Democracy Promotion and Sovereign Wealth Funds

A few years ago, Hampton’s post about democracy promotion and terrorism probably ran the risk of being twisted by unscrupulous critics into an apology for the terrorists. That got me thinking about the logical inconsistency employed by those who argued for democracy promotion, while denying that any real political grievances feed violent Islamic extremism. Fortunately, those days are over, and we can now discuss things as they exist in the real world.

Hampton already mentioned all the caveats necessary when considering democracy promotion. To which Dan Drezner will apparently be adding one more in Congressional testimony tomorrow: sovereign wealth funds. The reasoning, as I’ve seen it expressed elsewhere, is that by offering aid with no strings attached, China, Venezuela and various other cash-rich nations provide the developing world with alternatives to Western aid conditioned on political and administrative reform.

To my mind, democracy promotion, or more generally a values-based foreign policy, already faces plenty of obstacles. Both the pacifist “Carter” version, as well as the more militarized “Bush” model, are both largely considered to be failures in terms of advancing American interests. That’s not to say it’s not worth pursuing. It’s just to say that we still haven’t figured out how.

In many ways, we’ve helped to cultivate an Arab world that has Westernized (incompletely) without liberalizing, and it’s been kept in that frozen in-between state because it served everyone’s interests. Now it seems like the repressive status quo feeds extremism, and political liberalization legitimizes it (Hamas, Hizbollah). And if that weren’t bad enough, our money is losing its value, both figuratively and literally.

One thing we’ve got in our favor is that the competition has a way of making itself unpopular in a hurry. The African backlash against China is something of a cliche by now. And no one really takes Ayman al-Zawahiri’s political liberalization credentials seriously. Taken together, that suggests it’s a good time for a tactical retreat for democracy promotion. If our values are as universal as we believe, they’ll find ways to take root that will in turn help us identify better policies to support them.

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