WASHINGTON, April 23 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the second of two wrap-ups for April 22. Contents: Change in Guatemala; Syria and the Axis of Evil; Economy, taxes and jobs.
The Acton Institute
(The Acton Institute works to promote a free and virtuous society characterized by individual liberty and sustained by religious principles. Its goal is to help build prosperity and progress on a foundation of religious liberty, economic freedom, and personal moral responsibility.)
GRAND RAPIDS, Mich.-- Guatemala at the crossroads: the future of free market reforms
By Anthony B. Bradley
Interest in building a free and virtuous society is thriving in Central America, as evidenced by a series of March conferences held in Guatemala City. These conferences brought together some of the nation's most prominent religious, business, and political leaders.
The conferences, organized by the Instituto para la Productividad con Responsibilidad, or IPRES, the Instituto de Gobernanza, and El Shaddai Church, were designed to deal with a host of issues critical to the future of Guatemala's social and economic development. The rule of law, social contract, private property, limited government, the social responsibility of the church, private charity, and vocation are just a few examples of the topics covered. The mere fact that these events garnered such a diverse audience of participants, of differing religious traditions and professional backgrounds, is indicative of the widespread desire to free the wealth-generating potential of the market within a supportive moral culture.
Guatemala, a nation with a gross domestic product of around $20 billion, is still recovering from a brutal 36-year civil war -- a war that ended less than a decade ago. While the country is rich in natural resources, real GDP growth has been sluggish over the past several years, averaging around three percent annually. In 1998, GDP growth in Guatemala was 5.2 percent, up from 3.1 in 1996. By the end of 2002, estimated GDP growth was only about two percent.
Currently, corruption in the national government is the norm, drugs are trafficked freely throughout the country, and there is widespread poverty. As the largest economy in Central America, the economic and political situation of Guatemala affects the entire region.
Prior to the administration of the country's present leader, Guatemala underwent significant economic and political development. Under the leadership of President Alfonso Portillo, however, the country has experienced a sharp reversal of many of the pre-1999 free-market reforms. The Portillo Administration's enactment of higher taxes and its cavalier treatment of the rule of law have stymied the nation's economic development.
These conditions have brought about a renewed interest in the free-market reforms that characterized government policy in the 1990s. The March conferences in which I participated were designed to bring together some of Guatemala's "best and brightest" to discuss the future of free market reforms and, by extension, the very future of Guatemala itself. The fundamental conviction of all the sponsoring organizations is that the future of Guatemala lies not with a centralized federal structure dictating economic policy, but with the economic and moral components of a revitalized civil society working in concert for the economic development of Guatemala.
Rodrigo Callejas, an attorney from Guatemala City and one of the conference organizers, provides critical insight into the changes necessary to unlock the economic and political potential of Guatemala. Callejas notes that, for Guatemala to have continued economic growth, "a national dialogue has to be set in order for all sectors of Guatemalan society to agree upon a long-term national vision, based upon a stable legal framework, rule of law, a democratic government, and a socially-aware free market economic system."
However, like other countries in the region, the desired free-market culture needed for long-term, systemic change in Guatemala has been deterred by an overbearing and unwieldy federal structure. This structure has made Guatemala, especially in the perception of most investors, a very unfriendly place for business. Significant structural reforms are needed -- and needed immediately -- if Guatemala is to survive and be competitive in the international marketplace. Callejas is convinced that new growth will ensue when Guatemala's assets are capitalized and when there is "a single tributary scheme that will motivate investors and provide them with the stability for their investments."
Perhaps such a possibility looms more imminently than one imagines, since federal elections are scheduled for November 2003. The next generation of Guatemala's leaders, like Callejas, want to improve economic conditions by seeking "to take away the overwhelming power that the government actually has, and decentralize it to the civil society." A new vision for Guatemala is needed, continues Callejas, where " the government has to understand that its role is to serve ... and respond to the needs of entrepreneurs in a just and efficient way."
His is not a lone voice. Organizations such as IPRES explore and disseminate the dynamic relationship between ethics, social responsibility, and the institutions of the free-market. A fundamental principle of The Instituto de Gobernanza is to promote the principles of limited government and respect for the autonomy of civil society.
What is going on in Guatemala? There is a sense among this new generation of leaders that the country is on the verge of unprecedented social and economic gains. Free-market principles set in their proper moral framework provide these leaders and institutions with the hope that Guatemala is poised to be a model society in Latin America -- a society that provides moral, social, and economic opportunities for all its citizens.
Because of the seemingly intractable nature of the aforementioned issues, the next election will prove to be one of the most important in the nation's history. The drug trafficking network must be shut down and until it is, the overall safety of Guatemalan society remains a significant concern. The next administration must simply reconfigure the outrageous tax policy that is stifling entrepreneurs and suffocating the economy. Rampant corruption in the government must be addressed and successfully prosecuted.
The next president must take the long view of political and economic reform, focusing on those reforms necessary to obtaining the long-term benefits of a free market system, set within the appropriate moral framework. We should hope and pray that the next generation of Guatemala's leaders remains committed to pursuing a society that is both free and virtuous, for the sake of the country and the good of Central America.
(Anthony B. Bradley is a research associate at the Acton Institute.)
The Cato institute
WASHINGTON -- The Real axis of evil
By Charles V. Peña
In his 2002 State of the Union address, President Bush named Iraq, Iran, and North Korea as an axis of evil, "arming to threaten the peace of the world." The charge leveled at those countries concerned their development of weapons of mass destruction and whether "they could provide these arms to terrorists."
From the start, North Korea was the odd man out because it had little in common with the other two axis members. Now that the war in Iraq is ending, it's clear who the real axis of evil is: Iraq, Iran, and Syria.
The current rhetoric about Syria is déjà vu. It's almost like an instant replay of what was said about Iraq. Syria has weapons of mass destruction. Syria supports and harbors terrorists. Add to this the claims that Syria supplied the Iraqi military with night vision goggles and allowed Islamic fighters to cross the border to fight against U.S. forces, and that Syria has allowed Iraqi leaders (perhaps even Saddam Hussein himself) to flee across its border.
Some of the accusations by the Bush administration include the following: Deputy Secretary of Defense Paul Wolfowitz said that Syria is "behaving badly" and that "there's got to be change in Syria." Defense Secretary Donald Rumsfeld said, "the Syrians need to know ... they'll be held accountable." Secretary of State Colin Powell said that Syria "should review their actions and their behavior" and that the administration will "examine possible measures of a diplomatic, economic or other nature." White House Press Secretary Ari Fleischer said, "Syria needs to cooperate" and that "rogue nations need to clean up their act."
And President Bush said he believes that "there are chemical weapons in Syria" and that he is "serious about stopping the spread of weapons of mass destruction." It's clear where all this is leading. It seems that the drums of war are beating, again. Maybe not for an immediate invasion of Syria. But it lays the groundwork for a future invasion.
To be sure, Powell and British Foreign Secretary Jack Straw have given assurances that there are no war plans for military action against Syria right now. But the same thing was said about Iraq last summer. And the Pentagon undoubtedly has contingency plans that could be used for Syria.
Many people were willing to support U.S. military action against Iraq because they thought the policy was just about Iraq. But Iraq was never just about getting rid of Saddam. Just prior to going to war, President Bush unveiled what the U.S. policy was about. In February, he argued that Iraq was a first step "in the spread of democratic values" and the beginning of "a new stage in Middle East peace."
Ultimately, the war on Iraq is the implementation of the new U.S. national security strategy "based on a distinctly American internationalism" designed to "make the world not just safer but better."
So it should come as no surprise that the task at hand is still incomplete and that Syria is a likely next target. The reasoning follows a parallel path to Iraq. Because the first 1991 Gulf War left Saddam in power, there was unfinished business that necessitated the current U.S. military action.
It would be imprudent to allow the same thing to happen again. If Syria is harboring Iraqi leaders, building weapons of mass destruction (the Israelis have accused Iraq of transferring missiles and weapons of mass destruction into Syria), and supporting and harboring terrorists (even if those terrorist groups -- Hamas, Hezbollah, and Islamic Jihad -- do not currently attack the United States), then U.S. national security would demand that the U.S. military continue down the road to Damascus.
The truth is -- much like Iraq -- that Syria's weapons of mass destruction and support for terrorism do not represent a direct threat to the United States. And rather than trying to beat Syria into submission and increasing the U.S. military presence in the region, the administration needs to develop an exit strategy to remove U.S. troops from Kuwait, Saudi Arabia, and Iraq. That will do more to lessen the threat of terrorism against America than regime change in Damascus.
(Charles V. Peña is director of defense policy studies at the Cato Institute.)
The Institute for Public Accuracy
(The IPA is a nationwide consortium of policy researchers that seeks to broaden public discourse by gaining media access for experts whose perspectives are often overshadowed by major think tanks and other influential institutions.)
WASHINGTON -- Tax Cuts, Greenspan, Jobs
-- Ellen Frank, author of the forthcoming book "Money Illusions" and professor of economics at Emmanuel College in Boston.
"Bush's economic plan is unlikely to create jobs or growth as he claims. His plan centers on giving more money to wealthy investors with the supposition that they will invest this excess windfall in projects which will create jobs and growth. The reality is that wealthy investors are already swimming in money and unable to find sustainable growth avenues for their excess cash ... The terrible job market may squeeze wages, and with proposed tax cuts and federal spending increases on items beneficial to some corporate interests, business profits might recover. But in the meantime, working families are falling further into poverty and debt -- quite possibly we are looking at a period of sustained unemployment and job insecurity."
-- Dean Baker, co-director of the Center for Economic and Policy Research.
"President Bush's decision to reappoint Alan Greenspan as chair of the Federal Reserve Board is like inviting the captain of the Titanic back for a second round. Greenspan managed to ignore the largest financial bubble in the history of the world, which led to a loss of more than $8 trillion in stock wealth. As a result, the economy remains mired in recession. He continues to ignore a housing bubble, the collapse of which is likely to have even larger repercussions for the economy and the retirement security of tens of millions of baby boomers. He also supports an over-valued dollar that is causing the nation to borrow more than $1.5 billion every day from abroad. The resulting debt is going to impose an enormous burden on our children and grandchildren. In principle, failure is supposed to be punished. In Alan Greenspan's case, massive failure is continually rewarded."
-- Gertrude Goldberg, chair of the National Jobs for All Coalition and director of the doctoral program in social welfare at Adelphi University.
"The official unemployment rate is 5.8 percent, which comes to 8.4 million unemployed
people. As bad as that is, the reality is far worse. An additional 4.7 million people are forced to work part-time because they can't find a full-time job. About 5 million people want jobs but aren't counted as unemployed because they aren't actively looking for work. These people will suffer even further as Bush's proposed budget includes the elimination of school lunches for over two million low-income children, reduced health coverage for nearly 14 million children and lowering of already lean food stamp benefits."
