One of the most prominent trouble spots in the global economy is Greece. The government’s massive and rapidly expanding debt burden has raised concerns that the nation might be forced to declare bankruptcy. In light of this danger, the US ought to take action to resolve Europe’s internal dilemma. It should push for measures to contain the crisis while preventing similar situations from arising elsewhere.

Greece’s default would be disastrous for the United States. It would threaten to reverse the nascent global economic recovery and work to destabilize the European Union. If Greece defaults on its loans, investors will likely lose confidence in other European countries with high debt ratios, raising borrowing rates to prohibitive levels. This would create a vicious cycle in which those countries would then find it much more difficult to finance debt, which could possibly trigger further default. Unfortunately, numerous obstacles exist to a potential EU-orchestrated bailout. There are legal and practical questions to deal with, as well as political considerations. Already, public officials in other EU nations, most notably Germany, have publicly voiced skepticism about whether to intervene in Greece, citing the high costs associated with such a step.

After several agonizing months of uncertainty, it seems as though most countries have emerged from the depths of the economic collapse that ensued following the 2008 financial panic. US GDP expanded by 5.7 percent in the third quarter of 2009, while Europe has witnessed slowing rates of decline, and in some cases, including Great Britain and France, even modest growth. The response undertaken during the crisis by Western leaders, most notably US President Barack Obama and UK Prime Minister Gordon Brown, was extraordinary, combining bank bailouts with expansionary fiscal and monetary policies.

While these remedies appear to have succeeded to a degree, they came at an enormous cost; both the United States and Great Britain now face budget deficits in excess of 10 percent of GDP. If the economy enters what experts have dubbed a “double-dip” recession, in which the initial recovery is followed by a second downturn, it is unlikely that governments will be able to intervene on the same scale as they did during the initial phase of the crisis, owing to insufficient resources and public hostility. The US spent $800 billion on last year’s economic stimulus package while the Federal Reserve drove interest rates to record lows. Incurring more debt through, for example, another stimulus package would further risk the long-term financial stability of the United States. Thus, it is imperative that the United States and its allies maintain the current fragile, uneven recovery, or they will be doomed to suffer a protracted period of economic underperformance similar to Japan’s “Lost Decade.”

With so much depending on the revival of Western economies, any potential obstacle to the achievement of that goal must be removed. Greek insolvency would not only bring its own economy to a grinding halt, but could also have a domino effect. Many other members of the European Union, including Spain, Portugal, Italy, and Ireland, are also coping with excessive debt levels incurred by rampant spending over the past decade and sharp drops in revenue owing to the recession. In spite of EU rules requiring that budget deficits not exceed 3 percent of GDP, the lack of any effective enforcement mechanism, combined with “creative accounting,” has allowed profligacy to go unpunished. Already, confidence in the Euro has plummeted, causing its relative value to drop. Concern about the future of the common market could lead Eastern European nations, such Estonia, Latvia, and Lithuania, to rethink their planned entry into the Euro Zone, while strengthening the appeal of “Euroskepticism.” Critics of the Euro have long argued that a monetary union would lead to this kind of a crisis; now, their warnings appear to be vindicated.

A weakened EU is not an outcome that would be favorable for the United States. Although American and European politicians have their differences on some issues, a strong, unified Europe is in the United States’ best interest. As the US combats the complex and pressing questions of international terrorism, nuclear proliferation, human rights abuses, trade negotiations, Third World poverty, and environmental degradation, it is important to have a partner capable of assisting in its effort to provide global leadership. A weak and divided Europe cannot fulfill this role if it is plagued by economic disunity and decline.

To this end, the United States ought to play an active part in preventing Greek default. It should lean heavily on France and Germany, the EU’s economic powerhouses, to orchestrate a bailout that includes strict austerity conditions, cutting spending and raising interest rates, along the lines of International Monetary Fund standards. A major US diplomatic campaign, with the active involvement of President Obama, can display the vitality of this issue. Greece needs more than a band-aid solution; it needs a complete overhaul of its economic system. For years, Greece has run deficits well above EU limits. Rampant corruption and wasteful spending have brought the country to its current juncture. Even today, in the midst of the crisis, intransigent public sector unions have organized street protests in Athens and elsewhere, demanding immunity from the severe repercussions of fiscal austerity.

Critics contend that past interventions that imposed austerity have had disastrous consequences. While this did occur in the short term in some cases, such as the Asian economic crisis of 1998, in the long run, budgetary restraint is the only way to set countries on the path toward sustainable growth, as opposed to a temporary expansion followed by yet another crisis. Countries such as Thailand, Indonesia, and South Korea, all of which accepted IMF loans in the late 1990s, rooted out corporate mismanagement and other practices that inhibited productivity, and the result was protracted economic expansion over the course of the past decade.

Like the countries of East Asia, Greece cannot be given a bailout without strings attached because it will create a problem of moral hazard, allowing Spain, Italy, and Portugal to continue their prodigal ways in hopes that they too will be protected. Instead, they should be following the example of Ireland, which in recent months has introduced tough reforms designed to control its budget deficit, including sharp pay cuts for civil servants. Although controversial, these measures have been largely accepted by the Irish public, as they acknowledge that the short-term pain of austerity is preferable to continued financial turmoil. Hopefully Greece will demonstrate a comparable degree of responsibility in dealing with its dire financial situation.

US involvement is crucial to ensuring that a rescue package is formulated and organized according to the principles of austerity. France and Germany are hesitant to offer assistance, but could be persuaded if the United States emphasizes the importance of the Greek situation to the global recovery and the perils of allowing the crisis to spread. Such an approach will reap vast rewards for the US and its allies in the form of increased economic growth and greater geopolitical stability. For these reasons, President Obama ought to make securing aid for Greece a top priority.

After the earthquake, the international community supported Haiti with over $2.4 billion dollars and continues to supply countless aid and rescue workers. Unfortunately, Haiti’s lack of political and physical infrastructure makes this disaster one of the most complex challenges many aid organizations have ever confronted. To prevent such logistical problems in the future, Haiti must develop a long-term strategy that includes a more centralized aid administration, a strong security force, and a government willing to tackle urban decay with significant infrastructure improvements.

Haiti is the poorest country in the Western Hemisphere with a GDP per capita of only $1,291. Less than half of the country’s citizens have access to clean drinking water and malnutrition is endemic. From its founding by former slaves in 1791, the country has had more than its share of misrule; a UN peacekeeping mission has been stationed in the country ever since then-President Jean-Bertrand Aristide was forced into exile in 2004. Despite its difficult history, Haiti had just begun to improve, politically and economically, before the earthquake. The government had created a national developmental strategy in 2009, and the international community forgave much of Haiti’s debt. President Obama commented that the earthquake striking in Haiti’s rare period of optimism made it particularly “cruel and incomprehensible.”

In the immediate aftermath of the quake, the international community reacted promptly and generously. The US sent navy and coast guard ships to Haiti within hours and placed up to 2,000 marines on reserve, ready to be dispatched to the country if necessary. The United Nations, which had lost more than 40 personnel in the quake, including its mission chief Hedi Annabi, offered $10 million in immediate emergency relief, as well as former President Bill Clinton as a special envoy. Total long-term aid pledges total over $2.4 billion worldwide.

Despite the influx of aid pledges, Haiti’s ruined roads, seaports and airports, and political structure prevent ample aid from reaching those who need it. Supplies were initially shipped into Haiti through the neighboring Dominican Republic; later, officials had to turn away humanitarian aid as Haitian airports lacked landing capacity. On January 31, flights transporting critically injured Haitians into the US were suspended. Finally, aid officials were unable to bring in heavy-duty machinery to clear the rubble and rescue survivors until a day after the earthquake, time being of the utmost essence in rescue operations.

Although Haitians have shown surprising resilience and goodwill towards each other, sustained delays of supplies are spurring growing violence and unrest. Gangs have assumed authority in some of Port-au-Prince’s poorest neighborhoods, rendering some roads impassable and cutting off aid to some of the people most in need. The national penitentiary was damaged enough that some inmates could escape, adding to the chaos.

Urgent measures are needed in order to ensure that basic needs are met in the country. A more centralized aid administration should take over from the over 10,000 NGOs and variegated lot of UN peacekeepers—a combination of NGO delegations and US troops who are working out of sync—in Haiti. The UN should harmonize its mission by focusing on maintaining law and order, establishing security over unstable regions, and regulating the distribution of supplies that are necessary.

In order for these goals to be realized, the internationally community should help provide a military presence as well as further economic and humanitarian aid. President Obama has already committed 7,500 additional troops to contribute to recovery efforts, and according to Vice President Joe Biden, “[The American response wasn’t just] a humanitarian mission with the life cycle of a month … This is going to be a long slog.” There are debates over how long this commitment should last. While some, such as the French minister in charge of humanitarian aid, accused the US of “occupying” Haiti, others such as the US Navy’s Rear Admiral Ted Branch claim that as long as there is a clear knowledge and consensus that the US is there to restore Haiti, there should be no problems.

Although Haitians have welcomed recent UN crackdowns against the gangs, discontent is growing around primarily logistical problems, such as the inefficient supply and distribution process of aid and organizers’ failure to give medical organizations such as Doctors Without Borders priority to land in the country’s main airport. When 10 American missionaries who tried to smuggle more than 30 children out of Haiti on February 5th were charged with kidnapping, distrust of the US increased. In order to successfully restore Haiti to pre-quake levels and better, the US must accomplish the dual task of assuming organizational authority and maintaining an image of goodwill that shows that the US there to help—not to compromise—Haiti’s sovereignty.

But long-term efforts should not stop at restoring Haiti to its former infrastructure, says John Mutter, an expert on the affects of natural disasters and a professor of Environmental Sciences and Public Affairs at the Earth Institute of Columbia University. Mutter recommends an international effort to improve buildings and government infrastructure so that Haiti could be better prepared to face and recover from future natural disasters, similar to how Chile has managed to spare itself from the debilitating disaster of the recent earthquake there. Many experts suggest the government create programs to support the movement of already existing populations out of the overpopulated capital and into towns in order to counter negative effects of urbanization, such as the formation of poorly built shantytowns that experienced significant damage in the January earthquake.

Although long-term goals are materializing, Haiti’s immediate situation remains dire. Over a million people are homeless, 300,000 are injured, and 20 percent of Haiti’s jobs have been lost. In the long term, Haiti loses 80 percent of its college graduates to emigration, perpetuating the country’s lack of talent to initiate successful reforms. How the incapacitated domestic government will remobilize is unclear.

Recovery to and beyond pre-earthquake levels will likely take decades. The emergency response by the international community has been admirable, but only the coming months and years will tell how quickly Haiti can advance through reconstruction and recovery efforts.

Importing countries in the developing world and the U.S. should enhance the food security of the developing world by creating an open and predictable market. Such efforts should advance on two fronts. First, the developed world should recognize its distortionary role in world food markets and eliminate biofuel and agricultural subsidies. Second, the U.S. should work through international institutions and with exporting countries to mitigate the price increases in ways that do not hamper trade.

The dysfunctional food market has caused extreme food shortages and political conflict. When food prices spike, the poor and those who feed them cannot afford as much food. The UN’s World Food Program and the U.S. Agency for International Development have announced cutbacks in food aid in response to rising prices, while undernourishment has increased globally by roughly 20 percent since 2006. Rising food prices have also caused political instability in the developing world. In 2009 riots against food and fuel prices left nearly 40 dead in Cameroon, and food-related instability led to the Haiti’s prime minister and Madagascar’s president.
The food market faces two obstacles: long-term structural distortions stemming from Western policy, and short-term instability caused by exporting nations. A properly functioning global food market could allow direct investment in the most productive land and let net-importing countries focus on their comparative advantages. While the rise in food prices is partly due to growth in demand from developing nations, the recent drastic price increases owe much to misguided policies.

The West’s agricultural policies play a large part in the troubles of the global food market. The primary culprits are agricultural subsidies and biofuel subsidies. While subsidies are supposed to increase output and decrease global food prices, they divert private investment toward Western agriculture and away from underdeveloped countries, where the potential gains in productivity are greater. This counterproductive diversion of resources distorts investment patterns and reduces spare production capacity when prices are high. Biofuel subsidies encourage farmers to shift production away from food and toward ethanol, decreasing the supply of food and driving up prices. The U.S., by far the world’s largest producer and exporter of corn, may soon use half of its crop for ethanol.

These subsidies are also wasteful for Western countries. Subsidies are a blatantly inefficient case of special interest favoritism; the government will spend over $21 billion next year on “farm income stabilization.” Biofuel subsidies and regulations have become a boondoggle—estimated to cost the U.S. between $5 billion and $9 billion—that fails to reduce CO2 emissions.
The heart of the problem is the enormous political importance of food prices in developing countries. In countries where food makes up a large part of household expenditures, price increases can be devastating for voters and treacherous for governments. While facing political pressure to reduce food prices, several major food producers, including Argentina, Thailand, Kazakhstan, and Vietnam, restricted exports to ensure adequate domestic supplies. These restrictions further increased the price of food traded on the international market, causing additional pain to importing nations.

The trade restrictions have important disadvantages. First, they reduce income to farmers while their products’ prices are high, thus stifling investment and production when greater supply is most needed. Second and more damaging is that importing nations begin to fear that the market will no longer suffice to meet their needs. They rush toward panicked and inefficient responses, particularly those that increase production on their own land. Saudi Arabia, an extreme example, spent billions to achieve self-sufficiency in wheat production by turning desert into farmland; the drain on the country’s aquifers and its pocketbook forced Saudi Arabia to abandon the experiments.

Both of these trends steer investment toward unproductive land in importing countries and away from fertile land in exporting countries. Saudi Arabia, with enormous oil reserves and virtually no water, could export oil and import food rather than try to grow wheat in the desert. Its newest strategy for food security, along with countries such as China, the United Arab Emirates, and South Korea, has been to buy huge tracts of land in Africa, Asia, and Eastern Europe to assure long-term food security in fertile lands. While this may be an efficient investment in certain cases, the opacity and size of the deals has led to complaints of neocolonialism and corruption. Furthermore, this trend demonstrates the strategic disadvantages of global food insecurity for the United States.

The developed world must take the first steps to bolster the global food market, by eliminating agricultural and biofuel subsidies to enhance the food security of developing countries. More importantly, the United States must prevent nervous exporters from diverting food supplies inward. The first step is to alter the terms of the World Trade Organization compact to explicitly declare export bans (or extremely high export taxes) to be contrary to the principles of free trade and subject to penalty. While many exporting countries would oppose such a move, they might make this concession if the U.S. eliminates its agricultural subsidies—a long-sought goal that would make their own exports more competitive in return. Removing the subsidies could advance trade talks, since these subsidies were largely responsible for the breakdown in 2008 of the World Trade Organization’s Doha Development Round of negotiations to lower trade barriers.

It will be difficult to design international rules sufficiently compelling to overcome the political pressures attendant with rising food prices. Equally important will be policy advice to developing exporter nations to mitigate the effects of price increases as an alternative to market manipulation. As food prices rise, exporting nations gain income overall. The downside for such countries lies in the transfer of income from consumers to farmers. Governments, during times of high-prices, should assess farmers a lump-sum tax and distribute the revenue to the poor. Carefully calibrated redistributive measures could keep countries satisfied. A push for global regulation and policy changes would give less developed countries and their citizens the stability they need for security and economic growth and development.

Israeli Foreign Minister Avigdor Lieberman’s recent statement regarding the violent conflict between Israel and Palestine alludes not only to the lack of progress from negotiations in recent months, but also to the partisan political moment into which President Obama’s administration has entered with regard to its policies in the Middle East. Lieberman’s comments suggest a lack of initiative within the Israeli government to work toward a lasting peace settlement; indeed, over the last few months, violent conflict surrounding the city of Jerusalem and the failure of Israeli Prime Minister Benjamin Netanyahu to articulate more than rhetorical support for a “two-state solution” have added to fears that the region has turned its back on negotiation. Most importantly, Israel’s continued settlement building in the West Bank has delegitimized its more conciliatory gestures and will impede negotiations until expansion is frozen.

Under these circumstances, it is no wonder that President Obama and his Cabinet have shied away from addressing this ongoing crisis directly. The contradictory way in which the President has addressed Middle Eastern issues at various speaking engagements has led to a sense of confusion as to the extent to which he will support or reject recent Israeli stances. During his June 2008 appearance before the American-Israeli Public Affairs Committee, a powerful pro-Israel lobby group, then-Senator Obama assured the audience that his administration would continue to assist Israel to the tune of roughly $30 billion over the course of ten years – reaffirming a commitment from President George W. Bush. Furthermore, Obama insisted that the U.S. “must never force Israel to the negotiating table.” At his speech in Cairo a year later, however, President Obama condemned Israel’s continued expansion into the occupied territories, declaring that “it is time for these settlements to stop.” It is difficult to imagine how the president can expect settlement expansion to stop without pressing Israel to take part in any form of negotiations.

President Obama’s relative reticence regarding the Arab-Israeli conflict presents him with an unprecedented opportunity to devise a specific and comprehensive policy in the coming months. Furthermore, two very recent events have left the Middle East a far more vulnerable region, which would make a resumption of active peace negotiations with an American presence all the more timely. First, in September, the United Nations Human Rights Council issued the so-called Goldstone Report, condemning Israeli actions within the Gaza strip during its offensive last winter. Although formally dismissed by both the Israeli government – Prime Minister Netanyahu referred to it as “a mockery of history” – and the United States Congress, its endorsement by the United Nations General Assembly suggests that the report will not be so easily set aside. Defenders of the report argue that it speaks to the extent of Israeli human rights violations in the Gaza strip, while its critics contend that it fails to fully address atrocities committed by Hamas. Yet, in holding both Israeli and Palestinian leaders accountable, the Goldstone Report has helped shed critical and objective light on the seemingly endless regional violence. Obama’s refusal to acknowledge the report has hurt his standing among many Arab nations in which he is usually viewed favorably, or at least more favorably than President Bush. If Obama wishes to attract Arab support for peace negotiations, he must speak publicly about – and in doing so legitimize – the report, even if he temporally weakens him politically.

In another significant regional development, Palestinian Authority Chairman Mahmoud Abbas recently announced that he will not seek re-election in January 2010. Although the U.S. has regarded Abbas as a moderate in the region, his performance has been dissatisfactory to the Israeli leadership and to many Palestinians, who now criticize his wavering commitment to end the Israeli occupation of the West Bank and Gaza. Hamas, the dominant political player within Gaza, has opposed his decision to hold presidential and parliamentary elections next year. Obama’s presence in talks or negotiations could determine whether a moderate or militant leader replaces Abbas. Yet with the elections looming, time is not on the President’s side.

The nature of President Obama’s early forays into the Middle East will no doubt set the tone for his entire tenure in office. If his goal is nothing more than to continue supporting Israel at all costs, then little shift in policy from that of the previous administration is needed. If, however, his goal is to negotiate a peace settlement that will protect Israel’s sovereignty and security while creating a truly autonomous nation for the Palestinians, a more nuanced strategy is essential. The Obama administration has continuously wavered between pressing for an end to settlement construction in the occupied territories and accepting a resumption of peace talks while allowing the Israelis to continue construction. Yet until all settlement building ceases, negotiation will remain a dead-end as the “facts on the ground” continue to compromise Palestinian hopes for a state. As Secretary of State Hillary Clinton said, the administration “wants to see a stop to settlements, not outposts, not ‘natural growth’ exceptions.”

The United States, unfortunately, has a history of empty threats against the Israeli government. If the U.S. really wants an end to settlement construction, it must be willing to withhold some material support from the Israeli government. In 1990, during the first Intifada, the Israeli government began building settlements at an unprecedented rate. James Baker and others in the first Bush Administration perceived these settlements as an obstacle to much-publicized peace negotiations going on in Madrid at that time. The U.S. threatened to withdraw some financial support if the Israel government did not desist. Again in 1992, the United States refused to approve a $10 billion loan viewed by Israel as essential to meeting their increasing infrastructure demands. While this resulted in temporary bilateral tensions, the Israelis soon rejected then Prime Minister Yitzhak Shamir’s approach and elected more moderate leadership. The settlements were temporarily frozen, the peace negotiations went on, and the loan was eventually granted.
The strategy employed by the Senior Bush administration did not result in a total halt in settlement construction, but the U.S. won considerable concessions by exploiting Israel’s financial dependence as bargaining leverage.

Some might argue that the cessation of all terrorist attacks against Israeli civilians, mostly perpetrated by Hamas and the militant Shiite group Hezbollah, is the first necessary step to achieving a formal compromise in the region. Yet particularly since January, Hamas leadership has signaled a willingness to negotiate a cease-fire treaty with Israel and went on record in 2006 as agreeing to participate in talks working toward a two-state solution. While their recent concessions in no way compensate for their violent actions, they are a necessity to the peace process, and they must be brought to the table for their to be any hope of a lasting peace.

Others claim that pressuring Israel to accept compromise will deter it from participating in formal peace negotiations. Yet the U.S. managed to win a temporary settlement freeze in the early 1990s that coincided with a series of secret negotiations between Israel and the Palestinian Liberation Organization (PLO). These clandestine talks resulted in Oslo I, the first attempt to synthesize a plan for both Palestinian autonomy and the withdrawal of Israeli troops from the occupied territories.

The events of 1990-92, therefore, provide a viable model for the way in which President Obama can negotiate successfully with a Likud-controlled Israeli government. While the President certainly should not discard our history of cooperation with Israel, he must also take into account the degree to which Israeli survival depends on American financial support and our nation’s interest in maintaining stability in the Middle East as a whole. If President Obama wishes to encourage moderate Palestinian leadership and the renewal of negotiations, he must spend his political capital in a manner that reflects the true urgency of the region’s political situation and does not assume, as Mr. Lieberman says, that the region has “learned to live with” violent conflict.

By neglecting to cultivate America’s relationship with Brazil, the Obama Administration risks unsavory comparisons with the Bush Administration, which was heavily criticized for all but ignoring South America. With memories of a (supposedly) U.S.-supported military coup d’etat that instituted a ruling military dictatorship for twenty years still fresh in the minds of many Brazilians, the U.S. must offer political gestures and concrete economic compromises that show that its relationship with Brazil is as valued as when the U.S. became the first nation to recognize Brazil’s independence in 1822. Latin American expert David Rothkopf implores the current presidency to pursue this special relationship which has been neglected until now. Despite Obama’s warm remarks about President Lula at the recent G20 London summit—Obama declared, “He’s my man”—Rothkopf urges that Obama demonstrate commitment beyond just “lip service.” He writes, “[If the Obama Administration] only pays lip service to Brazil but slow walks the most important issues while seeking disproportionate payment in turn from the Brazilians… then tension and distrust are likely to manifest themselves.”

As noted by President Lula in his March 14th meeting with President Obama, reform of the American embargo on Cuba presents a golden opportunity to send a palpable signal not just to Brazil, but also to all of Latin America. The embargo on Cuba remains an antiquated and intolerant blemish on the U.S.’s relationship with the region—a relic from a war of ideas long since won. The U.S. must initiate a new campaign of ideas for a revitalized North-South relationship built on equality and respect in order to counter the efforts of populist leaders like Hugo Chávez, Evo Morales, and Rafael Correa to vilify the U.S. As Brazilian foreign minister Celso Amorim notes, “…It’s impossible not to talk about the Cuban embargo. It’s indicative of U.S. policy toward the region.” The repeal of the Cuban embargo would stand as a powerful symbol of goodwill and new beginnings, with all parties standing to gain, from the isolated Cuban public to the countless American multinationals chomping at the bit for a piece of the virgin Cuban market.

Moreover, enlisting the Brazilian President as a mediator in Cuban-American negotiations would be a brilliant choice for the U.S., not only because Lula is skilled at reaching compromise, but also because the move gives Brazil what it seems to want so badly these days: prestige. Brazil’s recent generous renegotiations to pay more for natural gas contracts with Bolivia and hydroelectric agreements with Paraguay, along with its successful leadership of the U.N. peacekeeping mission in Haiti, indicate that Lula is maneuvering Brazil to be the torchbearer for Latin America. And as Brazil cements and expands this leadership role, it wants a say in international affairs commensurate with its growing economic power.

Though the United States has officially “recognized” Brazil’s candidacy for a permanent seat on the U.N. Security Council, it can shoot a safe shot across the bow of the international order by announcing strong support for the bid. As Lula rightly ascertained in a speech to the U.N. General Assembly, “Today’s structure has been frozen for six decades and does not relate to the challenges of today’s world. Its distorted form of representation stands between us and the multilateral world to which we aspire.” A firm American statement of approval for Brazil’s Security Council eligibility would help strengthen a crucial alliance in Latin America. In addition, the United States stands to lose little political capital by expressing public support for Brazil. Unlike the G4 Security Council candidacies of India and Japan whose bids are opposed by important American allies such as Pakistan and China, respectively, and Germany, whose bid could be considered disadvantageous for the U.S., support for Brazil risks very little. Mexico and Argentina, the two countries most vehemently opposed to Brazil’s U.N. aspiration, are sturdy American allies who could be placated with little effort.

A final gesture that the U.S. should make to Brazil is opening up the U.S. market to Brazilian ethanol. Brazilian biofuel companies look at the American market with unequaled lust, as an astounding 54-cent tariff on Brazilian sugarcane ethanol makes exporting to the American market economically uncompetitive and unviable. Although repealing this tariff, which protects the comparably inefficient U.S. domestic corn-based ethanol industry, would be politically unpopular in the U.S., it is crucial to establishing a closer relationship with Brazil and would confer economic benefits on both countries. Given that the U.S. and Brazil account for almost 90 percent of the world’s biofuel production, developing a global ethanol market would be a mutually beneficial endeavor.

Also, such action is not without historical precedent. The Washington-based think tank Council on Hemispheric Affairs notes that officials in the Obama Administration could look to the International Trade Commission’s 1986 ruling on imported Brazilian iron ore as a historical blueprint to pleasing the elected officials in America’s Corn belt, as well as their Brazilian counterparts. Just as the 1986 accord legally isolated the American Midwest market so as to insulate the Great Lakes’ vulnerable iron industry, a similar ethanol agreement could institute an analogous protected trade area for American corn ethanol in western and central U.S., opening the East Coast to Brazilian ethanol. Since American ethanol consumption is concentrated in the West, the economic impact of such a policy change would not be dramatic, but it would be a crucial gesture of support to Brazil.

Over the years, many countries have claimed to possess a “special” relationship with the U.S. There has perhaps been no country more or longer deserving of that designation than Brazil. One of the last countries to enter the world recession and poised to be one of the first to exit it, as Jonathan Wheatley wrote in the Financial Times, “this is the Brazil that finally, after years of unfulfilled promise, is catching the world’s attention.” The three-pronged mix of political and economic gestures described above would allow the current Administration to make some much-needed overtures to its longtime rising star Latin American neighbor and possible long-lasting Latin American advocate. As for reciprocation, any Brazilian knows that once someone bestows an abraço on you, it is only good manners to return the favor.

Almost as if on cue, columns of foreign men come marching down from their hilltop encampments, invading every joint in sight in search of a good time. These, however, are not the colonizers of old (in fact, Ethiopia remained a singularly free country throughout the continent’s dark history of colonialism), but rather, a new breed of pioneers. The hardened, but eager, faces of these expatriates signify the rise of a new kid on the African block – the People’s Republic of China.

These men are vastly different from the conquerors who scrambled for Africa’s riches centuries earlier. Instead of the safari suits and velvet top hats that their European predecessors donned, the Chinese frontiermen of the 21st century come decked in loose overalls and somber hardhats. Unlike the infantrymen who arrived bearing rifles and muskets before them, the newcomers are contractors, technicians and engineers equipped with cranes and bulldozers. Nor do they live in exorbitantly fancy villas and seclude themselves in exclusive neighborhoods. When not toiling at their work sites or resting in their Spartan dormitories, most prefer the same (cheap) pleasures that their local counterparts enjoy.

It is men like these who have breathed life into the economies of little towns like Sekoru and surrounding areas, not only in their patronage of local hangouts, but in the big things they are accomplishing all around them. In this remote corner of the Great Rift Valley, several dozen Chinese engineers and construction workers are busy constructing East Africa’s biggest hydroelectric dam, Gilgel Gibe IV. Upon completion, it is expected to supply the urban centers and rural peripheries of southern Ethiopia and even neighboring Kenya, Djibouti and Sudan. This dam will not only bring electric power to hundreds of villages for the first time, but it will also be an indispensable catalyst for rapid industrial growth in the region.

This mammoth project, jointly financed by the Ethiopian and Chinese governments and the World Bank, is merely one of many similar undertakings that have sprung up all across Africa in the past decade. In its unfettered ambition to join the highest ranks of world powers, China has set its sights on Africa, aiming to establish deep, friendly relations with the continent. In countries like Angola, Nigeria, Ethiopia and Sudan, the Chinese government has been hard at work providing much-needed developmental assistance, not only embarking on comprehensive projects to build schools, hospitals, roads, bridges and dams, but also training the robust human resources needed to maintain them. Nor is China’s largesse limited to the mobilization of fleets of engineers, architects and construction workers.

The People’s Republic has had to reach deep into its pockets to finance its expensive relationship with Africa. According to the terms of a robust assistance package announced by Chinese President Hu Jintao at a summit of African Heads of State and Government in Beijing in 2006, China pledged to double aid to Africa by the year 2009 and provide $3 billion in preferential loans for development ventures, further establishing an Africa development fund expected to reach $5 billion. At this watershed event, Chinese Premier Wen Jiabao also proposed that China and Africa take steps to strengthen their commercial ties, bringing trade volumes up to $100 billion dollars by the year 2010. Indeed, since 2006 trade has grown even faster than the premier expected, reaching the $100 billion mark in 2008, a whooping 45 percent increase from a year earlier. According to figures released by China’s General Administration of Customs for the 2008 fiscal year, China imported $56 billion worth of goods and services from Africa, while exports to the continent reached a staggering $50.8 billion. This makes China Africa’s second biggest trade partner, behind only the United States and ahead of both Britain and France.

The benefits of closer ties with China for Africa are clear. China’s financial and technical resources allow for the construction of much-needed infrastructure, the gleaning of valuable expertise and the growth of trade and industry, among other things, all at a much lower cost than arrangements with Western countries would entail. Furthermore, the “no-conditionality” nature of Chinese assistance allows aid to be used to meet the priorities identified by African governments, as opposed to the dictates of Western governments and monetary institutions.

Moreover, China has striven to demonstrate its deep commitment not only to the economic well-being of the continent, but also to its peace and security. In the last two decades, the Chinese government has mobilized thousands of its armed forces and civilian observers to conflict zones in Southern Sudan, Liberia and the Democratic Republic of Congo. More recently, China has deployed a formidable naval contingent to the East African coast, where piracy has threatened to cripple international shipping.

All these generous overtures, however, have raised western eyebrows, perhaps because China’s newfound zeal may be reminiscent of a bygone era in which Africa was overrun by the imperial and commercial ambitions of different foreign powers. Because of a rapidly booming economy insatiable in its appetite for raw materials and markets for finished goods, Chinese multinationals have demonstrated their capacity and willingness to go to great lengths to secure both. In particular, they have demonstrated a strong desire to gain sustainable access to the sources of crude oil and natural gas in places like Angola, Nigeria and Equatorial Guinea, where the culture of good governance and strength of civil institutions are still lacking in maturity. Consequently, the unrivalled spending power and political clout of Chinese businesses has occasionally bypassed the needs of local populations and served to exacerbate their already impoverished conditions. Unrestrained drilling and loose safety practices by Chinese energy companies in the oil-rich Niger Delta and elsewhere have led to the pollution of drinking water sources, dislocation of inhabitants and rife corruption.

China’s willingness to overlook gross violations of democratic practices and human rights by its African trade partners has also made it the target of much criticism. China has played an obstructionist role in the UN Security Council in implementing resolutions targeting the Sudanese government for gross violations of human rights committed by government-backed rebels in Darfur, including the dislocation, rape and mass murder of hundreds of thousands of civilians. Moreover, the high prevalence of Chinese small arms and light weapons in several conflicts zones abets the further deterioration of peace and security in Africa. Either through the medium of international arms dealers or corrupt African governments, these arms fall into the possession of rebel groups in places like the DRC, where they are used to inflict serious harm upon civilians.

In spite of all this, however, there is no denying China’s invaluable contribution to the economic development of African states and its increasing assistance in bringing about peace and security. Nonetheless, the government of the PRC needs to re-evaluate the precise nature of its objectives on the continent and the extent to which its own interests are served by maintaining the policy of near complete “non-interference” in the domestic affairs of the nations it deals with. China could play an immensely constructive role by joining the international community of nations in demanding that African governments live up to the principles of transparency, accountability and respect for human life that they supposedly espouse. Pulling the weight of its enormous economic leverage and its permanent status on the UN’s Security Council, China could exert decisive pressure to facilitate the end of some of the most tragic human catastrophes of this decade. Not only would such a strategy pay dividends in creating political stability in the states that are increasingly vital to China’s economic interests, but it would also shine positively on the image of an emerging superpower that aims to be taken more seriously on the global stage. China has the unprecedented opportunity to be the catalyst of much-needed change on a continent that has been starving for it. It is an opportunity that the Chinese government and businesses need to seize for their own interests and for those of their African friends.

China’s prosperity should be welcomed. It benefits the Chinese people through better living standards, social mobility, economic freedom and improved government safety nets. China’s growth will also increase demand for foreign products and spur trade.

Despite its strengths, China still lags far behind the U.S.—especially in economic freedom and its capacity for innovation. Its GDP per capita is relatively low and its government inhibits innovation. While China should be recognized for its progress and strong economy, it is ridiculous to discount the U.S.’ economic potential or prematurely pontificate about American decline. The U.S.’ diverse population and capacity for innovation will keep it economically competitive and geopolitically strong for years to come.

Proponents of America’s decline make it appear as if China outperforms the U.S. both economically and educationally. In China, however, more than 20 million college students have few job prospects and half of its engineering graduates only have associate degrees. Naturally, given China’s massive population, it will eventually overtake the U.S. in its population of scientists. The U.S. though, educates more engineers per capita than does China and in its 2008-2009 report, the World Economic Forum ranked the U.S. as the most competitive economy. Minxin Pei, senior associate at the Carnegie Endowment for International Peace, says that despite China’s rapid growth, it will take nearly 50 years for the average income in China to equal the average income in America.

A recent article in the New York Times suggests that job opportunities for American graduates in China are plentiful and that so are the Americans seeking these positions as evidence of American economic decline. It recounts stories of Americans and their successful jobs in China; yet, it cites no research and provides no concrete figures. Some Americans may easily find work in China like the Americans in the article. Shaun Rein, founder and managing director of the China Market Research Group thinks not. Jobs for recent college grads are scarce in China. And Rien says that Chinese companies would rather hire Chinese employees who understand both American and Chinese cultures than American applicants. Rein says that Americans have to convince employers that they are more valuable than the Chinese applicants—hundreds of thousands of whom have the same western education as the Americans.

Jobs are scarce in China. Unemployment in cities is officially 4.3 percent, but unemployment among last year’s Chinese graduates is about 12 percent. And the number of Chinese college students is growing. The bottom line is that Americans will struggle to find jobs in China just as they will in the U.S.

Both countries suffer slow growth and high unemployment rates in this tough economy. The difference between the U.S. and China is that American culture and its government fosters innovation. The U.S. is home to a majority of the world’s most innovative companies and people. In 2003 IBM, an American company garnered five times as many patents as China and India gained combined. In 2008 the U.S. still greatly outpaced China in the number of patents generated.

Former Woodrow Wilson School dean and current Director of Policy Planning for the U.S. State Department, Anne Marie Slaughter talks about America’s creativity in “America’s Edge,” published in Foreign Affairs this year. She says that the U.S.’ capacity for networking will “renew its power and restore its global purpose.” Slaughter says that China’s economic and political policies will prevent it from becoming an international leader in economics.

American companies and even American universities are experts at networking and marketing themselves and their products. Slaughter explains how American multinationals use networking to create well-selling products in markets around the world. A recent article in The Economist points to America’s history to show how important marketing has been for American innovation: “Edison did not invent the light bulb and Ford did not think up the motor car, but both came up with the business-model innovations required to profit from those marvels.”

American universities also market themselves to draw foreign students who contribute greatly to innovation in America. Fareed Zakaria, author of “The Rise of the Rest,” says that nearly half of all science researchers in the U.S. are either foreign students or immigrants. Foreign nationals made up 62% of all PhDs in the 2006 in the U.S., but they only comprised 7% of all B.S. degrees. Although the stay rate—percentage of foreign students who stay in the U.S. upon graduation—decreased slightly over the past few years, it remains high. A little over two-thirds of foreign PhD students stayed in the U.S. for at least 2 years after graduation. The stay rate will depend on America’s economy and immigration policies and whether foreign students and researchers have job prospects there in the future. As of 2009, the U.S. State Department is reworking its policies to reduce the time it takes to process Visas to two weeks.

For now though, as a 2008 RAND corporation report says, “America accounts for 40 percent of the total world’s spending on scientific research and development, employs 70 percent of the world’s Nobel Prize winners and is home to three-quarters of the world’s top 40 universities.” Diversity helps America discover new markets. Like Henry Chesbrough of the Berkeley Haas School of Business says, Americans are so successful at marketing because of their “ability to listen to, and learn from, customers in new markets.”

The Chinese government is trying to increase its capacity for innovation through state-created communities that consist of University campuses and research centers of International and Asian firms. These state-planned centers of innovation will not recreate the dynamic environment that encourages innovation in the U.S. because innovation comes from what Slaughter describes as “positive conflict”—the ability to challenge the status quo. China wants to produce more innovative citizens yet it controls the simplest aspects of their lives.

During the 2008 Beijing Olympics, China exposed how strictly its censors media. Foreign journalists were appalled by how much the government censored the internet. Chinese journalists also face tough restrictions—China leads the world in number of Journalists imprisoned. The Chinese government controls foreign trade just as strictly. On August 12th, 2009 the WTO ruled that China has been violating trade rules by restricting imports of media—movies, music etc. The state film distribution organization, China Film Corp., can decide for example that this summer the Chinese people will watch Harry Potter and not Star Trek. Unless China allows its people more freedom, both personal and economic, its private sector will remain stifled and small.

China has a strong and growing economy that is helping many people escape poverty and improve their lives. The U.S. and the world though, should not lose confidence in America. Eric Schmidt, CEO of Google’s reminds us that, “innovation is how America works…creative destruction, this constant process of layoffs and new jobs and new companies and so forth is key to America’s competitiveness.” That mentality will make America the world’s most competitive economy for decades to come.