CIPE recently hosted partners from two strategic regions of the world: Asia and the Middle East. Here are excerpts of their presentations.
Snapshots From China
The Unirule Institute of Economics, established in 1993, takes its name from the "universal rules" that drive modern economics. This independent, private think tank - one of the very few in China - is dedicated to the growth of a market economy and the reform of outdated Chinese Government policies.
On November 19, Unirule's Chairman, Professor Mao Yushi, spoke at CIPE's offices in Washington. Excerpts of his remarks are below.
Professor Mao highlighted the remarkable economic development that China has undergone in the past two decades. Per capita income has tripled, he said, and the Gross Domestic Product has quadrupled. Foreign trade was $20 billion twenty years ago, and it has swelled to $325 billion today. With 150 million Chinese moving from rural areas to the city, China is witnessing the "largest population migration in human history."
The political situation has not kept pace with economic reform, according to Mao, but it has changed "very rapidly, very profoundly." Twenty years ago, exiled in the interior of China, he said, he had to report to the government in order to purchase a train ticket to see his family in Beijing. Today, equipped with a passport, he can travel abroad whenever he wishes with no government approval necessary.
In the same vein, Mao described ways in which the Chinese government used to manipulate its citizens through control of the food supply. Control in that manner has lessened, and Mao does not foresee the possibility of China returning to a dictatorship, in large part because the nation has moved beyond strongman politics.
Despite these advances, Mao noted, China still suffers from a one party political system and a legal system that remains under government control. Mao stressed the importance of developing strong rules in such areas as individual security, property rights, and human rights.
Mao feels that the development of democracy in China is a long-term goal that will require years of sustained effort. He noted that the middle class is very weak and poorly educated, and there is no social contract between the Chinese people and their government. More than 90 percent of Chinese do not pay income tax, for example, and citizens do not see any type of relationship between taxes and public services.
In concluding his remarks, Mao noted that political reforms are increasing, but there are still limits to the boundaries of freedom. Free speech is generally permitted, but freedom of the press is qualified. China's economic and political evolution has captured the attention of the world, and Mao Yushi's institute will remain at the forefront of that nation's reforms.
Developments in the West Bank & Gaza
Arab-Israeli negotiations have had their ups and downs in recent years, vacillating between the prospect of peace and the possibility of continued conflict. Through it all, the Israel / Palestine Center for Research and Information (IPCRI) has kept communications open between Israelis and Palestinians.
A CIPE grantee since 1994, IPCRI has established a reputation as a respected academic center with the ability to reach decision-makers on both sides, thereby enabling it to play an instrumental role in reforming commercial laws in the West Bank and Gaza. The IPCRI/CIPE program contributes to the modernization of commercial laws and to the development of a legal framework that encourages entrepreneurship and investment in the West Bank & Gaza.
On October 8, at its offices in Washington, CIPE hosted a presentation by the Co-Directors of IPCRI — Gershon Baskin, an Israeli, and Zakaria Al Qaq, a Palestinian. Their remarks touched on a wide range of issues, including:
Corruption — The credibility of the Palestinian Authority and the Legislative Council, according to Al Qaq, have been damaged by recent charges of corruption. Instead of shaking up the Cabinet through dismissals, he said, Chairman Arafat "shook it down" by adding ten additional ministers.
Investment Law — InveBaskin noted that the new investment law does not "provide incentives that businessmen really want" because "there’s no tax law, and until there's a tax law, the investment law has no meaning." The IPCRI/CIPE program has drafted a policy paper on the tax reforms needed to boost trade between Israel and the West Bank / Gaza, and IPCRI has brought these ideas to decision-makers in both governments.
Trade Relations — Fifty percent of the Palestinian budget today comes from customs and VAT taxes collected by Israel and transferred to the Palestinian Authority. This $800 million per year has helped to create a Palestinian public sector that never existed before.
The jury is still out on whether a unilateral Palestinian declaration of independence on May 4, 1999 — at the end of the period set forth in the Oslo Accords — would help or hurt the cause of peace in the long run. In the meantime, IPCRI and its Co-Directors are working hard to keep the channels of communication open, promote economic development, and encourage cooperation at every opportunity.