Nawaz Sharif addressing a public gathering in 2012. Credit: cc by 2.0

While entrenched interests among Pakistan’s powerful security establishment constitute one prominent obstacle to any such optimism, a more significant hindrance could be scepticism among the country’s other two neighbours – Afghanistan and Iran – over Sharif’s own past, including his dealings during his two previous stints as prime minister.

Better relations with India

For the moment, Sharif himself is attempting to stoke this optimism. During his election campaign, Sharif pledged to revive India-Pakistan relations, which soured during Pervez Musharraf’s presidency from 2001 to 2008, and during a post-election phone call Indian Prime Minister Manmohan Singh expressed his wish for a “new course” between the two countries.

Following through on this vow, however, will be very difficult. Pakistan has long used ethnic tensions against India, as against Afghanistan, and changing this policy will require both a new mindset and a new set of convictions.

Sayeed Salahudeen, chief of the Muttahida Jihad Council (MJC) and the Hizb-ul-Mujahedeen, a powerful separatist Kashmiri militia group believed to be based in Pakistan, has already warned Sharif not to abandon the “Kashmir cause” over “friendship with India”. As long as “Kashmir is under India’s occupation”, Sulahudeen continued, “the national security of Pakistan, the safety and security of its borders, and its economic stability is at stake.”

Pakistan’s support for Kashmiri militants has been an essential part of Pakistan’s approach toward India, and any attempt to end this will take time. During his election campaign, Sharif stated that the Kashmiri conflict “needs to be resolved peacefully, to the satisfaction of not only both countries but also of the Kashmiri people.”

Sharif also promised a full investigation into the Kargil conflict, the 1999 incident in which Pakistani soldiers and Kashmiri militants infiltrated Indian side of the Line of Control, setting off a major crisis between the two nuclear powers. Sharif, who was prime minister at the time, has long claimed that Musharraf, as the military commander, had acted on his own, although another Pakistani army general insisted in January that Sharif himself was not as ignorant about the plans as he has said.

The new prime minister has also said he plans to investigate the alleged involvement of Pakistan’s powerful Inter Services Intelligence (ISI) agency in the 2008 Mumbai bombings, another key action that would please India but thoroughly aggravate powerful elements within the Pakistani establishment.

The India-Pakistan conflict is today deeply rooted, and governments in Pakistan, both civilian and military, have for decades viewed India as a strategic rival. Indeed, the potential “threat” from India has consistently been the army’s justification for its massive budget.

While civilian governments have generally opposed increasing military expenditures, the military-intelligence establishment continues to exert considerable influence, particularly in foreign and security policymaking. Sharif’s post-election statement that the prime minister would now be “the army chief’s boss” was an attempt to mitigate this concern, but it remains unclear whether he will be able to effectively follow through.

Sharif appears to hope that expanding economic ties between the two countries will weaken resistance to enhancing relations between the two long-time rivals. India’s economy has grown at a much more rapid pace than Pakistan’s over the past decade, and building stronger commercial ties to its giant western neighbour offers Islamabad perhaps the most direct route to getting its own economy out of the doldrums.

Afghan discomfort

While Sharif has established a certain credibility regarding his desire for better relations with India, the same does not hold true for Afghanistan where the new prime minister does not enjoy much popularity.

This is due not only to his support for warring jihadi factions in 1992, but also because Pakistan under his watch became the first country to recognise the Taliban as the legitimate Afghan government in 1997. In addition, Afghans have yet to forget Sharif’s attempt to impose Sharia law in 1999, the same set of decrees the Taliban brutally imposed in Afghanistan.

In his congratulatory message to Sharif, Afghan President Hamid Karzai expressed his hope that the two countries would be able to cooperate “to root out terrorism”. However, this was viewed mostly as a formality.

“If Pakistan’s political officials want to show good faith,” an Afghan news website states, “they have to confront terrorist groups inside Pakistan that are organised by ISI.”

Indeed, concern over an uncomfortably close association between Sharif and the Taliban intensified during the candidate’s pre-election gathering in Lahore. If he won, Sharif promised, he would pull Pakistan back from the U.S.-led international “war on terror” coalition. If such a statement were not meant to “blackmail” the United States, an editorial in Afghanistan’s Hasht-e Sobh newspaper stated, it means “he is serious in what he is saying.”

In a separate interview with the Hasht-e Sobh, Mahmoud Karzai – Hamid Karzai’s brother and a possible presidential candidate for Afghanistan’s 2014 election – accused Pakistan of attempting to annex Afghanistan, the prospects for which the country “tasted during Taliban rule”.

Such rhetoric refers to an old dispute over the British-drawn boundary that divides Pakistan and Afghanistan as well as Pashtun tribal areas, though the region continues to be prone to frequent violence and remains a source of tension between the two countries. Whether Sharif can dispel such suspicions will yet another challenge he faces in improving ties with his neighbours.

Iran and Saudi Arabia

Iran, which also accumulated its share of complaints about Islamabad’s behaviour under Sharif in the 1990s, is not expected to play a primary role in Pakistan’s regional policies, barring a major event such as a military crisis or controversy around gas pipelines.

Contrary to some analyses, any Iranian scepticism regarding the new Pakistani government is not related to the Islamabad’s alleged support for Sunni insurgents in Balochistan province, on the Iranian side of the border. In fact, Iran and Pakistan have established a cooperative relationship on this front.

Rather, scepticism stems, again, from Nawaz Sharif’s support of the Taliban during the 1990s, as well as his close associations with Saudi Arabia which, among other support, gave him safe haven during the years he was exiled from Pakistan after his ouster by Musharraf in 1999.

Iran and Afghanistan almost went to war in 1998, after Taliban militants murdered Iranian diplomats in Mazar-e Sharif. Because of Sharif’s support for the Taliban, as well as his close ties to Riyadh, Tehran’s chief rival in a region that has become increasingly polarised along sectarian lines, Iran’s hard-line media has reacted with concern to his return as prime minister.

Among other things, Tehran is concerned about the fate of the cross-border natural-gas pipeline between Iran and Pakistan despite strong U.S. opposition. Pakistan desperately needs Iranian gas to meet its growing energy needs, and outgoing Pakistani President Asif Ali Zardari and Iranian President Mahmoud Ahmadinejad inaugurated the final construction phase of the pipeline in March.

Pakistan received 500 million dollars to start building the pipeline in its territory, running through Balochistan into Karachi, and the deal is clearly to Pakistan’s advantage.

However, if a story by one influential Pakistani newspaper is true, that deal could now find itself in jeopardy. The Dawn newspaper has reported on Sharif’s rumoured suggestions to Saudi Arabia that “he may be open to reviewing the Iran-Pakistan gas pipeline.”

South Africa has pledged to help Nigeria make the automotive sector the West African nation’s flagship industrial target. Currently German car manufacturer BMW has a plant at Rosslyn near Pretoria. About 80 percent of the BMWs produced there are for the international market. Credit: John Fraser/IPS

The lack of economic diversification throughout sub-Saharan Africa means that despite South Africa’s pledges to help Nigeria make the automotive sector the West African nation’s flagship industrial target, it may be difficult to do so, experts say.

Earlier this month, South African Trade and Industry Minister Rob Davies announced the initiative during a visit here by Nigerian President Goodluck Jonathan.

It is a move that is seen as an important milestone in inter-African industrial cooperation. However, Peter Draper, a research fellow at the South African Institute of International Affairs, questioned whether this collaboration would develop into economic integration.

“The real question is whether such cooperation could ultimately evolve into meaningful, broader, economic integration rather than the network of mostly hollow shells that currently masquerade as free trade agreements,” he told IPS.

“I think that Nigeria and the Southern African Customs Union should negotiate a complementary Free Trade Area agreement to promote closer economic relations – as the complementarities are strong, and it would bring the two countries closer together politically.”

Draper said that the African Union (AU) has already developed a number of initiatives for specific sectors, but more needs to be done.

“Actually there are quite a few sectoral policies covering, inter alia, energy, communications, transport, and various other integration initiatives. The problem remains implementation, not a lack of plans,” he said.

He said that it seemed to be commonly accepted that the AU’s role was to develop and coordinate implementation of a continental “master plan” that integrates these various initiatives.

“I think there is a role for a broader continental perspective, but I prefer the notion of ‘subsidiarity’ – pioneered in the European Union – where implementation is left to the lowest possible level of government.”

Draper said that the cooperation between South Africa and Nigeria could be an important mentoring initiative for South Africa.

“South Africa has been (involved in) auto industry policy development since the mid-1920s and has a lot of experience to draw on and share,” he explained.

“It reminds me of cooperation in Latin America, which historically evolved through sectors, involving the auto industry particularly. The European Community (which became the EU) also started out through a network of sectoral collaboration – iron and steel in particular.”

Minister Davies told the Business Day newspaper that discussions on automotive cooperation with Nigeria were still at an early stage.

But while some manufacturers, such as Nissan, might be willing to set up plants in Nigeria, others are more cautious.

Bodo Donauer, the managing director of BMW South Africa, said that in his group “production follows the market” and he does not currently envisage a BMW plant being established in Nigeria.

“Local production plants make it easier to access and develop new markets with long-term growth potential. Having a local plant also makes the company a ‘local player’ and boosts acceptance of the products locally and underscores our good corporate citizen approach,” he said.

“The success of this strategy has been proven by positive sales trends since the ramp-up of production plants, for example in the Unites States, in China, in the United Kingdom and, of course, in South Africa.”

He said that around 20 percent of BMWs produced at the Rosslyn plant near Pretoria are sold on the local market in South Africa “with more than 80 percent exported to markets around the world, including one percent to certain markets in the rest of Africa.”

“Given the current size of the new premium car market in the rest of Africa, we believe the BMW Group is well-placed with its current global production network to meet any additional demand in markets like Nigeria without the necessity for additional production locations,” he said.

Peggy Droidskie, an advisor to the South African Chamber of Commerce and Industry, said that the initiative between South Africa and Nigeria was very welcome, as regional integration in Africa remains high on the development agenda.

“Nigeria is a large market, and it is closer to Europe. This proximity to Europe implies that it would be logical for European connections to be used.

“The fact that South Africa is preferred (as a partner for Nigeria) indicates that South Africa is very competitive and can accommodate the requirements of Nigeria. It also provides South African manufacturers with an additional footprint in Africa,” she said.

Droidskie predicted that some manufacturers who currently operate in South Africa would become interested in setting up in Nigeria.

“Agreements of this nature are driven by politicians,” she noted. “The politicians believe that the agreements that they enter into benefit the private sector, which is often, but not always, the case.”

She said that South African vehicle manufacturers are already exporting a significant number of vehicles to Nigeria.

“Last year, the number was nearly 15,000. Nigeria is therefore currently a lucrative market for South African vehicle manufacturers. It is therefore very likely that the manufacturers will take advantage and come to the party.”

And she predicted that this cooperation could expand to other industrial sectors.

“If the profile of Nigeria’s imports is taken into account, there is considerable room for an increase in South African exports to Nigeria. For instance, there is room for greater trade in electrical and electronic equipment and machinery.

“With the development of the Tripartite Free Trade Agreement between the three regional economic blocs in sub-Saharan Africa, there is considerable potential for cooperation to expand to other countries and to other sectors.”

Trinidad and Tobago’s Foreign Affairs Minister Winston Dookeran, speaking, with CARICOM Secretary General Irwin La Roque (seated right).

Whether by accident or coincidence, recent days have seen a variety of Caribbean leaders and journalists question whether the region is failing to pursue leadership roles within international organisations – and thus losing its voice in global issues like trade, climate change, and peace and security.

“These days, it is difficult to find CARICOM citizens in top positions, except for Dr. Carissa F. Etienne of Dominica who is director general of PAHO [the Pan American Health Organisation]; Albert Ramdin of Suriname, who is assistant secretary general at the OAS [Organisation of American States]; and Judge Patrick Robinson of Jamaica, who is president of the International Criminal Tribunal for the former Yugoslavia,” the Jamaica Observer said in an editorial this week.

The paper went on to blame “the complete lack of strategic planning by the political leadership and Caricom Secretariat in positioning our regional citizens for top jobs.”

Earlier in the week, the country’s former prime minister P.J. Patterson, speaking at the launch of the book “Multilateral Diplomacy for Small States” by former Guyanese foreign affairs minister Rudy Insanally, also lamented the fact that few from the Caribbean Community (CARICOM) were occupying high-profile positions outside the region itself.

In defence of the 15-member bloc, Trinidad and Tobago’s Foreign Affairs Minister Winston Dookeran, who chairs the CARICOM Council for Foreign and Community Relations (COFCOR), said the issue was among “strategic matters” discussed during the two-day meeting of Caribbean foreign ministers that ended here Wednesday.

“At the level of Caribbean personalities in international organisations we are conscious of it and we had a long discussion on that and we are devising a process by which we are trying to improve that presence,” he told IPS.

Dookeran, who in his own address to the foreign ministers had also questioned whether “diplomacy in the Caribbean has lost its magic”, said that Caribbean countries need to make “the political statement as necessary in the councils of those bodies that we need to have a higher presence”.

CARICOM Secretary General Irwin La Rocque told IPS that Caribbean countries, despite their seemingly low profile, are still viewed as “prized assets” globally, and points to the presence at the meeting here of delegations from as far away as Japan and New Zealand.

“I am not so sure we have lost our charm, I think it is there. A number of political personalities have expressed an interest in coming to the heads of government meeting in Trinidad in July and I think that in itself speaks volumes,” La Roque said.

He added that there have been recent bilateral discussions with the United Arab Emirates, Turkey and Chile, arguing “the outside world seems to recognise the ability of the CARICOM countries to punch above its weight.

“I don’t think we have lost the charm, I think what we have to do is to be a little certain in terms of harnessing and leveraging our collective voices in the international forum,” he told IPS.

Caribbean diplomacy is expected to benefit from the decision of the Trinidad and Tobago government to fund a diplomatic academy at the University of the West Indies (UWI) that “would provide current and future diplomats, government officials, non-state actors with training and learning facilities on issues and processes that are relevant to the discharge of our diplomacy and the conduct of our foreign relations”.

Dookeran, who has been calling for a “new frontier for Caribbean convergence”, said the academy, which opens in September with an international conference, “will establish a network of cooperation with similar training and learning institutions to benefit from the benefits and offerings from other countries,” and that interest has been shown by countries in North America, Asia, Europe and Latin America.

“We are realising the limitations of being a one-language country,” he conceded. “It will take time to change that…this is part of our British inheritance.”

The CARICOM foreign ministers have also vowed to pursue reforms in the United Nations Security Council to better take into consideration the positions of developing countries.

“Clearly that’s an issue that is very troubling,” Dookeran said, adding that the membership should be “placed on the agenda squarely and frontally at the next [General] Assembly”.

“We have in fact begun to talk with some major countries in the world in order to make sure we have the necessary political clout to make a start,” he said.

The communiqué issued at the end of the meeting here said Japan’s candidature for a 2016-2017 non-permanent seat and reform of the Security Council had been discussed with Minoru Kiuchi, the parliamentary vice-minister for foreign policy, and “welcomed the commitment expressed by Japan to drastically increase assistance” to the region.

Nonetheless, Dookeran insists that small states “should have a political presence in the Security Council”.

“We are not saying in what ways it should be done at this stage, and we are saying that the continent of Africa should definitely be part of that process,” he said. Such changes would be a reflection “of the return to political and moral legitimacy of the body and therefore there is need to establish that so that its views cannot be ignored.

“There is [also] need to have more diplomatic dialogue with international financial institutions” such as the World Bank and the International Monetary Fund (IMF) so as to get them to change their lending policies to small island developing states (SIDS), he said.

In this vein, the Caribbean is working on developing new strategic partnerships with other SIDS “so that we can improve the strength of the voice of the small economies of the world.”

Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development (UNCTAD). Credit: UNCTAD.

Transmitted through both trade and financial channels, they led to an economic slowdown in most countries, and even outright recessions in others.

These recent events call for a thorough examination of the different kinds of possible shocks to the external economic environment and the channels through which they spread. We also need to better understand the factors that determine countries’ vulnerability to such shocks, and how we can strengthen the resilience of different economies.

Perhaps the most obvious case of an external shock is that of a financial crisis, such as the Asian Financial Crisis initiated in the early summer of 1997, or the most recent global financial crisis.

These shocks have demonstrated that countries need to build resilience against the shortcomings of our international monetary and financial system. The most pertinent shortcoming is the failure to avoid a disorderly expansion of short-term capital movements, which have been a major factor in creating economic instability.

Partly as a result of the experiences of the Asian Financial Crisis, many developing countries have built up their resilience and are in a stronger position today to withstand shocks originating in international capital markets than in previous decades.

Lower debt-to-GDP ratios and improved debt management have been contributing factors in this resilience. But the most important factor in shielding these countries from the volatility of capital flows has likely been their accumulation of foreign exchange reserves.

However, reserve accumulation as an insurance against the instability of capital markets is a costly policy measure, and one that is always second best to multilateral measures to better regulate these markets.

Furthermore, not all countries have been able to build up such a “war chest”. Indeed, some countries are now left with little reserves to cope with future needs that may arise in international financial markets, making them more vulnerable to external shocks.

A second external shock that has recently affected many developing countries is the sharp slowdown in demand for their exports in the developed markets after the recent financial crisis.

In the decade preceding the crisis, many developing countries were able to benefit from a trade-led expansion, allowing them to achieve growth rates that were sometimes four or five percentage points higher than those of the developed world.

This resulted in a significant shift in the balance of the world economy, with developing countries accounting for a growing share of trade and growth, and led some pundits to argue that we were about to witness a “de-coupling”, which would see developing countries continue to grow despite the unsatisfactory performance of developed countries.

However, prospects in the developing world remain heavily influenced by the growth dynamism in the developed countries. To the extent that developing countries continue to rely on exports to developed countries as their key growth driver and have to cope with unfettered capital flows generating boom and bust cycles, their economies will remain vulnerable to shocks to their external economic environment.

Most forecasts predict that the current difficult external environment is likely to remain for the near future, with only a slow recovery towards a weak growth path in advanced economies.

This suggests that developing and transition economies will need to reduce their export orientation to developed economies if they want to continue to grow and increase their resilience to external economic shocks. Instead, they will need to rely more on domestic, regional and South-South trade. Thus they will need to adapt their development strategy in order to strengthen resilience.

On the other hand, coordinated measures at the multilateral level to expand global demand would be preferable. For example, increasing domestic demand in advanced countries with a current account surplus would stimulate global demand while helping to reduce global imbalances. This would be more appropriate than the current process of global rebalancing, which is being led by demand compression in deficit countries, accentuating the risks of a global economic downturn.

These are only two examples of significant external shocks that developing countries are vulnerable to. Identifying external shocks and mitigating their impact on trade and development requires the availability of statistical tools that capture the growing interdependence of national economies.

Among the many measures that are available, the terms of trade is a key indicator of the impact of external shocks, especially in countries with a high share of external trade relative to gross domestic product.

The United Nations Conference on Trade and Development (UNCTAD) has been particularly active in this area, pursuing the development of more disaggregated terms of trade figures by estimating the contribution of different product groups to changes in the terms of trade.

All these issues require the attention of policymakers, as a better understanding of the problems will help in finding solutions.

(END/COPYRIGHT IPS)

But Mercosur’s underlying problems will continue to block progress towards integration, experts warn.

There is a “legal vacuum” surrounding Paraguay’s eventual return as a full member of Mercosur – South America’s largest trade bloc – said Tullo Vigévani, a São Paulo State University (UNESP) professor of political science specialising in international relations.

Venezuela’s admission as a fifth full member was approved at the Jun. 29, 2012 summit, when Argentina, Brazil and Uruguay took advantage of the absence of Paraguay, which was suspended at the same meeting because of the Paraguayan legislature’s ouster of then President Fernando Lugo earlier in June.

Lugo was impeached in what was considered a “summary trial” that violated the bloc’s democracy clause.

The Paraguayan Senate, which was blocking Venezuela’s inclusion by refusing to ratify the admission agreement signed in 2006, finally voted against it in August in a vote that was more symbolic than effective.

But a political agreement will likely be reached to sort out the institutional mess after Paraguayan President-elect Horacio Cartes takes office in August, since the bloc’s powerhouses, Argentina and Brazil, will exert strong pressure on Paraguay due to economic interests, Vigévani told IPS.

The new government, which represents the return to power of the rightwing Colorado Party that ruled Paraguay from 1947 to 2008, is expected to get Congress to ratify Venezuela’s admission.

However, Venezuela adds a new element of uncertainty in the bloc because of the opposition’s challenge to President Nicolás Maduro’s Apr. 14 victory, in the wake of Hugo Chávez’s death from cancer on Mar. 5.

But the challenges faced by Mercosur are mainly due to the “conflict-ridden relations” between Argentina and Brazil, which are both experiencing processes of deindustrialisation, according to Vigévani.

Argentina lost a large part of its industries in a lengthy process that began in the 1970s, he pointed out. Privatisation and trade liberalisation policies adopted in different periods, such as the 1976-1983 dictatorship or the administration of Carlos Menem
(1989-1999), led the country to disaster.

The problem is that Argentina is now trying to carry out “old-fashioned reindustrialisation,” protecting non-competitive sectors without the technological innovations that could help create a sustainable future for the country, although the pressure to generate jobs is understandable, Vigévani said.

Disputes between Argentina and Brazil have occurred constantly since Mercosur was created in 1991, such as in the case of attempts to achieve ambitious goals like macroeconomic harmonisation, complementary supply chains, free circulation of goods and services, and a common currency, which have proved elusive.

Trade between South America’s two giants grew 13-fold since the Asunción Treaty, which founded Mercosur, was signed. But it appears to have reached a limit in 2011, when Brazil exported 22.7 billion dollars worth of goods to Argentina and imported 16.9 billion, according to official figures from Brazil.

The imbalance in Argentina’s favour began in 2004. And last year, Brazil’s sales fell 20.75 percent, while Argentina’s only slipped 2.73 percent.

Bilateral relations have also suffered because large Brazilian investors have pulled out of Argentina.

Brazil’s state oil company Petrobras is selling its assets in Argentina, where it had a string of service stations, while Brazilian mining giant Vale, privatised in 1997, suspended a potassium mining project in Rio Colorado, drawing an angry reaction from Buenos Aires.

But Brazil is also caught up in its own process of deindustrialisation, although less dramatic and more recent than the one Argentina experienced in the past.

For that reason, it is trying to defend some industries with measures such as tariff hikes, minimum national content rules for government purchases, tax cuts, and reductions in energy prices, in order to sustain the near full-employment achieved thanks to the fast expansion of the services, agriculture and construction industries.

The industries that the Brazilian government is trying to shore up are, however, “backwards,” such as the metallurgical industry, while sectors with greater technological innovation, like electronics and chemistry, are not as strong, said Julio de Almeida, an economist with the Institute for Studies on Industrial Development (IEDI).

With China’s boom in the world economy, industrial output has shrunk as a proportion of Brazil’s GDP and exports.

In fact, this problem is faced by Mercosur as a whole, which has increasingly become an exporter of primary products and an importer of manufactured goods.

The challenge faced by the entire bloc is to develop “policies that strengthen members’ processes of innovation and training, to boost competitiveness in production that incorporates new technologies,” said Vigévani.

This view is more and more widely expressed by analysts. But no viable short-term solutions are in sight.

Venezuela’s incorporation as a full member of Mercosur doesn’t improve the outlook in this sense. With its growing trade imbalance and heavy dependence on oil exports and on imports for just about all other products, Venezuela is already a major importer of food and manufactured goods from Argentina and Brazil.

For example, Brazil exported 5.06 billion dollars worth of goods to Venezuela last year and only imported 997 million dollars, according to statistics from Brazil.

Brazil’s investment in Venezuela is also sliding, with several companies pulling out of the country.

Brazilian companies have only made four investments in that country in the last five years, compared to 20 in Colombia, 19 in Chile and eight in Peru, according to the Centre for Integration and Development Studies (CINDES) in Rio de Janeiro

The economic slowdown forecast for Venezuela – from last year’s 5.6 percent to 2.5 percent this year, according to the United Nations report World Economic Situation and Prospects 2013 – and a 20 percent inflation rate exacerbate the uncertainty of what Venezuela’s admission will mean for the bloc.

Nor does the negotiation of a trade agreement with the European Union, which is back on the table, promise many benefits, because it is basically a question of opening up that market to Mercosur’s farm products, as a counterpart to increased access by European industrial goods and services to South America’s two largest economies, which would merely aggravate the bloc’s problems.

In addition, the severe economic crisis facing the EU further limits the ambitions of the trade talks between the two blocs.

Courtesy of Bagher Asadi/Facebook

“So far as I know, this individual (in custody) is an experienced foreign ministry diplomat and his latest assignment has been deputy for the D8 group secretary-general,” former foreign minister Manouchehr Mottaki told the Iranian Student News Agency (ISNA). “But I am not informed about the details of the situation.”

The D8, of which Asadi was director of the secretariat, is a group of developing nations with large Muslim populations that have formed an economic development alliance. It includes Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.

A source close to the family told IPS that since his arrest, Asadi’s family has been under pressure from security forces not to discuss the matter publicly.

“They are worried that talking to the media will not help his situation in detention,” the source said on the condition of anonymity.

Another source close to the family told IPS, “We are in shock how the Iranian authorities can arrest somebody without even announcing it when he was at home.”

The source said that during the arrest, which occurred on Mar. 12, Asadi’s house was searched and his laptop and other personal items were confiscated.

“The authorities promised the family to release him after a few days, but he is still in prison. A few days after the arrest, Bagher called home and said he is okay. But since then there has been no news about his condition and the reason behind the arrest.

“We are concerned that he is under pressure and they want to break him,” the source added.

There appears to be official confusion as to Asadi’s status. Ahmad Bakhshayesh, a member of the Iranian Parliament’s National Security Commission, told Bahar newspaper Thursday, “Ordinarily, the arrest of a diplomat is a result of a violation he may have committed in the country in which he is stationed, or it could be political, for example about the subject of reformists.”

Speculating about the case, which he claimed no personal knowledge of, Bakhshayesh added, “I think this news must be wrong, and Reuters did wrong in publishing such news.”

This last was a reference to a Reuters article published Tuesday which first broke the news that Asadi had been arrested, although the reporter was unable to independently confirm the claim by anonymous sources.

Mohammad Reza Heydari, a former Iranian diplomat who joined the opposition following the violent post-election crackdown on street protesters in 2009 by the Iranian police and intelligence, told IPS that sources inside the foreign ministry told him that Asadi has criticised President Mahmoud Ahmadinejad’s policies in private meetings, and he may have been arrested after news of these talks were reported and leaked.

“Considering his way of thinking and his criticism, I believe they are building a case against him. Fabricating cases against individuals is a common practice of the Islamic Republic regime,” said Heydari.

“The Iranian regime has taken the Iranian people as hostages these days. He talked about the people’s rights and current affairs, and this was reported to Tehran by people he was socialising with, and this led to his passport confiscation and detention upon return to Tehran,” he said.

Among his foreign ministry colleagues, Asadi is known as one of the most professional Iranian diplomats. In a prescient January 2004 op-ed published by the New York Times, Asadi warned against the conservative group that could follow President Mohammad Khatami’s reformist cabinet.

“The conservatives’ blatant disdain for human rights and republican aspects of governance, among other things, would inevitably invite outside censure and further complicate an already tenuous relationship,” he wrote.

The Iranian mission at the U.N. did not return repeated calls by IPS for verification of the news or additional details about the arrest.

Although there has been speculation that the arrest is connected to upcoming national elections in June, Heydari believes it’s simply business as usual.

“This arrest is a part of the treatment the Islamic Republic gives its diplomats who speak their minds in the countries where they are stationed, aiming to give a lesson to the diplomats that if they express any opinions other than the ruling system’s, they will be severely dealt with,” he said.

Asadi’s arrest took place amidst other political arrests of reformists or critical activists over the past few weeks, as the Jun. 14 elections approach.

High-ranking officials have warned against the candidacies of former Iranian presidents Mohammad Khatami and Ali Akbar Hashemi Rafsanjani, accusing them of involvement in the 2009 post-election events.

According to Heydari, the Foreign Ministry Inspection Office routinely tells Iranian diplomats prior to dispatching them on their missions that they must refrain from expressing opinions in the presence of individuals who could be potential state enemies, as those expressed opinions could be used against the state later.

“There should be freedom for people to talk. After all, in different meetings, people express their opinions. Monitoring the individuals everywhere and questioning them later are not sustainable methods,” he said.

UNASUR presidents back Nicolás Maduro’s triumph and fly to Venezuela for the inauguration. Credit: Presidenty of Peru

Nicolás Maduro was recognised as president-elect of Venezuela by a Union of South American Nations (UNASUR) emergency summit held in Lima to discuss the situation in the highly polarised country, where a narrow electoral result triggered social and political tension.

Meanwhile, Venezuela’s electoral authority said it would audit the ballots that were not already scrutinised on election night, in response to opposition demands.

It was after 1:00 AM Friday when Peruvian President Ollanta Humala announced, at the end of a nearly three-hour debate behind closed doors, the bloc’s support for Venezuela’s election authorities, who had declared Maduro the winner of the Sunday Apr. 14 elections.

Humala publicly congratulated the leftwing Maduro, the political heir of the late Hugo Chávez (1954-2013), who stood by his side smiling and looking clearly relieved. On Friday Maduro will be sworn in.

“With this consensus agreement we want to express UNASUR’s position that we will always be involved in the task of accompanying, strengthening and cooperating in the processes of fortifying the democracy that we have today in the region of South America,” Humala said.

“The idea and spirit of UNASUR is to contribute to and cooperate in the solution of problems that can affect democracy,” he added.

A Peruvian official then read out the summit statement, whose second point indicated that UNASUR urged all sectors that took part in Venezuela’s presidential elections to respect the official results announced by the National Electoral Council (CNE).

The meeting hosted by Humala was attended by presidents Cristina Fernández of Argentina, Evo Morales of Bolivia, Dilma Rousseff of Brazil, Sebastián Piñera of Chile, Juan Manuel Santos of Colombia, José Mujica of Uruguay, and Maduro himself, as president-elect of Venezuela.

Vice President Jorge Glas represented Ecuadorean President Rafael Correa, who is on a tour of Europe, and ambassador Marlon Faisal Mohamed-Hoesein took part in representation of Suriname. The only active member of the bloc not represented at the meeting was Guyana.

Paraguay is still suspended over the June 2012 removal of President Fernando Lugo by the country’s legislature.

The chairman of Peru’s parliamentary commission on foreign relations, Víctor Andrés García Belaúnde of the opposition Popular Action party, stressed the significance of the emergency summit given the political standoff in Venezuela.

“The case of Venezuela is not similar to that of Honduras (where President Manuel Zelaya was ousted in 2009) or Paraguay. Venezuela is the fourth-largest economy in Latin America, and it is also a member and promoter of the creation of UNASUR, and this decision by the bloc will have repercussions throughout the entire continent, if not the world,” García Belaúnde told IPS.

The third point of the Lima announcement ratified what was stated in the Apr. 15 Declaration of the UNASUR Electoral Mission to Venezuela: that any complaint, question or request for an extraordinary procedure raised by any participant in the electoral process should be channelled and resolved within the existing legal framework and the democratic will of the different parties.

It went on to “take positive note of the CNE decision to use a methodology that would permit the total audit of the polling stations.”

In Venezuela, electronic voting machines produce a paper receipt, which voters deposit in boxes. On Sunday, 54 percent of the boxes were automatically scrutinised. The CNE has now agreed to audit the remaining 46 percent.

In the elections, Maduro took 50.8 percent of the vote, compared to 49 percent for opposition candidate Henrique Capriles, a difference of 270,000 votes. On Monday Capriles called publicly for a total recount, and thousands of opposition protesters took to the streets to back that demand. On Wednesday he filed a formal request with the CNE.

The decision to audit the rest of the ballot receipts, which according to the CNE is the only option provided in the regulations for the law on electoral processes, was accepted by Capriles, who said “with this we are where we want to be.”

In the end, the opposition leader did not fly to Lima as had been speculated ahead of the UNASUR meeting.

The fourth point of the UNASUR declaration called for a halt to any “attitude or act of violence that jeopardises the social peace of the country”. It also expressed “solidarity with the injured and the families of the fatal victims of Apr. 15, 2013” and called for dialogue and the “preservation of a climate of tolerance for the good of the entire Venezuelan people.”

Seven people were killed and 61 injured during the unrest on Monday, according to Attorney General Luisa Ortega.

After the UNASUR declaration was read out, Maduro lifted his right fist and hit his chest in a sign of victory.

While the summit was taking place, a group of Venezuelans gathered outside of Peru’s presidential palace, beating pots and pans and waving signs protesting the presence of the president-elect. But they were drowned out by a larger number of Peruvian sympathisers of Maduro and the late Chávez (who died of cancer on Mar. 5, after 14 years in power).

Legislator Freddy Otárola Peñaranda of Peru’s governing Nationalist Party, a member of the foreign relations commission, said UNASUR’s decision was in line with the fundamental principle that each country must resolve its own domestic problems.

“With this resolution, UNASUR is helping our Venezuelan brothers and sisters to find peaceful solutions to their problems under the principle of respect for the self-determination of peoples, “he told IPS.

“Venezuelans have to work out their own internal questions, without meddling by anyone,” he added.

Farid Kahhat, head of the international politics department at the Pontifical Catholic University of Peru, said that once Venezuela’s CNE agreed to audit the boxes with the ballot receipts, a UNASUR declaration was no longer necessary.

But he told IPS it was important that the bloc called for dialogue between the Venezuelan government and the opposition, and that it did not merely back Maduro’s victory.

Although Azerbaijan was the birthplace of the magazine, arguably the country affected most by its essays and illustrations was Iran. At one time Jalil Mammadqulu-zadeh, the editor of Molla Nasreddin, even moved its editorial offices to Tabriz, a city with a heavily Azeri population in the north of Iran.

The ideas propagated by the magazine even contributed to the intellectual foundations of Iran’s Constitutional Revolution of 1905.

Looking at the Molla Nasreddin illustrations hanging at the Ali and Nino coffee shop today, one is tempted to ask whether Azerbaijan can again inspire a democratically oriented transformation in Iran. In theory, it has the potential to do so. The Azerbaijani republic was born on the ashes of the Soviet Union with the promise of a democratic, European future.

The fact that most Azerbaijanis are, at least notionally, Shi’a Muslims and speak the same language as nearly a quarter of the Iranian population should have strengthened Azerbaijan´s position as a conduit for democratisation.

In reality, rather than serving as an inspiration for the democratisation of Iran, Azerbaijan itself is becoming increasingly vulnerable to hardline influences originating in the Islamic Republic. It is true that many Iranians travel to Baku to enjoy the socially liberal atmosphere, where they can do away with the strict Islamic dress code and enjoy an alcoholic drink in a cafe.

These are not trivial freedoms for those living under the thumb of an oppressive theocracy. However, Baku´s social liberalism is not matched by political liberalism.

Rather to the contrary, looking at Azerbaijan´s political evolution, many Iranians can see a familiar pattern unfolding in Baku, one that features the curtailment of rights via the promulgation of repressive laws against non-governmental organisations (NGOs), arrests of government opponents and the steady effort to restrict freedom of expression.

Over the past few weeks Azerbaijani authorities have arrested a number of activists from the civic youth movement N!DA, a presidential candidate from the opposition Republican Alternative Party, Ilgar Mammadov, and a charismatic Shi’a cleric, Taleh Bagir-zadeh. The scope and intensity of the latest crackdown suggest a fresh drive by officials to stamp out dissent during the run-up to presidential elections in fall 2013.

Iran, too, is scheduled to hold a presidential election in a few months. But Iranians do not look to Azerbaijan as an example of free and fair elections. Instead, it is Azerbaijanis who realise that – even in its current severely curtailed form, especially after the disputed elections of 2009 and the violent crackdown that ensued – the Iranian system offers a greater degree of pluralism than the Azerbaijani way.

Every presidential election in Iran since 1997, when reformist cleric Mohammad Khatami won, has produced surprising outcomes. This cannot be said about Azerbaijan, where the winner is known well in advance. The fact that even elections in the Islamic Republic are seen as more lively these days than in Azerbaijan is an indictment of the state of Azerbaijani politics.

Current conditions in Azerbaijan invite Iranian meddling. And the repressive policies of President Ilham Aliyev’s administration in Baku are making the Iranians’ task of extending their influence easier. The more Azerbaijani authorities crack down on local independent media, the more people tune in the Islamic Republic-affiliated Azeri language channel Sahar TV.

Cleverly, Sahar doesn’t just focus on religious issues, such as the demolition of mosques and bans on the use of hijab in schools, but also highlights more common concerns, such as corruption, political arrests and deficient social services. For many ordinary Azerbaijanis, especially outside Baku, Sahar’s coverage strikes a sympathetic chord.

In the southern regions of Azerbaijan in particular, where poverty and unemployment are still rampant, many people travel to Iran for foodstuffs and medicines, often despite petty corruption and humiliation from Azerbaijani customs officials.

The Mar. 31 arrest of Bagir-zadeh, the young Shi’a cleric who denounced President Aliyev’s administration in a recent sermon, may be a pivotal moment. The arrest sparked unrest in the militantly Shi’a village of Nardaran, north of Baku and Azerbaijani authorities have tried to use the protest as proof of a pro-Iranian Islamist threat, not least to bolster Western support for Aliyev’s administration.

However, many secular intellectuals in Azerbaijan, most of them worlds apart from the Islamists in terms of their values and lifestyles, have expressed support for Bagir-zadeh. The Iranian-incitement hypothesis thus hasn’t been able to gain traction. If authorities continue along this path, the Islamist-tinged opposition to the rule of the President Aliyev may well become a self-fulfilling prophecy.

It is in the interests of both Azerbaijanis and the country´s Western partners to avoid such a scenario. Baku should be pressured into making immediate policy adjustments, easing up on its efforts to stifle all forms of dissent. A political system in Azerbaijan that embraced, not shunned individual freedoms could also have a powerful demonstrative effect on Iranians, and be of help to those in Iran who are struggling for democratisation.

*Editor’s note: Eldar Mamedov is a political adviser to the Socialists & Democrats Group in the European Parliament, who writes in his personal capacity.

This story originally appeared on EurasiaNet.org.

José Antonio Ocampo. Credit: UN Photo/Mark Garten

The 2013 U.N. Human Development Report entitled, “The Rise of the South: Human Progress in a Diverse World” and its lead author, Khalid Malik, suggest that as the South grows economically, its citizens experience an “expansion of human capabilities and choices” that is leading to further social and political development.

Others are more sceptical of the purported “rise of the South”, pointing to the world’s widening income inequality, the lack of correlation between economic growth and equitable and sustainable socio-economic policies, and relatively unchanging global power dynamics.

On Monday, Columbia University’s Committee on Global Thought hosted a conference to discuss these issues with panelists including Malik, U.N. Ambassador Luis Alfonso de Alba of Mexico, and Dr. Jose Antonio Ocampo, a professor at Columbia’s School of International and Public Affairs and a former U.N. Under-Secretary-General of Economic and Social Affairs.

Ocampo called Malik’s characterisation of the rise of the South as a “tectonic change” a bit strong.

While he recognises the important changes that are occurring now, with regard to overall human development Ocampo says, “It’s a process that will have long-term implications.”

Excerpts from IPS’s interview with Ocampo on the impact of newly rising economies in international trade and global governance follow.

Q: Both you and Ambassador de Alba agree on the importance of multilateral global governance in terms of human development. Ambassador de Alba addressed the shortcomings of current institutions and, in particular, the U.N.’s inefficient decision-making processes. Discuss what productive, multilateral global governance would look like.

A: I have written extensively on the G20 and my perspective is that these informal institutions, which I call “elite multilateralism”, are not the best form of global governance. I like “the G’s” when they are part of multilateral institutions.

Global governance derives its legitimacy at the global level just as governance does at a national level, from universality. You have to have universal membership. For that purpose, the best way for these “G’s” to work is within a formal multilateral setting.

At the same time, I agree that you have to have effective decision-making mechanisms. Smaller decision-making bodies, in which everyone is directly represented, are fundamental. In all democracies, decisions are taken by a limited number of actors at the end, but those actors have to be representing all of the membership.

Q: What is the state of South-South trade relationships today? What constitutes an ideal South-South partnership that allows for progress toward a more advanced, dynamic economy?

A: There is one sort of South-South trade that is really part of North-South trade. For example, Southeast Asia is producing parts and capital goods that are assembled in China and then exported to the U.S.

In the case of China-India, it’s a huge deficit for India and surplus for China. There is a second China-centered relationship, in which China essentially imports raw commodities and exports manufactured goods. I would say, for commodity producers – i.e. sub-Saharan African, South America, and some of the Middle East – that’s an opportunity. But it’s still a very imbalanced trade relationship. In the long-term, you have to diversify away from that.

There is a third type which are legitimately South-South flows in which you have, more or less, a balanced relationship. For example, the inter-regional trade in Latin America is one relationship of that type – it starts and ends in developing countries. I think that’s the most positive of all, but it’s less common.

Q: As these newly rising economies close the income gap that separates them from developed countries, what do you think characterises fair and mutually-beneficial North-South partnerships?

A: In the past, the North-South relationship was considered to be an asymmetric relationship in which the North had to support the development of the South so it could cash out. I think that concept has become obsolete because of the heterogeneity of developing countries.

Ambassador de Alba mentioned this almost sacred principle of “common but differentiated responsibilities”. In the past, developing countries wanted to be treated according to the second part of that principle – “differentiated” – and I think, as de Alba pointed out, the “differentiated” still has to be considered today.

Even major emerging economies are developing countries – they are technologically dependent, they still have a large share of the labour force in low productivity activities, and the GDP per capita is still a fraction of that of developed countries. So they have a right to be treated with some differences internationally. But they are, at the same time, responsible and the responsibility those countries have is very important.

Q: How have Southern governments been an obstacle to human development and, on the other hand, what should they be prioritising in order to create positive conditions for growth?

A: The basic problem is that power ends up in the hands of the elite that uses power to further its own interests. This has been associated with developing countries, but it can also happen in developed countries, particularly in the financial sector. There has been a change in that regard during the recent crisis; now there is a bit more hope that financial policy will be detached from financial interests.

Successful human development strategy has to include very active social policy, including education, health, and social protections, and at the same time very active economic development policy, particularly the generation of employment.

We have seen so many cases of countries that have improvements in education and when an educated labour force comes to the market, there is no employment to absorb that population. You have to have an active social policy but also an active economic policy and the basic connection between the two is called employment.

The São Paulo Forum expressed its support for Nicolás Maduro in the upcoming presidential elections in Venezuela. Credit: Raúl Limaco/IPS

The São Paulo Forum, which groups leftist political parties and organisations of Latin America and the Caribbean, sees a victory by Venezuela’s acting President Nicolás Maduro in the Apr. 14 elections as key to the future of the left in the region, and to “containing the right”.

Maduro, the new leader of the United Socialist Party of Venezuela (PSUV), and Henrique Capriles, the candidate of the heterogeneous opposition coalition, will face off at the polls to win the six-year term to which the late Hugo Chávez (1954-2013) had been re-elected in October.

“For us the elections here are key, because an eventual defeat (of Chavismo) in Venezuela would mean a setback in the regional process of integration,” historian Valter Pomar, executive secretary of the Forum and a leader of Brazil’s governing Workers Party (PT), told IPS.

“It’s not the Brazilian or Argentine economy that would be affected in the case of a defeat (of Maduro) – which won’t happen – but the entire economy of Latin America, especially the weakest countries or the ones that are lagging the most in terms of industrial development,” Pomar said.

Parties that belong to the Forum, created in 1990 in São Paulo on the initiative of Brazil’s PT – in opposition at the time – currently govern Bolivia, Brazil, Cuba, Dominica, the Dominican Republic, Ecuador, El Salvador, Nicaragua, Peru, Uruguay and Venezuela.

Several of those countries belong to the Bolivarian Alliance for the Peoples of Our America (ALBA), Latin America’s alternative integration bloc founded by Venezuela and Cuba, or are beneficiaries of Venezuela’s Petrocaribe programme, which provides oil to 17 Caribbean and Central American nations under preferential payment conditions.

According to the Forum, Chávez’s initial election as president, in December 1998, marked the start of the rise to power of several of the group’s member parties. And since then, it says, none of them have been defeated in elections.

That does not count Chile’s Socialist Party, defeated by rightwing President Sebastián Piñera in 2010, because it was just one member of the centre-left Coalition of Parties for Democracy that governed since 1990.

The Forum working group, with 38 delegates from 27 parties in 18 countries, met Monday Apr. 1 in Caracas to pay homage to Chávez – who died of cancer on Mar. 5 – and express support for Maduro.

“This is an excellent show of support, which indicates to the popular movements of Latin America and the Caribbean that Venezuela is strategic and that the victory of Nicolás (Maduro) will also be a victory for the people,” Rodrigo Cabezas, a PSUV leader and Latin American Parliament lawmaker who hosted the gathering in Caracas, told IPS.

Maduro, meanwhile, said “this is the time of the greatest expansion of the struggles for the new independence of Latin America from U.S. hegemony and imperial domination. The road is just beginning in this new phase.”

The acting president and candidate, who joined delegates to the Forum in a visit to the mausoleum that holds Chávez’s remains in Caracas, expressed “special recognition of the Cuban revolution, as a forerunner to this Latin American and Caribbean process…It drove in the first peg, liberated the first territory, and generated the dynamic of resisting, fighting and winning,” he said.

“Yes, we are worried that the right is setting up an international operation, not only national operations, to deal us a blow. There is a counteroffensive by the right in the region, as seen in Honduras and Paraguay – the latter involving a coup by parliament,” Pomar said.

He was referring to the Jun. 28, 2009 coup that overthrew Honduran President Manuel Zelaya and the Jun. 22, 2012 toppling of Paraguayan President Fernando Lugo.

Nevertheless, “we see a situation of equilibrium. The right has failed to defeat us in the main countries where we govern, and we have not managed to get them out of power in Mexico, for example. But this relative equilibrium will not last forever,” Pomar said.

According to the Brazilian politician, “what could work in our favour is accelerating the changes in each country and deepening integration, a fundamental issue, because for many countries in the region it is impossible to forge ahead with the processes of change in an isolated manner. That’s why the presidential election in Venezuela is essential for us.”

This is reflected by the fact that the Forum has focused more on the vote in Venezuela than the Apr. 21 presidential elections in Paraguay, where the left is participating without a real chance of winning against the front-runners, who belong to the country’s traditional political forces: the Colorado and Liberal parties.

The Forum working group’s meeting also briefly discussed other international events, particularly the threats to global peace posed by the heated situation between South Korea and North Korea, the conflict in Syria and Iran’s nuclear programme.

Although the group agreed to protest what it called the provocation caused by U.S. military activities in South Korea, there were also voices in the meeting that complained that North Korea’s behaviour “facilitated” Washington’s alleged provocation.

In the debate on the situation in the Korean peninsula, the theory was set forth that the conflict there strengthens U.S. protagonism in the Asia-Pacific region to the detriment of China and its partners in the BRICS bloc – Brazil, Russia, India and South Africa – of emerging powers.

On the regional front, the meeting agreed that the most urgent situation involves the peace talks between the Colombian government and the FARC rebels, taking place in Havana.

As in nearly every Forum meeting, the Puerto Rican independence activists, this time through the words of Héctor Pesquera of the Hostosian National Independence Movement, insisted that the fight against the remnants of colonialism in Latin America not be forgotten, and called for the release on humanitarian grounds of Oscar López Rivera, who has spent nearly 32 years in maximum security prisons in the United States on charges of seditious conspiracy and armed robbery.