Seize the Moment (31 page)

Not even generous U.S. economic assistance has been able to counteract the effects of these socialist policies. Over the past ten years, Israel has received $15 billion in U.S. economic assistance, an amount per capita fifteen times greater than that given to the next largest aid recipient, Egypt. Yet Israel's real growth in 1989 was only 1.1 percent, while inflation ran at 21 percent and unemployment hit 9 percent. Israel's foreign debt totaled $16.4 billion, one of the highest per capita totals in the world. Instead of serving as a helping hand, U.S. aid to Israel has become an economic crutch.

India's economic and political policies represent another case of flawed priorities. Its leaders deserve great credit for integrating an extraordinarily diverse population into a relatively stable democracy. It has 702 million Hindus, 97 million Muslims, 20 million Christians, 17 million Sikhs, 4 million Buddhists, 3 million Jains, and 7 million members of other religions. Its people speak 23 main languages and more than 200 dialects and are divided into more than 2,400 castes. India's leaders committed a colossal error, however, when they bought into Western academic development theories emphasizing government intervention and import substitution.
With the natural industriousness of the Indian people—the average Indian immigrant to the United States enjoys a higher income than the average American—India's economy should have experienced booming growth in the 1970s and 1980s. Instead, real per capita growth bumped along at a 1.8 percent annual rate over the past twenty-five years, with its economic progress barely keeping pace with its massive population growth.

These mistakes were compounded by the misguided geopolitical ambitions of India's leaders. Instead of focusing on the dire needs of its people, whose per capita income reached only $340 in 1990, India's political leadership squandered vast resources trying to elevate their country to the status of a regional superpower. From 1970 to 1990, the Indian government spent ten times more on the military than on education and eleven times more than on health care. Even the rivalry with Pakistan—over which India easily prevailed in battle in 1948, 1965, and 1971—does not represent an external threat sufficient to justify astronomic military spending levels. With a population of 850 million and a GNP of $333 billion, India dwarfs Pakistan's 107 million people and $43 billion economy. Moreover, New Delhi's military—the fourth largest in the world—fields twice as many combat aircraft and tanks and seven times more artillery than Islamabad's.

It is obscene that together India and Pakistan—two of the world's poorest countries—spend over $11 billion annually on defense and even worse, have active nuclear weapons programs. While the United States has been rightly concerned with nuclear proliferation in South Asia, the exclusive focus on Pakistan's program has been unbalanced. India, after detonating a nuclear device in 1974, has reportedly developed a small but significant nuclear stockpile. Since India's
leadership has yet to fully accept the legitimacy of Pakistan's existence—and since New Delhi dismembered East and West Pakistan in the 1971 war—Islamabad concluded that it had no choice but to try to acquire its nuclear deterrent. Though we should seek to curb proliferation, particularly in volatile regions such as South Asia, we will not succeed if we ignore the security concerns that originally prompted countries to seek to develop nuclear weapons. We must therefore seek a region-wide solution, based on Pakistan's proposals for a South Asian nuclear-free zone, that will not only advance our nonproliferation objectives but also enhance security and stability.

India and Pakistan are symptomatic of a wider problem. Military spending in the underdeveloped world is spiraling upward by 7.5 percent a year, with the growth of its spending on military hardware outpacing that of the West by a three-to-one margin. A freeze on military budgets would free up $15 billion for economic development and for the dire humanitarian needs of the 180 million malnourished children in the underdeveloped world, 3 million of whom perish each year from preventable diseases because of inadequate medical care.

Many Western analysts argue that because of their problems, the countries of the underdeveloped world deserve massive foreign aid. Their view of the world comes from a Charles Dickens novel. A cause-and-effect relationship, they contend, links the wealth of the industrialized world and the poverty of developing countries. Exploitation by multinational corporations and unbalanced terms of trade keep making the rich countries richer, while the poor nations grow poorer. Only vast transfers of resources from north to south through credits, low-interest loans, and development grants can balance the moral equation. They call in effect for an
international entitlement program that would make the West the world's welfare agency.

Generous humanitarian assistance should be provided for those in desperate straits in the poorer countries of Africa. The infant mortality rate of Africa stands at 11 percent, reaching 18 percent in the Western Sahara. Half of the continent's 480 million people are infected with malaria. But filling Africa's tin cup with Western money is a stopgap measure. It will not solve Africa's chronic economic and social problems.

But if Africa's leaders want to know who is responsible for its economic disasters, they should just look at themselves. To blame the West—or the legacy of European colonialism—ignores the socialist policies that have transformed once-prosperous agricultural areas from breadbaskets into basket cases. All the aid in the world will achieve nothing unless combined with sound market-oriented policies. Over the past decade, the United States and other Western industrialized countries have injected over $100 billion in aid and credits into sub-Saharan Africa. Most was wasted because inefficient and corrupt governments refused to put into place policies to provide average farmers and workers with incentives to produce. If we attempt to carry these countries on our back, the moment they are on their own they will fall flat on their faces.

The argument that developing countries need the international dole to progress at a reasonable rate, if at all, is wrong. Those who contend, as one Western academic has, that “foreign aid is the central component of world development” are naive. Neither the Western world nor the Asian tigers needed infusions of external aid to industrialize their economies. We should reject the patronizing notion that underdeveloped nations need handouts to achieve what so many others did on
their own. While that should not lessen our desire to help the less fortunate, we must remember that foreign aid goes not to people but to governments. Only if those governments, in turn, institute the right economic policies will we help the peoples of the underdeveloped world, not just its government bureaucrats.

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Western policies toward the world's pariah states—South Africa and the Communist regimes in Cuba and Vietnam—must address circumstances complicated by human rights and geopolitical considerations. In these cases, establishing normal relations—particularly in the economic sphere—must also serve our interests and values.

The United States, as well as the rest of the world, has rightly condemned South Africa's apartheid system since its inception in 1948. Worse than the notion of “separate but equal,” apartheid was based on the principle that races should be separate because they
were
unequal. It violated the fundamental precept of Western morality that every individual deserves to be treated with basic human dignity and granted equal rights. Although blacks in South Africa had a higher per capita income than in any other sub-Saharan African nation, and although far more brutal regimes existed elsewhere on the continent, apartheid's formal legal inequalities made it different in kind, not just degree. South Africa's system was not only morally repugnant but also economically stupid. No country can afford to squander the talents and productivity of 86 percent of its people, as Pretoria did by discriminating against all nonwhites. By denying them equal economic opportunities, the South African regime undercut its own potential prosperity.

The economic sanctions imposed by most countries of the
West, however, were the wrong response. Though satisfying the self-righteousness of antiapartheid activists, the policy hurt the people we most wanted to help. The economic boycott against South Africa was color-blind, affecting both the white and black communities. But unlike the blacks, the whites were in a better position economically to withstand its effects. The 215 American corporations that divested from South Africa were no longer able to enforce their fair employment practices and spend millions of dollars on social programs that improved the working and living conditions of their black employees. Many American companies, such as Ford Motor Company, had financed black housing, schooling, recreation, and health facilities. If sanctions had remained in place until the year 2000, they would have cost South Africa's blacks an estimated 2 million jobs. Some key black leaders, who backed sanctions at the time they were imposed, have recently conceded the damage they did to South Africa's blacks.

Despite the criticism from Western foes of the South African government, President Bush acted correctly in repealing the sanctions in July 1991. President Frederik W. de Klerk had not only met all the conditions stipulated in the sanctions legislation—such as the repeal of the Population Registration and Group Areas Act and the release of all political prisoners—but had also signaled a clear intention to move toward a multiracial society. In addition to the negotiation of a new constitution, further progress toward a just and stable South Africa requires work on two fronts. First, the leaders of black organizations such as the African National Congress and the Inkatha Movement must curb black-on-black violence. A democracy cannot be built while blood flows in the streets. Second, the white government must prepare to redress the economic consequences of apartheid and block efforts by
white extremists who do not want South African blacks to play an equal role in society. This means not only equality of opportunity in education and employment but also reparations to blacks whose land and property were seized under apartheid. Only after these steps are taken can South Africa be fully welcomed into the community of nations.

The junkyard relics of Moscow's former empire in the underdeveloped world pose different problems. Some pundits argue that now is the time to normalize relations with Cuba and Vietnam, that the reasons for our mutual enmity have faded with the cold war, and that the West should extend trade and foreign aid as a peace offering. This view is wrong. The United States must insist that each meet specific political and human rights conditions before establishing diplomatic or trade relations.

We must not allow the brilliant performance of Cuban athletes in the Pan American games to blind us to the fact that Cuba is an economic disaster area. Castro's government, not the Cuban people, is to blame. Cuban Americans in southern Florida enjoy extraordinary prosperity, while Cubans ninety miles away who stayed behind suffer in abject poverty. After relying for decades on Soviet aid and subsidized trade, Cuba has been squeezed by the twin problems of incompetent government planning and cutbacks in Moscow's largess. Castro has tried pathetically to rally the Cuban people by calling for a “special time of peace”—a euphemism for wartime austerity. More than 240 items, including fish, fruit, milk, rice, and other basic foodstuffs, are now rationed. Fuel shortages forced state farms to draft over 600,000 bulls and oxen to replace their tractors. Instead of moving Cuba forward, communism has pushed it backward.

Vietnam faces similar problems. While the Soviets pumped
in over $33 billion in economic and military aid since 1979, the Vietnamese have sunk into a self-inflicted economic malaise. Poor harvests in the late 1980s pushed 7 million people to the verge of starvation. Today, Vietnam has a 20 percent unemployment rate and cannot absorb the 1 million new workers who enter the labor force every year. Trade with the former Soviet Union and Eastern Europe, which accounts for 60 percent of its total trade, has plummeted. Hanoi is scrambling to service its $18-billion debt to Moscow. Vietnam now sells old U.S. military equipment, such as tanks and armored personnel carriers, as scrap metal to earn hard currency on the international market. With a per capita income of $130, it is one of the five poorest nations in the world.

Because Cuba and Vietnam continue to challenge our interests, the United States must link diplomatic and trade ties to changes in their foreign policies. Castro continues to funnel millions of dollars of arms and ammunition to the Communist guerrillas in El Salvador and to encourage their obstructionism in the ongoing peace talks. During the past twelve years, the Salvadoran civil war has caused over $2 billion in economic losses and seventy thousand deaths. The United States must not expand political or economic contacts that would increase Cuba's ability to undermine democratic governments in Central America.

Vietnam's leadership has continued its quest for regional domination. It is sadly ironic that those who fought to expel French colonial rule from Indochina now view that region as their natural imperial domain. Despite the withdrawal of Vietnamese forces from Cambodia in 1989, Hanoi provides the essential economic and military support needed to keep its client, Hun Sen, in power in Phnom Penh. In addition, the Vietnamese dominate Laos, where they have brutally used
chemical weapons against the Hmong people in the southern part of the country.

Even if Vietnam were to facilitate a peace settlement in Cambodia and allow genuine self-determination for Laos, we should insist on two other conditions for normalization of relations. First, Hanoi's rulers must provide a full accounting of the 2,273 Americans still missing in action from the Vietnam War. Second, they must liberalize their totalitarian political system, particularly in the south. Since the borders of the unified Vietnam were established by conquest, not concord, we owe it to the Vietnamese people—millions of whom fought with us as allies—to demand improvements in the regime's human rights record before we restore economic and political ties.