Nigeria Is Not Pakistan

The state isn't trying to use Boko Haram as a political tool -- it's just been totally useless in doing anything to defeat it.

Pakistani President Mamnoon Hussain was scheduled to arrive in the Nigerian capital of Abuja on April 21 with a group of around 70 officials and business leaders for a three-day visit aimed at boosting bilateral trade.

Days before Hussain's arrival, a Pakistani Embassy official in Abuja told reporters the presidential agenda would include discussions on how Pakistan could help Nigeria address its energy and domestic gas challenges. Pakistan providing energy expertise -- fancy that! This from a country where power cuts grind factories to a halt, bodies decompose in morgues, and the rich are forced to fan themselves in the peak of the summer heat when their backup generators blow up from overuse. The heart of the problem is corruption, of course, which everyone knows but no one seems capable of handling.

After decades of covering the AfPak region, my standard of comparison is so skewed that I tend to see hope where most of my colleagues only smell despair. I know the bar has been set too low, for instance, when I start comparing the Islamists' women's rights track record to the Taliban's. If outage-hit Pakistan can offer its energy distribution expertise to Nigeria, it makes for an interesting study in the pecking order of mismanaged states.

But in the end, the lights went out on that plan. Hussain -- sometimes known as Pakistan's "invisible" president -- canceled his Nigerian visit. Not due to security concerns, insisted a Pakistani Embassy official in Abuja, but nobody believed him.

In the week leading up to the Pakistani presidential visit, the Nigerian militant Islamist group Boko Haram raised its profile in the terror charts, conducting attacks that have shocked even the group's fellow jihadists.

On April 14, militants stormed an all-girls secondary school in the remote northeastern village of Chibok in Borno state and kidnapped hundreds of girls. On the same day, a car bomb exploded during rush hour at a bus station in Nyanya, right on the outskirts of the Nigerian capital, killing more than 70 people.

In a jihad video posted days after the attack, Abubakar Shekau, Boko Haram's elusive leader, issued a stark warning. "This is a prelude," said Shekau, clad in camouflage fatigues and cradling an AK-47 assault rifle. Addressing President Goodluck Jonathan, the jihadi leader goaded the embattled president, as he has been doing over the past few years: "Let me be blunt: I am in your city, near you. Find me."

Finding Shekau is easier said than done. The Pakistani authorities know this, of course. The world's most wanted man was under their noses in Abbottabad, yet they claim they didn't have a clue.

In 2009, Nigerian authorities believed the brutish militant leader was killed in a security crackdown that led to the capture of his far more charismatic predecessor, Boko Haram founder Mohammed Yusuf. The Nigerian security forces proceeded to kill Yusuf in custody, summarily executing him before a crowd outside a police station in Maiduguri, Boko Haram's birthplace, according to news reports. Shortly after Yusuf's killing, local police and state officials insisted he had been killed in a shootout in the remote northeastern city while trying to escape. But few Nigerians familiar with the security forces' reputation for brutality believed the official account.

A year later, Shekau had the sort of "Lazarus moment" that's fairly common in jihadi circles, when inept government officials claim a high-profile militant has been killed only to eat their words when the presumed dead man emerges to vow fire, brimstone, suicide bombings, and more on the enemy infidel state.

Over the next four years, Boko Haram attacks on security forces, churches, markets, and schools in northern Nigeria have killed more than 4,000 people. The rising levels of violence has effectively brought normal life in this northeastern corner of Nigeria to a standstill, with millions displaced, schools frequently closed, and residents coping with the checkpoints and curfews of emergency rule imposed last year. There was a widespread feeling that the Nigerian government was either impervious or not doing enough to address the spiraling security situation. That sentiment reached a peak following the April 14 mass abduction, fueling public outrage on the streets of the capital -- where women's groups have been regularly demonstrating -- and on social media, where the hashtag #BringBackOurGirls has attracted high-profile voices such as Hillary Clinton and Mary J. Blige.

Now, U.S. President Barack Obama has finally stepped in, sending a team of experts to try to locate the girls. The announcement came just hours after reports emerged that another group of eight girls was kidnapped on May 4 from a village in Borno state.

In the immediate aftermath of the April 14 kidnappings -- a critical time for security experts to start tracking abductors and their hostages -- as the days turned to weeks, my horror turned to panic as I heard some Nigerian journalists on the airwaves explain that even in countries with far better militaries, such as Pakistan, terrorism takes time to tackle.

Let's be clear: Terrorists may be clever, committed, well-trained, and well traveled. They may employ asymmetrical tactics, seeking soft targets and sowing a level of terror disproportionate to their military abilities. But in the end, jihadi groups are only as effective as states, governments, and security services enable them to be. When terrorist threats or insurgencies drag on for years, with death tolls running into the thousands and with millions displaced -- as has happened in Nigeria and Pakistan -- there are invariably policy and structural issues at play.

In Pakistan, as we all know, the problem is official duplicity. Yes, since 2004, more than 4,000 Pakistani soldiers have been killed in security operations in the lawless tribal areas, according to military statistics. Pakistani officials often cite these figures when they are confronted with U.S. allegations that they are an insincere partner in the war on terror.

But the awful truth is, the victims of Tehrik-i-Taliban (or the "bad Taliban") are also victims of a shortsighted Pakistani military-intelligence strategy of supporting Islamist groups -- including the Afghan (or "good") Taliban -- in order to try to extend "strategic depth" (as it's known in policy circles) in neighboring Afghanistan. Nothing is going change this: Pakistan will not stop trying to spread its influence in Afghanistan or getting at India. This problem is here to stay.

In Nigeria, the picture is more nuanced. It involves poverty, corruption, geographical and sectarian grievances, impunity, inefficiency, and some levels of local political complicity. These are problems this former British colony has battled since independence.

But here's the good news for Nigerians who compare themselves unfavorably to the other former British colony in South Asia and who are seeking counterterrorism training and cooperation from Pakistan: The Nigerian problem is inefficiency, which is easier to tackle than an official, intractable policy of duplicity.

In an April report on the Boko Haram insurgency, the Brussels-based International Crisis Group (ICG) addressed some of the allegations of Nigerian political complicity that are occasionally heard but never detailed in the international media. The ICG report notes that, "while accounts are disputed, the narrative put forward by Boko Haram and now dominant in the region is that around 2002, [founder Mohammed] Yusuf was co-opted by the then Borno state gubernatorial candidate, Ali Modu Sheriff, for the support of his large youth movement, in exchange for full implementation of Sharia and promises of senior state government positions for his followers." Sheriff has denied the allegations, but speaking to the ICG, an unnamed senior Nigerian security official noted, "After the politicians had created the monster … they lost control of it."

Rival politicians have made numerous allegations of political complicity, which are hard to substantiate but are likely to increase as the 2015 election approaches. This is a country split between a mostly Muslim north and a Christian-majority south, a divide that provides the perfect backdrop for conspiracy theories.

The truth, however, is that Boko Haram is too huge, vicious, and unpredictable to be manipulated in a political game. There was certainly some local political complicity with the group back in the early 2000s. But that was when Yusuf -- a popular Quranic scholar who was engaged in the political process -- was the group's leader.

Yusuf's objections to Western education, which earned the group the name Boko Haram ("Western education is forbidden," in the local Hausa), included criticisms of evolution and the big-bang theory, which contravenes a literalist interpretation of the scriptures. I suspect Yusuf would have found that a number of fundamentalist Nigerian Christians -- of which there are many -- probably share this concerns.

But that was the old Boko Haram -- before Shekau emerged as a jihadi leader vowing revenge for his predecessor's death.

Boko Haram today is a regional threat. French military officials in Mali have confirmed that Boko Haram militants trained in northern Mali when the region fell to rebel control following a March 2012 coup. The Nigerian group has fighters who have trained and fought with al-Shabab in Somalia. It also works with, or tolerates, an even more hard-line splinter group, Ansaru. Boko Haram and Ansaru fighters have links to jihadi groups in the Sahel, including the Movement for Unity and Jihad in West Africa and al Qaeda in the Islamic Maghreb. And the Boko Haram threat is spreading to neighboring Chad, Cameroon, and Niger.

Nigerian politicians understand this very well. There's little evidence of Pakistani-style perfidy at the national level in Nigerian political or military-intelligence circles. The simple, sad truth is, the Nigerian government has failed to address the problem of poverty and corruption, which feeds jihadi ideologies in this oil-rich West African nation.

When it comes to a long-term strategy, the Jonathan administration has made halfhearted attempts at peace talks, with the appointment of a Dialogue and Reconciliation Committee last year and reports of talks through "backroom channels." Many Nigerian experts and former military officials maintain that a dialogue is necessary to address the problem. But some of the negotiators I've interviewed say there is a lack of political will to make the peace talks work. Boko Haram's long-standing preconditions for talks are never met. These include bringing Yusuf's killers to justice and releasing women and children (including possibly Shekau's wife and children) in detention. Boko Haram has claimed that at least one of its members, known as Abu Darda, who was "sent to dialogue on our behalf" in the northwestern Nigerian city of Kaduna, was "lured and arrested" by the federal government.

Of course, peace talks with groups such as Boko Haram and the Taliban are hard to pull off. Jihadi leaders tend to dismiss the very idea of negotiating with the infidel state. Even if they do engage in secret, back-channel talks, it's often hard to ascertain whether their emissaries are credible representatives or whether the emir has full control of various factions and splinter groups. Indeed, Boko Haram's organization appears to be more diffuse than the Afghan Taliban. Among Shekau's fighters, some of whom have petty criminal records, he does not command the level of respect and discipline of his more learned predecessor, nor does he have the stature of the Taliban's Mullah Omar.

That leaves a military solution to the problem, which Jonathan is not averse to -- if only his underresourced, poorly trained military-intelligence teams could get it right.

On May 1, U.S. State Department deputy spokeswoman Marie Harf told reporters the United States has provided Nigeria more than $20 million in security assistance. "Part of what that does is help professionalize their military, investigate terrorist attacks, and enhance their forensic capabilities," she said.

Ask any Nigerians where that money went, and they will roll their eyes and supply the old answer: corruption.

To be fair, the Nigerian military did step up its operations in late 2013 and managed to target senior Boko Haram militants. But the fight against terrorism has also been taken up by a civilian vigilante group called the Civilian Joint Task Force (CJTF), composed of youths helping the security forces. Security experts and some residents in the northern states say the CJTF has succeeded in cracking down on Boko Haram. But militia groups tend to become monsters; the New York-based Human Rights Watch has already recorded cases of CJTF excesses.

Announcing the latest U.S. security assistance to Nigeria, Obama noted that the "heartbreaking" and "outrageous" abductions "may be the event that helps to mobilize the entire international community to finally do something against this horrendous organization that's perpetrated such a terrible crime."

But this is not a problem the international community can solve. It's up to the Nigerian government and security services as well as the elites to ensure their authorities are doing the right thing. This includes a rapid governmental response to the violence in remote parts of the country, a professional military with counterterrorism units, special operations forces, and robust intelligence-gathering and sharing initiatives. The good news is, all Nigerians agree that's the solution. There's no insidious, shadowy, proxy-war policy at play, where the government or even one arm of the military-intelligence network may not know what the other arm is doing. Nigeria after all, is not Pakistan, and for once, it's better off.

Photo by PIUS UTOMI EKPEI/AFP/Getty Images


Do We Have Too Much Capital?

Nearly 20 percent of capital in the world’s two biggest economies is sitting idle. Are we saving too much?

There's been a lot of talk about the role of capital in the global economy lately, not least because of Thomas Piketty's book of the same name. Capital is an essential ingredient in the creation of most manufactured goods and many services as well. But what if we have too much of it, and what would happen if we had less?

Economists think about capital as one of the main inputs -- along with labor and technology -- in the production of just about anything. Allowing each worker to use more capital can raise his or her productivity, which may in turn lead to higher wages, but there's a limit to these benefits.

For example, imagine that you're working an office job using a regular computer and monitor. Having an extra screen on your desktop might help you to edit documents and keep track of multiple tasks. A third screen might also help a little, but a fourth or fifth might not make much difference. At some point, more capital doesn't make you more productive. The additional resources would be better used somewhere else in the economy.

You might think this sort of misallocation would be impossible in an economy growing at full speed, and that every bit of capital would be used efficiently. You'd be wrong. Only during wars has the Federal Reserve Board's measure of the share of capital being actively used in manufacturing, mining, and utilities topped 90 percent, and not always even then. At the moment, the United States is operating at about 78 percent of capacity in these industries. In the European Union, every country is at 85 percent or below in manufacturing, for an average of less than 80 percent overall.

Certainly, capacity utilization in the service sector might differ. But right now, 20 percent of capital in the world's two biggest economies may well be sitting idle. If distributed evenly, this would mean one out of every five computers, machines, and vehicles involved in production at every American and European business would be doing nothing. That's a lot of stuff -- with a global capital stock of close to $200 trillion just in regular financial markets, it could be worth $10 trillion or more. By comparison, the economy is much more efficient at using labor; an unemployment rate of 10 percent, which would be high by American standards and fairly normal in Europe, would suggest only 1 in 10 available workers was idle.

So why do companies have so much extra capital sitting around? For one thing, it's probably not always the same capital. As the economy changes to produce different goods and services with new technologies, the composition of the capital in use changes as well; these days, 3-D printers are replacing many other kinds of machines. Also, some capital might be obsolete, just like workers with skills that are no longer needed. And just like workers and their employers, some capital might be mismatched with its owners.

Yet there are other, more worrying factors that are likely contributing to a true glut of productive stuff. For instance, corporate bosses may buy capital just to use up the cash flow inside their firms. Even if they have no profitable opportunities to increase production, they may prefer speculative purchases of capital to returning the cash to investors via dividends; they keep hold of the money by turning it into physical property. In fact, some executives may be trying to build empires within their companies through the acquisition of capital; a bigger capital stock under their control may make them appear more important.

Another factor in the decision to purchase capital is its price. Most big companies buy new capital by raising money from lenders and investors. When interest rates fall, capital becomes cheaper for reasons completely unrelated to the productive capacity of the capital itself. Managers and executives may buy more capital simply because it's cheap; they may or may not use it in the future, but the risk attached to the purchase gets smaller when interest rates fall.

As anyone who follows the global economy knows, interest rates have been at or near all-time lows in advanced economies for several years. Central banks have been pouring money into the markets, in the hope that lenders would open their wallets, companies would make new investments, and more workers would get new jobs. Yet even in boom times, the capital stock is apparently overgrown; the utilization rate in the United States hasn't hit 81 percent in the industries followed by the Federal Reserve since the third quarter of 2000.

Over the entire economic cycle, the capital glut depends on households offering their savings to companies by buying shares or making loans. Investors are always looking for a place to put their money, and companies -- for whatever reason -- are happy to take it. Even when the companies have no profitable investments, they have ways of paying the investors a return; they can dilute the return to existing investors or cut into workers' share of revenue. An excess of capital is the result.

Basic economic models don't account for the possibility that an excess of capital could persist for years at roughly the same level. They assume that diminishing returns would prevent the economy from generating enough income to maintain the bloated capital stock. Unless a 15 to 20 percent cushion really is either indispensable or unavoidable, this seems like a faulty assumption.

But what a powerful assumption it was. Years of economic policy have been devoted to accumulating more capital. Several of George W. Bush's tax cuts were directed at increasing the return on saving, expanding the capital stock, and spurring a higher level of capital-based innovation. Today, pundits, professors, and politicians continue to argue for lower capital gains and corporate income taxes. What if they're all wrong, and in fact we're saving too much?

It's not always easy to make people save less and spend more. Until recently, Japan was locked in a high-saving, low-spending, deflationary doldrums. Some of the reasons for high saving rates were likely demographic. But with prices dropping almost every year, money gained real value just by sitting under a mattress. Saving was a natural response.

In an economy that's growing at a healthier pace, raising taxes on wealth might do the trick. As I've argued in this column before, such taxes might speed economic growth by helping to allocate opportunities more efficiently. Yet their effect on saving is far from obvious. Someone trying to build a nest egg of a certain size -- perhaps for a college fund, retirement, or bequest -- will have to save more if taxes rise. Moreover, the improvement in living standards resulting from shifting from saving to spending would be strongest among those who saved the most; in terms of consumption, the gap between rich and poor would widen, even if it closed in terms of wealth.

Perhaps I'm getting ahead of myself, though. The first step down this road is to verify whether the capital stock is indeed too large. Why is so much capital sitting unused? How much churn is there in the inventory of unused capital? Are the Fed and its counterparts around the world measuring the right thing? Once we know the answers to these questions, we'll be able to confront what could be an enormous and yet broadly ignored inefficiency in the global economy.

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