Michael A. McFaul, a Stanford political science professor and senior fellow at the university’s Freeman Spogli Institute for International Studies, was confirmed by the Senate to be the next ambassador to Russia. 

McFaul, President Barack Obama’s top advisor on Russia and a Bing Senior Fellow at Stanford’s Hoover Institution, will succeed John Beyrle.

"Mike will bring to his new posting in Moscow the same intensity, clarity of vision and imagination that he demonstrated as President Obama's point person on Russia at the White House," said Coit D. Blacker, FSI’s director and the Olivier Nomellini Professor in International Studies. 

The Dec. 17 voice vote confirming McFaul came on the last day the Senate was in session before its winter break. Sen. Mark Kirk, R-Ill., had held up McFaul's approval over issues with U.S. policies toward Russia.

During confirmation hearings before the Senate Foreign Relations Committee in October, McFaul discussed the overall status of U.S.-Russian relations, missile defense, arms reduction agreements and trade relations.

Since the beginning of the Obama administration, McFaul has been the special assistant to the president for national security affairs and senior director for Russia and Eurasia at the National Security Council.

He served as senior adviser on Russia and Eurasia to Obama during the presidential campaign and continued to advise on foreign policy issues during the transition.

The Obama administration has achieved new momentum in relations with Russia with McFaul's involvement.

The two countries have signed the New Start arms control treaty, which calls for significant cuts in nuclear arsenals; finalized a civilian nuclear cooperation pact; forged agreement on tougher sanctions on Iran; and expanded the supply route to Afghanistan through the territory of the former Soviet Union.

The two powers now turn to the efforts to forge cooperation on missile defense in Europe and to gain Russia's admission to the World Trade Organization, as well as the challenges posed by Iran and Libya.

"This is a complex and sensitive time in the ever-evolving relationship between the United States and the Russian Federation," Blacker said. "Having an ambassador in place who gets the relationship has never been more important. For this reason above all others, Mike is the perfect choice. We are all deeply proud of Mike and all that he has accomplished."

McFaul, who has served as FSI’s deputy director and director of the institute’s Center on Democracy, Development, and the Rule of Law, received a bachelor’s degree in international relations and Slavic languages and an master’s in Slavic and East European studies from Stanford in 1986. He was awarded a Rhodes Scholarship to Oxford, where he completed his PhD in international relations in 1991.

On December 6, the Program on Arab Reform and Democracy at the Center on Democracy, Development, and the Rule of Law together with the Safadi Foundation USA inaugurated the Safadi-Stanford Initiative for Policy Innovation (SSIPI) at a conference hosted by the Woodrow Wilson International Center for Scholars in Washington, DC and supported by the Center for International Private Enterprise. This gathering convened an upwards of 100 guests to explore the conference's theme of economic reform and development in the Arab world.  

The keynote addresses were delivered by IMF Head Christine Lagarde who commented on the economic landscape in the region and suggested methods to stimulate growth for emerging Arab economics, and Lebanese Finance Minister Mohammad Safadi who stressed the importance of institution building and transparent accountable governance practices for development in the region, particularly in relation to how Arab governments handle international aid.

Safadi Scholar of the Year Katarina Uherova Hasbani presented the findings of a research study she authored on electricity sector reform in Lebanon while in residence at CDDRL this fall. The SSIPI research partnership was initiated to promote policy-relevant research on Lebanon and supported Hasbani's visiting fellowship at Stanford. Hasbani, an energy policy expert, presented her findings to the policy- making community, arguing that reliable and stable electricity supplies are a pre-condition for economic development. Hasbani cautioned that the failing electricity sector in Lebanon threatens the country's progress diverting resources from social development and education.

Deputy Assistant Secretary of State for Near Eastern Affairs Tamara Wittes and Mara Rudman, Assistant Administrator for the bureau for Middle East at USAID, both commented on the development challenges and opportunities that lie in the wake of the Arab Spring. "What is happening in the region is about the people writing their own story," said Wittes. "The United States has to approach this with a sense of humility but we have a role to play because we are a major presence in the region." Rudman added that USAID is reaching out to new audience and partners in Egypt, many of whom are outside Cairo, to engage new actors after the January 25 revolution.

Miriam Allam, an economist with the OECD and Safadi Scholar first runner-up stressed the importance of public consultation and good regulation as best practices for cultivating active and democratic citizenship. Undersecretary of State for Economic, Energy, and Agricultural Affairs Robert D. Hormats, underscored the fact that economic reform must match social and political change in the region to create diverse economies that support growth, investment, and trade.

Inger Anderson, Vice-President for MENA at the World Bank, commented on the funding shortages from European countries that are resulting in decreased investment in the Arab world, when they need it the most. Both Anderson and Lagarde advocated for the reform of government subsidies, according to Lagarde, "governments need sustainable fiscal policies, including better targeted subsidies to help low-income groups."

Lagarde added that a key way forward is encouraging private sector investment to spur job creation but stressed that this requires predictability, a stable legal and tax environment, absence of corruption, and the elimination of regulatory loopholes.

Through this conference and ongoing research, the Safadi-Stanford Initiative for Policy Innovation seeks to offer new approaches and recommendations to advance development and governance practices in the region.

Transcript and video of event:

http://www.wilsoncenter.org/event/the-middle-the-storm-development-and-governance-the-arab-world

Speech by IMF Managing Director Christine Lagarde:

http://www.imf.org/external/np/speeches/2011/120611.htm

European leaders converged in Brussels to figure a way out of a worsening debt crisis and agreed to greater financial oversight and centralization. England refuses to go along with the plan, and Stanford political scientist Francis Fukuyama says he expects some countries will start bailing out of the eurozone.

“The political difficulties of deepening any fiscal union are so great that I wouldn’t bet on that happening,” says Fukuyama, the Olivier Nomellini Senior Fellowat Stanford’s Freeman Spogli Institute for International Studies and a resident at FSI’s Center on Democracy, Development, and the Rule of Law. “The easier path is going to be for countries to begin exiting.”

Fukuyama talks about the summit, the euro’s chances of survival and what’s at stake for America if the currency collapses.

What does the Brussels agreement mean for Europe’s debt crisis?

We will have to see how much of a binding constraint this agreement actually is. It’s just an informal agreement at this point. Political leaders can promise anything at this kind of summit and fail to deliver.

I think the most interesting thing going on is the eurozone – the 17 countries that participate in the euro – is actually splitting off from the greater EU. The reason that’s happening is that in order to save the eurozone, they need to make certain decisions on this type of deepening control. And countries like Britain will never go along with this. The 17 countries have to create their own unit that can make decisions at the expense of the larger EU.

Explain Britain’s refusal to have its budget reviewed by the European Commission

The UK is like the United States – they’ve always been jealous of their sovereignty. If you go to England and talk about crossing the Channel, they’ll say, “Oh, so you’re going to go to Europe.” While an American would say “England is a part of Europe.”

There’s a strong strain – especially within the conservative party – that really does not want to give up authority to what they regard as a bunch of French socialists in Brussels. That’s their vision of what the EU really represents. So they’re resistant about being dragged into any German scheme to deepen the powers in Brussels to include control over national budgets because that is a core element of sovereignty. The majority of people in Britain will say that will happen over their dead bodies.

What is the likelihood that countries will begin exiting the eurozone?

I don’t think it makes sense for a country like Greece to stay in the eurozone. It’s a matter of national pride that they don’t want to be the first country out, but it’s very hard to see how they actually return to growth under a system that links them to Germany in terms of the price of their currency. Long before there’s any kind of centralized fiscal reform that’s imposed on Greece, Portugal and these other peripheral countries, I think it’s more likely that they’ll exit. The euro will probably remain, but it will be at the core of the more stable countries.

What mechanism is there for countries to exit the eurozone?

There is no mechanism. Not only is there no legal way of exiting, there’s no disciplining mechanism. You have a stability pact where countries agreed they wouldn’t run a budget deficit greater than 3 percent, and Germany was really one of the first counties to violate that. But there were no sanctions. That’s the problem right now – there’s neither discipline nor an exit mechanism. That’s why everyone is fearing a disorderly, messy breakup of the EU, which would be extremely damaging.

President Obama has said the U.S. “stands ready to do our part" to help Europe resolve its crisis. What can America really do?

It’s an indication of how far we’ve fallen, but there’s really nothing concretely we can do apart from possibly increasing our International Monetary Fund share. But the IMF doesn’t have the ammunition to really help at all in this particular crisis. So all we can do is sit on the sidelines and try to get the Europeans to take our advice, which a lot of them are not inclined to do given the mess that happened on Wall Street three years ago. It’s a mark of the diminishment of overall American influence that we’re simply relegated to the sidelines of this crisis.

What’s at stake for America in the wake of a total European financial meltdown?

There’s a lot at stake. We are slowly crawling out of the biggest recession since the Great Depression. The one thing that could really send us back into a second leg of a recession is collapse of the European financial system and panic in Europe. If Europe doesn’t do well, the United States isn’t going to do well.

As the world holds a collective breath waiting to see whether China’s white-hot economy blazes ahead or fizzles, Stanford economist Scott Rozelle is talking up a plan to protect the country’s future.

“China needs to make sure every kid goes to high school so they have the skills and training they’ll need to be productive workers,” he says.

With only 40 percent of the country’s poor and rural children now receiving a formal high school education, that’s a tall – and expensive – order to fill. Rozelle figures China needs to invest at least $500 billion during the next decade to make sure nearly all the country’s children have the support they’ll need for a quality education.

But he warns the price will be even higher if the country falls short of that goal.

Hourly wages – now about $2 – rose by 19 percent in the past year. If China’s growth pattern continues, those wages can hit $10 to $15 by 2030. That trend is pushing China to shift from an economy based on labor-intensive, low-skilled manufacturing to one needing smarter, more literate workers.

Facing increasing payroll costs, employers cannot afford to hire workers who don’t have a set of basic skills and an ability to master complicated tasks. If the labor force cannot measure up, businesses – and the jobs they promise – will go elsewhere.

And if that happens?

“Then,” Rozelle says, “You have Mexico and the crisis that country is facing today.”

China is now in much the same situation as Mexico during the late 1980s and early 1990s, when wages began to skyrocket and the country planned to attract and create high-skilled jobs to support them.

The idea was to move Mexico from a middle-income nation to a rich one. But there wasn’t a deep enough labor pool to sustain the shift. While just over 80 percent of kids in Mexico’s well-off cities were going to high school, only about 40 percent of those living in rural and poor urban areas were getting a secondary education.

Factories paying low wages soon moved to other countries. Job opportunities dried up. Unemployment soared, and so did the power and presence of drug cartels and organized crime. Gang violence is scaring away tourists, foreign investment and domestic business plans. More than ever, Mexico is now swamped with crime and corruption instead of the spoils of an economic windfall that seemed within reach just three decades ago.

Should China fall into the same trap, Rozelle warns of a destabilized Asian behemoth that would put a crimp in worldwide trade and global prosperity. And without a strong economy to assure its own population of a rising quality of life, China might begin to assert its military to increase a sense of nationalism, he says.

“The world is much better off with a stable and growing China,” says Rozelle, co-director of the Rural Education Action Project at Stanford’s Freeman Spogli Institute for International Studies.

And he says China can avoid Mexico’s mistake by following the path of countries such as South Korea.

While Mexico’s fortunes and wages were rising, so too were South Korea’s. But China’s neighbor made a smooth transition from a low-wage, labor-intensive economy to a highly productive, innovative and service-based workforce.

They pulled it off because of a strong commitment to education. Even in the years when South Korea’s economy was fueled by low-wage, labor-intensive manufacturing, nearly everyone went to high school. Whether or not South Korean officials were betting that education and economic success went hand-in-hand, it turned out that a strong education system was one of the key factors in the country’s growth, Rozelle says.

“In the 1970s and early 1980s, you had young women who were making shirts and socks in sweatshops transform themselves into highly skilled workers doing high-fashion design and other high-wage, high productivity jobs in the 1990s and 2000s,” Rozelle says. “And the key to it all was that those women went to high school and learned the skills that high-wage paying employers demanded. It was mandatory and free, and those women learned how to read, write and do math.”

China has a lot of catching up to do if it aspires to South Korea’s model. With up to 60 percent of children in poor rural areas missing out on high school, China’s education system in those regions now looks more like Mexico’s.

But if China begins investing heavily, the country stands a good chance of hitting a sustainable economic stride. That means spending about $50 billion a year on services like early childhood education and computer-assisted learning while making sure schoolchildren have the health care, vision care and nutrition they need to pay attention and perform well in class.

“China has the money and the resources to contain the problem,” Rozelle says. “But it needs to do something right now, because time is running out.”