Could an open source philosophy be the evolution of policy creation? Photo:Nan Palermo (Flickr)

Hey Germany, let’s have coffee. The simple act of sharing best policy practices could help resuscitate the global economy. So why aren’t we doing it?

The private sector commonly exchanges best practices to create more effective and efficient business models. The public sector could stand to learn a thing or two. Leaders and policymakers need to extend their hand across borders to learn from the success of countries beyond their trade routes.

For instance, the German labor market has not suffered nearly as much as the U.S. during the recession. Brookings Institute Fellow Elisabeth Jacobs provides an underlying reason: they take a long-term approach to labor policy by building (and budgeting) a sort of “what-if” scenario directly into their policy.

By weighing the cost of employee retention against layoffs, they opt to keep workers but trim hours. Once the local economy improves, they ramp up accordingly. Combined with short-term compensation, German companies can mitigate both salary and job loss. How might a similar model work in the United States, England, or Greece?

While not all policies could work seamlessly across hemispheres, many could lay the foundation for localized discussion. Once customized, implementation can begin. Think of it as open-source policy creation. Developing countries could benefit from such collaboration, with the reciprocal also true. Take innovations in Curitiba, Brazil. They created a recycling system that also addressed poverty by exchanging transit tickets for waste, serving as an incentive for citizens to clean up. Could a similar policy-driven incentive also work in urban centers in Sub-Saharan Africa or India?

The ideas are out there. We just need to find them. Instead of traditional foreign policy ambassadors that focus on trade, resources or aid, why not have an official collaborator that seeks to learn, share, and then implement best policy practices?

After all, what good is knowledge if you don’t do anything with it?

China's getting wealthier, but the U.S. still leads by a wide margin. Photo: Fab O Lens (flickr)

For most economists, it isn't a question of if China will surpass the U.S. in terms of GDP, it's when.

Goldman Sachs estimates China will take the lead by 2027 and Standard Chartered suggests it will happen as soon as 2020, according to a recent article from the Economist.

So what does China's rise mean for the United States? Two recent articles in Foreign Policy explores what has become conventional wisdom regarding China's growing economic and military power, and turns this wisdom on it's head.

There's no doubt China has become one of the world's great powers. But American's tendency to view China’s rise as symbolic of U.S. decline and a new world order is an incorrect and even dangerous fear, argues Foreign policy contributor and Tufts University professor Daniel W. Drezner in Foreign Policy.

Exaggerating Chinese power has consequences. Inside the Beltway, attitudes about American hegemony have shifted from complacency to panic. Fearful politicians representing scared voters have an incentive to scapegoat or lash out against a rising power — to the detriment of all.

According to a recent poll by the Pew Research Center, 44 percent of Americans believe China is already the world’s top economic power, compared to 27 percent who think it’s the U.S. “That perception is completely at odds with the facts," explains a recent article in the Washington Post.

And even if China's economy does overtake that of the United States, China still has massive infrastructure and poverty challenges, explains Harvard University's Joseph S. Nye in another Foreign Policy report.

Even if China's GDP passes U.S. GDP around 2027 (as Goldman Sachs now projects), the two economies would be equivalent in size, not equal in composition. China would still face massive rural poverty and enormous inequality, and it will begin to encounter demographic problems from the delayed effects of its one-child policy. Moreover, as countries develop, there is a natural tendency for growth rates to slow.

Then why do so many Americans think China is the world’s economic leader? Drezner argues Americans are looking at the wrong metrics – total GDP being one, currency reserves being another. China’s currency reserves are the largest in the world. People assume this gives China leverage over the U.S., and let’s them dictate terms. This just isn’t true, explains Drezner, “China needs American consumers at least as much as the United States needs China to buy its debt.”

Even though China and the U.S. may need each other, Nye worries American fear could get in the way of a mutually beneficial relationship between the two superpowers.

China and the United States also have much to gain from working together. Unfortunately, faulty projections that create hubris among some Chinese and unnecessary fear of decline among some Americans could make it difficult to ensure this future.

So, what does it mean for Americans if China surpasses the U.S. as the world’s largest economy? Given the arguments made in Foreign Policy, maybe the best response is to stop worrying about it. What do you think?

A U.S. soldier in Afghanistan gathers a soil sample as part of his work on an army agricultural development project. Photo: The U.S. Army (Flickr)

The U.S. army’s “surge” in Afghanistan marked a new focus on development in addition to an increase in the number of combat troops. Development has not typically been part of the military’s purview. Yet, this new approach has much to recommend, especially in a country with endemic poverty and an anemic economy. Promoting economic growth and providing aid tends to make military missions more successful, asserts foreign policy expert Reuben Brigety. Having realized the utility of pairing military and development endeavors, the U.S. army is undertaking a host of new projects. But, asks the Economist in a recent article, to what avail?

The Economist questions both the sustainability and the suitability of the projects the army is implementing. These projects include improving telecommunications infrastructure, teaching Afghan farmers how to boost yields, installing generators to provide electricity and establishing markets to encourage trade.

Few people dispute that these projects have the potential to lift Afghans out of poverty, but many doubt their long-term viability. The Economist argues that the generators are “clearly unaffordable for the cash-strapped government that must one day take charge of [them].” Karl W. Eikenberry, current U.S. Ambassador to Afghanistan, agrees. He writes,"[p]roposals to buy generators and diesel fuel for Kandahar would be expensive [and] unsustainable," according to the Washington Post.

So why is the army adamant about undertaking this project? According to a U.S military official at the NATO headquarters in Kandahar, "[t]his [project] is not about development — it's about counterinsurgency." Development, in this context, is a tool to win the hearts and the minds of the Afghan people. By providing goods and services the Taliban cannot deliver, the military hopes to marginalize the insurgency’s influence.

The army’s ulterior motive for promoting development, can produce poorly designed development programs, points out the Economist. A 60 million dollar telecommunications project is just one example of the potential pitfalls of putting the army in charge of development.

The army favors this project because it will provide an alternative to current networks which local Taliban strongmen control. The Taliban's control of telecommunications is a problem according to the military, as they often restrict or shut down access at night to prevent U.S. informants from reporting Taliban movements. But it's uncertain if the addition of another network will directly affect the locals’ security, health or economic well-being. This uncertainty is further called into question by the fact that there are already four other operational networks in the region. Still, the army views it as part and parcel of its development campaign, illustrating how easily the army’s strategic interests can derail its mission to promote development.

The military’s track record in Afghanistan suggests that bringing development and combat operations under the same roof will be trickier than anticipated. Though there is still time for the military’s projects to bear fruit, their lack of success thus far should not be taken lightly. The trend of subsuming development projects under military command is growing worldwide, according to expert testimony given to the U.S. Senate. If this strategy is as ineffectual as Afghanistan may suggest, then we should take note and revisit the practice.

In Pakistan, the wealthy can afford elaborate celebrations, though much of the country remains poor. Photo: Tela Chhe (flickr)

Pakistan’s economy is growing, but only the upper crust of society enjoy the gains.

Pakistan's economy has grown each year since 1951, despite severe drought, political instability, and the global recession. This economic success is apparent in the Times' description of high-rolling lifestyles in Islamabad.

Much of Pakistan’s capital city looks like a rich Los Angeles suburb. Shiny sport utility vehicles purr down gated driveways. Elegant multistory homes are tended by servants. Laundry is never hung out to dry.

But, while some are well-off, many still struggle to get by. Pakistan ranks in the bottom quarter of the Human Development Index in terms of quality of life. And more than 60 percent of Pakistan's population gets by on less than $2 a day, according to UNDP figures. Two professors from the Lahore University of Management Science argue that Pakistan's skewed tax system is a driver of poverty:

[T]he single most devastating factor for increased income and wealth inequalities in Pakistan remains the regressive tax system. Incidence of tax on the poor in the last 10 years has increased substantially (by about 35 per cent), while the rich are paying almost no direct tax on their colossal income and wealth.

The skewed tax system in Pakistan contributes to poverty by increasing income disparities and redirecting funds for social spending back in to the pockets of the rich, explains the New York Times. But only about 2.5 million out of an estimated 10 million who should be paying taxes actually cough up the money estimates Akbar Zaidi, a political economist with the Carnegie Endowment. As a result, Pakistan has had to apply for a $10.66 billion loan from the IMF.

All in all, the rich gain either because they don't have to pay into the system, or because, when they do, they reap the benefits. In an effort to get some of the lost tax dollars, local communities have adopted a creative strategy. They've started paying transvestites to rap on the doors of the wealthy and collect owed taxes. The New York Times captured these "tax collectors" all dolled up in heels and full make-up, but also swathed with the Islamic hajab in a recent video. Often the rich will pay up just to avoid having these "outcasts" linger.

But, this localized effort is really just a stop-gap measure until real reform is achieved. Many look to the U.S. as the necessary catalyst for change say watchdog groups, such as Probe International. The U.S. essentially subsidizes Pakistan’s economy by providing billions in foreign aid, giving the Pakistani government little incentive to reform the tax system. Thus, indirectly, U.S. aid inevitably hurts Pakistan's poor.

Many are fed up, such as Zaidi, the Times reports. Zaidi believes “[t]he Americans should say: ‘Enough. Sort it out yourselves. Get your house in order first. But you are cowards. You are afraid to take that chance,” he challenges.

There is a scene in the movie Jurassic Park where skeptical scientists are about to take their first ride through the dinosaur-inhabited theme park. Back in the control room, the park's skeptical chief engineer (played by Samuel L. Jackson) watches events unfold on a monitor, leans back in his chair and mutters under his breath, "Hold on to your butts."

A similar sentiment is expressed in five Foreign Policy essays by economists who correctly predicted the current global financial meltdown. They warn us that "The Worst is Yet to Come" (the title of the collection) and that we had better buckle up for a long, rough ride.

What can we expect? In the U.S., a recession for at least the next 24 months, maybe longer. This in turn will have a ripple effect that may drive the global economy into a downward spiral of recession that will be the worst in 75 years. Because of the complex interweaving of the global economy, the economists predict that no country will escape unscathed.

We are starting to see the effects of economic freefall here in the U.S. Normally, I receive maybe one unsolicited resume a month from educators fishing for an adjunct teaching position at Marylhurst University. But starting around Thanksgiving, I've been receiving on average, one inquiry a day. Even the students applying to the business degree programs, which usually include a small share of career-changers and right-sizers, has grown to include some pretty impressively credentialed professionals looking to reposition themselves for a changing and increasingly competitive job market.

So is there a light at the end of the tunnel? Even the experts can’t answer that with certainty. According to the five economists, it is going to take a complex, internationally coordinated, unorthodox approach. Needless to say, it is not going to be easy. David M. Smick, editor of The International Economy magazine and one of the five experts cited in the article, suggests that the potential solution lies in the untapped financial reserves being held in money market funds and other places. According to Smick, “It’s simply sitting on the sidelines, including $6 trillion in global money market funds alone.”

The world’s leaders, including one newly elected U.S. President, have a huge task ahead of them. If we reframe the challenge in a more positive light, we could call this a terrific opportunity to excel. We wish them Godspeed. In the meantime, hold on to your butts.

Archbishop Desmond Tutu sees hope for Africa with Obama's Presidency. Photo: Joshua Wanyama (flickr)

Since the beginning of the presidential election, President Obama has always had tremendous support from African nations because of his Kenyan roots. An interview done by the Atlantic Online with Nobel Peace Prize laureate and humanitarian Archbishop Desmond Tutu may help understand why Africans have rallied support for a candidate who may have similar heritage, but has never lived in their continent.

During your speech just now, you spoke elatedly about the upcoming Obama era. What special significance does his presidency have for Africans?

"We have a new spring in our walk. In Africa, we keep having to find things that say, “Yes, we can!” And his victory has said, “Yes, we can!”, even in Africa. We believe that he can make more accountable the leaders, especially in Africa. Because he can be rough with them in a way that Bush, or any other Caucasian, could not have been. They won’t be able to say, “Oh, no, this is neocolonialism,” when they’re referring to someone who is part Kenyan. So I hope he uses that particular clout.

The other side of it is that one hopes so very much that he will be able to make Africa be taken a little more seriously. And perhaps he will even increase aid to Africa, remembering his African roots. But it is so important that he couples that with saying, “We have zero tolerance for unaccountable government.”

Tutu also says that in Obama's dignity, patience and inclusiveness, he sees "the African in him." Read the full interview here.