Policy Analysis
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This seminar is part of SPRIE's Fall 2003 series on "High-Tech Regions and the Globalization of Value Chains."

Over the past two decades, the physical products that we consume have increasingly been manufactured offshore. More recently, some business and consumer services have started moving overseas. India is an important destination for such work, as it has low labor costs, good remote process management skills, and adequate infrastructure. The talk will report on a recent visit to India in which about fifty business process outsourcing firms were interviewed. The work is part of a research project funded by the Sloan Foundation on understanding the impact of the globalization of business processes on the U.S. economy.

Martin Kenney is a professor in the Department of Human and Community Development at the University of California, Davis and a senior project director at the Berkeley Roundtable on the International Economy at the University of California, Berkeley. His research includes the role and history of the venture capital industry and the development of Silicon Valley. Kenney's recent books include Understanding Silicon Valley: Anatomy of an Entrepreneurial Region (2000) and Locating Global Advantage (forthcoming). He has consulted for various governments, companies, the United Nations, and the World Bank. He has been a visiting professor at Cambridge University, Copenhagen Business School, Hitotsubashi University, Kobe University, Osaka City University, and the University of Tokyo. He holds a B.A. and M.A. from San Diego State University and a Ph.D. from Cornell University.

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No longer in residence.

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R_Dossani_headshot.jpg PhD

Rafiq Dossani was a senior research scholar at Stanford University's Shorenstein Asia-Pacific Research Center (Shorenstein APARC) and erstwhile director of the Stanford Center for South Asia. His research interests include South Asian security, government, higher education, technology, and business.  

Dossani’s most recent book is Knowledge Perspectives of New Product Development, co-edited with D. Assimakopoulos and E. Carayannis, published in 2011 by Springer. His earlier books include Does South Asia Exist?, published in 2010 by Shorenstein APARC; India Arriving, published in 2007 by AMACOM Books/American Management Association (reprinted in India in 2008 by McGraw-Hill, and in China in 2009 by Oriental Publishing House); Prospects for Peace in South Asia, co-edited with Henry Rowen, published in 2005 by Stanford University Press; and Telecommunications Reform in India, published in 2002 by Greenwood Press. One book is under preparation: Higher Education in the BRIC Countries, co-authored with Martin Carnoy and others, to be published in 2012.

Dossani currently chairs FOCUS USA, a non-profit organization that supports emergency relief in the developing world. Between 2004 and 2010, he was a trustee of Hidden Villa, a non-profit educational organization in the Bay Area. He also serves on the board of the Industry Studies Association, and is chair of the Industry Studies Association Annual Conference for 2010–12.

Earlier, Dossani worked for the Robert Fleming Investment Banking group, first as CEO of its India operations and later as head of its San Francisco operations. He also previously served as the chairman and CEO of a stockbroking firm on the OTCEI stock exchange in India, as the deputy editor of Business India Weekly, and as a professor of finance at Pennsylvania State University.

Dossani holds a BA in economics from St. Stephen's College, New Delhi, India; an MBA from the Indian Institute of Management, Calcutta, India; and a PhD in finance from Northwestern University.

Senior Research Scholar
Executive Director, South Asia Initiative
Rafiq Dossani
Martin Kenney Professor University of California, Davis
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Donald K. Emmerson
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August was a bloody month. There was barely time to mourn between the exploding bombs: first at the Marriott hotel in Jakarta on Aug. 5, at U.N. headquarters in Baghdad and on a bus in Jerusalem on Aug. 19, then the two in Bombay on Monday. These were the latest sites in a chronology of carnage running from Casablanca through Riyadh and Bali to Manhattan's crumbling towers.

Each atrocity involved local actors and local motives. Each was perceived differently by the local populace, and the local repercussions of each terrorist act varied widely. Yet all were attributed to a single global menace: jihad. For three years now, acts of violence done in Allah's name have made terrorism and Islam almost synonymous, not just in Westerners' vocabularies but around the world.

From this blight, who will rescue Islam?

The nearly reflexive association of Islam and terrorism is not simply the creation of rush-to-judgment pundits and politicians. Not when the terrorists proudly proclaim religious inspiration for their acts. Both Jerry Falwell and Osama bin Laden have maligned Islam. But it is, above all, the jihadists who have distilled their faith to sacred hatred - of Americans, Christians, Jews and the millions upon millions of moderate or secular Muslims who disdain this perversion from within.

Muslims respond in different ways to Islamist violence. In Jakarta a few days after 11 Indonesians and a Dutchman were killed in the blast at the Marriott, I met up with two Muslim friends. They were brimming with conspiracy theories. Why, they asked, had 20 Americans reportedly canceled their reservations before the bomb went off? Could these no-shows have known in advance of the attack? Why was the severed head of the alleged perpetrator later found on the hotel's fifth floor? Had the CIA planted it there? Why were arrests made so soon? Could the U.S., or perhaps the Indonesian military, have staged the event?

Behind their questions lay an unspoken one: How could Muslims have done such a thing?

It would be convenient if my two friends despised Americans and were products of Islamist schools. But both men hold advanced degrees from top universities in the U.S. and exhibit no obvious animosity toward Americans. That two such people could give voice to such dark misgivings about U.S. intentions shows that Islam is not alone in its association with violence.

The flip side of denial is demonization. For some in the West, the enemy is not jihadists but all Islamists. Never mind that the vast majority of Muslims who promote their faith do so peacefully. The PowerPoint charts of counter-terrorism experts that ignore Muslim diversity and feature the evil genius Bin Laden reinforce a distorted, top-down view of Islam.

Al Qaeda's responsibility is all too real. But local context matters. For jihad to succeed, an outside agitator needs inside sympathizers, and their receptivity to recruitment will depend on local circumstances. Recognizing that Muslim societies are autonomous and heterogeneous is a necessary first step to realizing that Bin Laden and his version of Islam aren't absolute control.

Defenders of Islam in the West stress the fact that most of its billion-plus adherents are moderates who reject violence. Such reassurance is far preferable to demonization. But understanding is not served by exaggerations - that Islam or Muslims are always peaceful, or that jihadists entirely lack sympathy in the Muslim world. In Muslim communities, extremist and mainstream views intersect in many places, including schools, mosques and organizations. It is in these myriad local settings that Islam's connection to violence will or won't be broken.

Regrettably, reassurance sometimes lapses into denial. In Indonesia recently, several leading Muslim figures urged journalists to stop using the words "Islam" and "Muslim" in their coverage of the Marriott bombing. I've even heard Muslims object to the phrase "moderate Muslims" because it implies the existence of immoderate ones. Islam will never be rescued by language inspectors who would substitute deflection for introspection.

Can reform rescue Islam? In principle, yes, but in practice, not necessarily. There are at least a few individuals and groups in every Muslim society striving to make the practice of their faith more tolerant of difference and dissent, less restrictive toward women, more compatible with secular democracy and less preoccupied with imposing Islamic law. Liberal American observers tend to celebrate these reformers as rescuers of Islam.

Yet the sheer diversity of Muslim societies suggests that efforts to liberalize Islamic doctrine will face varying prospects of success. Before assuming that liberals and jihadists have nothing in common, one should remember that both advocate far-reaching changes that threaten the conservative views and habits of many mainstream Muslims. Reformers deserve American support. But preventing the status quo from getting worse may be a more realistic goal of such help than winning "hearts and minds" for humanism, let alone making the Muslim world look as secular and democratic as, say, Turkey.

Is America responsible for Islam's predicament? Some U.S. actions have fueled jihad. The American presence in Iraq could become a magnet for holy warriors comparable to the Soviet occupation of Afghanistan. Muslims pressed by Washington to oppose the hijacking of Islam by jihadists may instead decry the hijacking of U.S. foreign policy by hard- liners around President Bush.

But jihadists were fighting enemies long before the United States was born. The drive to create Islamist states is more than an attempt to check American hegemony. Different U.S. policies might shrink Muslim hostility toward U.S. actions. But intransigent theocrats will not be assuaged by the compromises necessary to resolve the Israeli- Palestinian conflict. Nor will either the failure or success of U.S.-led reconstruction of Iraq remove the reasons for Islamist violence in other Muslim societies.

Also shaky is the notion that "they hate us for our values." The democracy Americans espouse remains popular in the Muslim world. American notions of equal treatment for women are less welcome. But a woman's opportunities vary among Muslim-majority countries, including those in Asia that preceded the U.S. in having female heads of state.

Americans are disproportionally responsible for a modern world most Muslims feel they never made. Extremists have used such alienation to justify jihad. But it is not up to Americans to rescue Islam.

Non-Muslims can avoid unnecessary provocations and false reassurances. They can facilitate liberal reform. But it is Muslims, acting in diverse local circumstances, who will or won't break the cycle of jihadist demonization and naive denial that is ruining the image of their religion. Whether to rescue their faith is a choice only they can make.

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On the eve of accession to the World Trade Organization (WTO), with the aid of border policies, China was the second largest corn exporter in the world. During the time prior to accession, China's corn prices were estimated to be more than 30 percent above world market prices (Huang, Rozelle and Chang, 2003). China's government explicitly admitted to providing subsidies for corn exports of up to $US35 per metric, which accounted for almost all of the protection that corn producers in China were receiving. During the late 1990s and through 2001, with such high subsidies the nation's exporters were able to sell around 5 million metric tons (mmts) annually into world markets (Gale, 2003). Most of the shipments, especially in the 2000 and 2001, were sent to Korea and Malaysia. With such large shipments, the exports of other nations in the world (especially those from the US that traditionally was Korea's main supplier of feed grains) were displaced.

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US Grains Council
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Scott Rozelle
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The most important policy measures are those that improve the quality of rural Chinas human and physical resources and infrastructure that will provide the skills and abilities to rural residents that seek to integrate themselves into the nations industrializing and commercializing cities. Successful development policy, however, must also recognize that modernization is a long process that will depend on maintaining a healthy agriculture and rural economy.

While a rural development plan has many components, we restrict our attention to three broad issues: (a) the nature of Chinas new economic landscape and measures to enhance it; (b) changes that are needed to improve rural government and its partnerships with the rural population; and (c) reforms and investments that can improve Chinas resources: labor, land, capital, water, forests and the environment of the poor.

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World Bank Policy Note
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Scott Rozelle
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Is unipolarity--American primacy--good or bad for the world? For Southeast Asia? For Indonesia? How dangerous or constructive is the Bush doctrine of preemption? Should the U.S. try to spread democracy abroad? If not, why not? If so, why and how--by example, persuasion, force? Has the war in Iraq squandered American "soft power"? How has that conflict affected the campaign against terrorism in Southeast Asia? Has the U.S. been ignoring the Association of Southeast Asian Nations (ASEAN)? Or has ASEAN become so irrelevant that it deserves to be ignored? In the run-up to Indonesia's presidential election in April 2004, should the U.S. support the incumbent, Megawati Sukarnoputri? Or would that only strengthen her Islamist opponents by enabling them to portray her as an American pawn? What grade does the Bush administration's policy toward North Korea deserve? These are among the questions to be addressed in a wide-ranging evaluation of what the United States is doing, should be doing, and should not be doing in Asia.

Jusuf Wanandi has long been Indonesia's best-known analyst of Southeast Asian regionalism and the politics and foreign policies of Indonesia and the United States. He holds leadership positions in the Council for Security Cooperation in the Asia Pacific, the Pacific Economic Cooperation Council, the Prasetiya Mulya Graduate School of Management in Jakarta, and the Foundation of Panca Bhakti University in Pontianak (West Kalimantan). He heads the company that publishes Indonesia's leading English-language daily, The Jakarta Post. He co-founded Indonesia's most successful foreign-affairs think tank, the Centre for Strategic and International Studies. He has co-authored or co-edited more than a dozen books, including Europe and the Asia Pacific (1998), Security Cooperation in the Asia-Pacific Region (1993), and Asia and the Major Powers (1988).

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Jusuf Wanandi Senior Fellow Speaker Centre for Strategic and International Studies, Jakarta
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Does the World Trade Organization promote democracy? A large part of the heated and pro-tracted debate over China?s application for WTO membership revolved around this question. Prior to China?s WTO accession in December 2001, this debate had dragged on for nearly fifteen years. While one side argued that WTO membership would promote democratization in China, others argued that the wealth generated through economic integration would provide the resources to maintain authoritarian rule. Only time will tell whether WTO accession will contribute to pressures for democratization in China. In the meantime, however, this paper examines the empirical basis for these competing claims about the effects of GATT/WTO memberships on domestic political systems. Based on statistical analysis of a global data set, this paper concludes that members of the international trade regime are more likely than nonmembers to be democracies. However, there is little evidence that WTO membership in itself can promote democratic transition. Instead, it appears to be the case that democratic countries are more likely to seek to join the WTO.

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Shorenstein APARC
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Does the World Trade Organization promote democracy? A large part of the heated and pro-tracted debate over China's application for WTO membership revolved around this question. Prior to China's WTO accession in December 2001, this debate had dragged on for nearly fifteen years. While one side argued that WTO membership would promote democratization in China, others argued that the wealth generated through economic integration would provide the resources to maintain authoritarian rule. Only time will tell whether WTO accession will contribute to pressures for democratization in China. In the meantime, however, this paper examines the empirical basis for these competing claims about the effects of GATT/WTO memberships on domestic political systems. Based on statistical analysis of a global data set, this paper concludes that members of the international trade regime are more likely than nonmembers to be democracies. However, there is little evidence that WTO membership in itself can promote democratic transition. Instead, it appears to be the case that democratic countries are more likely to seek to join the WTO.

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North Korea's renewed bid for nuclear weapons poses an urgent, serious foreign policy challenge to the United States. The current situation -- though it bears a resemblance to the events of 1993-1994 -- is far more dangerous and difficult. North Korea has developed longer-range ballistic missiles; South Korea's growing nationalism has put its U.S. relations on shakier ground; and the United States is distracted by the wars on terrorism and for regime change in Iraq.

Despite these challenges, good prospects still exist for a diplomatic resolution to the North Korea problem. North Korea's dire economic circumstances have made it more vulnerable to outside pressure at a time when its neighbor nations and the United States are increasingly concerned about its nuclear ambition. Military means would not only exact huge human casualties but also deepen U.S. estrangement from Seoul and diminish prospects for developing a joint strategy with other Asian powers.

Given the urgency and complexity of the current situation, appointment of a special coordinator for North Korean policy could help the administration to formulate a unified policy, sell it to Congress, coordinate it with allies, and present it to Pyongyang. In any event, a key requirement will be real "give and take" negotiations with South Korea to arrive at a coordinated strategy.

In the end, Pyongyang must choose: economic assistance and security assurance on the condition that all nuclear activities be abandoned, or dire consequences if nuclear programs continue. Any new agreement, however, must avoid the deficiencies of the 1994 Agreed Framework. It must be more verifiable, less readily reversible, more comprehensive, more politically defensible, and more enforceable through the involvement of North Korea's neighbors.

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Shorenstein APARC
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Michael H. Armacost
Daniel I. Okimoto
Gi-Wook Shin
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C. Richard D'Amato is the vice chairman of the U.S.-China Security Review Commission, a commission established by Congress to review the national security implications of U.S. trade relations with China. Formerly a delegate to the General Assembly of the State of Maryland, he is the president of a consulting firm that represents American corporations on strategic planning and international trade matters. He is also a retired captain in the United States Navy Reserve, a position that brought him a variety of assignments, including attache duty at the U.S. embassy in Beijing, China, on proliferation issues and military-to-military initiatives in March 1997; service in the Battle Group Command Staff of the USS Eisenhower in the Red Sea during Operation Desert Shield; serving as an operations officer directing air drops into Bosnia and Sarajevo; and service on the planning staff of the newly created Asia-Pacific Center, which is a conference and study center under the commander of U.S. Forces for the Pacific, in Honolulu, Hawaii. Recently, Mr. D'Amato served as a member of the U.S. Trade Deficit Review Commission, a congressionally created commission charged with studying the nature, causes and consequences of the United States merchandise trade and current account deficits.

For ten years, beginning in 1988, Mr. D'Amato was the Democratic counsel for the Committee on Appropriations of the United States Senate. He was responsible for coordinating and managing the annual appropriations bills and other legislation on policy and funding of U.S. international operations and programs, including trade and defense and the full range of foreign activities of the U.S. government.

Mr. D'Amato has also served as senior foreign policy counsel for Senator Robert C. Byrd. In this capacity, Mr. D'Amato drafted the resolution that set Senate standards for international global climate change treaty negotiations. He also worked on a wide array of issues affecting U.S. international economic and political interests, including U.S.-Japan auto trade talks; World Trade Organization review legislation; U.S. involvement and funding of operations in Bosnia, Somalia, and Rwanda; and burden-sharing agreements during the Gulf War. Between 1980 and 1987, Mr. D'Amato served as the policy director for the Majority Leader, Senator Robert C. Byrd, for political, economic, and security policies. In this position, Mr. D'Amato supervised all work on a number of important legislative initiatives, including the 1988 Omnibus Trade Bill and the "Super 301" provision. Mr. D'Amato also wrote key legislation dealing with U.S.-Japan economic relations. During his career on Capitol Hill, Mr. D'Amato also served as the co-director of the Senate Arms Control Observer Group.

Mr. D'Amato began his career first as the legislative director for Congressman James Jeffords (R-VT) between 1975 and 1978, and beginning in 1978, as the legislative assistant and then chief of staff for Senator Abraham Ribicoff (D-CT) until 1980.

Mr. D'Amato has been very active in other aspects of public service, including an appointment as an assistant professor of government for the United States Naval Academy between 1968 and 1971, during which he was assistant varsity basketball coach and the sailing coach. He was responsible for the creation of an annual scholarship with the YWCA for college bound African American women and was the chairman of a local charitable hunger relief action organization in 1996, 1997, and 1998, which was a part of the nationwide "Share Our Strength" organization, the most successful hunger relief effort in the United States. In addition, he is active in the boating community in Annapolis, where he and his wife, Dorothy, have lived for thirty years.

Mr. D'Amato received his B.A. from Cornell University in 1964, graduating cum laude in government. He serves now on the Board of Trustees' Council for Cornell University. Mr. D'Amato received his M.A. and M.A.L.D. from the Fletcher School of Law and Diplomacy in Boston in 1967, and received his J.D. from Georgetown University Law Center in 1980.

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The Honorable C. Richard D'Amato Vice Chairman U.S.-China Security Review Commission
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