Few understand this better than Pim Fortuyn, an openly gay, shaven-headed former Marxist with a liking for lap dogs and exquisitely tailored suits. He travels around in a chauffeur-driven Daimler. Home is a marble-floored villa in central Rotterdam where his family standard flies from a flagpole in the front yard. But in anything-goes Holland, it’s not Pim Fortuyn’s lifestyle that attracts comment. It’s his politics. The 54-year-old former columnist wants an end to all immigration and the reimposition of border controls. He describes Islam as a “backward culture.” What’s more, he says, “the Netherlands is full.”
The Continent is looking and sounding very much like Fortress Europe these days. And the sound and fury is coming from all over–not just France, where the right-wing extremist Le Pen made such a surprisingly strong showing. On May 5, he will face Jacques Chirac in a runoff election for president. Two weeks later Fortuyn’s newly formed party, Pim Fortuyn’s List, which won 17 of 45 seats in municipal elections in Rotterdam in March, will flex its muscles in national elections. Never mind that Le Pen and Fortuyn–the “polished demagogues of our time,” the writer Ian Buruma calls them–will be buried under an avalanche of opposition. The important point is that they cannot be written off.
Call it the Fear Factor–an emerging awareness of the social conundrum at the heart of modern European life. That’s the economic necessity of immigration colliding with a visceral and widespread unease about immigrants. Alarm bells are sounding everywhere. From Athens to Dublin to Oslo, anti-immigrant sentiment is growing, especially among the working classes. For years the Continent’s hungry economies have drawn laborers from around the world. And if immigration scholarship has demonstrated anything, it’s that supply and demand are migration’s masters. Yet one government after another has sought to restrict immigration, rather than wisely manage it. They’ve rather ineffectively tried to close some doors, and not opened others that should be. Andrew Geddes, a migration expert at the University of Liverpool, describes the strategy as the “the logic of closure,” and it has backfired spectacularly.
What’s happening, says French demographer and political analyst Emmanuel Todd, is the product of decades of bad policy–resulting today in nothing less than “the rebirth of class conflict.” For too many years, French politicians have either taken working-class voters for granted (on the left) or (on the right) considered them out of reach. Le Pen built on this de facto disenfranchisement, winning support point by point from single digits in the early 1980s to 15 percent of the vote in 1995 and almost 17 percent on April 21–enough to edge out socialist Prime Minister Lionel Jospin. Combine Le Pen’s support with mass defections from the mainstream socialist and Gaullist parties (plus the 11 percent won by Trotskyist candidates on the extreme left) and you have what amounts not only to a stunning protest vote but also a sign of coming social upheaval. “It’s like an iceberg coming out of the sea,” says Todd.
The Le Pen Effect is already having dramatic impact. Along with the windy rhetoric from leading parties and statesmen, condemning Le Pen and all he stands for, there were also some none-too-subtle jumps to the right. Britain’s Labour government, for example, quickly promoted hard-line legislation designed to crack down on asylum seekers who were, in the words of one minister, “swamping” schools and doctors’ offices. Failure to act against foreigners who are stretching public services, he added, would be handing a “firelighter” to Britain’s small but rabidly anti-immigrant political party, the British National Party.
The impulse to talk tough is understandable. Polls and elections across Europe reveal a hard core of discontent, not only over immigration but also two hot issues often associated with it–globalization, seen as a cause of immigration, and rising crime, presumed to be an effect. To many Europeans, it’s no accident that crime has risen sharply with an influx of immigrants. And consider these disturbing results from a Eurobarometer survey in 2000: about a quarter of all Europeans report that they are dissatisfied with the idea of a society made up of different races, religions and cultures. Half would reject the American idea that multicultural diversity is a source of social strength. In Norway, Denmark and elsewhere, politicians have responded by moving right in immigration–a key factor in the triumph of center-right governments or coalitions over the past year.
If Emmanuel Todd is correct, this may only be beginning. Greece, for instance, has no extreme right-wing party of consequence, but the immigration issue has given birth to a potential one: the Hellenic Front. The Front got only about 10,000 votes in national elections two years ago. Nonetheless, the fear factor in Greece is especially pronounced–perhaps because of the shock left by the caravans of immigrants who added 10 percent to the country’s 10 million population in just a decade. Take Dimitra, a first-year university student who doesn’t want her family name used. She says her mother was laid off from her factory job, only to be replaced by a Romanian woman who earns half of what her mother did. Dimitra turned to the Hellenic Front because none of the mainstream parties seemed to want to deal with her concerns. “Until recently,” she says, “I was totally indifferent to politics and then I realized the daily injustices around us.” Dimitra is not alone in her disaffection. In a poll after the French elections, nearly 12 percent of Greeks surveyed said they would vote for a far-right party like Le Pen’s if they could.
The Germans have a word all this: Uberfremdung, or, roughly, overforeignerization. As if attitudes inside the EU weren’t already complicated enough, EU expansion into Central and Eastern Europe over the next half decade is a source of yet more concern. “There’s a fear that there will be large-scale migration into Western Europe,” says Geddes.
Here the fear factor is almost certainly unwarranted. When Spain and Portugal entered the Union, for instance, similar warnings were heard. Yet not only did the feared flood of migrants seeking work in the north not materialize, a sort of reverse effect was revealed: that former emigres tend to return to countries whose economies flourish once they become part of the EU. Yet that reassuring precedent seems to carry little weight among today’s Cassandras. Because of the politics of fear, the EU plan now is to delay full “freedom of movement” provisions until seven years after expansion takes place.
To give politicians some credit, they are sandwiched between the rock of economic imperatives (there will be immigration) and the hard place of political reality (over my dead body). But ultimately they have no choice. “Politicians will have to be bolder and sharper,” says Charles Grant, director of the Center for European Reform in London. “They’re going to have to talk about subjects they are uncomfortable with–because not talking about them at all will be disastrous.”
Here in a nutshell is the real problem. As Richard Medley points out in an essay concluding this package, Europeans have for the most part not been able to freely and openly debate this most profound and sensitive social issue, except by casting a protest vote. In this sense, Le Pen’s success can be viewed as an opportunity–even a good thing. With luck, it will open up healthy public debate. This is critically important, because many Europeans do not realize how dependent they have become on immigration–nor how much more dependent they will be in the future.
Consider what draws immigrants in the first place–the so-called “pull effect” in the social equation. It’s economic. Europe offers jobs, and it needs immigrants to keep its economies humming. One reason the United States outperforms Europe is that its labor force absorbs many more newcomers, and that immigration itself fuels growth. Consider also demographics. The PricewaterhouseCoopers European Economic Outlook 2000 report estimates that the European Union, with some of the lowest birthrates in the world, will need about 1.4 million immigrants a year to counteract the downward trend in the working-age population, expected to fall by about 56 million between 2010 and 2050. By itself, the fastest-growing EU economy–Spain (population: 40 million)–needs 10 million immigrants over the next five decades to keep its labor force viable, according to a U.N. report.
The failure of governments and politicians to address this “other half” of the immigration dynamic has left Europe in “a right old mess,” says Yasmin Alibhai-Brown, a writer on such matters in London. She is distressed by the failure of political leaders to deal with immigration “in the round.” Displaying “a complete lack of vision,” she says, they are being “appallingly hypocritical–knowing immigrants are needed but claiming they’re unwanted.”
Can Europe wake up? Perhaps, but doing so will require Europeans to accept that “immigration is inevitable,” says Geddes. Despite last week’s uproar, there have been encouraging signs. A small one came last week when EU interior ministers agreed on initial steps to “harmonize” national policies on asylum and establish a common immigration policy by 2004. But the deeper problem is psychological, tapping into hidden wells of cultural identity. Unlike America, notes Aristide Zolberg of the New School University in New York, Europeans do not have a deeply ingrained tradition of ethnic assimilation. There is no myth of the melting pot that shapes its identity as a “nation of immigrants.” That’s more than a matter of passing a few smart laws and tinkering with a system that’s already profoundly broken. For Europe to think of itself differently will require a major social transformation–and no small amount of courageous and enlightened political leadership.
title: “The Fear Factor” ShowToc: true date: “2023-01-24” author: “Eduardo Chandler”
Two teenage girls, relatives of the dragooned voters, stand in the gate of their home and observe the roundup. They’re surrounded by a clutch of small boys and girls. “We told them we weren’t registered to vote here, and anyway, they couldn’t force us,” 17-year-old Haseena says. “But they wouldn’t listen.” The soldiers took a 21-year-old brother and a 19-year-old sister from Haseena’s house. Asked why the people of this area didn’t want to vote, Haseena averts her dark eyes. A small boy pipes up: “If they vote during the day, the militants will come at night and chop off our heads.”
The state elections in Jammu and Kashmir–which began last week and will continue until the fourth and last phase is completed on Oct. 8–are seen by some as a potential first step in resolving the 55-year-old Kashmiri conflict, which has claimed some 60,000 lives and sparked two wars between Pakistan and India. (More than 155 people, including 64 civilians, have been killed just in the past month.) A free and fair vote to the 87-person state Assembly, the theory goes, could produce legitimate representatives of Kashmir, who could then help negotiate the fate of the disputed territory. In July, Secretary of State Colin Powell raised hopes in Kashmir–and the prospect of fresh engagement by Washington–when he said the election could be the beginning of “a process that addresses Kashmiri grievances.”
But these elections–held under virtual military occupation in an area under assault by terrorists–are not about hope; they’re about desperation. Residents of the overwhelmingly Muslim Kashmir Valley live in a state of siege, caught between the often brutal Indian security forces and armed militants who routinely kill civilians deemed to be enemies. New Delhi is eager for a high turnout to lend legitimacy to its rule. The jihadis want the elections to fail, and have warned people not to participate. Many Kashmiris are complying with that edict, either out of fear or because the separatist candidates whom they might support have boycotted the Assembly election.
The militants are supported by Pakistan, which claims that all of Kashmir should have been part of its territory at the time the country was partitioned from India in 1947. But Pakistan, India and the Islamic militants don’t seem to represent the popular will of ordinary Kashmiris. According to a credible poll conducted for the Indian magazine Outlook in 2000, 82 percent of people in the valley support a “ceasefire as a prelude to political dialogue,” and roughly three quarters favor “a separate identity” from both India and Pakistan.
It’s not hard to see why Kashmiris want azadi, or freedom. Indian soldiers last week patrolled roads, manned positions among orchards and forests, turned shops into bunkers and built foxholes and sandbagged gun emplacements around polling stations. Even more than usual, Kashmir seemed like a vast, armed camp. Soldiers in several areas made announcements on mosque loudspeakers to call people out to vote, sometimes threatening those who did not, according to locals. In some instances, they used force. “We call this gunshot democracy,” says Parvez Imroz, a prominent human-rights activist who has been threatened by both security agents and extremist groups, and was shot in the back by militants in 1995. “Fear is the basic factor here–implicit and explicit fear.”
Shortly after Haseena’s relatives were marched off, a man from the nearby village of Aham-e Sharief wandered up the road in torn and blood-splattered clothes, his cheek bruised. Mohammad Qasim Shah explained that the blood had come from his brother’s face. That morning, at around 11:30, Indian soldiers had come to their house to round up voters, and beat up both men with gun butts, he said. Qasim’s brother, Mohammad Said Shah, had a badly swollen nose covered in tape. Dried blood still speckled his mustache and lips. “I was shouting for help, bleeding profusely,” said the 30-year-old bank employee, his quivering hand holding a bloody rag. “I became unconscious. After that, I know nothing.” Shah’s sister Zubeida, 25, said that the soldiers beat her brothers in the yard behind their three-story mud-brick and cement house, next to a thatched hut that covers dry wood and hay for the family’s five cows. When she tried to intervene, she says, a soldier pushed her, then picked up a stick and whipped her with it. Mohammad Yasin Shah, a 65-year-old neighbor, says the soldiers later took the identification cards of some of the villagers and told them to collect their IDs at the polling station or lose them.
The choice facing those who wanted to vote in Shah’s village underscores why many Kashmiris are disillusioned with this election. The two main candidates are both “surrendered militants.” These are men who’d joined extremist groups in the one third of Kashmir controlled by Pakistan, climbed across the mountainous border with a militant squad and later turned themselves over to the Indian Army. Kashmiris suspect that some surrendered militants, who are also called “renegades,” were probably double agents, and joined the extremist groups as Indian spies. Others apparently decided that they didn’t want to die for a cause they didn’t fully believe in. India welcomes and rewards militants who turn themselves in, sometimes allowing them to form their own private militias. “These people talked of the freedom struggle some time back; now they are talking in favor of India,” says a schoolteacher in the village of Kaloosa. “They’ve taken money from both sides, and we’re just getting killed.”
The Islamic extremists have declared open season on pro-India candidates and activists, and have also targeted independents. Two candidates have been killed–one of them a state minister of Law from the ruling National Conference Party. One of last week’s victims was Ali Mohammad Dar, a 60-year-old National Conference Party worker. Assassins shot Dar with three bullets at close range at 10:33 a.m. on Wednesday in the summer capital, Srinagar; he fell down dead on a dirt street where sheep graze amid garbage. His family said he’d gone out to buy books for some of his eight grandchildren. “We innocent people are crushed,” said Farooq Lone, Dar’s nephew, who was at the family house for the first of four days of mourning. “We don’t know at any time what will happen to us from any agency, whether from the militants, or the Army or renegades. Nobody is safe.”
Pakistan has vowed to crack down on armed groups in its territory and to stop cross-border infiltrations. But it also insists on the right of Kashmiris to fight against Indian rule, and says it cannot possibly stop all incursions along the remote border. Indian officials say the incursions slowed in early summer, but have since picked up again. Pakistan-based militant leaders seem mostly unfazed. Syed Salahuddin, a former political candidate in Srinagar who took up arms after the massively rigged 1987 elections, now heads the Hizbul Mujahedin from his headquarters in Pakistani Kashmir. “No army in the world can stop Kashmiris from crossing into their own territory,” he says. “There is no shortage of fighters in Kashmir and we can keep fighting Indian forces for many more years without any outside help.”
Foreign mujahedin, many of them hoping to create a fundamentalist empire across the Islamic world, are both admired and loathed in the Indian-ruled valley. When Indian forces kill foreign fighters in the area of Baramula in northern Kashmir they hand the bodies over to the village of Kitchama, where the locals have agreed to bury them without a fuss. Dozens of earthen mounds, some with rocks as headstones, mark the final resting place of extremists from Pakistan and Arab countries; at least one man came from as far as Sudan.
Young men in the village say they admire the foreign militants because they fight against Indian rule in Kashmir, but don’t support their radical fundamentalist ideology. “There is hardly anyone in our village who has not been beaten by the Army,” says a bearded man named Mohammad who shows scars on his leg where he claims Indian soldiers burned him over the flame of a kerosene stove. Other men crowd around to tell their own horror stories. “We don’t want the militants to rule us,” says one man who says he once was part of a jihad group. “We want independence from both India and Pakistan. The militants came to help us. We don’t want anything from them beyond that.”
The leaders of separatist parties have said they would participate in elections only under certain conditions. The main one is that the voting be held specifically to elect a group of representatives to negotiate the final status of Kashmir. “If we participate in these elections we will lose our credibility, our political morality,” says Abdul Ghani Bhat, the chairman of the All Parties Hurriyat Conference, the separatist umbrella group. “We’ll be gone, finished.” A handful of separatist politicians are running as independents, which many Kashmiris and foreign diplomats take as an encouraging sign. Like most Kashmiris, the independents are exhausted by the violence, and hope to achieve Kashmiri self-determination by peaceful means.
One of the more prominent of the separatist candidates, Ghulam Mohideen Sofi, says he hopes Washington will get more involved in nudging all sides toward negotiation. “My agenda is to push for dialogue on Kashmir,” he says, sitting in a courtyard crowded with supporters. “There are basically three parties: Kashmir, India and Pakistan. We have to reach a stage where we can sit down and talk about a final settlement.” Sofi’s political mentor had similar aspirations, and worried the Kashmir movement for self-determination was being hijacked by foreign terrorists. He was gunned down on May 21. During the campaign, Sofi wore a bulletproof vest and was accompanied by Indian Army guards. His principles may get him elected–or, just as easily, killed.
title: “The Fear Factor” ShowToc: true date: “2022-12-18” author: “Daniel Romero”
Three weeks later the price of oil remains well above its long-term trend, closing at about $39 last week, and concern remains high over how long this shock will last. Each $10 rise in the price of oil takes an estimated 0.5 percent off world GDP growth, so the stakes are huge. According to the International Energy Agency, world oil supply is more than meeting demand, so many analysts believe the main driver of current prices is psychology: the market is inflated by fear.
To get a handle on this phenomenon is not easy. The risk premium is a slippery measure, not hard information stored in a database somewhere. Though it’s widely accepted and now hotly discussed in oil markets, many serious economists think the premium is a fiction, invented by lazy analysts to explain why their price predictions often fall so far off the mark. But let’s assume, for the sake of understanding how terror hits markets, that it is possible to strip out and measure its influence. To help psychoanalyze the current market, NEWSWEEK asked the World Markets Research Centre in London to estimate how much geopolitical risk contributed to the decision to buy oil for each year going back to 1970 (chart). The results suggest that the market has been at least as, if not more, driven by fear in the past–and that the future is bleak.
The oil shocks triggered by the Yom Kippur war in 1973, the Iranian revolution in 1979, the 1986 Iran-Iraq tanker wars and the gulf war in 1991 all produced price spikes in excess of what could be explained by the disruptions of supply. In each case, according to the WMRC, the risk premium spiked and accounted for at least 30 percent of the total price. The WMRC believes it was back up to 25 percent at the $42-a-barrel peak.
Yet the nature of the risk has changed. There is nothing markets hate more than uncertainty, and Mohammed Ali-Zainy, a senior energy analyst at the Centre for Global Energy Studies in London, notes that earlier Middle East shocks “were centered around governments, rather than the more unpredictable threat of terrorists.” True, the Yom Kippur war led to the creation of a cartel that wrest-ed control of the global market from Western oil companies and quadrupled prices in one hot summer. But OPEC would evolve into a force for price moderation and global stability–a trajectory Al Qaeda seems unlikely to follow.
Since no one can say when the war on terror will end, the fear factor now has a permanence that is entirely new. Even the obliteration of a major national oil industry in the Iranian revolution, which led to a record high of $75 a barrel (in today’s dollars), “was a singular, quantifiable event, not a nebulous threat,” says John Felmy, chief economist for the American Petroleum Institute. The same is true of the shocks of ‘86 and ‘91; they were passing events.
The first U.S. war with Iraq may have been the leading example of a largely psychological oil shock. When Iraq invaded Kuwait in August 1990, and the West embargoed all 4.6 million barrels per day of Iraqi and Kuwaiti oil, there was more than enough spare capacity in the world to cover the shortfall. Yet, blindsided by the invasion, and fearful of the Iraqi troops massing at the Saudi border, companies started stockpiling oil, bidding prices up from $20 to a peak of $41 by October–even though the net oil-supply disruption was zero. “At that point, most of it was fear factor,” says Lowell Feld, an analyst at the Energy Information Administration, an independent research arm of the U.S. Energy Department.
The legacy of earlier oil shocks has heightened the fear factor this time. In the past, the oil producers responded to price booms by investing in new facilities, creating excess capacity that magnified the ensuing price drops. Eventually producers became extremely wary of building new capacity. Since 1981 the world’s spare production capacity has fallen from 12 percent of total global consumption to just 2 percent. Virtually all of that spare capacity is in Saudi Arabia, the target of five major terrorist attacks in the past 12 months. “Psychology is extremely important right now, more so than normal,” says Ed Silliere, risk-management chief for Energy Merchant Corp., a New York trading firm.
If markets hate uncertainty, speculators like nothing better. Since 1983, when the oil-futures market was created, speculators have flooded into the game. The number of futures contracts held by hedge funds–which seek high returns for high-income investors–has doubled in the past two years. “Hedge funds are adding a level of volatility in the market that wasn’t seen during crises in the 1970s,” says Citibank analyst Peter Lynch. Yet those who blame this year’s run-up on hedge funds and other speculators are mistaken: according to the New York futures exchange, speculators were net sellers of oil from January until June 8, which would tend to drive the price down.
The notion of a risk premium itself is very controversial. The believers calculate the premium using models that factor in the components of oil prices–the balance of supply and demand, inventory levels–to produce an “equilibrium level price.” Anything above that is assumed to be the risk premium. MIT economics professor Robert Pindyck dismisses that definition as “nonsense.” The price of oil on the futures market can be moved only by adjustments in supply and demand for the underlying commodity. “The only way to translate ‘worry’ into a price in the oil market is to buy and hold more oil,” says Pindyck.
That worry was abated when Saudi Arabia pledged more oil production June 3. Then last week, when attacks on Iraqi facilities knocked out some 1.5 million barrels a day in capacity, prices barely budged, suggesting that markets had already priced in the possibility of attacks on this scale in the war zone. Silliere says if the attacks had happened in Saudi Arabia, oil prices would have been “blown away.” William Ramsay of the International Energy Agency says the markets aren’t likely to send prices skyward again unless there is a “step change” in the level of terror attacks on oil facilities. And until the war on terror subsides, no one knows when or if that day will come.
