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21. Pakistan\'s Roller-Coaster Economy: Tax Evasion Stifles Growth

Author:
S. Akbar Zaidi
Publication Date:
09-2010
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the last sixty years, Pakistan\'s economy has seen severe ups and downs. Once considered a model for other developing nations, Pakistan has been unable to sustain solid growth. Furthermore, a third of its population now lives below the poverty line, and its literacy rate is abysmally low. Pakistan\'s economic instability stems in large part from low government revenue resulting from the elite\'s use of tax evasions, loopholes, and exemptions. Fewer than three million of Pakistan\'s 175 million citizens pay any income taxes, and the country\'s tax-to-GDP ratio is only 9 percent. Tax evasion means fewer resources are available for essential social services. Pakistan spends too much on defense and too little on development: It has spent twice as much on defense during peacetime as it has on education and health combined. The government knows how to increase its revenue through tax reform, but the rich and powerful have resisted such measures for fear of lowering their own incomes. Without sufficient revenue the government will continue to be burdened with an unsustainable debt. It needs to end tax exemptions for the wealthy and develop broader, long-term economic plans for sustain able growth. In the past, the United States and other Western nations have come to Pakistan\'s rescue by paying off debts and funding development initiatives. Pakistan\'s elite has no reason to support reform as long as these bailouts come with no conditions attached.
Topic:
Development, Economics, and Monetary Policy
Political Geography:
Pakistan and United States

22. Millennium Challenge Corporation: Can the Experiment Survive?

Author:
John Hewko
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Millennium Challenge Corporation (MCC) was established in 2004 to provide grants to a select group of developing countries that demonstrate a commitment to good governance by investing in the health and education of their people and adopting sound economic policies. The MCC has performed admirably in the face of a number of challenges and unrealistic expectations, but its future success depends on its ability to address important philosophical and operational issues, and on Congress reforming the mechanisms by which it funds and judges foreign aid programs.
Topic:
Foreign Policy, Development, Emerging Markets, and Foreign Aid
Political Geography:
United States

23. Stepping Back From Democratic Pessimism

Author:
Thomas Carothers
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Pessimism about the progress of democracy in the developing and postcommunist worlds has risen sharply in recent years. Negative developments in a variety of countries, such as military coups, failed elections, and the emergence of antidemocratic populist leaders, have caused some observers to argue that democracy is in retreat and authoritarianism on the march. A broad look at the state of democracy around the world reveals however that although the condition of democracy is certainly troubled in many places, when viewed relative to where it was at the start of this decade, democracy has not lost ground in the world overall. The former Soviet Union is the one region where democracy has clearly slipped backward in this decade, primarily as a result of Russia's authoritarian slide. The Middle East has also been a source of significant disappointment on democracy but mostly in comparison with unrealistic expectations that were raised by the Bush administration. In most of the rest of the world good news with respect to democratization is found in roughly equal proportion to bad news and considerable continuity has prevailed as well.
Topic:
Foreign Policy, Cold War, Communism, Democratization, Development, and Political Economy
Political Geography:
Russia, United States, and Middle East

24. A New Direction for U.S. Policy in the Caspian Region

Author:
Martha Brill Olcott
Publication Date:
02-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
With Washington's influence on the Caspian region at its lowest ebb in many years, the Obama administration could reverse this trend with a new approach that accepts Russia's presence and China's interest as historical and geographical givens and emphasizes short- and medium-term problem solving in multilateral and bilateral settings instead of long-term political and economic transformations. The United States can accomplish more in the Caspian region by focusing on military reform and building security capacity than on forming military alliances. The United States should switch from a multiple pipeline strategy to a policy that advances competition by promoting market pricing for energy producers, consumers, and transit states. The United States could facilitate the introduction of renewable sources of energy as a stimulus to economic recovery and a source of enhanced social security. The United States should develop a nuanced strategy that encourages political development through social and educational programs and local capacity building. The Obama administration should name a high-level official as a presidential envoy to this region.
Topic:
Security, Foreign Policy, Development, Economics, and Nuclear Weapons
Political Geography:
Russia, United States, China, Washington, and Central Asia

25. Yemen: Avoiding a Downward Spiral

Author:
Christopher Boucek
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Yemen faces a great and growing number of challenges that endanger its political future and threaten its neighbors on the Arabian Peninsula. War, terror- ism, a deepening secessionist movement, and interconnected economic and demographic trends have the potential to overwhelm the Yemeni government, jeopardizing domestic stability and security across the region. Yemen's oil—the source of over 75 percent of its income—is quickly running out, and the country has no apparent way to transition to a post-oil economy. The dire economic situation makes it increasingly difficult for the government to deliver the funds needed to hold the country together.
Topic:
Security, Democratization, Development, Oil, and Insurgency
Political Geography:
Yemen and Arabia

26. Stabilizing Afghanistan: Threats and Challenges

Author:
William Maley
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Afghanistan cannot be stabilized by quick fixes. The United States, NATO, and their allies need to make a sustained commitment for the long term. Instead of a simple “surge,” there needs to be a much clearer focus on bringing security to Afghans' daily lives. Only once this is achieved will Afghanistan's government have real reservoirs of legitimacy. Afghanistan has not been served well by its 2004 Constitution, which created a dysfunctional system of government that relies too much on the president alone. The United States should support systemic reforms, first through the development of an effective executive office to support the Afghan president. Counternarcotics policies in Afghanistan must take account of domestic socioeconomic complexities, and be based on long-term development projects that increase the returns from cultivating different crops. Serious thought needs to be given to encouraging more Muslim states to contribute personnel to support the promotion of human security and development in Afghanistan. Pakistan needs to be pressured discreetly but very strongly to arrest the Afghan Taliban leadership in Pakistan.
Topic:
Conflict Resolution, Development, and War
Political Geography:
Pakistan, Afghanistan, United States, and Central Asia

27. Incumbent Regimes and the "King's Dilemma" in the Arab World: Promise and Threat of Managed Reform

Author:
Marina Ottaway
Publication Date:
12-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Incumbent regimes in the Arab world, monarchical and republican alike, have weathered the period of intense, worldwide political change that has followed the end of the Cold War without giving up much of their power. Though not completely untouched by events that have shaken the rest of the world, most Arab regimes have survived the wave of political transformation that has engulfed the rest of the world relatively intact. Many regimes have carried out reforms, but the reforms have been directed at modernizing the economy and addressing social issues rather than redistributing power in the political system. Indeed, most regimes that talk of political reform are in reality avoiding it. To be sure, there have been some political changes: For example, more political parties exist today in most Arab countries than fifteen years ago, and more countries hold elections of varying quality. Access to information and the quality of political debate have increased in many countries as well. Power, however, remains firmly where it was: in the hands of kings and presidents.
Topic:
Cold War, Democratization, and Development
Political Geography:
Middle East and Arabia

28. Rethinking Economic Reform in Jordan: Confronting Socioeconomic Realities

Author:
Sufyan Alissa
Publication Date:
07-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since 1989, Jordan has passed through several phases of economic reform aimed at stabilizing the economy and managing the transition from a state-dominated model to one that is private export led. Initiated under severe economic crisis conditions, the reform process in Jordan has been slow, selective, and uncoordinated. Thus far Jordan has succeeded in stabilizing its economy and engaging in a process of trade and financial liberalization and privatization, but it has failed to find long-lasting solutions to major social and economic challenges facing the country.
Topic:
Development and Political Economy
Political Geography:
Middle East and Jordan

29. The Challenge of Economic Reform in the Arab World: Toward More Productive Economies

Author:
Sufyan Alissa
Publication Date:
05-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The issue of economic reform in the Arab world is surrounded by many key questions. How do we define meaningful economic reform and what does it entail? To what extent has such economic reform advanced in the region? What is needed to accelerate the process? Are ruling elites motivated to undertake real economic reform and are they capable of doing so? Are state institutions able to implement economic reform and handle its consequences? Is it possible to have economic transformation without political reform? Furthermore, in individual countries, what can we say about the timing of reform-has it been planned out and phased in or pushed through quickly in response to crises? Who have been the winners and losers? What has been the interplay between economic and political reform-have they proceeded independently or can we detect a direct connection? What has been the role of external rents-whether oil revenues, remittances, or bilateral aid-in the speed or slowness, the depth or shallowness, of the process?
Topic:
Development, Economics, and Government
Political Geography:
Arabia

30. China's Economic Prospects 2006-2020

Author:
Sandra Polaski, Jianwu He, and Li Shantong
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China's economic growth during the past twenty-five years has been remarkable, averaging more than 9 percent a year. While there have been earlier episodes of comparable growth rates in countries such as Japan and South Korea, there is no precedent for such rapid growth in a country the size of China, whose population of 1.3 billion is thirteen times that of Japan when that nation began its rapid growth. The impact on the rest of the world of economic dynamism on this scale is already being felt. If China continues its rapid growth in the coming decades, it will take the global economy into uncharted terrain.
Topic:
Demographics, Development, and Economics
Political Geography:
Japan, China, Asia, and South Korea