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Economic models of pariah states

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Zagros View Drop Down
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    Posted: 31 May 2011 at 23:46
...over the last five decades?

I am wondering if it is the economic model of a nation that determines its pariah status as opposed necessarily to its politics.  This follows some observations from recent speeches from powerful political detractors in the West to the effect of freedom resulting from incorporation into the "global supply chain".

  • Libya
  • Syria
  • Iraq
  • Iran
  • North Korea
  • Vietnam
  • China
  • Soviet Union
  • Russia
Please list more and see if you can describe economic models (some are murky)  but pariah states  closed economic models where foreign ownership and access is limited or prohibited in law.  This is the hypothesis I am starting with.

can you argue otherwise that it is possible to be a pariah state with an open market?

Also it would be helpful to define and be clear on what a pariah state actually is.




Edited by Zagros - 31 May 2011 at 23:49
"There was glory in pissing, Corabb decided as he watched the stream curve out and make that familiar but unique sound as it hit the ground." So true.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 01 Jun 2011 at 00:02
It would seem that if you are defining 'pariah' from an econmic point of view, then the economic model of the pariah state must be the determining factor. If you define it from a political point of view then the political model must be. 
 
The immediate example of a pariah state with an open economy that comes to mind is Israel; closed economy states that arer not pariahs are more common. But we have also to be careful not to conflate 'open economy' with 'free market' or 'capitalist' since Germany under Hitler and Italy under Mussolini (and may other similar dictatorships) had capitalist economies that were nonetheless state-controlled and only partially open at best.
 
Certainly if you define a pariah state as a state in which foreign companies don't invest, countries that do not allow foreign investment woudl rather obviously qualify. So too would countries where political instablity heightens risk, whatever the current openness of the market.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote pikeshot1600 Quote  Post ReplyReply Direct Link To This Post Posted: 01 Jun 2011 at 01:24
States tend to be pariahs usually when profits are not adequate by doing business there. 

China is not a pariah any longer; North Korea is merely a diseased appendix of China, but South Korea is not.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 01 Jun 2011 at 01:32
From the point of view of investment, that has to be when the political risk does not outweigh the economic gan.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Parnell Quote  Post ReplyReply Direct Link To This Post Posted: 01 Jun 2011 at 02:27
I'm surprised Chile under Pinochet wasn't included in your list. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 01 Jun 2011 at 02:32
Economic compliance is the prime determinant in this hypothesis.  As I said "pariah" needs to be defined in this context.  I'll propose options for inclusion criteria after I think about it some more on the way home.

I want to know if this argument can be logically debunked otherwise it might be worth developing.


Edited by Zagros - 01 Jun 2011 at 02:38
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 08:15
1. Pariah. Let's start with the dictionary definition.  I pick this:

–noun
An outcast.

So a state that is outcast.  Now. Outcast from what?  Since we are talking about the world as it has been for at least the last half century then that would be outcast from the dominant political and economic protagonists of the day. Ergo: The West as a collective bloc (which it is) with its shared interests at almost every level.

2.  Nations that have or had Pariah status are included in my original list.  Israel is clearly not a pariah state.  Neither was Pinochet's Chile.

3.  The question is what categorises a nation as a Pariah State?  Is it its politics or is it its economics?  I am looking for a pattern; it can be either as G alluded to - but is there a connection and can it be shown that in fact the economic model is the prime or underlying issue which forces the politics?




Edited by Zagros - 02 Jun 2011 at 08:18
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Post Options Post Options   Thanks (0) Thanks(0)   Quote pikeshot1600 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 08:40
I suspect a pariah state is one that is so politically estranged as to be a "poison pill" in which to do business.  As such, I cannot identify a single state in which that is the case.  The only possible exception is North Korea because there is no economic benefit of substance that is identifiable in NK.

Businesses and even governmental entities did business with Nazi germany and Soviet russia because there were profits to be made there.  Saddam Hussein had no lack of economic partners.  neither has Libya nor have Iran or the PRC. 

It is, as said by a wise movie character, "all about money...Everything else is just conversation."


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:05
To be cast out from the world, to be excluded, reeks more of dissatisfaction with that nation's behaviour and character rather than if it is a worthwhile place to do business.Many African countries are so unstable or resource poor that they are terrible places to do business, and no one considers them pariah e.g. Liberia.

One is cast out when they have done something very wrong and will not make amends.

But really there are no pariah states. A country may be a pariah state from one nation's perspective, but not another's.  From China's perspective, NK is no pariah state.

So pariah state is just a term a country uses to pressure that state into worrying about itself diplomatically, or to conjur up support from friendly nations in opposing that state. Pariah state exists as a word in international diplomacy, and nothing more.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote pikeshot1600 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:18
C-XI,

NK is no pariah state for the PRC only because the PRC cannot let the country dissolve and cause refugee problems and political turmoil on their side of the international border.

China provides what the NK state needs in order for it to survive at a minimum level, no more.  Electric power; foodstuffs; medications, whatever....  Is there anything you can name that you buy that is made in North Korea?

I didn't think so.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:22
For NK to be a pariah state, all other states would have to refuse diplomatic recognition with it and any form of trade. I will grant that NK comes very close, but still not quite.

So pariah state remains a diplomatic term that countries apply arbitrarily based on how they want the rest of the world to view a certain nation.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote pikeshot1600 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:26
Originally posted by Constantine XI Constantine XI wrote:

For NK to be a pariah state, all other states would have to refuse diplomatic recognition with it and any form of trade. I will grant that NK comes very close, but still not quite.

So pariah state remains a diplomatic term that countries apply arbitrarily based on how they want the rest of the world to view a certain nation.


 So basically there are no pariah states.  As long as someone is getting a minimal benefit out of recognizing and/or doing business with a state entity, it avoids pariah status.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:32
Basically, yes. Pariah state is just a word employed by countries to frame another country in the light they wish to.

The only true pariah states in my mind are places like Sealand that no one recognises or does business with.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:37
Originally posted by Constantine XI Constantine XI wrote:

For NK to be a pariah state, all other states would have to refuse diplomatic recognition with it and any form of trade. I will grant that NK comes very close, but still not quite.

So pariah state remains a diplomatic term that countries apply arbitrarily based on how they want the rest of the world to view a certain nation.


I specfically made the definition to avoid arguments over semantics. NK is a pariah state as I am defining it for the argument I am thinking of building, since the lens of the West is the perspective here. 
"There was glory in pissing, Corabb decided as he watched the stream curve out and make that familiar but unique sound as it hit the ground." So true.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 09:39
I think NK may be the stumbling block for me since its very much its politics and not its economics that have cast it out.  
"There was glory in pissing, Corabb decided as he watched the stream curve out and make that familiar but unique sound as it hit the ground." So true.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 22:08
Same was true of Camodia. And now of Burma.
 
Your problem is that it is impossible to ignore the basic semantics of pariahdom, which exists whenever someone is repelled by someone or thing. When  you try to change the definition to produce a result that pleases you, which is what appears to be happening to pretty well everybody in the thread, then you are just indulging in whatever the plural of petitio principii is.
 
I can't think of a state that fits the normal definition of a pariah - pigs are pariah in Judaism/Islam no? - more than Israel in its relation with the Arab countries over the years.
 
If you limit the definition to countries that no-one invests in, then of course a pariah is a country in which no-one invests. But that's just begging the question, and makes the use of the term pointless - you might as well say 'a country in which no-one invests' as confuse the issue with wanting to call it a pariah. 
 
Wikipedia is suitably, if politely, scathing about the use of the term. It may be of interest to see the map of 'pariah states' it shows:
 
 
 
 


Edited by gcle2003 - 02 Jun 2011 at 22:11
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Tashfin Quote  Post ReplyReply Direct Link To This Post Posted: 02 Jun 2011 at 22:45
Indeed. The word pariah itself of Indian origin refers to 'outcastes'..i.e those who did not have any specific caste within the Hindu Varna (caste system), and hence relegated to menial domestic labour, outside the accepted structure of society... the question is accepted by whom..
 
A pariah state is basically an ideological perception, and hence interpretation, of a particular state and its international standing, coloured by a viewpoint or Weltanschung of another state (or bloc).
 
So  one cannot, imho, be strictly bounded by investment/economics (since who invests or otherwise again is coloured by perception and the dominant international alliances/relationships).
 
The changing nature of the pariah can be illustarted in numerous examples. For example take Libya, in the 1980's/90's from the lens of the West Libya was a 'pariah' state, a political and economic pariah  for the West (though with significant investment from the U.S.S.R, China) , then from 2002/3 onwards, after abandoning its nuclear programme, British, Italian and French companies began to invest heavily in Libya's oil industry, hence, to the  West, the 'pariah' no more, now that has reversed again...though now its isolation is even more complete....since it is pariah to both the West and the Arab world....though maybe not all of Africa
 
Israel is also interesting, from the Arab/Middle Eastern/Muslim World perspective, yes it would be perceived as a 'pariah' (apart from  the Jordanian government  and pre-revolutionary Egyptian regime and  to an extent Turkey), but not necessarily by the U.S. or European countries of course, or India (since the 90's), certainly as gcle stated its open economy cannot place it in this category (if we are to use investment/economics as a barometer of pariahdom), since it has broad international trade contacts (IT/Security/Defence) with the U.S., India, Turkey, Europe etc...
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Cywr Quote  Post ReplyReply Direct Link To This Post Posted: 24 Jun 2012 at 03:15
Syria had a relatively open economy throughout the 90s and the early 00s when many previously government controlled areas were opened up and the economy in general liberalised, and was able to attract foreign investment. It also expanded its tourism industry quite substantially.
It remained something of a pariah due to its foreign policy with regards to relationship with Iran, attitude to Israel etc.

Had the current crisis not come into being, it may well have slipped off the radar and become something like Libya.




Edited by Cywr - 24 Jun 2012 at 03:16
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Posted: 24 Jun 2012 at 04:32
Originally posted by Cywr Cywr wrote:

Syria had a relatively open economy throughout the 90s and the early 00s when many previously government controlled areas were opened up and the economy in general liberalised, and was able to attract foreign investment. It also expanded its tourism industry quite substantially.
It remained something of a pariah due to its foreign policy with regards to relationship with Iran, attitude to Israel etc.

Had the current crisis not come into being, it may well have slipped off the radar and become something like Libya.


 
That's not true. Syria only liberalised the parts of the economy that were basically crumbs. The real deal, the telecommunication's market and the oil/gas market is the soul property of the Assad family mafia. The Makhlouf family own one mobile company and are partners in another with another Assad linked family. The state oil company is the personal property of the president.
 
Gas distribution is owned by Assad's father-in-law and the imported goods are owned by the Shalish gang.
 
Syria is a pariah right now due to sanctions but even then imports from Turkey, Lebanon and Jordan are exempt regardless of what is imported which basically means that those sanctions are nothing but toilet paper.
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Cywr Quote  Post ReplyReply Direct Link To This Post Posted: 24 Jun 2012 at 04:56
I did say relatively open. I just don't believe its the economics that govern its pariah status.
Contrast today with the 60-80s when it was for all intents and purposes, shut off from the global economy.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 25 Jun 2012 at 19:40
Syria is hardly unique in the middle east as an example of where the state or the ruling family and its allies own domestic resources anyway.  So it's ironic that you class the Syrian regime as mafia-like given the state of economic affairs of the Persian Gulf's Arab countries where you have to have a Sheikh or Prince in your title to be in government. 

If it was economic status that dictated pariah status then all of the middle east would be pariah.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 26 Jun 2012 at 03:31
Your definition and parameters of Pariah are too fluid for a thesis to hold water. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Omar al Hashim Quote  Post ReplyReply Direct Link To This Post Posted: 26 Jun 2012 at 21:12
Originally posted by Zagros Zagros wrote:

...over the last five decades?

I am wondering if it is the economic model of a nation that determines its pariah status as opposed necessarily to its politics.  This follows some observations from recent speeches from powerful political detractors in the West to the effect of freedom resulting from incorporation into the "global supply chain".

  • Libya
  • Syria
  • Iraq
  • Iran
  • North Korea
  • Vietnam
  • China
  • Soviet Union
  • Russia
Please list more and see if you can describe economic models (some are murky)  but pariah states  closed economic models where foreign ownership and access is limited or prohibited in law.  This is the hypothesis I am starting with.

can you argue otherwise that it is possible to be a pariah state with an open market?
Ignoring the definition question you've missed the key element.
A nation that isn't "liked" by the west is usually forced out of open markets by sanctions. Not only that, but economic warfare directed against the "pariah" nation forces different ownership models in order to reduce the risk of attack.
 
The Korean megacorps would like nothing better than to do business in North Korea, but are restricted by numerous political reasons (on both sides) into only having a presence in the industrial zone on the NK-SK border. Vietnam (which I can't see why you think it's a pariah) has tried to copy the SK model, which is not that dissimilar to the one used all over Asia and in pre-Reagan America.
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