Sovereign Wealth Funds as Regulatory Chameleons: Views From a Georgetown University Law School Symposium

On March 30, 2009, the Georgetown Journal of International Law (GJIL) held an important symposium, entitled Sovereign Wealth Funds, focused on legal issues related to sovereign wealth funds at the Georgetown University Law Center. Ahmed Mousa and Kevin Goldstein of the GSIL and the GJIL staff are to be congratulated on putting together an excellent program.

The daylong program featured a group of speakers who provided powerful insights on the nature and direction of these vehicles. The Symposium Agenda and program included:

10:15 A.M. Welcome
Ahmed S. Mousa
Editor in Chief GJIL

10:30 Country Studies: SWF Form and Function
David Marchick (Moderator)
Managing Director, Global Gov't & Regulatory Affairs
The Carlyle Group

Norwegian SWFs
Professor Larry Catá Backer
Pennsylvania State University

Singapore SWFs
Professor Yvonne C.L. Lee
National University of Singapore

Russian Federation SWFs
Arina V. Popova
Cravath, Swaine & Moore LLP

Chinese SWFs
Dr. Brad W. Setser
Fellow for Geoeconomics
Council on Foreign Relations

12:00 Luncheon Remarks
Dean T. Alexander Alienikoff
Georgetown University Law Center

1:00 Can SWFs Further Development of Human Rights?
Professor Rumu Sarkar (Moderator)
Africa Center for Strategic Studies

Professor Patrick Keenan
University of Illinois College of Law

Professor Christiana Ochoa
Indiana University School of Law--Bloomington

2:00 U.S. Law and Sovereign Wealth
Professor Donald Langevoort (Moderator)

Professor Paul Rose
Ohio State University

Anne W. Salladin
Senior Counsel (International Affairs)
U.S. Dept. of the Treasury

Joel Slawotsky
Interdisciplinary Center, Herzliya, Israel

3:00 Governing SWFs: Strategies to Achieve Accountability
Professor William W. Bratton (Moderator)

Wouter Bossu
Senior Counsel, International Monetary Fund

Professor Anna Gelpern
Rutgers School of Law--Newark

Amb. Alan P. Larson
Senior International Policy Advisor
Covington & Burling LLP

Dr. Edwin M. Truman
Senior Fellow
Peterson Institute for International Economics

4:30 Closing
Kevin B. Goldstein
Symposium Editor GJIL

One of the great insights of the presentations, and a theme that ran throughout the program, was the nature of sovereign wealth funds as regulatory chameleons. Sovereign wealth funds appear as both formally public entities and functionally private entities. They sit aside a legal regulatory universe that tended to more strictly separate, through the imposition of distinct legal regimes, private form state operations. That once small place within which private actors assumed sovereign characteristics and public actors assumed the role of private participants in markets, especially markets outside their own regulatory territory, has now widened to the point where it serves as a terrain of it own autonomous regulation. The problem is, of course, that this regulatory universe for creatures that do not conform to traditional behavior and legal role expectations does not yet exist. And so political, economic and academic elites spend much time either trying to squeeze these entities into traditional legal and policy categories, or to expand these categories just enough to marginally contain at least some portion of the operation of these entities. And, for the moment, the result is a welcome window dressing and a substantive failure to produce effective, predictable and consistent regulatory frameworks--both for private actors operating in the sovereign field and for sovereign entities seeking the benefits (and obligations) of market participation. And indeed, to speak of sovereign wealth funds without also considering the regulatory activities of private actors in these markets, suggests a fatal omission, or at least one will continue to hobble the discussion about sovereign wealth fund regulation.

The first panel was particularly interesting for exploring two issues. The first was the importance of understanding the diversity of form and operation of sovereign wealth funds. The second was the equally important issue of perspective in analysis. Working through the operations, investment philosophies organization and objectives of the Russian, Singapore, Norwegian and Chinese funds suggested that easy categorization is a fool's errand. The funds ranged from socially responsible (Norway) to almost purely commercial by traditional standards. (Singapore) The funds also ranged from aggressively moving into foreign equity investments (Norway, Singapore) to serving as a vehicle for internal economic development (Russia). to traditional sovereign investment in debt instruments of other sovereigns (China) Their effects ranged from issues of private governance through shareholder activism in the service of state policy (Norway) to a space within which internal power struggles over control of domestic and foreign economic activity play out (China). The reaction of funds and fund governance to the current economic slowdown also suggested regulatory challenges, from the use of fund investment strategies to mask protectionist efforts by fund owners, to the validity of characterizing these entities as sovereign wealth funds if their principle task becomes to aid in internal economic development.

The issue of the regulatory effect of substantive investment was also raised along with the general issue of governance--does a state project power through investment as effectively as through traditional means and does not change the nature of regulatory responses in host states? Does it make a difference that private funds may act to project behavior changing policy power through their own investments as well? If both private socially conscious funds and state policy driven funds invest to maximize returns within the context of a set of ethical or policy parameters are they both exercising governance or commercial power and should the regulatory responses to the activities of both be the same?

Lastly, the importance of regulatory perspective became clear. Americans tend to worry about sovereign wealth funds when they appear to be deployed by states who are of interest to the Americans because of their size and military/political/economic power. Thus, sovereign wealth fund regulation became an issue when the Chinese and the Russians began to develop a taste for the instrument, but appeared of less concern when used as a vehicle for the investment of dynastic wealth from Middle East states or to manage state wealth of small commercial centers (though important in their own right) like, for example, Singapore. Yet, the operational context in which funds operate are as much And it is not clear that substantive standards useful in the interplay among the great military powers are responsive to the use of these funds by others. Consistent substantive regulation is thus unlikely in the near future, and larger states may be unnecessarily blind to the importance of the small commercial states in the development of practices and operations of these funds within global private markets (as well, of course, as the importance of these states and their funds for the evolution of global markets themselves). They also miss the important difference between sovereign wealth funds as a vehicle for extraterritorial projections of state power in financial markets and state owned enterprises, a distinction considered in more detail in later panels.

The issue of the utility of sovereign wealth funds in the ongoing project to develop and implement human rights standards in commercial and economic activity usefully highlighted another aspect of the regulatory complex that are sovereign wealth funds--their inextricable relationship to the regulation of private actors operating in host states and the search for a set of harmonized substantive standards. Certainly, the Norwegian fund's operations seek to move in that direction. They have sought to ground their shareholder activism as investors on the substantive standards of the Organization for Economic Cooperation and Development's Guidelines for Multinational Enterprises, and the Principles of Corporate Governance. But the Norwegian efforts are state centered, and its approach might be viewed as idiosyncratic. Professors Keenan and Ochoa would reorient the regulatory debate focus--moving away from a focus on the internal construction and governance of sovereign wealth funds and their relationship to financial markets an to a consideration of the possibility of using sovereign wealth funds as an aid to development for the developing world.

Sovereign wealth funds as tools of development requires the construction of a supra national institutional structure, an international organization as middleman for the creation of markets in development financing using the financial strength of sovereign wealth funds. This international institution, a "Multilateral Sovereign Investment Agency" would be constructed as an autonomous agency that acts as a conduit for investment of sovereign wealth fund assets. The object is to avoid some of the problems of the Norwegian social conscious investment problem--seeking to influence corporate governance behaviors and ethical conduct as a minority shareholder in entities operating in territories where public governance is weak, or in systems in which local banks and corporate governance systems are in effective. The Multilateral sovereign Investment Agency circumvents these problems, and the endemic corruption in certain states by taking controlling positions in entities. The targets would be the small to medium sized local firms that might serve as the backbone to the creation of viable middle classes in developing states, who in turn would serve as a guardian of governance cultures freed of the worst sorts of corruption. The proposal is intriguing on many levels. It provides an alternative to the International Monetary Fund framework. It segregates sovereign investment in ways that make more global regulation unnecessary, and it harnesses the sovereign element of the investment in the object of regulation. This is sovereign investment for sovereign purposes--private power for public purposes. The proposal raises additional interesting issues: how does the program distinguish between macro and micro corruption issues, that is between systemic corruption within the polity and corruption within organizations in which the agency invests. Moreover, if the agency takes majority or controlling positions in firms, is it or ought it to be subject directly to the systems of global corporate governance soft law as a mandatory matter. Can or ought a sovereign wealth fund to be accountable as complicit in the criminal or other unlawful activities of companies in which it has taken a controlling interest? Related to that issue is whether the agency becomes subject to liability under those soft law guidelines where an entity in which it invests violates domestic home or host state law or the behavior guidelines of soft law. Lastly, there is the issue of the regulation of the relationship of the home/host state and the agency. Where the host state, for example, is hostile, the problems of investment and governance might be considerable.

Turning to the regulation of sovereign wealth funds in host states brought the issue of private /public parity and difference to the surface. On the one hand, the traditional sovereign character of the investment represented by sovereign wealth funds and other mechanisms for investing public wealth has produced a regime in which such investments are subject to certain tax benefits unavailable to similar investments by private vehicles. On the other hand, to the extent that sovereign wealth funds are engaged in active investment strategies in equity markets it is not clear that the tax benefits grounded on the sovereign character of the investment ought to apply. Moreover, there appears to be little connection between the commercial activities regimes of sovereign immunity and the tax distinctions grounded in sovereign investment. Yet perhaps there ought to be some congruence between the two. Yet that is unlikely to happen under the current American regulatory universe in which those questions never seem to be considered by the same regulators at the same time. Equally interesting was the related issue of limitations on foreign investment. In this context at least, the United States appears to make no distinction between public and private foreign investors, or the form or source of the investment. Instead the focus is on the relationship between the foreign investor and the object of investment as it touches on issues of national security. Yet even the elaborate structure of such regulation appears to mask a political reality in which the ability to excite the public (or better put, the political classes, elected or not) appears to be more important than many other factors). Not that the functionaries in charge of the system do not do their jobs--apparently they might be the only ones who do, but the process within which their work is done appears touched with political considerations in substantial and interesting ways.

Lastly there were insightful suggestions in the way in which sovereign wealth fund governance is conceptualized. While the common theorizing looks at sovereign wealth funds as individual, autonomous and discrete units--the way in which separate corporate actors are understood to be legally distinct from other natural or legal persons--there was a suggestion that under some circumstances it might be more useful to consider sovereign wealth funds as aggregations. The issues raised are potentially important--dealing with sovereign wealth funds that decide to invest in concert, or against the interests of particular states or sovereign wealth fund competitors, regulatory approaches to special purpose "super" funds that are funded and controlled, in turn, by other sovereign wealth funds, and the regulation of private investment vehicles that serve as a front for public investors.

The last panel of the day served both to sum up and to point to the frontiers of governance issues. The panelists emphasized the disconnect between sovereign wealth funds as a political or rhetorical notion animating host state politics and sovereign wealth funds as a legally definable object of regulation. They reminded the audience that much of the storm over sovereign wealth funds in the United States, from the Dubai Ports World to the Chinese state efforts to take a position in Unocal did not involve sovereign wealth funds, but instead involved state owned enterprises. The relationship between sovereign wealth funds and state owned enterprises, of course, is at the frontiers of regulatory theory. See, e.g., Larry Catá Backer, State Owned Enterprises and Sovereign Investment in Foreign Economic Entities, Law at the End of the Day, Jan. 28, 2009. If the focus is on the traditional objectives of funds--to invest excess wealth in the assets of other states, then the investment activities of state owned enterprises does fit easily into the sovereign wealth fund universe. On the other hand, if the focus is on effect, the projection of market participatory investment power from one state into the other, the form of that investment (fun or enterprise) ought not to count for much. Yet the two vehicles are substantially distinct in organization, orientation, objectives and the like. Yet, as a matter of political rhetoric, their conflation comes easy in the United States, though their regulatory conflation does not--even in the United States.

Lastly, the panel considered issues of accountability. Again,ambiguity and complexity make easy theorizing impossible. In the corporate context, of course, accountability starts (and sometimes ends) with the shareholder. If that were the case with sovereign wealth funds, then the funds ought to develop mechanics of accountability to the sovereigns that fund them and in whose names investments are made and held. Yet accountability in the sovereign wealth context also implies accountability to host states. Here the regulatory rhetoric comes close to mimicking that of the great corporate soft law efforts, for example from the OECD and the United Nations Global Compact. In essence, a broadened accountability universe might suggest the incorporation of a stakeholder model for sovereign wealth funds, in which obligations to host states, to the entities in which such investments are made and perhaps even to the integrity of the markets in which (or through which) activity is undertaken, become sources of legal obligation. Lastly, of course, there are notions of accountability to the ultimate holders of sovereign wealth funds--the people of each state. This is an issue that tends to be overlooked. Equally opaque, from a regulatory perspective, are accountability issues in the process through which sovereign wealth funds determine policy. While in some states a corporate or closed (bureaucratic or administrative) model is followed that permits little effective input from other actors, in other fund administration models, civil society actors might play a more direct role in investment policy or in accountability frameworks. The role of such actors as stakeholders in the context of corporate (and multinational enterprise) regulation has become an important issue; it is likely to become one in the context of sovereign wealth fund regulation as well.

The the chameleon quality of sovereign wealth fund regulation. Formally public, functionally private, direct projection of state power abroad, participant in global markets, consumers of invest, threat to the integrity of private markets, source of diminution of state sovereign power, contributor to global matrix of economic regulation. The next several years will see great advances in frameworks for regulation of these entities. The direction of that regulation is difficult to predict. But models in other areas, principally from the private transnational sector, ought not to be ignored in that regard.

I end with the abstract of the paper I presented at the conference. The full paper will be available soon.

Sovereign Wealth Funds, Private Global Governance, and Public Global Investment: The Example of the Norwegian Sovereign Wealth Funds.

Larry Catá Backer

Abstract: The character of global regulation has changed dramatically over the last decade. Today, multinational corporations sometimes assert substantial regulatory power across borders, and states sometimes enter markets as participants rather than as regulators—especially when they engage in economic activity outside their borders through sovereign wealth funds (SWFs). In both cases the current transnational ordering has settled on voluntary principles based approaches to regulation—for example the Santiago Principles for SWFs and the U.N.’s Global Compact for multinational corporations. Both of these trends collide in interesting ways when sovereign wealth funds seek to develop and impose a principles-based investment strategy founded on specific notions of good governance and corporate social responsibility. The Global Compact suggests regulatory responsibilities for private economic actors: the Santiago Principles suggests that private economic actors might conform to notions of an idealized private investor. This paper looks closely at one example of this rising phenomenon—the socially responsible sovereign wealth fund. It focuses on a close review of one of the most influential funds, the Norwegian Government Pension Fund—Global (Statens pensjonsfond - Utland) more commonly known as the Oljefondetalong, along with its domestic counterpart, the Statens pensjonsfond – Norge, (formerly the Folketrygdfondet). Together they are among the largest and most influential sovereign wealth funds (SWF) in the world, and the largest in Europe. It first describes conceptual and regulatory frameworks on which current policy discussions of sovereign wealth funds are undertaken. It then turns to the Norwegian funds, focusing on the history of the Norwegian fund, its legal structure and the development of its investment principles. It then looks to the way those principles were used in two distinct areas—the creation of incentives to produce changes in the behavior and culture of corporations and the response to the global financial crisis of 2008. Both efforts expose the great policy and regulatory issues of sovereign wealth funds, their relationship to the regulation of multinational corporations, and their character as public private vehicles of transnational governance. What are the roles of investment? Does the SWF act as a private or a public investor, for example with respect to issues from wealth maximization and obligation to shareholders-stakeholders? The Norwegian funds provide a particularly useful case study of the issues that are now at the center of re-conceptualizations of the relationships between state and corporation, between economic and political regulation, between national and transnational legal frameworks, and between public and private legal regimes. The article first describes conceptual and regulatory frameworks on which current policy discussions of sovereign wealth funds are undertaken. It then turns to the Norwegian funds themselves, focusing on the history of these funds, its legal structure and the development of its investment principles. It then looks to the way those principles were used in two distinct areas. The first is corporate social responsibility—the creation of incentives to produce changes in the behavior and culture of corporations, the exclusion of companies doing business in Israel and the exclusion of companies doing business in Burma. The second is the response of the Funds to the global financial crisis of 2008. The paper ends with a consideration of the regulatory implications.

The paper argues that sovereign wealth funds like that of Norway are strong examples of the character of these entities as regulatory chameleons. Current regulation is based on a formally public/functionally private model. The touchstone for the model is an "idealized private investor" that can be distinguished from others. The idealized private investor standard at the heart of sovereign wealth fund soft regulation does not work. But it also does not work for private investment funds from which they are in part derived. For that purpose, the Norwegian Fund is considered against private socially responsible funds--like the TIAA CREF Social Choice Fund. Sovereign wealth funds may mimic private investment as much because private funds engage in regulatory/sovereign investment strategies as because the public fund mimics wealth or benefit maximizing participatory private commercial activity. The Norwegian funds evidence this nicely and point to the need for a different regulatory framework.

Anwar Ibrahim: Unity in Diversity in Malaysia Going Forward

A little over a year ago, during early March 2008, what might have seemed impossible a decade earlier had occurred--"Malaysia’s governing coalition, which has run this multiracial country without any major challenges for the past four decades, suffered a string of election defeats on Saturday, losing control of three major states and all but surrendering urban areas to the opposition." Thomas Fuller, Malaysia's Ruling Coalition Suffers Setback, The New York Times, March 9, 2008 (http://www.nytimes.com/2008/03/09/world/asia/09malaysia.html?hp). The victory appeared in the form of a defeat. The ruling party continued to hold on to its majority, and on that basis, its control of the government apparatus. But it had lost its 2/3 majority, and with it the power to amend Malaysia's constitution at will (and traditionally for the benefit of its members and allies), "which it has done more than 40 times since independence from Britain in 1957." Malaysia's Ruling Coalition Suffers Setback, supra .

The fruits of that victory was savored at the time by one of the most visible and important victims of traditional Malaysian politics--Anwar Ibrahim: "'I don’t think Malaysian politics will ever be the same again,' said Anwar Ibrahim, a former deputy prime minister who was expelled from the governing party a decade ago and is now one of the leaders of the opposition. 'There is a wave, an outcry for democratic reform.'" Malaysia's Ruling Coalition Suffers Setback, supra. And indeed, at the time, the vote had been seen as a sort of protest by the traditional losers of Malay politics--ethnic Chinese and South Asian citizens of Malaysia. "Voters showed their anger over a recent government crackdown against ethnic Indians by electing to a state legislature M. Manoharan, one of five advocates jailed after a street protest by Indians. It is unclear how Mr. Manoharan, who is being detained without a trial, will carry out his duties." Malaysia's Ruling Coalition Suffers Setback, supra. The ruling parrty also lost the only state with a majority of ethnic Chinese--Penang.

There has been a bit of tension among the members of the plural communities that constitute Malaysia since before the establishment of the Federation. Ethnic communal membership has, to some extent been hard wired into the Malaysian Constitution, Malaysian law and the structure for the distribution of power and benefits flowing from the state. Ethnic Chinese and South Asians, along with any other person permitted citizenship within Malaysia can aspire to be Malaysian (whatever that might mean) but never Malay. Article 160 of the current Constitution defines Malay to mean (in law at least) "a person who professes the religion of Islam, habitually speaks the Malay language, conforms to Malay custom." See Constitution of Malaysia, Art. 160. And, of course, a Malay may lose formal status as a Malay should he or she convert out of Islam, for example--an issue that has remained both controversial and explosive in Malaysia in recent years (and recently with respect to the procedures for recognizing conversion). The most talked about recent example involved both religious and state authorities in the Lina Joy case, in which Malaysia's Court of Appeal once ruled that Ms. Joy, who asserted that she had converted from Islam

would have to apply to a sharia court for permission legally renounce Islam. See, Ivy Sam, Lina Joy, Malay convert to Christianity, loses her appeal in Federal Court, highest legal body, The Manila Times, Feb. 2, 2007.

And indeed, to a large extent, the election results reflected the gains by these two sets of outsiders to majority politics--Anwar Ibrahim and disaffected Malays along with the two minority ethnic communities.

Those losses call into question the future of the country’s race-based coalition, a system in place since independence in which each major ethnic group — Malays, Chinese and Indians — is represented by a political party.

Opposition leaders have vowed to move Malaysia away from the system, with the National Justice Party of Mr. Anwar the loudest proponent of the change. Mr. Anwar, who many see as a possible future prime minister, is barred from holding public office until April because of a conviction for abuse of power in a politically charged trial. But his wife and his daughter won seats in Parliament on Saturday.

He said in an interview that he would not rule out asking a member of his party to resign so he can run in a by-election. “I’m not in a hurry,” said Mr. Anwar, whose party won 32 seats, up from one seat in the last election in 2004. Malaysia's Ruling Coalition Suffers Setback, supra.

Their union, to the extent it lasts, may bring change that would redistribute (and perhaps diffuse) power within Malaysia and reposition the role and effect of the religious parties within the state and in the relation of religion to law in Malaysia).

It was perhaps conscious of the youth and fragility of this union, and of the need to develop a sounder basis for more permanent alliance, that Anwar Ibrahim recently gave a speech on the anniversary of the March 2008 Malaysia elections. As a representative of an alternative post-Mahatir Malaysia, one that might well produce a more open and plural political system, his thoughts are well worth reviewing in detail. Anwar Ibrahim, Transkrip Pidato Kebangsaan “Ketuanan Rakyat” (Transcript of National Address), March 8, 2009.

Ibrahim starts by reinforcing the character of the political effort as bundled with an idea.

We gather today not only to celebrate an auspicious anniversary, but to hail the triumph of an idea, an idea so sublime that people throughout history were willing to give their lives for it.

Its force was so great that we have to be reminded by Victor Hugo of its strength. This great French writer said: “Greater than the tread of mighty armies is an idea whose time has come.”

On March 8th last year, an idea with the force of a tsunami landed by way of the ballot box in Malaysia.

This idea was that the people are sovereign, that they are the masters of their political destiny. Their destiny is not decided by autocrats or elites; plutocracies and a controlled media; neither the army, the police, nor by corrupt judges.

Their fate is decided by the free exercise of their choice registered through the power of their vote. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,”supra.

He means to suggest that the movement is not merely political but ideological as well. There are echos not merely to Western letters (he references Victor Hugo) but also one of the great masters of the rhetoric of the political idea, Fidel Castro. By referencing ideas rather than programs, ideology rather than personality, Ibrahim suggests the possibility of revolutionary action int he sense of overcoming a larger and better established opponent, but on the basis of principle. See, Larry Catá Backer, 'Las ideas no se matan!', Law at the End of the Day, Dec. 1, 2006. The idea appears simple--the possibilities for change inherent in mass democratic movements. But that requires both the mechanics of legitimate democratic expression and mass movements of people motivated by a singular ideology to act in a disciplined way, at least at the polls.

The program to be generated by the ideology Anwar Ibrahim proposes is simple enough to describe:

We have a comprehensive vision for leading Malaysia and our leadership is rooted in sound economic planning as well as reinstating the principles of democracy, socio-economic justice, equal economic opportunities and religious freedom.

We invest in education. We create jobs and bring foreign investment into our states, and we give everyone an opportunity to benefit from the newly created wealth. From what we earn we share with those less fortunate. And we fought the increase in petrol prices until the BN conceded to reduce the burden it had foisted upon the people. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,”supra.

And he deftly attempts to bridge that violence producing divide between Malay and Malaysian by conflating national unity with a unifying approach to economic policy. He tells his audience in carefully chosen words:

We have started to implement a Malaysian Economic Agenda for the nation that is truly Malaysian. Our aim is to build a prosperous country by establishing a stable and clean business environment that is competitive in the global economy. We believe in free markets, but our pro-growth policies are tempered with a dose of state intervention and an emphasis on good governance and social justice. This would ensure that the poorest segments of society including the Malays and bumiputeras have access to economic opportunities and aid that trickles all the way down instead of disappearing long before it reaches them. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Ibrahim reminds his audience that the mechanics of popular democracy had been hard won. He then reminds his audience of the electoral gains they have managed over the past year. He suggests possible future victories of a coalition well disciplined enough by ideology to act in concert, and free enough to permit individual expression through the legitimating expression at the polls. This is indeed a delicate act. "Today, a year later, we stand humbled by that expression of people’s sovereignty. In this last year, we have given the people in Selangor, Perak, Penang, Kedah and Kelantan a taste of the kind of government we ought to have when the people are sovereign." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

But clearly, ideas without mass politics remains little more than an academic enterprise. He provides them a measure of hope in the future of their alliance ("The Coalition has grown stronger and our partners have worked in unison to govern in the states. After two by-elections our mandate from the people is stronger than ever." Id.). More importantly, perhaps, Anwar Ibrahim also suggests that electoral corruption is still lurking--requiring greater mass vigilance to preserve that democratic space for popular expression. He effectively reinforces the legitimacy of the alliance by suggesting the corruption of their opponents.

BN’s fear of facing us in another election is most clearly visible in Perak. The illegitimate tactics they employed to attempt a hostile takeover of that State’s government backfired. In so doing they have alienated the public, which has issued strident calls from over 75% of its population for a fresh election. Petrified of an outcome that would swing the balance in our favour, the BN has abused its power and launched an all out attack on our elected representatives, making a mockery of itself and of the institutions of governance. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

This, of course, is classic politics in Malaysia. And corruption--especially the conflation of sexual and political corruption--is a lesson learned long and hard by Anwar Ibrahim himself. See Larry Catá Backer, Democracy Part XIII: Anwar Ibrahim Flees Malaysia's Democracy, Law at the End of the Day, June 29, 2008. Political corruption is merely a doorway to the corruption of the political and economic body. "This government has a dismal track record in disbursing funds – every year according to Morgan Stanley an estimated USD 10 billion is lost to corruption." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. Anwar Ibrahim will build on corruption to reach from the petty to a suggestion that corruption is itself the symptom of illegitimate power in Malaysia. Corruption thus stands as a bridge between particular action, ideology and legitimacy. It remains an effective tool of party and ideological legitimation within Malaysia on the traditional matrix: religion-politics-sex.

After much anticipation and hype we have a new Commission to fight corruption. But it has already proven its true colours. The MACC is no different from its predecessor, pursuing frivolous attacks against the Pakatan Rakyat whilst ignoring the endless supply of abhorrent corruption taking place in the BN government’s own backyard.

Has the judiciary shown any sign of redress? Do Malaysians feel confident that the scales of justice are more balanced and the dispensation of justice more fair? On the contrary, a superficial attempt to restore credibility to the process of appointing judges has fallen flat. The courts remain cluttered with judges whose records speak volumes as to their lack of impartiality and pervasive influence peddling.

Is the Election Commission a fair and impartial arbiter of elections? Or does it plot and scheme against the people and try to stack the odds in favour of the BN?

We have seen the darkest and most evil abuses of power take place at the hands of the police – an institution that has for many years resisted calls for reform. We condemn the tragedy of Abu Ghraib, and yet in our own prison cells victims are tortured and left to die. How manifestly unjust is it that the people of Malaysia must live in fear of those who are entrusted with their protection?

Those whose responsibility it was to safeguard this nation have failed. Years of their polices have left Malaysia at great risk. A lagging economy is on the brink of recession. Crime runs rampant and our streets are not safe to walk. The education that our children receive is substandard and many of our schools lack funding for basic infrastructure. The police and the judiciary are feared for their ruthlessness and their disdain for justice and human rights. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Corruption, of course, breeds division. And division produces great stress on rule of law governance. "If we address the crisis of confidence in our judiciary and take real steps to combat corruption, ensure the professionalism of the police and make our villages and streets safe, foreign investors will again find Malaysia an attractive destination. With continued investment in education, infrastructure and health care we can create the jobs we need and emerge from this recession stronger than before." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. And that in turn serves as another basis for attacking the legitimacy of the corrent holders of power within the state apparatus. "On the issue of justice, there remain two standards in Malaysia – one for those who wield power, and another for those who seek justice and call for the Rule of Law." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

And from political illegitimacy grounded in rule of law and corruption comes the issue of incompetence. Here Anwar Ibrahim suggests the direct connection between legitimacy and corruption, the avoidance of rule of law, and competence. The corrupt do not even have the excuse of competent administration in their favor--and therefore the suggestion of a necessary link between division, competence and the right to govern.

The Umno-dominated BN is caught in a warp of its own making. They talk about reform but cannot walk the talk. This is what a half-century in power does to you. It is unable to reform, immune to change, deaf to criticism.

Billions of dollars of public funds are poured into wasteful projects and the unnecessary purchases of military goods. Exorbitant commissions are paid while the perpetrators of these crimes go unpunished.

While the rest of the world braced for the impact of a deep and difficult recession, the Finance Minister seemed oblivious to the imminent economic challenges. While other nations geared for the calamitous conditions we now face, this man watched from the sidelines. In his most decisive act he issued bailouts for a few corporations using money plucked from the retirement savings of the Malaysian people. The earlier stimulus package has gotten stuck in the quicksand of bureaucracy, causing extraordinary delays in the disbursement of funds. The second one, which arrives belatedly in Parliament this week, may be a case of too little too late. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Worse, the incompetence and corruption, in turn perverts the mission of the state. The increasing plight of the poor can be understood as merely symptomatic of the disease of corruption, and serves as another sign of illegitimacy. "Despite our nation’s abundant natural resources, we see that the rich grow wealthier while the gap widens between them and the vast majority of Malaysians. The poor, the majority of whom are still the Malays and bumiputeras of Sabah and Sarawak and the Indians in the estates, are scarcely better off today than they were ten years ago. Behind the façade of a first world country we reflect the tendencies of Third World development." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. This is corruption beyond the Malay ethnic divides. All Malaysians, Anwar suggests, at least those of the lowest economic orders, are united in the ways in which they are exploited for the benefit of those who use the current system of ethno-apartheid for their own enrichment.

The government is encumbered by divisive politics and the underhanded tactics of the ruling party; a party that has placed its own self-preservation ahead of the interests of the people.

Religion and race are manipulated by the powers that be to sow divisions in the country and pit Malaysian against Malaysian. Democracy is itself subverted and the rights of the people are trampled and trodden with no respect for the Rule of Law. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Anwar then contrasts his own efforts to those of the current ruling party. The point is to construct a binary in which the ruling party stands for the negative and the coalition opposing that party stands for its opposite. "With an open hand and good intentions we in Pakatan Rakyat have reached out to our adversaries in government. Our brightest minds have offered solutions to the problems facing Malaysia and we have shared these openly in Parliament. . . . Sadly our efforts have been rebuffed. We have encountered in Umno politicians who are insecure and paranoid, desperate to hang onto power and oblivious of their responsibility to the people." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. The government is painted as intransigent, unreasonable, and selfish. These are layers of corruption that deepen the sense of the illegitimacy of the government and its ministers. But in the face of such bad conduct, Anwar offers patience and understanding. "We are not surprised by their intransigence. A party that has grown so out of touch with the plight of ordinary Malaysians can easily and without guilt abandon them in this moment of their greatest need." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

And thus the ultimate evidence of corruption--an abandonment of the people themselves, a repudiation of the sovereign popular power and a transformation of the government from a reflection of the popular will to a source of arbitrary personal gain among a group of people with no legitimate connection to the people--or the apparatus of state. To this the opposing coalition presents a stark contrast. Anwar suggests that they "have not allowed these selfish actions to dampen our resolve. Our Menteris Besar and Chief Minister have met to discuss avenues of cooperation among our states and our members of Parliament are vigilant in watching over the Rakyat’s wealth. Pakatan Leaders will soon announce shadow committees to monitor and report on the BN government’s spending and to evaluate the impact of its policies. Our policy committees will articulate more clearly the Pakatan Rakyat position on key areas including land reform, education, youth development and Sabah and Sarawak." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. He offers a government truer to the principles of mass democracy than those who formally hold office. And now we have come full circle, back to the core principles that define the opposing coalition--and now are understood to define the core principles animating the Malaysian state.

Thus, in a passage that merits close study in the United States for its parallels to the situaiton in the United States after two bailout passages of similar kinds passed by both major political parties, Anwar Ibrahim offers a substitute for the continuing funding of of crony enterprises whose managers are intimately tied to government officials:

If we allow more bailouts for crony companies and look the other way as billions of dollars in economic stimulus are funnelled back to these companies then our nation faces serious peril. It is imperative that with any economic stimulus package, a strong and impartial regimen of oversight and public disclosure also be implemented. . . . We have every reason to believe that unless monitored carefully the money will once again end up in the wrong hands, and the country and the people will suffer the consequences. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Where the current regime offers arbitrary assertions of government power, of rejection of rule of law, of cronyism in the service of the few, and the exacerbation of racial, religious and ethnic tensions to divide the country and preserve its power, Anwar Ibrahim paints of pictire of the opposing coalition as offering the converse--good governance, unity and adherence to a principled rule of law framework for asserting state power.

Our commitment to good governance is sacrosanct and the signs of its implementation can be seen throughout our states. Contracts are awarded more efficiently and with open tenders. Zero tolerance of corruption has saved us 100s of millions already, while giving small businesses and entrepreneurs the confidence to invest and create jobs knowing that the system works for them. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

And from this implementation of the ideology of the opposing parties good thing will flow to the people, not just ethnic Malays, but others as well. "This has also created an environment more attractive to foreign investment, which in Penang doubled in just one year and in Perak increased to RM 3.4 billion. In Selangor it has reached its highest point in nine years, RM 11.87 billion, creating 30,000 new jobs for Malaysians. . . . The Perak government has provided land titles to deserving families in the state, including Malay, Orang Asli and Chinese, a credit to Menteri Besar Datuk Seri Nizar Jamaluddin’s visionary leadership and his tenacity in defending the rights of the poor and marginalized." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

But all of this will be realized only if the coalition that constitutes the opposition can actually deepen its commitment to political action. But in the context of Malaysian ethno-politics, this deepening cannot be taken for granted. And so Anwar Ibrahim ends his speech with an appeal to the ethnically diverse and traditionally opposing groups that came together for an instant the year before. In that appeal there is a glimpse of the possible outlines of ethno politics in Malaysia. It is one that is meant to offer benefits for all of the participants without sacrificing a fundamental unity within the state. Here is another example of increasing global efforts to suggest an operationalization of 'unity in diversity.' The key is twofold: first reorient the privileged political classifications, abandoning ethnic and religious categories for class categories (rich/poor); and second, ensure that core ethnic privilege is not threatened, especially those of the majority group in its religion and cultural dominance. This is both a bracing and complicated gambit wholly impossible in the United States (the idea of a political program that focused on preserving white European cultural and religious privilege but sensitive to the cultural and ethnic sensitivities of other large sub groups would be politically implausible in the United States), but plausible in Malaysia.

With respect to the first aim, Anwar Ibrahim promises that his "priorities are to create jobs and combat poverty. Housing projects, particularly for lower-income groups will be announced. These developments will be livable and affordable, and we will also identify ways to improve the living standards in existing low-income residential areas." Ketuanan Rakyat,” supra. Anwar Ibrahim thus refocuses the political debate in terms of class issues, avoiding ethnic and religious division.

March 8th restored hope to many who had given up on our government. Throughout the country I meet Malaysians inspired by that day. They envision a future that is more prosperous and a nation more united. With the Pakatan Rakyat they envision a time when schools will be better, where cities and villages will be safer and where good jobs will be plentiful and where honest people can earn a decent living. Ketuanan Rakyat,” supra.

With respect to the second, Anwar Ibrahim first suggests a sensitivity to avoiding discrimination in the distribution of governmental benefits. For example, "Selangor has invested in the development and infrastructure of schools that cater to all the ethnic communities. In Perak 1,000 hectares of land has been granted to the religious schools (SAR) and to National type Chinese schools." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. Critically, Anwar Ibrahim walks a tightrope, both hopeful and ambiguous:

To our brothers and sisters in Sabah and Sarawak, I know that this belief and hope for a better tomorrow is hard for you. Your hopes and aspirations have been betrayed many times already. Give us a chance. This Coalition has proven it has much to offer you and that together we can build a better Malaysia.

To the bumiputeras – this nation is our home and in Malaysia our customs and traditions are secure. We believe that the best way to safeguard our values is to reject socially divisive approaches and uphold Constitutional guarantees. In doing so we will work to ensure that you remain pillars of this society and that your contributions in all fields are recognised and your excellence rewarded. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

The trick to the coalition is amalgamation. But this is dangerous stuff. It is only a small step from the carefully crafted ideas of diversity within union and the old American system of civil equality and social hierarchy. Anwar Ibrahim here suggests bumiputera generosity because they can afford generosity in the context of their own social place. Neutrality, in effect, is a sign of generosity of a majority comfortable in its status and sure of its position. There is a certain justice in the notion, but also a cerrtain danger. Consider this from a more exagerated and perhaps older perspective:

The white race deems itself to be the dominant race in this country. And so it is in prestige, in achievements, in education, in wealth and in power. So, I doubt not, it will continue to be for all time if it remains true to its great heritage and holds fast to the principles of constitutional liberty. But in view of the Constitution, in the eye of the law, there is in this country no superior, dominant, ruling class of citizens. There is no caste here. Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law. The humblest is the peer of the most powerful. The law regards man as man, and takes no account of his surroundings or of his color when his civil rights as guaranteed by the supreme law of the land are involved. Plessy v. Ferguson, 163 U.S. 537 (1896) (Harlan, J., dissenting).

Harlan's suggestion in Plessy v. Ferguson is a double edged sword. It suggests civil equlaity is the only fundamental basis of political organization. But it also suggests that in a plural society, social stability in the context of civil equality is grounded in a functional social hierarchy in which the majority enjoys a pride of place by virtue of its numbers and its achievements. Thsi presents both a reassurance and a challenge to the Malay majority, one which when subject to any sort of substantial stress might veer back to formal subordination.

And in that amalgamation, of course, religion must be factored into the mix. For Anwar Ibrahim, long associated with religious party politics in Malaysia, this is also a sensitive issue. But Anwar in no fundamentalist. He shares, with the outlook of manyy in the United States, the soft notion of majority power. Islam and Islamic values must be privileged if only because it serves as the fundamental social ordering principle of a large majority fo the citiziens of the state, the way that Christianity serves the same role in the United States. There is an echo of Justice Scalia's reminder of the power of dominant religions in plural society in the language Anwar Ibrahim uses here. See Employment Div. Dept. Human Resources of Oregon v. Smith, 494 U.S. 872 (1990) ("But to say that a nondiscriminatory religious practice exemption is permitted, or even that it is desirable, is not to say that it is constitutionally required, and that the appropriate occasions for its creation can be discerned by the courts. It may fairly be said that leaving accommodation to the political process will place at a relative disadvantage those religious practices that are not widely engaged in; but that unavoidable consequence of democratic government must be preferred to a system in which each conscience is a law unto itself or in which judges weigh the social importance of all laws against the centrality of all religious beliefs.").

Yet that prominence of Islam can be softened by its naturalization within a political culture that is grounded in the religious and ethnic foundations of Malay, Chinese and Indian, in the way that multicultural sensitivty migth soften Christina values frameworks int he United States. More importantly, for Anwar Ibrahim, that amalgamation is tied to the vision of the founders of the Malaysian Federation.

This spirit of togetherness was rediscovered on March 8th and it is a reflection of what our founding fathers envisioned when they secured our independence years ago. It is manifest in businesses and factories where Malaysians work together to build the goods that are exported to countries around the world. It is visible throughout this country in schools where Malays, Chinese, Indian, Dayak and Kadazan students learn side by side.

The spirit lies at the heart of the great civilisations that make up the fabric of this land. Muslims adhere to the Qur’anic injunction, li-ta’arafu, that we must recognise God’s wisdom in understanding our differences and showing compassion and care for all. The Chinese have a saying that conveys a similar message: si hai zhi nie jie xiong di; that within the four seas all men are brothers, a sentiment equally reflected in the Tamil proverb ontre kulam oruvane thevan, one humanity one spirit. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

We move, then, inexorably, from ideas, to implementation, to the corruption of ideology by the current holders of power, to the manifestation of that corruption in the suffering of the people and the perversion of ethnic and religious division and in the need to return to the original vision of the founders. "Greater confidence in the Pakatan Rakyat’s ability to govern is achieved not only through the implementation of sound public policy in the states but also in cementing our cooperation in the form of a Common Agenda." Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra. Thus, unity in diversity provides a mechanism for preserving the Malaysian Federation while avoiding a subordinating Islamization or a mandatory assimilation to the culture and practices of the indigenous Malays who once were synonymous with the nation but can no longer claim that political space. Anwar Ibrahim offers a glance at an approach to the difficulties of pluralist states outside of the West. It suggests both the developing states face a double difficulty--overcoming the hysteria and neurosis of the colonial experience and confronting the difficulties of constructing plural societies. The later requires the newly independent colonial subaltern to give up a substantial amount of power--cultural, religious and political--at the very moment when the colonial experience is overcome and they come to their power. There is irony and tragedy as a consequence, an irony and a tragedy that are sadly under-theorized in the academic literature and rarely confronted by the political class. Anwar Ibrahim has matured into a statesman who is among the few willing to face these realities. His own rise to privilege within the self serving world of dominating subaltern, and his rejection of that privilege, deepening in the context of his own degradation makes his efforts to reach out plausible and credible.

My fellow Malaysians, we are all travellers on the same road, striving towards one dream. This is the road that has not yet been travelled by in the history of our nation. It is long and winding and fraught with the greatest of hazards and impediments. We will be waylaid and abducted from our journey but yet we shall not be strayed.

And no matter what we must keep our faith and our resolve with the greatest of patience and fortitude. By God’s grace we shall succeed. Transkrip Pidato Kebangsaan “Ketuanan Rakyat,” supra.

Anwar Ibrahim walks a perilous tightrope within a Federation that could easily unravel. Whether he will succeed in the long run remains to be seen. And the shape of the new Malaysia is still far too hazy to see clearly. For all that, his optimism is refreshing.

Palestinians: More Jewish (and Less Muslim) than the Jews of the Middle East?!

I have always been interested in what tends to lie hidden beneath the pretty words and other absurdities that has constituted the multi-generational participatory theatre of the Middle East and a significant diversion for politicians, academics, religious communities, lawyers and others from around the globe with many axes to grind and many agendas (hidden or otherwise) to further. In the midst of the usual banalities, strident absurdities and general hatred mongering masquerading as social, political, religious and economic theory (or worse--advice) comes a perverse glimmer of an insight that is both brief and extremely rich. The context was a short interview with Jehan Sadat, the widow of the former leader of Egypt, Anwar el-Sadat, and "Egypt's First Lady of the World," published in the New York Times Magazine, The War Widow: Questions for Jehan Sadat, The New York Times Magazine, March 15, 2009 (interview conducted, condensed and edited by Deborah Solomon).

Earlier this year, I was surprised to read about violent clashes between the Egyptian border police and Palestinians who were trying to flee Gaza and buy food and supplies in your country.
That’s right. When you want to cross into Egypt, there are rules. But the Palestinians want to cross and come without anything, just like that. There were thousands and thousands and thousands who wanted to cross, which is not legal.

Why can’t the Palestinians, your fellow Muslims, be part of your country?
Because they are not Egyptian. Gaza is their land, and they have the right to have their own state.

I’ve heard the Palestinians characterized as being very smart and fond of argument, not unlike Israelis.
Believe me, they are more like the Jews than us. By the way, most of the Palestinians are very well educated. Because they are a minority, they are like the Jews. They are intellectuals. The War Widow, supra.

Well, there you have it. I suspect that Mrs. Sadat, as learned as she is, is more likely to reflect the common sense of the Muslim conventional classes (at least in Egypt) than the screaming intellectuals, religious, and others who poison our minds. But what she thinks, if that is conventional wisdom among the educated classes of Egypt (and other places within the conflict zone), is certainly explosive.

So, it appears that the Palestinians are the Muslim Jews of the Middle East. They cannot be assimilated into the body of Egyptian Muslim society--they are too alien for that. They are the Muslim "other" among Muslims. And their essential Jewishness is bound up in their eternal status as a minority within states controlled by others--and their dangerousness: they are educated, intellectuals. They belong with the Jews, who they resemble, rather than with the rest of the Muslims in the dar al-Islam. They may cross into the dar al-Islam, but only under controlled circumstances. If the Jews won't take responsibilities for keeping the Palestinians within their space, then the Egyptians, naturally, ought to undertake this task. They appear unable to assert that self control themselves. But it also suggests part of the reason why after over fifty years large unassimilated "camps" of Muslims continue to be suffered within the dar al-Islam, why the Palestinians have been kept apart from other Muslims--because these Palestinians are the brothers of the Jews, not of the Muslims into whose territory they had fled. These Jewish Muslims can be tolerated--because they are smart and well educated, useful (like the Jews in Europe a century ago), but they are certainly unassimilable outside of Palestine, proper. And even there, Palestinians did best under the tutelage of others, from Syrians, to Egyptians to ultimately, the Ottoman Turks.

I suspect that Mrs. Sadat's views are not novel. But they do not play well to advance the agendas of the various actors to this drama that is the ethno-religious war that is the Middle East. For all that, Mrs. Sadat certainly offers a novel solution to the problems of Israel and Palestine. The Muslim and Christian Palestinians, it seems, might solve their problems by the simple expedient of embracing the religious aspects of their national character and perhaps return to their roots--become Jews in faith as well as fact. Rather than build a wall, the Israelis ought to be establishing schools and foundations for the conversion of the faithful, much like the Wahhabi Sunnis established similar institutions all over the globe. See Natana J. Delong-Bas, Wahhabi Islam: From Revival and Reform to Global Jihad (Oxford University Press, 2004).

Consider the possibilities: if the majority of Palestinians embrace their Jewishness in faith as well as culture, the problems of the Middle East evaporate--at least with respect to the national character of Israel-Palestine. But of course, that presents a problem of a wholly different sort for the dar al-Islam. Could Jerusalem again become the chief city of the Palestinian Jews? Perhaps they might even build the Third Temple to share space next to Al-Aqsa Mosque. But this is fantasy, of course. But it suggests the separateness of Palestinian identity from that of mainstream nation bound Muslim perception, at least among a certain influential class within Islam.

And more perversely still, beyond the implausibility lie older and more insidious ideas--ideas that constitute the greatest political peril for both Israel as a majority Jewish State and Palestine as a Muslim-Christian state: the idea that neither people are worthy of statehood in part because they are both the same. And while the Jewish character might tolerate education and a certain utility for others, it cannot support a separate sovereignty. And so, of necessity, the conflict within the Middle East continues.

Preserving the Sheep in Contests for Control Among the Shepards: The Emerging Shape of International Humanitarian Law Based Management of Conflict

It has become clearer since the start of the Great Power adventurism that produced in the late 20th century the numerous states sundered out of Yugoslavia (itself a construct cobbled together in the early 20th Century by a coterie of predecessor Great Powers), that law has become an instrumental framework through which violent conflict is managed. While the ultimate aim of such management is the eradication of violent conflict altogether and the substitution of others forms of violence less ostentatiously gruesome), it has, in the present day, the more modest aim of preserving intact the productive elements of human society for the exploitation of the winner of any such violent conflict. Backer, Larry Catá, The Fuhrer Principle of International Law: Individual Responsibility and Collective Punishment, 21(3) Penn State International Law Review 509-567 (2003) ("the idea of the individual as independent actor, has led to the application of the fuhrer principle in the production of the emerging global principles of human rights spreading a cloak of protection around communities of individuals for communal acts. The individual. as independent actor, has given rise to a cult of individual responsibility for political acts, the responsibility for which once rested with the political community in whose name the acts were perpetrated." Id., at 524. "The punishment for infractions by a political community, especially against another community, is borne by the leader as proxy for the community. The doctrine of personal responsibility for communal acts is thus an inversion for the protection of the community." Id., at 535). And so, conflict is managed by minimizing the harm to the productive sectors, and by shifting responsibility onto the bodies of physical combatants.

This notion, written into the heart of international humanitarian law, has been evidenced of late in the conflict over the mastery of the Island of Ceylon. That conflict pits two ethnic elites in a violent contest for mastery of the Island or portions thereof. On the one hand, the majority Sinhalese population, constituted as the Republic of Sri Lanka has been battling the Tamil minority, whose elites have sought to constitute themselves as a separate Republic on the Island--and came very close to the realization of that goal a decade ago before a string of military reversal has led to their defeat in the last several weeks--leaving them where they began in violent acts of separatist terror. But in the course of that great violent contest for control, both sides have appeared to violate the nearly engorged rules of engagement by interfering with the welfare of the prize of the conflict between them--the civilian population of the Island.

And so it is that the United Nations, through its highest ranking human rights bureaucrat, Naventhem (Navi) Pillay of South Africa, the U.N. High Commissioner for Human Rights, has

expressed her growing alarm Friday at the increasing number of civilians reported killed and injured in the conflict in northern Sri Lanka, and at the apparent ruthless disregard being shown for their safety. "Certain actions being undertaken by the Sri Lankan military and by the LTTE may constitute violations of international human rights and humanitarian law." Pillay said. "We need to know more about what is going on, but we know enough to be sure that the situation is absolutely desperate. The world today is ever sensitive about such acts that could amount to war crimes and crimes against humanity." United Nations, High Commissioner for Human Rights, Press Release, Serious violations of international law committed in Sri Lanka conflict: UN human rights chief, March 13, 2009.

With the threat comes the the managerial solution in two parts. First, of course, the proteciton of the assets that are the object of the conflict, the civilian wealth producing population. "The High Commissioner called on both the Sri Lankan Government and the LTTE to immediately suspend hostilities in order to allow the evacuation of the entire civilian population by land or sea." Serious violations of international law committed in Sri Lanka conflict: UN human rights chief, supra. Second, the acceptance of outside referees for the conflict, empowered to act much like referee officials on the football pitch. "She also urged the Sri Lankan Government to grant full access to UN and other independent agencies to allow an accurate assessment of the human rights and humanitarian conditions in the conflict zone." Id. Thus, the operational face of managerialism--close scrutiny of the conflict by outsiders empowered to call violations of the rules and assess penalties.

And thus the consequences, a game with rules overseen by officials presiding over contests in which the competing teams battle within the confines of detailed laws of play--a juristic and legalistic overlay to what had been chaotic and uncontrolled contests. Management requires confinement to a pitch, the governance of rules and oversight. And who better for the elaboration of this understanding of the new realities of conflict than lawyers and judges. The current High Commissioner is well suited to this role. "More recently, Ms. Pillay has served as a judge on two of the most important international criminal courts in the modern era, spending eight years with the International Criminal Tribunal for Rwanda, including four years as its President, and then the past five years on the International Criminal Court in the Hague. Both of these courts deal with the extreme end of the human rights spectrum -- war crimes, crimes against humanity and genocide, and are at the cutting edge of the development of international law in these areas." United Nations Human Rights, Office of the High Commissioner for Human Rights, Navanethem Pillay confirmed as new High Commissioner for Human Rights. A jurist's perspective, a lawyer's sensibility, and a bureaucrat's sense of order and management of assets are precisely what is now called for in the management of conflict. The object is not political--it is likely that the United Nations and its organs are essentially indifferent as to the outcome of the conflict between Sinhalese and Tamil--but managerial, focused on the preservation of the objects over which the protagonists engage in violence. These assets are viewed as passive and reactive. These objects of humanitarian law are thus constituted as a legal fiction--neither a part of the conflict, nor vested with a particular interest in or power to participate in the outcome, but rather the prize over which the conflict is fought.

States seeking to engage in conflict--whether against internal or external enemies will have to deal with this emerging framework more intensely in the years to come. No longer confined to dependent states or regions that had been the playgrounds of Great Powers, the managerial war, the protection of the prizes of conflict, the new juridical basis of the management of violence, will touch all conflicts in which states use violence as a means to manage opposition. And the referees are not the organs of state power, but elements of international political and civil society that will assume a greater role in the monitoring, reporting, assessment, judgment and punishment of states (and their leaders) who fail to obey the rules and mismanage their violence. See, e.g., Opiyo Oloya, Omar Bashir's Indictment is a Writing on the Wall, The New Vision (Uganda), March 10, 2009 ("By issuing the arrest warrant for Bashir, the ICC is flexing its muscles and telegraphing its jurisdiction over the conduct of sitting heads of state. In effect, the ICC is saying, “We are willing to take on anyone, head of state or not, who is suspected of perpetrating crimes against humanity.” . . . . He is a wanted alleged criminal with blood on his hand. He cannot be seen, heard or even accepted among leaders of free nations. Indeed, with time, the chorus of support for the Sudanese leader heard in many African capitals last week will quietly die away, replaced by polite avoidance.").