Best practice risk management for RI banks

Best practice risk management for RI banks

Anthony Brent Elam
Managing Director
Bank Central Asia
Jakarta

2. Power -- Can we avoid an Iranian bomb?
2 x 21

Europe, U.S. must rethink
their strident stand on Iran
nb: "waived" and "waiving" should be "waved" and "waving". See
bolding below

Jonathan Power
Columnist
Istanbul

No country prevaricates so much unless it has something to
hide. The more the Iranians dodge and weave the clearer it
becomes that an important faction in its divided ruling class
wants to keep open the option to build a nuclear weapon. Yet at
the same time it is also apparent that another powerful faction
regards this as a mistaken policy that will set back all the
enormous effort that has gone into mending fences with both
Europe and America.

It takes no great effort to understand that Iran has reasons
for wanting nuclear weapons. Not least because Israel has them.
It is not so much that Iran believes it could engage in nuclear
brinkmanship to force Israel out of Palestine. Nor does it
believe it could use its own nuclear armory to neutralize
Israel's and then seek to engage it with conventional forces.

All these would be too risky strategies. It is more a simple
question of international standing. It is to be able to claim
that it is the one who most faithfully supports Palestinian
Muslims. It is the one that dares goes nose to nose, at least
theatrically, with the regional "bully" Israel.

Then there is Iraq. If Iraq had nuclear weapons during its war
with Iran, 1980-1988, it may well have used them. After all it
did use chemical weapons and at the time hardly anybody
protested.

The arguments against further proliferation are immensely
strong yet there has always been something unpersuasive in the
stick being waived should be "waved" by an America that continues
to develop the sophistication, if not the numbers, of its immense
nuclear arsenal. Moreover, it is joined in its Iranian quest by a
Europe which has two nuclear weapons states, both of which have
great intellectual difficulty in explaining why in a post Cold
War world they hang on to their armories.

Over the decades western policy towards proliferators has been
ambivalent, indecisive and inconsistent, none more so than
towards Pakistan whose nuclear weapons arsenal is now accepted
(as long as the government keeps it out of the hands of Taliban
sympathizers). But in April, 1979, the attitude in Washington was
almost as harsh as it now is towards Iran.

The Carter administration, convinced that Pakistan was
secretly building a nuclear weapon, suspended military aid in a
move mandated by Congress's Symington amendment. However, when
Soviet troops invaded Afghanistan in December of that year, the
Administration persuaded Congress to overrule the amendment and a
large arms aid program was started up again.

For the next decade, in return for Pakistan's help in building
up the anti-Soviet mujahidin fighters in Afghanistan, who later
went to work for Osama bin Laden, Washington turned a blind eye
to Pakistan's nuclear bomb efforts. Only in 1990 with the Soviets
driven out of Afghanistan did President George Bush senior decide
to cut off military assistance.

Once again this was reversed under his son, President George
W. Bush, as America wooed Pakistan for help in defeating the
Taliban and hunting down Al Qaeda members. Not only is the bomb
tolerated, not much fuss was made last year when the U.S.
discovered that Pakistan was acquiring missiles from North Korea.

Likewise, Washington's long refusal to acknowledge what it
knew since the early 1960s about Israel's secret nuclear reactor
and weapons plant in the Negev desert has cost it dear. Israel
with the U.S. behind it has never lacked an adequate conventional
defense. Its nuclear weapons program has been as much an
unnecessary provocation as its settlements policy.

Credibility and consistency are necessary and important allies
in the war against nuclear proliferation. But the same solemn
international agreement that the U.S. and Europe are now waiving
should be "waving" at Iran, the Nuclear Non-Proliferation Treaty,
is the very one in which the nuclear-haves solemnly promised to
make rapid progress in getting rid of their nuclear weapons in
return for most of the rest of world remaining signatories. All
this dissembling and double talking lowers the bargaining
strength of the West at this critical moment.

Yet the last thing the world needs is an Iranian bomb or Iran
to be within a screwdriver turn of having one. One more
accidental launch or opportunity for nuclear theft waiting to
happen have to be avoided.

The U.S. and Europe need to rethink their increasingly
strident stand. Offer Iran all the civilian nuclear cooperation
it can swallow in return for open books and regular intrusive
inspections. Offer to end all political and economic estrangement
(a policy turnaround long overdue). And, not least, set a better
example in their own nuclear disarmament programs. There is no
good reason why if the West played its cards well it couldn't
help Iran become another Turkey, democratic, pro Western,
militarily strong if it so wants, but bomb free.

3. Pro -- Just say no to Bush
1 X 48

Just say 'no' to Bush on his unilateralist agenda
see correction (bolded in white below)

Joseph E. Stiglitz
Professor of Economics
Columbia University
Project Syndicate

For three years, America's president has pursued a
unilateralist agenda, ignoring all evidence that contradicts his
positions, and putting aside basic and longstanding American
principles.

Take global warming. Here Bush is conspicuously absent without
leave (AWOL in military jargon). Time and again, he questions the
scientific evidence. (Of course, Bush's academic credentials were
never very impressive.) Bush's position is more than wrong; it is
an embarrassment.

Indeed, when asked by Bush to look into the matter, America's
National Academy of Sciences came to a resounding verdict (the
only one they could honestly reach) that greenhouse gases are a
menace. But America's automakers love their gas-guzzlers, and
Bush's oil industry pals want no interference with their
destruction of the planet's atmosphere. So no change in policy.

In Iraq, Bush again pursued a unilateralist agenda, saying
that there was incontrovertible evidence of a link with al-Qaeda,
and that Saddam had weapons of mass destruction. Even before the
invasion, there was overwhelming evidence that Bush was lying.
Detection technology made it clear that Iraq did not have nuclear
weapons, as chief UN inspector Hans Blix pointed out. It's
possible that Bush read those reports, but that they were beyond
his comprehension. It is also possible that he did not believe
what he read. Whatever the case, American policy was not based on
evidence.

Since the Cold War's end, America is the world's sole
superpower. Yet it has failed to exercise the kind of leadership
needed to create a new world order based on principles like
fairness. Europe and the rest of the world are aware of this; but
they don't vote in American elections. Even so, the rest of the
world is not powerless. Instead, the rest of the world should
just say no.

America has not won the hearts and minds of those in Iraq;
indeed, it has lost them, just as it has lost the hearts and
minds of much of the world. The U.S. wants to retain control of
the occupation, but it wants others to receive the bullets now
mowing down American soldiers. UN soldiers should not bear the
consequence of America's failure to manage the occupation, so
U.S. cries for financial help should fall on deaf ears.

What sympathy does the U.S. agenda deserve, when President
Bush has ladled out tax cuts of hundreds of billions of dollars
to the richest people in the world. It was not long ago that a
Republican Congress held up US$1 billion of UN dues, and
threatened that it would only pay what it owed if the UN
satisfied a raft of conditions. America's unwillingness to
provide small sums to wage peace contrasts sharply with the huge
amounts Congress quickly granted to wage war.

Advocates of a softer approach say that if the UN stays on the
sidelines, it will become irrelevant; by participating in Iraq,
it will build trust with America, so that the next time a dispute
such as this arises, America will turn earlier to the UN.
Nonsense. Those in the White House today believe in realpolitik.
They don't believe in loyalty or trust.

If history matters, it matters most significantly in this:
Those who have shown that they can be pushed around will be
pushed around again. If there is a next time, the U.S. will make
its judgments on what is in its best interests, regardless of
what the UN does.

I normally write about economics, not politics. But in the new
world of globalization, there is greater economic
interdependence, which requires more collective action, rules and
institutions, and an international rule of law. Economic
globalization has, however, outpaced political globalization; the
processes for decision making are far from democratic, or even
transparent. In no small measure, the failures of globalization
can be traced to the same mindset that led to the failures in
Iraq: Multilateral institutions must serve not just one country's
interest, but all countries'.

At the recent World Trade Organization (WTO) meeting in
Cancun, the developing countries put America -- and Europe -- on
notice that this system can no longer continue. In that case,
Europe was as much the culprit as America. Europe has no trouble
seeing the dangers of unilateralism in America's actions, in
everything from abandoning Kyoto to its refusal to join the
International Criminal Court.

But Europe should also reflect on its own practices, including
trade policy, where the EU works systematically to unbalance the
global trade regime against developing countries, despite
promising that those imbalances would be corrected in the current
round of trade negotiations.

Here, Europe acts like America, which has long talked the
rhetoric of free trade, while its actions have long ignored the
principles. Forget about America's rhetoric of upholding fairness
and justice; in trade negotiations, the U.S. ignores the pleas of
the poorest countries of the world to eliminate the cotton
subsidies that have had so devastating an effect on them.

If we are to make the world politically more secure and
economically more stable and prosperous, political globalization
will have to catch up with economic globalization. Principles of
democracy, social justice, social solidarity, and the rule of law
need to be extended beyond national boundaries. Europe and the
rest of the world will have to do their part--abiding by these
principles themselves, and giving each other, and America, a
shove in the right direction. Right now, this entails "Just
Saying No" to President Bush.