place as an emerging world power. Hosting the World Cup and the 2016 Olympic games is an integral part of Brazil’s soft power approach to foreign policy as the state continues to lobby for Security Council reform and equitable IMF representation.

The shining new stadiums that have been constructed in many capital cities are not enough, however, to mask the crumbling infrastructure that surrounds them. Taxpayers have footed the bill for the FIFA preparations, but few expect to see any return on their investment. In fact, the vast majority of Brazilians will not be able to afford to attend a single match in the new structures. And while the construction projects have offered short-term employment to some, the benefits will hardly be long-term. The stadiums are expected to remain vacant for decades to come, and the people that sold tickets and popcorn will return to their previous jobs or go back to being unemployed. Nevertheless, in a matter of several months and several billion dollars, the colossal structures were erected. This was no easy feat for a country where bureaucracy burdens reform and corruption hinders progress, and Brazilians took notice.

One June 13, 2013, frustration over lack of infrastructural improvements turned into fury when several states enacted a bus fare increase. Residents of Sao Paulo that make minimum wage spend an average of 26 percent of their income on public transportation to get to and from work. A group of disgruntled students in Sao Paulo took to the streets, igniting a movement that took the Brazilian government and the world by surprise.

Over the course of the summer, the demonstrations grew to be the largest in Brazilian history, surpassing the 1992 protests that brought about the impeachment of President Collor de Mello. Although the movement lacked central leadership, demonstrations were effectively organized in cities across the country via social media. The majority of the protesters were educated, middle class Brazilians, yet they were fighting for causes that more directly affect the poorest sectors of Brazilian society. Perhaps this is because the height of the protests occurred while university students were on winter break, and wealthier Brazilians could afford to take time off from work to participate in the movement while poorer Brazilians could not. Regardless, Brazilians strategically capitalized on the worldwide media coverage of the FIFA Conferations Cup and the World Cup preparations to amplify their voices and make their demands heard.

The demonstrators that swarmed the streets in June and July had three main demands: the elimination of bus fares for students, more money for healthcare and education, and political reform to reduce governmental corruption. Brazilians bear a tax burden comparable to that of Germany, yet do not see the investment of their money to improving hospitals, schools, or infrastructure. Valéria Figueira, a Brazilian supporter of the movement who lives in Salvador, said, “I am angry every day that I pay first world taxes to live in a third world country. That’s why I admire and support the movement completely. It’s interesting to note that there are so many middle class and upper-middle class youths demanding lower prices for a public transportation system that they don’t even use. This is because they were educated, which is, unfortunately, an opportunity limited to only a select class of our society.” Brazil has the lowest rates of college enrollment in Latin America, and its public education system was ranked 39 out of 40 in an evaluation by the Economist Intelligence Unit last year. Clearly, Brazilians have reason to be upset.

The initial effects of the movement were impressive. President Dilma Rousseff was slow to react at first, and her approval rating plummeted. When she finally held a press conference to address the protesters’ concerns, President Rousseff commended them for exercising their right to demonstrate and promised that her government would work to control inflation and reform healthcare, education, and public transportation. Several states retracted the bus fare increase, and Rousseff’s cabinet met to discuss and implement further reforms, such as increasing the amount of government funds allocated on public transportation and infrastructure. As she prepares to campaign for reelection next year, Rousseff will need to implement much-needed economic reforms and streamline public spending in order to regain the public’s trust.

Although the movement made progress on some of its demands, it has struggled to keep its momentum going since the Conferations Cup has ended. The protests have largely died down and are no longer making national and international headlines. Whether the protesters are satisfied with their gains or they are just waiting until the spotlight returns to Brazil during the 2014 World Cup is yet to be seen. Whatever the outcome, the protesters’ strategic capitalization on a moment in history when the whole world was watching Brazil was powerful. Brazilians effectively held the games hostage in exchange for social reform, setting a precedent for future World Cup host countries and sending a powerful message about the balance between international soft power interests and national development.

The Brazilian flag was raised after Brazil won the Confederations Cup final game, and the people gathered in the small bar stood to sing the national anthem together. With tears glistening in many of their eyes, they sang the chorus with a glimmer of hope for the future of their country:

O country vast by nature,

Fair and strong, brave and colossal,

Thy future mirrors this thy greatness.

Michelle Sinness is a first year MA student in Latin American Studies at UCLA, specializing in Brazil. She spent the summer in Salvador, Brazil under a Foreign Language and Area Studies Fellowship.

 

October 22, 2013 1 comment
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AsiaSecurity and Conflict

Persecution of Rohingya is Key to a Profitable U.S.-Burma Relationship

written by thegeneration

by Jacob Goldberg
Staff Writer

The success and international attention achieved by Burma’s current pro-democracy, pro-Western government has been a towering triumph for the former pariah state, but one that casts a vast shadow. Behind the veil of President Thein Sein’s liberal reforms and niceties exchanged with Western leaders (his recent visit to the White House last week was the first by a Burmese leader in five decades), Burma has been host to a series of human rights violations for which the supposedly reformist government has offered no viable solution. Rather than posing an obstacle to Burma’s development, however, the persecution of Burma’s Muslim population, the Rohingya, is the secret formula that binds the Burmese government to its Western patrons, most notably the United States.

The Historical Roots of Persecution of Muslims in Burma

While the mainstream media have attributed each outbreak of anti-Muslim violence in Burma since October 2012 to a single incident, such as the collision of a Muslim girl’s bicycle into a Buddhist monk or an argument between a Muslim gold dealer and his Buddhist clients that turned violent, the persecution of Burma’s Muslims actually has roots in the country’s birth.

The exclusion of Rohingya from the rights and protections of Burmese citizenship began at the Panglong Conference in 1947. At this meeting, convened by Burmese revolutionary Aung San (father of democracy icon-turned-parliamentarian Aung San Suu Kyi), minority groups in Burma were offered the opportunity to register as “national races.” A delegation representing the Rohingya community, however, was absent from this meeting, leaving the Rohingya bereft of “national race” status ever since.

This technicality was not used to systematically persecute Rohingya until decades later. In fact, during the short period of Burma’s democracy between 1948 and 1962, Rohingya were issued National Registration Cards and voted in national elections. Indeed, in 1959, Prime Minister U Ba Sue proclaimed that the Rohingya are a race like other races in Burma, and as such, they are entitled to equal rights.

However, these rights and services were discontinued shortly after General Ne Win ousted the democratically elected U Nu government and established a socialist military dictatorship in 1962. Beginning with Operation Naga Min (Operation Dragon King) 1978, the radically nationalist Burmese government has conducted a series of operations with the aim of purging illegal foreigners. Because of their lack of “national race” status, the Rohingya in Arakan state fell under this designation. These operations kicked off a vicious cycle in which hundreds of thousands of Rohingya are continually displaced between Burma and neighboring Bangladesh (from where the government claims they originate), rejected by both countries and rendered effectively stateless.

Today, Rohingya babies are not issued birth certificates, and Rohingya marriages are not recognized unless heavy bribes are paid. Rohingya are not even allowed to travel outside their villages, leading to claims of apartheid from the West.

The Strategic Value of Burma’s Muslims

Because the current regime profits from protraction of anti-Muslim violence committed by its citizens, the turmoil shows no sign of slowing. Allowing the violence to proceed and even contributing to the persecution themselves, the Burmese military gains the opportunity to cast itself as the only thing standing between peace and all-out chaos in Burma. Indeed, following the violent outbreaks in Rakhine and Meikhtila, in which state police are known to have participated, the regime declared a state of emergency in those areas, which gives it the legal authority to implement martial law. At a time when the entire world is cheering on Burma’s democratic transformation, the current regime walks a fine line between relinquishing power to the people and holding onto the benefits of authoritarianism. It is along this line that a small, internationally homeless minority group gets trampled.

The progression of Burmese history from its independence until today has led to the creation of the perfect victim. Because of the already tense relationship between Burmese Muslims and the country’s Buddhist majority, it has been easy for the government to tacitly stoke the flames whenever the opportunity arose and explain away the violence as the result of communal unrest.

The creation of this perfect victim also came at the perfect time. Although organizations dedicated to human rights advocate as best they can to end the persecution of the Rohingya, the people who can really make a difference have been conspicuously silent. Aung San Suu Kyi, the Nobel Prize-winning Burmese democracy icon who spent the last three decades fighting the military dictatorship, explained her silence as the refusal to “take sides” on an issue in which violence is committed by both parties. Suu Kyi, who now holds a seat in Burma’s parliament, is speculated to be maintaining her silence in an effort to appeal to her constituents, most of whom are Buddhist.

Also silent are President Obama and his administration. Along with Burma’s government, President Obama has the most to gain from Burma’s development. Burma serves as one of the main battlegrounds on which the U.S. and China vie for influence in resource-rich Southeast Asia. When the military junta was dismantled in 2010, China lost much of its access to Burma’s leadership. China’s estrangement deepened in 2011, when President Thein Sein suspended the China-backed Myitsone dam project, citing “the will of the people.” The suspension of the project was seen as a rejection of Chinese attempts to grab resources from Burma. Closely following the suspension of the dam project, the U.S. and the EU dropped their sanctions against Burma and sought the same investment opportunities as those which China now seems to be losing. By pitting the U.S. and China against each other in an ongoing bidding war for Burma’s resources, Thein Sein wields immense power over both his own country and those that wish to invest therein. And after almost a term and a half of foreign policy blunders, Burma portends to become the jewel in Obama’s foreign policy crown. Therefore, aside from a single mention in his Yangon University speech last November, President Obama has made no indication that Burma’s human rights abuses will in any way affect his decision to support the country’s development.

The case of Burma’s development is one in which national leaders profit at the expense of their people and the majority profits at the expense of a minority. And there are no signs of this changing. The current Burmese government has found a way to straddle both Western-style development and authoritarian control over its own population, and the Rohingya are the focal point of this strategy. By facilitating communal violence, the Burmese government demonstrates the necessity of the military to the Burmese people. And by targeting a defenseless, stateless minority with no influential leaders speaking on its behalf, the Burmese government ensures that the violence it creates poses no risk to its investors. Furthermore, were the U.S. to find the persecution of Rohingya problematic enough to alter its participation in Burma’s development, the U.S. would run the unacceptable risk of Burma sliding effortlessly back into China’s patronage. From the perspectives of President Obama and President Thein Sein, the Rohingya are a politically inconsequential, and therefore wholly inconsequential, sacrifice.

Jacob is a third-year International Development Studies major at UCLA, where he is serves as the president of the Olive Tree Initiative. He tweets on conflict and development in the Middle East and Southeast Asia under @Jrifter.

 

June 3, 2013 2 comments
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Mexico and Latin AmericaSecuritySecurity and Conflict

The War on Drugs: Mexican Cartels

written by thegeneration

by Akbar Khan
Contributing Writer

In 1971, President Nixon officially declared a “war on drugs.” Four decades later and after $1 trillion in government expenditures, the drug war still rages on with no signs of slowing down.  During Nixon’s time, the big players in the drug scene were the Colombian cartels. It was not until the 1980s, when the United States successfully used Plan Colombia to disrupt Colombia’s drug cartels, that Mexico’s cartels rose to prominence. Today, Mexico’s “narcotraficantes” have established a $25 billion industry and account for a majority of America’s methamphetamine and marijuana supply.

Although former Mexican President Felipe Calderón invested billions of dollars in the deployment of tens of thousands of troops and the reformation of police and judiciary systems, the fight against drug cartels has not made any substantive gains. If anything, Calderón’s militarization of the drug war has only escalated drug-related violence. The Mexican government estimates that since 2006 over 40,000 people have died due to drug-related violence. And even worse, some of Mexico’s cartels are now highly influential in certain territories like Guerrero and along the coast on the Gulf of Mexico, making it harder for the Mexican state to fight them. In some regions where the cartels have eliminated political representation, the Mexican government has effectively lost the monopoly on the use of force – a monopoly which scholars like Max Weber have deemed to be an essential requirement of statehood.

Why has it been so difficult to fight Mexican cartels? 

For one thing, Mexican cartels are quite sophisticated. They are structured and militarized organizations that employ at least half a million people, according to Vanda Felbab-Brown, a Brookings Institute narcotics expert. The cartels have also demonstrated a high propensity for brutality and terror – a tactic that has enabled them to increase control within Mexico’s institutional framework. In many cases, corpses are dumped in city streets and in extreme cases, the bodies are cut into pieces or decapitated. Reporters, many of whom are consistently the victims of cartel murders, fear fatal repercussions for detailing cartel activities. A survey by Reporters Without Borders lists Mexico as the fourth most deadly country for reporters. This has had a gripping effect on Mexico’s media, as demonstrated by a Juarez newspaper that dedicated its entire front page as a plea for peace to the cartels, according to an Al Jazeera presentation. 

Furthermore, the Mexican military has struggled to combat the cartels effectively. “Each year, the violence takes on distinct new dimensions,” states Victor Clark Alfaro, a security expert for the Binational Human Rights Center in Tijuana. “It’s like fighting guerrillas — it often defies understanding.”

This transformation of violence is demonstrated by the fact that some cartels, particularly the Caballeros Templarios, consider themselves to be more than simple drug traffickers; they view themselves as resistance fighters (La Resistencia). The very title “Knights Templar” (Caballeros Templarios) refers to early crusaders who protected pilgrims on their passage to Jerusalem. Other cartels substantiate their political motives to displace the government by organizing community events like picnics and barbecues. This demonstrates the cartels’ ability to not only compel violence but to support their efforts with ideological constructs of organized resistance and community welfare.

To top it all off, corruption within the Mexico’s government has severely hampered the war on drugs. Reports of government officials, police officers, and military personnel receiving payments from the cartels have repeatedly surfaced. “A system-wide network of corruption has ensured distribution rights, market access, and even official government protection for drug traffickers in exchange for lucrative bribes” according to a March 2011 CFR report. As one example of the corruption, in 2008, members of SIEDO (Subprocuraduría de Investigación Especializada en Delincuencia Organizada), the attorney general’s office in charge of investigating and prosecuting organized crime, and directors of the federal police were arrested for their ties to the Beltrán Leyva cartel. Noé Ramírez, the former director of SIEDO, reportedly received $450,000 every month for his services to the cartel’s leaders.

Of course, the supply side is only one part of the equation. The undeniable fact is that the demand for drugs in the United States provides an essential market for the cartels. According to the National Survey on Drug Use and Health, in 2010 there was an estimated 22 million Americans ages 12 and older using illegal drugs – nearly 9% of the U.S. population. That is an increase from the 6.7% of the population estimated in the 1999 Survey. With millions of buyers in the United States, Mexican cartels continue to generate a revenue stream that in turn serves to finance their violence and increased capabilities.

With their ability to intimidate, combat, conceptualize, and infiltrate, Mexico’s cartels prove to be a powerful force. But combined with this insatiable demand in America, the cartels become a cemented aspect of U.S. Mexico relations.

A more recent development on the drug war: Mexican cartels have exhibited increasing control in the rural areas of Mexico, namely in southern Mexico.

According to a study by Salvador Aranda in Revista Mexicana de Sociología, places like Michoacan that have not traditionally been in the spotlight of the media for the drug war, have witnessed more militarization and influence from cartels such as the Caballeros Templarios. This has led to changes in the agrarian culture of Michoacan due to the incorporation of the drug trade. 

Jerry Langton, author of Gangland, talks about the many poverty-stricken, indigenous people in Southern Mexico who, feeling alienated by the central government, turn to cartels like “La Familia” for their provision of healthcare and education. This is in contrast with the terror tactics that the cartels use in Northern cities since it demonstrates an ability to garner support by immersing themselves in the livelihoods of the residents.

Despite their increased integration in rural territories, the extent to which the cartels exercise control over their territories is most greatly hindered by divisions amongst the cartels themselves. Mexico’s drug landscape is dominated by several competing cartels but there is no single dominant cartel. As a result, the major cartels must compete for drug routes throughout Mexico and into the United States, which result in deadly territorial battles.

This division demonstrates that while the cartels collectively have a significant voice in Mexico, they do not have complete control over their territories. While much of their influence is leveraged by fear and hostility, their growing aptitude to become integrated into the lifestyle and culture in rural areas like Michoacan should seriously heighten the concern of Mexican and American officials.

Fact and figures from CNN, BBC, PBS, CNS News, Al Jazeera, El Economista, Washington Post and Time. 

Akbar Khan is a third-year Political Science student with a minor in Global Studies. He is an intern at the Burkle Center for International Relations. 

 

May 29, 2013 5 comments
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Global HealthMiddle EastSecuritySecurity and ConflictTerrorism

Pakistani Elections 2013: Vote for Change, Vote for Integrity

written by thegeneration

By Akbar Khan
Contributing Writer

December 2011, Abbottabad, Pakistan – Well over a year before Election Day, in one of the world’s most dangerous countries, I could already sense the beginnings of what was becoming the most important election in the history of the country. Political banners, slogans, and portraits lined street corners and highway billboards. Buses, filled with enthusiastic supporters, were shuttling constituents to party rallies. The political climate was heating up in anticipation of the upcoming May 11 election and even I, a foreign-born Pakistani, understood the magnitude of what was riding on the outcome

Since achieving Independence in 1947 under the leadership of Quaid-e-Azam Jinnah, Pakistan has not exactly been an exemplar of democratic statehood. In its relatively short 65-year history, the country has been the victim of four military coups, three territorial wars with India, and numerous rigged elections. Today, political corruption, rural poverty, and Islamic extremism plague the country. And yet, despite all this negativity, the people of Pakistan face an opportunity for change in the upcoming election.

In the Pakistan’s party dominated political landscape, there are about 90 parties, but the 2013 election has been dominated by three in particular:  Pakistan People’s Party (PPP), Pakistan Muslim League Nawaz (PML-N), and Pakistan Tehreek-e-Insaf (PTI). The latest polls show that the PML-N will win the most seats, followed by PTI and PPP. Some speculate that if PTI and PPP form a coalition, it could control a majority of the 272 electable seats and consequently, Imran Khan (PTI) would be designated as Prime Minister.  

 Pakistan People’s Party — Bilawal Bhutto Zardari

Founded as a progressive party in the 1960s, the PPP won parliamentary majorities in 1973, when Zulfikar Bhutto became Prime Minister, and in 1988 and 1993, under Benazir Bhutto, the first female elected Prime Minister of Pakistan. Following her assassination in 2007, the PPP won a majority of seats in the 2008 elections but have lost support in recent months with the rise of the PML-N and PTI. The current chairman, Bilawal Bhutto Zardari, is the son of Benazir Bhutto and Asif Ali Zardari, the current President of Pakistan. Educated in England and following in the footsteps of his mother and grandfather, Bilawal Bhutto possesses enormous potential as a future leader. However, since he is only 24 years old, he is unable to run as Prime Minister in the upcoming election (in order to run for a seat, a candidate must be at least 25 years of age).

The PPP has been the most targeted party of the Pakistani Taliban’s campaign violence, which has resulted in the death of several party members and the recent kidnapping of former Prime Minister Gilani’s son Yusuf Raza Gilani by gunmen in Multan. Since April 11th, pre-election bombings have left more than 100 people dead. As a result, the party has not been able to campaign as openly as it would like. Despite efforts by PPP members to protest to the Election Commission that the attacks have put an unfair strain on their campaigning abilities, with Election Day less than 24 hours away, there is little the party can do to make up lost ground. Because of the heightened threat of suicide bombers, the Pakistani Army has announced that 70,000 troops will be deployed across the country on Election Day.

Pakistan Muslim League Nawaz — Nawaz Sharif

The PML-N, a conservative party, is centered in the Punjab province. It won parliamentary majorities in 1990 and 1997 enabling its leader, Nawaz Sharif, to become Prime Minster in both years. Sharif has little to boast from his two terms as Prime Minister. Acquiring considerable wealth from his milling industry ownerships throughout the country, Sharif was accused by former President Ghulam Khan of corruption for his personal financial gains during his tenure as Prime Minster. Despite this allegation, the PML-N remains the leading party at this point in the election campaign.

Pakistan Tehree-e-Insaf — Imran Khan

 The PTI is a relatively young party founded in the 1990s. It is the only party out of the major three in this election that has not had a substantial political voice until recently. Its chairman, Imran Khan (the former cricket star who brought a World Cup victory to Pakistan in 1992), first achieved national political prominence through his construction of a major cancer hospital in Lahore, dedicated to his mother who died of cancer. His work on the hospital earned him a reputation as an honest leader because he consistently provided statements of the hospital’s funding records, demonstrating that he had not pocketed any of the donations he received for the project. He was also heavily involved in aid relief efforts for flood victims in 2010. His party’s campaign focus has been to bring justice to Pakistan and to eradicate corruption within the state.

The Path of Change

If there is one thing that has been consistently lacking in the Pakistani government, it has been integrity. Pakistan’s political institutions have been riddled with corruption. Parliamentarians have laundered taxes for their own personal benefit and high-ranking leaders have coerced banks to lend, only to default on the loans. Even I have witnessed police officers blatantly accepting bribes in their execution of the “law.” Unfortunately, there exists a gap in trust between the Pakistani people and their government.

However, on May 11th, the people of Pakistan face a landmark opportunity because this election marks the first time in the country’s history that one democratically elected government will succeed another. After years of “load shedding,” infrastructure deterioration, stagnant social and economic opportunities, and overall political neglect, they finally have an opportunity to steer the country in a direction that can cater to their needs. With this opportunity, though, comes a weighty responsibility: the Pakistani people must be the catalysts for the positive change they seek within the country. This change starts by filling the gap in trust between the government and its constituents. In order to do this, the people must distinguish between leaders who have had a record of corruption from those who have not and put the latter in power. A foundation of trust will only be laid down for future democratic transitions if people have confidence in the government; this is true of any country aspiring towards democracy and Pakistan is no exception.

Both the PLM-N and PPP would preserve the status quo. Nawaz Sharif has little to speak for his leadership besides allegations of corruption and the PPP, the currently ruling party, has accomplished little in its latest attempt to govern. Of the three major candidates, only one candidate has had a track record of sincerity and honesty. From the beginning of PPP’s campaign, Imran Khan has made it a point to fight corruption in Pakistan. To some, he lacks political savvy and experience, but his greatest asset is what is most needed in the country – integrity.

Unfortunately, several days ago, Imran Khan fell off of a tall structure while making a rally appearance. The incident was completely accidental but now Imran will be bed-ridden for several weeks, which renders him unable to campaign. He has insisted, however, on making speeches from his hospital bed. Despite the circumstances, Imran is still devoted to his cause for a better Pakistan and the country should take this as a sign of his determination.

Tomorrow, despite the violence, the Pakistani will take to the ballots. For their sake, and for the sake of the country, I hope they vote for the path of change and integrity.

Facts and figures from Trading Economics, BBC, UNICEF, Guardian, and Pakistan Today

Akbar Khan is a third-year Political Science student with a minor in Global Studies. He is an intern at the Burkle Center for International Relations. 

 

May 10, 2013 1 comment
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EuropeFeaturedSecurity and ConflictThe International EconomyUncategorized

The New Spanish Housing Crisis

written by thegeneration

by Ferran Masip-Valls
Contributing Writer

Suppose you purchased a home on a loan in 2005 with an estimated value of $500,000. Fast forward to May 2013 and the home has been devalued to a measly $100,000. Yet, your monthly mortgage payments reflect the initial value of the home and you are no longer able to afford them due to unemployment.  Eventually, you must approach the bank and hand over the keys of your apartment, accepting that you are now just another unemployed and homeless Spaniard, amongst hundreds of thousands. Sounds all too familiar for those in similar predicaments living throughout the Western world. According to the current Spanish banking system, after giving back the goods you mortgaged for the loan, you still must pay the remaining sum. For all the previous homeowners, this means the remainder of the “original” value back to the bank—plus interest. This is the all too common scene in Spain: unemployed, homeless, and owing hundreds of thousands to a bank that also owns your apartment.

A key factor in understanding the current housing crisis in Spain is to understand its history. This bubble, that began in 1985, became known as the “Spanish Miracle”: a process that placed a post-dictatorship country with a third world economy into the top ten economies in Europe over a few short years. However, with the bubble-burst in 2008, it became painfully clear that most of the “Spanish Miracle” was just smoke.

When the collapse of an economy is directly related to a basic need, there are always direct consequences for the general population. At the end of 2012, the Land Registry Information Service announced that an eviction happened every 15 minutes throughout Spain, which is outright alarming for a country with less than 50 million inhabitants. According to the National Institute of Statistics of Spain, the Spanish now boast 3.4 million empty houses, 13.7% of the total housing available.

Even after the damaging effects of the mortgage crisis, the Spanish banks continued to provide loans. One must understand that they too had their own assessment and taxation companies that allowed the banks to establish the prices for homes. In short, the banks were encouraging individuals to buy and invest beyond their means. Money has stopped flowing, unemployment has reached astronomic levels (27% in the overall population with 57% of youth unemployed) and the general Spanish population is struggling to pay the unrealistic mortgages. Common sense (and European law) states that when one cannot pay one’s mortgage, one must give the apartment or home that one bought to the bank that issued the loan. The debt is then paid. Nevertheless, in Spain, the banks thought differently.

This irregularity is attributed to the set-up of Spain’s political, legal, and economical forces having the same faces. CEOs and other figures inside the corporate and banking system were politicians beforehand, and vice versa. The same happens within the legal system. This leads to a lot of “friendships”: which in practical terms mean an astonishingly high level of corruption and impunity to certain individuals and private companies. All the while, one out of five Spaniards live below the poverty line.

In response, a gathering of common people who want to take action against those unfair evictions and current circumstances came about: “Plataforma de Afectados por la Hipoteca” – “Platform of those Affected by the Mortgage” (PAH). It is neither politicized nor centralized and it does not have legal status or clear leadership. Separate groups in various cities have been able to gather more than 1.5 million signatures to change the mortgage laws to make evicted people debt-free after eviction. This is a group of dedicated people who advocate for rationally using the estimated 3.44 million empty homes and apartments, now owned by banks, as social rents. Further, the PAH engage in “escarche”: going to a prominent politician’s house who is related with the origin of this problem and putting protest stickers on his door while holding a small demonstration.

The absurdity of it all becomes strikingly clear when observing the People’s Party, who have held the majority in government since the crisis began, and their reactions to such “escarche” movements. This April, Maria Dolores de Cospedal, Secretary of the People’s Party, made accusations such as “escarche is pure Nazism,” “the People’s Party voters would rather go hungry before stopping to pay their mortgages.” Other People’s Party members have gone to the extent of relating the PAH to terrorist groups.

In the streets of Spain, evictions occur every day; however, so do social movements. For example, on April 13, the PAH occupied a brand new, but vacant, 40-apartment building in the city of Sabadell owned by Caixa Penedes (a Spanish bank). The PAH opened its doors to homeless families after employing a selection process to grant homes to those most in need. Shortly after opening its doors, the police arrived and the peaceful occupation came to a screeching halt through an irregular procedure. Initially, one of the PAH’s lawyers was there to provide representation and act as a mediator to smooth the process should the police arrive, and did so when it happened. Everything seemed to proceed as planned. The surprise arrived the following day when two of the PAH’s members learned that they were facing criminal charges. The police also charged the lawyer, a third party, with disobedience and resistance to the authority. The lawyer is now facing trial, with the police seeking to place her behind bars for six months to one year. In defense of the lawyer, stand the PAH members as well as other “formal” organizations such as the Lawyers Guild and the City Council of Sabadell. Housing is currently a pressing issue in Spain—with the unaffordable mortgages and high unemployment, one must question when this social crisis will transform into a mass revolt. On the other hand… Hey! It’s cheaper to buy a house now! So invest, invest, and invest! I’ll lend you the money, because, well, I’m telling you, it has to work, it’s perfect, and it can’t fail!

Then, one wonders, why people in Spain are not happy.

Ferran Masip-Valls is currently living and working in his native Spain. He is a part of the unemployed under 30 crowd, even after having worked on four continents and completed five university degrees. He most recently completed a MA from Teachers College – Columbia University.

May 6, 2013 1 comment
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SecuritySecurity and ConflictTerrorismThe International Economy

Boston Strong

written by thegeneration

by Christine Smith
Editor

Two weeks ago on April 15, 2013, the city of Boston became the center of a locally-grown terrorist attack that involved two pressure-cooker bombs near the finish line of the Boston Marathon. The attack wounded hundreds of runners and spectators and killed three observers: a Boston University graduate student, an eight-year-old boy, and a local restaurant manager. Of the victims, over a dozen have had at least one limb amputated. In just those few minutes of chaos, what was previously a largely local sporting event morphed into a reason to highlight its international significance and to put aside political and ideological tensions to rally behind the United States. 

On the surface, the Boston Marathon may primarily appear to be a domestic event. After all, while the rest of the country and world goes about their daily lives, the entire city of Boston and state of Massachusetts shut down for Patriots’ Day, also known as Marathon Monday. At first glance, the race may consequently appear to many as merely an excuse to party with friends and to take a day off from work or school. In actuality, the Boston Marathon means significantly more; it symbolizes a day for the residents of Boston and Massachusetts to unite as New Englanders and to revitalize their already strong sense of regional pride. The race, however, also acts as a day for the international community to come together over a shared interest: running. 

As a result of its humble origins, the Boston Marathon has always been connected to the international community. Established in 1897 by U.S. Olympic Team Manager John Graham after watching and training athletes for the Olympic Marathon, the Boston Marathon has continued to include athletes from all over the world. Over 95 countries were represented in this year’s race alone, including 10 African and 15 Asian nations. The Boston Marathon bombings were not merely an attack against the United States, but rather an attack against 95 states of varying political, religious, economic, and ideological backgrounds.

Many runners opted to run on behalf of an international charity, further reflecting their deeper commitment to making a positive impact globally. Most of the 35 charities sponsoring the race are connected to either the Greater Boston area or to the United States, but several represent global partners, including the Alzheimer’s Association, the Leukemia & Lymphoma Society, and the Multiple Myeloma Research Foundation. As a result, over $133 million in donations have been given since the creation of the Boston Marathon Official Charity Program in 1989 to charities whose issues are just as important beyond American borders as they are within. 

Additionally, by occurring annually on Patriots’ Day, the Boston Marathon brings attention to the anniversary of the start of the Revolutionary War: a war that pitted the Thirteen Colonies, France, Spain, and the Netherlands against Great Britain in an effort to diminish Great Britain’s global power and to give the United States its independence. Consequently, the Boston Marathon acts as a reminder to both the U.S. and the world that the currently prosperous country was once a mere colony of the British Empire that lacked its own independent international voice.

Perhaps it is not surprising then, that the international community has rallied behind Boston and the United States in light of the recent Boston Marathon bombings. After all, many American allies regularly fall victim to terrorist attacks and thus understand the physical and emotional trauma New Englanders are currently experiencing. Even some countries, like Syria, whose relationships with the United States recently have been considerably strained as a result of the issuing of strong criticism of Washington and U.S. foreign policy, have reached out through social media to suffering New Englanders to express their condolences. “Boston Strong,” therefore, means more than the unification of a city; “Boston Strong” represents the world’s commitment to putting aside divisive differences to work together to help all innocent participants and spectators impacted by the Boston Marathon bombings.

Facts and figures obtained from The Boston Athletic Association, The New York Times, and CNN.

 

Christine Smith recently received her B.A. in Political Science and two minors in African Studies and Anthropology from Boston University. She is currently a first year M.A. in African Studies student at UCLA focusing on human rights issues in East Africa and plans to pursue a second M.S. in Print Journalism. She is also an editor with The Generation.

May 3, 2013 0 comment
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FeaturedMiddle EastSecuritySecurity and Conflict

Reconceptualizing Israel vs. Palestine

written by thegeneration

by Gabrielle Cherney
Contributing Writer

“We must pray for Israel. We must pray for Israel and our fellow Jews. Israel is under attack.”

I remember hearing this as a child during every religious service I was taken to at the reform temple my family joined. I heard this, I believed it, and I grew up taking the assumptions behind the allegiance for granted.

This experience is not unique to me, nor is it unique to American Jews, Americans in general, or Jews in general. The inheritance of a stance on the Israeli-Palestinian conflict, one of the most divisive conflicts of recent generations’ collective conscience, is almost universal.

Meanwhile, the mainstream media are constantly diagnosing, endorsing,
and proposing solutions—trying to answer the question of how to create stability in the region.

But while everyone ever-more frantically bickers about what the correct answer is, anti-Israeli powers continue to rise in the region, and the nuances and complexities embedded within the question itself are lost, making an educated position nearly impossible.

Mainstream discussion of policy proposals is laden with assumptions of false dichotomies and oversimplified history. As a result, analysis of current events, such as President Barack Obama’s recent trip to Israel, is misguided. There is a common lack of appreciation for the dynamics of inequality within Israel that exist beyond and within  Israelis versus Palestinians. Understanding these dynamics is fundamental to realizing that one of the main problems for Israel is its leadership’s insistence on embracing a Western identity despite its Eastern history, population, and geography.

Jews and Muslims have a long history of coexistence, particularly in Muslim states over the past two thousand years. Legally, socioeconomically, and politically, Jews were recognized and accommodated, despite divergence from the theocratic religious agendas of Muslim societies throughout the Middle East.

Additionally, an observable concentration of Jews has lived in the biblically defined borders of Israel for centuries. It was not until the late 1800s, with the first large wave of Zionists, when this Jewish concentration became significant vis-à-vis the non-Jewish population in the region. With this new wave of Zionists, Jews set on making Israel a legally recognized Jewish state and demanded higher wages for the same work Palestinians were already doing in the region. In response, the Jewish community excluded the Palestinians by effectively creating a split economy—one in which Jews made and spent higher wages and the other in which Palestinians experienced an economy with a considerably lower circulation of money.

This split economy set the stage for an easy transition to the systemic sociopolitical exclusion and economic blockade on Palestinians that arose when Israel became a state in 1948.

More importantly, up until 1948, the people of Palestinian were designated British Protected Persons, which meant essentially having a colonial-style extension of what can be understood as British ‘citizenship’ (insofar as the notion of citizenship functions in a colonial dynamic), as Britain owned the Palestinian territory after World War I when the Ottoman Empire was partitioned. This dynamic conveniently allowed the U.S. to create the Israeli state without infringing on a technically pre-existing “state.”

By the time Jews from all over were functionally bussed into the new Israeli state, the territory had already been zoned, categorized by level of security risk. The lowest levels of risk positively correlated with proximity to major cities—a proximity which also happens to be most conducive to socioeconomic and political access to the state.

Eastern European Jews (“Ashkenazim”) were placed in the relatively more secure and centrally located areas and Middle Eastern Jews (“Mizrahim”) were placed in the more obscure, high-risk areas.

Systemic discrimination against Mizrahim was, and continues to be, the consequence of the pro-West  incentive structure (i.e. garnering sociopolitical rewards by virtue of simply appearing pro-West) implemented at the very creation of the Israeli state. With Western oriented politicians installed in Israel, and supported by the seemingly more Western Ashkenazim in cities, the pro-West mentality dominated and was viewed as being at odds with the Eastern mentality, Jewish or otherwise.

Though different, and more extreme in the case of Palestinians, the discrimination felt by both Mizrahim and Palestinians has been so severe that coalitions have been formed to unite and promote mutual benefits for the two groups in the face of Ashkenazim exclusionary practices.

Simultaneously, the resistant cause of such coalitions rose in political prominence, which brings us back to the present situation. From the political center and left in Israel, political groups have been growing in numbers and force, endorsing the cause of middle and lower class Jews as well as Palestinians.

As I mentioned, most people in the Middle East, the West, or anywhere else, are raised under the pressure of an expected allegiance to either Israel or Palestine. However, the identity being embraced in order to inform that allegiance may not be as simple as you think—it is not as simple as Arabs vs. Jews; Middle Easterners vs. Israelis or Jews; or Jews vs. Muslims.

And perhaps most importantly, conflict between Jews and non-Jews, particularly Muslims in this case, is not inherent. Just as the relationship between these groups has shifted into one characterized as antagonistic in recent memory, it can shift back.

At the most fundamental level, Israel and its supporters must stop insisting on pushing a distinction between East and West as well as a distinction between Israel and the Middle East. Israel is in the Middle East and much of its population is Middle Eastern, religion aside.

The discrimination occurring within Israel is making it internally unstable and the projection of this discrimination is informing Israeli foreign policy. The result has been increasing isolation practices and general belligerence (i.e. violent assaults within its own territory and persistent aggression and threats toward neighboring states) on the international stage.

President Obama gave a speech on his most recent trip to Israel and the speech has received a huge amount of mainstream attention for its mention of concessions with Palestine. But less obviously and more importantly, what the President did with this speech was align himself with the position of the rising center-left portion of Israeli Jews, who have proven to be a surprisingly strong force during the most recent elections. He directly characterized the occupation of the West Bank as simply morally objectionable. This endorsement was inherently pitted against the position of Israeli Prime Minister Benjamin Netanyahu and was a way for the President to make his stance known and, presumably, fuel the fire of political tension in Israel.

The current state of Middle Eastern affairs vis-à-vis Israel, Palestine, and the immediate region as a whole is not sustainable. By criticizing the framework in which Israel appears to view itself and, in turn, the way many in the West tend to view it, I am not implying that Israel should simply let its guard down. I am merely seeking to combat the fundamental oversimplification of Israel vs. Palestine, which even Israel itself tends to promote.

Gabrielle Cherney is a fellow for the U.S. Department of Education’s Foreign Language and Area Studies Fellowship Program. She is being funded for research and language development specifically in Persian. Her academic specialization is on the Near East and Central Eurasia, as well as Political Science, at Indiana University in Bloomington.

 

May 1, 2013 0 comment
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AsiaSecuritySecurity and ConflictTechnologyThe International EconomyUncategorized

The Wise Words of Sun Tzu: The Rise of China and the Changing World Order

written by thegeneration

by Akbar Khan
Contributing Writer

In the words of Sun Tzu, the ancient Chinese military tactician, “The supreme art of war is to subdue the enemy without fighting.” To some, this may seem an unattainable naivety, and yet for 800 years, the Zhou dynasty adopted Sun Tzu’s advice, resulting in its reputation as the longest-lasting imperial reign in Chinese history. In contrast, conflict in the West has embodied a different meaning, one that involves direct military engagement. But to Sun Tzu, conflict was just as much about perception, domestic unity, and indirect engagement as it was about actual warfare. In fact, what Sun Tzu was proposing was that the greatest victory is not the one that comes from physical battle–but the one achieved without military confrontation.

Beginning in the mid-19th century, the “Century of Humiliation” refers to an era of British and Japanese subjugation of China. In the mid-20th century, Mao Zedong ushered in a new period of communist revolution. These two time frames represent an era of foreign domination and poor economic development in China. However, the contemporary era has witnessed the re-emergence of Chinese leadership in East Asia. Some even speculate that the Chinese economy will soon rival the American economy, after more than two decades of United States international economic dominance while others dismiss China’s recent emergence as a short-lived phenomenon. Let’s take a closer look.

As the U.S. has become pre-occupied with fiscal hardship and overseas engagements, China has been rapidly, yet steadily, honing in on American economic prowess. Over the last two decades, China’s annual GDP growth has hovered around 10%. With an abundance of cheap labor, European and American companies have developed supply chains in China to reap the benefits of low production costs, transforming the country into the global manufacturing hub. Even high-end brand names like Armani employ Chinese manufacturing. Cliché as it is, “Made in China” is increasingly stamping itself on American consumer products.

Some economists have predicted that China’s growth rate is unsustainable. They suggest that China’s capital endowments will yield diminishing returns, and, as a result, China’s impressive growth will drop considerably. However, this is not expected to significantly slow Chinese growth for at least another decade. In fact, the International Monetary Fund predicts that in terms of purchasing power parity (PPP), China’s GDP will surpass America’s in 2016. PPP is measure that uses currency exchange rates to adjust for differences in prices between rich and poor countries. Even if Chinese growth slows from present rates, America’s economic advantage over China is shrinking.

Not convinced on China’s prospects? There’s more.

The Chinese government, in a rather brilliant maneuver, has created export quotas on its rare earth metals, which is surprising considering China wholly dominates the market. One may wonder why Chinese leaders have pursued this policy. By limiting its own output of rare earth materials, China is creating incentives for foreign businesses to relocate to China in order to get around the quota.

Still not convinced?

In 2006, the Pentagon confirmed that China successfully tested a ground-to-space laser to block U.S. satellite imagery. Reports on exactly which satellite was targeted are difficult to discover, perhaps because the event is not something the American media are eager to reveal. In a report by Defense News, the National Reconnaissance Office Director, Donald Kerr, admitted that China had the technological capability to affect U.S. satellites. This revelation demonstrates the increasing technological capacity of China but the incident signals a more profound implication–China has stepped on America’s toes without repercussions.

China is increasingly doing as it pleases: trading weapons for oil to Iran, violating environmental restrictions, trading with North Korea, and keeping foreign imports out of its borders. Were China a weaker nation, the U.S. would be able to put much more pressure on China to cooperate. However, as a result of the extensive U.S. trade deficit, China owns over a trillion dollars of American debt. This gives China leverage over the U.S. economy in being a creditor to the United States.

China has shown it has the potential, the ingenuity, the technology, and the swagger–a seemingly complete package. But, the one serious disadvantage for China with respect to the U.S. comes down to raw, material capability. According to the World Bank, America consistently spends above $600 billion on its defense budget while China spends over $100 billion. The U.S. GDP is approximately $14 trillion; China’s GDP is about half of the U.S. GDP.

Yet, consulting the timeless advice of our old friend Sun Tzu in his military guidebook The Art of War, we come to realize that material assets are not everything. Rather, strategic, non-violent tactics are the most effective method for combating opponents. In a world with strong international peace agencies, increasing globalization and an implicit fear of nuclear holocaust, direct military engagement between major powers is unlikely; this means that China may be able to rival America without ever having to fire a single bullet. Now that is a victory Sun Tzu would be proud of.

 

Fact and Figures from the World Bank, The Economist, and Bloomberg Business.

Akbar Khan is a third-year Political Science student with a minor in Global Studies. He is an intern at the Burkle Center for International Relations. 

 

 

April 29, 2013 0 comment
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AfricaFeaturedSociety and Culture

Battle on a New Front: Chinese Media in Africa

written by thegeneration

by Rujuta Gandhi
Editor

First, China constructed multibillion-dollar cities, or ghost cities, dubbed as such because of the empty high-rises, parking lots, and playgrounds. Then, it “gifted” the $200 billion African Union headquarters. Now, China Daily, a global Chinese newspaper, blesses the continent with its Africa edition. Why is China burdening itself with a responsibility to develop Africa, and why expand its media presence? Perhaps the communist nation hopes to find amity by extending a hand of friendship—a gesture riddled with soft power ambitions.

Slowly developing Chinese media in Africa is a geostrategic move against western media, which already hold the upper hand by bashing Chinese involvement throughout the continent. Since 2008, these sources have increasingly been exposing China’s harmful role—its contribution to the genocide in Darfur is only one example. Non-media sources, such as the book China and Africa: A Century of Engagement, also contribute to this condemnation. Therefore, by establishing a media presence, China hopes to combat what it perceives as “misrepresentations” of its purpose in Africa. Such misconceptions could harm future economic ties and political support in Sino-African relations. Consequently, China is using the media as a tool of soft power.

This power play will help protect China’s future in both the long and short term. In the long term, it is likely that they aim to secure their economic presence and ability to extract natural resources or to resettle their burgeoning population, among other motives. However, in the short term, the government is taking swift action to survive on the new battlefield of state-financed satellite television news, a notion voiced publicly by former U.S. Secretary of State Hillary Clinton. Already, foreign news services, such as France24 and Russia Today, have moved their metaphorical pawns, bishops, and knights to gain ground and mitigate negative images of their respective countries. China is merely following suit.

Xinhua News Agency, China’s state-owned press, established its presence in Africa beginning in the 1970s and now operates more than 20 bureaus continent-wide. In 2011, it began broadcasting a subsidiary television station, CNC World. A year later, the state-run but market-funded Chinese Central Television (CCTV) rooted its headquarters in Nairobi, Kenya. Most recently (and another year later), China Daily launched its Africa edition. However, both broadcasting companies incorporate heavy biases in favor of China; they highlight social and cultural topics and positive narratives while avoiding controversial ones, including political issues. In the April 12–18, 2013 weekly edition, the article “Strong China-Africa Cooperation Pays,” endeavored to convince Africans that, with China’s aid, Africa can be an “Asian tiger,” while “Good Hair Days” discussed the relationship between women’s hairstyles and social change in China. Furthermore, in an attempt to gain an upper hand on the U.S., the cover story “Advent of a Banking Superpower” was followed with this sub-heading: “Country has massive lead over the United States in terms of availability of savings, says expert.”

The appearance of Chinese media parallels government motives and initiatives. Soon after the decolonization of Africa, the Chinese government began to establish diplomatic relations with African states. With these ties came Xinhua, the Xinhua News Agency’s online newspaper. These actions can arguably be perceived as part of the rewards package for African nations that supported Chinese Security Council membership. From post-colonization until 2000, media coverage contained little substantive analysis.

Since then, the need to increase their soft power drives the Chinese government’s new $7–9 billion policy. During the Chinese-dubbed Year of Africa in 2006, Chinese journalism and media relations were among many of the topics discussed during high-level exchanges and forums. The roadmap effectively institutionalizes soft power by assisting in the development of media infrastructure, revealing a long-term soft power mission to strengthen diplomatic and economic ties.

However, the survival and effectiveness of Chinese media are still questionable. In terms of journalism itself, the government is reportedly exporting its domestic censorship laws, which will likely result in declined legitimacy. On the other hand, China is making strides on the front of public diplomacy and institution-building assistance. Since 2006, Xinhua has trained a growing number of African journalists. Additionally, CNC World and CCTV’s bureaus both employ African journalists (though the executives and editors are Chinese). Meanwhile, the Chinese government provides media equipment as to support institutional development throughout Africa.

If Chinese media advances, Sino-African relations will strengthen. And if western media cannot wage its own soft power to fight back, a continuing shift in global power will be progressively more inevitable as the U.S. may lose ground on the resources and benefits that Africa can offer.

Facts and figures from BBC, China Daily Africa Weekly, and South African Institute for International Affairs.

April 21, 2013 0 comment
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AsiaFeaturedThe International EconomyUncategorizedWomen's Rights

China’s Housing Market: It’s More Than Just a Bubble

written by thegeneration

By Tina Kim
Editor

Often hailed as the economic spotlight of the world, China has enjoyed its robust growth in manufacturing, waves of foreign investments, and increasing economic power. In recent months the media have been covering stories indicating a looming housing bubble threatening to stagnate the growth of China’s economy. Reports have highlighted China’s high housing prices, millions of vacant apartments, and tax measures from the government to contain the housing bubble. One of the most striking examples has been “ghost cities,” entire developments of luxury apartments and high-end shopping malls completely empty of residents. Meanwhile, housing prices have supposedly skyrocketed while real estate development has stalled—allowing construction, steel and cement production, and furniture and interior manufacturing to come to a halt. Will China’s rapid urbanization and growth finally come to an end?

UCLA Professor of Urban Planning Paavo Monkkonen says a housing bubble is not the right way to frame China’s current housing market. Although high housing prices may be the case for large cities such as Shanghai or Beijing, there are lower prices in areas where there is not as much economic activity. Similar to the U.S. and elsewhere, the high prices are relative to the location: the closer to the hub of the city, the more expensive, and the farther away, the cheaper. Rather than high housing prices, limited investment opportunities and income inequality are greater explanations for unaffordable housing.

China is generally a “savings” oriented nation and has one of the highest savings rates in the world. According to Forbes, this fact may reflect the cultural preference for sons; “about half of the increase in the savings rate of the last 25 years can be attributed to the rise in the sex ratio imbalance.” One hundred and twenty-two boys are born for every 100 girls today, which means one of five Chinese men will not marry. As a result, men have tried to become more “competitive” bachelors by increasing their savings and owning an apartment.

However, there is constant insecurity from the cost of health care, education, and age-old pensions that may change in the future despite these savings. The natural reaction would be to invest one’s earnings. But for an individual in China’s middle and working class, there are very limited options. The government sets interest rates for banks, which yield very little return. As a result, individuals have turned to buying second or third apartments in order to secure their future. However, as more people began investing in real estate, prices have risen. In response, the Chinese government issued a 20% capital gains tax on sales of second homes in Shanghai (and later throughout the country) to discourage real estate investment and dampen fears of a housing bubble.

Interestingly, many couples have gone as far as divorcing to circumvent the tax. While remaining divorced on paper, couples would live as a married couple to buy a second home. But this does not fully explain why individuals would invest in developments of ghost cities, where there are no tenants or returns on investment, or pay for infrastructure like a new subway or terminal, where there are no people.

Monkkonen, who has taught at the University of Hong Kong, explains that ten years ago, this same phenomenon occurred. Local Chinese governments in the past built massive terminals, roads, high-speed railways and other infrastructure at the edges of cities. For a few years, these areas would remain empty, but ten years later, people would eventually occupy to a point where the government needed to build more.

People from rural areas moving to cities have primarily fueled this expansion. At the end of 2011, 691 million people were living in urban areas and about 657 million were still left in the rural areas. With a large supply of rural migrants, the expanding infrastructure and ghost cities are literally developments years ahead of their time, waiting for these people to fill the streets and sustain economic growth. However, at some point, China will run out of rural migrants moving to cities.

“So far everything has been about growth,” Monkkonen explains. “But eventually the expansion is going to stop and the whole way that cities get money is going to disappear or get very limited. They have to learn new ways to get money or else there’s going to be a huge disaster.”

The new property taxes, therefore, may be a transition for local governments to obtain new sources of revenue other than through expanding cities. Moreover, a new wave of tax reforms may also indicate a greater and ubiquitous problem in China’s economy: income inequality.

The gap between rural farmers and the rural elite has contributed greatly to this income gap. According to the New York Times, half of China’s 1.3 billion people live on incomes “less than a third of those in cities,” but “many outside analysts say [income inequality] has actually gotten worse, making China among the world’s most unequal societies.” New tax reforms and taxes are thus attempting to bring greater access to social programs to the poor and elderly. China’s new rural pension has added over 240 million people since 2009 and in 2011 over 55% of adults had pensions. However, China’s funding for pensions and the overall welfare system has been drastically underfunded. In some rural areas, pensions are as low as 55 yuan (about $8.75) per month.

“Welfare spending has been inadequate, amounting to about half the level of comparable middle-income countries,” as stated in the Wall Street Journal. In addition, there are more than 200 million migrant workers in cities who are systematically blocked from obtaining social services and jobs (despite cities’ high dependence on rural migration). This system, called Hukou, continues to divide income levels between the rural and urban people. Moreover, as rural migration continues and urban populations expand, the issue of affordable housing has become an increasing problem.

In Beijing, 2 million people of its 20 million population live in apartment-style bomb shelters underground. These are informal markets, with landlords and advertisement in websites for people attempting to find affordable housing in the city. The 2 million individuals are drivers, waiters, students (estimated at 30%), and people of lower income. A new policy in Beijing has ordered the eventual eviction of these residents, sometimes referred to as the “rat population,” according to Professor of Urban Planning at MIT Annette Kim’s research in Beijing.

China has taken measures to address income inequality; however, social programs have been significantly underfunded and the rural migrants in cities have been marginalized from social programs and services. Moreover, a more fundamental method to address inequality would be to invest and improve the livelihood of the younger generation. Due to China’s one-child policy, there is a greater burden for only children to someday financially support and look after their elderly parents. According to Brookings, “In 2010, there were 116 million people aged 20 to 24 and by 2020, the number will fall by 20% to 94 million;” however, the number of the elderly, which is already greater than the youth population, is projected to increase to 240 million by 2020.

Greater access to affordable housing, more investment opportunities, and social programs for lower income and the elderly must occur to secure China’s future middle and working classes and maintain China’s growth. Sensational policies such as building glamorous infrastructure, tackling corruption scandals, and containing the “housing bubble” may be helpful to a degree. However, for China—and any other country for that matter—its future economic power lies within the productivity of the younger generation, not in its buildings. China’s youth is the country’s greatest asset and will be the country’s greatest impediment if its government fails to recognize them its most sustainable investment.

Facts and figures from Forbes, Wall Street Journal, New York Times, The Economist, Bloomberg, CBS News, a personal interview with UCLA Professor of Urban Planning Paavo Monkkonen, and a guest lecture by MIT Professor of Urban Planning Annette Kim.

 

April 18, 2013 8 comments
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