Talking to the Enemy

We should know better than to talk to the Irans and North Koreas of the world.

• By BRET STEPHENS

It is the declared policy of the Obama administration that the United States should talk to enemies as well as friends. So why not talk to al Qaeda?

It's not as if al Qaeda isn't willing to deal. "Whether America escalates or de-escalates this conflict, we will reply in kind," Osama bin Laden said in 2002. Bin Laden renewed his offer in 2006, and his deputy Ayman al-Zawahiri made it again in a videotaped message released earlier this month: "The mujahadeen have opened the door for the West to turn a new leaf," he said. "But the [Westerners] insist on relations that are based on oppressing us."

Nor is it as if there aren't serious people in the West willing to entertain al Qaeda's offer. "If I was in government now, I would want to have been talking to Hamas, I would be wanting to communicate with the Taliban, and I would want to find a channel to al Qaeda," Jonathan Powell, formerly Tony Blair's chief of staff, told the Guardian newspaper last year. Seconding that view was U.K. Security Minister Alan West, a former First Sea Lord, who said not talking to al Qaeda was "silly."

But aren't al Qaeda's demands outrageous, and nonnegotiable to boot? In his message, Zawahiri ticked them off as follows: "Withdrawing the infidel forces from all Muslim lands, stopping the theft of the Muslims' wealth by the threat of military force, conducting [economic] exchange at real, fair prices, stopping the support for the corrupt, apostate regimes in the Islamic world, releasing all Muslim prisoners, and stopping the interference in the affairs of the Islamic world."

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David Gothard

China’s Public Enemy

The alleged instigator of the Uighur riots doesn’t talk like a terrorist. Demonizing her may backfire on Beijing.

HUGO RESTALL

Washington, D.C.

Rebiya Kadeer is undergoing a Chinese version of George Orwell’s “Two Minutes Hate.” Separatist, extremist, terrorist—China’s state-run media has pulled out the rhetorical big guns to put her beyond the pale of civilized society. By condemning her as the mastermind of last month’s riots that killed 197 people in the northwest region of Xinjiang, Beijing has transformed an exiled businesswoman and dissident into public enemy No. 1 for 1.3 billion people.

Even Ms. Kadeer’s family in China has joined the campaign—under duress, she says. After blaming her for the loss of innocent lives, several of her children and other relatives exhorted her in an open letter, “Don’t destroy the stable and happy life in Xinjiang. Don’t follow the provocation from some people in other countries.” In scenes reminiscent of the Cultural Revolution, the signatories have appeared on state television to publicly disavow Ms. Kadeer.

This blood-stained image is hard to reconcile with the diminutive grandmother, dressed modestly in black, who bustles about a cramped, U.S. government-funded office a block from the White House. Ms. Kadeer may be hated by many Chinese, but the president of the World Uighur Congress inspires admiration among the nine million ethnically Turkish Uighurs in Xinjiang and two million-strong diaspora. An indication of why she inspires such strong emotions comes as she responds to the first question; she speaks with a startling intensity, perching on the edge of a folding chair.

First of all, Ms. Kadeer denies she instigated the July 5 protests in her home town of Urumqi: “I did not tell them to come out on that day or that particular time to protest. It was the six decade-long repression that has driven them to protest.”

Ms. Kadeer’s own life is a graphic illustration of that repression’s ebb and flow. In the 1980s and early ’90s, she and her fellow Uighurs benefited from Deng Xiaoping’s loosening of controls in all areas of life. Like business pioneers around the country, she overcame obstacles created by Chinese officialdom to build a market stall into a business empire encompassing retail, real estate and international trade.

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Zina Saunders

Just as difficult was overcoming the Uighur community’s resistance to the idea of a woman taking the lead. Ms. Kadeer’s nickname was djahangir, a word of Persian origin meaning one who pushes forward regardless of the consequences.

The Uighurs are a fiercely independent people who have eked out a living in the arid Central Asian lands along ancient caravan routes and converted to Islam in the 15th century. During the Qing dynasty (1644-1912), China’s Manchu rulers managed to subjugate the Uighurs and other local tribes but had to fight off periodic revolts. After the collapse of the empire, the region briefly became the East Turkestan Republic before falling under the thumb of Mao’s People’s Republic. Many Uighurs still harbor dreams of eventual independence.

Once Ms. Kadeer succeeded in business, both the Communist Party and the Uighurs embraced her as a leader. In the mid-1990s she became China’s fifth richest person, and the party gave her a seat in the Chinese People’s Political Consultative Conference, part of the country’s rubber-stamp legislature.

But the tide was already turning against the Uighurs and other minorities. New policies and appointees from Beijing led to campaigns to assimilate the Uighurs and root out all dissent. That prompted Ms. Kadeer to make a fateful choice about where her true loyalties lay. She became increasingly outspoken about policies preventing Uighurs from sharing in the fruits of economic development. Finally, in March 1997, she gave an impassioned speech before the legislature enumerating the burdens faced by her people.

Immediately the party struck back. It took away Ms. Kadeer’s positions, then destroyed her businesses. Having once held her up as a model citizen, the official media tossed her accomplishments down the memory hole. Her rise from rags to riches is now said to be the result of “economic crimes,” including tax evasion and swindles. In 2000, a court sent her to prison for divulging “state secrets” for trying to send newspaper clippings to her exiled husband in the U.S. In 2005 she was allowed to emigrate to the U.S. in return for a promise not to engage in politics, a promise she promptly broke.

Now Ms. Kadeer is trying to garner support for the Uighurs from that most elusive of friends, the “international community.” Even as other parts of China continue to liberalize, she says, repression is intensifying in Xinjiang. She explains, for example, that there is new pressure to use Chinese rather than the Uighur language: “Even during the Mao years, he was a brutal dictator of course, but at least the Uighur people spoke their own language, and at least the Uighurs were free to live in their own courtyards.” Today, the government is flooding the region with Chinese immigrants, making the Uighurs a minority in their own homeland.

Uighurs face discrimination in education, employment, religion and even the ability to move around the country or travel abroad. Farmers are losing their small plots of land and being forced into the cities. Downtown Kashgar, the Uighurs’ cultural capital, is being demolished to make way for Chinese-owned real-estate developments.

But the final straw may have been a measure ostensibly designed to alleviate poverty: “Now the authorities force young, unmarried women to go to eastern China to work as cheap labor in sweatshops,” Ms. Kadeer says. “And this is a really provocative policy because it is against Uighur people’s culture, religion and way of life to send their unmarried daughters to far-away places they themselves have never heard of. This policy has tremendously backfired.”

One such deportation (villages are required to fill a quota) provided the spark for the July 5 protests. In April, some 400 Uighur men and women were sent to work in a toy factory in the town of Shaoguan in Guangdong province. At the end of June, after a disgruntled Chinese worker circulated a rumor that the Uighurs had raped Chinese women, a mob killed at least two of the outsiders.

Video of the riot quickly circulated on the Internet within Xinjiang, along with comments by Chinese that more Uighurs should be killed, while the authorities failed to announce measures to bring those responsible to justice. The city of Urumqi, capital of Xinjiang, become a powder keg of discontent.

According to Chinese accounts, protests began at around 5 p.m. on July 5 in the center of Urumqi and only turned violent more than three hours later. Whether or not this shift was sparked by the police attacking protesters remains in dispute. What cannot be disputed is that Uighur rioters killed Chinese, smashed windows, and burned cars in a shocking orgy of violence.

The intensity of the anger says much about the pent-up resentment of the population, and seems to have taken the authorities by surprise: “After six decades of repression Chinese officials had become confident they had control, and they were shocked at how quickly they lost control,” Ms. Kadeer says. “They realized what six decades of repression and fake autonomy could lead people to, and of course that’s the failure of their policies . . .” The Party’s unwillingness to accept that failure meant it needed Ms. Kadeer as a scapegoat.

The best evidence Ms. Kadeer did not instigate the riots paradoxically comes from the Chinese themselves. A documentary provided by the Foreign Ministry entitled “July 5th Riot and Rebiya Kadeer” makes it clear the Chinese were listening to Ms. Kadeer’s phone conversations to China and Europe. The most damning evidence the government propagandists could come up with is that she telephoned her relatives in Xinjiang to warn them that something big was brewing.

It seems more likely the protests were organized among residents of Urumqi using cell phones and the Internet. Immediately afterward, the government shut down all telecommunications and is only now reopening the networks.

Ms. Kadeer denies having the ability to orchestrate events within Xinjiang, but she freely admits that she maintains contact with family members and friends. “Of course we have some influence, but we did not influence what took place. There is no organization there.”

Two of her sons have been jailed, she says, in a bid to stop her from speaking out. “Because the Chinese government failed to silence me by imprisoning them, now they are blaming me for the protests to silence my voice in the world.”

The same documentary contains a disturbing clip of Ms. Kadeer’s forced confession on the eve of her release in 2005, a scene reminiscent of the war crimes confessions of American soldiers captured by the Chinese during the Korean War: “My motherland is like my parents. I was born after the Liberation, the Communist Party is an eternal benefactor. Whoever seeks to separate his country will be the enemy of his nation. . . .”

The government’s insistence that any dissent is equivalent to separatism, which in turn is evidence of terrorism, explains why Uighurs have been driven to such desperation. “When Uighurs who are not happy about policies stand up to say something,” Ms. Kadeer explains, “the Chinese label them as terrorists, separatists or extremists, and arrest them and in some cases execute them.”

Yet she does not rule out Xinjiang remaining part of the Chinese state—so long as Uighurs have self-rule within a democratic polity.

Demonizing Ms. Kadeer as a separatist may end up backfiring on Beijing. Uighurs had failed to attract as much international support as Tibetans because they lacked a figure like the Dalai Lama to speak on their behalf. Now they have a spokeswoman who is attracting angry démarches from Chinese diplomats as she travels the world.

In the last couple weeks she has visited Tokyo and Melbourne, Australia. In Melbourne she spoke at a film festival where a documentary about her life, “The 10 Conditions of Love,” was shown for the first time. After Beijing failed to convince festival organizers to withdraw the documentary, Chinese filmmakers withdrew their own movies in a move widely seen as government-orchestrated.

Ms. Kadeer is not phased by the pressure, and indeed her stubbornness is again coming to the fore. She seems to have drawn a lesson from the failure of the Dalai Lama’s softly, softly approach: Beijing only respects strength. She is determined to stir the pot, not turn the other cheek, in order to force China to the negotiating table.

Asked whether Uighurs should wait for the advent of democracy in China, she answers that by that time they may have lost their cultural identity. As difficult as it may be, the onus is on her and other Uighurs abroad to pressure the Chinese government into talks on greater autonomy: “I urge peace to the Uighurs,” she says, “they should remain peaceful no matter what happens, because the Chinese government will use any excuse to further crack down on them. So it is up to us, it is our responsibility to negotiate with the Chinese government to resolve the situation on the ground.”

But the immediate outlook for the Uighurs looks bleak. as China’s top government official, Nur Bekri, has promised to crack down with an “iron hand.” Ms. Kadeer claims that 10,000 Uighurs were rounded up after the violence.

Perhaps even more frightening is the way in which the government’s efforts to obscure the real roots of the riots are stirring up Chinese nationalism. The day after the Urumqi protests, a Chinese mob took to the streets looking for Uighurs. “The . . . Chinese government is indoctrinating its own people with ultranationalism,” Ms. Kadeer says. “It used to be the security forces arresting and killing Uighurs. Now it is the Chinese mobs themselves [who] are after Uighurs, both in Shaoguan and Urumqi. They know they can kill Uighurs and the police will turn a blind eye and just say it is a clash between peoples.”

Perhaps the worst-case scenario for China is the possibility that some other individual will emerge as the “mastermind” of the Uighur movement. As a religiously moderate and largely secular figure, Ms. Kadeer is somebody Beijing might negotiate with.

But Beijing’s efforts to portray resistance in Xinjiang as another front in the war on terror could become a self-fulfilling prophecy if Islamic fundamentalism takes root among the restive Uighurs and the global forces of jihad begin to target China. The need to avert that tragedy is the best argument for China to acknowledge its past mistakes in Xinjiang and end the campaign to demonize Rebiya Kadeer.

Mr. Restall is the editor of the Far Eastern Economic Review and a member of the editorial board of The Wall Street Journal.

Obama's search for an enemy

Obama's search for an enemy: The President keep beating the class warfare drum

MICHAEL GOODWIN

He hasn't called anyone an "evildoer" or denounced an "axis of evil." But make no mistake: President Obama is putting together an enemies list.

Strangely, though, those on it are not terrorists or foreign dictators. They are mostly Americans lucky enough to have succeeded through capitalism and democracy.

In the President's words, they are guilty of being "special interests" and "lobbyists." The Bush-era tax cuts were merely "an excuse to transfer wealth to the wealthy" and he will bring fairness by raising taxes on "the wealthiest 2% of Americans."

His barbs flow almost daily, faulting corporate leaders for "greed" and shirking "a sense of responsibility." And sometimes he suggests the problem is criminal, as when he defended his plan for an expanded government push into health insurance as necessary "to keep the private sector honest."

Less than half-way through what should be a 100-day honeymoon, the Obama administration is on a war footing. Make that a class-war footing.

Sometimes the targets are critics, including two TV commentators singled out by press secretary Robert Gibbs for faulting the President's bailout plans.

Sometimes the targets are Republicans, like conservative talker Rush Limbaugh, the focus of a plan led by chief of staff Rahm Emanuel to divide the GOP and score points with the Democratic base.

But the tone of the President's own attacks on industry and his spending and tax policies are increasingly worrying Wall Street and much of the business world. With the stock market reaching lows not seen in more than a decade, including a 20% drop since Inauguration Day, headlines like "Obama's bear market" are suddenly routine.

The President dismisses the growing perception he is adding to the economic pain. Asked about the markets, Obama waved them off as like a "tracking poll in politics" that "bobs up and down day to day."

It was a telling moment, for the markets on his watch have moved almost exclusively down. And the 55 million households that hold mutual funds are watching their savings and retirements vanish in great gobs.

Most are decidedly middle class, making them collateral damage of this war.

Obama himself remains popular, largely because of his charisma and because most people agree he inherited the problem. With staggering job losses and an unemployment rate now at 8.1%, the highest in 25 years, many Americans are hopeful our new President can right the ship and punish those responsible.

But Obama has expressed little interest in prosecuting those who cooked the books to make billions and undermined the financial system. Nor is he interested in rebuking Congress, including leading members of his own party, who fostered destructive lending and borrowing policies. He seems comfortable with his aides, including those who saw nothing amiss in their former roles as Wall Street players and regulators.

Instead, Obama's class-war language, most of it written into prepared speeches, looks like selective anger, calculated to stoke public emotion to build support for his expansive agenda. That agenda, which revolves around a dramatic increase in Washington power, relies on tax hikes on the same successful businesses and individuals he denounces.

First he demonizes them, then he taxes them.

And always, he makes liberal use of bogeymen. On Friday, as he stood before a class of 25 police cadets in Columbus, Ohio, hired with federal stimulus money, the President delivered a standard attack line against unnamed dissenters. "They opposed the very notion that government has a role in ending the cycle of job loss at the heart of this recession," he said.

Actually, few if any critics advocated doing nothing. But never mind. Being President means you don't have to let the facts get in the way of a plan to divide and conquer.

Deflation is the wrong enemy

Deflation is the wrong enemy
Samuel Brittan Financial Times

Too much that passes for financial comment is preoccupied with the bogey of deflation when it ought to be concerned with the reality of slump. By deflation I simply mean a sustained period of falling prices. This has sometimes been associated with falling output and activity, but not always. And you can have a severe slump while inflation is still in double digits, as any veteran of Latin American experience will confirm. It is more nearly accurate to say that slumps are associated with rapidly falling inflation, which may or may not take the recorded rate into negative territory, but even this generalisation is subject to many exceptions. By focusing on deflation we are picking on the wrong enemy.

We have been here before and not very long ago. Early in this decade when financial markets were getting jittery after the collapse of the dotcom bubble I wrote a column entitled Take a razor to the deflation debate. Some of the same short-fused commentators who now blame Alan Greenspan, the former Federal Reserve chairman, for overstimulating the US economy were then screaming for him to do more to offset the threat of deflation. A US economist, David Beckworth, has helpfully summarised the debate in the autumn 2008 issue of the Cato Journal. He distinguishes between malign deflation associated with a fall in overall demand and the benign kind associated with a productivity acceleration, the benefits of which are taken partly in the form of falling prices rather than entirely in rising wages. An example of this second type of deflation was the experience of the US between 1866 and 1897 when prices fell by an average of 2 per cent a year and output rose by nearly 4 per cent a year.

Such examples are, however, by no means confined to historical periods when prices and wages in industrial countries were more flexible. The UK consumer price index was rising last December at an annualised rate of less than 1 per cent if the comparison is made over six months rather than the conventional 12. The more popular retail prices index, to which many wage contracts are linked, had already fallen by an annualised rate of 3 per cent in a comparison over a similar period. This unusual behaviour was due to a combination of falling oil and commodity prices, the temporary value added tax reduction and price cutting in the shops, which together more than offset the effects of sterling depreciation. Should the British government reverse the VAT cut or plead with Opec, the oil producers' cartel, to raise oil prices just so it can say that there is no deflation? Or should we commit the "essentialist" sin of trying to define deflation out of existence?

The obsession with deflation is not confined to lesser breeds without the law. The Bank of England itself hardly ever refers to the danger of recession or economic slowdown without adding the mantra that this would risk taking inflation below the 2 per cent target. Suppose that we had one day a recovery with output rising by 4 per cent a year and no inflation at all, which is quite conceivable, although not very soon. Would Threadneedle Street be besieged with howling mobs screaming: "Give us back our 2 per cent inflation"? The fact is that the Bank has chosen to act as if the 2 per cent inflation target were its only objective even though its frequently reproduced mission statement requires it to "support the government's objective of maintaining high and stable growth and employment" so long as this can be done in a non-inflationary way. There may be members of the MPC who feel as I do about this logic-chopping but, once they are satisfied with actual decisions, do not have the energy left to quibble about wording.

The obsession with deflation stems pretty obviously from the experience of the US in the Great Depression of the 1930s. Between 1929 and 1933 US nominal incomes, real incomes and wholesale prices each fell by cumulative amounts of between 30 and 50 per cent. This was so obviously part of the same process that there seems no harm in labelling the whole process a major deflation. But important though it was, the Depression is not the whole of world recorded history and there have been other episodes when prices and output moved in opposite directions.

Finally, what about the spectre of "debt deflation"? This was invented by the leading US economist, Irving Fisher, after he had bankrupted himself in the 1929 stock market crash. The idea is simple. If a businessman borrows at 5 per cent and the inflation rate falls to minus 3 per cent he faces a real effective rate on repayment of 8 per cent. But this phenomenon is not confined to actual deflation. Suppose that he borrows at 10 per cent and the inflation rate falls to plus 2 per cent, he still faces an effective real interest rate of 8 per cent. The squeeze results from a sudden and unexpected drop in the inflation rate whether or not it reaches negative territory. This is an argument for gradualism when squeezing inflation out of the system when that is possible, which is far removed from our present problems.