Analysis of the Impact of Political Sanctions on Business Operations: The U. S. Embargo of Haiti in the 1990’s

Abstract

Of all the countries in the world that could not withstand the negative impact of an economic embargo Haiti was probably the most vulnerable.  The purpose of political and economic sanctions is to persuade a government to change its behavior in order to create an opportunity for improvements.  During the Embargo of Haiti of 1991-1994 thousands were massacred by the brutal military rulers and economic conditions became worse than ever for the Haitian people.  It ended only as US troops were headed to Haiti to implement an invasion and occupation.  The Haitian Embargo highlights the differences in interests among governments, businesses, and the people of the affected country.  Perhaps solutions lie in finding the point at which divergent interests converge.  After the 2010 earthquake one company (Thread, LLC) has provided bold leadership in reconciling the competing interests of governments, businesses and the people.

An analysis of the impact of political sanctions on business operations is incomplete if it is done in a vacuum or from the perspective of only one political or business standpoint.  Thus, in this short paper an attempt is made to provide a brief, but meaningful, overview of the political and business issues related to the embargo of Haiti that occurred from 1991 to 1994.   The story of the embargo is analyzed from two very distinct perspectives: the perspective of an American textile manufacturer (fictitious) and the perspective of Haitian textile workers.  In order to set the stage, a brief history of Haiti is given, highlighting some key facts related to its development (or lack thereof).   The brief history is followed by a description of the contemporary business climate, economic realities for the people of Haiti, and the political intentions and behavior of the American government in relation to Haiti.  Finally, in the wake of the 2010 earthquake and its devastating impact on an already fragile economy, the issue of Corporate Social Responsibility (CRS) is discussed as a necessary element for any American corporation operating in or doing business with Haiti. 

Brief History

The establishment of Haitian independence is historically very unique.  In 1804 Haiti was the first Latin American colony to achieve independence from its European colonizer and only the second colony to become independent in the western hemisphere (Skidmore, Smith & Green, 2010).   The United States of America was, of course, the first to achieve independence.  Haiti was the first republic in the new world that was ruled by persons of African descent and it represented the first time in history that a new country was established after a slave revolt (Werleigh, 1993).  Perhaps precisely because of these facts, it was not well received by the international community.  At the time of its independence, all of Europe, the US, and the Vatican refused to recognize Haiti’s status as a republic.  In 1824, France claimed that the government of Haiti owed it 150 million French francs for loss of property.  France’s claim was supported by the US and others in the international community with an economic embargo and in 1825 Haiti began making payments (Farmer, Fawzi & Nevil, 2003).  Loans were made from French banks and payments continued until 1947.  The total paid (with interest) in today’s US dollars is $21 billion. Essentially, former slaves were forced by the international community to pay restitution to their former slave owners. 

Poverty, political instability and interference by the US in its internal affairs persisted throughout Haiti’s history.  From 1900 – 1915 the US practiced what became known as “gunboat diplomacy” and engaged in military invasions of Haiti’s shores dozens of times (Farmer et al., 2003).  In 1915, the US engaged in a full blown invasion and militarily occupied Haiti until 1935.  In spite of claims by the US that it wanted Haiti to become a functional democracy it was a main source of foreign aid during the reign of Haiti’s most brutal dictators (e.g. Francois “Papa Doc” Duvalier, 1957-1971).  

Socially and economically Haiti became extremely stratified with a small wealthy elite class (mostly mulatto) and large underclass existing in extreme poverty.  In 1990, it appeared that things would begin to change.  Under the leadership of a priest (Jean-Bertrand Aristide) from a parish in the poorest area of Port-au-Prince, a political party was formed with the idea of bringing true democracy to Haiti and making changes that would reduce poverty and improve the health and education systems (Sprague, 2008).   Jean-Bertrand Aristide is described as the first democratically elected president in Haiti’s history (Farmer et al., 2003).  Unfortunately, within seven months, he was removed from office by a military coup that was supported by the elite class of Haiti. They feared Aristide would bring socialism to Haiti and threaten their status and wealth (Werleigh, 1993). 

The 1991 Embargo

The Economic Embargo of Haiti was triggered by a military that occurred within seven months of the election of Jean-Bertrand Aristide as President of Haiti.  Many in the international community expressed outrage that a democratically elected leader who had received 67% of the vote with a 90% turnout was ousted by military leaders who had previously left the country (Werleigh, 1993).  The US along with the Organization of American States (OAS) immediately proposed sanctions against the military government.  Unfortunately, the threat and implementation of economic sanctions did not prevent the military government from searching out and killing thousands of Haitian civilians identified as Aristide supporters (Farmer et al., 2003).  The Embargo has been criticized and most severely impacting those who it was intended to help while allowing exceptions that benefited American businesses and the Haitian elite (Werleigh, 1993).  The end of the embargo came in 1994 as a large contingent of American troops was on their way to once again invade the shores of Haiti.  The military leaders made a quick exit and Aristide was reinstated as President.

Government versus Business versus Popular Interest

As in any situation involving international relations, economics, politics and business, things can get very complicated.  The choices that are made in the process of any crisis depend on who is making the choice and from what perspective.  Regardless of how benevolent a foreign interest might sound the reality is that each government must make choices that are in its own interest.  However, when a government has been dismantled a vacuum is created that allows foreign interest to make choices that may or may not be in the actual interest of the dismantled government. 

Similarly, businesses operating or attempting to operate in a country that is experiencing a crisis, such as the economic embargo of Haiti, will make decisions that are in its best interests as defined by its own perspective.  Additionally, a foreign business in Haiti would have to decide what, if any, responsibility it has related to the wellbeing of its Haitian employees.  If an American textile manufacturer with a plant in Haiti has been successful, it would be motivated to develop a plan to return upon the resolution of the crisis and even lobby for exclusions.  That is exactly what happened during the economic embargo of Haiti.  Many American businesses found ways to gain exemptions and continue their operations at least at a level sufficient to maintain a presence in Haiti (Werleigh, 1993; Todd, 1994).

Finally, the interest of the typical Haitian civilian must also be considered.  President Aristide made the interest of the people his number one priority and it put him at odds with the Haitian elite, American business and eventually the American government.  The people of Haiti desire what people everywhere desire; an opportunity for a decent and comfortable life.  Unfortunately, what is offered to an overwhelming majority of Haitians is extremely low wages under inhumane working conditions.  Under Aristide the minimum wage was raised to $2.40 per day.  However, as a result of the embargo the cost of living in Haiti soared to levels comparable to or far exceeding prices in the US (Gibbons & Garfield, 1999).  For example, a gallon of gas rose to as high as $10 per gallon while in the US it remained below $1.50 per gallon.  The disparity between wages and prices has not been reconciled.  It is one of the conflicts in interests between American and Haitian textile manufacturers and textile workers.  It is in the interest of the textile manufacturers to maintain low labor costs.  The textile workers, on the other hand, consistently demand a livable wage and better working conditions. 

Corporate Social Responsibility (CSR) in an Economically Ravaged Region

Is there the possibility of a light at the end of the tunnel?  Can the conflict between the interests of governments, businesses, and the people be reconciled?  CSR has become a part of the vernacular among global corporations.  Most global corporations entered the new millennium with a new sense of social responsibility in relation to the environment and the conditions of people in the countries where they operate.  Sometimes CSR means providing support to local NGO’s or building new schools.  In Haiti one American company has taken CSR a step further. 

Thread, LLC was established after the 2012 Haitian earthquake it is a Pittsburgh based company involved in recycling plastics.  While volunteering in Haiti it owner and founder, Ian Rosenberger, observed the massive amounts of plastic bottles that seem to be everywhere. He believed that it would be possible to turn the massive amounts of plastic trash into something useful and employ Haitians in the process.  He established partnerships with local recycling companies and built a processing plant in Haiti that shreds the throwaway plastic and prepares it for shipment to the US.  In the US, Thread, LLC partners with others to turn the plastic into fabric and other usable materials.  The result is supplemental and fulltime income for over 2,000 Haitians.  As new partnerships and products are made from the shredded plastic, the profits for Thread and jobs for Haitians increases (Thread, LLC, 2013).  Thread offers a model of CSR that directly addresses the interest of both the business and the people it employs.

A Final Word

The issues of political stability, economic development, promotion of business interest, and social responsibility are certainly highly complex.  There are no simple solutions.  However, with bold leadership and a sense of social responsibility the points at which the interests of very divergent groups converge can be discovered.

References

Farmer, P., Fawzi, M.C., & Nevil, P. (2003). Unjust embargo of aid for Haiti. The Lancet, 361(9355), 420-3.

Gibbons, E., & Garfield, R. (1999). The impact of economic sanctions on health and human rights in Haiti, 1991-1994. American Journal of Public Health, 89(10), 1499-504.

Skidmore, T.E., Smith, P.H. & Green, J. N. (2010). Modern Latin America (7th ed.). New York, New York. Oxford University Press.

Thread, LLC (2013).  Thread impact report 2013. Retrieved from http://www.threadinternational.com/about-us/2013-impact-report/

Todd, D. (1994). Haitian companies' exports to U.S. soar by 50 per cent despite embargo. The Ottawa Citizen.

Werleigh, C. A. (1993). Sanctions: Haiti and the halfhearted. Bulletin of the Atomic Scientists, 49(9), 20.

 

Indonesia and the United States “Pivot to Asia”

This post was originally written as the final paper for a course on Global Business Practices and Asia.  The course is a specialty course taken as a part of my pursuit of a Doctorate Degree in International Leadership. 

 

Abstract

Indonesia is the fourth most populated country in the world and the third largest in Asia.  It has a long history of cultural development that was underdeveloped during colonial domination.  As a country it had to find and develop a new identity.  After more than sixty years since becoming an independent country, it appears that Indonesia has finally been able to successfully reinvent itself.  It relationship with the US has often been contentious but since 2009 the relationship experienced a complete turnaround.  The change was directly related to the election of President Barack Obama.  Having spent a portion of his childhood in Indonesia and being the son of a Muslim immigrant, he was an instant hero in Indonesia.  His presidency has coincided with that of President Susilo Bambang Yudhoyono in Indonesia.  Yudhoyono appears to have figured out how to effectively integrate the traditional value of “deliberation and consensus” into a modern democracy.   His leadership is leading to improved relationships with China and the US and greater prosperity for the people of Indonesia. 

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Indonesia is a very unique country in many ways.  Geographically it is made up of several archipelagos spanning a region between the Pacific and Indian Oceans.  It is the fourth most populated country in the world and the third most populated country in Asia behind China and India.  The United States is the third most populated country in the world.  Indonesia is a former Dutch colony and most of the developments in its relationship with the US have occurred since independence in 1949 (Country Profile: Indonesia, 2004).  .  Since independence Indonesia has struggled to find an enduring balance between contemporary political structures and traditional cultural practices.  Overlaying this struggle is the fact that Indonesia has more Muslim citizens (88%) than any other country in the world yet it is not a “Muslim State.”  Like many Asian countries, in spite of its struggles to establish healthy political stability, its economy has seen dramatic improvement since independence. Quality of life indicators such as average life span, healthcare availability, and poverty levels have also substantially improved.  With foreign assistance it has managed to keep its head above water but it has not yet fully capitalized on its potential.  Under President Obama the US has expanded its relationship with Indonesia as a part of the “Pivot to Asia.”  Indonesian public opinion of the US improved dramatically after the election of President Obama.  This shift in receptiveness has been referred to as the “Obama Effect” and paved the way for an improved relationship. 

This paper discusses the developments in the relationship between the US and Indonesia.  Indonesia’s current economic and political conditions have been heavily influenced by the impact of over a hundred years of colonial domination.  Indonesia, like many former European colonies in Asia and other parts of the world, appears to be subject to a double standard in academic and non-academic writings.  It is as if an attitude that the people of Indonesia should be satisfied with the “improvements” in their country in spite of the fact economic conditions continue to lag far behind those of the US, Japan and Western Europe. Finally, strengths and challenges for future development in Indonesia are also discussed.

Historical Overview

There is evidence that modern humans lived in the area now known as Indonesia 40,000 years ago (Country Profile: Indonesia, 2004).  By 5,000 years ago the cultures originating in the cultures of the interrelated archipelagos began to spread and have a significant impact on an area as far west as Madagascar and east into the Pacific. Cloves, found only in the Maluku Islands of Indonesia, had made their way to the Middle East as early as 4,000 years ago.   However, specific artifacts which might tell the story of trade and interaction between the peoples of the Indonesian archipelagos and other parts of the world have been hard to come by.  Artifacts discovered that provide concrete information about the people and their activities date back only to 400 B.C.  Such evidence confirms the development of well-organized societies and trade with India.  Additional evidence is available indicating the presence of well-developed kingdoms based on Buddhist and Hindu traditions beginning around 550 A.D.  Islam entered the archipelago by the eleventh century but did not begin to make significant gains in converts for about two hundred years (Country Profile: Indonesia, 2004). 

Contact with China increased between the tenth and fourteenth century.  Mongol attempts to dominate Indonesia during this period all failed.  During the Ming Dynasty (1368-1644) several attempts to exercise significant influence and control over Javanese power all failed. attempts failed.  It was around this time that Europeans began to express a significant interest in the Indonesian archipelagos starting with Marco Polo and then by the Spanish and Portuguese.  The Dutch and the English began to become involved in the area around 1600.  Europeans had a significant impact on trade and politics in the region, but colonial rule was not established until the mid-nineteenth century (Country Profile: Indonesia, 2004).     

The Colonial Period 

Establishing a Dutch Colony in Indonesia was not the primary goal of the Dutch government in Amsterdam, but the economic realities for the Dutch led to a dependency on the resources of Indonesia and the need to exercise greater control over the region to maintain its trade and economic position among the countries of Western Europe.  The economic reality combined with the popular view of Europeans as being a superior variety of humans made it easy to justify the forcible domination of the people of Indonesia. 

Initially, the Dutch Colonial Rule incorporated a great amount of tolerance for dissident opinion and allowed the development of several indigenous political parties.  Around 1900 with the development of the student organization, Budi Utomo, dissident opinion took a sharply nationalistic turn and increasingly the demand was for Indonesian independence.  The early nationalist leaders (many of them Dutch educated) believed that independence could be achieved through negotiation with the Dutch government.  The cultures of the region are based on beliefs that consensus is always the preferable option.  Early nationalist groups represented different segments of the Indonesian population and included a variety of religious and political beliefs.  Political parties interested in independence included Islamic reformists, Marxists, and social-democrats.  Operating on the principle of consensus being the priority these groups initially worked together to confront the Dutch.  The motto became “one land, one nation, one language.”  In 1926 and 1927 uprisings against the Dutch in West Java and West Sumatra led to the Dutch becoming less tolerant and repressive towards calls for independence (Guan, 2006).  The repressiveness only served to radicalize the independence movement.  Leaders such as Sukarno and Muhammad Hatta were exiled by the Dutch only to return as an Independent Indonesia’s first President and Vice-President. 

As World War II began the conflict between Indonesian Nationalists and the Dutch government was heating up but interrupted with the occupation of Indonesia by the Japanese.  At the end of the Japanese occupation the Sukarno and Hatta returned to declare independence for the Republic of the United States of Indonesia on August 17, 1945 (two days after the atomic bomb fell on Nagasaki, Japan).  However, the Dutch attempted to reclaim Indonesia as a colony.  After a period of additional struggle with the Dutch, Indonesia’s independence was recognized by the United Nations on December 27, 1949 (Guan, 2006).     

The Challenge of Independence

A common thread that runs through the various cultures of the people of Indonesia relates to the value placed on reaching agreement through “deliberation and consensus.” Guan (2006) has suggested that this egalitarian value that is intended to be inclusive and promote political stability may have actually contributed to increased division.  The initial governmental structure adopted by the new independent government of Indonesia was a parliamentary democracy modeled after the Dutch system.  The basic rule for decision making in such a democracy is 50% + 1.  The result is that instead of being more inclusive, political maneuvering could actually leave smaller groups disenfranchised.  The early leaders of the newly independent Indonesia attempted to combine such a system with the traditional value of “deliberation and consensus” with disastrous results.  Several years of parliamentary democracy failed to lead to the political stability and economic development that was anticipated by Indonesian citizens.  With this failure President Sukarno began to call for what he called a “guided democracy” that could more easily incorporate traditional Indonesian values related to “deliberation and consensus” (Guan, 2006). 

Up until the 1960’s the Indonesian Communist Party (PKI) had a seat at the table within Indonesia.  However, Indonesia considered itself a non-aligned country.  As the Cold War began to intensify the pressure grew for Indonesia to pick a side.  According to Guan (2006) the events leading up to the failed coup attempt and the ouster of Sukarno was triggered by the CIA.  One view of the series of events that took place in 1965 was that the CIA facilitated the failed coup attempt by communist sympathizers in the military to provoke a counter coup that would remove Sukarno and replace him with a leadership structure that was very favorable to the US.  With the support of the US, Major-General Suharto, Commander of KOSTRAD, the military’s Strategic Reserve force, lead the counter coup that saved Indonesia from becoming a communist regime.  Sukarno was implicated as a supporter of the communist and discredited.  The military action taken by Suharto, resulted in the massacre of about 500,000 Indonesian communist and suspected communist with many others being arrested and jailed.  Suharto was given the authority to do whatever was necessary to restore and maintain order.  He established what he called the “New Order” that emphasized economic and social growth while discouraging mass participation in the politics of ideology that was encouraged by Sukarno (Guan, 2006). 

Suharto’s New Order was embraced by the US and Western European countries resulting in a substantial increase in foreign aid and investment.  The new capital stimulated economic growth in Indonesia and its citizens began to experience visible improvements in their lives.  Aid from the US alone increased from $200 million in 1967 to $4.8 billion in 1992.  The substantial increase in oil prices after 1970 also helped stimulate economic growth (Country Profile: Indonesia, 2004).  An average GDP growth rate of 4.3% gave credibility to Suharto’s New Order which lasted for 30 years.

The collapse of Suharto and his New Order was due to fact that in spite of significant economic growth and development in Indonesia, the primary beneficiaries of the growth were an elite class of business people and government officials.  By the 1990’s the amount of civil unrest increased and with the collapse of the Soviet Union in 1989 there was less motivation to turn a blind eye to Suharto’s often brutal use of military force against civilians.  International support for Suharto evolved into international criticism of his heavy handed tactics in maintaining political stability.  The final blow to Suharto’s New Order was the Asian financial crisis of 1997.  Political repression, the war in East Timor, increasing levels of inequality within society and finally the economic downturn saw an end to support for Suharto both domestically and internationally.

In 1999, parliamentary elections were held in Indonesia for the first time since 1955.  The change in leadership reopened the door to foreign aid and investment.  The US began warming up in its relations with Indonesia but did not make any significant overtures to expand the relationship.  Anti-American sentiment during the Bush administration at the beginning of the 21^st century grew to an all-time low in Indonesia.  America was seen as anti-Islam and as having launched a war against Iraq mainly because it was a Muslim country (Guan, 2006).  However, as will be discussed later in this paper a dramatic and unprecedented turnaround in Indonesian public opinion was about to take place as America Inaugurated a new President in 2009.

Current Indonesian Economic Status

Today Indonesia employs a market economy and is very active in pursuing healthy economic relationships with the US, China, India, Japan and others.  In spite of a near complete financial collapse at the end of the 20^th century Indonesia has managed to reestablish growth and development within its economy.  Since 2000 it has made gains in several categories such as GDP, GNI, percent at or below poverty level, and life expectancy at birth (World Bank, 2013). 

Indonesia’s 2012 GDP was $878.0 billion.  Its population was 246.9 million resulting in a per capita GDP of $3,557.  In 2012 the GDP for the US was $16.24 trillion, with a population of 313.9 million resulting in a per capita GDP of $51,749 (World Bank, 2013).  The Indonesian economy has established a more favorable position globally and it is expected that their economy will continue to experience growth.

Indonesia’s main trading partners are Japan, the European Union, the United States, Singapore, and South Korea.   Indonesia recently has been experiencing a 65% trade surplus.  It is one of the world largest producers of liquefied natural gas and has a substantial petroleum industry as well.  The manufacturing sector accounts for about 40% of GDP and employs about 20% of the workforce.  Another 40% of GDP is accounted for by the services sector and employs about 40% of the workforce.

The last ten years has in Indonesia has seen improved political stability with a functioning democracy.  Outside investment and foreign aid is increasing and inflation has slowed.  Corruption has been a significant problem for Indonesia but its anti-corruption efforts appear to be having an impact.  The level of corruption has been decreasing steadily for more than ten years.

US-Indonesian Relations

In 1961 the US became the UN appointed mediator in a dispute involving West Papua.  The dispute involved a plan by the Netherlands to grant West Papua it independence and the Indonesian opposition to the plan claiming that West Papua was a part of Indonesia.  Confronted with the possibility that Indonesia might seek the assistance of the Soviet Union in annexing West Papua, the US position leaned toward support of the Indonesian government.  President John F. Kennedy in explaining why he supported the annexation stated that as the West Papuans were “living, as it were, in the Stone Age,” they would benefit by the modernization the would come as a result of the annexation (Rutherford, 2013).  The reality was that West Papuans were not actually living in the Stone Age.  However, such rhetoric was useful at gaining public support for a position that denied self-determination to the people of West Papua. 

The attitude was similar to the attitude the Dutch had as they began to dominate the people of Indonesia and subject them to a long period of colonization.  Only in the case of President Kennedy the rhetoric was used in favor of an independent Indonesian government.  The US involvement in the negotiations between the Netherlands and Indonesia marked the beginning of an often contentious relationship between the two countries.  President Kennedy was assassinated two years later and Indonesian President Sukarno was removed from office in 1965.  However, with the Cold War raging, Indonesia’s next leader capitalized on the conflict between the two super powers gaining favor with the US and being rewarded with military aid, foreign aid, and US investment (Country Profile: Indonesia, 2004).        

Sukarno’s replacement Suharto demonstrated his strong anti-communist views by completely destroying the Indonesian Communist Party (PKI).  In doing so he endeared himself to the US and other Western European countries.  As a result the US and others became willing for many years to turn a blind eye to the heavy handed authoritarian regime of Suharto.  In 1975, the day after a visit by President Gerald Ford and Secretary of State Henry Kissinger, Indonesia invaded and annexed the former Portuguese colony of East Timor where a leftist leaning political party had become the leading political force.  Thus began East Timor’s long struggle for independence from Indonesia (Timeline: US-Indonesia relations, 2010).

At the end of the Cold War the US and others stopped looking the other way when it came to Suharto’s tendency to use military force against his own people.  In 1991, in response to the Dili massacre the US Congress stopped International Military Education and Training (IMET) assistance to Indonesia.  This action marked the beginning of a long period of contentiousness between the US and Indonesia.  However, with the departure of Suharto in 1998 and the reestablishment of parliamentary elections in 1999 the US attitude toward Indonesia began to warm (Murphy & Suryodiningrat, 2010). 

The next major turn of events that impacted US/Indonesian relations was the terrorist attack in the US on September 11, 2001.  Initially, the Indonesian government came out in support of the US and condemned the attack.  However, when the US invaded Afghanistan and launched a pre-emptive strike in Iraq, President Bush and the US government were accused by the Indonesian government as favoring the attack and invasion of Islamic countries over non-lethal diplomatic solutions.  Public opinion of the US and President Bush fell to an all-time low.  In spite of the antagonism from the Indonesian government the Busch administration worked consistently to improve the relationship (Timeline: US-Indonesia relations, 2010). 

On December 26, 2004 a devastating Tsunami in the Indian Ocean impacted Indonesia.  The US responded with 25 warships and over 13,000 people to assist in relief efforts.  In 2005, the US also removed nearly all restrictions regarding military aid and effectively restored normal relations on the military level.  As a result of the relief efforts and the removal of restrictions on military aid, the relationship between the US and Indonesia warmed up considerably.

The next major event in the improving relationship between the two countries was the election of Barack Obama as President of the United States.  Not only had President Obama spent part of his childhood in Indonesia but he was the son of a Muslim immigrant to the US.  Public opinion in Indonesia of the American President went from an all-time low under Bush to an all-time high under Obama.  The shift in public opinion in Indonesia became known as “the Obama Effect” and it paved the way for improved cooperation between the two countries (Murphy & Suryodiningrat, 2010). 

In 2010, the final military restriction still in place was removed.  Also, that same year President Obama and Secretary of State Hillary Clinton announced sweeping policy adjustments in the US relationship with Indonesia that are designed to support the continued social and economic development of Indonesia and have a positive impact on American business as well.  In December of 2010 the US opened the @america Cultural Center in Jakarta.  It was developed in partnership with American tech companies and is designed to inform Indonesians about America, Americans, and American products (Onishi, 2011).   Whether such centers can further impact Indonesian public opinion of Americans is yet to be seen.

US Public Opinion of Indonesia

While it is very easy to find documentation of Indonesian public opinion of Americans, finding documentation of US public opinion on Indonesia is another story.  American seem to know very little about Indonesia other than the fact that President Obama lived there as a child.  Some have used this fact to make the argument that he was actually born there and is not legally the President.  Others have concluded that since his father was Muslim and he spent time in Indonesia that he must be Muslim. 

American public opinion about Muslims in general is far easier to find.  Perhaps such opinion is exemplified by the woman at a McCain Town hall meeting during the 2008 Presidential campaign, who stated that Obama was a Muslim.  It was stated as if being a Muslim was equivalent to being a terrorist.  McCain’s response did not refute the connotation that being a Muslim was a bad thing; he chose to simply affirm that Obama was not a Muslim and was a good man.  The exchange between McCain and his supporter is a reflection of the opinion of many Americans.  This automatic negative opinion of Muslims has been described as Islamophobia.  Islamophobia is described as; An exaggerated fear, hatred, and hostility toward Islam and Muslims that is perpetuated by negative stereotypes resulting in bias, discrimination, and the marginalization and exclusion of Muslims from social, political, and civic life (Ali, Clifton, Duss, Fang, Keyes and Shakir, 2011).

However in the case of Indonesia, in spite of the fact that it is 88% Muslim and has the largest Muslim population of any country in the world, it is not always perceived as a Muslim country.  Americans tend to be aware that Bali is in Indonesia and perceive it as a great exotic place to visit.  On the other hand, Indonesia’s first President and Vice-President consciously chose not to make Indonesia an Islamic Republic.  As a result, the Indonesian government does not present itself to the world in the same way the leaders of Iran, Saudi Arabia, and the United Arab Emirates would present themselves.  Indonesian cultural tradition tends to be more open than the culture of many other Muslim countries. 

Indonesia, Asia and the World

Indonesian leaders during the past ten years have managed to accomplish what both Sukarno and Suharto desired to do but failed.  Susilo Bambang Yudhoyono, Indonesia’s current President is finding a finding a way to effectively incorporate “deliberation and consensus” into political practice (Spranz, Lenger & Goldschmidt, 2012).  President Yudhoyono entered into a strategic partnership agreement with China in 2005 (Hadi, 2012). Entering into such an agreement with country that could easily over power you is perhaps risky and provides no guarantees of continued compliance.  Then in 2010 President Yudhoyono entered into a strategic partnership with the US.  In doing so agreements with both the US and China are strengthened.  With the possibility of pushing Indonesia closer to the US and away from China, Chinese leaders must be willing to follow through on their agreement of Indonesia.  Likewise, the US would not desire to be left out or excluded of the process in Indonesia’s relationship with China. 

Developing such relationships and remaining very active in the leadership the Association of Southeast Asian Nations (ASEAN), Indonesia has placed itself very strategically in the middle of the not only the Asian market but has garnered a place on the global stage as well. 

Strengths, Weaknesses, Opportunities and Threats for Indonesia

As Indonesia continues its development in the 21^st century it has become acutely aware of the fact that it is in a position to play a very active role in the development of Asian and global development.  Indonesia struggled in the years shortly after independence with being able to implement effective democratic processes that did not deteriorate into political gamesmanship and conflict.  In the early days after independence Indonesia had to struggle with internal conflict among its people and skepticism and doubt from the international community.  However, it appears now that the current government has found the path to balancing traditional cultural beliefs and contemporary economic and political realities so that progress can be sustained.  Indonesia’s idea of “deliberation and consensus” is definitely a strength.  It has used this concept to establish a reduction in domestic conflict and to develop and expand key relationships at the international level. 

Corruption is definitely a weakness.  Indonesia has enacted new laws to assist in combating corruption.  Indonesia has a strong military but must be careful to not use its military capability in a self-destructive manner, such as to quiet dissidents.  The concept of deliberation and consensus can go a long way when attempting to settle disputes and complex issues. 

One of Indonesia’s greatest opportunities relates to its location in Asia and its proximity to India and China.  India and China have been two of the fastest growing economies in the world.  Strategic partnerships with China and India can only strengthen its position in Asia.  Strategic partnerships with the US and the EU can only strengthen its position on a global scale.  Our world is changing.  The old colonial and chauvinistic ways of thinking are gradually disappearing.  Opportunities for developing interdependent relationships that are not exploitive will abound if approached with an attitude of openness.

The greatest threats for Indonesia are likely to come from within.  An atmosphere transparency and openness must be created by the government.  Another internal threat relates to making promises and not delivering.  The people of Indonesia expect their leaders to develop, promote and implement processes that result in real economic development that can be experienced by the majority of Indonesians.  If the government fails to deliver the people will once again demand a change.            

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References

Ali, W., Clifton, E., Duss, M., Fang, L., Keyes, E. and Shakir, F. (2011). Fear, inc.: The roots of the Islamophobia network in America. Center for Progress America.  Retrieved from http://www.americanprogress.org/issues/2011/08/pdf/islamophobia.pdf.

 Country Profile: Indonesia (2004).  Library of Congress – Federal Research Division. Retrieved from http://lcweb2.loc.gov/frd/cs/profiles/Indonesia.pdf

Guan, Kwa Chong (2006). Rewriting Indonesian history: The future in Indonesia’s past.   Institute of Defence and Strategic Studies, Singapore. Retrieved from http://www.rsis.edu.sg/publications/WorkingPapers/WP113.pdf

Hadi, S. (2012). Indonesia, ASEAN, and the rise of China: Indonesia in the midst of east Asia’s dynamics in the post-global crisis world. International Journal of China Studies, 3(2), 151-166.

Murphy, A. M., & Suryodiningrat, M. (2010). US rapprochement with Indonesia: From problem state to Partner. Contemporary Southeast Asia, 32(3), 362-394.

Obama announces U.S.-Indonesia comprehensive partnership. (2011). Foreign Policy Bulletin, 21(1), 148-181. doi:http://dx.doi.org/10.1017/S1052703611000104

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Economic and Political Development: Comparing China and the US

When discussing the political and economic development of China in comparison to the political and economic development of the United States one must first acknowledge that from a US perspective the cultural reality is that China has been largely demonized while the US has been largely glamorized.  If the intention is to engage in an accurate assessment of China’s development, then one must thoroughly engage the process of critical thinking.  Stark realities must be acknowledged for both countries that strip away, as much as possible, the distorting veils of evil or heavenliness that might tend to bias our evaluation.  To accomplish the task of an honest and critical comparison, the first order of business will be a brief review of the political and cultural histories of the two nations.  The histories will be followed by an overview of economic development in both countries, with a focus on the period since World War II.  Finally, the question will be asked “How Free is Free?”  This question refers to numbers imprisoned in each country as a measure of “freedom” and economic disparities that are widening as a result of “free” market expansion.

Historical Patterns in Culture and Politics

For many centuries China came under the rule of dynasties.  Changes in dynastic order occurred sometimes occurred within a dynasty and would result in changes in the ruling family, with little change in political policy or structure.  Thus, there could be a degree of change while the dynasty itself is maintained.  On the other hand, a change to a new dynasty would most often involve violent conflict and sweeping changes in political structure.  The Chinese dynasties followed the Confucius principle that emphasized the restoration of an ideal system of governance when the actual practice had slipped into something that was far from what was desired (Starr, 2010).  The result was a cyclical historical pattern that sought to reach and maintain ideals of governance and prosperity.  The last dynasty (Qing) collapsed in 1911.  The next 38 years proved to be very tumultuous for the Chinese people and was filled with war and bloodshed stemming from internal conflicts among those vying for power after the collapse of the Qing Dynasty and from external attacks, especially from Japan (Starr, 2010).

The dust began to settle in 1949, under the leadership of Mao Zedong.  Although China was now under a very different political structure under Mao and the Communist Party, the principles of Confucius relating to governance seemed to reemerge.  Consistent with Confucius principles, Mao’s goal was to establish an ideal government that capable of bringing stability and prosperity to the masses.  However, instead of identifying Confucius as the foundation of his ideas, as in dynastic rule, Mao cited the writings of Marx and Engels as the foundation for the development of a Communist China.  Changes in China’s political and economic policy since 1949 also seem consistent with the Confucius notion of reaching for ideal governance.  Clearly, economic changes that have taken place in the last thirty years are not at all consistent with the philosophy of Marx and Engels.  China’s move to increased privatization and market economy structures are actually a contradiction of the course of the socio-economic development that would have been predicted by Marxists.

The history of the political and economic development in the United States is in stark contrast to China.  The US originated as a number of British colonies in a foreign land.  The colonies operated under a market based economy but saw itself at odds with the indigenous peoples whose land they were now occupying.  The general approach was to expand control of territory via treaty and military conquest. This approached continued after the colonies became independent.  While the US Constitution proclaims very high ideals of human freedom and basic rights, the reality was that only 7% of the white male population was permitted to vote in the first presidential election.  Most of those voting owned human beings (mostly Africans) whom they enslaved and then profited from the labor their slaves provided. Indigenous people were not eligible for citizenship in the newly formed republic.  Interestingly, membership of the Chinese Communist Party as a proportion of the entire population of China is not very different than proportion of those eligible voters to the population of the United States at the time. 

Since then the US has experienced many wars and internal struggles.  Post World War II saw an economic boom for the White majority but intensified discrimination for African Americans and other non-Whites.  A pivotal point of contention was actual participation in the democracy and voting rights.  In the US political power is based on two things: financial leverage and winning elections.  Thus, US history is replete with efforts to influence (legitimately and illegitimately) the outcome of elections.  Full participation in the economy of the US has also been very restrictive throughout its history.  Groups that are generally favored benefit far more from economic development than groups that have been discriminated against.

China and the US since World War II

For China and its more than one billion residents, the period since World War II has been the most prosperous period in its history.  Mao’s initial focus on the rural farmers and peasants saw equalization in salaries between rural and urban dwellers (Starr, 2010).  Later when economic development stalled, Deng Xiaoping instituted economic reforms further globalized China’s economy.  The reforms, however, have had a disproportionate impact.  Urban areas, where 45% of the population lives have benefited far more than rural areas, where 55% live (Starr, 2010).  

In the US income disparities exist between urban and rural dwellers as well.  The economic expansion that took place after World War II was largely in urban areas.  Since World War II, the US population has shifted from being a majority living in rural areas to a majority living in urban areas.  China’s goal is to follow this same path.  In fact, all of the most prosperous countries of the world have majority urban populations.  The disparity that has stubbornly persisted in the US is one based on ethnicity and not location.  Economic statistics for African Americans as group continue to resemble that of a Third World country than that of a developed country.  Full participation in the economy of the US has been a serious challenge for African Americans who continue to experience significantly lower per capita income and significantly higher unemployment than the mainstream of America.

How Free is Free?

One of the main images involved in the demonizing of a Chinese authoritarian regime is one involving imprisoning dissidents.  On the other hand one of the images that is glamourized about the US is the freedom to speak out against our government without fear of reprisal or imprisonment.  The reality is not so clear cut.  Yes, there are many documented cases of arrest and imprisonment of Chinese citizens who have spoken out against the Chinese Communist Party (CCP) or Chinese government.  These arrest and imprisonment largely target those have been involved in what the CCP identifies as threats to the political stability of the China and range from arrest after the Tiananmen Square protests in 1989 to a number of arrests and imprisonments related to a Falun Gong peaceful protest in 1999 (Starr, 2010).

However, a closer look at international imprisonment statistics paints a different picture when comparing the China and the US.   The US ranks #1 in the rate at which it imprisons its citizens at 716 per 100,000.  China ranks #126 with 121 persons imprisoned per 100,000.  In raw numbers during 2011 the US imprisoned 2,239,751 adults.  China imprisoned 1,640,000 during the same period (ICPS, 2012).  In the US when the rate is broken down by ethnic group a very disturbing picture develops.  In 2011 the rate for African Americans imprisoned was 3,023 per 100,000.  In raw numbers that is 873,502 or 39% (Carson and Sabol, 2012).  African Americans are only about 12% of the US population.  Such numbers are sufficient to disrupt the economy of entire communities by removing a significant number of able body males from participation.  The above statistics when viewed objectively would suggest that it is the US that has a greater problem with unfair treatment and the restricting of freedom of its citizens.

Conclusion

We in the US often brag about our economic prosperity and economic opportunities while belittling a country like China for its limited opportunities, high level of poverty, and authoritarian regime.  While it is undeniable that the US is a prosperous country with much freedom, it is also true that large segments of the population have been and continue to be denied inclusion in the prosperity and freedom that so many brag about.  China’s traditions and priority of political stability appear to us in the US to be almost paranoid in their implementation.  Yet, China in spite of its restrictive policies related to religious and social expression, is attempting to expand the development of economic prosperity.  Perhaps there is something that both sides can learn from each other.

References

Carson, R. A. and Sabol, W. J. (2012). Prisoners in 2011.  Bureau of Justice Statistics. U.S. Department of Justice, Office of Justice Programs. Retrieved from http://www.bjs.gov/content/pub/pdf/p11.pdf.

International Centre for Prison Studies (ICPS). (2012). World prison brief. Retrieved from http://www.prisonstudies.org/info/worldbrief/wpb_stats.php

Starr, J. (2010). Understanding China (3^rd ed.). New York: Hill and Wang.