Category Archives: Economics

Catholics Respond to Rising Anti-Globalization in Latin America

By Bristow Richards

Last year saw citizens of the US and Europe respond to globalism with disdain and contempt. 2015, the year of the COP21 climate accords, the Trans-Pacific Partnership, and the Iran Nuclear Deal, gave way to 2016, the year of Donald Trump’s election, Brexit, and a general loss of faith in institutions. There is reason to believe that the same variety of anti-globalism could have political weight in Latin America as well. In recent decades, the region has experienced the worst side effects of both national isolation and global interconnectedness. In the Eighties, states involved themselves too heavily in their national economies and instituted too many import barriers, which led to an inflation crisis that ruined entire markets in the region. Latin American historians often refer to the era as the “Lost Decade.” Openness to international markets and institutions, on the other hand, can also be dangerous. Argentina had the biggest sovereign debt default in history in 2001 after relying almost solely on foreign capital and the IMF.

 

What can assuage the looming anxiety Latin Americans feel towards globalism? Populism and protectionism have been one cathartic political response in other regions of the globe. But politics is not the only solution.

 

One group of Catholics claims to have the answer. In February, Spanish-speaking Catholic theologians met in Boston to discuss the church’s approach to globalization and structures of exclusion. At the inaugural Ibero-American Conference of Theology, Catholic thinkers discussed issues from ranging from populism and acculturation, to the environment. Among those present was Juan Carlos Scannone, a previous teacher of the current pope, and Carlos María Gallí, one of the pope’s close friends and advisors. These Catholic thinkers argued that their particular reading of Christianity could address contemporary problems faced by all people, across political spectrums and throughout the globe. Their approach to Catholicism is called Liberation Theology – made renowned by Gustavo Gutiérrez in his 1973 book, A Theology of Liberation. Gutiérrez himself attended the conference, a gesture that seemed to give credence to the contemporary supporters of his theology. Although liberation theology once enjoyed considerable sway in Latin America, its influence has waned in the past few decades. In this political moment, however, liberation theologians are gaining momentum, hoping to return to mainstream political and cultural conversations in the Americas.

 

Liberation theology, according to its proponents, is a reading of Christian teaching that focuses on helping the poor and excluded to overcome exclusionary institutions like governments and multinational corporations. It has often been characterized as a leftist sociopolitical movement. Some strands of liberation theology take on a deterministic, Marxist interpretation of material well-being, encouraging the working class to struggle against these exploitative or extractive institutions, and to struggle violently, when necessary. The summary declaration from the Ibero-American Conference of Theology, however, takes on a gentler tone. The declaration calls for a reinvigorated approach to theology that pays special attention to “the reality of social conflicts,” aspiring to overcome vast inequalities of wealth, resources, and opportunities in Latin America and the Caribbean. The region could use it, too: inequality plagues Latin America from Buenos Aires to Bogotá, although it has been modestly improving in the past few years. To impoverished rural parishioners, a materialistic understanding of religion is more descriptive of their reality than the messages of vacuous Vatican elites, who are more concerned with debating abortion and gay marriage.

 

The “preference for the poor” espoused by liberation theologians is not unique to their movement. Pope Francis, though he does not specifically endorse Liberation Theology, has gone to great lengths to bring the church’s attention more to its people, especially its poorest. When he was the archbishop of Buenos Aires, the pontiff-to-be made it a priority to improve the church’s relations with the villas miserias – “miserable neighborhoods”– where poverty and crime were often deadly. He condemned international institutions and unchecked capitalism for exacerbating the suffering of Argentines after the 2001 default. As pope, he has sought to improve Vatican relations with liberation theologians. In 2015, Francis invited Gustavo Gutiérrez to speak at the Vatican as a welcome guest. Perhaps more notable was when the pope ordered the beatification of Archbishop Óscar Romero, a divisive liberation theologian who was shot at the altar during the reign of El Salvador’s oppressive military dictatorship in 1980. The pope’s latent support for liberation theology has given the movement the nearly official legitimacy it has lacked since its founding.

 

Although Pope Francis has conditioned the church to consider the tamer calls of liberation theology, Gutiérrez and his entourage may still not be fully capitalizing on their chance to influence political events in Latin America. Elections in the Americas are seeing center-right administrations rise up under the likes of Argentina’s Mauricio Macri and Peru’s Pedro Pablo Kuczynski. While the source of this retreat from the Left may be based as much on disdain for the corruption of current leftist governments as it is on a rejection of leftism itself, the political landscape is becoming less amenable to some of the basic ideological premises of liberation theology. To make matters worse, Latin America is becoming decidedly less Catholic, with studies indicating that Catholic identity has decreased by more than 20% since the 20th century.

 

Despite these challenges, liberation theologians continue to have an immense asset at their disposal: Catholicism itself. Issues like globalization, migration, and poverty are transnational by nature. Transnational issues are also notoriously difficult to approach by any sort of international political effort. They aren’t necessarily the product of sovereign states, and it is nearly impossible for loose coalitions of independent countries to agree on how to solve them. The church, on the other hand, has the characteristics of a transnational movement. It relies on more than a billion individuals, who regularly choosing to reaffirm it. The Church does not need borders or laws to maintain influence. Furthermore, the Catholic Church has extensive bureaucratic capacity and ideological authority in the Vatican. The pope can influence Catholics with inspiration and religiosity, without imposing laws or inciting partisanship. Pope Francis has the power to open the minds of nearly 1.2 billion people, to ideas of social and political activism, to urge them to resist oppressive institutions. At the very least, he can make Catholics more receptive to religious leftism.

 

Catholicism (from the greek word katholikismos, or “universal doctrine”) can be a powerful solution to the fears that transcend national boundaries. Emboldened by a friendly Vatican and renewed organizational capacity, it seems that liberation theologians will attempt to strengthen their base in Latin America, and perhaps enter the cultural mainstream within the next few years. It will be a slow process. Gutierrez and his colleagues will likely take advantage of Pope Francis’ frequent visits to the region in the next decade, using his liberal Catholicism to further legitimize their endeavors. Time will tell if their message really takes root.

 

 

Taiwan’s Tourism Sector Takes a Hit as ROC Learns Dangers of Over-reliance on China

By Tom DeMarzo

Approximately 5,000 tourism industry workers took to the streets of Taipei in mid-September to voice their frustration with the declining number of Mainland tourists to the island state. Protestors from 11 separate sectors of the tourism industry marched in the pouring rain for three hours and ended up outside the Presidential Office Building. During the march, the disgruntled workers held up signs, performed skits, and yelled slogans. Chants of “No pay, no life!” accompanied headbands stamped with the characters “Jobs and survival” and, perhaps most dramatically, T-shirts that read, “This is a life or death situation for the tourism sector.”

The tourism industry constitutes a significant portion of the Taiwanese economy. In 2015, Taiwan attracted 10.44 million tourists and generated US$14.39 billion in revenue, which totaled 4% of the same year’s GDP. Since the establishment of direct, non-chartered cross-Strait flights in April 2009, Chinese have made up approximately 40% of tourists in Taiwan. In fact, Chinese tourists in 2015 outnumbered the combined number of tourists from Japan, Hong Kong, South Korea, and the US. It goes without saying that Chinese tourists are vital to the health and success of Taiwan’s tourism sector. Aside from the sheer size of China’s population, several factors explain the massive influx of Chinese tourists into Taiwan.

China and Taiwan’s close geographic and cultural ties play an important role in attracting Chinese tourists to Taiwan. Located just 110 miles off the coast of southeastern China, Taiwan is viewed by many as a guardian of traditional Chinese culture. After falling to Communist forces in 1949, the Kuomintang fled to Taiwan and brought with them thousands of historical relics. The dominant political party also encouraged citizens to embrace a Chinese identity in order to legitimize claims of representing the one true China in the world. Meanwhile in China, the Chinese Communist Party under Mao Zedong cracked down on “the four Olds” (si jiu四旧) –  Old Customs, Old Culture, Old Habits, and Old Ideas – during the Cultural Revolution from 1966 to 1976. The massive sociopolitical movement wreaked a tremendous amount of damage on the country, its populace, and its culture. Today, Mainland Chinese tourists travel to Taiwan to observe divergences in Chinese and Taiwanese culture and politics. Whether it is Taiwan’s democratic system and all of its trappings – from campaign advertisements to opinionated and vocal taxi drivers – or marveling at the bustling activity surrounding Confucian temples, Chinese tourists frequently marvel at the myriad of differences between China and Taiwan.

A second factor contributing to large numbers of Chinese tourists traveling to Taiwan is China’s growing middle class and steadily increasing disposable income per capita. Following Deng Xiaoping’s launch of Opening and Reform (gaige kaifang改革开放) in 1978, the Chinese economy experienced exponential growth and full-scale industrial development. A growing middle class with more money to spend on travel and leisure has emerged as China continues to reap the benefits of gaige kaifang and transition from an industrial economy to a service-based economy. Given the cultural and geographic proximity of Taiwan and China, it is no surprise that many Chinese choose to spend their vacation time and money traveling to Taiwan.

Finally, improved economic cooperation between China and Taiwan and changes in the Taiwanese domestic political landscape facilitated the proper conditions for increased cross-Strait tourism. Prior to 2009, Chinese and Taiwanese citizens hoping to travel across the strait had to fly on chartered flights rather than on commercially scheduled flights. However, an agreement in April 2009 allowed airlines to schedule regular, direct flights, and thus more than doubled the previous number of flights traversing the strait. This agreement was made possible in part due to increased amounts of investment and trade between China and Taiwan, culminating in 2008 with the Economic Cooperation Framework Agreement. The timing of the cross-Strait travel agreement reflects the political dimension. Cross-Strait relations warmed up following the election of KMT candidate Ma Ying-jeou as Taiwanese president in 2008. The Chinese government favors the KMT because of the party’s long-term goal of unification, as opposed to the Democratic Progressive Party, which advocates de jure independence from China, nationalist Taiwanese identity, and higher military expenditures. China and Taiwan’s cultural and geographic closeness, China’s economic growth, and changes in the economic and political environments on both sides of the strait resulted in a steadily increasing number of Chinese tourists visiting Taiwan. The natural outcome of this trend is the Taiwanese tourist industry’s heavy reliance upon Chinese tourists to fill up their hotels, restaurants, tour groups, and tour buses. Therein lies the cause of September’s protests.

The number of Chinese tourists visiting Taiwan has flagged considerably since the election of Tsai Ing-Wen, the head of Taiwan’s pro-independence Democratic Progressive Party, as President of Taiwan. In May and June, Taiwan saw a 12% decrease in Chinese tourist arrivals compared to 2015, and a 15% decrease in July. According to Taiwan’s Mainland Affairs Council, Chinese tourist arrivals have decreased by 22.3%, a devastating blow to one of Taiwan’s most important industries.

Taiwan hoped to see an uptick in tourist arrivals during the National Day and Mid-Autumn Festival holidays, but those expectations were dashed when tourist arrival numbers remained low. However, the decreased number of Chinese tourists visiting Taiwan is not the result of an economic slowdown in China or some natural disaster that struck Taiwan. Instead, the Chinese government reportedly lowered the maximum allowance for Mainlanders traveling to Taiwan following Tsai’s election – from 16,000 a day to 10,000 a day – to place pressure on Taiwanese President Tsai Ing-Wen.

Understanding the 1992 Consensus is important in understanding why the Chinese government wants to pressure Tsai. The 1992 Consensus was the product of a meeting between Gu Zhenfu (辜振甫) and Wang Daohan (汪道涵), the heads of SEF (Taiwan’s Straights Exchange Foundation) and ARATS (China’s Association for Relations Across the Taiwan Straits), respectively. Gu and Wang both sought to establish a political foundation for future cross-Strait interactions, but could not agree as to whether the “One-Country, Two-Systems” formulation – wherein Taiwan would agree that China and Taiwan are one country but each constitute a different “system” –  should be built into this framework. In order to hold their respective positions on the matter, Gu and Wang verbally expressed their views in a purposefully ambiguous manner. ARATS put forth the following statement: “Both sides of the Taiwan Strait uphold that One-China principle and strive to seek national reunification. However, in routine cross-Strait consultations, the political meaning of “One China” will not be touched upon.” SEF responded: “Although the two sides uphold the one-China principle in the process of striving for cross-strait national reunification, each side has its own understanding of the meaning of one-China.” This sly way of saying “let’s agree to disagree, and move on” allowed the PRC and ROC to engage in increasingly frequent and meaningful interactions throughout the next couple of decades, culminating in a 2005 meeting between Chinese President Hu Jintao and Lien Chen, a 2008 meeting between Hu and Taiwanese President Ma Ying-Jeou, and a 2012 meeting between Chinese President Xi Jinping and Ma. However, President Tsai’s adherence to the DPP’s pro-independence line and refusal to accept the 1992 Consensus has frustrated China, and high-level official talks have not occurred since Tsai’s inauguration in May.

President Tsai has repeatedly stated that she does not intend to deviate from the status quo of cross-Strait relations, and her commitment has kept China, Taiwan, and the US happy. Explicitly announcing any sort of move toward independence would infuriate China and generate a dangerous amount of tension across the Taiwan Strait, which in turn would upset the US. On the other hand, many Taiwanese – especially the DPP’s constituents —  would view Tsai taking steps towards reunification on China’s terms as surrender. Despite her commitment to maintaining the status quo, Tsai has managed to avoid consenting to the 1992 Consensus (jiuer gongshi九二共识), which precludes Taiwanese independence claims. In doing so, Tsai has not abandoned the DPP’s objective of eventually gaining independence from China. In both her inaugural address on May 20th and her National Day speech on October 10th, Tsai acknowledged the 1992 Consensus but stopped short of accepting it as the political foundation for cross-Strait official interaction. Note the language Tsai used in her inaugural address with regard to the 1992 Consensus:

“By existing political foundations, I refer to a number of key elements. The first element is the fact of the 1992 talks between the two institutions representing each side across the Strait (SEF & ARATS), when there was joint acknowledgement of setting aside differences to seek common ground. This is a historical fact.”

Tsai echoes her assessment of the 1992 Consensus as a “historical fact” in a speech she delivered on National Day:

“We respect the historical fact that in 1992, the two institutions representing each side across the strait (SEF & ARATS) met, and we advocate that both sides must collectively cherish and sustain the accumulated outcomes enabled by over twenty years of cross-strait interactions and negotiations since 1992, and continuously promote the stable and peaceful development of the cross-strait relationship based on such existing political foundations.”

In China’s eyes, using the 1992 Consensus as a political foundation for cross-Strait relations allowed both sides of the Taiwan Strait to meet each other halfway; the 1992 Consensus does not require China or Taiwan to explicitly state their positions about whether the PRC or ROC is the sole legitimate government of China. However, Tsai and the DPP are not concerned about governing China, and their repudiation of the 1992 Consensus has prompted China to apply pressure on Tsai from within Taiwan.

This brings us back to the thousands of Taiwanese tourism workers protesting in the rain. The Chinese government’s restriction on tourism has significantly damaged Taiwan’s tourism sector, despite Tsai’s government infusing US$1.3 billion into the struggling industry. Moving forward, the Chinese government will likely take advantage of Taiwan’s strong economic dependence on China to turn Taiwanese voters away from the DPP. Taiwan’s reliance upon China extends far beyond its tourism industry; China has been Taiwan’s top export market since 1999, and China became Taiwan’s leading source of exports (US$48 billion, or 18% of total Taiwanese exports) in 2014.

Nearly seven months have passed without any indication of cross-Strait relations warming back up to pre-election levels. China’s decision to limit the number tourists traveling to Taiwan – or as some posit, allowing tourist numbers to regress down to normal levels by no longer encouraging Chinese citizens to travel to Taiwan – demonstrates that it is not willing to resume talks until the DPP accepts the 1992 Consensus. Instead, China will focus on cultivating ill-will towards the DPP in the hearts of Taiwanese voters. China’s plan to withhold economic benefits previously offered to Taiwan during KMT administrations may very well backfire if it stirs up civic nationalist, anti-China sentiment among the Taiwanese. But with Taiwan’s tourism industry badly hurting and Tsai’s approval rating sinking from 70% in May to 44% in late September, China may be content to wait until the 2020 general election and hope that the Taiwanese vote with their wallets.

Featured image from The Indian Express