Brand America Wears Thin

Cairo, the cultural capital of the Arab world, is a loud city. Car horns mix with calls to prayer from the city's minarets. When I visited earlier this year, what I heard from Egyptians sounded like a broken record. Conversations went like this: "Where are you from?" "New York," I always said first. "Oh, you're an American!" "Well, yes," I muttered. "See, I like you. I like Americans. It's the American government that is terrible."

Karen Hughes would probably sympathize. She was the State Department official encumbered with the task of boosting the image of the U.S. in the Islamic world who announced her resignation last week. A former NBC reporter and director of the Texas Republican Party, Hughes served President Bush for five years when he was governor. She was appointed two years ago, and other than her prior service to Bush, one has to wonder about her credentials. She had no experience as an ambassador, and more confounding, she speaks no Arabic.

According to a recent Pew survey of 7,200 people across the Middle East, America has an image problem. The U.S. is "wildly unpopular," and perceptions of the country are "abysmal." Indeed, we've come a long way since the immediate aftermath of 9/11, when the Middle East held candlelight vigils to show their solidarity with our grief. It's almost hard to believe how bad things have gotten, until you remember the arrogant bungling foreign policy that led us to war.

The war has instigated a rebellion at home, too. Hughes' colleagues at the State Department are revolting against forced service in Iraq. Resignations could be imminent. At a raucous, hour-long town hall meeting last week in Washington, veteran diplomat Jack Croddy stood up and said to a State Department official, "It's one thing if someone believes in what's going on over there and volunteers, but it's another thing to send someone over there on a forced assignment. I'm sorry, but basically that's a potential death sentence, and you know it."

The Cairenes I met know that reconciliation with the U.S. won't come from more of the same. The world won't be safe for our diplomats--let alone for the folks at home--until our administration fully grasps that.

There's a difference between diplomacy and deceit. The Egyptians know this. It's time for Washington to learn.

(Also published in Metro.)

Dancing Sudanese Women for UN Secretary General Ban Ki-Moon

New York Times UN correspondent Warren Hoge files a report from Juba in southern Sudan where Secretary General Ban Ki-Moon arrived today to a "raucous welcome." He'd come to ensure the lasting peace where, for more than 20 years, Christians had battled the Arab capital of the country, Khartoum.

10,000 UN peacekeepers are currently on the ground there, and Hoge reads into Ban's straightforward statement, "As you know well, this remains an essential--and fragile--cornerstone of peace across the whole of Sudan," a reference to a possible solution in Darfur, the region northwest of Juba where millions have been displaced and hundreds of thousands slaughtered. Genocide continues today.

Ban stepped off the plane and found himself faced with a crowd of dancing women and men in warrior headdresses.

It's clear that Ban is doing a bit of diplomatic dancing, warming up to Sudanese president Omar Hassan al-Bashir, and while he couldn't get Bashir to announce a full-on cease-fire (Bashir claimed security concerns), instead he'll work to "bring about" a cease-fire.

During the opening of the UN General Assembly in New York later this month, Ban will corral regional leaders for a "high-level meeting."

Talking abounds while reports trickle out about open conflict in the refugee camps.

60,000 Iraqis Are Now Fleeing Their Homes Every Month

On the heels of a New York Times report about an Iraqi Red Crescent Organization assessment that the number of internally displaced Iraqis has doubled since February, the United Nations High Commissioner for Refugees has announced that the humanitarian situation is worsening, and displacements are "soaring."

According to the UN, 60,000 people a month are now fleeing their homes. A total of 2 million are scattered within the country. More than 1.4 million more now live in Syria. Neighboring countries are feeling the strain on their infrastructure and schools. Refugees are also flooding into Europe, Jordan and Iran.

“Displacement is rising as Iraqis are finding it harder to get access to social services inside Iraq and many Iraqis are choosing to leave ethnically mixed areas before they are forced to do so," said UNHCR spokesperson Jennifer Pagonis in a statement. "Some Iraqis who stayed in the country until the end of the school year recently started leaving the country with their families.”

United Nations Installs David Shearer as Iraq Envoy, A Way Forward in Baghdad?

Following up on the United Nations' expanded role in Iraq (see earlier Inquirer report), UN Secretary General Ban Ki-moon has appointed New Zealander David Shearer as his deputy envoy to the torn nation. Shearer relieves Jean-Marie Fakhouri who was a Deputy Special Representative working on humanitarian, reconstruction and development. Shearer takes on that load, and additionally, he will serve as the UN Resident Coordinator and Humanitarian Coordinator.

Shearer had been working in Jerusalem and Lebanon for the last three years and has also led humanitarian operations in Albania, Rwanda and Liberia. In Lebanon, while he had to deal with Hezbollah, as to how he conducted his operations, he said, "We are trying  to work as much as we can through local government, particularly the municipalities, which are very close to the people. On occasion, we have worked with particularly effective local non-governmental organizations. We find the better way to reach the people is by working with the established authorities."

Only, in Shearer's new role in Iraq, anything resembling an established authority is fleeting. How will the UN move forward in Baghdad?

In a BBC report that compiles the mixed feelings over the UN's role, they report that, "The number of staff will only increase from 65 to 95 - a small but very symbolic step for the world body." While the US has been urging an increased UN role, but the obvious criticism surfaces quickly: George II's administration harps with a hollow voice after it shunned the international organization during the 2003 invasion.

Meanwhile, Zalmay Khalilzad, the US ambassador to the UN that helped to engineer the expanded UN role and, himself being a radical departure from his predecessor John Bolton, is shaping the discussion by highlighting the internationalism of the endeavor. Khalilzad's words from the BBC: "We in the international community have had our differences in regards to Iraq, but despite these differences I believe we all share our vision for Iraq's future."

Associate at the Center for Strategic and International Studies Johanna Mendelson Forman assesses the US's embracing of the UN as a possible sea change of US foreign policy: "It sends a signal to the world that the US is ready to engage and work with friends and allies – and also with its adversaries – to find a way to manage the crisis in Iraq and the region. The unanimous vote demonstrated a consensus by UN member states that only through a diplomatic engagement would the security that Iraqis long for be realized. It also underscored the skills of Khalilzad to bring back the members of the council to a point where they were willing to revisit a UN role. Is multilateralism making a comeback?"

Shocking that the US would reach out to the UN not only at a moment in a disastrous war, but also as the humanitarian crisis in Iraq grows to be one of the foremost on the planet? Perhaps this speaks directly to the heart of the matter.

Recently, just-retired British Permanent Representative to the UN Emyr Jones Parry suggested that the UN will bring a much-needed "impartial presence," responsible for what might conveniently be called the three R's: reconciliation, regional involvement and refugees.

It seems he's most certainly right, only, no matter if the staff were amped from 65 to 95 or to 950, does the mix of conflict, disaster and will for war between the Tigris and Euphrates today lend itself to even the finest political instrumentation of the UN?

Subprime Market Fallout Shakes Middle East

Earlier, the Inquirer pointed to tightened purse strings around the world because of the shoddy home loan market going bust in the US. Deals from Argentina to Japan have been put on hold, because financing has finally begun to discriminate.

In there a sour deal was listed in the United Arab Emirates. London-based Barclays bank had put the brakes on a $937 million loan to DAE Aviation, the Washington, DC subsidiary of Dubai Aerospace Enterprises Ltd. The company had wanted to buy some airplane maintenance companies from investment behemoth, the Carlyle Group.

And now it seems that the ripples of the subprime fallout are rolling deeper into Dubai.

Oil-rich investors in the Middle East have been making the best of depressed markets. For instance, Dubai World has just taken a $5 billion stake in MGM Mirage. At the same time, however, the Journal points to Emaar Properties, the maverick real estate company, which is taking a bit hit.

Emaar is one of the jewels in the crown of the Middle East economy. In a project for the UAE, Emaar is partway finished with the $20 billion Burj Dubai project, which will include the world's tallest building, the Dubai mall (Emaar says it will be the biggest in the world), and a serious of housing developments.

Emaar also has operations in the US, and in a conference call yesterday, Chief Financial Officer Amit Jain said that those operations were taking a hit on Emaar's bottom line.

According to the Journal, shares hit their lowest price in two years yesterday at about 9.75 dirhams, or $2.65. Emaar shares pulled on the Dubai bourse, which dropped 2.4%.

Lehman Brothers, other banks, and plenty of subprime lenders have already began firing staff. Could the subprime mortgage fallout prove to be more a kick in the shins than a full-on topple for the world economy?

(Image a rendering of the Burj Dubai.)

Let My Hedge Fund Thrive, Inshallah

While today in Iraq Muqtada al-Sadr may be perhaps on of the most popular Shia political figures, if not the most powerful, his pedigree makes his leadership all the more interesting. His father in law, Muhammad Baqir al-Sadr, who was a scholar and devoted to Khomeni's Islamic Revolution in neighboring Iran, actually wrote the book on Islamic economics.

Entitled, "Iqtisaduna," or, "Our Economics," al-Sadr critiqued both capitalism and socialism, claiming that Sharia law doesn't jibe with the western liberal ideals of private property. Instead, public and private property come from Allah. He wrote extended critiques of Marxism, and his economic worldview envisioned a system that was not only in line with the teaching of the Koran, but also reconciled the inherent contradictions of capitalism.

At the same time, there are nearly a billion Muslims today across the world, and the free-market system is making attempts to appeal to would-be investors. A recent front page piece by Joanna Slater in the Wall Street Journal investigates the 'Rent-a-Sheik' issue and asks, "Could a hedge fund be Islamic-friendly?"

Sharia law prohibits interest, as it exploits the borrower. Where are Muslims to invest, then? Der Spiegel tracked a new set of "Sharia compliant" mutual funds setup by Deutsche Bank late last year. Reportedly, DB is joining UBS, HSBC and Citigroup, who all have already made the same kind of venture.

Seeing that economies across the Middle East, mainly due to increased oil revenues, have been growing at more than 10% on average, Western bankers clearly see a demand. But how severe will the shifting be from emerging Muslim societies who face an opportunity to put their money to work and, at the same time, vow to act in accordance with a religious edict?

(An advertisement for Islamic banking in Kabul, Afghanistan.)