THE INDEX – March 12, 2009

The head of Madagascar‘s military resigned Tuesday after a group of pro-opposition soldiers demanded his departure. This is the latest in a string of power plays the country has witnessed since the January standoff, all leading to possible civil war, according to the U.S. ambassador. For about six weeks unrest and protests have swept Madagascar—one of the world’s most impoverished nations. As the weeks pass, the island country’s citizens are becoming increasingly upset at the way the country is run. At least 100 people have died in the clashes and the United States is allowing non-essential embassy staff to leave.

Morocco severed diplomatic ties late last week with Iran citing “intolerable interference” in the country’s domestic politics. Morocco, a predominantly Sunni country, has accused Iran of spreading Shia Islam and proselytizing over the last several years, reports Al Jazeera. But this recent move is likely due to an ongoing feud over Bahrain, a small Muslim state where a Sunni leader rules a Shiite majority. Both Morocco, which is interested in raising its profile in the Arab world, and Iran are anxious to encourage a friendly Bahrain government.

Zimbabwe received its first pledge of aid from a Western nation Wednesday when Australian Foreign Minister Stephen Smith promised $6.4 million to be used for basic services like water and sanitation. A power sharing deal put opposition leader Morgan Tsvangirai in office as prime minister in February while Robert Mugabe remains president of the deeply troubled nation. The United States and the United Kingdom said they won’t donate any aid until the new government proves it will engage in actual power sharing.

For the second day, the Pakistani government banned a national protest march and arrested hundreds of participants. For many, this action by President Asif Ali Zardari—head of the secular Pakistan People’s Party—is in the same style as that of the nation’s previous leader, the ousted General Pervez Musharraf. These protests, and the government’s responses, are just the latest evidence of an ongoing confrontation between Zardari and Nawaz Sharif, a former prime minister, that has been brewing since Musharraf’s ouster. Since Zardari’s recent moves include a two-week long ban “on gatherings of more then four people,” Sharif vows to continue encouraging protests, with the aim of unseating his opponent. This is all occurring while Washington is reviewing its polices in the region, which could lead to more aid for the Zardari government to counter the growing insurgency from radical Islamic elements, including Al Qaeda and the Taliban, in Pakistan.

Said Jawad, the Afghanistan ambassador to the United States, has urged that the Afghan government should open talks with the Taliban, with the goal of demonstrating that Afghanistan is not Iraq. In Iraq, the U.S. plan was to arm local leaders in the fight against Al Qaeda. In Afghanistan, according to Jawad, these leaders have been replaced by “warlords and narco-traffickers” so “we must have a coordinated and unified approach on talking to the Taliban, and the conduit should be through the Afghan government.” President Obama has already “floated” the idea of talking to moderates within the Taliban. Jawad echoed these sentiments saying that mid- to low-level Taliban members might be wooed a number of ways, from dialogue to bribery to job creation. But the ambassador suggested that hard-line Taliban leaders are all but out of reach. Additionally, according to Jawad, neighboring Pakistan has yet to consider extremists as enemies, and he welcomes the commitment to suppress insurgencies there as it relates directly to the climate of violence and unrest in Afghanistan.

Calling for a new, more open-minded understanding of the market economy and its apparent roots in Adam Smith, Nobel Prize winning economist and author Amartya Sen asks in light of the current financial situation: “What exactly is capitalism?” Is a “new system” needed that carries with it the same old profit-driven goals and aims? Or should new perspectives be cultivated of a “non-monolithic economic system that draws on a variety of institutions chosen pragmatically?” Or is a “new world” needed that avoids capitalistic forms? To Sen, these questions that press us today are similar to the quandaries Adam Smith faced in the eighteenth century as he analyzed the concept of a market economy in his book The Wealth of Nations. The often-cited trade incentive of Smith’s pioneering study—considered to be the foundation of capitalism—was always in need of a lot more elaboration, according to Sen’s interpretation of Smith. “An economy needs other values and commitments such as mutual trust and confidence to work efficiently,” Sen says while pointing to some of Smith’s less familiar ideas and passages. Continuing to evoke Smith, Sen sees the “father of economics” as wanting “institutional diversity and motivational variety, not monolithic markets and singular dominance of the profit motive.” In short, Sen seems to be asking policy makers, financial gurus, and Federal Reserve officials to diversify not only their portfolios, but also their thinking when it comes to the global financial crisis.

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