On November 15, 2007, FSI held its third annual international conference, Power and Prosperity: New Dynamics, New Dilemmas, examining seismic shifts in power, wealth, security, and risk in the global system. Acting FSI Director Michael A. McFaul, former Secretary of State Warren Christopher, and former Secretary of Defense William J. Perry offered stagesetting remarks before a capacity crowd of business and civic leaders, diplomats, policymakers, faculty, and students. Interactive panel sessions encouraged exploration of contemporary issues with Stanford faculty and outside experts.

“For more than two centuries , a debate has raged in our country over whether the Congress or the president has the power to start, conduct, and terminate a war,” stated former Secretary of State Warren Christopher. The issue has been made urgent by what is called the “War on Terror,” regarded by many as almost unlimited in duration and geographic scope. “One frontier issue is whether the commander-in-chief authority gives the president the power to override the Constitution,” he said, specifically “whether or not the president can authorize torture that may offend the Constitution, wiretap American citizens, and suspend habeas corpus.”

Christopher and former Secretary of State Jim Baker are heading a new National War Powers Commission to study and resolve these issues. Planning to do something of a prospective nature, they will focus their recommendations on the 2009 Congress, seeking to bring to bear the collective judgment of both the president and a Congress traditionally reluctant to exercise the power it has under the Constitution.

“I spent most of my adult life under the dark cloud of a nuclear holocaust, a war that threatened no less than the annihilation of humanity,” said former Secretary of Defense William Perry. Now the Cold War is over, but its end did not bring about the end of history. “History is being written every day in the streets of Bagdad, in the deserts of Darfur, in the nuclear test range of North Korea, and in the nuclear laboratories of Iran.”

Perry identified four potential security threats: the danger of a nuclear terrorist attack, drifting into a new Cold War, drifting into an environmental disaster, and the danger that radical fundamentalists will gain ascendancy in the Islamic world. “There is a fundamental conflict between our need to keep nuclear bombs out of the hands of terrorists and our need to reduce carbon emissions,” he stated, for the global movement to increase nuclear power could increase terrorists’ ability to get fissile materials. “The solution must lie,” he advised, “in establishing international protocols for how nuclear plants are operated and nuclear fuel supplies are controlled.”

A complementary route is to work to reduce and then eliminate nuclear weapons. Getting to the political will to take those steps was a major objective of a January 4, 2007, Wall Street Journal op-ed, “A World Free of Nuclear Weapons,” published by Perry, George Shultz, Henry Kissinger, and Sam Nunn, and conferences at Stanford. “This conference can teach us what to do,” Perry said, “what is needed is the political will to do it.”

Gi-Wook Shin, director of FSI’s Walter H. Shorenstein Asia-Pacific Research Center, chaired Plenary I, “Asia’s Triple Rise: How China, India, and Japan Will Shape our Future.” “While our policymakers are preoccupied with the Middle East, Asia is going to have much more impact on our future,” Shin said. Asia is experiencing a unique moment in Asian and world history. Can three great nations rise simultaneously, creating a regional architecture for stability and security? What role can the United States play?

“There are two defining characteristics of today’s world,” said J. Stapleton Roy, former U.S. ambassador to China, “America’s role as the sole superpower and China’s precipitous rise to power and influence.” Roy traced China’s resource demands, military development, and global economic impact and evaluated China’s influence on U.S. foreign policy. “While we see a more powerful and prosperous China as a security threat,” he stated, “the case could be made for a more optimistic scenario in which growth creates a sizable middle class, greater global dependence, and a more open society as the fifth generation of Chinese leaders takes over, the first to mature in a period of openness to the world and the power of modern democracies.”

“The only democracy in the world with which the United States had endemically bad relations during the Cold War was India. Happily that has changed,” said Robert Blackwill, former U.S. ambassador to India. He addressed our many areas of common interest: the fight against global terrorism, energy security, a healthy global economy, and shared democratic values. Analyzing the pending civil nuclear cooperation deal, he placed India’s need for 15–20 new nuclear reactors in the context of domestic growth. Some 450 million people make less than $1.50 per day; India will not tolerate outside direction to slow growth. “The United States and India are natural allies,” he concluded.

“The India entering its seventh decade as an independent country is one that is open to the contention of ideas and interests within it and outside … wedded to the democratic pluralism that is its greatest strength and determined to fulfill the creative energies of its people. Such an India truly enjoys soft power in today’s world.” former under secretary-general of the united nations shashi tharoor“Japan has resumed a solid growth track,” said Michael H. Armacost, Shorenstein Distinguished Fellow and former U.S. ambassador to Japan. The country seeks respect and wants a permanent seat on the U.N. Security Council, which it deserves. Japan’s economy is four times the size of China’s; Japan’s military budget is just 1 percent of GDP, yet it is the third largest in the world and the most sophisticated in Asia. Japan has the resources of a great power—huge financial reserves, modern science and technology, and enormous aid and investment flows. As Japan assumes a more robust international role, we should expect the Japanese to “hedge their bets,” he said, balancing strong U.S. ties with other nations and competing with China in pan-Asian community building efforts. Japan-U.S. relations should not be forgotten, he advised, as we focus on China and India.

Shashi Tharoor, diplomat, historian, and former U.N. under secretary-general, mused about “India’s Future as a Great Power.” Asking what makes a country a world leader, he acknowledged that India has the world’s second largest population, fourth largest military, status as a nuclear power, and the fifth largest economy. Yet a nation that cannot feed, educate, or employ its people cannot be termed a “great power,” Tharoor noted. He suggested that India’s greatest asset is its “soft power”— its liberal democracy, social and cultural diversity, and enormously popular culture. All hold important lessons. “The India entering its seventh decade as an independent country,” he said, “is open to the contentions of ideas and interests within it and outside … wedded to the democratic pluralism that is its greatest strength and determined to liberate and fulfill the creative energies of its people. Such an India truly enjoys soft power in today’s world.”

Lynn Eden, associate director for research at CISAC, chaired Plenary II, “Critical Connections: Faces of Security in the 21st Century,” examining security risks posed by Iraq, nuclear weapons, and food security and the environment—issues, she noted, “that are also central themes of the Stanford International Initiative: improving governance, pursuing security, and advancing human well-being.”

“There are now multiple indications that conditions on the ground in Iraq have improved quite substantially,” said Hoover Institution denior fellow and CDDRL faculty member Larry Diamond. Violence is down and there is a return to something approaching normalcy, as a result of the 30,000 “surge” in U.S. troops and a more effective counterinsurgency strategy adopted by General David Petraeus. The new military-sized force and strategy come at a propitious moment, when the Sunni Arab heartland has turned against Al Qaeda. As Al Qaeda has been weakened, fear, fatal bombings, and Iraqi and U.S. fatalities have declined significantly. The problem is that strategic military gains have not been matched with requisite political progress: enacting an oil revenue sharing bill, reversing de-Baathification, and scheduling provincial elections. “The harsh fact is that military progress on the ground is not sustainable,” warned Diamond, “without political progress toward reconciliation in Bagdad and the provinces.”

“As Americans, we have not thought systematically about what it means when we use the phrase ‘Islamic fundamentalism.’ We tend to treat it holistically. If we are going to understand this threat, we have to disaggregate that big thing called ‘the Muslim world’—we have to know the difference between Islamic fundamentalist, Islamist, and liberal Muslims.” acting fsi director and political science professor michael a. mcfaulAssessing nuclear proliferation, CISAC Co-Director Scott D. Sagan said, “In 1963, John F. Kennedy famously relayed his nuclear nightmare that by the 1970s there might be 15–20 nuclear weapons states. Was Kennedy’s fear inaccurate or only premature?” Today there are nine nuclear states, but the Non-Proliferation Treaty (NPT) is cracked and challenges abound. The A.Q. Khan network in Pakistan exported nuclear technology to Libya, North Korea, and Iran. North Korea withdrew from the NPT and conducted a 2006 test, before agreeing to dismantle its nuclear program. Iran has rejected international demands to suspend uranium enrichment. The United States has not lived up to its NPT commitment to work toward eventual elimination of nuclear weapons. For Sagan, keys to nonproliferation include a successful U.N. 2010 NPT Review Conference, peaceful resolution of the North Korean and Iranian crises, developing control of the international fuel cycle, and American ratification of the Comprehensive Test Ban Treaty.

Turning to human security, Rosamond L. Naylor, the Julie Wrigley Senior Fellow at FSI and the Woods Institute for the Environment, reported that 1 billion people face acute risks every day from hunger, infectious disease, resource depletion, climate change, and civil conflict. Incredibly, 15 percent of the world’s population lives on less than $1 per day and 50 percent live on less than $2 a day. Three billion people are vulnerable to disruptions in food prices because of competing biofuels and climate change. While terrorism kills 3,000 people each year and battle deaths claim 20,000, more than 6–8 million people die every year from hunger and malnutrition. “What can be done?” asked Naylor. We urgently need to conserve our genetic crop resources and invest in rural development, agriculture, and education.

Gilles Kepel, professor and chair, Middle East and Mediterranean Studies, at Sciences Po, delivered the dinner keynote, “Islamic Fundamentalism: On the Rise or the Decline?” “As Americans we have not thought systematically about what it means when we use the phrase ‘Islamic fundamentalism,’” said Acting FSI Director Michael McFaul. “If we are going to understand this threat, we have to disaggregate that big thing called ‘the Muslim world’—we have to know the difference between Islamic fundamentalist, Islamist, and liberal Muslims.” Gilles Kepel, a leading author and scholar of the Middle East, who has “invested tremendously in the study of Islam,” was invited to fill that void. “When it comes to understanding Islamic fundamentalism, Paris is the 21st century,” said McFaul. “I see it as a real challenge to all of us to learn from our French colleagues, and tonight I promise you, you will learn from one of our French colleagues.”

In a December 2001 manifesto, Knights Under the Prophet’s Banner, Ayman al-Zawahiri, Osama bin Laden’s mentor and Al Qaeda ideologue, admitted Islamic jihadists had failed to mobilize the masses to overthrow their corrupt rulers, “the nearby enemy,” and establish Islamic states, Kepel began. By inflicting a massive blow on 9/11 on “the far enemy,” the United States, they would demonstrate that America was weak, Islamic militants were strong, and the masses could revolt against their leaders without fear. The Muslim world and then the whole world would become ruled by Shariah under Islamist aegis. Kepel then asked, “Have they succeeded in what they set out to do?”

“After 9/11, we had a clash of two grand narratives: ‘jihad and martyrdom’ where the apostate regimes of the West and the Middle East were about to fall and ‘the War on Terror’ in which the roots of terrorism would be eradicated and autocratic regimes would tumble, bringing about democracy and a transformation of the Middle East.” professor gilles kepel, institute of political studies, parisKepel’s answer was no. Since 9/11, he said, “There have been two grand narratives: the narrative of jihad and martyrdom preached by Zawahiri and bin Laden, arguing that the rotten regimes of the West and the Middle East would fall, as jihadists waged copy-cat bombings in Africa, Europe, and the Middle East, suicide operations, and so forth” and “the narrative of the American-led War on Terror,” hammering that the roots of terrorism would be eradicated and autocratic regimes would tumble, bringing about democracy and the transformation of the Middle East.

The 2003 invasion of Iraq opened a new area for radical Islamic mobilization. But the two clashing narratives gave ground to something unexpected: the rise of Iranian influence in the region and “a golden opportunity not for Sunni Islamic fundamentalists but for the radical Shia in Iran,” who after the 2005 election of President Ahmadinejad found they could engage in nuclear blackmail with the world and threaten the United States with the activation of Shiite militias in Iraq, where American forces would be at a disadvantage fighting two enemies at the same time.

While Zawahiri continues to paint the “triumphal march of Sunni fundamentalism,” Kepel stated, “the discrepancy between his world view and reality is growing bigger and bigger.” To date, the bigger winner from 9/11 is not Al Qaeda but the Islamic Republic of Iran. Iran and Hezbollah have become the heroes and champions of the Muslim world. This fragmentation in the Muslim world, pitting Shia against Sunni, has weakened the Sunni radical movements’ ability to mobilize. How the confrontation plays out, he concluded, will determine the future of the Middle East.

POWER AND PROSPERITY: NEW DYNAMICS, NEW DILEMAS

INTERACTIVE PANEL DISCUSSIONS ON CRITICAL ISSUES
In an FSI conference highlight, participants engaged in spirited debate on leading issues with Stanford faculty and outside experts. Audio recordings of the plenary and panel discussions are available below.

IS DEMOCRACY GOOD FOR HEALTH?
Alan M. Garber, Grant Miller, Douglas K. Owens, and Paul H. Wise

NUCLEAR POWER WITHOUT NUCLEAR PROLIFERATION?
Scott D. Sagan, David G. Victor, Robert Rosner, and Siegfried S. Hecker

A CHANGING CONTINENT? OPPERTUNITIES AND CHALLENGES FOR EUROPEAN UNION EXPANSION
Katherine Jolluck, Mark Leonard, Monica Macovei, and Wolfgang Münchau

GROWING PAINS - GROWTH AND TENISIONS IN CHINA
Andrew G. Walder, Jean C. Oi, Scott Rozelle, and Xueguang Zhou

AUTOCRATIC HEGEMONS AND THE NATIONAL INTEREST: DEALING WITH CHINA, IRAN, AND RUSSIA
Kathryn Stoner, Larry Diamond, Michael A. McFaul, and Abbas Milani

FOOD SECURITY, CLIMATE CHANGE, AND CIVIL CONFLICTf
Rosamond L. Naylor, David Lobell, and Edward A. Miguel

FACES OF ENGERY SECURITY
David G. Victor, Bryan J. Hannegan, and Chris Mottershead

OVERCOMING BARRIERS TO CONFLICT RESOLUTION: THE MIDDLE EAST
Allen S. Weiner, Byron Bland, Bruce Jones, and Lee D. Ross

The Bill & Melinda Gates Foundation’s Agricultural Development Program has awarded Stanford University’s Program on Food Security and the Environment (FSE) and a team of collaborators $3.8 million over three years to conduct a quantitative assessment of the effect of biofuels expansion on food security in the developing world. This work will determine how different scenarios of expanded biofuels production in rich and poor countries will affect global and regional food prices, farmer incomes, and food consumption of the poor. In three case-study countries (India, Mozambique, Senegal), it will make a more detailed assessment of the opportunities and pitfalls associated with an array of possible biofuels development scenarios (e.g., using different crops for biofuels production, using marginal land versus highly productive land, etc.). We expect the work will represent the first systematic, detailed effort to address the effects of biofuels expansion on welfare in poor countries and the first available analytic tool for assessing possible biofuels investments in individual developing countries. Project collaborators include FSE, the International Food Policy Research Institute, the Center on Chinese Agricultural Policy, and the University of Nebraska.

Through this grant, the Bill & Melinda Gates Foundation aims to assess how biofuels may affect smallholder farmers in the developing world. This includes assessing both the risks, such as increasing food prices, and the potential opportunities for smallholder farmers to leverage biofuels to boost their productivity, increase their incomes, and build better lives for themselves and their families. The foundation and Stanford University will disseminate the findings widely to inform a broad audience, including policymakers.

FSE is also very pleased to announce a private gift from Lawrence Kemp for further work in the biofuels area. The Kemp gift will be devoted to building a team of faculty and students on campus who will analyze the transmission of global price effects to local markets, provide policy advice and communication on biofuels, and expand the field-level coverage of Stanford’s biofuels work.

In the November 2007 issue of Environment, project collaborators Rosamond L. Naylor (FSE), Adam Liska, Marshall Burke (FSE), Walter P. Falcon (FSE), Joanne Gaskell, Scott Rozelle (FSE), and Kenneth Cassman demonstrate how high energy prices and biofuelspromoting agricultural policy result in higher food prices generally and then examine in detail the potential global effects of biofuels expansion in four countries for four crops—corn in the United States, cassava in China, sugarcane and soy in Brazil, and palm oil in Indonesia. They argue that in each case, the threats to global food security from biofuels expansion likely outweigh the benefits, especially in the short run. This is because in many poor countries these crops play an important role in the diets of the poor and because the poorest in the world typically spend more money on food than they earn in income through farming. They also note that “second generation” technologies such as cellulosic biofuels will likely not play a significant role in biofuels production over the next decade or longer—and thus in the near-term are very unlikely to be the win-win that their proponents suggest. “The ripple effect: biofuels, food security, and the environment” excerpted from Environment, November 2007

The integration of the agricultural and energy sectors caused by rapid growth in the biofuels market signals a new era in food policy and sustainable development. For the first time in decades, agricultural commodity markets could experience a sustained increase in prices, breaking the long-term price decline that has benefited food consumers worldwide. Whether this transition occurs—and how it will affect global hunger and poverty—remain to be seen. Will food markets begin to track the volatile energy market in terms of price and availability? Will changes in agricultural commodity markets benefit net food producers and raise farm income in poor countries? How will biofuels-induced changes in agricultural commodity markets affect net consumers of food? At risk are more than 800 million food-insecure people—mostly in rural areas and dependent to some extent on agriculture for incomes— who live on less than $1 per day and spend the majority of their incomes on food. An additional 2–2.5 billion people living on $1 to $2 per day are also at risk, as rising commodity prices could pull them swiftly into a food-insecure state.

The potential impact of a large global expansion of biofuels production capacity on net food producers and consumers in low-income countries presents challenges for food policy planners and raises the question of whether sustainable development targets at a more general level can be reached. Achieving the 2015 Millennium Development Goals adopted by the United Nations General Assembly in 2000, which include halving the world’s undernourished and impoverished, lies at the core of global initiatives to improve human well-being and equity, yet today virtually no progress has been made toward achieving the dual goals of alleviating global hunger and poverty. The record varies on a regional basis: Gains have been made in many Asia-Pacific and Latin American-Caribbean countries, but progress has been mixed in South Asia and setbacks have occurred in numerous sub-Saharan African countries. Whether the biofuels boom will move extremely poor countries closer to or further from the Millennium Development Goals remains uncertain.

Biofuels growth also will influence efforts to meet two sets of longer-run development targets. The first encompasses the goals of a “sustainability transition,” articulated by the Board on Sustainable Development of the U.S. National Academy of Sciences, which seeks to provide energy, materials, and information to meet the needs of a global population of 8–10 billion by 2050, while reducing hunger and poverty and preserving the planet’s environmental life-support systems. The second is the Great Transition of the Global Scenario Group, convened by the Stockholm Environment Institute, which focuses specifically on reductions in hunger and greenhouse gas (GHG) emissions beyond 2050. As additional demands are placed on the agricultural resource base for fuel production, will ecosystem services (such as hydrologic balances, biodiversity, and soil quality) that support agricultural activities be eroded? Will biofuels development require a large expansion of crop area, which would involve conversion of marginal land, rainforest, and wetlands to arable land? And what will be the net effect of biofuels expansion on global climate change?

Although the questions outnumber the answers at this stage, two trends seem clear: Total energy use will continue to escalate as incomes rise in both industrial and developing countries, and biofuels will remain a critical energy development target in many parts of the world if petroleum prices exceed $55–$60 per barrel. Even if petroleum prices dip, policy support for biofuels as a means of boosting rural incomes in several key countries will likely generate continued expansion of biofuels production capacity. These trends will have widespread ripple effects on food security—defined here as the ability of all people at all times to have access to affordable food and nutrition for a healthy lifestyle—and on the environment at local, regional, and global scales. The ripple effects will be either positive or negative depending on the country in question and the policies in play.

Energy self-sufficiency at home can mean widespread starvation abroad, FSE director Rosamond L. Naylor and deputy director Walter P. Falcon write in a May 18 San Francisco Chronicle op-ed.

Crude oil prices hit $120 a barrel this month, translating into gas pump prices above $4 a gallon in parts of the United States. As a result, the rallying cry of energy self-sufficiency is gaining strength, reinforcing the U.S. policy of promoting renewable fuels, particularly corn-based ethanol, to reduce dependence on imported oil.

But a different rallying cry—food self-sufficiency—is becoming louder in many developing countries where rice, wheat and other staples are in such short supply that food riots have erupted. China, India, Argentina and several other countries have raised export restrictions on key crops to ensure food supplies for their consumers. That move has further increased world prices.

It is important to remember two key lessons from similar chaos in world food markets in 1973-74. First, attempts to gain domestic price stability create global price instability. And second, once policies are established to protect food markets, they are not easily dismantled. It took two decades for rice trade to expand in Asia, and even then, it remained limited.

The United States must take a lead in confronting the world food crisis. But to do so will require a genuine commitment to improving the well-being of people around the world—and recognizing that energy self-sufficiency at home can mean widespread starvation abroad.

In its starkest form, the global food crisis is about rising agricultural commodity prices that place hundreds of millions of poor people at greater risk of malnutrition. Most of the 800 million people globally who survive on a dollar a day or less live in rural areas and work on farms.

The two- to fourfold jump in prices during the past 18 months for internationally traded commodities, such as rice, wheat, corn, soy and vegetable oils, has resulted in fewer and smaller meals for the poor. The rise in the number of malnourished people globally is only beginning to be tallied.

High food prices have been associated with high petroleum prices. The cost of crop production is up, the value of the dollar is down, and biofuels are an attractive alternative to fossil fuels for transportation. Diverting one-fifth of the U.S. corn crop to corn-ethanol production and setting a renewable fuels mandate of 20 percent of U.S. motor fuel consumption by 2022— a fourfold increase in 15 years—has driven up prices for corn and substitute crops, especially soybeans.

Demand for corn, soy and other livestock feeds already had been rising due to increased meat consumption by China and other emerging economies. Add some major weather, pest and disease shocks, and the market for staple agricultural commodities tightened dramatically in 2006 and 2007.

Moreover, a surge in speculative activity has exacerbated market volatility.

How should the three presidential candidates, in particular, address this crisis?

For starters, the United States should retreat from its heavy promotion of corn-based ethanol and allow the markets to settle. Although the 2008 U.S. Farm Bill, passed by the House and Senate last week, includes a reduction in the ethanol blending credit from 51 cents to 45 cents per gallon, the subsidy remains high and is offset by other biofuels production incentives.

President Bush plans to veto the bill, but both the House and the Senate passed it with more than the two-thirds majority needed to overturn a veto. The presidential candidates, Sens. John McCain, Barack Obama and Hillary Rodham Clinton, were all absent for the vote.

The bill increases the Food Stamp Program by $10 billion to help poor Americans buy food at higher prices, but there are no measures that will assure developing countries and international markets that global food supplies will be adequate and that prices will come down. Congress needs to endorse the World Food Program's new strategy of providing food aid in the form of cash instead of surplus grain shipments, a strategy that would allow food-deficit countries to purchase their calories regionally and thereby promote agriculture closer to home.

It also would be wise for the U.S. Agency for International Development to expand, not abolish, investments in agricultural research for low-income countries.

The world can produce plenty of crops at reasonable prices for food and feed, if appropriate agricultural investments are made. But it cannot produce enough crops for food, feed and fuel at prices affordable to half of the world's population.

Researchers at FSE have received a 3-year, $350,000 grant from the Rockefeller Foundation to study the potential effects of climate change on agriculture and food security in Sub-Saharan Africa. The Rockefeller funded work will seek to assess climate threats to staple food crops at a country level, quantify the sources of uncertainty inherent in these assessments, and determine what implications shifts in crop climates have for agricultural adaptation and genetic resources preservation - with the end goal of helping prioritize investments in agricultural development and food security under a changing climate.