In its Oct. 6-12 number, the venerable Cairo Al-Ahram covered a conference in Washington, D.C., on the connection between terrorism and poverty, called "Beyond Bullets: Economic Strategies in the Fight on Terrorism."[1]  --  The conference was almost entirely ignored by the U.S. mainstream press, though the Philadelphia Inquirer did do a piece on Richard W. Vague, the Philadelphia banker who originated the conference.[2] ...



By Paul Wulfsberg

** With growing public and elite consensus that military action alone is unable to stop terrorism, the New America Foundation convened last week in a conference on the economic response to terrorism **

Al-Ahram Weekly Online
October 6-12, 2005

WASHINGTON -- Insufficient education and economic underdevelopment are often blamed for providing what is typically termed a "breeding ground" for extremism. Tackling terrorism by fighting poverty was the subject of a conference entitled "Beyond Bullets: Economic Strategies in the Fight against Terrorism," hosted on 21 September in Washington. Organized by the non-partisan New American Foundation, the conference featured an all-star lineup of experts from the fields of media, academia, and politics, with Peruvian economist Hernando de Soto acting as the keynote speaker.

To counteract the radicalizing process of disempowerment and exclusion, Harriet Babbitt, the director of Women Waging Peace, proposed focussing on the question of how to bring political organizations that have used violence at some point, such as Hamas, Hizbullah, and the Muslim Brotherhood, "into the system." CNN terrorism analyst Peter Bergen also took a conciliatory approach, arguing "Islamists are a potential ally" for United States interests in the region.

Sherle Schwenninger, founding editor of World Policy Journal, also pinpointed unfulfilled economic expectations as a culprit. "[Educated youth] have a choice between driving a taxi in London and driving a taxi in Cairo, and they perceive neither as suitable to their middle-class aspirations."

Explicitly rejecting the World Bank and IMF as ideal guides for developing countries, Schwenninger argued "there is no substitute for huge public works in the Middle East to put people to work." He clarified that jobless youth should be put to work in New Deal-style programs improving infrastructure rather than creating useless bureaucratic positions. "I know it's out of ideological favour but it makes a lot of sense."

One recurring issue at the conference was the dilemma posed by Nikolas Gvosdev, editor of The National Interest, who asked whether a benign authoritarianism such as that in Singapore was preferable to a democracy unable to provide economic security, such as Columbia. Gvosdev interpreted National Security Advisor Condoleezza Rice's speech in Cairo last June as a sign that the Bush administration has decided to discard the friendly authoritarian model.

De Soto rejected both what he labeled as "electocracies" which had nominal or even competitive elections without having a truly representative government, and authoritarianism, benign or otherwise, pointing out that authoritarianism offers no mechanism for change should it no longer be benign.

While more than one speaker chastised the U.S. for its stinginess in providing foreign aid for developing countries, there was general agreement that direct aid does little to actually stimulate sustainable development.

"Charity is great, but it's not the battlefront," said de Soto. He went on to expound on his well-known theory stressing the importance of establishing the legal framework conducive to private enterprise, with the full extension of formal property rights as the crucial first step in economic development driven by the indigenous private sector.

"Foreign aid is mostly marginal, but what we need is what I call 'imprinting,' wherein other countries come to share our political and economic values," said Lael Brainard, vice president and director of the Global Economy and Development Center at the Brookings Institution.

While the conference presented a range of viewpoints and ideas, it never seriously debated its basic assumption -- that economic development can reduce future terrorism. The popular perception that there is some causal link leading from economic deprivation to terrorism has persisted and perhaps even become more widespread since 11 September 2001, but studies have failed to discover a correlation between the two.

Only David Hale, chairman of the board of China Online, made even a passing reference to research which has found no causality between personal economic difficulties and the propensity to commit terrorist acts. Studies such as "Education, Poverty, and Terrorism: Is There a Causal Connection?" by Alan Krueger and Jitka Maleckova have even suggested that terrorists tend to be middle-class and well-educated, far from the common perception of a desperately poor individual with nothing to lose. Nonetheless, he went on to claim that "the reality is we have a lot of poverty and a lot of inequality and this provides a breeding ground for terrorism."

As the editor-in-chief of The Washington Monthly, Paul Glastris, pointed out, "[terrorists'] grievances are not directly tied to poverty, and it's not just impoverished countries that have terrorist problems."

Babbitt endorsed this more subtle understanding, arguing that "not poverty, but political and economic disenfranchisement and disempowerment" are among the root causes of terrorism. De Soto followed the same line, saying that terrorists "pick up their constituency not from the poor but from the excluded."

Seymour Hersh, a columnist for The New Yorker, went further as the representative voice of dissent, downplaying economic development as only one of several possible non-military steps to pre-empt terrorism. According to Hersh, the U.S. and its allies cannot avoid "dealing with the bigger issues" such as the Israeli- Palestinian conflict, the failure of Western European societies to integrate Muslim immigrants, and U.S. foreign policy in general.

Research so far has suggested that the connection between poverty and terrorism is tenuous at best, with no clear causality. Global economic development unquestionably is a goal worthy of dedicated pursuit by countries with the means to help others, one that does not need a "war on terror" for justification. For its part, the "war on terror" could focus on issues more directly tied to terrorism, such as political disempowerment.


By Joseph N. DiStefano

** Juniper Financial Corp.'s chairman campaigns for a "thoughtful response." **

Philadelphia Inquirer
September 21, 2005

Alarmed by American policy in Iraq and other Muslim countries, a Philadelphia banker hopes to organize Americans around what he calls "a thoughtful response" to terrorism.

"We have low growth, rising interest rates, oil has touched $70 a barrel, the federal deficit has reached historical highs, and we're gonna spend $1.3 trillion" on a war in Iraq that is creating "new generations of terrorists," says Richard W. Vague, chairman of Juniper Financial Corp. and former head of the nation's largest credit card operation.

In an unusual move for a contemporary corporate CEO, Vague set up a conference for today in Washington. Titled "Beyond Bullets: Economic Strategies in the Fight Against Terrorism," it will feature writers Peter Bergen, Michael Barone, and Seymour Hersh, economist Hernando de Soto, and scholars and policymakers.

Bankers and other corporate leaders tend to avoid taking public stands on controversial issues. But, following the attacks on New York and Washington and the ensuing U.S. invasion of Iraq, "I felt for the first time I could not sit around and not do anything," Vague said. "The issues are so pervasive, and our policy is so misguided, that it affects my family, my business, and my friends."

Vague, 49, of Center City, is a voracious reader of history. A practiced orator on technology and banking, Vague will speak at the end of his conference, which he organized with help from the New America Foundation, led by another corporate activist, 3Com Corp. chairman Eric Benhamou. New America's directors include New York investment banker Steven Rattner, whose longtime clients include Comcast Corp.; Christine Todd Whitman, the former New Jersey governor and ex-Bush administration cabinet member; and others.

But Vague has not set out to recruit other business leaders to his way of thinking. His audience is Washington policymakers and the American public.

He spoke this week at his Juniper office, in a refurbished Wilmington warehouse with electric guitars adorning rough brick walls. Vague founded Juniper as an online credit card bank after leaving First USA Bank, which he cofounded, in 1999, following First USA's purchase by Bank One Corp.

The merger was a difficult combination (Bank One is now part of JPMorgan Chase & Co.), but highly profitable for Vague and other First USA investors.

Juniper was purchased last year by Barclay's P.L.C., the British-based international bank. But Vague said his activism was his own, not supported or encouraged by Barclay's.

Last fall, Vague paid for full-page ads in national newspapers under the headline "Our Actions and Policies Are Dramatically Increasing World Terrorism." The essay blamed al-Qaeda and its attacks on the extreme response, by some Muslims, to "extreme poverty" and "rapid modernization" in Muslim countries, which have disrupted "tradition, social order, family structure," and economic life.

While endorsing efforts to "pursue terrorists aggressively," Vague's essay said the military alone could not defeat terrorists. Instead, the world needs "meaningful progress" toward easing the Israeli-Palestinian struggle, the Indian-Pakistani dispute over Kashmir, the Chechen war in southern Russia, and other conflicts "that directly affect the Islamic world." And the West needs to increase trade "with enlightened Muslim countries" such as Turkey and Jordan, building middle classes instead of merely enriching "power elites," Vague wrote.

Finally, he wrote, U.S. forces need to "dramatically lower our profile in Iraq." Vague called the Iraq war an error that has caused "an unacceptable loss in lives" and "engendered hatred and increased terrorism around the world. This is not our America -- ours is bold and vigorous," and "values love, friendship, respect and decency for the whole world."

Vague did not initially sign his essay, but it invited readers to visit, his Web site -- where he is identified -- and to respond.

Many of the critics focused on Vague's questioning of the U.S. role in the Israeli-Palestinian dispute, and called him naive.

"I am very pro-Israel," Vague said Monday. "The problem is not the fact that we're helping Israel. It's that there's more we should do in the pan-Islamic world."

See bios of speakers and more details about the "Beyond Bullets" conference in Washington via

--Contact staff writer Joseph N. DiStefano at 215-854-5957 or This email address is being protected from spambots. You need JavaScript enabled to view it..