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NEWSWEEK COVER: How to Win the Peace

With the war in Iraq won, the more complicated task for the United States is bringing democracy to a region that has not known it, writes Newsweek International Editor Fareed Zakaria in the April 21 cover story «How to Win The Peace» (on newsstands Monday, April 14). In an adaptation of his just-released book, «The Future of Freedom: Illiberal Democracy at Home and Abroad,» Zakaria examines how the U.S. can learn from past forays into democratic nation-building to help create a genuine liberal democracy.

America’s goal is much broader than just making Iraq a better place. Building democracy, reshaping a political culture and creating new mind-sets are as complex as they ever were, he writes. If done right, helping create a new Iraq will be the greatest foreign-policy project America has undertaken in a generation.

Zakaria writes that building that democracy will require «a prolonged American or international presence. We can leave fast or we can nurture democracy, but we cannot do both.» Over the past decade, he says, the developing world has been littered with examples of quick transitions to democracy that have gone badly awry. To avoid the same fate in Iraq, order must come first, then liberty. «First establish a stable security environment and create the institutions of limited government — a constitution with a bill of rights, an independent judiciary, a sound central bank. Then and only then, move to full-fledged democracy.»

Until a legitimate Iraqi government has been formed, the United States will play the role of honest broker among the various factions. And to avoid looking like a colonial power, Washington should make every effort to have the United Nations bless the process, to get the European Union and Japan to help fund and administer it, and to get the Coalition forces to be involved as peacekeepers.

But there are two great obstacles to Iraq’s democracy: its oil resources and its ethnic and religious diversity, writes Zakaria. «Oil — like other natural resources — does not help produce capitalism, civil society and thus democracy. It actually retards the process. Countries with treasure in their soil don’t need to create the framework of laws and policies that produce economic growth and create a middle class. They simply drill into the ground for black gold. These ‘trust-fund states’ don’t work for their wealth and thus don’t modernize — economically or politically. After all, easy money means a government doesn’t need to tax its people.»

But there are ways to limit the damaging political and economic effects of oil wealth. One solution is privatizing the oil industry, but perhaps the best approach is to create a national trust — with transparent and internationally monitored accounting — into which all oil revenues flow. And ethnic diversity, properly handled, can be a great source of strength in Iraq. But power will have to be divided, shared and checked, he writes.

«The constitution of a new Iraq should create a federal state, with substantial local autonomy. The regions should not be all ethnically or religiously based. The electoral system should not create a ‘winner take all’ system, in which a party that wins 51 percent of the vote gets all the political power. Let the losers share in the spoils. Have both a head of state (a president) and a head of government (a prime minister), another way to give some representation to various communities. So a Shiite prime minister could govern while a Kurdish president would be the titular head of state.»

As American armies were sweeping through Iraq last week, the 101st Airborne Division went into the city of Najaf in the south, the heartland of Shiite Islam. A journalist from The New York Times stopped a waving bystander and asked him what he hoped the Americans would bring to Iraq. The man shouted out four words, one louder than the other. «Democracy,» he cried. «Whiskey. And sexy!» Who says the American Dream has lost its appeal?

It will not take much effort to bring whisky and sex to Iraq — if indeed they ever left. But bringing democracy to a region that has not known it will be more complicated.

With the war won, pundits and policy wonks — who are quickly replacing generals on television screens — have a new refrain: «Now comes the hard part.» In an important sense, this is wrong. It will not be difficult for America to make Iraq a better place than it was. The first step, disarming small bands of thugs, might involve bloodshed. The second, creating order, will require a much deeper American involvement in policing. It might take some time. But it is hardly insurmountable.

Improving on Saddam Hussein’s tyranny is going to be easy. If the next government of Iraq does not routinely imprison, torture and gas its people, institute a reign of terror, systematically persecute the Shiites and the Kurds, and steal the lion’s share of national resources for the Army and secret police, then it will be a better government than Iraqis have had for three decades. Many problems lie ahead, but eliminating Saddam’s regime is a huge leap forward for Iraq.

America’s goal, however, is much broader — to create a lasting and genuine democracy. For many who supported the war, like myself, the threat from Iraq was real. But more important than the danger was the opportunity. Here was a chance to rid the Arab world of a monstrous dictatorship and to help foster a new model for Arab politics. This is the real prize, and it will come only through hard work. While the skill of the U.S. military and a technological revolution have made it easier to win wars, building democracy, reshaping a political culture and creating new mind-sets are as complex as they ever were. If done right, helping create a new Iraq will be the greatest foreign-policy project America has undertaken in a generation.

President George W. Bush has often said that America wants to help build democracy in Iraq. He has also said that America will hand over power to Iraqis as soon as possible. These are, of course, the politically correct things to say. Washington does not want to look like an occupying power. But the history of political and economic reform around the world suggests that building democracy in Iraq will require a prolonged American or international presence. We can leave fast or we can nurture democracy, but we cannot do both.

This is not because the Iraqi people don’t want democracy or aren’t capable of it. The scenes of liberated Baghdad should remind us — as did similar scenes in Kabul after the Afghan war — that people the world over do not like to be oppressed. No culture or religion makes them content to forgo their basic rights. But wanting democracy and achieving it are two different things. Over the past decade, the developing world has been littered with examples of quick transitions to democracy that have gone badly awry. The countries of Central Europe — a longstanding part of the Western world — have been the exceptions to this dismal pattern. The awkward truth is that whisky and sex have proved much easier to export than constitutional government.

We could, of course, hold elections in Iraq, hand over power and go home. But elections do not produce democracy. Consider Russia, where Vladimir Putin was elected but rules like an autocrat. He has forced his political opponents out of office, weakened other branches of government and intimidated the once free media into near-total silence. And he’s one of the success stories. In Venezuela, the elected demagogue Hugo Chavez has turned himself into a dictator, running his rich country into the ground. Eighty percent of Venezuelans now live below the poverty line. In Africa, 42 of the continent’s 48 countries have held elections in the last decade, but almost none of them have produced genuine democracy.

What is called democracy in the West is really liberal democracy, a political system marked not only by free elections but also the rule of law, the separation of powers and basic human rights, including private property, free speech and religious tolerance. In the West, this tradition of liberty and law developed over centuries, long before democracy took hold. It was produced by a series of forces — the separation of church and state, the Renaissance, the Enlightenment, the Reformation, capitalism and the development of an independent middle class.

England and the United States were considered free societies 200 years ago — when under 5 percent of their populations voted. More recently, Hong Kong, for decades ruled as a «crown colony» by Britain, was one of the most economically and politically free societies in the world. Today democracy and liberty are intertwined in the Western political fabric, so we can’t imagine them as separate. But around much of the developing world they are coming apart. Democracy is flourishing, liberty is not.

It’s not that liberal democracy cannot spread outside the West. It has, and in far-flung places. But it is instructive to see where and why. Over the last decade those countries that moved farthest toward liberal democracy followed a version of the Western pattern: first capitalism and the rule of law, then democracy. In much of East Asia — South Korea, Taiwan, Thailand, Malaysia — a dominant ruling elite liberalized the economy and the legal system. Capitalism created a middle class that then pressured the government to open up the political system. It nurtured an independent civil society that has helped consolidate democracy. In Latin America, the most successful liberal democracy today is Chile, which followed a similar path under Gen. Augusto Pinochet. These dictators were not trying to create democracy. But in modernizing their countries they ended up doing so anyway.

Washington officials often say that American democracy is not necessarily the model for Iraq. Perhaps, but the central philosophy behind the American Constitution, a fear of concentrated power, is as relevant today as it was in 1789. «In framing a government,» wrote James Madison in Federalist No. 51, «you must first enable the government to control the governed; and in the next place oblige it to control itself.» Order, then liberty. In Iraq today, first establish a stable security environment and create the institutions of limited government — a constitution with a bill of rights, an independent judiciary, a sound central bank. Then and only then, move to full-fledged democracy.

Paddy Ashdown, the British politician who was appointed «czar» of Bosnia, admits that administrators there got the sequence wrong: «We thought that democracy was the highest priority, and we measured it by the number of elections we could organize. The result even years later is that the people of Bosnia have grown weary of voting. In addition, the focus on elections slowed our efforts to tackle organized crime and corruption, which have jeopardized quality of life and scared off foreign investment.» «In hindsight,» he wrote, «we should have put the establishment of the rule of law first, for everything else depends on it: a functioning economy, a free and fair political system, the development of civil society, public confidence in police and the courts.»

Part Two

The Obstacles

Vice President Dick Cheney recently remarked that Iraq’s oil resources — the second largest in the world — will be a «significant advantage» when building democracy. This is a common refrain, echoed by many within and without the administration. Unfortunately, the opposite is closer to the truth. With the exception of Norway, virtually all the world’s oil states are dictatorships. This is not an accident. Oil — like other natural resources — does not help produce capitalism, civil society and thus democracy. It actually retards that process.

Countries with treasure in their soil don’t need to create the framework of laws and policies that produce economic growth and create a middle class. They simply drill into the ground for black gold. These «trust-fund states» don’t work for their wealth and thus don’t modernize — economically or politically. After all, easy money means a government doesn’t need to tax its people. That might sound like a good idea, but when a government takes money from its people, the people demand something in return. Like honesty, accountability, transparency — and eventually democracy.

This bargain, between taxation and representation, is at the heart of Western liberty. After all, that is why America broke away from Britain. It was being taxed but not represented in the British Parliament. The Saudi royal family offers its subjects a very different bargain: «We don’t ask much of you [in the form of taxes] and we don’t give you much [in the form of liberty].» It’s the inverse of the slogan that launched the American Revolution — no taxation without representation.

Far from limiting state power, oil actually strengthens it. There is always enough money for the army, the intelligence services and the secret police. Saudi Arabia, for example, spends 13 percent of its annual GDP on the military, four times America’s level. Oil also means that corruption infects every aspect of the society. Businessmen are valued not for what ideas they have or how hard they work, but for who they know. Oil states have a courtier culture, not a commercial culture.

No Iraqi will read this analysis and come to the conclusion that the country should seal up its oil wells and forswear its natural resources — nor should he. But it is worth asking how best to limit the damaging political and economic effects of oil wealth. It is not an impossible task. After all, some trust-fund kids turn out well.

The key is to take the wealth out of the arbitrary control of the state. This could mean privatizing the oil industry. But in Iraq, the oil is largely in the Shiite, Kurdish and Turkoman areas, which could trigger ethnic conflict (as happened in Nigeria). Privatization would also probably enrich a few well-connected Iraqis and create corrupt oligarchs, as happened in Russia. So it might also be worth looking at the structure of the few well-run state petroleum companies — Malaysia’s Petronas, for example — as models.

But perhaps the best approach is to create a national trust — with transparent and internationally monitored accounting — into which all oil revenues flow. These revenues could be spent only in specified ways: on, for example, health care and education. The World Bank has been experimenting on such a model with Chad, the tiny oil-rich African state. Alaska is another successful version of this model. Steven Clemons of the New America Foundation points out that Alaska distributes its oil revenues directly to its residents, bypassing the corruption usually created by leaving it in the hands of governments or oligarchs. This is a variation of land reform, redistributing wealth broadly, which was crucial in spurring democracy in Japan and almost all other feudal societies.

The second great obstacle to Iraqi democracy is also one of its great strengths — its ethnic and religious diversity. The two dramatic and successful transitions to democracy in recent memory are Germany and Japan, which became reasonably mature democracies within a decade of World War II. Both were advanced, industrializing countries, but more important, both were ethnically homogenous. Iraq is riven with ethnic and religious differences. Its 25 million people are made up of Kurds (15 to 20 percent), Sunni Arabs (15 to 20 percent), Shiite Arabs (60 percent), plus Turkomans, Assyrians and other Christians.

Meanwhile religious, tribal and ethnic divisions have been growing sharper in Iraq in recent years. For much of the past half century, Iraqis saw themselves as Iraqis first and then Shiites or Sunnis. The Baath Party, with its socialist leanings, downplayed religion, tribe and ethnicity, teaching that these were signs of backwardness. But over the past 10 years, Saddam Hussein has encouraged religious and tribal loyalties. Saddam, the secular leader, became Saddam, the builder of mosques and the convener of tribal gatherings. Dancing at these events, he would shoot a rifle in the air in true tribal spirit.

In part, this was Saddam’s crude attempt to gain legitimacy. But it also reflects a general rise of identity politics in the Arab world. The failure of regimes like Saddam’s — originally Western styled, socialist, secular — has led people to see Islam as their salvation and to seek comfort in their tribal and ethnic backgrounds. Young democracies have a very poor record of handling ethnic and religious conflict. The most dramatic example is, of course, the former Yugoslavia, where the end of communism opened up a raw contest for power. Early elections fueled the rise of Serbian and Croatian nationalism, and a subsequent orgy of ethnic cleansing and war. During the 1990s, many observers watched what was happening in the Balkans with puzzlement. Weren’t the forces of democracy also the forces of ethnic harmony and tolerance? Actually, no.

Elections require that politicians compete for votes. In societies without strong traditions of tolerance and multiethnic groups, the easiest way to get support is by appealing to people’s most basic affiliations — racial, religious, ethnic. Once one group wins, it usually excludes the other from power. The opposition becomes extreme, sometimes violent. This does not have to happen, but it often does. Even in India, a reasonably mature democracy, Hindu fundamentalists have pursued an extreme form of nationalism that terrorizes the country’s Muslim minority — and greatly appeals to hard-core Hindu voters. Last year in Gujarat, a regional government run by the fundamentalists allowed the police to assist in the massacre and ethnic cleansing of thousands of Muslims. The result: the ruling party won a resounding victory in the polls.

Diversity, properly handled, can be a great source of strength in Iraq. But power will have to be divided, shared and checked. The constitution of a new Iraq should create a federal state, with substantial local autonomy. The regions should not be all ethnically or religiously based. The electoral system should not create a «winner take all» system, in which a party that wins 51 percent of the vote gets all the political power. Let the losers share in the spoils. Have both a head of state (a president) and a head of government (a prime minister), another way to give some representation to various communities. So a Shiite prime minister could govern while a Kurdish president would be the titular head of state.

While all these processes are underway, while democracy is being built in Iraq, someone is going to have to govern the country. In the short term, that will inevitably be the United States of America.

Part Three

The Opportunity

There is no greater necessity for men who live in communities than that they be governed,» the columnist Walter Lippmann once observed, «self-governed if possible, well governed if they are fortunate, but in any event, governed.» In Iraq, only the American and British forces can govern in the short term. Washington has announced that it intends to form, at the earliest possible date, an Interim Iraqi Authority. It’s an important step to include Iraqis as early as possible in the new regime. If all goes well, the Bush administration seems to believe that it can very quickly rebuild Iraqi infrastructure, get basic services operating and transfer power to this authority. Within months, perhaps a year, America will hand over power to the Iraqis, demonstrating that this is truly a liberation, not an occupation.

This scenario, however, is unlikely to play out. Virtually everywhere the United States has intervened — Bosnia, Kosovo, Afghanistan — military forces have had to stay far longer than anyone expected. In Afghanistan, the administration thought it could establish order quickly and cheaply. It has had to reverse course — perhaps too late. It will have to do the same in Iraq.

First there is the need for law and order. But there is also the reality of power struggles. As leaders emerge and are selected, others will be excluded. They may not accept this fate quietly. As the rivalries, feuds, score-settling and political jostling begins, the country will stay peaceful only if an undisputed authority keeps the peace. Little noticed in recent years, the Kurds have created some genuine democracy in the north, but the region was sheltered by American air power.

The next few years are crucial, because it is during this same period that a constitution must be written, power sharing must begin, courts must be established and important policy decisions about oil and rebuilding must be taken. The United States will have to get involved in these decisions to ensure that they are not hijacked by one group or another in Iraq. Until a legitimate Iraqi government has been formed — until national elections — the United States will play the role of honest broker among the various factions.

And yet this is going to be called colonialism. The Iraqis who feel excluded from the new regime will level that charge instantly. Others in the Arab world who are threatened by the changes in Iraq will want Iraq to slip back into «normalcy» — which is to say dictatorship. The Saudi foreign minister called last week for an end to the «occupation» of Iraq — before Baghdad had even fallen into American hands. This then is the paradox: to build democracy in Iraq the United States must stay on, but to demonstrate that it is not a colonial power it must leave.

The solution lies in involving other countries in this process. To the extent that the United States can make the assistance to Iraq multilateral, all the better. Of course, someone has to be in charge, and that will be the United States. But Washington should make every effort to have the United Nations bless this process, to get the European Union and Japan to help fund and administer it, and to get the Coalition forces to be involved as peacekeepers. This will take some of the economic and military burden off the United States, a burden that is likely to be larger and longer than anyone currently estimates. In the eyes of Iraqis, the involvement of outsiders will be seen as international assistance, not American occupation.

There are many models of transitional government. The United Nations runs Kosovo, but Bosnia is governed through a specially created multilateral body. The goal is not to empower any one international organization but to create legitimacy — legitimacy for the outside forces but also for the participating Iraqis. One of the dangers of an exclusively American occupation is that the Interim Iraqi Authority will be seen as an American puppet. The greatest modernizer of the Middle East, Turkey’s Kemal Ataturk, was able to revolutionize his country in large part because he had unimpeachable credentials as a nationalist. He fought the Western powers even while he Westernized his country. It is impossible to know who will rule Iraq, but no one can doubt that it will be someone who can appeal to Iraqi nationalism.

For America, the stakes in Iraq are very high. If Iraq becomes a successful, modern, liberal country, it will have ripple effects throughout the Middle East. Just as the success of Japan inspired other Asian countries to develop, so Iraq might unsettle the stagnant order of the Middle East. It will not solve all the problems of the region. (The road to Jerusalem runs through Palestine and Israel, not Baghdad.) But it will address the most crucial one—the region’s political dysfunction.

In a broader sense, how America handles Iraq will have a bearing on how the world perceives the United States. If we use this moment of victory and power to reach out and include others, it will demonstrate that we have not just great power but also generosity of spirit. Naturally, those who supported the military intervention should be given special attention. But a place can be found even for those who didn’t (with the possible exception of Mr. Chirac’s government. Even multilateralism has its limits).

The challenge is not as arduous as it might seem. We are not really nation-building in Iraq. Iraq is already a nation. It is not even a failed state. It is a failed political system, which needs to be transformed. In doing so, America and others in the international community can help. But ultimately it is Iraqis who will build a new Iraq. The single most important strength a society can have is a committed, reformist elite. That has been at the heart of the success of Central Europe, weathering through all its ups and downs. When Michel Camdessus, former head of the IMF, is asked why Botswana, a diamond-rich African country, has done well, while most diamond states have not, his answer is, «Three words: three honest men.» Botswana has had three honest and competent presidents.

There is no magic formula to create such statesmen, but Iraq has a significant advantage — the memory of Saddam Hussein. Just as the backdrop of communism spurred Central Europeans to reform, so Iraq’s long nightmare might well make its leaders determined to break with the past. National trials, memoirs, truth and reconciliation commissions, oral histories — all will help maintain and recover that memory. No matter what problems they face, most Iraqis will surely try hard to ensure that their country never again enters the abyss it has been in for three decades.

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