New Blueprint

Emergency manager Kevin Orr has issued his plan of adjustment for Detroit to emerge from Chapter 9 bankruptcy. The proposal is politically complex and, if approved, precedent-setting.

It's complex, because to help cope with $18 billion of debt and liabilities, and severely-limited city services, it calls for, inter alia, the creation of a $815 million rescue fund over 20 years for Detroit - a city for decades run by Democratic mayors and administrations - $350 million of which would be contributed by the Republican-run state government. Another $365 million would come from local and national foundations, and $100 million from the Detroit Institute of Arts, all these players coming together in a sort of "grand bargain". The plan would be precedent-setting, because it proposes to slash not only unsecured debt but, as well, pensions and health-care obligations, which until now, given the state constitution and legal precedents, have been considered promises to pay that cannot be broken.

When Detroit first filed for bankruptcy protection last July, many thought that holders of unsecured bonds might ultimately receive 10 cents on the dollar at best. Under Orr's plan they will get somewhat more - 20 cents on the dollar, with secured creditors receiving a full 100 per cent of their principal. Pensioners fare a little better - the pension checks of general retirees would be cut by 34% and those of the police and fire retirees by 10%, but only by 26% and 4%, respectively, if the pensioners agree to support the proposed $815 million "grand bargain". This is likely to be contentious: the Police and Fire Retirement System board of trustees said last week, "We believe Detroit can afford much better treatment of its pension beneficiaries who dedicated years of their lives in the service of the city".

And there are other contentious issues. State legislators must approve the state's $350 million participation in the rescue fund, and some have already made clear their conditions for support. Senate Republican Majority Leader Randy Richardville wants assurances that other Michigan cities won't be next in line. Other legislators are insisting that their support is contingent on the establishment of a regional water authority, overseen by a regional board. Orr's plan proposes just that; Detroit would cede control of its decrepit water system to a suburban-dominated regional authority in exchange for $47 million each year for 40 years. Suburban leaders, however, and especially Oakland County Executive L. Brooks Patterson, are at best wary of any long-term deal - water or otherwise - with the City of Detroit.

So Orr's adjustment plan should be seen as no more than a well-crafted first-draft blueprint - much more than an opening discussion, but hardly a final framework - that faces formidable political opposition, and public-sector union resistance, before its presentation for confirmation by US bankruptcy judge Steven Rhodes in mid-April. Nonetheless, Washington, and state and municipal governments throughout the country - most of which are also struggling to determine how to meet what are likely unrealistic pension promises to retired workers - are watching the Detroit story closely.

Splitting in Two

Looking very much like events in Cairo's Tahir Square over the past three years, the bloodshed in Kiev's Independence Square over the past few months has followed a sadly predictable pattern, deteriorating this week to the point where the government began directing its police, including even a few snipers, to shoot and kill Ukrainian demonstrators. Dozens have been left dead, and hundreds wounded.

Both the Egyptian and Ukrainian uprisings, either of which still has the potential of becoming a full-scale civil war, are in essence pleas for better government - more representative, more effective, or at least less repressive and corrupt. Unlike that in Egypt, however, the Ukrainian violence is, principally, just the latest manifestation of a country - of 45 million people that has existed as an independent country only since 1991 - that has been torn continually between East and West. This time, unlike last decade's Orange Revolution, Russia has had its man firmly planted in Kiev - President Viktor Yanukovych - who last November rejected a proposed free-trade agreement with the EU, and who has since then directed the onslaught against his own citizens. They, in turn - especially those in the western (and westernized) half of the nation - have said "no more" to Moscow's influence, and instead see a path to greater freedom only through closer economic and political alignment to Western Europe.

The West of course agrees. America implemented visa bans and asset freezes pertaining to President Yanukovych's men; the EU yesterday imposed similar sanctions. Perhaps these had some impact, because today, after "all-night-talks" involving the Ukrainian President, Ukrainian opposition leaders, a key Russian diplomat, Vladimir Lukin, and, notably, a power-troika consisting of the EU foreign ministers from Germany, France and Poland, a deal has been signed that creates an interim coalition government, early Presidential elections, and a reduction of the President's constitutional powers. President Obama, making it clear during a press conference yesterday at the North American leaders' summit in Mexico City that Ukraine (and Syria) should not be used by Russia as "cold war chessboards", spoke "candidly" today with Mr. Putin, reiterating the point.

For now, the killing in Independence Square has stopped. Hope is that calm will hold, though protesters remain in the Square. But, as in Egypt and elsewhere, the difficult issue, after all the bloodshed, is - what's next? America's feeble, often naive foreign policy is not likely to provide much consistent direction. The Ukrainian opposition, which on most matters rarely speaks as a single voice, has all along insisted on President Yanukovych's resignation and arrest. That is not part of today's deal (although as this note is being written, there are reports that the President has left Kiev). Moreover, there is no obvious leadership alternative even if the President did resign - Yulia Tymoshenko, the jailed opposition leader and a former Prime Minister who as part of today's deal will be released, has discredited herself, and is hated in Western Ukraine. And there just aren't any other candidates who could possibly bridge the nation's fundamental cultural and political divide.

Today's deal is, thus, fragile at best. So is the Ukrainian economy, with rapidly growing government and current account deficits and plunging foreign exchange reserves. Standard &Poor's downgraded the country's credit rating today to CCC, eight levels below investment grade, and expressed their concern for imminent sovereign default.

 So, the months of violence and today's agreement in Kiev leave two basic questions - first, is economic collapse looming (watch for the news that an IMF bail-out team is heading to Kiev), and secondly, is there any chance the Ukrainian people can re-start the process of determining their own destiny while avoiding the splitting of the country in two? Ukrainians may wish to recall Abraham Lincoln's prescient pre-civil war warning: "A nation divided against itself cannot stand".  

"Yes" or "No"

On Thursday, September 18, 2014, Scotland will vote in a referendum. Seven hundred years after the Battle of Bannockburn, in which the English army was defeated by the King of Scots Robert the Bruce during the wars of independence, and some 300 years after Scottish unification with England, about 4 million people (anyone living in Scotland who is at least 16 years old, and armed forces members serving abroad) can vote, yes or no, to this question: "Should Scotland be an independent country?". (Quick primer: the UK government gave temporary powers to the Scottish Parliament to hold the referendum under Section 30 of the 1998 Scotland Act, a piece of legislation that established the Scottish Parliament.)

So the campaign is underway, and it's full-speed ahead: Yes Scotland is the official campaign for independence; Better Together is the opposition. Just this week, the rhetoric kicked up considerably, with UK Prime Minister David Cameron, Chancellor George Osborne, Bank of England Governor Mark Carney, Scottish First Minister Alex Salmond, and even Irish Sinn Fein President Gerry Adams, all entering the debate. Mr. Cameron set the tone, speaking emotionally from the Olympic Park in London last Friday, noting that he could not, with his Scottish heritage, bear to see the country "torn apart", and that "all 63 million of us (living in the UK) are profoundly affected" by the referendum. He cited "four compelling reasons" to save the Union: the economic benefits of being a bigger country, greater international clout, connections between people, and the cultural impact of the UK. Mr. Salmond replied that the Prime Minister was merely lecturing to Scottish voters in a "sermon from Mount Olympus".

A less emotional discussion was presented by Chancellor Osborne and Governor Carney, who focused on the issue of an independent Scotland sharing the pound sterling. This is something Scottish First Minister Salmond sees as feasible and sensible, given the close integration of the two economies. Mr. Osborne disagrees: "The pound isn't an asset to be divided up between two countries after a break-up, like a CD collection", he said, and if that weren't clear enough, he commented, "If Scotland walks away from the UK, it walks away from the UK pound", and that "there's no legal reason why the rest of the UK would need to share its currency with Scotland". Governor Carney, speaking two weeks ago in Edinburgh, was at one time thoughtful, technical, yet stark, in his warning that the failings of the Eurozone - especially the sovereign debt crises - show that a successful monetary union requires fiscal and political union, just what Scottish independence would erase.

Governor Carney's rational argument notwithstanding, the independence issue is highly-charged, and the recent onslaught from Westminster deriding Mr. Salmond's no-pain vision of independence could deal a death blow to the concept, or just as easily provoke a nationalist backlash from the Scots. Polling data (of which there are no shortages) do not yet provide any clear evidence for either side - Scottish voters prefer the Scottish National Party (SNP) when they vote on the composition of government in Edinburgh, but are not necessarily convinced that independence from the rest of the UK is best.

They have a few months to decide. Expect lots more polling and debate - rational and emotional - before the September referendum.

An Indictment

The United Nations' Convention on the Rights of the Child (CRC), which came into force in 1990, establishes fundamental, child-specific needs and rights: it requires the state to act in the best interests of the child (rather than treating children as possessions or chattels), obliges the state to allow parents to exercise their parental responsibilities, acknowledges that children have the right to his or her own name and identity, to express their opinions, to have a relationship with both parents, even if they are separated, to be protected from abuse, and to have their privacy protected. It also forbids capital punishment for children. Since its introduction, the Convention has been ratified by 193 countries (that is, virtually all members of the United Nations, except Somalia, South Sudan and the United States), which means these nations are bound to the Convention by international law, and that their governments are required to report periodically to the United Nations Committee on the Rights of the Child. The Committee, in turn, submits written, though non-binding, views and concerns. 

One such written view - an especially blunt and wide-ranging one - was issued yesterday, this one pertaining to a periodic report from one of the ratifiers of the Convention, the Holy See. The Committee began by noting that the Holy See's submission, received early in 2013, was delivered, regrettably, "with considerable delay" - that is, some 14 years after it was requested. Within the context of years of revelations of sexual abuse of children by Catholic priests, including most recently in Europe in 2010, the UN committee decided to spend most of 2013 not only reviewing the Holy See's report, but listening to its delegation. Yesterday, in their written assessment, they welcomed the "willingness expressed by the delegation...to change attitudes and practices", looking forward to the "adoption of prompt and firm measures for the concrete implementation of its commitments".

But the committee's conciliatory tone stopped there. The remaining 15 pages of their assessment of the Holy See's adherence to the Convention constitute an extraordinary, broad indictment. Thus, it urges the Holy See to, inter alia, abolish the discriminatory classification of children born out of wedlock as illegitimate, to refrain from using terminology that could challenge equality between girls and boys, to encourage, through legislation and policy, the recognition of a child's right to be heard in relevant legal proceedings, to assess the number of children born of Catholic priests and to ensure the rights of these children to be cared for by their fathers while refraining from confidentiality agreements when providing their mothers with financial support, to address the anonymous abandonment of babies by providing family planning, reproductive health and counseling to prevent unplanned pregnancies, to investigate internally the conduct of religious personnel working in the Magdalene laundries in Ireland and in all other countries where this system was in place to thereby ensure that those responsible be reported to respective judicial authorities for prosecution, to explicitly oppose all corporal punishment in child-rearing by amending Canon Law, to develop clear guidance and training on when and how to refer child abuse and neglect to investigative authorities, and to investigate all allegations of children being separated from their families through psychological manipulation by such Catholic institutions as the Legion of Christ, insisting all such activity cease. The Holy See should also review its position on abortion which places obvious risks on the life and health of pregnant girls, and should ensure that Canon Law recognizes the diversity of family settings.

However frank these and several more recommendations are, the most scathing commentary in the UN review is reserved for the matter of sexual exploitation and abuse of children committed by members of the Catholic churches which operate under the authority of the Holy See. The committee is "gravely" concerned, then again expresses its "deepest concern", noting that clerics "have been involved in the sexual abuse of tens of thousands of children worldwide", and "the Holy See has not acknowledged the extent of the crimes committed, has not taken the necessary measures to address cases of child sexual abuse and to protect children, and has adopted policies and practices which have led to the continuation of the abuse by and the impunity of the perpetrators". Even when addressed, such abuse has been dealt with as "grave delicts against the moral"  through confidential proceedings and a code of silence that in most cases have allowed the guilty to "escape judicial proceedings".

Preliminary press reports suggest the Vatican is angry, even outraged and infuriated, that the UN would presume to weigh in on its doctrine and criticize its teachings. It has accused the committee, comprised of 18 experts including child welfare advocates and academics, of demonstrating an ideological bias, and of being unduly influenced by gay rights groups. Silvano Maria Tomasi, the Vatican's permanent observer at the United Nations in Geneva (where the CRC is located) said this: "Trying to ask the Holy See to change its teachings is not negotiable".

If such a defiant, defensive approach truly reflects the Vatican's underlying sentiment and strategy, then it is difficult to imagine the extent to which anything will change by September 2017, when the UN committee has invited the Holy See to submit an update.

Searching for Peace Again, in Addis Ababa

Civil war is brewing again in the Sudan, and once again the Ethiopian government is trying to stop it.

Civil war in the Sudan is not new. The country's first began in 1955 - just as the Sudan gained independence from British and Egyptian rule - and lasted 17 years, ending with the 1972 Addis Ababa Accord that granted a degree of autonomy to the southern part of the country. It worked, mostly, for about a decade. Then, in 1983, Sudanese President Nimeiry cancelled the autonomy arrangements and moved to take control of the oil fields that straddled the north and south. He also decided that all of Sudan, including the non-Muslim south, was to become an Islamic state under Sharia law. Thus began the second Sudanese civil war, with the south's Sudan People's Liberation Movement rising up against Khartoum. For the next 22 years, as many as 2 million people would die, another 4 million be displaced, some 200,000 women and children from southern villages be taken into slavery in the north, and thousands of children be recruited into the armies. Despite cease-fires, peace accords and regime changes in both the north and south, the war and its atrocities would rage on, with mass starvation a constant threat. It would even become overtly international in scope through the 1990's when President Clinton finally declared Sudan a rogue state, in part because of the al-Bashir government's earlier support of Saddam Hussein in the Gulf War.

It wasn't until 2005 that a Comprehensive Peace Agreement was signed, in Nairobi, ending the conflict. Autonomy for the south was re-established for 5 years, following which a referendum would be held in the south to determine the region's independence. Ninety-five per cent of those who did vote in 2011 opted to secede from the north, and the new country of South Sudan was thus born. At the time, given the decades of human misery in the region, many thought that fundamental resolution had finally been achieved through independence for the south, and that development of the new country's vast oil reserves and fertile agricultural lands could, with international aid and trade, proceed.

But in recent months it has become increasingly evident that the years of fighting between the north and south are being replaced not by economic development, but by yet more violence, both within Sudan, and within South Sudan. The latter is now close to morphing into full-scale civil war along purely ethnic lines. President Kiir's Dinka faction are battling sacked Vice-president Machar's Nuer ethnic group, with the inevitable results: the United Nations announced yesterday that it believes several thousands of people are dead, some 3.7 million are in acute need of food, and nearly a million are displaced from their homes. Evidence of just how desperate the need for food has become emerged again late last week in Malakal, a city in northeast South Sudan: UN warehouses, where the World Food Program (WFP) had stockpiled 1,700 tons of food aid, were stripped completely over just a few days by thousands of people - from soldiers and rebels to ordinary civilians - loading their loot into anything with wheels, including donkey carts. This was, moreover, just the latest of a dozen looting attacks, with some 4,400 tons of food stolen from the WFP, leaving the agency wondering if it can proceed.

According to the WFP, South Sudan now has the distinction of constituting a "level three" emergency, along with just two other countries in the world today - Syria and the Central African Republic. As in earlier decades, attention is focused on the Ethiopians, Kenyans and Ugandans, in the hope that they can once again mediate a truce, this time between South Sudanese factions. A cease-fire was signed on January 23 in Addis Ababa. But with an increasingly militant and dictatorial President in Juba, and a former Vice-president who is currently in a bush hideout, and who in one fashion or another has been entrenched in guerrilla warfare for decades, prospects of making it stick, and resuming the peace talks, are anything but hopeful.