Duchy of Hazard

Fernand Grulms of Luxembourg's national financial center is not amused by Eric Pape's tongue-in-cheek take on the country.

Eric Pape ("The Lap of Luxembourgery," September/October 2011) describes Luxembourg as a country rotten to the core. We write not to question the article's style or humor, but to get some facts straight.

Among the numerous inaccuracies in this article is the myth of the GDP per capita figure. This figure is relatively meaningless when applied to Luxembourg and cannot be used to demonstrate the country's wealth. Luxembourg's GDP is generated not only by the local workforce but, as Pape admits, by a large number of cross-border commuters. These represent some 150,000 out of a total working population of just 340,000. With foreign workers added to the head count, Luxembourg's per capita GDP falls by around 45 percent.

Pape writes that Luxembourg's per capita external debt (some $3.76 million per person) is 84 times that of the debt-ridden United States. According to Eurostat statistics, the global level of Luxembourg public debt in 2010 was €7.66 billion (around €15,200 per capita.) Hence the external debt cannot be several trillion euros.

In addition to relying on inaccurate statistics, Pape's article also displays a poor understanding of politics. He says that democracy in Luxembourg is a joke because the ruling family is hereditary and appoints certain members of parliament. This is not true. Moreover, parliamentary monarchy is a widespread model, which democracies including Britain, Denmark, the Netherlands, Norway, Spain, and Sweden have adopted.

Luxembourgers do not suffer from a sense-of-humor failure, but we expect articles about our country to be well-researched and constructively argued. Given that Foreign Policy is an opinion leader in its field, poorly crafted texts can mislead readers and raise questions about the credibility of a distinguished publication.

Chief Executive Officer
Luxembourg for Finance

Eric Pape replies:

I was willing to risk my well-being when Foreign Policy sent me, its intrepid reporter, into the bowels of Luxembourg to write an irony-laden dispatch that mocks myself and parachute journalism in general, but I try my best to relegate my banking and debt analysis as a journalist to my own banking and debts.

So, for the most sensitive numbers -- those suggesting that Luxembourg has an outlandish external debt (which is not to be confused with the country's honorably low public debt) -- I sought out "experts." One was the genial (and sadly recently deceased) parliamentarian and banking-world expert Lucien Thiel. Thiel readily acknowledged the famously high external debt data that I brought up with him, and he contextualized it as the natural extension of the tiny country's unparalleled success with investment funds, among other things. In his telling, Luxembourg's external debt is a sign that it is economically creative, and thriving.

Interestingly, Luxembourgian folk wrote to explain away pretty much all the data brought up in my dispatch. Could it be that Luxembourgers are so dejected that the only statistics that they have faith in involve good news: the puny public debt, low unemployment, and projections for vibrant economic growth? Maybe they are right about that. (As for the country's dismal score on the happiness ranking, I welcome travel donations so that I can visit similarly unhappy peoples and rank them myself.)

If Luxembourg really is the dark, corrupted heart of Europe, then one thing is clear to me: Evil sure picked a pleasant place to live.


The Jihad Deficit

Terrorism scholar Daveed Gartenstein-Ross says Charles Kurzman is underestimating the threat al Qaeda will pose in the coming decade.

Charles Kurzman's essay ("Why Is It So Hard to Find a Suicide Bomber These Days?" September/October 2011) probes an important question and offers a balanced, intelligent answer. Kurzman fleshes out a significant structural weakness within the jihadi movement: its inability to draw as many recruits as it would like (and as many as some fear). His conclusion is undoubtedly correct that the terrorist attacks we may see in the near term "do not threaten our way of life, unless we let them." A great tragedy of the past decade is the way the blundering U.S. response to the very real threat of terrorism has often strengthened the enemy's hand.

But though his overarching argument is astute, I fear Kurzman's analysis understates the risks we'll face in the coming decade. Although he points to a decline in recruits entering terrorist training camps, militants have also flocked to live battlefields in places like Afghanistan, Iraq, Somalia, and Yemen. Real combat experience is one of the best drivers of the enemy's ingenuity. The era of austerity we're entering further ensures that fewer resources will be devoted to policing efforts to contain the threat.

Moreover, Kurzman appears overly dismissive when he writes the National Counterterrorism Center "calculates that Islamist terrorism claims fewer than 50 lives per day." Fifty lives a day adds up to a considerable total over the course of a year. It's even more significant when one considers militant groups' ability to set in motion retaliatory violence, as they did in Iraq, or exacerbate humanitarian crises, as al-Shabab has in Somalia. But these differences in threat assessment aside, I commend Kurzman for his thoughtful essay.

Senior Fellow
Foundation for Defense of Democracies
Washington, D.C.

Charles Kurzman replies:

I thank Daveed Gartenstein-Ross for his sobering reminder that recruits continue to get live battle training in numerous conflict zones. Fortunately, the number of militants in these areas, as estimated by U.S. government officials, continues to run much lower than the numbers trained in Afghanistan during the Taliban era and far lower than the numbers that many experts predicted after 9/11.

I agree that the death toll from terrorism is a terrible human tragedy -- how fortunate we are that it is not higher! Think what our world would be like if as many people died from terrorism (13,191 in 2010, according to the National Counterterrorism Center) as die each year from nutritional deficiencies (approximately 418,000 per year, according to World Health Organization estimates). Global concern need not be calibrated solely with fatalities, but even well-informed people may be unaware of these disparities in scale.