Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon. I live in National Landing Va 22202

Some Afghan views on restrictions on women in the name of Islam

Most non-Muslim American’s, myself included, know relatively little about Islam. Unfortunately, what we do hear often comes from Muslim radicals, or anti Muslim hate mongers. I find it very interesting and enlightening to listen to discussions of Islamic teachings among Muslims. I belong to the Afghan Intellectuals Network on Facebook, which gives me a very good opportunity to listen in to such discussions among young Afghans (I snuck in with an age waver). You will get a very different picture of Islam in a very traditional society than you are likely to find in the American media. The following discussion was provoked by the announcement reported in the following newspaper article. I find the sharply conflicting views absolutely fascinating and hope that you do too. You might also be interested in my earlier blog on “Shariah and America” and comments on that blog:   “Comments on Shariah and America” 

President defends scholars’ guideline regarding women

by Mir Agha Samimi  Mar 6, 2012 – 16:18

KABUL (PAN): President Hamid Karzai on Tuesday said a guideline concerning women issued by the Afghanistan Ulema Council, involving the country’s top religious scholars, was in accordance with the Sharia.

Issued on Feb. 2, the guideline prohibits women from meeting men in public places like bazaars, offices and educational institutes. It said women, while travelling, must always be accompanied by male guardians.

But western media reports quoted some people as saying that the guideline was in conflict with the Constitution and amounted to curbing women’s right.

At a news conference in Kabul, Karzai said: “The Ulema Council, which issues a guideline every month, has in fact supported women in line with Islamic laws.”

Last Friday, the president added, the scholars handed out a statement that supported women’s stance in keeping with Islamic values. “It represents the country’s Islamic viewpoint and all Muslims of Afghanistan are bound to respect it.”

Wazhma Sadat  I am working on ways to stop the Ulema from making it illegal for women to travel. Inbox me if you want to work with me! You don’t have to be a woman, an Afghan, or a Muslim to disagree with this. This law is taking the most basic rights from women: the right to education. In a country with such limited resources, we travel thousands of miles away to gain education, so our kids won’t see the violence we’re used to today. And this law, if passed, will limit every sliver of hope we’ve built so far. If we’re talking about Islamic law, then the most respected Mullahs of Afghanistan need to learn the Sunnah of the prophet first, which includes respecting women, including women in the high-level decision-making process, and more importantly, the Fard (obligatory duty for every Muslim) of education for both men and women.

This post received 64 comments. Here are a few of the more interesting ones

M. Ishaq Ahmadzai So, Wazhma jan..what do you want to get from this? Are you interested in challenging the law/religion. Islam does allow in certain cases when there are no options available. A woman can give birth to a child in the presence of male doctor but only if there is no gynecologist.

Wazhma Sadat I guess I am just hoping that our so-called Ulama learn about the real facts of Islam before imposing their own racial, gender, ethnic based agendas in the name of Islam. Islam, Alhamdulellah, is much more fair that what we practice in the name of it in Afghanistan. I am Muslim. I live Islam. I wouldn’t challenge it. But I do challenge thoughtless, and baseless rules on vulnerable people of our country. If the government wants me to stop studying in another country because I am not traveling with a mahram, then they should pay for my father to come live with me. AND they should guarantee for my father to get a US visa, as well. These rulings are pathetic: totally political to suppress women, and minorities in many cases. We live in a society where we call each other Kafir! In Islam Takfeer is haram. But look at how we address different sects of Islam within the country. The Ulema should talk about eradicating opium production, corruption, ethnic based discrimination. They should educate us men and women of Afghanistan to have mutual respect to each other. But look at what they choose to talk about. A woman’s traveling alone has not created the mess we are in now. The Ulema’s baseless rulings have!

Please don’t think that I am pro seeing women in tight shirts and jeans in Kabul. I respect my culture and religion as much as anybody else. But I want the Ulema to understand the importance of education. AND the importance of women’s education, which would be hurt really badly by this rule.

Ali Sher Learn the importance of education at what cost ? I’m sure they have good reasons. We have to give them the benefit of doubt. We really do not know or do not have enough information as to what’s really going on in Afghanistan. All we see is what’s on Afghan TV and what I see is that things are getting worse and worse as the years are getting closer to DOJ.

Wazhma Sadat We do have to give everyone the benefit of the doubt, including the women in Afghanistan. Not every woman who meets someone outside is dating. Innamal A’mal bennyyat. And ONLY Allah subhanahu ta’alla knows our intentions. Many women have had to work outside to support their dying family members. I don’t think every woman who talks to a man is wanting to attract the man. Remember the times that women came to the prophet and asked him questions, very openly.

Plus, we have lived the worst days in Afghanistan, not those who are in authority right now, including our president. He did not suffer poverty like all average Afghans did and still do. He did not see his wife get beaten in front of men on the streets by the Taliban for wearing white tumbaan. His female relatives did/do not have to choose prostitution to bring food to their family. Nor did any of these Ulema go through what an average Afghan goes through everyday. Do they think of the widows of our country? Do they think of the daughters who want to make their fathers proud… who want to help their ill mother gain better health? What about this is un-islamic?

True, we are getting close to yawm ul Qiyyama [The Day Of Resurrection – Day of Judgement], and I see the signs too. The signs include the hypocrisy of these people who discriminate everyone who is not like them. I see the signs when these ulama don’t talk about the hadith/Quran verses that talk about MEN lowering their gaze, but only impose laws on women. A society is never made sustainable if you have rules only imposed on a particular part of it. We know better what is going on in Afghanistan than those people who spend their weekends in Dubai.

Why don’t these Ulama remember Bibi Ayesha, Bibi Fatima, Bibi Rabia (who was the first person to introduce God’s love in Islam to the rest of the world). Did prophet Muhammad ever tell any woman not to go to school? Did he EVER force his wives to do anything? Anything?

In fact, what we call “dating” today, is allowed in Islam in certain circumstances like if we have the intention to marry the person and if we are meeting in a public place and if there is at least a third person present. What is not allowed is to force girls to get married before seeing the man (usually the old guy who is ‘buying’ a bride). This happens in Afghanistan and it IS un-Islamic. Think about it. For once, put yourself in an Afghan girl’s position, please.
Gaining education is fard in Islam. The Ulama and the gov. should be MORE islamic and build schools and make it MANDATORY for EVERY Afghan man and WOMAN to go to school BECAUSE it is Fard (like praying). They should make it illegal for people to stay illiterate, because amokhtan ilm ba hard wa zan musulman farz ast. The reason why we travel is not because we love leaving our families, and we love being at mercy of other people and countries. The reason why we travel is because our parents are not ministers to pay the bribe it requires to get into to Kabul University.

These are the signs I see and fear. I am saddened that Islam is not practiced the way it should be in Afghanistan, where women are respected, where corruption is non-existent, where education is at its peak, where hypocrisy has no room to live. This is the Islam I know of and I live for, Inshallah. The life in Afghanistan seems so far away from what I believe Islam is.

Wazhma Sadat ‎

1: what the Taliban did was crimes against humanity. Not Islam AT ALL. I wouldn’t use the word “impose” here, since it has a diplomatic connotation. The Taliban were very far from anything close to that. And they still are.
2: Yes women get raped in the west, but who is comparing US with Afghanistan? The problems in other countries should not be the reason why we could justify our society’s flaws.
3: “We need to bring our women back to Islam so they can raise children that grow up to respect women and give them their rights. Our women are more and more involved each day in music, drama, movies, etc., etc.”?? — I am speechless. I think we need to bring our MEN back to Islam. Make them stop going to prostitutes and increasing the demand for such a terrible and un-Islamic practice. Make them stop harassing women.

Music, drama and movies have not been the problem in our history. I wish there were more movies if that kept us away from fighting with each other based on ethnicity, or if it kept us away from suicide bombing and other forms of crimes. Plus, if we watched movies like The Message, we would learn more about Islam than what our so-called, mostly illiterate Ulama have to offer.
4: dating in the west could mean whatever. Meeting with a non-mahram can be permissible according to Islam under certain circumstances.

Last: I don’t think it is the Ulama’s duty to “bring women back to Islam.” They are the reason why so many of people run away from Islam, sadly.

I am not going to fill everyone’s notification with more comments. I pray that we are all guided towards the right path. I pray that we all start thinking about major things like children dying in our country, women getting raped, small boys used for bachabazi, politicians using the people as their disposable promotional tool for fame. And most of all, I pray that we all strive to learn more about Islam and the beautiful path is has to offer through EDUCATION for ALL.

Abdul Waheed St  I just read your second comment…I totally disagree with You dear. Do You know what our Afghan Muslim females who have been studying on a scholarship in US or other countries do??? I guess You are one of the scholarship holders in US. Do You think that is the way a Muslim girl should live and study. They wear tight jeans and shirts with no scarf on their head, actually not studying there, but enjoying a few years of their life away from their parents.

[name withheld by request] It is not so my dear Waheed jan. Whenever we judge West we judge them from their clothes and Hollywood movies. But that is not the true reflector of US culture. Don’t look at their clothes, look at their mindset and the way of thinking.

Abdul Waheed St  Americans have a mindset of and thinking of occupying the world, killing innocent people, destroying peoples life, culture and basis. I think sending Afghan females abroad whether it is US or any other country is just destroying our culture and mixing our culture.

[name withheld by request]  Waheed jan the idea that Americas want to occupy the world and kill innocent people is what comes from Halwa Khoor Mullahs who don’t have the real knowledge of how the world works. If so then why is US spending billions of dollars a year in the world?

Abdul Waheed St  Well Walid Jan minds are different and everyone see the facts from different angels but I guess clever is someone who observes and sees the facts from every angel. US is spending Billions for their interest not for mine or yours…

[name withheld by request]  And if you look from the other angle, which you have never ever looked from, it is in our mutual interest. You need to widen your perspective rather than being strongly influenced by a Mullah who is less educated than you.

Wazhma Sadat  Salaam again! I am not going to go into details about what people wear or whether they continue to hold onto their values as Muslims and Afghans while abroad, because that is their personal choice and Allah is a better judge, inshallah. But if you are specifically talking about me, then you should learn more about me, brother 🙂

Additionally, who said we were talking about the US? How about women going to Jordan to study Islamic studies? One of the sad things about my education experience in Afghanistan was always lack of understanding of Islam! My teachers in many institutions in Afghanistan did not know much about Islam. I think by limiting people’s freedom to go abroad to get an education, we are limiting their opportunity to learn about many things that are not offered in Afghanistan, including a thorough understanding of Islam. Islam is not about judging people based on what they wear… the tightness of jeans does not determine people’s imaan. Who are we to judge.

I am sorry if you’ve had a bad impression of girls who’ve been abroad. I am sure I don’t have to tell you that no one represents one another. And that we are not to judge who wears what with what intention (Islamically). Plus, not everyone is away from home to “enjoy”… many study day and night with the hope to return. Let’s not generalize, inshallah.

Inam Ul Haq Humdard  Dear Brothers and Sisters please don’t give fetwas from your stomach while you have not studied Islamic Scriptures….. don’t read those books which are written by so called Muslims/Wahabis and for exact detail read those books which are written 200 years ago by ulemas of that time…….thanks

Abubakr Asadulla There is absolutely no limitation to women traveling in the Quran. There are a few contradictory Hadiths—5 to be exact— that point to limiting women’s travel distance.
1) Hadhrat Abu Hurairah (Radhiyallaahu Anhu) reported Rasulullah (Sallallaahu Alayhi Wasallam) as saying

‘It is not permitted for a Muslim woman to make a journey of a night unless accompanied by a Mahram.’

2)Hadhrat Abu Hurairah (Radhiyallaahu Anhu) reported that Rasulullah (Sallallaahu Alayhi Wasallam) said,

‘It is not permitted for a woman who has faith in Allah and the last day to make a journey of a day and night.’

3) Abu Saeed (Radhiyallaahu Anhu) reported Rasulullah (Sallallaahu Alayhi Wasallam) saying, ‘It is not permitted for a woman who brings faith in Allah and the Last Day to make a journey of more than three days unless she is accompanied by either her father, brother, husband, son or a relative who is her Mahram.’

4) Hadhrat ibn Umar (Radhiyallaahu Anhuma) reported Rasulullah (Sallallaahu Alayhi Wasallam) saying, ‘A woman must not make a journey of three days unless accompanied by a relative who is her Mahram.’

5) Hadhrath ibn Abbas (Radhiyallaahu Anhuma) reported that Rasulullah (Sallallaahu Alayhi Wasallam) said, ‘A woman must not make a journey unless accompanied by a Mahram or her husband.’

Based on Islamic principles, men and women have equal rights and Surah an-Nisa’ 4:1 states that men and women are created from a single soul (nafs wahidah). One person does not come before the other, one is not superior to the other, and one is not the derivative of the other. Thus, if they are equal in God’s eyes why are they being treated under TWO laws. If a woman can’t travel without a Maharam, why can’t it be expected from men to travel without a Maharam? Both men and women are vulnerable to Satan; why pick on women? The simple truth is that many of these attributed Hadiths to the prophet were written at a time of tribal warfare, when neither men nor women were safe to leave home. Those same rules can not be taken literally to pertain to the 21th century. Fortunately, women can travel safely and there is no apprehension about them being harmed any more than men, as long as appropriate judgment is used to their destination.

We have to remember that the earliest documents attributed to prophet (PBUH) are at least 100 years after he passed away. Moreover, it should be mentioned that many of today’s restrictions on women originate from after the prophet (PBUH) had passed away and they are a reflection of Arab customs and traditions rather than Islamic law. For example, Saudi Arabia doesn’t allow women to drive. Does that make it Islamic for women in Islam to stop driving?

Abubakr Asadulla Any philosophy left to the hands of semi-literate is a dangerous phenomenon. The interpretation and application of Islam isn’t a privilege of a few, on the contrary it is a collective endeavor. Islam was complete with the death of Prophet (PBUH) and any philosophy thereafter is left for interpretation and modification, as someone pointed out, in Islam we are gifted with the right to Ijma and ijtihad. Ijtihad representing my right to utilize my intelligence to conform with what my goal is to worship God, and Ijma to have a consensus amongst people for collective good, in situations that are unique to our time and era.

In opinion of many scholars, this restriction on women, assuming this Hadith is really from the prophet, had limited application and duration. Times have changed and so have dangers to men and women. Above all we have been given the Ilm of Aqalia (knowledge of common sense) which in my mind and I am sure others dictates equal rights for both men and women.

If there is fitna in society, it is the failure of societies to have appropriately educated its population. One cannot restrict women for men’s evils. There are millions of women that travel freely without a consequence, why are we picking on Muslim women? Limiting women’s travel is insulting to women and our creator, which calls men and women equals (Quran 3:195).

Unfortunately, the truth is that men and women are prone to haram regardless of travel or not. We shouldn’t pass a blank law categorically limiting women’s movements out of fear of a few that may transgress. If such is the case no man should be allowed outside of their rooms, let alone their homes. At the end of the day, instill the right tools in your family, give them the right tools to judge right from wrong and trust Allah that He will guide to the straight path.

More from Rosewood

As my United, Canadair flight from Denver descended over Bakersfield toward the Meadows Field airport, my phone indicated the arrival of a text message. My brother Gary was asking, “Where are you?”  I responded: “Just landing—early”. It was 8:10 pm Thursday (March 1) with a scheduled arrival of 8:25pm. I noticed that my Brother’s text was sent at 5:15 pm, a bit after my scheduled arrival in Denver of 5:04pm. He picked me up with a smile and no further comment.

Gary delivered me to my father at the Rosewood Retirement residence. My mother’s mother had lived and died there, as had her three daughters, including my mother two and a half years earlier. https://wcoats.wordpress.com/2009/09/30/notes-from-a-visit-to-rosewood/   https://wcoats.wordpress.com/2009/12/02/my-mother%E2%80%99s-funeral/   https://wcoats.wordpress.com/2010/05/22/breakfast-at-rosewood/

My dad’s door on the second floor was locked, which was very unusual. He let me in and explained that some lady down the hall kept coming into his room if he left the door unlocked. We hugged and he said, “You need to lose some weight.”

My dad has always had a very good memory. He has always been a great game player (especially bridge) and still wins regularly at Rosewood bridge games. But his memory is fading in some areas these days (he will be 95 in May). He had slipped in his bathroom some weeks earlier and hit his forehead on the sink on the way down. He lay there pushing on the emergency call button on his wrist wondering why no one came until (after 5 – 10 minutes he said but who knows) he realized that he was pushing on his watch on the other wrist by mistake.

He recently lost his address book of many years (the old paper kind), in which over half of the names are now crossed off, and was trying to recollect the missing phone numbers and addresses. He called a woman he had attended classes with in grammar school, now living in Northern California, chatted for a while, and then carefully wrote down her address information. An hour later he could no longer find it to put in his new address books, which he couldn’t find either.

But he forgets nothing in bridge. He runs a weekly group of two tables and complained how much work and time it takes him to keep two tables filled. People are always dropping out or forgetting to come. He told me that a women’s bridge group had started inviting him to join their group when one of their regulars couldn’t make it. Eventually they asked him if he would like to become a regular member.

He remembers the batting averages of the big baseball stars from before I was born and which team won the World Series each year for the last thirty years. He is also up to the minute on the accomplishments of our local teams. He eagerly told me that the Drillers (his and my high school teams) had won the wrestling tournament over the weekend, totally forgetting that I have no interest in wrestling, baseball, basketball, or football whatsoever.

Most of dad’s life he was happy to sit quietly by while mom ran his life. This was because he had no objections to the way she ran things. When he did, we all knew it. After she died, he stepped forward and became more extroverted. The monthly Rosewood newsletter listed him as Mr. Social. We are all kind of shocked.

He complains that he is very busy all the time. It seems that it takes him much of the day going through his mail. I have not been able to convince him that he does not need to open and read everything sent to him.

Major progress has been made, I think, toward separating him from his car (which, fortunately, he seldom drives). Rosewood provides a small bus for transporting residents to various places.  But he doesn’t always find that convenient and the idea of taking a taxi is totally alien to him. It really comes down to his sense of freedom. For several years I have been planting the seed that he should save all that insurance money and give the car to his grand-daughter (Gary’s daughter Kristin) who lives here in Bakersfield. He says that he will. Coming home from lunch Friday I said: “Dad, why don’t you bit the bullet and give Kristin the keys to the car when she comes over for dinner this evening.” He snapped: “I will give up the car when I am ready and I am not ready yet.” An hour later he said, “When I move into the new apartment next week with the larger refrigerator, I want to stock it with food and I will give Kristin the car after that.”  Stay toned.

Saving Greece: Austerity and/or growth

Econ 101: When discussing Greece’s economic problems public officials and the press regularly toss out the need for “austerity” and/or “growth” as if they were clearly defined and understood concepts. I suspect that they mean quite different things to different people. While it is convenient to summarize complicated policies with single words, it can also stand in the way of understanding what is really meant. So what are the policies needed for Greece’s recovery and what should we call them?

Stocks and flows: For starters we need to distinguish the stock of Greek debt (the existing outstanding amount of previous, unrepaid borrowing) from its annual deficit. Greece’s debt reflects the past history of its annual deficits. Its current and prospective deficits foreshadow the future stock of debt. A full default on Greek debt—wiping it all off—would reduce Greece’s annual interest payments on its debt but beyond that would do nothing to reduce its annual deficit and the build up of its future stock of debt, which eventually would again become unsustainable. So forgiving (defaulting on) all existing Greek debt, by itself, will not resolve Greece’s problems.

Sticking with broad simplifications, Greece has two major economic problems. First, its government spends more than it can pay for without borrowing (the deficit — the flow of new debt). Moreover, like the U.S. and many other governments, it has made commitments to spend in the future (e.g. unfunded pension commitments) that are not yet reflected in its stock of debt or its annual deficits. This must change because it is not sustainable. Lenders will lose confidence in the government’s ability to service its debt and will stop lending. This calls for “austerity”, i.e. eliminating the annual deficit, by some combination of reducing expenditures and increasing tax revenue. I will return later to the distinction between structural and cyclical deficits.

Greece’s second major problem is its low productivity and uncompetitive prices. By themselves these would simply imply a lower standard of living for Greeks. But the average Greek has been spending more than his income by borrowing, giving the temporary illusion of a higher standard of living. To the extent that Greek spending is for foreign produced goods and services and these imports are not fully paid for with Greek exports, they must be paid for by borrowing. This artificial standard of living is obviously not sustainable.

Greece shares the same currency, the Euro, with 22 other European countries (including non members such as Monaco, Kosovo, and the Vatican).  If Greeks borrow domestically to pay for imports, Euros will flow out of Greece, tightening liquidity. This should put downward pressure on wages and prices in Greece, which would help restore its competitiveness with the rest of the Euro zone. If Greeks borrow abroad, interest rates on such borrowing should eventually increase to cover the increased default risk. This will discourage Greek borrowing. Greece has reached this point.

Some argue that if Greece had its own currency it could reduce its real wages by devaluing its currency and thus restore external competitiveness. Cutting real wages in this way would be easier, they argue, than cutting nominal wages directly as Greece has just done for government employees. Experience in other countries suggest that devaluing its own currency, if it had one, would set off domestic price increases to offset the loss of real wages unless labor markets were made more competitive. A spiral of devaluations and inflation would likely ensue. Only when real wages can be reduced to competitive levels one way or another can Greece hope to grow out of its current problem.[1] Thus the Greek government is undertaking structural adjustments to liberalize labor and product markets in order to make them more efficient and to make wages and prices more responsive to market conditions.

Some argue that the emphases in Greece should be put on growth.  Given the debate in the U.S. between Keynesian and neo classical economist over whether growth requires “stimulus” to increase demand (the Keynesian view) or “structural adjustments” to make labor and product markets more efficient and to encourage investment (the neoclassical view), it is not completely obvious what the proponents of growth in Greece have in mind. Attempting to promote growth with government stimulus to demand is not in the cards, as that would require more government spending and/or lower taxes and thus even larger deficits that no one is willing to finance. The only way for Greece to enjoy a higher standard of living is to undertake structural reforms that will allow the economy to be more productive and its wages and prices to be more competitive with the rest of the world.

So Greece needs to eliminate its deficits (actually run surpluses to reduce its outstanding debt) and liberalize its labor and product markets to establish balance in its external trade. All serious students of the Greek situation agree with this. The policy debate is complicated, however, by the interaction between growth and deficits and the speed with which an economy adjusts to changes.

If the Greek economy grows more rapidly it helps its debt problem in several ways. First, a growing economy generates more tax revenue from the same tax system. This reduces the deficit. It also tends to reduce government expenditures linked to safety net expenditure (e.g. unemployment insurance). This also reduces the deficit. In addition, the capacity of an economy to sustain and service debt is linked to its size. Thus economists look at the ratio of debt to GDP. A more rapidly growing economy tends to reduce the debt/GDP ratio by increasing the denominator.

While Greece must eliminate its deficits, the initial impact of expenditure cuts and higher taxes is to temporarily reduce income and tax revenue. Greece is experiencing this now. Its expenditure cuts have not reduced its deficit as much as expected because the temporary slow down in economic activity as displaced government employees (for example) look for new jobs, has been larger than expected thus reducing tax revenue by more than expected. A reduction in income has the same but opposite effect on the deficit as does an increase in income. This phenomenon is called automatic stabilization. Both Keynesian and neoclassical economists favor allowing such cyclical swings in government deficits and surpluses. But in the long run the government’s structural deficit (its full employment deficit) should be zero or at least smaller than the economy’s long run average growth rate. In Greece’s case it should be in surplus for a number of years to reduce its existing stock of debt.

The positive impact on competitiveness and income of liberalizing labor, services and product markets will also take time to develop. Balancing Greece’s fiscal budget now, before structural reforms have had time to work, would require much larger fiscal corrections (spending cuts and tax increases) than would be needed for long run balance.

This background should help understand and evaluate Greece’s options. Without external financial help (as is now provided by the EU, IMF and ECB), Greece could not adjust its fiscal deficits enough in the short-term to avoid the need to continue borrowing temporarily. Under these circumstances market lenders are likely to charge such a high risk premium to buy Greek sovereign debt to cover the prospects of default that deficits would become worse rather than better. Greece would default (with or without leaving the Euro). If it had defaulted in December 2011, it would have saved 16.3 billion Euros in interest payments on outstanding debt out of total government expenditures of €76.8 billion, but would have had to cut expenditures instantly an additional €6.3 billion to keep it within its tax revenues of €54.2 billion, over a 10% cut in non-interest expenditures instantaneously. This is austerity on steroids. The Greek economy had already stopped growing in 2008 and shrank by 3.3%, 3.5% and 5.0% in 2009, 10, and 11 respectively. The shock of default would surely depress the real economy further than the 2.0% decline currently forecast for 2012, reducing tax revenue further and requiring even larger cuts in spending. This does not take account of the impact of a Greek default on its banks, which hold a significant amount of Greek sovereign debt, and which the government would no longer be in a position to support. Default is no panacea, and this has not taken into account the possible negative effects in Spain and Italy, to name but two other European countries.

The approach taken by the IMF and EU is to agree with Greece on targets for both deficit reduction (austerity) and structural reforms (growth) that aim to restore full balance by 2021 and to finance the declining deficits in the interim at modest interest rates so that Greece does not need to borrow from the market. The program requires the “voluntary” write down of private sector holdings of Greek sovereign debt by about 70%. Greece would reduce its deficit from almost 10% in 2011 to less than 5% in 2012 (a primary surplus – i.e. not including interest on its debt—of 0.2%, raising to a primary surplus of 2.4% in 2013 and 5.0% in 2014). This “austerity” is being supplemented by significant structural reforms. The program is a balance between the pace of austerity and growth. Slower implementation of austerity requires a longer period of IMF/EU financing but with potentially more rapid growth.

Government employment is being reduced by 22% between 2010 and 2015 (150,000 employees). Future pension commitments have been reduced. Inflation has fallen below the Euro area average. However, external competitiveness has improved as the result of wage reductions in Greece rather than improved productivity, i.e. living standards have fallen. In general, labor market and business sector reforms have lagged. Changes in labor laws to allow more flexible wage bargaining and to ease the cost of lay offs are showing positive results. A number of services and professions have been liberalized to subject them to greater competition (cruise ships, highway freight, tourist coaches, regulated professions). The cost of starting new businesses has been reduced (“The new law reduces the number of steps (from 11 to 1), days (from 38 to 1), and cost (by more than 50 percent) required to start a business.”). Nonetheless the slow pace of such reforms is the major weakness of the program. Public acceptance of its changed circumstances and how best to deal with them has not be easy or smooth either.

It is noteworthy that the Greeks work more hours on average than any other European county (2,017 hours per year compared to 1,408 hours a year for Germans). German’s enjoy a higher standard of living because they produce more each hour they work. Greece needs to liberalize its markets to become more productive. Lowering wages will make Greek output more competitive beyond its borders but will not raise the standard of living for Greek workers.

The euro group has stated in its communiqué, “We reiterate our commitment to provide adequate support to Greece during the life of the program and beyond until it has regained market access provided that Greece fully complies with the requirements and objectives of the adjustment program.” The proviso is standard but also reflects Greece’s poor record of honesty and implementation.

IMF financial support is parceled out in quarterly installments contingent on Greece meeting the conditions agreed to for each quarter. This combines the carrot of financial assistance with the stick of close monitoring of Greece’s compliance with the reforms needed for long run success. There are no good options for Greece, but the current agreement between Greece and the IMF/EU seems to hold out the best hope for potential success. It balances austerity and growth. It will not work without public acceptance. Government promises to its public are being and must be broken. The Government needs to convincingly explain that these promises cannot be kept and that a brighter future requires the reforms that have been promised to the IMF/EU/ECB and the increased productivity and growth they should make possible.

Iceland and Ireland are well on their way to recovery from their debt disasters. If Spain and Italy can get and stay ahead of the adjustment and reform curve, and they have new governments committed to doing so, Europe should pull through and be stronger for the experience. But the next few years will be difficult.

[1] Mario Blejer and Guillermo Ortiz, “Latin Lessons”, The Economist February 18, 2012, page 94.

Afghanistan: Koran burning

Updated February 26, 2012

Associated Press: “More than 30 people have been killed in clashes since it emerged Tuesday that copies of the Muslim holy book and other religious materials had been thrown into a fire pit used to burn garbage at Bagram Air Field, a large U.S. base north of Kabul.

The death toll from days of unrest includes four U.S. soldiers – two killed last week by an Afghan soldier, and two military advisers shot Saturday at the Interior Ministry.”

By AMIR SHAH, Associated Press, February 23, 2012

“The unrest started Tuesday, when Afghan workers at the sprawling American base noticed that Qurans and other Islamic texts were in the trash that coalition troops dumped into a pit where garbage is burned. Some Afghan workers burned their fingers as they tried to salvage some of the books. Afghan government officials said initial reports indicated four Qurans were burned.

“The materials had been taken from a library at Parwan Detention Facility, which adjoins the base, because they contained extremist messages or inscriptions. Writing inside a Quran is forbidden in the Islamic faith, although it was unclear whether the handwritten messages were found in the holy book or other reading materials.

“A military official said it appeared that detainees at the prison were exchanging messages by making notations in the texts.

“A delegation of Afghan religious leaders, lawmakers and government representatives visited Bagram as part of the investigation. They issued a statement late Thursday calling for an end to protests and accused insurgents of infiltrating the gatherings to foment violence. They said they expected those responsible for the Quran burning to be prosecuted through the U.S. military court system.”

In response to these events I addressed the following question to a group of young Afghan intellectuals in Kabul:

“I am very interested in your comments on the Koran burning event in Afghanistan.

“The U.S. military made a regrettable mistake in burning some Korans at Bagram airbase. It was the result of ignorance of Afghan and Muslim attitudes toward the destruction of their holly book.  It was not the results of malice. President Obama personally apologized for the act to President Karzai, an extremely rare thing for American Presidents.

“In the West, idolatry is not respected. What is holly in the Bible, Koran, or Torah are their words, not whatever pieces of paper they might be printed on. Thus the reaction of some Afghans to burning some Korans is incomprehensible to us. Over a dozen lives have been lost because of this reaction.

“The Washington Post reported the following yesterday: “Those behind the act should be asked about their deed and must be punished,” said an officer near a U.S. military base in Kabul. “If I find the opportunity, I would shoot them in the head.” For us it is truly barbaric to put the burning of a book on the same level as taking a human life. I assume such views do not represent modern Afghan thinking and seriously doubt that Islam teaches such things, but I would be grateful for your views on these questions.”

Here is the resulting exchange followed by some non-Afghan comments first:

Diba Hareer

Warren Coats, you are right. For us, the educated Afghans, it does not make any sense at all. The incidents and the killings, which happened, cannot be justified. How on earth you could say, “We are killing each other, destroying buildings because our holy book was burned”. It’s unfortunate that we have very few educated people in our country. Our elites are getting out of the country and living in the west, as they cannot tolerate the chaos in Afghanistan. Their security is also at risk at times. We have only 34% literate men and 13% literate women. In our schools students are not taught the right values. If we teach our kids love, respect and patience, we can prevent these incidents to a high extent. The illiterate isolated masses can easily be manipulated. The manipulators took advantage of this opportunity and further encouraged the public to get crazy. I still believe the educated youths even few can bring a change since its proved that you can make a difference with as few as two persons. I hope those of us who are studying right now, get together and find a way to get Afghanistan out of this situation.

Masoud Dost

Miss Diba,
With respect to those elites that realize value of our holy Books.
It seems you are in big misunderstanding that our elites are out of country, it might be your own perception.
Any how, I really condemn those who do not respect holy books whether it’s mistakenly or with full understanding.
I accept that the illiterate isolated masses can easily be manipulated. The manipulators took advantage of this opportunity and further encouraged the public to get crazy.
The questions arises who pave such illiteracy, low level or high level, educated or uneducated, elite or …?

Diba Hareer

Masoud, by elites who are out of country I was pointing to those whose knowledge can contribute to reconstruction of our country but they do not want to work with the corrupt government. The majority (if not all, while I think so) are working with the government only to serve their pockets by taking the advantage of the corrupt system. Azizullah Lodin the chairman of high office of oversight and anti- corruption was complaining from corruption at his own office. I and you know that many of the current and ex-ministers’ files are with the office of Attorney General who are accused of corruption.. I wish I was able to tell u who the elites are. I am sure neither you nor I want to argue over those figures. The point here is to confirm that, killing and injuring one another and destroying the buildings are not sensible ways of showing that you are angry over burning Quran. What can u achieve by killing your country folk? I doubt if even a few number of these protestors know what is written in Quran and what does that mean. Besides that, they are destroying the image of Islam. They once again represented us as barbaric to the world.

Shoaib Rahim

‎Warren Coats i’ll try and share an observation on why this reaction took place then. The Jihad against the soviets created a new identity for the majority of Afghan population; i believe this identity to be obsessively revolved around a very specific and rigid interpretation of Islam. We were occupied, slaughtered and kicked out of our country during the Soviet war for being Muslims..and on the flip side, we were funded, armed and supported by all for strengthening the same identity. After the soviets left, although we failed to form a nation and keep the peace, Islam was the only alleged uniter among our people and more or less still is since notions of nationalism are still in its infancy. Secondly, life is not valued in our society and a life lost in the path of ‘defending islam’ is a virtue…it was enshrined in our value system during the Jihad against the soviets and this value lives on strong. This essentially means that you can’t compare Afghan society with other non-war afflicted societies because the values differ greatly. Third is a very strong notion of victimization by the ‘imperialist west’ and its anti-islamic agenda. Neo-conservative policies during Bush, Guantanamo Bay, constant targetting of muslims by western media..all play its role in demonizing the masses with anything “western”…and the US forces have had many instances of killings and quran burnings which have made the image worse. so we have Rigid Religious Interpretations + Cheap value of life in our society/celebration of life lost for religious cause + anti-western sentiments. Add in foreign hands and opportunists and you get the reality behind Afghan riots. At least I would see it like this.

Alessandro Califano

Warren Coats, I’d like you to focus on a different setting on regard of your question. Let’s imagine a Western country (why not the US?) being occupied by armed forces of a different religion and culture. Let us now imagine someone among these “alien” forces throwing a New Testament copy in the garbage can, along with used kleenex tissues and potato peels – are you really sure that locals would say: “Oh, please, we are strongly against idolatry, keep going in your doing…”? In my humble opinion, malice or not, people have been mowing down reciprocally for much less in some un-barbaric Western countries… Ever heard anything about Northern Ireland, yourself?

Two non Afghan comments. The first comment, from a Saudi friend, sheds light on the seeming anomaly of the routine practice of the Saudi government burning Christian Bibles confiscated in the Kingdom with no public outcry from anyone.

Yousef (Riyadh, Saudi Arabia)

I think the main cause of outrage in Afghanistan is because of “who” did it. As of my knowledge, the only way to dispose Quran in Islam is to actually burn it. It is not to be thrown with other waste since it contains the words of god. Basically because it’s holy.

I think if they let Muslims do the burning and clarified the reasons behind it before actually doing it it wouldn’t have had the same public response.

Tom Lutton (Washington DC)

Warren, thank you for sending this; it is good to hear from you.  Your simple act of asking a question, listening to the response, and sharing the response with others is a welcomed start to bridging a cultural divide that has been so wide for so long.  The lack of education on both sides certainly does contribute to the deplorable violence.  Honest communication and consistent efforts to understand differences ironically seem to be the weapons of choice to eliminate the cycles of violence.

The British American Relationship

I saw The Madness of George III in London yesterday evening on my way to Kabul. The evening included a nice dinner and visit with old friends Tim and Jan Conway, first met in St. Andrews Scotland in 1976. The play, and David Haig’s portrayal of King George III, was spectacular. British theater is the best in the world century after century.

The play set me thinking again about why American’s are so fascinated with England and the English monarchy. My ancestors are mainly English so I may have a slanted perspective. But America’s basic values and institutions, which are respected by all American’s what ever their ancestry, were built upon those of the United Kingdom. We see it most clearly when contemplating the role and place of the British monarchy in British governance.

What fascinates us, I think, is the interaction between the King (or Queen) and his government. From the Magna Carta on Britain has evolved a system of governance based on the rule of law. The powers of the King are limited and checked the powers of Parliament and The Law. This interplay, these checks and balances, are on display in every movie or play about the British monarchy. This, I think, is the core of our fascination with the British monarchy. The King is all-powerful and unquestioned within his household but constrained by tradition and law in his broader exercise of authority.

Indeed, with all of it’s shortcoming, Britain benefits a great deal from the rule of law. The rule of law is much more than having good laws evolved from practical experience (the common law approach of Britain and America rather than the civil law tradition of Europe). The rule of law is an attitude of the members of society. It is the orderly, voluntary adherence to the norms society has agreed on. The result is a much more efficient and relaxed social and economic life.

The English famously queue (line up in an orderly way). It makes the experience of waiting to be served so much more relaxed. Waiting in “line” in Italy, on the other hand is a tension filled, guerrilla warfare effort to minimize being taken advantage of by shamelessly rude Italians, all of whom have relatives or friends ahead of you in line holding their place. On average Italians are more charming than the English. I have concluded that this is necessary to compensate for their disregard for the rule of law. Italians don’t pay their taxes, don’t cue, and in general circumvent at every opportunity the law.

A consequence of the rule of law in Britain and northern Europe more generally and its weaker hold on the behavior of Italians and southern Europeans more generally is that the United Kingdom functions more efficiently. Social interactions are smoother. And members of society enjoy more true liberty. The weaker hold of the rule of law in the south is like a tax on the functioning of the system. The explicit taxes that are not paid by Italians are replace by the tax of higher cost social interactions as they struggle to improve or at least defend their place in line. Italian’s are only fooling themselves to think that they have gotten away with not paying their taxes.

The Future of Money

I solicited 12 articles on very diverse aspects of the future of money for the current issue of the Cayman Financial Review (I am a member of the Editorial Board).  http://www.compasscayman.com/cfr/

I wrote two of the articles myself and I hope that you enjoy them:

http://www.compasscayman.com/cfr/2012/01/11/The-future-of-money—What-is-it-/

http://www.compasscayman.com/cfr/2012/01/11/The-Technology-of-Money/

Peeing on corpses

It is not difficult to imagine a bunch of scared 20-year-old urinating on the corpses of enemies they killed first. In today’s Washington Post Sebastian Junger thoughtfully explains the environment in which the disturbing video of American Marines urinating on dead Taliban solders was made : http://www.washingtonpost.com/opinions/were-all-guilty-of-dehumanizing-the-enemy/2012/01/13/gIQAtRduwP_story.html

Whether we can understand such behavior or not, it has harmed our goals in Afghanistan and increased the danger to other solders. Marine Capt. Timothy Kudo, explains this perspective well in today’s Post: http://www.washingtonpost.com/opinions/as-a-marine-and-afghan-war-vet-im-insulted-by-the-desecration-video/2012/01/12/gIQAswIrwP_story.html.

The event is sad but America has demonstrated to the world how a mature democracy openly discusses and deals with its mistakes. We may be proud of that.

The Invented Palestinians

Five years after a previous visit to Israel and the West Bank and Gaza (or the OPT—Occupied Palestinian Territory—as the UN and the Palestinians call it), I am once again residing in the charming American Colony Hotel. As on my two most recent previous visits (in 2005 and 2006) I am advising the Palestine Monetary Authority that I helped set up in the mid 1990s on strengthening its capacities as a central bank and preparing to issue its own currency should the political and economic situation ever justify doing so.

The American Colony Hotel, now decked out for Christmas (see pictures), has a long history here—over 150 years—and has hosted many interesting guests. There are the politically important visitors such as Winston Churchill, Mikhail Gorbachev, Senator George Mitchell, George Shultz, James Wolfensohn, Kofi Annan, and T. E. Lawrence. There are the artistically important visitors such as Graham Green, Leon Uris, Saul Bellow, John Steinbeck and Marc Chagall. There are some big names in the media business such as Ted Turner and Barbara Walters and in music such as Sting and Juan Baez (my personal favorite). The list of movie starts is long, including Sir Ben Kingsley, Lauren Becall, Peter Ustinov, Ingrid Bergman, Omar Sharif, Richard Gere, Uma Thurman and Vanessa Redgrave. But the one that tickles me the most is Peter O’Toole, who visited here many decades after the visit of T.E. Lawrence who he portrayed in Lawrence of Arabia.

The Hotel is in East Jerusalem, that part of the city that is in the West Bank, OPT, or Palestine as you wish, that was occupied by the Israelis in the Six Day War of 1967. Following that war, famous visitors were generally making a political statement in favor of peace. The American Colony was considered neutral territory. I have written a lot in the past about the Israeli-Palestinian situation and if you are interested I urge you to reread earlier blogs (posted here for the first time): “The View from the West Bank – a history of the conflict”, “Jerusalem in august 2006”, “Leaving Israel August 11 2006”.

While here this past week, American politicians demonstrated again a lack of balance and/or understanding in addressing the truly difficult situation here. In the case of Newt Gingrich, who brushed aside the desire of Palestinians (Arabs or whatever you want to call the people driven out of their homes by Zionists sixty years ago and the Israeli Defense Forces almost 45 years ago) to return home, it is surely blatant dishonestly and vote pandering, as he knows better. The Israeli Press is ablaze with debate about Newt’s comments (as it always is about something), and Israel’s political relationship with the U.S. more generally.  Secretary of State Hillary Clinton’s visit and comments about women are still reverberating.

Balancing America’s commitment to the military defense of Israel with promoting the peace in the region that we rightly see as essential to Israel’s well being, has grown particularly difficult of late. President Obama stated the obvious several times during his administration (Israeli settlements being build in the West Bank are illegal, and the border between Israel and a new Palestinian state should be based on the borders of Israel approved by the UN long ago) then rolled over dead in the face of Israeli President Netanyahu’s (who we know from French President Sarkozy is a liar) shouts of outrage.

I had not appreciated before that when some Israelis quote Hamas and some other Palestinians as refusing to recognize Israel’s right to exist (which sounds rather like the desire for another holocaust) they are referring to the Palestinian demand for their “right to return” to their homes, the other insoluble issue preventing a resolution of the Israeli Palestinian conflict. Two articles on the front page of Monday’s The Jerusalem Post illustrate the issue. The banner article was titled: “Cabinet approves plan to fight illegal infiltration; Netanyahu: We will close businesses, so that the enterprise known as the State of Israel does not close – PM to consider repatriating workers when he visits Africa.” What is this all about? Statements by Israel’s Justice Minister, Yaakov Neeman, in the article just below the one quoted above help clarify that question.

Reacting to criticisms from visiting American participants in the Jewish Council for Public Affairs (JCPA) leadership mission to Israel of pending legislation containing loyalty oaths, the Minister scolded the American’s with raised voice saying: “There is no discrimination in any of the legislation…. We will have a majority of non-Jews if not. This is a Jewish state. If you don’t like it, you can move to another country.” He followed this with: “All Jews need to come home to Israel. I want them here. A Jew who doesn’t live here in Israel is not doing the most important thing.”

The Minister and many Israeli’s want a democratic Jewish state. That required them to drive out those living here who were not Jewish and preventing them and other non-Jews from returning (about 20% of Israelis are Arab). The refusal of Hamas and some other Palestinian’s to accept the legitimacy of the Israeli state is not anti-Semitism, it is an expression of their demand for their “right to return” home. It is anti-Zionist.

Israeli Jews are divided on this issue. Palestinians are divided as well. Those in the West Bank and living in Jordan as Jordanian citizens lead relatively prosperous lives and are prepared to give up their past claims on their homes and move on. These Palestinians are generally well-educated and hard-working. For them some token return of a few hundred thousand of the almost 5 million Palestinians driven out of their homes would be enough. But those 1.4 million still living in refuge camps after all these years (largely in Gaza, Lebanon, and Syria) have little to gain from, nor interest in, moving on. This split in the Palestinian ranks largely reflects the Hamas – Fatah divide.

Why then hasn’t the U.S. and the Quartet (U.S., EU, UN, and Russia) focused more on better treatment and integration of refuges in their host countries, largely Lebanon, following the good example of Jordan? And why has Israel so often frustrated the economic development of the West Bank and especially Gaza where most of the refugees still living in camps can be found. There in lies a very complicated story of conflicting interests among Israeli Jews, and among Lebanese political groups. The Lebanese do not allow Palestinians to work or become citizens for fear they will upset the delicate, existing balance between Christian, Sunni Muslim and Shea Muslim political groups and interests. The political conflict in Israel between those wanting a greater Israel and turning a blind eye if not actually encouraging illegal settlements in the West Bank and the peaceniks who favor a “two state solution,” is complicated by monopolistic business interests who continually use their economic and political influence to stifle (if not crush) economic competition from often very adept Palestinian enterprises. Thus no proposal for peace with the West Bank and Gaza can gain wide-spread support in Israel or in Palestine.

The Governor of the Palestine Monetary Authority told me at dinner last night that he feared that the resent wave of so-called “price tag” attacks on Palestinians and mosques in the West Bank and on the IDF (Israeli Defense Force) by right-wing Ultra Orthodox Jewish settlers risked turning what is now a territorial dispute into a religious dispute (Muslims vs Jews). For decades Ultra conservative Jews would park their campers in target areas of the West Bank and stay. When they were harassed by Palestinians for being on Palestinian property, the about to become settlers would seek protection from the IDF, which has occupied the West Bank since the Six Day War. Some months later they would demand adequate water and waste disposal, and then electricity and a few years later they would demand permission to build homes their on the grounds that they had already been living there for some time.

Many Israelis have lost patience with these settlers and periodically the IDF remove them from their illegal settlements. The settlers have dubbed their current attacks on the IDF as the “price tag” for being evicted from their illegal settlements. But right-wing Israeli governments have tolerated the continued advances of these settlements for years. The mystery is that the U.S. seems to tolerate it too. Netanyahu’s sharp rebuke of President Obama’s criticism of the settlements last year and Obama’s quick back down is a case in point. For the moment, the Israeli government seems to be creaking down. According to the Jerusalem Post: “IDF feels that to tackle ‘price-tag’ phenomenon, the gov’t needs to toughen legislation, increase policing, send a clear message.”

The United States has already faded as a major influence on events here. Speaking the truth would be the best way to serve the best interests of our friends in Israel, Palestine, and region. It would help if Newt Gingrich and other politicians stopped pandering to the Jewish and religious right voters in America who ally with them with unprincipled and inaccurate characterizations of the situation here in Israel and the Occupied Palestinian Territory. “Look who is talking about ‘invented’ peoples”

Leaving Israel, August 11, 2006

This is the re-posting of an earlier note:

Hi from Home

Sorry for two notes so close together, but travel conditions today warrant an update after British authorities arrested 24 terrorists who planned to blow up 10 planes over the Atlantic yesterday. I left Israel this morning on Lufthansa with the Governor of the PMA heading for Washington DC. We assumed that we were on the same flights all the way. Thus in Frankfurt I followed him to his gate. After one hour of extra security procedures we arrived at the gate to discover that we were on different flights and I was in the wrong terminal. Thus I passed through another security check point in the correct area and boarded my flight. To my disappointment the plane lacked the sleeper seats I was expecting. I am afraid that I grumbled about it to the steward. Half an hour later my name was called along with 5 other first class passengers and informed that we were being moved to another flight using a 747 with proper seats. The steward whispered that it was because of my complaint. This, however, meant that we had to go through the original security check point yet again. This time they took away my toothpaste and other similar items from my PC bag. They were not impressed when I told them that all of these items had passed through there three hours earlier. Go figure. Anyway, I am home safe (except for the security warning about demonstrations in Washington against US support of Israel’s war against Lebanon).

I would like to share with you the experience last week of one of my fellow advisors at the Palestine Monetary Authority (PMA). He was leaving Gaza, where the PMA has a branch, to return to Ramallah where I was working when he and his driver come under fire from an Israeli tank. This occurred at the Palestinian side check point of the border crossing from Gaza into Israel (the only way to get to the other part of Palestine in the West Bank). The gun fire lasted three hours during which he spoke by phone from the floor of his car to the Governor of the PMA and the U.S. Embassy. He is a fellow American and was born and raised in Virginia. You will be shocked, as he and I were, at what the American Embassy said to him. The woman on the phone said that his name, Akram Baker, sounded Arabic and asked if he was of Palestinian decent. He said yes. She asked what he was doing in Gaza and informed him that the Israeli government does not want American’s of Palestinian decent in Gaza and that the U.S. government would not help him. Israel basically keeps Palestinians living in Gaza prisoners within Gaza and makes it very difficult for Palestinians to enter and leave Gaza. The PMA Governor contacted the Palestinian President Abbas who got the Israelis to call off their tank. We seem to have a new second class American citizen.

The day before this incident one of the PMA employees in Gaza and her daughter were killed by an overhead Israeli helicopter. Akram asked me how I would define terrorism and answered his own question by saying the UN defines it as terrorizing (intimidating, frightening, even murdering) civilians in order to promote some political or ideological goal. Doesn’t that describe, Akram asked, Israel’s continued use of collective guilt and pressure against Palestinians to pressure their government to control terrorists in their own midst. For example, placing dozens and dozens of check points throughout the West Bank to make it difficult for Palestinians to travel around their own homeland (I had to go through two permanent check points every morning and again every afternoon between East Jerusalem and Ramallah—all in the West Bank—plus the occasional impromptu ones). Or closing the border to Palestinian day workers in Israel whenever a suicide bomber blows himself up in Israel? Or by arresting Palestinians legally and fairly elected to the Palestine National Authority (PNA) Parliament for simply being members of the Hamas political party because some terrorists affiliated with some members of Hamas held an Israeli solder. Or by destroying vast parts of Lebanon’s infrastructure and killing over a thousand of its men, women, and children to punish them (Christians included) for not being tougher against Hezbollah fighters in their midst (before the current war, a majority of Lebanese opposed Hezbollah and now a majority support them). Or, killing the PMA employee and her daughter as they walked down the street because they “tolerated” Palestinian terrorists in their midst who held an Israeli solder hostage.

For Palestinians, Akram said, Israeli solders are terrorists. That is why Palestinian children sometimes throw stones at the Israeli solders as they drive through their neighborhoods. It is the only weapon they have. A few become suicide bombers.

But what is Israel to do to defend itself when so many of its neighbors do not accept its right to exist. Become a better neighbor perhaps? But what does it mean that many Arabs do not accept Israel’s “right to exist?” This is a sanitized reference to the desire of many Palestinians to drive Israelis back off the land they took from Palestinians in 1948 and 1967. Hamas, Islamic Jihad, and other Palestinian terrorists are the small minority that cannot get over that historical fact and move on. Most Palestinians—everyone I have ever met—have moved on and would just like the Israelis to withdraw from the territories the UN demands them return (West Bank and Gaza) so that they can get on with their lives. In fact, like almost all political movements anywhere, Hamas really simply wants to govern like any other political party and has separated itself from its militant wing (sounds like the IRA of old). It is in Israel’s interest to make normal political participation more rewarding for Hamas than terrorism—to let Hamas or any other elected government succeed or fail on their merits and to hold them accountable for their performance. Israel and the rest of us should do all possible to help the Palestinian government succeed. A successful Palestine would be a safer neighbor for Israel. Instead, Israel has stopped transferring the taxes it collects for the Palestine government on imports through Israel, proliferated walls and checkpoints throughout the West Bank and made proper administration by the Palestinian government impossible. Now the failure of the PNA will be blamed on the U.S. and Israel. When will they ever learn,… when will they ever learn.